Tag Archives: debt

First Debt Goal Down!

WOOHOO!

So, I had paid $800 on payday (Jan 31) towards my Discovercard, leaving a balance of $450. Today, my federal tax refund came in so I clicked right over to the Discover website and paid this baby off! I can’t wait until the payment posts and I can see that $0 balance. Super excited!

On his way out the door this morning, fiance couldn’t find his laptop this. He had LEFT IT BEHIND IN CLASS last night. “HOW does that HAPPEN?” you may ask. I do not know. But he is one lucky ducky because when he stopped by the classroom after his morning work study shift it was sitting right where he left it. He had a backpack stolen out of his car on the same campus a few months ago, so this was seriously lucky. Whew!

Stumbling Blocks

So payday for February has finally arrived! Yay!

We had some implosions (eating out, extra alcohol, extra grocery store trips) at the end of January that used a portion of the dogs’ vet money. I had planned to recover that with some money that had been planned to go into savings: a portion of my tax refund, an “extra” work study paycheck from fiance, and a reimbursement from the GI Bill for fiance’s school registration for the semester.

But then we found out that the disbursement my fiance got from the GI Bill was much lower this month than we had estimated. I knew it would be only a small portion of the full month payment because classes didn’t start until the 27th of January, and the payment is based on the portion of the month where classes are in session. Consequently, that meant we had to adjust our budget. Out the window went things that were adjustable: $100 for eating out this month, paying only the minimum $25 payment on a store credit card rather than the $50 planned, and using a portion of my tax return, when it arrives later in the month, to pay off my Discover card which had been intended for wedding rings and savings. I had planned to pay off the Discover card on payday, but instead I was only able to pay a portion of that today. I will receive my tax refund, registration reimbursement, and fiance will get two more work study paychecks before the end of the month, so I will still be able to pay it off this month as planned. But pulling some money out of the tax return will take away from money that was planned for wedding rings and our summer wedding “tour” of our home states. I’m hoping I can make up for that money with money my parents usually give me for my birthday in April, which I had not included in my wedding tour savings calculations because I don’t know how much it will be.

While this was disappointing, it certainly has not diminished my will to keep moving forward and making progress on getting out of debt. I felt really relieved that we had the ability to readjust and reprioritize and just make it work. We were lucky that we have a few irregular sources of extra money coming in this month that we were planning on putting in savings.

So while we stumbled, we did not fall! Yay! Of course, we still need to continue working on avoiding those implosions I mentioned…

Goals Part I – Get Out (of Debt), Girl

So I have three primary goals:

  1. get out of debt
  2. get in shape
  3. build some new marketable skills so I don’t feel trapped in my job and so I have something I can make money with if I get desperate and want to change careers.

For this post I’ll focus on my get out of debt goal, and break it down a bit. I’ll do my debt story in a future post.

My fiance and I have combined finances. I know some experts do not recommend this before marriage, but he and I both feel totally secure with it. It also improved our relationship because we don’t argue about money anymore. I’ll go into detail about how we got there and our specific arrangements/agreements in another future post.

Our debt falls into a few categories:

  • Credit cards (both of us) – ~$28,000
  • Student loan (me) ~$12,000
  • Car loans (both of us) ~$10,000
  • Bad debt in collections (him) ~ $8,200 (but we’ll probably settle the debt for a little more than half that)
  • IRS (him) $2000

So that’s a nice ugly $60,000 in debt there!

The credit cards are the ones that are really on fire because the interest rates are all over the place, but they’re all high, and even if they weren’t, I still wouldn’t want to have them. The plan is to pay credit cards off first, IRS is on a payment plan already, pay off all the debt in good standing and then settle the collections crap along the way. The past two years were spent dealing with fiance Gogig’s financial “emergencies” so we agreed the next year or two would be about taking care of stuff that is in my name since I covered the majority of both of our expenses for a while prior, and a good chunk of the credit card debt anyway is from spending on both of us, not just my stuff.

Since credit cards are the first goal, I’ll break them down:

  • Discovercard ~$1250 – pay off in February 2014.
  • Banana Republic Visa ~$5900 – pay off in May 2014.
  • CapitalOne ~$5800 – pay off in November 2014.
  • Citicard ~$10,000 – pay off in February 2015.

I have a budget spreadsheet and basically the plan is to throw all extra money at this debt until it’s paid off. Some money that doesn’t go to living expenses will be put into savings for an emergency fund and also for some planned future expenses like pet stuff, kid stuff, holiday stuff, birthdays, car registrations, etc.

I’m also expecting a small raise and bonus in June this year (2014), with the possibility of instead getting a promotion and significant raise which may speed up my timelines. So fingers crossed for that.

I tell you, I just can’t wait for February 1 to roll around – it’s pay day and it’s the day I’m going to pay off that Discovercard. I CAN’T WAIT. I hate it! I want it gone and out of my life!!