July 07 - July 08: A Year in Review

[DebtFreedomFighter]

A Year in Review - My TMMO Anniversary!

I thought it was appropriate to take a moment (okay several) and take a peek back at my successful year of climbing the Mountain of Debt. I have tried before to "pay down" the credit cards, but I'd never been successful as this year. I stuck to it! A whole year! I don't think I have stuck to anything this tough for a whole year before!

One year ago: Debt Totals
Chase: $8588.00 (random spending surfed/stored here for a lower rate)
Citibank: $10958.00 (this one too)
Bank of America $16830.00 (this one too)
Discover: $1600.00 (used for purchases)
Citibank 2: $1743.94 (the used card - when the balance got to high it got surfed ... see above)
Car Loan: $5389.00 (which I am proud of. We were 2 years ahead on this car loan)
Emergency Root Canal & Crown: 1505.00

Budget consisted of:
Mortgage/HELOC (creative financing package to eliminate PMI)
Utilities
Groceries (that I rarely stuck to)
Debt Pay Offs
Taxes
Savings Accounts (Christmas, Vacation, Home Improvements, DS's 529)

The Feeling -- The Fear -- The Failure
My dh tells doomsday stories of the failing economy almost daily. He doesn't handle the bills or the family finances. He never even looks at them. His talk plus our financial situation was making me panic! HARDCORE! The fact that they were talking about raising the minimum due % from 1 - 2% of remaining balance on our credit cards made me SHUTTER! We were going to fall apart and fall apart fast!
I was looking into refinancing the house and hoping I had enough equity to roll some of my large balances into my home loan. I was stressed to the core, yet couldn't talk to the dh about it because the arguments would get ugly. I hate ugly arguments.

Miss guided Priorities
I've always been a pack rat. I've always had a thing for savings. I had savings accounts that I used as sinking funds for everything. I had these long before I heard of the word sinking funds. Congrats to me to have done something right in the last 17 years of marriage! However, my ability to save money for certain things like 2 wonderful Disney vacations means that credit cards were being used to pay for other things while I was tucking away money for the vacations. As you noticed - my budget had wide holes all over it!

July 07- July 08: The Year of the Plan

1. NO credit cards! I don't care how bad you think you NEED something! Either you pay CASH or you don't get it!

2. Prepare a Proper Budget. I have ALWAYS had budget. The problem with my budget is that it was missing the everyday life things: clothes, medical bills, hair cuts, vet bills, dentist visits, dining out, entertainment etc. It always consisted of what bills were due and nothing more than that. That's where the credit card enters the game and takes over. And Stick to It anything looks good on paper. The matter of having the strength to actually LIVE with the restrictions....NOW THAT was the battle.

3. Rearrange Priorities. Although, being honest - I didn't wipe out all of my savings accounts, but I need close a few accounts and paid off my smaller bills right away. I was paying more in finance charges than I was gaining in interest. That plus with a proper budget, I wouldn't need those accounts anymore.

4. Find Holes in our Budget. The eating out all the time, the random Walmart stops that cost $100 a pop, entertainment every week etc. Plugging the holes in the budget really helped make what money we had coming in HELP our situation!

5. Work a little Harder! My DH is incredible when it comes to working. His work ethic is off the carts and he gobbles up overtime like no body's business. My job doesn't entitle me to a lot of overtime except for the spring training time. I gobble that up. I've been really paying attention to the grocery budget AND STICKING TO IT! I make dinner every night. We only go out once a month or maybe twice a month IF there is money left over from grocery shopping.

6. Debt Payoff - We have successfully paid off over $30k in debt this year - by rearranging priorities, working and having a CD mature for us to throw into it. We are down to our last two debts. Our two biggest.

7. Play Smarter - This works! The lessons I have learned have been so incredibly valuable to me! The stress has died down. We have a handle of our finances. I refinanced the HELOC to be a regular loan with a fixed rate. Now it is a part of the mortgage, the way it was originally was written. We have NOT used a credit card in a year! Okay let me say that again because that is just so amazing - if you knew our family you would agree -- here goes -- WE HAVE NOT USED A CREDIT CARD IN A YEAR!!!

Wow! That felt great!
A beneficial year!
By next July first (or hopefully sooner) you will hear me yell from the rooftops.

[Greebo]

Wendy! That is TOTALLY awesome!!!

I'd love it if you'ld post updated balances to show how far you've come!

[nuisance26]

~What a fantastic year you've had! Very inspirational. Thanks for sharing with us!~

[DebtFreedomFighter]

My last two debts:

Bank of America (which I surfed to Citbank 2 for it's duration)
WAS: $16,830.00 NOW: $7,886.68

Citibank 1 (2 transfers stored on this card - 1 @ 0% for life and the other for 1.9% for life)
WAS: $10,958 NOW: $9,218.72

[Russ]

I'm impressed. Very inspirational and something I plan to print.

Congratulations!

[Jamauk]

Wendy,
THanks for sharing! THat's so inspirational. DH and I had been waffling about whether or not to start "hard core" this July 1 (start of fiscal year) because of our house situation, etc...

Reading your post made me realize there will always be something so no time like the present to get started!!

Congrats!

[MirandaK]

That is soooooo fantastic!! I'm absurdly jealous!

[Greebo]

My last two debts:

Bank of America (which I surfed to Citbank 2 for it's duration)
WAS: $16,830.00 NOW: $7,886.68

Citibank 1 (2 transfers stored on this card - 1 @ 0% for life and the other for 1.9% for life)
WAS: $10,958 NOW: $9,218.72

That totally kicks butt!

And how big was your snowball when you started, and how big is it now, if I may ask?

[DebtFreedomFighter]

My snowball throwing isn't typical. I didn't add all those original debts into my snowballing plan so their payments don't roll off into paying my current debt situation -- instead it went into making sure they was money available for the new budget and the items that I had never budgetted before.

I forgot to post that during our first days of July, that I used extra money to get us a month ahead. That means we use this month's income to pay next month's bills. What a blessing THAT is!!

Back to your question:

Our Monthly Income - Our Monthly Budget= What goes to the credit card companies. At the very least I have budgetted $650 for debt paying which covers minimums and about $300 extra towards one of the debts. I've been fortunate to always have extra money at the end of the month (another comment I have never been able to make before!!!!)

[Greebo]

So you paid off nearly $30k in ONE YEAR, with a snowball add on of about $300/month. The CD you put in was big, I gather?

[DebtFreedomFighter]

I emptied some savings accounts which afforded a couple thousand, the CD which was almost $10k, the overtime, our income, tax refunds and the tax rebate paid for the rest

The $650 wasn't the original minimum budgetted, but it has been since I got to the last two debts.

Does that make sense?

[DebtFreedomFighter]

To clarify - I currently have at least budgetted the $650, but have been routinely putting more money than that towards the debts because of what I have left after the basic budget is "paid for".

[Domestic Gal]

You are doing FANTASTIC!!!
When you are DEBT FREE are you going to call Dave Ramsey up and scream to the TV that you are DEBT FREE??

[Ceashels]

Wendy, congratulations to you for all the hard work you did. I am inspired and amazed at what you have accomplished and know you will be debt free pretty darn soon. Your story is an awesome one and you should be proud.

[DebtFreedomFighter]

You are doing FANTASTIC!!!
When you are DEBT FREE are you going to call Dave Ramsey up and scream to the TV that you are DEBT FREE??

We should! I don't know if my dh and ds would join me. I'm the vocal one in the family! Knowing me, I could scream loud enough for all of us in the house! LOL