Debt reduction talks...at 5am?

**MomToTwoBoys** · 12-11-2008, 08:02 AM

Ok, 5am is honestly the worst time for it but with both kids in bed, and the fact that I got woke up at 3:45am by DH (who fell asleep on the couch and disabled the alarm to go outside when he woke up), it seemed like a great time to figure things out.

I checked the email, got DH's check stub (he gets them electronically now, cutting out an additional piece of paperwork per two weeks) and saw that we had $13.64 more than what was budgeted. I asked him what he wanted me to do as far as debt repayments for this next two weeks. I mentioned we had roughly $100.65 worth of minimum payments and besides the mortgage, the only thing we had to get was groceries for the next two weeks.

He had talked about line of credit before for all the smaller debts to transfer them (right now, the interest for the smaller debts is about 28.9% and that has to go!) so we'd have a lower interest rate. I wasn't too keen on it, but if it'll save us money each month then I'm on board. So the plan right now is that after we get back from Christmas vacation, he was going to his bank to talk to a financial advisor about a line of credit. The line of credit would help us because it would free up cash and make debt repayments that much easier.

I then looked at his check stub and realized that with one more pay day before January, he's made about 6-7k less this year. Ironically, we're doing better financially and not dipping into overdraft since May with the reduction in net income. We looked at what we've done to reduce the debt, and agreed that the majority of it was cutting back on eating out and reducing the grocery bill by $400/mo.

When all was said and done, we agreed that paying the minimums until March would be good. March turns into a busy time for DH, meaning more money from overtime. We also get back the tax return around then, which is going towards debt payoffs. There is also a small loan from FIL that helped us get the van, and that hasn't been figured into the mix yet. He told DH and I that as soon as we got the CCs paid off, then we could give him back the $6k that we owe him. I also got a raise in cost of living from the VA, and that's $25 more per month (which the entire thing is affected by exchange rates, given that it's a US fund coming into a Canadian bank). We need to prepare ourselves for July 1st because after that, we don't get the extra $100/mo for a second child tax credit. We do, however, get subjected to a possible raise in tax credit from the first one given our income totals from the previous tax year.

So after all of that, DH is on board more than ever to get the debt killed off!