...I think I'm going to lose it.
After going over ALL our debts, it's disgusting. I keep thinking how did this happen in the first place??? Ugh... the problem of our debt is actually much, much worse than I originally thought, and my original projection was a high estimate of what we owed.
We're going to have to take serious drastic measures soon, I think. I don't know we we will get out of debt by ourselves. I just don't know what to do. I've read many books and been very disciplined with the credit cards and not bought anything on them the past few months, and still we owe and owe and owe. My plan was to take it one at a time, but it still seems so discouraging. I've read quite a few books that all sum up the same things, but being that there's SO MUCH we owe, it's very difficult to have extra money to pay on the credit cards. And with interest rates, even the very low ones, it's still hard.
Ugh. Maybe I should stop whining and lamenting what we're going to do about this mess and start planning how it will be resolved.
There's still my "one thing at a time" plan. I was also thinking about professional help, but I know we'll have to shell out more money that we don't have. I don't even know what kind of professional could help us, but I'm sure there's someone out there. Although I must admit, the thought of going into a financial institution with a million credit card statements and loan documents would be horribly embarassing. Also, we're going to have to start cutting every single little corner financially that we can, and since I work on commission I am going to start hauling ass at the work I do and do as much work as possible for the extra money.
This is overwhelming at this point. *sigh* Gotta go write some checks now...
edit: ok, I just paid off the Macy's card that I owed a mere $155.12 on. I know it's not much, but it's ONE card paid off and one less bill to pay. I feel a little better now : )
Archive for August, 2007
...I think I'm going to lose it.
I was thinking last night about debt and all that messy stuff, and I was thinking that not ALL of the decisions that I've made have been crummy ones. It was nice to sit down and think of them because it makes me feel like there's hope for the future and that somewhere swishing around in this head is a rational spender with smart choices.
I think the biggest one that I've made that was a big decision that was also smart was to buy the house we're living in. It's an upper/lower apartment with just two units, so we live in one and rent out the other to a guy who's been here forever. It's not the nicest house or best house, sort of on the small side, but it holds all our stuff and is relatively affordable. After the rent check comes in, we come up with just $300 a month to pay the mortgage, which is much, much less than we were paying for rent. It's nice to have that wiggle room. I've decided as of today when I go to the bank later, i'm going to automatically deposit the rent check in the savings account, just to give us a little extra padding (or some padding, as the case may be.) I'm sure if we had bought a single house that cost the same amount (which we almost did) we'd be struggling like crazy to make ends meet and it would be impossible to put money into the savings accout or to make extra payments on things. Let me pat myself on the back for that one. Whenever I get frusterated that it's too small or cramped or we have to go downstiars to take the dog outside (at 3 a.m. that's NOT as easy as simply opening up a door) I just remind myself that it was the right decision, and plus when we are fininaiclly stable enough to save for a down payment on a new house (which I want to do by the time I'm 30) we can keep this house and rent out both the upper and lower, or decide to sell it if we don't want to bother with being landlords. Ok, so there's one good decision.
I guess the second (I'm struggling to think of a third) good decision was when it came time for me to get a new car a few months ago (mine needed a new transmission and basically a new engine... I'm a big Volkwagen fan, but putting a transmission and engine in a Jetta that was already old and had tons of miles was not something I wanted to do). I could very easily have went out and bought a brand-new car or a car that was a year old and was $20,000 or something, which is SUPER tempting when you picture yourself cruising around in a shiny new car, but in the end I decided to buy a six-year-old car that had only fifty thousand miles on it, a good body and lots of life left in it. It made the insurance much cheaper (yay) and since I live and work in the city, a new car only would have gotten all scratched and dinged up anyway. Not that I want my car to get dinged up, but it's not as bad when it's already older. Plus it will be paid off in a year instead of four or even five.
Well, I guess that about rounds out my smart decisions I've made. A house and a car are big purchases though, so I'll pat myself on the back just once for managing to not get in too deep with those items : )
I am going to get out of debt. I really am. I've said it before, but now I feel that we have no choice or we're going to wind up owing a million dollars by the time we're 30 and never going to get our dream house.
I am 25 years old. My husband is 28. We probably owe somewhere in the range of $30,000 in loans and credit cards, not counting two car payments (both of those equal roughly $10,000 left, give or take) plus a mortgage (about $80,000 left). That's a lot of debt, being that together we bring in roughly $60,000 a year before taxes.
So where to start getting out of this messy situation? How did this happen? Im obviously far from a financial genuis. The one thing we have going for us is that we have never paid a bill late (ever) and we have no kids to support, unless you count our dog, which I do.
I've already made some steps that I feel are productive. I cut up *every single credit card*. I am going to cancel my Paypal account. I'm going to do it right now. Just a second........ Ok, Paypal won't let me saying that there is something that is outstanding. I know the last thing I bought on Paypal was a ton of books, and that was weeks ago. I really wanted to do this now while I was "in the mood" to do so, because I don't want to think about it any more. I just want to cancel it. I will come back to that later.
So in addition to getting rid of all credit cards, I have taken what some people have said is drastic and unimaginable in this day and age. I have taken the two check/debit cards from my two checking accounts and given them to a family member who I know will not give them back to me until hell freezes over, and even then he might keep them. I trust him enough to not give them back. I've been living like this for roughly a month now, and I have noticed that it changes a lot of things. First of all, when I go to the bank on a Friday, I have already planned out how much money I need for the week for food, gas, parking, etc. Once it's gone, it's gone. God forbid I actually go into a bank to withdrawl money, which I hate, hate, hate actually going into banks, so I haven't done that yet. There is little convinenves that I miss, such as paying at the pump for the gas and stuff, but it's not a huge deal or anything. It's put me more in touch with what I spend. For example, before I could walk into a Walgreens and have in mind that I was only going to buy toothpaste, but then see other little things that I "had" to have and purchased impulsively. Now, however, when I know I only have $30 for the week, I only buy the toothpaste. It's a good thing, but has taken some getting used to, and I do find times when I think "oh, if I only had my bank card on this Sunday I could go and purchase this overpriced crap that I don't need but it's on sale in the Sunday paper and I neeeeeed it!'
It's also helped a lot food shopping. Before I would just throw a bunch of stuff in the cart, go to the checkout late, swipe the debit card and be on my merry way, wondering who I spent $120 on food that's going to last us one week. Now I'll put something in the cart and say to myself "that's $5... now $8... oh, we don't really need this, we'll never eat it, I'll just put it back and spend the money on something that I know we'll eat for sure." So that's how it's been.
I really want to try to make a budget. I've had problems with this forever being that I work solely on commission and paychecks differ from month to month. I might make $200 less or more a week (sometimes as much as $400 les or more) some months. I try to earn as much as possible every month (I'm a work-a-holic, a good thing for someone who is commission-based) but just can't seem to get a budget down. I plan on sitting down and getting all our bills together and all our expnses and figuring out the MINIMUM that we need each month, and then the rest will go into paying off extra debt and making an emergency savings fund (which as of now is a whopping $200).
I just need a plan and stick to it. I have done that in the past, but as soon as I start doing good, I convince myself that we "deserve" something, usually a fairly big purchase. I keep repating to myself over and over "we don't need any more crap. We have enough stuff as it is. We just don't need it and don't have room for it and I'll only wish I had the $$$ later for something necessary or paying on an extra bill."
I've decided to take the credit cards one at a time. I'm going to pay off a little one first that we owe $500 or so on just to get that feeling of fablousness of paying off one. I'm hoping that will movative me to just keep plugging away. After that, I'll do the higher-interest credit cards from highest to lowest.
I'm excited. I'm really serious about this this time. I told my husband that we'll be eating cereal and Ramen noodles every day for the next few years, but it will be worth it.
By the way, I guess I should mention at some point that I handle all the bill paying, banking, etc. Obviously I haven't done a good job of it, but it's sort of the lesser of two evils. I'll get more into that another time.