'the plan'

If you missed our omission of debt guilt, check out Friday's post...it's a doozy.

Here's 'the plan' to get out of the $18,860 debt hole that we're in.

1. Stop using Credit for 'entertainment'

Jordan and I agreed on step one before the wedding. 

2. Get all balances below 30% of available credit.

This is our first step for each card so that we minimize the impact on our credit scores - as without a doubt they have taken a hit.  Fortunatly the credit utilization part of your credit score can be fixed within a few statement cycles with large payments - we need to do this first so that if the bank re-checks our credit (which i'm sure they will) before we get the mortgage in Nov/Dec - we're still in good shape.

3. As the interest rates are the same, pay the balances down in order of smallest to largest

I beleive in small wins before you get to the end goal as a motivator - by paying off the smallest balance first we'll not only get some of these small wins, but we'll also pay the least amount of interest.

Pretty simple right?  We were blessed that we had some amazing monetary gifts from the wedding which are going to help us acheive goal one for our personal cards this month and goal one for the joint card next month.  We'll then attack Jordan's card, mine and then the joint.

Here it is in spreadsheet form:

This image shows you the summary of the plan - you can see that each payment also accounts for regular spending as well (as described above).

Part One -

We will only use our joint CC for gas/groceries (as those are very consistent) - entertainment will now be paid for using cash.  Here are our averages for the last ten months and our commitment until Christmas:

I've zeroed out booze and eating out as that will be all part of the entertainment.  Education is for Jordan who goes to school once a week and needs $ for parking and other items.  I'd like to take out $50 every friday and use just one 'jar' for that - but i need to see if Jordan wants to do one a week or one a month at a time.

Part Two -

The first column shows our maximums, the second column is what we want our maximum balances to be for the purpose of a solid credit score and the third column is the immediate payments we need to make.

Part Three -

You can see the breakdown of the payments for each month here

The grant is the $1,000 Jordan gets for each completed year of his apprentice.


If you made it this far in reading, this spreadsheet basically summarizes everything i've already described.


but wait.

We still owe $2,100.54 (plus probably a couple hundred dollars worth of interest)
(ps the credit card balance in the previous screen shot is less b/c my spreadsheet was broken and not behaving properly - it will be $2,100 remaining owing not $1,015 as shown above)

yup.  we do.

Iffff our roommate stays with us for October/November - we'll have another $1,000 to apply to the balances and the rest will be taken care of in December.  I'm hopeful that our house won't be ready for possession until december so that we'll be able to do it in one payment instead of two or more.  We also may get our damage deposit back which was $1,275 - so that and the roommate could potentially pay of the rest by Christmas.

thoughts, questions, comments - we're all ears



  1. Always with your spreadsheets and always with a plan. I said it before and I will say it again. I have lots of faith that you both will bring this debt under total control.

    The only suggestion I have is instead of paying down the credit cards with the lowest balance first, since they are all the same interest rates at the end of every month you should just send one big lump sum payment to the card carrying the highest balance as the highest balance card attracts the most interest. This will also bring all of them down at relatively the same time unless you want to free up cash flow in then which I would just pay off the smallest to largest completely.

  2. The one thing I disagree with is using your wedding gift money to pay down your credit cards with. I would never give a gift of money if I knew it was going towards debt instead of something for the home etc.

  3. @ Rafiki - thanks for the support (and the suggestion). I had a great chat with Jordan last night and he's 100% on board with 'the plan'

    @ Anonymous - thanks for the great feedback! We had thought a lot about this and decided that our friends and family would not want us to be holding on to debt that was gaining interest while buying furniture and house hold items that we simply do not need, particularly when the debt was accumulated from throwing them an awesome party.

    Once we're out of debt, which we'll be able to do rapidly we'll then be able to save rapidly and use the money to make any large home purchases we need.

    I see it as borrowing from ourselves and repaying ourselves with the wedding gift money.

  4. I'm curious as to why you folded eating out and booze into entertainment. I mean, I understand that all three of those are "fun" money situations so it makes sense for them to be grouped together, but I would think it might be a little harder to track doing it that way. What if you learned that it's very easy for you to give up movies or dinners out, but you tend to spend "fun" money on alcohol - it just seems like that would be interesting information to have, which would be hidden by all three being in the same category.

    (However, I have more than 30 categories in my budget spreadsheet, so I like categories!)

  5. @ Little Miss Moneybags

    Great question, thank you!

    I would prefer likely the same number of categories that you have, but Jordan HATES a bazillion categories, he likes one lump. So part of the decision to put those three items together was a bit of marriage negotiation.

    The other part is that I'm actually not worried about tracking where the $200 goes. The money also has to pay for any necessary personal care (haircuts or whatever) - so if there's money in the jar we can get something done or buy something fun - and if there's not, we can't.

    $50/week for two people won't go very far, but it's better then giving ourselves nothing. Hopefully it works.

  6. Those are huge monthly payments...
    Where is that money coming from?
    Am I correct to assume that August and September's payments are wedding money?
    October and November's payments are pretty high too - if I remember correctly, isn't that about 50% of your combined take home pay? How tight does that make your budget for those months?

    Thanks for sharing your plan. I love your honest, upfront spreadsheets. Good luck getting that paid.

  7. @ Makky's mom - thanks for the question!!

    Everything is squeezed really, really tight. The August payment is coming half from our cash flow and half from wedding (about $5,000 is wedding money).

    September is lucky b/c I get three pays that month - so that is the boost for that month.

    October/November is just a budget squeeze. We have basically eliminated all variable expenses except for $900/month (700 is gas and groceries and 200 is for everything else).

    Our combined take home income is about $5,500 - so you're right it's about 50% of our take home pay going to debt repayment.

  8. I'm hoping this doesn't come off as mean, but more genuine question about how you are going to make this work. You've had plans in the past and it seems like you guys have consistent difficulty sticking to the plan/budget. I struggle with the same thing, so not looking to pick on you! That said, why do you think you'll be able to do it this time?


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