Credit Card Debt Update

After finishing yesterday's post, we updated all of our spreadsheets and numbers to account for no more auto-debits to our emergency and gift funds which meant we freed up some monthly cash flow to go towards our credit card debt.  We also decided to put the $500/month towards our 'house fund' on hold until the debt was paid off - which freed up a lot more cash flow.

So - here's the updated debt pay off plan:

That's right.

June.

The last time I posted on this we were looking at November.  We've shaved off five months - great news!

When Jordan and I were talking on Monday evening, he admitted that he had been feeling like the money in all of our savings funds were 'off limits' - he felt like he had no say and no access to that money.  I on the other hand, feel freedom and safe when we have money tucked away - so that it's their if we need it.  We both actually want the same thing: flexibility - but have fundamental different ways of going up getting it.

From there we talked about our credit card debt a bit.  He mentioned that his card had a balance of about $850 on it - $300 of which were for repairs for the truck that he didn't want to use the credit card for (the joint one) and didn't feel good about talking about it.

He also has felt like he had to use his card as a buffer - even for normal day to day spending.  That said, he hasn't touched it except for a Valentines day gift for the house since we started our new spending plan - which we both feel a lot more comfortable with.

So, we have committed $300 from April's budget to go towards his credit card for the truck repairs.

We're also going to continue the conversation on our allowances and if we still need them.  Jordan feels strongly that if we didn't have an allowance, he wouldn't use his card and would even rather cancel it and just stick to the joint account.  I tuck my allowance away to help pay for clothes that aren't 'needs' and guilt free purchases for lunches with friends sometimes - but if we find a way to build that into our regular spending, then maybe we don't need them anymore.

Credit Card Pay Off Plan

Here go...round three?

(ding - ding - ding)

We currently owe just over $4,500 on our credit card..again.  Below are the months for the rest of the year and the debt pay offs that we're committed to each month.  Regular months, with four pays, will see $225 payment.  Months with five pays will see a payment of just under $800 and March sees the largest payment because on top of being a five pay month - we also received a payment from our shares at my work.

What's different this time?  If you missed it, go back a couple of days and check out The New Plan.  The biggest differentiating factor this time is that we actually won't be using the cards at the same time.

I'm not sure if I'll be able to continue to do my month spend tracking - but i'll give it a try using the debt card/tracking receipts a bit better.

Organized for the New Year

I hope you all had a fabulous Christmas/Holiday celebration with friends and family - I've enjoyed having a week off and am looking forward to another.  I spent some time this morning finalizing the transfer of all of our accounts to our new house and getting our 2012 budget confirmed.  Jordan and I, unless an unforeseen disaster strikes, will have our credit card totally paid off by the end of the year and we are both so looking forward to entering 2012 being consumer debt free (aside from the vehicle loan).

We have settled on the following as our monthly budget:

Our utilities won't be that high - but it was the average of the bills in the rental.  While our home was built with some upgrades in the windows and insulation and we also have six months free of our phone, internet and satellite tv services - we haven't received our first bill yet and just want to have a bit of wiggle room.

Our insurance has been a huge win, we had further discounts when we actually moved and so this payment includes both of our vehicles as well as the house.

I have increased our gas budget because our commute is a bit longer - we don't have a good gauge on what it will be, but if it's more - the overage in the utilities guess should cover it.

I'm not really concerned if we spend more or less in either booze or eating out/entertainment categories - as long as the three combined are equal to or less than $450/month.

We have started our allowances up again so that we have a bit of personal spending freedom.  It's so nice to be able to treat someone to lunch without having to check in with each other first.

The Joint House account is a planned spending account that includes everything from clothes, shoes, hair cuts, pets, annual expenses, vehicle and home maintenance as well as large household purchases.

The majority of the Joint Gifts account is for Christmas, but it is also intended to include birthday presents/housewarming gifts and that sort of thing too.

The Joint Emerg and RRSP accounts are pretty self explanatory - although last year we only put $100/month into each of these and we've increased it to $200/month for each of these categories.

Financially, I'm feeling a lot more positive as Jordan and I embark into the new year as a married couple in our own home.  I'm looking forward to staying positive in the rest of my life too!

Debt Update

As of today (Jordan's pay day) we have made our last large payment for the month of August towards our debt and have so far only used our credit cards for gas and groceries as we committed.  I know it's only been a week...maybe less, but I think it's a win!

I've made a couple of slight adjustments to 'the plan' - come on....it's me, of course I did.  Here is how we're shaping up for the next couple of months:

Jordan's dropping off the grant paperwork today, so I'm hopeful we'll have that $1,000 within the next week or two.

I'm keeping our tracking bar (top right) up to date as well, so if you're ever curious where we are at - that will give you a clear picture as to whether or not we're sticking to our plan.

'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.

Summary:

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

phew.

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

Credit Cards of Doom

That's right, I said credit cardssss... plural.

I've been hinting in a few posts lately that our credit card was creeping up with a higher and higher balance.  Now that we are finished making our last two largest purchases (flights to vegas and wedding bands) - I thought it was time to share where we are at and what our plan is to pay it off.

Okay - there it is, it's far less scary when I stop pretending that it's not there.

Jordan and I are both committed to doing everything we can to get this these paid off!  I hope that you'll see our dedication reflected in next months monthly spending re-cap.

It's time again...

A while back (perhaps a year and a half or so) when I was crawling out of the credit card debt hole, I made a decision to deplete my emergency fund to pay off my credit card.  I knew that If i didn't have a zero balance - it would be way to easy to justify small purchases - and keep the end balance high.

it's that time again.

On our way back to cow-town from my parents home town, Jordan's truck broke down.  I learnt that a 61km tow costs just under $300 - and that's after we got a 'deal'.  I also learnt that an alternator costs about $180.  Those little devils, plus the visa balance I wrote about last week, plus the gas for our vehicles and other fun times in my home town = a very nasty credit card bill.  

we've had to re-evaluate how we're going to pay it off.

My total visa balance is now about $2,080 - not everything has posted yet - but I believe that number is fairly accurate.  Well, it will be about that when Jordan buys the truck part today.  

I have already taken $575 from my account - this includes monies from my pay pal account, gift fund and a little from my e-fund.  That was part of my original plan to pay off my lower balance last week.  I have also already taken $500 from our joint chequing bills account.    I have transfered the money from my christmas and Efund, but it hasn't hit my main bank - it should later today or first thing tomorrow as I initiated the transfers last night.

Jordan is still intending on giving me at least $500 from his $1,000 grant that's coming his way - and that will go straight into the emergency pot.  I should also have about $350 from my next pay day (Friday) to put back as well.  

On an aside, I'm not longer sure that $1,000 is a good enough emergency fund.  Sure - it's gotten us out of this mess - but what if it was something bigger then the alternator - and what if it was 100km tow - not 61km.

Where the money's at

I feel tight, strapped in, restricted.

It's only been two and a half weeks since I was in crisis mode when my grandmother fell and broke her hip.  I had felt like things were going to be okay, but now I feel like stressed out again.

I think what has happened is that after wracking up almost $700 in one weekend on my credit card - the $450 I put on it the following pay day didn't feel like it made a big enough dent, but let me tell you it sure put me in a squeeze for the last two weeks.  So much so that I have been using my credit card far too much lately - so now I'm going to have to do another big payment (more then the $250 I had originally planned).

I was going to put up exactly what I've spent on my visa over the last while - but I don't think everything has posted yet.  I can tell you that I owe about $700.......*sigh.

New charges do include:

• Groceries
• About $80 over a couple of different shopping trips
• Cell phone bill (automatically charged)
• About $55 - some extra long distance here from when I was in BC
• Some Liquor
• Maybe $50
• Ancestry subscription
• About $30
• Best buy
• I had a $100 gift card which we used, but ended up spending an extra $100
• Ikea
• About $25
• Eating out a couple of times ($15 here, $20 there)
• Some charges from websites - to post roommate wanted ads
• Also I bought gas two days ago b/c i couldn't quite make it to pay day (today).

What does Gail always say - she says not one of those things seems very big, but put them all together and you've got $700 worth of STUFF.

Sigh.

Jessie, stop buying stuff.

I think my bi-weekly budget will look like this:

I did reduce my variable spending budget by $50 - but I don't want to cut it any further - because I'll use my visa again.

I think that when I owe something on my visa - I rationalize spending more.  It feels like it's easier to justify  "Well, I owe $400 on my visa already, what's another $25".  Further to that, I thought it would be better to just pay off my visa each pay day, rather then taking from my emergency fund when we had our family emergency.  I now think that that was a mistake, because it set me up to spend more money.  If I had just paid it off, then committed to replenishing my E-fund - I bet I wouldn't have spent another $450 bucks.

Lesson Learnt.

Interest Reversal

Too funny.

I put so much $$ towards paying off my credit card, that my bank over charged me in interest.

They now owe me $1.02

How strange is that?!

I am credit card debt free!

...that's right, I am finallly

credit card debt free!

wow.

I'm not sure I believed this day would actually come! I feel like in some way or another I have owed money on my credit card for the last five years or so. I've come very close to paying it off a few times, and then promptly plummeted right back into debt. I even cashed out a few RRSP's a couple years ago to try to pay it off.

My CC debt has never felt insurmountable, and has always felt insurmountable all at the same time. At it's worst it always ranged from $3,500 - $5000. I think that the relatively small sum made me feel even worse that I couldn't get it paid off. I would often wind up criticizing myself because, come on?! What's wrong with me?! Why don't you just do it!

I could blame the length of time on any number of factors, but I'm not going to go down that route. Instead, I'll tell you what I did that worked.

1. I had to make the decision that eliminating this debt was important to me!

It had to be more important then a haircut (which I haven't had in probably a year and a half), more important then new shoes, new work clothes, or a new couch (to name a few).

2. I put myself on a budget, and stuck to it.

I used Gail Vaz-Oxlade's 'magic jars' to get me on track. Living on cash really worked for me, although at first made me very uncomfortable. I had only to remind myself of point number one before I got over it. I put $250/bi-weekly towards my credit card debt while continue to save in my RRSP's and emergency fund.

3. I built a $1000 emergency fund

Once my credit card debt was in reach, I used the majority of that emergency fund to pay of my debt. I was wayy over my head with it, and truly needed it to be gone. It was my emergency! I am now working to build that fund back up.

4. I cut up my credit card!

I tried leaving it at home, leaving it with Jordan - I even wrapped it in paper with awful messages to myself reminding me that I wanted my credit card debt paid off. The only thing that got me to break the habit of using it, was to remove it from the equation. I had used my emergency fund to pay off this debt, and the only way to not regret that decision was to cut it up the card.

Not using the credit card finally enabled me to be able to have my debt repayments do their job and - repay that debt!

Thank you for following me through this first step towards financial freedom. Going forward in the short term I plan to get my emergency fund back up to at least $1000 and have a debt free Christmas. Come January I plan to focus on eliminating my student loan debt. I look forward to continuing this journey with all of you.

Credit Card Debt Repayment - Update

WOW! I'm so pumped, it's rediculous.

Only one more pay period and I'll be credit card debt free!!! Just two more little itty bitty payments (okay not so little, but STILL!!). I feel like a little kid, so excited!

I will be credit card debt free in 10 days!

New Credit Card

As some of you folks know, I recently cut up my credit card so as not to be tempted to use it while I was clearing up that pile of debt. Due to the general day to day need to have a credit card, and the want to keep my credit history that is associated with that card active - I've decided which card to use going forward.

Thanks to everyone who left some tips/advise on which cards you use.

I've decided to go with the CIBC Dividend Card (visa). There's a couple reasons I went with that guy.

1. I needed to stay with a card that CIBC offers to be able to switch my current card and the new one while maintaining my credit history.
2. It's rewards were the most attractive to my lifestyle

So what's the deal?

- No annual fee

- Interest rate is 19.5%

- Earn up to 1% cash back

"on net purchases you make with your card. Your rebates will be accumulated and the money saved will be credited to your card account, when the December statement is issued."

- You earn 0.25% on the first $1,500 spent, then you earn 0.50% on the next $1,500 you spend, then you earn 1.00% after that.

Apparently I also receive these benefits:

• 
  
• $100,000 Common Carrier Accident Insurance5
• AVIS car rental discounts up to 20% on at participating locations6
• Free personalized CIBC Convenience Cheques7
• Guaranteed hotel reservations
• Cash advances of up to $1,000 a day8
• Emergency card replacement
• Worldwide VISA acceptance when at over 24 million locations
• 24/7 roadside assistance in Canada or the mainland U.S. with no upfront fees and a market rate guarantee with Driver Assist9

I'll look into all the little explanations for each of those, but I highly doubt I would take advantage of any of it.

The card will come sometime in the next two weeks, and the pin and access information will come the week after. So, in theory, I won't receive it until after everything is cleared up.

16 more days until I am credit card debt free

Credit Card Debt Repayment Update

Hizzah! Jordan gave me the $100 for his brother's birthday present a few other small things, and it has been put towards my visa.

Current owing is now$951.00

18 days until I am credit card debt free!!

What credit card do you use?

I've been thinking that sometime in a couple of months, I will consider getting a new credit card. I would like to have it for the odd time where you need credit to rent a car, or hotel room or other such thing. I also realized (today) that I need a credit card to get my credit score online which I like to do once a year or so.

I'm wondering if I should look for one with low interest, no annual fee, points, cash back, bonus', reward miles... ect.

I think that a non-negotiable woudl be no annual fee. If I don't plan on ever carrying a balance, EVER AGAIN, then the interest rate doesn't really matter. So that leads me to cash back/points/reward miles ect...

I'm wondering how people in the pf word have chosen which credit product they use?

Any tips?

Final - Project Overtime Update

As I'm sure a lot of you know (I'll just pretend that I lot of people read this), I've been working to put a lot of overtime in at work.

My original goal was to have 75 hours banked by August 7, 2009. I came pretty darn close. I requested a 30 hour payout on July 24, 2009; and I have requested a payout of 21.75 hours for my next pay period. I was able to bank a total of 51.75 hours in about a months time. That's pretty great I'd say. It helped me put (or will when I get paid out for the second portion) upwards of $600 towards my credit card debt.

Any overtime that I complete now would not be paid out during the next four weeks which is past my debt repayment goal.

That said, I do have some more OT on the horizen.

I was approved for another week or so of OT within my group (I'm thinking maybe 1o - 15 hours tops), and there may be another group that needs some administrative help after hours as well.

This was a fantastic way to move my debt repayment schedule ahead, and I would reccomend it for anyone who is in a position to do so.

Good-Bye Credit Card

In efforts to stick to the magic jars and pay off my credit card, while avoiding another epic jar fail, I've decided to actually cut up my credit card. This is a big deal for me.

My credit card is my crutch, it's my emergency fund, my I want it fund, it's my I didn't budget for enough groceries and I'm hungry fund. My credit card, is the only thing holding me back from being super happy with my finances.

I am not willing to let it and my constant use of it to control me, my finances, and my state of happy any more.

So, bye - bye credit card.

I actually cut it up on Friday so that I couldn't use it at all this weekend. I feel, well, I'd love to say that I feel good about it. At this point I'm sort of neutral. We'lll see if this helps stick to the plan.

Credit Card Debt Repayment - Update

Here is an update to my credit card debt repayment progress. My original plan was posted here. It has gone through some significant morphing; however, I am still on track to have that card paid off completely by the first week of September.

Wow, that's only 4 weeks away.

PAYDAY

Oh, how I love pay day!

All (or just about all) of my automatic transactions have already taken place.

MY VISA DEBT IS NOW A MERE $940!!!!

That's over 70% of the way to my goal!!!

Okay, that felt good.

I've updated all of my tracking bars, as well as my NetworthIQ badge.

{edit}

Jordan and I are heading to my hometown this weekend, right after work today - See you all on Monday!!

Credit Card Debt Repayment

:D I just got my paystub for tomorrow's pay. I've got enought $$ from my OT to put an additional $300 towards my visa (as promised). So as of 12:01am tonight, or rather tomorrow morning - I will owe about $940 on my credit card! 8 weeks after that the debt WILL BE GONE!

On top of that, my grandma gave me a little $$ for my birthday. What that means is I have $150 for my jars for July 24th to August 6th and $150 for August 7th to August 20th. Plus, after next pay period I should have $150 left over to cover any additional horse-related costs. So Yay Me! I do have 10 hours banked, and I'll probably be able to put in an additional 10 next week that I can request to be paid out the following week. I'm happy this morning!

My Mantra for the next few weeks: do not use your credit card, do not use your credit card, do not use your credit card....there, hopefully that helps.

Credit Card Debt Repayment

So, I reallllly enjoyed my camping trip!! I even had some great conversations about money!

I talked to Jordan about some ideas that came up while camping - and I have decided (with his support) to use my emergency fund to help pay off my Visa once and for all. Jordans income could cover all the bills if I were to lose my job (with nooo wiggle room) - and we have over $3000 in our house fund. So IF IF IF I were to lose my job, he said we could use the house fund temporarily.


I know, I know - I NEED an emergency fund. Yes, thats true. However; I think whats most important right now is getting rid of this credit card debt. I beleive I am experiencing debt fatigue.... I have had this stupid credit card debt that waivers between $2000 and $3000 for the last several years... and I am so tired of feeling sick and sad over it. After 5 birthdays this month and 3 camping trips - I managed to get it up over $2700!!! How did I do that!.... so Stupid!


Heres what I am going to do:

The items highlighted in green have already happened. Due to my horse moving to Calgary! Yes she will be moving on August 4, 2009 (and might be pregnant, but thats for another post). Ill need about $150 from my emerg fund to cover a few things, so $850 of that will go on my credit card. I have 30 extra hours coming to me this week which should be about $300. I will be banking another ten hours this week and next week that I will request to be paid out probably on August 21, 2009 if not sooner. Which may shorten this time frame.

So - thats the plan (again... another plan).

Once the E-fund comes through (online transfer ING to CIBC) I will cut up my credit card.

I will!