I hate finances.
Hate.
I hate paying bills, I hate spending money, I hate looking at my bank accounts, etc.
The last year has been especially stressful on the finance front. I was on bed rest and on disability until Jack was born, and that was a significant pay cut. After Jack was born, I not return to work outside of the home but instead started teaching piano and voice lessons from home, which is not super lucrative. Meanwhile, D has been working in the same job and while his boss agrees that he deserves a raise, the company "cannot afford" to give him one.
Meanwhile, we have a car with an awesome custom body job from hitting a deer 2 1/2 years ago that needs to be fixed (5-6 grand worth of repairs). We have credit card debt (not much, compared to the national average, but it's still there). We have a small student loan that we're making payments on. We have a car loan that we're making payments on for our Corolla. The car repair and our debt hangs over my head.
Add that to the normal expenses of rent, PGE, car insurance, food, phone/internet and gas.
And we live frugally - we don't go out to eat often and when we do we use coupons, when we buy clothes we buy them on super clearance, we don't take extravagant vacations, etc.
But, I still stress about getting out of debt and making ends meet.
While I've been reflecting on areas in my life that I want to change and improve, this is one area that begs to be improved, at least for the sake of my mental health.
One of my "resolutions" is to be credit card debt free by the end of 2013.
I feel like this is achievable. I would love to be entirely debt free, but that is an overwhelming goal and we simply don't have the income for it, at least not at this point. And, I personally don't think that the small student loan or the car loan are considered excessive or unnecessary debt.
But, credit card debt on the other hand? I think that carrying around that debt is unnecessary.
So, I am going to be sitting down and figuring out a serious action plan for how we can be credit card debt free by the end of 2013 for sure.
Which leads me to this question:
Have any of you gone though this paying-off-debt process? What tools helped you the most? Any apps or websites or charts? What do you suggest?
I COMPLETELY know how you feel. I HATE debt. Something we did together (Craig did it somewhat begrudgingly since it doesn't bother him quite as much as it does me) was sit down and make a list of all of our debts and put them in order from highest interest rate to lowest. I already had a solid monthly budget in place and we were actively working on getting a "month ahead" but I wanted more. Ps-A "month ahead" basically means that by the end of the month we had all what we needed for the following month ready to use on the 1st so we weren't living paycheck to paycheck anymore. THAT is an enormous weight lifted by itself.
ReplyDeleteBack to the debts...
With our monthly budget in front of us, we knew where we could trim things a bit here and there to be able to put a little more towards our debt each month. We kept the house a little cooler etc. so we could pay about $10 more than the minimum each month. When our pay got better, that $10 increased to $25 and so on. Today, I was able to pay off both of our credit cards (one had mine & Olivia's hospital stay on it-ouch) and my car. We only made this plan two years ago. Sophie was a tiny baby, we had $5000 in medical bills from Craig's big surgery, I was the only able to work and life was not easy. It was so not easy, we had to move in with family because I was only making $700 in a good month and that wouldn't cover the basics of a roof, fuel and food.
We do have a better income now than years previous but I know a few things helped us get all three "bad" debts taken care of today:
1- Paying our tithing FIRST. I think that's a pretty obvious one.
2- Prayer. You are trying to live the way He has had the prophets counsel you to live. You are doing your very best to follow and He WILL help you even if that help isn't exactly what you want right now. I wanted some magical envelope of money to show up but that wasn't what I needed and He knew it. Struggling and making me wait was good for me.
3- Dedicating an exact amount each month to paying them off. It was pretty easy to "cheat" a couple months before we made a chart with exact amounts. This way, I got the specified amount in my head as a "bill" rather than as a "oh, if we have anything left at the end of the month we'll pay more." This made a HUGE difference for us.
I hope this wasn't too much. I'm right there with you on this. Our next big obstacle is the student loans. My sweet husband wasn't taught much about finances growing up and his parents didn't help with school. Let's just say it's going to be a while until we're free from our $18k cloud. BUT I know that every month we're getting closer and checking a block off on our chart and seeing the final date get closer sure helps!
Thanks so much, Sarah, for all of your suggestions! We have been "a month ahead" until just recently (like, the last two months) when unexpected expenses seemed to pop up everywhere. But I'm working towards getting to that point again! I sat down last night and did some planning for how to get out of CC debt by the end of 2013 and it's totally doable (thanks to our tax return, honestly...). It feels so good to have a solid plan in place!
DeleteThese are some good blog posts on the topic:
ReplyDeletehttp://www.getrichslowly.org/blog/2006/09/28/in-praise-of-the-debt-snowball/
http://www.getrichslowly.org/blog/2008/01/24/debt-snowflake-placeholder/
http://www.getrichslowly.org/blog/2008/08/26/free-debt-snowball-spreadsheet/
I completely agree with Sarah. We were able to get out of credit card debt this past year and I wish we had a plan for it, but really, we just decided we wanted out. The BIGGEST contributor to this was the fact that we paid tithing. I know it. I am unable to work here, aside from my artwork. The piddly amount I bring in goes to U.S. account for things like credit card bills and storage fees. When money got really tight, due to immigration expenses, food, car repairs, and the fact that chicken costs 10 euros a kilo, we were always carried through by gifts from others or larger card orders. We used things like gifts and bonuses to put a substantial payment onto the debt. We're now trying to figure out how to get out of student loan debt so we can stop worrying. Good luck! I know you can do it. Pay your tithing and work diligently doing whatever you can to get out of debt and you will be blessed because of it.
ReplyDeleteBekka, I totally agree with you about paying tithing! In just the last 6 weeks, when I have stressed the most about paying tithing v. paying bills, I have seen SO MANY blessings poured out on us because we paid our tithing first. It's remarkable! The Lord truly does bless us when we put him first.
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