Day 3: Analyzing How It Went Wrong

As I've been writing the past few days, I've been trying to figure out where it all went wrong.

I still drive a 1994 Saturn that was probably paid off before I even got my first drivers license. My dad gave me his old car when I graduated from college. Before that, I had an old Grand Am, and before that a Dodge Dynasty. We bought a 2004 Chrysler Pacifica in 2007, which we are still paying off, and will be for the next three years. We pay every two weeks and refinanced last year to decrease our interest rate on the loan.

We bought a house that fell within our price range, based on our salaries three years ago. I've received raises since then, including a promotion. Our home owners insurance went up as the result of a claim for a flooded basement, and our property taxes went up because a school levy passed. Our monthly mortgage payment is still hovering around the same level as it was when we bought the house, but will go up when they reevaluate it this year.

I consolidated my student loans in 2005 to lock in a low interest rate. I took an additional disbursement after the consolidation though, so it has a variable interest rate, and I have a Perkins loan that I didn't include in the consolidation because I hoped to teach high school in an economically depressed area and hoped to have the loan amount forgiven. My career has gone a different route since that time and I don't believe it will go back that way. I found out today that the interest rate on my variable rate loan is supposed to go down again on July 1. I will probably consolidate again at that time, because I don't believe interest rates can go down much lower.

We do not use our credit cards wisely, obviously. We started out using them like you're supposed to; buying things and paying them off monthly before they could accrue any interest. Somehow though, they started spiraling out of control. We used them for a new couch and paid it off before any interest accrued, we did the same with some of our electronics on our Best Buy card, but then we used interest bearing credit cards to buy Christmas gifts, and a bed, and a vacation, and before we knew it, they were maxed out. We planned to use tax returns to pay these items off, but then the ac blew up, the basement flooded, our car got a flat tire and all of the tires needed to be replaced. It was sort of the "when it rains, it pours" phenomenon.

We're pretty much waiting for my car to blow up, and you can be sure that it will happen at the most inconvenient time. We spend a lot of money on things we don't "need"; premium cable package, cell phones, clothes for the kids, toys for the kids. We've already addressed that though, haven't we?

I have been trying to find ways to budget, but it seems like everything is a "need" to us these days. I went to pick up a few things tonight, just stuff for the week, and walked out with $50 of junk.

I just keep telling myself to keep swimming. One of these days, when we're debt free, I want to be able to go back to my husband and tell him, "Look what we did. Look how much we've paid off." Two nights ago, after writing my first entry that added up our all of our debt, I told him how much we currently owe. He said, "You can't do that. You can't include student loans, mortgage, and the car loan. Those don't count as debt."

It's all debt. And it all has to go.