I made a stupid decision this morning, or maybe not. I paid a collection account. I know the experts say not to pay collections, that in most instances they can be gotten out of, especially on a debt that is four years old; however, I really felt that I needed to pay the medical bills for when I had my daughter.
I didn’t even know that a new collection agency had the bills. They’ve been passed around a lot. When I first incurred them, I fought them because the hospital hadn’t processed our application for financial assistance, then I fought them because I simply didn’t have the money to pay them. We didn’t hear anything for years, and it wasn’t until this spring that we heard from another collection agency. I actually originally thought that the collections were from when I had my son, but upon further examination, realized that they were from 2006.
So, why did I pay them, knowing that conventional wisdom says that I could keep disputing the debts and having them passed around until the seven years that they wouldn’t be able to put them on my credit report anymore? Because I don’t want to fight them on a debt that I know is legitimate. I honestly thought I’d paid them in 2007. And, they discounted it to half of the outstanding balance.
I figured if I was going to pay off debts, paying off a medical bill that’s been haunting me for four years wouldn’t be a bad one to start with. At least I feel like that’s one albatross that is no longer hanging around my neck.
In our financial world, things kind of took a deep dive this weekend. I learned that my husband can’t be reigned in financially, and when he splurges, so do I. If I’m being honest with myself, I did need to two new pairs of shoes that I bought. Realistically, working in an office, I needed shoes that didn’t have holes in the soles. It was a financial expense that I had to incur. It hurt, but it needed to be done.
We bought our daughter a new bed this weekend. As I stated, she is four years old, and she was still sleeping in a crib. She was above the weight limit for the crib, and it’s actually recalled, so I knew I needed to get her a new one. I wish we would have had a way to get it home ourselves because we spent $40 on delivery. Hopefully when we return the recalled crib, we’ll get some money back to offset the expense.
We also bought birthday gifts for our daughter. I had planned to buy her one toy and some clothes. My husband went crazy and spent close to $130 on toys for her. I reminded him that Christmas is only three months away, but it didn’t matter.
So we completely undid all of the good we had done on paying off our debt in one weekend. Now we’re back to square one.
My mother, sister, and I are going to have a garage sale the first weekend of October, so hopefully I’ll make a little money and be able to put it directly towards credit card debt. First of the month, with winter clothes as we’re entering fall, and some homegoods that we no longer need… I think we’ll make decent money, at least. Last time I made $200 with one box of clothes. Hopefully I do at least that this time.
Monday, September 20, 2010
Friday, September 17, 2010
Day 97: Plugging Along
I haven’t had a lot to write about our debt payoff journey lately. As it stands, things are stagnant, but not, if that makes any sense.
I don’t have any big plans up my sleeve to eliminate half my debt overnight. I think we’ve made all of the big moves that we can, and now comes the time to follow through with our debt payoff plan. We just have to hammer away at it.
Effective my next paycheck, I will not be contributing to my 401(k). This is only a temporary bump, and I intend to start investing again in March when we receive our tax return. When we receive our tax return, we will be paying off three of our credit cards, eliminating nearly $300 a month in credit card payments. Once those three credit cards are paid off, our financial picture will look a lot brighter. I keep telling myself, “Six more months until we have some breathing room.” Not to say we’re going to go crazy with that breathing room, just that it will be a welcome change from our financial state for the past six months.
My husband is still a nonsmoker, for a month as of Wednesday, but he’s discouraged because we’re not seeing immediate financial returns on his quitting. I’ve tried explaining that we have benefited financially from it, because if it weren’t for him quitting, we’d be even further underwater with our bills than we are right now, but he wants to see positive growth in our savings account, not elimination of credit card spending.
I read financial articles every day, and see people complain that the economy isn’t getting any better and people are still broke. They blame the president, the banks, the realtors, but never seem to point the finger at themselves. It’s a bitter pill to swallow, knowing that we’ve lost $20,000 on our house in three years, knowing that we’re locked into a 6% interest rate, and we can’t get out of our home because we’ll never make back what we owe on it. But I don’t blame anybody else for our financial position except for myself. I don’t even blame my husband, because he told me three years ago that we should stay in an apartment and save money for a down payment, instead of putting nothing down on a house that we were only lukewarm on. Instead, I wanted out of an apartment, and here we sit.
I could blame the credit card companies for our outstanding financial debt load. They did, after all, increase our interest rates to 24%+ and convert our fixed cards to variable cards, but if we hadn’t used them irresponsibly in the first place, we wouldn’t have had as much debt for them to profit off of.
I could blame the student loan companies for not reigning in the amount of loans they were allowing me to take out, giving me more than three times tuition costs. I could blame the car company for selling us a lemon, or giving us a high interest loan…
You get the point.
But, it’s nobodies fault except ours. We’re the ones that got dollar signs in our eyes and thought we were made of money. The funny thing is, we’re not making anymore money than we were before. Our utilities are going up monthly. Our mortgage bill went up substantially, because of escrow. We’ve got a new, higher car payment, and a new higher insurance bill. And yet, we’re paying credit cards off. Funny how that can work, when you prioritize your spending, cut out fast food and cook at home, eliminate unnecessary shopping trips that you were only making for the sake of boredom. Looking at our financial picture, I am amazed how much money we were hemorrhaging.
Six months. It will only be six months until we have breathing room; until our credit cards aren’t maxed out, until we’re not scraping pennies just to make ends meet, until I can start sleeping at night without having nightmares of losing our home. Six months seems a long way off, but soon it will be Halloween, then Thanksgiving, and then Christmas.
Until then, I’ll just keep swimming.
I don’t have any big plans up my sleeve to eliminate half my debt overnight. I think we’ve made all of the big moves that we can, and now comes the time to follow through with our debt payoff plan. We just have to hammer away at it.
Effective my next paycheck, I will not be contributing to my 401(k). This is only a temporary bump, and I intend to start investing again in March when we receive our tax return. When we receive our tax return, we will be paying off three of our credit cards, eliminating nearly $300 a month in credit card payments. Once those three credit cards are paid off, our financial picture will look a lot brighter. I keep telling myself, “Six more months until we have some breathing room.” Not to say we’re going to go crazy with that breathing room, just that it will be a welcome change from our financial state for the past six months.
My husband is still a nonsmoker, for a month as of Wednesday, but he’s discouraged because we’re not seeing immediate financial returns on his quitting. I’ve tried explaining that we have benefited financially from it, because if it weren’t for him quitting, we’d be even further underwater with our bills than we are right now, but he wants to see positive growth in our savings account, not elimination of credit card spending.
I read financial articles every day, and see people complain that the economy isn’t getting any better and people are still broke. They blame the president, the banks, the realtors, but never seem to point the finger at themselves. It’s a bitter pill to swallow, knowing that we’ve lost $20,000 on our house in three years, knowing that we’re locked into a 6% interest rate, and we can’t get out of our home because we’ll never make back what we owe on it. But I don’t blame anybody else for our financial position except for myself. I don’t even blame my husband, because he told me three years ago that we should stay in an apartment and save money for a down payment, instead of putting nothing down on a house that we were only lukewarm on. Instead, I wanted out of an apartment, and here we sit.
I could blame the credit card companies for our outstanding financial debt load. They did, after all, increase our interest rates to 24%+ and convert our fixed cards to variable cards, but if we hadn’t used them irresponsibly in the first place, we wouldn’t have had as much debt for them to profit off of.
I could blame the student loan companies for not reigning in the amount of loans they were allowing me to take out, giving me more than three times tuition costs. I could blame the car company for selling us a lemon, or giving us a high interest loan…
You get the point.
But, it’s nobodies fault except ours. We’re the ones that got dollar signs in our eyes and thought we were made of money. The funny thing is, we’re not making anymore money than we were before. Our utilities are going up monthly. Our mortgage bill went up substantially, because of escrow. We’ve got a new, higher car payment, and a new higher insurance bill. And yet, we’re paying credit cards off. Funny how that can work, when you prioritize your spending, cut out fast food and cook at home, eliminate unnecessary shopping trips that you were only making for the sake of boredom. Looking at our financial picture, I am amazed how much money we were hemorrhaging.
Six months. It will only be six months until we have breathing room; until our credit cards aren’t maxed out, until we’re not scraping pennies just to make ends meet, until I can start sleeping at night without having nightmares of losing our home. Six months seems a long way off, but soon it will be Halloween, then Thanksgiving, and then Christmas.
Until then, I’ll just keep swimming.
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