Christmas, the Budget Buster

Oh.My.Gosh.

How on earth did this happen?

We planned to spend $200 per child on gifts, plus stocking stuffers, and hoped to come in at about $500 total for their Christmas gifts.

But we have no self control.
No legitimate budget.
No concept of how much we're spending.
No restraint.
Nobody to reign in our spending habits.

My husband made me sit down and write a list of everything I bought for the kids and how much it cost, so he knew how much money he had to play with. As I wrote it down, and my daughters list covered the entire front of a sheet of notebook paper, plus some of the back, I realized we had a problem. A huge problem. A $700 problem.

That is right. My five year old is receiving $700 in gifts for Christmas, including all new bedding for her room, a Nintendo 3DS with three games, and a whole lot of Lalaloopsy dolls (Misty Mysterious, Marina Anchors, Rosy Bumps & Bruises, Suzette La Sweet, Silly Hair Jewel, and approximately 10 mini's). There is more, but I can't remember it all. In comparison, my son had very little, so my husband went crazy buying him stuff this weekend.

That does not include items I plan to make them (tee pee's, pillows, my daughters dress up costume).

I added up our current credit card totals. We put $3000 on credit cards this month.

We have not bought for the adults in our family yet. And I don't know if I'm supposed to be buying for nieces and nephews.

And suddenly I feel like my throat is closing up and I'm getting panicky because I know I have a serious shopping problem.

I vented about this problem to some of my friends, and ultimately felt like I was being attacked back. I had already acknowledged that I had a problem, and I felt like they were just piling on.

Anyway, I told John that going forward, we're going to have to limit it. I'm going to start a Christmas club after the first of the year and we are NOT spending anymore than we save for Christmas next year.

I had been feeling so excited because we were going to have credit card bills paid off once we got my bonus and tax return at the first of the year, but now my bonus is paying for Christmas and we're going to owe on taxes, so now I just feel completely overwhelmed. I'm thinking about getting a part time job, just to pay down credit card debt.

And on that note, here's what our debt looks like as we end November.

This Whole "Occupy Wall Street" Thing

I have been hearing the words "Occupy Wall Street" for the past month or so, but I haven't really paid much attention to it. I know I should; as a hard working, responsible American, I should be paying attention to what these people are doing. I came across this article and the accompanying comments tonight. The comments really, really pissed me off.

First off, according to this calculator, our family is at the 70% mark based on our gross income. That means we're better off than 70% of the people in this great country of ours.

I don't feel like it.

My husband and I both work forty hours a week. I have all of our bills budgeted out, week by week, through the end of 2012. Once we pay our fixed bills, we still don't have enough to pay for food and gas, let alone pay for anything extra. Sure, we could probably cut some non-necessities like cable and cell phones, but we don't have a home phone and cable is pretty much our only form of entertainment. We don't go out and do anything. By time we pay our mortgage, utilities, student loans, car loans, insurance, and minimum payments on credit cards...

Anyway, I was reading the comments on the link above and all of these people with a lot of money were deriding people that don't make more money because they're clearly not working hard enough. A lot of my family makes significantly less than I do, even less than my husband does. It actually seems to me that the less people make, the harder they work. They work hard physically. They work long hours, some of them at multiple jobs, just to make ends meet. It's not about not working hard, its about not having opportunities beyond retail and fast food. It's hard to get out of a rut of once you get in a line of work. It's hard to get promoted without experience, and you can't get experience without the opportunity.

The 1% say "Go out and get a college degree to succeed. Take out loans to do it."

NO!

Students are basically indentured students to financial institutions after finishing college. I was a 3.94 student, top of my class, high SAT scores in high school. My family was also dirt poor. Do you know what that got me in the way of financial aid? $50,000+ in student loans. I will be paying off student loans until my kids are in college. I would love to go back and get my Masters degree, because my manager and previous AVP have both said that I need to get it if I want to go any further in the company. So basically, to spend another $50-$100k to get a degree to make another $10k in salary a year.

I was lucky to land a job after college. I ended up with my current company through a temp agency, and I have been fortunate to get promoted three times since then. I know three people that have been laid off from different companies in the past month; two of them in healthcare, which was supposed to be the untouchable industry.

College is supposed to provide people with an education to give them a better opportunity. Instead, colleges have become money making institutions that constantly raise tuition ceilings so they can require more money out of students for less education. Many companies won't hire individuals without a college education. Given that I will be paying my college education off until my kids are in college, there isn't really any money for me to save for my kids college educations so they will follow the same vicious cycle.

There is no way for people in the middle class to get ahead. There is certainly no way for people in the lower class to get ahead. While a select few may get a lucky break and find some way to make it, most will not.

It makes me angry to see people say "Just work hard and you'll be rich too." If it was that easy, then there wouldn't be a 1%. There wouldn't be the disparity between the rich and the poor. Most of these people say they started with nothing. I sincerely doubt many of them really know what it is to "start with nothing."

No Counting, Just Trying

I can't keep counting the days that we've been paying off debt when we realistically have not been paying off debt during much of that time. I haven't written lately because I feel like a big, fat failure. We've only added to our debt.

I think last time I wrote, we were getting or had just gotten a consolidation loan to pay off some of our credit cards, or maybe I hadn't even done that yet. Anyway, we consolidated a ton of our debt and promptly went out and ran up those cards all over again. As much as I talk about wanting to pay off debt, I can't stop spending money. And then I blame it on my husband. Looking at our expenditures, it's mostly me. It's my random trips to Kohl's, my daily lunches with coworkers, buying toys for the kids just to buy for them. I like to spend money because I work hard for it and feel like I deserve it.

But, we're no better off now than we were before. We're treading water. We make minimum payments on credit cards and then use those cards to pay for the things that we need and want, so every month our bills are staying at exactly the same level.

We made the decision last week that we were going to use our savings account to pay off credit card debt. Clearly, it's not going to cover all of it because we have so much debt and so little money, but we're paying off our Target credit card, our Kohl's card (which we used to buy a new vacuum when our old one burned up last week), and the bulk of the balance on one of our credit union cards. Basically, it puts us back to where we were when we consolidated our debt in the first place.

We will mostly tread water through the end of the year, trying to save enough money to pay for Christmas and limiting what we purchase this year, and then when we get our bonuses and tax return after the first of the year, we'll pay another large chunk of our debt. Then finally, next summer, we'll use all of the savings we've accumulated to pay off the remainder of our credit card debt. It will leave us with two car loans, my student loans, and our mortgage, but we won't have revolving debt anymore.

This also means I'm taking my lunch four days a week and limiting my lunch excursions to Friday's. We're trying to eat out less as a family too, for our health and our wallets. I got a raise last month, which my husband doesn't know. It only added $40 a paycheck, but that's a tank of gas for my car. I should get another raise after the first of the year.

I never expected this to be so hard. I didn't expect it to be so much work. Hopefully by next summer, I'll be reporting how we're in such a better place than we are right now. I want to save for our retirement, and I'd like to buy a bigger house, but how are we supposed to do that when we can't even discipline ourselves right now?

Day 374: More than a year, and no closer to being paid off

I have read a lot of doom and gloom articles online lately. How can you not, though, given the current economic situation. But more important than the articles themselves are the comments that follow them. They truly paint a picture of the American psychie, or do they?

Last week, I read an article about how the personal savings rate should be 16-20%. Although it did not state whether that was 16-20% of gross or net pay, I don't think it was really relavent. My initial thought was "How on earth is anybody supposed to save 16-20% of their pay??" And then, I looked at my own personal finances. I currently throw $200 a paycheck into my savings account, and another $25 per pay into each of my children's savings accounts. There is very little return on investment right now, but I am not confident enough in our economy to save money any other way. After combining mine and my husband's salaries, I discovered that I am currently saving about 15% of my gross income and about 9% of our combined gross income. That doesn't sound like much, in comparison to the recommended 16% savings rate but, there are weeks that we have extra money after paying bills. I leave $100 in our checking account to spend for the week and throw the rest into a savings account. I do this on two different bank accounts. By the end of the year, I will have saved approximately 11% of our gross income, based on current projections and IF we face no emergencies that require withdrawal from those accounts.

Based on last years tax return and my current withholdings, I estimate we will receive a $2000-$2500 tax return this year. It is considerably less than the $4000 we received last year, but that's because the other half of that money is already being put into savings. This is the first year I have claimed more than zero exemptions, but I kept reading about how I should get that money now and not let the federal government have it for free, so I did what was suggested. Next year, I'll bump it up and hopefully break even.

Once we pay off some of our credit cards, loans, etc, we will have eliminated about $500 in expenditures, half of which can go into savings as well.

In taking steps to consolidate our debt, I applied for a consolidation loan. I didn't originally plan to, I just contacted my credit union to find out the terms of the consolidation loan, but when they gave me a call to discuss the terms of the loan, they pulled up my account and filled out the application. I was approved immediately, and within two hours, had the money deposited into my account for me to distribute as needed. I paid off one credit card, a loan, and the majority of a second credit card. That second credit card will be paid off this month as well.

I went back and forth on the consolidation loan, because there is an early pre-payment fee that if it is paid off in less than 2.5 years, I am charged a $50 fee. I did a quick look at how much I was paying in interest on these cards and loans, and determined that it was well worth it, even with a $50 prepayment fee. We will likely pay a chunk of the loan off with my bonus next year, and continue to make monthly payments before and after that time. If I ever get the raise that I am expecting (hoping for), it will help significantly.

I also decided on the consolidation loan because I have learned that if we have a zero balance on a credit card, we are a lot less likely to use it. Something about putting a balance on a card that was previously paid off just bothers me psychologically, but if there is a balance, I know I'm making a payment on that card anyway, so I am more inclined to use it for random spending. At least with the consolidation loan, I will not be able to amass any more debt on it. There is a fixed amount that I will be paying on for a predetermined amount of time and once it's paid off, it's paid off.

Another fun thing that I learned, that has bolstered my confidence a little, is that we have finally reached a point financially where we're not spending more than we're making. I know it seems a little backwards to be putting money into savings when we were using credit cards to meet basic financial needs, but I felt like (and still do) that if either of us were to lose our jobs, I would rather have money in the bank than a paid off credit card. I can negotiate with a lender, but if I have a $0 balance credit card and no income, it won't be long before access to my card is shut off. So I have been using my lowest interest credit card to pay for basic necessities, like gas and groceries, and then making the same $250 payment every month.

That said, here is a picture of my current debt totals for June.

Day 354: May Totals and Random Updates

I believe when we last left off, I had recently had an interview and was waiting for word as to whether I would get a promotion to a new position, or whether my job audit would net me a promotion in my current role.

I'm sad to say that neither happened. The job I had interviewed for decided that I did not have enough experience, which I guess I can see since everybody else they interviewed was a business analyst and I am just in sales support. It doesn't make it any less disappointing though. HR responded to my job audit by stating that, although I'm doing more work than required for my position, the extra work that I'm doing is not required for my current position and is simply an added benefit that I bring to the job, so they told my manager that my job could not be reclassified.

So I got no more money. However, after three years, my husband finally got a $0.75 an hour raise. I personally feel it should have been more, given that they haven't given raises in three years, but I'm glad he got something. His company has now started offering a retirement plan too, so we will be filling out the paperwork to start contributions to that as well. It will be a hit to our take home pay, but I'll be glad that he's saving something for retirement. I will likely start contributing again after the first of the year, possibly with my merit raise next year.

While it's disappointing that my current department gave me nothing for my efforts, my manager did say that she could give me a merit raise at my midyear review, and another one next spring. I'm anxious to see what kind of increase I get at midyear.

My student loan payment is going to go up $10 a month after my August payment, as part of my graduated repayment plan.

I have noticed that several readers have ended up on my blog for searching the term "What is a grandfathered repayment plan." From what I understand, there was a revision in the student loan terms, both pertaining to interest rates and payment terms for student loans. I believe this was in 2006, but don't hold me to it. At the time, it seemed like a great idea, because it made all student loans fixed rate, instead of variable, and was locked in at the "low" interest rate of 6.some-odd percent. As we all know, when the economy tanked, this "low rate" was no longer a low rate, but I guess that's how things work. From comparing my payments on my current (grandfathered) repayment plan and the new repayment plans, it appears that the new plans have smaller incremental increases on the graduated plan, but the loan is stretched out for a longer period of time. I believe when I signed my loan paperwork, the longest a loan could be repaid on was 20 years. Now it is 25. Similarly, extended repayment plans can last for 25 years, instead of 20.

I think this is kind of a catch 22 for consumers. When I began repayment on my loans about five years ago, I only had 20 years to pay them off. Yes, my payments are going to increase every two years so I will be paying larger payments towards the end of my repayment period, but I only have 15 more years of paying on them. I have been considering consolidating my loans that were not included in the initial consolidation so all of my loans will be locked in at the same rate, however I believe that this resets my payments to another 25 years (unless I make additional payments on the principal) and I end up paying more interest in the long run. Do I consolidate an lock in the 2.something interest rates on my currently variable loans, or do I leave the two separate and pay them off in 15 years?

If I were making any headway on our debt payment plan, I would leave them as is. My student loans would be paid off in less than 10 years, and if my interest rate on the variable loan skyrocketed, it is legitimately small enough that I could pay it off with a tax return or bonus. But I also know that we always have those returns and bonus's spent before they're even deposited. I hate making grown up decisions.

I actually think I'm becoming a little too obsessive about money, bills, debt and the like. I already have a whole payment plan mapped out for our bills for 2012, and we're not even half way through 2011 yet. I mapped out all of the bills we have to pay, based payments on our current salaries (assuming no increase in salary), assuming no decrease in our mortgage (which we should see because of our decreased homeowners insurance premium), and assuming we continue paying the same monthly payments on credit cards, even as the balances and minimum payments decrease.

And you know what? We have a lot of extra money left after paying bills. Now, it doesn't take into account groceries or gas or any other necessities, but I know approximately how much we spend on these items in a given week or month, and they can fluctuate based on what disposable income we have left after paying bills, but I have to say that unless something catastrophic happens (*knock on wood*), 2012 should be a great year for us financially.

We have 22 weeks where we will have more than $150 after paying bills, 7 of which we will have more than $200, 4 of which we'll have more than $300, and 2 of which we'll have more than $400.

I hope that it actually comes to fruition. That is a lot of extra money to pay towards credit cards. On my spreadsheet, I assumed $200 in spending money (for gas, groceries, and miscellaneous spending) and for weeks with more than $200, I will put everything over $200 in our savings account.

Like I said, I'm a little obsessed about it, and a little crazy for devoting so much time for it, but I think seeing it in black and white helps keep me on track for paying things off in a timely fashion. If I can see where the progress is being made, I'm more likely to stick with it.

Ok, so that's enough rambling I guess. Now I will leave you with pictures of our May debt. This does NOT take into account the money we spent on vacation, as it was not accumulated until June.

As you can see, there wasn't much change in the overall composition of the debt, or the amount of debt paid off.

Day 311: April Debt Totals and Just Waiting

I'm at a loss. I don't know how to decrease our debt level when we're having a hard time meeting our monthly obligations. We pay down credit cards, or pay them off by the end of the month, but then the next month we don't have enough money to pay for gas, or food, and it has to go on our credit cards. One of the credit cards I paid off last month with our tax return now has an almost $800 balance. I was going to pay it off before the payment due date, but then realized that I did not account for our water bill in my budget this month, so there goes that plan. As gas prices continue to increase, our ability to pay off our debt is going to be dramatically impacted. They are predicting that $4.00 a gallon gas will come to our town this weekend based on the $111 a barrel oil. It's very disheartening that the harder we try to get ahead, the more it seems like something is trying to keep us down. We've already seen our grocery bill nearly double in the past year, and that's buying the same items we were buying before.

On a more positive note, I switched insurance companies. I have been with State Farm since I first started driving 15 years ago. I've always had auto insurance with them, and then renters insurance when I had my own place, and more recently, homeowners insurance. They've usually been pretty good to us, so I never had a reason to shop elsewhere. Well, last January we had to file a claim because the county flooded our basement. Six months prior to that, we had filed a claim on a busted ac/furnace unit, thinking the whole thing would have to be replaced to the tune of $5000. They repaired it, instead of replacing it, so our claim was for a measly $800, so it wasn't even worth it. Anyway, last year, on renewal, State Farm raised our homeowners premium nearly $100 because of our claims history. Two months ago, we received notice that they were increasing our deductible from $500 to 1% of our replacement value, which was nearly triple the deductible we already had on record. I called our agents office, furious, asking how much the deductible was going to be and advising that we would be shopping our insurance elsewhere. They told me they would see if they could decrease our deductible to $1000 and that the reduced coverage would mean lower premium. Wrong. When we received our renewal invoice, our premium went up nearly 25%. So, I started shopping my insurance.

In the interest of full disclosure, I work for Nationwide insurance. I have worked here for nearly 5.5 years, but never switched from State Farm because I liked the way I had been treated by them and the last time I was quoted with Nationwide, they were nearly double State Farms rates. Upon receiving our renewal notice, I called Nationwide. The result? Our homeowners premium is down $105 over 2010 premium (down nearly $250 from what we would have been paying with State Farm). Our auto insurance? Down about $20 a month, so almost $250 for the year. By switching to Nationwide, we saved almost $500 in premium this year. I guess the commercials don't lie.

They will reassess our mortgage payments in July. Hopefully by then, the County Auditor will have reassessed our property value for tax purposes as well, and we should definitely see a decrease in property taxes due to the reduced value of our home. I sent in the paperwork this year to have them reassess, after seeing a more than 30% decrease in property value. The house next door to ours is currently on the market for $35,000 (foreclosure) and has been for several months with no sale. I've finally just stopped looking at house values in our neighborhood because it's too depressing. I'm pretty convinced we're never going to be able to move.

We did decide to take a vacation this year. I booked the room a few weeks ago and got it for 15% off the lowest advertised price, plus they waived the resort fee and parking fees. After dividing the cost with my sister and mom, who are going along and sharing the condo with us, it worked out to less than $1000 for the week for the hotel room. We should have the entire cost of the room paid off before we leave for vacation. We're trying to have a garage sale before we go, but it got rained out last time.

I interviewed earlier this week for a higher paying job. Upon learning that I was interviewing, my supervisor at my current job approached me and told me that she knew I was doing more than required by my job description, so she wanted to perform a job audit to try and get me a promotion and a raise. I should know if I get a second interview by the end of the week (or possibly Monday), and I don't know how long it's going to take to hear back on the job audit, so right now I'm on pins and needles waiting to see if I will get another raise, this time in the way of a promotion.

Anyway, I promised our current debt totals, so here they are. As you can see, we did increase in credit card debt. Our credit cards now compose 9% of our overall debt load, as opposed to 8% in both February and March. I'm hoping that interest rates stay low until they determine the new student loan interest rates next month (I think it's next month), that way I can reconsolidate and reduce my payments further.

Day 277: To Vacation or Not to Vacation

I haven't really had much to write regarding our debt pay off journey lately. Since making a large, lump sum payment on my rewards card and doing a balance transfer from my high interest cards to the rewards card, we've pretty much been on auto pilot. I will see a raise on my first pay in April, and my husband's employer recently told him that they are actually planning on issuing raises this year, after stagnant wages for the past three years. My husband is also receiving a bonus on his second paycheck of every month, based on performance, so we actually have more money coming in.

However, for every positive movement in our finances, there is a negative. We received notice from our insurance company that they are nearly tripling our deductible and they are increasing our annual premium between 20-25%. I am currently shopping our insurance to other companies to see if we can get better coverage or better rates, or possibly both. I'm hoping, since I work for an insurance company, that my employer will be able to provide me a better rate than what I've got now.

Also on the home front, I am submitting a request to our county tax auditor for them to re-evaluate our taxes for 2010, so I can hopefully reduce our annual payment on that. If our home value is going to decrease over 20%, I would like to see a similar change in our taxes. I need to take the paperwork and have it notarized today so I can put it in the mail this afternoon It has to be postmarked by 3/31.

The biggest possible hindrance to our financial goals is our desire to go on vacation this year. We're discussing a week long vacation at the end of May, which will likely cost us in the ball park of $1500-$2000 for the week. We hadn't really been planning on it up to this point, however I think that my husband and I are both at the point that we feel like we need a vacation. We probably don't need a $2000 vacation, but we do need to get away from here for a little bit and take a break from work. I am trying to plan ahead for the added expense and pay off as much of our credit cards as possible before we go, so I don't feel like it's as much of a setback.

Anyway, we are just chugging along. I will update later this month with our revised debt standing.

260: Fired Up

I am so angry this morning.

I have banked with Kemba Financial Credit Union for seven years or so. I have always sang their praises, extolled their virtues, and recommended them to my friends. They have the highest interest rates of any local credit union, they've been easy to work with, when issues have cropped up with my account they've resolved them quickly. I have two checking accounts, two savings accounts, an IRA, a credit card, a car loan, and a CD with them, as well as having a savings account for each of my children.

I have never paid a fee with them, except when I overdrew my account.

Until this morning.

I woke up to find that they have implemented a new program called Kemba Advantage. It's great if you qualify, but apparently they now charge a "Kemba Advantage Fee" if you don't. I honestly never considered that I wouldn't qualify. Between the four accounts, I deposit close to $2000 a month into my accounts, and charge $300-$400 a month on my credit card. I don't use my checking account much, except to pay bills, but many of my credit card payments are drawn from that account.

The qualifications for Kemba Advantage are that you deposit your paycheck (at least $1000 a month), receive estatements, and have 15 transactions per month. In order to avoid a fee, you must meet these qualifications, or have an average daily balance of $500 in your checking account.

I had 13 transactions this month. So they took $14; $6.95 per checking account.

I'm ready to pull all of my money, close my accounts, pay off my credit cards, and transfer my car loan to our other credit union. I'm pissed. We don't have "a lot" of money invested, but it is growing on a biweekly basis.

I was so excited to do a balance transfer to my Kemba credit card and be done with my Best Buy and Target card. Now I've paid over $5000 on a credit card that I want to pay and close, leaving me with a high interest credit card instead.

I'm so angry.

I e-mailed their customer service and demanded the fee back. If I don't receive it back on BOTH accounts, I will be closing all accounts. Our other credit union doesn't charge fees. They don't pay as much in interest, but online banks do. Online banks pay more.

This is not how good companies keep good customers.

Day 258: Yay for Tax Returns

I didn't realize it's been nearly two months since I've updated, but that just means that todays update is even better than usual.

We got our tax return on Friday. We also got my bonus on Thursday. Our state return will be here on Tuesday, and my second bonus will be here in two weeks. My husband's employer has started paying monthly performance based bonuses, which means an average of an extra $100 a month, and I will find out on Tuesday what my raise will be for this year. It is a very happy time in our household, even though we have nothing fun or exciting planned for this money. Well, I guess it depends on your definition of fun and exciting.

Friday, I dropped our entire tax return and my bonus onto my credit card with our Credit Union. It cut the balance in half. Why would I do this, you may ask, when our Target card has more than double the interest rate. Well, my credit union is currently offering 2% cash back on balance transfers. Now that I've paid down half of the balance on that card, my credit union will be initiating a balance transfer on the two credit cards that we will be paying off. In addition to paying off two credit cards, I will be getting $100 cash back, deposited into a high interest (10% +) savings account.

In addition to eliminating a quarter of our credit card debt, my husband and I finally sat down and had a conversation about our financial goals. This is the first time I feel like we are working together, instead of against each other.

I decided to create a pie chart of our current debt so that we have a visual representation of the distribution of our debt. I based it off of the chart I've been using since last June to keep track of our debt amount.

I think it might be good for both my husband and I to be able to visually see our debt decrease. When we start accumulating savings, I'll add that too, so we can see our debt decrease and our savings increase.

I actually feel good about where we're headed, and I feel positive about the future.

Day 213: Optimistic

I’m beginning to feel genuinely positive about our finances for the first time in a long time. It’s too soon to be throwing a party or declaring victory, but I am finally seeing the potential for improvement over the next six months. The first step I’ll be making is paying $600 towards my Best Buy card this week. That will pay off one of our purchases that was no interest for 18 months before any interest accrues. In February, I will be receiving my bonus, which after taxes will give me about $1100 to go towards credit cards. I will probably put the entire thing towards our Target card, since it has the 24% interest rate.


Our tax return will likely be delayed, because of the changes to the tax laws at the end of last year, since we may itemize. As long as the Best Buy purchase is paid off though, I don’t mind waiting a few extra weeks to get my refund. Our refund will pay off the remainder of the Target card, and will also pay off the balance of my Best Buy card. I also sold my broken down old car for $300, so that will be put towards debt too.

By April, we should have two credit cards completely paid off.

Now, in the meantime, I am building savings. I am putting the difference between last year’s insurance premiums and this year’s insurance premium into a separate savings account. I also increased my exemptions for tax purposes and am putting that difference into savings for the next year. I am also putting money into our regular savings account by over-contributing towards our mortgage payment. By the end of December, we will have about $8500 in savings. I’m going to use that to pay off our remaining Best Buy card and our CU 1 card. That will leave us with one credit card balance going into 2012. That makes me really, really excited. And seeing step by step how we’re paying off these balances makes me very confident that we can follow through with it.

Also, I will likely consolidate all of my student loans in June this year. I anticipate that loan rates will increase this year and I would like to have all three student loans into one single payment. My other option is to not consolidate them, but to instead wait until spring of 2012 and pay the two smaller loans off with savings and our tax return. I have six months to think that over, and see what the interest rate will be for next year.

So long as everything goes according to plan, by this time next year, we will have paid off over $26,000 in debt. And, we will still have money in savings. That, my dear readers, makes me very, very happy. And more than that, it makes me very motivated and determined.