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.