I have been horrible at keeping up with this blog lately, mostly because I do no good and nothing has really changed for the better. Maybe if I had kept up with it, I would show a little more restraint, but I haven't so here we are.
First, a little level setting. At a point earlier this year, our overall debt had decreased to $200,713.01. We had four credit cards with a combined balance of a little more than $27,000. We also had two car loans with a combined outstanding debt of $29,064, and my student loans with an outstanding balance of $39,766. We also had a mortgage loan of $104,678.
As of the end of November we had $202,346.77 in debt. It is more now, but I don't have actual totals at the moment. Of that debt, $29,227 was on credit cards, $26,934 was for cars, $39,645 was for student loans, and $106,539 was for our mortgage. So, our credit card debt went up more than $2000, our cars went down a little more than $2000, student loans stayed stagnant, and the mortgage debt actually went up as a result of our refinancing.
Clearly, this does not reflect well on my money management skills.
In addition to increased debt, we now carry balances on all of our credit cards. Not just balances, actually, high balances. Nearly maxed out and juggling the cards to avoid going over the limit or being declined for a purchase. It is mostly because of our Disney trip last month, and because of Christmas shopping this month (which we did spend significantly less this year than we have in years past), but also because we want what we want when we want it.
I had planned to pay my Discover Card off in March, when I received my performance bonus, by not using the card in the interim and paying more than the minimum payment every month. Instead, we use the Discover Card regularly and carry a high balance. I was juggling all of our finances, trying to figure out how we could pay the entire balance off before it starts accruing interest and not completely destroy ourselves financially. As more and more minimum payments started rolling in, the picture was actually pretty bleak, with me feeling like my only option would be to drain the kids savings accounts and my savings account to pay it. Even then, it was going to be tight.
In addition to the Discover Card, I had it all budgeted out how I was going to pay my Best Buy card off two months later, then my credit union credit card, and then my student loans. I was going to systematically pay off all of my debt by next summer by snowballing payments and going smallest balances first (with the exception of the Discover Card and Best Buy card because they both had promotional interest rates that were expiring). We would have paid off all of our credit cards by next July and one of our cars by the end of next year. We'd be saving for a house and probably able to handle two mortgages.
Except for that pesky problem of spending money. How are we ever going to get ahead when we're spending so much on credit card payments that we don't ever have any extra? But it never stopped us from spending the money anyway. I was starting to feel the walls closing in and feeling the panic that we weren't going to be able to pay our bills when we started paying interest on an $11,000 credit card.
And then today happened.
Today, I was offered a new job. I had applied for it at the beginning of November and hadn't heard anything before we went to Disney. I got back from our trip and had a voicemail inviting me to interview for the position. I interviewed last week and, because it was in my current office, got a feel for where they were headed in the hiring process. Even though the majority of this job was stuff I'd already been doing, I was one of two top candidates for the position. The other possessed a technical skillset that I lack, but I have my own technical skills and experience with the responsibilities of the role. I was on pins and needles waiting for a decision, and the longer it dragged out, the more convinced I became that they had decided to go with the other candidate. Instead, I was called into the hiring managers office this morning and offered the job, and a more substantial raise than I ever could have imagined.
I came home this evening and put the numbers into the paycheck calculator. The number that was spit back at me made me do a double take and I ran the numbers again. Nope, that was right. More than $400 extra. Per paycheck. Every two weeks. Over $800 more a month than I currently take home. I plugged the numbers into my budgeting spreadsheet (as savings, not spending money) and there it was... the answer to our downward spiral. With this influx of income, even if - if - we maintain the maximum balance on the Discover Card, we will have enough in savings by March to pay the entire balance, in full. After that, the other credit cards start falling off quickly The small balances disappear in a couple of months and the big balances will be gone by year end.
If we continue to budget based on my current salary, our credit card debt will be nonexistant by this time next year. If we don't spend the extra money on anything except debt payment. If we've survived this long, surely we can do it for another year. And then a year from now, we can just start socking money away in savings and maybe even investments. Maybe buy a house we don't hate. This promotion, doing something that I actually enjoy, and the raise that came with it just dramatically changed the path our lives were on. I can't wait for everything to start turning around. This might just be the boost we need to get ourselves under control.
