I have told my husband repeatedly, 2012 is the year we pay off our credit card debt. We might not be able to pay off the student loans, cars, house, or signature loan, but in 2012, we are going to pay off our credit cards.
I have started taking some steps to pay them off. I opened a Discover Card and transferred some of my balances to it at 0% interest for 18 months. They each came with a 3% balance transfer fee, but the balance transfer fee on each equals one months interest, so I'm still not going to end up paying as much on the debt. After transferring as much of the balances as I could (I was not able to transfer them all because the credit line was not high enough), I drained our savings accounts so I can pay off the remaining balances on a couple of the cards. We will still have a pretty significant amount of debt accruing interest, but I'm trying to position us so that we can pay it off this year.
I was not 100% what the balances were on the credit cards as I set up the balance transfers so what I did was this:
Estimated that our Target card had a balance of about $3500, but was not sure of the exact amount, so I transferred $3000 to the Discover card and used a portion of our savings to pay the remaining balance.
One of our Credit Union cards had a balance of about $2100, but I wasn't sure of the exact amount, so I transferred $2100 and used savings to pay the remaining balance.
I used savings to pay off our Kohl's card and my Victoria's Secret credit card.
My husband's paycheck should be pretty big next week, since he worked the full week, plus got paid for an extra day for Christmas and for New Years, so 20 hours extra on top of the full two weeks worth of work, plus he'll be receiving a bonus (possibly two, depending how long it takes for them to pay the second). My bonus will come in February and it is pretty sizable this year.
I think between the two, we should be able to pay off all of our credit card debt that is currently accruing interest. We will have a Discover Card and two Best Buy cards that have debt that are accruing 0% interest, which we should be able too pay off throughout the year and should be, hopefully, credit card debt free by the end of 2012.
The biggest challenge for us is that we don't want to stop spending. We have real issues controlling our spending. Even as we've had the conversations as they've related to what we need to do to pay off the debt, we're still talking about taking a Disney vacation, which would have to be charged, and we still make random trips to the store whenever we're bored and just buy whatever. We still can't exhibit the will power we need to be successful in this resolution, so that may take a lot more time and effort than even I expect.
I have to accept that we will have slip ups and we will probably make mistakes along the way and we may even fail as the calendar flips to 2013, but if we can make strides this year, then it will go a long way in improving our financial position and getting us to the point where we are eventually debt free.
Showing posts with label Credit Union. Show all posts
Showing posts with label Credit Union. Show all posts
Sunday, January 1, 2012
Monday, June 27, 2011
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.
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.
Tuesday, March 1, 2011
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.
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.
Subscribe to:
Posts (Atom)