Thursday, January 03, 2013

Did Santa push you over a fiscal cliff?

Were you able to avoid a personal fiscal cliff with your holiday spending?

It is awfully tempting to pull out a credit card -- or several of them -- to buy all those perfect gifts for families and friends. I am anxiously awaiting payday, because I admittedly busted my holiday spending budget.

I spent more than I wanted to or should have between the gifts, gasoline to travel to various family gatherings, several meals out around the holidays and a simple lack of discipline. However, I am proud to say that I didn't spend for anything on credit. It was all funded by cash pulled out of my growing debt snowball.

I estimate that I set my payoff plan back at least a month. But it felt good to be able to spend a little money for fun stuff, rather than just sending it all off each month to pay for fun stuff from yesteryear. Maybe that will hold me over for a while with all that pent-up desire to cut loose and spend some money. Hopefully, it won't lead me to make a habit out of pulling money out of the debt snowball on an ongoing basis.

I am so tired of the debt. I am ready to be done. But I am probably still a year away. That is, if the changes in my withholding this year doesn't slow down my debt snowball. I know I will have to tweak the budget because monthly pay is going to drop, probably more than $100 a month. Remember how President Obama and Congress changed our social security withholding rate a couple of years ago? Yea, that's done now.

So our take-home pay is going to shrink. This at a time of year when utility bills are up for most of us to heat our homes for winter. And if you have to deal with all that, and used credit cards over the holidays, you will also be paying higher minimum payments on the higher balances on those accounts tapped for holiday purchases.

A few years ago, those factors combined would have caused me a lot of anxiety, because I was struggling to pay even the minimum payments.

I don't have that anxiety this year. While I am still paying minimum payments on all my credit accounts but one, I am paying way more than the minimum on that one. So I may have to shrink that bigger payment by more than $100 a month due to the change in withholding plus another $50 or $75 a month due to higher electric bills in the winter. That may slow things down, but I am no longer afraid. I also don't keep the thermostat set so low that my living room could serve as a vegetable crisper.

I am warmer, happier and far less stressed this new year than I was in 2010 or even 2011 or even 2012.

The last Congress couldn't find much money to cut from its budget, is still spending liberally on its credit cards and was stretched out over the edge of fiscal cliff before taking a sideways step to avoid economic catastrophe. I can empathize with that. I used to do that myself.

I stopped. The new Congress won't.

I had a wonderful holiday season. I got to spend a lot of time with family and friends. I have $20 to last until payday, some groceries left in the kitchen and all the bills are paid. There are no big surprises coming in the mail this month. So far, 2013 is starting off OK.

No cliffhangers here.

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