Debt free -- finally

Today, I sent off my last payment on the last debt I owe. I feel like shouting! Actually, I feel like going out and spending money.

That scares me.

The truth is, I will need to spend some money soon. I need some new work clothes. My vehicle needs some stuff too, like new tires, shocks and a windshield (the current one has had a nasty crack for more than 9 years). But I am thinking within the next year or so I will trade up to a new used car, and putting much money into my truck isn't going to add much, if any, value to the 19-year-old vehicle.

Then there is a list of stuff I want. Small stuff. Big stuff. Expensive stuff. Cheap stuff. Some may nearly be necessities, like new eyeglasses. Some are nothing but luxuries, like a new iPod and digital camera.

I've spent 4 years and 1 month so focused on putting every dollar I could find into paying off debt. It's become a habit. Now I need to learn some new skills and build some new habits, like learning to prioritize purchases to get the things I need and enjoy life a little while also saving money for emergencies and a replacement vehicle. I'm thinking a may even want to buy a house. Some day. Maybe.

I had stopped putting money into retirement for a while, but I have that set to restart. That may not directly fit Dave Ramsey's prescribed baby steps, since my emergency fund is not yet funded, but retirement feels a lot closer today than it did 4 years ago.

Debt freedom feels great, but it hasn't really sunk in yet. I have not yet had an opportunity to see money going to the savings account instead of out as a payment to one (or more) credit card accounts.

I wasn't sure I was ever going to get here, even as I saw the debt shrinking more and more, month by month and year by year.

I did it and I am proud of that. You can do it too.

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.

Yes, I am breaking up with you. Seriously. Go the hell away!

It's been harder to get rid of JPMorgan Chase than I thought. I wrote in my post on July 13 that I had closed out my Chase credit card account.

A modified version of the Chase logo from the website
www.chase-sucks.org

I was wrong.

My first clue was that when I would log into my account information to pay my bill, check for new statements, etc., and there was no notification on the account that it was closed.

My second clue was found in my mailbox today. It was an offer to transfer balances from other cards to my Chase account. It was headlined: "A Straighforward way to reduce the amount of interest you pay", which is pretty ironic from a card that was charging me more than 27 percent interest. So, while they wouldn't lower my interest rate on my existing balance, they would offer me a promotional interest rate of 0 percent through next fall. After the promotional period I would be charged my "standard" 27.24%. Oh, and there would be a 1% transaction fee for each transaction. Inside the envelope were those handy little checks tied to my account, which mail thieves must love.

I was not happy to have checks floating around in the U.S. mail linked to an account I attempted to close a month ago.

Fortunately, today is the day my new statement posted to my account. I had paid off the balance on the card earlier this month, but of course, there was interest accrued, which hit the account today. So, I again selected the option to pay off the outstanding balance for the 12-plus dollars in interest. Hopefully, I paid it fast enough that there will not be additional interest to pay next month (how would I calculate a few hours of interest at an annual rate of 27 percent on 12 dollars?).

Soon after I hit the send button, I was on the phone to customer service. Again.

Why, yes, they did have a record of my call last month and that I had requested to close the account.

 Why, no, the transaction was not completed.

Did I really wish to close the account?

Why, yes, I do.

This time, the customer service rep said I should receive a confirmation in the mail that the account was closed.

So, we will see what I get next in the mail from Chase. Will it be a letter confirming that my account has been closed? Or will it be another promotional offer with enclosed checks? That is, of course, assuming someone else doesn't find those checks first.

• A note from the editor: I find it amusing that I write about the evils of consumer credit here, and specifically mention my frustrations with JPMorgan Chase, yet Chase and other credit card ads often appear in the Google Ads on this site. Surely, the ads are related to the content, but may be viewed as unfortunate ad placement by the people/companies paying for the ads. Should anyone get the impression that I am making money from the same types of accounts I am "bashing," I will say that in all the time I have had ads on this blog, I have yet to get a check from Google. There just hasn't been the level of traffic needed to trip the earnings amount that prompts Google to cut a check. So much for my daydream of earning extra income as a blogger. So, enjoy the irony along with me. Or snicker at my unprofitable hypocrisy. Either way is fine with me.

Which bills do you pay first?

What should we make of the lasted information released by TransUnion on consumer debt? Some of the highlights, detailed in a story by the Associated Press indicates that Americans are charging more on their credit cards than we were a year ago.

The story reports that the percentage of accounts 90 days overdue is low and that "Many borrowers have taken steps to save money and whittle down their debt."

That sounds good.

But it also says that of people who have a mortgage, "many have made credit card bills a priority over their home loans and other financial obligations."

What?

So, people would rather risk losing their home than let an unsecured credit card go unpaid.

How did we as a culture let our priorities get so out of whack?

Banks issue mortgages. Banks issue credit cards. I wonder what advice banks would offer, if they offered financial advice. Would they tell their customers to pay their credit card first or their mortgage payment? Perhaps they would rather have the house back than little to no hope of collecting the unsecured debt. But do banks really want to own more foreclosed homes?

But what do I know. My debt situation wasn't and isn't normal, according to TransUnion, which says the average credit card debt per borrower, while up 6 percent from a year ago, is only $4,971. That's down 13 percent from the $5,719 average in the second quarter of 2009. That $5,700 figure is about what I owe on  three separate cards.

So, obviously I am not the brightest bulb in the box. But I have learned enough to pay for the roof over my head, utilities and food first and then allocate the money that's left to pay off my past stupid spending.

Closing the Slate on a long, difficult Chase

I could never make a living by betting on sports. I am too tempted to put my money where my heart it. I can't bring myself to bet against my favorite teams or bet on hated rivals.

By the same logic, I probably would be awful as a full-time stock trader. I would be too tempted to put my money into favored brands and perhaps ignore investing opportunities for companies with which I had no personal association. And I would certainly have difficulty putting money into companies with which I had negative experiences.

That is why I am taken aback at the news today that JPMorgan Chase led a stock market rally. The rally is attributed to the fact that the bank reported stronger profits than the analysts expected, even though the bank's own investment bungle earlier this year cost far more money than was originally thought.

So, JPMorgan Chase lost $5.8 billion dollars, but still managed to eek out $5 billion in earnings for the previous quarter. Wall Street investors apparently think JPMorgan Chase is going to do great things for their portfolio in the future.

And on the same week Wall Street investors make that bet, I chose to end my relationship with JPMorgan Chase.

I finally made the call this week to close my remaining Chase credit card account. I have about one more payment to make before I completely pay off that card. I probably should have closed the account long ago when I cut up the card, but I had kept it active thinking maybe they would lower my interest rate at some point. They didn't and it got to the point where it didn't matter, because I am close to being able to pay it off in full.

I had daydreamed about what I would say when I eventually called to close the count, as if my speech could serve as some sort of verbal victory lap. It would sort of be a "take-this-card-and-shove-it" diatribe, but far more eloquent. Perhaps the petty functionary at customer service would pass me up to a supervisor, who would make a grand apology and gesture to try to offset more than 2 years of 27-plus percent interest rates, in spite of no late payments. They would try desperately to keep me as a customer -- and I would briefly consider it -- before sticking to my new-found financial morals and insisting the account be closed.

There was no grand speech from me. And the customer service rep, who did ask why I was closing the account, made no attempt to talk me out of it when I said I was paying off all my debts and was particularly unhappy with the high interest they had been charging me. I said I would never use the card again. After a brief pause, she said the account had been closed.

Now, all that's left to do is to wait for another billing cycle and another payday, and to pay the remaining balance.

I am done with JPMorgan Chase. Wall Street isn't. And that's OK. We can agree to disagree. Perhaps there may even be some JPMorgan stock tucked away somewhere in one or more of my 401(k) accounts. And that's OK too. I doubt it will ever earn me 27-plus percent a year as an investment. But it sure as hell won't cost me that much ever again in interest charged each month on a credit card.

One more account closed and almost paid off. Four to go.

So long, JP.  Thanks for helping buy some things that seemed terribly important over the years. And, in a strange way, thanks too for jacking my interest rate to the moon, because you helped me to finally learn how stupid I had been with credit cards. You forced me to finally look around and see how deep of a hole I was in. Some lessons can only be learned the hard way.

But just to be clear, JP, I still hate the way you treated me and will never do business with you again. Some of those dollars you pissed away were mine. Maybe not many, in the overall picture, but more than you should have got over the years, because you came to see me as a bad investment. I take some satisfaction in proving you wrong, but I will take even more satisfaction in never writing you another check ever again.

24 squares down the line

These days, it seems I measure the passage of time more with a spreadsheet than with a calendar. The budget dictates everything.

Two years ago this month, I started down the path of getting out of debt. May 2010 was the first time in my life I put all my debts down on the page. It was the first time I looked critically at how much I made, how much I owed and what my minimum obligation was to each creditor for the month.

It was a bleak picture. I owed more money to creditors than the average one-person median household income for Oregon in 2010.

I could not keep my head above water some months. There was not much, if any, wiggle room. It was ridiculous. I was making too much money to be so broke.

Now, 2 years in, I have paid off almost half of that debt. I've paid more than $24,000 and zeroed out the balance with 6 creditors. I averaged paying off $1,000 a month in principal, which is pretty incredible, given that those first months the money was almost entirely eaten up by interest. My debt snowball barely qualified as a snowflake.

Unless fortunes change, for good or ill, there is still a bit more than a year and a half to go.

Some days -- the bad days -- it seems like I will never get there. I want to give up. I am tempted to give in and go back to spending money on credit. Every piece of footwear I have is tattered and most are so worn out they can't be worn out of the house, with holes in the soles and severe scuffs. My car is many months and many miles overdue for an oil change. I need things. I want things. I want a real vacation and a new iPod and, well, let's just say there is a whole list I've been compiling of things I want.

Other days -- the good days -- my spreadsheet shows me how far I've come. I can see that there are fewer days of debt ahead than behind. I am beyond the halfway point. I am actually looking forward to calling up Chase in a few month and canceling that account, which reamed me with its obscene interest rate. They won't be collecting much more interest from me. And never will again. That will feel so good. Perhaps only paying off the last debt will feel better.

Sticking to the plan must be its own reward -- for now

I got my tax refunds back. As I mentioned in my last post, I had been dreaming of buying some toys. It was tempting to reward myself for the progress I have made on paying down my debt.

I knew that would not be the right thing to do, but I was still tempted to spend a chunk of the cash on the thing I've been denying myself. Many of them are practical things, like some new shoes.

So it was awfully hard to send off an extra payment on one of the credit cards. But I knew I had to do it. The risk was getting too great that I would just piss the money away. Oh, sure, I would have used it on stuff I needed. I would have used it to replace stuff that was worn out and broken down. But it's also stuff I've lived without for months and can live without a while longer.

I am so tired of pushing this debt snowball. But I also don't want to do anything that keeps me pushing it any longer than absolutely necessary.

The debt I am working on now is the one that I hate the most. It's the Chase credit card that has been charging me more than 27 percent interest for years. It's the one that has pissed me off and continues to piss me off every time I look at my budget and my debt status. But now, I will can see the light at the end of that particular tunnel. And with the extra money from the tax refund, I should be able to pay off that card in August, if my calculations are correct.

I want to be done with that sucker. I need to be done with it. They've gotten more than enough money out of me for my stupidity.

I like to think I can keep up this pace until the end. I've done it for almost two years now. I've got a little less than 2 years left if I can keep this up. But I have to admit, the routine is wearing thin. I'm tired of living like a hermit to avoid spending money that's not in the budget. So close and yet so, so far to go.

At least on of my creditors may be getting tired of me not using my credit account too. The folks at Discover keep sending me special offers every time I turn around. And now,  I got a new Discover card in the mail this month, which was odd, because the old one had not expired and this is the third time I have got new cards on this account in the last 10 months.

So, when I called to activate this card I asked why I keep getting new cards so often. The customer service rep told me that since there hadn't been any activity on the card in a while, they just wanted to make sure I hadn't lost my card or something. I assured her, I had not lost my card (although I have shredded several of them, now). I said that I'm just trying to pay down all my accounts. She said she could put a note on my account not to send any more cards until this newest one expired.

If I had kept to the standard debt snowball method, the Discover card would be the one I would be paying on now. But, once I'm done with the Chase card, three of the card accounts I have left to pay all have within a few hundred dollars of the same balance. So, I'm tackling the highest interest accounts first. The Discover card has the lowest rate, so it may end up being the last, or next to last one I'll pay off. I can live with that. For a while anyway. Just, hopefully, not too much longer.

Struggling to do the right thing

I am dreaming of new toys.

I got my state tax refund and the federal refund should be arriving any day now.

I should put the money toward my debt. But I am really thinking about getting a new toy or two. Or three.

I have a new cell phone on my wish list. And my iPod battery won't hold a charge and the screen is going out.

Or maybe a new tablet of some sort would be in order, like a Kindle Fire. Maybe if I forgo all of those things I could even afford a new laptop.

Or maybe I could finally get a new camera.

So many possibilities.

I can almost justify it to myself. After all, I've got nearly 2 years of payments before I eliminate the debt completely. And the tax refund will probably only make a difference of about a month or so in the final payoff date. It's been so long since I've splurged on anything for me.

The refund is burning a hole in my bank account and it isn't even there yet.

I should pay on my debt. Should. Not sure I will though. I have been good. So good for so long. I'm not sure I can hold out until 2014.

Sometimes breaking up is easy to do

Over the weekend I closed another credit card account. I had paid off the balance on the card last month and the statement I got last week confirmed a zero balance.

It feels really good to have one less bill and one less credit account. I thought about leaving it open for a while with the balance paid off. But I am no longer motivated by trying to improve my credit score. I just want out of debt -- permanently and forever.

It feels particularly good to get this account paid off because it is one of the accounts that was charging me more than 23 percent interest. But no more. And the account was easy to close too. The automated customer service line meant I just had to push a few buttons and give a few voice prompts over the phone. No person came on to give me the hard sell to try to get me to keep the account open. I wish every account I closed made it so easy to break up and say goodbye.

I opened the account almost 17 years ago when I moved to California. It was a department store account that I used to buy my first washer and dryer. Sometime later it was converted to a MasterCard account, so I could use it anywhere. That turned out to be a bad thing, because use it I did, too often and too many places. I think my last major purchase on the card was, ironically, another washer and dryer when I moved back to Oregon.

That washer and dryer are still working fine. In fact they seems to be working better than ever, now they I know they are completely paid off, along with all the other stupid, silly, irresponsible purchases I paid for on that card over the years.

Six down. Five to go. I've paid off about 38 percent of the debt I had when I started this journey in May 2010.

The next card on my hit list is the biggest interest rate bloodsucker of them all. I should be able to pay off this next account in about 8 months, if all goes according to plan. It will be a great pleasure to get that account paid off and closed.

I also got my taxes done over the weekend. This makes the second consecutive year I've done my taxes really early. I used to dread that task. Now, I couldn't wait to get them done, particularly if it means I can apply my refund to my debt. I'm impatient to get this crap over with and move on with my life.

It gets better, folks. Don't give up.

In some of my early posts on this site, I wrote a lot about the pain and aftermath of the breakup in a personal, romantic relationship. But I am not grieving the loss of these financial relationships. Sometimes, breaking up is easy to do.

Is bad news for us good news for Uncle Sam?

The latest news from the Federal Reserve is that consumers are borrowing more money again. Forgive me if I don't see indebtedness as good news. I am glad I am not one on those getting deeper in the hole.

If you have it, and want to spend it, that's fine. But don't borrow to do it. Your economy, and the nation's, will be healthier in the long run.

The following is a Storify story with the news and some reaction from the Twitterverse.

Victim, rescue thyself

I was reading back through my posts about my credit woes and my work to get out of debt. I was pretty disappointed in what I wrote because it didn't convey the way I felt going through this stuff. It definitely didn't capture how I felt when I was getting started down this road.

I was scared. Petrified. Paralyzed with fear. Consumed with doubt.

I didn't know what to do and didn't know where to start.

I felt sorry for myself. I felt like a victim.

I found myself fantasizing about magic solutions to my problems. I dreamed of lottery jackpots, or finding a rich girlfriend. I wanted it to just go away. Immediately. If not sooner.

It got really scary as the economy turned sour. I knew people who were losing their jobs. I knew even a brief period of unemployment or a major mechanical breakdown of my car could spin my life out of control and leave me homeless. I already felt helpless.

The most insidious and dangerous feeling, though, was that feeling of victimization. I blamed the banks and credit card companies. I told myself that if they would just lower their interest rates, I would be OK. And it was their fault for extending so much credit to me. They should have warned me. They should have educated me. They should help me. Never mind the fact that they had helped me for decades by giving me money to spend that I had not yet earned.

It was their fault, not mine, that I was in this mess.

I really wanted a quick fix. For a while, I thought maybe that would be bankruptcy.  Maybe all that debt could just go away and I could start over. Start fresh.

It all felt like a very bad dream. If I could only wake myself up, I would realize it was only a nightmare, chased off by an alarm clock and the light of day.

Of course, there has been no magic. Fortunately the problem is going away, but it was not immediate. It's more like a slow-melting than a flash fix.


In a strange way, the paralysis I suffered saved me from doing something stupid. It kept me from grasping as some of the crazy options which actually seemed viable at various points in time. It kept me from running away. It kept me from trying some dumb debt forgiveness program. The banks, my "victimizers", actually did me some favors too, but not the ones I thought I needed. The companies that raised my interest rates finally got me to stop using my credit cards altogether. My personal bank also favored me by turning me down for a debt consolidation loan.

The work began. It started slow. It has improved slowly. The work has been incredibly hard and yet startlingly simple. The hard part is sticking to it, day after day, week after week and month after month. The simple part comes from doing, well, nothing, really, certainly doing nothing that costs any money I don't have in cash.

I know that a job loss would still be a major problem, but I also know that I could get through it because I wouldn't be using credit cards to try to maintain a lifestyle an unemployed person can't have. And I wouldn't worry about not paying the credit card bills for a period of time if necessary, because I wouldn't be trying to keep in their good graces so I could keep on using them.

I thought I was a victim. I felt sorry for myself. But I wasn't a victim. I just wasn't very mature financially. I had learning and growing to do.

The victim's fear and anger has been replaced by motivation to get through this as quickly as possible. Life is not great, but it's better. To put it into context with the early theme of this blog, that of getting over the grief of a relationship breakup, it's a lot easier to tell what progress you are making to get out of debt than it is to figure out how close you are to healing a broken heart. The progress against debt is measurable, you can track it on a spreadsheat. It's a simpler equation to calculate.

Return to 'normal' not a good sign

The Fed reported today that Americans increased their spending in November. Some might see that as good news and a sign of economic recovery, but because that spending increase was on credit cards and through auto loans, that doesn't strike me as a good news.

In fact, that sounds like whatever lessons people learned about cutting debt and increasing savings have been forgotten.

I held out some naive hope that I was part of some new trend, a wave of Americans cutting up their credit cards and getting smart with their money. To further my delusion, I thought that if Americans could get their spending under control, maybe we would be able to expect our government leaders to do they same.

I guess that dream was nothing but a delusional fantasy.

On the positive side, I take some comfort -- pride even -- in the fact that I didn't turn to plastic over the holidays. If you did, and you have been working to get out of debt, I hope the decision to take a big ol' snort of  unsecured credit represents a temporary slip.

Cut up the cards and dedicate yourself to paying off your bills again.

In the Associated Press story linked above (and here), include the following section:

The rise in borrowing comes as many consumers are seeing little to no growth in their paychecks. Inflation-adjusted, after-tax incomes shrank by nearly 2 percent in the July-September period.

I can relate to the stagnant paycheck status. However, I can also tell you that I have much more discretionary money to spend now than I did when I started this process of working to get out of debt. In the beginning I had about $50 each month that wasn't either going to minimum payments, paying housing expenses, covering fuel costs for my car and buying food. Today, I have about $550 per month in my debt snowball, which can go to other costs if necessary. That's how I paid for Christmas without using any credit cards.

I am still paying the same amount each month to credit cards that I was a year and a half ago. The difference is, I am paying that money to fewer accounts and paying down the principal on one account at a must faster rate than I was before.

I still worry what might happen if I joined the ranks of the unemployed. But now, I know if that happens, I can't and won't turn to credit cards to tide me over until I get a new job. Getting deeper into debt at I time I may not be able to pay my bills would be profoundly stupid. But at one time, that was my back-up plan. Of course at one time, I convinced myself it was a good idea to take a cash advance against one credit card to pay the monthly payment on another one. Yea, I did that. Several times. Financial panic did not lead me to make smart decisions.

You don't have to use my plan. But you do need a plan and the willpower to stick to it, whether the holidays are approaching or not.

New year, new strategy

I've been working to pay off my debt for a year and a half. Based on my latest estimate, I have 2 years to go. Then I will be debt free.


I got through my second Christmas without charging any gifts or expenses on a credit card. So, there is no post holiday remorse or added financial stress to deal with this month. I didn't really make any resolution for the start of the year, but I did set some goals for the year. I reaffirmed my goal to work my debt payoff plan for the year.

This month I will pay off my sixth debt. Five more to go.

As I've posted before, I have been using the debt snowball method to pay off my debt. I can see why some financial experts, particularly Dave Ramsey, recommend the method for its emotional benefit of seeing some balances go to zero quickly. I needed that reinforcement. I needed a few wins, even if they were small, pre-season wins.

Now, 4 of the 5 debts that are left are all within a few hundred dollars of each other. I plugged the numbers into a couple different debt-reduction calculators which show that whether I pay the smallest debt or the one with the highest interest rate (sometimes referred to at the debt avalanche), the time it will take to pay off my next debt and all the debts are about the same. What will change is that I will save a good chunk of money on interest.

I want out of this mess as quickly as possible, and I want to pay this crap off as quickly as possible. And I really like the idea of paying Chase as little money as possible, since they are charging me the highest interest rate. I'm still a bit angry and bitter about that. I look forward to closing that account as fast as possible.

The debt I will get paid off this month is actually the second highest rate of interest. Neither creditor has budged on their rate. It will be good to be done with them both. But in an ironic twist, an apparent sign that at least one of my creditors is not assuming I will default, one credit card send me a notice this week that they were raising my credit limit. That follows an offer a few weeks ago from the same creditor that was offering my a loan of up to $25,000.

I won't be taking them up on the loan offer. I will, however, stretch out the interest I will pay them, because of their lower interest rate. That now looks like it will be the card I pay off last. That payoff has been penciled in on the calendar for January 2014.

But I will be doing my damnedest to push that date up earlier if at all possible.

So far so good. I am ahead of the calculation originally made in 2010. I have two more debts paid off than I was expecting to have paid by this time and my final payoff date is now projected 4 months ahead of that original estimate. The debt snowball has grown.

Now it's time to start an avalanche.

Steps forward and back

I canceled a credit card today.

 I had intellectually made the decision to do it a while ago, but didn't for what I thought was a practical reason. I had chopped up the card and could not find the account number, which I thought I would need. Today, a new card for the account came in the mail, so I placed the call.

I learned during the call I would not have needed the number.

On the front of the card, it told me that I had the account since the year I graduated from college. It had to be one of the first credit cards I ever got.

It was harder to pick up the phone than it should have been. I haven't used the card in months. It was the third debt I paid off, following another gas company card and some money I owed a family member. But I've kept the card around "for emergencies." Well, I have taken a long road trip, and a few shorter trips since the card was paid of and haven't "needed" the card. I have been buying fuel with cash and doing fine.

I know it's just that it was a 20-plus year habit. I've relied on credit cards for most of my fuel purchases for years. It started when I moved to California. I liked the convenience of paying at the pump when I moved to California at the self-service gas stations.

The process of closing the account may have been harder than it needed to be because, in spite of my confident recent posts, I've been slipping on my budget of late. The food budget has been blown. I've cut into my fuel/car expense budget and been eating a lot of fast food. Not as much as I once did, but I was eating fast food several days each week.

I've just been so bored, living like a hermit in my apartment, eating cheap grocery store food.

It's a good reminder of how I got in this mess in the first place. Periodically, a few times a year, I would go on spending binges, often or always when I was feeling the most financially strapped. I'd pull out a credit card and splurge on something, like a nice meal, or gifts for family or friends, or some crap that I thought I really wanted/needed but didn't.

This time has been different. While I have blown my food budget, I have financed my misbehavior with cash out of other parts of my budget.

Now, the Labor Day weekend is here, and I'm looking forward to getting out of town for a few days. It's not really a budgeted expense, but I can do it, with cash, so I'm going. I shouldn't go, but yet I need to go in the worst way. I am profoundly bored and need something resembling a life.

I still have a long ways to go and it's going to take quite a bit more time. More time than I want it to take. I'm confident I can make it. Dave Ramsey would not approve, but I'm taking a weekend and spending time with an old friend. And I will be paying with cash. So maybe Ramsey can give me a pass on that.

Learning to bank on myself

The credit card companies, once a source of endless hours of stress, now merely amuse me. A few weeks ago I got notification from one of the banks with which I still have a card with a balance. The letter informed me that they were lowering my credit limit, due to information they had seen on my credit report.

I admit, I was briefly disappointed by the news, until I remembered I am no longer charging to that account and have no intention to in the future. So, oh well. No biggie.

Then this week, I get a notification from a different credit card issuer that tells me they are raising my credit limit.

I had to laugh. How can two different financial institutions look at the same financial information and come to two opposing conclusions?

Periodically, I still look for logic from these institutions. I still hold out some faint hope that a couple of the account holders will take note that I am paying down my accounts in pretty big chunks. The debt snowball is rolling and it is moving a little bit faster all the time. It sure wouldn't hurt my feeling is the interest rates on a couple of those accounts were reduced. But I now see that the best way to lower the interest I will eventually pay is to pay all the accounts off, one by one, as quickly as I can.

I still wish I could get the debt paid off immediately, which I can't. But I have increasing confidence I will get it all paid off. It will still take a while, but I've kept to the plan for more than a year. Just need to stick with it.

I am breathing easier. I now feel like I have options. For example, I've been putting off buying new clothes for work for more than a year. When the weather turns cooler this fall I am going to need some new long-sleeved shirts. Now, I know I can pay all the minimums on all my accounts and use part of the extra I pay for just one month's payment on my smallest account and buy a whole new wardrobe if I choose to do so. It won't be a fancy wardrobe, but it would be several shirts, a couple pairs of pants and a new pair of shoes, all of which I sorely need.

While I am at it, I should also get an eye exam and some new glasses. My current pair is several years old. I can afford to do that now if I wish to do so.

The thing holding me back on the new clothes and the new eye glasses is that I don't want to slow down my progress. I am reluctant to spend money on myself. In years past, I would have used credit cards for such purposes and not blinked. Now, I can, and will, spend cash.

Uncle Sam, are you feeling Standard and Poorer?

Uncle Sam is going through the same thing many of the rest of us have already experienced. His credit score has been downgraded and financial experts are saying he may be at higher risk of not paying off his credit card bills.

Oh, sure, he was still paying his debt. He hadn't missed a payment. Shouldn't Standard and Poor's cut him some slack? Yea, I said the same thing to Chase and the other credit card issuers who jacked up my interest rates and dropped my credit limit. It didn't go me any good. It's some small consolation that Uncle Sam didn't get much better treatment either.

Now, we will see if he learns the same lesson some of rest of us have had to learn. Will he figure out that some of the things he thought were necessities are really luxuries?

I don't know about you, but I'm not holding my breath.

Goodbye cards of summer

A new Discover card came in the mail today.

I didn't realized the old one was about to expire because it had been shredded months ago. I'm not sure it really was about to expire, because the expiration date on the new card is only about 18 months out.

So, I activated the card, which seems strange to do, since this one will just be shredded too. But I find myself just letting the card sit here, its new baseball-themed design staring up at me from the table.

According to my debt payoff plan, this card should be paid off in sometime around the time this card is set to expire.

Maybe I should just close this account to new charges. I had been keeping the accounts active, in the hopes that as my debt is paid down it will actually help me get a lower interest rate on the couple of cards that are charging insane interest based on their formulas that seem to think I will default, even though I haven't had a late payments in more than 4 years according to my latest credit report. But the Discover card actually has my lowest interest rate, and I don't have any reason to think it will get any better before the card gets paid off.

So, I don't know what's the best thing to do or the right thing to do on issues like this in my debt payoff journey. But I know if the cards are shredded they can't be used.

So, the pretty new baseball-themed Discover card has been processed through the shredder. Bye, bye baseball Discover.

Year 1 in my war on debt

It was one year ago this month that I finally sat down to figure out just how much debt I had accumulated and try to figure out if there was a way out. One year ago, I wasn't sure there was, but I knew I needed to do something. Figuring out how much I owed was the first step. The second step was trying to learn how to do a personal budget and live on it.

There have been ups and downs, and there is still a long ways to go. I figure it will still be about 3 years before I am debt free, depending on what twists and turns life takes between now and then. That still seems like an awfully long time, and it gets frustrating, but it is good to have a year's worth of numbers to see that I have made progress. It's the one, solid thing that keeps me going and keeps me working the plan.

Today, I just paid off my 5th debt. The first four were all small, under $1,000 each. But this one was my first significant debt paid completely. I thought I would feel much more excited about it than I do, but the truth is, having just sent off the biggest chunk of money I have paid at once on a bill has left me feeling a little big sick to my stomach. It hurt to pay that much.

This one is on a credit card account that has actually been closed for years. I don't remember why I closed it for sure, just that I was feeling abused by the company at the time. Yet I have been sending them monthly payments for years now anyway. But not after today. Today that debt is paid.

Over the last year, I've reduced my debt by about $11,000, nearly $4,000 of that on the debt paid off today.

My debt snowball is growing, and that's good. It's going to take a while to pay off the next lowest debt on the list though. It's this next stretch that may be the one that test my resolve to keep as aggressive on my payment plan. The next 6 debts are all bigger. My goal is to try to pay off one more by about the end of the year if I can.

I got a check in the mail this week from sale of some stock that I had. That's what allowed me to pay off the one debt and will allow me to pay a chunk toward the next debt on the list. But I have to admit, that having the most money I've had in the bank, perhaps ever in my adult life, makes it awfully tempting to go spend some money on something fun or buy some things that I could use, like some new clothes. I also don't know yet, what the tax implications of the stock sale will mean yet.

One year into this, I now realize the year went pretty fast and I'm proud of how well I've been able to remain focused on the plan. I've got a confidence now that I can get through this and can actually be debt free. But it's still hard to fathom how I can continue to live like this for three more years. It's not that I feel a need to use credit cards again. But the lifestyle dial back has certainly been painful. There hasn't been much "fun" over the last several years, even before I really had a plan I just knew I was in trouble and needed to cut expenses.

The Federal Reserve reported this week that consumers increased their credit spending in March and that credit card spending increased for only the second time since August 2008. I'm glad I'm not one of those increasing their personal debt. But I understand the desire to spend some money.

One year ago, I was still hoping for a miracle. I was still hoping someone or something would step in and save me financially. Now, I know, that this process of learning to manage my money, live on a budget and sacrifice over a long haul should all serve me well in making sure I never get myself back into a mess like this again.

Measurable progress seen in debt payoff plan

I'm beginning to understand what Dave Ramsey talks about when he says you need to get "gazelle intense" at attacking debt. I paid off Debt No. 4 this month, and now I can't wait to get rid of the rest of them.

Of course, the first 4 debts were pretty small. The ones that are left are going to take a while to polish off. Based on all the number crunching I've done, the next debt should get paid off late this year, unless I can figure out a way to increase my income somehow.

It feels good to be making progress. The amount of money I have to contribute to my debt snowball is slowly creeping up as the minimum payments on the remaining debts slowly inch downward.

But I'm getting impatient too. As my confidence grows at living on a budget, and living within my means, I am tired of living under the specter of debt that is now years old. It was May 2010 when I finally took the time to add up all my debts to get a clear picture of the financial mess I got myself into. Since then, I've paid the debt down by more than $7,100 in about 9 months.

I don't know if I've ever confessed this on here before or not, but I actually went to talk to someone at the local Consumer Credit Counseling Service a few years ago. Because I wasn't behind on any of my bills, they didn't offer any help. I knew I was in trouble, but didn't know what to do at the time. I had yet to discover Dave Ramsey back then. In searching through some paperwork recently, I found the snapshot of my debt back when I went to CCC in the fall of 2007. From fall 2007 to spring 2010, I managed to pay down my debt by a little less than $5,500. So, I've managed to make more progress in 9 months than I made in the previous 2 and three-quarters years.

What a difference a plan makes. That, and the willpower to stick with it.

Credit card borrowing down for 27th month is news our budgets can live with

The Federal Reserve reported on Friday that consumer borrowing rose in November for things like cars and college loans. However, the Fed also reported that people are actually saving more and spending less on unsecured credit, meaning credit cards.

We, the people, borrowed 6.3 percent less in November on our credit cards. It's the 27th straight month that consumer borrowing declined.

An economist the the Bank of Tokyo-Mitsubish said consumer borrowing was down 2.2 percent in November, from November 2009.

"Household attitudes toward the use of credit cards soured during the Great Recession and it's going to take time before many people get comfortable with using them again," Ellen Beeson Zentner told the Associated Press in a story release Friday.

"We have a long way to go before credit normalizes," she said.

For me, putting the brakes on consumer credit IS the new normal. For one thing, the credit card issuing banks have not returned the interest rates they charge to "normal" either. Whether it's their intention or not, they taught me that I had far too much credit and had tapped far too deeply into it, and when the banks increased interest rates, it wiped out any discretionary income. So, when I get out of this mess, I don't ever want to get back into it again.

So, don't count on me, and people like me, to do more to fuel the economy. The available funds I have are not increasing.

Sure, some of us will undoubtedly start using credit cards again. But not all of us. For those of us committed to paying only for things we can afford now, this is the new normal, and the banks better get used to it.