Emerging back into the light

I'm starting to re-emerge into life again, now that I've got some discretionary income. I've started to attend some events that cost money. I'm not paying huge amounts, but I've bought some tickets to some local concerts ($20 total for 2 tickets to outdoor music events), went to see another performer play a couple of times at a local club, and today I went to see a simulcast of one of the last Monty Python performances.

Small things, yet, but after 4 years of avoiding most entertainment and recreational activities that cost money or required tickets, I've experienced more entertainment in the last month than I have in a long while.

It feels good to get out and be around people again, even though I am an introvert and a homebody by nature. There's a line between being a homebody and hermit and I have flirted dangerously in hermit territory for too much of the last 4 years.

I still have some short term financial goals I want to meet, like building up an emergency fund and starting to save for a car. But I think I am also going to dedicate some money in the budget for entertainment, especially now, while it's summer and the weather is decent.

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.

Then there was one

There's only one debt left to pay. I sent a payment today to pay off another credit card.

It feels like this has been a long time coming. I am impatient to be done with all of this. Before the end of summer, I should be completely debt free, barring unforeseen financial circumstances.

There was a time in this process where any unforeseen expenses were a cause of great anxiety. Now, it is mostly just a cause of irritation, because it's just some money that can't go toward eliminating the debt.

I really wanted to have everything paid off in less than 4 years from the time I became committed to getting out of debt. That, really, that's just an arbitrary number. Perhaps there is some benefit to having this process take four-plus years. I have learned patience and persistence and learned to trust the plan and the process.

It works to live on less money than I make. If I can do that now, when I am still working to get out of debt, I think I have better odds I can be successful doing the same thing when I don't have credit card debt hanging over me.

All it will take now is about 4 more payments. Four more BIG payments. Then I'm done with it. Out from under it. And I can turn attention to other things. Then, and only then, can I start setting some new priorities. Then I can start making new plans.

That's the part I look forward to the most. It feels like life has been on hold, in far too many ways for far too long.

Vacations. Clothes. Toys. Car. Retirement. Maybe a house, someday.

I've learned how to get out of debt. Now, the next task will be learning how to save money and learning how to make smart choices on how to spend money again. I've spent the last four years paying off past bad decisions, large and small.

One more piece of penitence to perform, in four installments, then I shall be debt free.

Getting out of the rut

So far, 2013 hasn't gone exactly as planned. That's both good and bad. I had been in a huge rut. And I was using my budget and efforts to get out of debt as an excuse to stay well entrenched in that deep groove.

There's been an evolution in job duties, which has given me new things to do at work. But there was no change in pay -- up or down -- so that hasn't affected by budget, for better or worse.

But the biggest change was deciding to move into a new apartment. The change of scenery has done wonders for my mood. I hated the place I was living. I felt stuck there, but had been planning to stay until I got out of debt. I won't bore you with the details, but the living situation became untenable and I really needed to move. So I found a place I love, but it costs a bit more money for rent and I am paying a little more in other household expenses each month. And it cost me a little bit to get moved.

Then my computer died. While I have not been a very dedicated blogger, I spend a great deal of time on computers, at work and at home, so I needed to replace the old laptop. In doing so, I was weak and put the expense on a credit card. I am not proud of that, but I didn't want to wipe out my emergency fund. So, I did a bad thing and charged it.

The good news on the financial front is that I am down to three debts now and should have the next one paid off in three or four months.

But the bad news with resetting my budget is that it may take me into next summer, or even longer, to be completely debt free. I have chosen to pay more to have a bit better living situation and I have committed to helping a family member financially too, which will cut into the budget and extend the debt payoff date. I am not happy about that stretching out the timeline, because this process feels like it has already taken far too long. But I can live with it. I can now afford to make some financial choices when necessary. I don't have to stay holed up in my apartment studying my budget spreadsheets for entertainment. I have decided that having my finances in order, while an admirable goal, will be a bit hollow if I have no life. And I had stopped living there for a long time.

So, I have loosened up my budget a bit to spend a little more on things besides debt. I have actually had a date, and have another one planned. I didn't realize how much I was using my finances as an excuse not to connect with people. I was in an emotional rut too, perhaps even deeper than the financial one.

I made a lot of bad financial choices in my life. I don't always make all the right one now either. But I am making much better ones. Breaking some bad habits. Speaking of that, I am trying to quit chewing again too. I'm still getting my nicotine through gum, but I haven't dipped snuff in nearly 4 weeks now.

These feel like choices that can help me live longer, happier and financially healthier.  That may be a rut out of which I may never want to climb.

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.

Potland couple shares their journey to debt freedom

I meant to post a link the other day to an Oregonian article about a couple that paid off nearly $70,000 in debt.

It was pretty easy to tell by the phases used in the article, and the title of their blog, Beans & Rice, Rice and Beans, that the couple followed the Dave Ramsey plan to get out of debt. The story didn't actually credit Ramsey, but the writer of the article did confirm that Ramsey was an "influence."

I wish I was doing so well at documenting my process of getting out of debt. One complaint, though, about the blog, is that the blog cannot be sorted by date, only by topic.

It is good to hear, and read, the stories of people who have reached their debt-free goal. It make the journey more bearable and serves as inspiration.

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.

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.

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.

I only cheated a little bit

I have not been faithful to my budget. I've been cheating.

Fortunately, I have not been using any credit cards. All my financial indiscretions have been committed with cash.   I haven't busted the budget completely, or burned through any funds needed for bills, but I've slipped up.

This month, I have had some extra money in the bank. And I've been eating out at restaurants and spending some money that I know I should be devoting to my debt payoff plan. The wasted funds don't add up to big cash, but it's allowing some old, bad habits to creep back in to my life.

I know a lot of the reason is that I'm bored. I'm just tired of not having a life in order to stick to the budget. I am seeing the progress of the last year of work. I no longer have to spend every penny I bring home just to make minimum payments and afford food. Now, if I only paid the minimums on all my accounts I would actually have some money left over to play with. And it's tempting to play.

Maybe it's because the weather has been getting better. I've felt cooped up for a long, long winter.

Perhaps in this next phase, in order to get all the way through the debt payoff plan, I need to find a no-cost hobby that gets me out and about a bit more. Or, maybe, if I'm going to stay cooped up, I could spend more of the time I spend in front of a computer writing more rather than staring at numbers in a spreadsheet. I know the number, though they are changing a bit more rapidly each month, don't change when I just stare at them.

Yes, I've cheated, and I'm not proud of that. But I haven't pulled out the plastic, in spite of the urge to splurge.  If I keep it up, in one year I should be less than 2 years from being out of debt.

Sometimes that seems so close. But far too often it all feels so far away.

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.

Our economic tsunami

I heard on the Today Show this morning that the current estimate on the damage caused by the Japanese earthquake and tsunami is $300 billion.

The amount of money the U.S. government is overspending this year is 4 times that much.

That's a massive tidal wave of economic destruction caused by Congress and the president.

Are you starting to get a feel for the enormity of our financial problem?

Celebrated a credit-free holiday

I got through the holidays without tapping into any credit cards. It's the first time since I've had credit cards that that has happened. It was an all-cash holiday.

I am proud of myself for that.

I wish I could just accept that and move on, but I can't resist the urge to beat myself up a bit.

I didn't go a very good job of planning for the holiday spending in advance. I didn't budget for it in advance at all actually. So that meant I ended up tapping into my savings account -- my emergency fund if you will -- to cover some of my holiday and monthly expenses. So far I've depleted the account by about $150, which isn't too bad. But there are still a few more days until pay day, and I've run out of supplies. The cupboards are getting pretty empty and there may not be enough meals left to take me through to pay day. The menus have already got pretty unbalanced.

So, it appears my effort to tackle my debt may have to get set aside for a month or so until I can rebuild my savings account. It may only be the delay of a month or two, but it's still a disappointment.

I've learned a lot about budgeting in recent months, but I still have to learn about how to budget for things outside the regular monthly bills like holidays, birthdays, car insurance, etc.

I should be paying off one small debt this month. I'm tempted to just pay it off anyway and work on rebuilding the savings account next month. But as I am also learning, the Dave Ramsey plan works quite well for me if I stick to it. Even parts of the plan I was skeptical about, like using cash envelopes for things like groceries, car expenses, entertainments, have helped keep me focused on my goals. Although, I'm sure Mr. Ramsey would not consider Christmas an emergency, I also know I should rebuild that fund before I tackle the debt again. I'm just so close to paying one more debt off. I want to be done with that one and move on.

Back to the plan. If I can get aggressive enough this year and can get a few months ahead of schedule, I may be able to pay off a credit card debt this year too in addition to the small debt I'm close to finishing off.

The next two years are going to be a long, hard slog before I can really start knocking these debts down -- and out -- in the two years after that. I would either need to up my income, reduce expenses even more -- or both -- to get on a faster track.

There's still much to do and much to learn and a whole lot of work to do. But maybe the corner was turned in 2010. Here's to continuing progress in 2011.