Wednesday, March 27, 2013

Getting out of debt..

It's been on my mind of late. More so than usual, though I'm not sure why. DH and I reviewed our finances at the end of 2011 and re-did our budget in an effort to put money aside both for emergencies and for retirement. The chances of Social Security being around when it's time for us to retire are slim and none, so we need to ensure our own ability to support ourselves.

Last year, 2012, was better than 2011. While our retirement fund holds exactly the amount it should, the emergency fund does not. But that's what it's for, right, to pay for life's surprises. Try telling DH that. He gets upset when we spend from it, but it's there so we don't get off the budget. It's there so we can pay the regular bills when we can't get our regular paycheck.

We did a minimal amount of paying down debt last year. Instead, we focused on establishing the two safety funds and making them a part of the monthly budget. Although, we did receive a health insurance rebate check towards the end of the year and I did, in fact, pay off a gasoline credit card. I took the payment from that credit card and rolled it over to another credit card, increasing the amount I have been able to pay toward it.

This year, my goal is to focus more on debt reduction, now that the safety funds are established.

A few weeks ago, I received money from the bank that holds our mortgage. That went towards this next credit card. I also filed some AFLAC forms for annual doctor/dentist visits and got money back. Guess where it went? Yeppers, to this same credit card. In the last month, I've been able to cut the balance in half. I have one freelance editing job in the hopper and when I get paid, that money will go straight to this CC as well. I should have it paid off no later than June. Woo hoo. That really makes me happy.

Once I've paid it off that money will roll over to the next credit card with the lowest balance. Unfortunately, with just this additional money, it's going to take fourteen months to pay it off. That's a bit more daunting, but if I get the Final Line Editor position with Samhain Publishing, then all that income will go towards eliminating this debt as quickly as possible. (My goal would be December2013 or January 2014 (as the due date is early in the month)).

After that, well, you get the idea.

I know there are other things I can and need to do, but I need to figure out what and then how. Any suggestions would be most welcome. (Just FYI, while we haven't cut them up, we rarely use our credit cards anymore. Mostly minor online things. Like my RWA membership.)

Sad to say, we exceed the average debt amount. And I'm trying to change that.

Wish me luck!


Regina Richards said...

Good for you, Jen! Sounds like you're making real progress. In August 2008 we were up to our eyeballs in debt and knew if we were going to be able to send 3 kids to college we were going to have to get very focused.

It wasn't easy, but it was sooo worth it. We've been debt-free including the mortage and cars since August 2012.

We don't feel any richer since the money that was going to pay off the debts is now going to pay for the kid's college. But we haven't had to borrow to get them through.

We've managed to stay completely debt free. Hopefully, 3-4 years from now when all the kids are financially independent (and we've made it clear to them they WILL be financially independent), mom and dad can finally go on a real vacation.

Again, congratulations!

Char Newcomb said...

Being debt free is a great feeling. I've been there a few times. :) I usually manage to pay off anything I've put on the credit card within a couple of months unless something unexpected comes up - like taking the kid to the ER... (or me and my upcoming visits to the doc. Even with health insurance, I'm anticipating a big bill for that MRI. Ugh.)

I do charge big things - like plane tickets, hotels, weddings... So I got the wedding paid off, then I got Jeff's ER billed paid off. I was nearly down to $0 until I put down deposits for England. Ah well...

Unknown said...

You have a plan, and it sounds like you're off to a great start! :)