War on Debt: One Step Forward, Two Steps Back

In January, I declared war on our credit cards.  With over $11,000 dollars in credit card debt, I mapped out a basic plan to accomplish the goal of being free of credit cards by 2012.  And in the spirit of complete honesty, I’m going to share the nitty gritty details with all of you.  (*Names of creditors have been changed to protect the not-so innocent.)
 
One month down and honestly, it could have been better.  The game plan is to make minimum payments on the cards with the lowest interest rates and focus on getting rid of the higher rate cards first. 
 
I had originally figured that I needed to direct $1025 per month to credit card payoff.  I knew that I would have to start a little slower since we still have some other bills to get caught up on, but after much financial analysis, I settled on $400 towards the highest interest card, we’ll call “Dingo.”  That made a total of $579.66 towards debt payoff.  It looked good on paper (or Microsoft Money) when I made the payment, but quickly realized that I had not allocated enough for all the expenses we would incur in the two weeks between paydays.
 
So, our recent purchases have been going right back on the Dingo card.  I really hate relying on credit for basic items like gas and groceries, but I’ve been trying to put a positive spin on it.  At least our interest charges were lower because of my $400 payment.  And that means our money served more of a purpose than it would as cash sitting in our checking account.  That’s what I’m telling myself to ease the frustration, at least.
 
And with our taxes filed, and a healthy return on it’s way, I feel confident that we will be able to get back on top of the debt repayment rather quickly.
 
February Goal: Apply $1470.34 (+ amount spent on recent purchases) towards credit card debt to recover ground lost.  That will payoff Dingo and allow almost $800 to get thrown at the Badger.
 
  Aardvark Badger Chinchilla Dingo
  8.24% 17.90% 11.15% 23.99%
January $84.66 $48.00 $47.00 $400.00
February        
March        
April        
May        
June        
July        
August        
September        
October        
November        
December        
         
Balance $4,823.63 $3,528.47 $2,488.93 $539.51

Next Post in the War on Debt Series: Comments, Questions, Concerns, Dreams for the Future…?

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8 Responses to War on Debt: One Step Forward, Two Steps Back

  1. MommyJ says:

    Good for you! There is nothing more financially frustrating than debt, especially credit card debt. It drains so very much, from your pockets, and your sanity! Keep up the good work!

  2. thelittlebig says:

    I am super proud of you for doing this. We're trying to get our debt paid off before… well, before a huge milestone that's coming up. Those little expenses inbetween can really kill you.

  3. Jen @ Dear Mommy Brain says:

    Thanks for the encouragement!

  4. Sally says:

    I am really impressed with your transparency. Sometimes, just knowing that other people are aware of your plan can be the motivation on those months when it seems impossible to get ahead. It holds you accountable when you would otherwise be compelled to "cheat" LOL!

  5. StirSpoon says:

    Paying off your high interest cards is a very good idea. But, if you have a card that has a low payoff balance you can get a feel-good moment by paying that card off first. Maybe making 2-3 payments on the low balance will effectively consolidate your balances.

    Just a thought.

  6. The Mrs. says:

    Good for you! Living debt free seems to be the impossible dream this day and age…seems like you have a good plan :) visiting you back..I'm on my crack fairy (black berry) and have no idea how to 'follow' via mobile phone grrr.. Ill be back later when my laptop isn't sick!

  7. Let'sMakeADifference says:

    Good for you! Sounds like a great plan! I'm blog hopping and am now following! Would love for you to check out my blog and follow back!

  8. Lisa K says:

    Good job with having a plan- I think that is the first step.
    I found you on blog hop- I hope you will follow me back.