War on Debt: Reevaluating

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.)

If you are a regular reader, no doubt that you can infer that October was a tough month for our family. 

With several unexpected expenses, we didn’t have quite as much “extra” left over at the end of the month.  So, we only put about $400 towards our credit cards this month. 

But we are officially down to one credit card!!

That is $8,389.52 in credit card debt paid off in the last 10 months.

While I’m over here doing a little happy dance, I can’t help but be a little disappointed… 

You may remember that the original plan was to have all of our credit cards paid off by the end of the year.  But over the summer we got derailed by multiple vacations some unexpected expenses.

And once we broke the momentum, it was difficult to get back on track.

But perhaps that was not such a bad thing.  We have been living on a starvation budget for so long we have neglected to make many much-needed purchases over the last several years.

So over the last few months, we have strove to find a balance between digging out of our debt and affording some long overdue necessities.

Sure, we want the debt to be gone.  But we also need to buy clothes that fit.  And repair things around the house.  And purchase Christmas gifts.

I used to budget $1025.48 every month for the plastic and whatever was left was used to pay our bills and buy our necessities.  However, what was left was sometimes not enough.

Now I am using the envelope budget system, the bills come first, then the debt.  And although this means we won’t make our debt free by 2012 goal, I kind of like it this way.

And aside from the fact that I keep forgetting the appropriate envelope when I go shopping, the cash system has been incredibly helpful at controlling our spending.  Because I’m sure that without it we would have more than exceeded the $100 we went over budget last month.  (Hello, stress eating.)

I have spent a lot of time trying to keep monies organized because of the above forgetfulness, but I recently decided that the point of the envelope system was to make budgeting SIMPLER.  And worrying about $3 spent out of the wrong envelope was only giving me headaches.

So when our grocery spending was a little tight because I purchased *ahem* $50 worth of bacon at the beginning of the month, I stole borrowed a little from the household budget to cover milk and bread at the end of the month, but I’ve made my peace with that.

Sometimes you have to rob Peter to pay Paul.  And I’ve rationalized that as long as what Paul spends isn’t more than both their funds combined, all should be good in the world.  Well, except for Peter.  He’s probably pissed.

Moral of the story?  The War on Debt is going to be moving a little slower than originally planned.  And that’s okay.

We still have a long way to go in figuring out our whole financial plan, but every month we are getting a bit closer.

 Next post in the War on Debt series: Financial ADD

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4 Responses to War on Debt: Reevaluating

  1. I’ve done the envelope system a few times in my adult life…worked wonders when I was single, but I find it such a challenge with kids…there’s always something when we’re out an about…a scone here, some french fries there…etc, etc. But you’ve reminded me that it’s doable so maybe I’ll try once more!

    • Jen says:

      What if you created an envelope for those purchases? Both my husband and I have our own spend money for times like that when we. need. caffeine. (or whatever) That also helps when we are out and unexpectedly stop for something. If I don’t have the right envelope, I use my money and just pay myself back when I get home.

  2. Holly says:

    Congratulations on getting down to one credit card. :)

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