War on Debt: Game Face

War on Debt: Game Face

In January 2011, 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.)

This time last year I was all, “It’s on…” and I vowed to have all our credit cards paid off by the end of December.  Then the car got smashed and my momentum was broken.

I spent several months wallowing in my financial misery and attempting to justify my unfocused spending.  In August we jumped back on the wagon, but it was short-lived and we ended up in the dirt again as we approached the holidays.

Well, it’s 2012 and I am armed with a new strategy and we. are. going. to. pay. this. shit. off.  Even if I have to live on rice and beans and give up Dr. Pepper.  *gasp*

The new plan is to liquidate some of our savings (leaving us with a smaller emergency fund) and start throwing everything we can at that last card.  With a balance of $4324.18, I figure that should take about five months based on our budget, but the goal would be to make that final payment in April.  Hello, Tax Return!

In order to keep us focused, I changed the organization of our budget.  There are now three categories of expenses.  “Bills,” “Variable Expenses” (like food and gas), and “Debt.”  Previously, it was just too easy to see the debt payments as regular recurring bills and it diminished the importance of getting it paid off.  Now that they are separate, it is clear what our repayment goals are and how far we have to go.

A year later, I can see the light at the end of the tunnel, but we still have a long ways to go to be debt-free.

What changes did you make to your budget for 2012?

The final post in the War on Debt: Spoiler Alert

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17 Responses to War on Debt: Game Face

  1. Kim says:

    We started a few months into last year paying all our bills at the first. We transfer our income from savings into checking on the first, then as we get paid, those checks go back into the savings accout. It’s easier to tackle all the bills at once and see what we have left then to always try to remember what bill is due when.

    • Jen says:

      I have most of our bills on auto pay, so they come out all over the place, but that would be a good system to try. And then you always have one month of income on reserve…

  2. Robbie says:

    Sounds like a great plan! I am trying to do the same but I have been laid off for 7 months and DH works & lives out of state making finances quite a challenge. I am paying off 2 dmall store credit cards today and it feels SOOOO good! We are trying to do the Dave Ramsay Snowball effect method. I am hoping by the end of the year we will have all but 2 large bills paid off and when our house sells those will be wiped out too!

    • Jen says:

      Congrats on your progress! It’s amazing that you’ve been able to keep from accruing new debt after the layoff! That’s when we acquired most of ours… It’s hard to not see the balances dropping as fast as I want, but I know we will get there…

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  4. Jennifer says:

    Did you say something about wallowing in financial misery? Girl, look at the big picture: You paid off half of a big fat credit card debt over the course of a year! That’s awesome. And you’re my hero.

    We have a big fat credit card debt to pay off (more than your original amount) and when we get our tax return we should be able to pay off half. It’s a bit depressing, but it will be better than where we are now, so I can only think of it in a positive way. Progress is progress!

    Good luck to you in finishing off yours once and for all.

    • Tamika says:

      I was thinking the same thing! You did freaking awesome!!!

      We are in limbo with our employment so I can’t make any major changes to our plan til we know where hubby will be working….

    • Jen says:

      It was more derived from the giant set back of totalling my car. We could’ve had that sucker paid off by the end of this year and now we started over with a new loan… Sigh.

      But yes, I am proud of what we did accomplish last year. Perhaps our goal was a bit too lofy, though. I’m always an advocate of setting expectations low to avoid disappointment. :) Also I think we would’ve had better luck sticking to the game plan if we hadn’t already been on a starvation budget for the previous 2 years. After that much time we had to loosen things up to fix stuff around the house and just save us from going crazy.

      • Tamika says:

        so true. We had planned for my hubby to work overtime in July/Aug and earn an extra 5K takehome – that was going to our credit card.

        Instead at the end of June our truck broke down and cost us $4986 to fix. So – all that money went towards the truck and we were no further ahead than 3mths prior….although, that just shy of 5K isn’t ON the credit card…

  5. Shirley says:

    So this is the year we only buy the essentials. With the remodel we are going to need all our extra money to go to that.

  6. Yay for you! It takes persistent effort, doesn’t it? We’ve paid off $44k in 14 months, with $15k to go. We are thisclose, which makes me want to up my game ever more. Good luck!

  7. *even. Or ever. I guess that works too.

  8. Dana K says:

    Great job & great plan moving forward! I totally understand getting sidetracked & off your game when it comes to getting out of debt. You are totally going to kick this!