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
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