The hole I'm crawling out of

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One common thread among the debt-buster bloggers I've started to read is that they come clean on their blogs not just about being in debt, but about exactly how much debt they are in, when they make what payments, etc. I've thought a bit about whether I wanted to do that here, and felt very uncomfortable with the idea. Thinking about it further, I realized that the reason I felt so uncomfortable about it was (a) because I am embarrassed by my financial picture and have been lying about it to myself and others for a long time and (b) because I was brought up, like most people in this country, to think that talking about money was crass, particularly if you actually use numbers.

Well, fuck both those reasons. This is about accountability and changing my behavior, and the first step is definitely coming clean. As far as it being crass to talk about money, that seems almost laughable given the level of conspicuous consumption surrounding me and perpetuated by me every day. So I'm going to publish the numbers.

As of today, my financial picture is as follows:

Total credit card debt: $8,093.16
Total student loan debt: $33,674.75
Total savings: $163.77
Checking account balance: $11.69

My current post-tax income is approximately $2,868.97 per month, but should be going up slightly in the near future. I contribute $1,700 to our joint account each month. My personal monthly bills are as follows:

Audible subscription: $22.95
Cell phone bill: $48.57
Student loan payment: $257.03

That leave me with approximately $840 per month that is currently unaccounted for. That money has to go towards that ridiculous credit card debt and low savings balance. My plan, as I conceptualize it today, is to put $600 per month towards these goals--$500 to the credit card, $100 to the savings account (after I build up a month of extra money in my checking account from my no-spending Lent so that my checking account balance will stop going down to near zero every month). That will leave me with about $240 per month to spend. Part of this will certainly go to non-regular but necessary expenses, such as prescriptions and doctor's visits. The rest will be my spending money.

Finally, I am expecting a tax refund of about $1,800 in mid-March. That money will go to pay down the credit cards, period. No taking some out for fun money--I've already had too much fun. Also, if/when I get my expected raise, any difference between my current salary and my future one will go directly to the credit card debt.

'So that's what I'm working with. It feels good to have written it out, for some reason. More manageable. I've always been a person who has to write things down in order for them to be true, so I guess that's not surprising. I have a lot of work ahead of me.

11 Comments

Wow, even figuring that all out in hard numbers is impressive!

Once I was in a group and one person asked another how much he made, and then quickly apologized for asking. Then the person asked said "No, I will tell you. If we keep it a secret then they always have the power." i.e. to pay us unfairly.

I never thoguht about it that way, but that's really true! Still it takes courage to put it out there! Congrats!

WOW. Very courageous, Grace. Go you!
-Amazon

thanks for the inspiration and the links

I only have one question: What will you do for fun? If not fun, then...whatever it is people do that isn't neccesarily fun but keeps them from flipping out?

This is the question I always try to figure out. If expensive fun(shopping, bars) is a bad habit, what will replace the benefits of those bad habits?

Please don't say "will power", either. I don't have any of that.

Out of curiosity, what's the rationale for putting the $100 in the savings account instead of towards the credit card debt?

Well, mainly it is just that it bothers me a lot not to have any savings. It feels really unsafe. So, since my credit card debt isn't accruing any interest, I want to put a bit into savings each month while I am paying it off, for the sake of peace of mind.

Do you think that's a bad idea? I'm open to suggestions.

Simon, that's a good question. I guess I will stay home and watch movies and read books, which is pretty much what I'd do anyway, just dispersed with shopping trips.

As long as the credit card debt is interest free, it's a fine strategy. It's when people pay interest on their credit cards in order to build up savings that I get worried.

To Skye
"...As long as the credit card debt is interest free, it's a fine strategy. It's when people pay interest on their credit cards in order to build up savings that I get worried...."

I've seen alot of people in credit card debt through my work, basically if you don't have some sort of emergency account or cash lump sum then eventually what happens is people will tend to use their credit cards again to get them out of trouble, which totally brings them back into the debt cycle that is credit cards. However if they have a cash fund which to use rather than the credit card, they will slowly but surely stop using the credit cards to bail them out

Dollface, I'm BIG-time proud of you. You're tired of credit cards taking a bite out of you at 18 percent each time, so you're deep-sixing the debt. Make sure to put away $1000 for the emergencies. Otherwise, good luck, baby ... and way to go! You inspire.

Hope to hear more about your financial situation in the next posts.

Not everybody is as adept as you are at handling debt, especially with sneaky credit card tactics people don't often know about.

Good for you for tackling your debt!

Hey, I have some good news to share (further to our e-mailing correspondence with Smithie last year) - I paid off all my credit cards! Unfortunately I still have $5000 debt in other areas, but it's interest-free, so hooray.

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