Saturday, December 09, 2006

Credit Card Debt Paid Off - was it worth the sacrifice?

I did it! I paid off all of our credit card debt. Hooray for us! (We did the happy dance yesterday, when I sent that last payment to Bank of America.)

If you read Tweak Your Financial Goals - 1 Year Mark, you know that as of November 7 (2006), I still owed $560 on the last credit card. I figured I would have it paid off in 3 months.

I was sending approximately $185 a month to that last credit card company. Now, that might not seem like a lot of money to some folks, but when you're supporting a family of 3 on less than $20,000 ($16,700 take home) a year it's a hunk of cash to come up with every month.

If you've done the math, you can see that sending $185 a month for 3 months pays off that $560, and that was my plan. But, when I made the November payment, I was so excited about being so close to my goal that I dug even deeper to pay it off early.

I made the November payment on the 17th, and by the 27th I came up with enough money to send an additional payment. Then yesterday (December 8th) I had December's payment a week early, so I made 3 payments in about 21 days..

How did I manage to come up with $560 in less than a month? I did two things.

One, I pared our living expenses down to the bone. That meant:
  • a cold house (turned the heat way down-this meant I could use some of the money I had saved for propane, because we would have more left for next year)
  • no treats or snacks in the food budget (we rarely eat junk food so that part wasn't too hard, but entres of ground beef, eggs, beans, soups, or pastas was boring at times)
  • no eating out (we don't do this often, but I even eliminated our once-in-a-blue-moon fast-food run)
  • no extra principal payments on the mortgage (I usually send in additional payments to accelerate our 30 year mortgage, instead I sent that money to the credit card company)
Two, my partner got a part-time job at a nearby grocery store. Now, this method of coming up with extra money obviously made the biggest difference in the short run, but it was the most challenging for me.

Kim had been talking about getting a part-time job for a while, but I was against it. I felt that she was already contributing enough by working 40 hours a week at her regular job. Also, I didn't think she would find a job that would allow her to set her own hours (she wanted to work one day during each week and Saturdays).

But, she persisted. She really liked the people at the grocery store where she does our shopping, and she believed that the manager there would let her work on the two days she had available. So, I figured it was worth a try. She was right. He hired her on the spot.

The hourly wage is low, and some weeks she is only scheduled for one day, but the $50 she makes on that one day made a huge difference in our saving ability. (And, she really likes working there.)

The job doesn't cost us much. It's only 5 blocks from home, so the gas use is negligible. She packs a lunch, or comes home to eat. And, she didn't have to buy any special clothing; it's a grocery store so jeans and tennis shoes are fine.

So, that's how we did it. Lots of sacrifice and some extra work. Was it worth it? You betcha! We are Free from debt (except the mortgage), and that feels really fine!


lndsymaria said...

That's incredible! Congratulations! You've inspired me.

F_M_M said...

Thank you, Indsymaria. I'm so proud of my family. We've all learned a lot about how we spend money.


Not ban at all.