How are we doing this?

I believe on Dec 13th, we met with our financial counselor at the Village where we went over all of our numbers.  At that time we owed just over $43,000 on our credit cards.  Today Jan 21st, that number is right around $38,000.  So in about 5 weeks we have paid off about $5,000.  How the heck did we do that?

Well the first thing we did was we got completely on the same page.  Meghan and I looked at each item that we spent money on and decided one of three things, keep it, get rid of it, or decide later.  That decide later column could have gotten really big but we were very focused on getting out of debt so there is only one item that is actually in the decide later column (our cable/internet combo).  Right now with Meghan going back to school, the internet is a must.  All of her classes are on line and she needs to have access to her classes from home.  IF we need to cut something else out though, this can also go as she can find access at the library, mall, etc.  Cable TV – I have already contacted our cable company and have told them that if they can’t lower our rate then we’ll either find a new company or cut it all together.

One thing that fell into the get rid of pile was going out to eat.  We found that we averaged over $400 a month on dining out charges.  We are realistic though and know that cutting it altogether is just not going to happen.  Especially since on Wednesdays we both go directly from work to picking up the kids to grabbing something to eat to church.  We get home around 9:15 so eating out on those nights is a must.  But what we have done is cut that to the bare bones.  One Wednesday we ate at McDonald’s for like $12.35, pretty good considering there are 5 of us.  And the other thing that we have done is Wednesday is the only night we go out to eat, maybe once a month maximum after church on Sunday (but that hasn’t happened yet).  We figure we can easily cut that eat out bill to $100 a month which will be a savings of $300 a month and $3600 a year.

Another thing that we did out of necessity was limit our shopping (mainly grocery) trips to once a week.  We have done that every week since Dec. 13th.  And to top that off, we are making a list of what is NEEDED and we only get what’s on the list.  Our Walmart bill was between $800-1100 every month.  Because of limiting our trips and what we need, this bill has been lowered to less that $400 a month.

One last thing that really can seem quite small at the time but can add up quickly is how I pay off our debt.  It seems easy to pay off debt in even number amounts.  $500 here, $300 there.  Well what I like to do is get all my information into our checking account then decide how much money we need left in the bank after all bills are paid.  The last time I did this I realized that Meghan and I would both get our next paycheck in two weeks.  (Since she gets paid every 2 weeks and I get paid twice a month it can vary.)  I decided that we needed to keep $200 in the checking account just to be safe.  That meant I could pay $727.35 on our credit card bill.  I could have made it an even $700, but 27.35 this time and 42.07 the time before, and 33.67 the week before that adds up to right around an extra hundred bucks paid towards our debt just for pushing as much money towards our debt as possible.

We found some really big bills that could be cut quite easily.  If you are looking to cut your expenses, sometimes you’ll find something big like this or sometimes you’ll only find little things.  But the most important thing to realize is even little things add up.  Whether that is bring coffee or pop from home instead of Starbucks or the vending machine, bringing lunch from home instead of going out to eat.  There’s lots of things you can do to start, you just have to pick one or a few and do it.  I know by the little changes we’ve made we’ve got an outside shot of having our entire $43,000 credit card debt paid off in the next 1 ½ years.  It’s aggressive and will be very tough to do, but I think we can do it and that’s our goal.

4 thoughts on “How are we doing this?

  1. That’s great! All good things. One note to readers, if those same guidelines had been followed from the beginning, the credit card debt probably wouldn’t have been there at all!
    Our family has a “rule” against keeping a balance on any credit card and it has served us well. We live on a quite small income, but we live comfortably.

  2. Looking at all the numbers, I can’t figure out where you found $5,000 in 5 weeks to pay on your credit cards. Did you sell something? If not, where did all that money come from?

  3. Trust me I’m just as confused/surprised as you are. I don’t honestly know where it has all come from either. First off, I coach basketball and got my coaching check shortly after we started this, which was a good chunk of that. Normally we would use that for Christmas presents and actually used very little of it this year. Second, Meghan and I both got paid 3 times each during those 5 weeks. We understand we aren’t going to be able to pay down our debt by $1000/week every week, but somehow did during the first part of this process.

    Last weekend I was only able to pay off about $300 and this week about $800 but every little bit counts and is getting us closer to our end goal.

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