by Claire
I started to put together our numbers for this month and YUCK. I don’t like what I am seeing! We WILL do a better job next year of budgeting for Back to School. Wow. That really took a toll. Then we had the emergency fund take a hit with catching up on the mortgage. That stinks and can be a real motivation killer. And…don’t yell too loud…but I used the Discover card. Gulp. For my resale shopping BUT I have the full amount due set aside to pay before any interest hits. I think it is on the budget for next Friday, September 7. It was a partial slip in the sense that I just wanted to use a credit card! That’s weird and surely the sign of some sort of addiction. I promise it will be paid off. Details coming this weekend.
Born and raised in Texas. I’ve at least driven through every state in the US courtesy of a roadtrip loving Dad.
I’m single with two children and a good parenting relationship with their father.
I am a “life is just half full of funny” kinda gal. Humor is my saving grace and I am thankful for it every single day. I have a strong Catholic faith and am thankful for that foundation.
I read a lot for a living but still enjoy a good book. I love biographies but in recent years have found the need for fun fictional books–sadly, for a long time I just didn’t enjoy fiction!
I love live theatre of any kind–from local productions to Broadway.
I love to scrapbook and pride myself in my kids’ albums.
I love being a mom but also love my career. I’m blessed to have found a balance allowing me to be at everything my kids need and want me to be at–while also having a career.
Favorite Quotes: Well behaved women rarely make history.
Behold the turtle. He makes progress only when he sticks his neck out. -James Bryant Conant
You’re going to continue to struggle with debt until you learn to say no to yourself and the kids when the money isn’t there and until you learn not to follow what “everyone else” is doing. While your spending in the last month or two may have been sensible and relatively frugal, I’m sure that none of it was literally necessary and could have waited until your family was in a better cash position. It’s weird how we’ve been socialized to think we all need to go on “back to school” shopping sprees. There’s nothing magical about that time of year that makes kids need new clothing. Worn-out and too-small clothing can be replaced at any time. Almost no kid in the US literally “needs” new clothing at any given time. While it sounds like your wardrobe was low, I’m sure you also didn’t literally need the new things you bought, or perhaps you just needed a few of them. Staying out of debt and being financially healthy means not shopping the way you’ve been used to shopping.
Sheesh, let’s at least wait for the official update with more details before you tear Claire apart? I _think_ your overall point is well-taken, but let’s consider what phrases like “literally necessary” and “waited until your family was in a better cash position” mean in practice. Are you really suggesting that nothing gets bought until all ~90k of debt is settled? Does clothing “literally” have to be torn to shreds before it is replaced?
The fact is that even you concede that the spending “may have been sensible and relatively frugal”.
Another fact is that Claire is making good progress on her debt. She is also quickly identifying non-optimal spending and correcting it.
OK, with that off my chest, I will also add that there is no need to get too paranoid about credit card spending in of itself. As long as the spending is justified, and NO BALANCE IS CARRIED FORWARD that is subject to interest charges (as is the case here). The fact is that many financially responsible people use credit cards regularly, even exclusively, as they can be incredibly helpful to keep track of how money is spent. I’m sure I’ll get some push back here, but I don’t think it’s a contradiction to assert that some people spend money more responsibly with cash while others spend more responsibly on credit (for the reason above, and a few others). I personally can never keep track of where my cash goes…
I am with Joe, on both points. Margot is a bit harsh and unyeilding. Life isn’t black and white. In “real” life, a lawyer can’t wait until clothes are literally falling apart before buying new ones, and you bought used! I think that the fact that you were wearing shoes with holes suggests that you have been holding back for a long time.
Sometimes, you just have to do a cost/benefit analysis. Is buying some used clothes worthwhile if it means that you look and feel more professional? AND if it means you have a small setback? The answer is likely “yes” on both counts.
Keep up the good work. You are clearly doing your best. Remember that perfection in one area of life usually means other areas are ignored. You are doing a great job on your finances, family and work. That’s what you should focus on.
FYI – I used to hate credit cards, but have decided that they’re not inherently bad. Let’s face it, it is the user, not the card itself that is the problem. I have found that if you are dedicated to paying them off montly, they are a great source of free treats (especially to those of us who are on an austerity plan!). After paying off our credit cards, I opened an Amazon credit card. I use it on large purchases, and pay it off monthly. We pay no interest charges,and we get lots of free stuff from Amazon. Free coffee for me, free books for the kids, shampoo, gifts, etc., etc. One can accumulate hotel nights, airline mileage, etc., etc. I don’t see anything wrong with that.
Credit cards are not the evil. I have been using credit cards (actually only one and I have another just in case) for the last 22 years and I have never paid a penny in interest or late fees. I follow my spending daily on an excel sheet. I have been making budgets ever since I was able to read, write and do simple mathematics. Please do not get me wrong, I am not boasting or anything. After all, I am single and I have no family obligations. I have been frugal all my life but every once in a while I need to splurge as well. I am sure Claire is doing her best and once she becomes debt free, she and her family will manage their finances very well.
This is inspiring!
Thank you Jaye! I really did wear those shoes with holes! I’m embarrassed about that in some ways but it is the truth. Your cost/benefit analysis is spot on. It is a setback but it was worth it. I didn’t go crazy as it did in the past. It was a controlled spend.
Hi Margot! Let me clarify that the back to school spending was not on clothing for the kids. In fact, I did great cash only clothing shopping for the kids. It’s the fees associated with this time of year that got us. We paid $150 for the children’s Faith Formation classes at church, $100 for activity fees for elective courses at school, registration fees for extracurricular activities (and I think you’ve told me in the past that the kids don’t need those activities and if it wasn’t you it was someone…but that is not something I am willing to cut). Those registrations fees were another $200 or so. I totally rocked it on school supplies doing those over time and based on sales. And yes, I literally needed the things I bought. Promise. I’ve lost weight with the real food and my clothes did not fit. I could not go to that mock trial in those clothes. We continue to deny ourselves but yes, September will have to see some tightening once again. Thanks for your support!
I’m confused by the terminology in first two sentences. Maybe you meant “this” spending was not for kids clothes, because in the next sentence you say the kids clothes were bought with cash. Spending is spending, whether paper bills or plastic was handed to the cashier. I don’t worry about the distinction of buying on credit vs cash any more than whether you used $10 or $20 bills. It’s just a method of transfering money to the store. A problem only arises if you bought with a card and had no idea where the cash would come from to pay it off.
Personally I use my credit card exclusively (and our summer holiday flights are free every year). Any day I make a purchase I immediately add the amount to my spreadsheet so the new balance includes that spending. Just like old fashioned tracking in your checkbook – once you write that check you must consider the money gone even if it’s still sitting in your bank account. Once I swipe the card I assume the money is gone and can’t be respent.
Let me quickly address this JMK. I used my personal, regular weekly spending money on the kids’ clothing and school supplies so it wasn’t taken from any part of the regular budget. I did this over a course of 4 weeks a little at a time. The back to school spending that occurred on all of the fees directly reduced what we had to put toward debt so the debt payoff goals were not met this month. I hope this clarifies what I was trying to say.
Oh Claire, I could’ve written this post myself! It’s been a horrible month for us too! I truly feel like it’s 2 steps forward and 1 step back when it comes to paying down debt.
It all looks great on paper, but the reality is life throws us curve balls all the time and here lately Murphy’s Law has been ruling in our house. Sometimes I think about just giving up on this. I’m getting so tired of watching every penny and denying myself I could scream. It gets especially frustrating when things that are out of our control happen and take a large chunk of change from our efforts. I really have to start making peace with mistakes that my husband and I have made so I can move forward with trying to fix them. We chose to buy a new bigger and better house a few years ago and use our old one as an investment property. Well, the rental market is flooded here and we’re sitting empty with no real hope of tenants for possibly the next year. We got word yesterday that plenty of people have looked at it but the floor plan is “all wrong” and not open-concept enough. There’s nothing we can do about this and I feel so trapped. We could try to sell, but if we can’t find a tenant how are we going to find a buyer?? Pricing it low might work but we’ll lose about 25K and that’s money we’d have to borrow and pay back adding to our debt.
At the end of the day, I have to take a step back and be thankful that we can pay our bills. We aren’t in threat of foreclosure. We’re doing better than most, but we’re sacrificing our financial security in the future because of choices we made in the past. I guess we keep plodding along and do what we can to fix it because doing nothing will ensure we won’t ever be out from under this.
Don’t sweat using the credit card. You have the money to pay it off next month so do it and move on. Take a deep breath, remind yourself of your goals and why you want to reach them, and then get to work again.
This is tough but you’re not alone!!
Thank you Cathy. I hate the situation we are both in and that we had a hand in creating! It is a terrible feeling. We have to know we didn’t get here quickly and we won’t get out quickly, but we can do it! Thank you so much for this post.
August has been horrible for us too because of our “need” to go to Six Flags and a water park. Neither trip was budgeted for but I felt that, since we’re getting paid three times in August, we’d have the extra money to pay for it. I just didn’t budget for the extra money at the right time and ended up going into negative account balance because of a donation check I wrote to our church. Nothing like being a good person and giving then having your bank charge you a $35 insufficient funds fee. That was totally my fault but worth ever second of time with our kids. The positive outcome, though, is my husband and I getting back on the band wagon and getting our crap together for September. Best of luck to you in this upcoming month. I LOVE your blogging!
Sigh. I don’t want to give up those kid moments!! It is such a brief window of time. I’m no help on this. I will tell you to spend on those moments every single time. Okay maybe I’ve learned we don’t need the theme parks that cost so much but still, they’re only little once! I hate that there were NSF charges Erin! I was there just a short 8 months ago!
Hi Claire! I just wanted to reply with a positive comment for you and your “yucky” August month! Welcome to being the CFO of your family and in many regards your life! It is a pretty stressful job (out side of litigation, I think) but like all large corporations and small businesses, budgets are tweaked usually on a quarterly basis. My analogy relates to you being a mom, having a family, a household, DH, etc and having to report back to shareholders and Wall Street, translation, your family. Many times as Cathy C says, “life throws you a curveball”. And as a Erin states, “she is getting back on the wagon” and getting ready for September, and I am sure with your new outlook and accounting skills, you will see Septembers budget differently. Your husband probably does sales forecasting for his job, you can ask him for help. Running a family and a household is a business too. Best to look at it that way. Just like Ford and the banks, you are in the process of paying back your debt!
As your CFO skills become more highly tuned, you will see the cyclic effects of our consumer economy on your budget. Things always need to be tweaked and brainstormed, meaning you recognize that possibly Back to School can be spread out over three months on a cash basis when seasonal sales take place before Back to School happens. Also, as a professional, how you look, and the impression you make via personal style is important and part of your job. You must meet clients, and looking like you came from the gym is not possible. First impressions in the work world are made within 30 seconds.
Commentary by Margot and Joe illustrate that there are incredibly hardcore personal and emotional views on personal finance that truly are diverse. I also think many views can be on financial situations are as volatile as a presidential election!
You are exploring and finding out what your personal finance views are and how they will fit in your life and personality. The word frugal has many definitions and meaning to individuals.
I too LOVE your blogging and you exploring what works BEST for you, plus, I can live vicariously through your “debt” adventures! Way to go new CFO!
THIS IS AWESOME!!! I’m printing it and putting it in a prominent place to serve as a great reminder. Thank you!
i’ve been out of pocket for a while but I’m starting to get caught up now.
First, sorry to hear about the job situation. I’m impressed with how graciously you handled it, this is an inspiration to me. I also agree iwth your decision to stop chasing the carrot.
Second, it was cool to see Steve chime in on your house post! I laughed when you said you are an attorney because I remembered my advice that it’s so important to consult an attorney on the lease to own question. you must have chuckled at that one. i also laughed at your sly “i’m in the insurance industry” comments before. no shame in your profession, most of us wish we could have a profession we love and make great money at. congratulations on finding that. although with your positive attitude i bet you’d love most careers you could have chosen.
now for the bad part. tsk tsk. no no no no no on the credit card. just CUT IT UP. you can do it. you may have the cash set aside but could you have used that cash to pay down debt if you didn’t run up add’l cc debt? i didn’t real all of the back and forth comments with margot above but i agree with her first line – if you do this, you’ll continue to struggle with debt. just cut them up. or i’m going to call discover pretending to be you and request the account to be closed.
ok, sorry if that was harsh, but that is our job when you slip up! good luck getting back on track. i’m looking forward to seeing your new numbers.
Thanks for the kind words. I’m kind of proud at how I’m tackling the work stuff. I was really back to myself by Sunday afternoon. I have a very strong faith.
I did chuckle with the check with an attorney comment but that was also one of the reasons I shared what I do. As I chuckled I felt like I was deceiving my readers! That said, I will still contact a real estate lawyer on the house thing. I did a little real estate stuff in a former life but I know and accept my limitations. If only real estate lawyers wouldn’t try to go to trial…but I digress!
Funny thing is I actually said out loud to a friend that “Adam will not be happy” when I used the Discover card! She thought I was talking about my son who is also named Adam! Then I mentioned Margot and she knew what I was talking about at that point! Don’t look too TOO forward to the new numbers and let’s just look forward, shall we? Lol! September will be better.
I agree with Adam, cut up the credit card! You have a lot of debt, but you are still making excuses for your credit card spending and shopping sprees. I have a lot of debt too, but we are only using cash and saving for things that we actually need. I find it interesting that so many people are giving you positive feedback about this, when the whole point of your blog is to get out of debt.
Hi Molly. The only thing I can guarantee is that I am keeping it real. Of course I want out of debt, but I am also human and I won’t be perfect in this process. Another reader recently griped that I wasn’t sharing my struggles enough. I know full well I won’t and can’t and don’t need to please all of the people all of the time…but sheesh…this is feeling just a wee bit catch-22. I won’t let it stop my free flow blog style but I do need to spgetbit out!
I know it sounds harsh, but as some of the others said, what you need right now is to face the reality of your debt situation. A bargain is not a bargain if you don’t have the cash to pay for it, and right now you really don’t have the money to be buying new clothes. I’m sure you could have found several different outfits using the clothing you already have. I think it’s hard for some of us to read the platitudes/rants you’ve been sharing when we see you still not truly facing the depth of your debt.
Wrong. But thanks for sharing!
I would again gently disagree with the past few comments.
First, I think there must be a fundamental misunderstanding about how credit cards work. Mathematically, there is no difference between paying $10 for something with cash on Monday, or paying $10 for the same thing on Monday with credit, and then paying your credit card company $10 on Friday with cash. As I wrote above, there are some clear differences in psychology between paying with cash or credit, but those differences can work both ways — it’s important for people to figure out what works for them.
Second, I just can’t agree with comments that imply that somehow Claire is not taking her debt seriously. It’s true that when you are in debt, every cent you spend on ANYTHING is technically money you are not spending to pay down your debt. But one must live, right? Where do you draw the line? Should it be ramen for the next two years? Squeeze everyone into a 300 square foot apartment? Stop taking showers? (Each of these are actual examples taken from personal finance blogs I’ve read in the last several years).
She has thoughtfully laid out the case for individual expenses: the clothes are a great example of something that are actually important for her job.
I would just point at the sidebar: over $10k of debt repayment + emergency fund since the blog started (January?).
I think Claire’s come up with a reasonable approach involving establishing a timeline for the expected debt payoff, and monitoring month-by-month how she is doing. She has thought
Some months (as apparently August) will be disappointing, but a month or two ago, several thousands dollars were paid off in a single month!
There is always room for improvement (and I’ve been one of those voices at times) and I look forward to continuing reading about navigating through all of the complex issues!
Joe!!! Not Ramen! :-). Seriously though thank you for the support. You are correct regarding January as a start date but it wasn’t for the blog, it was just putting a stop to the bleed for January and February. So, I’ve actually only blogged for 5 full months and I don’t think we did anything but minimums for March and April. The $10k paid then is really only 3 months. From incurring NSF penalties to $10k down in 3 months? I’ll take the rough month of August in stride! Thanks for the reminder.
Hey Claire, I’m sure you wont even get to this comment, being your post is 2 days old already…but I only got to reading this last night while waiting for my son to finish his (free) guitar lesso) ….I didn’t have time to comment…..But,so many things are running through my head…just want you to know you have my support and I UNDERSTAND….when you firts posted about your job, my first reaction was how does someone who makes that much money have these issues? But then I stopped my self…I realize that how we got here is a big part of the problem but its difficult to fix overnight…and even if we stop spending on some of the old things it doesn’t mean new ones will not take its place…(and it doesnt mean the old one were simply frivolous as some people assume).The back to shcool and fall activity thing is definately something that changes every year for me…Last year my daughter needed an $80.00 calculator and it had to me new because it was a new version….it was major trauma for me…but we got it, she got an A in Geometry…(cash)
I think when you write, people are assuming alot because they don’t have every detail…..not alot of “Money people” comment on your shopping trip because they didn’t understand it….but days later when you mentioned the use of a credit card…BAM! they all came out preaching….Honestly getting out of debt seems impossible but by seeing people putting it all out there, I realize I am not the only one, and it can’t be ignored. Feelings of anxietey creep up on me constantly, but when positive things happen, I right them down and share them with my family, like you do on your blog. Yesterday I found out that My Electric/Gas utility budget Bill was reduced by $50.00 a month…that was HUGE! The other quick thing I want to say…Is I think your whole thing with food and planning and cooking on Sunday is amazing and I know that organization and being prepared for every meal saves a fortune…(Organizing and Planning are key in all this, I know).Last night we got stuck in a horrible activities/meeting night and ended up getting dinner out at the cost of $45.00…I was not happy, but I literaly was about to pass out at 8:00 and getting home wasn’t happening…THe last meeting was a “last minute” thing and my work day was insane, so my “planned dinner” got scrapped…..BUt…I’m moving on….Keep doing the same….Thanks, this was a really inspiring post and comment response!
I’m with you, Claire- I paid off my debt at the end of July and I’ve been doing a horrible job of budgeting for August! There are always rough patches, and I’ve always found that August and December are my terrible months for shopping. I’m confident that you’ll be a superstar with money this fall. You’ve done so well already. Keep it up! We’re rooting for you!
I just wanted to chime in here again and add my 2 cents about credit cards. Please don’t take the “just cut it up” advice! Not only does this not solve the root of the problem, it leaves you in a bad position when faced with situations that require a credit card. It’s pretty hard to get a rental car, hotel, plane tickets, etc these days without one. They are imperative to maintaining a good credit score and while some might say you shouldn’t care about your credit score if your goal is to be debt-free, that’s just irresponsible and careless. Are you always going to be a renter? Do you never want to own a home and (gasp) take out a mortgage on one? Not everyone can pay cash for a house. Having no current credit cards on record won’t help with getting a mortgage. Your credit history has to be diverse and long-standing. Pay off those cards but make sure you hold on to the oldest one!! Don’t cancel it!
It’s no wonder so many people can’t seem to qualify for a mortgage with some of the comments made on here. Just because you don’t have any debt and have all your little financial ducks in a row doesn’t mean you’ll be viewed as a good credit risk.
Back to my analogy of CFO again… Corporate and small business CFOs hopefully never make rash financial decisions concerning the economic situation of their company and that is the same for Working Mom CFOs. Don’t buy into the “just cut up your card” concept. Poor financial advice and rash. Reason: it can affect your FICO credit score. Go bury it out in the backyard, freeze them in a chunk of ice but do not cancel the account which is what I am assuming the other comments are referring to. Cancelling the account will affect your FICO score and you have mentioned that down the road you would like to purchase a home. Be smart and prudent about what accounts you cancel which eventually you might do. I would get the balances to 0 and wait 2-3 years to purchase your mortgage, then when you are set in your home, cancel big time!
Read all that tiny print, and adhere to the T and Cs plus legalities. There is a lot of legal research and manpower dollars used to create credit cards’ T and Cs.
So many family units do not think of themselves as a small business with a huge expense column on the spreadsheet. Think of your company and billable hours and apply that rationale to your family finances. Cathy C. is using smart thinking, don’t cancel!
Besides it is ludicrous and financially foolish to pay cash for a house, might as well invest that in EE bonds if you want a sure investment, and be careful how one does their mortgage, plus, that is STILL a tax deduction (mortgage).
Learn how to manipulate your money and not your money (or people) manipulating you!
Plus, your writing is fine, I love your personal style, whether it “correct” grammar or not!
Using credit card in present time is not anything but just a status symbol, people who use it face trouble some time when someone stolen their card & miss use it. So it’s important that be careful for the credit cards.