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Ashley’s New Plan of Action

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In case you’re a new reader – welcome! Thanks for stopping by!

To catch you up….

I first started blogging here in March (Intro post here).

At that time, my #1 goal = eradicate credit card debt IMMEDIATELY!

And, not to toot my own horn, but I’ve done a pretty good job (and thanks to YOU for all the invaluable advice along the way! I’ve learned so much already!)

So as a follow-up to this conversation and trying to decide the next course of action for my debt-reduction plan, I wanted to give you a quick follow-up, along with my new goals:

Order of Debt Repayment (now that WF is paid in full, woot woot!):

  1. Bank of America credit card (goal date = paid by July 2014)
  2. Sallie Mae 8.5% student loan (goal date = paid by September 2014)
  3. Sallie Mae 8.25% student loan (goal date = paid by November 2014)
  4. License fees (goal date = paid by January 2015)
  5. Carmax (goal date = paid by January 2016)
  6. Remaining student loans (no goal date yet because I want to reassess in January 2015)
  7. Medical bills (no goal date yet, see above)

I was originally going to pay the higher interest student debts first, but I can’t do it. I’ve GOT to pay off the credit card debt for my own personal satisfaction and sense of accomplishment.

Next, I will try to get rid of the two high-interest student loans. Getting rid of debts #1-3 will free up $218 in minimum monthly payments (which will be invaluable when my deferment ends on the student loans in February). I’m still a little undecided regarding #4 and #5. I feel like I’d get more personal satisfaction from paying more toward the Carmax loan, but the license has a balance of about $5,500 versus $23,000 for the car, so its a huge difference. We could feasibly pay off the license fees before my student loan deferment ends (in February), but in contrast, there’s NO CHANCE I’ll have the car paid off before deferment ends. Again – I’m trying to free up those minimum monthly payments so they can be applied to the student loans and other remaining debt.

Notice my new “goal dates” for paying off these debts. I have to say as a disclaimer that these are really optimistic dates. Keeping those dates will have us paying about $3,500 toward debt each month (as opposed to the $1500/month we have budgeted). This means we HAVE to keep pulling these big income months like we have the past couple months. This may be possible….I mentioned how “I’m getting a raise” (by teaching additional classes….which started this week so its already “in effect”). Additionally, my husband has hired a new crew of workers so his income will also receive a bump from the work this new crew is able to complete. But at the risk of sounding like a hypocrite (given this morning’s post)…I don’t want to count our chickens before the eggs hatch. I think it will take a few months of my new income + my husband’s new income for us to really know what what we’ll be bringing home each month (in terms of pay). I hope it stays steady with what its been the past couple months, but there’s no guarantee. Only time will tell.

So, yup. Just an update on my new plan of action and goal dates for debt-eradication. I really appreciate all the suggestions and feedback! For example, I had NO IDEA that student loans can’t be consolidated for a lower APR. No point in consolidating then! So those will all be staying separate. I do still plan on trying to refinance the car loan, but I want to wait until my recent huge Wells Fargo payment gets updated with the credit reporting agencies (as I believe it should help give my credit score a little bump).

Hope you all have a great Memorial Day weekend!

 

 


I couldn’t wait!!!

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I broke my cardinal rule. I counted my proverbial chickens before the eggs have hatched. And I’m taking a bit of a risk to do this, but…..

I JUST PAID OFF MY WELLS FARGO CREDIT CARD!!!!!!

(*cue the herald angels singing and imagine my euphoric screams here*)

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This was a big – HUGE – deal.

Starting to write here has changed my life (I know this sounds cliche and silly given that it’s been 2 months, but I’m for real). I swear, if I had continued just as a reader (not contributing), there is NO WAY I would be here right now. These past couple months we’ve done pretty well with pay. So we’d be sporting flashy new clothes, or perhaps taking a fun summer vacation. We would put a little extra toward debt, too, but we certainly wouldn’t be throwing every single penny possible toward debt payments and, thus, be in our current position.

You don’t know how happy this makes me! Since I’ve started here: I paid off my Capital One credit card (once maxed out at $7500, balance when I started blogging in March = $413). Next, I paid off my Wells Fargo credit card (once maxed out at over $10,000, balance when I started blogging in March = $7700). Next on my radar is my last credit card, Bank of America. With “only” a balance of $2200, it should be gone within a month.

How did I do this?

First, we’ve been cutting back (I have a whole money-saving tricks series!).

But let’s not kid ourselves, this has primarily been due to increased income (well above our “average”). And every extra cent has been thrown toward debt.

How else did I do this?

Well…..I cheated the system a little. I couldn’t help it. For those with variable incomes, this is a “do what I say, not what I do” moment…..

I have mentioned before that we have a budget (for all of our minimum expenses and debt obligations). We wait until the month is completely over to determine how much “extra” is leftover, and we apply that money toward debt in the following month (as a one-time snowflake payment).

Wellllllll…….I didn’t do that this month. It was driving me CRAZY to see my checking account balance high enough to pay off the WF CC and I didn’t want to wait until May was over to apply the funds! So, this messes up my budget a little but I ended up doing two things I would generally advise AGAINST for anyone with variable incomes (1) I spent money that will hopefully be in surplus from this month (May) to apply toward the WF balance (even though we don’t know yet exactly how much surplus we will have), and (2) I used some logic to assume that, should our surplus not be as much as I’m guesstimating….then I can “borrow” the money from myself. Our current monthly payment to WF is $900, so basically I’m using the June money and applying it toward our balance NOW instead of waiting a week until June is officially here.

I was able to do this because we currently have these funds in my checking account. If something were to go wrong (i.e., husband has work problems/doesn’t have jobs the rest of the month/terrible problem that costs money instead of making money), then it is still “okay” because I had this money available in my Capital One 360 Savings (I talked about all my assets in this first post…we don’t have a ton, but we do have some liquid cash in a money market account + CapOne 360 savings).

This is definitely “counting my chickens before the eggs have hatched” because the month isn’t over yet….so I have no way of knowing whether our income will truly be high enough to justify a huge (almost $3500) payment toward this bill.

But I did it anyway.

So hopefully when the dust settles from May I’ll discover that I made a good decision (meaning, we had enough “extra” money to cover this expense). If not, then that just means that our savings has decreased a little and – oh well. I think it was worth it to get out from under the 13.65% APR credit card debt (side note:  Now all of our remaining debts are under a 10% APR. For some reason, this feels like a big threshold to cross – even though I won’t be satisfied until we have NO debts and aren’t paying ANY interest!)

Oh happy day!!!!

I am smiling from ear to ear! Bank of America….you’re next! Mwhahahaha!!!!! (<<<< I love my evil debt-paying laugh! Feels so good! ) : )

Thanks for all of your advice, suggestions, and support along the way!!!


New Numbers

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I have updated my debt numbers and could do a backflip over that BofA being gone!!!!  But alas I am in an airport and don’t want to cause a scene!  I’m returning from a work trip to South Texas and had a layover in Houston. A long layover. The flight schedule to South Texas from SA is terrible and often takes longer than a car ride would BUT I do not like to make that drive alone. It is a long, desolate route and I don’t trust myself to stay awake so I almost always fly.

The flight was overbooked and so I jumped up to volunteer to go home on a later flight and I got $500 in vouchers!!!  I’m so excited!  The kids are with their Dad anyway so I’d be sitting at home instead of sitting at the airport!  I’ll take that free money!  And did I mention…Southwest flies to Puerto Rico now?!

On the downside, my laptop won’t connect to the Internet so I’m posting this from my phone!  My eyes are too old for this but you have the new numbers!!!


New Numbers Are UP! And I hope you’re impressed…

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I could not be more excited to share my new debt numbers!!!!  I set out to make February a turning point and I succeeded!  I paid the $3950 to the IRS AND nearly $4,000 to Bank of America!!! 

WOW!  WOW! WOW!  I was also able to pay a little extra (just to say I did) to the signature loan.  I set a little goal of putting the cash from my regular spending money that I did not use toward that note.  That’s a fun little debt reduction game I can play b/c it is very easy to transfer money anytime to that signature loan via my credit union’s website.  It made me make very different spending decisions all month long.

I hope you are as proud as I am!  I’m working out details on my March goals and hope to have incredible results to share on April 1!   I have to be realistic I know because the chance of burn out increases if I set the goals too lofty and I don’t want to fall off the wagon.


Updated Numbers

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I’ve updated the debt and savings numbers.  I am overjoyed to only owe Bank of America $7.954!  I’m also excited about my extremely low signature loan rate but still somehow more thrilled about the Bank of America aspect.  Whatever motivates you, right?!  While the overall debt amount remains unchanged the savings in interest is no small gift!  I am motivated!

And it’s a good thing I am because I owe $3,950 to the IRS by March 28, 2013. Totally stinks that adding that in takes me back up to $45K in debt but it is short term (very short term…76 days in fact) and I have at least a partial plan to attack.  My goal is to “find” money to put toward that without detouring from my regular monthly debt payments. 

I have moved $1,150 from my emergency fund because I had stockpiled that for taxes when I learned of the debt. Please note:  I have created a separate “asset” item called the IRS savings account but for some reason it isn’t showing up on the sidebar.  I’ve got an email out to Jeffrey for a solution.  I received a small commission check from Pampered Chef for $100 and I sold some of the kids’ clothes at resale shops for $80.  I found a lot of random things to sell and they are selling.  As of now, I have $300 coming in from Ebay.  There’s sterling silver jewelry, purses, kids’ items, craft items and they all have bids. I do not yet have that $300 added into my IRS savings.  So I am currently at $1,330, $2,620 to go.  I really pray that I will get at least that for my wedding ring.  It is a 1-carat princess cut diamond, platinum setting that I have all the documentation for including the receipt showing the $7,000 paid for it and the appraisal at right around $10K.  I have zero emotional attachment to this ring and will spend a little time getting as much as I can but honestly–I’ll be happy if the tax debt is paid.  I do want to share for the record that I did not participate in the selection of this ring at all.  Zero input.  I wanted a plain band, no diamonds and was never very comfortable wearing the ring.  That’s not bitterness talking…just the truth.  The ring only lost more appeal when I learned of the 401K withdraw used to buy it. 

Anyway,  I have two real food workshops on the books for January with prospects for a few more.  I’m confident I can do this….but….IF I can’t “find” the money I DO have the option of making minimum payments for just the months of February and March and using the overage to knock it out.  I think I will see what comes of the wedding ring sale research and plan on revisiting my plan on Feb. 1.

Have a great weekend!


Great News from the Credit Union!

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I went into the credit union today to put the signature loan in my name alone–pursuant to the divorce decree.  While I was there I asked about options regarding both the interest rate on the loan as well as borrowing additional amounts to knock down one of the other two cards.  I am so happy to report that they lowered my interest rate to 4% AND increased the loan amount to $20,000!  I couldn’t believe it but then realized that I am better off standing on my own credit rating than combining with my former spouse!  Just another validation about the whole marital mess!

I’ll complete the final paperwork later this week and then make a payment to Bank of America to bring that balance down.  The BofA will continue to be my focus because A) the interest rate is the highest and B) say it with me…I hate Bank of America!  I’ll update the numbers when all of the transfers and such are complete.

Happy Day!  I’m feeling GREAT!  What a total shot in the arm at the beginning of this new year!


New Numbers are UP!

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I just updated my debt numbers and am happy to see that stupid Bank of America has reduced by $1,776 since last month!  Alleluia!  That debt is my primary focus right now although I did pay a little extra to the signature loan too.  Not much but overall I am pleased with the progress considering it was the holidays and the debit card madness got slightly out of control.

My emergency fund remains the same as I chose to sink extra into debt reduction this month being comfy with the emergency fund for now.  We should see that grow in the next few months as I set aside money for the IRS.  I have some projects in the works to get to the approximate $5,000 needed by March 28.  I’ve challenged myself to leave the regular debt payoff plan in motion while I come up with new sources of $ for the IRS bill.  I have a very real sense of urgency about collecting that money and paying the debt. I did a clean out of old jewelry this weekend and will be exploring my options with that to generate some income.  I have real food workshops on the books for Jan, Feb and March with RSVP’s coming in steadily.   I’ve boxed up kids’ clothing and my clothing for a run to the consignment shop for a little extra cash. All in all, I’m proud of my brainstorming income ideas.

I hope everyone had a wonderful New Year’s Day.  The kids and I spent time with new friends and had a great, unique, day! 

 

 

 


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