NFR: Let’s talk about debt, baby!

January 22, 2009 at 7:16 am 11 comments

I was talking to my friend, Julie (See J? I told you I’d pimp out your blog. LOL) , the other day about debt. Probably not the most pleasant conversation among friends but one that many people are facing right now. At least I know I am. I remember reading that 2008 was the highest bankruptcy filing, almost 1 million (say it like Dr. Evil) people; young, old, married, single, student. Wow.

Julie even mentioned that her pastor was doing a sermon series on financial peace. Now I am not a very religious person. I guess I believe there is something out there but I really can’t say what. Officially my family is Buddhist but a certain Bostonian friend once told me that the teachings of Buddha are about living a simple life free from material things to reach enlightenment and I am not simple or free of wants. Ok I admit it. I want alot of things. I am a material girl.

See how that works. Its a vicious circle really. Being a material girl isn’t cheap. Therefore I have acquired some credit card debt. Thankfully I do not have any other debt. No school loans, no car payments, no mortgage. It could be worse. I have friends and family that over under in their home, have 10x the debt that I have, lost their job. I know its easy to blame the lenders and economy but let’s be honest and place some of the blame on ourselves too. Did we really need those $300 Coach shoes that were 50% off? (Yes, I am talking to you A.)

But I think there is a difference between good debt and bad debt. School loans are good debt IMO. Buying things you can’t afford and putting on your credit card is probably bad debt. (Why are you all looking at me like that?) I have gotten better though. I use to have 10 credit cards. Now I have 2. Hey baby steps right? I am working on freezing my last 2 credit cards like my friend, Amanda, does with hers to avoid using it in snap Nordstrom sale decisions but I am not quite there yet.

Right now T and I have figured out a 1 year plan to pay off our debt. No more paying the bare minimum. Now practically my whole paycheck goes to our debt and we live on his income. Right now it kinda sucks b/c I feel like I am working my arse off and not getting the instant gratification of spending my hard earned money (ie I really want a Wii+Wii Fit!) but I know I will later when that giant credit card debt weight is lifted from my shoulders and we can buy a house (and adopt a doggy!)

What are you doing to find financial peace?

Entry filed under: Not Food Related.

TWD #47: Surprise! No berry cake. FF: [Flash]

11 Comments Add your own

  • 1. Caitlin  |  January 22, 2009 at 7:38 am

    I’ve just been a bit more conscious of my “unnecessary” spending. I never eat out, and take advantage of bulk bins and sales at the grocery. And I don’t know how long it’s been since I’ve bought new clothes for work or new running shoes! I’ve just been waiting it out though – things will start looking up eventually, right?

  • 2. Julie  |  January 22, 2009 at 8:31 am

    Yay, my blog got pimped! Thanks girl!

    Of course you know all about my feelings on debt etc., I guess that’s part of what inspired you to write this post. Maybe I’ll have to write a post on my side of the story too. :)

  • 3. Nikki  |  January 22, 2009 at 9:32 am

    We’re in total debt payoff mode. CB you know the sitch but for everyone else. I went into my marriage with $500 in debt and DH has well lets just say he owes a fucking shitton. We’re almost done with the CCs, BUT his student loans will be tormenting me for years. I don’t necessarily thing SL debt is always good debt for example … when you fail a class and have to pay $5000 to take it over that’s not good. If you have to take the class a third time well you suck at life (ya I’m talking about my hubs). I also think its bad debt when you take out a little more than what your class costs to pay for food and fun … ya my husband sucked at life in college.

  • 4. Alanna  |  January 22, 2009 at 10:34 am

    It is SO hard! I’ve finally had to do similar to you and start making much larger payments on my credit card. I have two cards, and I am actually paying the smallest one off next month! I am SO excited. Now the hard part is paying off the other one without continuing to charge things to it. I have a really hard time controlling myself with online shopping. :( But, we are going to be buying a house soon, and I know that it is better to get our debt paid off now than to have that added expense on top of home-owner costs. It’s hard, but I have to keep telling myself how good it will feel to have it paid off! Mike is really good about putting huge payments on our joint CC each month. It really is a good feeling to see that balance go down!

  • 5. Mary  |  January 22, 2009 at 12:39 pm

    In college I really ran up the credit card debt. Like HUGE amounts. Fortunately for me I was in the energy marketing industry and we got really really big bonuses every yeat and I was able to pay off the CCs. But now I’m scared to have a credit card with more than a $500 limit. Which I use and pay off to rebuild my credit.

    Now if I could do something about my mountain of student loan debt. 10 years of undergrad and then going back to school equals a mountain. I may be blogging a LOT about dried beans…. :)

  • 6. Amy  |  January 22, 2009 at 2:19 pm

    Since I am a stay at home mom (a job with huge benefits, but zero pay), I have become quite the couponer in the last year. I make pretty much every meal from home and plan those by using ads to create my menu. I miss eating out, but I don’t miss the bills!

    ;) amy

  • 7. Shawna  |  January 22, 2009 at 5:04 pm

    Excellent plan! I am in the process of getting my husband and myself on a budget and sticking to it…like you, I have 2 credit cards…I keep thinking that with those minimum payments, I could be stashing a lot of cash into our savings…so our new goal is to pay off our credit card debts asap. Good luck!!!!!

  • 8. Girl Japan  |  January 22, 2009 at 6:56 pm

    It happens to many, not all but many. I was never a debt owning type of girl until I married an abusive husband (YEARS ago), his way of saying sorry was “allowing me to shop” and it was most certainly a way of coping… a decade later I carried some responsibility in that but refused to help pay when I left his butt… to me I still have those bruises, and well I did not take the house or wanted anything to do with any of it.. so I think he got what he deserved.

    So I had to wait the years and started off fresh with New Credit…

    That aside, I also thought “shopping” is no way of coping.. yea it could be worse.. drinking, drugs etc … (that was a far reach)

    but it also allowed me to think deep…. a decade later.. I have only one credit card, a mortgage and got 3.4% interest on my car loan … but I still have student loans which I NEED and want to finish paying off but I always put that last on my priority.

    For the past 9 years I have been really frugal, I like having a nice nest egg but once that is where I want or feel comfy I think it is okay to splurge and shop.. nothing wrong with wanting…

    I think setting aside some spending money having a good ratio paired with one ‘s income or if it is a household income … you have to enjoy life too..

  • 9. macduff  |  January 23, 2009 at 2:36 am

    Oh, I hear you. It’s insane, credit card debt. I swear, you look at my closet, my way of life, and there’s nothing flashy. But I have credit card debt. Why? Because sometimes I go somewhere and need something elemental, and it’s just too damn expensive. It’s so ridiculously hard to get away from it. So I’m with you there. My god, the gas crisis alone put me back a year.

    I just don’t even go into Macys. I’m a ridiculous bargain hunter, and I’ll even shop second hand. That helps. And yes – you just pay pay pay pay pay everything back. It sucks. I work three jobs and I am still in the red every month.

    I’m with you. It’s good hearing someone else vocalize it. The Buddha does have this awesome parable about the mustard seed, which I think of a lot. The gist of it is that no one is alone in their suffering.

  • 10. Adrienne  |  January 23, 2009 at 7:50 pm

    I have been reading one of the many “getting out of debt and staying there” type books and even though my debt is more business related it applies across the board. The formula is to take the total amount of debt you have (wether it be between 2 cards or 5 cards or whatever) that is NOT house, or vehicle. Once you have the total, then divide it by each respective balance on each card. You’ll end up with a % of your total debt for each account you have. I.e. Visa 30%, MasterCard 40%, Express 10%, Macy’s 20%. Each month take the amount you can and plan to put towards that debt (say $1000) and then percentage it out to the respective accounts: $300 to Visa, $400 to MasterCard, $100 to Express, and $200 to Macy’s. I’ve been using this formula for about 6 months now and it’s amazing to feel like I’m finally managing my debt instead of letting it control my life. Good luck!

  • 11. Natalie  |  January 25, 2009 at 10:51 pm

    We’ve got car debt. And student loan debt. But we just don’t don’t don’t let ourselves use those credit cards. The husband did — but I put an end to it when I married him and paid it off with wedding money.

    You just have to develop that discipline — and help each other stick with it. Don’t use them anymore. There’s honestly no reason to use credit cards. Read books and blogs — there’s lots of PF blogs that help! And make yourself stick with it. It might mean less clothes and more chicken and less red meat and less starbucks, etc. but it can be done. I know you can do whatever you put your mind to! You’re super Clara!

    You’re awesome! And kudos to you for being honest with it — that was the hubs and I’s first step. I’m so dreading the day when those law school bills come due. I know it’s “good debt” — even our church says that home, school and car is OK — but whatev, it’s still a lot of money!


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