State of the Debt

Posted on November 23, 2007
Filed Under debt |

I am, like most Americans, head over heels in debt. At one time, this was not a painful situation but times have changed and so has my situation. I have made good decisions and bad decisions and it’s a shame that the economy didn’t cooperate with the good ones. I chose to leave my job, sell my house and move to an area where the cost of living was half of my previous location. My plan was to sell my house there for enough to pay off my debts and go into business for myself.

What with one thing and another, the housing market dropped like a stone when I put my house on the market. I succeeded in selling it at a decent price and the contract fell thru the day after I had moved to my new house. Four months and 5 contracts later, I got enough for it to purchase my new house. Period.

During those four months, I struggled to hold on to both houses and my other debts fell by the wayside. It was not intentional, it was a matter of survival. Bills got prioritized and unsecured debts (credit cards) fell by the wayside. I am not sure if you know what happens when you don’t pay your credit card bills so let me explain. First of all, they charge you a late payment fee of 39.95 plus interest on the account. If you go over the limit, they add an additional 39.95 over limit fee. This adds up to almost $80 in addition to your regular payment. Geesh… how do they EVER expect you to get caught up.

Then they send you a nice little note that says if you are feeling overwhelmed, call this 800 number and one of their customer service reps will help you. HA!! Their customer service reps are trained to get as much money from you on the phone as possible and when they have done that they berate you about your next payment and try to get you to write a post dated check.

So what do I do? Well to start out with, I have been researching budgets, spending plans, emergency funds, etc. It started with someone recommending Dave Ramsey Dave has an awesome website, radio program and lots of good ideas and tools to help you budget and reduce debt. If you search around on his page, you can even find some of it free. My problem with Dave is he charges for almost everything but I have to thank him for getting me started.

My favorite website so far is “It’s Your Money” Michael brings in the best of all of the Financial advisors and he does it for FREE! He has some great excel spreadsheets that will do everything from tracking your spending to projecting your debt payoffs.

So why am I putting all this in a blog? Well, it’s called accountability. I have to be accountable to someone or something and so this is it. I’m going to post my debt status monthly, rant and rave about progress, stumbling blocks, savings until I beat this pain in the wallet.

I will save up an emergency fund. I will pay off my debts. I will put money into a Freedom account monthly. I will dig myself out of this hole and back into Financial Peace.