Family Sunday

Today I am going to a birthday party for my 2 nieces, who turned 4 and 5 this month. We are giving them book and art supplies instead of toys. They have enough toys.

Yesterday we went to the bank to get the mortgage process started. We opened a joint savings account to start saving for the down payment. We realld should have done this a long tim ago, but it's done now and that's the point. We have been concentrating for the past year on paying down our debt, and we are making some real good progress. If things go the way they have been, I will be down to 1 credit card payment per month by the end of October. At the beginning of this year, I was paying off 3 a month. The scary part of this whole thing is that I don't use this card anymore, and it will still take me a year to get it all paid off. Just saying it out loud is frightening. But, I am on my way and I am excited about the prospect of being debt free....until we get our house...

1 down, 40 to go

I have officially started my new quest to rid myself of credit card debt. According to the calculations I made a few weeks ago, I have 40 more paychecks until I am officially out of debt. but, I forgot that twice a year, I get an extra paycheck that is not budgeted for! After calculating that in, I concluded that I could pay my debt off by 9-2-09 (the day after my 40th birthday). That would be an awesome birthday present!

Seriously, this has become an obsession!

More good news

At work so blogging quickly...

Logged onto my credit card account to gloat over my new zero balance and decided to check to my balance transfer offer. It had always been 6.99 % financing. To my surprise, they were offering 0% financing on all balances transferred through November 2008. I quickly applied, knowing that even at my current rate on that card, it would be paid off by August. I got my approval today. Yay! I did some calculations and figured I would be saving about $350 in interest charges by making the transfer. (It would really be $450 but it did cost me $100 for the transfer.)

Did some more calculations, and figured if everything goes well, I could be completely out of credit card debt by November 2009. I know it seems so far away, but in terms of paychecks, it's only 41 away! I need to figure out how to create a taskbar for that...

One step closer to being debt free

Today I paid off one of my credit cards. I am doing a happy dance in my pants! For the last year, I have been obsessed with paying down my consumer debt. I want a house, and the only way I will be able to comfortably start looking for one is without all the debt I have boosting my finance rate up. My credit rating is good, but I want it to be excellent when I apply for a mortgage. Heck, the way the housing market has blown up over the past few months, they may not give mortgages to anyone with less than excellent credit!

How have I done it? I listened to quite a few financial advisers on satellite radio and NPR, and this is the method I have chosen:

• Choose the card with the smallest balance and focus on paying that one off. Pay the snot out of it (as much as you can afford) and just pay the minimum on the other cards.
• I call my credit card companies ( had 3, now I only have 2! Yay!) every few months and ask them to lower my interest rate. My method is to tell them I got an offer to transfer my balance to another card at a lower rate, and ask them to match that rate. The have never matched it, but they have given me a temporary lower rate for a few (9) months.
• I changed the rewards program on my Discover card to the new Motiva plan. If you pay on time every 6 months, they give you a months worth of finance charges back as a cash bonus.
• Now that I have one card paid off, my plan is to transfer the balance on my card with the highest rate(Discover) to my now clean card. I just got my 6 month bonus, and ended up getting an additional $10 by redeeming it in gift cards instead of putting it back on my card. I thought long and hard about that one, because I really wanted to just use it to pay down the balance. I decided to reward myself instead. I earned it, after all. If I had not gotten my bonus yet, I would have waited for that before transferring the balance.
• I will use the $$ I was paying on my first card and add it to the minimum payment of my card with the next smallest balance. Then, it is the same formula until that one is paid off. It will get paid off quicker, because I am able to pay more on it.
• I get paid every 2 weeks, so every time I get my pay stub, I go online and pay on my cards. By paying every 2 weeks instead of once a month, I am saving on interest charges (because it is compounded daily) and I never have to worry about running short at the end of the month, because I pay it out as soon as I get it. What I have leftover is my budget for the next 2 weeks for gas and any other personal items I may need or want(our household budget automatically goes into a separate account). Everything leftover at the end of those 2 weeks gets transferred into my savings account. (If I have $5o as my beginning balance on payday before my paycheck posts, I will transfer that into my savings account, where it stays unless there is an extreme emergency. I've been doing this for almost a year now, no emergency yet.)

So, I am feeling pretty awesome right now. I am happy, happy, happy!