Goodbye 2014: The Year in Debt Review

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As the clock ticks down on 2014, it is a natural time for reflection on the wins and losses and ups and downs of the year. It always seems as though the year flew by, and this was no exception.

I started off in 2014 with high hopes of finishing what I started in 2013 – finally killing this infernal credit card debt. In January 2014, I had $22,770 left in credit card debt (of my $30,340 total) and measured optimism. I knew that the single woman with double debt faces certain additional challenges to being able to turn around her finances. I also knew that in my case, the key to getting rid of this credit card debt within the year would hinge on lowering my living expenses.

I was not happy in my living arrangement for most of 2014. I really wanted still want to have my own place, but that is completely impossible in my high cost of living area. To live in a nice place, and in a nice area, many people spend on rent what I bring home in an entire month.

Ummm, no.

umm no cat

Sadly I can’t afford that. So, if I must live with roommates then, I knew I needed to make it as financially worthwhile as possible.  I couldn’t wait to get out of the onerous lease that I was trapped in.

At work, my awesome direct manager left to work at another employer and…

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Yes, she did. And I was afraid of reporting to the senior manager as she was quite intimidating to me. I was afraid that I might lose my job if I displeased her. I am happy to report that the senior manager and I have since worked together on a couple of projects and I no longer find her quite so intimidating at all. She has been quite kind to me, however I do know that I have room for improvement.  In other words I’m not shaking every time I get called into an unplanned meeting, but I’m not still naive enough to think that I can get comfortable in my role. The job is challenging and is at the upper range of my skill set, so it will continue to be draining as I develop professionally.  I also have a new direct manager who is also great. Things are not perfect, as it is sometimes very stressful at work, but I am grateful to have an income.

By April, I’d paid down half of my credit card debt to $15,000. It was a proud moment for me, as the first half of the journey is the hardest. The balances are at their highest and payments appear to have the smallest impact. By April, I was at the midway point. I was finally gaining momentum. I was starting to see a life beyond this credit card debt. I was starting to dream of doing something that I’ve wanted to do for over a decade — take an international trip — once the credit card debt was gone. While most of the leaders in the personal finance blogosphere warn against such choices, as it could lead to a life of reckless and out of control behavior…

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…I got some good words of encouragement from you guys to help me keep things in perspective.

I’ve realized that travel is important to me, and that I don’t want to wait another 10 years before I can see the world. That is a prison sentence. I plan to take a trip in 2015 or 2016, depending on when I have the credit card debt gone for good and have cash saved up for the trip. So daydreaming of exotic locales also keeps me motivated these days.

In June, I found a new room to rent and was over the moon happy to spend $1,000 less on rent every month. Seriously the cost of living here is ridiculous. My new living arrangement with my three Craigslist roommates is far from perfect, but much better than what I had before. I’m having to put up with things that I ordinarily would not put up with, but that’s the price I have to pay for such reasonable rent. With that extra money going toward debt, I was able to pay down my credit card debt to $9000+ by August. Breaking that 4-digit mark was a great psychological boost. Now with 4-digits of debt, I could see the light at the end of the tunnel. It helped me to renew my resolve.  I continued to make my payments. My debt dropped slowly to $6,000+.

In the last few months of 2014, I feel like I’ve been on a debt carousel. I’ve stalled at the $6,000+ mark. Unexpected but necessary medical expenses, along with a poorly controlled food budget have slowed my payoff.

Spending confession: Holiday Hangover

One step forward…two steps back. Is that how the saying goes?

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After reaching an all-time low credit card balance of $5,567 at the beginning of December, I now have $7,190.47 in credit card debt. Ugh! I want to strangle myself sometimes.  What the hell happened? What did I even spend it on?

I just looked at my statement and did some eyeball calculations. Numbers are approximate.

$285  Groceries & food
$100  Credit card interest  (My 0% transfer rate has now ended.)
$300  Holiday Gifts
$333  Handmade Bed Quilt
$100  Books (work-related)
$500  Clothes  (Half of which I will likely send back once they arrive.)

With my next paycheck I will pay some of this back down. All in all, however, it’s been a pretty good year financially — down from $22,770 to $7,190  $5,990 in CC debt.

Addendum:

Woot! I got my last 2014 direct deposit paycheck this morning and promptly put the bulk of it toward the credit card debt.
With only hours remaining in 2014, my ending credit card balance will now be $5,990.00

With more careful planning, it should have been zero, but I’ll take what I can get. Now that interest has kicked in on my credit card again, this really needs to die, and soon.

Thanks guys for reading along and sending kind words my way throughout the few years that I’ve been posting here.

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Goodbye 2014!

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

The Last 5 is the Hardest to Lose: Hitting a Debt Payoff Plateau

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I’m getting more and more frustrated about getting out of credit card debt. I feel like I’ve been holding at 6k remaining in CC debt forever. If you’ve ever sought to lose weight, you know the saying that the last 5 lbs is the hardest to lose. I feel that the last 6k is becoming the hardest to kill.

I’ve spent more money than intended on shoes lately. I started with buying two pairs because the ones I wore before were about 5+ years old, uncomfortable and worn out – literally with holes opening up in them. One of the new pairs (casual) is still ok, but the other pair (for work) turned out not to be very comfortable for long distances. I bought another pair only to suffer the same fate. I bought a third pair and had the same thing happen. They felt great at first but couldn’t hold up after a lot of walking during a typical workday. I’ve burned money in pursuit of comfortable work shoes, yet I’m still hobbling home in pain after work because my feet hurt.

I had some overdue dental work done last week and got slammed with a $1085 bill. That’s not a typo. I’m hoping that my dental insurance will cover some of it at least. It was dental work that had to be done otherwise the consequences would have been bad and even more costly. Plus, my dentist is one of the best in the business, so I know the work will last. Actually, I don’t have any regrets about it. What’s done is done. It’s just that these things are not helping me make any traction on this stupid debt. I work two long stressful weeks at a time, waiting for my paycheck, and when I finally, fiiiinnnaaalllyy get it, something takes it before I can put it toward this debt. I just feel like I’m never going to pay this card off. Arrggghh!!

Two years ago today (11/27/2012) I made my first post on this blog. I was $30,000+ in credit card debt and resolved. I’m thankful for having the opportunities that I’ve had to shave my expenses and earn enough to pay down my debt to $6,500+. However I know how much further ahead I could and should be at this point. Enough. It’s time to practice patience.

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

It’s Over 9,000! My Credit Card Debt Breaks the 4-Digit Barrier!

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I’ve been waiting to write this post for a while. It will be short, but sweet…

WooHoo!  My balance is under $10,000 for the first time in over 8 years!!! Yes. That’s not a typo. I can’t believe it either.  I don’t even want to think about all the interest I’ve been paying out all this time. Ugh! Ugh! Uggghhhh! (Cries) 😥 .  I only want to think about how great it feels to break this barrier. Now I feel like the end of the tunnel is in sight. And this train has no return trip.

Forgive this anime (Dragonball Z) meme reference but, if  ‘Over 9,000’ refers to a feat of strength or an off-the-chart feeling of power, then this applies to me.  I like to think of this animated gif as my credit card company getting the news that I’m about to pay it off way sooner than they thought.  Ha!

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Oh yes, it’s right, credit card company. Oh so very right. Muahaha!

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I’m killing this debt, Kill Bill style.  This is the countdown…

$30, 000’s  – Elle Driver (California Mountain Snake)

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$20, 000’s – Vernita Green (Copperhead)

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$10,000’s – Oren-Ishii (Cottonmouth)

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One more to go…

$1,000 – Bill (Snake Charmer)

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And now, I’m going to kill Bill.  He represents the last $1,000 of this credit card debt. And he’s goin’ down! You can run, but you can’t hide!

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Renting a New Room and Writing a New Budget

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(This is not a picture of my new room. My room will not be as nice as this, but it’s somewhat similar.)

As you may know from my past posts, I have been sharing (one roommate) an overpriced apartment for the past year. One of my goals for 2014 was to find a cheaper and cleaner place to live once my lease ended.  Well, the good news is that I have! I found a room on Craigslist a week or so ago that I went to see.

It was not love at first sight.  The picture in the ad left much to be desired, but the rent was affordable so I had to at least check it out. It is  a few towns over from where I live now.  I decided to walk there from the public transit station along the busy main street. It was unusually hot that day and there were a couple of  points where I thought I’d miscalculated the distance on the map and wanted to turn around and go back home, but I didn’t and eventually found the place.

There are three roommates, all women in 40s/50s, pleasant, so that may be a positive change. The room, like the house, was small, old, and a little dark, but neat. At first I didn’t like it at all, but the more I kept thinking about it, the more it made sense to rent the room.

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Image credit: photographymad.com

I went back a few days later to drop off the deposit, sign the lease and see the room again. Talk about a big difference! I took a different route to get there by walking along a green walking and biking path that I’d learned about thanks to Google Maps. It was cool, breezy, and calm. I got there before I knew it, and realized that the house is within a few blocks of a small public library (win!), a popular local natural grocery store (big win!) and a small gym.

One of my long-standing goals is to find a way to get in shape. For the first time in my life I have developed the dreaded muffin top. My skin, which was never clear to begin with, has gone completely to crap, and I have the ironically named ‘laugh lines’ exploding all over my face.  Why? It’s not from laughing, I assure you. I’ve been stressed out to the point of burnout over the past year.

I’m hoping that being near a good grocery store and a running path will make it easier for me to make some much needed health improvements.  I don’t know if I’ll spend money to go to a gym, but if I can at least start running that’s half of the first battle. Anyway, as I said, what a difference a few days made. I’m glad that I didn’t pass this place by because of the Craigslist picture. I’m glad I didn’t turn around on my way to see it that first day. I can make this room work. As long as its  safe, clean, and bug free, I’ll be fine.

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Image credit: stackthatmoney

I’m mostly excited about the rent. Did I say it was affordable? It is only $500 /month INCLUDING all utilities and wi-fi!!

Depending on where you live, $500 per month may not seem special, but where I live now, rent that low is RARE to find. So my housing costs will drop from $1500 /mo. to  $500/ mo. for a $1000 savings each month! I can’t wait to start throwing all of it towards this credit card debt. With this housing shift, I will be back on track to kill this credit card debt entirely this year!

I won’t be living high on the hog, or even low on the hog. You all know I’d MUCH rather have my own place, but by doing this I’ll have less and less debt to stress out over. I hope to be in the room as little as possible and spend more time outside for once, so that’s another goal.

After this credit card debt is gone, I’ll reformulate my basic budget

 MY AUG – DEC. 2014 BASIC BUDGET

Q4 2014 Budget

Yeah, that phone charge is out of control. I felt like I had to go unlimited because I currently work from home 2 days per week and with all the conference call meetings i’m on everyday – I kept running out of minutes and getting slammed with extra charges.  (I don’t get a company phone.) I will be looking into how to reduce this.

I really hope this new room works out for me and I can stay for a while. This may be the best shot that I have for while to cut down this debt.  I’m finally getting back on track to follow my own advice.

Cutting down on housing and transportation expenses are the quickest ways to save the most money. If you’re thinking about taking the leap yourself…

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Image Credit: thetaline.org

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Credit Card Progress and Annoyances

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When will it end?! I’m done with evil credit card companies!

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Progress:
My current credit card current balance is now $17,990.00! Yes, I’m actually happy about this.  It hasn’t been this low in years, and I’m very happy to finally turn the corner on the $20’sK to now be in the $10’sK.

I got a small year-end bonus at my job, which I was very pleased to get. I promptly applied every penny of it (what was left of it after taxes), to my credit card debt.

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Annoyances:

I got a routine monthly statement from my old credit card company a couple of days ago. This is the old credit card with a 19.9% interest rate that I paid off months ago with balance transfers to two 0% interest cards. Thank goodness I opened the email to verify my $0 balance. What I saw instead was that I now had small balance on the card for $3.99.  What?! Where did that come from?

After some investigation, I realized that I had bought a book on Amazon several months ago on this credit card, but never received it because the release date kept getting pushed out. I remember getting that book eventually, but ultimately sending it back for a refund. I got the refund. However, it did not cover return shipping, hence the $3.99 balance on my credit statement.

Ok. I open the credit card app and pay the bill, or at least I try to. Error message. The payment system will not let me make a payment for under $5.  What?!   Sigh. Fine.  I’ll pay the $5 and deal with having a credit on my account.  Nope. Error message. The system will not let me pay $5 because it is more than 7% over the $3.99 balance.  What?!  Really?!  So I guess the only way out of this is to charge something else on the card to raise the balance and then pay the whole thing off. Sneaky, sneaky.  So that is what I have done.

Grrr. Things like this reinforce my bad experiences with credit cards and particularly with this credit card company.  The silver lining, if you can call it that, is that at least this will show some activity on my account. I’ve read that not having any activity on your credit card can give companies grounds to lower your limit or close it.  I don’t want that to happen on this card – not because I will ever use it again – but because credit scores are important in the super competitive rental market out here. Even private, independent landlords require your credit report as a part of your application. This is also by far and away my oldest credit card, so getting it shut down would adversely affect my credit score.  [Edit: I’m now learning that landlords are more interested in potential tenant payment history on the report than in the credit score itself, so I may not need to be too concerned.]

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Patience, grasshopper…

No matter how much progress I make, I’m frustrated that I can’t pay it off faster.  I know that it took me years to get into this debt and it will take time to get out of it, so I need to learn patience.  I’m just ready for all this money that I spend on debt every month to instead go into investment vehicles that will result in earned interest, not paid interest.

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)