The BIG NY Resolution

One of my New Year’s Resolutions was to stock my fridge.

The other resolution was to get out of debt. This is something I’ve been trying to do for years but I’m going to give those credit cards and car payment a whammy for sure this year, or so I hope.

In the last five years, I have accumulated an incredible amount of debt. On credit cards I owe roughly thirteen-thousand dollars. The why doesn’t matter – let’s just say that experience is the best teacher when it comes to managing money. Most of that debt was avoidable, some of it not so much.

In addition to the credit debt, I also owe in the neighborhood of eleven grand on my car.

The first two parts of my New Year’s Resolution regarding my debt was this: the first, to pay off half of what I still owe on my car by the end of the year ($5700 divided by twelve…), and the second to pay off my Capital One ($600), Discover ($800), Chase ($1100), Dell ($1000), and Goodyear ($1100) accounts by August. If I’m successful in the latter, I might also be able to pay off Providian ($2200) by December.

The third part of the resolution was to address the root of the credit card issue — generally, when I’ve used credit cards lately, it’s been because I haven’t had any cash to pay emergency bills (i.e., when I blew my clutch out). Since September, I’ve been making an effort to put $50 a week into my savings account, and only dipping into it when absolutely neccessary – as of yesterday, my account totaled nine-hundred bucks.

The big part of this is, of course, financial discipline. I drew up a budget last night accounting for my rent, my utilities, insurance payments, gas and grocery expendetures, ‘spending’ money, et al. I’m working on a draft of scheduled payments to the credit cards, taking into account my timeline of August.

Before I moved out, my Dad told me that what kept him awake most nights was his debts. I didn’t really understand what he meant, and I suspect most young people don’t, I know that I treated those credit cards like free money, and now I’m paying (literally, out the ass) for that mistake, as I should be.

Here’s to killing the credit cards and chopping them into tiny little pieces.

And anyway – I can’t buy a 6-speed Jeep Wrangler until I get all of this shit paid off anyway.

0 thoughts on “The BIG NY Resolution

  1. Yeah – sigh. I was surfing for a new car today to replace my ’97 Jetta (even though it only has 72K on it since I take the Metro to work, AND it’s been paid off since 2002….

    Anyway, happily dreaming about a BMW 330ci, and the window company calls asking if I wanted to go ahead and get the last 3 windows in the house replaced at the same price I did the first 8 windows last year before the price guarantee runs out….they called just as it was pouring rain this morning and I had a pan to catch the water under kitchen window. Ummmmm – yes please.

    As for the car….? Hold that thought.

  2. I totally hear you about the debt. I’ve spent the last year and a half trying (and so far succeeding, thank God) to get myself out of credit card debt. I don’t know if this is sound financial advice but I found it psychologically helpful to pay off one credit card at a time. For example, you might want to take the Chase (or some other card with a large balance) and work on it while paying only the minimum on the other cards.

    I found it really rewarding to be able to close out one credit card at a time. It showed me that it was possible and that I was making progress. I think that if I had spread my money around, I wouldn’t have been able to see any progress and I would have gotten discouraged.

    In any case, good luck!!!

  3. Yeah, I think that’s what I’m going to do, but I’m going to be shooting to pay off the lowest balance cards first, for the psychological boost. So what I’d be doing, for example, is paying minimums to MBNA, Citi, and Chase, then sending $100 plus interest to Dell, Goodyear, and Discover, and sending hopefully $300 or more to Capital One. Then when Capital One gets paid off, I’d take that money and roll it over to the card with the next highest debt.

  4. Motleyfool.com has a lot of good advice on getting back on track with credit card debt. It helped me quite a bit.

    First thing is to dump that savings account. That money is sitting in the bank doing nothing (minimal to no interest) while you’re most likely paying out the ass in interest rates on money owed on credit cards. Take that $900 and take a major bite out of your highest interest rate card (most likely Dell or Goodyear) and it’ll save you money every month in lower interest charges.