Budgeting Fun

Irv and I have really struggled financially during our 37 year marriage. With medical bills, raising 3 active kids, being unemployed and underemployed…we dug ourselves deep into debt. We got out a couple of times by refinancing our house but then crawled right back in again. We don’t want to refinance again at this stage of our lives and in this economy, so what option do we have? Only one…it’s time to tighten our belts and bite the bullet.

Let me say that Irv and I don’t live a luxurious life. We have a tiny house, don’t wear fancy clothes, don’t drive fancy cars, but we do live beyond our means at times, and that is a problem.

We have always had the mindset that if we need or want it and don’t have the money for it, we’ll just charge it and pay for it when the bill comes in. Well, we follow through on the first part and charge it, and then we never follow through on the second part of paying it off when the bill comes.

Doing that over the course of many years digs you into a great big debt hole and that is where we always seem to be. It isn’t that we can’t pay our bills, it’s tight, but we can pay them, it’s just that we seem to have more and more bills every year. We really haven’t charged much in this past year except for car repairs, tires and our new dryer, but it will take a long time to pay that off.

I’ve been working for a while on a budget…one where we truly set limits for our spending. We would take cash out for weekly expenses like food and gas on payday and leave the debit cards at home. Then if we need or want something and don’t have the cash for it…we will have to think about whether or not it’s something we have to have right now or not.

Debit cards are a great way to see where your money is going, but it’s also very easy to overspend…oh, it’s just a cup of coffee, or it’s just a pair of shoes, or it’s just some carryout….when you add that all up over the course of a month, you may have spent hundreds of dollars you didn’t really have.

The first thing I would like to do is to set a food/household budget. Irv and I tend to buy whatever we need/want. We have no idea what we’ve spent at the grocery store until we get to the checkout. It could be $120 or it could be $170. Then on top of that…every Friday and Saturday night we get carry out. Nothing expensive, but it’s still $25-$30 a week. Do we really need to spend that much on food and household supplies a week? I don’t think so. It's just the two of us for Pete's sake!

I think we should be able to keep it under $150 total. So, my thought is that we take $150 with us to the store, pay attention to what we are spending….then if there is anything left of the $150…that is what we have for our weekend carry out.

I love my carry out so you can be sure I will be paying close attention to what goes in that cart. I also read once that if people looked in their cabinets and freezer they could probably eat for a week or two without buying anything but perishables. Think you could do that? I think we could. What a great way to save some money. Plan your menu around what you already have on hand!

The other thing we need to look at is our personal spending…all of the little junk we spend our hard earned money on….but my head is spinning and my vision is blurred by little dollar signs right now so I think that is enough for today.

How do you keep your spending under control?

Credit! Who Needs It? Me!!

Well for the third time in as many years, we got a letter from our only remaining credit card company saying that they are going to raise our interest rate....and it's all the government's fault!

I read over the letter and tried to decipher the fine print....yadda, yadda, yadda. We are raising your rate to almost 16% even though you are a great customer...blah, blah, blah. You have until November 27th to decide if you like your new deal. If not, you can close your account, keep the interest rate you have now and make your regular monthly payments. Wow, I am so excited!

My initial instinct was to close the account. It makes me so mad when you pay your bill on time and you always pay extra....and...they don't really care.

I talked to Michael because he is really, really up on credit scores since he did tons of research before they bought their house and he said to try not to close the account if we can. We have had this account for over six years and it's a positive on our credit score. I really don't understand all of that, but the balance on this one is way too high to have a 16% interest rate. I had decided to close it and give Discover a piece of my mind! :)

So, we applied for a new card with another company because I hate being without a credit card in case of an emergency. The new one arrived, so I called to cancel the Discover card. Get this...the lady literally bent over backward to get me to keep the friggin' card. The interest rate will go up a half a percent, not to the dreaded 16%, but you are such a good customer, please keep it....etc. etc. etc.

Now I was really confused. Keep it? Close it? Keep it? Close it? I told her I would call back. I called Michael and he said to keep it. It will help our credit score to have that good credit history on a card we've had for that many years. So, darn it anyway....I have to keep it. We have good credit and I hate for my score to drop too much in case we do decide to move at some point and need to borrow money. I don't want to be working hard to get my score back up....I would rather work to make my good score an excellent score.

Darn you Discover! I wanted the satisfaction of telling you to kiss my butt....and now I can't. I will continue to pay my bill...on time...every month and one of these days...I won't owe you a penny! So there!!

Venting

I was going to write about underwear today, but right now I'm mad and I need to vent, so underwear might have to wait until tomorrow!!

Okay, so I get home today and I'm standing at the kitchen table opening the mail and I open an envelope that says on the outside, "Important Information Regarding Your Account". It's from Capital One, which is one of our credit cards. I'm thinking, so what can be so important? I know, I know, you want me to charge some more because you aren't making enough money off of me with interest rates so low.....

I pulled the paper out of the envelope and the front says, "Important notice of a change in terms regarding your account ending in: XXXX. Now they have my attention!

You guessed it....they are raising my interest rate from the sweet 5.99% that it is today to 15.9%. OUCH! Of course, we can choose to close the account and keep our 5.99% until we pay it off or we can keep our card with our wonderful new rate. Uh, I don't think so.

Naturally, we will be closing the account today, but man does that ever tick me off! We only have 2 credit cards. One is a Discover that is just in my name that I've had for years, and then the Capital One is in Irv's name.

I hate credit cards, but on the other hand they have been there when we needed them and for that I am grateful....however, after today, Irv won't have a credit card and I'm not sure I am comfortable with that. I worry about there being an emergency where a large amount of money might be needed that we don't have. Then what would we do? There are still places that don't even take Discover. We need a VISA or a Mastercard....but I don't want a new credit card. I am trying to pay them off and get out of debt! UGH!

This has to be a sign from somewhere. It has to mean something, but what is it? Kathy, you need another credit card. Kathy, you don't need any more credit cards. Kathy, you are one weird woman.....probably the last one!

I am working right now to calm myself and look at the big picture. We have jobs, we have insurance, we have our home and the fact that Irv won't have a credit card is really no big deal. If we need money....we'll just ask our kids! Okay, I feel all better now.