Tuesday, March 11, 2008

The Burden

Today we hit a financial milestone.  We've done some major financial shuffling before, but nothing on this scale.  We refinanced and folded some big debts into our mortgage.  It increased our mortgage payment  but removed over three times that a month in credit card and loan payments, not including what extra money I've been dumping in to try to whittle our credit cards down.  We've been down to zero credit card debt before, and it came back with a vengeance.  The challenge now is to make sure that it doesn't return.  

The cards will not be in my wallet anymore, for one thing.  I've used them successfully in the past.  For years I successfully paid credit card bills in full every month.  I used them predominantly for purchases at businesses where checks weren't accepted.  Now that I have a debit card, though, credit cards aren't as important.  I'll still use them for business and travel, but other than that, they can nicely collect dust in the safety deposit box with our passports and other seldom-used, important documents.  There's a possibility we won't use them at all, even when traveling, at which point we'll probably just cut them up.  It all depends on how things will look in the checking account without the constant drain on the disposable part of our income.  It may be possible for us to do the big stuff without having to reach for credit.

I was definitely giddy woman today.  After working with a thin and sometimes deficit budget for household expenses, I'm looking at the possibility of depositing spare $$ from my checking account into a savings account where those $$ can accumulate interest.

I know, blah blah blah money blah blah blah.  But when you've carried the burden for years, the relief is unbelievable.  The whole household was affected, but as the financial drudge I got to face it twice a month, every month.  I'd watch it slowly shrink and then something would inevitably happen and it would hop back up with gymnastic effortlessness.  I couldn't even have the comfort of buyer's remorse.  I knew I couldn't promise myself that I wouldn't overspend again.  The cars and truck had to keep running.  Animals needed their veterinary care.  Kids needed clothes and school supplies.  When we were able to save and plan then we did fun things like buy cameras and computers with cash.  When our savings was hammered and September came around, buying jeans and sweaters with cash was a pipe dream.  We paid for Mojo's adoption with cash.  I paid for his extensive medical care on credit cards.  I paid for my Nova with cash.  I paid for all it's repairs with credit cards.  And so on.

And so it goes.  But now we have a cushion in addition to the lack of credit card debt (I love you refinance genie!)  As that cushion builds, the less likely it is that we'll need to resort to credit cards to pay for large, unexpected or expected but unmanageable expenses.  

This is the way things ought to be.  I know this.  The Richest Man in Babylon and Suze Orman have taught me how things ought to be.  At times I lived very responsibly, but when kids came into the picture I lost my way.  I could make excuses, but really, I stopped looking at finances as closely as I did as an independent woman.  I got out of the habit.  I lost control.  I've had chances to get that control back and I failed.  Hopefully I've learned a lot through my failures and this time I hope for success.  To be fair to myself, before I had a family I had only my own crud to juggle and that was pretty darned easy.  It's a different game with a family.  Although the same rules apply, it's much more complicated.

So here's a toast to those who have gone before me on the road to a credit card debt-free life, and those who shall follow.  Live and learn, learn and live with one less burden.  


Carissa said...

Yay you! I'd say bite the bullet and cut up all your cards except one. Don't even let them tempt you. That's what I've done (and the one card isn't in my name, but TC, who is not the spender in the family and he doesn't carry the card with him).

We can't refinance (because we in an awesome set up for our mortgage as it is), so I've set up a five year payment plan that will pay off all of our cards without me having to worry about them anymore. I just pay the amount I've arrange for each one, then when one is gone, fold that money into the next and so on until Poof. Gone. And since they are all cut up (except one, and I think that one's end is in sight), I can't put anymore money on them. They'll be paid off about eight months before the car will be, so I'll fold all the credit card money into the car payment to get it gone, too.

I'm excited about all the possibilities. I'm budgeting for our travel and trips, so we have the money set aside now, and I have built in a cushion, too, to help with anything to jumps forward suddenly. And lucky for us, Kate, who goes through clothing like a fashion model, gets most everything from handmedowns from neighbors and cousins. Yay for handmedowns!

Good luck managing those cards (cut them up!) and congrats on the freedom!

Kai Jones said...

We did something similar last summer, after struggling for a few years. We took a huge hit to our annual income when my ex stopped paying child support, and we didn't adjust our spending as fast as we should have. It's not easy to stay within our budget, but it's a great feeling that we're managing to do it.

Kami said...

Credit cards don't tempt me, thank goodness. We got into trouble this most recent round because of lack of monetary cushion, not because of buying non-necessities with credit cards, although we did go through a travel stage, building debt through visiting new places, and a home improvement stage. Both the travel and the home improvement debts were paid off. This last debt arose from the mentioned stuff, plus needing new tires on vehicles and all that jazz.

The credit cards are safe where they are. I'll only put one back in my wallet when I need it (hopefully I won't need it) and take it back out when I'm done.

One huge advantage to this--I have a lot fewer cards to sort through when I'm looking for the blasted Safeway member card or the Pet Perks card or whatever silly card various businesses have set up for rewards in exchange for the privilege of tracking what I spend my money on.

Thanks for sharing, Kai and Ris. It helps me feel less dumb when I know very intelligent people ended up in the same boat as me. Now that I'm back on shore they'll have to drag me kicking and screaming back into that boat, assuming they'll manage to get me near one at all.

Kami said...

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