08 December 2009

confession time

ok ladies, i have a deep dark secret that i am coming clean with.

i am in credit card debt and i hate it. i have three credit cards, one with j.crew and two visas {one with my bank and one with the devils at capital one}. i owe a total of $5,799.42. my average interest rate is 19%.

this is incredibly embarassing for me to write about. my parents are both involved in finance and i think they did a great job of {trying} to instill in me the importance of personal financial responsibility. but like so many other things, i just didn't listen. that ends today {well, december 31, to be specific}. i'm getting a jumpstart on my new year's resolutions. this is the year i get {mostly} out of credit card debt. i say mostly because, based on the delightful plan that oprah and suze orman have devised for me, it will take approximately 16 months, give or take a few, to pay everything off.
i'm not including my car loan or my student loan in this because to be perfectly frank, i don't mind being in debt for those two things. don't get me wrong, i certainly don't enjoy it, but i need a safe, reliable mode of transportation and ummmm....education rocks!

i could give you lots of excuses as to how i got myself into this pickle , but they would still be excuses. and for every legitimate excuse {i.e. replacing the entire front end of my car after my accident in april. not cheap, even with insurance}, there are excuses in the form of shoes i "needed" to have.
i am telling you all this because i NEED, nay absolutely MUST, be held accoutable for this goal. putting this out there for the {blog}world to see is motivational to me. a few encouraging words from you lovelies wouldn't hurt either. here's how it's going to go down:

according to suze and o, the most effective way to go about this is paying off the j.crew card first {while still making the minimum payments on the two visas, natch}, then the bank visa, and then the capital one card {henceforth known as "the devil card"}. i owe $1,180.35 to j.crew and will be paying $295/month until it is paid down. By my calculations, that should be done by april 30. at this point, i will begin paying $316/month to wachovia, in attempts to pay down the $972.26 i currently owe {minus the minimum payments i'll be making in the interim}. that should take until july. and then i begin the long process of paying off the devil card. at $389/month, it should take me another 8-9 months to pay that off. so i'm just not going to think about that one just yet.

whew....it actually feels pretty good to get this all of my chest. now i'm realistic...the above plan means assuming that i have zero "emergencies" in the next year and that i never, ever slip and charge a nice meal out on the town or a pretty new dress. which ideally, i won't. but life happens. the trick is just to stay on track, even if i slip a couple of times.

bravo to those of you who made it through this incredibly unfun and long post! you will be getting monthly updates from me from now on about this decidedly dull topic, so i'm going to be brainstorming ways to make this a little more fun for me {and you}. yay for fiscal responsibility!

time to go put some plastic on ice...

14 comments:

Anna said...

Love this! I've never had a cent of credit card debt in my life (pay it off in full each month), but I can certainly sympathize as a 20-something woman surrounded by today's culture of instant-gratification. Be sure to check out Dave Ramsey and the snowball method. Keep us posted on your progress. Being debt-free will feel so amazing!

USCEmily said...

I have $4500 in credit card debt that I am trying to pay down right now. I understand your pain! I would love to hear if you got the Oprah & Suze Orman plan from a book, online, etc. as I think I need a better plan than the one I have now.

Miss Sweet Tea said...

Oh man - I totally understand this! I have found the hardest part {naturally} is not reusing the card once you have some paid off. This is what is happening to me because honestly, things do come up and you need to use credit instead of debit or cash. I hope your plan works...being debt free would be awesome!

miss mal said...

like they always say, knowing you have a problem is the starting point! if you really feel like you MUST have something new (dress, shoes, etc), coordinate a swap with friends -- it'll be new to you and they'll get some "new" things also, plus it doubles as a girls night

MCW said...

I am in dept as well...and it is a horrible feeling. I started off by transfering my credit cards to a lower balance (one is at 0%). Makes things a lot easier!

Cary Dale Taylor said...

Kudos for making the commitment. I did it about 5 years ago and it feels awesome!!! Good luck. We are here cheering you on.

Preppy 101 said...

Good for you to realize this at your age! It's not too late and you will be financially sound in a few months! Just think, when you are out of credit card debt, you can save so much money and then not have to worry about using credit cards!! We're with you for encouragement!! xoxo

Allison said...

I was in the exact same spot and paid off all my debt (not school associated) last year. I will share something that helped me through the process:

Have you ever heard people who are on a diet say, "Nothing tastes as good as being thin feels?" I took that and applied it to shopping. "No top, dress, or pair of heels is worth the sick feeling that I get at the end of the month when my bills come." So true. Hope this helps!

Beyond by Maureen said...

I agree with Anna! Dave Ramsey is a inspiration! I've never been in debt, but my husband is about to graduate law school...so I guess I/we will be. Check out Dave, he's simple and logical! Good luck!! Keep us updated!

LPC said...

Congratulations. Never too late to put things in order.

Michelle said...

First of all, don't be ashamed to admit this! I commend you for standing up and taking a stand against your CC debt. I, too, have CC debt...much more than you, sadly...but still. Debt is debt. Like you, we have a plan. We are going to do a debt snowball starting in January (hopefully, I'll be employed by then) and it is our goal to have our double-digit debt paid in a year. We are following the principles of Dave Ramsey. We already have our emergency fund saved...now it's just onto the actual snowball part of the plan. I also have his book & watch him nightly on Fox Business. Love him! Suze just scares me for some reason.

I, too, don't count my student loan debt or, in my case, my mortgage...at least the interest on those two are tax deductible.

Sounds like you've got a well laid out, well thought out plan...and you've got the desire to win the battle. You are going to do it!

Black Labs and Lilly said...

Capital One is truly issed by the devil himself. Best of luck with this and I can't wait to here about your progress, it is great motiviation for me to get in control of my credit situation.

perfectly paisley said...

Okay, fortunately I have no credit card debt. However, there are many many days when I walk into Saks and think about all of the SERIOUS damage it could do. It's tempting it is. But, having student loans and having to pay that God awful thing every month for fun I had 2 years ago is a reminder in itself. I think that is the worst part... I'm shelling out tons of money for something I'm not even enjoying right now!
So maybe that will help, think about how the time you pay for that shirt or dress or shoes you will A) probably have paid for it 1.5 times because of interest, and B) You will have already enjoyed the newness and fun!

I'm so inspired by you, what a great goal for you to put forth for yourself. You will feel so great when it's all over! :o)

haircutting in high heels said...

What an inspirational post! Especially nearing the year end. I came upon your page because I love HEELS! I feel inspired to share. I also have debt that started with travel abroad to hairshows. While that is a business expense for me unfortunately I was over my head with the expenses incurred and unfortunately not all is deductible come tax time. I have also followed Suze's advice and it truly has changed my thinking and spending. I agree with the above post: . "No top, dress, or pair of heels is worth the sick feeling that I get at the end of the month when my bills come." It's hard but if I really love it I pay cash only! Thank you for the share.
hugs,
Gina