Sunday, February 27, 2011

Number Crunching


The average household credit card debt is $14,750. 

Ours is, give or take fifty dollars, $4,000* as of the beginning of February.

*I’m not including student loans.  That’s a totally different discussion, and one I don’t really mind paying. 

For some of you, that might sound like a ton.  For others, it might be nothing.  For me, it’s the average.  I feel like we’ve been paying down cards for a long time, and for the past six months or so we’ve been sitting right at around that $4K.

I want to pay these all off by the end of the year.  My original goal was by July, but with the fun news of my pending unemployment, I’m going to give us an added six months.  I feel like putting this out there is going to keep me honest.

How did we get that much?  I’ve thought about it, and it all comes down to one thing:  transportation.  Any of you who remember my car remember how much of a money suck it was.  I probably had to put in $500-$750 to fix it every year in college.  College, where you don’t really have a job except for pocket money, so those repairs were charged every time.  The day before we moved to Chicago, I literally gave my car away, realizing that it wasn’t even worth trying to get money for it.  I signed the title over to a tow truck driver in the parking lot of our apartment complex in Atlanta.  My credit card had a $3000 balance, due in large part to that dumb car.

I’ve paid that card down to practically nothing.  It took me many years of steady payments, but now it’s got a manageable balance.  I’m pretty proud of it. Then we get to the second part of the transportation question:  plane tickets.  Most of the debt on Andrew’s two credit cards, other than the replacement wedding ring he just had to buy, is due to plane tickets.  And then lately we've gotten things like an overcoat for him - that I think he'll be able to wear for a decade, easily - and a suit for me, which should come into good use when I start to get all those people banging my door down for job interviews.  We don't use credit cards for small purchases.  We never buy groceries on credit, or shoes, or whatever.  We only use them for big ticket items, and it feels like lately those big tickets have gotten bigger.

None of this is unmanageable.  In fact, before I found out that I was definitely losing my job, I had a plan for it.  Which included a chart.  I made a chart with each card we have, and put spaces in it for each month.  I realized that we can afford to pay $800 a month on the various bills.  Each month, I was going to write in the squares what the balance is on each card, and total it up so I saw the ebb and flow.   Once we paid something off, I was going to up the amount I paid for bills that we still owed.

I still plan on doing that, at that rate, until I’m officially out of a job.  Hopefully I’ll find something new before then so I don’t have to stop our rate.  We’ll see.  If I actually do go through a period of unemployment, I’ll ration out what we can afford.  Hopefully by then it won’t be that hard because we’ll have paid it down enough.

I put this out here so that everyone can hold me to it.  At the end of each month, I’m going to put in my new total.  And we’ll see if I actually keep myself on track.

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