The Outlook...

So Steve was laid off two days ago. At first I was relieved because, like I said in my last post, I believe the best option for him is to go back to school. Its a great opportunity to do something he never would have done if he had a full time job.

But now I have to admit...I feel completely defeated. I had these huge goals this year of paying off as much as possible on our credit card debt. Now I assume that come the end of this year we will be in almost the exact same position and that just devastates me. I don't know how much longer I can take all of this debt.

But I know that challenges happen and there will always be obstacles in the road. We just need to persevere. Right now the main goal for us has switched from paying off as much debt as possible to paying the minimum payments on-time and hopefully not having to add any more debt. At least if we can do that then some of our balances will decrease by a little bit.

One little set back...

I would find it hard to believe someone if he or she said that the economy has not negatively impacted them. That being said so far it hasn't been so bad for me. I've lost 40% of my 401(k) but I'm only 22 so I have plenty of time for that to bounce back up. However, I've just been hit. Hit pretty bad.

My husband is days away from being laid off. I'm in an internal state of panic. We are stretched pretty thin each month as it is. Plus, with unemployment the way its going it doesn't look like there will really be any full time jobs available for him.

There is really only one option for us at this point. He needs to go back to school. He served 4 years in the military so he is fortunate enough to have the G.I. Bill, which is vastly improving in August. He qualifies to have 100% of tuition and fees paid for and on top of that receive $830 a month for living expenses. He would also get $1000 per year for books. In addition, in the state we live in (TN) because he served in Iraq he is also qualified for $1000 at the end of every completed semester. He would have to work a part time job to make ends meet but most students do.

Steve's not so sure we can make it. However, I will be graduating in December and hopefully have a full time job then. But more importantly, this will give him the skills in order to obtain the job of his dreams and not just something to pay the bills.

I encourage any veteran out there who has gotten or may get laid off to seriously consider getting some use out of the G.I. Bill. It may not work for all veterans but its worth looking into. Its a sacrifice in present income but can dramatically increase future income. And with the job market right now...there is almost nothing to lose.

Inspiration...

One of my favorite Personal Finance blogs to read is Get Rich Slowly. Recently J.D. posted an incredible article, The Razor's Edge: Lessons in True Wealth, about a very close friend of his.

The idea that stuff is not what makes a person is very hard to comprehend in today's materialistic society. It is always important to take a step back and remember what is most important in life. Living frugally isn't always sacrifice. Instead, it is a way to achieve greater accomplishments in life.

My condolences go out to J.D. for the loss of an incredible friend.

Lucky...

In the past weeks I've been reevaluating my situation and I've come to the conclusion that I am very lucky. The debt that I got into was due to my own will and my own decisions. I have tons of student loan debt but that just means that I am bettering myself for the future. My husband and I only live off of one income for the time being...in a year when I graduate hopefully our situation will improve drastically. But most of all I consider myself lucky because I did all of this at a young age. I'm only 22 with plenty of time to correct my mistakes. I'm a firm believer that it is never too late to start on the right path--no matter how old you are. But as a young person in a lot of debt I have learned my lesson. After I pay off my debt I will, with any luck, never be in this situation again.

Also, because of my debt I am taking a stronger look at other aspects of my life. Not only do I want to build a nice emergency fund I also would like to purchase insurance to protect my lifestyle. In the coming weeks I will be investigating the best life and disability insurance plans for my husband and me.

This very uncomfortable place that I have gotten myself in really is a blessing in disguise. I truly hope that anyone else out there with loads of debt can view it as an open door to a new life. Debt is no way to really live.

Where I'm at...

Okay, so I've already had one huge success today. I called one of the companies I have a credit card with and asked for a lower rate...and BAM!!! It dropped just like that. I'm ecstatic! I had actually tried to a couple months ago and they totally denied me. It was at 28.99% (the only late payment I have ever made in my entire life!) and they wouldn't reduce it for me. So I paid it off. Well then I started using it again...it only has about $900 on it but still. The rate got slashed to 9 something. Now I just need my husband to do this for a couple of his...he's not so financially diligent which explains why I have since taken over ALL of the finances. So this promted me to write a post about where exactly I'm at...

Altra Line of Credit	$4,897.00	6.71%
Altra Credit Card	$7,344.68	7.9%*
AAA Credit Card	$1,972.79	7.99%
Sam's BoA	$1,209.14	9.99%
Citi Upromise	$930.44	9.42%
Steve's Chase	$9,855.00	29.99%
Steve's BoA	$633.00	29.99%
Steve's Discover	$4,649.78	21.99%
Kohl's Charge Card	$173.27	----
Total Credit Debt	$31,665.10

Impressive, I know. We also have about $18,000 in vehicle loans, a $6,000 student loan I'm already paying on, and I will have about $40,000 of other student loans that will have to start being repaid when I graduate in December of 2009. So we have about $100,000 of debt. And about $30,000 yearly income.

And where is my emergency fund? It has about $600 in it right now.

Goals for 2009:
1) We need to pump up our emergency fund. I hope to put all "found money" (i.e. tax returns, etc.) into it. Also, I do have a small amount transferred automatically twice a week to my emergency fund. This amount will increase in a couple months.
2) Pay down some high interest credit. In addition, Steve needs to call his credit card companies to request a lower interest rate.
3) I'm going to venture into couponing and trying to find deals on grocery shopping. My goal is shop only twice a week (I can't do once a month shopping since I don't have a large freezer).

It is daunting looking at these figures. I try to see it as a challenge or a game. I play to see how much I can save on expenses in a month. It feels so good to make larger payments than the minimum when I can. Sometimes it is a struggle but to see the numbers slowly going down is well worth all the work.

Also, Steve and I made the pledge to stop using credit cards. Well that didn't happen. We slowed down our usage greatly but have yet to stop altogether. I guess that is another goal for us to work on.

Sometimes I wish I could win the lottery and pay off all of our debt and be done with it but I know I wouldn't feel that I accomplished anything. I need to earn being debt free...even if that takes lots of effort.

Beginning 30K Later...

Hi. My name is Sam and I have $30,000 in credit card debt.

I often ask myself how I got to this point. I'm not a shopaholic--not really at least. It's not medical bills. I wasn't laid off. I am not a victim of credit card debt. I allowed this to happen...but it wasn't overnight.

I'll start at the beginning.

I had worked at a credit union part-time for four and a half years while in high school and college. During that time I learned so much about finances. In these years I actually decided one of my lifetime goals--to someday have a FICO score above 800. I wanted perfect credit and I thought I was on the fast track to getting it. I knew it would still take some time but I already had some building blocks in place. I had a credit card and I paid it off every single month.

And then I met my husband. We had a long distance relationship for the first year which meant quite a bit of driving and flying to see each other. This ended the paying off the credit card every month. After he served his four years in the military we planned to move to Tennessee, closer to where he grew up and 1,000 miles away from my home. We moved into an apartment and quickly bought the things we would need to make our life together. Looking back the 52-inch plasma probably wasn't the brightest idea at the time but we still enjoy it today. We made quite a few choices that may not have been the best but at the time we could do no wrong. My husband and I were both unemployed but he was waiting on a job that he had in line. However, the security clearance needed for this job required months of background checks and waiting. I was in school full-time still and only able to work part-time.

After 6 months of living together and racking up enormous amounts of debt we got married. It was a wonderful day. Exactly what I had imagined. But that didn't come cheap either. About a week after the wedding my husband and I sat down to completely look at our finances. We made a decision that we would no longer use our credit cards. It was a glorious day...our first step to debt freedom. Our one month wedding anniversary was my husbands first day at work. Months of his unemployment and my part-time work didn't cover our expenses so we were now $30,000 in debt (credit card debt alone!!!). It was finally the time to turn our life around and take hold of our finances. That was 6 months ago.

So far I really don't have too much of a plan. I want to attack this debt and just get rid of it but I can't. We can make barely the minimum payments on our cards and other debts and expenses. I can tell now that this is going to be a very slow process but I know it will be incredibly rewarding.

Small progress makes a big difference.