Six Figure Debt

This Christmas season has been much more enjoyable than last year.  A year ago we were without work and had no money left in our emergency fund, this year we BOTH have great jobs and we are quickly repaying debt and rebuilding our emergency fund.  I know it sounds very basic, but the emergency fund has become an obsession.  We are throwing every extra cent we earn into the emergency fund as we understand that this economy could see one or both of us unemployed in the blink of an eye. We won’t stop funding the fund until we have a solid six months of living expenses in our savings.

Now that Mrs Bad Spender and I are employed and in the process of debt reduction we have put together a budget to accomplish our goals.  Our goals are to be debt free in 12 months, start contributing to our children’s college funds again, save for a vacation and to begin rebuilding our wealth.  This budget is our first attempt to get our finances under control, we actually started budgeting last month but we needed a month to tweak it before we were ready to lock in our figures.So, this is our December budget and we have not strayed.  We even subtracted money from the “entertainment fund” because we really don’t go out that much anyway.  We used the money to purchase Christmas presents for the kids and added some to the Emergency fund.  The budget is a work in progress, we will continue to squeeze more and more money from it to repay debt, but we really need to get the Emergency fund fully funded.

Things are rocking along at our jobs, my wife loves being back in the classroom and I certainly don’t mind working in my field. However, the slowdown in the economy has forced us to delay some CC debt repayment so we can invest in our small business.Our Chase CC has approached us with a settlement.  We currently owe $17,000 and they have offered to settle the account for $5,300.  We have accepted and will pay the credit card off with payments of $2,300 and $3,000 in December and January.  It is one less daily call we will have to be stressed about.  The collector was actually very pleasant, understood our situation and made us a better deal than we asked for in the first place.  I’m gaining a little more respect for the CC companies as they appear to understand the current economic plight of most Americans and want to help.Watch the graphs to the right, you will now start to see our debt dissolve quickly.  Things are looking up!

I haven’t written on this site in a while because frankly our financial situation is so depressing that I didn’t even want to acknowledge it all all, it was much less painful to bury my head in the sand and forget about the turmoil in our financial life. However, things are looking up in a big way and my wife and I are counting our blessings that we both landed great and I mean GREAT jobs in our areas of expertise. My wife is a Teacher and she was hired on the eve of the school year starting. It came as quite a surprise to us as we had given up hope that she would get a job.  Needless to say, she took the job and I transitioned into the General Manager role in her small business.  It wasn’t much of a transition as we have spent countless hours working on her business over the last two years. After about a month I received a completely unexpected call about a really great position with a company that I had done work for in the past.  Believe me, I had no idea this position would come up and when I interviewed and was hired it was a pleasant surprise. So….here we are, both with great jobs and a growing small business. What to do next? Between the two of us we are now making about $150,000 annually. I don’t count on any income from our small business as we reinvest everything we make back into the company. We are now in a position to get back to the debt snowball that I started last January.  I’ve decided against seeking settlements with the CC companies as I now have the means to pay down this debt and would like to have a clear credit report when this is all over. The first thing we plan to do is contact all of our creditors and set up a plan to get back on track.  With our current income we should be able to get all the cards current and start eliminating the debt.  We will tweek our debt snowball a bit to account for the current balances and get to work. For the time being we will live on my wife’s salary and use mine to pay down the debt quickly. The credit card companies are getting a tad more aggressive, instead of them making the decision to work with us to get back on track they are starting to threaten litigation.  Suing us isn’t an option as we don’t owe any one card enough to even pay them to sue, I’ve also begun to take a hard-line with the callers.  I simply tell them they will have to wait a couple more weeks until I get paid, I don’t argue, I simply repeat the same things…”I’ll pay you as soon as I get my first paycheck.”  Some don’t like it and try desperately to get some money out of me but it is fruitless as we still haven’t gotten paid.

After I wrote my last post, I received not one but two calls regarding potential employment.

I interviewed with job # 1 on Friday.  The position is within my field, not exactly what I am trained to do, but a position that certainly is within my skill set and one that I am qualified to do.  The interview went great and I am confident that I will get an offer from this company.

This spring has brought no relief to our situation.  Currently we are in default on all credit cards and can’t even seek settlements because our basic living expenses far exceed our income.  I’ve had zero luck even getting a job interview and my wife is getting interviews but so far no offers.

To make matters worse, our small business, which was growing nicely in January, February and March has come to a near dead stop.  I don’t know if it is just a cycle or if our customers have just stopped spending money.  I hope it is a cycle but at this point I am losing hope that our customers will return.

I apologize for being falling behind in my posting, I’ve been suffering from a small case of the unemployed blues, never in my life have I been so excited to work and I can’t even get a sniff.  It is so bad that I honestly can’t imagine working, let alone working in a position that I am actually qualified to do.  It is enough to keep me depressed indefinetly.

This morning, I woke up, decided I needed some positive news in my life, so here it is…the “GOOD NEWS” roundup!

I guess I should consider this good news, but it is odd how we got to this.

Today I received a call from Bank of America, remember, we just decided last month not to pay our credit card, instead we decided to save the money and attempt to settle our debt with the credit card companies.  Well, today BOA call to see why our bill wasn’t paid on time and we informed them of our plan to seek a settlement with them to pay the cards off in full.

Every Sunday I am going to focus on good news in the world.  I find it thereputic to seek out some good news each week as I feel constantly beaten down by the string of bad news and dire predictions.  I am an optimist by nature so I tend to look on the bright side of life but it is hard when myself, friends and relatives are struggling so hard in the current economic state.  So, here are a few stories to relieve the stress and hopefully put your mind at ease for a few minutes.

It seems like lately all we get is bad news, the newspapers, the television news, the Internet, you name it all they do is deliver a huge dose of bad news everyday.  It has gotten to the point where I just ignore most of it, but I do feel like it is starting to take its toll.  I’m sure  I and not alone when I say that I feel completely beaten down by the economy, bad news and my job search.