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!