Six Figure Debt

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.

It’s pretty obvious that we are going to take many years to get to the point where we are debt free.  We understand the road ahead and aren’t overly uptight about it. We see this journey as a series of steps toward a debt-free life.  My debt snowball estimates we will be debt free in 2021, yes,  that is 12 years if we don’t throw more money at the current debt.  Our plan in 2009 is to drop that debt free date to 2015, which means we will need to increase our debt snowball by $200 a month, which is totally within our reach if a few things break out way in the new year.

Our debt reduction plans took a small hit this week as we were hit with $300. in unexpected medical bills.  It isn’t anything we can’t handle but it put a serious crimp in our debt repayment this month.  Looks like the minimum payments for at least one of the three credit cards.  We will still make a double payment on the home equity line of credit.

I will update you on our debt this week; we did manage to take a chunk out of our debt, reducing our HELOC by $800, cutting a few hundred of each of the three credit cards and even adding a few hundred dollars to our emergency fund.

This is easy for the wife and I, we are very focused on our goals.  They are…..in order!

1.  Eliminate 25% of our total revolving debt.  This amounts to about 25k between January 1, 2008 and December 31, 2008.  We can do this, we are making enough money and have more on the way when our small business opens in March 2008.  In addition my other Internet sites are beginning to show a serious profit, maybe as much as 20k in 2008.

Here are a couple of great suggestions from my favorite site about how to save money and have a great frugal Christmas holiday.

–Trent at The Simple Dollar lists twelve things he’d like to see under the Christmas tree under $10.  I personally love a “memory stick full of memories.”

–We’re in Debt lists a receipe for “Cheap Christmas Cookies.”

–Million Dollar Journey lists helpful hints to keep your budget in-line during the Christmas season.

–Cheaper than cheap explains how to save money on your holiday grocery bill.  Great advice.

While I attack my debt I am also exploring options to make extra money on-line.  Here are 5 that I have used and have already starting to see a little income from after just a month.

1.  Blogging.  There are many ways to monetize your blog.  The best for me so far is Google Adsense.  I haven’t made any money off this site yet, but the traffic is growing and I hope to see some revenue soon.  My other blogs make close to $1000 a month.

• HELOC                              $ 61,622.16
• Credit Card # 1                $  15,000.00
• Credit Card # 2                $ 11,206.94
• Credit Card # 3                $ 21,209.65
• Misc. Attorney fees         $ 28,000.00

Debt to be repaid.                 $  137,038.75

A large portion of the money we owe, 40k is a loan that we made to ourselves from our home equity line of credit to start our new business.  It is being repaid by the company and should be even in 5 years.  The rest, approximately 97k is ours to pay for no matter how long it takes.

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I started this BLOG because I was inspired by a couple of web sites and the writers honesty and willingness to share their stories.  Check them out.  I have made them my first two blogs on my blog-roll.  

It’s been a rough go for me and my family over the past two years, but likely not unlike the trials and tribulations that most families go through on a regular basis.