Thursday, August 18, 2011

On Debt

Credit is a necessity.  You have to have it.  Unfortunately, it's far too easy to let it get out of hand.  This is the position I find myself in now.  I am making my monthly payments on my 3 major credit cards, and in excess of the minimum, but I'm just not comfortable with the amount of debt I'm carrying.

This is not the result of negligence or irresponsibility by any means.  It's because, since 2008, I've had several very expensive unplanned for "emergencies," and they have had to go on credit.  I'm talking one year where I had so much dental work (root canals, extractions, crowns, bridges) that I exceeded my covered annual limit.  BAM.  $2000.  Then my roof had to be replaced due to storm damage.  Yes, it was covered by my homeowners insurance, but I upgraded the quality of the shingles to 30 year, and there was underlying damage to some wood that wasn't covered.  BAM.  $2500.  Last year I discovered black mold in a bathroom that desperately needed to be redone anyway.  I called in a contractor to give me an estimate and he discovered that the floor was also falling in.  They had to tear it out down to the crawl space and rebuild it.  BAM.  $5000 for the demo/construction plus an additional $1500 for new fixtures/paint, tile, etc.  In July this year Camille had breathing difficulties over the holiday weekend and had to go to the emergency vet clinic.  BAM.  $1600.  In a nutshell it has added up and added up faster than I can keep it paid off.

So I have a plan.  I think a plan is crucial.  It's one thing to accept that you're carrying too much debt but without a PLAN there's no way out.  I now know exactly how I will pay it off.  I know exactly how much I am going to pay on each card every month.  Barring any additional emergencies I know I will have the two highest interest rate cards paid off in 20 months.  This will leave one card to pay off (the lowest interest rate but highest balance) and once the others are paid off I think I can get that one under control in 18 months.

So where am I going to find the fundage to do this?  Stay tuned!