POST OF THE DAY
Credit Cards and Consumer Debt
Then, Now, and Someday

Related Links
Discussion Boards

By Jim2B
July 17, 2006

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

Consider this a CC&CD testimonial post intended to inspire you to share your stories.

Then1 (circa 6/2003):
On our way back from a weeklong family camping vacation. Our mini-van made a huge *CLUNK* and started blowing thick black smoke. Thank goodness we were traveling with friends that had a current AAA membership!

It turns out that its transmission had died. The estimate was ~$1800 and we weren't sure how we could pay for it as we didn't have this much remaining on any credit card and we certainly didn't have this much cash sitting around!

Then2 (circa 3/2005):
As I often do, I was running math calculations in my head as I was drifting off to sleep. I discovered that we paid more in interest on our consumer debt than we did towards the principal + interest on our house. This was so disturbing it woke me up and made me resolve to do something about it.

After about 1 week of playing the BT game, we reduced the amount of interest we paid in every month by $600! This was the core of what we came to later learn was our "snowball". Since this time, we've continued to cut out things we don't need/want/use and continued to grow our snowball relentlessly.

Then3 (2/2006):
We joined TMF!

Now:
In July, we've suffered from a vicious attack of entropy. Our mini-van transmission died again ($2000), DW took the new kittens to the vet due to concerns about parasite infestations ($200), lawn mower died (fixed myself for ~$30), vacuum died (working on that today for an estimated cost of $5), central air-conditioner died during the hottest week of the year (no idea how much this will cost and guess it'll be at least $200 to fix), and the lawn mower died again due to a different problem (also repaired by me at a cost of $0.15).

We had no problems charging this to our "trusted" CC as it had a $0 balance, and we'll be able to pay off these charges at the end of the billing cycle out of our snowball funds (although it annoys the hell out of me that I have to rob my scheduled pay-down of our HELOC for this month).

Someday (estimated to be ~11/2007):
Once all Consumer Debts (minus our primary mortgage) are paid off, our snowball will approach $3000/month. We plan to set aside a 2-4 months of payment as our efund starter money. Then we'll split this money evenly between retirement funding, other savings (efund, car replacement, home maintenance, etc.), and kid's college funding.

We plan our daily lives to be very similar to what it is today except instead of filling the hole we dug earlier in our lives, we'll be building a mountain of savings to buy our freedom.


So what was "the Event" that woke you up from our societal-induced consumer hypnotism and made you realize the path to freedom?

Jim


Become a Complete Fool
Join the best community on the web! Becoming a full member of the Fool Community is easy, takes just a minute, and is very inexpensive.