Kick Debt's Butt

I don’t know if irony is the right word. Perhaps it’s some kind of strange financial sadism. But for whatever reason, we backslid on spending after I was laid off.

At the beginning of last year, when we finally recognized that credit card debt and other consumer spending was eating away at any chance we ever had to build wealth, the first thing I did was put us on a “cash box budget.”

I segmented the family expenditures and applied a finite monthly amount to them, ensuring that the total equaled an amount that when combined with my debt attack, would not leave us negative at the end of the month.

It worked fantastically for the three or so months that we used it. In fact, what we thought might feel stifling, turned out to be liberating. There is a large peace of mind factor that goes with knowing what you have to spend. Then the job bomb, and like I said for whatever reason, we threw the cash budget out the window.

So here we are, almost a year later, and in spite of some major set backs, we’ve done a great job of paying down our consumer debt.

With that said, I’m getting the cash box ready again. This time the balances are adjusted to be a bit more realistic and if I’ve done the math correctly, we still will be able to continue with our aggressive debt attack while hopefully building a decent buffer in our operational (i.e., checking and savings) accounts.

I’m already planning for post consumer debt life; where we start routing money in to investments and not debts!

As much as it pains me to know that my thieving credit card companies will be getting another month's interest out of me, I have of course decided to re-purpose my debt attack amount to Christmas.

I had to convince my wife that we are making outstanding progress and that there is a light at the end of the tunnel, but this past year has been pretty tight around here and we haven't done a whole lot. After it was all said and done, a little Christmas spirit was just the thing we needed!

I will say this. We are all getting the travel bug and I think a nice trip, paid for with a "trip budget" and not with a credit card, will be a fantastic reward. Unfortunately, we will not be in a financial position by this summer to go to the World Cup in South Africa, but my goal is to be in that position by the next Cup in 2014!

It's December and we all know what that means. Christmas shopping! Well, I'm torn. I want to enjoy the season of giving without being stressed out about backsliding on my debt butt kicking routine that is now finally back in full swing since my layoff.

So part of me wants to go VERY light on gifts, in which case I run the risk of being a scrooge this Christmas.

And the other part of me wants to use my monthly debt attack amount to buy Christmas gifts for everybody; which of course knocks me back a month on my debt pay down goals.

I guess the answer is, what will my kids remember when they are grown and raising their own family in 10 years and our debt is ancient history?

I'm looking back through my posts, which really didn't get started on this blog until August of 2008 - and wow what a difference 15 months can make!

When I started this thing, our family was still using our credit cards to make purchases without any regard for consequences and our debt was skyrocketing.

Then, in January as the recession was really cranking up, I got scared and locked every credit card we have down.

And then in February, financial catastrophe - I was laid off with no real savings account and a HUGE debt burden. We were able to string it together until I finally landed another job in August. Yes August!

But guess what? Because so many of our credit card companies were unwilling to work with us; we have now become absolutely anti credit card.

Since I started my consumer debt reduction initiative in January of 2009 - I've managed to pay down $18,678 in debt. I still have a small mountain to climb, but I'm snowballing every month and have an "attack" amount of $793.30 which will only grow. If everything goes as planned, I'll have destroyed our Mt. Everest of $41,555 in debt by March of 2011! And as long as I can practically manage it - no credit card company will ever see another penny of interest from me!

So I'm thankful for my family, my job, my health, and our direction!

Employed! Finally...after a few months of absolutely nothing I was offered a position with my old company! So now I'm back to kicking debt's butt - however my situation remains tenuous as long as I carry this much debt, so I'm being as aggressive as I can be!

My own company was gaining momentum, but this really is not the right economy to be starting your own business unless you have significant private financing available (i.e., serious change in your own bank account).

That being said, I'm happy to be back on a corporate payroll - the consistency of steady payments will allow me to pick back up where I left off paying off debt.

I had a couple of late payments during my lean months so my interest rate skyrocketed on a couple of cards. Not only did that impact my credit score, but it put me further in the hole. So my first order of business is to pay those high rate cards off!

How funny is it, that to the day, I wrote this article:

The new McLane reel mower is on the way!

and have just finished a great afternoon of yard work which included using this great little lawn mower. Before I made this purchase, I had forgotten how nice it is to take pride in doing your own yard work.

So now I've cut, edged, and mowed and can admire my work with a cold one!

As I sit here and pen the first post in months on Kick Debt's Butt, I find myself somewhat relieved.

Finally the icy job waters have started to warm a bit and I am faced with securing gainful employment yet again.

We still have our house, our cars, our health, and our happiness. Thankfully! And we have paid down some debt in the meantime - not a lot - but some.

With my new income stream I should be able to pick right back up on the debt snowball I had started back in January.

Oh, and by the way, I paid off my lawnmower last month, which means now I start up the break even curve every time I cut the grass!

Folks, I’ve been exhaustively on the job hunt since I found out my group was being eliminated. That was on Feb. 13th.

Twelve weeks have passed. I haven’t spent any time posting to the blog. Instead I’ve been furiously networking. As a result, I’ve been on quite a few interviews and I have at least one offer that feels like it’s about 98% there.

Of course until I have a signed offer letter in hand, I’m still officially unemployed, but I do enjoy writing and if something in here helps someone else, then we’re all a little better off.

I’m going to try and take the next few weeks to chronicle the major financial events of the past couple of months. Thanks for your patience!

-KDB

I love the written journal but a lot of my readers on my PF Blog have been asking that I continue to write about this experience. Maybe it will help and it only takes me about 10 minutes a day to bang out a quit post of what's going on.

No matter what, I still have debt that I need to address.

Up at 6:30AM. Today I need to update my resume. I need to find out about going in to the office downtown - a terrible commute but given the state of things, I need to be closer to the action (assuming there is any.)

I want to create a business flyer for OAG just in case nothing pans out on the job front. I hate to have one foot in the court of entrepreneurship and one foot in the court of job security, but I know how hard it it to get your own consulting business going in a good economy, nevermind this rotten economy.

Create an email database. Send out inquiries. The other big risk of self employment is health insurance expenses. My COBRA will cost over $1000 per month. The upside of running your own business is, there is no one who can lay you off.

Up at 7:45AM - happy President's Day. Need to read the "package" that came in the mail on Saturday. Today is Day 1 of my 10 weeks. I need a haircut.

I also need to call one of the Partner's in the old business to find out if there are opportunities to move back over. In addition, I need to blast my network. Start with personalized emails - phone calls are a bit too much.

Here's my list for today:

• Call the Partner
  
• Read the package
  
• Make a list of Networking events I want to attend this week
  
• Call the technical writer recruiter who contacted me, ironically enough, Friday
  

I decided to reach deepr in to my old previous firm network. I have some very promising leads with my old team. Very. I think it would be folly in this economy to ignore this.

I called a couple of graphic design people about the layout of the print edition of Peach State Soccer. I'm going to stick with the magazine as an online ezine for now. Big investment to turn it in to print.

I have my big idea running as well - but need to prioritize for near term survival and long term growth.