All of our debt is one credit card. Most of it is debt from when dh started up his side business. The business has been unable to repay us what we loaned to it, and so we have been unable to pay off this debt (I want to chime in here and say though, the business has saved us much more than this amount and so I don't regret dh starting it. BUT we will never do that again unless we can do it without taking on debt)
Here is the info:
interest: 303.47 is at a HUGE 11.15 APR and the rest 14,495.09 is at 6.11 APR (total of 83.15 in December)
Minimum payment: 229.19
I believe last year we paid off 6000 of this debt. Also, they are only applying our payments to the 6.11% APR. Blech.
We have already mailed the January payment of 300. We have it set up in our bank account to auto pay citibank 300 every month. Last year, when we had extra we sent it in. I believe last Jan, the min payment was 290 and we could only scrounge up 10 dollars extra to pay that month! (but hey, still, paying over the min - no matter how small helps so we tried to not get too depressed about it LOL).
So this year we need to find 14,624.22 + interest to them. 9,000 more than last year!
Where will the money come from?
Good question. One we haven't entirely worked out. We know where some will come from:
- Cut back on spending. pull a few areas of the budget back as far as possible.
- I have already told where I worked last summer, that I am willing to work again this year.
- grow more food this summer to lower food costs
- Cut way back on savings
- Mortgage payment is dropping this year. The bummer - we don't know by how much. We can shift the difference to the credit card. (and no, not because it's an ARM - we have a standard 30 year loan. However, our mortgage companies pays our real estate taxes. Taxes didn't go up as expected last year so we have enough in our escrow that they are lowering our contribution. We fully expect to go under the required amount this year and for it to increase next year - which is what happened in 2008 LOL)
The good news is that we have a bit of savings set aside. Although we are following Dave Ramsey's baby steps, we decided given the current climate right now, we needed to have more than 1,000 in savings even though debt is paid off. Because dh works with advertising and he's watching competitors go out of business more often than we feel comfortable with, we built up some savings at the end of last year - enough for 2 months of expenses. We are hoping the economy turns around and that if we get debt down low enough, we can just pull out the money from savings. We don't have saved what we owe, but we could pull out 5,000 and pay off any remaining debt if we feel dh's job is secure!
At this point though, we know that we probably won't make much of a dent into savings until the second half of the year. Medical deductibles reset in January. Also, life insurance is due. And car insurance. And our dentist appointments are all in January. The only thing we won't be worrying about in January? Christmas expenses because we save a bit for those all year and had the money we needed in December. ::phew:: But most of "extra" income comes in September and October - my dh works a second job and his business operates then (so I guess really he works 2 extra jobs on top of regular day job) and I also make some extra money then as well. But, every month, anything we can pay on top of that minimum balance is good I think!