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The Plan! The Plan!

August 18th, 2009 at 07:24 am

My apologies to Fantasy Island. I used to love that show when I was a kid, although I suspect now that I had no idea what was going on during the episodes. At our house, I also suspect that we've been living on our own little Fantasy Island.

The first payments to the credit cards in our new reduction plan began today. At the current rate, our credit card debt will be paid off in 2 years.

I created a budget based on the payments we were already making to the lenders (which were greater than the minimums), so that the shock of our more focused frugal lifestyle wouldn't be derailed before we could appreciate some of the benefits. For example: I didn't cancel the cable/internet. I am leaving the cell phone plans alone at $30/mo for my husband and I. And, I have told myself that it is ok if I want to buy a coffee or have an inexpensive lunch out.

I also built 4 savings goals into the budget: the emergency fund, a Disney Cruise (for 2012), a Christmas fund, and a fund for a china cabinet. People would be absolutely right to say that we should be putting every cent into our debt reduction. The fact is, the all or nothing budgets haven't worked for us. My thought is that by building some of our wants into the budget, we'll have an incentive to keep to the plan.

If the debt reduction budget works out the way I've envisioned, we'll have extra each month -my plan is to put that extra towards the credit card debt.

We will continue to carry a heavy burden of student loan debt (my law school loans top $100,000), mortgage and car payment. I will start looking at those once we've paid off the credit cards.

Thinking about our financial situation is both frightening and empowering. I know how we got where we are, and I'm trying very hard to stay positive and focused on where we are going to be.

5 Responses to “The Plan! The Plan!”

  1. mrs. Says:

    I think you've taken the great first steps to acknowledging where you are and determining where you want to be. Get your EF up and running, that was the first step in our house to help us move away from using the cards for "emergencies". Looking forward to seeing your progress.

  2. ceejay74 Says:

    I'm definitely one who needs little pressure valves and rewards built into my debt-reduction plan. If ever someone should be cutting to the bone and throwing their life into paying down debt it's my family, but I know that would drive us crazy and toward near-certain failure, so we're taking a more scenic route. It's helped us stay on track for 2.5 years so far and we feel ready for many more years of orderly budgeting and frugal living because we know there's the occasional treat along the way!

  3. creditcardfree Says:

    It seems like a great plan! Let us know how it works out for you.

  4. NJDebbie Says:

    I'm glad you realize what works for you. I'm looking forward to continue reading about your progress!

  5. MomEsq Says:

    Thanks for the encouragement! I need it!

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