Taking Paths Less Traveled

Joyful Hiker. Mother. Teacher. Adventurer.

After letting auto-pay handle business for the past 6 months and me just living my best life, there came a point when I needed to face reality. I had to look at what kind of havoc ignorance had wrought. Last month the thought of diving into that pit of despair led me to check my balances and then take another break. This month, however, with school back in session and routines working their magic, I dove in.


How the fuck did all these things happen. Well, first, I apparently didn’t read or comprehend the fine print of the numerous companies contracting me into their profits.

Guess what? That student loan consolidation plan didn’t actually tell me that if I took the reduced payment option, I one day soon realize that I had just allowed $3k of “interest capitalization” to accrue. Seriously, that is my ENTIRE TEACH GRANT. No one was there to tell me, “Hey this is a bad idea.” Yes, being completely honest with myself, I knew what I was getting myself into when I accepted $55k in loans. But what were the alternatives? I had to get a degree to get a job that would come even a little close to supporting my children and providing them with a stable environment. Working through college would have meant baby-sitters and working night shifts. Is it really worth it to work a part time job AND pay for a babysitter? Now I’m just a slave to the interest rates.

Enough about that though. Because that was only “debt” number one and I haven’t contrived a solution to that problem. The next gut wrenching debt I tackled is my credit cards. (Oh, joy!) Two months ago I had thought my credit card debts totaled around $25k. Well, I was wrong. Let’s add some more ten-thousands to that. Double Ouch.

It doesn’t matter that a year and a half ago I had devised this plan to pay off my credit cards in two years. It had been the perfect plan. I was going to consolidate my loans and pay less interest. Only the plan didn’t take into consideration that the loan company wouldn’t give me enough money to pay off all my credit cards. So, the accounts remained open and obviously, given my current situation, I continued to use them. I just didn’t stick to my budget.

Realistically, I just can’t afford to do all the things expected of me in our society on a single income. I know I can make different choices, such as, do my own nails, color my own gray hairs, ignore Starbucks Happy Hour, engage in meal planning and cooking in. I could stop buying things for my students, make my kids purchase generic clothes, shop good-will for my clothes, get a second job. I already don’t pay for a gym membership, share all my streaming accounts with family, shop at Winco, and I never go to a mall. These are things that I perceive many people doing, so what exactly am I doing wrong?

Disclaimer: I know, even in my “dire” circumstances that I am swathed in privilege. I had the good credit to get all these loans, I have a reliable car, my ex pays child support, I live in a nice neighborhood with a really nice landlord that hasn’t raised my rent (fingers-crossed, knock on wood). These things I am grateful for, and I am aware that people have experienced much more severe hardships in their lives.

My first world problems are still mine to fix.

So… solutions… where do I go from here? Well, today my dive in to my finances was deep and efficient. Because, after all, when you are faced with something the only way to the other side is often right on through it. What’s that song? ‘If you’re going through hell, keep on going” or somethin’ or other. (Squirrel: isn’t it funny how silly our little sayings look in print?)

This part is a punch in the gut. I had to look at where my money has been going. All the money advice people have told me this is the first step. I keep several different records of my expenses, digital and paper. The first one is a simple composition book that lists my non-negotiable expenses like rent and utilities, income, budget, and credit card activity. The second one mirrors that, but it is in a complicated spreadsheet that I built the last time I made a budget plan. It works really great with the numbers changing based on income and expenses. I decided to give it an update and make it useful to me again since I had basically blown that previous plan sky high.

PS. Spreadsheets are fun. If you don’t know how to make one, I suggest you hop online and learn some of the basics. You don’t really need to know a lot to get some good financial organization.

This spreadsheet allowed me to plug in the numbers of my debt. Balances, interest rates calculated monthly so that I know how much the interest charge will be each month, and, of course, payments.

On one sheet I have my credit card information, on the second sheet is the income/expense report also found in my composition book. Only, the sheet is interactive. When I make more money, a bunch of numbers change so that I can see how much I’ve got.

It really is pretty basic stuff, but it was soothing to set it up. It makes me feel as if I am actually accomplishing something, even though all action will take place one long month at a time. Making a fun spreadsheet is all the productivity that I will get until the first of the month.

I also use the Mint app that takes all my accounts, puts them into a single place, sets a budget with alerts, and categorizes all my spending. It is a simple way to have my choices at my fingertips… I just have to open the app and take a look… :-/

Unfortunately today I made a bunch of rash decisions before I sat down and looked at my data. The first mistake was to send all my savings into a credit card in one smash hit. It felt great bringing that balance to zero, but I have left myself vulnerable. It will be many months before my savings account will make me feel good again. Until then, I don’t have a fail-safe plan if things go wrong.

The next mistake I made was to go crazy applying for zero percent credit card loans. The more I ask for a loan the less money they seem to be willing to give me. Last month good ole BofA offered me a $10,000 limit credit card with 29% interest (gasp!!) and this month they were so kind as to lend me $500 for 0% interest. Nothing in my financial status has changed, except for a keen sense of desperation.

With all my options seemingly tapped out, I reached out directly to the credit card companies. I called and explained to them that I was entering a phase of financial difficulties and I feared that I would no longer be able to sustain the payments that I’d accrued. Each of them transferred me to a ready-made debt-counseling department. I was put into contact with a nice guy named Tomas who listened to my situation and helped me take a good look at my finances. He even empathized strongly with my plight. There were some things that he dug up that were revelations for me. For example, Discover had lied to me when they told me that they would give me 18% interest the last time I had asked for help from them. Nope, that credit card was at 20% (still more palatable than 29% but sheesh!).

Tomas was very thorough and basically told me that with my income I was loosing $900 per month just with basic necessities. And, yes, that is why my credit cards are going up, partly. That, and I know that I have an Amazon problem. You know it’s really bad when you get a delivery one day and have no idea what’s in the box. Surprise!!! With everything at our fingertips, impulse purchase retail therapy is also one of those things that deep down I know better not to do.

Tomas’s plan was appealing. He would take over my 4 debts, negotiate lower interest rates and pay all the bills for me. The accounts would all be closed and everything would be paid off in 58 months. – The catch? Because there is always a catch. – While this plan would be easy for me, I would be paying $35 a month for them to manage my accounts.

After reviewing my numbers with him, I realized that this wasn’t really going to help me. Two of my accounts already have low interest rates. The other two interest rates are outrageous, but they have smaller balances. I felt in my gut there was a better way. I told Tomas I would consult my family. (This is a really great way to get sales people to let you off the line, by the way.)

I decided to use the snow ball method that my spreadsheet is designed to facilitate. This is a proven effective method, you just HAVE TO STOP USING THE CARDS. (Yelling at myself here!!) First, I will pay the minimum payment on all the accounts except one. The first account should be the smallest balance with the biggest interest rate. All the extra money I can spare in my budget will go to this account. If I follow my budget, I will have around $1000 extra to send to my credit cards. (oh how I wish that $1000 was going into a savings account… soon soon soon!) When that account is paid off I will take all that money and send it to the next account. By this time I won’t have to pay the minimum payment on the first account, so I will now have $1300 to send to the second account. To learn more details about this method, just do a quick google search.

The sad thing, guys, is that this isn’t my first-go around. Nope. I don’t even want to get into that right now. But, again. It’s the truth and why not just own it. Yes, circumstances and choices got me here. I believe that I am doing my best at whatever moment I’ve been given. And sometimes that best needs some extra work.

This time, though, just like my new diet… is going to be the last. I have a budget and a plan. If I follow it carefully I will pay off my credit card debt in 24 months. This gives me an incredible sense of hope. It fits well into my 5 year dream plan for FIRE (Financial Independence Retire Early). The concept of retiring early is incredibly appealing to me. It seems nearly impossible with a single income, however. Anyone want to move in with me? Taking applications… 😉

The key difference this time is that I’ve got some help from my kids. Both of them are old enough to understand our situation and it’s past time that I actually taught them how to manage money. (It’s okay that we are all learning this together, right?)

One idea that I came up with is to keep a separate account that automatically pays out the recurring expenses such as rent, electric and car payment. That account will not have an accessible debit card. A second account will have our monthly budget automatically deposited. This will be the only way that we can draw money for food, gas and other purchases.

It’s not going to be easy as this is going to forte the opportunity to get creative. Sometimes creativity can hurt. Creativity is certainly inconvenient in this situation. However, my work stress this year is significantly decreased compared to last year. I feel that I’ve got the energy and determination to stick it out the next 24 months.

I know I am not alone in this debt tornado. It is hard for me to even post this into the public sphere. In my family we never openly talked about finances and why we never seemed to have enough money to “keep up with the Jones’s”.

Do you have any suggestions how I can tough it out for 2 more years and really stick to my goals? I would love to hear your stories in the comments.

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Tom’s Bike Trip

Adventures and experiments in two-wheeled travel

Finding Normal

Single parenting in the ADHD Family

Taking Paths Less Traveled

Joyful Hiker. Mother. Teacher. Adventurer.


Thoughts and ramblings of a young adult

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