December 31, 2007 - Budget update...

Well, some reworking on the budget was done here recently.    In trying to reduce our debt, we realized that come January, we lost a lower interest on one of our credit cards.  Dh called to negotiate a lower interest... they wouldn't hear of it.   So, instead we refinanced the credit cards... all of them.  They are all overall at a lower rate, but on one loan to be paid off in 8 years.  I am hoping that will be sooner.  In doing that, they closed down our largest credit account... fine with us!  

The way the loan works is that the bank the credit account was through, offered us an unsecured loan.  They closed the credit card account.   They will then transfer the amount leftover to our bank account for us to pay off the other credit cards.  I thought this a bit risky, but it will be done.  I have no need of double payments.  The refinance actually dropped our total payments by $45... and they have an end date to be paid off.  

After the cards are paid off, I now have a very large payment each month, rather than several smaller ones.  So, to compensate, we will be setting up a specific account for our bills.  Actually we have this done already... for all our bills that have regular payments, we set aside a specific amount to be transfered into our "insurance" account... named by us originally to deal with insurance payments, but has grown to cover vehicle payments and now this larger consolidated loan as well.   The money from Dh's check is divided at the bank into the different accounts and this one account is untouchable, as it is specifically geared to cover specific bills. 

I agreed to the transaction, but asked Dh to please not use the credit card for gas or whatever little things he needed... he admitted it just adds up... like getting off work and having no money, but wanting to go to the farm store for sheep wormer, which costs $70, then filling the truck, another $80... that is $150 on the credit card just like that.  He says that he agreed with something he thought my Dad had said... never to charge gas or groceries, as that is money gone and you have nothing to show for it.  So that is the plan.   We will see how it works.  I already took the cards out of my own purse as well.  I had used it a couple times for "groceries" because the holiday meal is just bigger than our normal budget allows.   My bad... as the kids these days tend to say! 

Dh is getting moved to a different shift at work and the amount of overtime he gets will go down, so we are trying hard to live within the means of his base income.  This has been a work in progress, one we were trying to get to, but one that was not a priority until we knew we had to live without  the amount of overtime pay that we were used to. 

So, it is a time of adjustment coming up for us.  I hope that these changes will make it easier to pay things down.  According to the new payment schedules, in 8 years, our truck, the van, the consolidated loan and our furniture loan will all be paid off.  Actually in 3 years our truck is done, so we ought to be able to pay down the other loan even faster.    That will leave us with no extra liens other than our home loan.  I pray that we are diligent to this path we've begun to take.   May God lead us each day with our expenses, that we will make good decisions. 

Warmly, ~Melissa

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December 31, 2007 - Untitled Comment

Posted by gabbie427

Good luck with your budgeting and your debt free goals. We are currently debt free except for the house payment and it feels so good!!!!

God's Blessings,
Amy Jo

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December 31, 2007 - Hang In There!

Posted by Ann

It took us 8 years to pay off our debts, and it was so worth it! It was a real sacrifice, but I'm thankful that the Lord gave us direction on what to do.
Ann
www.harvesthomestead.blogspot.com

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