So. I should really go over what I have accomplished last year (and this year, to date) in my quest to become debt-free.
I managed to totally clear up my credit card debt, and, to my surprise, when I sent for my free annual credit reports, and ordered my FICO scores, I found that it had improved, over the time I have been working on getting debt-free, from about 340 to 751 from one reporting agency and 753 from a second. I also managed to reduce one of my personal debts (the roommate) by half by helping her this summer when she got scammed.
To my surprise, I received a windfall in December. One of my uncles had passed away, and had left a request with his daughter to send me the legal tax-free amount. (For the record, I would much rather have my uncle be alive, but he was 96; had a long, good life; and was not doing well physically — still, he was my favorite uncle.) $1,200 of that has gone to pay off some of the smaller personal debts, and $1,000 of it went to the more substantial debt I owed my ex (including some money he loaned a friend that I had him add to my bill so that when I paid him back I would have, effectively, paid off the loan my friend had made me years ago, and she would be off the hook. with him). I also managed to pay my years-old debt to Verizon, so when I get a new apartment (eventually) I will have the option to have a landline, although I probably will not use that option unless I want to continue with the DSL service I am curently using (which may end up being more convenient than having to change my email address).
I took advantage of Suze Orman’s Save Yourself plan, as outlined in her book, Women and Money, and, in November, I completed the twelve months of payments into my TDAmeritrade moneymarket and received the promised bonus. While I am investigating higher-interest alternatives to that account, I am continuing to make a payment each month.
I have put aside $1,000 for an everyday emergency fund, and have opened two accounts at ING Direct, a regular savings account, which will become my long-term emergency fund, and a 6-month cd. In three months, I will open another 6-month cd, so that I will have two laddered cds, thereby having some liquidity in case of an emergency that needs more than I have in either savings account.
I also closed the credit card that had not only an annual fee, but a monthly one, but only after I had called them and tried to get the rate reduced and the monthly fee removed. They were not willing to do either, so I decided it was worth the small ding to my FICO score. Following Suze Orman’s advice, I only closed the one card last year. This year, I am opening one card…I hae successfully applied for a Discover card. The goal here is that I eventually have a VISA, a Mastercard, a Discover card, and an American Express card, but will have gotten rid of the four store cards I own. Until I do that, the plan is to make one purchase a year on each of the store cards, and pay it off immediately.
The one down side for the year is that my Target card is listed as a bad card, and will be until 2015, all because I was late on one payment in December of 2007. SO, A WORD OF WARNING TO ALL: Whatever you have to do, do not miss a payment, even if it does mean paying a card off in two installments instead of one.
I am shifting more and more of my payments for things to either my debit card, which comes directly from my checking account, so as to not incur more debt, or via the bill pay function at my credit union. The benefit of this is that I only get charged for the bill pay service if I do not use it during a month.
I am now writing the checks for the utilities (other than Sue’s phone), so that they don’t get turned off. and I made sure that I had my name added to both accounts. I will also be calling Con Edison and National Grid to see if I can get us on a level billing plan, so that we don’t get killed in the summer. We are still sharing a Verizon DSL account for internet service, since $18.95/month for two computers is not bad.
I did make a couple of purchases with the windfall I got: I replaced my tv, which was over 15 years old and on which the color was dying, with a Toshiba HD tv/dvd player, and added DVR to my basic cable service. I also replace the Dell laptop, on which the keyboard was getting wonkier with every passing day, with a new HP laptop. Given the nature of the laptop, and the newness of the HDTV technology, I did get service contracts on both items, but still ended up spending about $300 less than I had planned.
My actual splurge was yarn for a sweater I wanted to make. I enjoy working with good yarns, but often use lower-end yarn for large projects for two reasons: 1) it fits my budget better, and 2) there have been enough advances in the technology that there are some lovely not too expensive blends that work very nicely. I shopped wisely and got the good yarn (Rowan Purelife British Sheep Breeds in Steel Grey Suffolk) on sale, with the pattern being free. I’m about 3/4 finished with the sweater, btw, and shall include a piture when it’s finished.
I have taken on a challenge project in my other journal. It’s called Project 365, and the idea is that you post a picture every day for a year. I’d tried this once before, but that was the year I had my surgery, and I fell way behind and gave up. BTW, that journal is friends only, but if you are on LiveJournal and want to see it, drop a comment at the end of this post with your LJ handle and I will friend you. If not, I will also be creating a set for these photos on Flickr, and will post a link when the set is ready. I want to replace my camera this year, and I did some looking, but the one I wanted was out of stock and I did not appreciate the salesfolks at J&R trying to pressure me to buy something else, so that will wait. I am using the camera in my phone for pics so far, because I have no way of getting to the pictures on my good camera since the cable seems to have vanished, and I have not been able to find a replacement.
I am also looking to replace my cell phone, and change service providers, but that’s a lower priority, and will also wait until my contract has run out, since I have no wish to pay *any* early termination fees.
The offset to all this is that, instead of making a dent in my student loans, they are in forbearance for at least six more months. The plan there is that when I have gotten rid of all the smaller personal debts and made more of a dent in the three larger ones, I will pull the student loans out of forbearance and start aggressively paying them off.
I do understand that most folks would go for the student loans first, then the personal ones, since the student loans do accrue interest. The thing is taht, with the economy tanking, and job security being what it is these days, I am more concerned that my friends who supported me at crucial moments get paid back so that when they need their money it’s there for them. This is a choice I have made, understanding the ramifications thereof, and I stand by it.
Also, as I think I noted elsewhere, I have begun taking steps so that I will have an additional income stream from writing, and have started taking online courses in html, to be followed by other online courses in webpage design and structure, so that I can do some of that as an additional income stream in future.
So, I am starting 2009 in a really good place compared to previous years. And it is my intention to continue paying off things, and getting closer and closer to my goal of being totally debt-free!