Day 2 – Another day older and (not) deeper in debt

Well, it’s now Wednesday 1/31/2007. Payday is two days away. That is significant for a couple of reasons:

1. 1) The change in my deductions, withholdings and the termination of my 401 contribution mean that I should have an additional $320 (plus or minus) in each bank account each payday, and
2. 2) We still have $140 in the checking account. YES – we didn’t overdraft. This required some (not really a lot) of sacrifice. It’s not like we’re eating Ramen every meal…once a day yes, but not every meal. The boys are eating every meal and it’s not a big deal. I’m pretty confident that with some concentration and a little work and sacrifice, that we will be on track to pay this crap off by March 08.

 However, we are suffering on the relationship side of things. I know I’m kind of being a baby about it, but I’m still pissed about being left in the dark for so long about our financial situation. Should I have asked more pointed questions earlier on? Sure, but I did not want to give my wife the impression that I didn’t trust her with the finances. So I go home late every night, I say very little to my wife, and leave for work before the kids get up. She asked me directly today, “Are you ever going to like me again?” in kind of a joking way, but with some concern I’m sure.

Welcome to my hell

Because of some miscommunication between my wife and I, it turns out that I have 20,440 in outstanding, revolving credit. On top of that, I have a student loan of 1,765 and a car loan of 14,986. Add it all up and we’re looking at 37,198 in unnecessary debt. YIKES.

What happened? Good question. Here’s my best guess: My wife quit her job at the end of 2005 and I thought that we were doing okay financially. It wasn’t until last Wednesday that my wife told me that in order to make ends meet she had to take out credit card debt to the tune of 15,000 in order to pay the bills. Woah…what the…I’m guessing that my wife felt a little guilty and somehow felt that we were going to be okay.

 The funny thing is that I’m a CPA and I do okay, but I felt that it was important to have my wife in charge of the finances, and we’ve been fine for 13 years, so I didn’t anticipate a problem. Well, that’s all changed and I’m think that I’ve got a good plan.

When I first found out about this I was absolutely furious…I felt a little betrayed – I almost wish that she told me that she’d been watching porn or having an affair. In some ways that would be preferrable than the hole that we find ourselves in know. I still am having a tough time talking to her about it, or about anything, for that matter. The first 3 nights after she told me I slept on the couch, and only the past couple of nights have I slept in the bed, but there’s certainly no warmth.

I wrote down a list of demands – including:

• I needed statements of all debt outstanding, including rates, balances and minimum payments.
• I needed a detail of all other monthly payments we are required to make (tithing, utilities, etc.)
• I told her that under no circumstances would we be exchanging gifts, going on trips, etc. until at least all the revolving credit was paid off…(I’m not too concerned about the car, but I’m guessing that as soon as I get the ball rolling and pay off the other stuff, it won’t be a stretch to make the rest of the payments.)

I then went into work, changed my withholdings and got rid of my 401 contribution. I know that some out there may disagree with terminating the free match from my employer, but I felt it was important to get the extra 180 a month to improve cash flow and stop the hemmoraging.

I also purchased a budgeting system called “You Need A Budget” (http://www.youneedabudget.com/). Why? I didn’t have the cash to spend on Quicken, and I needed badly a budgeting system. Keeping a check register is easy, I just wanted a budgeting solution. Maybe in the future the reports and added functionality of a Quicken-type of software will be useful, but I just couldn’t justify the cost at this point.

Anyway, I feel better after my online confession. The reason that I’m doing this is so that I can become accountable to someone – even if it’s just the internet and nobody reads this. I do hope that if anyone reads this that they’ll comment on what they’ve done in the past. We are not doing debt consolidation – that is completely out. We’re not going to take out another mortgage on the house…also completely out.

My inspiration for creating a debt diary is this person’s blog: http://www.bloggingawaydebt.com/. Check out her website…she’s way honest and it’s inspiring and refreshing.