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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: Financial Update Date:  1/30/2006  7:02 AM
Author:  ApacheMech Number:  219679 of 312187

Sorry, the time limit was up at the internet cafe. The HELOC was a really bad idea, but I had no choice in order to make ends meet. I had put all of my credit cards (higher than 15%) and a vehicle loan and some other consumer loans with high interest rates together so I could set up a snowball with more than $75 a paycheck payment. I had to put the vehicle on it to make it worth while. I turned an approx. $750 a month ordeal into a $450 a month payment to free up some cash flow as well as gave me some more income tax return money at the end of the year for further payoff.
I had around $18,000 or so in credit card debt on six different cards. I now have $7500 on one, soon to be paid off. I had an orthodontist bill of $4000, $3500 freezer full of food and a 2nd vehicle loan for DWs car. One debt consolidation loan $28,000 and a $42000 HELOC. I have left the HELOC in an interest only mode and have made the min payments on the debt consolidation loan bringing it down to $18000 or so.
Bottom line is: 6 months worth of work translates into $80,000 worth of debt turned into $67,000.
Next steps: 1.) I plan to pay off the credit card completely and use it for everyday purchases (I.E. gas and groceries), paying off balance completely every paycheck without exception.
2.) Break up the $18,000 consumer loan using 0% BT method and setting up auto pay to add security. I am going to be careful with this one so as to not take in too much and not be able to pay off the balance in the amount of time the offer is good for 0%. Does anyone have any additional tips on this one?
3.) My e-fund is set at $2000 with an automatic payment of $50 a month allotment to build it up even more without seeing the difference (Some of my pay raise).
4.) My Xmas fund is set at $1000 a year through an automatic payment of $84 a month allotment to cut some of the end of the year Xmas spending (also some of my annual pay raise)
5.) My TSP (Thrift Savings Plan-401k) allotment was doubled using the rest of my pay raise. It is currently at 4% (was 2%).
6.) I need reconfigure my monthly budget when I get home from Iraq in a couple of weeks to see if I can squeeze anymore money out of it. I think I am going to cancel the Insurance Annuity (well, its actually a variable universal life insurance policy with tax sheltered investment capability)...$132/month. I need to go back to basic cable without the internet...$115/month. Cancel the cell phones and stick to our house phone...$115/month. Finally, I need to learn how to set up a menu to where I won't have to go to the grocery store and spend my life savings for things I don't even use most of the time. Any help with that last one will be greatly appreciated. I think I will also post this one of LBYM board.
7.) I need to refinance the HELOC to a lower interest rate from 12.5% interest only to a regular one that takes some of the principal with each payment. I also need to call to lower my credit card interest rate.
8.) In addition to all of that, when I get home, I am going to witness the miracle of birth for the first time with my second baby. My first was born while I was in Iraq the first time. I still idolize my wife for that one. I was on the phone, but all I heard was A LOT of My daycare bill goes up, but I think I can handle that one with just the cell phone cancellation and maybe half of the cable bill.

I have roughly 13 years left in the military and my goal is to be debt free with at least 2/3 of my mortgage paid off ($200,000 to start with). I don't know how I managed to get into this much debt, but I have learned that credit cards are EVIL when used in the wrong way. I go to college for free in the military, so I would like to earn my degree in Aviation Management along with my A&P license (equivalent to ASE for automobiles, but for aircraft), and my FAA license as well.

Sorry this turned into a book, but I can see a glint of a light at the end of the tunnel and I am in a chipper mood. I would like to thank all of the great help I have recieved at this board and I look forward to reading in the future.

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