No. of Recommendations: 19
I've been lurking on this board for about a month now, and I want to thank you all in advance for everything I've learned so far. What an amazing group of people you are!

I figured, however, that it was time to go public. It may be the only way I continue to force myself to stay on track. And I look forward to any and all suggestions/comments you may have.

Deep breath.

Here's the current picture:
balance interest notes min/month limit
Citibank 13,733.86 2.90% (until 4/1/03) 293.00 25,020.00
MBNA 0.00 18,800.00
AmexOptima 0.00 18,700.00
USAA 0.00 11,908.00
Student Loan1 788.61 5% 30.00
Student Loan2 7,513.91 7.50% 107.45
Student Loan3 17,435.58 4.61% 150.16
Car Loan 6,757.03 6% 369.12
TOTAL 45,225.58 950.00

efund $ 3,063.29 target $10K
401k $ 2,821.55 6% (matched by employer)
529 $ 1,265.22 $200/mo

And here's the story.

I know the $45K in debt is scary, but that figure was over $120K a year ago, so I feel pretty good about the progress I've made so far. My job-life history is a bit eclectic, but suffice it to say that I used to work in an industry where I was doing what I loved every day, fulfilling my childhood dream, really, but I just wasn't making “enough” money (topped out at about $21K/year). This was partly because I was living way beyond my means, and had been for a long time (that part is probably pretty clear from the debt figure :) on top of the fact that I was digging out of huge undergrad student loans.

So what did I do? I went to grad school, got even deeper into debt (see Student Loan1-3), got my Masters in a year, worked in that profession for a year, increased my yearly income (to about $60K), but I still wasn't making “enough” money.

A friend called and offered me a position in the industry I'm in now, where I make a very nice living (started matching my old salary, and now I'm up to about $130K/year). Unfortunately, the industry is not very stable, and while I've been lucky enough to have steady work for 3 years now, I'm trying to prepare for potentially being unemployed when my current project ends (sometime around next September/October). I have some time, but it just doesn't feel like enough.

When I took a really hard stab at paying off primarily credit card debt last year (although I also managed to put my undergrad loans to bed), I paid no attention to an emergency fund, nor to my son's college fund (he's 8). And I had no investments (the 401k at work is new).

A couple of other things. Son's dad and I live together but have never married. We've always rented, because we've 1. never had any money; 2. never felt like we were going to stay in one place very long. In my son's first 4 years of life, we moved 4 times…always to a “nicer” place (that we couldn't really afford). We have completely separate finances. Because I make the most money, I pay all the big bills (rent, clothing, groceries, summer camp, gifts, etc.); he pays utilities, child care, some groceries, and all of his personal stuff. The trade-off is that he has a very flexible work schedule so he can coach soccer and baseball, be a classroom-parent, etc. He's primary care-giver; I “make the money.”

We live in the Bay Area and I pay $2095/m in rent for a very modest house in a decent, but not amazing neighborhood (SO's truck got stolen out in front of our house a few months ago with all of his tools in it – he does carpentry and such. I was very thankful that I had added renters insurance to my plans last year when I was feeling flush. But so much for the secure feeling of living in the suburbs. We never even locked our house before!). We're talking about moving, but there isn't a hell of a lot out there that's much cheaper that's in a district with decent public schools (CA schools really stink). I'd love to go private, but it's just not in the numbers right now. Anyway, that's our biggest monthly expense (besides debt).

Oh, and I have a really good credit history (I check my reports every year; the newest ones are on their way). I may have been in debt, but these are all cards I've had since undergrad years, mostly (not a lot of new inquiries into my acct) and I've always managed to pay on time. I know the huge credit limits I have are bad. I know I need to get rid of some cards (and the temptation to use them). The only reason I'm even hanging on to them is so that I can continue to play the BT dance until they're paid off.

One more thing…I also have an Amex green card that I use to pay for nearly everything. I haven't had to pay for a plane ticket (family is back east) in years because of their Membership Rewards program. It also really helps me to keep track of my expenses (I live in Quicken). I've read a lot about paying cash for everything, but I actually hardly ever use cash or write checks. I love that my life is mostly paperless.

Now, for my plan.

1. Get efund funded to $10K. I won't sleep well until this is in place. I've played around with a bunch of different scenarios, but I just want to have it there in case I find myself suddenly without a job (which is a possibility every day). And I want it there now; I don't want to build it between now and September (which is sort of my “drop-dead” date). I'm afraid that if something happens, I'll just pile up the cc's again and I'm trying so hard to stay in the frame of mind that THAT IS NOT AN OPTION.

2. Once efund is at $10K (I'm aiming for end of March; hopefully sooner), start snowballing the debt. I can't figure out a way to have it all gone by September, but at least I'll have made a dent.

3. Assuming I still have a job in September (and want to stay doing what I'm doing), the next step will be to look at my investments.

My questions:
Is this all totally misguided?

One thing I noticed is that by charging everything to Amex, I'm actually living a month beyond my means! I always have enough to pay off the Amex in full when it's due, but I realized that because I'm shovelling as much money as I can to savings/debt, I'm not actually leaving enough to pay for my weekly expenses when I have them. Does this make sense? It came as quite a shock to me. I don't know what to do about it. Except for shelving the Amex for a couple of months and seeing what happens.

This is way too long already; sorry. I'll stop now.

Thanks so much for reading. Even if no one were to respond, just having this out in public feels like a good step for me.

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