My husband agrees with you, Peachy. We will pay off the card with the money. Not all the checks and transactions have cleared yet but when they do, things will look like this:

CC 1 $0 @ 22% !!!
CC 2 $0 @ 15% !!!
CC 3 $3600 @ 15%
HM $198,645 @ 4.75%.
SL $350 @ 2.5%

Savings: $1300 + ~$300 in savings bonds

Major score! Way to go, Margerie!

Credit cards are a headache, so if your mom gives you any more money, focus on the next CC, and you'll only have to worry about living off of one income and paying the mortgage. The student loan has such a low interest, that the 350 can wait if need be. In the meantime, start planning now, while you still have time and brown hair (ha ha). I don't really know if you have grays already, but you get the drift...

I've read the book as well. I completely agree that it seems many people criticize the book without actually reading it. It has definitely helped me.

Good luck.

I feel like I'm on a rollercoaster. One minute we're planning for imminent unemployment, the next moment things are looking a bit brighter.

So, my husband has been working really hard at finding a new job. I am so proud of him! But we got some amazing news: his contract was expired until the end of March. And the kicker? They underpaid him by $5 an hour this whole year! He had negotiated a higher rate when he started working but they screwed up and paid him the lower rate. So we're getting a lump sum--over $8k.

Granted, he feels foolish that he missed it. On the other hand, I'm not sure we wouldn't have frittered it away. I don't mind.

So, we'll pay off the debt. All of it. Then sock it away. And keep looking for a new job for him. But tonight we're having champagne.

Don't worry, we won it as a door prize at a party.

That's great news! I wish I had some champagne right now. I only have sparkling wine.
Anyway, I bet his contract was extended because you guys were making plans..you know, people who plan don't have emergencies!

Awesome news! I hope the taxes are automatically deducted and all that, so you don't have to worry about this come tax time....

You must be feeling really good right now. $8K+ will wipe out your CC and SL balances and give you a flying head start on your 3-to-6 month emergency fund!!!

Keep on planning...

CecilyC

That's great! It will feel so good to know the debt is gone as your husband looks for a new job.

Thank you, guys! I am so giddy!

Not only does it mean we get to accomplish some of our goals, it's also basically a $5 an hour raise for him going forward. YAY!

My only concern is that we stay strong and don't go into windfall "fritter it away" mode.

More good news: my husband got a raise of $3 an hour. So, effectively, he'll be getting a raise of $8 an hour.

I am thinking about what I want our next steps to be, and how to set reasonable goals.

Short term: we have over a week of vacation coming up at Christmas and while we don't have many out of pocket costs, he won't be getting paid. I might funnel some of our emergency savings into vacation savings for the time being.

Long term:

$21k - Six months bare minimum savings
$8-9k - Sewer line needs replacing at some point.

Assuming we stay employed, those will take us about a year, so those will be my goals for 2013.

My goal is to save his $8 an hour "raise" and 20% of each of our current salaries. It's going to be tempting to spend more. In a way, I think this might be harder for me than getting rid of the debt.

It's windfall day! Actually, I hate calling it a windfall because technically, my husband earned this money. So it's more like mega-paycheck day.

I paid off our credit cards and student loan.

CC1 had a high of $2500, it is now $0
CC2 had a high of $8000, it is now $0
CC3 had a high of $2500, it is now $0

Good riddance to bad rubbish.

Student Loan was about $2000 when we married, it is now $0

Phew. We have no debt except the mortgage.

We now have $4000 in our savings account. Goal for the emergency fund: $21000.

Here goes nothing.

Congrats! You guys are doing great! Isn't it a nice feeling to be debt-free but the house? The next step (saving up those goals) can be less exciting than paying off creditors, but stay focused - you can do it!

That's great! Isn't it funny how money just appears when you start paying attention to it?

We're in the process of creating a $20,000 emergency fund and it's slow and not as exciting as paying off debt. We have a chart on our fridge that we color in as we make progress. Makes it a little more fun...

Alright.

Here's where we stand:

Savings: $6190
Mortgage: $198,100

We have over 3 months of mortgage payments saved. Which feels pretty good.

I got a 3% COL increase. It won't feel like much but every bit helps.

One hiccup in January is we'll be short a paycheck because of a vacation. I think with the increase in income, we can just cut back on savings a bit and will be fine.

Meanwhile, my husband has really gotten into early retirement blogs. He wants us to start saving 50% of our income. I am... mixed about this. When he first started reading these blogs, almost as a reactionary thing I started overshopping. I think I have settled down but it kinda rattled me. The weird thing is is that I am so excited to have him be involved and engaged with ideas about frugality and savings, which he never exhibited much interest in before. Yet I feel like every time he starts talking about reducing our fun money to almost zero, I panic a little.

Sometimes people need to experience things rather than have them explained to them. I tend to be one of those people. But, finding your "sweet spot" of saving will be an iterative process, it's just important to remember to keep the "swings" from being bigger than the last.

But, you should always remember that no one here knows when their time is up. So, do the things that are most important to you if you can, and continue to find that place where you strike happiness with a savings. Perhaps put a few of your husband's ideas into practice for a month or two and see if you actually miss the things you cut. Maybe you do, maybe you don't...