I agree. I started tracking every last dime I and the family spend and I can´t imagine the order and stability of the economy we now have if we did´nt. We see "anomalies" and changes instantly, and can act on them.

Keeping track means you make priorities and plan in advance, instead of spending on the first need you encounter ad hoc. Prioritizing can easily bring down costs a couple of percent - wich is often the little difference between slowly getting further into debt and slowly getting out of debt (and stronger economy).

Great job! As I posted earlier, I would recommend trying to kill the little debts first while you work on getting an overall plan in place.

I would cancel the cards that you pay off. Some people have different opinions on this, as cancelling cards may impact your credit rating. But I think you and your wife have some spendy habits and you probably would be better off getting rid of the temptations.



I wouldn't cut back on the 401k at this point. First, getting the match is increasing your overall compensation. Second, your wife is not working so I assume she is not putting anything aside for retirement, so as a couple you will be behind overall. Third, you are already in your 30s and you've likely got years of debt repayment in front of you. If you cut out your retirement savings until you are debt (nonmortgage) free, you'll be in your mid to late 30s. You can't get those years of contribution back, your wife is likely not contributing (maybe in your next post, talk about what you have saved, you home, your retirement savings, etc.) and you probably started late based on the fact that you were in grad school.

At this point, I would leave it as is and focus on killing the little debts and getting your budget under control. Once you have a better sense of things, I would look at the time share, the cars, the home equity loan, the retirement savings, etc.

Way to go on paying off the Macy's card! Now take that $25 per month and the $80 per month you freed up from lawn service and cell phone, and the $100 from eating out, and put all of that $205 per month towards the Best Buy card, religiously, every month, month after month, until it's gone.



I absolutely agree with Sam on this one. Don't, DON'T cut back your retirement contributions! Make that contribution untouchable. The rule is "pay yourself first." Then make the cuts in your monthly budget and snowball them to pay off the debts. Don't steal from your future self any more (you have already done $250K worth of that, right?).

I promise, you will make more progress if you mostly use reductions in monthly bills to pay off debt than if you mostly use windfalls (like money from selling stuff on Craigslist). The windfalls certainly help (as in the case of the Macy's card! yay!), but I can tell you from experience, it's chipping away month by month, gradually freeing up more and more minimum payment and monthly expense money to throw at the debt, that will make things happen.

Does one of you know how to cook? If not, time to start accumulating new skills. You can easily spend $40 a pop, or more, per meal for the two of you to eat out -- but you could make a bunch of meals with $40 worth of groceries!

Do you make a monthly spending plan? As in: these expenses usually come out of paycheck one, and here's what we usually have left over; these usually come out of paycheck two, and here's what we have left over, etc.?

I'm with Cecily on this one. You need to come up with a plan to repay your debt. I would focus on the smaller debts on your list and come up with a concrete plan on how you are going to kill those debts month to month. I would leave the bigger debts on autopilot (i.e. paying the minimum by automatic payment each month) for now.

I also agree with Cecily on the spending plan. We use a yearly and monthly spending plan.

Here is an update on paying down our debt, from the $300 my wife got selling things on Craigslist and a bonus from work (about $3400 after tax), we are using this windfall to pay down our credit card debt. Here is the latest credit card balance checklist:

Balance on Debt and (minimum monthly payment):
Macy's Card - $213.78 ($25) - PAID OFF!!!!
Capital One Mastercard - $1,128.87 ($49) - PAID OFF!!!!
Costco Amex - $1,111.26 ($35) - PAID OFF!!!!
Ashley Furniture - $1,754.25 ($66)
Best Buy - $892.86 ($25) - PAID OFF!!!!
BofA Amex - $6,507.86 ($109)
BofA UCR Visa - $8,285.25 ($197)
BofA Platnm Visa - $9,965.01 ($202)
Time Share - $15,773.53 ($291)
Chase VISA - $21,617.82 ($429)
BofA Home Equity - $54,756.74 ($187)
Graduate School Student Loan - $113,965.92 ($417)
Auto #1 - $10,300 ($343)
Auto #2 - $26,789 ($565)

Tax season is coming up and we are anticipating a return of at $2000, so I'll be using that to pay off the Ashley Furniture and then start chomping away at the bigger balances. I have about $2800 in our savings account, should I just withdraw that money at put directly into our debt repayment?

Wowzer! Great job on killing those credit cards!



You may want to work on changing your withholdings so you are not getting such a big refund as that's an interest free loan to the IRS. Might be better to increase your cash flow so you can work on paying down the rest of your debts.

As for the savings account, I'd keep at least some of that set aside as your emergency fund. You'll find that as you work on getting your financial house in order emergencies will crop up. I remember we had a big car repair bill when we were in the middle of trying to kill our unsecured debt and it was great to have the emergency fund to pay that off rather than adding to our debt.

on that note, a word of caution. many of us have gotten through tight times by skimping on the groceries. but if his wife is feeding a baby, she absolutely needs more than what most of us would consider a skimping-by diet. she requires plenty of protein rich foods, and she's probably eating an extra 400-600 calories per day. this will increase the grocery bill while she's nursing, inevitably. good groceries are still cheaper than baby formula, so this is part of the bigger picture to consider.

keep up the positive changes, mazdai6! you're heading in the right direction! one thing to consider for your grocery bill is planning 6-8 meals at a time, and then making large and infrequent grocery store trips. make sure you plan for easy and healthy snacks for your wife if she's home alone with the baby, so you're not getting calls to stop and pick up XYZ on your way home and she still keeps her energy level up. also consider getting some nutrition supplements like ensure to keep her going in a pinch- so you're not tempted to order a pizza some evening when you had planned to make dinner.

Hey, I bet it feels great to see those balances go away, right? Good for you guys!! Plus you've now freed up an extra $100+ per month for your snowball, to start eating away at the bigger balances. Making those disappear is going to take a lot of patience, but you can do it!

Having said that, NO! NO! DON'T empty your savings account to pay off the credit cards, You have a baby. You need an emergency fund! You don't want to put that money towards one of the big balances (without paying it all off), then suddenly have to run your credit cards up again because something happens and you have no cash to handle it with! You'd wind up right back where you started. Your goal is never to be in that much debt again, to only watch those balances go down, right? Having savings to handle the bumps is the only thing that makes this do-able. *Keep your savings right where they are* and plan to increase them eventually.

You'll be ending the year on an up note! Good.

Great job on paying off those credit cards!

I agree with Cecily - don't touch your emergency fund! I know it's tempting, but you'll be glad to have it when something unexpected comes up.

I just paid off what's equivelent to your best buy. That felt great... I can only imagine what paying off ALL of those felt like. Keep up the good work.

Here is an update on paying down our debt. We used our tax refund (~$2000) to pay off the Ashley Furniture Card! So far to date we paid off all the smaller balance credit cards and now it's time to take that snowball and roll onto that BofA Amex card, we are anticipating that we will have that paid off by the end of this year. Me and my wife know that this is going to be a long struggle but we are trying to stay positive about it and it's really nice to see balances that we can check off. Also I did not lower my contribution to my retirement account because I just couldn't fathom missing out on the free matching on my contribution. Also we have increased our emergency fund now to about $4000. We are still trying to decide if we should just put that emergency fund toward the debt. What do you guys think?

Balance on Debt and (minimum monthly payment):
Macy's Card - $213.78 ($25) - PAID OFF!!!!
Capital One Mastercard - $1,128.87 ($49) - PAID OFF!!!!
Costco Amex - $1,111.26 ($35) - PAID OFF!!!!
Ashley Furniture - $1,754.25 ($66) - PAID OFF!!!!
Best Buy - $892.86 ($25) - PAID OFF!!!!
BofA Amex - $6,507.86 ($109)
BofA UCR Visa - $8,285.25 ($197)
BofA Platnm Visa - $9,965.01 ($202)
Time Share - $15,773.53 ($291)
Chase VISA - $21,617.82 ($429)
BofA Home Equity - $54,756.74 ($187)
Graduate School Student Loan - $113,965.92 ($417)
Auto #1 - $10,300 ($343)
Auto #2 - $26,789 ($565)

See Cecily's response from Dec. 03.
You are building an emergency fund for a reason; it is going to stay there until you have an emergency. DON'T TOUCH IT!!! Maybe this is another exercise in changing your behavior. Just because you have a pile of money doesn't mean you should spend it. Hands off, buddy!

And nice job paying off the Ashley Furniture.