Saturday, January 3, 2009

Confession from 2008

Here it is:
I used my credit card to buy Christmas presents online, so now my CC debt is up to $6000. This shows me that I am not cured of the CC habit. To help my rehab, I applied for a new debit card and changed my address at the bank. This should give me the tools I need to avoid future charges.
This also showed me that I don't have a handle on my budget, because I thought I would have enough cash for Christmas, but there is nothing left-over and I charged $300. What happened? Tracking my spending in 2009 should make the picture clearer.

I need to cut up the card, but I'm afraid I will need it in an emergency.

I keep remembering Sharon Rose's quote, "Slow progress is better than no progress". I'm better now than I was when I started in 2007.

8 comments:

Sharon Rose said...

Hi there-thanks for the shout out my dear and I'm pleased you remembered the quote too. You can tell from my post too on my situation, that slow progress is sure progress and you've certainly made great progress since 2007. Throughout 2008 I stopped and started the use of credit cards. I've stopped now, as I feel I can't control using them if I have one in my purse. For some reason, I would find a use for it. I've cut them up and although the accounts are still open, they are unavailable to use and I feel more in control with my debit card and cash. Very best of luck for 2009 my dear.

Christine said...

You used the Credit Card for Christmas purposes????? ;)

Don't fret. My DH & I racked up $400 on my JCP for Christmas. But, we have a plan for Cleaning it up, too. In fact, I have already sent $100 last week towards the balance.

So, you haven't completely lost it. Just have a plan for rectifying. :)

Ms. MoneyChat said...

we all fall off (it took me 3x to finally get it right) but the key is to get back up and never quit.

question...how does changing your address at the bank help w/your rehab?

stay encouraged and yes, slow progress is definitely better than no progress. you're better than you were in 2007 and you will be better in 2009 than you were in 2008, i'm believing that for you!

RTC said...

Thanks for the encouragement, guys.
The reason that changing my address at the bank and getting a new debit card will help, is because I tried to use the old debit card (old address, soon-to-be-exhusband's name) to order online, the order could not be processed. Now I'll have a debit card with my name and my new address. Of course, I hope I don't have to order anything on-line anytime soon! :)

Joseph Sangl said...

You should create an escrow account for all of your known upcoming expenses so that you don't have to go back to debt ever again.

Typical known upcoming expenses include Christmas, vacation, car repairs, property taxes, quarterly or annual insurance premiums, etc.

Calculate the total amount needed to cover these expenses and divide by the number of paychecks you receive. That will tell you how much you need to save from each paycheck to ensure that you can cover all of these expenses without them busting your budget or turning to debt.

You can check out the Monthly Escrow Account calculator at http://www.josephsangl.com/tools/

RTC said...

Thanks for the resource, Joseph. I'm attempting to begin an escrow account for 2009. I'll check out the calculator on your site.

Finally Frugal said...

I also had/have a problem with credit cards, and I approached it this way:

1. I tracked every penny I spent. This made me much more aware of where my money was going (after it was gone!) but perhaps more importantly, it also made me think before purchasing. Knowing that those new shoes, or bag, or whatever would go on my 'list' of things I purchased shamed me a bit. That helped.

2. I left my credit card at home. Like you, I was afraid I'd need my card in an emergency, so I didn't want to cut it up. So I left it at home, in the same drawer where I keep my passport and social security card. Not having it handy made it much more difficult to purchase things I couldn't afford on the spur of the moment.

Keep it up! You're on the right track!!

RTC said...

@Finally frugal
I like your suggestions. I'm working on tracking my spending with YNAB. So far, I like the program and the process. As for leaving my credit card at home, Buddy the Beagle chewed it, so I can't use it in stores, however, I am still tempted to buy online with it!