Last Thursday was the official 1 month milestone of our debt diet.  We are doing great so far.  In fact I give us an A++.

We got our tax return and were able to put the entire $6000 towards paying off one of our cards.  Which then enabled us to transfer $7500 of a high interest card to the other card we just paid off for 0% interest for six months.  Then with all of the money we saved in April we were able to pay another $1500 towards that high interest card to pay it off completely.  You have no idea how much weight this takes off my shoulders.  We are making half mile strides in being credit card debt free instead of just teeny tiny steps paying a little bit each month and feeling like it will never end.

I am really proud that we have been able to follow through with this.  Each day is a struggle and each day is a triumph.  There have been many many times where it would have been easier to go out to dinner or when we just felt like taking Eva somewhere for the day that would have ended up costing us $100 after everything.  Instead we have to get creative and learn how to keep ourselves occupied without spending money and without feeling like we are depriving our child during her most formidable years.

Not having cable was a huge adjustment.  I swear Chris went through withdrawals that first day.  I couldn’t get him to leave the TV alone, he kept adjusting the antenna trying to get more channels.  I’m sure it didn’t help that it was the same day he quit smoking.  Yep, you heard right.  My 34 year old husband who has been smoking since he was in the womb has not had a cigarette for 16 days!  I am more proud of him than if he had become an astronaut and flew to the moon.

What keeps me going is knowing that this August we will have paid off two of our biggest cards and that in November we will have a third one paid off.  That will leave us with one final card with a balance of $2000 that we will have paid off in February.  We are taking a break from our debt diet for December and part of January as a reward for all the money we have been saving by doing without.  This Christmas is gonna be like Biggest Loser contestant big!

After the new year  it is back to business.  Once we get that last card paid off in February we are on to our next goal of building our savings up to 8 months worth of pay.  This debt diet has really opened up our eyes to just how much money we are wasting on things that we don’t need and how much we really can do without.

To read about how this all started click here:

http://www.modernmommyblog.com/index.php/2009/03/25/my-debt-diet/

and here:

http://www.modernmommyblog.com/index.php/2009/03/26/entertainment-on-a-tight-budget/

*photo credit: http://www.flickr.com/photos/chmurka/3053828420/

Here is the plain and awful truth. Since I stopped working in October our savings has dwindled and dwindled until this past week when it was completely gone. DH doesn’t get paid until next Tuesday and we have about $160 to our name right now.   So you can imagine my despair when I received a reminder e-mail that one of our credit card payments is due this Saturday and the minimum payment is $250.

Luckily DD was sleeping so that I could fret and despair by myself for a couple of hours while I stared at our bank account balance and tried to figure out how we are going to make this work. I finally came to the conclusion that we either need to get all of our credit cards paid off PRONTO or I need to go back to work. Dh and I both don’t want that because we feel it is best for little E to have a consistent caregiver and that person is ME.

So we came up with an eight month plan where we spend absolutely no money except for what is necessary to live on and we put all our money towards our credit cards. If we can do this we will have them paid off in November of this year. That’s not so bad right?

In order to find out how long it will take to pay off our cards I found this website that calculates it all for you.
Then I printed out our budget and crossed out everything that could be spared and reduced the rest to the bare minimum. This is what it ended up looking like.

-Of course we have all our mandatory bills like our mortgage, second mortgage, hoa, auto insurance, and utilities.
-No more gym
-No more chiropractor/massages
-No hair cuts, for me anyway (I know…YIKES)
-Deferring our student loans
-Grocery’s $300
-Gas $175
-Entertainment/Dining out $80
-Clothing $30
-Household $30

This basically means that I cannot buy ANYTHING that I don’t need. It also means that we can’t take any big summer vacations or go to an expensive restaurant. But if it is only for eight months I can live with it. If there is something that we really really want to do, like see Wicked for our anniversary, or take Eva to Disney on Ice like I was really wanting to do then we might have to cut back on some other areas as well. Like getting rid of cable or cutting back on our cell phone use.

I’m hoping and praying that by the end of this experience I am a better person and I will be able to live with less for the rest of my life. At least I know I will have less stress in my life.

I’m already so proud that we walked to the grocery store last night and only spent $25 for the whole week!

Oh and I was very relieved when I called the credit card company and they told me they would give us a one time reprieve on our payment this month. Meaning we don’t have to pay them anything until next month and we will not be punished at all! That was a relief.

Tomorrow I will share my list of things I figured out we can do for free or practically free this summer so we aren’t completely stuck in the house.

*photo credit: flickr