Since we've paid off our credit card debt, things have been good. We are now in our new house and we're really enjoying it. My kids really deserved to have their own room and a place where they can play. It's so great to be in a nice, quiet, safe area.
The phone calls and letters from collection companies have finally stopped and there's a lot to look forward to. The car loan is almost paid off and we're slowly paying off medical bills and once things settle from our move, we're going to start saving for a down payment for a house.
I've gotten a few comments in my previous post about paying off our debt by taking out some money from my husband's savings fund. I completely expected to receive the comments I did and I know that most people wouldn't understand our decision. I do want to say though, that it was not a 401k and it was not a loan. We do have to pay some penalty taxes next April, but we are already prepared for that.
When we settled some of our previous debt last year, we knew the amount "forgiven" would be considered income, we received the necessary tax forms for them and it was taken care of. We are also fully prepared for any money we might owe the IRS for the amount of debt that was forgiven.
My husband and I gave our decision a lot of thought. I guess we did take an easy way out, but it was what we felt we needed to do in order to make a better life for our children. Just to make the record clear, I've never used a credit card in my entire life. All of our debt was from my husband's previous marriage and we haven't charged a single thing in 5 years. All of the credit card accounts are closed, the cards are cut up and we both are looking forward to a better financial future.
But this doesn't mean we are completely out of debt! We are still working hard to pay off those medical bills, we still live a very frugal life. I cook as much as I can, pack my son and husband's lunches, line dry our clothes, go to the library, live within our means, among many other things. We don't go on vacations, buy new clothes or buy frivolous items.
Our mission isn't over, but it does feel damn good to be free of credit cards. I've seen what harm they can do and my husband has learned his lesson. We both made a vow over a year ago that this is a new start and it will never happen again.
Thursday, August 28, 2008
Friday, August 15, 2008
We're Credit Card DEBT FREE!
Yes, that's right! After a year of trying to pay off our credit cards, it's finally happened, we are now credit card debt free! I know I've been neglecting this blog, but believe me, a LOT has been going on. First I'll explain how we were able to finally get it all paid off.
Well, we found a house for rent in a gorgeous area of Solebury Township of Pennsylvania. It's an old house, but that's how I like 'em! We'll finally have a back yard for the kids and it's right across the street from the school my son will be going to!
In order for us to afford to move to this house, we needed some money. We didn't have enough saved but we needed to move out of our apartment. Rosemary needs her own room and we were tired of the area we were living in. Plus, this house is actually cheaper than our apartment! So, we decided to take some money out of my husband's savings fund at work.
At first we tried to come up with other ways to get money to move, but there were no other alternatives. We realized that this could actually be a new start for us, so we took out enough to pay off the credit cards in addition to the amount we needed to move. We got some good settlement offers from the credit card companies and we are now officially credit card debt free!
We still owe some money for medical bills, but those should be paid off in a few months. In other good news, we only have a few months left on our car loan! Once that is paid off, we'll have over $400 a month left over!
I know you're probably thinking it wasn't smart to take money out of my husband's savings fund, but we agreed that once we are settled in the new house and get an idea of what our bills will be like there, we are going to increase the amount being taken out of his pay check that goes towards his retirement. We also justified taken the money out, because those credit cards were a lot of baggage from his first marriage and we really needed a fresh start.
But this doesn't mean that I won't continue with this blog. We are now more determined than ever to pay off the rest of our debt, save money and ultimately move a lot closer to my family. It feels wonderful to be free of those credit cards and we really did work hard to pay off most of them. There were only 2 left that we paid off with the money we took out, yet there was a total of 7 all together.
Next weekend is when we're moving to our new house, but I promise I'll update the rest of my blog, with our new totals for the medical bills debt and post more regularly. :)
Well, we found a house for rent in a gorgeous area of Solebury Township of Pennsylvania. It's an old house, but that's how I like 'em! We'll finally have a back yard for the kids and it's right across the street from the school my son will be going to!
In order for us to afford to move to this house, we needed some money. We didn't have enough saved but we needed to move out of our apartment. Rosemary needs her own room and we were tired of the area we were living in. Plus, this house is actually cheaper than our apartment! So, we decided to take some money out of my husband's savings fund at work.
At first we tried to come up with other ways to get money to move, but there were no other alternatives. We realized that this could actually be a new start for us, so we took out enough to pay off the credit cards in addition to the amount we needed to move. We got some good settlement offers from the credit card companies and we are now officially credit card debt free!
We still owe some money for medical bills, but those should be paid off in a few months. In other good news, we only have a few months left on our car loan! Once that is paid off, we'll have over $400 a month left over!
I know you're probably thinking it wasn't smart to take money out of my husband's savings fund, but we agreed that once we are settled in the new house and get an idea of what our bills will be like there, we are going to increase the amount being taken out of his pay check that goes towards his retirement. We also justified taken the money out, because those credit cards were a lot of baggage from his first marriage and we really needed a fresh start.
But this doesn't mean that I won't continue with this blog. We are now more determined than ever to pay off the rest of our debt, save money and ultimately move a lot closer to my family. It feels wonderful to be free of those credit cards and we really did work hard to pay off most of them. There were only 2 left that we paid off with the money we took out, yet there was a total of 7 all together.
Next weekend is when we're moving to our new house, but I promise I'll update the rest of my blog, with our new totals for the medical bills debt and post more regularly. :)
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