Financial Peace – 1 Year Later (part 2)

You can read Part 1 of this series here.

Credit Card

Credit Card (Photo credit: 401(K) 2013)

February rolls along, and I’ll admit.  I was a little embarrassed, because I think we were the only couple in our group who didn’t have that sacred $1000.00 emergency fund (EF).  Other couples had cut up their credit cards, but the only credit card we had was a twice-used (several years prior) Best Buy card with a long-standing zero balance on it.  I cut it up, anyway.  After all, why keep it if I never even used it?  Couples had cut out or cut back their cable.  We’re bare-bones on cable, anyway.  It’s like we’d trimmed all we could, but we still didn’t have much, if any, to put towards our EF.

Around mid-February, I sat down with stacks of papers and forms and my trusty laptop and filed our income taxes.  And OMGosh!!!  I was about to hyperventilate when I saw our refund amount.  My husband looked at me hopefully and asked, “Is it enough to go to Universal?”  I smiled and said, “We could go on a very NICE trip to Universal.  And we will – after we clear our debts and save up for it.”  (Yeah, I’m a little evil like that.)

We had found out by this point in the class that there are two types of people in this world.  There are Nerds, and there are Free Spirits.  Layered onto that, there are Spenders and there are Savers.  The strongest relationships will have one of each.  In our household, I’m the Nerd Saver (you can just as easily have a Nerd Spender).  Give me the money, give me the savings, give me the special accounts and I’ll let that money sit and grow and do great things for us.  When I have a goal in mind, I’ll sacrifice some fun to meet that goal.  My husband, on the other hand, is the Free Spirit Spender.  Don’t feel like cooking?  “Hello?  Domino’s.”

So, when Peter found out what our refund was going to be, he was seeing himself at Hogsworth down in Orlando.  I was seeing us having the long-awaited EF and paying down some debts.  We had some small medical debts, a slightly larger ($1300) medical debt, credit card debts totaling around $3500 and a personal debt of $7500.  So, just over $12,000.  Yet, we’d heard stories of debts ranging in the tens of thousands, and we personally know of someone who was working down $300,000 in debt, so that amount, big as it was, seemed entirely doable as long as we had a plan.

My birthday is in late February, and all I wanted for my birthday was to pay off my credit card debt, and I believed it was going to happen.  My credit card company had been calling and calling, but I couldn’t pay them a dime, because we were still struggling to pay for our “four walls.”  So, they would call asking why I hadn’t paid them, and I’d very calmly say, “I’m sorry, but you fell below the line.”  The credit agent would be giving me an incredulous, “I’m WHAT???” while Peter and our older daughter would be piled in the office doorway busting their butts laughing.  (In FPU, we learned that paying for the “four walls” must come before paying down debts, and when you run out of your allocated money, then you don’t spend anymore on whatever falls below that line.)

The morning of my birthday, I checked our accounts, and there it was.  A very large deposit had shown up that morning.  I immediately texted my husband, transferred $1000.00 into savings (woohoo!!!  Emergency fund at last!), then called my credit card company.  Oh, what fun!!!  I’d set up a payment arrangement for March, just to get them off my back.  The conversation went something like this:

Thank you for calling *****.  Can I please have the last 4 digits of the account holder’s social?”

I gave her that, verified my name and address, answered the security questions and then…

“Thank you.  How may I assist you today?”

“I’d set up a payment for 10 March for $165, and I need to cancel that.  I won’t be able to pay it.”

“OK.  Do you mind if I ask what’s preventing you from making that payment?”

“Because I’m going to pay off the entire balance today.”

[Pregnant pause.]  “Oh.  I see.  Well, I guess that’s good for you.”  I swear, she sounded like she was going to cry.  I guess if my company was looking at a loss of money, I’d probably feel a little down, too.

I paid it off, paid off some of those medical debts and a few other things.  I burned through over $4000.00 just like that.  Finally Peter said, “Stop!  I want to see some of this money before you spend it all!”

In under two weeks, our emergency fund was 70% gone.  Ticked.  Me.  Off.

Stay tuned…

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