March Check-In: What the Hell Just Happened?

It was mad, I tell you, mad.

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So, if I had a phrase for March and my money, that phrase would be “cognitive dissonance.”

It was a month of the usual savings, and also some blindsiding budget-sucks in the form of household emergencies.

It was the month we were approved for a home equity line of credit that allows us to effectively wipe out our consumer debt and raise our net worth while…somehow briefly increasing our debt. (Tip: If you are in the market for a HELOC or auto loan, please do not forget that credit unions give you awesome values for these).

It was a month in which we reset our carefully calibrated, tightly wound budget to better suit it to the New Normal, post-loan.

It was our sixth month without spending on credit cards in which we…spent on credit cards.

Most confusing, it was a month that ended with our most immediate savings untouched and somehow a decent surplus in our checking account.

Dudes, that never happens. I am so confused.

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Before I get to the good news, here’s what the hell happened to our budget for the bad:

last month: $329 in unexpected expenses that left us with a car repair and a dead cat.

this month:

  • Two planned trips to retrieve our son from college and put him back again: $250, more or less
  • Another car repair, covered by warranty $100
  • A car rental, maybe reimbursable, maybe not: $240
  • A furnace repair, covered by warranty: $125
  • Another car repair, NOT covered by warranty: $388
  • Some stress-eating because I forgot my lunch, and stress-pour-over-coffee-from-that-fancy-place-near-work-I’ve-been-avoiding: $40
  • An unplanned trip back to New York to pick up car from where it had broken down and been repaired: $125 or so

So much for the bad news. Here’s some good.

If I wasn’t a believer in the power of the emergency fund before, I am now. What is miraculous is not that we had every dime saved to cover these costs (we didn’t — we charged about $500 to credit cards), but that the presence of the savings carried us far enough this time that I can recover from the debt in 30 to 45 days through my paychecks. Plus, weirdly, the $100 we keep in reserve and the very small $235 we keep close at hand in a growth account are still there. There’s also a balance of about $200 in our checking account.

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I’m not saying we’re out of the woods. Yes, our consumer debt is now under $8,000 (ironically, most of it is a car payment). Yes, our net worth has shot up dramatically. But we lost some of the gains of the last six months on our overall debt (though it is now mostly “good” debt).

Since our experiment started in September, our net reduction of overall debt is $1,855.

I'll take it.

Here’s what I woke up to this morning:

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I had a number of troubling debts these past few years, but perhaps none was more troubling than the debt to Paypal, incurred in a year when I had to pay a lot on taxes, and with a few intemperate “zero interest” purchases floating in the muck, too. I think my interest rate was around 26% on most of this; I am ashamed to say I just stopped looking. Having this and a lot of other credit debts rolled into our HELOC means we can make rather large payments to the one loan that go farther, faster — if we are disciplined.

As I’ve said elsewhere, we have two more major hurdles to clear this year and next: A major roof repair, and the remainder of college for our son.

Discipline, now more than ever, will make or break us. We’ve been disciplined for six months under austerity conditions, when $10 could shift us into overdraft. What happens now that we have freed up about $1,000 a month? Ideally, nothing new happens. All of that money just goes to a debt that will still take more than two years to pay off.

The biggest surprise I am experiencing is a sense of emptiness and maybe even panic: without debt in so many buckets, without crisis conditions, will I slip?

Without debt in so many buckets, without crisis conditions, will I slip?

Stay tuned. Our debt chain of $25,000 still applies.

In fact, I have to put back two links now to round it up.

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Say, drop me a line and tell me how your plans for the year are going. I’d love to hear your goals. Keep going — and don’t lose your nerve!

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I’m a 50-something bohemian with a mountain of debt and regrets. Can I dig out before it’s all over? I brake for poets.

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