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October Financial Reflections

October 1st, 2013 at 02:31 pm

For the past couple of years I've done some extra financial reflection in the month of October. It was three years ago this month that we finally woke up, and started to pay serious attention to our finances.

A couple things happened that month. DW received a freelance check (that was in the days before four kids, and she did some freelance work). I think it was a couple thousand dollars. We also had our second of three sets of renters move into the our for sale house. I think the house had been vacant since July or August - a couple months anyway. We were also about $450 past due on one of our CCs. That CC had a whopping 32.99% APR.

Within the same week that we received DW's freelance check, we received a letter from the above mentioned CC. The CC company (Advanta) was offering us a deal - if we paid the $450 that we were past due, they would cut our interest rate to 16.99%. We jumped on the deal, and sent the check that day. Advanta kept their end of the bargain, and cut our interest rate. Most of the rest of DW's freelance check went to various other debts.

That bit of momentum got the ball rolling for us. I dug in, and totaled all our CC balances, compared the balances to each card's interest rate, and realized that (after the $450 payment, and interest rate cut on the one CC), we would still be paying very nearly $200 per month in CC interest alone.

The first step I opted to take was to find a 0% APR transfer to a new CC. My credit score was in a shambles, and I didn't qualify for a new card at that time. Another thought I had was to borrow against my retirement fund. I actually went to a bank, and picked up the forms to apply for the loan. I think they were offering an 8.99% APR on the loan. I don't remember for sure, but I may have filled out the paperwork, but I never did submit it.

That previous August, I had stumbled upon the SA forums when my mom and dad had a question for me about retirement savings. I had asked the question for them, and passed on the answers, and never did return to SA until I was faced with the question - should I borrow against my retirement fund to pay off CC debt (or, shift unsecured debt to a lower APR with my retirement fund as collateral, to be more precise). Thankfully I asked the question, and thankfully the forum regulars steered me away from that choice.

DW did qualify for a 0% APR 3% balance fee card that next January. The limit was $750. We transferred that, minus the 3% fee, and ended up doing two more balance transfers until the Advanta debt was paid off this past January.

It would be another six months before I found the Blog side of this site, and those of you who have been following my blog for most of the pat 2 1/2 years know the rest of the story in gory detail.

You also know that we've stumbled at times, and have had help along the way. But, as I remember that seemingly unbearable, rocky mountain that we faced three years ago, I can't believe that we've turned it around.

3 Responses to “October Financial Reflections”

  1. ceejay74 Says:

    Congrats Bob! You've made an amazing turnaround.

  2. creditcardfree Says:

    You have done an excellent job! It is a journey and generally isn't full of quick fixes. I thin the things you learn from the process are carried with you in future financial decisions, making things get better and better.

  3. PatientSaver Says:

    Getting rid of debt is very empowering; it puts you back squarely in the driver's seat.

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