Tuesday, September 24, 2013

Financial Update: Two (small) Steps Forward

I expected to feel elation. Joy. Or even relief.

I paid off the high-interest credit card. I got to click that button that says to pay the entire balance. I've been thinking about this day for weeks. In the days preceding, I was looking forward to the glee I expected to feel when it was done.

Instead, I felt (as the song goes) nothing. Except curious why I didn't feel more.

Maybe because last time, I felt too much elation and then deep despair when I had to use it again. While I feel fairly confident that won't happen again, I think that must be it. Not fear necessarily, but a need to keep vigilant.

There are a lot of family bdays coming up, and then the holidays. And the Car account, while not completely empty, is not quite plentiful, either. 

And a few weeks ago, I did something that might sound crazy. I finally upped the amount of my retirement contribution to get the full 4% match my employer offers, and that decreased my weekly take-home pay by $26. When you're living paycheck-to-paycheck, that makes a difference.

I've been avoiding this for too many years, though. I was losing a lot more money in the long run than $26/week. Still, the reality of the harsh difference reminds me that I still have a long way to go until I feel financially secure.

While in years past, I would've taken the amount budgeted for the high-interest credit card towards paying the remaining credit card, in my new plan, that's not the recommended path. Instead, I am using some towards building a Presents account, adding a little more to my grocery budget (a line item where we've been most likely to go over), and a little more to the Fun category.

See, here's the thing about only paying the minimum and not adding to the credit card balance. Eventually, that minimum decreases. At that point in time, I don't actually decrease the budgeted amount towards the credit card so that even this month, I'll be paying slightly more than the minimum. And my X has been a lot better lately about sending me child support, so I use some of that towards credit card debt which also helps.

By adding budget items, I am more likely to stay in budget and not add to my credit card. Especially with all the gift-giving that will be going on in the next few months, I will probably still dip into my savings, but at least it's not the credit card. I have recognized that my grocery budget wasn't high enough, so I'm funding that more appropriately. And, yes, I'm even treating us a little bit by adding to the "Fun" category (only $3 a week, but proportionately, I'm okay with that).

Progress may be slow, but I have now accomplished two important financial goals. By paying off one credit card and meeting the contribution match, I am starting to step slightly beyond merely paying bills on time. I am starting to build a financial future. 

1 comment:

Missy June said...

Way to go, April! Those are HUGE steps IMO and I love your plan to accurately budget rather than go full tilt at debt. It sounds like a realistic way to break the cycle. Awesome job!