Our Personal Economic Challenge – Will We Survive?

economic challengeIt is coming very close to 2 months since my husband and I created our first budget and we have been working at trying to figure out how to stick to it so that we can begin paying down our huge debt. There are days when I wonder why we waited so long to address this issue. But really I know why. It is because our financial situation is scary and overwhelming.

Our budget isn’t just a list of income and expenses. It is a tight budget that we constantly review each week to see if there are any other expenses that we can decrease or eliminate.

One of the things that we are looking forward to is having our car paid off by June of this year.

We have been sharing one vehicle for the past 2 years and it has worked very well for us.

Our car loan is $310.07. Once we make our final payment on our car we can allocate that payment amount each month to paying off other bills.

As well, one of our credit cards has an interest rate of 19.99%. That’s huge!

I’ve noticed that a lot of banks in the U.S. offer 0% credit cards. The banks in Canada do not do that.

We have spoken to our bank twice about lowering the interest rate on this card but one of the few options available to us is to change to a card with an interest rate of 11.9%.

Another option is to use one of those balance transfer cheques at 1.9% interest for 12 months to move money around.  We are working on transferring some balances to reduce our interest rates so that when we make our payments every month more of the money will go towards paying off the balance instead of being eaten up by the interest charges.

There are days when I personally find following a budget and keeping track of every penny we spend very motivating, and there are days when I get very angry with myself about our whole situation, and I wonder how we will survive this economic challenge that we have gotten ourselves into.

Weathering Tough Times

Over the weekend I came across an interview between Oprah and Tony Robbins. She recently attended one of his live events in L.A. and then interviewed him one on one.

One of the points that he made that really caught my attention was when he spoke about “weathering tough times”.

He says that everyone (rich and poor) experiences a number of seasons throughout their life and equates the tough season to winter.

He also says that there is no going around a season, we can only work through it. Hmmm...

Of course the big question for us, and most likely for many of you if you are struggling with your finances, is when will winter be over?



    • WorkSaveLive

      WorkSaveLive 02/27/2012 6:57 a.m. #

      When my wife and I first started our "get out of debt" journey, it felt like winter lasted months. It took quite awhile for us to see any significant progress, and all of the changes we were making felt extremely painful at the time.

      Fast forward 5 years and it has all seemed like a breeze. You will make exceptional progress...it's only a matter of time.

      Much like you said in your post, we're all going to continually face tough times. Despite the significant change in our financial lives over the past 5 years, this last year was very tough. A lot of unexpected expenses, car repairs, lack of income, etc.

      I've learned to just deal with the tough times because I know they'll pass. I know they'll make me better and they're intended to teach me a valuable lesson.

    • AverageJoe

      AverageJoe 02/27/2012 1:12 p.m. #

      You definitely have your eye on springtime with that car payoff!

      The zero percent credit cards in the US are only introductory offers, and are often predatory. A company will offer zero percent interest for six months and then sock you with a monster interest rate afterward. Not cool.

    • Tackling Our Debt

      Tackling Our Debt 02/27/2012 1:50 p.m. #

      @WorkSaveLive Sorry to hear that this past year has been difficult for you and your family again. It is a struggle now, but you are right, this too shall pass.

      @AverageJoe I wondered how those zero percent cards worked. I didn't think it could be indefinite, cuz the credit card companies want their share.

    • Emily @ evolvingPF

      Emily @ evolvingPF 02/27/2012 5:11 p.m. #

      You will survive and you have all of us here for support and accountability!

      I don't know if you are familiar with Dave Ramsey, but the testimonials of the people who have gone through his program to become debt free are SO inspiring! You can pick up his book Total Money Makeover or listen to his radio show/podcast.

    • SB @ FPR

      SB @ FPR 02/27/2012 5:13 p.m. #

      Are you new to this country? I have a feeling.. And as long as you know your problem and possible solution, you can do well, just maintain discipline. Your blog catch line is similar to my other site

    • Tackling Our Debt

      Tackling Our Debt 02/27/2012 5:48 p.m. #

      Thanks Emily! It is a lot to work through, but perhaps equivalent to trying to lose weight (which I finally conquered) so hopefully we will conquer this as well.

      I have heard a lot about Dave Ramsey but have not read his book yet. I will, but one of the concepts that I see many people talking about is paying down your debt from smallest to largest amount regardless of the interest rate. While I understand the satisfaction of paying the smallest bill and getting it out of the way, when I look at the ones with the highest interest rates I can easily see that the minimum payment is completely going to interest, so the balance will never decrease if we follow that plan.

    • Tackling Our Debt

      Tackling Our Debt 02/27/2012 5:54 p.m. #

      @SB @ FPR Thanks for dropping by! :-)

      Sorry, not sure what you mean by new to this country? What country are you talking about?

      I am in Canada but I do know that Americans are being offered zero percent credit cards and Canadian banks do not do that. What I didn't know and AverageJoe mentioned above is that they only give you that zero rate for 6 months.

    • Emily @ evolvingPF

      Emily @ evolvingPF 02/28/2012 2:48 p.m. #

      Sicorra, I'm not advocating for you to follow Dave's program! I would go for the highest interest rate as well. I'm just saying his show/books are a great resource for hearing the stories of other people getting out from under massive debt (whatever the method) and are very inspiring.

    • Tackling Our Debt

      Tackling Our Debt 02/28/2012 6:41 p.m. #

      @Kari Seeing the light at the end of the tunnel and understanding that tough times are not permanent is important.

      @Emily Yes I know you weren't Emily, and I do believe that the testimonials on his site will be very good for me to listen to.

      I was actually on his site the other day and plan to read it well, including his books. I also saw a quick interview the other day with the author of the Wealthy Barber and I plan to read his book as well.

      @Both :-) Thank you for your support! I've been thinking about my situation a lot, of course, and even though we have a detailed budget in Excel, I think what I need to do is create an action plan. I am not much of a goals type person, but an action plan with a to-do list is very much my style.

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