First off Jenn, I think it's great that you're aware of your debt, and that you WANT to pay it off! That's the first step!!! My husband and I are currently focusing on paying off our debt, and let me just say that I think that is soooooo important to the whole process...that your husband and you are in it together. And YES, that means confessing to him
that you owe more than the $8,000 that he is aware of! Matt and I are both spenders, but my first priority has always been to pay it toward our debt first, leaving a little left for "fun" at the end of the month. Matt's priority is to have fun, and then put a little toward our debt if there's anything left at the end
. Well...when we first got married and I took over all our bills/money, I was almost trying to sneak extra money away to the credit cards, because I knew he would want to spend it if he knew we had it available! That really doesn't work! Since then, we've sat down and discussed the situation, I got him on the same page as me (agreed to spend as much as we could to the credit cards each month, promising him that I'd ensure there's money leftover for "fun" (i.e. eating out, Best Buy
, etc.) within reason), and it's so much easier since we're both on the same page. For us, it's about realizing that we need to get out of debt if we hope to have bigger and better things in the future (house, better cars, etc.). We can keep each other in line with our spending (although he's so good to NEVER say anything negative when I buy more clothes for Sukoshi
), and we ONLY pay for stuff with our debit card or cash (the debit card because we earn airline miles, so it's more advantageous for us than cash, and it comes from the checking account just the same). I think it is sooooo important to STOP using those credit cards! And...I'm pleased to say...we had 4 credit cards (with large balances) when we first married, and we're down to only 2 now, and 1 of those will be paid off this month, and we don't have much left on the last one! So...we'll have our credit cards paid off by December, and that will just leave us with the car loans and student loans.
I did a lot of reading on Dave Ramsey's site (someone else recommended him in an earlier post), and I focused on getting the credit cards paid off in the order of highest interest rate first. That's what worked best for me because I hate paying interest to ANYONE
! Ramsey suggests for some people, it works better to pay off the smallest balances first (regardless of interest rate), so you can feel your achievements quicker and keep up the motivation. You have to decide what will motivate you more - knowing you're saving on interest, or paying off a balance entirely. It sounds like you have good deals with the 0% interest on 2 cards, so I'd focus on the 11% one if I were you.
And lastly...if at all possible, I think it is so important to have savings accounts as a net to fall back one day, because you never know when someone will lose a job, get terribly ill, etc. I know you're asking how you can afford to funnel money into a savings account when you're also supposed to be funneling it into your credit card companies, but it is my personal opinion (I'm sure others will disagree) that some savings is so important, even if you can only put away a little each month. Matt and I have 4 savings accounts - Regular, Christmas, Vacation, and Pets. We have the money automatically transferred to our savings accounts each month, so it is just another "bill" to us that the bank automatically pays from our checking. It is great because it doesn't require any thought (other than making sure there's money in the checking account when it drafts
), but it is there when we need it. By saving for Christmas and Vacation throughout the year, it makes it more affordable when the time comes to need it. And as for pets, we do that instead of getting pet insurance, so we have a fund in case anything goes wrong with the babies, but I don't feel like I'm throwing my money away with an insurance company if they don't ever need it. And the regular savings is just in case we ever lose our jobs or anything. It doesn't matter how much you save at first...it could only be $5/month if that's all you can spare...but get in the habit of saving! Coming from a spender, I know it's hard...but it is so good to have that net to fall back on!!
Again, these are just my personal methods and opinions, and you may not agree with them
, but hopefully you'll find what will work for you and keep up the motivation!!! Good luck!!