It’s time for drastic measures

by Erika Torres

I made it a point that this month, we would dig ourselves out of the hole when Eric was injured in April and couldn’t work for five weeks.

I didn’t freak out for several reasons, and I thought that we would manage fine. But now that we have both been working for well over a month, I find that I am consistently one paycheck behind.

The Reason we need to get rid of our credit cards

It seems as soon as I get one of our paychecks deposited into the bank, it is doled out to pay down the credit card and the basic bills. I always leave a few extra hundred dollars in our checking to tide us over till the next paycheck, but it’s never enough and we end up using our trustworthy credit cards to get us through the next payday.

I know while most aim-to-be-debt-free people abhor credit cards, I really like them for the points. We also never pay interest on them because we pay them before the interest accumulates, but it still drives me nuts to be living one paycheck behind.

How bad has it gotten? This past week, I paid more than $800 toward our credit card (expecting to pay off the remaining $500 with our next paycheck), and the very next week, we were back up to $1300. It’s like I’m not even paying any money on it!

As much as I like to blame our financial problems on Eric (hey, at least I can admit it), the truth is we just keep getting hit with things that need to be paid, like a $300 unexpected vet bill, as well as commitments and obligations that require money. We probably also have not been as vigilant with our finances this month because we both feel we’re now a dual-income household again.

It has to stop

When I say our finances are out of control, I mean that if we don’t stop this NOW, we’re going to be back in the hole again. I am done with credit card debt. I am not going back there. As of Friday, we are living a debit-card only lifestyle.

It felt good to contribute a chunk of change toward the credit card again, and hope that this time, the amount will finally keep going down instead of back up again.

Debit Card-Only Lifestyle

Why not cash? I like to at least know where our money is going for budget’s sake. If I hand Eric $100 for gasoline, I will bet you my very last penny that he will not spend it all on gas. He’s gotten way better with finances, but let’s not tempt an alcoholic with a happy hour special, okay?

As much as I wanted to get out of the hole in June, it looks like we’re going to have to keep plugging through July. This is irritating me to no end.

I hate paying for our past, instead of saving for our future.

If I’m paying off debt, I can’t save as much as I would like, I can’t contribute toward our retirement, I can’t save for our house down payment fund, and I can’t pay off my student loans faster.

Do you ever find yourself slipping back into your old habits?


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Burning the Financial Candle on Both Ends - Personal Finance Round-Up July 1, 2012 - 8:02 am

[…] have the value or impact you intended them to have? If not, then you could be making do with less.It’s Time for Drastic Measures¬†[Newlyweds on a Budget] “This past week, I paid more than $800 toward our credit card […]

rubysongbird June 24, 2012 - 5:15 pm

YES! Certain times of the month, or when I KNOW I don’t have a ton of money, I want to spend frivolously and it’s very hard not to. Even today I bought 3 bags of yarn because they were on sale and in 5 minutes I had myself convinced that I’m going to crochet a blanket. We’ll see if that goes as well as the time I had myself convinced I needed a hot glue gun or a sewing machine… to this day I have used the glue gun once and the sewing machine came out of the box, looked complicated, and went right back in.

William June 21, 2012 - 10:03 am

I have to disagree with you on eliminating credit cards. The credit card is not the problem. The problem is spending money you don’t have. If you know your budget every month, spend only up to that amount. I swipe my card on every transaction and do not ever go above my monthly budget. At the end of each month, I pay off the full amount. Using a credit card and going over your budget is the same as using a debit card and over drawing every month if you don’t watch your spending.

In addition, my credit card has gotten me a ton of free things from my rewards points program. I’ve gotten a free xbox, wireless router, vacuum cleaner, and hotel stays. All that cost me nothing, no interest, because I pay off the entire balance each month, staying within my budget. On top of that, credit cards are more secure than debit cards. Your bank offers more theft protection with credit cards than they do with debit cards. In terms of security, I “never” use a debit card. Control your spending and credit cards are fine. If you can’t do that, then it’s a lost cause either way.

Kris @ BalancingMoneyandLife June 20, 2012 - 2:58 pm

I hear what you’re saying – we’ve been juggling since January. Still not paying interest, but it’s very frustrating! Good luck.

Daisy June 18, 2012 - 8:19 pm

Good luck! You’ll do great.

Like you, I have a hard time tracking cash. I know that there would be a bunch of small, unaccounted for expenses in there if I used cash, so the debit cards are a lot easier to manage.

Adrienne June 18, 2012 - 5:04 pm

This is really real, which is part of why you’re so awesome!

I understand the feeling of loosing control and being a paycheck behind, it doesn’t feel good. We’ve been there. We were recently just there.

We don’t have credit cards, but unfortunately this hindered us when we bought a house, because we didn’t have revolving credit, but we’d never liked the debt thing… it’s really a Catch 22!

CeCe @Frugalista Married June 18, 2012 - 4:53 pm

I avoid using the cards for anything over what my actual monthly spending budget it like the plague. It actually freaks me out to not pay a CC balance off in full. Every now and then it’ll be a planned thing but the general rule is to pay it off so I keep wracking up the points and paying it off monthly. Good think you are nipping it in the bud now. If paying it off every month isn’t happening then it’s best to just not even go there.

Reply June 18, 2012 - 4:21 pm

Yeah girl – I am getting soooo close with being credit card debt free but I have to buy plane tickets to get back to Grenada and using the credit card is so tempting, but I remind myself that’s how I got into this mess to begin with. So, I keep plugging away working and saying no to all the pretty things I want to buy like, every day. Still, you are doing pretty awesome with everything so don’t be too down on yourself girlie. I know you will rock it and inspire me to rock it, haha.

eemusings June 18, 2012 - 3:44 pm

Feel your pain over here. As well as his cash allowance, T has been putting small purchases of food here and there on the cards … and it all adds up.

“I hate paying for our past, instead of saving for our future.” I think this is a fantastic quote, and really sums up what it’s all about. Good luck getting back on track this month

Nell @ Housewife Empire June 18, 2012 - 2:15 pm

Good for you!! I gave up credit cards about two years ago, and I’ve never looked back. One thing that sucks, though, is adding up all the charges I’ve made at the end of each month – it’s painful to look at that, but it helps me to curb my spending more when I feel the guilt.

Elizabeth @ Broke Professionals June 18, 2012 - 12:39 pm

I think humans are creatures of habit – we are prone to slip back into those old habits. Isn’t that why they say old habits die hard? Anyway, we use credit cards, but we are very strategic about their use. That said, we usually have 1-2 months a year where the bill is far higher than we planned, due to calamities (like needing new tires) or just indulging in luxuries (like too many dinners out). Seeing that bill is all we need to get back on track… well, for the next six months at least.

Hannah June 18, 2012 - 12:33 pm

Lately I’ve been on a real “I choose not to” vs “I can’t” fix. There are a lot of things that I say I can’t do when I actually can, I’m just choosing not to. A fancy dinner to celebrate a friends birthday – instead of saying “sorry I can’t” I now say “Sorry, I have a limited budget and that dinner isn’t in it – how about you come over for some wine next week and I’ll cook for you.” In my opinion, I hated saying the can’t word but I’ve learned to become responsible for my financial decisions and it has really helped lay off the CCs. (That and the husband hiding one from me for my own good – by my own request!)

Debt and the Girl June 18, 2012 - 11:59 am

Sorry to hear about that! I know that can very hard. I am horrible with handling cash as well. I always thinks its “free money” since its out of my bank account and therefore not traceable anymore. Crazy I know! I am bad with eating out though we have slowed down a lot on that lately. I am trying to be a good little saver and cook but now our grocery spending has increased as well. Yikes! No bueno.

Kim June 18, 2012 - 11:16 am

I know exactly how you feel right now. I hate when I’m putting several hundred towards paying down credit cards, but by the end of the month I’m pulling out the plastic because we’re out of money. If I hadn’t had to sink that cash into the credit card bill to begin with, the money would have been there at the end of the month. Its a vicious cycle. I’m just trying to get back to zero balances so we can get onto a cash only plan.

Another Kim June 19, 2012 - 1:12 pm

Thuis happens to us ever so often – usually when a few big things fall in one pay period & there’s little cash left. Usually it’s a trifecta of rent, car insurance, and something unexpected. We put the ccs on ice, literally, and commit to not eating out for a month. Works every time, You’re not slipping, it’s just that sometimes you can’t plan everything in life, you know?

KendraD June 18, 2012 - 10:23 am

We slip back into eating out way too often. It’s one of those things that have plagued me my entire adult life. When I was a grad student and then a single professional, I was on the go for 12-14 hours out of the day, so I’d often just grab food on my way home or with friends. I never cooked. Now I cook probably 2-3 times a week, but I have a hard time if I feel like I “have” to cook. And we still eat out more than we should. Each move has thrown us for a loop and it seems to take forever to get settled in and out of the moving stage.

What we’ve found to work for us, is to have plenty of quick and easy things we like to eat. This way, if I don’t feel like cooking dinner, we just go grab whatever we want out of the pantry/fridge/freezer and heat it up. I guess it’s our food version of going debit only. We’re not without our missteps, but we’re getting there.

Best of luck to you on ditching the cards!

Emily June 18, 2012 - 9:47 am

My husband and I have switched to a cash only diet about 6 months ago. It was hard at first because I feel like I have “permission to spend”, but what’s helped us is saving for a combined goal using the “extra” cash. For instance, my husband and I are determined to move out of our apartment and into a rental house by the end of the summer. We have a deal with whatever we don’t end up spending (for me, it tends to be gas or work lunch money, for him it’s his “spending money”), goes towards our moving fund. As long as it’s something he’s motivated to have, we ensure we have “extra” money.

Michelle June 18, 2012 - 9:26 am

I agree with you and Amy, if I have cash, I am more likely to spend it. Since I never have cash, it gets into my head that it’s “free money,” even though it obviously isn’t!

Army Amy* June 18, 2012 - 8:51 am

I find that (like your hubby) I spend more money if I’m doing cash only. I feel like I have permission to spend the cash, so I spend it. With the debit card, I always think, “no, I really don’t need that.”*


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