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Smithee Debt Update, January 2010

This article was written by in Debt Reduction. 18 comments.

The last time I talked about my credit card debt here, one of our community said that he didn’t know the specific numbers of my problem, and it got me thinking that I’ve probably lost sight of one of the main reasons I wanted to be writing here in the first place: to keep myself honest. I feel worse about my behavior when other people know about it.

So, here is exactly where I am:

I have one credit card that lives in my wallet (and it does seem like it’s alive sometimes), the Charles Schwab Signature Visa. I’ve been using it instead of my bank debit card for daily purchases because I get 2% back from the money I spend, and I thought I could handle the temptation. The current balance is $5,724, obviously more than I should have spent since I last paid it off, which I should be doing every cycle. The interest rate is 13.24% and the last finance charge was $74.49.

I have one other credit card currently owned by Chase that was cut up a long time ago, and represents the remaining debt I started building up in 1997. The remaining balance on it is $1,104. The interest rate is 12.24% and the last finance charge was $11.92.

In my bank account is $10.17, because the last time I got paid, after making the necessary transfers to cover monthly expenses, I had $1,000 leftover, which I sent immediately to the nice people at Charles Schwab. The only money that gets used to pay off the Chase card is what I earn from my side jobs.

And now I’m thinking that I should probably forgo the 2% cash back on the Schwab card and go back to using my debit card for daily purchases. I thought I could rely on my self-discipline not to spend more than I could pay back, but it looks like that wasn’t true. Bummer.

Now, I guess I just need to figure out what is a reasonable amount to let myself spend during an average week. I can’t really go on historical data, because I’ve been doing it badly for quite a while. So, ignoring the credit cards for a second, after contributing my share of the family expenses, I have $1,723 leftover every month. I’m going to try restricting myself to $100 a week, which will enable credit card payments of about $1,300 instead of $1,000.

I don’t know if I can afford breakfast, lunch, gasoline, and doing something occasionally nice with my wife on $100 a week. But if I’m going to get serious, I have to get serious now. Summer weather is going to start in about a month, here in Texas, and when it’s hot outside, I get depressed, which turns to self-destructive behavior like spending too much and eating Chocolate Zingers. I need to make this a habit so I can avoid that.

Thanks for listening, you’ve been a good ear. You don’t mind if I come to you with my problem again in the future, do you? I hope it’ll seem rosier, then.

Updated July 25, 2010 and originally published January 26, 2010.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 18 comments… read them below or add one }

avatar 1 Anonymous

Thanks for sharing.
It’s great that you are keeping it real.

I know you probably don’t wanna hear it but why not eat breakfast at home, and pack a lunch. It takes less than 10 minutes to do each, and would save you $10 or more bucks a day!

Even if you don’t have time to sit down for breakfast, purchasing a pack of muffins or cereal bars at the store is way cheaper than buying them out.

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avatar 2 Smithee

I’m making lunch at work with supplies I get from the store. I want to do the same with breakfast, but I haven’t yet figured out how to do that and still be somewhat healthy, the best I’ve managed so far is to find a banana, but that leaves me feeling hungry.

Unfortunately I can’t bring myself to wake up early enough to cook breakfast and still make it to work by 7 AM. Likewise with exercise.

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avatar 3 Anonymous

My go-to breakfast is a whole-wheat English muffin, halved and toasted, with peanut butter and bananas on top. Doesn’t require much time to prepare, has enough fiber and protein so I can make it to lunch (and if I’m going to the gym, I’ll add a hard-boiled egg – we do a batch every weekend), and relatively healthy.

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avatar 4 Anonymous


As far as your $100/week goal to do what you want…

What I do is sweep money to my ING checking account every week and use that card just for the stuff you talked about. It is just another barrier between me and my money that I know I need (and it seems like you need as well).

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avatar 5 Anonymous

Granola bars & coffee. That usually tides over my late-rising tuchus till lunchtime. Granola bars can be had on sale for about $2/box. They have 6, which means on one especially hungry morning you can have two. Try that with your bananas. Or even some tangerines to change things up. (I can eat 5 at a time.)

You can make $100 last a week, even with gasoline, but I do find that I put gasoline on my charge plate so I can fill it to the gills and figure out my MPG.

I’m so glad I’m not the only blogger with credit card debt left! :-) It’s an uphill battle but one you can win!

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avatar 6 Anonymous

for cheap, filling breakfast, i usually buy bulk steel cut oats (essentially, oatmeal before it’s processed all to hell). it needs to simmer for about 20 min (8min if you get the quick cook ones), but that works while i get ready for work, feed my dogs, etc. then i mix in some brown sugar, a handful of chopped nuts, and whatever fruit i have on hand (diced apple, sliced banana, chopped up dried apricots, raisins…). it’s good for you and really “sticks to your ribs.” and at about $1/pound bulk for the oats, it’s a really cheap basis for a breakfast (i use about 1/4 C for a serving, so that comes out to like $0.15)

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avatar 7 Anonymous

It’s still too early for me to do interest-rate math, but I’m willing to wager that the 2% cash back from CC purchases is being far outweighed by the interest you’re being charged on your monthly balance. I think it’s time to take the CC out of your wallet and leave the debit in there. Heck, perhaps take the debit card out, too, and just live on cash until you get that CC balance in check.

If you don’t smoke, $100 a week is doable. Many cheap, fairly healthy meals can be had for a few bucks a day, tops, such as granola bars, English muffins (I can always get a twin-pack of 12 for $1.99 SOMEWHERE), reduced-sodium soups, and the like. Gas may eat up a good portion of that $100, but you have to suffer for your debt sometimes. Good luck paying it off — think about it, if you stick to the $1,300 monthly payment without adding to your CC debt, you’ll have it wiped out in less than 5 months.

@Mapgirl — blogger with debt over here, too! :::waves::: Almost done with the CC debt, though!

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avatar 8 Anonymous

Carrying a dollar on a card that charges 13% is costing her roughly 1.08 cents per month that she carries it. Given that her card is likely charging her interest from the day she makes the purchase (no grace period when you carry a balance on every card that I know about), she’s already lost more than half of her rewards by the time her payment is due for that cycle.

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avatar 9 Anonymous

According to the Schwab Bank Invest First Visa terms and conditions, there’s a 25 day grace period on purchases. So if you don’t carry a balance, you’re golden.

It does mention a minimum $1.50 finance charge. I’m not sure if that still applies when you have no balance. Even if it does, if you purchase $1,000/month, you still get $18.50 back.

Just make sure you don’t miss any monthly payoffs, because 13% on $1,000 will wipe out the benefits right quick.

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avatar 10 Anonymous

We’re here for moral encouragement Smithee! Just stick to your guns and plow through that debt. If you feel yourself ever doing something stupid like get into more debt, post an entry and you’ll know we’ll be more than happy to give it to you! :P

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avatar 11 Anonymous


Thanks for the update. I enjoy hearing these stories and it gives me motivation to stay the course. You know exactly where you stand, which is the first step to paying off your debt. Good luck! Hopefully next update, we will hear better news.

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avatar 12 Anonymous

Wow, Smithee, I can sure relate to your story. I began my own journey through personal financial reinvention and the first thing I had to do was step far away from the credit cards. I began by tracking everything I spent in a software program and even though I didn’t use credit cards I was still spending way too much. Recently, I started using Mint. You should take a look at it. I find it fun and when I set it up I immediately found ways to save a bunch of money every month without giving up a normal lifestyle. What became most apparent was the waste. Good luck to you.

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avatar 13 Luke Landes

Hi Smithee: You will only succeed at eliminating your debt when you are truly ready to commit to that goal. I don’t think you’ve committed yourself to it yet. Just like how I haven’t committed to getting into better shape. The numbers won’t be important until then because you’re not really measuring anything. I could weigh myself every day and analyze the daily or weekly variations, but the numbers are meaningless because I’m not doing much of anything to affect them.

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avatar 14 Anonymous

Too true. All too true. I should go on a debt and food diet. Too bad there isn’t Quicken for dieting. My exercise/diet spreadsheet really doesn’t work that well to keep me motivated, but Quicken does wonders for my finances! (running in place, in a static state when it comes to debt)

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avatar 15 Anonymous

I am trying the cash approach for Feb. (of course I picked the shortest month :) ).

I’m allotting $350 for groceries (and household staples like laundry detergent, etc.) and $150 for gas (NO CREDIT – JUST CASH!). I’m using previous months numbers to gauge how much $ is needed. I will not use the cc simply to get the cash reward.

I am hoping that each month I do this will help me to get a better handle on those little purchases that leave me w/a huge cc bill each month.

Good luck to you!

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avatar 16 Anonymous

P.S. Forgot to mention above):

Groceries includes hot lunches for the kids, restaurants, and fast-food for a family of 5. Not an easy task!

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avatar 17 Anonymous

I guess I’m just the opposite, I’m depressed with the cold weather (it’s currently below freezing in Dallas! yikes) but happier in the summer.

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avatar 18 Anonymous

Another blogger with embarrasing debt, here. Good luck on your journey.

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