Monday, July 29, 2013

The plastic debt is on the rise

I have passed the halfway point in my maternity leave and the end is in sight, which makes me sad to leave my babies but also relieved that we'll have two incomes again.  It's been stressful trying to live off of one income and our meager savings.  We've already wiped out the small savings account we had built up and are now in the "preserve our cash so we can pay rent/ put everything else on the credit card" mode to make it through to the end of my leave. 

Now, I'll be honest here, I never stopped using my credit cards through this whole debt reduction process.  I know most debt gurus would slap my hand for that but my goal in this process was not just to pay off my debt, it was also to learn how to manage finances (including debt) wisely.  I have come a long way in my relationship with my debt and credit cards.  I have one card that I use regularly and pay off, in full each month.  I only put charges on it that have been budgeted for and that I have the cash to pay for.  I also cash in the points earned on the card for gift cards for things like groceries or pet supplies.  I also have a card that carries a balance that I am slowly paying off.  This was the card I used to do a balance transfer to get all my credit card debt to a 0% interest rate.  Since we are now out of savings and putting everything that we don't have to pay cash for on the card, the balance is rising and I will not be able to pay it off in full.  After all this time, the credit card debt is rising instead of falling and I'm not happy about it.

Even though I knew going into the maternity leave that we would have to accrue some debt to make ends meet, this makes me very nervous for several reasons.  The most obvious one is that I've worked so hard over the past two years to pay off debt, going back into debt just sucks!  I keep reminding myself that my goal this year was NOT debt reduction.  The goal is to hold the line and not go further into debt than I was at the beginning of the year ($49,267 total debt) which is still totally doable but doesn't make me feel much better.

The second reason it makes me nervous to be relying on the credit card is that in my exhaustion and time strapped state, I find that I'm slipping back into some old bad habits.  Things like grabbing food on the go, making poor choices when I'm rushing through the grocery, and generally just not paying attention to where I can get a better price for things are all adding up.  Plus the old attitude of shrugging these small amounts off because they are so small, surely I won't have any trouble paying them off later is also sneaking back into my wallet.  

Lastly, because S and I are now a combined financial unit, there are times where he has to use my credit card to keep our cash preserved.  I wouldn't worry about it except that he and I are not on the same page financially speaking.  I have been diligently hacking away at my debt and revamping my attitude towards spending and debt.  He, on the other hand, has always lived paycheck to paycheck and doesn't easily recognize the difference between needs and wants.  He also lacks the ability to put off purchases until there's a better time to buy something either because we have more money available or because there's a better price.  He's slowly making changes towards a more fiscally fit lifestyle but there are still times where he spends unnecessarily and to see those expenses show up as credit card debt makes me uneasy.

For now the best I can do is keep reminding myself (and S) of the importance of only purchasing what is absolutely needed to get through till I return to work.  We will have to make paying off the card our first priority once we have two incomes coming in again.

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