The Debt Diet Challenge Week #3: Our Participants Weigh In

This is our weekly installment of The Debt Diet Challenge, in which Credit.com follows the lives of five people selected to take Jean Chatzky’s Debt Diet—to get themselves out of debt and on track to a better financial future. Every week, Jean Chatzky updates us on the participants’ progress, and the participants blog about their experiences with the program.  Here are the latest dispatches from our participants…

Erin

Hi. My name is Erin and I’m a debt-aholic. It’s been 12 hours since I last reviewed Quicken and 18 hours since I last spent any unapproved money. It’s been 1 hour since I last hated myself for being in debt.

I’m truly struggling with blogging about my experience today. This process has been an extremely emotional roller coaster for me—has been for the last five years. I’m tired of the emotional ups and downs that being in debt causes. That combined with raging hormones has caused a truly rebellious mind this morning. I don’t want to write about getting out of debt. I don’t want to care about trying to get out of debt. Don’t even talk to me about looking at my debt paydown spreadsheet one more time!

Getting out of debt is a mind game. Watching every dollar we spend and analyzing whether or not we should spend it is exhausting. It causes me to overeat. It causes me to drink more than I probably should. It causes me anger towards my husband if he spends a dollar I don’t approve and anger toward my kids when they want something I want to buy them but didn’t budget for. Overall, I’m a pretty frustrated (and unhappy) person. Sure, I look pretty normal on the outside—like a successful and satisfied career woman.  Inside, I’m falling apart.

I feel like I’ll never make enough. I feel like we’ll never get out of debt. I feel like I might fall apart emotionally on a daily basis. Meanwhile, I’m counting calories, watching my alcohol intake, and trying to take deep breaths before I talk to my kids or my husband.  I’m amazed that I haven’t spontaneously combusted with all the anxiety and anger I hold inside.

The Debt Diet is helping me to put it all out there so I can start healing myself but it’s going to take longer than I thought, and possibly some therapy  :)

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Read Chris’ story »

Chris

It was not a bad week. I had some small victories and a couple large expenditures, but I did not get out the charge cards. I was getting ready to take my broken mower to the repair shop. Instead, I got out the manual. I discharged the engine, I cleaned it, did some maintenance work and I got it started again. Victory!!! Then I mowed the lawn myself and saved an additional $40. I was hot, dirty and sweaty—but it felt good to save a repair bill and a mowing charge, too!

My two large expenditures: 1) my city-ordered sidewalk repair and, 2) dog grooming. I paid almost $900 in cash for these two things. The dog grooming was unexpected—he rolled in something foul and the smell did not dissipate with my home grooming effort. Since he is an indoor dog—money well spent!

I have decided to “borrow” a small amount from savings for two days, just to make sure that bill-pay payments were made far enough ahead of the due date to be received on time. That money from savings, however, was returned to savings on Friday, which was payday. My mortgage payment was due on the 1^st of August; my paycheck came on the 29^th of July. My primary bank bill-pay should’ve made it, but I didn’t want to worry or end up having it paid a day late. It is not worth it in the long run.  My mortgage company charges $15.00 to pay by phone, so that is not an option I want to use, either.

A few more victories: Three days with no spending at all!! I also cashed in my change jar thinking it would be around $30-$40.  It was a bit over $100. I will keep saving my change.

My goal this week is to develop a budget. I am reviewing last year’s expenditures and calculating occasional bills such a bi-annual auto insurance; auto license registration; and pet expenditures for veterinarian bills, food and supplies. I am in a period of low gas and electric bills, but this winter will be more expensive. I need to understand my occasional and fluctuating costs, and make sure I transfer additional funds to my savings each month, too, so that these types of items don’t surprise me. I have never had a real budget before, and I am learning about some of my spending patterns in the process. It is a good exercise and long overdue.

This program and my discussions with Jean are focusing me on results.  I know the balances in my accounts on a daily basis. I keep my goals in front of me. I share my progress with family and friends. Jean reminded me to include holiday expenses in my budget—good point!! And, I am still losing weight!! What a great bonus!!

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Read Melissa’s story »

Image courtesy Debt Diet Challenge blogger Chris

Melissa

We are Week 3 into the Debt Diet challenge and I found that I have become very anxious and a little stressed. My husband thought at the beginning of this process that his biggest challenge would be overcoming discouragement that could arise if our debt didn’t go down as quickly as we hoped it would.  I found this week that was my issue. It has only been 3 weeks and we have at least 3 years to go unless we find a big chunk of money somewhere.  Like a food dieter that gets on the scale too frequently, I have been looking every night at the debt totals. Nutritionists tell you not to weigh yourself everyday; I can see that measuring my debt everyday is probably equally unhealthy. I just want it to move faster! I guess in the big picture that is a good thing.

I find myself counting the days until we get our next paychecks so I can throw some more money at this problem. Each time I leave myself very little discretionary money so I won’t be tempted to spend, but unfortunately I had to borrow from savings this week because I overspent. The success for this week is that I still haven’t used my credit card. Nevertheless, I did borrow money I put into savings in the last 3 weeks as part of my “pay yourself first savings plan” for emergency issues. This week we did suffer a heatwave, much like the rest of the country, but I don’t think a few dinners out and several trips to the ice cream stand qualified as emergencies. Ice cream seems like such a small treat but each time it is $20 for a family of 4. I am hoping to put the money back plus continue with saving again. The weather is cooler already so I have to get back on the wagon I fell off this past week.

I continue to look for other ways to fund the $10 per day toward debt paydown needed for the Debt Diet challenge. I spoke with Jean this week and we discussed getting a lower interest rate for one of my credit cards. I have another offer in the mail so I am going to first see if Capital One will reduce my rate. Otherwise, I will try to negotiate a transfer rate and do a balance transfer.  Also we discussed calling a mortgage broker to see if refinancing our mortgage is a good option for us right now. Jean advised that I should give the broker my scenario and credit scores and ask what they think without having them look up my credit. Every time someone pulls your credit report, it affects your points. I need to maintain the highest points possible, and this was a tip I never would have thought of before.  I went back through the activities of the Debt Diet and considered refinancing my car. It looks like it would save us $20-$30 per month.  I am not sure this would be worth it but then again that is 3 days of $10 per day needed.

Overall we are making progress even though it is painfully slow, a mental challenge all by itself. I have spent years as part of the “I want it now and I can use my card to get it” generation starting with my first credit card in college. I know it is going to be a daily challenge to keep pushing through all of this and I am hopeful that the more I struggle, the more I will persevere through this and eventually become debt-free.

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Read Penny’s story »

Penny

This is the third week on the program and I continue to track my spending. I have had a few surprises come up.  One was a car repair that was unexpected, but needs to be done. My husband does not know a lot about repairing a car, so we asked a friend if he would help.  He agreed to help, so we bought the part and will save on labor with our friend’s help.

I also bought a small (700 watt) countertop microwave.  I have been putting this off because I wanted a microwave above our stove.  We have been without a microwave for about four months now. My husband and I talked about just getting a small one because we really can’t afford a bigger model. There is also the additional installation cost to have it installed over the stove.  We mostly use it for thawing out food or reheating leftovers.  Our kitchen is small and there is not a lot of room for a larger countertop microwave. I spent $65.00 on the microwave and maybe could have saved more by shopping around. I made some additional money last weekend, so that is what I used to buy the microwave.

I also visited the doctor this week with sinus infection.  I have health insurance and the doctor advised me to get over-the-counter medicine.  That saved me some money, as well.

I continue to work on the debt diet program online and have learned some valuable lessons which I am sharing with one of my friends. My friend and I had a garage sale this past weekend and we were discussing credit cards. She thought it best to pay down credit cards that have a low balance; she said she had heard that on TV. I went on Jean’s website and showed her the value of paying the highest interest one first. I explained what Jean had told me and she was very interested. She hasn’t really ever pulled her credit report and I showed her the correct website to use and how to get it free for the entire year. I’m glad to say I sold most of the items I had and will be putting most of the money into savings. I did eat out with our friends, so I kept some out to cover what I spent on eating out. I am trying to only use what money I have in my purse and when that is gone I am out. That is something I learned from the program.

Jean and I also discussed overdraft protection this week.  I currently have it as an emergency, and I try really hard not to use it.  I wanted to find a better way to cover a check without the large service charge. I talked to my bank about different options and I am glad to say that I chose an option that is the lowest way to cover overdrafts.  I opened a savings account and when/if I have an overdraft, it will only cost $5.00 to transfer the money from savings to checking. I am a little concerned that I can save money in there for that reason, so I hide the account online.  I feel if I can’t see it, I won’t spend it.  This was another joint decision with my husband.  We are really looking at this opportunity positively and I am so happy.

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