2019 has been a tough year finance-wise. A lot of unexpected expenses: necessary house repairs, unplanned trips, less than thrifty spending and a costly tax filing oversight grew our short term debt (mostly credit cards) to an uncomfortable level.
I currently not worried about our base expenses at this – mortgage, car payment, and basic food/utilities budget – I managed to balance these for a while with good result. However piling up credit card debt is a bit unsettling. If left unchecked, and not serioustly tackled it might lead to financial distress. I decided to do something about that.
Step 1: hunt it down, and write it down.
I started with my notebook, a bunch of pens and a pot of coffee. I wrote down every account, and approximate amount I could remember. My heart sunk a little bit. It’s natural but i’ts better to know exactly where your money is (or isn’t) than to guesstimate and make a costly mistake. I reviewed all my paper and electronic statements I could find (yes I need a better filing system) and I knew I would need help keeping track of all this If this is to be overcome.
Step 2: Organize, use technology and free services!
I am a bit traditional – I prefer established Applications, to certain cloud services and Apps, I am a big fan of using spreadsheets like Excel to keep track of my finances. Google sheets also work pretty well if you do not have Microsoft Office – but I also wanted a more automated solution to keep track of my debts. I logged in to MINT (free!), and setup as many connections to my financial accounts as I could. After a few days I had an accurate financial picture of where do I stand. Between my initial notes, and excel spreadsheet, and a MINT summary with down to the last cent numbers I now knew that…
…It wasn’t pretty. We had about $40,000 of short term, high interest debt.
What now? I need an action plan.