Author: Jerry

Tackling debt 2019. Part 1 – assessment.

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.

The Master Plan to buy a house begins.

We started to pine after a house of our own shortly after moving to our current place, cute, but temporary and somewhat tight apartment in Westchester County, New York. However due to some uncertainty to my job situation (possibility of a major distance move), we had to wait it out. Thanks to that we had an opportunity to compare what we want to the real world, and carefully consider,  plan and research our future house purchase.

That was slightly over two years ago. During this time we had ample time to among other things:

  • Narrow down the area we want to live in
  • Figure how much of a house we can afford in chosen neighborhoods
  • Budget our day to day finances around our target house price range
  • Educate ourselves (while trying no to go insane) on basics of credit, mortgages, and house buying
  • Perform a metric ton of driveby’s in our target areas.

Hello world wading through the world of personal finances.

I started this to chronicle, and vent, and possibly help someone else going through similar experiences. Lets see where it take us. Welcome.

This will be a big year for us. A series of posts is coming chronicling our first house purchase and a mortgage odyssey that I’m sure follows.