Daily Archives: March 31, 2012

Where the debt stands…

Oh boy, it’s actually worse than I thought it was.  We’ve been paying down a big debt (our line of credit) and paying minimums on the rest of the cards.   We started off at about $55,000 in September 2009 and paid down a bunch in order to secure the mortgage for our house.  I think we’ve done ok, but I think that we can definitely do better!!  We’ve had a couple of setbacks in the accident I had in January 2011 and the transmission going in our van, that derailed some of the debt payment that we planned on doing.  The grand total is:

$29,014.54

We also still have far too many credit cards.  Between us we have 7 cards (6 visa/mastercards and one big box store card).  One of the cards is Shane’s work credit card that gets paid off with expense cheques and does not come out of our budget…it does not carry a balance.  Ultimately  I would like for us to have 3 cards.  One for Amy and Shane, one for me, and Shane’s work card.  As much as it would be nice to have NO credit cards at all, I think that having one card is a good thing to have in order to maintain credit. 

The line of credit will be paid by mid-May, so that’s when we’re going to start snowballing that payment onto another debt.  We are going to start with the card that has the highest interest rate and that is the PC Mastercard which currently sits at $5394.13.  We currently have a minimum payment of $115.00, so if we add the $500, our payment will be $615.00 and that will take until next February/March to pay off completely and then we’ll close the card!   Then we’ll add that $615 payment to another minimum balance and start paying that down. 

I haven’t crunched all the numbers but with all our minimum payments, we are sitting at our debt repayment being at about 17% of our income.  It’s a little higher than Gail’s recommended 15%, but it’s a figure I can live with as it is close.   We are still saving about 10% of our income and managing to live pretty well even with the extra 2%.

Our mortgage comes up for renewal in June 2013, and we are batting around the idea of consolidating  the rest of the remaining debt into the mortgage.  Of course, I know it’s still consumer debt that needs to be paid off, and we’ll put extra money on the mortgage every month.  We haven’t made a decision about that yet. 

My question for you all is:  Have you ever done the consolidation route?  What is your honest opinion about doing that?  Would you just continue to do snowballs instead?  Why?  Any and all opinions are welcome.

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