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September net worth update – Up 3.36%

September ended up being a great month for our net worth. It increased 3.36% and it now stands at a negative $39,625.

As always, you can visit my Net Worth IQ Profile to see all of our debts since I only track credit card debt on here. I also keep track of our savings account balance under the “Other” asset category.

I am very pleased with this increase, although I know a bit of it is short-lived. A big reason our cash is so high is because of a health insurance payment of over $800 (it’s due every two months) + loan at, but even if that money wasn’t included, we’d still have an increase in our net worth for the month.

I often think a month is going to be a tough month, but then somehow things work out. Sure, we’ve had a few months where our net worth decreased, but overall it’s been moving up…up…up. It feels wonderful.

In fact, it feels so good that I want to show the debt monster a thing or two. There’s still that goal of getting our credit card debt under $20,000. Time to review our cash flow to see what I can do 😉

An Extra Bonus

We had an extra bonus yesterday. Wouldn’t you know it… it turns out that we had impeccable timing when it came to clearing out our third bedroom (my home office) and combining it with our bedroom (which left a spare bedroom).

We received a very unexpected call that a friend of ours that lives near the West coast. He was going to be in town and wondered if we could pick him up from the airport. Right away, my husband offered him a place to stay because we now had a spare room!

All I can do is chuckle at the timing. It worked out beautifully. Of course, the airlines were not so cooperative and our friend now won’t be here until later today since one leg of his flight was very late. But, we still can offer him a place to stay while he’s in town.

Life sure works out in funny ways, doesn’t it?…

Deja Vu – credit card debt is under $20,000!

Back in July, I was pretty excited that our credit card debt was under the $20,000 mark. It was a little bit short-lived, because after receiving a total for our IRS debt, I had to increase our debt by over $1,600. It was a bit of a setback, but it fueled the fire to get our debt load back under the $20,000 mark.

Last night, after calculating our net worth, I knew I had to see if we could send more money towards our debt. Our checking account will be pretty low for a while, but I managed to squeeze out some money and our credit card debt is now at $19,990.


The next mark will be $18,807. Why? Once we hit that, we will have paid off half of our credit card debt 😉…

Moneyfacts comments on rising LTV levels

Small loanFinancial advice site Moneyfacts has issued a statement regarding the trend among some mortgage lender to increase the loan-to-value (LTV) rates on their mortgage offers, in response to the rising levels of debt in the USA.

The site notes that total secured lending in the USA now tops $1 trillion, with average household debt at $8,577, or $50,091 with mortgages included.

Rising house prices and lower affordability are leading to borrowers needing to take on larger loans, which some lenders have responded to by increasing their maximum LTVs, Moneyfacts claims.

“Income multiples have reached an all time high, increasing numbers of borrowers are opting for interest only mortgages and repayment terms in excess of 30 years are now commonplace,” said Scott Hanton, mortgage analyst at Moneyfacts.

“But most recently we have witnessed an increase in LTV limits, meaning that more mortgage products requiring a smaller deposit from the customer are now available.”…

Paying off your debts

Most people with high levels of debt are desperate to try and get it paid off as quickly as possible in order to enjoy more financial freedom and relieve themselves from the depressing burden of being in debt. However, wanting to pay your debts off and actually getting around to paying your debts off are two different matters altogether, and many people simply can’t see the light at the end of the tunnel because they are so deeply in debt.

The good news is that there are certain steps that you can take to try and repay your debts more quickly, but you will need to put in commitment and effort, and you will need to exercise willpower. Speeding up repayment of your debts can mean that you do not have to spend so long worrying about your level of debt, and you start looking forward to a time when you won’t have these debts hanging around your neck. There are also solutions available for those that feel they are unable to keep up with their debt repayments and need to look for a suitable solution.

Avoid minimum payments

If you are paying off credit cards, store cards, and catalogues, you will find that they request minimum payments each month. Although the minimum payments requested is the very lowest amount that you should pay, ideally you should aim to pay more – in fact, as much as possible. This will minimize on the interest that you have to pay on your debts, and will enable you to repay your debts far more quickly. The difference to the amount of time that you will be repaying your debts can be cut dramatically if you make more than the minimum repayment each month, and of course the more you can pay the quicker your debts will be cleared. Research has shown that some consumers that make minimum repayments on credit cards each month end up repaying a relatively modest balance of a couple of thousand pounds for longer than they are paying their mortgage.

Cutting back

Although it may seem obvious, one thing that many people fail to do is try and make cutbacks in their monthly spending in order to try and save a little money each month, which can then be ploughed into paying off debts. You can make various cutbacks such as cancelling subscriptions that are not necessary, cutting back on social outings or purchasing luxuries, etc. Although each amount may only be small, all of these savings will add up, giving you extra money to put towards debt repayments.

Do the switch

These days most consumers have become savvy enough to realize when they are getting a raw deal on their services, and many have saved a small fortune each month by switching energy supplier, broadband provider, insurance providers, etc. By doing a little research using one of the many price comparison sites available today you could save a fair amount on your outgoings each month, and again this can all be used towards repaying your debts and clearing the balance more quickly.

Second job

Many people decide to take a second job in order to raise extra money to clear their debts, and this can be an effective way to increase the amount that you can pay. You need to make sure, however, that you learn to allocate the extra money towards debt repayments and don’t get used to having it as disposable income, as otherwise you will be far less likely to spend it on paying off debts.

Increasing the amount of money that you pay off on your debts can have a snowballing effect, and this means that as you pay off one debt you will have more money to put towards other debts, which in turn you can also clear more quickly. The idea is that each time you clear one debt, such as a credit card or a store card, you allocate the money that you were paying on that debt to another debt, and once that one is repaid you then reallocate the money to the next debt on your list.

Of course, this is a plan that is only viable if you can meet the monthly repayments on your debts. There are people that, for one reason or another cannot keep up with repayments on their debts, and there are various solutions available. It is important not to default on your debts if possible, particularly in the case of secured debts that are secured against your home. You should seek professional advice from a debt management agency or debt charity in cases such as this, and they can provide you with information on the options open to you based on your circumstances.…

Living the Debt-Free Life

My friend’s surprise visit earlier this week was so very welcome. He only ended up staying less than a day (because of his airport delay troubles), so the visit was way too short. One day, we’ll be debt-free and can afford to pay him a visit.

That leads into an article I caught my eye this week. J.D. asked his readers “How to Live Debt-Free”.

J.D.’s been working to get his finances in order and he’s scheduled to be debt-free by Christmas. He’s curious about the transition from working to become debt-free to living debt-free. How much do you relax with your frugal ways? How many indulgences do you give in to?

As you can see from what I wrote earlier, I already equate being debt-free with having more freedom to spend money on life experiences. I’d love to be able to visit my friend out in the West and maybe even visit the ocean. Knowing me, it’d still be a very frugal trip, but it would still be an indulgence. I think there is a happy place that one should find once their debt is paid off. You want to spend money to experience life, yet still save some money to secure your financial future.

Exactly where that happy place is, I’m not sure. I have a while to think about it more before we are debt-free 😉…