Thursday, August 14, 2008

Coming Clean (Admitting My Mistakes) - Part I

Okay. Step Number 1 in getting back on track financially is to come clean and admit my mistakes. So, here goes:

1. I Used Our Credit Card
A couple of months ago we had finally paid off all of our credit cards, leaving only our (rather large) Home Equity Line of Credit (HELLoc) as our last debt, with a balance of $22,000. Then I somehow wandered off the financial path.

Here's how much I charged to our credit card over the past month or so (after it was at a zero balance). Drum roll please . . .


Okay. I said it. That wasn't too hard. (Well, actually, it was!)

What wasn't too hard was charging that much once I got started.

Here's a breakdown of what I bought:

FL Clothes 07/27 WAL-MART 93.34
FL Clothes 07/27 CATHERINES 14.99
FL Clothes 07/27 FASHION BUG 193.34
FL Clothes 07/28 TARGET 60.49
FL Clothes 07/30 SAVAS' HALLMARK 50.40
Cat Doctor 08/07 MSPCA 440.28
School Sup 08/10 STAPLES 37.79
Jewel Biz 08/10 AC MOORE 28.74
Misc. 08/11 TARGET 144.89
Dining Out 08/12 BUGABOO CREEK 22.29
Schl Cloth 08/12 VARIED 150.00
Groceries 08/14 Mkt Bskt 200.00
Subtotal of Activity $1,481.00

2. I Didn't Pay Attention To Our Finances
The first day I used my credit card it was to purchase new clothes for myself for a trip I was taking. At that time I didn't know how much money we had in our checking account. Because of not knowing how much money I had available, I found it necessary to resort to using a credit card for the purchases. I had fallen into a pattern of NOT paying attention to our finances.

The same can be said of most of the above purchases. Either I didn't know how much money we had in our account so used the credit card to avoid having our account become overdrawn, or I knew we didn't have enough money in the account. All of the above expenses, were, after all, NOT budgeted for.

When we first started on our Journey to Financial Peace in February 2007 I checked our checking account balance every day. I also tracked all money that came into and out of our house. I had a detailed budget. I funded our cash envelopes every month. I read the Carnival of Personal Finance. I ready many PF blogs.

Basically, over the past several weeks, I have failed to pay enough attention to our finances.

3. I Didn't Pay As Much As Planned To Our Debts (Debt Snowball)

This one is a doozie. I just started digging into it and I am shocked and depressed. I'll give all the details in my next post. :(