Getting to Know Your Debt

Getting organized with our bills is something I’ve been working towards for a few years now. I admit – I spend too much money; but I still sorta keep track of it and am aware of it. That’s a step, right?

We’ve got a “budget” but it’s really only for keeping track of what bills we have each month. I don’t have a “budget” for going out to playdates or getting lunch or anything; just what we have to pay on the phone, the television, utilities and credit cards each month. I’ve been working on spending less and making more (which is why you see a lot of paid ads on the blogs) and it’s coming along nicely. I have a LONG way to go though.

So, to help me (and you) there is this website that gives you your “BillsIQ” and it’s really handy for figuring out where you are at in terms of bills, debt help and the organizing/planning of payments. It covers everything from monthly budgets to retirement to saving for your child’s college fund. I went through and answered a few simple questions and it told me that my “IQ” was a “B” – 83%. Not bad! I pay our bills on time each month (although, in the past couple months I’ve forgotten at least one – not good because this is the largest variable in calculating credit score) and I generally know our credit score although I’m not sure of the number (check your credit report at least once a year). Credit scores are based on three things; payment history, debt loads and debt utilization (how much is on your credit cards in terms of limit).

Like I said, our budget consists of a breakdown of each bill we pay each month. I am working on paying off 3 credit cards (I’ve already paid off two). The only card I’m using right now is the Discover – although it would just be better if I stopped using the card (and generating more debt). I pay more than the minimum payment each month also; which is super important. According to my plan – those three cards (if they aren’t used) will be paid off in less than three years. We also have a debt consolidation loan which is being paid on each month. But, it’s all for the greater good I suppose. We’re working on getting some debt relief as soon as we can and we’ve got a pretty good payoff plan. Now – all we have to do is keep to it!