Digging Out Update #2

Today I had to raid my IND Direct savings account to cover my AmEx payment. ARgghhh!! I transferred nearly all of the money we've been saving since the beginning of the year ($1900 out of $2127), which is money that is earmarked for my husband's quarterly tax payments. It looks like we may be skipping the June quarterly payment and making a double payment in September. I guess that may be the smarter thing to do, technically, because that way we earn interest on our money instead of Uncle Sam -- except that the money's going to AmEx instead of hanging out in an interest-earning account.

This is a little setback, but not too bad. My husband's income ebbs and flows, since he's a small business owner. We have a fine cushion when you look at the receivables, but it's just a matter of when we'll receive the receivables and what to live on in the meantime!

Also, I had to reduce the electronic payment amount on my evil 18.99% Chase card by a $1,000, because we just don't have the cash right now to make the big payment I planned to this month. To make matters worse, the balance has actually gone up from $4900 to $5346 since last month because we're still using this card to get by in between client payments. My goal is to get that puppy down to $3800 by the end of June (same $ goal, but deadline has been extended from 6/15/07). That means I've got to make another payment of about $1200 in the next 3 weeks (after replacing the funds from my ING Direct account).

Speaking of evil credit cards, yesterday my husband opened up the mail and in a very non-descript legalistic memo, BofA was informing us that they would raise our interest rate from 9.9% to 23.99% unless we opted out by notifying them in writing. The catch is, if we ever use the card again, we automatically accept the new interest rate. I wrote the opt out letter last night and cut the cards up. We actually don't use them these days anyway, but this is a pretty big concern since we're carrying over $15K in debt on this card.

We've seriously cut back our spending in every area of our lives and sticking to our new budget pretty tightly. I am really hoping that I can front load extra payments on the credit cards later on this month or early on in the month of July so I can be sure to stick to the payment plan.

Next update coming soon...