Well...since I have brought at least some of our decision making process to this board, I thought I'd post the final outcome.

All - okay, almost all (we are keeping Sears and Lowes w/small credit limits for emergency house repair/appliances) - of our credit cards have been CLOSED.

No more reliance on credit for us. It's how we get into trouble, just buying small things, online purchases, groceries, gas, on the credit cards. It's just too easy to overspend.

I'm not proud of the fact that we are unable to pay off the CC in a short time frame and instead are putting our debt onto our house. But it buys us the freedom, in the short term, for me to continue to pursue writing as a career (which is paying dividends, albeit s-l-o-w-l-y), and to know that our debts are consolidated into one lower payment at a low interest rate. I mean, I know it's not like "yay we paid off the CC!" - it's just the same debt w/a new lender.

And having learned this lesson twice over already, this being the third time, I hope it sticks this time. Sigh.

Final note - dh is fully, fully, FULLY on board this time. We've sat down together, did a Dave Ramsey style zero based budget. It's very, very tight, even with the HEL. But, it's doable like that for the short term. I'm making great use of a book of hole-punched blank ledger sheets that I've inserted into a three-ring binder, and am using that for keeping track of checking balance, spending, and planning ahead (I can write out upcoming bills, and see what's left over, instead of thinking "wow we have $700 in the account!" and not realizing we have $X payment coming up or whatever). Anyway, bringing it all back to paper has helped immensely.

Good for you. Stay strong and focused. :) ((hugs))

Really getting rid of the cards is a good start!! I hope it goes well for you, and that both you and dh can continue to work together to make it happen.

Good for you taking the initiative.

We have consolidated ours to a no interest for a year card and so I am going to take a day after the kids start school and cancel all the cards that we have open. We are also working on using cash and doing a zero based budget as well and I feel very confident in where we are at right now.

Thanks mamas. Oh, I also took us off of the direct mail lists, so we won't get any credit card offers in the mail. :) That, the currently bursting bubble and resultant rising interest rates, and the hit our credit report will take from closing all our lines of credit, should keep us away from more credit long enough to establish some positive habits.

Bobbi Jo, good for you for consolidating to zero interest! I was really trying to do that w/ours, but needed the short-term flexibility of lower monthly payments to get on my feet w/the writing and so we can really, truly have a proper budget on the basic income of just dh. Also we had so much credit out there and available, no one would give us much more (again based on dh's income) so consolidating all onto one wasn't going to happen. But most of it has been at 0 or 1.9% for a year, so it hasn't cost us anything, but promotional times were going to be up soon. Plus, I've been reading about the credit crunch and feeling like it may only become harder for us to get equity, and it would be at a higher rate. This feels like the right move for our situation from a long-term financial standpoint.

Glad you have it all figured out in a way that is best for you. We are actually putting 25% of dh' net into a snowball so the 1 year no interest was best in our situation. Plus we already have a HEL and I am not willing to get a second one.

:hug:

Sounds like you guys have a plan! Nothing better than feeling like you are moving in the right direction. :)

This is what we need to do badly, thanks for the motivation.

Good job Lauren! I know it isn't as great as paying something off... but it is a step in the right direction (and a step to lower interest) and both are things to be celebrated. :heart:

Val

so glad you're feeling great about the final decisions with the finances. i'm so happy for you that dh is with you this time!

Yes...as far as lower interest. It's at 7.25% fixed. We're paying $95 in closing costs (less than a bunch of balance transfers!). We are also paying off $500 of our credit card balance out of our own money at closing, which feels good.

We will have $2000 in escrow to pay for grading the land to help dry out our basement. It should be plenty to do that and perhaps seal the cracks in the foundation. I'm hoping that will be enough to cure the moisture problem; otherwise I am not sure how much more it will be, but we'll need some sort of major drainage system installed in the basement itself. If that's the case, we'll know next spring, and will get it done then and hopefully have the $ to pay up front (if not we'll do a payment plan with the basement contractors if the flooding is bad again). But I am hopeful that we won't even need to go there; our basement flooding is relatively minor and from everything I've read, is likely to be caused by poor grading (ie, we have a hill going into our house!).