Destroying Debt Channel

Destroying Debt: Saving Money through Covered California

In a previous blog, I wrote that Shawn and I got our health insurance coverage through Covered California. It is the health insurance marketplace for the state of California. We ended up with a health plan that covered both me and Shawn. It cost only a few more dollars than the health plan that covered only me.

Right away, it was obvious that we were saving money by purchasing a health insurance plan through Covered California. Part of the reason was because we qualified for a subsidy. The only way to get a subsidy is to go through the marketplace (which, for us, is Covered California).

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Our “Obamacare” Story

A pink piggy bank sits next to a stack of dollar bills. A stethoscope is on the money.

Shawn and I signed up for “Obamacare” yesterday, and we got a really good health plan for a very affordable price. I wanted to share this story for a couple of reasons. First, I wanted our story to serve as a counterpoint to the hysteria that is being passed around about canceled health plans and skyrocketing rates. (ThinkProgress has a helpful guide that will teach you how to spot a fake “Obamacare” horror story).

The other reason I wanted to share our story was because it directly relates to our efforts to destroy our debt. We got a health plan that covers both of us for just a little bit more than the cost of a plan that was only covering me.

Previously, I wrote a b...

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Rule Zero of any plan to Destroy Debt

The numeral zero

It should probably go without saying. But if you’re trying to get out of debt, it’s really not all that complicated; Maximize income, reduce expenses, apply remainder towards your debt. Read any debt-reduction manual and it’ll pretty much come down to that concept. The problem is, it’s not always so simple.

Our household income tends to fluctuate. This makes it very difficult to even do rudimentary financial things like making a budget and sticking to it. There is a certain amount of income that is reliable. But that money isn’t enough to cover all of our regular expenses. So, when there isn’t enough money coming in to cover all of the bills, some of those bills get paid for with credit. Which means more debt. That was our case last month and it’s likely to be the case this month, too.

And that brings me to the subject of this blog entry. I think there’s one rule that’s missing from nearly all of the popular debt-escape plans. A hidden “rule zero.” And that rule is: Have a steady income that’s enough to cover your basic living expenses. It’s so obvious that I think all of the Ranseys and Ormans of the world tend to overlook it. But it’s the ultimate foundation for any kind of financial success.

And it’s not as easy to achieve as it may seem...

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Making Debt to Destroy Debt?

Screen shot of a text note showing different balance transfer options

If the plan is to eliminate debt, then making more debt would seem antithetical to that plan. But in this case, I decided to look at the overall cost of carrying a debt over a particular period of time, and weighed two options for carrying that debt against each other.

Our smallest debt is being carried on a credit card. The balance on that card as of last month was about $7500.00. The interest rate on the card is between 12 and 13 percent. According to that card’s last billing statement, if we made only the minimum payment, we’d pay about $60.00/month in interest. The minimum payment was around $160.00, so that’d put $100.00 towards principal. I knew I had some offers from other banks for balance transfers at 0% interest...

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Destroying Debt: Freezer Breakfast Burritos

Breakfast burritos in a plastic bag.

I had gotten into a habit of buying pre-made burritos at the store, usually to heat up for breakfast. Like most people, I have a limited amount of time in the mornings to eat. So, I need something fast and filling. I remembered reading about the Simple Dollar’s bulk breakfast burritos and thought it’d be worth trying out.

I don’t par...

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Destroying Debt: By The Numbers – May/2013

Pencil eraser removing the word "debt" from paper

Jen did an overall summary of the nature of our debt in the initial Destroying Debt post. Now it’s time to look a little more closely at the current state of our debt, so that we can document any progress (as well as any setbacks) we have along the way. I’ll create a new “By The Numbers” post every month to show exactly where our debt is at the time.

May 2013:
Mortgage: $32...

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Destroying Debt: Insurance Rate Change

A pink piggy bank sits next to a stack of dollar bills. A stethoscope is on the money.

Health insurance is kind of backwards. If you are extremely wealthy, then you might (potentially) be able to get through life without having health insurance coverage. I mean, Bill Gates is unlikely to have concerns about being unable to pay for an extended hospital stay or the cost of the ambulance that took him to the hospital, right?

What if you aren’t extremely wealthy? You are simply not going to be able to pay your medical bills out of pocket. You just don’t have the money to be able to do that (especially if you develop a serious illness, or get into a big accident). The only way you are going to be able to pay for your health care needs is if you can get insurance coverage. Theoretically, health insurance is supposed to be there to help you pay for (at least some) of your medical bills.

Which brings me to an obvious problem. Health insurance is expensive. We aren’t going to be able to access the Marketplace system until at least October of this year (where we should be able to find affordable health insurance). That is, unless the Republicans manage to find a way to destroy the entire health care reform system before then.

In short, this me...

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Destroying Debt: Crowd Funding Jen’s Birthday

Jen in a cute hat at a coffee shop

I’ve been a bit obsessed with crowd funding lately. I love the idea that a group of people can get together and pool their resources to make a financial goal that might otherwise be unobtainable, possible.

There are a lot of websites devoted to crowd funding these days. Some, like Kickstarter, are focused on specific creative or technological projects. Others, like GoFundMe or Crowdtilt can be used to crowd fund whatever you want.

After...

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Destroying Debt: A Starting Point

A small plant with two leaves appears to be growing from coins

The inspiration for the “Destroying Debt” blogs at No Market comes from real life experience. Shawn and I have amassed a large amount of debt. It is my understanding that this is not unusual circumstances. Many Americans are in debt. That being said, Shawn and I don’t actually want to be in debt. We’ve tried, over the years, to get rid of the debt, and we do ok for a while. Then, some tragedy happens that prevents us from paying what we owe and, at the same time, increases our amount of debt. This situation may sound familiar to a lot of people.

At the time I am writing this blog, our debt is approximately $55,000.

How did we get to this ...

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