We're two months into our home-grown debt-reduction plan, and I have some observations to share.

1. We've managed to make a little progress towards paying down one of the credit cards. This is a card that I will take great pleasure in cancelling, once it's finally paid off, because they've been gradually creeping the interest rate up on it over the last 8 months. In October, it was at 7.99%. In November, it went to 8.14%. In December, it reached 8.63%, and so on.

It's legal, of course. And it's all done in such tiny increments that you might not notice the higher payments, not if you were still using the card every month anyway. Which we didn't, because we were.

It may be legal, but it doesn't feel right. It doesn't seem like a great tactic to use, if the credit card company wants to keep me as a customer.

Bobby called and complained, and hit the equivalent of a customer service brick wall. So that's the first credit card that's going into the shredder, as soon as we pay it off. I'm going to keep at least one card for emergencies, but it sure won't be that one.

So the lesson we learned: keep an eye on the interest rates from month to month, because it's a sneaky way for the credit card companies to keep you in their debt.

2. In all of the financial books I read, there was one piece of advice that really struck me. It was: "Pay cash for everything."

Of course, I'm nowhere near the ability to pay cash for everything. If my car breaks down, the credit cards are coming out! But I took it to heart and combined it with the eternal advice to "Set a budget", and I'm pretty happy with the results. We figured out how much money we had to live on every month, after the bills were paid. And then we took that amount of money out of the checking account, in cash, and forced ourselves to live on it until the next pay check. Then we did it again.

Results were somewhat mixed. Bobby found that having small bills in his wallet made him more likely to stop and get an ice cream cone after work, or to buy an extra soft drink at the baseball game. On the other hand, we both agreed that it made us more careful shoppers at the grocery store -- if we knew that we only had $50 to buy groceries for the whole household, then we were more likely to shop for meals that made good leftovers (for lunches) and to hunt for the best bargains. (For example: do I really need that package of pre-washed, pre-cut baby carrots, or would it be cheaper to buy the bulk carrots? And if I absolutely have to have baby carrots, aren't they cheaper in the frozen version than the fresh?)

So the lessons we've learned: set a budget, have a few meals planned out in advance that work well as leftovers, and pay cash at the grocery store. But be aware of the tendency to spend money just because it's in hand!