Debt-Free Zone

Is My Debt Payoff Too Aggressive? + Debt Snowball Progress for August 2015

Slaying my credit card debt is one of my top goals. I plan to be well done before my 30th birthday. What a great gift, right?

I discussed this with a friend as we were kayaking, and he thought that was a great goal. Then he told me that he had discussed maxing out his Roth IRA contribution with his girlfriend and encouraged her to do the same this year. Apparently, his girlfriend’s parents offer a matching contribution.

“Must be nice,” I thought.

I wish my parents were in a position of wealth and power to offer those types of incentives for me and my brothers. It made me think about the legacy I want to leave and why it’s important to stop paying for past mistakes (credit card debt) as soon as possible, so I can start investing more money for the future.

During my mid-year checkup with my financial planner, he grew concerned at my aggressive debt payoff strategy. I’m paying $350 more than the minimum on those cards. He’d prefer that I shuffle over more money into the Roth IRA. Who knows how long the government will keep that option available?

I definitely here what he’s saying. Plus, I’m starting to feel the pinch. Medical bills are rolling in from my surgery 10 weeks ago, and it seems as if my car, Penny, is guzzling up a good amount of gas. My small pot of discretionary income seems to be shrinking mightily, so I’ve started taking out a weekly allowance in cash to live on. Living on cash again is an eye-opener!

But I remain steadfast in my resolve because it will only take four months to get rid of Credit Card No. 2. Then just another 6 months or so to get rid of the third and final card.

I’ve started to say money affirmations daily to keep my spirits up and stay in a mindset of abundance—not lack. Things are going to turn around. I’m upward bound! (Oh, that rhymed!)

Debt Snowball Progress for August 2015

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Debt Snowball Progress for July 2015

The snowball is getting bigger! This month, I rolled over the payment from Credit Cart No.1 into Credit Card No. 2. I also added a bit more to the amount each month so that I’m not paying a small bill in December.

It was so odd and disheartening to see such a large amount of money go to one creditor. I’m excited for the day when that money will come to me and no one else. Those dollars will go toward retirement, other investments, savings or big purchases I’ve longed to make.

I can’t even remember what I purchased with the credit card. Isn’t that a shame! Whatever I bought probably wasn’t worth the aggravation it’s giving me now. I’ll remember this feeling so I won’t go into more credit card debt when I break free. By this time next year, I will be free. God-willing, I WILL BE FREE.

Debt Snowball Progress July 2015

Being happy to pay bills + Debt snowball progress for June 2015

Being happy to pay the bills. Is there such a thing? INDEED, THERE IS!

I woke up this morning excited to check my bank account and see it reduce because my automatic payments had been withdrawn. Then I grew more excited to pay my Internet and cable bill.

Why would anyone be excited to see their funds reduced? Reason No.1: I had the money to pay the bills. Of course, I’d like to see my coffers full at all times, but I’m not worried about withdrawing too much or not having enough money to begin with. So many other people are. I used to be in that position a few years ago.

After graduating with my master’s degree and getting my job, for which I just had my two-year anniversary last week, I started keeping an online spreadsheet of my bills. The spreadsheet goes back to September 2013. At that time, I had absolutely no control or schedule in regards to my finances. Bills would come in, and I’d set them aside. Then after a few weeks, I’d look around and go, “Crap! Is that credit card bill due today?!” Thus, the scrambling would begin. I got tired of it. Sometimes, that’s what it takes to change.

The spreadsheet helped me put everything in one place — what I owed and to whom, when the payment was due, and the amount of the payment. It held my regular payments and medical bills that would come up time to time. Little did I know, this was the beginning of a budget, which I tried to avoid like the plague. Those rows and columns helped me plan where my two paychecks (and freelance money) would go each month. Then I got on the schedule of paying bills on the 1st and 15th. It has saved my life, made me happy about payday and happy about paying the bills.

I think Michelle Singletary wrote that one should make bill-paying a celebratory event. You have the means to pay the bills, so be grateful and think positively. Heck, maybe drink a little wine while pressing “Submit Payment.” Wine Wednesday. Why not?!

Now, I’m not saying that I love bills. The fewer, the better. But I’m grateful to have the means to take care of them in a timely manner.

Here’s Reason No. 2 for my happy, post-bills state: I PAID OFF A CREDIT CARD!

Woo hoo! I finally paid off the credit card I used to take care of car repairs. I planned to pay it off in April, but guess what—I had a major repair in April and split that bill between my savings and the credit card for the 0% interest for six months. It’s been a long while since I paid off a card. This is a nice little victory.

Now, only two cards stand in my way. These cards aren’t incurring interest thanks to balance transfers. After getting out of credit card debt, I’ll start killing off student loans. “If it ain’t one thing, it’s another,” the great Frankie Beverly sings. But the good thing is: I’ve got a plan. And I’m working it. I’ve already rolled over the payment from Credit Card No. 1 into Credit Card No. 2’s next payment. I pray that I continue down this path with little resistance.

DebtSnowballJune2015

Balancing balance tranfers + Debt snowball progress for May 2015

Earlier this year, I got my first balance transfer card in hopes of paying the bill in full before the 0% interest promotion ends in April 2016.

Well, I took advantage of another promotion. My main bank mailed a promotional offer to get 0% APR on balance transfers and direct deposits through November 2016. Initially, I just threw the paper aside. Then the bill for a major surgery arrived. I needed $1,800 and credit seemed like my only option. Previous medical bills had eaten most my HSA and regular savings.

balance transfer processSo I called up the bank to learn more about he offer. The representative, Denise, was so helpful. We talked for 40 minutes. She helped me understand the conditions of the promotional offer, talked about her past issues with credit and gave advice on how to repay my credit card debt.

Denise said she was trying to keep up with the Joneses in Atlanta. She was charging purses and whatnot on her credit cards to look fly. Before she knew it, she had a major problem/ Just like me, she took advantage of balance transfers with 0% APR promotions to climb out of debt.

I decided to go ahead and get a direct deposit to pay for my surgery. Denise said she knows so many people who are using credit to pay off medical expenses.

I told her about the credit cards I’m paying off. Then she asked how much interest I was paying on a store card. When I told her, she was like, “Girl, go ahead and transfer that balance to this card.” She said it doesn’t make sense to continue to pay that high interest rate, when you can use this offer to pay if off without accruing interest until November 2016.”

Then she asked if I had more questions.

“Could you lower my interest rate?”, I asked.

“I’m so glad you asked,” she replied.

It cracked me up because although I’d read about asking for interest rate reductions, I hadn’t asked in such a long time. “Clothes mouths don’t get fed on the boulevard.”

Denise lowered my interest rate on that credit card and another card, which I’ve paid in full and haven’t used since, by 3 points each. She also gave me an extra year on the promotion and

With the direct deposit, I essentially created more debt. I hate that notion, but I realize that what’s more important is that I have a decent plan to pay it off in a decent fashion.

I’ve reworked by debt snowball plan, leaving out student loans. That’s a whole ‘nother can of worms. According to my calculations, I can get out of credit card debt in a year and 2 months—so before my 30th birthday. What a gift that would be!

Debt Snowball Progress May 2015