I couldn’t fall asleep Friday night, so I decided to look at our budget a little more closely. I had postponed the final payment for our credit card debt until early October because we have some other bills this month. However, I realized that I had the due date for those bills about a month too early.
I flipped the amounts around and was able to pay off the last $1,187 of our original $20,000 in credit card debt tonight! Actually, I was talking with a friend and recalled that at one point last year, that debt was closer to $23,000, but I just use $20k as an even number. That debt was dogging me for the last 6+ years, and it’s finally gone.
How do I feel? Eh, tired. Relieved. But I probably won’t celebrate until Citibank notifies me that they have received the payment. That’s when it will hit home. However, it’s now onto our next debt: my student loan.
How did we do it? Perseverance. I made a plan and stuck to it. The end date was motivated by an expiring 0% balance transfer offer on my Citibank card, where I had about $12,000 for a year. I worked backwards from that point to find out how much I needed to pay each month to get rid of the debt in a year.
Granted, we make a decent income to be able to pay over $2,000 extra per month to our debt (first our one car and then the credit cards), but we also live a fairly frugal lifestyle. Our frugal lifestyle doesn’t involve reusing paper towels or taking baths every third day. Rather, we just avoid buying stuff we don’t need, unless we really want to treat ourselves. Our latest two treats were some nice gifts for Stacie’s 30th birthday (much deserved too) and a Nintendo Wii for both of us.
Stacie wears very little makeup. We don’t buy DVDs, we rent them. We don’t go clubbing. We lead a pretty boring lifestyle, but it suits us. We don’t feel like being trend-setters or go-getters. Instead, we wanted to focus on getting our financial house in order, as well as advancing our careers through additional projects (Stacie) or a masters degree (Me). So all in all, we worked at both cutting costs, as well as increasing income through hard work and a little ingenuity (this site and Building Nutrition).
So when you think you can never get out from that mountain of debt, remember these 3 tips:
1. Stop spending so much (and maybe try to develop additional income if you’re able)
2. Create a budget and a goal
3. Stick to the plan
There’s not much more to it! Oh, and be prepared for emergencies, disaster, or Murphy’s Law.