This time I mean it!
I’m on debt payoff round 2 and here’s what I’ve planned and accomplished.
- I created a list of my credit card debt that contained the amount I owe, the interest rate and the target date for when I want it gone.
- I called the credit card companies and got them to agree to give me a few months interest free. The furniture store agreed to not charge me interest for 6 months, Bestbuy and my credit card company gave me 12 months each. I then prioritized my payments based on the interest rate and the total balance. The furniture, will be paid off first, the TV and appliances will be paid off second, and the credit card will be paid off last. Even though I had a lower balance on the credit card from the Best buy, I opted to pay the furniture off first because it had a shorter interest free period.
- I divided my total balance from the furniture store by 6 and started paying that amount monthly. I put all other cards on autopay until I was done. I stopped going out and started hosting nights in with my friends. Each person brings beer/wine and chips in for dinner. We either cook or order pizza. Doing this allowed me to pay double what I had originally planned to pay so that card got paid off in 3 months. One down, two to go.
- I shifted the amount I was paying towards the previous credit card to the card I used at Bestbuy. I kept the other credit card on autopay. That card now has less than $250 remaining on it before its paid off. I continue to host the nights in parties. I also haven’t gone shopping in 5 months. I eat out maybe twice a month.
- The last card is the biggest and the baddest :(. I have been paying the minimum amount on this one for about 5 months but plan on increasing the amount I put towards it once I’m done with the credit card from Bestbuy, which is soon. This one is going to be the most painful one because its literally twice as much as the other two balances combined. I’ll have to continue hosting my nights in so I don’t go out, no shopping or vacation for the foreseeable future and any bonuses/raises I stand to gain will be going towards it. If I follow my plan, the big bad card will have a balance of zero by early next year two months shy of the end of my interest free year.
Once I have accomplished these goals, the plan is to maintain this lifestyle, beef up my emergency fund, and save a 20% down payment for a rental property. I’ll be on the lookout for money saving/earning tips and pointers. I’d like to not go back to working on the weekends so I’ll also be reading up on how to invest in stocks and trying out a few investment apps. Please feel free to share any tips that have worked for you.
Is there a faster way to get out of debt? Should I be prioritizing these cards differently? why? Do you have any suggested reading related to investing, debt payoff or personal finance you think will help me?