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Welcome to my October Debt Payoff Report.
This is a monthly blog series where I’ll document my journey towards becoming debt free!
Why A Debt Payoff Report?
You may be wondering why I would want to publish a payoff report as opposed to an income report. Now don’t get me wrong, I love reading income reports! Reading them gives me a double shot of confidence to work hard. There are a lot of bloggers who have worked hard in their respective niches in order to make ends meet for their families. In fact, they’re able to become their own boss without giving in to the hustle and bustle of your typical 9 to 5 job.
Just like the authors of those famous income reports, I want to be honest and transparent about my journey. Since I am not profiting off of my blog at the moment and I’m drowning in debt, I’m putting a twist on things by publishing a debt payoff report. I want readers to see my struggles with overcoming debt. Hopefully, I’ll come across some who can relate.
I have debated whether or not to publish my debt progress report for the sole reason of being embarrassed. Sharing accomplishments are great, however, it’s equally important to share the struggle and the path taken to get there. As a blogger, I am documenting this journey to see if I’ve made any progress towards my end goal.
The purpose of this debt progress report is to hold myself accountable by showing you how much debt I’ve been able to pay off throughout this journey. If I can do it, believe ME, you can too. I hope that I can encourage someone who can relate to my struggle.
Previous Debt Progress Reports
Debt Progress Report — August 2018
Debt Progress Report — September 2018
My Credit Card History
I have accumulated almost $9,000 in credit card debt on one credit card!
This debt stemmed from my inability to secure full-time employment shortly after I graduated from college. I had bills to pay but I did not have enough money coming in to pay them. I came up with this brilliant idea to pay my bills with a credit card (side note: I’m being facetious). Rather than ask for help, I was paying my phone bill, purchasing food, putting gasoline in my car and occasionally treating myself to mini shopping sprees. As a young adult, my thought process was “if I could afford to pay the minimum payment, I’ll be good”. Seriously, what was I thinking?! If anyone out there is in credit card debt or debt in general and this is your current mindset, you need a wake-up call!!!
So here I am a few years later, correcting the mistakes that I’ve made in the past. It’s embarrassing to share my credit card history because I am afraid of what others would say about me. Here I am with a Bachelor’s Degree in Accounting and MBA in Finance and I’m swimming in credit card debt. Based on my academic credentials, yes I should know better. It’s easier said than done. Yes, I can teach others how to reconcile their bank statements or how to manage their finances, that doesn’t necessarily mean I apply those principles in my everyday life.
Now I am facing my credit card debt head-on, I am determined to pay it off. I will be debt free and I’ll have financial freedom.
Debt Snowball Method
I am following the debt snowball method in order to pay off my debt.
A few years ago, I enrolled in Dave Ramsey’s Financial Peace University. (Phenomenal Program – I’m thinking about enrolling in a refresher course!) This program teaches you how to manage your money as opposed to letting your money manage you.
According to the Dave Ramsey Website, The debt snowball method is a strategy where you pay off your debts in the order of smallest to largest, gaining momentum as each balance is paid off. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.
The steps are as follows:
- List your debts from smallest to largest.
- Make minimum payments on all your debts except the smallest.
- Pay as much as possible on your smallest debt.
- Repeat until each debt is paid in full.
Credit Card Debt Payoff Breakdown
Four Credit Cards Down – One More To Go
By applying the Snowball Method, I made the final payment on my second credit card!!!! Woooo-Hooooo!!!
First Credit Card – Paid off in August
Second Credit Card – Paid off in September
Third & Fourth Credit Card – Paid off in October
Breakdown of Credit Card #3
- Opened: Sometime in 2012
- Annual Fee: $0
- Annual Percentage Rate (APR): 23.90%
- Minimum Payment: $50.00
I have a love-hate relationship with Credit Card #3. This card belongs to one of my favorite retailers (next to Target) LOL. I love everything about this store. This is how you know you’ve spent A LOT of money at a department store. Have any of you received an invite to attend a “private Christmas shopping party?”. The party is held in store – closed to the public and catered. You’re greeted at the door with champagne and appetizers. It felt great to shop and be served for the night but I realized that all of this was literally at my own expense.
I LOVE this store and will continue to shop here – however, I have a new motto. If I cannot pay in cash for my purchase, it needs to stay at the store. This is my SECOND time paying this card off in its entirety. I hope to keep this card at a zero balance. No need to go shopping anytime soon.
Breakdown of Credit Card #4
- Opened: Sometime in 2013
- Annual Fee: $0
- Annual Percentage Rate (APR): 26.49%
- Minimum Payment: $39.00
Credit Card #4 is probably the ONLY card that I did not let get out of control. With this card, I stayed on top of my monthly balances. This store allows you to pay off your card balance on the same day you complete the in store purchase!! This time around, I purchased a few items and I did not pay the balance as soon as I made the purchase. As a result, my balance continued to rise.
I paid high interest on both cards – as I like to say I’m “giving all of the churches money away”.
As of today, I have paid off four credit cards in three months!!!!
What is your debt story? Are you working towards paying your cards off? Have you paid off any credit cards this month? Or perhaps, this year? Comment below – I’d love to hear your story.
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