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Hi Everyone! Welcome to my Debt Progress Report.
This is a monthly blog series where I’ll document my credit card debt journey.
Why A Debt Progress Report?
You may be wondering why I would want to publish a progress report as opposed to an income report.
Well, this all started out as my way of embracing my debt. Initially, credit card debt was never an issue for me because I did not use credit cards. Due to recent events, I had to resort to using my credit cards and that’s why I’m in this predicament today.
I’ve decided to take a big step and be transparent about my expenses. I have debated whether or not to publish my progress report for the sole reason of being embarrassed. In order to share an accomplishment, I need to share the struggle and the path taken to achieve get there.
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.
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.
One Credit Card Down – Five More To Go
By applying the Snowball Method, I made the final payment on one credit card!!!! Woooo-Hooooo!!!
Breakdown of Credit Card #1
- Opened October 2016
- Initial Balance: $1,924.93
- Annual Fee: $0
- Annual Percentage Rate (APR): 26.99%
- Card opened under a credit card promotional period – 0% interest for 24 months.
- Minimum Payment: $46.94
- Paid Off One Month Before Promotional Period Expired
I’ll admit, this purchase was an impulse buy. As a “shopaholic” at the time, I just had to have this item and after the first few months, I felt the bare brunt of my decision. When you create a budget, be sure to ALWAYS differentiate your wants from your need needs. If you do this, I can guarantee that your spending pattern will change.
I paid off this debt – one month before the promotional period expired. I was excited about paying off this debt. However, I was equally excited about paying this off early and not having to pay $671.00 in deferred interest.
I have paid off one credit card, and I have four more to go.
Financial Goals for 2018
2018 is almost over and I have a few more goals that I’d like to accomplish before the year-end. My goals are:
- Pay off three cards before 12/31/18
- Start using the Cash Envelope Method
- Seek additional ways to earn additional income
What are your financial goals for 2018? Do you have credit card debt? Have you recently paid off any of your credit cards or financial debt? How did it make you feel? Feel free to share your experiences with me by commenting below.
