Do you cringe when you think about your current debt ? What about when you think about how you will pay off your debt? I know I did Every. day. In this post I go over my debt update, the numbers and where I started & how its going.
Telling the world what my debt looks like seemed crazy at first, but now I see it as a way to help people to move forward with their debt and building generational wealth. If it wasn’t for the people that I followed on YouTube and Instagram, I wouldn’t have the urge to fix my financial situation and attempt to free myself from owing companies and paying them extra money in interest every month.
My debt journey started as soon as I was 18 years old. The day that I turned 18, I applied for a Bank Of America Credit card. The day that I received the card in the mail, It was used it to buy a brand new T.V. for my new duplex that I moved into. The T.V was $499 plus tax and my credit limit was $500.
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I literally put the $499 charge on the credit card and paid the tax with my debit card. It took me a month to pay off this credit, paying $250 every pay period. Eventually I paid off the TV, but I kept racking up the card every time I made a payment. I paid interest on this card every. single. month. for years. I cannot tell you how long exactly, but I can tell you that it was YEARS.
Just from reading the above paragraph, it’s safe to say that I struggled with money and debt.
Current Debt Update
I am proud to say that as of May 2021, I have successfully paid off ALL of my consumer debt. You read that right. I have no more revolving credit card debt tied to my name. The only debt that I currently still have is:
- Student Loan $2,225
- Car Loan $20,000
- Mortgage $200,000
Since February 2019, every single credit card used was paid in full every month. I use cards for points and cash back, however one of my credit cards (balance transfer card) that we were making monthly payments on from 2020 with no interest since we transferred our credit card balances to this credit card. I paid a total of $300 in fees within 18 months to payoff a little over $10,000 of debt. This debt was paid in full in February 2021 and It has been well worth the fee because the amount of interest that I saved over the course of 18 months was dramatically more.
Every other credit card was paid in full every month without paying any interest since I made the balance transfer equaling 24 months of no interest payments made to any creditor ! It’s a task trying to keep my emotional spending at a minimum, sometimes I just want to spend everything and charge every credit card. This is me just being honest, but I quickly realize where I came from and where I’m heading.
Where I started
My debt started with a little over $10,000 credit card debt for the second time. (Technically 3 if you count the very first time I paid off my credit cards (21 yrs old) only to reuse them the same month).
I had debt with every credit card company you can think of including Victoria Secret, Ashley furniture, and Capital One to name just a few.
Many of my credit cards on a monthly basis to pay for things that I technically didn’t need but wanted. I also put myself into debt because I was in the wrong relationships when I was younger but we can get into that in a later post.
My student loan was in deferment for as long as I can remember and I refused to pay any of it so I re-started paying the debt with a balance of $3,600. I didn’t have a car note nor a mortgage at this time.
Combined, my fiancé and I had approximately a $26,000 being credit cards & personal loans.
How we made a plan to destroy our debt
In the beginning of our paying off debt journey, it was hard. Hard to communicate Even harder to agree on every thing money related. I refused to give up and I kept at it until I could figure out what worked for him and I. If you would like a thorough explanation, check out my piece with CNBC Here.
To sum it up quickly, here are the steps I took to get through paying down debt with my fiance:
- Setting up dates to budget and review our finances
- Setting goals on a monthly basis and striving to reach them as best we can
- Giving ourselves discretionary money so we didn’t feel like we were struggling
- Reviewing any mishaps and setting a plan for future occurrences
- Giving each other grace, it’s not going to be perfect every time!
- Setting up a Zero based budget and using budgeting sheets every. single. time. we have money deposited into our accounts. You can check out the budget planner I created & use every week here.
- Checking in weekly to see our debt update and if any changes need to happen.
- Continued to look toward WHY we were doing this in the first place.
My Current Plan for my finances
Since I am not interested in paying off any of the debt that I have now in full fast, I have different goals for my money.
- Investing toward my Roth IRA Hopefully hitting the max every year from now on
- Adding toward my emergency fund Yes, more….
- Saving toward more sinking funds You cannot have enough of these
- Saving for home improvements Bring on the landscaping and the home inspo
- Investing in my education and skills You can never have enough certifications
- Giving back to my community I can finally do this now !
- Investing into future projects/businesses Entrepreneurship and all things boss lady
Having the freedom to choose where my money is going feels so liberating. I am no longer a slave to the lender and I now choose where my money goes. I am finally free! This debt update has been literally on my mind for weeks!
To summarize, I started accumulating debt at a young age and It destroyed my ability to create wealth starting at a young. I made so many stupid decisions with my money & I am so grateful for finding the debt free community because I don’t think I would have started to focus on my financial journey if I didn’t find it. I realized a change needed to happen, I paid off every credit card & now I am moving forward to create generational wealth.
