This month marks a big achievement for me. My savings balance is now larger than my debt! Now it's only about $800 more than my debt but it's a step in the right direction. I don't include my mortgage when talking about debt and you may think that should be included, but I don't and I'll tell you why. First, my mortgage is good debt, it has an associated asset and I bought my place in a short sale a little over a year ago and I now have equity in my home. Second, I live in Washington DC and I live in a 2 bedroom condo that I own for about $30 more a month (that includes mortgage+condo fee+real estate taxes) than my rent was for a 450 square foot 1 bedroom apartment.
I have been obsessed about paying off my debt, I am constantly reviewing my spreadsheets seeing if there is a way to pay it all off a little faster. This week I decided to take $1500 from my savings account since I have more savings than debt and pay off a chunk of debt. So after that payment clears the bank I will have $5000 in savings and I will have $4200 left in debt payments. I'll be done by June 2011 and that will be a huge relief.
Friday, July 23, 2010
Monday, April 19, 2010
Debt Sucks!
3 years ago, I was in $20,000 of credit card debt. Over the last three years I have paid off about $12,000 of that. I wish I could say that there was some quick fix and that I found a way to be rich on the internet, but that has not been the case. These are the ways that I have helped myself.
1) Created a budget.
2) I put away the credit cards. It was harder than I thought it would be, but ultimately paying cash made sure I didn't overspend and I haven't accrued any new debt.
3) Made sure that I had some money for myself every month. Paying off debt quickly is great, but you can't do nothing, and having some money in your pocket every month for drinks with friends, a movie, dinner out, or something you want makes life better. I work off of the 50-30-20. Since I'm in debt, I use 50% of my paycheck for necessaties, 20% for my monthly fun, and 30% for debt/savings.
4) I took out a loan and consolidated some of my high interest credit card debt, which took my interest rates down.
It is a difficult road and there are no quick fixes, but I have about $7600 left and I'll let you know how it goes.
1) Created a budget.
2) I put away the credit cards. It was harder than I thought it would be, but ultimately paying cash made sure I didn't overspend and I haven't accrued any new debt.
3) Made sure that I had some money for myself every month. Paying off debt quickly is great, but you can't do nothing, and having some money in your pocket every month for drinks with friends, a movie, dinner out, or something you want makes life better. I work off of the 50-30-20. Since I'm in debt, I use 50% of my paycheck for necessaties, 20% for my monthly fun, and 30% for debt/savings.
4) I took out a loan and consolidated some of my high interest credit card debt, which took my interest rates down.
It is a difficult road and there are no quick fixes, but I have about $7600 left and I'll let you know how it goes.
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