Tag Archives: credit card debt

Debt is Not Forever

#DebtIsNotForever is a month long campaign that Jackie over at The Debt Myth has started. I'm cutting it real close with this one, but a lot of my fellow pf bloggers have joined in on this movement and I don't want to miss it!

Debt is Not Forever

When I think of my debt, I get overwhelmed. A lot of the time, I feel like I’m literally drowning in my debt.

My credit card debt still exists, even though I’ve paid it off “for good” several times already.

My student loans are slowing taking my money each month and they’re sticking around for much longer than I wanted them to.

My car loan is not so slowly draining my account each month and it has me locked in for another 3 years.

And please, don’t get me started on my mortgage.

Debt is Not Forever

Pay days are easily the most bittersweet days of the month for me. Sweet, because I’m so happy to see what I’ve earned. I work hard every day at my job and it’s nice to see the real rewards. Bitter, because the money doesn’t sit in my own bank account for too long before it gets sent away to my debts.

This cycle happens every 15th and last day of the month, and it’s a real rollercoaster of emotions for me. At the end of pay day, I’m mentally exhausted and exasperated. I literally feel like I’m drowning and I’m barely staying afloat.

But that’s the thing. I feel like I’m drowning, but the reality is – I’m staying afloat. The light at the end of the tunnel is so incredibly tiny at this point. But the great thing is that the end is there.

I may feel like I’m drowning now. But I know that there will be a day where I’ll be out of the water, lounging on a beach, sipping my Mai Tai, and basking in debt freedom.

I’ve stopped saving for my wedding. I’ve cut back considerably on eating out and entertainment expenses. Sacrifices have to be made in order for me to get out of debt for good. Whenever I feel like it’s too much to give up, I remind myself of how freaking good it will feel when that first pay day comes around and there’s no one left to pay but myself.

Whenever I feel like I’m drowning, I close my eyes and tell myself:

Let’s be realistic – the end of my debt is not near. But the end definitely exists. My debt is not forever!

And all of a sudden, I’m overcome with relief and motivation to keep on keepin’ on.

Debt is not forever, my friends.

How are you doing on your debt journey? What motivates you to keep on fighting?

AMDG,
Lisa

The Year of Less Debt

At the beginning of the year, I declared 2015: The Year of Less. Throughout the year, I'll be sharing what exactly that entails and how I'm executing the idea and mantra of less in my day to day life.

Year of Less: Debt

I had to start the series with this one. After all, this is a pf blog!

When I decided that this year would be The Year of Less, my debt immediately came to mind.

As you may or may not know, I started this blog as I just climbed out of credit card debt for the first time. I’ve since fallen in and out of credit card debt and it’s frustrating to say the least.

Not to mention all the other debt I have. Credit card debt… student loans… car loan… mortgage… oh my!

Year of Less Debt

Current Debt Breakdown

As of the end of 2014, here is what my debt looks like:

Debt Breakdown

All in all, my debt amounts to $308,598.

Holy. Guacamole.

Game Plan

I don’t really have a set number that I want my total debt to be at by the end of the year. The Year of Less means less focus on end goals and more focus on habits and ongoing changes that need to be made. With that being said, this is what I hope The Year of Less will bring to my debt.

Credit card debt: eliminate completely

That’s right. I’m sick of focusing on my credit card debt and I’m sure you all are tired of hearing about it. 2015 is the year where I get rid of my credit card debt for good. I’ve even stopped saving for my wedding so I can focus on annihilating my CC debt!

Student loans: slightly overpay every month

My original goal when I first started this blog was to pay off all of my student loans by December 2015Oh, I was so naive. Now, being at the start of 2015, I know that this goal just isn’t realistic. Not only am I still battling high-interest credit card debt, I’ve got a wedding to pay for! So, the game plan for this particular debt is to pay the minimum payment each month PLUS I’ve rounded up to the nearest $100 increment. That’s it.

I know, it’s a little disappointing that this debt won’t get paid off according to my original goal. But I’m not too worried. I don’t have any private loans, so the interest on these bad boys is pretty low. Letting go of the original accelerated payoff goal means less stress, too.

Car loan: minimum monthly payment

Although my monthly car payment isn’t exactly small, the interest on it is. I don’t mind paying the minimum on this for this year. I do plan on accelerating the pay off sometime after the wedding, but for this year, minimum is the way to go.

Mortgage: minimum monthly payment with occasional overpayments

My real estate agent did a wonderful job in locking us in at an incredible rate, so I’m not exactly in a rush to pay off this debt. So for the most part, the minimum monthly payment will do.

As far as the occasional overpayments go – my mom, brother, auntie, and I all split the mortgage and house bills. Every month, I pay the minimum on the mortgage as well as make sure all of our bills are paid on time. Since the house bills are on different cycles and are slightly different each month and quarter, there are some months where we have an overage of funds. When we have extra in the pool, I throw it straight to principal.

Less debt = more freedom

When you focus on less, you make room for more. So what does less debt mean for me? Less debt means more freedom. More specifically for 2015 – less debt means more freedom to put my money toward my wedding savings.

In the long run, I want to be completely debt free. Who doesn’t? When that glorious day comes, I’ll be more free not only from credit card companies, but also my student loan servicers and mortgage company. When I no longer have monthly payments to others, I am free to finally pay myself more and even give more to others.

That’s the end goal of all of this. That’s why I want to focus on less debt in 2015 and in all years to come after that.

What are you doing in terms of your own debt? What does less debt mean to you?

AMDG,
Lisa

December 2014 Net Worth Update

My last 2014 net worth update! Here we go…

December 2014

Net Worth as of December 31, 2014: $219,634

Overall, my net worth increased by $3,654 this month!

Assets

Cash: $3,302 [up $1,716]

This category always fluctuates and this month was no different. This is probably one of the biggest increases in cash, mostly because my auntie gave me two month’s worth of her mortgage payment at once. I mentioned before that my mom and auntie will be gone for a while (until the middle of February to be exact) so my auntie gave me her money in advance. I’ll take it!

Short Term Savings: $2,050 [up $21]

This consists of:

Emergency fund – $1,005 [up $1]
Personal Escrow account – $41 [up $21]
Wedding fund – $1,004 [up 1]

I keep most of my short term savings accounts over at Capital One 360 so I can look at all of my savings in one place. My wedding fund stayed practically the same (except for the dollar I gained in interest – woohoo!) since I’ve vowed to stop saving for my wedding until my credit card debt was gone. The increase in $20 came from my monthly contribution to my personal escrow account.

Retirement Savings: $27,657 [up $546]

This consists of:

401k – $1,828 [up $303]
Traditional IRA – $8,745 [down $52]
Roth IRA – $17,084 [up $296]

I successfully fully funded my Roth IRA by year end. I know you can make 2014 contributions in the first few months of 2015, but I personally wanted to do all of my 2014 contributions in 2014. Other than the small decrease in my Traditional IRA, I’m very satisfied with my retirement accounts.

Est. Car Value: $16,225 [no change]

Self explanatory.

Est. Home Value: $479,000 [no change]

Self explanatory.

Liabilities

Credit Cards: $3,694 [down $428]

This consists of:

Discover @ 15.99% – $693.96
Wells Fargo @ 0.00% – $3,000.00

This is the first time I’m showing the breakdown of my credit card debt. I figured the more transparent I am, the more I can hold myself accountable. I mentioned in a previous post that I recently did a balance transfer to a 0.00% credit card. Of course, the 0.00% rate doesn’t last forever – it goes up to a whopping 22.15% in 15 months! Don’t worry, I plan on paying it all off before I even get to that point.

Student Loans: $15,033 [down $127]

This consists of:

Group A – Direct Subsidized @ 6.8% – $2,917 [down $15]
Group B – Direct Subsidized @ 6.0% – $3,717 [down $19]
Group C – Direct Subsidized @ 5.6% – $4,524 [down $25]
Group D – Direct Subsidized @ 4.5% – $2,235 [down $13]
Group E – Direct Unsubsidized @ 6.8% – $1,640 [down $54]

Solid, solid progress on these loans. As long as I have credit card debt and as long as I have a wedding to plan for, these aren’t exactly a priority right now. But I’m still throwing $200 each month to these.

Car Loan: $16,865 [down $331]

Pretty solid progress considering I pay the minimum on this loan. There’s really nothing new to report on this front.

Mortgage: $273,006 [down $484]

Same as above – I pay the minimum on this. Nothing new to report on this front either.

Overall, December was a fantastic month for me! I love seeing all these greens!

How was December for you?

AMDG,
Lisa

I’ve Stopped Saving Money For My Wedding

Don’t worry, it’s not what you think folks!

In my last post, I shared that I was almost done with blogging.

It’s tough having all of your financial decisions – mistakes and all – out in public. I know that constructive criticism is good, but sometimes it doesn’t feel too good.

With that being said, I’ve received a ton of support, from both my real life friends and online friends. I just wanted to start off by saying thank you to those who reached out to me and commented. It really means a lot to me. Ultimately, although it’s tough, I’ve decided to continue to blog throughout this journey of mine.

I’m a struggling debt blogger, and this is my story. Warts and all. I’m open to any (constructive) criticisms and advice. Heck, that’s why I’m blogging in the first place! To show the real struggle of someone who is constantly fighting the urge to swipe.

Don’t worry – just because I’ve resolved to keep blogging through my debt doesn’t mean I don’t have a plan to get out of it fast! Here are a few ways I’m handling my credit card debt.

0% Balance Transfer

My main credit card has an interest rate of 15.99%. Yikes! I knew I had to take care of that soon. Even if I vowed to never swipe my card ever again *cough see next step cough*, that interest rate is making my debt grow faster than my savings!

I’ve mentioned before that The Fiance works at a big bank and he hooked me up with someone who helped find a 0% introductory rate on a credit card. I know, this isn’t a long term solution. But I got to transfer about $3,000.00 to this new rate for I think 12 months (okay, I should double check that) which basically buys me some time. This way, my debt isn’t growing as fast as it was before and I can focus on tackling the high interest cards for the first few months.

Swiper, No Swiping

Yes, I’ve put myself on an indefinite swiping ban with my main credit card. Finally. Not only did most of the balance get transferred to the 0% card, but now I’m vowing to not add anymore debt to the card at all!

This ban has been a long time coming. I was avoiding this step mostly because I always felt like I just needed to swipe once in awhile. But really, I was just giving myself an excuse to lose control.

I’ve Stopped Saving For My Wedding

Okay, more like paused. But yes, it’s true. Don’t worry, The Fiance and I have talked about this. Every month, I throw about $1,000.00 to my growing credit card debt and about $500.00 to my wedding. Now that my credit card debt is growing at a much slower rate, and add in the new swiping ban I imposed on myself, $1,500.00 a month toward credit card debt will do more damage than $1,000.00 a month will do.

Don’t worry, I plan on saving for my wedding eventually! This is another reason why I gave myself this ultimatum of paying down debt before saving – I want to save for the wedding, so this will make me want to pay off my credit card debt faster!

Also, my wedding isn’t until February 2016. We’ve already booked a couple of vendors for pretty damn cheap and although we haven’t asked for help, we’ve received a ton of generous offers. I’ll be going into how we plan to budget for our wedding in a future post

I know, that last one might sound extreme. I literally sat up in bed in the middle of some random night and exclaimed (to no one), I want to stop saving money for my wedding!“. Crazy, I know! But The Fiance and I know just how much my credit card debt stresses me out – much more than how much wedding planning is stressing me out – so we both agreed that I just had to tackle the debt first.

What do you guys think? Do you think I’m being too hard on myself? What did you sacrifice when you were paying off your credit card debt?

AMDG,
Lisa

November 2014 Net Worth Update

Since my December 2014 net worth update will technically be up in the beginning of January 2015, this will be my last net worth update for 2014! Crazy.

November 2014 Net Worth Update

Net Worth as of November 30, 2014: $215,980

Overall, my net worth increased by $1,600 this month 🙂

Cash: $1,585 [up $66]

Nothing too eventful in this department, since this category seems to fluctuate every month.

Short Term Savings: $2,029 [up $122]

This consists of:

Emergency fund – $1,004
Personal escrow – $20
Wedding fund – $1,002

My personal escrow account is something new I just opened up. I will be writing a post about what it is in the near future. In the meantime, I’m slowly socking away money in my wedding fund.

Retirement Savings: $27,110 [up $892]

This consists of:

401k – $1,525
Traditional IRA – $8,797
Roth IRA – $16,788

Oh baby! I only contribute about $530 to this category, so the rest of it was pure gains baby! Seriously – seeing my money grow without me really thinking about it never gets old!

Est. Car Value: $16,225 [down $17]

It’s been 2 years since I purchased my Honda Accord. The value keeps going down, but at least this decrease wasn’t as big as the last one.

Est. Home Value: $479,000 [no change]

Self explanatory.

Credit Cards: $4,122 [up $411]

*Sigh* Terrible. I know. Christmas shopping definitely does not help. The Fiance and I plan to share a Christmas list, similar to what we did last year. Hopefully that will help keep the costs down. I’m also considering making some of the gifts myself. All in all – I have no excuse. My retail addict self is up to no good and I’m torn.

Student Loans: $15,160 [down $131]

This consists of:

Group A – Direct Subsidized @ 6.8% – $2,932
Group B – Direct Subsidized @ 6.0% – $3,736
Group C – Direct Subsidized @ 5.6% – $4,549
Group D – Direct Subsidized @ 4.5% – $2,248
Group E – Direct Unsubsidized @ 6.8% – $1,694

Solid progress on these bad boys this month! This is the first time I’m actually providing a breakdown of my loans. As you can see, I have 5 loans, all under the same provider. I’m throwing about $200 each month to this and I’m paying them down using the snowball method – minimums on everything and any excess to the loan with the smallest balance, which is Group E, the unsubsidized loan.

Car Loan: $17,197 [down $333]

Nothing new – slow and steady for this loan until everything else is cleared out of the way.

Mortgage: $273,491 [down $483]

Same as the car loan – slow and steady for a while… but progress is progress!

Overall, a great increase. Yet that damn credit card debt that I keep adding to is still haunting me. I need one of these:

How did you do in November?

AMDG,
Lisa