Tuesday, October 28, 2008

Getting out of Debt

One of the biggest goals on my list is to pay down at least 50% of my credit card debt. This would be a heck of a lot easier if I had a full-time job, but if I wait for conditions to be ideal I'll drowning in debt.

The course of action I've chosen to take is three-fold. First, stop using my credit cards. Second, pay as much as possible on every card each month. Third, full disclosure.

Stop using my credit cards: I stopped using the cards about a month ago. It's been a very difficult adjustment because since grad school I'd been using them for things like gas and groceries, so now trying to budget those items impacts my entire family.

Pay off as much as possible each month: I've been paying about $800 a month on three different accounts. Two of them have a 0% rate, so I see a noticeable decrease every month. The third card is my "working card", the one I was using {daily} and it has an interest rate of 12%. As credit offers come in I transfer balances off this card onto lower rate cards.

Full disclosure: There are mixed thoughts about this step, but I think it's good for two reasons. It helps me to stay honest about my spending and it opens dialog with others about spending. Credit debt can be a shameful thing, the more open I am about it the more likely I am to receive encouragement to war against it. My current total debt is $35,436.66. A year ago it was $21,322.64. As of today I have 783 days to pay down $17,718.33. That's a little over 2 years and if I continue to pay $800 per month I can pay off $19,200 in that time, that should cover finance charges as well.

I'll let you know how it's going.


santina said...

Here's some full disclosure for you. I completely understand your debt because I'm in $53,158.58. Together we will beat the system!

mathcutie said...

Ooh! You're winning!

santina said...

I don't know if "winning" is the word I would use.

Arlene said...

Hey Naomi!

glad you got the steps figured out. Part of the reason for my part time gig is to help pay off mine. I don't owe much, but with the economy the way it is we don't get steady pay and it gets burdensome.

I hope you're successful!

Newburgh Restoriation said...

Wow, I'm kinda in the same situation, but not that much. Even though I had low tuition, my credit cards should be included in the tuition debt.