My Debt….Journey out of Hell

I know there’s a saying that says if you find yourself in hell, just keep walking, because eventually you will get yourself out of it. The other day, I did something scary, but necessary. Except for my federal loans, I added up all of my debt. (The federal loans are just too overwhelming to grasp.) And here’s what the picture looks like (avert your eyes if you don’t want to be scared, or is it scarred, for life?!)

Tower Garden: $407.70
Capital One credit card: $2,651.65
Citibank credit card: $3,929.69
Auto Loan (through a credit union): $6,005.16
AES Loan (private student loan): $10,567.09

Grand Total (again, avert your eyes if you need to): $23,561.29

My gross income is just barely above that. As Dave Ramsey would say, I don’t have a debt problem, but an income problem. So I plan on trying to find a second job if I can. Or, finding a way to make money online. Some of you have given me good ideas in the past.

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Rio Grande River, as seen from the Tingley Beach open space area

I’ve also listened a lot to a podcast called Budgets and Cents. The “Budgets” part of the podcast is Cait Flanders, and she went on a shopping ban for one year. After the first year, she decided to continue it for a second year. During that time, she only bought essentials like food.She had a pair of jeans that ripped and she eventually had to replace them. When her one hoodie just got completely gross, she got another one, but only after months of looking for the perfect hoodie. It might seem a bit extreme, but it did help her to really appreciate the stuff she did have. I know it will help me too, even as I continue to get rid of stuff I have accumulated over the past year, but realize I really don’t need. Every dollar I save by not shopping for stuff, will go to the debt.

So, I’ve decided to do something similar. I’m not going to shop for things I don’t need. Just groceries for myself and for the furry ones, pretty much. And I am going to start checking out all the free things to do in Albuquerque. There are actually quite a few free museums that I can take a look at, ranging from the atomic bomb to meteorites! After all, part of the reason I moved to a city was to take advantage of amenities a city has, that a smaller town does not. I’ve already been checking out a lot of the free open public spaces and am really enjoying checking them all out with Morgan. We both get the fresh air and exercise we need.  So, occasionally, I may pay to go into a museum or some place like the Botanical Garden that does have an entrance fee. But I will space those out accordingly. I know if I don’t treat myself occasionally, this won’t work. I just have to remember, it’s ok to treat yourself, but in moderation.

I am going to keep my gym membership to Planet Fitness. It’s only $21/month and working out is once again, very important to me.  It all works together.  It’s helping my morale improve, and I am liking the way I look in the mirror, more.  Same thing with my running sneakers – if they wear out, I’m going to replace them. One thing I do know that it is worth spending money on is good sneakers if you want to run. Since my health insurance at my new job (once it kicks in, in January) has a high deductible, I need to focus on eating well, and staying healthy. Luckily, those are two things I already realize the importance of.

So, you will notice that up above, the debts are arranged in order from smallest to largest. I plan on paying off the tower garden first. I plan on taking a couple hundred out of savings, and then paying the rest out of my paychecks. (I’m not using it in this apartment since I heard that roaches like water, and well, it’s a hydroponic system. So I may try to sell it online.)  Then, the money I was paying to that every month (about $81) will go toward the Capital One card. I’ve found that gas here is cheaper than it was in Lake Powell (it was a tourist destination, so no surprise there), so whatever I budget for but don’t use per month, is going to go the debt payoff. I get paid $10 every month from  my credit union for having my checking account with them, having money directly deposited, and using my debit card a certain number of times. So, guess where that is going?!

I am paid way ahead (about 5 years) on that AES student loan, so I plan on making smaller than the full payments every month of $167.  It accrues about $27 in interest every month, so I plan on paying more than $27, but also paying it every two weeks, when I get paid. You see, student loans are different than other types of loans. The interest accrues daily. So while it may not seem like a lot, every little bit can help. It’s kind of like paying off your mortgage twice a month instead of just once a month. It shortens the loan time.  (I just paid $20 on it this morning.) The money that I am not paying toward the AES loan will go toward the Capital One card. That should help  a lot since the Capital One card has a higher interest rate.

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one of the few moments in which I could get Morgan to sit still on  our walk at Tingley Beach

The Citibank card is currently on a 0% interest rate, and I need to check to see when it ends. It was 21 months when I signed up, so I think I have another year or so. If that time comes up, and it’s not paid off (the likely scenario), then I will transfer it to another credit card which is giving 0% interest for a certain number of months. Then I will snowball what I had been paying on the Capital One card into the minimum payment on the Citibank card, and then on to the car, and then on to the AES loan at the end. The car loan has a low interest rate so a lot of my $142 monthly payment goes to paying off principal.

So yes, this is the snowball method. It’s different from picking the debt with the highest interest rate, but it does provide you with more “wins” and let’s face it, handling money is an emotional thing. If it wasn’t, we would all be millionaires, right?!

I’ve updated my direct deposit with my work – luckily, they allow you to put your paycheck into 5 different accounts! So from every paycheck, I will be saving for the annual or semi-annual bills that come up, like renter’s insurance, car insurance, etc. That way, when the bill comes due, the money is there. And I am also continuing to save to go to my brother’s wedding in Florida in May.

I watched this video earlier today via the His and Her Money youtube channel, and I was definitely inspired. This girl started out making $15K per year and she owed $25K on her student loans. She paid it off in about 3.5 years. I don’t know that she had some of the expenses I have, but if she can do  it, then I have no excuse to not even try on my end.

I will talk about the budget I have planned in a later post because this one has already gotten way too long!  But I wanted to get this post out there so that the few of you who read this blog regularly can be my accountability partners. I need people to know what is going on. (And thanks to those of you who do read it regularly, even though my posts have been somewhat sporadic lately.)

Finally, I will leave you with a picture of Baby O doing what she does best: sleeping. 🙂 Well, she snuggles pretty well too. LOL (She and Max are both snuggling up to me as I type away. There could be worse things in life than having two animals trying to love you at the same time.)

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my adorable baby girl, Baby O

As always, thanks for reading and please feel free to leave a comment or suggestion below. 

 

 

 

 

9 thoughts on “My Debt….Journey out of Hell

  1. Nice post Terri!! Take advantage of the free haircuts at your Planet Fitness. The guy at the front desk said they were one of only four planet fitness’s to offer that.

    • Gary, i’m going to now that I realized I have the black card! I thought i had the white card but found out I was wrong. I will definitely tip the person! And thanks, I’m glad you liked it! I want to “live like no one else!”

  2. Brave of you to call yourself out on your debt! Some habits that keep me on track and have worked for other people I know: 1.Tracking personal finances as if you’re doing it for a business ~ I use Mint.com 2.Envelope system-I started doing this when I went through Dave Ramsey’s course & continue today. 3.I have NEVER owned a new car nor have I financed a car. A car is one of your biggest expenses. 4.Stick to your budget. With the envelope system it’s pretty straight forward. When you’re paid, parcel out what goes to where for the month & STICK TO IT, NO cheating! ; ) 5.Create a home-based business/side gig. You can write off a portion of your rent/mortgage, utilities and other expenses. 6. Second hand shop for clothing/furniture. 7.No TV/cable bills since 1988. 8.Trade services. 9.Fix/mend, don’t replace. There are ‘Repair Cafe’s popping up all over. 9. Dog walking service. A friend started using an app. and got 2 very happy, well paying steady customers (outside of the app). 10.Clean houses/check in on a shut in/babysit 11.Tutor (you’d be great at this). That’s just a few . . . hope this helps a wee bit . . .

    • Darris, lots of great ideas! (I tried to write you back last night but it doesn’t seem like the comment went through from my phone.) I will NEVER pay for cable ever again. And right now, i’m not in a hurry to even pay for netflix. I have amazon prime and there are free online streaming things I can get through that. And what I can’t get there, I can get at the library. I’ve been thinking of doing dog walking actually – I would do overnight pet sitting but I don’t think my HERD would like to have anyone else staying with us, especially Morgan, who is very selective about her dog friends. (Read: she doesn’t like many.)

      You know, when I was in Boston, I didn’t have a car for the last few years but the mass transit was much better than here. If I move closer to work when my lease is up, then maybe I could bike to work. For right now, it’s just too far to bike.

      The only thing about the envelope system – I don’t think I would feel comfortable carrying a lot of cash on me around here.

      I have gotten rid of CC debt in the past – I just made a lot more money. So now I know I need to be more intentional with every decision I make. Do I want to spend a dollar on a candy bar? Or put it toward my credit card debt? Yep, CC will win! And I need to figure out what I can tutor people in.

  3. Hi Teri! Catching up on your blog. That amount of debt is not horrific!atvall. Not to me, anyway “-). How long will it take to finish the snowball? Sweet Baby O. Good to see him so snug and happy!

    • Oh no, the debt is horrific. It doesn’t include the over 100K I have in federal student loans. But those, I will be doing an income based repayment plan, so at the end of another 24 or 25 years, I will have whatever amount hasn’t been paid will be forgiven. So yeah, it’s bad!! 🙂 Glad you’re back!

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