I’ve been wanting to write this post for a couple of months. It seems like something I should have started writing when we actually started saving and paying off our credit card debt. But at the time, we were still figuring out how to do it, experimenting, and engaging in perpetual planning and calculation.
I’ve also been trying to figure out how to write about it without it sounding like those gimmicky, unrealistic articles I hate. You know–the ones that promise a step-by-step plan to erase your debt. It doesn’t do any good to try and tell others how to erase their debt when nobody has the exact same resources to work with.
This is why I titled this post the way I did–this is the story of how I (or rather, we) paid off $10K in six months. Because if I learned anything in this process, it’s that nobody’s debt is the same, nobody’s life situation is the same, and no matter who you are, there is absolutely nothing easy about this.
I’m going to preface the rest of this by stating that $10K was the total amount of our credit card debt and not student loan debt (that’s a story for another day and more along the lines of indentured servitude). In the ultimate irony, the majority of our credit card debt actually originated from the expenses associated with moving out of state to begin better jobs.
We both did find better jobs, with much better pay, but anyone who utters the phrases, “Just get a job” or “Just move” must live under a rock. Bachelor’s degrees might as well be high school diplomas and Master’s degrees are the new Bachelor’s. Now, you have to be creative and also find ways to supplement your existing income to make financial headway. Both of these approaches take creativity, ingenuity, and PATIENCE.
Once we both gained stable employment, we had to create a budget together that worked for our life and was consistent with our goals. If you’re embarking on this journey with another person, you both MUST be on the same page. If you both don’t have the same financial goals, things can go south pretty quickly. Make a plan together and encourage one another to stick to it.
Our first order of business was to pay off our combined credit card debt as quickly as possible. Credit cards are usually high-interest, which is a complete waste of money if you’re not paying them off in a timely manner.
We made a list of our necessary expenses, which included: Rent, utilities (electric, gas, and water), one car payment, internet, cell phones, and Netflix. After designating funds to those, we divided the remainder into groceries, gas, savings, and credit card payoff.
This seems like a lot of stuff on paper, but there are ways to minimize your bills and make a few of them more manageable. Before deciding to be more aggressive in our debt payoff, we were putting a couple hundred dollars in savings every two weeks. This is always a good idea and I encourage building an emergency fund, no matter how much. When we switched to a more aggressive payoff, we didn’t touch our savings so we wouldn’t be in crisis during an emergency. That being said, here’s how those six months played out:
Total credit card debt:
$10,420 across 3 credit cards
Weapons of choice:
2 incomes, 1 budget, and a perpetually evolving plan
Month 1: November–$384 paid
At this point, we were just beginning our journey. I finally secured a new job and we could seriously plan our debt payoff. We were splitting our remaining income between this and savings. Even though our distribution eventually changed, like I said, I always recommend saving and working toward a good emergency fund.
Month 2: December–$1,534 paid
This is where our plan changed slightly. After much calculating (on Stuart’s part more than mine), we realized that aggressively targeting our credit card debt would allow us to be (credit card) debt free by April of 2016. This was a major turning point because we didn’t even realize this was a possibility until December. With high-interest credit cards paid off, we could then focus on paying off one private student loan, saving for a house, investing, or whatever else we wanted to do financially.
Month 3: January–$1,575 paid
I never realized it until I began outlining this post, but we consistently increased our credit card payments each month. This was especially surprising in January because we traveled over Christmas and I was sure that would’ve set us back a little bit. But it could’ve been due to the fact that paying down those credit cards in giant chunks was extremely motivational. Seeing those numbers shrink was empowering and every week we couldn’t wait until the next pay day so that number would shrink even more.
Month 4: February–$1,899 paid
Conveniently, one thing that helped us save money was our hardcore fitness routine. We stopped buying so much (or any) craft beer at the bottle shop by our house and going out to eat every Friday (which also included craft beer). We also decided to invest in a home gym rather than continuing to pay a monthly gym fee. It wasn’t cheap, but with our ever-evolving plan, it was possible. Now we won’t ever have to pay a gym fee again and we can work out whenever and however we want.
Month 5: March–$2,195 paid
Did I mention we were planning a wedding and honeymoon while all of this was going on? Photographer, reception venue/food, and a honeymoon. The end. You could count my dress and his suit, but they came from Mod Cloth and a Men’s Warehouse sale. And we looked ballerrrrrrrr… We saved the receipt from the reception to put in our wedding album because we were damn proud of that feat of frugality. All I have to say is, our best decision was scheduling the reception for 4PM at an awesome local brewery because, yes, they will give you Happy Hour drink prices. NEALIS FOR THE WIN.
Month 6: April–$2,833 paid
Honestly, the only reason it took until the middle of April to pay the rest of our credit cards off was because we used them on the honeymoon cruise.
Neither of us could believe it when we made that final payment and there was a zero balance on every card we had (one of which had been closed since before we moved). All that work budgeting, saving, scrimping, and pinching had finally paid off. Literally. But you know what? We didn’t feel like we missed out on much during the last six months.
We still made time to do fun things that didn’t require money, and those that did, we planned them out and made smart decisions so we didn’t sabotage ourselves. This isn’t to say there weren’t slip-ups or unforeseen expenses, but having budgeted so well, they were easier to recover from. It’s like losing weight, you don’t throw in the towel just because you cave and eat a donut. In this case, just because you decide you deserve a fun night out, you don’t just stop paying off your debt. When you begin the journey, it feels like there’s no end in sight. But if you stay patient and trust your plan, you will feel a rush of freedom once you reach the finish line.
We are by no means at the finish line, but the credit card battle is over and that is always something to celebrate. In the coming weeks, I’ll be recapping how we created our budget, ways we were able to save money on our monthly bills, and even plan a wedding while aggressively paying off our debt.
Are you in the midst of debt payoff or just deciding how to begin? What are some ways y’all save money on everyday expenses?