This month, I officially paid off the last of my credit card debt. I’m honestly a little embarrassed that I had any to begin with—I wasn’t all that careful with my money right after graduating because taking home a real paycheck was dizzying. I didn’t bother doing the math, and was pretty liberal to treating myself when I had a bad day and needed a pick-me-up. Or when I had a good day and needed to celebrate. Or really anytime I wanted something; I was a pro at coming up with excuses. Finally, when I got serious about budgeting just about a year ago (and subsequently fell down the FIRE rabbit hole), I was able to make real progress on tackling the beast.
Before the Budget
Little things added up. And some big things, like emergency vet bills that I wasn’t prepared for. And before I knew it, I couldn’t pay my card off in full every month. But it was okay! I had a 15-month promotional 0% APR, so I just needed to catch up before that ended! And then the debt slowly grew, and I had close to $7,000. Now I’m not really one to be laissez-faire about this sort of thing, so even before I formalized my budgeting plan, I had gotten that down to about $3,500. But that was still a lot.
Part of the problem was that I was dealing with depression for about a year, and it’s hard to drum up the motivation to make meaningful changes in your life when that’s going on. Suddenly, when I went back on medication for anxiety and depression, I had a “normal” amount of energy and motivation. So instead of using all of my willpower on showering, walking my dog, and generally presenting the façade of a healthy human being to the world, I had a surplus. And that surplus put me into a self-betterment overdrive; it was exhilarating.
Money Wake-Up
In July 2017, I got serious about several goals. One of them was improving my health—cooking at home more, getting more exercise, making more effort to build up a local group of friends. The other was financial—getting more serious about pursuing financial goals (and defining them, period), budgeting, and paying off debt. I knew that I wasn’t going to be able to get rid of $3,500 immediately, especially not if I was also saving up an emergency fund. So I did the math and decided to transfer the balance to one of my cards that had given me a promotional 0% APR on balance transfers for a flat 3% fee.
Yes, that cost me about $125, but that was way less than I was paying in interest. And this time, instead of letting that promotional period slip away from me while I kept spending, I put $300 a month toward the debt each month like clockwork. Any charges I put on the card got added on top of that so I would stay on track (the card is my main Visa, so I only use it when Amex isn’t accepted or if I’m overseas and don’t want to pay foreign exchange fees).
Well That’s Anti-Climatic.
You mean that fact that I could have pre-written this post months ago because I knew that I would be paying off my credit card debt promptly in June 2018? Why yes, yes it is. And I like it that way. This time last year, I felt like my money controlled me, and it was a Jekyll and Hyde kind of boss. Now, my money works for me. I have savings for major expenses that I anticipate, and plenty saved for those that are more of a surprise. I’ve upped my contributions to my 401(k), and I’ve started putting money aside for a down payment on my first home.
I could have dialed back some of those goals to pay the debt off faster. And I’ll admit that was an attractive option because I’m the kind of person that loves a reason to give myself a gold star. But I wasn’t in a rush because it wasn’t costing me anything after that initial transfer to take the debt pay-down slow and steady.
What’s Next?
Compared to this time last year, I’m in a much better place. Mentally, Physically, and Financially. I still have student loans to deal with—about $17,000 at this point, but I’m also okay with that staying on auto-pilot for awhile while I work toward other goals simultaneously. I automatically put a little extra a month toward the higher interest rate loans in that pile, but given that they’re all federal loans, none of the rates are egregiously high, so I can live with that.
Now? I’ve been spending quite a bit of time thinking about how to either lower my cost of living by moving to a cheaper area or raising my income. Figuring out how to do that is the problem! And while I don’t have the rush of that sudden return of energy that I had this time last year, I have enough bandwidth to get excited about new projects and ideas, which feels pretty damn good.
