The Bride Goes to Credit Camp
It is almost the end of July, 2020, and I am going to credit camp.
Though this blog will remain private for a period of time, I intend to eventually make it public once I have tracked some of my successes and documented the beginnings of my journey to financial freedom. I am one year away from graduating with my MSN and getting married, and it is time to finally buckle down and take control of my finances.
I remember when I first put a large charge on my credit card with no intentions to pay it off right away. It was the summer of 2016, and I treated myself to not one but two Michele diamond watches on a 0% APR credit card. I had 18 months of no interest on new purchases. I will disclose that my ex-significant other was no king of money consciousness, and lived paycheck to paycheck with many impulsive purchases in between. Though I had previously embraced a debt-free lifestyle and taken much pride in a bulky savings account and $0.00 balances on my credit cards, I slowly became more lax about paying balances off.
And that is when I began to fall into the hole.
Around the same time, I revamped my blog, a hobby I was quite fond of during college. I made a decent amount of change having sponsors post their ad on my blog. It was something I enjoyed, and I was lucky to have been so successful with something at the time. However, social media had changed the way blogging and influencing worked during my “break,” and instead of having items provided to me to review, I felt the need to constantly make new purchases in order to provide my audience with exciting and refreshing content. I began to open up new cards in order to make new purchases, and over the course of a few years, I had the following cards with nearly maxed out balances: Discover iT, Citibank, Chase Freedom, Chase Slate, PayPal Credit, and American Express. The interest rates on these cards were up to 25%. To make matters worse, I took out an Upstart loan (also with a 25% interest rate) for $20,000 with the intent to pay off the balances on some of the cards. Instead, I spent some of the money, paid, down a few of the cards, and ended up maxing them out over the course of another few months. Keep in mind, I was also taking out loans for graduate school (and more than I needed, at that), and paying off a new car after my lease ended.
It became clear to me that I had a spending problem. I have anxiety and depression, and my impulsive spending habits often allowed me to put a “band-aid” on the emotional agony and discontent I harbored on a daily basis. Combine this with the fact that I work full time, live on my own, and am in two graduate programs, and you have found the recipe for a financial and emotional trainwreck.
After my mom died, I continued to spend impulsively. It wasn’t until I got engaged that I realized my spending was no longer about me-it was about to involve someone else. I make a decent living more myself and that is how I maintained this spending track record for so long. I had easy access to overtime, and often used one of three excuses to justify my spending:
1. I will pay it off later.
2. This purchase will make me happy, even if I cannot pay for it in full right now.
3. I should buy what I want before I get married and have kids.
Suddenly, option #3 no longer sounded so far away. If I was going to end up helping tackle my fiancé’s student loan debt as well as my own, I first needed to deal with my own issues.
I began my starting a debt tracking binder, and have been using it for 3 months (May, June, July 2020) up until this point. I have a much better idea of where my money is going, my monthly expenses, my spending habits, and my minimum payments for every account. I broke the binder down into multiple sections, including a debt tracker, monthly expenses, and a reflection section. I have found that the reflection section has allowed me to take a look at some of the “cold hard truths” I previously did not want to concretely examine. My little purchases on things I did not need (mostly clothes) added up to $500+ each month. My monthly expenses totaled around $1,500. So, aside from my monthly payments for these accounts, where was all of my money going?
Interest, and haphazard payments. There was no coordination to any of my budgeting, and I casually threw chunks of money at different accounts without previously paying any attention to interest rates on different accounts, not to mention the balances. Physically reviewing and writing down the successes and failures of budgeting each month enabled me to get to the root of the problem and make an appropriate action plan to begin tackling my debt once and for all.
Last week, I paid off a $1,300 balance on my Chase Slate card. That is the first credit card to have a $0.00 balance in years. I honestly don’t think it had a zero balance since when I first opened the card, around 2016 or 2017. It felt liberating, and I was able to finally see that this debt spiral really did not have to go on forever. Now that I was paying for a wedding, it was frustrating to think that all of my spare change could no longer go toward debt now that I had made an aggressive plan to attack it; however, this was a hole I dug for myself and the least I could do was document it so that others can see it is possible to get out of debt. As of this moment, I am a single working woman, which should also provide some reassurance to others that it is possible to do this even with one income.
Using a debt reduction calculator, I am currently looking at $58,786.09 in debt and $17,339.75 in interest if minimum payments are made from now until March 2023, my prospective payoff date using the Avalanche method (highest interest first). If I use the snowball method, I will end up paying $18,038.38. I should also note that this is not including my student loan debt, which is currently estimated around $45,000. (I will cross that bridge when I am done paying off this other debt, which is around the same time I should graduate with my DNP and will need to begin paying off my loans). If I come across chunks of extra change between now and then, I will use it towards the next balance I am trying to pay off in hopes of paying this down sooner than later. However, my fiancé and I will eventually need to purchase a home, build a savings, and have a life.
Though this blog will remain private for a period of time, I intend to eventually make it public once I have tracked some of my successes and documented the beginnings of my journey to financial freedom. I am one year away from graduating with my MSN and getting married, and it is time to finally buckle down and take control of my finances.
I remember when I first put a large charge on my credit card with no intentions to pay it off right away. It was the summer of 2016, and I treated myself to not one but two Michele diamond watches on a 0% APR credit card. I had 18 months of no interest on new purchases. I will disclose that my ex-significant other was no king of money consciousness, and lived paycheck to paycheck with many impulsive purchases in between. Though I had previously embraced a debt-free lifestyle and taken much pride in a bulky savings account and $0.00 balances on my credit cards, I slowly became more lax about paying balances off.
And that is when I began to fall into the hole.
Around the same time, I revamped my blog, a hobby I was quite fond of during college. I made a decent amount of change having sponsors post their ad on my blog. It was something I enjoyed, and I was lucky to have been so successful with something at the time. However, social media had changed the way blogging and influencing worked during my “break,” and instead of having items provided to me to review, I felt the need to constantly make new purchases in order to provide my audience with exciting and refreshing content. I began to open up new cards in order to make new purchases, and over the course of a few years, I had the following cards with nearly maxed out balances: Discover iT, Citibank, Chase Freedom, Chase Slate, PayPal Credit, and American Express. The interest rates on these cards were up to 25%. To make matters worse, I took out an Upstart loan (also with a 25% interest rate) for $20,000 with the intent to pay off the balances on some of the cards. Instead, I spent some of the money, paid, down a few of the cards, and ended up maxing them out over the course of another few months. Keep in mind, I was also taking out loans for graduate school (and more than I needed, at that), and paying off a new car after my lease ended.
It became clear to me that I had a spending problem. I have anxiety and depression, and my impulsive spending habits often allowed me to put a “band-aid” on the emotional agony and discontent I harbored on a daily basis. Combine this with the fact that I work full time, live on my own, and am in two graduate programs, and you have found the recipe for a financial and emotional trainwreck.
After my mom died, I continued to spend impulsively. It wasn’t until I got engaged that I realized my spending was no longer about me-it was about to involve someone else. I make a decent living more myself and that is how I maintained this spending track record for so long. I had easy access to overtime, and often used one of three excuses to justify my spending:
1. I will pay it off later.
2. This purchase will make me happy, even if I cannot pay for it in full right now.
3. I should buy what I want before I get married and have kids.
Suddenly, option #3 no longer sounded so far away. If I was going to end up helping tackle my fiancé’s student loan debt as well as my own, I first needed to deal with my own issues.
I began my starting a debt tracking binder, and have been using it for 3 months (May, June, July 2020) up until this point. I have a much better idea of where my money is going, my monthly expenses, my spending habits, and my minimum payments for every account. I broke the binder down into multiple sections, including a debt tracker, monthly expenses, and a reflection section. I have found that the reflection section has allowed me to take a look at some of the “cold hard truths” I previously did not want to concretely examine. My little purchases on things I did not need (mostly clothes) added up to $500+ each month. My monthly expenses totaled around $1,500. So, aside from my monthly payments for these accounts, where was all of my money going?
Interest, and haphazard payments. There was no coordination to any of my budgeting, and I casually threw chunks of money at different accounts without previously paying any attention to interest rates on different accounts, not to mention the balances. Physically reviewing and writing down the successes and failures of budgeting each month enabled me to get to the root of the problem and make an appropriate action plan to begin tackling my debt once and for all.
Last week, I paid off a $1,300 balance on my Chase Slate card. That is the first credit card to have a $0.00 balance in years. I honestly don’t think it had a zero balance since when I first opened the card, around 2016 or 2017. It felt liberating, and I was able to finally see that this debt spiral really did not have to go on forever. Now that I was paying for a wedding, it was frustrating to think that all of my spare change could no longer go toward debt now that I had made an aggressive plan to attack it; however, this was a hole I dug for myself and the least I could do was document it so that others can see it is possible to get out of debt. As of this moment, I am a single working woman, which should also provide some reassurance to others that it is possible to do this even with one income.
Using a debt reduction calculator, I am currently looking at $58,786.09 in debt and $17,339.75 in interest if minimum payments are made from now until March 2023, my prospective payoff date using the Avalanche method (highest interest first). If I use the snowball method, I will end up paying $18,038.38. I should also note that this is not including my student loan debt, which is currently estimated around $45,000. (I will cross that bridge when I am done paying off this other debt, which is around the same time I should graduate with my DNP and will need to begin paying off my loans). If I come across chunks of extra change between now and then, I will use it towards the next balance I am trying to pay off in hopes of paying this down sooner than later. However, my fiancé and I will eventually need to purchase a home, build a savings, and have a life.
Above is the debt reduction calculator template edited with my information, originally taken from Vertex42.com. I truly have no idea how many thousands of dollars in interest I have paid to date, but all I can do now is look forward. I am going to be using the Dave Ramsey Avalanche method to attack this debt from the top down, taking out the highest interest accumulating debts first. It is reassuring to start this now with a balance of $0.00 on one of my cards. I am not going to be tracking interest, as that will be too difficult. However, I currently have $2,000 in my savings account and $3,200 in my wedding account. I will try to bulk these nest eggs up along the way.
Though frustrating, I know this will be an eye-opening journey. I hope others can learn form my mistakes through transparency and honesty. If anything, meditating on gratitude, faith and patience will be a large part of what carries me through this journey to financial freedom.
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