It's really struck me lately just how much debt I've managed to acquire over the last few years.
The Ugly Truth
- Personal Loan - $24,105
- Credit Card 1 - $4947
- Credit Card2 - $7317
- Credit Card 3 - $5499
- Credit Card 4 - $7177
- Credit Card 5 - $677
- Credit Card 6 - $4000
- Credit Card 7 - $3000
- Emergency Fund - $0
- Savings - $0
Total = $56,722
Yes 7, count them 7 credit cards! What was I thinking? No wonder I'm 38, in a well paying job and don't have a home of my own. As today is the first day of Spring here in Australia, what better time to 'spring clean' my finances, and put that debt on a diet once and for all.
- I'm running with the snowball method of paying off my debts, from smallest balance to highest, as I know myself well enough to realise I need the gratification. I've managed to find an extra $700+ in the budget for the snowball per month, by actually creating a budget!
- I'm keeping the current minimum balances fixed at this month's amount on the debts ongoing, maintaining those payments even as balances go down.
- I've set up automatic payments to come out each pay day on each of the debts.
- I've taken the cards out of my wallet
- I've set up $100 a pay transfer to start building my emergency fund.
Based on the snowball calculator I used, I should have eliminated 6 of the 7 credit cards by my 40th birthday in May 2009, and completely debt free by May 2010.
Now, to work the plan in reality.