Saturday, 1 September 2007

Day 1 - The ugly truth, and a plan

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.

The Plan

  • 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.


  1. I guess your situation of having this amount of debt and owning so many credit cards are really common these days. A great post :)

  2. I'm glad I'm not alone with this issue, but it's horrible to think how many people like myself must be out there these days. Credit too easy to come by etc.

  3. Anonymous6/9/07 15:56

    Yey you started your blog!

    I'll be watching your progress. Good luck:)

    Thanks for the link, I've linked you.

  4. Ah, welcome to the club. It's amazing how mcuh debt you can accumulate without really, really being aware of it. When I first put all my debt on paper, I was astounded at the amount. There's loads of us on here in the same boat, we'll all hold hands together. I've linked you on my site. Careful, blogging is addictive ;)

  5. I thought only people in the U.S were in debt... hmmm now I'm starting to see different trends, so how much is your debt in American dollars??