I missed the boat on a 6 month re-cap on where I’m at with my Debt Diary, so consider this a 7.2 month update 🙂
I’ve been going through some financial hardships, so I’ve been trying to diligently pay off my unsecured debt so that in the next months, when I have to move out of my condo and find an apartment, that I can survive on my own and be cc debt free. That way, my large payments can start to chip away at my personal loan, car and student loan debt.
In August 2010, I started the Debt Diary as a way to keep myself in check and so that my fellow bloggers can see my progress and inspire themselves to do the same. It’s a great feeling to change those numbers around every month after payday and see the little bar inch closer to the right. I started with $78,789.19 in debt, which is mostly due to my large loan with Sallie Mae but nonetheless, is debt that I owe. My credit card debt was paid off twice. Once in 2006 with a personal loan (aka loan numba 1) and another time in 2007 (aka loan numba 2), however, after I paid off my debts and aligned myself with a debt consolidation loan, I found myself racking the balances back up and not only have the 2 personal loans but also over 8K in credit card debt.
Since this past August, I’ve dwindled my credit card debt waaaay down and eliminated balances on 4 cards, which I’ve canceled and am focused on my two biggest credit cards (one with an original balance of $4,200 … which was the max and one with a balance of $2,000). My overall balance between the two is sitting pretty at $3,432.27. According to Suze Orman’s Young, Fabulous and Broke, she recommends that people in debt should focus on paying off their credit cards with the highest APR first, and then funnel those payments over to the next credit card until all are paid off. Right now I’m focusing my eyes on my credit card that has a 19.99% APR (which was negotiated down for 1 year from 29.99%) so I have 1 year with a 10% lower APR to really get my debt down on this credit card. I’ve been making pretty large monthly payments around $500 a month and recently pushed 1K from my income tax refund to the card. My goal is to have this paid off by my end of May paycheck. My debt on my second credit card should then be around $1,600 and I will take the next three months to pay that baby off, so hopefully by August 2010 when I will be credit card debt free. That’s my goal.
My next step would be to incorporate a rental payment into my monthly debts and hopefully be able to push an extra $300 a month to my smallest personal loan (which has a current balance of $3,148) which would increase the payments to about $500 a month. Then I’ll go after my “big girl” personal loan (which currently has a balance of over $6,700). Then the car payment and finally Sallie Mae … the mother of all loans.
I have a ton of work ahead of me but am excited to see where I’m at a year later in August 2011 when I take a look at my financial state.