My Current Debt Situation

I think most people are embarrassed about how much debt they have. I know my wife and I are, in fact it’s really hard for me to post about our income and debt.

With that in mind though I want to be open and honest about my journey, sometimes I think people show only the good and not the bad side of getting out of debt.

We aren’t perfect and some of the things I talk about here that I do, I don’t always do. A perfect example is buying lunch at work, I do it way too often and should bring food much more than I do.

Another is paying more than the minimum on the credit cards. For the most part that’s all I’ve been doing lately.

Not only that but I took a huge risk and used the paid off amount to start my Amazon FBA business, which was both terrifying and exciting. I have since made enough from that business that it is supporting itself and doesn’t need me to add debt in order for it to grow.

Not only that but it has actually started help to pay some bills around the house. Like rent, food, gas, etc.

That being said I want to bring you up to date on my debt situation, not only so you can see the progress (or lack thereof) but to talk about what I’m going to do in the future to change it.

So without further ado here are my 4 credit cards and their current balance:

Chase: $6,910.85
Discover: $3,771.59
Barcaly: $5,566.78
Capital One: $3,025.91
Total: $19,275.13

In my first post on debt, in December 2015 I had $19,652.00 in debt. I have only paid off $376.87 or 0.019%.

These numbers almost make me tear up, I feel I have done so much work, so much hustle, so much sacrifice and looking at these numbers you would never know it.

The question that may come to your mind (and to mine too) is “where has all my money gone?

I have been side-hustling and showing you exactly how much I’ve made  since December.

So let’s look at the numbers again.

Chase:

By far the largest amount and the highest interest. This adds around $140 a month just on interest. I only recently paid attention to this before that the payment was only about $152. So for months I have only been paying off around $12 off of this card every month.

Discover:

This card has the lowest interest and is the one I used and maxed out again to start my Amazon FBA business (now doing nearly $2,000 in sales a month). I had it down to around $2,800 but have since maxed it out again.

That was a gamble, one that paid off, but still did set me back a bit.

Barclay:

This is interest free for about 4 more months, I got it in hopes of using the balance transfer to get the debt paid off over a year ago before I discovered that wasn’t the solution just another part of the overall problem.

It has helped a bit but I’m concerned that it will end up making me spend more money in the long run than had I dealt with the debt to start and not play games with it.

Capital One:

My very first credit card I ever got, back when I was younger and foolisher (still young and foolish). I am working on this one by paying minimums off and it has gone down to where there is actually credit available of a almost $300, but I won’t be getting to excited about that yet.

So Where Did All The Money Go?

I didn’t go on lavish vacations, or go on a spending spree. I have built up a emergency fund, and a checking account buffer.

I finally for the first time in my life have a emergency fund of over $1,000 (currently at $1,228.27) AND for the first time I have a buffer in my checking account of $700.

I used to spend all of my money until account hit $0.00, now the number $700 in my account is “0.00” in my head and it allows me to have some comfort as when I get too stressed about money.

So in reality even though I haven’t got much paid off on the cards, I have saved an extra $1928.27 OR 10%, but it doesn’t stop there.

Taking an inventory of everything currently at Amazon for sale I have $1,880.83 (I have another shipment about to go out so this isn’t including those numbers of which I’m estimating is $300 to $400 more).

So adding that too how much I have currently that brings the total to $3809.10 or 19.76% of the original debt paid off.

It’s important to look at the big picture and not just how much of the credit cards are actually paid off.

Moving Forward

So where do I go from here? Well, to start off with the majority of the income went into building an emergency fund, a buffer for my checking account, and starting a business.

Those initial things are now done, I don’t have to build another emergency fund (unless something comes up), and I don’t have to start a business again.

So from here on everything can go to paying off debt. I have perfectly set myself up that whenever any income enters my account I don’t have to use it for bills or to pay minimums I can actually add it to my debt, getting it paid off.

My goal at the end of the debt repayment article was to pay off the credit cards by December 31st 2016, I’m now almost 7 months there and less than a percentage to that goal, that means the next 5 months of the year will be intense.

My Amazon business needs to increase, meaning putting more time, sweat, and money into it.

My Freelancing needs to increase, meaning finding new clients, pitching them cold, and getting more regular on my own site.

My blog income needs to get started, meaning providing more value to you my reader and finding ways to monetize that doesn’t make me feel as if I’m only in it to make money.

I need to get back on the road and drive for Lyft, I got a new phone now (with working GPS), and have detailed the car and will be out this whole weekend to make as much as possible.

I need to find any other way to increase my income, and then throw it all towards debt. Yes the business needs money to grow but from here on out all money goes to debt, the business will have to pay for itself no more robbing Peter to pay Paul.

Is paying off nearly $20,000 in 5 months possible, yes, to some it seems impossible.

But now I know I can do it, the next 5 months will be the most profitable of the year for me, I will grow my amazon sale, get more freelance clients, drive for lyft more, and yes I will get out of debt this year.

This has been a long road so far, and will be even longer in the months to come. Thank you for following, and cheering me on this far but I ask that you continue to help. Your words of encouragement help me go further.

With the help of all of you, I will be the best “future me” I can be.

Image courtesy of adamr at FreeDigitalPhotos.net

22 thoughts on “My Current Debt Situation”

  1. It sounds to me like you’ve accomplished quite a bit over the last few months and put yourself into a good position for the coming months. Paying down your debt will take a lot of effort and discipline, but it can be done if you really want it. Keep going, you can do it!

    1. Thanks Gary for the support, it means a lot. I have really set myself up well that I’m sure of. This months Amazon Sales have been amazing WAY better than I thought it would, which makes me feel even more confident in the coming months.

  2. I wish you the best luck with your efforts. Just be careful with putting money into the business, particularly borrowed money; you don’t want to end up further in the hole.

    1. RAann that truly has kept me up a few nights, I took a risk using the little credit I had to get the business started and am now only using the cash from the business to keep it going. It is still stressful knowing that I’m using a ton of cash (more than my bills at home) going towards growing this business now.

  3. Hey Tyler! Thanks for sharing more about your situation and well done for your honesty. Getting out of debt isn’t easy and I think it’s commendable how you’re trying to increase your income through Amazon and other methods. You took a risk starting up your Amazon business through credit, but thankfully it seems to be paying off for you. My advice would be to not fund any more of that through credit but focus on using your current inventory to make money. I know you want the business to grow and I’m sure it will. I’ll be cheering you on to succeed Tyler!!

    1. Thanks Hayley, your support helps more than you know. I have stopped using credit to fund the Amazon business and it is still growing. There are days that I feel it isn’t growing fast enough and I want to use the credit again to add to it but than I talk myself out of it.

  4. Thanks for sharing this honest post! I completely agree – it’s easier to write and share the good stuff and let the bad slide under the rug.

    Sounds like you have a great plan to pay off your credit cards by the end of the year. You can do it! Though the next 5 months may be tough, it’ll be worth it when your card balances are all $0!!

    1. Yea this was a very difficult article to write, looking at the numbers crushed me more than words can describe. The next 5 months should be very exciting I’m nervous about them as well as excited.

  5. This is great, Tyler! I strongly feel that having a good EF is crucial when breaking the debt habit. It gives you a cushion so you don’t have to finance when you get stuck. I’d say these numbers are something to be really proud of.

    1. Thanks for the words of encouragement, yes the EF is a major help. Just a few days ago my wife had a car problem that used up part of the EF but we’ll easily recover that in a few weeks. Thanks for stopping by.

  6. We’re in the same boat. We have an EF for the first time ever, and it’s been amazing. It’s hard not to see the debt numbers dropping faster, but at least they’re moving in the right direction!

    Plus, with your new business and income streams, I’m confident you’ll accomplish your goal. You’re in a much better position than you were at the beginning of the year – don’t sell yourself short!

    1. Pia, having an EF is something I have tried to have for years and only now been successful at it. Yes the start of the year to now has had many many changes and I’m looking forward to whats to come.

  7. Your honesty is great. I try to do the same, share the good times and the bad times. Life isn’t perfect and I try to show that. You are showing it, too.

    I know it’s painful to see that your debt hasn’t moved down in months, but there are two sides to the budget ledger…income and expenses. Sounds like you worked hard on the income side and maintained a sready expense side. I would call that a win. You will get those expenses down soon enough with your aggressive plan for the next 5 months.

    Good luck!

    1. Thanks Brian, sharing the bad is so much more difficult than I thought it would be. I’m hoping to not have to put any more bad news up on the blog.

      My income has greatly increased, but I almost feel like just the business has grown and my income has gone down. Right now the business requires more and more for it to grow which means all the income that comes out of the business goes right back in. That’s exciting and will ultimately lead to getting out of debt.

  8. Congrats on saving an emergency fund. It was one of the hardest things for me. I’m glad I was able to do it because having a cushion makes a difference. Keep pushing when it comes to paying off the debt.

    1. Yes Jason, I’ve already seen a difference. My wife’s car recently had a problem and needed a fix, eating up a portion of our emergency fund, but because we had the fund it wasn’t as big of a deal.

  9. Good luck with the 5 month plan! I think a lot of us write about things we know we should be doing more often when we talk about our financial health -part of blogging is sharing stuff that’s worked for us with other people – that doesn’t mean we’re 100% masters of it though.

    1. Mel, I’m convinced I will never be an expert in anything. I love writing and talking to others but I’ll never think of myself as a expert, or master of anything.

  10. Very brave of you to share this! You really shouldn’t beat yourself up over the credit cards for too long, you did make some impressive changes since you started in December. Having an emergency fund and not spending until your account shows a zero is quite a step forward.

    You’re setting yourself up for more success in the future, so keep going!

    1. The changes are amazing, I had hoped that I would have hoped to be in a better situation right now. That being said I’m still happy with the progress that has been made, it gives me courage to go on and make even more progress. This month alone I have already doubled my previous month sales on Amazon, we’ll see what happens in the near future.

    1. Hey Emilie, I haven’t posted anything more recent than this. I’m waiting for a few more things to go through in my finances and then I’ll do another update hopefully by end of next month.

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