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:
Capital One: $3,025.91
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.
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.
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.
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.
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.
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