I’ve decided to share my debt story in the hopes that it will help someone else realize that there is hope for getting out of debt. While I’ve just recently started on my journey to be debt free, I have a plan I’m committed to. And it’s working. When there is a plan with an end date in sight, it makes the weight of being in debt so much more bearable and gives you something to look forward to. Here’s my story:
Due to the overwhelming amount of student loans I took out to finance my education, my personal finances have been a mess since I graduated college…almost 14 years ago. I just took it for granted that I was going to be paying off those student loans for the rest of my life. Literally. I’m talking about somewhere in the ballpark of $100K in loans. I was resigned to the fact that my life was going to be less-than because of the ill-advised debt I took on for my education. I’d just come to accept it as an unchangeable fact. Until this past January.
It all came crashing in on me while I was sitting in the waiting room of a car dealership. I had brought my car in for what I thought was going to be a $50 routine service / oil change, and received the news that I actually needed over $800 in repairs. I started to panic. I put it on my credit card, and realized I was dangerously close to my limit, so I immediately transferred $800 from my emergency savings account to pay the charge on my card. And then proceeded to sink into a week long shame spiral before I pulled myself together and started to formulate a plan to get my life under control.
My first thought was to just pull money from my 401K to pay off my credit card and just take the hit, but it wasn’t that simple or easy. So I needed a plan B. I went to my credit union and was able to get a personal line of credit that was half the interest rate of my credit card. I paid off the balance on the card, and now I will be paying off the line of credit much quicker with that lower interest rate.
At about the same time, I also came across an automated debt snowball spreadsheet. I promptly uploaded it into my Google Sheets and put in all my information, both dreading and eager to see how long I was looking at being strapped with this debt. What I saw really surprised and inspired me, and I immediately put myself on a spending fast: no more dinners out, no more unnecessary impulse spending. I figured that if I applied the same principles that had helped me lose 50lbs of unwanted weight, I could get myself out from under the burden of unwanted debt as well. And just like losing weight, it’s so rewarding to see your discipline paying off.
Feeling good about getting my finances in order, I decided to pull my head out of the sand and check in on the student loans that my Dad has been paying for me. The loans I assumed I would take over once I paid off the loans I’ve been paying. I was shocked to see how low the balances are. He’s continuing to pay them for me, and is well on track to paying them off within the year. Now that I know exactly where I stand, instead of just having an unclear debt cloud over my life, I’m feeling really optimistic about my financial future.
Here’s a snapshot of where I am at the end of February 2017:
Capital One Credit Card– paid off!
starting balance at beginning of January 2017: $1,392.73
- Credit Union Line of Personal Credit current balance – $5346.31
starting balance at beginning of February 2017: $6,446.31
$1,100.00 paid off this year.
Estimated pay off date: July 2017
- Car Loan current balance- $6,827.02
starting balance at beginning of January 2017 $7,431.64
$604.62 paid off this year.
Estimated pay off date: November 2017
- Student Loan #1 current balance – $7,449.33
starting balance at beginning of January 2017 $7,805.57
$356.24 paid off this year.
Estimated pay off date: March 2018
- Student Loan #2 current balance - $9,604.33
starting balance at beginning of January 2017 $9,749.15
$144.82 paid off this year
Estimated pay off date: August 2018
- Student Loan #3 current balance - $14,249.97
starting balance at beginning of January 2017 $14,452.24
$202.27 paid off this year
Estimated pay off date: March 2019