Ever since I can remember having a job, I have had credit card debt. I don’t even want to know how much I have paid in interest over the last 10 years. I think knowing how much I have paid to the credit card companies would make me sick to my stomach.
What I remember being told when I was young, by various authoritative voices, was “It’s good to have some debt. It helps you build a credit history,” so that one day I may take out even larger sums of debt to buy a car, house, etc. What I wasn’t told is that once you start using credit cards, it’s extremely hard to stop.
The way I see it now, beginning to use my first credit card to gain a credit history was not worth the hassle I have gotten myself into over the years.
I think it is more important to teach individuals to work hard before you want or need something, then pay for it in cash or with your debit card. Teaching yourself to earn your possessions is a better lesson to learn and worth more in the long run, than buying on credit — before you’ve worked and earned that purchase — in order to build a credit history. At least in my case I think that to be true.
I’m going to climb out of this hole of debt I have dug over the years.
I am thrilled to be on my way of working myself free from any financial obligations. I basically have two categories of debt: credit card and student loans. I’m tackling the credit cards now, and will pay off student loans next. I could potentially be debt free by December 2011, but I might wait to make my last student loan payment in June 2012 for a good reason that I can discuss later.
Why am I deciding to take care of my personal finances publicly?
Well, I agree with Adam Baker when he says “Personal finance should not be a taboo subject in our society. The more light we can shed – and the more examples we can share – the better off we are!”
I’ve learned that challenging myself publicly is a highly effective way to motivate myself to make the personal changes I seek. Also, if anyone can get tips, motivation, or generate their own ideas from my experience, that would be all the better.
What exactly am I going to do?
The goal of this project is to pay off all my credit card debt — $6000 spread over 5 credit cards — within 3 months (May 16 – August 15).
How am I going to meet this goal?
1. Pay an average of $60 per day, everyday, towards credit card debt.
- $60 per day X 100 days = $6000
- There are 92 days between May 16 – August 15. I plan to make up those last 8 days and any presently accruing interest over the span of the three-month project.
- I will actually be making one payment every two weeks, that will pay for the days of each 15-day span. I’m going to begin with $50 per day payments the first month, then increase to $60 per day the second month, and finally $70 per day the third month.
2. Work diligently. I’ll work 50-70 hours per week of the course of 13 weeks.
3. Stay on pace. If I must use credit, I must pay it off within 2 pay checks. That will be on top of the usual daily payment.
4. I will update my progress twice a month. That is, on the first and fifteenth. I will have an occasion post about the project such as money-saving measures, advice on spending and saving habits, etc. in between updates.
This project is the next installment of my Experiments in Living Deliberately.