Admitting the problem
Part I: My journey out of debt
I’M IN DEBT!
Nope, not student loan debt (though until recently I had that too), not medical debt, not even home or auto-loan debt; I’ve got good old fashioned high-interest grab-you-by-the-gonads-and-twist credit card DEBT. Oh, and I’ve got a sizable installment loan out too so, MOAR DEBT!
I got myself into this situation, now I’m getting myself out. I’ve spent too long deep in my own pocket and I’m sick of putting my own financial goals and those of my family just out of arm’s reach; so my partner and I recently made the decision to grow up, focus, and fix our damn finances!
Facing my debt reality hasn’t been easy. To be honest, I put off really looking at it for years out of fear. I treated personal finances as if they were out of sight out of mind, something that’s easy to do if you have a sizable line of credit. At the end of the day though, debt catches up with you. It lowers your credit score, it prevents you from saving, and it makes things like home ownership feel like an impossible dream. I realized that in order to start achieving some of the goals we’d set, things were going to have to change drastically.
I want to have a healthy relationship with my personal finances. I refuse to allow money to be my enemy. The journey to a debt-free life is multifaceted, and it’s not as easy as simply spending less or making more. Figuring out the root cause of bad habits, identifying triggers, and practicing awareness are also bits of work that need to be done in order to establish and maintain the discipline necessary to achieve larger financial goals.
I’ve started this blog to keep track of and share my progress, as well as join in the discussion about how debt and consumerism are impacting our ability to self-moderate, which in turn prohibits us from achieving the things we really want in life. It’s my hope that #1 I’ll be able to eliminate $40k in debt and get into a position to purchase a home within the next 18-24 months, #2 join in the conversation to help inspire others also struggling with the burden of debt, and #3 to learn from the success of others and seek out new ways to help achieve my goal of a life free of debt.
Below, I’ll provide a breakdown of my debt situation on what we’ll consider "Day 0″ of my mission. I’ll share additional monthly expenses and a more detailed budget in another post, and provide monthly updates along the way!
The ugly:
Credit Card 1: $5,200 Interest Rate: 20%
Credit Card 2: $17,300 Interest Rate: 18%
Install Loan 1: $5,400 (10/17) Interest Rate: 10.3%
Install Loan 2: $13,200 (09/16) Interest Rate: 8.2%
Grand Total: $41,200 plus some serious interest
So there it is, that’s my mess. It’s time to get to work.
Until next time -
