CHALLENGE: ZERO. (Or, How I Paid off $2,031 in Credit Card Debt in Two Months)
Sorry for the impromptu break here at the Broke Girls blog – but one of us was busy moving house while the other was busy crushing the heck out of her credit card debt.
Wanna know how I paid off 2 g’s in credit card debt in exactly 2 months? (That sounds way cooler than, “Wanna know just how a girl manages to rack up $500 worth of grocery bills on her Target card?”) I kept a half-assed diary that makes for a pretty substantial read, aaallll laid out for your viewing pleasure below!
7/21 (At the Start):
This month, I’m facing the thing I’ve been running from since starting my personal finance journey: limitations.
Because sometimes (oftentimes, really) responsible spending is denying yourself the donut, putting down the $7 nail polish, unsubscribing from the emails that shout “20% Off!” of the cutest swimwear [where you click on the link because you totally haven’t gotten a new bathing suit in years, and still 2 of 3 of the pairs you own are from high school, so isn’t it about time? And 20 minutes later somewhere buried in page 15 of a shopping site filled with $80 bikinis a little voice reminds you – “Bitch, you don’t even like the beach!”].
Ahem. When it comes to the finer things in life (money, food) self-imposed limitations are the worst. But they are vital if you want to be at all successful.
If you’ve ever read Amanda Steinberg’s book Worth It, she talks about how everyone has a money story – a narrative developed from a young age that, to this day, defines thoughts, feelings and emotions surrounding dolla dolla bills. Mine is “I can afford that!”
(After devouring this book, I understood that there’s a difference in physically having enough money in your account to pay for something, and having enough in your budget to purchase that something; and that just because you can technically afford it right then and there, doesn’t mean you can afford to swipe for whatever you want, whenever you want. Mind blowing, I know.)
So I had to retrain my brain a bit (a lot) when I started creating a personal budget and setting goals. Just because I make a decent salary, doesn’t mean I can afford that thing RIGHT NOW, with all the other things I need to afford this week/month etc.
Anyway – getting back to limitations. I’ve kept my lips shut about the fact that I accumulated a bit of credit card debt… and the other day, I finally came clean to my boyfriend about it. So starting immediately, he’ll be picking up some of the things I regularly purchase, like food for us and for the dog, while I go on a short-term spending diet.
It should take about 4-6 weeks for me to pay off what I owe, if during that time period I cut out:
- Dog food and medicine (obviously, the boyfriend will be buying his medicine!)
- Eating out at restaurants
- Buying lunch out at work
- Takeout and delivery for dinner
- Coffee shops
- Shopping and personal spending (on myself and for our home)
So, here we go…
8/4 (Starting off on the Right Foot):
I’m two weeks into my zero debt challenge, and am floored by 1. How much debt I’ve already paid off, and 2. How little I’ve missed spending money on. It’s only been two weeks, so let’s not get dramatic…
8/23 (In the Thick of It):
OKKKKK. I have come up with a huge, long list of takeaways that I’d love to share for those in similar shoes!
1.Don’t try to pay the same amount as partner who makes more than you.
This was something my boyfriend brought up when we first talked about my debt. I recognize that I’m the type of *~independent woman~* who feels the need to go halvsies and pay her way in life and in love. But I was really only short changing myself.
I make a comfortable salary, but my boyfriend’s take-home pay is at least 20% more. Looking back, there was no reason for me to pay for our dinners EVERY NIGHT of the week on top of groceries, or to pay for my boyfriend’s dog’s food and medicine. [That sounds cold. I mean, I am literally OBSESSED with my dog, he is the best thing in my world. But technically, pre-nup style, he was my boyfriend’s dog first and therefore always will be! So that means first and foremost, he’s my boyfriend’s financial responsibility.] Anyway. There are plenty of other ways for me to help out that aren’t so expensive – like calling the vet when the pup’s meds are low, putting gas in the car, or picking up food that my boyfriend pays for.
Being an independent woman means being able to pay your way, yes, buuuut it also means being independent of debt and other shackles to financial freedom.
2. It’s OK to take a break from the fun things.
It’s ok to let the fun things go for a while. I was so resistant to budgeting for the longest time because I thought it meant coming face to face with not spending money on the things I enjoy most – food.
What I learned when I started budgeting was it doesn’t have to. What I learned when I started aggressively paying down debt was it’s okay to take a break from those things.
You’re more able than you think. Making lunch for myself was a chore before – thinking about what’s the cheapest, easiest thing to make (and then reusing those ingredients) made it easier than ever to meal prep.
3. Use what you have!
Food and snacks, clothes and accessories, household supplies, gift cards. Everyone indulges differently. Essentials to one person are different for another. When we started slashing items from my budget, I was surprised to find my non-negotiable was my Brazilians? (#tmi)
So to keep that, I had to forgo some other things. I FINALLY used some gift cards I had stashed since my damn high school graduation, and finally ate a lot of food in my fridge/freezer/pantry that otherwise would have continually been ignored.
4. Have visuals to keep you on track.
As an epicure, I do best with aggressive, short term goals where I can see progress being made. I checked in with myself and my accounts every 3 days to see where I was at. Sometimes, that meant paying a chunk of $200, others it meant scheduling a quick and dirty $50 payment. Some weeks I paid a little off both cards, others I only made progress on one.
If you find yourself itching to see those numbers go down, I definitely suggest a visual! I threw together this sexy progress tracking sheet in Drive in just a few minutes. I don’t know that I would have kept as organized or excited about paying off debt without it!
5. Friends are willing to help.
I’ve had friends in the past who were honest about their financial limits. Being upfront about what you can and can’t spend money on isn’t something to be ashamed of, but rather helps those who care about you to support you.
It was such a relief to talk about #thestruggle with Martine and other lady friends who have either gone through similar circumstances or could sympathize!
6. Juggling financial goals is hard; but it doesn’t have to be.
Being an adult in tune with your finances means there are a whole bunch of needs competing for your attention. Say you walk into an extra $500. Do you put it towards student loan debt? Your emergency savings? Vacation fund? Retirement? All of those goals are important for different reasons. You have to be able to benefit them all, but it helps to set short term goals and focus immediately on one specific account.
i.e. I’ll build up my emergency savings to one month’s rent, and then I’ll pay off 50% of this credit card debt.
Or, I’ll focus on aggressively contributing to my retirement fund until it has $10,000 – then I will start a separate savings account for my kids’ education.
7. More important than getting out of debt? Is staying out of debt.
Before you start paying down, have strategies in place so you can’t slip back into old habits. For me, that means building and maintaining a cash cushion in my checking account so I never have to rely on a credit card when waiting for my paycheck. It also means not paying for vacations out of pocket, but rather with money set aside ahead of time in a separate savings account.
9/26 (DONE done done):
To be honest, hitting $0 on those credit cards didn’t feel nearly as good as getting down to the last $100! But logging into my Discover card portal to see a $0 balance over the last 2 weeks has been a damn relief.
To harp on that last piece of advice, I wanted to be sure I planned out my next financial goals and activities once those two cards were finally, officially paid off. I’m not one of those weird, hippie, freeze-your-credit-card-in-an-ice-cube types. To build good credit, you have to actually use credit. So I will be very carefully continuing to use both.
Discover card: Others recommended to me that credit cards only be used to pay for purchases that are paid for automatically. Normally that would be utilities or something similar. Since I pay for our utilities the old fashioned way (paper bill and check ftw), my Discover card is going to get hooked up to my Starbucks card for automatic reloads. That $50-100/month should be easy breezy to pony up. & I’m not allowed to use this card for anything else for the foreseeable future!
Target card:I’m still going to use my Target card weekly because, duh, 5% off. But I will be paying off the balance in full each payment period, come hell or high water.
One of the best things I learned from this experience is that restricting my spending doesn’t actually feel restricting at all – it felt pretty damn freeing. Especially once I opened up about my situation to others!
What’s your best debt repayment advice? If you’re in the midst of paying off debt or have already crushed it yourself, what secrets can you share with us?!
Jess works in the e-commerce and nonprofit industries with a focus on digital marketing, search engine optimization, social media, and public relations. She loves pop punk, performing arts, big cities, books, and chardonnay.