|Whoo! I'm cruising along!|
Ladies and Gentlemen, I am very happy to announce that I have managed to pay off almost 40% of my debt now! Isn’t that incredible? It’s barely been a year! Not only that, I have paid off more than $11,000 in credit card debt! I am unbelievably happy about the way things are going with my repayment plan. Now that the interest payments are getting massacred, I am paying off more and more principle so MasterCard doesn’t know what hit them. What makes me even happier is that I bought 2 plane tickets home for the holidays for $700 each AND gave $100 to charity and despite having purchased $1,400 worth of stuff; I still managed to reduce my card to $3,558! Finally I am feeling more like one of the converted.
During this economic meltdown, I am becoming quite grateful that I started this process when I did. I can’t imagine what some people out there must be feeling with debt like I have and the possibility of losing their jobs looming over their heads. I think the message is becoming ever clearer: we need to plan better. Not everyone is going to agree with everything I say, but I think it’s about time some of us got a debt enema and cleansed out some of this $hit. I read an interview with my besty, Gail Vaz-Oxlade where she talks about getting rid of credit scores and eliminating credit card debt. She describes a generation out students that got duped into signing up for credit cards with high maximums and embarrassing interest rates.
To make matters worse, the government’s student loan program has ridiculous interest rates and students are paying the price. To add to the frustration, it is getting harder for graduates to find a good enough job to even start to pay back their loans properly other than with just the minimum payment. The repayment plan is so lousy that they have people paying off their student debt for 10 years and accumulating thousands of dollars in interest. It’s no wonder this generation is not learning any positive lessons about credit. Now don’t go thinking that I’m going to be sitting in some tent somewhere protesting about the world’s inequalities and all the problems that causes (believe me, the list is huge), but I really just want to shake some sense into some people who think that it is sustainable to live the way they do and rack everything up on credit. Why do we always try to keep up with the Joneses when they are probably in just as much (or more) debt than us?
This is the part where I challenge you. In Gail’s interview, she is challenging everyone to live without using their credit cards for the week of November 13 to 19. Just one simple week and it’s so much easier than you think (believe me; I go months at a time). If you are one of the people who is automatically thinking, “no effing way John, I can’t live without my credit card, especially during black Friday”, then you probably really need to try this exercise. Really, calculate how much money you are spending every year on interest. On a card with 19.9% interest, your $100 item becomes a $119.90 item in a year. You buy a $1,000 item and that jumps to $1,199.00 for that item. In my case, my interest rate was 18.9%. I carried a $14,581.45 balance, which means that in one year, I would pay $2,755.85 in interest! It’s no wonder the credit card company kept increasing my limit; they wanted me to be able to carry more money on my card!
|I think the sign is self explanitory|
So here’s where I challenge you (see what I did there, it’s called role reversal); try to go a week without using your credit card, or better yet, go the entire month. Leave your card in the freezer, throw it behind a heavy piece of furniture, and just learn to leave the house without it. For those of you who are feeling extra ambitious, go the extra mile and calculate how to get rid of the balance on it once and for all. There is a great debt repayment tool on CNN that allows you to enter as many of your debts that you have and it tells you exactly how much you will need to pay on each one of your debts. You can then set it the time you want to pay it off in and it will adjust the figures accordingly. Give it a go! You really can pay of the debt, it just takes a bit of focus but it is certainly possible.
Good luck with your challenge everyone!