I want to do this!

Pay off all debt before the end of 2018

submitted
  • ExplorerSoul
    ExplorerSoul Doing 4 cheers 2017-06-06 04:34:50

    I had looked over my budget again and was hoping to pay about $700 towards my credit cards starting this month, but I forgot about one expense and also thought about other things I might need some wiggle room for. In the end, I decided on $500, which seemed more reasonable. It's not as much as I'd like to be putting in, but I'm trying to be realistic. There won't be much leftover after having made all my payments.

    I'm curious to see how reducing my spending might impact my next update.

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  • ExplorerSoul
    ExplorerSoul Doing 0 cheers 2017-05-31 23:57:06

    Update #3 (May 2017)

    Loan #1 (Royal Bank - interest rate: 9.83%)
    Last month's balance: $8,517.32
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $8,098.98

    Loan #2 (Family - interest rate: 0%)
    Last month's balance: $5,800.00
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $5,500.00

    Credit Card #1 (Royal Bank - interest rate: 11.99% for both purchases and cash advances)
    Last month's balance: $1,930.66
    Planned to pay: minimum monthly payment + some charges
    Actually paid: $176.91 (including minimum)
    New balance: $1,881.80

    Credit Card #2 (CIBC - interest rate: 19.99% for purchases and 22.99% for cash advances)
    Last month's balance: $1,411.00
    Planned to pay: Not sure
    Actually paid: $455.66 (mainly towards new charges)
    New balance: around $1,935.00

    Credit Line (CIBC - interest rate: 7.2%)
    Starting balance: $4,754.27
    Planned to pay: minimum monthly payment
    Actually paid: a few dollars more
    New balance: $4691.60

    Total debt remaining: $22,107.38

    Still on track overall except credit cards. Obviously I shifted much of my spending from Credit Card #1 to Credit Card #2.

    Hoping next month will be better.

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  • ExplorerSoul
    ExplorerSoul Doing 1 cheers 2017-05-18 03:58:48

    Today I received an offer to increase the limit on credit card #2, around twice its current limit. Go figure!

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    • aenea
      aenea 1 cheers 2017-05-18 20:45:35

      @ExplorerSoul ha don't you love it when they tempt you like that? so kind. so supportive. so self-interested.

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    • flutterbyyou
      flutterbyyou 1 cheers 2017-05-19 04:40:23

      @aenea it might not be a bad idea to take it. A higher limit gives you a better credit score. You just need to keep from using any of the increased limit. I try to treat my credit cards like debit cards and only change what I can pay off at the moment.🌼

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      • joycultivation
        joycultivation 1 cheers 2017-05-20 03:35:38

        @flutterbyyou @ExplorerSoul I agree. credit scores are all about ratios - how much you have available vs. how much you owe. a higher credit score will lower your interest rate on your line of credit. lower interest is always helpful.

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        • ExplorerSoul
          ExplorerSoul Doing 1 cheers 2017-05-20 14:05:07

          @joycultivation @flutterbyyou Thank you. I agree that it can help with the ratio, especially if the balance is very high and close to the limit, but I don't feel accepting the increase would be good for me right now as I am struggling to manage with the limit I already have. I used to have a much higher limit on both cards, but when I took out the loan and credit line, the limits were reduced to $1000 if I'm not mistaken. Since then, they have been increased once and part of me wishes they had remained at $1000.

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          • joycultivation
            joycultivation 1 cheers 2017-05-21 04:46:48

            @ExplorerSoul sounds like you know what is best for you and you will make a responsible decision based on your self awareness. trust your intuition on this. good luck and we are cheering you on!! money stuff is hard. because shopping.

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            • ExplorerSoul
              ExplorerSoul Doing 0 cheers 2017-05-22 15:03:52

              @joycultivation The unfortunate part is I am quickly nearing my limit, but I don't want that to be a reason to increase my limit.

              Thank you for your support.

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              • joycultivation
                joycultivation 1 cheers 2017-05-22 17:13:41

                @ExplorerSoul Yes. You definitely do not want to take on MORE debt. Accepting a credit limit increase is usually a good idea when you are nowhere near your limit. For example, an increase from $10K to 13K when you only owe $500 or $1000 in the first place will not put you at risk of going over your original limit. Forcing yourself to stick within the original limit by turning down the increase sounds wise.

                Getting everything paid to zero will boost your credit score as well.

                Good luck with this. You have been working hard at it and you are doing great. I believe in you!!

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  • ExplorerSoul
    ExplorerSoul Doing 0 cheers 2017-05-15 23:48:33

    So today I received a letter informing me that the annual interest rate on my line of credit is going up in June (used to be prime + 4.50% - now it is prime + 7.00%). Yay!

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    • joycultivation
      joycultivation 0 cheers 2017-05-16 02:47:26

      @ExplorerSoul ugh. booo!!!

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      • ExplorerSoul
        ExplorerSoul Doing 1 cheers 2017-05-17 00:56:00

        @joycultivation I know. 😞

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        • joycultivation
          joycultivation 1 cheers 2017-05-20 03:36:37

          @ExplorerSoul get the credit limit increase and improve your credit score! then you can qualify for a lower LOC rate!

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          • ExplorerSoul
            ExplorerSoul Doing 0 cheers 2017-05-20 14:05:41
            This message has been deleted
          • ExplorerSoul
            ExplorerSoul Doing 0 cheers 2017-05-20 14:07:46

            @joycultivation Oh, do you think my rate went up because my credit score has worsened? It's funny though because it's the first time in a while that I haven't touched my line of credit and am just focusing on paying it (even though it is only the minimum right now).

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            • joycultivation
              joycultivation 2 cheers 2017-05-21 04:44:45

              @ExplorerSoul LOC = Line of Credit. usually your credit score is used to calculate the interest rate on your line of credit, at least initially when you first apply for the credit. all of your credit impacts your credit score, not just your line of credit. so if you owe money on other things like visa cards etc. that will also impact your credit score.

              the credit score is calculated based on ratios. for example, if you have a $5000 credit card and owe only $100 on it, they look at the ratio of $100/$5000. if you owe $3000 on it, the ratio $3000/$5000 is much different. in order to get a high credit score you want to have the biggest possible difference between the amount available to you ($5000) and the amount you owe ($100 vs. $3000).

              this is why it can be strategic to take on a credit limit increase but then never ever spend the money - it will boost your ratios and you prove to the banks that you are responsible at managing the money you borrowed (by not touching it basically).

              however if you know that having money available to you will put you at risk of spending it and then taking on more debt, then the wiser decision would be to turn down the credit increase. it is all about what is best for you in your situation and if you get tempted, the temptation might be worth paying more attention to than strategically increasing your credit score. the strategic stuff only works if you plan on taking on a higher limit without touching it.

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              • ExplorerSoul
                ExplorerSoul Doing 0 cheers 2017-05-30 16:21:42

                @joycultivation The last time I checked my credit score, it was higher than expected (surprisingly). But yes, at this time I think I need to focus on better management before another potential increase.

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                • joycultivation
                  joycultivation 1 cheers 2017-05-31 12:49:38

                  @ExplorerSoul it is great that you are checking your credit score regularly and building that awareness.
                  one thing i am learning through using an app to track every penny is that i have more than i think and that life is more affordable than i realize.

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                  • ExplorerSoul
                    ExplorerSoul Doing 0 cheers 2017-05-31 23:30:50

                    @joycultivation It usually is when we stop spending on frivolous things.

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                    • joycultivation
                      joycultivation 1 cheers 2017-06-01 03:21:45

                      @ExplorerSoul Yes. I am learning that I really love frivolous things. Like, sometimes resisting the shopping feels like I am trying to break an addiction.

                      I have been doing well lately - the last 2 weeks I have been super frugal and managed to save a bit of each paycheque.

                      I am paying lots of attention to the tiny microspends that add up. Today i bought a tim hortons coffee for $1.50 instead of a $5 starbucks latte. it worked the same to wake up my brain.

                      total eat out spend today = $1.50 which is far less than $15 or $30. baby steps.

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                      • ExplorerSoul
                        ExplorerSoul Doing 0 cheers 2017-06-01 03:27:13

                        @joycultivation Oh, I don't think this is surprising. Marketers know how to target us consumers (probably in ways we don't even realize), and I think those of us who do spend more on unnecessary things probably have our weak areas, whether it be food, clothes, shoes, products, etc.

                        Really glad for you and your progress. πŸ™‚

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  • ExplorerSoul
    ExplorerSoul Doing 1 cheers 2017-05-04 03:17:38

    Not a good week so far in terms of spending. And the vicious cycle continues.

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  • ExplorerSoul
    ExplorerSoul Doing 3 cheers 2017-04-30 23:48:57

    To follow up on my last entry:

    Payments towards loans and credit line are still on track.

    Credit card #1 is not in good shape. I will be receiving a refund of about $131.55 for an order I returned, though, so the balance reflected is not exactly accurate.

    There weren't any new charges on Credit Card #2 for April until this weekend, when I used it three times.

    After all of my payments (and still a few personal IOUs I haven't yet paid), the amount in my bank account is close to 0. The most discouraging part of that is knowing this will lead to me resorting to my credit cards, which defeats the entire purpose. I told myself that other than gas, groceries and a purchase I had to make, I would try to limit my spending until my next pay, really because I have almost nothing left and because I don't want to be adding plenty of new charges.

    I also want to spend less in general but May is going to be a difficult month due to several occasions and additional expenses.

    I think I hoped to pay off my credit cards by the end of August, but at this rate, I think I will just aim to have them paid off by the end of the year. This means paying about $439 per month total on credit cards. Maybe extending the deadline will leave me with a little more wiggle room, though I'm worried that I should be cutting it even more in May.

    Because the balance on Credit Card #1 is now higher, I will put 3/4 of the amount towards this card and 1/4 towards the other. Once #1 is lower again, I will revert back to putting the higher amount on #2 since the interest is higher on that card.

    The difference in the total debt remaining really should be more than it is.

    I think what I also find difficult is that since starting the job I have now, I have been working so hard yet I am barely making any headway financially. It's not the job's fault of course, or at least I don't think it is, but it does take up a lot of time and mental space and I don't know if I am just in a worse state because of it but it has been a struggle to get a handle on my finances this time around when it seems I was better able to before. I think of the amount of time I've been there and how little progress I've made so far and it is hard not to feel discouraged. I am fortunate to be earning an income, absolutely. I just wish the result of all my hours could be more visible. But that's up to me I suppose.

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  • ExplorerSoul
    ExplorerSoul Doing 4 cheers 2017-04-30 15:46:08

    Update #2 (April 2017)

    Loan #1 (Royal Bank - interest rate: 9.83%)
    Last month's balance: $8,916.02
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $8,517.32

    Loan #2 (Family - interest rate: 0%)
    Last month's balance: $6,100.00
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $5,800.00

    Credit Card #1 (Royal Bank - interest rate: 11.99% for both purchases and cash advances)
    Last month's balance: $1,484.85
    Planned to pay: $171.25
    Actually paid: $171.00
    New balance: $1,930.66. Yeah.

    Credit Card #2 (CIBC - interest rate: 19.99% for purchases and 22.99% for cash advances)
    Last month's balance: $1805
    Planned to pay: $513.75
    Actually paid: $514
    New balance: around $1,411

    Credit Line (CIBC - interest rate: 7.2%)
    Starting balance: $4,819.11
    Planned to pay: minimum monthly payment
    Actually paid: minimum monthly payment
    New balance: $4,754.27

    Total debt remaining: $22,413.25

    I am doing so well. Not.

    Write more soon.

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  • ExplorerSoul
    ExplorerSoul Doing 3 cheers 2017-04-05 00:57:31

    Notes about update #1:

    Both loans and my credit line were paid as planned and are on track.

    Credit card #1 is not in good shape. Because of recent charges, my total debt decrease is roughly $293 (instead of the nearly $1100 decrease that would have been possible for March), which is terrible considering the payments I made, which amounted to so much more.

    Credit card #2: I had roughly $42 in new charges that I have yet to pay.

    If I would still like to have my credit cards paid off in the timeline I had given myself (six months, but now five), I would have to increase my monthly payment to $685 (instead of roughly $493). I have to see if I can manage this. If I am able to, I will still focus 3/4 of that monthly payment (in this case $513.75) towards Credit Card #2 (since it still has a higher balance and interest rate) and 1/4 ($171.25 in this case) towards Credit Card #1.

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  • ExplorerSoul
    ExplorerSoul Doing 3 cheers 2017-04-04 02:37:27

    Update #1 (March 2017)

    Loan #1 (Royal Bank - interest rate: 9.83%)
    Starting balance: $9,328.09
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $8,916.02
    Debt decrease of: $412.07

    Loan #2 (Family - interest rate: 0%)
    Starting balance: $6,400.00
    Planned to pay: regular/minimum monthly payment
    Actually paid: regular/minimum monthly payment
    New balance: $6100
    Debt decrease of: $300

    Credit Card #1 (Royal Bank - interest rate: 11.99% for both purchases and cash advances)
    Starting balance: $716.23
    Planned to pay: $123.25
    Actually paid: $123.25
    New balance: $1,484.85 (This is where I need the red font option)
    Debt increase of: $768.62

    Credit Card #2 (CIBC - interest rate: 19.99% for purchases and 22.99% for cash advances)
    Starting balance: $2095.25
    Planned to pay: $369.75
    Actually paid: $369.76
    New balance: around $1805
    Debt decrease of: $290.25

    Credit Line (CIBC - interest rate: 7.2%)
    Starting balance: $4,878.16
    Planned to pay: minimum monthly payment
    Actually paid: minimum monthly payment
    New balance: $4,819.11
    Debt decrease of: $59.05

    Total debt remaining: around $23,124.98

    I will write more soon. Feeling disappointed right now.

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    • joycultivation
      joycultivation 1 cheers 2017-04-29 21:08:59

      @ExplorerSoul I think that you should not feel disappointed - by taking the time to write this entry, and calculate all of the numbers, you are making HUGE progress. You should be proud of yourself. Your pysche is totally aware of the situation now - every time you are tempted to make an impulse purchase or spend on something you do not need you will be able to make VERY WELL INFORMED choices! A lot of people are afraid to even look under the hood and acknowledge the truth.

      In this courage you have demonstrated a lot of courage and self-honesty - BRAVO!!!!!

      During my "debt-free journey" this year I totally overhauled my spending patterns, and now that the debt is gone, I am finding that the amount each month that I am able to SAVE is way higher than I ever imagined it could be. I learned how LITTLE i could live off of and that life is never as expensive as we think it is. I am taking all of these lessons about frugality into "savings goals journey" now.

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      • ExplorerSoul
        ExplorerSoul Doing 2 cheers 2017-04-30 03:37:59

        @joycultivation After I saw that you cheered my entry, I looked at the total debt amount again and thought, it feels like a long road ahead. But I really appreciate you taking the time to comment and your encouragement.

        I am definitely considering my spending and I agree about how little we can live off of and that we often don't need as much as we think we do.

        After making all of my payments just the other day, I had nothing leftover which made no sense because it meant I would have to turn to my credit card(s). I don't like the thought of reducing my payments and taking longer to accomplish this goal, but I have to be realistic. I am finding myself back in an old pattern of paying too much and leaving myself with nothing and ultimately finding myself in a vicious cycle.

        Will be posting my next update soon.

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  • ExplorerSoul
    ExplorerSoul Doing 1 cheers 2017-03-21 02:45:03

    I'm disappointed that my first real update (coming at the end of the month or beginning of April) won't reflect the progress I should have made, all because of the spending. What saddens me even more is that I don't think I will be able to pay most of it back as I thought I would, and all of this ultimately sets me back in terms of my timeline.

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