It’s been a hot minute since I’ve posted a Debt Repayment Recap.
I wish I could say it’s because I’ve been so engaged in a side hustle that I’ve had no time to blog or anything. But really it’s because I’ve been a little apathetic with my debt repayment and have subsequently been ashamed of bringing that to light. Like “they” say, though… slow progress is better than no progress, amiright?!
Here’s a look back on my debt repayment journey!
When I started my debt repayment journey in May, I was $23,983 in debt:
Dental Credit: $1,809
Credit Card: $1,399
Combined Debt of $23,983
Today, December 31, 2015 I am $19,779 in debt, meaning I have dropped my overall debt by 17.52% since I started paying off my debt.
Car: $18,190 (-12.44%)
Dental Credit: $0 (-100%)
Credit Card #1: $1,566 (+11.93) (oops)
Credit Card #2: $23 (I don’t know how to calculate this.)
Combined debt of $19,779 (-17.52%)
Here’s what I’ve learned this year in attempting to plow through my debt:
- Money management is less about money and more about mentality.
It’s not about the amount of money you make. If you are constantly thinking, “I’ll start taking care of my money when I have more money,” there is absolutely no way that’s actually going to happen. How you treat your money when you’re broke is the exact same way you’re going to treat your money when you’re well-off.
- Do not stop.
From September – November, things really sucked. After plowing through my $2500 dental debt, I lost steam. I thought I could switch onto auto pilot and that I’d stay the course full steam ahead. Wrong. So wrong. I got a little loosey goosey. From May – August I dropped my debt by 11.7%, but from August – December I only dropped it by 6.52%. But here’s what matter: it kept going down.
- You can prepare to stay out of debt while you’re getting out of debt.
Part of why my debt repayment slowed down a bit at the end of the year is because I finally started thinking about preparing for the future with my money. In July I drained my savings account to pay off a debt. From then on out, any expenses that popped up (like a new tire, an unexpected bill) had to be put on my credit card. I set up auto deposits to the savings account connected to my checking account. Thanks to Ernie, I opened an account at Betterment. Betterment is an investing service. I’ve been thinking about ways to invest my money but was at a complete loss as to how to do that. Betterment is great because you can set up an auto deposit, decide what percentage you want to divide into bonds and stocks… and then they invest it for you. I am IN LOVE with this service. Sign up with my referral link and you’ll get 6 months for free. Just so you know, I only got 1 month for free and I plan on paying from here on out (full disclosure: if you join with my link, I get a month free).
- Financial health rolls over into other areas of your life.
For awhile I thought that financial health was just about what I chose to spend my money on. However, in my life I can see that the healthier I become financially the more I desire to improve my physical, spiritual, and emotional health. I don’t want to spend money, so I figure out ways to spend my time that don’t involve shopping or spending money without thinking about it. It requires more intentionality and TIME.
Just paying my car payment every month next year will drop my debt by 24%. My goal is to drop my debt next year by… wait for it…. 39.37%. Here’s why. If, by next year at this time I have dropped my debt by 39.37% I will have cut my overall debt in half in 20 months. The magic number is $11,991.
I’m thinking of going back to the cash only envelope system to really help jumpstart that – and how perfect that New Years starts on a payday, right? I can start the New Year on a cash-only system.
What are your financial goals for 2016, and how did you do in 2015? Let’s keep on keeping on!