I haven’t done a Personal Finance post in a while.
I’m a blogging slut. I will blog about anything and everything. My keyboard, spreads its legs to any topic that gives it even a glimmer of interest. I think it has something to do with the fact that it’s typewriter father never gave it much affection growing up…
Anyways, enough anthropomorphising my blog and it’s slutty ways.
I feel good about how I’ve managed and am currently managing my debt. It’s no longer a snarling, fang-toothed monstrosity that I have to bury my head in the metaphorical fluffy baby blue blanket with bunnies on it. I’ve come to terms that this debt was a mistake. But without making that mistake, I wouldn’t have taken the time to learn all the tips and tricks in regards to paying debt off (and in a year – wealth building). I wouldn’t have learned that not only I have the the willpower to create and stick to a budget, I really don’t miss all the crap I used to spend money on (alcohol and wild nights out).
Now onto the budget! 🙂
So this is my debt as it stands.
Amount Owing is pretty self explanatory – that’s the current amounts owing on those particular cards.
Amount Paid – that will be the amount I’m paying off come next payday, which will be on the 12th of April.
The percentage in the bottom far right is the percentage of debt I still owe on ALL my cards AFTER I make those above payments.
So in 9 days, my debt will be down around about the $15K mark. And sure, if any sane person had debt of that amount they would be in a state of near panic. But that’s probably the one good thing about having debt in the high-$20K – low $30K, you have perspective on just how worse it could be.
Okay it’s taken me 2 years to halve my debt. But in saying that it’s been the last 4 months where I’ve seen the most (consistent) upward movement in my net-worth. I’ve paid of $4000 off in my total debt since January! I’m no longer struggling with interest, as in I can pay off a significant amount of my debt every month (before interest is applied) that when at the end of the month when the interest is applied, it doesn’t feel like I’ve gone 1 step forward and 2 steps back.
Now as you can see from my proposed payments, I am not strictly adhering to the avalanche method (where you concentrate all your monies on one debt, and make only the minimum payments on all others). The minimum payment for Ignite by Westpac is about $150 a month. I’ve put in $350 last pay, and will be putting another $300 this pay, essentially I’m quadrupling the amount I really should be paying. Why? Interest. If I get and keep my outstanding balance to under $7000 on this card, my monthly interest goes down from $150 to around the $100 mark.
And since this card will have an outstanding balance on it until December this year (8 months) that’s an extra $400 of interest I will not be paying. Couple that with the little-bit-more-than-the-minimum payments I make, when I actually start paying off this card (around the middle of August) I might actually might have made a bit of in roads into this card before the avalanche method brings it into focus.
Now let’s take a look at my Net Worth graph (and yes I am excited about putting stuff into graphs. I am a nerd. Deal.)
I have now reached equality to the highest point from my earlier attempts to pay off my debt (before life happened).
So in 9 short days I will have surpassed my previous benchmarks! And in 23 days I’ll have left those benchmarks in the dust! WOOT!
And even though it’s still 8 more months till I am completely debt free, that light at the end of the total is definitely a lot closer than before.
I can smell a hint of fresh air.
I smell freedom.
It smells like chocolate 🙂