So what is this all about, I hear you asking.
Okay back story first.
Basically coming into my early 30’s (yikes!) I found myself through girls, numerous brain farts, psychotic breakdowns, girls, and many other such trials and tribulations experienced during my 20’s, that I was over $40,000 in debt. The exact figure I’m not QUITE sure of, as I lost the first spreadsheet/budget I had when I first started looking at my debt back when I turned 30 or 29, I can’t remember (there were some substances involved during my 20’s which I’m sure has wrecked my memory completely). But I definitely recall that I had a budget/spreadsheet made up at the beginning of 2010.
So we can start from there.
2010 – $30,000-ish in debt(??)
I was on my way, I had an OK job, didn’t pay well but it allowed me to live rent free. For three months I pumped all my money into my Amex (with minimum payments going into the 2 Citibank Cards and one ANZ card) I paid it off. Then I lost the job after three months. I spent 2 months living in a hostel in a city I didn’t know, with no friends, no family and no income, because I was too ashamed to go back to my family and tell them about how I lost another job (again during the whole brain-fart noughties, I don’t even know how many jobs I went through it could possibly as high as 20!). The credit card was used and maxed out. I finally managed to score another job in a similar place (again living rent free!). Which leads us to Mid 2010…
Mid-2010 $25,000-ish in debt(??)
Alright round 2! This job was pretty amazing. My boss was great, my co-workers were great and for 6 months I sorta pumped my money into my credit card debt (there were times when partying seemed more important though). I managed to pay off a sizeable chunk of my debt. Then the place was bought out by another company and started going downhill. I quit (but the place closed down 2 months after). I found myself with a girlfriend I accidentally picked up along the way, in a country town. After 6 months of living in an isolated environment. We went nuts. The cards were maxed out. Again. I found a temp job and was living with my parents for a while. Then the girlfriend found a job in another city. I shrugged my shoulders and said “Meh. Why not?” Found a job there and moved to yet another city, going even deeper in debt in the process. Which brings us to 2011.
2011 – $23,640 in debt
I started a budget when I got the job at the beginning of the year, and stuck to it… for 2 and 1/2 months. Then one of my famous brainfarts ensued and I lost the plot for 3 and 1/2 months. I was still making payments on the cards but I’m not too sure how much on each card. Barely the minimum payment due if I’m going to be honest. But I managed to pull my head out of my ass, and get back on track. Which brings us to now…
NOW. $20,934.26 in debt
I have been back on the budget now for 5 weeks. This coming payday will be the 6th week in a row I have followed and stuck to it. I’ve gone from following the payment snowball method (where you pay off the debt with the lowest balance first) to the payment avalanche method (where you pay off the debt with the highest interest first). I’ve just calculated it and I pay a whopping 40% of my salary into debt reduction. Is this even sustainable? From past history it doesn’t look like it. But I’m willing to give it another go. From my calculations, factoring in interest, I should have all my credit cards paid off in the first few weeks of 2013. If I manage to pump my tax returns into my credit card payments it could be a whole 6 months earlier!
After reading numerous blogs online about people being up to their eyeballs in credit card debt and managing to break free, personal finance guru’s touting their method, I thought I might as well pee in the ocean as well. So here’s my pee.
Oh and I’m also short, fat and have bad teeth. Debt first, I’ll tackle the rest later.