August 2012 Debt Update: Balance Transfer Time
This month was great for debt repayment, as the whole summer has been. It will slow down a bit after September so I am working hard to pay as much as I can now.
Smallest Debt (July 2012): $1,683
Smallest Debt (August 2012): $0
The goal was to have the Discover paid in full and I did! So now I need a new “smallest debt” although the name of this category was really a misnomer and it is now my Highest Interest Debt, which is my other credit card, the one that sat at over $18K for most of this year.
Highest Interest Debt (August 2012): $11,108
Looks doable, right? The reason why it’s not at 18K is because I took advantage of the 0% for 18 months balance transfer offer at Discover. I called to complete the transfer which was supposed to have a 3% fee and with a simple question (exact words: “or maybe you have a better deal for me?”) the rep changed it to a 2% fee. I am still saving money so I accepted the 2% fee, because I would have had to apply for a new credit card to find a 0% APR/0% fee deal, and I don’t want to do that. So I still have four debts, but the interest rates are 0% (Discover), 6.25% (student loan) and 3.9% (Mazda). The balance on the Discover is $7K, and I will only pay the minimum while I try to knock out this high-interest credit card balance at 10.24% APR.
I am really grateful to have been able to pay off a lot of debt in the past few months and now I have a lot of other things I am trying to figure out. So my goal for September is to be at $10,000 on the high-interest debt. I also think I might have a DSLR camera by the next update. I’ve only been wanting it for three years so I think I am finally going to do it!
Total Debt Update:
August 2012: $26,795
% Change from July: 7.6% Decrease!
If you are new to my blog and find yourself in over $30,000 worth of debt (or maybe $40K or $50K), I don’t want you to think this is all super easy fa la la la I’m paying off my debt look at me! I was more clueless than anyone else about making a plan, a budget or being committed to paying off debt. You can definitely do it. It will be hard and some months you will have all these crazy expenses you didn’t plan for or something stupid like a parking ticket will happen. It’s OK. Don’t let that sinking feeling of desperation sink in. I used to wake up every morning stressing out about how much debt I had. I would be calculating which bills to pay so that there was still $11 in my bank account. It’s been 14 months (that’s a year and two months for laymen) and I’m finally feeling like the momentum has picked up and I’m able to make progress each month. It might not continue like this but no matter what, I now know I have the ability to be more reasonable and disciplined with money. If you are looking for my most organized thoughts on getting out of debt, check here.
How are you doing with your finances this month?