On January 1 of this year, my total credit-card debt was $2,448. I resolved to pay it off this year. My credit-card balance has been as high as $5,000 since graduating from college five years ago, so I put a plan in place.
- Each paycheck I pay at least $150 toward my balance.
- I put myself on a strict daily budget determined by paycheck amount minus bills divided by 14 (number of days until next check). Any extra cash goes toward the balance, including overtime earnings at work.
- I cut back on leisure spending.
- No more purchases that I can’t pay off that month.
- I started with three cards, but I transferred the balance on the card with the higher interest rate to one with zero-percent interest for a year. I pay most of the $150 on the card with the higher interest.
- Dining. I vowed to cook more meals and dine out less. Gone were the days of weekly brunch with friends. I stopped buying lunch at my office building’s cafeteria every day. For the price of a hot lunch, $6, I could buy the ingredients to make two or maybe three meals. Pinterest offers easy-to-follow recipes and I use coupons as much as possible. I limit myself to drinking mostly water each day. If I go to a bar, I limit myself to one alcoholic drink.
- Entertainment, Travel and Health. Travel was the most difficult thing to cut back on. I try to stick with in-state road trips and split the costs with others. I bid on hotels online to get the lowest price possible. I also cut back on movies. Instead I use Netflix or wait until the a movie comes out on Redbox. I love the outdoors, so when a friend wants to hang out I suggest free activities like hiking, swimming or a free yoga. I avoided the cost of joining a gym until this month. When I did join, I refused to pay a high enrollment fee; I ended up paying $25.
- Shopping. In the past six montVisit Sitehs, my only clothes purchases have been a dress and cardigan for a wedding, a dress for my birthday, two pairs of jeans for cooler weather, and two pairs of shoes that match everything. I’ve gotten creative by bringing back clothes I haven’t worn in a long time and pairing them with newer items. When I do have to buy, I pick low-cost retailers, thrift shops and yard sales. I often look in the clearance section first. When I need something new, I research the lowest price possible online and save for it.
- Unexpected expenses. My condo needed new flooring, as the carpet was in bad shape. I took on a DIY tile project with my boyfriend that added $858 to my balance for tile and supplies. This saved us money because professionals charged up to $2.50 per square foot to install it. In March, I found out my tires were in bad shape and needed to be replaced. There went $332. In April, my car’s brakes needed to be replaced. The repair shop recommended more than $600 in repairs, but I opted to only get the parts that were completely damaged, at a cost of $268.
The Results So Far
As of today, my balance is down to $1,100 on just one card. I estimate that I can pay this off in August if I make payments of $300 to $400. This won’t be easy, but if I keep following my rules I will be free of credit-card debt before the year’s out.