The Money Dance: Intro
Originally published at Lane Ellen. You can comment here or there.
Today I start discussing a goal: to kill my credit card debt in 18 months.
How will I do this? Well, tentatively, of course.
The facts are:
I have four credit cards.
They have a bunch of money on them.
They do not have favorable rates.
I tend to overpay them, but with no plan or real strategy.
I still use them here and there.
The thing that got me started on this process was Ramit’s blog plan of How to Save $1K in 30 days. Some of the ideas are useful to me, and somehow, I found this important link regarding the Snowball method of paying off your credit card debt. The free excel spreadsheet here is fabulously helpful.
I’ve had my own spreadsheet for a while, but it doesn’t calculate the interest. I’m just not ambitious enough to build that. I’ve also heard of the snowball method - where you pay one card off, and the money you WERE paying towards that card gets lumped onto another card’s payment until you pay that one off. Thus, the payments grow as you gather speed.
I recent killed one of the cards, but then followed it up by spending on two others that I never use. I don’t expect to never have a credit card and pay everything by cash - I’m a realist, and I enjoy buying things. But I want to get to a point where I feel comfortable buying something on a card and paying it off within two months after purchasing. I want to feel like less like I’m secretly undermining myself long-term (crushing credit debt) for short term payoff (buying something). And someday, I may decide to own a home.
So, I will keep people who are interested up to date with things I am doing in the Money Dance. The Snowball Excel sheet says I can get rid of the debt in 18 months. We’ll see if I can stick to that.