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Credit Card Debt

How We Paid Off $20,000 In Credit Card Debt

How We Paid Off $20,000 In Credit Card Debt

1. Preparation of a monthly budget

We prepared a monthly budget on a spreadsheet and this helped us to track on our expenses. I ensured that I updated every single time that made a transaction or budgeted for something.

This monthly budget helped us to note down what we earned over a specified period and how we planned to spend it including future expenses in the house. Other ways through which you can create a realistic budget include;

• Calculating your expenses; you can do this by referring to your bank statement, and all your financial documents to help you calculate how much you spend in a given period of time. You also need to factor in unexpected expenses such as unplanned repairs in the house

• Figuring out your income; You need to know your actual income by calculating all the funds that you expect which may include your salary, dividends, and online sales.

• Calculate how much you need to save and have a debt repayment plan; you need to subtract your expenses from your income and determine how much you need to save. This will help you have a clear and visible way of saving and having good use of your money using a monthly budget.

2. Quickly clearing credit cards

We started by clearing our credit cards by clearing our smallest balances for a start which enabled us to remain with the huge balances. This helped us to appreciate the steps however small that we were taking towards clearing our balances. This plan helped us remain with the huge balances that we created a formula for clearing. This motivated us into clearing them in order to remain debt-free

3. Make it a routine to check your balances daily

Checking the balances daily helped me to note my budget spreadsheet. This routine check helped me to record any purchase that I made or any debt that I cleared during the day and keep it updated. This helped me to note and appreciate any little steps that I was making towards achieving financial freedom. This routine updating of your budget spreadsheet will help you to note all the financial transactions that you engage in on a daily basis without forgetting.

4. Always ensure you get fair interest rates by negotiating

It is possible to negotiate your interest rates from your credit card company to ensure you get a fair deal. Negotiating our interest rates from the credit card companies helped us to save due to our continued and long-standing business relationship with the same credit card company. Other ways through which you can negotiate or a fair deal on the interest rates include;

• Understanding your current situation; You need to evaluate your current status by knowing all the essential terms such as the current balance of your cards, and the grace period.

• Understand the terms of your credit card company; It is essential to understand your bank or credit card company perspective in order to establish how you can best negotiate and up to what level they can agree to your request.

• Make your request known; You can call the customer relations office and explain to them your request. It is essential for you to remind them of your past histories such as prompt payment of your bills and your good credit score. This can help in negotiating for favorable interest rates

5. Pay in cash

Paying in cash is the best method to use in order to avoid overspending. Always strive to pay everything in cash where possible. One way through which you can budget with your cash money is by classifying all your budget areas and having the allocation for each. This may include; entertainment, food, utilities, and gas with each having an appropriate allocation that will last you for a month. This will help you to note your expenditure and correct your spending habit

WHERE TO CUT BACK

6. Taking your meals outside

Preparing your meals at home saves your money and helps you avoid unnecessary spending. For instance, preparing more dinner helps you save lunch money the following day. Such a habit of avoiding eating out will help you save money that will help you achieve financial freedom in each small way

7. Check on your groceries budget

Having a proper grocery list helped us save money since we were able to plan and calculate what we needed for a specified period such as a week to avoid having excess food in our house. This helped us to buy the most essential things only and save money for other things in the house. Buying our own groceries also helped us get creative with the menu that we were preparing in the house especially when we wanted to prepare something new.

8. Get a simple cell phone

Having a simple phone will help you cut on costs that come with sophisticated devices such as smartphones. You will be able to have zero expense on apps and data browsing costs which at times can be costly. Such a little movement will help you save money each passing month.

9. Cable or satellite Television

Cable tv can be costly especially if you are struggling financially. Cable or satellite television forms part of a critical form of entertainment that we believe we cannot live without. This type of entertainment comes at a cost which if necessary, you need to cut to help you save money by reducing your bills. Television keeps us glued and has been blamed for time wastage and laziness in some people which if removed will help to reduce on expenses in the house and also save on time by making us more productive in our day to day work

10. Entertainment

While we all know that entertainment is important and helps us have a great time in our daily lives, it can be a costly move if overdone especially when going out for entertainment. This high cost can be brought about by expensive food and drinks at entertainment spots or traveling to such entertainment spots which can at times be located in distant places. Conducting research online for affordable festivals or events has helped us save money while in search of weekend entertainment or any outing that we wish to have

11. Your Insurance covers

One of the ways through which we were able to save was by consolidating our insurance covers. Consolidating the insurance covers helps to reduce the premiums that you can pay to an insurance company. This move also helps you to have all your assets covered by one insurance company.

12. Health insurance

It is essential to cut on your health insurance costs to ensure you get affordable health insurance that you can comfortably pay for. Some of the ways through which you can ensure you have an affordable health insurance include;

• Checking all the available options before purchasing the health plan; exploring all the available options will help you know of the most current and updated options available in the market and thus help you to have a more recent set of packages to compare with.

• Check the coverage of all the plans in the market; you need to know the coverage of the plans which will help you know how well you and your loved ones especially if married are covered.

• Get a health insurance broker to guide you; a health insurance broker will guide you in choosing the best health insurance cover for your use especially in the modern market that has numerous options and which can be confusing to choose from. A health insurance broker will guide you by understanding your budget

13. Car loans

We decided to sell our cars to enable us to clear our car loans which were straining to pay. We then decided to purchase a locally used car for our use. This turned out to be a great investment decision that we made since we had a car that we did not have to pay any loan for and which served us well and provided us with much-needed convenience which is important in this era. We hence decided to always pay cash for any car purchase to eliminate the strain of paying for car loans which can be expensive.

14. Clothing

When doing shopping recently, I was able to find cheap polo shirts that were being sold at $8 each while others were priced at $3 each. This helped in saving a little cash which can be used in other small commitments in the house. In order to make more savings, I resolved to have a few shopping sprees in a year to avoid unnecessary shopping which can be expensive and end up consuming huge amounts of money. In regard to shopping, I always shop for a specific item that I need and this has helped to avoid unnecessary shopping or buying items that are not necessary for our use.

15. All the little things

It is essential for you to determine whether the small things that you undertake or buy are worth it. Small things such as an upcoming party, gym membership, and unnecessary travel can leave you with high bills that can cost you huge amounts of money. It is important you prioritize all your tasks and activities to minimize the chances of overspending your money on non-essential things which are not worth it.

BE THRIFTY

16. Shop at second-hand stores

Shopping at second-hand stores will help you get great items at an affordable price. Other places to find cheap items include garage stores and at thrift stores. Items that you can find are; furniture, clothes, decor and amazing deals that will help you save money from each purchase. Shopping in these stores, however, requires a plan such as having a list in mind and your preferred item that you wish to purchase.

It is also important you shop with a budget to avoid overspending while at the second-hand stores. Lastly, you need to know where you intend to carry out your shopping by carrying out proper research to know the stores better and what they offer including the price range of the various items found there

17. Always ask questions

Do not be afraid to ask for a discount when making purchases in a store. Asking for a discount can help you get discounts and thus save you money when shopping. You can also inquire on critical aspects of the item such as the sizes that are on sale, when an offer is likely to come up or when it is likely to be on the shelves again. This will help you have all the facts regarding a product which will help you in future purchases.

18. Check on store’s clearance racks

Goods that on clearance sale tend to have a discount which is meant to encourage quick purchase and clearance of items from the stores. This is particularly important if you are shopping for a specific item. This will help you save money while making a purchase in the stores.

19. Save on gifts

One way through which you can save on gifts is by getting creative. Creatively designing a gift will help you save on money that you would have spent purchasing. This is particularly helpful in important events such as birthdays which can include framed printable that I am fond of giving on such important days.

20. Shop around and also online

Comparing the prices of items that are found in your local store and those found online can lead to great discovery where one is cheap. Such comparison will help you know where to shop as you seek to save money especially when shopping which can be a costly undertaking, especially for consumer goods.

WORK IT GIRL

21. Find extra income

Finding an extra income will help you comfortably settle all our bills and have the guarantee of securely having a comfortable life where you can afford the basic items. For instance, I was able to create websites and do graphic jobs which helped me get little money for our use. I was able to keep the job as a side hustle after finding a full-time job later.

This created two revenue streams in our house and which helped us to comfortably settle all bills and clear all debts easily. One of the most popular ways through which people are able to earn extra money in today’s world is through online work such as doing freelance online work which includes article writing, data entry, and virtual assistant work which are some of the simple ways through which you can work online and earn extra money.

22. Do it Yourself

Doing things by yourself in the house will save you money that you would otherwise have used to pay for the services rendered. Some of the tasks that you can carry out by yourself include; applying a coat of paint, repairing your broken table, changing your lighting bulbs, or carrying out simple moldings in your home.

23. Use coupons

Coupons can help you save little money that you can use in your own simple ways in the house. It is however not a major way through which you can expect to make huge savings.

24. Saving around the house

Some of the little ways through which you can make savings around your house include; turning off our lights when out of a room, purchasing energy saving bulbs for use at home, purchasing cheap furniture. Such small savings will, in the long run, help you save money for other uses in your home.

25. Prepare a 5-year and 10-year plan

Preparing a short term and a long-term plan has numerous benefits which include;

• It helps you manage your income better by classifying what you need for your expenditure and for savings.

• It helps you to increase your cash flows by establishing your spending behaviors, and expenses. This will help you have careful use of our money as you seek to save with a goal in mind.

A five-year plan is a short-term goal that is meant to solve immediate issues and contribute to a bigger goal that can be spread in a ten-year plan.

Conclusion

Living a financially stable life requires careful planning of your finances and having all your plans in order. The factors listed above comprise the many ways through which you can clear all your debts by understanding all the elements that you can do without as you seek to save your money and have better uses. You also need to understand the new ways through which you can add extra income generation channels in your life to avoid living on a very tight budget which can be stressful in this modern life

This article, therefore, is meant to guide you as you seek to achieve financial freedom, it is however not meant to make you strain and live a life of need but to guide you on the simple and useful ways through which you can save and live a debt-free life that we all endeavor to have.

About the author

Willie DeJarnette

Just wanted to provide some basic knowledge of credit cards, credit score, and other credit types financial resources. Always trying to provide an understanding how to use credit cards and basically staying away from financial ruins.

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