Tuesday, September 8, 2009

My debt breakdown…

In 2003, I was in $26,000 of credit card debt. Here is a general year-by-year breakdown of my debt repayment process.
2003- $26,000 (combined starting balance on all of my cards)
I would pay $433.33 each month towards my multiple credit cards which would total $5,200 each year.
Therefore, at the end of each year my amounts looked something like this.
2004- $26,000 - $5,200 = $20,800
2005- $20,800 - $5,200 = $15,600
2006- $15,600 - $5,200 = $10,400
2007- $10,400 - $5,200 = $5,200
2008- $5,200 - $5,200 = $0
Just to put a few things in perspective. First, I am rounding these numbers so it didn’t look as perfect as I am describing here. Second, at times I lapsed and started to spend on my credit cards so my balances weren’t always going down each month. Third, I wanted to show my debt repayment this way because I want to discuss my Getting Out of Debt Rule #3 again.
This was a popular post because I think many of us don’t pay attention to the small things in life that are budget busters.

Anyway, let me take my vending machine example again. By the way, I love vending machines because I have a sweet tooth and just can’t resist sugar sometimes. Say I spend $3.00 every day for an entire year on candy from the vending machines in my office, at the mall, at school, and at the pool. That is $1095.00 that could have gone to my debt.
Now, I want to do the math for you. If I had taken that $3.00 and paid a credit card bill each day I would only have to come up with an additional $4105.00 for that year. Or that would be an additional $342.08 each month.
Isn’t $342.08 easier than $433.33 to handle?
Well, that is my breakdown of my credit repayment folks. What I am not talking about is my daily breakdowns? I had many of those. I will save that for another post.

Best wishes,


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