Have you ever heard the phrase, “a goal without a plan is just a wish”? Well I’m starting to think that is true. Like many of you, I always have financial goals… some I have shared on this blog and others I have not. As we start this brand new year, I have to ask myself, were my goals of last year actual goals or just wishes for the future? I started reflecting on this the other day while looking at older posts about financial goals. Sure, I can list some of my goals but without a plan, how can I help you as readers follow my financial journey? Isn’t that the point of all of this? I also started wondering how much is too much to share? The answers to these questions will unfold throughout 2013, but for today, getting a plan together is the priority.
The Problem: In my pre-She Makes Cents life, I worked every month and in a short amount of time, I paid off my credit card. Then the bottom fell out and I was using my credit card to simply…live (very honest moment). Long story short, my balance of about $5300 (rounding up) is nowhere near, where it should be. Why, you may ask? Because I was caught up. I started swiping to get the “cash back” deals that I told myself I would pay it off at the end of the month and didn’t. I wasn’t using my envelopes as I should have and I might not have fully realized the my new financial situation.
The Solution: In reading some of my older post, I remembered a period where I locked my credit card up in a safe deposit box. Initially, I just wanted to see how long I could go without credit card spending. I wasn’t swiping, I wasn’t living beyond my means, and the balance was slowly decreasing over time. I am a very goal oriented person, so I know adding the component of an end goal date, one of the tips featured in the post How to Make and Achieve Your Goals, will help. Thinking back, why did I ever take the card back out?
The Plan: If you are in a similar situation, this is how I plan on making this wish into a goal and a goal into a “been there done that”. While I would like to have this paid off in a year, I know I may need cushion. My end goal date for credit card payoff is August of 2014. That means, with my interest rate, I will need to be making a payment of $294.36 per month to be credit card free by next August (check out the credit card payoff calculator at the bottom of my sidebar to figure out yours). Instead of paying the minimum, which is NEVER a good look, I will pay the fixed rate listed above or more. Also, whenever there are cash back deals through my bank, I will use the “rewards” to pay down my credit card. In my research, I have heard the advice to pick up the phone and call your credit card company for a reduced interest rate but depending the company, they may label you as a “high risk” customer and close your account, so do your research first.
How Are Your Eliminating Your Credit Card Debt?
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