No More Credit Card Debt

By on Sep 25, 2010 in Credit Card Debt | 0 comments

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I have paid off all my credit card debt and can proudly say I have no more credit card debt! It feels good. Find out how I did it!

How I paid off my credit card debt and have no more credit card debt. I’m so happy.

1. Pay Yourself First
So my first step was to make a plan. I took how much I was making a month and since I’m on a salary base, I can know for sure what to expect on the 1st and 15th. You’ve heard it before: “Pay yourself first.” Well, in this case, it was to pay the credit card companies first. For example, I knew to expect $2,000 each paycheck and I knew how to allocated every dollar of that paycheck. I set a goal to get out of credit card debt in 6 months, so I took the amount I owed and divided that by 6. Then I calculated how much I need to pay each paycheck to reach that amount. Pretty simple, right? Not exactly.

2. Following the Plan
The easiest part is to make a plan. We all make plans to lose weight, get in shape, save up more money, spend more time with the family, etc. But how many of us actually follow through? The follow through is the hardest part. With finances, it’s a bit easier because you can set up automatic withdrawals which go to savings accounts, pays off debt, or goes to retirement funds. As long as you are certain when you will get paid and how much, this is relatively easy. Make sure to set up auto-withdrawals at least a couple days from after you get paid just in case something goes wrong and you don’t get paid exactly on the 1st and 15th. Also, make sure to keep a reserve in your banking account so that you won’t get an automatic withdrawal when you have nothing in your bank account.

3. Be Meticulous
Along with setting up automatic payments, I was meticulous about paying down debt. I made sure to also add manual payments on top of the automatic payments. This made sure that I was on top of things and it even helped to pay down debt faster. Even if it was just $100 here or $150 there, those small payments add up over time. In terms of savings, it goes the same way. On top of my automatic savings, I would also make manual transfers into my brokerage funds so that I would reach my max Roth IRA limit faster or reach my goal of savings faster.

4. Cut Down Expenses
If you have to eat cup of noodles or pasta with just sauce for 3 months, do it. Do whatever you have to do to reach your goal. That’s that. Cut your expenses and be disciplined to not buy things that you don’t need. Sell things you don’t use on eBay or Craigslist. Do what you have to do.

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