I woke up $10,000 richer this morning, thanks to knocking down my credit card debt a bit more.
My credit card debt is now down to $91,551 (from $106,636 in November) and net worth a bit over $322,000: total assets $959k minus total debts of $657k. Of course that net worth is mostly paper and pixels, what Zillow thinks my house is worth and what the stock market says my retirement accounts amount to. I’m not touching any of it to pay off the credit card debt. Besides, it is a fraction of what it ought to be.
If I got rid of all my debt, I’d practically be a millionaire (again), but that’s another story.
Here’s my plan:
FIRST: Whenever I get a big splash of consulting income (about four times a year) and this year’s tax return, push it to paying off debt. That alone will knock the debt down about $50k by the end of the year.
SECOND: Every month after paying off bills and before paying any debt, leave $2,800 in my checking account to have on hand for the month’s spending needs:
All this will be paid from my checking account, not borrowed against the future! I suddenly and belatedly realize that failing to do the second step has been my downfall.
THIRD: Then put the remaining $2,200 toward whatever little bit accumulated on a credit card (which should only be on my husband’s card mostly for some of the above items) and past debt. Keep an eye on interest rates, asking for lower ones when possible and paying more toward the higher interest rate cards.
My goal is to be out of credit card debt by April 2019.