Dear Hivers
October was my worst financial month ever in my married life, and even in my professional life! Thankfully, it’s my brother’s semestral break, and I didn’t have any big accountabilities to pay for. Just to give you an idea, $1000 is beginning to last for two weeks! When before, it could only last for about half a week!
I had been irresponsible in using my credit. I have been bad at managing my cash flow.
I swore to myself that this is never.gonna.happen.again!
Here’s my plan to pay off all my debts!
List down all my debt!
To get a bird’s eye view of the total debt I have to deal with, I gotta list them down. Everything! That includes credit card debt. Loan from bank. Money I’ve borrowed from friends and family. Even utilities I forgot to pay. Car payments. Everything. Nothing should escape this registry of debts!
When I did that I realized that I owe more than $100,00 all in all! Shucks. That’s a lot, even for my level of income!
Stop borrowing!
The next logical thing to do is to stop borrowing! That’s why I cut up one of my credit cards. I kept the one with a very low credit limit for my online purchases and for experimentation purposes. I want to discipline myself by treating credit as cash!
Save up my $1,000 Emergency Fund.
Why $1,000? Because, I need to finance some of the emergencies that could happen in my life-hospitalization, or the upcoming birth of our first child, or some car repairs and stuff like that. A 1000-dollar emergency fund is already a pretty good amount of money. So it will be a great investment for my peace of mind.
I plan to make $1,000 in the next 2 months. So help me God!
Decide on a minimum amount of money to be paid monthly.
This will actually depend on the minimum payments dictated by my creditors. In the case of my credit cards, this would be anywhere between $500 monthly.
I won’t go down that route, though. I want to decide on a TOTAL minimum amount of money I can pay. Depending on my level of income, I’m setting aside $ 500 for monthly debt payments. I will divide that into my existing debts.
This is only the minimum though. Most likely, I will be making bigger payments, especially if some of my projects earn money! I want to make the most out of my money and getting rid of debt is definitely a great way forward!
Follow Debt Strategy
I’m going to attack the smallest debt I have until it is totally paid. And then I will start paying off the next smallest one, until everything gets paid.
Six months! That’s my timetable. So by May 2020, I can say that I am already, totally debt free!
Focus on the end goal.
Focusing too much on the effort required to do this may take away my resolve and commitment. But if I look forward to May 2021 when all my debts shall have been paid, our first baby is in my arms, and we’re preparing to invest. Isn’t that blissful?
Pray, Commit, Act!
So, I will be praying for this endeavor. It can be tough. But I’m willing to commit to it. Already, I am cleaning up my finances and preparing for action. At the end of the day, it’s about my actions, more than my words and my resolutions!
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