By Jaida Redwood
I’ll get straight to it. I woke up one day with $20K in credit card debt. For a while, I thought it was fine, as I had always had on-time payments, and my credit score remained in the “good” range.
However, while my on-time payments and “good” credit score looked good on paper, my savings account did not.
It was non-existent.
The savings that I always told myself I’d get back to, became a part of the forgotten. I had accumulated about $800 a month in credit card payments, making very little impact to my total debt owed due to interest.
I had little leftover to invest in myself.
Why did I have so much credit card debt?
It all began at 20 years old when I got my first apartment and credit card within the same year. It was one of the most exciting years of my life, but was a cocktail for disaster for a college student who paid everything herself, and knew little about financial management and building wealth.
I often ended up using credit cards for when I didn’t have enough money to pay bills, but still felt compelled to enjoy all of the great things NYC has to offer that weren’t free.
By the time I reached the age of 27, I had finally become aware of where I was going wrong. I started to want more out of life other than “keeping up with the Joneses”.
Making smart money moves
Dining out at the newest restaurant in Manhattan became less important to me. Buying food and cooking at home was my new jam!
Travel remained important, but I now traveled within my means. I no longer felt the need to say yes to every invitation.
Shopping turned into something I did on a “need only” basis. If I didn’t need it, I didn’t get it. Shopping therapy was replaced with dealing with my shit.
I learned how to say no to others and myself, so that I could say yes to the things that mattered. Being financially secure and having the ability to invest were things that mattered.
As I began to dive deeper into my financial goals, it became easy to say no to the habits that didn’t help me. I lived within my means and kept my expenses low. I began to see the progress and reward of delaying instant gratification.
I started to map out how to get rid of the money owed.
I paid the smallest credit card debt off first to the largest, which I learned by following Dave Ramsey’s snowball method.
I changed not only my habits, but my lifestyle.
I created a budget sheet to keep track of my monthly spending by category.
Credit Card Debt Free
Changing my spending habits, lifestyles, and having a goal to pay off debt, led me to be credit card debt free as of July 2020. It took me two years to pay off my credit card debt, once I made it a goal!
My next major goal is to pay off the rest of my student loans. I have about $13K left, and I’m projecting it to be paid off by August 2021.
Do you have your financial goals?
Have you created a budget sheet?
Are you in a similar situation that I was in?
Please know that taking the first step to change your habits is the beginning of a new life that will eventually bring you abundance.