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1 Year to Debt-Free!

2012 December 5

At this point next year, I will be something I have not been since I was 18 and received my first “You’ve been approved!” notice in the mail:  I will be completely and 100% credit-card-debt-free.

[Insert sound of my squealing here.]

That’s right:  on November 2013, I will be finished with my 4-year commitment to my debt management program and free of all credit card debt at the tender age of 31.  (Seriously, how many people in America can say that?)

The Long & Winding Road

It’s been a frustrating and impatient journey.

Four years ago, as my APRs kept soaring and we found ourselves with less and less left in our bank account at the end of each pay cycle, I realized that something had to be done.  It wasn’t one of those valiant “I shall make this right!” proclamations; it was more a back-against-the-wall, “Holy shit, we’re not going to be able to keep our house if this keeps up!” kind of decision.

Since we didn’t want to be totally credit-cardless for 4 years in case an emergency sprang up, and since I had the larger debt-to-income ratio, we decided we’d consolidate all the accounts under my name first, then work on my husband’s debt.  That way, he could still hold a few cards open in case we needed it.  (And we could keep our Kohl’s card to get the wicked discounts Kohl’s is constantly running for cardholders.)

So, taking the first step and admitting I had a problem, I signed up for a repayment program with Consumer Credit Counseling Service of Buffalo and prepared myself for 4 years of learning to live without my plastic crutches.

We failed quite a bit at first.  Since my husband still had cards open, it was tempting to keep using them for non-emergency “needs” like wanting to have a “nice” dinner for our anniversary or taking a road trip to see that band we’d Always Wanted to See So Of Course We HAD to See Them.  We also made the mistake of opening up a Target card figuring we always shop there, so it would be dumb not to get the cardholder discount on all our purchases.  Then we bought way more than we normally would each week (oh, the lure of “it’s only credit”!) and were only able to make the minimum payments, thus nullifying any minor savings we were getting at checkout.

I had to learn to reprogram myself.  It’s honestly taken me until this last year of the program to get to the point where I’ve got a credit-card-free mentality.  If an unexpected expense like a vet bill or a car repair comes up, I’ve trained myself to first think of how we can fit it into our budget—what other areas we can cut back on or what additional freelance work I can take on to cover it—rather than automatically putting it on my husband’s cards just because they’re “there.”  We’ve started paying more than the minimum on my husband’s largest balance to start the ball rolling until he can go through the program himself.

It’s taken us this long to get our finances (and financial mindset) in shape instead of merely focusing on the damage control of my payment plan.  But we’re here—and soon enough, we’ll be even further.

What Lies Ahead

I almost fell over when I read a recent post on Budgets Are Sexy entitled What Would a $40,000 Raise Feel Like?  The author was contemplating how much money a year he’d be saving once he got through his own debt management program, and it amounted to the equivalent of suddenly getting a $40,000 raise!

When I finish my program in November of next year, it will free up $420/month in our budget.  That, my friends, is the equivalent of a $5,040 raise.  (No, it’s not quite as impressive as a $40,000 raise, but I’ll take it!)

Once I’m able to open a card again (just one, strictly for emergencies and tucked safely in a drawer where I can’t easily use it), my husband will start his own debt management program to pay off his credit card debt.  This will most likely reduce our monthly expenses even further since monthly program payments are considerably lower than what you’d be paying directly to the cards if you weren’t enrolled.

Then, in 4 more years from that time, we will both, in our mid-30s, be a credit-card debt-free couple, with an extra lord-only-knows-how-much in the budget (and the bank!) each month.

Maybe enough to finally start that retirement fund we should already be building.

Maybe enough to take care of the roof the driveway the leaky basement in our current home—all paid for in cash.  (A concept that still feels kind of made-up to me.)

Maybe enough to do start doing what we both really want with our lives, instead of being enslaved to our current jobs because of the bad choices we made in the past.

One year from now, baby.  One year from now…

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  • Jillian Reading

    This is so fabulous to read! Congrats! All of your hard work is paying off! This post made my day!

    • Cordelia

      It is! I can’t tell you how great it feels to have made it this far. (Possibly comparable to how you feel after conquering an exhausting but rewarding Cross-Fit workout?) :)

  • Abby Heugel

    Congrats! I’ve never had credit card debt, but I do have a mortgage that I’m sure I’ll be paying until I die. However, never credit card debt! It has to feel like such a relief for you guys. Good luck with the year ahead :)

    • Cordelia

      Thank you!

      Yeah, our mortgage/student loans are a whole ‘nother kind of debt we’ll have to work on chipping away at after this. But the credit cards were the big weights around our ankles. You are SO lucky (and wise) to have avoided the credit trap. Keep it up–it is not, NOT worth it.

  • Cordelia’s Mom

    I’m proud of you for learning fiscal responsibility at such a young age (I sure didn’t). As you and I both know, getting out of the credit card mindset is extremely difficult and can be a long and stressful process. But paying cash all the way is so much fun – I love plunking down actual money while people in line behind me are fishing around in their purses for a credit card that “still has some room on it.” And every time I walk onto my new front porch, I think “Wow – this is mine, I paid cash for it, and no one can take it away for non-payment.” (Don’t know if they could, anyway – is there such a thing as a porch repo guy?).

    True, you have to cut back on the extras until the cash builds up, and it takes a very long time. But the peace alone is worth it, knowing that NEXT MONTH, you won’t get hit with extra credit card bills for silly stuff you bought THIS MONTH.

    Keep it going. You know I will try to help you whenever I have a few dollars to spare from my own budget.

    • Cordelia

      Thanks. :)

  • Melissa

    Yay! *shakes virtual pom-poms* (You get virtual confetti thrown, too, when you post that you finished paying them down. ;) )

    • Cordelia

      Confetti? Hell yes! Now I’m extra-dedicated! :)

  • Brittany

    Yaaaayyyy! Wooooooo!!! Congrats! I’ve never had credit card debt, but I did have a car loan once. The feeling of relief when I finally paid that last payment of $238.92 (oh, yeah, I still remember how much it was) was AWESOME. And now dearly beloved car is starting to show its age and we need to be saving for a new one so that we hopefully will have a good down payment and won’t have to pay much per month. Even better is if we could pay for it in cash, much like your plan. I would looove for that to happen, so we’ll see. In any rate, CONGRATS!!!!

    • Cordelia

      Thank you! You’ve been extremely smart to stay away from credit cards. I can’t wait for my own feeling of relief when everything is paid off. (I paid my car off a couple years ago and it feels AMAZING to have something that big that I know is 100% “mine,” free and clear.)

  • Chantale

    Congrats! I am in EXACTLY the same situation. My consolidation loan ends next year and we did the same thing with the husbands cards. After seeing your calculation, i did one of my own – my “raise” will be $6612! This might mean I can move on to better jobs without worry. That is what I am REALLY looking forward to.

    • Cordelia

      WOOT! Congrats!! We will have to have a virtual toast when we both get free!

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  • Karen J

    Rock ON, Kelly! Woot!

    I’ve managed to avoid *that* particular trap, except for cars (mostly because I couldn’t get credit anyway) – have always been leery of making a “monthly commitment” to pay for something that may already be broken by the time I finish paying for it.

    Happy for you changing your mindset – that’s the only way to work it, without beating yourself up for the rest of your life.

    • Cordelia

      It is–what’s past is past, what’s done is done, so all I can do now is learn from it and use it to make better decisions in the future. Being debt-free at 31 is not too shabby, and I am very thankful for that eventual point.

  • Heath Capps

    Great job! I very luckily married an industrious woman who helps keep our family on track and has taught me much about managing our income. It’s tough if you weren’t taught this in your family of origin, and I wasn’t. I dig your foreward-thinking thought process! Planning for the future will surely pay off in the end.

    • Cordelia

      So true. I came from a similar background. I really wish they would teach practical personal finance management in high school and college–in fact, I think they should make it a mandatory class. THAT would really prepare us for our futures.

      • Karen J

        “…wish they would teach practical personal finance management in high school…” No kidding!

        Well beyond “how to balance your checkbook”.

        I don’t even know what I don’t know about ‘how and why to manage my finances’ – only that I have impressions of how the Parents did it, and emotional relics in reaction to their systems, but no internalized knowledge of what to do or not do

  • Alexis Grant

    Awesome! Congrats… 2013 will rock :)

    • Cordelia

      Indeed it will–I suspect great things from this coming year!

  • Search Marketer

    Wow congratulations. for sure your 2013 would be rocking hard. Do you have any advices on how to pay the credit card debt easier?