Rethinking Finance:  How we paid off credit cards in about 5 months

It all started with a prayer request.

I had started a new prayer journal with some heavy hitters in my personal/practical prayer list.  How were we going to get out of credit card debt?  How were we going to pay off the car?  How could we ever pay off the student loans?  It weighed heavy on me last summer.

Moving mysteriously, and providentially as God does, he began making some things clear. The answer to the above questions was related to some of the other things on my personal prayer list.  I was due for a promotion this fall.  What if I actually got that promotion?  How much would it be?  How much could I payoff if I used that?  Then, as if weaving in another thread in the tapestry of my life, my colleagues voted for me (probably because I was the only one not at that meeting) to lead the charge on getting a raise for all my coworkers at this facility.  It was a daunting task, one that would take me six months to prepare the argument for.  This other thread became the answer to my other prayers as well.  What if we actually got this raise for everyone (including me)?  Again, the money could pay off these other prayer requests.

Two Raises and a Snowball

Amazingly, over the course of about 2 months, I got two raises, and fairly substantial raises too.  This changed everything.  My wife and I were determined that these raises could not just become “our new norm” for buying more things at Target or adding a new piece of furniture.  We had to use these to pay off debt.  After the first of the year, and our vacation to warmer climes, we got down to brass tacks.  Using the “debt snowball” method- we methodically hit each debt.  The remaining credit card balance from last year- boom!  Paid.  The next paycheck was for a credit card debt for a new air conditioner that went out the summer before- boom!  Paid.  This felt good!  The final debt of $1400 bucks from the summer before when we had some unexpected bills- boom!  Paid.  Wow.  This felt amazing.  Each time our debt load got smaller and our amount we could use each month toward more debt got larger.  I loved this snowball– and usually in February I am sick of snow!

Next on the list was to set up our emergency fund.  The next two paychecks we set aside $1,000 to have on hand.  We also decided to have the new rule of not being able to use credit cards unless we could pay it off immediately.

Hills and Mountains

Finally, we made it to our larger mountains.  Having trekked through the foothills of smaller debt, and now sitting next to our watering hole of the emergency fund, we braced ourselves for a longer, steeper hike.  We looked back at all we had done.  How far we had come.  How our views of money, debt, and spending were starting to change, and how badly we wanted to keep pushing up these higher mountains.

The next big peak is the car loan.  Given the debt snowball, we can now throw $2,000+ to the car loan every month.  That means, car loan free by this summer!  It’s funny how you change one thing in your life, and other things follow suit.  We started buying things used.  My wife found an awesome rug for our front room on craigslist for a third what you would pay for new.  We now frequently purge and sell whatever we can on craigslist.  Less is more, and every dollar counts.

Here’s to scaling higher mountains!

This post Rethinking Finance: How we paid off credit cards in about 5 months first appeared on Rethink Redo Repair.

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