I talked in one of my recent blog posts about my goals for the 2020 year and how my biggest financial goal is to pay off all my debts (minus student loans). I thought I would take some time today to just share exactly what my plan is to pay all of this off!
So the first thing I did was break down each of my debts and look at the amount I owe, the minium balance I can pay monthly, and the interest rate on each of them. The minimum payment per month was deducted by looking at the following:
- The minimum I can pay according to my lender
- The minimum I need to pay to have the debt paid off by 2021
- Interest rates/ Perks for each card (Ie: no interest for the first 2 months on one of my cards etc)
- How much I could feasibly pay according to my income
After that I was left with this.
Car Payment: $257. Monthly payment: $91
Citi Credit Card: $300 Monthly payment: $30 Discover Credit Card:$1,000 Monthly Payment: $85 Capitol One Card: $300 Monthly Payment: $30
So that leaves me with paying a total of $236/month. The idea is once I get one of them paid off, the month I WAS spending on that bill, will be put towards another one until I get that one paid off and so on until they are all paid off. It’s like a big snowball effect!! The best part about this is I can decide how much per month I am able to spend on “debts” and keep it constant.
And because I have to have a graph for absolutely everything in my life, I of COURSE made on here too. And I shall share it with you here.
Now I know this graph doesn’t account for interest and the simple reason for that is, I was feeling lazy and didn’t want to do math. BUT keep in mind this graph isn’t actually for me to follow, it is just to use as a reference each month. And as a guide to keep me on track throughout the year. I did, however, end up going back and doing the math to see roughly how much interest I will end up paying and in the end it only added less than a months worth of payments for each debt. (This is a good reference for learning how interest works on credit cards!)
I do plan on using all of the money I make from my side job to pay down these debts as well. My goal is to pay all of them off in half the time projected in this graph. For those wondering, I drive Lyft on the side! I have an entire graph/spreadsheet for that as well to explain how to actually make money with it, since it can be costly upfront with the amount of gas you’re spending to actually drive.
The rest of my 2020 financial goals include changing the way I see money. To do this I am keeping a detailed log of what I spend my money on. (Again its a spreadsheet, Google Sheets please sponsor me 😂) This will also help my long term goal of paying off my debt & saving for a house!
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