Chapter 1 | The Damage

Filed Under: Money Diary

In my money story, I introduced you guys to the history of my money habits. In this post, I will well dive into more of my debt and plan for paying it off.

Where I stand

Currently, have over $200,000 worth of debt. Essentially, I own an invisible home. I look at my debts into categories (1) Consumer Debt: $10,866.02, (2) Bar Loan: $8631.76, (3), Auto Loan: $29, 086.94, and (4) Student Loan: 161, 073.01.

The Plan

During the summer of 2017, I read The Total Money Makeover: A Proven Plan for Financial Fitness and let me just say it really open my eyes to how to get out of debt and start building wealth. It helped me understand that if I do not have the cash to pay for it than I cannot afford it. I highly suggest everyone read this book. It is best $15 dollars I spent in a long time. Now, I will not be following David Ramsey’s plan exactly. I will mainly be following his debt snowball method.  You can learn more about my reasons by watching this video.

Emergency Fund

In December of 2017, my goal was to fully furnish my emergency fund so that I can start paying off my debts in 2018. I completely furnished my emergency fund mid-December. I had a lot of reservations about funding my emergency fund to $1000 dollars because personally, I do not feel like it is enough. Once I pay off smaller debts I will fund my emergency fund to at least one or two month worth of expenses.

 

JANUARY 2018: Current States 

My goal for 2018, is to pay off as much of my consumer debt category as I can. Therefore, right now it is my focus debt and the only debts I am paying attention. The rest of my debts I will just be making my minimum payments.

FOCUS DEBT: Consumer Debt (Before-10,866.02; Current-$10,372.10; difference: -$494.10)

• Best Buy (Before – $395.45; Current – $0; difference -$395.45): PAID IN FULL
• Care Credit (Before -$672.10; Current – $645.10; difference: -$27)
• Mattress Firm (Before – $871.20; Current – $840.22; difference: -$31)
• Rooms to Go (Before – $1,238.19; Current – $1,212.19; difference: -$26)
• Discover (Before – $2,898.78; Current – $2,835.78; difference: -$63)
• Capitol One (Before – $4,964.81; Current – $4,838.81; difference: -$126)