But I don't make a fortune here. Actually, $2,000 was a month's salary at my regular job and I wasn't exactly in a position to go an entire month without paying bills or other expenses in order to pay down that card immediately at the time. It's one thing to pay down debt, but not at the expense of paying for the basics like shelter and food at the very least. Although granted I did pay for more than just those two things.
When paying down a credit card, the first and most important step really is deciding to pay off the card. In doing so, you become more conscious of how you spend money using it, but most importantly, you are now keeping a careful eye on the balance as well. This way, whatever money you do spend should be paid down in addition to the extra money you put on top of it to pay down the existing balance.
Although the smart thing to do is really to stop using the credit card you're paying down and either switch to cash or debit, or maybe just use a different or get a second credit card. This is mostly because for most credit card companies, an existing charge means interest begins to accrue on new charges almost immediately rather than give you a 21 day grace period.
Anyway, the original plan was to cease spending money on it while also pinching out $200 a month out of my monthly earnings to pay down the balance, which meant that it would be more or less paid off within a year. Simple and manageable.
But then I turned around and paid it down in two months.
No, I didn't end up dropping $1000 of my monthly earnings into my credit card out of sheer overeagerness. Well not all of it. Part of it was because I had some fortuitous timing at the time.
One of the first things I did was picked up the small wad of cash of $900 that had been slowly accruing and amounted to a pseudo emergency fund and dumped most of it into my credit card. This is something that is not highly recommended. While I did save on interest costs in the short term and therefore netted some money in the process, in the same breath, if I ran into a real emergency in the time it took for me to re-accrue the money, guess where the spending would have ended up? Back onto my credit card.
I got lucky however. No major dilemmas occurred.
The other fortuitous event? My freelance work.
When I budget my money or consider my monthly expenses, I generally do not account for money earned on top of my regular pay - things that includes overtime, holiday pay and my freelance work - mostly because I am never guaranteed month over month when I would earn the extra cash.
It's may be less money to play with when balancing my budget, but in doing so, in months that I do make some extra cash, it can act as a surplus in my life and can go to things like a small treat or reward outside of my actual planned budget, but primarily is meant to be spread between my savings and my debt.
A lot of extra work however usually means the windfall can be generous for the month. How generous? A week's worth of extra work freelancing means I basically add another paycheque to my earnings, and it is all money that is unaccounted for.
That is exactly what happened in September and October and was the cash I used to foist the remainder of my credit card debt out the window, a solid eight to ten months ahead of schedule.
The goal of paying down my credit card debt had existed almost as long as I've been carrying a balance. So there was happiness in seeing that account at zero after so many years of carrying a balance. But mostly, there was a sense of real relief. Relief that I got the burden out of the way so quickly and relief that the extra strain on my earnings was finally gone.
Too bad I can't realistically do the same to my student loans. Now that is a longer term task to tackle. But the point right now is to pay down that balance to a point when a large surplus of cash can realistically eliminate my burden.
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