Destroying My Debt

Day 9| Paid: $1150.36 | Remaining Debt: $61998.08

My monthly Non-Debt expenses are approximately $1233. (This does not include my health/dental/legal insurance which are automatically deducted, and this takes into account all of the savings I calculated in my previous post.)

Now remember, my monthly income from my day job was $712 a week, so $2848 for most months with 4 weeks. That has actually up now to $752 without my $401k contributions, so $3008 for most months.

My minimum debt payment monthly is $2088.38

That leaves $919.62 for non-debt expenses

That means, even after potentially saving myself $538 my non-debt expenses of $1233 are still $313.38 over what I am able to afford per month, assuming I make all my minimum debt payments.

Fuck!

That is why I resorted to those shitty payday loans – I just couldn’t keep my head above water without an influx of cash. And now its coming back around to bite me in the ass.

That is why paying down this debt quickly is so important to me. I am currently living above my means with these debt payments… yet I am not even paying for my own housing.

But I also know that freedom will not come just from cutting expenses. There is only so much I can cut and still live. I already have almost no social life outside of my girlfriend and a few other close friends. My primary hobby (hiking) is fairly cheap, except for the expense of driving to where I am going.

I would consider cutting things like SiriusXM or other items…that would make a small difference, but they won’t fully close that gap of $313+ and right now I am just not willing to go that far just yet.

So I need to make more money. I have no choice in that. It is the only way I get out of this debt. Yes I will try to spend less money each month, and that will help tremendously, but the only true way out is to earn more.

I have already mentioned it a few times but the first step to that for me is going to be Uber. I already have been doing some occasional Uber, but not consistently and not with this mission to take care of debt. I will be talking more about that in the next day or so.

Day 8| Paid: $1150.36 | Remaining Debt: $61998.08

Now that we have taken a closer look at my debts, I want to take some time to look at my non-debt expenses to get a clearer picture of where those stand, and to see if there is anything I can either completely eliminate or at least cut back on.

The reality is that the only way out of this mess is to either decrease expenses or increase my income. Ideally I can find ways to do both at once.

So now lets take a look at my expenses and see if there is anything I can eliminate, or at least cut back on

Automatic Deductions from Paycheck

Health Insurance: $33.18 /week

Dental Insurance: $4.00 /week

Legal Insurance $3.22 /week

401K Contribution: $49.84 /week

Plus Federal, State, Medicare, and Social Security Witholdings.

Obviously I can’t do anything about the taxes. The health and dental insurance are excellent plans, relatively inexpensive, and are the cheapest option my employer offers. So they stay.

I am tempted to stop paying for legal insurance, but it has already more than paid for itself when I used it a couple years ago when I was selling my old house, and I feel it is more than affordable and could really save me if there are any non-criminal legal issues that pop up.

I have decided to stop contributing to my 401k until at least the payday loans are paid off. I actually set it up so my contributions stopped during the last pay period in December, so I know that after the adjustment for taxes this puts an extra $40 in my paycheck each week. That is at least $160 a month that can go straight to my debt.

I was hesitant to stop contributing to the 401k since I knew I would be giving up the matched ‘free’ money from my employer. However I want this debt gone as soon as possible, especially those high interest payday loans, and the $40 a week will do a lot more good paying those down than they will collecting 10% or so interest, even with the matching funds. Right now I am planning on restarting my contributions as soon as the payday loans are paid off. Monthly impact: $160

Static Monthly Expenses

Housing: $0 – I currently live on a guest house on my parents property. A few years ago I lost my job, and I had trouble finding a new one where I lived. However I did find a job relatively close to where my parents live. So since nothing was tying me down to where I live I rented out my house and moved home. Then when COVID initially hit my tenants lost their jobs and decided to move out, so I decided to sell my house. That was a whole fiasco and really doesn’t impact the purpose of this blog, other than to serve as some backstory. Regardless I have been living rent free on my parents property for a couple years now, which of course makes me even more pissed at myself because without having to worry about rent or mortgage I should have had the extra cash to clear up this debt already.

Electric & Internet: $100 – I pay my parents $25 a week towards the electric and internet bills. I could ask my parents if I could not pay this, but they have been gracious enough allowing me to live on the property rent free I just don’t feel right doing that.

Car Insurance: $135.50 – I have a plan with Progressive. I have shopped around regularly for better rates, but this continues to be the best I am able to find. I currently only have the minimum state required liability insurance, as well as a rideshare rider since, as I will be discussing in a later post, I do use my vehicle for rideshare.

Storage Unit: $94.95 – When I moved back to my parents property and sold my old house I had a lot of extra things that just didn’t fit in the guest house. I did get rid of alot of things and downsized significantly before the move, but I do have some old books and other items I am not willing to fully give up. Hopefully I can purge more and move into a smaller unit soon, but for now this is an expense that can’t really budget. I hate this expense, and as someone drawn to minimalism I feel like this is one of the worst of my monthly expenses.

Phone: $68.09 – This does not include the $18.34 that I pay each month on the installment plan for my phone, which I include under the debt category. My plan has unlimited calls, unlimited data, and also comes with HBO Max. I can’t get a cheaper unlimited plan with my carrier. I know I could switch to a lower cost carrier, but that would also mean immediately paying off the balance of my phone, and I have been with my carrier for ages and they have the best service by far around both where I live and work.

SiriusXM: $16.87 – I have the lowest plan they offer that includes music. I am hesitatnt to give this up because it is my go-to when driving for Uber. I also enjoy it as an alternative to spotify and terrestrial radio. I spend so much time in my car that I feel like I am willing to keep this extra, but it is high on my list for possible things to cut if needed.

Zoom: $16.04 – When COVID-19 started I picked this up both for my work (I run a lot of meetings and conferences) and also for personal use. The free option just didn’t have the functionality I needed. I still use this almost daily. I do get reimbursed for it from my work annually, but that won’t happen until October of this year, so for now I have to count it in my expenses.

Spotify: $10.69 – From 2015 until 2021 I barely listened to any music. I get really into podcasts and just listened to those while driving. However last year I rediscovered my love of music and finally downloaded Spotify and quickly subscribed to the premium version. It has been amazing rediscovering old bands I love, as well as discovering new music. I don’t want to give this up, I just spend too much time in my car and enjoy having the freedom and flexibility that Spotify gives me with music.

Gym Membership: $10 – I have a Planet Fitness membership. I know they are looked down upon by a lot of the fitness community, but it is the cheapest option in my area and it has been great for me so far. I used to be a member of a more expensive gym and I never really felt that the high price was worth it. The $10 fee is more than worth it considering how often I go to the gym. Could I get a better workout somewhere else? Almost certainly. But I would be paying a lot more than I am not, and upgrading to a better gym just doesn’t fit with my current financial status and goals. On the flip side I am not willing to hurt my physical health just to save $10 a month.

Netflix: $9.62 – I am definitely going to cancel this now. I may renew later, but I get HBO Max for free through AT&T. I don’t watch much TV or movies anyway, but right now if I do watch anything I will focus on watching things on HBO and put this extra $9.62 (lets just call it $10 to keep it simple) toward my debt. Monthly Impact: $10

Google Plus: $6.38 – A number of years ago I did some consulting and coaching on the side, and created a website and a custom email address. I still use that email as my primary email. I could get rid of it, but I actually hope to eventually resurrect this little side venture in some form as part of my plan to pay off the debt, so I guess this stays for now.

Membership Sites & Courses: $38 – I subscribe to two different e-learning membership sites. I love learning new things and have gained some valuable knowledge that has helped me in my career as well as personal development. The one site I use the most costs $30 a month, and I get true enjoyment out of that one. The other costs $8 a month and I do love it, but I have been subscribing for about a year now and I don’t know how much more I can get out of it anyway. So I am definitely going to cancel that one, and will put the other $30 site high on my list of things to cut in the future if needed. Monthly Impact: $8

Stocks and Roth IRA: $15 – I have an account with Acorns. I know it isn’t the best platform but it has worked well for me. I have both an “Invest” account and a “Later” account, which is a Roth IRA. Both the balances are small since I have only been putting $15 a week towards them combined. I am going to pause those payments, and while I can’t touch the Roth IRA balance, I have withdrawn the Invest balance of $849.75 already and that went to that Payday Loan 1 lump sum payment that was due on Friday. So I wiped that account out, and will pause all payments for now. Monthly Impact: $60

Variable Monthly Expenses

Propane: $60 – I use propane for heat, hot water, and also for cooking. In 2021 I spent $653 total on propane, which averages out to $54 a month. However the bulk of that is in the winter months. I am going to budget $60 a month for propane in 2022 with the understanding that most of that will be spent in January and February this year. In fact I just got my tank filled last week and I have a bill for $220 due this month. I need to start putting aside a set amount each month towards this bill so it doesn’t impact my finances much in the winter months. Unfortunately there is no significant way to cut this bill down as I already keep the house pretty cool.

Car Maintenance: $50 – Last year I averaged about $50 a month on maintenance, repairs, inspection, oil changes, etc. I know that within the next couple months I will need new tires as well as an oil change, and considering how much I drive I probably have more expensive maintenance coming up fairly soon.

Tolls: $100 – Between my regular driving, visiting my girlfriend, and trips to the mountains or the beach, I average around $100 a month in tolls. When you are regularly driving on toll roads or have to regularly cross bridges, these expenses are almost impossible to avoid. I can probably cut down this expense a little bit, but not without potentially impacting my relationship and non-financial goals negatively.

Fuel: $250 – As I have said a few times, I drive a lot. Commuting to work, visiting my girlfriend, Ubering. My gas expense varies drastically each week, and even each month. If all I do during the week is drive back and forth from work I can easily get by with a single tank of gas for the week. But if I travel to hike, visit the girlfriend, or do any Ubering, I can easily get up to 3 or 4 tanks a week. The price of gas also drastically impacts this number. For now I am going to budget $250 a month for gas, but will definitely have to reevaluate this.

Food: $200 – Like my fuel expense this can vary drastically by month. For example in November I only spent a total of $203 on groceries and eating out. However in December that was over $400. I tend to only eat one meal a day, but I make that meal high quality. Since I do live on my parents property I will have dinner with them maybe once a week, and whenever I visit my girlfriend if we go out to eat or grab food anywhere she usually pays. That tends to be our tradeoff – I drive to visit her (much easier for me to do for various reason) and she pays for the food while I am there. I have no problem paying my half, or even for both of us, and I do so occasionally, but she is always more than happy to cover the cost. So this expense is variable, but for now lets say $200 a month for food expenses.

Vices: $300 – I have some vices. Not anything terrible or illegal, but I do love caffience, alcohol, and nicotine in all its forms. I use them all in moderation, and I tend to change it up depending on what mood I am in and what is stressing me out. I really feel like the use of tese all is a result of boredom and self-loathing from some pretty negative experiences over the past few years more than anything else.

These are a major financial drain. Looking at these expenses as a group in 2021 I averaged around $10 a day. That is $300 for any given month, or $3650 for the year. That along could have prevented me from the worst of my debt. So I need to give these up, not only for my physical and mental health, but for my financial health as well.

So no more substances. Maybe the occasional drink if I am out to dinner with my girlfriend. And caffeine will be limited to coffee or tea that I brew at home – no more coffee shop drinks. And definitely no nicotine or other products. Potential Savings: $10/day, $70/week, or $300/month.

Annual Expenses

Notion: $48, Workflowy: $49, and Todoist: $29 – I use these professionally and personally. I am a little bit of a ‘productivity’ junkie and I have fine tuned my own system pretty well, and I use all of these. These are annual subscriptions, and Notion and Workflowy have already been paid in January. ToDoist is renewing in June. I will have to consider if it is worth renewing when the time comes.

Medium: $50 – This was also already paid at the start of January, so either way it stays for now. I read enough on there and want to support the content creators that I enjoy, so I do feel its worth it, but I will revisit next fall to see if I should renew for 2023.

Highbrow: $48 – This is a service that provides mini courses via daily email lessons. It is set to renew in April. I do enjoy it but I think I have pretty much gotten everything I can out of it so I probably won’t renew when the time comes in April.

Geocaching: $30 – I occasionally do some geocaching when I travel or go hiking. Not sure if it is worth the subscription. It renews in July so I will see then.

Google One: $30 – I have tons of stuff stored on Google Drive. So much stuff that I had to pay for extra space. This renews in November, so I am going to see about clearing out the clutter in the drive before then so I don’t have to pay the extra.

Gaia GPS: $10 – I do as much hiking as I am able to whenever and where I can. I use this to both plan and track my routes. It is definitely worth the price. In fact I think the pro plan is more than worth the price, but because of this financial mission I am on I will probably keep it at the basic level for now. Renews in August.

Altogether if I don’t cancel any of these annual membership they total to about $$294 annually, so about $24.50 a month, or about $5.65 a week.

Summary of Savings

401k: $160 monthly

Acorns: $60 monthly

Netflix: $10

Membership Sites: $8

Vices: $300

Some months have 5 weeks, so for those months the total for some of these items will be different

Total Monthly Impact: $538

This is actually more than I thought it would be when I started going through this. If I can put that much extra per month towards my debt and an emergency fund, as well as find ways to earn some extra income, I should be able to get rid of this debt in a decent amount of time.

Day 7| Paid: $1150.36 | Remaining Debt: $61998.08

I had originally planned to write about my non-debt expenses today, but I decided to put that off tomorrow and take a few minutes to savor a little success.

Payday Loan 1 is officially paid off today!

I woke up and immediately checked my bank account and saw that it was automatically withdrawn. Then I logged into the loan website and confirmed the balance of $0. If you remember that loan was a lump sum payment, and all of that was due today. I paid that mostly from cashing out my Acorns “Invest” account that I had set up a few years ago and was putting a tiny bit into each week. That provided about $850+ of the funds, and then I put some of my recent paycheck towards it. Thank god that is over and done with, but I still have a long long ways to go.

I also had an automatic payment today for Payday Loan 3. That loan has weekly payments of $87.86. Of course from that $54.46 went to interest and only $33.40 went to the principle.

I am torn on how exactly to track my progress using the counter at the top of each of my posts. There are a few ways to do it, but the simplest seems to me to simple include every dollar paid to my debt under “Paid” and the “Remaining Debt” to show the total amount remaining on that day. I could do something fancier with tracking principle and interest paid and remaining, but the way I decided to do it seems the simplest, even if it won’t result exactly in the Remaining Debt lowering by the same amount as paid. Oh well…

Day 6| Paid: $0 | Remaining Debt: $63,117.27

Okay, here is where it gets stupid and embarrassing and idiotic. The Payday and Installment loans.

Here is a little tip for everyone out there: If you ever feel like you might need to get a payday loan – DON’T. Do everything in your power, literally everything, to avoid taking out these loans. They are predatory, and you can easily get yourself into a cycle of taking out one loan to pay another, and spiral downward quickly.

These loans aren’t the first that I have taken out, but they will be my last. I vow to never take another payday loan ever again.

I honestly don’t even know what I took them out for. I think the first time I took them out was in 2015 when I found myself unemployed for the first time. I didn’t want to lose my house or my car and I was too proud to ask for help from family.

Now, 6 years later, they are still haunting me. I find myself slightly short on cash one month, and boom I get a quick infusion of very expensive cash. It takes care of my immediate need, and then I pay out my ass on the backend.

This is why you need an emergency fund and some liquid assets, so that if you ever find that you have mismanaged your cashflow, or you are short one month, you can pull from these sources and avoid being ensnared by these loans.

Payday Loan 1: This is a short term loan that I stupidly took out about a month ago. It has a lump sum payment of $1062.50 due tomorrow, January 7^th. I never even bothered to look at the contract when I took it out, but it has an APR of 651.79%. I originally borrowed $850 and will be paying $212.5 in interest. That is ridiculous. But I am the idiot that did it, and as sad as I am going to be tomorrow when I wake up and see the payment coming out of my bank account I will also be so thankful that this debt is gone. Fortunately I have generous family and a generous boss who all gifted me cash for Christmas. Every single dollar I was given is going towards this debt, plus a little bit of my paycheck from yesterday. Then I cut remove the chains from this loan from around my neck and focus on the next 3 that are weighing me down.

Payday Loan 2: I really don’t know why I needed this money. I took out this loan a few months ago, and looking back through my calendar I really don’t understand why I did it. I think I just got an offer for some instant cash and took it, damn the consequences. That was stupid.

Anyway right now I have a balance of $2632.55 with an interest rate of 206.48% and a biweekly payment of $243 (which I put down on the spreadsheet a few days back as $486 monthly just for simplicity sake). If I only pay the minimum required every two weeks I will have this paid off in July of 2024. That means paying $486 every month for a year and a half. Damn. I can’t do that, that is completely unsustainable and will ruin me financially for the foreseeable future. Because of that, after Payday 1 is paid off tomorrow, this loan has to be my Top Priority. Every single extra cent has to go to this loan so I can zero it out as quickly as possible.

Payday Loan 3: This one really saddens me. I remember when I first took out this loan almost 2 years ago. I was dating a women (different than my current girlfriend) and we had planned a weekend away. I ended up needing some maintenance on my vehicle and had some other unexpected expenses pop up in the two weeks before the trip. After those expenses I really couldn’t afford the weekend getaway, but in order to save face, I took out a $2000 loan. The trip didn’t cost nearly that much of course, and I used the balance to treat myself to some items that had been on my wishlist for a while.

The weekend getaway was nice enough, but 3 weeks later she and I broke up, and I had an extra $2000 in debt. I started to pay it off steadily, but I had no emergency fund saved up, so when an unexpected expense popped up about a year ago I refinanced the loan.

So here we are today, with a balance of $1854.64, an interest rate of 159.53%, and a weekly payment of $87.86 (which I put down as 351.44 per month in the chart above for simplicity). While the interest rate is massively lower than Payday 1, and even significantly lower than Payday 2, it is still an astronomical interest rate, and paying almost $88 a week is unsustainable, especially when combined with the $243 biweekly payments from Payday 2. Averaged out that is $209.36 a week going towards these loans…and I only bring home $712 a week. That leaves a tiny bit more than $500 for all my expenses, including all the other debts I reviewed over the past few days.

After Payday 2 is paid down I have to shift the focus on paying this debt down. The reality is I am drowning beneath these two loans. Once I have them paid off I think I will finally feel like I have broken the surface and can at least tread water. I will still have a long way to go until I reach shore, but at least I won’t be weighed down by these two massive anchors.

Installment Loan: The three payday loans I just went through are the worst of the worse. But the situation with this loan is really not much better. I took out this loan in 2015 when I was unemployed and had fallen behind in all of my payments. The original loan was for $7,800 and today my payoff balance is still $7779.45. Now this isn’t a payday loan, it is a legitimate personal loan from a bank, despite the relatively high interest rate of 35.94%. However they have been very flexible in letting me defer my payments whenever I have run into a tight spot. However that is also why 6 years later I have paid them thousands of dollars in payments, yet still owe almost exactly what I borrowed. However unlike the Payday loans I do not feel like this loan was predatory, and it truly saved me when I needed it. The only thing I am frustrated by is that, based on the original payoff schedule when the loan originated I should be making my final payment in February of this year. Of course I am nowhere near paying off this loan due to deferments, and they won’t update the payment schedule until after February. So I don’t have a clear timeline of when this loan would be paid off, assuming I continue to pay the minimum required each month. However I don’t plan on paying only the minimum each month – once all of the payday loans above are paid off this is the next debt on the list to get rid of. It isn’t weighing me down as much as the payday loans, and the interest rate is drastically lower than them, but it is still a loan that should already have been paid off, and I hate seeing those $281 leave my bank account each month. It will be nice to have that back once this loan is gone.

Day 5| Paid: $0 | Remaining Debt: $63,117.27

We are almost all the way through the exploration of my debt. Today I want to look closer at the auto loan and the student loans. Then tomorrow we will look at the payday and installment loans.

Auto Loan: While the majority of this loan is actually low on my priority list I did fall 1 month behind in payments, so catching up and getting back on time is a high priority. This loan originated in October 2019 when my old car was falling apart. You see, two years prior to that I had brought that old car in for an oil change at a quick lube joint. I am not sure what they did…but the following day my engine burnt out. I don’t know if they failed to put in oil, or didn’t put in the filter or drain cap properly, or what. All I know is that my engine was toast. So I had to get a new engine. Well, a new used engine. But from that day forward the car never worked right. It had turned into a lemon. The heat stopped working, and three different mechanics couldn’t figure out why. The gas mileage tanked. The transmission started to go. It was awful. But I was in debt, underwater on the loan for that car, and couldn’t afford not to have a car. Fortunately my father is very generous, he hated seeing me drive around in that unsafe vehicle, and graciously agreed to put up the money for a down payment on a new car as well as co-sign the loan. So we did that and I walked away with a gently used 2016 Jeep Cherokee, and my old auto loan was rolled into this one. So I walked off the lot owing more than the Jeep was worth, but ultimately in a better position overall. Then a year ago I refinanced that auto loan with my current bank, got the interest rate dropped down to 7.05%, and was able to remove my father as a co-signer. The whole process sucked, and I recognize I am extremely fortunate and grateful to have my father willing to step in and help me out the way he did. Ultimately I am in a good place with the vehicle. Despite starting out underwater on the loan due to my old car loan, right now the blue book value of my Jeep and the balance on my current loan are about even. I know this is partly due to the situation with used cards currently, and that once the car market stabilizes it will again be less than the loan. But overall I am in a good spot. I have a current balance of $19,279.80 with an interest rate of 7.05 and a minimum monthly payment of $389.08. I fell behind because I just honestly forgot about the payment last month. Stupid mistake on my part, and even though the auto loan is not an incredibly high priority getting back on time with the loan is. It is not as high a priority as the other loans, so I may get back on track by simply paying a little extra each month rather than do a full lump sum to catch up. We will see, but either way I need to get back to fully on time payments with this. Otherwise my plan is to pay off the other loans, then the credit cards, and then tackle the auto loan.

Student Loans: I have two student loans, but at 6.8% interest rate, with a total current balance of $27,074.86 and a monthly payment of $318.63. Over the years I have deferred these, gone on interest-only repayment plans, gone on forbearance when I was unemployed, etc… These should have been paid off long ago, but they are still around haunting me. On top of that due to my own stupidity and focusing in other things I am now 6 months behind on these payments. If I go further than 6 months I will default on the loans, and unfortunately I do not currently qualify for deferment or forbearance due to the nature of my loans, even with the provisions in place with COVID-19. Believe me I have tried. So for now I just have to suck it up, get current with the loans, and then pay them down.

Other than getting current with both the auto loan and the student loans I do not feel that these are urgent debts to pay off, due to their fairly low interest rates. They are obviously important to pay off, as I truly have come to believe that Debt = Emergency. However, compared to the loans we will discuss tomorrow, despite the high balances of the auto and student loans, the reality is they are manageable. Getting on time is important, but otherwise I think I need to plan on only paying the minimums.

I knew from the start that it would be basically impossible to pay off 100% of my debt over the next 12 months, especially with a total balance that is almost double my net income. While I haven’t made any final decisions yet right now I am leaning towards putting together a goal of paying all of my debt with the exception of the Auto Loan and Student Loans. Of course I would get current with them and continue to pay the minimums, so the balance owed would continue to drop throughout the year. But I think if December 31^st comes around and the only debts I have left are these two loans I can feel pretty damn good about myself. That would still mean paying off $17,012.42 plus whatever interest accrues, and with a base income of $37,024 that will not be a walk in the park.

Day 4| Paid: $0 | Remaining Debt: $63,117.27

Today I want to talk about my credit cards. I currently have 4. Let’s look at each of them

Credit Card 1: This is a secured credit card with my bank. A few years ago I closed all my credit cards. That was actually one of the conditions of the bank I was working with to secure a FHA mortgage for my old house (that is a story for another day). So a few years ago before my major personally financial crash (again a story for another time) I decided I needed/wanted a small credit card, but my credit score was in the dump, but I got an offer from my bank for a secured credit card – put down $50 cash and get a credit card with a $500 limit. So I went for it. And for two years I used it responsibly, but this past year I let my old habits creep back in and maxed it out. The current balance currently stands at $501.91, so $1.91 over my limit. It has an interest rate of 24.74 and a minimum monthly payment of $25. If I never put another dollar on the card, and only pay the minimum each month, it will be paid off in January of 2024 and I will end up paying about $118 in interest.

Credit Card 2: Chronologically this is actually the 3^rd credit card, but like the 1^st card it is with my bank, so it is easier for me to think of them as #1 and #2. This is actually a cash back rewards card with a limit of $300. I got this about 18 months ago, and for the first 6 months I did all my spending on this card, paid it off weekly, and earned some nice cash back. Then I slipped into my old habits and maxed it out. Right now my balance is at $295.70 with a 26.99% interest rate and a minimum payment of $25. Assuming I don’t add another dollar to this card and only pay the minimum it will be paid off in April 2023 and I will pay about $58 in interest.

Credit Card 3: This is a Synchrony Car Care credit card. A few years ago my old car was broken down and beat up. It was in horrendous shape and it needed work badly…except I had no money. The estimated repair was around $800, so I applied for a Car Care credit card to see if I could at least finance some of the repairs. I ended up with this card for $500. However my father was gracious enough to save me and helped me put a down payment on a new to me used car. I traded in my old car as part of that deal and never went through with the repairs. I will talk more about my current car and the details about that later, today I just want to focus on the credit cards. So for a long time this card sat unsed. The card itself could only be used at auto repair shops and gas stations, so I kept it in the center console in my car in case I ever needed it in an emergency. Then one day when I was short on cash I used it for gas…and kept on doing that for a few weeks until I maxed it out…. The card has a $500 limit, and currently my balance is $380.79 with a 29.99% interest rate and a minimum monthly payment of $29. If I make the minimum payments only it will be paid off May 2023 with about $87 going towards interest.

Credit Card 4: This is a Synchrony Care Credit card which can be used for medical, dental, veterinary, prescription, and health supplies. I have excellent health insurance but no HAS and my current savings is basically zero, so at the time that I got this card it seemed like a good idea to be able to cover any unexpected copays, or if my cat needs veterinary care, or anything like that. I do not plan to use this unless absolutely necessary. In fact they threated to close the account since I hadn’t used it yet, so a few weeks ago I purchased some health supplies using this card and paid off the balance the next day. I needed the supplies anyway so that wasn’t a big deal. Right now the balance is $0 and I hope to keep it that way.

My credit card situation is not ideal. I wish all the balances were $0. I am sure you can see a pattern: I get a card, use it responsibly for about 6 months, and then go buckwild and max it out. Fortunately all of the credit limits are $500 or less, otherwise this could be a much bigger issue.

The credit cards are high on my priority list, but they are a much smaller issue than the high interest loans, and even if I pay only the minimums the total I end up paying in interest is relatively small. Fortunately I think with the debt paydown plan I am putting together I will be able to pay these off quicker, but for now the minimum payments will have to suffice.

Day 3| Paid: $0 | Remaining Debt: $63,117.27

Today I want to dig a little deeper into the specific debts. First lets start with the easier ones.

After yesterdays depressing realization I need to start with something light today. These are not quite in the order that I have listed above, they are simply in the order that I feel like talking about them.

Phone: In 2020 I upgraded my own IPhone SE to the newish IPhone 2020. I financed it for $549.99 with a 0% interest rate (as long as I stayed on AT&T’s plan). As of today I have paid of $348.46 and have $201.53 remaining. I pay $18.34 each month as part of my cell phone bill. That is scheduled to be paid off in October. Since it is a relatively small monthly payment, with 0% interest, and already included in my cell phone bill this isn’t a debt I am going to pay too much attention to or rush to pay off. However when October rolls around and my cell phone bill is $18 less I plan on taking that extra and putting it towards either another debt or savings depending on how I am progressing with my plan.

Orthodontics: I first got braces in 7^th grade. My teeth were messed up. The braces worked wonders and my teeth and overbite straightened out, but I hated wearing the retainer afterward. Absolutely hated it. So I am sure things never got fully corrected, and over the past 23 years my teeth have shifted and became messed up again. Most notable was the gap between my two front teeth. I was very self-conscious of it and decided I wanted to do something about it. I knew it would be expensive to get orthodontic work done but I decided it was worth it.  So in January 2021 I bit the bullet and got Byte aligners. They are amazing and have done wonders for my teeth. I feel much better about things, it was worth it. But the process was expensive. The total cost was $3074.00. I put a down payment of $449 and financed the remainder of the $2625.00 balance with Byte at a 7.74% interest rate and a monthly payment of $99.54. I will owe $1687.76, and even though the treatment is almost complete I will be paying until 2023. However once it is fully paid I should be able to recoup some of the costs from my dental insurance plan, but unfortunately at this point I still have to pay out of pocket. However this is one debt that I do not feel bad about at all. Yes I would have preferred to be able to pay in cash up front, but the improvements this has made to my life makes the debt well worth it, and because of the relatively low interest rate (compared to some of the massive interest rates coming up) I have this set as a low priority debt and plan to continue to pay the minimums for now.

If your teeth are janky and you are interested in trying Byte aligners I highly recommend them. Please use this referral link:

Afterpay: December can be a tough month financially for many people. Between Christmas shopping and holiday travel many people rack up their credit card debt just to make it through the holidays. I am no different (but I need to be different next year). November and December can be especially difficult for me. Although I generally don’t purchase gifts for many people, the number of people that I felt a need to buy for grew this year, and both my girlfriend and my step-father’s birthdays are in December. I feel like I was able to find the perfect gifts for everyone this year, but that means spending a little more than the cash I had on hand. So I used Afterpay for a few of the gifts I was purchasing from the same store. If you don’t know Afterpay is one of the many apps/sites in the burgeoning Buy Now Pay Later marketplace, which also includes Affirm, Klarna, and others. Fortunately this purchase was interest free, so this truly was simply spreading the total payment out over 8 weeks. I am sure there is a hidden cost somewhere that I am unaware of, but for me it meant that I was able to purchase a few gifts from the same store for a total of $208, I paid $52 at the time of the order, and continue to pay $52 every two weeks until the balance is paid. At this time I have two payments remaining, one on January 12^th, and the final payment on January 26. Since this is 0% interest and the payments will be complete by the end of this month I am not rushing to pay this off, however once it is paid off I need to consider adding this bi-weekly payment of $52 to my debt snowball.

Affirm 1 and Affirm 2: Affirm, like Afterpay, is another Buy Now Pay Later program. However unlike Afterpay it breaks the payments down into monthly payments. I am not sure how the algorithm works but they do charge an interest rate. In my case 29.99% for one and 29.98% for the other. The first purchase was for a new laptop – my old one was completely busted and I desperately needed a new one. So I purchased one using Affirm credit for a total of $830 (I went for the cheapest laptop that fit my needs). Following the payment plan I would pay a total of $140.96 in interest for a total cost of $969.23 paid over 12 monthly payments of $80.91, with the final payment being $79.22. I don’t feel too bad about this debt – I severely needed a new computer and it would have taken my months to save up enough to purchase one. Of course I am not happy about this debt, but it could have been worse. Since this will be paid off before my upcoming debt snowball can ever reach it I am just going to continue to pay it off at the planned schedule and then roll that monthly payment into my snowball or savings.

The second Affirm loan I am less proud of. One of my favorite brands discontinued my favorite line of their products. However they were still available online from Target. So I splurged last summer and purchased a total of $430.03 worth. The loan terms included total interest payments of $72.95 for a total cost of $502.98 payable over 12 monthly payments of $41.92 (last payment $41.86). I am scheduled to pay this off in June of this year. I plan to continue paying the minimum monthly unless I somehow miraculously manage to get my debt snowball down to this loan in time. Otherwise I will just pay it off on schedule and roll that $41.92 into my snowball or savings.

That is it for today. I will continue my deep dive into my debt tomorrow with my Credit Cards

Day 2| Paid: $0 | Remaining Debt: $63,117.27

Before we look closer at the actual debt I want to give you a brief sense of my average income, just so you have something to compare my debt to and can appreciate the scale. 

My job pays me weekly on Wednesday. After taxes, health insurance, retirement contributions, and automatic deductions, plus my recent annual raise, I ended 2021 with a net pay of $712 a week. That is an annual net salary of $37,024. On a monthly basis that is an net income of $2,848 for most months except those with 5 Wednesday (March, June, August, and November) where I bring home $3,560. 

That means for 2021 I am looking at a base net income of $37,024. 

Now lets take a look at my debts. Here I am listing out my debts in my own ‘priority order’. I listed the balance owed, the interest rate, the minimum monthly payment, and the current payoff date. In the future we will take a closer look at some of them but today I just want to give an overview of where things stand.

Debts As of January 1st 2022

Debt	Balance Owed	Interest Rate	Minimum Monthly	Current Payoff Date	Notes
Payday Loan 1	1062.50	651.79	1062.50	1/7/2022	Lump sum
Payday Loan 2	2511.05	206.48	324	7/12/2024
Payday Loan 3	1798.04	159.53	351.44	8/12/2022
Installment Loan	7807.74	35.94	281.52	Unknown
Affirm 1	160.13	29.99	80.91	2/8/2022
Affirm 2	251.46	29.98	41.92	6/23/2022
Afterpay	104.00	0	104.00	1/26/2022
Credit Card 3	380.79	29.99	29	5/1/2023
Credit Card 2	295.70	26.99	25	4/1/2023
Credit Card 1	501.91	24.74	25	1/1/2024
Credit Card 4	0	26.99	0	N/A
Orthodontics	1,687.76	7.74	99.54	6/26/2023
Auto Loan	19,279.80	7.05	389.08	9/19/2026	1 Mo Past Due
Student Loan	27,074.86	6.8	318.63	Unknown	6 Mo Past Due
Phone	201.53	0	18.34	10/22/2022
Total	63,117.27		2088.38

So my total balance owed, as of today, is $63,117.27 with a minimum monthly payment of $2088.38 With my annual net income of $37,024 and monthly net income of $2848 that means my total debt is 170.48% of my income, and my monthly minimum is 73.23% of my average monthly take home pay. 

That is utterly ridiculous, and is depressing to see. The hard numbers really put everything into sharp focus and now I can really see how deep the hole I’ve dug myself into is. 

Two quick notes:  

First I did not include the minimum monthly payment for Payday Loan 1 in the total of the monthly minimums. That is because that is an upcoming lump sum payment on January 7^th. That is one and done, so it didn’t seem appropriate to include it in the calculation. 

Second thing is you will notice that my auto loan and my student loans are past due. Even though they have a relatively low interest rate, and are generally low on my priority list, getting myself current on those loans is actually a very high priority. That is not as high as taking care of those 3 damn payday loans, but definitely higher than anything else on the list. 

Tomorrow we will take a closer look at some of the loans and I will explain my reasoning for ordering them this way. I will follow that up with a closer look at my monthly and annual expenses, and then look at ways to cut costs and increase income. The fun is just beginning. 

Day 1| Paid: $0 | Remaining Debt: $63,117.27 

I am in debt. Bad debt. Crushing debt. Yes it could be much worse, but it never should have happened in the first place. 

So this year I am on a mission to erase my debt. I want to crush it and completely destroy it. 

I would love to say that my goal is to be 100% debt free by December 31^st, but that is unrealistic and improbable. That is a stretch goal that I am going to try like hell to reach.  

I do have other personal and relationship goals that need to be achieved this year, and those all have a financial cost which has to be factored in as well. However I think I have a plan to destroy the vast majority of my debt this year, set myself up to easily pay off the remainder in 2023, and still achieve my other goals in the meantime. 

I don’t except anyone to actually read this blog. This blog is primarily to hold myself accountable. Perhaps someone will discover this and it inspire them or help them destroy their own debt. I do hope that happens, but even if it doesn’t I am looking forward to documenting my progress here. 

Over the next few days I will be giving an overview of my financial situation and my plan. We will start with my debts, then take a look at my income, my expenses, and my plan to decrease expenses, increase income, and pay off my debts. I expect I will post fairly frequently for the first week or two, and then this will become a weekly or perhaps monthly log of my journey. 

I am not a financial genius (otherwise I wouldn’t be where I am today) and I have no background in accounting, finance, or business so I suspect that I will occasionally use improper terminology, forms, formulas, and processes. Please forgive me now, I am still learning, and I am open to feedback, suggestions, and improvements. Ultimately though this is my own journey, and the process I am going through to achieve this goal needs it to work within my own knowledge, skills, experience, and psychology or else it won’t be achieved. 

Join me tomorrow where we will take a closer look at the debt I am trying to destroy, and you will get a better sense of how f*cked I really am.