This month, I paid $400 towards my crummy line of credit. I posted a week or so ago about how this particular bill is my final high interest debt (not counting my student loan or car loan). I’m on a mission to pay it off, and quickly! As of today, the total amount due was $8,080. I paid an additional $150 today (earlier in the month I had paid $250). Here is what I should expect to see in a few days, once the payment is applied to the balance:
- New balance should be: $7,931…..Yeah! Finally under $8K
Based on my debt repayment calculations (via CreditKarma.com), if I can pay $550 a month towards this loan, I should be able to pay it off in 18 months. However, if I can only pay $400 per month, like I have done so far this month, it will take me 29 months (or just under 3 years!) My mission is clear and simple; pay it down! Here’s how I’ll approach this task (mind you, I’m not one to read financial books. So if I’m accidentally copying someone’s method, like the snowball method, I swear I thought this up myself!):
- Pay the regular payment of $250 on the loan due date
- Make an additional payment of $150 (the amount I’m saving on my refinanced car loan) within a week of the loan due date
- Later in the month, as more income hopefully streams in, make an additional payment even if it’s only $25
Below is my own graphic showing the original amount due at the beginning of the month and the total balance due today. As I pay off the loan, the red bar will decrease and the green will increase until I’ve paid it off completely. At that point, the bar will be entirely green. Each month, I’ll update the bar showing my progress. This will keep me motivated to pay it off even quicker (hecklers are welcome….egg me on!)
You may have noticed this past week I’ve been challenging myself quite a bit! Summer is approaching and I’ll have more time to fulfill many of my challenges, like biking (not doing too bad, up to 28 miles!) My next challenge is more time consuming (write a children’s book that teaches them math the “friendly” way). However, I’ll get to that in time.
What do you think of my debt repayment strategy? Do you think this looks good? What would you suggest I add or do differently?