Tag Archives: credit

Credit Card Debt

Just like the average American, Kevin and I have a decent amount of credit card debt. Enough so that it will take us about 18 months to pay it all off. We don’t at all promote excessive usage of credit cards. In fact, we try our hardest not to use it unless necessary. But in when our lifestyle changed, our spending habits and financial situation changed. So now we need to work on getting rid of that debt, so we can start putting money aside for our dream home.

Starting July 1st, we’re cutting out all unnecessary spending. No more Starbucks or Dunkin’ Donuts. No more spending money on makeup, until we’ve paid off all our credit card debt. No more wasting money on Netflix, since our kids never even use it anymore. We’re cutting back on our data plan with our cellphone company, to save a little extra to pay towards our debts. Every little bit helps to pay it off that much faster. By the end of July, we’ll have paid off one of our credit cards. Then it will take us about 3 months to pay off each of the rest of the cards. So by April 2016, we’ll have gotten our tax return back and can pay off our last two credit cards. Which means we’ll have no more credit card debt.

So you’re probably wondering how we’re going to pay off all this debt in a matter of approximately 10 months. We have just under $19,000 in credit card debt. That’s a lot of credit card debt. But lucky for us, we can definitely pay this off in less than a year. We’re good with our money, we don’t go out and by things we can’t afford.

Since we’re cutting out Starbucks & Dunkin’ Donuts (until we pay off our credit cards) we’re going to use the money we were spending on coffee towards our credit card bills.

If two coffee’s everyday costs us about $7 (from Dunkin’ Donuts) and we buy coffee everyday in a month we’re spending about $210. Just on coffee! So our plan is to take that $210 and our minimum monthly payment and put it on the first credit card each month until it’s paid off (it will be paid off by the end of July). Then we’ll take the $210 and the last cards minimum payment (add those together) and then add them to the new cards minimum payment (e.g. $210+$25+35=$270). Once the 2nd card is paid off, we’ll keep on adding the next card’s minimum payment amount to the previous figure until we get our tax return back. By the end of April 2016, we’ll have paid off all our credit cards if we put our entire tax return on our last two cards. Please note: We’ll still be paying the minimum payments on all our other cards while we’re doing this, until we get to the card with the lowest interest rate. By paying off cards from highest to lowest interest rate, we’ll save money in the long run. We won’t be skipping any payments, as we don’t want to hurt our credit scores… we want to improve them as much as possible before we purchase our dream home. No need to get stuck with a higher interest rate on a mortgage than we need too. We have decent credit right now, we could have a 3.375% interest rate through our credit union. But we just haven’t found our dream home, nor do we really have the finances to purchase a home that really fits the needs of our 5 children.


So as of right now we’re working on getting ourselves out from under all this credit card debt. I will occasionally update on this subject, so I can tell you how well this system is or isn’t working for us.