How this couple paid off $ 27,000 in credit card debt

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If you have more credit card debt than you can handle, you might feel like you’ve run out of options. But there is a way out. Many people are able to pay off their credit card debt in full, whether they consolidate their debt on balance transfer credit cards, create a budget that allows them to prioritize paying off their debt, or use popular techniques to pay off their debt. repayment of debts, such as the snowball method or the avalanche method. .

Tana Williams, a digital marketer who blogs about her financial journey at Debt Free Forties, worked with her husband to pay off $ 26,619 in debt in just 17 months, including $ 3,251 in credit card debt. The two used a combination of budgeting, hustling, spending cuts, and payment strategies to reduce their credit card, car loan, and student loan debt to zero. But it took them a few tries before they could successfully engage in the debt repayment process.

“Consistency is a personal struggle for me at all levels, so even though we were motivated and had the skills to make decent money from a side gig, we still strayed from the payoff path. debt, ”Williams said. “We were tackling massive debt, then we’d walk away and start an expensive house project. We were doomed to repeat the cycle several times until it finally got underway in January 2017. ”

How did Williams and her husband get into five-figure debt and how did they get away with it? We asked Williams to share his story and give advice to anyone else who might be in a similar situation.

Credit card debt can happen to anyone, so don’t feel bad if it happens to you

“My husband and I bought our debt like so many others,” said Williams. “It started with the classic combination of credit cards in college and student loans.”

After taking out a car loan, taking out a mortgage, and paying hospital bills related to the birth of two children, Williams and her husband fell into the all-too-common habit of putting more daily expenses on credit than they could. could. afford to pay – and this habit continued, month after month. “Although we didn’t buy anything extravagant or outrageous, we still spent more than we earned each month, which led to a big pile of debt. ”

Along with buying more than they could afford, Williams and her husband found themselves dealing with a few emergency expenses that quickly added to their credit card balances. “Once our roof was damaged by a storm when my husband was laid off for a few months and had to use a credit card to cover the deductible. We also used a credit card to pay a hefty tax bill, which in hindsight was a mess, especially after adding some hefty credit card processing fees. I highly recommend finding another way to pay the tax bills! ”

How did the Williams family end up in so much debt and why did they prioritize discretionary spending over important financial goals like building an emergency fund? Like many people, they wanted to live a life that was slightly beyond their means. “I think we both assumed that was our parents’ quality of life,” said Williams, “so that’s what we expected as well.”

Create a budget, then create a plan

“Budgeting was a big part of our debt repayment history,” Williams explained. After she and her husband set a family budget and started tracking their spending, they could see where their money was actually going each month, and then they came up with a plan that prioritized paying down debt over paying off debt. ‘other types of discretionary spending.

“Once we started budgeting – and not just recording what we spent after the fact – we were able to see where our money leaks were,” Williams said. “We got rid of cable, moved to pay-per-view mobile plans, and drastically cut our entertainment budget. We asked for discounts wherever we could, including our child care services, and started shopping at discounted grocery stores.

Use introductory 0% APR cards to save money on interest charges

Many people use interest-free promotional offers to save money on credit card interest charges, but even the best introductory 0% APR cards only work if you pay off your balance in full before it ends. the promotional interest rate.

“We made sure that any 0% term debt was repaid the month before the final payment was due,” said Williams. “If we owed $ 2,000 on a 0% credit card and had seven months before the interest hit, we would aim to pay it off in six months and pay $ 333.33 per month. ”

After Williams and her husband paid off all of their introductory 0% APR cards, they avoided opening new zero-interest promotional accounts, including balance transfer credit cards. “We knew our weak spots, and getting new cards at 0% interest seemed too easy to downgrade.” While Williams could have saved money on interest charges by taking out new credit cards with introductory 0% APR offers, she and her husband decided to focus on paying off the loan first. their existing credit accounts.

Use a proven debt repayment strategy

“We used a combination of tactics to eliminate our debt,” Williams told us. “I chose freelance web development and started a blog, and my husband worked overtime when he could. We also sold things around the house, moved to a cheaper area, and used the snowball method. ”

The Snowball Method is a proven method of debt repayment popularized by financial expert Dave Ramsey. When you use the snowball method to pay off your debt, you are paying off your smallest debt first while making minimum payments on all of your other credit accounts. Then you use the money you previously budgeted for your smallest debt and add it to the minimum payment for your next smallest debt.

As you take turns paying off each debt, the amount of money you can afford to spend on your next debts snowballs, and as each debt payment increases, you start to pay off your debts more. quickly.

A common alternative is the Avalanche Method, which requires you to focus on paying off debt with the highest interest rate while making minimum payments on all others.

Avoid creating new debt by making it difficult to spend on credit

One way Williams avoided incurring new debt by paying off his credit cards was to make it harder to buy on credit.

“We did things like lock our credit cards,” said Williams. “We have also removed our credit card information from Amazon and other websites we have visited to make it harder to build up indiscriminate debt.”

Now that Williams and her husband are no longer in credit card debt, they’ve started using credit regularly, but they’re only making purchases that they can afford to pay off in full. Williams also schedules her credit card payments to keep her credit usage low and take advantage of her credit card grace period to save interest.

“We have a few credit cards and we charge things on them every month,” Williams said. “However, we pay them back every two weeks to avoid any interest or fees. It’s easier to keep an eye on them and make sure they don’t get out of hand and out of control because you review them more regularly.

Be consistent and find a way to stay motivated

What advice does Williams have for people looking to pay off their own credit card debt? “Be Consistent! Although your debt repayment story goes through its ups and downs, what makes it work is that you keep going through those setbacks. A great book called“ The Compound Effect ”by Darren Hardy has me helped realize that it’s all about doing a little something every day to reach your goal.It’s not the rush to the door that will get you to the finish; he constantly takes one or two steps each day , which adds up over time to get you to the end.

Since paying down debt is often more of a marathon than a sprint, it’s a good idea to find a way to stay motivated, even during setbacks. Williams suggests connecting with other people who are also trying to get rid of credit card debt and share your struggles and successes as you work towards your goal.

“Find support and motivation to keep you going, whether it’s books, blogs, podcasts, friends or a Facebook group. Being surrounded by like-minded people with similar goals makes all the difference! ”

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