I’ve been told all my life that it’s tacky and impolite to talk about money, but if I don’t how am I supposed to know if I’m getting ripped off on bills or taken advantage of by credit card companies? Seeing as how everything’s on fire anyways, I’m going to throw etiquette out the window and lay out my entire financial plan. I pride myself on my resourcefulness. I’m good at making investments, and I’m good at paying off debts. As it were, after tallying up my credit card debt, it hovers right around $10,000 dollars. Oof!
Now before you jump to conclusions and assume I have a spending habit, I should mention I’ve been remodeling a house, and in the last two years I’ve installed a privacy fence, replaced all the windows, gutted and remodeled the entire kitchen, sunroom, and bathroom, and I just finished the living room. I’d say getting all of that done with just 10 grand in debt is pretty good. Now I want to see how quickly I can pay it all off. Now I want to mention that I am NOT a financial advisor or any kind of expert in economics. I’m sharing my financial goals because a.) I’m an average person and not some dude on the internet selling fantasies about how to become a millionaire. And b.) I’m open to advice and suggestions. I’ve also explored a plethora of passive income and side gigs, and I want to share my experience with you all.
But first! We must evaluate the finances. I decided a good place to start was tallying up my bills. I round up the bills to make it easier, and this is what it boils down to per month:
mortgage – $375 (it’s low because I bought a fixer upper)
utilities – $150 (on average)
insurance (car/home) – $75
cell phone – $100
trash – $30
Spotify – $10
groceries – $200
Add it all up and it’s around $950 and just to cover any extra expenses, we’re going to call it an even $1,000. So my total bills come out to about $1,000 a month which I think is pretty low. Now, before we get into the income, do you see anything off with the numbers above? Am I paying too much for anything? I don’t have internet yet, so that’s not factored in, but I will eventually. On to the income:
I’m a teacher, so I average about 30K a year which isn’t great, but considering how low my expenses are, I think I’m doing all right. I make on average (after taxes) about $2,500 a month. I have a side job cleaning office buildings which earns me an additional $600 a month. And I rent out my spare for $300 a month. Why so cheap? Well, it’s a fixer upper. Living in a construction zone half the time is not exactly ideal. I make around $3,400 a month which means minus the bills, I have about $2,400 of extra spending money which I intend on putting toward my credit card debt. I’m under the impression this is more than the average person. Am I correct in that assumption? So despite my relatively small salary, I’m doing all right. Now let’s get into the debt. Oh boy!
I’ve taken out several credit cards, and I use them for almost all of my expenses. My regular bills come out of my banking account automatically, but I put everything else on the cards in order to get the points. After all the remodeling and purchasing new furniture etc. this is the debt I’m looking at along with the interest rates.
Capital One Venture – $5,187 – 23% APR
Lowes – $1,755 – 26% APR
Discover – $2,870 – 0% APR
I took out the Discover card in order to transfer half the debt from the Capital One. Unfortunately, I racked the debt back up on the Capital One card, so I’ve just recently qualified for another balance transfer credit card with Bank of America. Now I’ve been told opening up new lines of credit won’t hurt my credit score, but closing them will. On average, I have about 6 or 7 credit cards, but these are the only 3 carrying a balance currently. My intention is to use the Discover card and the Bank of America card to transfer debt off of the cards that carry a higher interest rate. And once I’ve paid them off, I plan on closing them, but I don’t know what that’s going to do to my credit score. Again, I’m not a financial expert, so I’m all ears. I also have about $2,000 left on a secured loan I took out through my bank when I was replacing all the windows in my house. Add it all together and round it up and we’re looking at about $10,000 in debt.
If was really diligent, I could have it all paid off in about 5 months. I looked into a Home Equity Line of Credit, but my bank said it probably wouldn’t be worth it since I can pay off the debt so easily with my extra income. I also considered debt consolidation, but again, I don’t think there’s enough there for me to go to those lengths, so we’re going to do this the old-fashioned way. I’m going to work and see how quickly I can pay it all off. In addition to my regular income, I’m going to explore a number of side gigs and odd jobs for the next couple of weeks and share with you all my experience. The first one I’m going to explore is BLOGGING, so stay tuned!