{February Topic: Finance} Using ReadyForZero to Pay Off Credit Cards

My most important goal in life right now is paying down my credit card debt. Now, I’ve mentioned in previous posts that I’ve been lucky enough to escape having a car payment and college loans. For that, I’m truly thankful. I can’t imagine having to deal with student loans or car payments on top of what else I owe like most of my friends. However, after graduating, I got a job that paid a fairly decent salary with little to no bills because I lived at home. In short, I made stupid decisions and money burned a hole in my pocket to the point that spending a couple hundred dollars on a Michael Kors bag or new clothes every month became regular purchases for me rather than something I saved up for.

Looking at my transactions in Mint, I somehow managed to rack up nearly $40,000 in transactions on credit cards in about 4 years. To my credit (no pun intended), the balances of those cards never exceeded more than a couple thousand dollars at any given time, but it’s not what the balances were, it’s that I had become comfortable with having balances on them in the first place. I bought whatever I wanted rather than what I needed. Looking back, I cringe at all the interest I’ve paid because I wanted to buy “stuff.” Even more cringeworthy is that most of that “stuff” I bought I probably don’t even use or have anymore.

Now that I’m trying to be a “responsible” homeowner, and am solely responsible for all the bills, I have no choice but to be mindful of my spending. The first step of that involves getting out of my habit of relying on credit cards.

On a regular basis, I keep three cards in my wallet:
My debit card, which gets used for most purchases.
A low interest credit card for routine bills, which I pay for at the end of each month. While I work to get my savings back in order, emergency expenses like the dishwasher I had to replace are also going on this card. (My goal is to build my savings back up so that these expenses can be paid for up front.)
Another credit card from a different vendor just in case they don’t accept the other cards I have since both my other cards are the same.

Unfortunately for me, that very last card, with the highest interest rate, is the one carrying the highest balance at the moment making it my first priority in my payoff plan, which brings me to a service I recently stumbled upon called Ready For Zero that makes putting a payoff plan together a piece of cake.

Like Mint, it’ll ask you to connect your accounts. From there, you tell it what you’re able to pay each month toward your credit card balances. With that amount, Ready for Zero will factor in your minimum payments and interest rates and tell you how much you should pay toward each account each month. However, it doesn’t stop there. Ready for Zero can estimate when you’ll be debt free and even plots out your payments on a graph. I like graphs so this is something I really enjoy.

My favorite feature, by far, has been seeing how much I pay in interest daily because of the balances I’m carrying. It’s a simple number that people don’t pay much attention to most likely because it’s often buried away. Watching that amount decrease with every payment triggers a little celebration in my head, and when it goes up, I actually feel it. It may be only a dollar or two, but that’s money each day I would have rather spent on something else.

Oh, by the way did I mention ReadyforZero is free? If you’re looking for an easy way to visually help you pay off your credit cards, this is fantastic. Definitely check it out.

Until next time,

Andrea

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Creative Frugal Choices Pay Off

I have a bit of a confession and a big lesson learned for anyone reading this.

For the past couple years, I’ve been living at home helping my mom with her finances. Living at home definitely has it’s perks. I won’t lie. One of those perks I took advantage of was not having bills. Aside from the $900 I gave her each month, I had very few “bills” and even then they were more like conveniences (Netflix, Birchbox, etc.) The result – I blew my money away like no tomorrow. If I saw something, I bought it. A trip to the grocery store for dinner for one night might have been $40 bucks. Seriously what was I thinking?

Word to the wise: don’t do what I did. I’d be in a much better situation without the $2K in debt. Thankfully that’s all I have.

Fast forward to today, I’m looking to buy a home. If my offer on this home goes through, by the time closing comes, I’ll have nearly $13,000 in the bank to put towards a small downpayment, a part of closing costs and some minor expenses when I move in. All I can think of is had I saved my money instead of blowing it, I’d have more money to put down, and more money for repairs afterwards. But, live and learn.

So not wanting to put more money on credit cards and wanting to be as thrifty as possible, I’ve started getting creative with options, and here’s what I’ve accumulated over the past week and all for free:

– $95 in Home Depot gift cards from Nielsen Mobile Rewards and MyPoints

– a side by side fridge

– a George Foreman grill – why not?

– a blender

– a full set of silverware

– gifts of $2500 from family – THANK YOU!

Sure it’s just a start and it’s going to take work to get everything that I want done, but even so that’s significant amount of savings that I won’t need to be paying out of pocket or on credit cards when I move in, which means more money left over that can go towards the new floors and saving for other improvements and paying down the credit cards.

In fact knowing I made nearly $5 in Amazon gift cards this afternoon alone gives me hope that provided I curtail my spending {I have to…}, stop buying retail first and check out thrift stores, and find other means to do things has given me a new goal – Try to pay for everything on Amazon with gift cards and cash back offers as much as possible.

Next on the list, sell some of my old things I don’t use – tons of American Eagle Jeans and other clothes, a full size Yamaha digital piano, an acoustic guitar, some old text books, and a few other gadgets here and there.

It won’t be instantaneous, but slow and steady is going to have to win my race because as far as I know, I’m not getting a raise anytime soon {although if any of my employers are reading this, one would certainly help out the financials :)}.

Thanks for stopping by, and hopefully I have good news shortly.

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