{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,


{February Topic: Finance} Keeping Track of My Money with Mint

For February, I’m going to be focusing on finances.

For getting an incredible overview of my finances, I turn to Mint. By connecting all various bank accounts, credit cards, my mortgage, and even some manually updated loans like the one for my orthodontic work, I can quickly see where my money is going.

Mint has a quite a few features that make it worthwhile for me:

1. Creating a Budget – Because Mint has access to every transaction across my accounts, it can not only tell how much money I have coming in each month, but also what I’m spending. Because of this, Mint already had a pretty good idea of what my monthly spending looked like. I just needed to make a few adjustments to get my spending in alignment with my financial goals. After the initial set up, Mint takes care of the rest with minimal effort on my part. Occasionally a transaction will get categorized incorrectly and I’ll need to adjust it, or my mortgage payment will be processed a day or two early causing it to look like I’ve exceeded my mortgage spending. A feature I’ve been enjoying lately is the ability to set up spending categories to rollover to the next month or span across multiple months which I find useful for things like groceries or gas where I tend to spend more or less depending on my plans. Mint really makes it easy to see how much income you have, how much you’ve budgeted, and what’s left over. They even suggest ways to use that left over money like paying off credit cards or reaching your goals sooner.

2. Notifications – The obvious use case for notifications would be if I’m coming close to or have exceeded a spending category on my budget. I love Mint for this alone, but it also notifies me of large transactions or when my spending is abnormal. These notifications has saved my butt on more than one occasion, like when a disgruntled JCPenney support rep charged my credit card without authorization or the morning I woke up to find that my credit card had been used to pay for someone else’s several thousand dollar college tuition balance.

3. Graphs – I’m a sucker for graphs, and Mint has graphs for everything. Given that I’m focused on paying off my remaining debt, the two I use most are Debts Over Time and Net Worth Over Time. Watching the debt fall and the line on my Net Worth gradually increase is beyond satisfying, and Income Over Time is nice way to jog my memory as well. Since I’ve been tracking things with Mint for so long, I can literally see each promotion I’ve ever received on a graph.

4. Available Wherever I’m At – None of this would be useful if I couldn’t access it whenever I needed to. Whether I want to quickly check my accounts from my phone using their mobile app, get a quick notification using their desktop app, or view everything online, Mint makes it super easy to get the information I need wherever I’m at.

The one feature I’d love to have in Mint that actually worked as intended is their Goals tab where you can select a goal like paying off debt or saving for an emergency. The idea is that Mint helps you plan these things out and tracks your progress. Sadly, my Pay Off Credit Card Debt goal has never worked quite right despite reaching out to Mint.

In my next post, I’ll discuss what I’m using instead of Mint to help with paying back my credit card debt. Stay tuned.

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