I got this idea from Matt Jabs, who does a great job blogging finances at Debt Free Adventure In a post he wrote today for five cent nickel, he challenges you to get angry at your debt by figuring out how much it’s actually costing you.
*Update:* Student loans were not calculated, as I’m not in “payback period” quite yet. That’s coming in December, so they will be on the next one.
So, I’ve decided to look into this myself, and may make this an ongoing part of the blog. I have 3 credit cards and for the month of November, 2009, my costs were the following:
- Southwest airlines credit card – Paid $10.05 in interest on this card. (you may be thinking that I had already paid this off, but due to the car situation, I had to put a balance back on it)
- Washington Mutual Card – Paid 59.55 in interest on this card.
- My other card is at 0% until may of 2010, at which time I hope it’s paid off.
So, my debt is costing me approximately $70 every month. Which sucks, but if you follow my tweets for the blog, you’ll know that I served up my WaMu card a whopper recently. Here’s what happened:
I decided I was tired of it, took $1,000 in one-dollar bills, rolled them up into a giant roll (drug dealer style) and shoved it down the throat of my wamu card. Because of this, I hope to have the card paid off soon. (kinda like the one below, but not of 100′s).
What I did to my Credit Card.
Once I get this paid off and I can save my $70 per month for the future, instead of paying for the past.
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That is a great way to look at it! With that thought, we can also say that we are making banks $70 more rich every month. So when we get out of debt, we can instead save that money and start making ourselves $70 more rich every month. Keep up the good work!
Exactly right eric,
Im glad that soon enough I’ll be able to take this extra $70 and keep it for myself, instead of giving it to the banks. I think im going to make this a monthly series, but soon it’s going to change….I’ll have to make the first (of alot) of student loan payments in december, so I can have a whole new set of banks to hate and interest to tabulate. I’ll keep on going with it, cause I’ll be $70 richer every month, and $840 richer every year!
I see you don’t have nearly as much debt as many others. Good job. Keep it that way!
I challenge you to never go into mortgage debt. Everyone will tell you you’re crazy… but if you stay out of debt, you’ll stay out of slavery and will be able to do whatever and go wherever whenever.
Something to think about.
That’s quite a challenge Matt. I’ve been considering it for a while, and it will take some serious thinking. My girlfriends grandparents were deeply afraid of debt (they grew up during the depression) and didn’t take out a mortgage either. Instead, they bought land with cash, and had a house built on it. They couldnt afford to build the whole thing at once, so they built the basement first, covered it with tar-paper and lived in there until they had the cash for an extra layer.
This allowed them never to go into debt on their home.
Something you might want to consider is paying off your credit cards in partial payments. For example, let’s say you have a minimum amount due of $100 per month. Instead of paying on the creditor’s timetable, set up your checking account to send $25 a week to them.
At this juncture, banks are accepting multiple payments per month from consumers (unlike mortgages). I would suggest watching to see if that doesn’t make a bit of a dent in your finance charges each month. The faster you pay, your daily average balance decreases. This is how I was able to get out of debt faster.
If you decide to try this, please keep me posted because I’d like to see this logged month over month since I didn’t think to do it at the time I was in debt.
Best of luck!
Kim
Kim
The way that I pay my debt is usually to send them large payments around the due date, and whatever leftover money I have I send along the way. This past month, I have made 4 payments, totaling around 1400 to one card. Im going to continue doing it this way, as it allows me to keep some cash in reserve while making substantial progress on my debt. I’ll definitely keep posting updates to the debt, and maybe some more fancy graphs and whatnot.
Debt is costing us a lot isn’t it? Well it is good that you are attacking it and so on top of your game. I have been reading your comments and it has encourages me to try this strategy as well. All the best.
Just make sure that you stick to your strategy! Pick one debt (whatever it is) and throw all your resources towards that. Once you find that first success, you’ll find the road ahead much less steep.
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