Now that you know my background, most importantly my impulsive spending, lets get down to those figures.
We zen, breathe… and pull that bandaid off.
I’d like to say I don’t have much damage, but damage is still damage.
Like I stated on my previous post I have two credit cards, both with amounts owing. I no longer have my car loan as this was paid off in full last month (this on its own was $16,000 AUD).
Here we go…
Credit card 1 – Bank: ING. Total owing – $1,565.15
Credit card 2 – Bank: American Express. Total owing – $2,285
Total credit card debt: $3,850.15
To most this is probably a laughable figure… “oh, what Lauren $4k debt?! check out mine!”
$4k is still $4k, and that ING card still sits in my wallet and gets used when the end of the pay week rolls around and I’m craving that Taco Bell and 3x coffees in one day. I can’t stop myself from using money that isn’t actually mine. Yeah its kind of mine as I pay it back in the future, but technically its not mine.
As a person I was talking with the other day said, “you really have been a victim of circumstances”. I wracked up this debt due to 3 things; 1. I went on two holidays in a space of 2 months and overspent on both, 2. I forgot I had one off bills coming and just put them on my credit card, 3. I moved interstate quite quickly with little to no savings which cost money that I did not have.
So, what am I doing about it?
I have told myself that we have this debt and we need to reduce and remove this debt, which is step one. We have set up a snowball method on the ING Credit card as what I have yet to mention is that the ING card has 7 smaller amounts equalling that larger total amount.
For those who don’t know what a snowball is;
I think it started with Dave Ramsey (the boss man of debt freedom, no for real check him out… he even has an app!) and basically you take your smaller debt regardless of interest rate and you smash all you can into that debt while paying minimum requirements on everything else. Once you pay that smaller debt off, you put that money you were putting on that debt on to the next smaller debt and so on and so forth until all debts are gone!
Now for that ING card, here is how that snow ball is going:
Debt 1 – $57.22
Debt 2 – $94.25
Debt 3 – $156.20
Debt 4 – $201.24
Debt 5 – $275.68
Debt 6 – $326.53
Debt 7 – $454.03
It’s a lot I know, and with what is coming up in the near future I need a lot of this gone.
Funny enough, I don’t stress too much over my Amex card… even though that’s the highest amount overall. I don’t know why, my mind just doesn’t even think of it. My auto payments come out once a month and we top it up with the required additional payment every fortnight. I guess cause I don’t actively use this card on a regular basis and that there is no additional amounts being added to it that I stress less.
But my biggest problem is not that I have these cards, its that I buy unneeded items and food. For example, I have great coffee and a coffee maker yet I still go out and buy my coffee every day, I also have food at home yet I go and buy take away almost every day. I know that this money is better off being saved or being towards things yet my brain goes “mmm… French fries, lets go buy” like no brain, stop.
So how do I curve this habit? The many money tracking apps are clearly not helping me, taking the credit cards out of my wallet isn’t helping me, the coffee calling my name isn’t helping me. So what do I do?
Cash Envelopes. I think we will start there.
“But what is cash envelopes Lauren?!”, in my next post padawan I will explain this and if this worked for me this week.
I’ll talk to you soon.
Lauren
Moneyless Millennial 