I am finally ready to share our debt numbers… and it’s scary! (Both the amount and putting our real numbers out there for people to see.) In April of this year, our credit card debt reached a total of $24,905.68, which was $1105.68 OVER our spending limit at the time. Amazingly, we weren’t charged any fees for being over our limit, other than our monthly interest. However, our interest rate has increased literally every month since then, so that’s how they are getting their extra money. We went from 14.99% interest to 15.49%, then to 16.24% to our current interest rate of 16.99%.
Our credit card “very graciously” saw that we were getting in over our heads, so instead of suspending our credit card (which was over the limit) or denying transactions, they increased our limit by $5000! We now have a credit limit of (ridiculously!) almost $30,000! It took us a long time to wake up, but I think we finally did! We still have a TON of credit card debt, but we are working on it.
Currently, our credit card debt stands at, $19,943.47. Still way too high, but less than it was.
We have not been able to pay off quite as much as we would like for a couple reasons. First, like I talked about in a previous post, we were given a truck that cost several thousand dollars to get running. (But was still less than the price of a used car!) We paid cash for all of the repairs. Secondly, our dog had an unexpected vet bill. He is 12 and we have been very lucky that he hasn’t been very expensive, but last month he cost us $1000. We were able to pay cash for that too. We also took a long weekend away as a family to Pismo Beach. We hadn’t done that in years and because we paid for that in cash, I consider it money well spent; but I’m trying to be honest in saying why we didn’t pay off as much as we would have liked.
Most importantly, we haven’t added to our debt, and in fact, have made a little headway. As of our September 2022 credit card statement, we have paid off $4962.21, which amounts to 19.9% of our total credit card debt. Honestly, could be better, could be worse.
Going forward, I am hoping to be able to payoff around $800 per month, after interest. At that rate, we will still be in debt for almost 2 more years. Again, it’s longer than I would want, but I think an $800 decrease per month is realistic. I don’t want to set unrealistic goals because then I will just be depressed and discouraged when I missed them.
We don't have any student loan debt or car loans. We have a mortgage and small solar loan in additional debt. I am really focusing on our credit card debt as that is what is weighing us down.
As I said in my last post, I am expecting a lump sum payment this year equal to 6.5% of my salary. I haven’t yet decided what I’m going to do with it, but looking at these numbers, it is mighty tempting to send it all to debt and just live with one month of expenses in my emergency fund and to work on building it back up, slowly. But I don’t have the money yet so I don’t really have any decisions to make, yet.