As of December 23, 2011, we have paid off all of our credit card debt.
Remember back in January, when I wrote about adding more than $2,000 to our credit card? Just under 12 months later, that debt is gone.
*dances a jig*
There is something so immensely satisfying about paying off a loan.
So how did I do based on my original three-step plan?
Step 1 was to build up a beginner emergency fund of $1,000. Done and Done. And actually, we did this twice, since we spent most of our emergency fund on incidental costs related to buying our condo in September.
Step 2 was to pay $600 a month toward our credit card debt, and have the card paid off by August 2011. In retrospect, $600 was a little ambitious. We ended up paying off the credit card four months past our original deadline.
But wait, you might say. Why am I so excited that we met the goal four months past the deadline?
- Because we met the goal at all.
- Over the course of 2011, I had recalculated our ability to pay off this credit card based on cash-flow fluctuations and situations that came up. By my last estimation, the card wasn’t going to be paid off until February 2012. So really, we were able to pay it off two months early. 😀
Step three was to cut up the credit card as soon as it was paid off. Also done. 
Now what?
The best part about having paid off this credit card is that doing so reduced our monthly outgoing expenses by $80 (the amount I was having automatically transferred to the card each month), and frees up the $200 I was using to pay down the card faster.
So what am I going to do with that $280 now that it’s “extra”?
There are a few things I could do with it:
- Snowball it into the monthly payment for our smaller car loan.
- Use it to pay for the first semester of going back to school, including books.
- Use it for some combination of the above.
Option 3 is likely going to be the one I choose. I haven’t re-figured our monthly budget since paying off the credit card, but I suspect that at least some of the extra money will have to go toward the cost of going back to school. Any extra we get is going toward our smaller car loan, however. We only have $1,000 left to pay on it, and it would be awesome to pay it off sooner.
{ 4 comments… read them below or add one }
Congratulations! Paying off debt is an amazing feeling and great accomplishment. You’ve worked hard this year towards making that goal happen. It sounds like you have a great plan in place to spend the extra money too. Good luck
Thanks, Carrie.
Here’s hoping next year is just as successful.
Congratulations on getting the credit cards paid off! I know how fantastic that felt for us.
Since we’re currently paying for school out of pocket, my question is, how much is a quarter/semester going to cost and when do you have to have the cash by? Can you then save up enough for the next quarter/semester during the first one? If you were to pay off the car loan, could all of that money then go toward school costs?
C is on a quarter schedule, and our budget is to save what he needs for the next quarter during this one. We actually started saving for full time school while he was only part time, and we’ve been able to throw extra to savings, so we don’t “need” to be that aggressive anymore, but it means that if something major comes up (dog needing surgery, major house repair, etc) I can raid the school fund and we’re still on track for paying his next quarter out of pocket. Funnily enough, what we save each month for his schooling is about what we were paying a month on our last car loan.
Thanks! We’re pretty excited to be able to put that money toward something else.
As far as paying for college as I go, I go into the specifics of this in great detail at my “Becoming a CPA” blog, but the gist is that a semester at the Business college I am applying to costs $4,957 (if I take three classes, or 9 credit hours) or $3,387 (if I take two classes, or 6 credit hours). I have $1,000 saved at the moment, and the ability to save $350 a month (low-ball) for the foreseeable future. If I pay in installments (three times per semester), for the 9 credit hour semester, I’d have to make one payment of $1,983 and two payments of $1,487. No matter how I slice it, unless we get some windfall cashflow (which I never like to depend on), or possibly enough in scholarships, I can’t pay for each semester with money saved during the last semester.
This is all projected, of course. If my husband (or I) get a raise, or if we do get windfall cash flow, I fully intend to pay for as much of each semester as I can with savings instead of student loans. But looking forward and saying, “At the end of this, I might have $21,000 more in student loans,” is better than sticking my head in the sand. 😀
Thank you so much for thoughts an advice, by the way. It’s helpful to have someone who is currently doing it share their experience and their wisdom. Ain’t the internet grand?
{ 3 trackbacks }