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I’m very excited about this post today! It is a guest post from Melanie over at Partners In Fire who I work with on a regular basis. She has been blogging about financial independence for a while now and even has a new podcast!
Check Melanie out at Instagram and Twitter because she is very engaging and active! Melanie recently fell into a bit of debt and is currently climbing back out of it. She has a great strategy in place and wanted to share with you how she is going to get back on track. Without further ado, here is her post!
How I’m Going To Dig Out Of Credit Card Debt
When Ryan and I first started talking about guest posting on his blog, I was at a loss of what to write about. Arrest Your Debt is all about paying down debt; what would I know about that? I’m an expert at getting into debt, not getting out!
Well, that’s not exactly true. I did just rack up a huge amount of credit card debt, and I’m on a mission to pay that off. Hey, what a great topic! I should write about how I’m going to dig out of this massive hole I put myself in!
How I’m going to dig out of Credit Card Debt
Digging out of this six-thousand-dollar hole is not going to be easy, but it’s definitely doable. I have an action plan, and I’m going to stick to it. My plan includes earning extra income and cutting back on my expenditures.
Earning Extra Money
The best way for me to earn extra income is to do overtime at my job. I hate working extra hours (I’m trying to find a way to not work anymore, not work even more!), but desperate times call for desperate measures. I’m sure there will be a few overtime shifts available in the next six months, and I will definitely sign up for them. I’ll also be sure to work on the smaller holidays when my office is open. Double pay for working the same amount that I usually do is always the answer! I should be able to make about $1000 in the next few months by volunteering to work holidays and one or two overtime jobs (they aren’t available as often as I’d like!)
I should be getting a small bonus this year for my performance at work. Guess where that money is going? Yep, the entire bonus is going to my credit card debt. It’s an easy way to pay off a big chunk of debt without putting any extra effort in. My bonus this year should be around $1000.
If worse come to worse and I can’t pick up any overtime, I can always sell some of my stuff. I have a few collectibles from back in my garage selling days that I’ve never even posted on Ebay, so I can start there. I also have other household items that are in good condition that I don’t need anymore. This is a perfect time to downsize and get a little extra cash for paying down that credit card debt! I can probably sell about $500 worth of stuff.
Although I’m side hustling my butt off with blogging, podcasting, and gaming, I’m not making any money off of it at this point. They say that if you put a lot of effort in, most blogs start taking off after about a year. Well, my one-year blog-iversary is at the end of November, so hopefully this all powerful “they” is right! If I ever do manage to make any money off this blogging thing (fingers crossed!) it’s going to go right to debt repayment.
All those ways of making extra money sound fantastic, but they may not come to fruition the way I’ve envisioned. The main thing that I’m going to do to pay off this massive debt is cut back on my spending.
I got into debt because I couldn’t say no to travel. Well hello willpower, because this year I’m not taking any international trips! Did you know that they taunt me though? One of my best friends just invited me to go to the real Oktoberfest in 2019!! That’s on my bucket list! I declined this time. I’m going to be good and forgo all international adventures until I get my spending back on track.
I’m not going to completely limit myself though. I am going to take a trip to Chicago to see my family for Thanksgiving. I can’t even remember the last time I spent a holiday with them, I’ve been away for so long. But to save money on the trip, we are going to drive the 12 hours to Chicago rather than fly. This saves us money on airfare and we won’t have to rent a car when we are in the city (double win!). We will also bring our dogs with us so we won’t have to pay for boarding. Triple win! The only real cost for our Chicago trip is going to be gas. I can definitely afford that.
The freaking power bill was one of my most expensive bills all summer. It was between $200 and $250 a month! That’s just insanity. I’m sure most of that is the air conditioning, but Savannah is just too hot and muggy to go without. I did increase the temperature from 74 degrees to 76 degrees, I’m still comfortable (because I’m always cold anyway), but my boyfriend has been struggling a bit. I’m also confident that the fall will bring cooler temperatures, and the air won’t have to work as hard. Last fall and winter, my power bill was about $100 per month, so that $100 to $150 in savings is going straight to the credit card.
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This is the one place in my budget where there is a decent amount of wiggle room. I usually give myself a whopping $800 per month for gas, groceries, and extra spending money. I know I can keep my grocery bill to about $100 per week, and gas is about $100 per month, so if I cut out the “extra spending money” part I can save about $300 a month to put towards my credit card debt. I just have to remember to keep room in my budget for snacks, because hangry Melanie likes to spend way too much money on food! It will be a rough few months with little to no extras, but the end result will be well worthwhile.
No, I’m not going to cut back on my retirement savings or cut out any of my automatic distributions. That’s just crazy talk! However, I am not going to add anything extra to my savings until my credit card is paid off. Usually, when I do my budget, I split all the left-over money between debt repayments and savings accounts. Instead, all of the money is going to debt repayment. I usually have between $200 and $300 left after everything each pay period, so this will be an easy way to put extra money towards debt.
Total: $800 per month/$4800 in six months
Paying it off
Based on the numbers, if I’m able to hustle at work and cut back a little at home, I should have no problem paying off my massive amount of credit card debt in six months. I’ll be posting monthly updates on Instagram so be sure to follow along and be an accounta-billa-buddy! Also, feel free to leave your tips for paying off debt in the comments; after all, we are all Partners in this journey to financial freedom, and I need all the help I can get!
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I also want to give a special thanks to Ryan for accepting this guest post. I hope you all have enjoyed it, and if you want to see more you can catch me over at Partnersinfire.com