Tuesday 22 September 2015

Momentous Payday and The Snowball Theory!

Okay, so I am excited, as today is payday, but not just any payday, this payday is special. Today is the first payday that I actually put that full end of month payment on the dreaded and dastardly (that which cannot be named) Card #3!

I loathe this card not only because it had the largest balance but because it symbolizes the whole of my struggle against credit card debt. This thing has been turned off, (just because I missed a payment and moved) since 2011 but they have been charging me like it was turned on ever since, and even sneaking in a few extra charges along the way. Trust me I will dance when it is finally paid off and I never have to deal with that organization again! . . . But I digress (into a rant . . . sorry).

So you can at least understand my joy, when today I will take the first large bite out of this card. Not only that but this makes September the first month that all of my credit card budget goes to one card! This is big and plays into my “Snowball Theory” of debt elimination.

What is the Snowball Theory of debt elimination? Well, when you look at your debts, don’t bother to look at the interest rate, just accept that you’re getting screwed and move on.  The only exception would be that if the current balance on two or more cards/debts are the same, then chose the one with the highest interest rate, then the next highest and so on down the line. 

So, first pay off the smallest debt, then move on to the next highest debt, and keep going until you are out of debt. This way the money that you were spending on the “minimum payments” on the smaller debts can be added in to paying down the higher debts. This way your momentum increases as your resources snowballs and grows bigger (as does your confidence) as you go.

It is because of this that the balance on Card #3 will fall quickly and take just shy of two more months to pay off. Okay it will take two more months to pay off but that last payment will be much less than the full credit card payment budget. 

Then that money, that entire budget will be mine, mine to do with as I please. Then, I will finally have control over my own paycheque and life. Truck and trailer payments are one thing, for there is a fixed amount and an end date, credit card debt is a never ending debt that keeps on taking. 

The only thing worse than credit card debt is payday loans. Trust me, stay away from them and if you are on that cycle do whatever (legally and ethically) you have to in order to get break that cycle and get away from them.

As for me, I will focus on the happy thought that the final stage of my credit card paydown quest has begun in earnest. 

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