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June 2016 Debt Repayment

June 24, 2016
AUTHOR: Emilie
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So here is how I started the month.

ECSI (College Debt): 8528.77
Upstart (Starter-life Debt): 4970.92

Credit Cards
Southwest (Chase): 3080.86
Discover: 1074.44

Combined Debt: 17,654.99 

And here’s all the progress I made:

ECSI (College Debt): 8471.31 (-0.7%)
Upstart (Starter-life Debt): 4813.25 (-3.2%)

Credit Cards
Southwest (Chase): 3054.27 (-0.9%)
Discover: 1374.53 (28.0%)

Combined Debt: 17,713.36 (58.37 or 0.33%)

… So I acquired debt this month. I know, I know. It’s terrible. But here’s what happened. After a bummer last month, I decided that in addition to continuing to be extremely strict on my finances, I also needed to generate more revenue. There’s only so many hours in a day and working and freelancing take up time. Then The Paradise Pack appeared before me and with it, the opportunity to buy Elite Blog Academy 2.0, which I was having serious remorse over not having invested in when the opportunity came. I was able to get the entire Paradise Pack and EBA for less than the cost of EBA had I bought it last time. I didn’t have the ability to cashflow it because I don’t have a couple hundred dollars in my wiggle room, so I put it on my Discover card. I’m sorry and I do feel bad about it, but I know it was an investment in me and I’m optimistic that I will be able to garner a return from it!

I also didn’t aggressively pay off debt because I’ve been focused on rebuilding my bank account. I live on last month’s pay which means I keep one of my two monthly paychecks (~$1300) in my bank account at all times. It’s still really important to me to have at least $1000 in my separate savings account in case of emergencies. I did have more before but it was depleted by my decision to move in May. This means I like to have $2300 in combined savings (bank account cushion + liquid savings). That’s more than the Dave Ramsey Baby Step of $1000 but considering any family emergency requires a flight and that flight could be international, it is really important to me to have this piece of mind. I only paid minimums so that I can rebuild that savings account. Unfortunately, I did not reach that threshold this month, so I will have to work towards it again next month, but I should reach that pretty easily, letting me go back to attacking my debt.

Also, I’ve made a new adjustment on my debt snowball. I was determined to attack my Southwest debt, as if it was my smallest debt, but I feel like I’ve been working on it for a while and not making much progress. This was limited in large part by the face that I was paying $175 on my Discover card, a huge amount but not enough to make a substantial difference. The advantage to this method was that since the Discover wasn’t accumulating interest, I could put extra to help decrease my interest payments on my Southwest card.

Emotionally, though, it’s been hard to feel like I’m working so hard and not making any progress. I decided that I needed a win, so going into next month, I’m going to be attacking my Discover card with the goal of paying off the balance (currently: $1375) by September.

It’s easy to get sucked into needed all the little wins to keep motivated and as I caught myself doing that I wanted to take a second to reflect on my progress so far! I started off 2016 with over 22K of debt in six different places. I’m down to four debts and under 18K in six months while living in a major city with high cost of living, notwithstanding multiple trips (Georgia, South Carolina, Ohio, Florida) and a cash-flowed multiple-state move.

Let’s talk: How did you do with your debt repayment this month?

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