5 Takeaways from Paying Off $3750 in 3 Months
#3 Believe that You Can
Credit card debt is an alluring trap: we want things we can’t purchase with money we already own, so why not let a future version of ourselves pay the cost? On some level, it makes sense even though it’s unhealthy. In addition, with so many marketers using the buy today, gone tomorrow trick, it’s tempting to fall into the well to avoid fear of missing out.
I have fallen into this trap many, many times. I still owe a lot of student loans and had two credit cards totaling 8500. I also had no savings as last year I spent over three months unemployed and four months underemployed.
In March, I was in a life-changing car accident. My mom’s 2017 Hyundai Sonata, which was two years from being paid off was totaled. The cost of the new car after the insurance payout? $20,000. I couldn’t see a way out of the mess I had created for myself.
I decided to start with one of the smaller debts and the one charging the most interest. I gave myself a year to pay off the $3750 maxed-out credit card and then went to work like a fiend with working overtime hours.
On Friday, June 26th I paid off the first card I was working on, two months after starting my quest. I consider it three months because after paying off the monthly bills, I won’t be able to save or keep working toward financial goals in July.
There are five lessons I’ve learned in the last couple of months that are worth carrying forward.
Saving First is Key
I started with the credit card debt as it felt like a noose around my neck. I considered the $1,500 emergency fund but rationalized that if need be, I could charge most purchases if I lost my job. Why not go for a huge goal right off the bat?
The thing is, something is going to go wrong during this journey and if there are savings, they will save the day. For me, it was the day that I paid off my card. I started having shooting pains in my lower abdomen. I waited and avoided going to the hospital for 24 hours, hoping it would go away. Turns out I have an abscess that needed an ER visit and sonogram.
Had I actually taken the experts advice and saved up, I wouldn’t have had to worry about the price of that hospital visit. I would have had the money to pay it upfront instead of incurring more debt.
Budget for Bills First
One of the things I did differently this time (I’ve attempted to get out of credit card debt a few times in the past) was to spend on all the monthly bills instead of trying to split the paycheck multiple ways. I found that I was able to have at least one or two paychecks per month that could be devoted solely to pay off.
There was a relief that came through doing it this way, and it felt more organized than past attempts. Keep first things first and the rest falls into line.
Believe that You Can
Belief is the bedrock of success. It’s what was missing from every failed attempt to get out. What you set your mind to is what will eventually become your reality.
Unlike previous times, I made the conscious decision to believe no matter what. I read really good financial books, repeated money mantras, and reminded myself of how much easier it would be to not have to shell out $75 per month on things I bought and then forgot about.
I had faith that it might be a long journey, but I was going to get there somehow. My mindset flip is one of the main reasons I succeeded at paying off so much in the first few months.
Learn to DIY
Being committed to saving money leads to new skills. One of my downfalls is restaurant eating- that problem was solved because my boyfriend is a great cook and has been teaching me some of the tools of the trade. I also learned to gauge the oil in my car so I’m not going for premature changes and know where I stand with that level.
Other skills this challenge is likely to teach: budgeting, repairing small rips and holes in clothes, meal planning, and finding best deals (for starters). These are important lessons that our parents and especially grandparents knew. Somehow it seems to be lost in our generation of cheap clothing, fast food dollar menus and instant gratification.
Set a Goal Outside Your Comfort Zone
Setting goals outside our comfort zones leads us to push harder for the things we want. They keep us accountable, challenge our assumptions and act as building blocks to encourage us the next time we want to take on large projects.
When I first considered paying off my card, I thought about setting a one-year goal. However, the idea kept coming back to me, “wouldn’t it be awesome to get this over with before your birthday? You could know that at least one giant was slayed.”
Reminders of goals are powerful things. Write goals on post-it notes, in your journal, leave small objects around that remind you of what you’re striving for.
I had a small post-it note in my car that listed how much I needed to pay off the card and my birthday. Keeping reminders around influenced a lot of the decisions that I made.
Conclusion
The key after accomplishing is to first celebrate the win. When you’ve strived to accomplish a goal you once thought was impossible, you need to celebrate the tiny steps that got you there. The celebration doesn’t have to be big either. Dinner out, a new item of clothing or a new course are relatively inexpensive but great ways to celebrate.
The other key is to keep the momentum by moving on to the next goal. Don’t forget the lessons learned while working on this project and use them with the next large goal you set. You will start to see success when you keep going.
