Getting out of debt – Rearranging finances

I had a meltdown last week about finances. Surprise, surprise.

It’s taking me a while to swallow the fact that it’s totally ok to spend $13,000 on a wedding when we have tens of thousands of dollars in debt hanging over our head. Personally, I think it’s a big financial mistake but a few things are helping me feel otherwise. “Life can’t be put on hold because of debt.” “Marriage is more important than debt.” Yadah, yadah, yadah.

Regardless, I needed to feel like we weren’t being completely stupid with our money. Maybe then I could stop complaining.

When Matt was living with his parents after college for a year, he made some serious progress with his student loans. In addition to eliminating one loan entirely, he is almost a year ahead on payments for another loan. Great news.

Currently, we pay the minimums on all of our debt except for my credit card, which is our smallest debt. I pay a little over double the minimum to get the balance to go down faster. In my dream world I wouldn’t have any debt I would be able to pay a lot more than that to tackle our debt faster.

After looking at our debt payments, we realized we don’t need to be paying the minimum on the loan that Matt is so far ahead on. He likes to pay the minimum because it reduces incurred interest but it’s technically not necessary. Normally I would be fully supportive of this, but the interest on my credit card is much higher than this loan and the faster the credit card is paid off the faster we can get our debt snowball rolling.

So we’ve decided to take that minimum payment and apply it to my credit card debt, starting this month. That means I’ll be paying $350/month to this damn card and it should be gone by May at the very latest. Any extra income we earn will also go towards debt so we’re hoping it can be earlier than May.

Another advantage of getting my credit card paid off faster is to improve my credit score. It’s not bad but my high balance doesn’t help. I would love to go into a marriage with a better credit score – how romantic is that??

Let me tell you, the day our debt is gone will be one of the coolest days of my life. Probably on par with my wedding. I cannot wait for either of them!!

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One Response to Getting out of debt – Rearranging finances

  1. I hear ya. Thinking about my student loans makes me want to cry. And to top it off, I’m not even in the field I went to school for (dental hygiene) and I’m working a temp job at the moment which may or may not be getting extended through October. I’m freaking out. I, unfortunately, have credit card debt too, although not really a lot (just under $1000) compared to what it could be. It’s still there, though, and I’m freaking out about being out of a job soon.

    I can’t wait to have everything paid off! I don’t know what I’ll do with myself!!

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