I used to sell life insurance in one of those thinly veiled pyramid schemes.

To be fair, I didn’t know what a pyramid scheme was at the time.

To be completely transparent, I never actually sold any insurance.

Way back then, I was too young and too green to be embarrassed about it.

I kept hope alive that that opportunity would work out for me in the end.

It didn’t.

I’d wanted another job on the side, but I hadn’t completely committed to getting rid of my debt.

To date, I have (1) credit card debt + (2) a car note + (3) and student loans.
Since I’ll be paying student loans off forever, I’m pretending that I’ll be “debt free” once #1 and #2 are done.

Don’t judge me. 

When you finally commit to eliminating debt for good, consider these 5 things:

1. Whether or not your timeline is reasonable.

If it’s too short, you might decide your goals are impossible. You may get discouraged and give up.

If it’s too long, you might decide your goals are impossible. You may get discouraged and give up.

If your budget isn’t accurate, you might not even KNOW your timeline is unreasonable. You may get discouraged and give up.

I want to save $10,000 by December.

And I want to pay off all my credit card debt.

And I want to save at least $5,000 by December so I’ll have a head start when we’re ready to buy a house in a couple (few? several?) years.

This is completely unreasonable and impossible (given my income, expenses, current knowledge of trading and investing, and the amount of jobs I currently have).

*If you know more than me, teach me. 
Call me. Email me. 
Let’s make some magic happen!

Fortunately, my unreasonable timeline won’t discourage me from moving forward– this time.

Fortunately, I’ve been using my budget long enough to know just how (dollar amount-wise) unreasonable it is.

How’s your timeline?

2. Whether or not you need a mentor, an accountability partner, or a financial planner.

I don’t like talking about money. More specifically, I don’t like talking about debt.

One day I’d like to seek help from a financial adviser, but if I could afford one, I probably wouldn’t be in the mess that I’m in. The struggle.

Do you need (or want) someone to hold you accountable?
Do you have someone who can help you reach your financial goals?

3. Whether or not a personal loan will help.

I know, I know, I know!!!

Hear me out first.

Like you, I think loans are the devil.
Like you, I think it makes no sense to borrow money to pay off money (or credit) you borrowed.

However, and this is a big HOWEVER–
Under the right circumstances, from the right lender, with the right interest rate, a personal loan can actually SAVE you money.

Simple example:
My Bank of America credit card has a balance of $3,766.43 with an APR (annual percentage rate) of 24.49%. This means that I pay about $79 in interest EVERY SINGLE MONTH (without even using the card).

In 12 months, I will have paid more than $940 IN INTEREST on this $3,766.43 debt for a credit card I haven’t used since 2016.

One option would be to take out a personal loan with a significantly lower interest rate. This would save me money and could even IMPROVE my credit score. *More on that later. 

4. Whether or not consolidating your loans will help.

Consolidation isn’t for everyone.

I’m on an income based repayment plan for my student loans.

If I consolidate, my monthly payment will increase… wait for it… by at least $600 dollars MORE THAN WHAT I’M ALREADY PAYING. PER MONTH.
Let me say that again. If I consolidate, I’ll pay WHAT I CURRENTLY PAY EACH MONTH + $600 dollars.

EACH MONTH.

So, while it’s true that consolidation will save me THOUSANDS, it will only save me thousands over the life of the loan.

This is true even with an interest rate that’s significantly lower than my initial interest rate on the loans.

Read the pros and cons before you choose to consolidate.

5. Whether or not you should reach a set savings goal FIRST.

I would’ve been SOL more than once without my emergency savings account. It’s still recovering from the last hit it took.

I want to reach a certain balance before I’m comfortable putting more money towards my debt. But if I wait, I’ll still lose a good chunk of money in interest.

I haven’t figured out the right answer.

I just do what feels right each month.

Should you keep paying the minimum until you reach your set savings goal?

What works best for you?