Oh man! April is fool-ing me around. I perceived I will have more selfishly ‘me’ time, but it turns out my ‘me’ time was taken over by the pile of work after office hours and during weekends. Screw ‘me’. Mostly, screw the work.
Anyway, that’s not the main point of this post.
Each time when work keeps piling up taking control over not only your reality, but your dreams as well, then you realized that it has messed up your personal life. And when that gets under way, you’ll likely become remarkably ambitious (although it won’t take you that far either) and start deliberating about your debts. The haunted debts that I usually share with you guys, keeps me sacrificing my ‘me’ time presently for work. No kidding.
My biggest debt (putting aside mortgage) is the credit card. Well, this is how it goes.
The Visible Thing
So the first, boring part is to spend some time to go over my old mails, taking out all the credit card billing statements for ONE year (you can check online too if yours are not printed version). Then I will file them corresponding to the list of banks (Yes, I have more than 1 credit card, what else left for me is always the interest). File up the first page for the recent statement, so this way you’ll know your latest or last balance.
The Emotional Stakes
By this stage, you’ll get a bit emotional, sighing along the way seeing all the figures. No worries there, this is the time to take some action. At least you are now aware of your hidden debts; hence take it one at a time. Once you’ve known your total debts and the exact balance to pay off, you’ll find yourself being in control.
The Info Gathering
Before moving on any further, I have some tips to share with you on what I did previously. Since you comprehend that you don’t have much amount of money to repay in a short duration (perhaps gradually stick with the minimum payment), that’s where the charging interest starts to crack a joke for you. It’s not funny for us, but let’s take control over that silly joke:
- Find out all your bank contact details
- Call each bank (I know, this is tedious!)
- Talk to the agent, ask them if there’s any way to reduce your balance
- Ask them to waive your annual fee too (trick is to say you never miss to pay them)
- If step (3) doesn’t help much, ask them about the “Balance Transfer” rate and “Flexi-Payment” rate (most banks have these facilities, they have competitors anyway!)
- If they do have (5), ask them if there’s any penalty fee for early settlement
- Gather all your details now and compare
By this stage, you’ll have some sort of this information:
Balance Transfer (BT) – Facility on a credit card when you transfer existing debt on one credit card to another credit card (typically with a lower or no interest rate)
Flexi Payment (FP) – Converting your credit card transactions into affordable monthly installments (usually requires certain amount of minimum transaction)
To take the most benefit out of it, I would suggest you to reserve one of your credit cards for the above plan and not spending any other retail on top.
The Game Play
The games begin. So now we have all the information, it’s time to map out our expected, glorious day of debt settlement. Below may look an easy amount of repayment, however I still have other commitments to look into, which easily blown away 3/4 of my salary.
Let’s be honest, here’s how I’ve put up mine in summary as an example: (All rates in USD)
Before Year 2012
- Started taking credit cards: Year 2009
- Total credit cards owned: Proud owner of 6 cards (from 4 banks)
- Total debts: Almost USD 14k in total
- Total credit cards owned: Amazingly proud ‘Gold’ member of 4 cards (from 3 banks)
- Total debts: Almost USD 9.5k in total
- Total credit cards owned: Plain silly ‘Platinum’ member of 2 cards (from 2 banks)
- Total debts: Almost USD 7k in total
- Below table summarize my rough figure of recent credit cards
- ‘Total Amount’ represents the original amount of debt for both credit cards before the entire conversion plan was done
- ‘Actual Date Complete’ is following the monthly repayment schedule provided by the Bank depending on the type of plan offered
- Credit card (2) is the reserved credit card that I used for all the balance transfer procedures, etc which clearly shown the spikes by March 2013
You won’t notice much variance in the beginning, but you will soon observe the balance decreases drastically (depending on the duration of settlement that you’ve signed up to). Mainly is because of the lower, fixed interest rate which allows you to take control over it.
The best part is the visibility for you to foresee when you will actually reach the freedom of credit card debts. For myself, I added in the goal to settle them earlier (on last column), so that I’ll be able to relay my focus on other commitments.
To keep the ball rolling, start targeting on the smaller amount first. As you can see in (1), that’s the credit card that I plan to terminate by my Birthday this year, in pursuance of my 2013 Manifesto. Likewise, I’m still working my way to follow some of Dave Ramsey’s baby steps, simultaneously with several saving plan and other numerous hard ways to kill the ghost, one at a time every year. I found myself trapped inside the ghost, instead of the other way around.
Nevertheless, I won’t be financially free altogether during the short period of time, except in some measure of hope that this first step would allow me, in future, to have my ‘me’ time at any chapter in the book of my life.
I have a desire for every single day to be feeling like Saturday and I don’t prefer to hate Mondays. I don’t want to end up quitting too fast and aiming to take a couple of smaller actions in between. Substantially, I believe I can achieve the real meaning of life.
… And so can you.
“If you think nobody cares if you’re alive, try missing a couple of car payments.” -Earl Wilson
I’m not working as an accountant, nor studying any Finance-related subject in college (not even close). I don’t know how to calculate figures printed on my food or clothes receipts. I’m way too lazy to do my own math, even as simple as fingers can do. So please don’t judge me, I’m not trying to be smart in debt management or anything related for that matter, but just sharing my own experiences that I’VE came across with you guys. Much love and I need more cash! 🙂