In case you haven’t read my DEBT page, you might want to do so first before reading this end of month debt repayment update. It would just make more sense, so go do it now!
January was a good debt repayment month for Girl Meets Debt for 2 main reasons:
A) I got rid of my VISA and MASTERCARD and consolidated my credit card debt onto a Personal Loan with a teeny tiny lower interest rate of 11.65% compared to 11.99% and 12.99% respectively. I begged and pleaded and tried to
charm talk my way into convincing my bank to give me a lower interest rate but that was the best I could do lol. Apparently I was “lucky” to be approved for the loan in the first place considering my overall debt amount was humongous and I had no financial assets. (Their words, not mine )
B) I moved in with J so now I share the rent with someone rather than pay for it all by myself. Before, rent was approximately 31% of my monthly net income, it is now only about 19% of my monthly net income. WOOHOO! And because I moved out mid way through the month, my former landlord found someone else to move in right away so I got back my full damage deposit and half a month’s rent! I also sold my mattress and bed frame to the new tenant moving in so I made over $1000 in extra “income” this month and used it ALL as extra payments towards my Personal Loan!
Now let’s see the exact numbers…
Starting Overall Debt: -$57,458.94
Student Loan: – $45,525.94
Personal Loan: - $11,933.00
End of January 2013:
Student Loan: - $45,424.82
Personal Loan: - $10,564.51
Current Overall Debt: – $55,989.33
Which means I put a total of $1,469.61 towards my debt in January!!! It’s a small dent in the big picture but it is such a relief to pick up some momentum and have the debt ball rolling….
I’ve decided to adopt the popular “Debt Snowball” repayment method and pay off my Personal Loan first since I am currently on interest relief on my Student Loan and only have to make the $101.12 required monthly payment. This minimum payment goes all towards the principal balance. However, the interest relief is up for reassessment next month so hopefully I can maintain my interest relief status for awhile longer, while I pay off the Personal Loan as soon as possible.
I plan on documenting my whole journey to becoming “Girl Meets Debt-Free” so I can see that this blog will be around for a long time friends. $57,000+ in debt will not disappear overnight. Hopefully you will all stay around for the ride