Paying Down my Debt – Debt Wise

Today is a good day, a REALLY good day.

When I was living in my apartment, my finances got out of hand. Like a lot of people things just went a little wrong and then it was hard to get myself out of debt. Over 4 years I built up a sadly impressive amount of debt and maxed out all my major credit cards. I’m sad to say that there were weeks where I had to check credit card balances to see if I had enough to buy dinner. You’re pride really takes a stab when you realize your credit cards are so maxed out you can’t afford a loaf of bread. Or when you realize you have to decide between paying your gas bill or a buying a bottle of advil PM so you can sleep at night.

But times are a’changing!

Today I officially paid off one of my credit cards. Granted I still have 2 more to attack, but this is a big moment for me. It’s a huge sigh of relief to realize that I’m building a degree of financial security. Not only do I have a decent value credit card for last minute emergencies, I’ve also built up a 3 month emergency fund in case something was to happen to my job.

How to do it yourself

There are a lot of different methods to reducing your debt, but my favorite financial guru is David Bach. I’ve read nearly every book that David has published and I had even pre-ordered his new book, Debt Free for Life. It was delivered to my Kindle on December 28th, just in time to start the new year plan.

Most of the stuff in his book, I had heard before, but I still felt a little lost. To be completely honest, with my mortgage I had about $190,000 of debt.  That is, until I read about DebtWise. Just so you know, I’m not being paid for my review of this system. No one asked me to talk about it, and no one is paying me to use the product. I’m paying for the monthly fee out of my own pocket. I’ll tell you right now…It’s worth every penny!

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DebtWise made the process so simple, that I didn’t really have to think about what to do. After filling out a few questions about my debt, it pulled all the other details from my credit report. It also gave me my FICO score from Equifax. With all that information, it spit out a plan for me to follow which cut over 30 years off my payment plan. Brace yourselves…this is about to get unreal!

Without the Plan…

  • All my debt would be paid off in February 2054
  • I’d be 72 when my debt is paid off (Ouch!) 
  • I’d pay over $171,000 in interest
  • Monthly payments total = just over $2000 (including monthly mortgage payment)

With the Plan…

  • All my debt (including my house) will be paid off in May 2022
  • I’ll be celebrating my 40th birthday in May 2022
  • I’d pay less than $57,000 in interest
  • My House will be completely paid off in 11 years
  • My Credit Card debt will be paid off in 2 years
  • Monthly payments total = just over $2000 (including monthly mortgage payment)  Yes, my payments each month don’t change. But what I pay to each debt will change over time.

I could be COMPLETELY DEBT FREE and OWN MY HOME before I turn 40 YEARS OLD!

Thats pretty incredible.

Let me clarify for anyone reading this, I’m working with a single income (I’m not married or in a relationship that shares income). Just imagine what could be accomplished if I was married/dating with a second income. So for everyone out there, if it works for me, it can work for you!

DebtWise Pros:

  • Easy system to work with, simple layout, very easy to understand the plan and questions
  • Provides you with 4 Credit Reports & 4 FICO Scores from Equifax each year.
  • 1st Month Free to test it out
  • Pulls most updates directly from your Credit Report
  • Calculates exactly how much to pay each credit card/debt each month

DebtWise Cons:

  • Monthly Fee (around $15)
  • You need to be proactive in updating some of your debt to keep the plan up to date

Of course you don’t NEED DebtWise to create a plan and succeed. David actually outlines the ‘DOLP’ plan in his books which you can follow. For some reason DebtWise works for me and I an inspired to succeed with this.

It’s not going to happen overnight, and it means changing some of my spending habits, but this year will bring some major accomplishments.

2011 Goals…

  1. CapitalOne Credit Card Paid Off
  2. Discover Credit Card Paid Off

That’s right, BAM! I have paid off one credit card this year so far and it feel so good.

 

I’m hosting the first family BBQ at my house this afternoon, and I have so much to do. I’ll be back later to share the outcome and recipe for the amazing Whip Cream cake I mentioned yesterday.

 

Addison

One response

  1. Pingback: 2011 Recap | Changing My Destiny

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