Credit Card Debt-Free

I did it, I paid off my credit cards (well my only credit card that was carrying a balance). I had to take the money from my emergency fund, but it is paid in full. And I feel great about it.

My sidebars have been updated. Not only was I able to pay off my credit card debt, but I still have $826.40 in my emergency fund, $100 in my travel fund, and $85 in my gift fund. I am going to work really hard over the next couple of months and try to rebuild my emergency fund back to $3000 while still contributing $100 a month to travel and $85 a month to gifts. I am going to need the gift money for Christmas shopping and the bf and I love to travel, so I am sure that money will come in handy.

I am shouting at the top of my lungs "I AM CREDIT CARD DEBT FREE."

Elimination of Debt

I am officially going to take the plunge and do it. I am going to deplete as much of my emergency fund as I need to and pay OFF my credit cards. I have been contemplating this for awhile now, but I kept saving because I wasn't sure if I was going to have employment once my judicial clerkship ended. Well, I have found a job that starts the day after this one stops. As such, I think that it is time to let go of the money, pay off my debts, and then start rebuilding my emergency fund. In the long run, I think that I will be more satisfied knowing that the only debt I owe is on my student loans.

What's the plan after the debt is repaid?

First, I am going to snowball the money I usually pay on credit cards every month and rebuild my emergency fund back to $3000.00. Once that task is complete, I am going to snowball the money to my student loans. Some of my student loans are at 8% interest because they are private loans; thus, I want to eliminate that debt next. After that, I will have to re-evaluate my situation and determine if I want to continuing tackling my student loans or want to build a bigger emergency fund or exactly what my next goal will be.

Improvement

I paid my cc bills today. I am definitely making progress since I started this blog in March. At the rate things are going, I should have the cc bills paid in full by November 2008. One month early!

However, I haven't been able to put any extra money towards my student loan debt. Once my credit cards are paid in full, I am going to have to make the decision on whether I want to start putting the $566 a month towards a new car payment or towards my student loan debt. While I hate to take on more debt, my car is just not practical anymore with gas prices at $4/gallon. Plus, the new job I took that starts in August will require me to drive at a minimum of 40 miles a day. Can you say, OUCH.

Stimulated. . . FINALLY!

Hooray! I got my stimulus check directly deposited into my checking account this morning. I cannot wait to throw the money at my credit card debt, update the sidebars, and see the burden slowly slip away. Although it will all have to wait until after the weekend. I couldn't be happier. I know that Bush wants us to stimulate the economy with the $600, but I cannot bear to do that until all of my credit card debt is GONE forever!

So I guess everyone now knows what I am doing with my stimulus check, what are you doing with yours?

Getting anxious about the start of a new month

I just starting budgeting and writing this blog this month. Therefore, my saving meters have not really made any progress. So, with the start of next month comes excitement. And also decisions. As I was driving to my tennis match last night, I started thinking. . . . how actually should I allocate my money every month and am I making the most of my money. Here are my two thoughts.

First, I am hoping to increase my "fun in the sun"/emergency fund to $6000 by the end of the year. That means with 9 months left I need to make contributions around $334/per month. Currently, I am contributing $500/per month. My thought is this. . . should I only be making the $334/per month contribution and applying the additionally $166 towards paying off my credit cards?

Second, along the same lines is this thought. . . should I actually deposit $900 at the beginning of every month into my ING/"fun in the sun" account and withdrawing the $400 or maybe $566 amount around the 20th of every month to make my credit card payments by the 26th?

Or should I just continue to contribute the $500 per month until I reach my $6000 goal and then start snowflaking the $500 per month contribution into my credit cards?

The credit cards are definitely at a higher interest rate than I am earning on my ING account. So, the faster I pay them off, the better I will be. I think that I am going to pay with my budget a little during the month of April and see what I can come up with. Any thoughts are greatly appreciated!

Tax Refund - Part II

I decided to put my tax refund towards credit card debt. Besides the fact that credit card debt is the logical thing to do, I thought that is would be the most satisfying thing to do in my situation. Applying the amount towards credit card debt puts me closer to my goal of paying my credit cards off by Dec. 2008, and once my credit cards are paid off the $400 a month that I have allocated putting towards them can then be funneled into my student loan debt repayment plan.

Tax Refund

I would like to start off this post by saying - I always wondered how bloggers had enough information to write about to keep posting daily without running out of ideas, but now I totally get it. That being said, I got my federal tax refund back today! While it is only $1374.00 - that is going to make a dent in some debt that I have. Now, the big question??? What debt to I apply it to. I know that traditional logic says that I should apply it to credit card debt because it is at the highest interest rate, but I was thinking about applying it to my student loans. Here is my logic - I have a little over $107,000 worth of student loan debt. (You didn't read it wrong...$107,000). So, while it is at a lower interest rate, it still accrues more interest a month than my credit card debt (a little under $5000) because there is more principal. Also, I was thinking that if I didn't accelerate my student loan due date, then my student loan payment every month may decrease as a result and free up a little extra money each month to apply towards my credit card debt. What does everyone else think? Should I still apply it towards my credit card debt or actually go against traditional logic and apply it towards my student loan debt?