My New Year’s Resolutions, or: What I Plan to Do with All That Debt

I am not one for creating new year’s resolutions. I usually find them to be self-defeating since I already know I won’t follow through on them. After all, what is stopping me from completing these resolutions any other time of year?

I realize that the simple (and fleeting) psychological effect of a “new year” isn’t enough to keep me going. It’s really a waste of time.

Further, I am a hypocrite so please ignore all of the above as I am making a new year’s resolution!

My goal isn’t related to pie-in-the-sky changes like volunteering more, losing weight, being a good person, etc.—it’s actually a completely practical (read: selfish) resolution: I want to get out of debt. With the recent birth of our child we have racked up quite a large credit card bill and had no buy a new (used) car. On top of that I have student loan debt:

Screen Shot 2016-01-12 at 6.53.40 PM

As you can see from the above I don’t have massive levels of debt (and student loan is considered “good debt” since it’s a tax write-off) but I want to get it down to zero as soon as possible. One thing to note is that my credit card (CITI DoubleCash) has an interest rate of 0% until May of this year. Once May hits it’ll start charging an APY of 15-18%, which is why I’m concentrating on that debt first.

In order to avoid paying interest on the credit card I’ll have to pay around $2000 for the next four months—that sounds like a definite “maybe” to me on this goal.

With my income remaining stagnant for the past few years I plan to look for other sources of active and passive income streams. Barring that I will have to learn how to save money instead.

Ways I Have Found To Save

One tool I have discovered recently is Digit. This tool (which is web-based but is controlled via SMS messages) takes small, and affordable, amounts of money from your checking account to save into your Digit account. It does this on 2-3 day intervals with varying small amounts of $10-$30 at a time. It took me less than five minutes to sign up for this service and I look forward to saving without even realizing it.

Another way I have saved money is by refinancing my student loans through SoFi. SoFi is one of the leading online companies in consumer lending. I refinanced my 6 student loans, with ever-more-suffocating interest rates of up to 7.2%(!), and received a much lower overall interest rate as you can see above. In the long run this will save me around $4000. Using the link above you’ll receive $100 if you’re approved for a loan.

I’ll provide updates on what income sources I have discovered and where I am on paying my debt in future posts.

-Pierre

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