I believe the first step, when we are being completely honest with ourselves, is to take a reality check. Where am I exactly? Is it as bad as I think? Is it better – or worse? I won’t know until I crunch some numbers.
Let’s take the plunge:
Balance Interest Rate Minimum Payment
Credit Card A $ 8,522.59 19.99% $ 224.00
Credit Card B $ 1,435.15 19.99% $ 36.00
Credit Card C $ 1,968.65 8.99% $ 66.50
Overdraft A $ 2,519.81 21.99% $ 54.75
Overdraft B $ 481.38 19.99% $ 12.51
Loan $ 2,945.00 0.00% $ 86.60
TOTALS: $17,872.58 $ 480.36
So, that’s the truth of the matter. Needless to say amounts will vary as deposits and purchases are made. On the plus side, I have $51.11 in savings. Now you know the nuts and bolts of my financial situation, as do I.
This income period, which occurs in two days, I will pay off the loan with the exorbitant interest rate. I am always able to meet my minimum payments and often pay more. Credit cards and overdrafts are like lines of credit. I can make a substantial payment, but before you know it I have used my available cash and I am dipping in once more to my overdraft or credit card room to keep me going. Does this sound familiar?
My objective, now that I know exactly where I stand, is to whittle away at this debt. I know how much I can comfortably use each month to draw it down. Next post I’ll explore an excellent tool for figuring out where to go next!
Until next time,
Affectionately,
Penny
Financial Peace - A Journey 