Whoa! I’m up to my eyeballs in debt! I’ve been slowly trying to work my way out but this summer we had a major setback. My air conditioner went out and where I live here in Phoenix that’s not optional to fix. I called the AC guy to come and take a look and it was the worst case scenario. I needed a new AC system. The old unit was about 13 years old and I had been told for the last few years to be prepared for the worst because sooner or later it was coming. Well, this summer was the final straw. The repairs were going to be so much that it didn’t make sense to fix the old unit again so we opted for a new unit.
Needless to say, throwing a bunch of money on a credit card that had previously been paid off was pretty disappointing and so here I am making new plans to pay off my debt even faster. I’ve seen reports like this from time to time online where people are tracking how fast they can pay off their debts so I figured, why not me. At least there would be some level of accountability, sort of. If nothing else it might help me to stay focused and motivate me to try and make this a success. So here’s where I stand now:
| Category | Starting Debt as of October 16, 2019 | Rate |
| CREDIT CARDS 4 | 319.93 | 16.99% |
| CREDIT CARDS 2 | 1,700.14 | 25.49% |
| CREDIT CARDS 3 | 7,577.93 | 16.10% |
| CREDIT CARDS 1 | 13,225.42 | 13.74% |
| AUTO LOANS | 18,718.26 | 0% |
| STUDENT LOANS | 30,259.94 | 6.55% |
| HOME LOANS 1 | 54,463.92 | 9% |
| HOME LOANS 3 | 147,606.51 | 5.25% |
| HOME LOANS 2 | 239,288.07 | 4.75% |
| TOTAL DEBTS | 513,160.12 |
My goal is to pay this off as soon as possible. I know, I know, I’m not even following the SMART goals method to do this. I should have created a time frame or something like that. First things first though. For now, I just wanted to get it down on paper and there are some things in the works that may help me reduce this faster. For instance, we usually get some larger payments from our Amazon arbitrage business in the last few months of the year and I’m trying to refinance out of a couple of home loans. This is my starting point though and there are a few things that I should mention about all of these debts.
First off, a couple of credit cards are used for short term financing of the online selling business. They can rack up a balance pretty quickly but usually are paid off within the month. We are pretty careful to not go out and purchase more inventory than we are able to pay on the next payment so we don’t have to pay interest. That would kill the profits in the business. So throughout this exercise, you’ll see those go up and down pretty quickly depending on the timing of payments from Amazon to our account. Those credit cards are referred to as CREDIT CARDS 1 and 2 on the list.
You’ll also notice there are a bunch of home loans the first 2 are for my home mortgage. Yeah, I have a first and a second on my home. It’s another one of those, ‘seemed like a good idea at the time’ type of things. Originally the first was an interest-only loan that I refinanced into a fixed. The second is a high fixed-rate loan with a balloon payment. It’s coming due in a couple of years. I wanted to refinance it all into one loan but at the time I refinanced the first, my house was still underwater when including the second. Yep! I bought the house at the end of 2006, at about the absolute worst timing, but again, that’s another story.