Small Debt Payoff – Round 3

Here we go again! This will probably be a shorter blog post on my debt payoff. 

If you have read my previous posts, you know I implement both theories of debt snowball and avalanche. There’s definitely been some ups and downs over the past 2 years, but one of the constants has always been my credit card. 

One of my goals for 2021 was to payoff my Citizens Bank credit card. I have carried a balance on this card for years, it’s been a thorn in my side, and was most recently hovering near $7,000! So, without further adieu, I am happy to announce I have finally paid it in full as of 2/22/2021! 

How did I do it? Well, I used almost every cent of our 2020 federal tax returns. This is definitely not the most sexy way to use your tax return, but I would rather be rid of this debt than go on a shopping spree. 

Where do I stand now with debt? Unfortunately, the AmEx has gotten a bit out of control again (whomp whomp), we still have a furniture bill, my grad school loan, and the other debt in our sights for the year: the car loan.

Let’s break it down:

Debt	Balance
American Express	$6,867.94
Furniture	$4,200.26
Student Loan	$7,134.30
Car Loan	$14,021.90
Total	$32,224.40

Horrifying truth? I literally just realized as I created this table how high the AmEx was. I thought it was in the $4,000 range. How embarrassing. I *might* have been avoiding looking at it…

So what’s the plan? 

The furniture and the student loan are currently 0% loans, so we will be targeting the AmEx most immediately. Somehow we usually manage to pay this down very fast every time there is a balance, though I’m not sure why… It could be because it’s both my husband’s and my card, so we both can see the balance which results in a form of accountability. The rest of our federal tax returns and all of our state tax returns will be used towards this. 

Our other finance goal was to start additional payments to the car loan in June 2021 because we are going to need 2 vehicles that can fit 2 carseats in the very near future. 

Is this debt snowball or avalanche? I guess it’s technically avalanche because the order in which we are focusing our payoff is coincidentally by interest rate. 

Over the next 3 months we will be throwing all extra funds to the AmEx and freeze our spending on it. My serious hope is it’s less than 3 months to pay off. I have been making some Poshmark sales recently which will help the debt payoff. Lastly, we will just have to be a bit more frugal in the coming months. 

If you want to see how my debt payoff has gone in the past, click here. 

Next time I do an update I want to be able to report the AmEx is at a zero balance and we are making extra payments to the car loan! 

Anyone else on a debt payoff path? How’s it going for you?