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Plan of Action – EF, Debt and Retirement

As any one who has been reading me long knows, I keep myself motivated during this debt payoff journey with small baby step plans. It’s been a while since I had one since my two remaining debts are quite large…

And as previously mentioned, I do think I need to start putting something toward retirement…

So here’s my short term (baby step) plan…

For the remainder of October through December, I will continue with my current budget. Paying the minimums as listed toward my two debts. But putting all additional income toward my EF. If I continue making the same amount I have the last few months, I will reach a solid 4 month strong EF by the end of the year.

Then I will diversify a bit and split my additional income between a Retirement plan, not sure which one yet, and putting extra money toward debt payments. I have decided to prioritize the car debt over the student loans at that time.

Raspberry tea to close out a long day of walking around colleges

I will redo my budget in December to take into account these plans AND adding a line item to save towards Princess’ last year of high school. More to come on that in then…

Life has been very good to us this year. Steady and quiet. A change from our last few years. I am so grateful for the respite after jumping from emergency to emergency. I am now working on business plans for next year along with putting some personal goals down on paper.

Hope

Hope is a resourceful, solutions-driven online business manager with over two decades of experience helping clients streamline operations, manage projects, and grow their businesses through digital marketing and technology.

But life has a way of rewriting your plans.

A year ago, Hope made the decision to move in with her aging parents full time – a season she wouldn’t trade, even as it came with its own financial and emotional weight. Earlier this year, she lost her mother, and is now walking the tender, disorienting path of grief while learning what “forward” looks like from here.

Hope came to the Blogging Away Debt community in 2015 as a single mom raising five foster and adoptive children. She’s written through job changes, financial setbacks, and the bittersweet transition to an empty nest. Her kids are finding their footing in the world now – and so is she.

Rooted in faith and fueled by the same perseverance she’s brought to every hard season, Hope is ready to face her finances with fresh eyes and an honest pen. She believes that clarity, courage, and community can change the trajectory of anyone’s story including her own.

She lives in Austin, TX with her dad, loves adventures with her dog Addie, and is figuring out, one step at a time, what this next chapter is meant to be.

My transition to a healthy relationship with debt

by Elizabeth S.

Transferring card balances to a low interest loan

I’ll preface this post by saying that it is more emotional than rational. Debt can be very emotional! It felt so good to see those credit card balances hit $0. I know that they aren’t paid off, but the interest rates stressed me out so much! Speaking of the line of credit, I hadn’t quite understood the terms of the line of credit balance transfer. It turns out, if you opt for this low fixed rate for one year, you’re locked in for that amount and can’t add any money to the balance for the duration of the term. That’s right – I can’t touch the line of credit other than to make payments for the next year. And to be honest, I am thrilled about that. I haven’t earned the freedom yet, in my own opinion. I appreciate measures to safeguard my finances from myself, because history shows I can be impulsive. So how am I transitioning to a healthy relationship with debt?

My new purchasing and reconciliation workflow

As of Friday, I’m using my rewards Visa for all purchases and transferring the money from my checking account immediately. I had initially planned to transfer the balance weekly, but I’m still struggling with budgeting a bit and don’t want to take any chances with racking up purchases I can’t afford. I intend to give you monthly net worth updates and I’m excited to be able to demonstrate to the readers here that I am paying that Visa off and not carrying a balance. The rewards aren’t all that great, but they add up and I am hoping to be able to cash them in for a gift for someone around Christmas.

Here’s how my recent transactions look on my visa!

A healthy relationship with debt?

It feels different now. I know the stress of living with credit card debt. That feeling of utter stupidity when the credit card statement comes and I’m throwing away $100 of my hard-earned dollars to interest. The stress of running out of money a few days before payday, and realizing I need to use my credit card for foolish things I could have planned for. It’s premature to say I’ve accomplished anything (I haven’t), but I’m proud to say my mindset is noticeably different. I approach purchases completely differently than I ever did before.

I want to be solvent! I’m counting down the days until my net worth hits zero, which is a sort of funny thing to consider. But having a little chunk of savings, and room to breathe in my accounts, all of this is so motivating. It’s pushing me forward to achieve the goals I set in the summer with you, the readers. I’m buoyed by having a plan, and having a contingency plan. Why didn’t I do this years ago? Sigh.

Elizabeth S.

Elizabeth is a single woman in her early 30s, working as a manager at a software company and living in the most expensive city in Canada. She hopes to blog about her journey to eliminate debt and build savings for home ownership someday. Whenever she has taken two financial steps forward, she’s always taken a step back with a bad credit card purchase (we’re looking at you, unnecessary iPhone of May 2019). Elizabeth lives alone with her fur kids, a dog and cat, and when she’s not in front of the computer, she enjoys running, camping, reading, and baseball.