Welcome to Day 4 of the 60-Day Financial Fitness Challenge.
Today’s task:
Pay off all credit card debt
For most people, this might actually be a huge undertaking. For the most part, I’ve almost always paid off my credit card weekly.
The most credit cards I’ve had at once were two – a travel rewards card and a credit card through US Bank. I changed from an AA Advantage card to a Bank of America travel rewards card because of the annual fee on AA Advantage. I signed up for that one using a deal through a flight which gave me 60,000 miles in exchange for purchasing a single item over $5 on the card. Best. Decision. Ever.
I never got a credit card because I needed one. But my dad said that it would be good to build credit, so I got one when I got my first car and only used it for gas. I paid it off weekly back then, and never used it for anything else until I was in college to purchase my first international flight. I was so grateful to have it then, because I was banking on raising the funds to get to Italy through crowdfunding. Luckily all the scholarships that I applied for came through, and the crowdfunding, too. But I have never had to pay interest on my debt until…last month. And it was just because I forgot to categorize my expenses that Sunday. So dumb.
Even though I put a fair amount on my credit card now (including recurring expenses related to my business, which I’m realizing now that I should set up a business credit card to reap the rewards for), if I ever was in a position to not pay it off from what I had in my checking account, I always paid it off with my savings.
For any readers out there that aren’t leveraging your credit card to give you cash back, it’s high time you get on the wagon. Every few months, I’ll go into the ‘points’ section of Bank of America and redeem them. Usually it’s around 10,000 points, and it gives me anywhere from $30-$75 back on my card. Not too bad. I think I could still do better, though.
There’s tons of blogs out there where people explain how they use travel rewards for everything. And they travel for very cheap. I used to follow a travel blogger who always had incredible stories to tell. She was pretty much a nomad, and would find all kinds of creative ways to fund her travels. Unfortunately, I can’t find her blog link at the moment, but if I come across it again I’ll throw it in here.
Anyways, today’s task was to pay off my credit card. I had a balance of $425.85. And I had enough in my checking account to pay it off. So I did. Done.
For those of you who are in over your heads, there’s a few things I’ve heard over the years as a good way to start. And if you haven’t listened to the podcast I linked in Day 2, do it! She gives some very practical tips for this – including sending a faxed letter to the company/companies that may be harassing you with phone calls, asking them to only send you mail. Wild.
- Take care of you first. Cover your basic needs. Food, shelter, rest. Everything else can wait.
- Call the companies who you owe money to and ask them about any programs that they have that can help you reduce your payments, pause payments, etc. and tell them about your situation.
- Pick either the snowball or the avalanche method or a combination of the two. I didn’t even know about the avalanche method until I read about it here. It’s basically either deciding to pay the card with the highest interest rate first, then all of the others. The snowball is when you pay off the smallest loan the fastest, then take what you were paying on that one and put it towards the other one. The snowball method can also be applied as a savings strategy, which is what my financial coach suggested when I worked with her earlier this year.
- Move your money over to a different credit card that has a 0% interest rate.
There’s probably a lot more to this one, but I’m going to leave it there for now.
What I’m really interested in sharing today is actually some of the takeaways that I had from a podcast I listened to while driving, which I thought was SUPER timely, even though I technically broke my rule a little bit about only listening to content about personal finance.
Here’s the thing, though. I want this challenge to embody the values behind the brand, which means marrying mindset with practical action and strategy. When it comes to money, there’s nothing different about my approach.
So the podcast I listened to was about a woman who says that she’s a channel. And she talked about this idea of bringing together the vertical with the horizontal – the spiritual plane with the physical, more egoic existence that we have. And the importance of finding ways to weave in the ‘vertical’ more often into our everyday lives. For me, what this translates to is finding peace in the present as often as possible. And in her words, letting go of self. Acting in service to others while always taking care of your needs first.
I sketched this image while listening to a panel discussion this morning for work, processing what I heard, and how it relates to this challenge:
Mindfulness + Joy + Financial Abundance.
I love this idea and thinking about how it can apply to my life. And how I’d like to cultivate a deeper sense of peace within myself – and confidence, really – that everything is working for me, not against me. It all has a deeper purpose that’s contributing to my growth as a person, the lessons that I was apparently supposed to learn in this lifetime, and the things that I’m supposed to be sharing with you.
What does that mean for financial stability?
- Possessing a deep knowing that it’s all going to be okay
- Recognizing that I’m not the only one struggling right now
- Comparatively speaking, I have a roof over my head, and that’s something to be truly grateful for
- Taking stock of all the resources I have available to me, whether free things on the internet, or through all of the skills I’ve developed over time and how those are resources that translate to my earning potential
- Letting go of the idea that happiness translates to spending
- Loving the people around me deeply and telling them as often as I like, without regard to how it might make them feel
- Forgiving myself. Embracing ‘mistakes’ as ‘steps in the right direction’ even when it doesn’t feel that way
- Trusting myself to be able to communicate what I need with those around me – whether that’s help, time to myself, setting boundaries around my work, or raising my hourly rates
One of my favorite quotes from the podcast was:
“There are only two fears: 1. The fear of not having what you need, and 2. The fear of losing what you have.”
This message is so powerful and felt incredibly timely regarding my financial situation because I am simultaneously feeling both of these. When we change, we have to shed a lot of things. Let go of relationships, the idea of a future we had envisioned, physical items, and more. I decided to move my belongings into a storage unit while traveling abroad, which was an incredibly challenging decision to make because I love my current apartment. And yet. The community where I live isn’t fulfilling all of the needs I have, and I believe that there’s a different community out there that’s a better fit for what I envision as a more youthful, energizing place.
I almost cried when I told my landlords that I was moving out. They’re like adopted grandparents to me, and they’ve treated me incredibly well, always looking out for me as if we were family. Change is hard. But I also feel relieved because I’ll be saving about $750 a month while I’m abroad.
This, my friends, is reducing your expenses. 🙂
That’s all for today. I’m cheering you on in your financial fitness journey!
