So, FINALLY got rid of credit card #2 last week. This means I can no longer rely on my credit card for back up cash to make purchases. At the start of this blog, I questioned whether or not I should have an emergency fund saved before I started paying off debt. I opted not to, and got right into the debt repayment – and had been using my 2nd credit card (in July particularly) to cover any extra expenses. Obviously this was not ideal and it did see a few steps forward and quite a few steps back in debt smashing over a 6 week period.
Now I do not want to put a cent on my credit card. I still have 1 remaining card active (with zero balance) as I need to have it for work expenses when I travel. The other card I have closed off.
I have very little in the bank account at the moment to act as any buffer. So my plan is to put some coin into my savings to ensure that I will not touch that card for expenses. It means however, holding off on big payments towards the loan for maybe the next 2 pay dates. But I think it will be worth it.
Next pay date I need to pay $290 towards accommodation on a girls weekend away in November, and also $385.00 for flights for a trip to New Zealand in February 2014. The trip to NZ was not something that was on my radar but the opportunity to go came up recently and I’m really excited about it and by Feb next year will be certainly looking forward to a trip!
They are 2 fairly big payments I need to make from my next pay, so I figure I will also put some towards a buffer in my savings account. I’m calling it a buffer fund, rather than an emergeny fund as I’m not planning on saving enough for an emergeny fund in the true sense of the word in the world of debt repayments. Its just $400 – $500 to act as a buffer between me and my credit card. I know for a proper emergeny fund, people save thousands or 3 months expenses etc.
So basically, it means my debt smashing will likely be rather uneventful over the next few posts. However, I will still contribute to my loan repayments even if only in small amounts.
Right, so here are my week 26 stats
Monday: $3.50 coffee, $6.50 health and beauty purchase
Tuesday: $3.50 coffee, $23.60 groceries, $29.00 loan insurance, $178 loan repayment
Wednesday: $8.40 coffee
Thursday: $3.90 coffee, $30 ON TRAVEL CARD
Friday: $20 on travel card
Saturday: $40.50 drinks, $35.00 dinner
Sunday: $4.90 coffee, $12,95 paint and paint brush, $2.90 health / beauty purchase
Total spending: $402.62
Credit card #1 – $0.00
Credit card #2 – $0.00 – WOO HOOOOOOO!!!!!
Personal loan: $6808.64
Total debt remaining: $6808.64
Total starting debt: $14,744.12
Debt reduced by week 25: $7,935.48