In January 2016, I moved my little family from Chicago to Wyoming in order to conquer the more than $60,000 worth of student loan, credit card, and medical debt we owe. Get caught up on how we did in January here, or start from the beginning with our debt story.
February is supposed to be this month of love. We celebrate it by turning everything into red hearts and pink flowers. We give candies and love letters to our crushes. And we generally spend the month going the extra mile for the ones we love.
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But I spent February less like Cupid shooting arrows into bare bottoms and more like a warrior on a warpath.
And enemy #1 was my debt.
“Boom!” went the last of my daughter’s medical bill.
“Kapow!” shouted the last of a credit card with more than 19 percent interest per month.
These debts fell before my sword because of one reason: I had found what worked for me.
There are a huge number of ways you can pay off debts, and there are a million “experts” out there who can tell you exactly how you should do it. Believe me — I’ve read everyone from Dave Ramsey to Suze Orman. I’ve talked to financial experts and financial bloggers. I’ve gotten all kinds of expert advice.
There’s one thing I’ve taken away from all of these interactions and advice books: no one knows you and your money better than you do.
Among the most frequent pieces of advice I got when I first started focusing on my debt a few years ago was to snowball my debts. It’s a popular idea, one you likely have heard of already. For those who haven’t, it’s relatively simple.
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The idea is that you pay off the debt with the highest interest first. Once that debt is paid, you use the money that would have gone to that debt and begin paying down the next debt, creating a cascading — or “snowballing” — effect.
However, when I tried to snowball my debts, my highest interest debt just happened to be my largest debt. And if you need to know anything about me, it’s this: I am way too impatient for that.
So, we decided to try the cash-only method. The theory is great: you cash in your paychecks and use only that to pay your bills. At the end of the month, you put whatever you have left over towards your debts. It required a lot of advance planning and just sucked the energy out of us.
So in February, I threw away the advice I had gotten, deleted the emails from well-meaning friends and family, and even returned my Suze Orman book to the library in order to focus on what works for me. And that's the strategy that I like to call, the “Michelle doesn’t have time or the patience to slowly chip away at something. She needs to destroy a debt NOW!”
I picked our smallest debt, a credit card we rarely use, and I chewed it bit by bit. Anytime I had an extra dollar, I threw it at the debt. I did this so much so that my husband became annoyed at how many emails he would get confirming each payment — $5 here, $28 there, always with different (and seemingly random) amounts.
But here’s the amazing thing: those small payments amounted to a whopping $3,624.
That's a total that I would have thought impossible just a few months ago. But I managed to pull it off by doing it, as Frank Sinatra sings, my way.
When it comes to debt repayment, there is no right or wrong way. Sure, some of the methods will save you money in interest, and other plans will keep everything organized and tidy for you. You owe it to yourself to try out the different methods out there to see what works for you.
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But the reason the “Michelle Method” works for me is because it’s not organized or tidy. I didn’t get into debt in an orderly fashion, and I didn’t amass it in huge chunks, either. Rather, it’s the little spending decisions I made that ultimately added up.
And so far, doing it my way is working.
I’m proud that I was able to pay $3,624 in the shortest month of the year, bringing me that much closer to my goal of paying off $20,001 by the end of 2016.
Follow me here if you want to know how I rode through March, slashing more debt.
This is part of a series chronicling Michelle's road to debt payoff. To see Michelle's April update, click here.