Who would have thought April would be the month that our finances really started to shape up? Thanks to some fortunate circumstances and the military, April has been our best month yet. I never really made financial goals for April because so much was going on, but I did mention some things I would like to accomplish financially. Here’s what’s happened thus far:
Ever since we started this journey in September 2015, one thing has remained steady. I CANNOT STICK TO A PLAN. If you’ve been following our debt pay-off struggle, you’ve seen me go back and forth on the best avenues to take. Sure, I’ve made continuous progress on paying down our debt, but I switch up the methods almost every month. Sometimes I do it because I think it will save us more money. Sometimes I do it because I think it will work faster or keep us more motivated.
With that reminder – I’ll tell you that some of the goals I discussed in my March pay-off report changed significantly as April progressed. Let’s discuss:
PF bloggers often write about the snowball method, debt consolidation, and balance transfers as a a way to boost motivation and make debt pay-off simpler. Sometimes, having one large payment versus several smaller payments makes commitment to paying off debt easier.
There is no right answer as long as you’re moving forward.
In our situation, we had several small payments deducted from our account throughout the month. It’s one of the reasons we chose to pay off our Chase card and a Sallie Mae loan before other high interest debt. For us, it’s easier to see fewer larger payments leave our account than several $50-$75 amounts.
It’s also one of the reasons we use our Quiksilver card for our regular everyday purchases (from the electric bill to car insurance to gas & groceries), but that’s a story for another day. Note: We pay off what we charge every month on the Quiksilver, aside from the recent furniture splurges. The debt we owed on it was from our wedding. We almost had it paid off until we moved to Colorado and got really excited about a new apartment. (But I don’t think I need to explain myself to you. Nobody’s perfect.)
No matter what your opinion is, paying off some of those smaller debts gave us a huge confidence boost and more motivation to continue pushing forward.
The point of all this backstory is that a solid offer came my way and I took it. Despite having a lot of debt, Mike and I have pretty good credit with a large credit line. Our FICO scores are only going up as we reduce our credit utilization. Earlier this month, Discover increased our credit line and offered us a balance transfer with 0% for 15 months. Even though our Quiksilver has a low interest rate, I wanted it paid off sooner because we do use it for our daily purchases and it is much easier to track spending when you don’t have additional debt clouding up the statements.
We transferred the Quiksilver balance to the Discover.
Call it whatever you like and judge if you want. Originally, I had wanted to pay the Discover down to $1000 by the end of April. I changed my mind because I liked the balance transfer offer. With this transfer, we will now be able to pay off the Quiksilver every month in full. It’s one less debt payment we have to worry about, and we’re saving money on interest. Since our credit lines are increasing and our utilization is going down, our FICO scores are on the up-and-up so we can refinance the truck and start saving money there as well! I feel good about the decision.
We received our final moving reimbursement from the Air Force.
This money has yet to be completely allotted, but as of right now, we’re sitting on most of it. I need time to think about where I want it to go.
I paid the Citi card down to $305.
Again, I know what I said last month. This 0% rate is going to last until the middle of next year. However, I used $500 of the moving reimbursement to pay it down so it would help our credit scores. We all know the end result here is to get the truck refinanced to a better rate. Baby steps…
The family debt is gone.
It’s been a huge month! Even if we didn’t pay extra for all of it, lower debt is lower debt. End of story!
I hope your month was as great as mine!