Back in the Black

This year, on Black Friday, instead of shopping, I made a $1,700 payment on my credit card.

First off, let’s be clear, I’ve never been a Black Friday shopper. The idea of fighting crowds or scouring the internet to find a great deal on something I probably don’t need and probably don’t need to buy as a present for someone, is not desirable to me. But that doesn’t mean I don’t spend money, and I’ve got the credit card debt to show for it. To be exact, a total of $7,200 on two credit cards. My credit card balances, which were nearly paid off, grew this year - I’ll tell that story another time, and I’m on a mission to pay them off by next August.

So how did I come up with a $1,700 payment?

It wasn’t some miracle and I didn’t win on a scratch off card. Instead, it was the luck of the calendar. As is the case for those of us who get paid bi-weekly, two months every year will have three paydays. And December is one of them. An extra paycheck, essentially! Instead of thinking of this as more money to spend, I think of it as an extra bonus paycheck. A chance to pay down debt or save for something important. This year, it’s clear where that money needed to go. Not to new sofa or bigger gifts for my kids, but to my Capital One card.

I’m applying it to my credit card with the highest interest rate, which has recently jumped to an astronomical 30.24%, thanks to rising interest rates! That’s crazy! With a balance of $4,300, my interest payment alone last month was $106. My goal is to pay off this and my Discover card (jumped to 26% interest!) by next August. Being able to throw an extra $1,700 at this debt was a huge help.

Now, with the Capital One balance at $2,600, the interest will still be at about $60 next month. Still a lot, but those numbers will keep going down. I am well on my way to being free of high interest credit card debt in 2024.

Once I’m not spending on credit card payments anymore, that money can go toward my savings funds. I have funds set up for CHRISTMAS/BIRTHDAY GIFTS, TRAVEL, CAR MAINTENANCE, and other things that I know I will need or want to spend on at different times during the year.

So, while I’m not out there spending on Black Friday, I am giving a gift to myself. I’m getting a step closer to being back in the black!

Do you get paid bi-weekly? Do you use this tactic as well? Comment below if you track the calendar for that extra money month!

But wait a minute…what about Christmas gifts? Well, that’s where those spending funds come in handy. I’ve been putting $20 aside every week in my Christmas envelope. The result is more than $1,000, which will be my budget for gifts, decorations and holiday fun. Wouldn’t it have been better to put that money toward my debt each week? Imagine if I had just focused on paying off the credit cards. By this time, my balances would have been lower but I’d be in a tough spot for Christmas and, quite possibly, feeling the need to rely once again on credit cards. I’m a BIG fan of The Budget Mom. See what she says about this topic here at the 8-minute mark (but you’ll want to watch the whole thing!) BTW, she calls them “sinking funds.”