10 Ways I Paid Off My First Credit Card!

I have been very excited to write this post, because it means that as of today, I have officially paid off my first (of 2) credit cards!  Woohoo!

This was not easy, and came with many setbacks.  In this post, I will share some of the strategies that worked for me.

*If you have been following, you may notice that this has happened about 2 weeks earlier than I anticipated.  There are 2 reasons for this.  First, I recently made the tough decision to move a chunk of money from my investments (TFSA if you are in Canada) onto my other credit card, which I will start paying down now that this one is finished.  When I was doing this, I decided to take 300$ from that move, and put it onto the first credit card, to bring me one pay-cycle closer to completing paying it off.  Why didn’t I just finish it off by paying 600$ instead of only 300$?  I only transferred 300 because I still wanted that last payment to be mine, from my paycheck.  I wanted to retain that success experience of waiting for my paycheck, and then making that last payment and seeing that beautiful zero after all this hard work.  The other thing that happened is that as I approached the finish line, I started getting really excited about it and just started throwing any extra money I could find at it.  Not much, just 12$ here, 20$ there, etc.  The result was that I am done 2 weeks earlier than anticipated, and my last payment is considerably smaller than it was supposed to be.

So let’s talk about how I did it:

1. I took baby steps.
   • I took baby steps mentally.  What I mean by this is that I made small manageable changes to the way I spent money, and then gradually adjusted those changes to be progressively more drastic as time went on.
     • I initially started budgeting when I was still in school, and had (at that time) no intention of starting to pay down the capital on my debts.  Simply learning to use a budget, all on it’s own, was a huge lifestyle and behavior adjustment for me.  It might be that you grew up learning to budget, and so this is easy-peasy, but if you are like me, with limited to no financial awareness starting out, then learning to budget is a whole step (and learning process) of it’s own, but more about this later.
     • In the process of learning to budget, I was able to start experimenting with different ways of allocating my money to different categories in order to learn what balance worked best for me.  I continue to play around with my spending money and saving categories, to see how aggressively I can pay down my debts without feeling overly restricted.  This is an important point, because when I feel too restricted, I start to fail.  The same thing goes for dieting.  At least for me personally, any time I feel overly restricted, I start to slip up.  For this reason, what works for me is finding ways to spend less without feeling deprived.  This could be by allowing myself to spend on certain items, or on good times with friends, or whatever it is that helps me to feel satisfied and fulfilled at that time.
     • I experimented with cutting back (financially) in various areas of my life to see how it would feel, and what my life would look like after those changes.
     • Eventually, I took a huge step by moving in with my parents.  By this point though, I had already been taking baby financial steps mentally for  a year, and I was ready to take a bigger plunge.
   • Try thinking about what small and manageable baby steps you might be happy living with, and start there.  I would recommend not even thinking about bigger steps at first.  Just choose 1 or 2 “baby step” sized changes to implement, and notice how you feel as you apply them.  Only after you’re confident that you are comfortable with those first steps, should you start taking further or larger steps.
2. I monitored my self-talk around money and budgeting. 
   • This one goes hand in hand with the “baby mental steps” idea.  As with any type of behavior change that you would like to implement, it is important to notice your “self-talk” or thinking about the change.  Basically, we have lightning-fast automatic thoughts flying through our mind at all times, and these thoughts have a huge effect on our emotions, actions, self-esteem, well-being, and much more.  For this reason, it is important to listen to what kinds of thoughts you might be having about learning to budget, or about learning to be frugal.  I will explain three types of automatic thoughts that could sabotage your efforts.
     1. Negative judgments about spending changes. 
        • This would be any kind of thought you have that says something like “Not being able to spend money sucks”, “I’m not going to have any fun if I don’t spend money.”, “This is going to be so sad and boring”, “Not spending money is going to stress me out.”, The budget is restricting me.”, etc. etc. blah. blah. blah.
     2. Negative judgments about your abilities.
        • These messages might sound like “I’m not strong/smart/dedicated enough to really do this.”, “I’m too lazy to do this.”, “I’m not good enough to accomplish this”, etc.
     3. Negative judgments about your goals.  
        • These thoughts might sound like, “This goal isn’t worth it anyway, everyone has debt.”, “This goal isn’t even possible anyway, why would I try.”, “No-one else is paying off their debt, why would I try.”, etc.
   • All of these types of thoughts, if you hear them unconsciously all day long, can very seriously  sabotage your ability to take the necessary actions to accomplish your goals.  It is important to spend some time noticing what thoughts are flying through your head at lightning-fast speed.  Once you notice them, write them down.  But don’t stop there.  Once you have a specific negative judgment of your own, think about a positive statement to directly contradict it.  Here is an example:
   • Negative judgment:
     • “The budget is restricting me.”
   • Positive rework:
     • The budget is not restricting me, the budget will give me financial freedom in the long term, and will save me from the short-term stress of not being able to pay my bills.
   • The positive rewording could be anything for you, it’s only important that it is relevant to you.  That is, think about the meanest, nastiest, or most frightening part of these automatic thoughts (self-talk statements) and counteract that in your positive rewording.  Whichever version feels the most powerful to you is the one you keep written somewhere, and come back to any time you need help overcoming these negative judgmental thoughts.
3. I kept going after setbacks.
   • When I first started making progress on paying down my credit cards, I suffered a LOT of setbacks.  One main thing that happened was that I unexpectedly needed new winter tires for my car.  This meant that I had to suddenly and unexpectedly spend 750$.  At that time, I didn’t have an emergency fund, and I had been putting all my extra money onto my credit cards, which meant…..you guessed it: I had to pay for the tires with the credit card.  Even though 750$ is arguably not a huge setback, this still served to demoralize and demotivate me for quite some time.  I started to believe that it wasn’t possible for me to ever pay them off, so why bother trying.  I eventually addressed this faulty thinking, and started trying again, but not until after I had given up for quite some time.  I have now learned 2 lessons from this:
     1. Setbacks will happen, but I will keep going anyway.
     2. I need an emergency fund for when these types of things come up.  Now that I have paid off this first card, I am allocating all the money I would be using to pay down my credit cards to establishing an emergency fund before I move on to the second card.  This is something I learned when i recently read Total Money Makeover by Dave Ramsey.
4. I said “no” to a lot of stuff.  
   • Saying “no” was a real struggle, and is something I continue to struggle with today.  In fact, I wrote a blog post about a struggle around saying no, and how to deal with friends who have different financial priorities.  This continues to be difficult in 2 ways.  First, it’s just hard interpersonally to tell people “no” and then deal with their reactions.  I tend to surround myself mostly with people who are reasonable and say/think along the lines of “Oh, you’re paying down debt! That’s totally a priority! No worries!”  Those are my favorite type of people.  However, I also encounter people whose reactions are more in line with a child who has been told they can’t have a toy.  This is harder to deal with.  Mostly, I choose my goals, because achieving them is going to make an immeasurable positive impact on my long-term mental and physical health, and on my stress levels, as well as on my ability to live the kind of life that I strive for.  For this reason, I remind myself of this: quite honestly, my financial (and therefore mental and physical) wellbeing is more important than anyone’s birthday/wedding/concert/cottage weekend/party/etc.    The second reason that saying “no” can be hard is FOMO.  If you aren’t familiar with this pop-culture term, it means fear of missing out.  This is something I have definitely struggled with through this process.  I have had 3 close girlfriends  get married in Hawaii during this time frame, and I have missed all three.  I live in Canada, so going to these weddings would have been astronomically expensive, and my friends understand this and do not give me any grief about it, but it still hurts.  The fact is, I want to be there.  I want to see them get married.  I want to go to Hawaii.  Also this summer, my sister tried to get me to go to about 3 different music festivals.  I turned down all three, even though I want to go.  I definitely experience FOMO around saying “no” to these things, but now that I am making real, visible progress against my debt, I know that it was worth it.  While I’m still sad about missing out on these weddings, honestly, I’m so happy I didn’t go, because I am making progress, and that is extremely exciting.  I used to feel that my debt was an impossible challenge, and that I would never conquer it, but now that I am seeing real progress, I don’t feel that way anymore.  Now I feel empowered, capable.  I feel that it’s going to take some time, but I am really going to do this thing.  I am going to pay down all my debts.  This is a wonderful and powerful feeling.  For the first time, I now allow myself to actually think about what it might be like when I succeed, and how different my life will be from anything I have ever experienced.  I don’t mean that I will have fancy cars or luxury trips or anything like that, I probably never will.  What I mean is that I will live a life where I have confidence that I can pay my bills and that my cards will not be declined and my checks will not bounce.  A life where I am capable of saving for and buying things in cash.  A life where I have substantial retirement savings and I don’t have to worry about what will happen to me.  That life sounds amazing and very calm, safe, and stable.  This is what I strive for.
5. I kept a budget. 
   • If you have read my other posts, you might know that I use YNAB to budget the money I have now, and an excel spreadsheet to plan the money I will have in the future.  I know everyone hates the word budget but this was the crux of the whole thing.  Without the budget, there would have been no success.  When I wasn’t budgeting, I had no idea where my money was going, and I was constantly confused, and saddened by my failures.  I eventually realized that the sadness and frustration I was experiencing was actually a lot worse than the initial inconvenience & difficulty of learning to work with a budget.  I am so happy that I stayed the course with budgeting, because honestly, it wasn’t easy at first.  Learning to budget had a learning curve, and like any there behavior change, it took time and came with a lot of setbacks and initial failures.  Always remember that failures or “relapses” in the behavior change are an important part of the change process itself.  Even when you have a setback, you have still gained from the attempt.   Below, I have included an image depicting any behavior change.  There are various elements and stages of behavior change, and failures are expected as a part of a cycle that moves continually upwards toward the desired income.  If you have a setback, do not feel that you have failed. Instead, say to yourself, “Okay, I have had a setback/relapse, what did I learn from this?  What specifically led to this relapse?  How can I apply the knowledge of what led to this relapse in my future attempts?  This goes for any type of behavior change, and learning to budget is no different.  Anyone who tells you budgeting is easy doesn’t remember what it was like to have never done it before.  Find a program / system that works for you, and embrace failures as opportunities to learn.
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6. I made payments the instant I was paid.
   • I know this should be automatized, but truthfully, for me, it wasn’t.  I had an appointment at my bank several months back where I asked them to automate all the payments to my credit cards (and to everything else), but they said that for a variety of reasons, I could not do that.  Actually, now that I am writing this, it strikes me that this is something I need to revisit with them. Why would I not be able to do this? Anyway, I digress:  I did not automate my payments, but I did make sure it was the very first thing I did every time I was paid.  This way, that money was gone, and I was unable to try to move it to other categories.  I personally find each overpayment of my credit cards to be really exciting and rewarding, but it is likely that many people do not feel this way.  If you do not happen to be a strange human like myself, having these payments automated is likely the way to go, because it ensures your success in actually doing it, and prevents you from self-sabotage.
7. I read blogs, listened to podcasts, read books articles about paying off debt to stay motivated.
   • During this time I basically sucked up any and all information I could get about paying off debt.  I especially enjoyed stories about other people who were successful.  The reason for this is that it is really easy to look at the totality of your debt and feel like paying it off is just. not. possible.  Hearing the stories of others who managed to pay down debt (especially large debts) has helped to keep me going so far.  For an especially motivating story, check out this podcast. 
8. I processed the struggles with other friends who are in debt. 
   • I have one girlfriend from my Master’s program who is basically in the same situation as I am.  Talking with her about the struggles, challenges, and successes has really helped me to feel like I am not alone.  It has also helped me to work through my thinking on issues related to my debt, & my debt repayment.
9. I followed personal finance / debt repayment accounts on all my social media. 
   • This was another really helpful strategy for keeping me motivated.  First I did a google search for something like “Best personal finance accounts to follow”, which pulled up a couple lists of twitter, Facebook, instagram accounts.  Then I went on all my social media accounts and systematically followed a bunch of the best accounts.  This meant that every single time I logged into my Facebook, twitter, Pinterest, etc., I was going to see reminders / tips for paying down debt and being financially responsible.  This helped to keep the idea present in my mind and at the front of my consciousness.
10. I wrote a blog! 
    • Granted, I really just started doing this, and I have been paying off my credit card for much longer than I have been blogging, but I really feel like engaging in the personal finance community has been helpful in keeping me accountable.

I am very happy to have had this first success experience, and it helps me to feel motivated and capable of continuing to conquer the next chunk of my debt, and eventually, the whole thing!

Today, I feel less like a Debt Dummy, and more like a Debt Repayment Bad@$$!

I hope that sharing my experience so far helps you in your journey toward debt freedom, and as always, thank you for reading.

Debt Dummy