Balance transfer? Nah.

After crunching the numbers for how long it would take us to smash our last personal credit card to smithereens, I panicked. The card has about $10,000 on it. It has a minimum payment of about $300 per month. Currently, we’re racking up about $170 dollars in interest every month.

I messaged my husband, telling him we had to do a balance transfer, that this interest was killing us. So, for the first time in my life, I researched credit cards. As someone with credit card debt, who’s been spending a good chunk of time obsessing, calculating, and altering daily life to pay if off, this felt nauseating. And somehow, in the course of an hour, I accidentally signed up for two new credit cards. So now I felt sick and dumb.

We’d never dipped our toes into the world of balance transfers, but we figured it was highly unlikely any credit card would let us transfer the entire balance of $10,000. It’s just too big a number. (And, no, Creepy Loan Sharks who follow this blog, we’re not interested in anything you have to offer.) So, we’d need to spread the debt out over two, or even three, different cards.

Last night, we sat down for the first time to discuss this last card in depth. While I’ve actually enjoyed exploring all of this new financial knowledge on my own these last months, it was nice to share the conversation with Julep.

We laid out hypothetical situations using pen and paper and a free online debt calculator. The results shocked and horrified me. I was all set to start us down the balance transfer path, so sure of myself, and I really could have made our ever-improving situation so much worse. When you compared the balance transfer costs to just sticking with our same card, and slamming money toward it, we would come out ahead with the card we currently have.

With the budget lockdown in place, the currently allotted $600 a month that we have going toward this card will keep increasing. By June, we’ll be able to increase the $600 to $700. By July, as long as we stay the course, we’ll have another $100 to slam at the card. And soon, our produce farm will really be humming, and I’ll be able to take at least another $100 out of the grocery budget, which is currently $400 per month, and put it toward the credit card repayment.

And all the while, our interest on that card starts to finally drop. We’ve been choking on that $170 interest per month for a long, long time because we were only making the minimum payments for years. If we stay on the budget lockdown, and hurl everything we have at that card for just a few months, that interest takes a nose dive. When I looked at the numbers, and saw how that interested plummeted, I felt energized. The key is the budget lockdown. The solution is appreciating what we have in life and not wanting more. Sometimes the math is hard for me to grasp, but this concept I get.

After much discussion, we agreed to keep all sinking funds in place. We were both in agreement that not having sinking funds in the first place is a large part of what got us into this mess in the first place.

When it comes to luxury sinking funds, like the $50 a month “fun fund,” we decided those needed to stay, too. They’re part of what makes this entire journey feel so painless, day to day. On that note, though, we decided that our goal for those elective sinking funds should be to not spend all of them every month. Even if we end up with $10 leftover, we shouldn’t celebrate by running out and needlessly spending it, we should put it toward the debt.

Stepping away from the legal pad and computer last night, knowing we weren’t going to open any new cards, was a huge relief. Sometimes the devil you know is better than the one you don’t.

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