My Journey Through Debt: Part 3: Paying Down the Principle

This is part three of a series about my journey through debt and how I climbed out of the debt trap. If you are new to this blog, you will find my debt story here, and also be sure to read Part 1 and Part 2 before reading today’s post.

Once I stopped my out-of-control spending habits and started writing down every penny I spent, I started to see a little money left over at the end of each paycheck. This money went towards paying down the principle of my loans.

Minimum payments on credit cards pay mainly the accrued interest and a few cents (if any) of the principle of the loan. That must-have deal on your favorite brand, quickly becomes quite pricey once the balance is on the credit card, and you are stuck paying for it (with interest) for the next decade.

By paying down the principle of the loan, you are lessening the amount of the original loan. Do not be discouraged if you only have 87 cents to pay towards the principle. I have been there. 87 cents is exactly what I had left in my pocket book at the end of the pay period. That is exactly what I added onto my minimum balance due and sent in to the credit card company.

Never let yourself be tricked into believing that whatever money amount you have available is too little. No matter WHAT it is, it will help pay down your debt. As you pay down the principle, you will slowly see a shift in how much of the money you pay the credit card company goes to interest, and how much goes to the principle balance.

I have been asked which card I paid down first. After paying all the minimum payments to each card, I put the extra money for the principle towards the card with the highest interest rate. In this way, I was getting the worst load off of myself the fastest way possible.

This is NOT an overnight quick fix. It took quite a while for me to get myself into the amount of debt I had on credit cards, and it took me quite awhile to get out. The difference was, I actually came to the point of looking forward to receiving the credit card statements in the mail and sending my payment in.

I knew that everytime I sent in a payment, I was inching closer to getting out of my debt pit. Sometimes it was 87 cents. Sometimes, it was $100. whatever it was, it was a step closer to my goal of paying off my credit card balances.

In order to make extra money so that my principle was paid down faster, I took on extra jobs. I cleaned homes, tutored, and did any other odd jobs that were available. I also sold items that I did not need and put the cash earned towards principle. Every Christmas and birthday gift that was given to me as cash went towards my debt. No it was not what I WANTED to do with it, but it was what I NEEDED to do.

I came very close to rationalizing that it was my BIRTHDAY present. I DESERVED to splurge on something with that money. But you know what? No, I didn’t. I had put myself into slavery of the credit card debt, and I was slowly, little by little, getting my freedom back. Out of all of the things I was doing, turning over my birthday and Christmas present money to those credit card companies was the hardest.

Ok, so I have shared with you how I got into debt, my realization that I was debt, my immediate actions, how I started to keep track of my money, how we changed our food habits, and why it is important to always pay towards the principle. In a future post I shall delve into how I started the very necessary, yet very painful process of making cuts in our budget so that more money was freed up to pay down the principle of the loans.

Thank you for staying with me on this topic. While debt, and money in general, seem to be a taboo subject in our society, it is one that needs to be discussed and shared. Remember, this is MY story. I have been there. Do NOT give up. No matter how deep your debt pit is, there is ALWAYS a way out.

As Aristotle said, “We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.”

~Annie