AN008: Ready for a 22% Raise?
Discover the quickest way to access "free" money in your personal budget
Quick, pull out your calculator and punch in your take-home pay. Now multiply it by 1.22. Nice little bump, right? That’s the equivalent of giving yourself a 22% raise.
What’s the quickest way to give yourself access to that kind of “free” money? Pay off your credit card debt. If you’re not paying attention — and banks are counting on your distraction — that debt is sneakily eating a hole in your finances. Like a leaky faucet in a closed sink, that 20-22% interest accumulates, drip drip drip. By the time you realize what’s happened, you have quite a mess to clean up.
The Secret Shame
I’ve seen first-hand the paralysis and pain created by credit card debt. During a phone call with my late mother many years ago, she admitted in a small voice that she had more than $6,000 in credit card debt that she couldn’t get rid of. I was speechless. Mom? The person who had drilled into our heads the importance of being so conscientious about money?
My disbelief quickly turned to compassion as I realized the toll of this secret shame, and how heavily it must have weighed on her for many months. It robbed her of peace of mind during the latter years of her life. From her perspective it was a huge burden, but once shared it could be handled, the load lightened.
Avalanche or Snowball?
Two theories prevail about getting rid of credit card debt. The debt avalanche method says that after you pay the minimum on your cards, you pay down the highest interest-charging card first, since it will have the greatest impact financially. Then you move on to the next card and apply the same strategy. The debt snowball approach is to pay off the one with the smallest balance, since bringing that to zero will fuel your resolve and give you momentum.
Whichever you choose, ditch the guilt and shame. Nearly half of American adults carry credit card debt, and the pandemic has crushed all sense of normality and standard budgets. A clear path forward begins with pencil, paper, and a realistic budget that includes a payment plan. And if you need help, professional debt counseling is a path that many have found valuable. Easy? That depends on you, but likely not. Worthwhile? A definite yes.
Hold the Vision
Those who have successfully rid themselves of long-standing credit card debt say that one thing that kept them going was holding on to the vision of being credit card debt-free, and what that would feel like in every bone in their body. “The results were so worth it,” one woman shared with me. “It was incredibly empowering in ways that I didn’t expect. And now I make purchases with clear intention.”
The next time you're about to pull out your handy and reliable piece of plastic, ask yourself, “Why am I even paying with a credit card?” If you’re clear on your personal rules or reasons about when to use credit, it becomes a more conscious choice.
Here’s to your power — as a woman, and a master of your financial future.
Remember:
The quickest way to access “free” money in your personal budget is to eliminate credit card debt
Paying down debt begins with a clear-headed assessment, a realistic budget, and a payment plan
Becoming debt-free may take a while and holding a clear vision of your future can help sustain you — and it’s totally worth it
My challenge for you this week:
The next time you’re considering a credit card purchase, ask yourself: Will this give me satisfaction for as long as it will take to pay it off?