Paid off our first credit card Frugally

We paid off our first credit card!

This is a monumental day in the Beatle house as we just paid off our first credit card! Thanks to Mr. Beatles side gig, we had a little extra cash at the beginning of February.

If you look at our debt chart, the paid off debt is CC1 and we paid the entire balance of $856 in one fell swoop. No checks, no mess, paid conveniently online. (Note: the original debt chart shows our finances when we first started, the updated chart is below)

Paying this credit card now frees up $194 per month in minimum payments, bringing our total monthly nut down to $4,904. We are still deciding how we are going to allocate the extra $194 (meaning, which debt we are going to put it towards next).

Some other big news

We have one other piece of big news. We have decided to sell the rental house. For real this time, no taksey backsies.

We meet with the realtors on the 15th of this month to take a walk through of the house and formulate a plan.

I think we are very lucky in that our realtor is also a well-known landlord in our city and has a lot of contacts with cash buyers.

We are hoping to list it for $89,900 and sell for no less than $82,000.

There is no mortgage but it does have a $25k HELOC and it needs a roof, which two contractors both quoted at $4k.

There is $11k owed on taxes, but we are paying $500 per month on the back property taxes, so every month it doesn’t sell is another $500 reduction of that debt.

Then there is the realtor fee of $4,290 and closing costs of probably $2,500.

If all goes to plan, we are looking at around $32,000 to $35,000 when we walk away at closing.

That would be a huge deal for us and would enable us to pay off every single credit card and loan we have, except for a few thousand owed to my parents. Which, unfortunately, they likely will refuse repayment of anyway.

Paying off our debt with the rental proceeds would reduce our monthly nut to $3,321. That’s nearly half of our original monthly expenses of $6,567 when we first started. A savings of $3,246.

Updated Debt Chart

Frugal Paying off Credit Card

And finally, here is our updated debt chart (not including the sold rental, because duh, it’s not sold yet).

AUTO LOAN39335916.54%
CC7 (STORE CARDS)100202025.24%
Furniture Loan276195025%
 Property Tax Payment Plan535 11,365 18%

12 thoughts

  1. WOOHOO! Paying off that credit card is HUGE! Nice job! Best of luck with a quick sale on your rental property, I’m sure it’ll feel good to have that deal done!

  2. Awesome work! I’d suggest going after CC3 or CC6 next. With that extra $194 you can have one of them paid off in just 2-3 months.

    Also, good for you for allocating that extra $194 to debt repayment, instead of to other spending! That’s so critical to the snowball method.

    Keep going! 🙂

    1. Thank’s Zoot! I was also thinking of CC4 because of the low balance and the fact that we could pay it off quickly. But Mrs. Beatles likes the idea of CC2 because of the large minimum payment and the high balance.

      1. Think of the high-interest-rate debt as one big lump at ~24%–in that sense, it doesn’t really matter which one you pay off first. 🙂 Do whichever one helps you most psychologically–for me, it would be totally paying off the small high-interest ones, which means one less payment to make and one less check to write. But if you like the idea of CC2 better, go for it! The good news is that you win either way!

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