I have one credit card with a high credit limit that I've had for years. (The limit started out low and has been steadily raised over the 15 or so years I've had the card.) Every so often, usually when I start making big payments toward the card, I'll get a low-interest balance transfer offer. I just paid the entire card off yesterday, and today I got an offer of a balance transfer for 2.99% until June 2019.
I decided to take advantage of the offer. My other cards that carry a balance range in interest rate from 10.99% to 13.99%. (I have a few with much higher rates, but I paid them off and no longer carry a balance.) My credit limit isn't quite high enough to knock out the entire balance on my other cards, but I can get most of it. I'll still have a modest balance left on one of the 10.99% cards. However, this refinancing will save me thousands of dollars on interest over the next year and a half.
I don't plan to carry a balance that long; my goal is still to have them all paid off by summer, but this gives me some breathing room in the interim and will allow more of my payments to go toward principal instead of interest.
My credit card payoff was originally planned for March, but I did some more calculations when I did my budget, and I realized I didn't set aside enough money for taxes. Being self-employed is expensive, and I'll have to write the IRS a huge check in April, so the credit cards will take a bit longer than planned. It's still nice to see the end in sight, though.
Wednesday, September 27, 2017
Friday, September 1, 2017
Broke Urban Lawyer Gets Less Broke
I've been living entirely off of my income at my solo law practice for two months now, and it's been working out really well. Not only is my quality of life higher, but I'm making more money than I thought possible. Document review was really holding me back.
Every time a check rolls in, I'm still in awe that people keep paying me. I've set it up so that I pay myself a "paycheck" twice a month from my business bank account, and whenever I have enough extra to make me feel comfortable doing it, I'll give myself a bonus. The paychecks are modest and go toward my living expenses, and the bonuses go toward my credit cards.
Since I last wrote, I've paid off my car and about half my credit card balances. In a few weeks, I'll be refinancing my credit cards to a really low rate to accelerate the payoff. I should have them paid off in 4-6 months. Considering that just a year ago, I was very seriously considering bankruptcy, this is nothing short of remarkable.
I know I've been kind of abstract here about actual numbers, but we're not talking a small amount of debt. My student loans are in the six figures, and my credit cards were in the mid five figures when I started and are now in the low five figures. Part of why I didn't lead off with that when I started the blog is because I was embarrassed about it.
The student loans don't really embarrass me; that's just what law school costs. But the credit cards were embarrassing. The debt came about because I suffered a series of misfortunes that exhausted and exceeded my emergency savings, and the misfortunes kept coming faster than I could deal with it. Once I got back on my feet, I balanced my budget and started digging out. I can see the light at the end of the tunnel!
I owe some money to my parents as well. They helped me out when I suffered some of those misfortunes. Mathematically, it makes more sense to pay the student loans before my parents because my parents aren't charging interest, but emotionally, I want to pay my parents first because they were being very generous to me, and I don't want to take undue advantage of that generosity. My goal is to have them paid back by next summer.
Then I'll start saving for retirement and tackling my student loans. The end is in sight.
Every time a check rolls in, I'm still in awe that people keep paying me. I've set it up so that I pay myself a "paycheck" twice a month from my business bank account, and whenever I have enough extra to make me feel comfortable doing it, I'll give myself a bonus. The paychecks are modest and go toward my living expenses, and the bonuses go toward my credit cards.
Since I last wrote, I've paid off my car and about half my credit card balances. In a few weeks, I'll be refinancing my credit cards to a really low rate to accelerate the payoff. I should have them paid off in 4-6 months. Considering that just a year ago, I was very seriously considering bankruptcy, this is nothing short of remarkable.
I know I've been kind of abstract here about actual numbers, but we're not talking a small amount of debt. My student loans are in the six figures, and my credit cards were in the mid five figures when I started and are now in the low five figures. Part of why I didn't lead off with that when I started the blog is because I was embarrassed about it.
The student loans don't really embarrass me; that's just what law school costs. But the credit cards were embarrassing. The debt came about because I suffered a series of misfortunes that exhausted and exceeded my emergency savings, and the misfortunes kept coming faster than I could deal with it. Once I got back on my feet, I balanced my budget and started digging out. I can see the light at the end of the tunnel!
I owe some money to my parents as well. They helped me out when I suffered some of those misfortunes. Mathematically, it makes more sense to pay the student loans before my parents because my parents aren't charging interest, but emotionally, I want to pay my parents first because they were being very generous to me, and I don't want to take undue advantage of that generosity. My goal is to have them paid back by next summer.
Then I'll start saving for retirement and tackling my student loans. The end is in sight.
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