I Am Living on the Financial Edge to Get Out of Debt (AGAIN)

I am living on the financial edge to get out of debt (again). For the sake of transparency, I purchased a car back in 2015 when my Toyota Camry died on the highway. I also paid cash for my daughter to attend a private college. I have been saving for her since she was four years old. But things came up that led me to use my credit card again. In order to clear out this debt in the shortest amount of time (four to six months) I am living on the financial edge.

I decided to hunker down and use most of my income towards my current debt. I took a new job in a new city and had to use the remainder of the money in my savings to pay for my apartment. I also decided to quit doing my contract work a month before I started my new job. That also which quickly dried up my resources so I living  on the financial edge to get out of debt again.

Paying Down Debt While Living on the Financial Edge

Doubling down on my car payments. My current car loan balance is $5,682.59 and my car note is $483 a month. I have been paying $570  a month or an extra $90 to pay off the car since 2015. In order to get this paid off quicker (this summer) I am paying $1,140  per month!!!!

Paying $2,000 a month split between two credit card. Sometime last summer, my septic/plumbing system at my house needed to be repaired. That costs $5,000 and would have wiped out a good deal of my emergency fund so I opted to put it on my credit card.

My daughter also got hold to one of my credit cards and was using it without my knowledge. This significantly increased my credit card debt.

So I have decided to commit $3,140  just towards my debt, not just my normal bills (rent, car insurance, food, cell phone, gas, electric, etc).

Although I am not “technically” living paycheck to paycheck, I am living paycheck to paycheck just to get out of this debt as soon as possible.

Buying Clothes While Living on the Financial Edge

Living on the financial edge on purpose is something a lot of people wouldn’t choose to do. The natural thing to do is to continue paying the minimum on debt. Or even to go crazy shopping. Let me be honest, I did to shopping for some new clothes but I got some great deals.

I needed a new wardrobe for my new job because what I had was sad. I was able to get some GREAT deals to not bust my budget even more. For example, one store I love, Modcloth, had dresses that were formally $80 for $20 each. I came away with six dresses and a coat for $160.

Banana Republic had a great sale, too. I was able to buy $668 worth of clothes for about $230. I have been doing really well getting some amazing outfits for really low prices.

Putting Aside Savings While Living on the Financial Edge

I am also maxing out my savings while living on the financial edge. Although I am in debt, and could use my funds to pay down this debt, I opted to immediately start saving for retirement again. While working my contract work I was no longer able to put aside for retirement. This was a big problem for me.

Now that I can I am putting the IRS maximum of $19,000 into my savings. My employer also gives an amazing match (8% of my income), better than my last employer. If I stay long enough, I might be able to retire earlier than I originally thought I could retire.

Additionally, I am still using Acorns to save money. I currently have almost $1,000 as of this writing. If you use this link you  and sign up you can get $5 automatically credited to your account. I will get $5, too, by the way.

What My Future Looks Like After Living on the Financial Edge

After I get out of this current debt situation I plan on saving MORE (duh). My goal is to save enough to buy another property here , and to start saving my emergency fund again. However, I will make sure that I have enough to spend as well as to save.

Future Emergency Fund Saving

My plan is to save 8 months of an emergency fund if not more. I had a goal last year of saving enough to take a one year sabbatical from a job. I would still like to do that.

Future Home Saving

Last year I met a woman who is the same age as me and retired. She purchased about five rental properties when they were cheap and now lives off the income. All her homes are debt free. I still would like to buy at least a two unit property to get additional retirement income.

Future Fun Saving

After July/August, when this debt is paid off, I am treating myself to a week long trip to an out of the country beach. Just me, myself, sand and some drinks.

It’s not fun living on the financial edge and I PRAY I don’t end up in this situation again. But like I have said before, things happen. And now that I know how to get out I hope life doesn’t throw me a curve ball and I get back in. As you can see, I am sacrificing to make a better life for myself. If I can do it so can you!