Financial Literacy

Mint Money Audit 6 Month Check-In: Was Rebecca Able to Squash Her Debt?

My first Mint audit was dedicated to Rebecca, a 34-year-old government worker who was stuck living paycheck to paycheck. With nearly $11,000 in credit card debt and very little in savings, she desperately wanted to get ahead in her financial life.

My recommendation at the time was to transfer her credit card debt to a 0% balance transfer card, cut cable and take on a small side gig to help Rebecca become debt free in a little over a year.

Happy to report that over the past six months, she’s made big strides to reduce debt and create more breathing room in her budget.

Here’s an update on Rebecca’s finances:

Squashed debt by 50%

Per my advice, Rebecca transferred a good chunk of her debt – about $5,500 – over to a credit card that offers her a 0% interest rate for the first 15 months. She was paying an average 10% interest on her old cards and by paying just the minimum, her final payment wasn’t going to happen for another six years. With zero interest she can apply more towards the debt principal and become financially free much sooner.

She also sold her 2009 MacBook via ebay Valet and used the $400 towards debt. And thanks to a performance review, she netted $780 and applied most of that towards her credit card balance, as well. She saved the remaining $200.

Overall, her credit card debt has diminished by more than 30% to $7,400. She says she’ll also be using her tax refund, approximately $500, towards the debt, too.

More earnings, more savings

While she hasn’t picked up a side gig per my suggestion, Rebecca did earn a nice pay raise since we last spoke. Thanks to a promotion at work, Rebecca nets an extra $300 per month. She uses $200 of that to pay down debt and places the remaining $100 in savings. Another benefit of the promotion is that she no longer needs to commute to downtown St. Louis, where she was paying a daily parking rate.  Her new office is also much closer to her house and this change of address helps her avoid the St. Louis City Earnings Tax, which, Rebecca says, was running her $700 per year or about 1% of earnings.

Bye, bye cable!

I’m a big proponent of cutting the cord, which Rebecca did and says it hasn’t prevented her from catching her favorite shows. “I now use Sling TV through an Amazon Firestick, freeing up another $100 in my budget,” she says.”

Remember, I’m always interested in hearing from you. If you would like to be considered for a Mint money audit, just write to me: Farnoosh@farnoosh.tv.

 

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at farnoosh@farnoosh.tv (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.