Debt Management: Hitting our 2nd Financial Goal

It's been a while since I last posted a blog and these past few weeks have been so busy that December felt like a breeze. I got motivated to post another one as I got a private message from a friend from church about the content of my blog. (If you have any comments or suggestions, please do tell me in the comment box below). 

Before the end of this year, we had reached another big milestone in our financial goal as a husband and wife. 

Yes, Loan #1 fully paid off. 

As a recap, we paid off our credit card debt in a span of 6 months. 

5 months later, we were able to pay a personal loan in full and 4 years in advance (yeah, you heard it right). I just cannot fathom the idea of having a baby anytime soon and by that time we are still juggling in between monthly payments. 

What's our secret??? 

Visual Roadmap

We have a self made Debt Tracker. Which I made few months after we started paying off our debts. It motivates us to keep on track especially that our Debt Management Plan will take us a year and a half to finish. It inspires us to keep on going because as we are paying for our debts, we are slowly building up our assets and retirement plan. 

Sticking to the Budget

The majority of us hates the "B" word. It sounds restricting isn't it? But believe me, this is one major component in order to achieve a sound financial future. 

Once you have your budget in place, it takes a lot of discipline and sacrifice in order to succeed. One trick that I want to share with you is to keep your financial goal in mind (paying off debts, buying a house, preparing for a baby) in order to avoid going out of the budget. 

Extra Cash doesn't mean it's extra cash

Well, let's hear the fact that if you have tons of debt, that extra cash aren't yours in the first place. But you can still choose to not pay for any of your debts. It just inhibits you to reach your goals faster plus always remember the interest charges that keeps on racking up. 

Teamwork

I am blessed to have a supportive husband. Since we got married, we decided to combine our income with individual access to each of our accounts. Every dirham that comes in is being allocated before the salary day. All allocations are being discussed during our brief money meeting in order to prioritize the financial responsibilities that we have for the upcoming month. 

Putting All Freed Up Cash

We basically put all our freed up cash from the credit card payment to the loan. Since we have thousands of dirham in balance, we kept the budget for the loan payment in an envelope for a few months until we reached our target. 

We did not procrastinate

When we had our cash on hand, we first made sure that we have few hundred dirhams left just incase we will face an emergency. 

We then went to the bank to finally settle the bill. We were amazed after hearing that a 1,800+ aed discount will be given after paying the loan 4 years in advance. 

It's such a great feeling when you are both knocking off every challenges while holding hand in hand with God backing you up. 

Two are better than one; because they have a good reward for their labour. Ecclesiastes:4:9

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