Finally debt-free

In April 2012, I decided I had to get serious about paying off my credit card debt. I'd been in New York City for eight months and paid off my moving costs, and I was finally making a real salary after eight years in grad school. Total credit card debt? $22,510.57.

This week, I finally paid the end of it off.

I didn't do anything fancy. I simply put a large chunk of my income towards the bills every month. First, I paid off the smaller of my two cards, then tackled the larger card. (The psychology of having a card paid off was more important than tackling the higher interest rate card.) Finally, about a year ago, I transferred what was left to a new 0% APR card.

I haven't totally sworn off credit cards. One card I've had for nearly two decades has a high credit limit that is good for my credit rating. That is linked to my iTunes account - it keeps it active, and it means my checking account isn't cluttered up with $1.29 charges. It gets paid off every month. The other card I use for purchases that are more secure on credit cards, such as airplane tickets. It gets paid off as well. The third card will be closed soon.

A huge weight has been lifted from my shoulders, but of course there were trade-offs. My savings account is practically empty. In fact, I have a negative net worth overall. My student loans aren't huge (although morbid as this sounds, at least if I die, my family won't have to pay them), but my 401(k) and rollover IRA will let me retire around age 70, if I plan to make it to 70 and a half. I've increased my 401(k) contribution - it should be higher, but first I need a savings buffer. That comes before paying off any student loans or maxing the 401(k).

This is the first time in my adult life I haven't had credit card debt. You know, that's pretty exciting.