Sunday, August 5, 2007
Background: A single professional who works as an associate editor for a news Web site. She owns a condominium in the District and earns about $44,000 a year.
New Year's resolutions: She wanted to pay off $4,500 on her only credit card and build up a savings cushion of at least three months' living expenses.
Progress thus far: By cutting expenses and automatically putting aside money from every paycheck, she's saved $1,050.
New developments: In April, she transferred $4,350 of her credit card balance to another card advertising zero percent interest. The zero interest expires in March 2008. With no interest expense, she has been able to reduce the debt to $2,800. She has also increased the credit card payment to $400 a month from $200.
"It feels really good to see that number getting smaller and smaller each month," Schleicher said.
Still, with all her other expenses, Schleicher needed to find extra income to pay off the debt by the end of the year. So, as I suggested, she got a part-time job.
Using her experience as a former high school teacher was a good idea. Schleicher's extra work as a tutor will bring in a nice flow of funds.
Next step: Take on as many tutoring assignments as she can. All the money she earns at $33 an hour, minus what she needs to hold back for taxes, should be applied to the credit card debt.
"I'm hoping that when students panic about summer reading lists, I'll get lots of calls," Schleicher said.