A simple math equation helped a couple pay off $40,000 in 6 months

A simple math equation helped a couple pay off $40,000 in 6 months

  • Amy Crockett refinanced $40,000 in credit card debt to make payments more manageable.
  • She calculated the amount of interest she was paying daily, which was about $2.
  • She manually paid $4-10 a day in addition to monthly payments and paid off the debt in six months.

Early in their marriage, computer client specialist Amy Crockett and his wife, Emily Crockett, quickly racked up $40,000 in credit card debt.

“None of us cared what we were buying. We funded our own wedding. We funded our own custom-designed wedding bands. And then we got a watch that was probably too expensive for us, and all those things happened. are added together,” Amy told Insider.

The couple decided to refinance their credit card debt, which caused their interest rate to drop by 10%. According to records seen by Insider, the Crocketts received a monthly payment of $830 to pay off the debt within a year, but Amy was determined to pay it off faster.

She figured out how much interest she was being charged per day

First, Amy calculated how much interest she was charged each day; it was about $2. She says, “One of the things I love about SoFi [the company that refinanced the debt] in particular, they give you the power to extract that data instantly at your fingertips. I realized while playing around with the app that you could reverse-calculate the amount of interest charged daily.”

She then realized that making small daily payments equal to or twice as much as the daily interest charged would quickly reduce the principal balance of the loan. Amy adds, “What’s fascinating about this is that if you stay in control, your balance starts going down because you lose $10 of principal and your interest starts going down on top of that. Pretty quickly, that Tear down that debt hill.”

She was manually making small daily payments

Amy says, “I figured out that if I paid $2-4 a day above that interest rate – even $10 a day if I can swing it – the balance would drop shockingly.”

According to records reviewed by Insider, Amy began manually paying $4 a day, increasing her daily contribution to $10 a day once she gained momentum. In just one billing cycle, Amy was able to reduce her main balance by $5,220.

She paid $40,000 in just six months

Amy says paying off $40,000 in just six months inspired her and Emily to start a debt-free journey. In addition to their credit card debt, the Crocketts also refinanced $25,000 in student loans and saved $1,200 a month by refinancing mortgages on their family home and rental homes.

The Crocketts used this experience to leverage their improved credit to buy more rental properties in Fort Worth, Texas. They also drastically changed their relationship with spending after being so focused on paying off $40,000 in credit card debt.

Amy says, “Before, I wanted all the cool cars that were on the road. Today I drive a pay car. It’s a 2015 or 2016 Hyundai. And I’m looking at the Teslas going by. , I think, ‘Oh, I would love to have that.’ And then I think, ‘Boy, if I spent this money, that would be the exact payment to acquire a house that would ultimately perpetuate financial freedom.'”

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