Imagine shattering the chains of a $153,000 debt mountain on just one income—it's not a fairytale, it's my real-life conquest that I, Katie Hatfield, am thrilled to share with you. Journey with me as I reveal the practical maneuvers that propelled me to financial freedom in a remarkable five and a half years. From grasping the elusive concept of trailing interest to the strategic timing of credit card payments post-billing cycle, I lay bare the tricks that kept creeping interest at bay. Moreover, I'll let you in on how dodging those pesky overdraft fees and syncing bill due dates with cash flow can keep your hard-earned money where it belongs—in your pocket.
But the road to financial clarity doesn't end with banking savvy; it stretches into the daunting realm of healthcare expenses. Ever felt like medical bills are more cryptic than ancient hieroglyphs? I divulge how demanding an itemized bill after a sinus surgery not only unveiled the mystery but also slashed the cost. Harnessing the power of Health Savings Accounts (HSAs) and advocating for transparent medical billing are just the start. For those hungry for more fiscal knowledge, I've got just the treasure trove of wisdom, along with a workshop that could be the key to unlocking your own debt-free life. So, tune in and arm yourself with the insights that could steer your finances to victory.
Imagine shattering the chains of a $153,000 debt mountain on just one income—it's not a fairytale, it's my real-life conquest that I, Katie Hatfield, am thrilled to share with you. Journey with me as I reveal the practical maneuvers that propelled me to financial freedom in a remarkable five and a half years. From grasping the elusive concept of trailing interest to the strategic timing of credit card payments post-billing cycle, I lay bare the tricks that kept creeping interest at bay. Moreover, I'll let you in on how dodging those pesky overdraft fees and syncing bill due dates with cash flow can keep your hard-earned money where it belongs—in your pocket.
But the road to financial clarity doesn't end with banking savvy; it stretches into the daunting realm of healthcare expenses. Ever felt like medical bills are more cryptic than ancient hieroglyphs? I divulge how demanding an itemized bill after a sinus surgery not only unveiled the mystery but also slashed the cost. Harnessing the power of Health Savings Accounts (HSAs) and advocating for transparent medical billing are just the start. For those hungry for more fiscal knowledge, I've got just the treasure trove of wisdom, along with a workshop that could be the key to unlocking your own debt-free life. So, tune in and arm yourself with the insights that could steer your finances to victory.
Have you ever thought about how small changes and maybe reading the fine print, could make a big impact on your journey to debt freedom? Today, I'm going to share four tips, small things, that I didn't think would be a big deal, but made a huge impact on my journey. Hi everyone, this is the debt free dad podcast, where we help you take control of your finances so you can live a happier, less stressful life. My name is Katie Hatfield and I will be your host for today's episode, so we are looking at just how we can make some small changes to make a big impact in your journey to debt freedom. Four things that I'm going to share with you today on how I have paid off personally in five and a half years on a single income over $153,000 in debt. So the first thing that I am going to talk about is actually something that I only learned about a couple of years ago, and I'm in my 40s.
Speaker 1:
I didn't ever know about what trailing interest was until I started working for a bank, so let me tell you about trailing interest. I'm going to read it right from a credit card statement you may see interest on your next statement, even if you pay the new balance in full and on time and make no new charges. This is called trailing interest. Trailing interest is the interest charged when, for example, you didn't pay your previous balance in full. When that happens, we charge interest from the first day of the billing period until we receive your payment in full. You can avoid paying interest on purchases by paying your balance in full or, if you have a plan balance, by paying your adjusted balance on your billing statement by the due date each month. And then it has you look at your card member agreement for more details. So, when it comes to trailing interest, what this means. So, for example, this was my billing statement that closed on January 26th of this year. It's all my charges from like the end of December and the majority of January and it will be due. Well, it was just due on February 20th. So you made the charges last month, it's due this month, but the billing cycle itself closed on January 26th. Basically, every day if I had not made a payment from January 27th, the day after the statement closed, the billing cycle closed until the due date of February 20th. For every day that I hadn't made a payment or paid off that statement, I would have been charged interest, daily interest, compounding interest, trailing interest that's what that is called. So essentially, we all usually look at the bill and we say, okay, this is due February 20th, I'm going to pay it on February 20th, but because of this trailing interest. It's just little things, but they add up very quickly, especially when the interest is not working in your favor.
Speaker 1:
What you want to actually be doing is saying, okay, this statement closed on January 26th. I need to be paying this bill on January 27th because otherwise, every single day that you're not making that payment, the bank can charge you interest. And yes, it's legal and yes, it stinks. So if you've ever paid off, like a credit card in full, and then the next month you get a little bill like $4, $12, $27, something like that, that's the trailing interest that they charge. It's like, yeah, you did pay off that whole balance, but you waited until the actual due date on the bill. So we're going to charge you interest because you did have a balance. We're just going to pay, charge you the interest on that balance for these next, like two or three weeks before you actually make a payment. So one thing to do is actually just eliminating that trailing interest being charged by simply the day that your billing cycle closes, pay it the next day. The next thing is going to be avoiding overdraft fees, and this kind of also goes right along hand in hand with your due dates on bills.
Speaker 1:
I was the queen of overdraft fees. I think I had paid over $500 or $600 just in overdraft fees that I had paid in like the six months leading up to like just taking a look at my finances and saying I need to make a change. One of my very best friends happened to work at my credit union and I knew because I was always floating payments. I told my friend I'm like could you throw like 20 bucks in my account to get me through so that I don't get another overdraft fee, because I'm hoping that my paycheck deposits before this bill comes out, but I'm not sure if it's quite going to cut it and I just need like to float for a day or two. And she looked at my account and she rolled her eyes because she's my best friend and she's going to tell me like it is. She's like do you realize you have paid over $500 in overdraft fees in the last six months? And I'm like, hmm, that's a lot. And I mean, I knew I was paying them. I did it all the time To avoid overdraft fees.
Speaker 1:
You can switch to a bank that does not charge you fees. So, like I have a bank now it's all online and it is it doesn't charge you any overdraft fees because it just doesn't let the charge go through. So you might have a fee from the merchant or from the credit card company if they try to take your payment out of the account and the money isn't there. They might ding you with a returned payment fee. But your bank is not going to also hit you with a fee If the money is not there. They just say sorry merchant, sorry credit card company, there's not enough money, try again later. But they don't charge you a fee and that does help. So at number three we kind of touched on it is you can always call your bank or your credit card company, your credit, just say, hey, I'm having trouble paying my bill on the 13th, I get paid on the 15th. I always have this due date on the 13th. Is there any way we can just move that? So I'm not potentially floating and hoping that my paycheck deposits a little early before your payment comes out of my account and some banks will do it, some banks will not.
Speaker 1:
Another thing that you can negotiate is your interest rate. I called one of my credit cards and high balance with them and it was like 29% interest and it was just killing me because so much of my payment every month was going towards Interest. So they said, okay, we're going to close your account and we will set you up. So you're paying $150 a month, every month until this account is paid off. But they dropped my interest down to point nine nine percent and then made a huge impact and I literally Just a couple of like two months ago, paid off that account. But now it's done and gone and closed and I don't ever have to make that payment again and I love that fact.
Speaker 1:
So the last thing that we're going to talk about is Medical bills. I put medical bills on a credit card and if you are paying a hospital or a doctor or clinic or whatever and they have said, okay, we're willing to work with you and do a payment plan and they should be able to they should not be Charging you interest or anything like that. If you call their billing department and talk to them and Negotiate, hey, I'll pay you, even if it's five, ten, $20 a month, something small. As long as you're making that payment, they can't send you to collections, they can't charge you interest or late fees or anything like that, even if it's small. And get it in writing. Just don't put medical bills on a credit card where you are going to be charged interest in late fees and all of those kind of things. Where it's a minimum payment. Do and it just is Some of the worst decisions that some people have made.
Speaker 1:
Also ask for an itemized bill.
Speaker 1:
If you get a Medical bill that you're like oh, this seems really high, which I mean every medical bill I ever get seems high. I had a Sinus procedure done earlier last year. I had talked to them in great detail about, okay, what's this gonna cost? I had the money in my HSA account, so I'm like alright, here's your sixteen hundred dollar check. And then a couple weeks after the procedure, I got a bill for like another 16 or 15 or sixteen hundred dollars and I called them and like I paid already, that we talked about what was due, I asked for an itemized statement and she's on the other end of the line going Okay, all right, let me do, do, do, do and like all of a sudden my 1600 dollar Bill came to. Oh no, you only owe us 118 dollars and some sense.
Speaker 1:
So always be sure to ask for an itemized Statement. If it only has like two or three lines on there and it just has a big dollar amount at the end, just say, hey, can you break this down for me? And somehow, magically, it seems to Decrease significantly as far as the amount do. So those were definitely things that helped me in my journey to pay off my debt. So if you are looking for more great tips on how to get started on your personal finances, head over to that free dad, calm, and we do have our free life without payments workshop and we share a lot of other great tips. So until next time, take care. Thank you so much, oh you.