Hi there, I've been reading the RSS feeds for a while, but just made my way here to the forums. I'm 32 this year and have been in a continuing battle to get out of debt. Credit cards are way too easy to use. Here's how I'm slowly getting out from under the debt I've accumulated.

1. All food (groceries & eating out) are to be paid for with cash from the current paycheck. I will not charge any eating out! If I run out of money before the next payday, I'm going to pack my lunch!

2. No more charges to the credit cards. This has been particularly hard as I've had no savings to use as a backup when emergencies come up (like some roofing I needed done).

3. I will get at least $1000 in my savings account.

4. I will pay the most I can towards the card with the highest interest rate (which also has the lower balance). On the other card, I'll pay just over the minimum- say round to nearest $5 increment.

5. Before I purchase anything new (say over $30) I'll go home and think about it for at least a day. Also, I'll make sure that I am following my budget and that I can really afford to buy said item.

6. I will report my progress on Monday of each week.

So, that's it to start with. I'm currently about $17,000 in debt on credit cards. When I get the one card paid off I will re-evaluate and determine if I should include my car loan in the mix.

I've been thinking more about how I've gotten in debt. The main things that have happened is that I get into relationships with guys that make less than me and I keep wanting to treat for things. Or an emergency comes up for them that they can't take care of... and so I do. I'm too generous with others. I think my last relationship was the worst for this because I was with him for almost 4 years and during that time he was actually unemployed for 6 months. So of course, I felt obligated to support him.

I'm too nice for my own good.

Basically, I need to start being more selfish and if the person I'm with/ dating/ whatever cannot afford to do something-- I cannot bail them out. No matter how much I may feel the need to do so. It's not healthy and it's not MY responsibility!

If the guy I'm with can't take care of himself, how can I think that he's going to be fair to me?

Just something I've been thinking about last night. I'm off to work!

Today while I was at work (yes, I should have been working, but my mind was elsewhere!) I went through my bills and tried to plan for the next few months. I had gotten a few bills while I was on vacation and needed to catch up. In doing this, I've found a couple ways that I'm going to work on cutting down my expenses.

1. I called up my cable provider and asked them what I can do to reduce my bill. They suggested switching to Roadrunner lite. It saves me $20 per month. Well worth the reduction in speed in my opinion.

2. I cancelled my subscription to Netflix. I haven't had time to watch anything and really I can get a lot at the library-- for free.

3. I'm going to use my "high-tech" thermostat to keep my house at temperatures that are okay for my pets while I'm away. This will save minor amounts of money probably, but every little bit helps. While I'm home I'm going to try to get used to keeping the a/c and heat at higher & lower temps than I'm used to. Dressing differently while home can help me get used to it.

4. I'm going to look at my expenses each month (with Microsoft Money) and see how I've done on my bills. Comparing long term to see the effects.

Okay, now back to work with me!

I had some extra time this morning before work... so I did something I haven't done in weeks... I packed a lunch! It's not anything terribly exciting- ham & cheese sandwich with one of those individual mac & cheese things & an apple & a diet dr. pepper.

Despite the fact that I'm totally exhausted today, I think that this is a good start to keeping me on track. Oh and I went grocery shopping last night too and spent about $65 in cash. I still have a good amount to get me through the end of next week for going out to eat later on.

Today's going to be a rough day to stay focused at work. However, I just got a nice bonus check of about $950 for my work so I'm feeling pretty good about my job overall. I'm using that money to help with the recent roofing bill which is due by the end of this month.

And for the record, I wanted to state my finances as of yesterday (some are not exact).

Debts:
Credit Card #1- $978.85 (APR is 23.99%)
Credit Card #2- $3,521.56 (APR is 19.24%)
Credit Card #3- $12,825.97 (APR is 3.99%)
Car Loan- $11,000 (APR is 5.99%)
SBA Loan- $4,000 (APR is 2.9%)
School Loan- $2,000 (Not Sure of APR!)
Roofing Work- $1470 (5% late fee and 10% interest charged)
Mortgage- $111,000 (7.75% fixed 30 yr mortgage paid every 2 weeks)
Bank of MOM- $600 (loan that makes me feel really guilty and want to pay off very soon)

Good things:
401k- $53,000 (Reduced amt added to $110/ month until out of debt)
Savings- $120.00 (4.5% interest rate)
529 Savings - $100.57 (Upromise balance of about 850 to be added in June)

I'd appreciate advice on order paying off my debts above...

Jen, Good job on packing the lunch, saves money and calories!

Re: your payment plan, I'm a big fan of Dave Ramsey's debt snowball (pay smallest debts first) but since you've got some high interest cards I would start with the highest interest credit card debt first. I also wonder whether you could find a lower rate card to transfer the high interest cc debt to (you may have already thought about that one). So I would pay of credit card debts first, highest interest first and then move on to SBA and school loans and then car loan. I'd also address the bank of Mom loan as soon as possible (pay it off if you get a bonus or tax refund, etc.)

Good luck!

Thanks for the advice! I did actually transfer some money to a lower interest credit card just last month. That's why the one with the highest interest is under $1000. I agree that paying off that high one makes sense. I'm thinking of paying off my Mom Loan first though since it makes me feel the most guilty. I know she doesn't expect me to pay it back right away, but with the bonus I got from work-- I feel like I should. I'm going to play with my budget a bit more and see what I can really afford to do. I don't want to get in over my head again and start charging to the credit cards!

Yesterday was a good day... the only money I spent was a budgeted item-- new shoes for work. Though it occurs to me that I should look online to see if next time I can buy them at a cheaper price. I buy them every 3-4 months due to some problems I have with my feet and so it adds up quite a bit. Even saving a few dollars would be worth it.

I had to turn the AC on today. It was too warm for me to sleep comfortably last night. Bummer! I was really hoping that I could hold off on doing that longer. I think if I were to get a fan for my bedroom it might be worth the investment. Need to research this more.

Off to work now!

I sat down this morning and scheduled out (somewhat roughly) how long it will take to pay off the debt that I have. I found it overwhelming and depressing. Do people really succeed in doing this? Can I do this?

FOUR YEARS at minimum to pay off my debt. That is provided nothing happens that is a major catastrophe with my house/ car/ job. Wow. It's really sobering how quickly things have added up and how LONG it takes to pay them off.

By January 2011 (holy cow!) I will have accomplished the following:

1. Paid off all credit card debt.
2. Paid off car loan (a year earlier than my loan was supposed to be paid off).
3. Paid off loan from flood two years ago.
4. Have a clear conscience and will be able to contribute fully to my 401k.
5. Have a SAVINGS ACCOUNT with SAVINGS in it.
6. Paid off approximately $6,000 on my mortgage
7. Paid off my school loan.

Now that list makes me feel really good! I want to do this! It's daunting to think of how diligent I will have to be for the next 4 years, but the payoff will be wonderful.

I'm thinking I may use my todo list reminder service to help keep me on track. A monthly reminder or more frequently will help me stay focused.

4 years seems so long, but really, it isn't.

I need to convince myself that this is a do-able thing!!!

Jen, I like what I've read so far. I like your goals. I know that four years seems like forever, but believe me: it's doable! My own project will have taken me 3-1/2 years by the time it's finished. March 25th of next year is my target date!

One thing that *really* jumps out at me is the interest rate you're paying on your mortgage. How much time do you have left on that loan? Can you qualify for a better rate?

We bought our first house for $112,000 at 9% in 1994. When interest rates dropped to 6% in the late 90s, we refinanced for 15 years. Our payments were actually *lower* than at the higher interest rate. It was crazy. (And then we started paying an extra payment a year, which was really going to cut time off the loan.)

According to Bankrate, current mortgage rates are about 5.75% for 30-year and 5.50% for 15-year.

Because I don't know how much longer you have left on your loan, I'm going to assume the full thirty years just for sake of argument. Here's how refinancing would affect things:

Currrent $111,000 loan at 7.75% (30 yrs) = $795.22 monthly payment
Refinance $111,000 at 5.75% (30 yrs) = $647.77 monthly payment
Refinance $111,000 at 5.50% (15 yrs) = $906.96

If I were you, I'd go play with the Bankrate mortgage calculator.

I'm not saying that you should refinance, but I do think you should explore the option. There are a lot of variables involved, and maybe it doesn't make sense, but this could be a place where you could save a hell of a lot of money. You could either reduce payments and stretch things out to free up cash-flow, or you could reduce the term and add equity more quickly.

And if now isn't the right time to refinance, keep your options open. A lot could happen in the next 4 years that could make it easier to cut that time way down. Keep your chin up.

I had a wonderful weekend and didn't spend much! YAY! I spent a total of about $40 (gas & food) to go camping with my sisters. This morning I had packed a lunch for work, but on the way I forgot it on my kitchen table. DOH! Luckily I have a frozen meal in the work freezer.

I'm still working through my budget and trying to get myself organized. I'm going to look into the possibility of refinancing, but since I just did it a little over a year and a half ago... I don't think it's really going to be worth it. We shall see.

Busy week ahead! Not sure if I'll be posting much on here. Catch ya later.

I have trouble bringing my lunch every day as well. I do try to hit the grocery store every couple of weeks and pick up frozen dinners (for work lunch and dinners), a bag of bagels and some cream cheese. That way if I forget my lunch or I'm hungry for breakfast I'm covered.

Okay, yesterday I got one of my credit card bills for the account that I had just done a balance transfer to. Much to my surprise, the $8000 that was already on the card ended up getting switched to a higher interest rate. Which makes the whole exercise futile. Grrr. Now I'm thinking that I should try and move all my credit card debt to a totally new credit card and go from there. My only concern would be that the limit on the credit card might not cover all my cards. Is it possible to call them up and ask them to increase it?

I hate to apply for another credit card, but I have a good credit rating (762 last I checked) and I think it would be dumb on my part to pay all that interest.

Thoughts?

I'd absolutely ask (1) why the increase on the original $8000, what triggered that increase, did they follow their rules, did their rules change, etc. (2) and I'd ask them to lower it back to where it was (if you have a preapproved offer in hand you are in a stronger position).

It never hurts to ask, and to ask again (sometimes you get a better result depending on who you ask, so I might ask more than once).

Good luck!

Four years seems like a very long time at the begining of paying down debt. However, as someone at the end of that four year period, I can tell you it goes faster than you might think. And when you start to see the numbers change faster and faster, it will make you very, very happy. When we started, with almost $30K in debt, 4 years seemed like forever, and we weren't sure we could live on what was left. Now, with about $3k left, and the end in sight, we're thinking about how much "extra" money we're about to have. (Most of it is going to student loans and savings, but we're going to use some for "fun".) The light at the end of the tunnel is almost blinding now. Stick with it, the rewards are more than just financial.

Had a pretty good week overall. I did buy some unplanned things on Friday, but I had been thinking of getting them over the past few months. And I paid with my debit card so it's "cash" so to speak. This week I have some larger expenses to take care of:

- Pay toward the Mom loan.
- Pay the roofing bill.
- Get an oil change for the car.
- Pay for last week's golf lesson.

I'm going out of town this coming weekend and I'm going to go to the grocery store there to avoid eating out too much. I'm also taking the dog with me to avoid boarding expenses. Hopefully all goes smoothly and she handles the car trip well.