I have been in debt ever since I was able to get my credit card at the age of 18. I made lots of mistakes with my finances, and now at the age of 28, I'd like to be out of debt by 30. I paid everything by credit card, falling for those gimmicks of 0% this, 1% back on this, etc. Well it only works if you pay in full, which I never did.

I also had a crazy car payment of $550/mo for the better part of 3 years (lease) that held me back from getting out of debt. So I made some changes.

I ended the lease early, without penality. I bought a used, but reliable vehicle, that costs me $200/year. My car insurance decreased about $18/mo (was hoping for more).

Drained my savings account, 401k, and cashed out my savings bonds that were given at birth and throughout the years. I was able to take my 50k in debt, down to ~35,000. Part of that 35k is my car loan (10k) which has a balance of around 85xx now. So I try to just look at my credit card debt instead, which is 25,400.

I signed up for readyforzero the other day, added my accounts, and i'm hoping it helps me remain motivated in paying my bills. I only have a year and half if I want to meet my goal of debt free by 30. As long as I'm frugal and keep the same income, its definitely attainable.

However, I find these urges to spend and that is the hardest part to get over. It's like a drug, very addicting. Once taken, it only provides a few moments of thrill, then its over.

The other issue I have is that I want to find a part-time job on weekends, or even weeknights, except I can't see myself going back to retail now having a nice office job. I'm not sure what other ways I can earn extra income to speed up this debt free process. I have a few things I'd like to sell, and I posted them on eBay, Amazon, and Craigslist, but other than that, its not enough to get me out of debt.

What are some ways you found extra income? Did you set up short term goals that helped you stay motivated to reach your long-term, main goal?

Welcome, unplugged! I definitely like to break things into smaller goals so I feel like I'm making more progress. If you have multiple credit cards, focusing on one at a time might make it seem less overwhelming.

We have a chart on our fridge that we color in for whatever goal we're on. (When paying off a car loan, we had a car outline with squares inside. Each square = $25 or something like that. Now we're doing the same thing as we build up our emergency fund.) Maybe something like that would give you the same sense of excitement that shopping does now?

We haven't really made much extra money. Most of our "extra" came from tracking our spending and finding things to cut. There was a lot of money we were just wasting every month. It sounds like a part-time job could really help you meet your goal more quickly. You could look at it as a temporary thing just until you pay off your debt.

Interesting idea.

I like that idea.

Well luckily I received a nice Christmas bonus! I went from 16 credit cards down to just 8, and I should be able to pay off 2 more by the end of January. The rest of the cards have very high balances, ranging from 3-5k with 20-24% rate.

Second job is definitely something I need, even if it is just for a short time. I do pay off one credit card at a time. I try to tackle the ones with the highest rate. However, I do find paying off the smaller balance cards a quick relief. Plus it feels better having one less bill come in the mail, and whatever that minimum payment was, I can now apply to another card.

The last few cards being such high balances makes it seem like its going to take forever to pay, but looking back at how many cards I did pay off keeps some motivation to keep going.

Posting here keeps us motivated. Snowflaking (paying extra little bits here and there) and snowballing (adding the minimum payments of cards now paid off to the amount sent in to the next card) keeps us motivated. And, of course, we keep each other motivated! So keep posting your progress!

Nothing wrong at all with tackling the smaller balances first if it keeps you moving forward. But I hope you didn't drain your savings accounts entirely...one emergency on a credit card, and you could wipe out a bunch of your progress. Urk.

Good luck and keep us informed!

Sadly I did drain my savings account to pay off whatever debt I could with it. I need to start building it back up now but its tough when all you want to do is pay off your debt.

Status as of 12/28:

I was able to pay off 3,268.43 of my debt so far in the month of December. My Christmas bonus really helped with that!

I have 3 cards that now have balances under 1k. So I'm hoping to just get rid of them by the end of January. After that I won't be able to pay as much as I did in Dec/Jan. Probably be lucky if I could do 1250/mo.

please tell me you have some sort of emergency fund in place. If you completely drained your savings then you are leaving yourself wide open for adding more to your debt should something arise.

I have a friend in a similar situation as you ... so even more than usual I was mentally cheering you on as I was reading your posts. At first I balked at the liquidation of your 401k ... but with >20% interest rates on those credit cards, it might have actually been the best move. I definitely agree with getting rid of those small balances now so that you can start attacking the bigger monsters. Once you get to a point where you're not completely wiping out a debt all in one shot because the balances are just too large, I think it might be beneficial to put away even just a small amount ($1k) in a separate emergency fund to which the previous poster hinted. I know this will delay things slightly but it's like insurance against Murphy ... and you can get right back on track the next month and continue with the same progress you've been making. Thank you for mentioning readyforzero as it seems like a great motivational/tracking tool for getting out of debt ... I've suggested it to my friend (ironically he had worked in retail for years before landing this first real office job but a few months ago he started the 2nd job in retail on weekends and it is helping slightly but he really wants to quit). I wholeheartedly applaud you for taking charge of your [financial] life and so many positive steps to turn things around.

With debts at 20-24% I'd really try and see if you can consolidate those debts into a lower interest loan somewhere. That's so much money you'll need to pay on just the interest only to stop you from gaining more debt. Any improvement could be well worth it.

As for a second job, if you have any marketable skills such as building websites, translating, copywriting than try to find some clients in those markets. But it does take quite a time before you've got a constant stream of income that way. Going back to retail isn't such a bad option really. It's more money in, less time to spend your own money, and it's normally healthier than your sitting office job. You get to stand and walk around burning calories and getting paid for it. Other people pay for a gym to get the exercise. (ok, this might be overdoing it, but find the positive to the situation and you might just get exited about it.)

I don't have a fund right now. I'm taking a chance until I can pay off more cards.

Right now I'm paying $370 a month in credit card interest. I'd like to almost cut that in half before I even consider putting anything into savings.

My 401k was small, probably not even $3000, so it wasn't a 'big' loss per say.

The web site is probably the best thing for me. I tried using Excel and I find I never update it so my progress was never accurate. With this method, I see results once my credit cards update their balances. (Usually within 2 business days).

i cut down a lot of weekend activities for the winter to save some extra cash to put into my debt as well. It's nice to see things improving, especially how it shows your daily interest rate and how its been decreasing.

Trust me... I feel your pain. I have around 34k in credit card debt and Im paying around 1100 a month just in min payments. My interest payment is more than yours (400+ a month). But a couple of weeks ago I was sure glad I took the advice of folks here. I had to take my dog to the vet cause she messed up her leg. Cost me $85 bucks. At least I had the eFund to cover the expense... otherwise it would have had to go on a credit card and I'd be going in the wrong direction again. It's these little things that make us glad we have the eFund.

I am actually on Round two of my debt reduction journey. First time I was just like you.... Between the stuff that popped up unexpectantly and my purchases... I was worse off then when I started. Now I have almost $500 between my savings and eFund that I can tap into if needed. It sure helps with the stress level... and it keeps me from adding to my credit card debt.

You have to do what you feel is best for you, but please think about adding some sort of saftey net... even if it's only a few hundred bucks. It will feel so good when you can cover that small setback with cash vs. putting it on the card and going the wrong direction.

I guess everyone's situation is different but I'm still taking the risk. I have no pets. The only two things that are of importance are me (health) and my car (to/from work). Since I can perform any car repair, I'm not stuck paying high labor rates. And I have a good enough policy to cover damages and rental if an accident were to occur.

I always keep at least $500 in my checking. I don't even put that $500 in my checking balance. So when I'm nearing $0 I don't actually have to worry if my check is going to bounce (I don't really write anything larger than $400) . I know its not a lot of money but its better than paying $35 NSF fee.

Most likely I'll increase it to $1000 - but not right now. I want to be somewhere near $15k remaining before I do.

Some would call that a cushion... and some would call that an eFund. I'd say your on the right track. If I'd known about the 500 I would have never of posted about you draining savings. You still have something to fall back on if something small happens.

So I'm down to 6 credit cards. I was able to pay 2 more off today. I'm left with a balance of 22,320 according to ReadyForZero. This amount also includes my HSBC loan (5k remaining) to factor in. My car note is now somewhere in the high 8's or low 9's.

My credit score also went from 630 to 661 over the past month.

I also sold my laptop which I don't use that much for $850 and I'll be getting back roughly 2k in tax refund. So with that $2850 I can easily pay off 1 credit card and apply at least 900 towards another almost having it paid off.

My toolbox is up for sale as I don't use that either. Spoke with my Matco distributor, and he said he would talk to the guys in the shop if they are interested. So that's another potential 2700-3000 I could use.

If all goes well, that's 20-23% of my debt I could pay off, putting me in a much better finacial situation. At that point I plan on putting 10% of my pay into a savings account, retroactive from Jan 1st.

By the end of this year, I'll have a decent amount of savings/emergency funds saved, and possibly debt free if I skip out on a vacation this summer or at least take a small one.