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Author: Bottles Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308519  
Subject: Re: Credit Card Debt Reduction Date: 4/8/1998 1:17 AM
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JJ Dyson,

Congratulations on taking the first steps to living debt Free. This is a great place to learn from ppl's past experiences of what works and what does not work, as well as share in yours. I highly recommend reading the past posts here at your leasure when you have time, they are full of helpful hints.

I am a little concerned about your approach. 24 to 36 months is a great goal to set for yourself but unfortuantely you cannot just take the sum of all your individual balances and divide by 36. Your right in your intuition about forgeting the intrest. You have to factor that in or you'll never get yourself out of debt. This is where the credit card companies make a killing off of ppl like you and I :(.

The basic formulas (this will give you a good rough Approximation of the intrest)

(((APR/100)/12)*Current Balance) + Current Balance

From there you would have to add any new charges for the month and deduct any payments made. This formula would be repeated each month. I have a pretty good
spread sheet that does this and is set up for 1998/1999 years, just email me if your interested in them and have excel.

The first thing I would recommend is organizing not just your debts but all your accounts and begin tracking all your fincances. I have been doing this now since the new year. Its an eye opener the first month. Even down to tracking the quarters for our littles ones gum balls and pennies in the fountain. I would recommend either MS Money'98 or Quicken '98. Sad to say, but I have heard MS Money is a little better section for debt reduction then quicken and both do about the same for tracking expenses and generating reports.

I have even posted a monthly debt chart on our fridge as a reminder. So far It looks good, Debt level always going down each month. Good Positive Reinforcement is important!!!

Another aspect that some ppl have touched on was to add up all your minimum Payments and add a little to one or two of the cards. Think of that amount as one Big payment per month and never deviate from that, unless you add to it of course. As debts are retired just add more to the remaining debts and your'll be out of debt that much faster.

Any monetary gift, bonus, or tax refund.. Any extra money you get, atleast use a majority of it to retire your debt faster. Every little bit counts.

Those are just a few ideas. It may seem daunting, but there is light at the end of the tunnel. Good luck and keep us all posted on how your doing.

Rob
Bottles


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