I'm finally gonna do this. I've been steadily chipping away at my debt for about a year now... here and there. Have all the 22%+ cards PAID OFF - woo hoo! Did a few balance transfers to lower-rate cards and I'm in a much better position that I was previously. Here's my current situation:Age: 27Earn $65k/yearRent $610/monthUtilities about $150/monthCar $415/month (it's a lease, so I can't really get out of it)Ins $125/monthCards:MBNA balance: $6750 @ 17.9%B of A balance: $2660 @ 8.9%Citibank blanace $6230 @ 11.9%, but here's the kicker: I've been FOOLishly paying Creditshield premiums for the past eternity. Almost $60 a MONTH!!! That's coming to an end, ASAP, believe me! I feel like an idiot, in that I've been paying up to $600 annually for their unneeded "service." Bleh.Anyhow, my plan of attack is this: I've been snowballing and I've found it VERY successful, so I'm keeping that up. also, gonna call the CC companies and ask for lower rates - or beg, in MBNA's case. As previously stated, I'm gonna get rid of that Creditshield monkey on my back.My boyfriend and I have been VERY disciplined in recent months about LBYM. We cancelled our Hawaiian vacay that was supposed to begin tomorrow (have the tix and everything!) to save money. That will eliminate $1200 off the Citibank card right away (yay Travel Ins!) We're also looking at renting an apt more than $200 less than what we're paying now. When we move, adios cable & cable modem. That will cut down utilities to a more reasonable figure. We've cut way, WAY back on entertainment and eating out and in the past couple months, we've managed to save $1600 (including a couple of windfalls, too) That money was supposed to be spending money for the vacation, but since it's been cancelled, I'm leaving it alone right now (and still contributing - transferred $100 to it this morning.)Anyone else have any suggestions? I'm steadily socking away about $350/month to my 401k. Since the market is for shit right now, I thought about suspending payments until there's an upswing and using the extra (about $200 after taxes) to pay CC's. What do you guys think about that? Any ideas/input are greatly appreciated.Thanks!
Age: 27Earn $65k/yearRent $610/monthUtilities about $150/monthCar $415/month (it's a lease, so I can't really get out of it)Ins $125/monthActually, you can get out of the lease (almost always), but what you have to do is to purchase it outright (probably by borrowing the money which you may or may not be able to do) and then selling it. It's at least worth checking into.Anyone else have any suggestions? I'm steadily socking away about $350/month to my 401k. I think it's a good idea to get that extra $200/month and put it towards your bills until they're paid off. Leviathan
In a nutshell . . .<<Car $415/month (it's a lease, so I can't really get out of it)Ins $125/month>> . . . yes, you can.Find out the pay-off and the book value. Sell it and take a loan out for the difference. If you don't like that idea, total up what you will be paying in the total term of the lease and if that doesn't shock you a little see what it will cost for you to keep the car AFTER you've paid all this money. You could get a decent used car for half the payments that this one has, that would require maybe even half of the insurance payments and that would save you well over $3K each year alone. (Ball park speculation, of course, but based on experience)Otherwise, I think you have the right idea. Do you have an emergency fund of at least $1,000 while you're getting out of debt.Fred
I would keep contributing to the 401k. You are very young and will see many market cycles in your lifetime. The best time to buy stocks is when they are cheap and your time horizon is 35 or 40 years.
You didn't mention an emergence fund. I think that you should have one. I wouldn't suspend payments to 401k, if you want to cut back to your company's match and put the rest against the cc debt.Catleen
Emergency Fund (from original post):"we've managed to save $1600 (including a couple of windfalls, too) That money was supposed to be spending money for the vacation, but since it's been cancelled, I'm leaving it alone right now (and still contributing - transferred $100 to it this morning.)"Guess I didn't make that very clear - that savings is my emergency fund - really the first time I've ever had one! Thanks for all the responses. Will definitely look into the car situation. And, I'll leave the 401k payments alone. Unfortunately, I'm a contractor and as such, I don't get a match, but I've been contributing since age 23, so I could be in a much worse situation, I guess. Always looking at the bright side...Jenn
Well, Congratulations! It sounds like you are on your way to Financial Freedom!I'm an administrator with a national credit counseling & debt management firm and to see that you are tackling these financial challenges on your own is extremely refreshing. This industry (credit & debt counseling) is designed to assist you with the tasks that you cannot handle or negotiate on your own. However, every once in awhile we witness someone like yourself with the self-discipline and determination to go it alone, without any professional assistance. Although, those who over-extend themselves (like yourself) keep food on my table :O) it is indeed refreshing and promising to see you meet these challenges "head-on". We can only hope that our society, as a whole, will someday have the discipline and "drive" that you do to become Financially Free! Three important things to remember: 1. Long-term, personal education.... Educate yourself as much as humanly possible. When you sell your car (and you'd better!)-- spend a couple hundred bucks on a financial management course for you and your BF. The knowledge and experience that you'll gain will be priceless. 2. Remember that your debt-to-income ratio should never exceed 20%! In other words, if your monthly bills are over 20% of your monthly income---you're in trouble! 3. Keep checking out the FOOL and let them guide you to earning more moola! That's right, the easiest solution to all of this to make more money! I'm not sure what you do to earn that 65k per year, but I'll bet you your 65k that there is a better way! Become aggressive and seek a higher paying job or better yet, start your own biz---think aggressive! No excuses....you're young!Good luck & I hope this reply helps.
Welcome Alcordust to credit cards.Which agency do you work for?. Does your agency pay its clients bills late as well?.JnJfools
JnJfools....very amusing reply. No, really I mean that.
"I'm an administrator with a national credit counseling & debt management firm..."Nice to hear one of the "pro counsellors" praising individual initiative!Alex
"Which agency do you work for?"Trying to bait this person into a naughty "solicitation" post?"Does your agency pay its clients bills late as well?"I truly hope this was said in jest. I do realize that, with the insane amount of debt in the world, there are plenty of shady "helping" organizations out there. There are also many much-needed good ones.But, then, you probably know this, right?Alex
"...very amusing reply. No, really I mean that."Good for you alcordust. You didn't reveal your company. You may have been beaten into a bloody fool... ;-)I'm curious...Really, I am.I know the Fool is a bastion of independent, self-activating Fools; but, becoming a Fool is a process. And, we all need help to be better Fools.So (coming to my point), what's the Foolish take on credit counselling and debt reduction organizations?[Maybe I should have created a poll...]Alex
Thanx Amzolt! I appreciate your support on my first set of post replies on the fool. I, too, am curious what the "foolish" opinion is on credit counseling and debt management organizations......perhaps a poll is in order?Thanks again,Alcordust
"I, too, am curious what the "foolish" opinion is on credit counseling and debt management organizations......perhaps a poll is in order?"Since you are the administrator of one of those organizations (and brave to be posting amongst such independent folk!), I feel you should do the poll.I'll certainly give you my honest opinion.Alex
Alcor,I am not a mean person but what I wrote was a nice post compared to what you would get attacked with if you don't rest your credit counseling credentials.I have people in my life who have fell behind in their credit payments (which is their fault) and all these ccc tell them is go to credit counseling. Almost every post that has been written about such service include such statement as:-They paid late and I am now more behind than before-They want $200 plus $7/month to negotiate & didn't lower my rates-They are telling me it will take 4 years to pay my $10,000.00 debt offI am not stupid, I know the cccs get a kick back and I think that is straight out wrong. If the person is honestly making an effort to correct their mistakes, debt counseling shouldn't be mandatory. It only should be mandatory as a last action before bankruptcy.I have nothing against you; I am saving you some headache. You have valuable experience (as we all do), I am not going to devalue your experience but I am going to suggest that just be you, the person, not you, the credit counselor..02 cents,JnJfools
1. You can always have the cablemodem under entertainment expenses...2. if your company has 401k match, at least keep it matching to that.2b. RIGHT NOW IS THE PERFECT TIME TO INVEST IN THE MARKET, YOU BUY MORE SHARES OF THE SAME STOCK, BECAUSE THEY ARE WORTH "LESS". If you have already been socking money away to the 401k, just leave it there. You typically by shares in a fund, and not in actual stocks. make the low market get your total price per share/mutal fund share down. It looks like with the size of those credit lines you are going to be into a lot of agony paying those suckers down. I mean even if you are putting an extra 1k a month towards debt paydown, that would still take 6 months to pay off just MBNA. I would make little mental blocks of $1000.00 and do little mini-happy dances, and just try and tackle $1000.00 at a time. Pay 85% of your extra money too MBNA, and then 15% of your extra money to bank of america. Granted this is not the best option for reducing the amount of money you pay in interest. But i think for what it would cost you, it may make you feel a little more "accomplished" in what you are doing and make you feel better to make a little bit of headway on two cards at the same time. Or if you really want, just pay off the Bank of america like mad. Then balance transfer from mbna to bank of america. Pay off Bank of america, then do another balance transfer. & so on. That way it doesn't seem like such a 'huge mountain'. You tackle the molehill, then when you run out of dirt, take some from the mountian. Just an idea.Mike
Anyone else have any suggestions? I'm steadily socking away about $350/month to my 401k. Since the market is for shit right now, I thought about suspending payments until there's an upswing and using the extra (about $200 after taxes) to pay CC's. What do you guys think about that? Any ideas/input are greatly appreciated.jennapeach,Just my thoughts here, but since the market is low right now, it seems like a great time to be buying in (that whole "buy low, sell high" thing). I don't think I would lower what I was putting into the 401k now, myself. I am personally putting in all I can scrape up without hurting other payments.Sounds like you have things under control.Good luck.Beth
I do appreciate your 2 cents. After all, that's why all us fools love the boards, right? Communication. However, if you'd really paid attention to my first two posts on the fool, you would have noticed that I was not exactly promoting the services of my industry. I spoke of two things: 1) most creditors that we work with suck! -and- 2)It is refreshing to see others taking care of their financial challenges on their own... Obviously, not a sales pitch about my biz. You mentioned that I should not "advertise" my position within the credit counseling industry. JnJ, I'm simply offering my experience as it relates to the specific topic or post....something that we all do, right? I am being me--it just so happens that I'm also a credit counselor.Next issue: I understand that you know others that have had a bad experience w/ credit counselors. Well, who doesn't?? Example: AOL sucks, right? Yet, it's still the largest ISP. There are alot of crappy credit counselors out there. There are "whores" in every industry who give it a bad rap. I can only defend the company that I represent.....we are very focused on the long-term education; not just the quick fix. We do not "charge" per account listed, we certainly do not pay creditors late, and we assist our client in reaching their "debt free date" ASAP.Yep, 90%+ of all non-profit credit counseling/debt mgmt agencies do get fair-share contributions (kickback, as you called it) from the creditors that they work with. Pretty terrible, isn't it? To actually get compensated for recovering funds from a debtor that, (based on historical stats) would have more than likely filed bankruptcy.Listen JnJ, the fool is certainly based on "outside the box" financial thinking and strategies. It's a community full of amazing individuals capable of self-help, improvement, and empowerment. But, guess what? Right now, that only equals approx. 2% of our "real world" society. I feel that my job as a credit counselor is to educate people and show them how to do what most of us "fools" already know how to do on our own. If you don't mind, I'd like to invite you to participate in a small poll that I'm going to post here on the board in the next couple of days. I'd like to get feedback (good or bad) on the foolish opinion of HONEST credit counseling and debt management agencies (and they do exist, ya know).Thanks for letting me throw a couple pennies back at ya, JnJ. Again, I appreciate your feedback and I'm adding you to my fav list.Alcordust(the newest lil' fool in town)
I know the Fool is a bastion of independent, self-activating Fools; but, becoming a Fool is a process. And, we all need help to be better Fools.So (coming to my point), what's the Foolish take on credit counselling and debt reduction organizations?[Maybe I should have created a poll...]The poll is a great idea. (I checked the thread but I'm not completely caught up yet.) In our personal finance area there is an article about this:http://www.fool.com/credit/cardtricksstep9.htmHow does 1) the community feel about this article and 2) those "in the biz" fee? Do you think we were fair? Not harsh enough? Too harsh?TMF Dawn
"How does 1) the community feel about this article and 2) those "in the biz" feel? Do you think we were fair? Not harsh enough? Too harsh?"Dawn, I'm in the "biz" and I voted in alcordust's poll:http://boards.fool.com/Message.asp?mid=15675989 I think the article on the Fool is fair, though one should take note that it focuses its description primarily on CCCS:http://www.fool.com/credit/cardtricksstep9.htmAnd, note this, from the article:"Listen to their advice, adapt it to your needs, but never hand over control of your monthly income. In many instances you can negotiate lower rates on your own. But if your creditors number in the double digits, you may find it exceedingly difficult to get all of them to lower interest rates or work out an acceptable payment schedule. That's where the services of CCCS can come in handy. It has relationships with nearly all unsecured creditors and can usually negotiate lower rates. If you do sign up for a debt-repayment plan from CCCS or any other organization, follow through. Should you renege on the plan, it can show up as uncollected debt on your credit report for seven years -- a red mark almost as bad as bankruptcy."Alex
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