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Yay! Great job, walstib! You posted for a second day, and you have more ideas for what you can do. That's ALL YOU NEED RIGHT NOW. I realize that you are getting a million good suggestions, and you can take all of them.... sometime. For now, though, you had several good ideas in your post. Keep thinking, keep taking little tiny steps. You're right that small wins are important right now.

Which does not, of course, let you off the hook on budgeting. Just that that's not what you need to do right this minute. You'll get there as you work through things. Instead, I will ask one other question: Do you have a small amount of money -- $1,000 or so, maybe -- put away in case of really dire emergencies? If not, please do think about that. And also, give your spouse a hug. If you're the one who needed to get on board, she has been living with a lot of stress.

ThyPeace, delighted that you're still at it. Keep going!
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Good morning, and welcome!

One essential step is to determine where the money’s been going. Gather together the past year’s worth of cc bills, and your check register, and add up what you’ve spent in each category.
You’ll tweak the categories as you go, but as an example, you can start with mortgage/rent, utilities, insurance, internet/TV/landline, house maintenance/repair/improvements, cell phone, car payments, car maintenance/repair, gas, medical, groceries, restaurants, travel, donations/gifts/charity, gym, ...

This exercise can easily take a solid two days, so plan accordingly.

The reason it’s a year, and not just the past few months, is because some things don’t happen often (major car service, Christmas shopping, ...) and so can get overlooked if you just take a snapshot of a short time span.

After you gather the data, we’ll be delighted to help you analyze it.
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Financial stability requires offense (bringing money in) and defense (controlling the money that goes out).

You’ve already mentioned an “offense” move (selling stuff), but it’s essential to also map out a defense. You can call it a budget, or spending plan, or whatever you like, but in order for your plan going forward to be at all realistic, you have to compare it to past spending.

Hence my advice to go through last year’s paperwork.
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Welcome and Congratulations on deciding to take charge of your finances!

I second YewGuise's comments about gathering your spending history and posting it here for analysis. I would also encourage you to track every penny you spend going forward. Write it down, or use an aggregation program like Mint to track debit* transactions, and input your cash transactions manually, as well as categorizing the checks.

*Notice that I didn't say anything about tracking credit card transactions. That's because in order to pay off credit cards, the best first step that you can take is to stop using them completely. That's just like filling in a hole - if you want to fill in a hole, you stop digging it first.

If you feel that you *must* use credit cards (and I would suggest that you should re-examine your desire to actually pay off your cards if you think you *must*), then at least put all new charges on a single card that you pay off completely, EVERY SINGLE MONTH.

Dave Ramsey baby steps seems like a decent plan, and I think I could get "gazelle intense."

Dave Ramsey's Baby Step 2 approach of paying down the smallest balances first, rather than ordering the debts by interest rate, is not the most efficient way to pay down debt. It can be psychologically motivating, but unless ordering your debts from smallest to largest also happens to order the interest rates from highest to lowest, it will end up costing more money to pay off the debt.

It's up to everyone to make up their own mind what will work for them, but the fact that Ramsey doesn't mention this choice in Baby Step 2 has always irked me, since that means that he's making the choice for the debtor. He talks a lot about how "it's more motivating" to pay off smaller debts, but 'motivation' is a personal thing, and he's not giving people enough information to make their own choice about what motivates them.

If, along with posting your spending analysis (per YewGuise's post), you would post your debts, interest rates, minimum monthly payments, and the income you have to pay the debts down, your paydown strategy can also be analyzed, and you will understand how much each way will cost you, and make your own choice.

AJ
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...along with posting your spending analysis (per YewGuise's post), ... post your debts, interest rates, minimum monthly payments, and the income you have to pay the debts down...

I think we're moving toward "please just give us the whole picture." If you were to visit a good financial planner, the first thing they'd do is ask: What are your
1. Goals (short term and long term)
2. Cash flow (money in, money out)
3. Assets and liabilities (house, car,...; mortgage, cc debt)

I apologize for jumping to step 2. I see, from the LBYM board, that you have at least 2 children, one successfully launched and the other a H.S. senior faced with a college decision. Looks like your immediate goal is to point your H.S. senior toward a college that will maximize his chances of long term success.
But yeah, the Goals part of the picture is critical, and drives the whole process. (For example, why do you want to pay off cc debt? "Just because" is not as motivating as "So I can retire at 66 instead of 72" or "So I can stay in my own home and not have to move into my grown children's basement.")
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Wow! There are already some great replies here and they are much appreciated! I think you have a good idea re tracking expenses. This may take some time, but I am looking for ANY ways to free up extra cash to use as ammo.

AJ-We have continued to use credit cards for gasoline and for online purchases. That's it. I will no longer use the card at the pump and will go with cash instead. This won't curb the expense as it is a 'necessity' purchase, but it will make the use of a card more rare. We aren't the "shopping spree" type but we do buy online as a way of keeping expenses low. For example, I do our car maintenance and repairs. Most of the parts, filters, etc are bought online for less money. I use a CC for these purchases because I feel it is safer than a debit card. Would it be wise not to do this? I do see the value in keeping any CC purchase to a minimum to shorten the payoff.

You made a good point about the baby steps order of pay down, but I think mine happens to be in line with Dave's plan for the time being.

Here are the card stats and order I plan to pay them:

#1 $1283.76 at 17.44%

#2 $5630.63 at 17.49%

#3 $11336.57 at 13.99%

#4 $17697.63 at 13.99%

#5 $14838.00 at 0% temporarily

Monthly CC payments have averaged $1420 for the past 12 months. I expect to be able to add more cash to that number in 2019.

Thanks for the great advice so far!
Walstib
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...bought online for less money. I use a CC for these purchases because I feel it is safer than a debit card.

You are right, cc's are a lot safer than debit cards. "Online" covers a lot of ground, and the examples you gave (car parts for DIY required* maintenance) sound fine to me, but we'll discuss again after seeing your whole list of debts, expenses, income, etc.

* My husband is a car enthusiast, and buys parts for enhancement that aren't strictly required, but we can drill down into all that later if "car parts" turns out to be a suspiciously large part of your spending.
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Yew wrote: (For example, why do you want to pay off cc debt? "Just because" is not as motivating as "So I can retire at 66 instead of 72"...

Fair enough. CC debt has been an enormous source of stress in our day to day lives for years. We live pretty much paycheck to paycheck and paying for anything is stressful. I NEED to slay this. It is a "want" but it is also a "need."

Yew wrote: I think we're moving toward "please just give us the whole picture." If you were to visit a good financial planner, the first thing they'd do is ask: What are your
1. Goals (short term and long term)
2. Cash flow (money in, money out)
3. Assets and liabilities (house, car,...; mortgage, cc debt)

I touched on the in/out a little in my last post. The bigger picture is that we held on and revolved debt for years while raising kids on a low income. We made stupid big decisions but kept every day food/household expenditures at rice-and-beans levels. We are finally at a point where I can take my head out of the sand and have a look around to see what can be done. Income has increased modestly and big ticket expenses are lessening. Kids were a huge expense with a lot of unpredictability. Some are out and paying their own way now. I'm looking around and see cars that we no longer need, which will lessen insurance/maintenance outlays etc. I see possibilities and hope that we simply didn't have before, despite playing the best defense that we could at the time. Looking back, there is no amount of "you need to spend less" advice that could have changed where we were. We played awesome defense. It didn't/couldn't change our situation at the time, but it kept us out of bankruptcy and DID help in the long term. (The long term being now.) I agree that we need to continue to spend like paupers if we are to come out of this.

I feel stupid for laying this all out here, but in a way it is cathartic. Depressing; but motivating.

Walstib
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Most of the parts, filters, etc are bought online for less money. I use a CC for these purchases because I feel it is safer than a debit card. Would it be wise not to do this?

I would agree that using credit cards is safer than using debit cards. That said, if you're carrying a balance on the card that you are using to 'save money' by purchasing online, you probably aren't saving as much as you think, since that 13.99% - 17.44% in interest starts accruing against your purchase the minute it hits your balance. So, until you can free up a credit card that you will pay off in full every month, it's probably better to purchase locally with cash.

That said, with one card that has only a $1284 balance, it shouldn't take long to pay that one off. When you have paid it, and the residual interest off, so that you have a $0 balance, then you could start using that card for purchases that you already have money in the bank for (and have planned for in your spending), so that you can pay the card off in full every month and never be charged interest on that card again.

#5 $14838.00 at 0% temporarily

When does the 0% expire and what rate does it go to? If it's at or below your other 'low' cards at 13.99% then that's probably a good order. If it's going to go up to the 17.44% or above, then you might want to move it up in the order.

Also, you need to be careful when accepting balance transfer (BT) offers to ensure that they really will save you money. Many cards charge a BT fee (pre-paid interest) of 3% - 5% on the entire balance up front, which adds to your debt. Pre-paying this interest up front can save money, but it needs to be analyzed to ensure that it will. If you have another BT offer that you want to look at in the future, bring the terms here before you make the transfer, and we can help you figure out if it will save you money.

AJ
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Good points AJ. I might take it a step further. Even the stuff that goes on a CC that gets paid in full each month is costing us interest. The roll of toilet paper in my bathroom is at the expense of a 17.49% interest rate even though, nay--BECAUSE I paid cash for it. That cash could have gone to the debt and I would be paying 17.49% on that much less. In a way, everything I own is costing me 17.49%. <Mad> I'm scrutinizing all "things" and re-evaluating whether it is a "need" or a "sell." Some things were once a need but they have converted and this will help my situation!
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Even the stuff that goes on a CC that gets paid in full each month is costing us interest. The roll of toilet paper in my bathroom is at the expense of a 17.49% interest rate even though, nay--BECAUSE I paid cash for it. That cash could have gone to the debt and I would be paying 17.49% on that much less. In a way, everything I own is costing me 17.49%.

Great point!

You sound like you are on the right track!

AJ
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I'm scrutinizing all "things" and re-evaluating whether it is a "need" or a "sell."

Don't sell the Toilet Paper. It's going to come in handy eventually.

Fuskie
Who gets his TP from Costco but goes with the cheaper Kirkland brand...

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Welcome, Walstib! The folks who have already answered you are some of the best around (there are several more who will likely show up when it's not weekend anymore). They can punch your numbers into shape faster than I will ever be able to.

So I usually focus in other areas. In your case, my questions are family and motivation related. Family first: Where will there be cooperation and support from family, and where will there be resistance? Have you gone through all of these issues with your spouse in detail? Even if your spouse is "not the numbers type," it's important that you both see the numbers regularly and talk about plans for dealing with them.

Also, kids. Are the kids aware of the situation? Not necessarily in as much detail as your spouse, but in enough detail that they will understand choices related to purchasing, or not, things that they may consider extremely important? Since your kids are older, including them in the discussions is a great way to help them launch their own lives. As they see you digging out of the hole, they will learn tips and tricks that will help them avoid these things, or at the very least know how to get out if they do get in.

Now, let's talk consistency. $50k+ is a lot of money, but not as much as several people here have dealt with. I started out with more than $300k of debt, none of it associated with credit cards. (Mortgage, debts to various people who loaned me money in difficult times.) It took a LONG time to pay it off. The laser-focus thing is great, yes....

And it's even better when it becomes a completely automatic part of your life. It takes a lot of time to get to that point, but it's important because once saving is automatic, it compounds incredibly well.

Starting to get to automatic means building consistency. First doing the right things more often than not, then doing them 3/4 of the time, then 85% of the time, then 93%, then 97%, then 99%. (Most people don't need to get to 100%.) So what can you do to build consistency?

First, decide to post here Every Single Day. Might seem like a lot, and it is. But it's one measly post. You can talk about anything related to decreasing debt or increasing income. Choosing to make rather than buy your morning coffee. Choosing to sell one of those cars. Choosing to start making potholders as a second income. Whatever. The point is to keep this stuff in the front of your head and build a habit of looking for improvements. Maybe start with two weeks of one post a day. There are more things I can think of, but overwhelming newcomers is something that we do all too easily on this board.

I'll be here reading!
ThyPeace, looking forward to finding out what you're thinking about.
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To add to what has been said here already:

Make sure your spouse is on the same page.

Review any recurring monthly costs, such as cable, phones, internet, etc. Check rates, and make the call at least to you current provider asking about lower cost alternatives. Consider dropping those you can.

Make sure your spouse is on the same page.

Big ticket items that depreciate ought to be on the quick to sell list, unless there is strong seasonality in sale price (you may not want to sell a jet ski now :).

If you go "Gazelle intense" with a side hustle, make sure its not costing you money. There are lots of Uber drivers that don't account for the wear and tear on their vehicles and loose out particularly at tax time.

Check/recheck tax returns - have you been claiming appropriate deductions/credits? Are you or your spouse withholding too much, leading to large refunds at tax time. You want that money available now. And to the extent allowed by tax law, you want as low of income as possible for use on the FAFSA.

Make sure your spouse is on the same page.
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Hi Walstib,

Some very good advice so far
As a former fellow member of massive CC debt. I would like to share a few thoughts and recommendations that helped me and DW (Dear Wife) get control and quickly slay our near 35K CC debt and much more other debt. It takes a while to work through getting a Budget completely accurate and to a point where it’s showing you and DH the whole picture. I ended up using a rather simple spreadsheet with weekly rows and columns. I get paid biweekly so it made it easier to see each of the monthly bills that way.
The point that I want to make though is that what is so very important is that the Budget is not a torture device its purpose at first is just to balance you spending the goal that you want to strive for is that once you have the month balanced each paycheck you get is paying something to your target debt Card#1 in your case and rewarding you with a larger snowball.

My Recommendation: have a file folder for each Card 1 through 5 on the outside write the balance and minimums. On Card1 same thing but write also for each paycheck you how much more you paid Highlight it every month. That is your focus the rest of your debt until Card1 is paid off is on auto pilot. But, again your focus is on building the Debt Snowball . Luckily we cannot think of 2 things at once. Don’t waste any time on beating yourself up, you and DH are training yourselves to control you income to work for you now. No longer is it just going out to get Stuff… Its got a purpose to work for you. Making a good budget that works and last it really has to give you positive progress each paycheck has purpose. Yes find all the leaks you can cut hear and cut there but everything is focus on Card1. When you are done with Card1 Post on this board how big your new snowball is now.
I cannot emphasis that enough – I don’t see 50K debt, I see Card1… Focus…Kill … Kill .. Kill Grab a cooky a few Rec’s on your progress post for killing Card1 and march on to Card2.
Good luck to you Walstib

Roy
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Cooky... Ok 4 am in the morning...

Cooky is the person who makes the Cookie feel free to grap either just payoff card1

lol
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It is a new day. Thypeace said to post every day, so here are a few thoughts.
"Make sure your spouse is on board" is now in progress. I AM that spouse that needed to get in the ring.

Budget. Ugh. That will be a work in progress. I am going to put a 90 day goal on the written budget. In the shorter term, we are looking at pay periods and expenses and due dates and such and understanding the framework and the likelihood of success next month. One step at a time.

Consistency. I am hearing and understanding how important this will be. It is the key to progress.

Here is what I can do today:
Cash in old savings bonds. I have four $50 savings bonds that are decades old that were given to me as awards/thank yous. Yesterday I looked up the values and found that they have fully matured and will no longer earn interest. It is time! These are small, but they represent $530 that can attack the debt TODAY. I will raid my venmo account that has a few hundred in it from my side hustle this month. Combined, and in addition to the normal payment this will pay off CC#1 to zero. That is by far the smallest balance, but a reward is a reward and that is important at this point. Consistency may be the key to progress, but I also think that seeing progress will be the key to (wanting) consistency. Those two will feed off of each other, I suspect.

Thanks for the encouragement. I am feeding off of it and learning from your experience.
Walstib
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I haven't red the whole thread, but know you received good advice.

On cashing in the savings bonds, don't forget that the interest received on those will be taxable income when you file your 2019 taxes in 2020. Granted, it won't be a lot, but it's something to keep in mind.

Rose, Tax Consultant. Who should check her old bonds to see what they are worth.
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Rose:"On cashing in the savings bonds, don't forget that the interest received on those will be taxable income when you file your 2019 taxes in 2020."

Thanks. I hadn't thought of that, but it is all the more reason to cash them now...in January!
Walstib
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I am going to put a 90 day goal on the written budget. In the shorter term, we are looking at pay periods and expenses and due dates and such and understanding the framework and the likelihood of success next month. One step at a time.

One budget caveat - it can be the less regular expenses that can do in a budget. Things like car maintenance and birthdays. And while it can be tempting to defer maintenance of many kinds - car, house, human, it can end up costing more in the long run.
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That is an awesome first day's post! Good for you for taking up the challenge! One day, one post, and one Credit Card paydown FOUND. That is huge! Let us know when you send in the payment and bring it to zero -- we have things called "happy dances" for those. You get to dance, we all get to cheer. (You can dance virtually, of course, rather than doing embarassing things in public.)

Can't wait to hear what tomorrow brings!

ThyPeace, notes that these early wins are -very- important. Celebrate them!
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Good deal

Another suggestion for a different day - give a call to each of the credit card companies, asking to see if they have a lower rate. They may offer a balance transfer - I wouldn't bite on any of those yet - you are just checking to see what they can do to lower your rate now. And if they can't do anything, suggest you are going to be looking to move their balance to a lower rate card. Be polite, the customer service rep is just doing their job, and whatever they can see on the screen is what they can do. This first time might be a bust. But as you pay down your debts, your credit utilization will improve, and your credit score will get better. So if you get no luck this go around, give it another try in about 6 weeks. Wash, rinse, repeat. You probably won't have luck on the 13% rate cards, but might on the 17+% cards.

If you are able to make steady progress on the cards over 3 to 4 months (in terms of net pay down, and maybe getting an interest rate dropped), then I'd try to find a balance transfer offer on attractive terms.

A note about the cards - Dave Ramsey hates them - many of the folks here use them for some flexibility, but we strive to get them paid off that month or very quickly. Canceling a card after you have paid it off will increase the percent of available credit used, and will negatively impact your credit score. Keeping it open, but not used likely gets you the best score. By all means get most of the cards frozen in ice or otherwise unavailable, but save the scissors until after your have 3/4 of this debt paid off and have built up a more substantial emergency fund.
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If you are able to make steady progress on the cards over 3 to 4 months (in terms of net pay down, and maybe getting an interest rate dropped), then I'd try to find a balance transfer offer on attractive terms.

The 'attractive terms' are the key, and need to be analyzed in terms of when the debt would otherwise be expected to be paid down. In some cases, BT fees actually cost more money than the interest paid would have cost.

AJ
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If you are able to make steady progress on the cards over 3 to 4 months (in terms of net pay down, and maybe getting an interest rate dropped), then I'd try to find a balance transfer offer on attractive terms.

One other thing about 'attractive terms' - some BTs require higher minimum payments - so that needs to be figured in on the debt pay down. It doesn't do a lot of good to transfer to a 0% rate if the minimum required payment eats up the 'extra' money that was supposed to be put toward high rate debt. So, it's critical to understand the full terms and conditions of any BT offer before you can make the decision that the terms are 'attractive'.

AJ
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Walstib wrote: Budget. Ugh. That will be a work in progress.

I was in my thirties when I realized that my spending was outstripping my income. Not by a lot, but by enough that I was digging a hole rather than piling up a hill. At the time, Andrew Tobias had just published his "MYM" (Managing Your Money) book...and it was a slender volume. I read it and I laughed as he explained how easy all of this was. It WAS easy, once I committed to it. It was even fun. I began to keep track of everything I spent...everything down to a 25 cent candy bar. I kept track of checking (easy because of the register), credit cards (easy because of the bills) and cash (not so easy because it spent, but getting receipts helped me put it back together)

After a month or so I began to see some of the leaks in my financial boat and I plugged them. Impulse purchases began to dwindle. Even purchases that I was pretty sure I needed were put on hold for a time to see if I really needed them. I found that I was paying for redundant services so I took a look at memberships and other payment plans that had grown like barnacles on my monthly expenses.

When MYM became available as a computer program, I bought it immediately and happily set up my categories and accounts. Then, at the push of a button, I could see where things were month to month and year to year. Somewhere in there I realized that I was in control.

Many years later I found Motley Fool and I found that many others had gone through the same process to gain control, but they had maybe taken different paths. It was (and still is) fascinating.

So, my two cents is: figure out where the money comes in and where it goes out, either with paper and pencil or with one of the many money management programs for sale and for free on the web AND make use of the great advice and personal stories of success that you find here at Motley Fool. If you aspire to control of your finances it can be inspirational to hear from others how they got control. I think you will find in most cases that it was a bit of a long slog but well worth it.

skorthos
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Todays update:

First, I truly appreciate the posts here and every 2 cents has an impact! :)

Budget: Nope. I'm resisting. Not gonna do it. Not now. That will be fun one day when I am in a better place and a budget can offer hope. Right now, a budget can only offer hopelessness and that is a motivation killer for me. (in my opinion/my world). I won't let that happen and I won't let any kind of formal budget absorb my energy right now. I am at a "victories are important" stage and avoiding depression is certainly important too! I have been writing down every expenditure for now...small steps!

I listed a (no loan) car on Craigslist. I have some experience here and can navigate those waters. There is a chance that the sale could pay off card #2 and get my highest rate down to 13.99%, but I don't want to get ahead of myself. Cautiously optimistic.

Other "things" are listed on Ebay, Marketplace, and CL as well. Nickle and dime stuff--actually a few hundies hopefully. Part of these are my side hustle.

Interest rates and such: Kill the 17.99 comes first. Minimums to the 13.99s. I need to find out when my 0% expires, but it isn't an issue that has risen to the top of the list. I will hopefully have two empty cards by the time that rate jumps, so a transfer may be possible...getting ahead of myself though.

My head is spinning a bit. I'm trying not to get consumed. I think I will have more long term success if I don't go completely over-the-top consumed by all of this. I realize that some of these thoughts may not be ideal, or in line with the group think. Please continue to work with me. You have all been very positive and encouraging and that is a ray of sunshine in a world where it is easy to beat myself up. Again, I really appreciate it!

Walstib
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I listed a (no loan) car on Craigslist. I have some experience here and can navigate those waters.

I've also bought and sold cars on CL, it's great for that. If there's a CarMax near you, I'd suggest also getting a price from them. I have friends and relatives who didn't have time for CL (couldn't be home to meet prospective buyers) who had very good luck with CarMax.

Budget: Nope. I'm resisting. Not gonna do it. Not now.

LOL, yep, your aversion came through loud and clear earlier ("Ugh...90 days..."). Well, you have to do you, and since you're making progress, that's great. Doesn't have to be perfect.

I have to confess, though, that's it's a little frustrating for some of us other posters, because we love nothing better than to say "Stop spending money on cigarettes, alcohol, soda, desserts, vacations, books, movies, clothes, gifts,... until you're out of debt!" and, not knowing what you're spending on, we can't say any of that. :)
Given you've already done the "rice-and-beans" and "awesome defense," though, you're probably on top of all that anyway.

Note: there's a big difference between "spending history" (what you did in the past, and is just a matter of a couple of days with a pencil and paper) and "spending plan" (what you plan for the future - this takes longer as it requires prioritizing and scheduling; not to mention that it's also called a budget, a word that frankly freaks out a lot of people).
When your income-producing activities plateau, you'll have enough time and optimism to take a crack at the former. The latter can wait. Well, it'll have to (you can't create a spending plan without a spending history).
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Interest rates and such: Kill the 17.49 (fixed that for you, at least according to your list upthread) comes first. Minimums to the 13.99s.

To get an empty card that you can use for any/all online purchasing (as previously discussed), that you will faithfully pay off completely each and every single month (thus avoiding all interest charges, so it doesn't matter what the rate is), I would suggest killing the 17.44% card first, since the balance is only $1284, and it appears that you will be able to generate enough cash from selling things and cashing in your savings bonds to pay that one off completely.

Note: When you pay off any card, you should estimate how much interest will accrue by the time the payment posts, and add a little more than that amount to the payoff. That way, you should end up with a slight credit balance, which will keep additional interest from accruing. If you don't feel comfortable estimating the interest, use the prior month's interest amount. If you haven't charged anything additional on the card, that should provide an upper limit on the interest that has accrued.

I need to find out when my 0% expires, but it isn't an issue that has risen to the top of the list.

I would strongly suggest figuring out both when the 0% expires and what rate the card will increase to before making more than minimum payments to the 13.99% cards. 13.99% is still a rate that you want to avoid, but if your 0% rate is going to go up to 18% or 20% in a few months, and you don't have a solid plan* for paying the 0% balance off before expiration, you may need to make that one your priority.

*Hoping for a balance transfer offer is not a solid plan.

I will hopefully have two empty cards by the time that rate jumps, so a transfer may be possible...getting ahead of myself though.

Keep in mind - if you plan on using one of the cards for online purchases, you will only have one card available to do a balance transfer to.

Also, be sure that before you do a BT, you:
- analyze any upfront fees vs. interest that you would pay on the current balance during the time the offer extends
- understand what the minimum payment will be on the transferred balance, and ensure that you will be able to fit those payments into your monthly amount devoted to credit card payments
- have a $0 balance and no accrued interest remaining on the card you are transferring to before you do the transfer

AJ
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Yay! Great job, walstib! You posted for a second day, and you have more ideas for what you can do. That's ALL YOU NEED RIGHT NOW. I realize that you are getting a million good suggestions, and you can take all of them.... sometime. For now, though, you had several good ideas in your post. Keep thinking, keep taking little tiny steps. You're right that small wins are important right now.

Which does not, of course, let you off the hook on budgeting. Just that that's not what you need to do right this minute. You'll get there as you work through things. Instead, I will ask one other question: Do you have a small amount of money -- $1,000 or so, maybe -- put away in case of really dire emergencies? If not, please do think about that. And also, give your spouse a hug. If you're the one who needed to get on board, she has been living with a lot of stress.

ThyPeace, delighted that you're still at it. Keep going!
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"*Hoping for a balance transfer offer is not a solid plan."

<sigh.....>

You are absolutely correct and your post has a lot of good info. You may be underestimating the level at which I am backed into a corner I do need to "hope" for a BT that improves my situation once the 0% rate jumps. I'm not holding my breath, just hoping. It is very likely I will have to shuffle that card to the top when some usuary rate kicks in. That is the real plan. That is the reality. I'm trying to think positive. Hopelessness is paralyzing.

"Do you have a small amount of money -- $1,000 or so, maybe put away in case of really dire emergencies?"

I'm new here Thypeace. I've been taking a better look around and I'm starting to realize that there are a a lot of very rich people on this site. I'm seeing high incomes, millionaires, and for the most part people for whom money is no object. They also seem to have very good habits, work ethic, history, decision making, intelligence, etc so I'm not saying they came by anything easily. I'm only pointing out that...there seems to be a certain amount of "out of touch" with the reality of someone as strapped as me. You, et al, have been super helpful and kind and I get the sense that you all genuinely care. Respectfully, I'll point out that $1000 is a very VERY large amount of money to me and my family. I need to stick around and submerge myself in this great group and learn everything I can even though I don't really fit in.

All, I don't wish to resist, push back, or ignore things like "you need a budget" and emergency funds and such. I DO need to somehow carve out some breathing room first. A budget sounds awesome, but those are for people who have more money than month. When I read things like "don't forget, your roof or furnace won't last forever and that isn't an emergency-- you need to plan for that in your budget" I realize that a budget can only point out failure/futility. I need hope and I have to deal with reality currently. I'm trying. This debt is my emergency right now.

Positivity: We have health insurance. I have contributed to a retirement fund for many years. It isn't a ton of money, but it has trickled for a while. We aren't hungry and we have a roof. Yesterday we ate black eyed peas made from dry stock and it was/is delicious. Poor folk solace.

I am very grateful for the advice I am receiving!
Walstib
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I sorely hope that last post doesn't push people away.
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...black eyed peas ...solace...

Also, per Southern tradition, good luck for the New Year! Add something green (typically kale) and the good luck will include prosperity. :)

Positivity: We have health insurance. I have contributed to a retirement fund for many years... We aren't hungry and we have a roof.

and: you're healthy. A list of assets is typically comprised of property and money, but in fact your greatest financial asset is the ability to work and generate income.
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You may be underestimating the level at which I am backed into a corner I do need to "hope" for a BT that improves my situation once the 0% rate jumps. I'm not holding my breath, just hoping. It is very likely I will have to shuffle that card to the top when some usuary rate kicks in.

Okay, but you still need to find out what that 'usury' rate will be. You may be surprised - it may be 13.99, like the other cards that you have balances on. But not knowing and waiting until the rate actually hits is hiding your head in the sand. And when you are trying to get your family out of the hole that y'all have dug yourselves into, you need to see what's coming up as well as you can. So, do this today: Call the number on the back of the card with the 0% rate and ask them when the 0% rate will expire, and what the rate will increase to. Then ask them if they have a lower rate available for you now, and if not, what you would have to do to get a lower rate. And then (as already suggested) you should call each of your other cards, and ask them for a lower rate, and if they don't give you one, ask them what you have to do get a lower rate. And then put a plan together to take those actions to get lower rates.

I've been taking a better look around and I'm starting to realize that there are a a lot of very rich people on this site. I'm seeing high incomes, millionaires, and for the most part people for whom money is no object.

You will also notice that a lot of those people have been Fools for a long time - 10, 15, 20 years or more. They didn't necessarily start out that way. A lot of them had debt that was as large as yours, if not larger, and a lot of them probably had less income than you do now. And even though it may appear to you that 'money is no object' to them, that's incorrect. They got to be that way because they do value money, and they spend it frugally, even if they are millionaires and have high incomes.

Respectfully, I'll point out that $1000 is a very VERY large amount of money to me and my family.

Well, I'll just point out that it's less than 2% of your current debt level. You don't have to tell us, but think about what % of your family's total annual income it is. And if you sell the stuff you have for sale for the 'hundies' you've indicated and the car for almost enough to pay off the 17.49% card, it's maybe, what - 16% - 18% of that total? So putting it in perspective, it may seem like a HUGE amount to you, peering up from the bottom of the hole you are in, but when you look at the big picture, is it really that large?

When you manage to sell all that stuff, I would strongly encourage you to take $1000 of the money and put it away in a savings account, only to be touched in a dire emergency - one that you would walk across the street naked in a snowstorm to get to the bank where the savings account is located to get the money. That will help you learn the skill of 'letting money sit' as well as prevent you from having to put something like deductibles from a car accident onto a credit card, increasing both the debt and the interest it's costing you.

All, I don't wish to resist, push back, or ignore things like "you need a budget" and emergency funds and such. I DO need to somehow carve out some breathing room first. A budget sounds awesome, but those are for people who have more money than month.

I would say that spending plans are actually the most critical for those who have more month than money. If they don't plan every penny that they spend, they end up without money and lots of month left to go. And planning your spending will help you carve out that breathing room, as will putting $1000 away in a savings account.

When I read things like "don't forget, your roof or furnace won't last forever and that isn't an emergency-- you need to plan for that in your budget" I realize that a budget can only point out failure/futility.

No, a spending plan helps you not have to scramble to come up with money to fill up the tank this week. If you don't have money put away to fill up the tank because you paid it all to the credit cards, then you end up having to put the gas back onto the credit card - what's the point of that?

I need hope and I have to deal with reality currently. I'm trying. This debt is my emergency right now.

And the problem is, if you deal with the debt as 'my emergency right now' - you are likely to put yourself in a position where you will end up having to put something unexpected onto a credit card, which will push your debt in the wrong direction. And what will that do to your motivation?

The debt is not really the emergency - it took you, what - 10, 20, 30 years to get into this much debt? It's going to take you a while to get out, too. So, the debt is really just a long trip to a destination that you can only get to one step at a time - not an emergency. And you need to guard against emergencies from re-routing you away from the destination.

AJ
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AJ- First thank you very much! Second, I want to argue a little, but I feel like I might eventually, one day, say you were right.

Some of that post isn't smart right now, but I was smarter than my parents when I was twelve.

An emergency fund actually sounded like a good idea to me a while back, but the more my eyes open up the less I see the sense in it right now, unless someone wants to pay me > 17% on that money. It seems like a Dave Ramsey psychological win thing that isn't really financially the best. I would think that most savvy people would say that it isn't the best idea just like getting a large tax refund isn't the best idea.

New guys. Sheesh! ;)
Walstib
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An emergency fund actually sounded like a good idea to me a while back, but the more my eyes open up the less I see the sense in it right now, unless someone wants to pay me > 17% on that money. It seems like a Dave Ramsey psychological win thing that isn't really financially the best. I would think that most savvy people would say that it isn't the best idea just like getting a large tax refund isn't the best idea.

The emergency fund is certainly not the most efficient way from a cost perspective. Putting the $1000 onto a credit card will save you $175 each full year you have a card charging you 17.49% (If you manage to get the 17% cards paid off quickly, then it drops to saving you $140 a year.)

That said, there is value in learning how to 'let money sit' and there is the 'sleep at night' factor. Those may or may not be worth $140 a year to you at this point in time - only you and your family can decide that.

AJ
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An emergency fund actually sounded like a good idea to me a while back, but the more my eyes open up the less I see the sense in it right now, unless someone wants to pay me > 17% on that money.

I get it. I was where you were in the past.

For a while, I was throwing every spare dollar I had to high-interest credit cards, pleased that I was saving money. Then my car would get a flat tire, or the washing machine would stop working. And since I had no money set aside for these freak occurrences, I would have no recourse but to whip out the credit card to pay for them. Definitely a three-steps-forward, two-steps-back thing.

I've had other people argue with me about this, but here's what works for me. Any extra money I can find, I don't immediately send to a credit card. I set it aside in a savings account until the balance of the account equals the balance of a credit card. Then, if nothing seems to be on the verge of breaking, I pay off the credit card with one giant payment.

Then I repeat the cycle. Set aside spare monies into a savings account, plus the minimum payment that I had been paying the first credit card, and continue.

Again, people will shriek that this isn't the least-expensive way to pay off debt--and it isn't--but it works for me. Last year I had unexpected expenses of several thousand dollars. Ten years ago I would have had no choice but to put them on credit. But I had the money in the bank. I was hoping to pay off a loan with it, but instead I prevented myself from getting deeper in debt.

I also stopped worrying about flat tires.
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Walstib…. You do fit in…more than you know… This was me and DH when we came to TMF
Consumer Debt: $44,953
Credit Card $33,795
Depart Store $4010
Orthodontics $1170
Personal Loans $5978
Secure Debt:
Auto Loan $13,560
HELOC $29,644
Parent (Student) Loan $25,300
Mortgage $149,304
Total Debt: $262,761 with Combined Net worth of -$15,860

43 years old DW 45 and we had just been denied Student loan for our oldest Son and our credit report took a hit so my Credit cards were going to start raising rates… I am not so removed from that time to not remember the fear and hopelessness …
You do fit in… The people here are awesome … They can help you work through small steps at a time.

Goal one might be to find the point where the month balances…Maybe not a budget but if you can get to where total CC debt is less then this month…… that is one step closer to freedom… Please don’t get discouraged….. Once the month balances the start building an emergency fund that will help making the next months goal of lowering the debt just a little bit better…step by step

YOU DO FIT IN

Roy
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When my DW and I did Dave Ramsey, we had roughly $25,000 in credit card debt, $30,000 in student loans, and about $95,000 on a mortgage. At that time, our yearly take home was in the neighborhood of $49,000/year

A few words of encouragement -

You are running a marathon, and we are excited to see you and encouraging you to sprint. Set your own pace.

When you sell the car, once its no longer titled to you, cancel any insurance you have on it.


I would encourage you to do the following:
Figure out what your typical monthly net income is - don't count anything that isn't reliable, but if a side hustle is reliable count it.

Look into what your 4 walls cost each month. It doesn't have to be exact, but if you know what shelter, food, power/heat and the other necessities cost.

Add the cost of the minimum payments on your credit cards and other debt together with your 4 walls spending.

If your monthly net income is greater than your debt + 4 walls spending there is something to work with. If 4 walls + debt costs more than your net income, as Dave says, you might just have to tell some of the debt holders "No, I'm not paying you this month".
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Hey there, Walstib! Glad you're still here and still thinking. Sorry to freak you out with the thought of $1,000 set aside. You've gotten excellent advice from folks here about how to think about that, so I won't rehash it. Instead, I will reinforce the idea of thinking about things every single day.

I really liked the last poster's idea of figuring out whether you can stay afloat -- income greater than bare minimum living -- or not. It's an important calculation, even if you just rough it out. Also, the panic you are now feeling is a completely normal part of this process. That doesn't make it feel any better! It just means that you are waking up to the situation you are in. Please try to consider that to be a good thing. You cannot change what you're not conscious of. I don't know what it took to wake you up, but I'm glad you did.

I'm tempted to suggest a few more things for you to think about, but recognize that maybe there's been enough for one day. Instead, I'll just ask: Did you send the payment to the Credit Card company yet? Looking forward to the Happy Dance moment!

ThyPeace, and small wins are good, so also looking forward to tomorrow's thoughts on the situation.
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An emergency fund actually sounded like a good idea to me a while back, but the more my eyes open up the less I see the sense in it right now, unless someone wants to pay me > 17% on that money. It seems like a Dave Ramsey psychological win thing that isn't really financially the best. I would think that most savvy people would say that it isn't the best idea just like getting a large tax refund isn't the best idea.

There are many layers to this onion. Let me describe another one from a different perspective to see if that helps seeing where I believe we're coming from.

Pause reality for a moment, and do a mental exercise. Ready? Skip ahead 5 years and look around. You're out of debt, your spending is under control, you have an emergency fund started, and the future is looking very bright. You look back and reflect the path that you've been on the last 5 years. After slaying a $50,000 dragon, the $1,000 emergency fund almost sounds piddly. That's the perspective that most people here are presently at, but don't think for a second we don't remember being in a situation very similar to yours.

My personal mountain was $53k, a combination of my CC debt and my new bride's student loan debt 13 years ago. The struggles you feel right now are real. Period. But, we are asking you to consider another possibility: when at the bottom and looking up, there is a possibility the view might be slightly distorted.

I believe most of us reflect up on that time that you are in now fondly because things were simple because there was only one focus: slay the debt monster. It's a goal that's very worthy, and actually fun once you've slayed it. We remember those days and are excited when somebody starts on that path. We're all behind you and rooting for you!

There's a lot of wisdom here, but there are also a lot of different personality types. You seem to know yourself well and what will work for you and what won't. My advice would be to take what's useful and throw away the rest (for now). That being said, I, too, am a proponent that a "spending plan" (not a budget) is a good idea. When there's too much month at the end of the money, you need to be purposeful and strategic where that money goes. Now more than ever!

I agree that it is overwhelming right now because it is a lot of work and it will fail the first month or two as you begin to realize your true expenses, but at the end of a very short period of time (3 months or so), you will have a very good handle on where the money is going. More importantly, you will be in control and decide which areas to decrease spending will have minimal impact on your life. Don't think of a spending plan as a restrictive tool that tells you "here's all you have, you're a loser for not having enough." Think of it in offensive terms: "here's what I have, where can I pack the most punch?!?!??!!?!" It's a game of whack-a-mole at first until the moles stop coming up and you're whacking them all at the same time.

My $0.02. Good luck!

-Agg97
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That is a really SUPER post, Agg! I'm sort of overwhelmed by the quality of the content in all of the posts here. I simply can't respond to each because of my 9-5, side hustle, day-to-day, and this whole mess, but please know that I am trying to digest and take them to heart. I am grateful for the contributions here!

Brief news:
We are doing something in the name of killing debt daily. All of our interest rates crept up this week. It is good to see the credit cards are jumping on board and strengthening our resolve. I looked over the past couple years of statements and the rate has gone up around 0.25% every 2-4 months. Uncool. The 0% remains at zero and I found out it will remain at 0% until August.

I haven't cashed in the savings bonds yet, only because I haven't made it to a brick-and-mortar during open hours. I'll beat the next billing cycle for sure and we're still on track to blast the one balance.

E fund and car sale are a bit complicated at the moment- it will work out and in time I'll have an e-fund number of $750. I'm still not crazy about the idea, but I'll do what I'm told. After all, "I heard it on the internet, lol! :)

One foot in front of the other for now. I feel like we are coming to good decisions and I'm getting really good advice here. Thank you all for welcoming me and for helping out!

Walstib
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For example, I do our car maintenance and repairs. Most of the parts, filters, etc are bought online for less money. I use a CC for these purchases because I feel it is safer than a debit card.

1. Welcome. Sorry I'm late to the party. You've already got some good advice - and there's probably more I haven't read yet, so apologies in advance if this is duplicating something further down the thread.

2. On this item above - I get it. There are good arguments to be made both ways on the debit vs. credit card issue. I'm not going to address that. What I do want to mention is that if you are NOT paying these new purchases in full every month PLUS the interest for that month PLUS something towards the earlier balance, you are not getting ahead. That's an easy way to fool yourself into spending more than you're making.

3. If you wander around the investing areas of the site, you're going to run into people who are well-off. Some (certainly not all, but some) have a hard time understanding people who are struggling financially. I would avoid those areas for now. There's good advice about investing there, but that's not what you need at the moment. I'd stick to this board and the Living Below Your Means board, with occasional forays into the more social areas if you want.

4. Getting out of debt is hard. And it takes lots of time. I don't talk about my personal situation very much, but I've been at it since I joined the boards around 2000. I'm not out of debt yet, but I'm no longer a slave to the debt. My debt is going down now and has been consistently for a few years now.

5. You're going to get tired of the process somewhere along the way. Don't let that derail you. Don't be shy about asking for some encouragement. Every once in a while stop and look back at where you were and compare that to where you are now.

--Peter
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I looked over the past couple years of statements and the rate has gone up around 0.25% every 2-4 months. Uncool.

It's not really 'uncool' - it's the terms that your cards have, which you need to understand. Most cards are based on prime rate. Since the prime rate is currently 5.50%, the 13.99% cards are probably prime + 8.49%, the 17.44% card is probably prime + 11.94% and the 17.49% card is probably prime + 11.99%

The Fed has been increasing the 'Fed Funds rate' (the rate that banks charge each other), which, in turn, drives the prime rate (the rate that banks charge their most favored customers) up. A year ago, the prime rate was 4.5% and 2 years ago, the prime rate was 3.75%. During the financial crisis, the prime rate bottomed out at 3.25% in Dec, 2008 and didn't increase to 3.50% until Dec, 2015, so there was a long period of very low rates. Even now, we are at the low end of what used to be considered 'normal' rates, so don't expect that your credit card rates will go down any time soon, unless you are successful at asking for a lower rate. And each time the Fed announces an increase in rates, you can expect your credit card rates to increase, too.

The 0% remains at zero and I found out it will remain at 0% until August.

Have you found out what rate it will increase to? You can probably look at the terms on your card's website to find out what they are adding to the prime rate to calculate the rate, so you'll have an idea. Keep in mind that any increases in the prime rate between now and August will also increase the rate that it will jump to.

E fund and car sale are a bit complicated at the moment- it will work out and in time I'll have an e-fund number of $750. I'm still not crazy about the idea, but I'll do what I'm told. After all, "I heard it on the internet, lol! :)

Yes, this advice is, as always, worth what you paid for it. Seriously, I'm glad that you are going to have a small e-fund, and $750 should be enough to keep you from having to take backwards steps for many things.

AJ
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Good enough, Walstib. Baby steps, taken regularly, will beat every crash-and-burn sprint ever tried. Do ONE thing today, ONE thing tomorrow. You're catching on to why I said one post a day, too. Don't reply to everything. Sure, thank people, note when something really catches your attention, ask questions. But right now you don't have time to answer every single thing. Focus on the essentials of doing right now. Later you can contribute more, of course, if you want to.

So the next baby step: How and when are you going to the bank? Tomorrow's Saturday -- does your bank have Saturday hours? If not, how can you make time on Monday to get there? Thinking about it won't get you there on your own, but a fill-in-the-blank-plan could. Like this:

"I will go to [fill in bank name and location] to cash the savings bonds on [Saturday/Monday] at [insert time]. I will leave from [wherever you'll be before that] at [insert time before that required to leave, travel, park, and enter the bank]."

Yes, I know it seems silly. Please try it anyway. And when you have written it out, set an alarm on your phone for the time you need to depart to make it to the bank.

ThyPeace, baby steps are the most important steps. You got this!
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>One foot in front of the other for now. I feel like we are coming to good decisions and I'm getting really good advice here. Thank you all for welcoming me and for helping out!

Sure. Another word of advice...don't fall into "analysis paralysis". Based on what you've said, it seems like that might be a non-issue for you. But, the thoughts and behaviors you are having are all positive. Don't kick yourself for not doing "ideal" when "good enough" works for now.

Another idea to ask yourself whenever making a decision: "If this ends up being a bad idea, can it be reversed?" I applaud that you're dedicating $750 for an emergency fund. Try it for a few weeks and if you still aren't racking up more debt and proved to yourself that you're headed in the right direction and the "paying 17% on $750 is still killing me", then by all means throw the $750 towards that debt! Right now, though, it seems like the biggest crisis is to "stop digging, no matter what". The $750 e-fund is part of the "no matter what".

-Agg97
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ThyPeace, you have spoken so kindly in this thread and your posts are helpful, fun, and and informative. The "post daily" suggestion was a gem. It turned out to be a seed that has kept the helpful suggestions flowing. Thank you!

Since it is Friday night and I am broke, I stayed in and got a little more organized. I looked over statements, looked at the past 4 months trends and balances, and tallied January 2018 credit card debt.

The bad news: We have treaded water and made no progress. Our overall CC debt is almost identical to what it was 12 months ago.

The good news: We have treaded water and not gotten DEEPER in CC debt over the past 12 months. Deep breath...there is hope!

It may still take 90 days before any formal spending plan/budget comes together. Today I learned enough to know there is balance. If I earn a little more and play even better defense, the balance will go in the right direction. That is my tiny step for now. It is an important victory to me just to arrive at this place...a place where I can see that "possibility" exists!

ThyPeace, I have a little story about that Saturday trip to the bank and those savings bonds. When I dug them up, I knew they had to be cashed out. When I googled the tables and found out they are fully matured and earning no more interest I KNEW...it's time! The only reservation I had about cashing in was sort of sappy and sentimental. The oldest of the bonds dates to 1979. I was a little kid but I remember it well. I have a photo clipping from the newspaper that shows the president of the local chamber of commerce presenting the bond to me. It's in my old photo album. Also, the bond bears both mine and my mother's name..."Walstib OR (Walstib's mother's name)."

Mom has been gone 14 years now. I think this series E relic with our names is kind of cool. I actually thought about filing the paperwork to cash in a "lost" bond, then keeping the paper memento for my album. It certainly wouldn't make good money sense to hold a bond that won't earn interest, right?

Does anyone see where this is going?

I am considering a compromise on my emergency fund stance that involves holding those emergency "funds" in the form of old, matured savings bonds. This sounds good on several levels even though it may not follow the TMF playbook verbatim. These old bonds don't invoke even the slightest urge to spend. They can be converted quickly in the event of a financial emergency, but I would have to go to a bank during business hours. There would be a built in cooling off "is this REALLY an emergency" period, but yet the money would be there if the answer is "yes!"

It may not be in lock step with the algorithm here, but I think this works for me. This can always be re-visited, but here goes: For now, I'm planning to hold $250 cash plus $530.22 (ACV) worth of US savings bonds and will call it my $750(+) E-fund.

Card #1 will live on without those savings bonds finishing it off, but only for another week. Balance on it stands at $406.78. I feel a little less out of control today. Just a little. It is good.

Walstib
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Thanks Agg97. My tiny steps are sort of underwhelming, but they are steps indeed and I am a little less overwhelmed today. Thanks for the encouragement!!
Walstib
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Mom has been gone 14 years now. I think this series E relic with our names is kind of cool. I actually thought about filing the paperwork to cash in a "lost" bond, then keeping the paper memento for my album. It certainly wouldn't make good money sense to hold a bond that won't earn interest, right?

Not a bad idea. I would encourage you, at a time of your choosing, to go ahead and file the paperwork to cash in "lost" bonds and keep the paper.

As an aside, I gave my nieces and nephews who are too old for toys 1 oz silver eagle coins for Christmas this year. It may or may not be sentimental to them at some point, and if push comes to shove, its worth the current spot price of silver.
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Thank you for the kind words, Wastlib! I have always enjoyed entertaining and encouraging folks who are in the midst of adversity. I appreciate you giving me the opportunity. I think your idea to use the savings bonds as your emergency fund is reasonable, but only if you are able to convince yourself to use them in that emergency. If you reach for the credit card instead, then you will need to figure out another option.

So let's see, you said you are barely treading water. Good! That's far better than being underwater. From where you are, you can make progress, and in fact you already have. You paid off something like $800 on one of your 17% credit cards. (I know, I'm not doing precise math.) So that means that you will have $136 more this year than last year, at a minimum. Excellent! That's a start you can build on.

Now, the next question for you to think about. You have a job and a side hustle, right? Can you get any additional income from the job, or uptick on the income flowing from the side hustle? And let me do this pointedly. Can you do those things WITHOUT putting in extra time? I realize that may seem counterintuitive. But thinking about it that way will force you to think about both more income and more efficient income.

ThyPeace, also, who else in the household is contributing income these days?
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car sale ... a bit complicated...

Why?
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car sale ... a bit complicated...

Why?


The day after listing it on CL...break down. It required a tow (done) and a probable major repair (not yet diagnosed, but I'm suspecting throw out bearing and therefore clutch). An as-is sale would probably cost too much and/or waste time. I might do the repair myself if it were summer, but I don't have a garage and would be doing it in my driveway. The weather is terrible, so I'll pay. On the up side, the weather will help sell this car fairly quickly in my area...AWD Subaru.

I did a sprint in my side hustle and think I have the cash to cover the job if I Rob Peter temporarily, and pay him back with the car sale, all of which I think can happen within a couple or three weeks. I was already prepared to shoot for a quicker sale over a top dollar anyway, since those dollars in-hand earn 17%+ so to speak. I'm also looking forward to cancelling the plates and insurance when it sells. Every little bit help!

Question of the day: I'd really like my CC debt to be at a lower interest rate. Given my situation, is there a reasonably good way?

I may have to just grin through it as I slowly retire the highest rate balances first, but it would sure be helpful if the long term rate were lower. I don't want to involve my home. Balance transfers? I haven't done the math, but paying 5% for short term 0% doesn't sound prudent either since my timeline for paying the balances is long term. I'm still in a phase where I'm looking for efficient ways to make a big difference in the short term or long term. I'm looking for good/free/easy steps I can do right now that are high impact and these interest rates are a focus.


Joining/reading this board was one of those simple, high impact steps and it is already making a difference! Thank you all!

Walstib
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Given the car is paid for, and no longer needed, IMO fixing anything is throwing good money after bad. Just sell as-is, for salvage if need be.
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Per your earlier message - Don't involve your home others may differ on this, but until you have verifiably stopped digging a credit hole, for an extended period of time (like years) you should not even begin to consider a HELOC or cash out refi. No one can take your house if you stop paying a credit cards. Unsecured personal loans may be available from your bank or credit union, but should be considered only if you have stopped digging.

The simplest way is to make those calls to see which cards might lower their rates.

Regarding the balance transfers, I suggest the following:
divide the current interest rate on a card by 12 (18%/12 months = 1.5%/month). Divide the balance transfer charge by this number. For example: 5% by 1.5%/months = 3.3 months For a 0% balance transfer offer with a 5% charge, you are therefore better off with the balance transfer for any balance you expect to have more more than 3.3 months. Math is a little different if the balance transfer rate is not 0%.

The caveats, as mentioned earlier in this thread, is to make sure:
1. The minimum payments on the balance transfer are still manageable. Not all cards calculate minimum payments the same way. And they can change. Several years back, when we had our debt largely on Chase 0% balance transfers, Chase more than doubled the minimum payment. 0% or not, if you can't afford the minimum payment, its a bad deal.

2. What will the interest rate be when the balance transfer offer ends? If the rate on the card is not similar to or less than the card you are transferring from, its questionable, at best if a balance transfer is a good idea.

I'd suggest a few different things to make a little incremental progress, and suggest carefully evaluating any balance transfer attempts.

for most people, a dollar saved is equivalent to at least $1.50 earned . I know you are already doing beans and rice, rice and beans. But there may be some low hanging fruit you haven't picked yet.

A. - are any of the credit cards points or miles cards? Many times, points/miles can be converted into an account credit. If available, consider doing that. It won't serve as a payment, but can reduce your outstanding balance slightly.

B. - you have car(s) and a home. If you haven't shopped insurance costs within the last 6 months or so, get in touch with an insurance agent or 3 and see if there are good policies available to you at a lower cost than what you are paying.
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Question of the day: I'd really like my CC debt to be at a lower interest rate. Given my situation, is there a reasonably good way?

This week? Probably not. In a couple/few months of paying down your debt, probably. Once you start paying down debt, your credit score will go up and will start to get better terms and rates offered to you. Unfortunately, that requires to suck it up for a bit and just start paying it down.

Not sure if it's been pointed out yet, but on the right side of the screen, under "Announcements" is a link called "CC Snowball Calculator". It's fairly good at helping you run various scenarios, including teaser rates and such. Basically, put in your balances, interest rates, and teaser rates (all of which you've already given above). Plug it in, select which order you'd like to pay it off, plug in the amount you can dedicate to debt payoff. You can plug in a few different values, and get a feel for how big the debt actually is. Right now, it probably seems "so big I don't even want to think about it."

-Agg97
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Yew- the difference in a sales price as-is vs repaired is in the thousands. The repair will be in the hundreds. I don't want to "pay" that much for the convenience of just getting rid of a car.

A Craigslist car that isn't running/driving and "only needs a clutch" is assumed to be a parts car or a real gamble to a buyer who sort of knows cars. I would take a bath on it without the repair. Fixed, it is a pretty good Subaru with relatively low miles that I'd list reasonably for $7200 and sell for a good deal at anything over $6500, probably quickly considering the season.

There is always the possibility that someone comes along and offers me an even trade for a 10k truck that handles like crap in the snow, so that he can get to work with all wheel drive. I'm enough of a car guy to carefully consider something like that if the deal is lopsided enough to be worth the trouble. This kind of thing happens fairly frequently in my rural area and I know a couple of construction trade guys who make good, fast cash doing this on the side. I'm not recommending this to anyone, but it is reasonable hustle in my case.

Walstib
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Danbobtx, anything involving the house is a hard no. The rewards cash-in may be an option, not sure. I never really paid any attention at all to "rewards" as I always thought they were all just "spend more" gimmicks. If any reward has passively built up I'll try and cash that out though.

Agg97, you are correct on the "so big" part! Thanks for the tip on that calculator!

Walstib
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Question of the day: I'd really like my CC debt to be at a lower interest rate. Given my situation, is there a reasonably good way?

1. Call the credit card company and ask them for a lower rate.
2. Whether or not they give you a lower rate, ask them what you need to do to get a(n even) lower rate.
3. See if you can do those things without compromising the rest of your payoff plans. (For instance, if they want you to make larger payments, but that's not the card that you are snowballing yet, making the larger payments may need to wait.)
4. Call back again in 3 or 4 months and repeat.

I don't want to involve my home.

That's good. Especially since equity loans are no longer tax deductible unless the money is substantially used to improve your home.

I haven't done the math, but paying 5% for short term 0% doesn't sound prudent either since my timeline for paying the balances is long term.

You do need to do the math to see if BTs are worth it. Sometimes they are, sometimes they aren't. And part of the math needs to look at what rate it will jump to when the 0% rate expires, in addition to looking at if your minimum payments will increase.

AJ
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Happy Monday!
       last week:      now:

cc #1  $  1,283.76     406.78
cc #2  $  5,630.63   5,649.57
cc #3  $ 11,336.57  11,367.07
cc #4  $ 17,697.63  17,745.24
cc #5  $ 14,838.00  14,838.00
       -----------  ---------
total  $ 50,786.59  50,006.66

Liquid assets:
$ 530 savings bonds
$ 250 cash (from venmo acct?)
-----
$ 780 total

To do this week:
- Call cc's as aj said.
- Fix car (optional) and sell it.

Does that about sum things up?
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...I have a photo clipping from the newspaper that shows the president of the local chamber of commerce presenting the bond to me. It's in my old photo album. Also, the bond bears both mine and my mother's name..."Walstib OR (Walstib's mother's name)."
Mom has been gone 14 years now. I think this series E relic with our names is kind of cool...Does anyone see where this is going?


No. You don't need the bond to remember your mother. You have the newspaper clipping. Plus, presumably you have other things to remember her by: a photo, a teapot, or (if you really need something with her name on it) your birth certificate.

Are you a hoarder, by any chance?

What makes sense is to cash in the bonds and use that money to get the car fixed, this week, so that you don't put the repairs on a cc.

If you can't do that, sell the car as is. Every day it sits there, the expenses keep piling up (registration, insurance, cc interest).
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#1 $420.77 pay off date 2/15 line 27,000

#2 $5630.48 $137 due 2/11 17.49% line 14,000

#3 $11191.04 $248 due 2/10 14.24% line 11,500

#4 $17531.33 $387 due 2/10 14.24% line 31,400

#5 $14555.92 $145 due 2/23 0% line 16,000

Cash spent 1/21-1/27 on all categories, if I had categories : $285

E-fund: $780 cash.

There is a little progress across the board, but I'm not putting too fine of a point on comparing the numbers. It's still early in the game and I'm not real sure on where everything was in the billing cycle, what payments had been applied, and such. General progress though.

This weeks goals:

Figure out what Thypeace was alluding to.

Hold the line on spending. Sounds vague, but we are tracking with some intensity. One day this will have a number.

Pay those minimums on #2-4 with my Feb 1 check.

Pay cash for Subaru repair and re-list for sale. I think it is/will be covered by an uptick in the hustle income! This one could turn into next weeks goal, depending on how long the shop takes. I won't leave thousands on the table and sell it as-is. I wouldn't do that even if I wasn't 50G in the hole. Instead, I'll exercise a little patience and common sense and plan to pay off #2 with the proceeds. AJ485, at that point I'll call card #3 and try to lower that rate as you suggested. Bobtx (?) pointed out that they may raise the minimum payment if a lower rate is negotiated. After card #2 is retired I'll be glad to get a lower rate AND pay a higher minimum because that will be the target card at that point.

Thanks all!
Walstib
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Hi Wastlib! Glad you're thinking about how to be more efficient in your work. Think of it as reducing friction. Take out every bit of unnecessary delay, every extra movement. Get it down to the essentials.

Speaking of essentials, let's see here...

#1 $420.77 pay off date 2/15 line 27,000

#2 $5630.48 $137 due 2/11 17.49% line 14,000

#3 $11191.04 $248 due 2/10 14.24% line 11,500

#4 $17531.33 $387 due 2/10 14.24% line 31,400

#5 $14555.92 $145 due 2/23 0% line 16,000

Cash spent 1/21-1/27 on all categories, if I had categories : $285

E-fund: $780 cash.


Setting aside spending for a minute, your total debt is now $49,329.54. When you first posted here, it was $50,630.76. Congratulations! You have paid off $1,301.22!!

Seriously, that's good progress for your first week of working at this. I know people are going to hound you to deal with that car, and I agree with them. If you want to repair it before you sell it, then add that to your laser focus and git 'er done. If it's just going to sit in the driveway and cost you money, then make it disappear now rather than later. Also, remember the opportunity cost. If you spent the repair time on your side hustle, would you make more money than you will on the increased value of the car? If so, repairing the car is actually costing you money rather than saving it.

ThyPeace, wants to develop a side hustle of her own, but that's a separate story.
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Thanks ThyPeace! Thoughtful as usual!

Let me see if I should look at this car sale differently. There are a few who are gently telling me I am an idiot and that's fair. I AM the guy with the debt.

We have a $7200 car that has no loan. We want to sell the car and use the cash to pay down credit card debt. We want to do this as quickly as possible.

Clutch went out one night. Car was towed to the repair shop 16 hours later. It is a $1000 job for the shop to do it. If anyone is following the math and thinking that the $7200 car needing a $1000 repair is therefore worth $6200 as-is, that is patently incorrect. That is not how it works. The car is worth around $1500 "as-is" with no clutch. Instead of $7200, I'll use a fast sale price of $6500 for comparison. Here goes:

Option 1: Current loan ($0) + $6500 sale price - $1000 repair expense = $5500 in the black.

Option 2: Current loan ($0) + "as-is" sale price $1500 - $0 repair = $1500 in the black.

Also note, the car will sell faster at $6500 than it would for $1500.

$1500 cleared vs $5500 cleared.

Does anyone really think the extra $4000 is not worth it? Please explain. I'll keep an open mind.

The car was towed to the repair shop the very next day. I am farming out the job to get it done more quickly. I couldn't do the job in this weather if I wanted to. I am sure that work didn't start over the weekend, but that is the only "letting it sit around" that is happening. The car is IN the shop bay. To the extent that it is in my control I am in hurry-up mode.

Very realistically, the $5500 I end up with will pay off CC#2 AND lower my overall interest rate. I don't see a fast win in settling for $1500 and leaving $4000 on the table. I only bring home $2200 every 2 weeks from my regular full-time job. An extra $4000 isn't chump change to me.

If a guy who is $50 thousand in debt should blow off a fast $4000.00, then I have a LOT to learn! I am all ears though and I'll try to digest the reasoning.

Walstib
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I do think Option 1 is the better choice. (Assuming something else major doesn’t fail as soon as this problem is fixed.)
I’m just saying to use the savings bonds to help pay for it, so you can get it out of the shop sooner rather than later. With any luck, by the time the car’s ready you’ll have enough cash without the savings bonds, but if not, then use the bonds. You can’t afford to be sentimental.
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The car was towed to the repair shop the very next day. I am farming out the job to get it done more quickly. I couldn't do the job in this weather if I wanted to. I am sure that work didn't start over the weekend, but that is the only "letting it sit around" that is happening. The car is IN the shop bay. To the extent that it is in my control I am in hurry-up mode.

I would suggest letting the mechanic know you are wanting to sell the car, and asking if they know of any potential buyers. That way, maybe you won't even have to bring it back home.

AJ
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I would suggest letting the mechanic know you are wanting to sell the car, and asking if they know of any potential buyers. That way, maybe you won't even have to bring it back home.

Great idea--I can see plenty of people who, looking for a reliable used car, would mention it to their mechanic first. Or the mechanic may know he could buy it for a fair price, fix it at cost, and flip it himself, which might hit a sweet spot between selling "as is" and spending $1000 to get top dollar.

cm,
sold a Honda Accord to our mechanic when the repairs were past what we had and got a nice down payment on a new-to-us car
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I think it is/will be covered by an uptick in the hustle income!

Talking about spending money you don’t have is a danger sign. Refusing to do a budget also means when you sell the car, you can’t see the additional expenses like insurance and registration that you could also be saving and available for other purposes.
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Thank you all very much. I need to get away from daily posting and focus my energy on the task(s) at hand. You guys have been a great help!

Walstib
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Hi Walstib! I'm glad you thought through the car repair decision. That level of thinking, and even some more in that direction, is why I suggested posting once a day. Some people fall into a trap of posting dozens of times a day. If even daily is too frequent, that's totally fine. Come back when you have more questions, or when you have that happy dance to do.

Also, I suspect that the constant sense of inadequacy that goes with facing this debt may be getting to you. Completely understandable, and something we all had to deal with. Just keep trying to be 1% better. It's really hard stuff. And if you just keep trying (and cut up the credit cards), you'll get there.

ThyPeace, still cheering for you.
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Are there any snares to avoid when it comes to converting "rewards" to an account credit? I found that one card has, if converted, $87.50 and another has $25. I'd like to lower my balance my that much if there is no "gotcha."
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Are there any snares to avoid when it comes to converting "rewards" to an account credit? I found that one card has, if converted, $87.50 and another has $25. I'd like to lower my balance my that much if there is no "gotcha."

No gotchas that I've come across. I do this on a monthly basis.

-Agg97
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The only catch is they generally don't count as part of the "minimum payment" - I've typically applied them right after a payment has cleared.
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Are there any snares to avoid when it comes to converting "rewards" to an account credit? I found that one card has, if converted, $87.50 and another has $25. I'd like to lower my balance my that much if there is no "gotcha."

Some cards require you to convert a minimum amount, but with $25 for the smallest amount, you probably meet that.

Some cards allow you to purchase gift cards at a discount - buying a $50 gift card for $40, for instance. If your grocery store, or another retailer that you frequent for necessities has these cards available, it might be more effective to buy the gift card for $40, and then put the $50 that you would have spent (and had in your budget) toward the card instead. But if all they have are cards for places that you have stopped spending at (restaurants, for instance), then that's probably not a good option.

As danbobtx pointed out, be sure you understand the terms of the payment before you make it. Most card issuers don't allow the rewards payments to count towards your minimum payment, but if they do, be sure to take that into account when making payments if the card that the rewards are on isn't your high priority account.

Similarly, if the card company allows you to get the same payment if you transfer the money into a deposit account (checking or savings), and the account that the rewards are on isn't your high priority account, you would be better off transferring the money to the deposit account, and then using it to pay down your high priority card.

AJ
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I have one card that I was able to set to automatically apply the rewards to the balance, monthly.
Another that mails me a check whenever the rewards balance reaches $50.
(Both would be happy to credit a checking account, but that requires my having a checking account with them, which I don't have or need.)

I like that, because I never have to track or think about rewards for those cards. For the others, I have to actively convert the rewards to a credit to the card, which I do whenever I think of it, which works out to about every 3 or 4 months.

As noted, it doesn't affect the minimum payment due, so if you're paying the minimums that's something to keep an eye on.
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(Both would be happy to credit a checking account, but that requires my having a checking account with them, which I don't have or need.)

The checking account may not need to be with them. I have rewards go to the checking account from which the credit card it paid. It is an outside bank account.
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The checking account may not need to be with them.

It does.

I have rewards go to the checking account from which the credit card it paid. It is an outside bank account.

Your cards work differently.

Lots of options. OP will find out where he can direct the rewards for his own cards. The most common are a credit to the card, a check to the cardholder, and a credit to the cardholder's checking or savings account.

Actually, I take that back. The most common - certainly the most heavily promoted - option is to use the rewards at a retailer to spend more money. Personally, I find that too complicated, although it can work for others. I like to Keep It Simple wherever possible.
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Actually, I take that back. The most common - certainly the most heavily promoted - option is to use the rewards at a retailer to spend more money. Personally, I find that too complicated, although it can work for others. I like to Keep It Simple wherever possible.

Which means it all depends on the person. I try to maximize the value of the rewards but that requires that it isn't difficult and the reward form is useful. I do use the rewards on one card to purchase restaurant gift cards. It gives a 25% bonus and is for a restaurant where we frequently meet friends for lunch. All other rewards are claimed as account credit or checking account deposit.

(My husband wasn't watching the rewards for his mothers credit card. The rewards were over $500. The rewards have been deposited to her checking account.)

The checking account may not need to be with them.

It does.

I have rewards go to the checking account from which the credit card it paid. It is an outside bank account.

Your cards work differently.


Which is why I said it may not. It depends on the credit card issuer.
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Thanks all. Reward points converted to an account credit.

Part of attacking this debt needs to involve minimizing interest rates to maximize the actual debt reduction efforts.

Would it be better to pay a 5% fee up front to transfer a high APR balance to an existing card, or to open a new card with no BT fee?

I asked myself that question and the answer is "it depends." After some thought it seems that the existing card is offering 0% for only 10 months. While that would save money overall there may be a better option. At the end of 10 months, I would have to move the money again and pay another fee (or re-shuffle my pay down order) since I would only be paying the minimum here.

If I open a new account it is possible to get a $0 BT fee and a longer 0% APR term. The problem is that a new card would likely have a low limit. It would still help, but on a small scale. I'm looking for larger scale interest reduction so that my payments can pack a bigger punch.

The card that is almost completely paid off (9 more days) is with Citi with a limit of 27K. They are offering the 5% for 10 months of 0 APR. I found that I could open another Citi card, the Citi Simplicity which also has 5% BT fee and 0% APR, but the term is 21 months. That term would give a significant boost to debt pay down for the same "price."

I am eyeing the new Citi because I've heard Citi allows you to move available credit from one account to another. If the new card limit is small as expected, I could add most/all of the current Citi 27K line onto the new card with the more favorable term.

Using round numbers, moving $20,000 from 14.24% to 0% would cost $1000. Interest on that amount would be reduced from $232/month to $0... twenty one months in a row. A short sighted me thinks that I have no business ADDING $1000 to my ridiculous amount of debt. Without doing precise math, it looks like short sighted thinking is VERY expensive over time. Just thinking for now, but I do need to address the APR as part of the overall plan.

If you are still following along, thank you!
Walstib
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Reward points converted to an account credit.

Excellent.

Have you sold the car?
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Part of attacking this debt needs to involve minimizing interest rates to maximize the actual debt reduction efforts.

Yes, that can help optimize your pay down. But the thing that will make the largest impact is to be able to consistently make more than the minimum monthly payment toward your highest rate debt. If you can decrease the rate that a lot of your debt is at, without diminishing the amount that you can put toward the high rate debt, that's useful. But if diminishing the rate that your debt is at increases the amount that you have to pay toward the low rate debt, which, in turn, decreases the amount that you can put toward the high rate debt, then it may not be as useful as it appears on the surface, and a detailed analysis, with assumptions about what you will be able to consistently pay toward paying down your debt (which kind depends on having a budget) should be done before making any moves.

The card that is almost completely paid off (9 more days) is with Citi with a limit of 27K. They are offering the 5% for 10 months of 0 APR. I found that I could open another Citi card, the Citi Simplicity which also has 5% BT fee and 0% APR, but the term is 21 months. That term would give a significant boost to debt pay down for the same "price."

Before deciding to open a new card, you should call Citi and ask if you can get the same offer on your current card. Additionally, the rates on the Simplicity card being offered online are currently 16.24% to 26.24% https://www.citicards.com/cards/credit/displayterms/flow.act... Since your current Citi card is at 17.24%, I would expect that the new card will be at least that high, and probably higher - since it's an additional extension of credit. So, you would be increasing the rate on the remaining balance by at least 3%, and possibly as much as 12% vs. keeping it on the current card. Assuming that you are going to pay minimums on the 0% rate, you will still probably have at a pretty big chunk on that card when the promo period is over. If the rate is 12% higher, it won't take very long to end up paying all the interest that you 'saved' by paying the $1000 upfront fee.

You also need to find out how the minimum payments will be figured on either offer. As already mentioned a few times in this thread, 0% offers can have higher minimum payments. What I have often seen is that minimum payments on a 0% rate can be up to 4% of the balance ($880/month on $21k - because you added the BT fee), while minimum payments on a balance that has a non-zero rate is the interest charged plus 1% of the balance. For $20k on your 14.24% card, that would be $238 in interest plus $200, or $437. That means that the minimum payment on the BT could be $443 higher than the minimum payment by keeping it on the current card, which would mean that in addition to adding $1000 to your current debt, you would be paying down the remaining high rate debt by $433 less each month, increasing the amount of high rate interest you pay.

My advice, which, as always, is worth what you paid for it, would be to forget about buckle down and work on consistently paying a set amount toward your debt pay down each month for several months. Once you've determined how much that amount is, you can actually do the detailed analysis that is necessary to see if a BT will really save you money.

AJ
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What AJ said X2.

In general, I would be reluctant to open a new line of credit right now in your position. I'd back up the suggestion of asking any and all of your providers if they can meet or beat the introductory offer. The current balance transfer offers I'm getting are a 3% transaction fee, not 5%, but are typically 15 to 18 months at the 0% rate. And if you aren't 100% sure the balance transfer won't be paid off by the end of the term, the regular interest rate is probably more meaningful than the balance transfer fee.

If you can't get a current card to meet or beat, I'd look carefully at the credit score for me and my spouse. While Dave Ramsey doesn't believe in credit scores, I do and your best chance long term to get more favorable rates is to improve your credit score. There may be a credit score simulator available to you (I know some Chase cards have this) that let you estimate what various activities will do to your credit score. If your credit score is lower than say 720, I'd suggest working to improve it by keeping a consistent history of on time payments, reducing credit utilization by paying things down, and letting your youngest account age (accounts opened within the last 2 years can hurt your score). Watching my own score, it can swing wildly over a few months, and with discipline, you can make it swing in your direction.

Good luck

Danbobtx
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AJ, it took several reads for your post to start making sense. It does now, sort of, except for one major thing. We have had an endless supply of BT offers over the years/decades. While that is no guarantee that there will be one when the current 0% runs out, I do think that it is a reasonable assumption. The BOA rep, just yesterday, said that he couldn't lower our APR. He went on to say that as a consumer it makes sense to BT to Citi and also added that as soon as we do BOA would start sending good 0% offers to lure money back. What a strange game. I'm tabling this idea for now because you post did resonate except for the omission.

In other news, I did our taxes and fortunately we were stupid last year! TurboTax gave us a credit report as well. it is a Transunion that sits at 751. One of our cards posts an Experian number to our online statement every month. Currently 762. Indeed we have made timely payments for years and years. It is time to get out of this cycle.

To that end, what are your thoughts on downsizing my retirement contributions for the short but not super-short term. Currently we divert $200 per 2 week pay period, pre-tax. My employer contributes 3% to a separate plan and that would continue. There is no employer match to lose. If I cut the contribution down to $50/pay for example, that frees up $300 per month to add to debt reduction. At this point I am not worried about being unable to fund 2019 at some later year. I live on the other side of town. Ramsey says to do it. What does TMF think in this situation? No brainer?

You have all been very helpful. Thanks very much for playing along as I seem to jump from one topic to the next! There is just so much that needs addressed. One step at a time.

Walstib
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Great job on credit scores. Once your debts are paid down, you'll easily be in the 800s!

To that end, what are your thoughts on downsizing my retirement contributions for the short but not super-short term. Currently we divert $200 per 2 week pay period, pre-tax. My employer contributes 3% to a separate plan and that would continue. There is no employer match to lose. If I cut the contribution down to $50/pay for example, that frees up $300 per month to add to debt reduction. At this point I am not worried about being unable to fund 2019 at some later year. I live on the other side of town. Ramsey says to do it. What does TMF think in this situation? No brainer?

Intellectually, it's a no-brainer. Do it. However, make sure that you follow through with this and pay it down rather than have that money become your de facto "emergency fund". Or, you get exhausted from this game and just up your lifestyle rather than re-instate this. The psychological/emotional side of this is very real; do it only if you're confident in the follow-through.

-Agg97
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To that end, what are your thoughts on downsizing my retirement contributions for the short but not super-short term. Currently we divert $200 per 2 week pay period, pre-tax. My employer contributes 3% to a separate plan and that would continue. There is no employer match to lose. If I cut the contribution down to $50/pay for example, that frees up $300 per month to add to debt reduction.

As Agg already indicated, it's critical that you actually put that $300 per month toward debt, IN ADDITION to what you are already CONSISTENTLY paying.

Since, at this point, you haven't built a record of several months of consistently paying a specific minimum amount on your debt just from your regular income (i.e. not counting for all of the stuff you are selling, cashing savings bonds, doing way more on your side hustle than you can continue doing, any other found money, etc.), I would say that it's too early in the process to take the step of cutting your retirement contributions. Once you get to a point where you can say - without any additional changes to our lifestyle, we can and do pay $X toward the debt every month, month in and month out, for at least 4 - 6 months - then you should consider things like cutting retirement contributions.

Please remember - you are in a marathon, not a sprint. It took you years, if not decades, to build up this debt. It's going to be a many months (probably years) long process to pay it down. So if you take a few months to get to where you are optimizing everything, it's okay.

AJ
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Intellectually, it's a no-brainer. Do it. However, make sure that you follow through with this and pay it down rather than have that money become your de facto "emergency fund". Or, you get exhausted from this game and just up your lifestyle rather than re-instate this. The psychological/emotional side of this is very real; do it only if you're confident in the follow-through.

I could not Rec AJ post enough we also lowered our 401K down to 4% the whole time killing CC dept, it was such a psychological boost to add what I was paying to 401K over to Debt Snowball and always make sure that all of it went to the Target, there were times I would pay same CC 5 times in a month. Why? Simply because the more I put towards the Debt Snowball the larger it would grow, me and DW were paid on opposite Fridays so when things got really rolling every paycheck something was going to make the Snowball bigger. I like to think of it as future investment capital. IMHO add the $150 per biweekly right away.

…. Just one more plug for your future Budget/Spend Plan. Having categories on paper would give me a quick look at each area to see if they might be something I could do that month to maybe squeeze a bit more out of that area all to go towards Debt Snowball. There were some definite other benefits but getting started it seems like the whole purpose of my budget was to reward our Debt Snowball with anything we happened to save. The end of all your hard work is you will have a very sizable amount of capital that can really start working for you….
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I've been out of pocket (incredibly busy week), so will be replying in a bunch rather than daily. First reply:

Are there any snares to avoid when it comes to converting "rewards" to an account credit? I found that one card has, if converted, $87.50 and another has $25. I'd like to lower my balance my that much if there is no "gotcha."

Good for you for continuing to look under every rock for money to throw at your debts!

ThyPeace, seriously, check the couch for change, too. :)
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Would it be better to pay a 5% fee up front to transfer a high APR balance to an existing card, or to open a new card with no BT fee?


I'm glad that you raised this question, thought about it, and made as good a decision as you could. That's a muscle you're building -- doing analytic thought around your financial choices -- and it can be a ton of work to build that muscle. Once a day, though, over a long period of time and you will be YUUUUUUGE (Conan the debt slayer: https://www.rottentomatoes.com/m/conan_the_barbarian#&gi...).

ThyPeace, has been reading Nerd Fitness articles, so you're lucky you didn't get a Captain America or Hulk reference...
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And.... last reply for today.

what are your thoughts on downsizing my retirement contributions for the short but not super-short term

I did this while I was paying off my debt. (In fact, one of my debts was a 401(k) loan. With encouragement from this board, I paid that one off very early on.) I agree with those who note that you must actually use that money toward debt payoff. Rather than making a sudden significant reduction in contributions, how about FIRST setting up an auto-payment to your credit card of choice on the same day you get paid. Say an extra $50. And THEN reduce the contribution to your 401(k) by, $50 plus taxes so that you net the $50?

If you can do it that way, you never see the money and aren't tempted to spend it. But -- test and experiment to see if you really do it, with someone small enough that if it doesn't work, you can undo it. AND of course, make sure your partner in the fight (your wife) is completely on board with this approach.

ThyPeace, you know, like these two: https://itunes.apple.com/us/movie/ant-man-and-the-wasp/id140.... Which reminds me, renting from RedBox and making popcorn at home? Less than $5, even if you go all out with the butter and add Hot Tamales. When you get to a milestone, plan something like this as a treat for the two of you. Totally worth it.
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Walstib

I'm with the others that say leave the retirement contributions alone for now, so long as you are making some progress on the net debt. In particular, depending on your income level and the types of retirement you are contributing to, reducing that retirement savings may do some combination of the below:

1. Decrease the amount of the Retirement Savings Contribution Credit (only applies to up to $4000 in retirement contributions, with a variable credit percentage based on income and filing status).
2. Increase your taxable income (if contributing to a traditional IRA or 401k)
3. Increase income reported on the FAFSA, reducing your children's potential amount of aid.

Based on your most recent post though, I would encourage you or your spouse to adjust your withholding, and dedicate the increase in take home pay this change generates to the credit card debt.

Good luck

Danbobtx
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$0
$5332.05
$11077.82
$17355.48
$14410.92

Not reflected:
Tax refund, which landed in the bank today after pay day "dues" went out.

Car sale- still in the shop. This is a top priority and I literally can't wait to sell it and chip an iceberg off of the debt.

I DID scale back retirement funding but it didn't take effect on todays check. I had to go with the guaranteed 17% return for my sanity.


Other news:

Good progress on a budget. "Misc" is currently too inclusive and large. Needs more time/work.

March is a three paycheck month.

One foot, however imperfectly, in front of the other.

Walstib
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Hi Walstib! What a great update! Congratulations, you have hit your first Happy Dance post!! You are always welcome to start a new thread; unlike other forums, people commonly start new ones rather than continuing these for a long time. And if you start a new thread, you have the benefit of being able to put "Happy Dance!" in the subject. Everyone here knows what that is and will thus be more inclined to read it.

So let's see where you have been and where you are today (the below table uses the < p r e> and < / p r e > formatting marks, without the spaces):


1/21/2019  2/15/2019
#1 $ 1,283.76 at 17.44% $-
#2 $ 5,630.63 at 17.49% $ 5,332.05
#3 $11,336.57 at 13.99% $11,077.82
#4 $17,697.63 at 13.99% $17,355.48
#5 $14,838.00 at 0% $14,410.92
Total $50,786.59 $48,176.27
Difference $ 2,610.32


Holy moly, would you look at that? You've paid off more than $2,000 of your debt!! That's amazing! I recall you saying that $1,000 is a HUGE amount of money, but yet here you are, having well over doubled it. That's really freaking awesome! Fantastic job! And more than that, you're quietly working away at a BUDGET??? Sweet!!!

ThyPeace, delighted, and looking forward to that car sale. Heck, that'll knock off Card #2 all by itself!
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Tax refund, which landed in the bank today after pay day "dues" went out.

If your refund was at least 4 figures, and you don't anticipate your tax situation changing much from 2018 to 2019, I would encourage you to adjust your withholdings using the IRS withholding calculator https://www.irs.gov/individuals/irs-withholding-calculator and dedicate the extra money each paycheck toward your snowball, along with the dedicated money from reducing your retirement contributions.

March is a three paycheck month.

Be cautious in spending the 3rd paycheck in March all on debt, even though it seems like it's 'extra'. Most people have to go through an entire 6 month cycle for that paycheck to truly be 'extra' and you've only been doing this about a month.

The first paycheck in April won't come until April 12. If you have bills that, for instance, are due on April 10th, they will need to come out of the March paycheck.

AJ
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