Seriously, what are the best ways to get out of debt??

[Jenn218]

Okay, we all have it......but how do you really get rid of it??? DEBT!!!

I could really use about $15,000 (not much, but too much) to get out of debt.

What is the best way to get the funds to do this?

Have you been in debt and got out? If so....HOW DID YOU DO IT??

I know, I know...the first thing to do....CUT UP THE CARDS and NOT spend money......

WHAT ELSE?

Anyone get a loan to pay it off and does that work well?

PLEASE PLEASE PLEASE....send any and all options!!!
I would love to hear your success stories!!!

[Wylie's Mom]

Hmmm...well, I think it depends too on what KIND of debt you have. For example, mortgage debt vs. credit card debt. Mortgage debt is "good debt", you know what I mean? If it's credit card debt - yep - cut up all cards but one, stop spending, and pay if OFF asap. Can you consolidate some debt into a home equity line?

[Jenn218]

Hmmm....I don't know??!! I was always good with my credit cards, paying them off each month, unless I just couldn't, but catching back up the next bill, etc. And yes, I always pay double, triple, etc more than the min. amount. I have three cards....2 are 0% interest and 1 is 11% interest. BUT since I have been home this past 4 years, they have increased dramatically...to the point that I am very embarrassed. YIKES!!!

[Wylie's Mom]

Originally Posted by Jenn218

Hmmm....I don't know??!! I was always good with my credit cards, paying them off each month, unless I just couldn't, but catching back up the next bill, etc. And yes, I always pay double, triple, etc more than the min. amount. I have three cards....2 are 0% interest and 1 is 11% interest. BUT since I have been home this past 4 years, they have increased dramatically...to the point that I am very embarrassed. YIKES!!!

If you can get all of the balances on 0% cards, that'd be ideal - bc then you can pay off straight principal. A home equity (HELOC) would be around 6-9+ % right now. Although you may be able to find one that has a "starting rate" of 1% for awhile...

[Jenn218]

Okay, so transfer all to 0% interest...I can get that done. That would be better than a loan, right?

I am sooo bad with money...I never could budget anything in my life! Horrible, isn't it?!

I thought about having my husband use his 401K (part of it), but I think they get penalized for that, I am not sure?

Okay...is there life after plastic??? I bet it is hard to get use to.......

What would be the best way (for me) to supplement the $$ to get them paid of quicker? I am at home.....any good ideas?

[CollegeCutieUSF]

You can also put yourself into one of those debt consolidation programs. You have to be in the program for x ammout of years, but they do all the dirty work and call the cc companies and get them to lower their rates and some lessen the ammout you owe, and this way you only pay one monthly payment.

OR... you could rob a bank or play the lotto. I'm in a similar situation, but with school loans... needless to say... short from selling my eggs, I don't see any other way out of the debt

[Jenn218]

Ha! Well, I am not a gambling person....I have gone twice and lost (luckily not much)...and well, robbing a bank does sound tempting (just kidding), I would never get by with it. I am not good at lying, people always know!

I don't know about the debt consolidation...I have good credit...does that mess it up?? AND I have low interest cards, so I don't know if I need that or not.

That is one reason I want to get my ridicolous debt paid for and out of the way, because in not so many years (yes, it is getting closer and closer) I will be having those college loans!!! YIKES!!

Umm...selling eggs! Selling plasma.....yikes! All sounds....harsh!

[Wylie's Mom]

I love Suze Orman for money management. Here is a link to some debt stuff - but she has a TON of info, this is just a snippet - so click around in there: http://www.suzeorman.com/igsbase/igs...fExpertiseID=5

[Jenn218]

Originally Posted by Wylie's Mom

I love Suze Orman for money management. Here is a link to some debt stuff - but she has a TON of info, this is just a snippet - so click around in there: http://www.suzeorman.com/igsbase/igs...fExpertiseID=5

THANKS!!!
I had forgotten about her....I had watched bits and pieces of some of her show on PBS awhile back. I think we were leaving town or something and I missed it.....she seems to be really good!

I am planning a yard sale in a few weeks.....last one I did (long time ago) did $800 (not bad for two days) and I will put all the money from it towards the 11% card...which is also the highest balance card too.

[drawlins27]

NEVER do debt consolidation! Check out this site by Dave Ramsey about debt consolidation.

http://www.daveramsey.com/the_truth_..._3035.html.cfm

Also check out the rest of his site about how to get out of debt. Pick up his book Total Money Makeover (just don't use your credit card to buy it because he doesn't accept them). It uses 7 "baby steps" to get you out of debt and is VERY easy to understand. He has made it his mission in life to help people get out of debt and hundreds of thousands have done it. I'm a huge Dave Ramsey fan in case you can't tell

[Yorkiekids]

You usually can call the companies you do have high interest rates with and renegotiate the interest rate. Tell them you might have to go with a credit consiolidation company, and they will usually jump through hoops to lower your rate, so they don't lose all the interest. Burn the cards so you can't glew them back together, and their is life after credit cards. It's not easy, but it's do able. You just have to question every purchase you want to make, and make sure you absolutely need the item. If not you don't buy it. This is weird, but if I have an absolute need to shop for things I don't need I'll shop, put them in the basket then walk away. It gives you enough of a fix. Atleast it does for me.

[Jenn218]

Originally Posted by drawlins27

NEVER do debt consolidation! Check out this site by Dave Ramsey about debt consolidation.

http://www.daveramsey.com/the_truth_..._3035.html.cfm

Also check out the rest of his site about how to get out of debt. Pick up his book Total Money Makeover (just don't use your credit card to buy it because he doesn't accept them). It uses 7 "baby steps" to get you out of debt and is VERY easy to understand. He has made it his mission in life to help people get out of debt and hundreds of thousands have done it. I'm a huge Dave Ramsey fan in case you can't tell

Ooooooo......Thanks!!! I believe I have read some of his articles (maybe in some magazine like First or Woman's World or something like that).
THANKS SO MUCH!

[pamacluan]

If you can, stay away from credit counseling and helping companies. That can affect your credit rating which means you'd have to pay more to borrow on a home or any loan in the future. They don't always tell you that because they probably wouldn't be the informer to the credit rating agency.

I would look at your regular monthly bills. What do you spend for mortgage, taxes, insurance, medical, dental, food, childcare, yorkie care, personal grooming, you get the idea and the amount of income that you have? Are you living within your means? If not, is there an extenuating circumstance to not live within your means. For instance, if someone has returned to university and is incurring some student loans to help with living expenses. If you are living within your means can you cut back some place so that you can pay more on your debt? I had a single client once who was living at home to pay off debt so that she could buy a house. She was struggling to accomplish that so we analyzed her spending habits and we realized that between her morning coffee and bagel, lunches and snacks we could save her about $20 everyday.

For some people it helps to go to a cash system for a while so that they are more aware of what they spend. I, for some reason, am not comfortable with carrying large amounts of cash. When I say large amounts, for me these days that would only have to be over $60. I just don't usually carry cash. I like to charge purchases because then I can really see what I spend. I put my checkbook into Quicken and when it's up-to-date, I can run reports and tell what I'm spending and where. I also have an REI credit card and there's no fee and I get a rebate every year to buy some cool gear at REI.

Make a list of all of your debt and note on the list what interest rate you are paying. Definitely make sure that you are paying as much as you can on the higher interest rate loans and also move those loans to no interest or lower interest if possible.

As far as the 401k, if you husband is under age 59 1/2 and not disabled you would be penalized using that money to pay off credit card debt. There are some additional exceptions but they are pretty limited. The penalty is 10% on the total distribution and then you still have to pay regular tax on it.

[Bizzymammabee]

A good way to pay down debt and save yourself money would be to borrow from your 401k if you are not too close to retirement. It's a good way to get the funds, pay it back at a lower interest rate and the biggest plus is that the interest goes to you and not a credit card company. I used from mine to do put in my new kitchen and install hardwood floors throught out my house. There are no penalties for taking a loan from your 401k.

I love the fact that I am in debt to myself only and every single penny of interest goes into my account.

I wouldn't do the debt consolidation because I dont' like paying a fee to anyone. My mom did it once with this very well known company that does that sort of stuff and they were messing up her credit on their own by making the payments late. You can also call your current credit cards and as long as your not late or delinquent and a good payer you can ask about getting a lower rate on your cards. That is what I just did on the ones that I had that were empty.

Life after credit cards takes getting used to. You can also do a big chunk payment by budgeting things out of your income tax returns.

Good luck...I know how it is to feel caught up in the cycle of credit card debts.

[Jenn218]

Originally Posted by Yorkiekids

You usually can call the companies you do have high interest rates with and renegotiate the interest rate. Tell them you might have to go with a credit consiolidation company, and they will usually jump through hoops to lower your rate, so they don't lose all the interest. Burn the cards so you can't glew them back together, and their is life after credit cards. It's not easy, but it's do able. You just have to question every purchase you want to make, and make sure you absolutely need the item. If not you don't buy it. This is weird, but if I have an absolute need to shop for things I don't need I'll shop, put them in the basket then walk away. It gives you enough of a fix. Atleast it does for me.

I never thought of calling to lower the 11% card....I will definitely do that! THANKS for that tip!

I read somewhere that you should carry your card statements with you, so when you feel the urge to purchase something, pull those out and see that total...that will make you think twice! Course, that would be horrible if your purse got stolen with your statements in it!!!

I think I am going to keep one card (one of the 0% interest cards), BUT have it in our lock box.....I think that is smart, isn't it?? Course, knowing me, I will be fighting the urge to pull it out...maybe my husband will have to take the key and hide it some place!! That would work.

I have control....but very little anymore!!

Also, my husband does NOT know the exact amount that I owe...I just hate to tell him because he works so hard for all we have and this is my mistake that I am not proud of. He knows of about $8000 of it...is that wrong?