YorkieTalk.com Forums - Yorkshire Terrier Community - View Single Post - Seriously, what are the best ways to get out of debt??

pamacluan · 10-03-2007, 03:12 PM

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.

10-03-2007, 03:12 PM	#13
pamacluan Yorkie Talker Join Date: Jul 2007 Location: Oregon Posts: 20	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.