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GarrAarghHrumph
09-22-2010, 03:27 PM
My next goal is to wicked pay down my debt, and get rid of all my credit card debt asap. Have others done that/are doing that? What methods work for you?

My plan is the following: cutting "fun" style expenses that I can't pay for in cash (ballroom dance lessons are, sadly, gone), paying more than my minimum payments each month, and taking any "windfall" money I get (tax returns, adjunct teaching money, etc.) and using it for the debt.

What I am not cutting, which others might cut, is my skating, and that of my daughter. That, I pay for in cash, anyway, but that cash will still go toward skating, not toward credit cards.

Kaffeine
09-22-2010, 03:33 PM
Try to cut out eating out. That tends to be a huge expense for a lot of people. Even buying from the dollar menu adds up.
Look into your electricity bill and see if you can save there.

Garden Kitty
09-22-2010, 03:33 PM
Do you ever watch the show Till Debt Do Us Part on CNBC at 10? This woman comes and helps a family who is trying to get out of debt. One of her first things is to make sure the family creates a budget which includes a set amount for debt repayment each month. She then makes sure they track every dollar spent and puts the budgeted amounts for various categories in cash (usually in a set of jars) so that people have a visual reminder of how much they've spent and what's left in each category.

attyfan
09-22-2010, 03:42 PM
A written budget is a great help. I have saved by careful grocery shopping (comparing advertised prices and going to whichever store is less that week, discount houses, etc.). Also, I buy almost all of my clothes at thrift stores. The clothes are surprisingly nice, and I still save even if I get them altered to fit better.

KatieC
09-22-2010, 04:00 PM
Every time my hours get dropped to part time at work I cut out all DVD rentals, book purchases, and most meals/movies out.

Good luck with paying down the debt.

myhoneyhoney
09-22-2010, 04:10 PM
hubby and I have been debt free (well, other than medical bills) and credit card free for over 6 years now. Some things we do to stay this way:
1. cars. We saved up and purchased both our cars cash which meant no monthly payments and we ended up paying less for insurance because of it.
2. live in a smaller, much less expensive place. We have 4 kids but we don't need as much space as others make it seem. Another plus for this is that it gets us out of the house so our kids get plenty of outdoor activities and exercise.
3. eat at a restaurant only once or twice a week (usually during the weekend) and that includes fast food. Everything else is cooked at home. It's always cheaper (and usually healthier) to buy more groceries than eating out.
4. Set aside "fun" money each week and don't spend even just a penny more.
5. Electronics... we know families that spend THOUSANDS on electronics each year. We only replace something when it's broken and is not worth fixing

Good luck. It's tough and takes a lot of commitment but well worth it IMHO.

Jenny
09-22-2010, 04:17 PM
Thought this worth sharing - for the first time this month, one of my credit card statements came with this notation:


The estimated time to repay the current statement balance if you only make the minimum monthly payments on each due date is 33 years and 9 months.

This is on a balance of just $1900.00. :eek: Further, if minimum payments stayed the same, the total paid over that time period would be $15,390.00. :wideeyes:

If that isn't motivation to make clearing credit card debt and paying the balance every month a priority, I don't know what is.

Good luck everyone.

skatemommy
09-22-2010, 04:18 PM
my favorite

www.daveramsey.com

genevieve
09-22-2010, 04:28 PM
I have been paying down long term credit card debt, and have made significant progress in the last 2 years. Like you, there are expenses that some people would say to eliminate that I refuse to give up (for me, it's dance classes), but here are things that I have done that have sped up my debt reduction:

Don't use credit cards for anything but emergency expenses (and not those if you have savings that can cover them). If you have anything recurring billed to a CC, even if it's small, switch to your debit card - I used to have my cell phone and internet charged on a CC because I didn't like the idea of giving those vendors access to my cash account. The amounts weren't significant, but my CC payment went farther once they were removed.

Pay more than the minimum balance due. Way more. more than the alternate amount noted on your CC statement (see Jenny's post above - statements now come with a timeline for min payment and a higher payment). Set an amount you'll pay each month, and keep paying it. As your balance decreases, that monthly amount will pay for more of the debt and less interest. Commit to the idea that monthly payments can go up, but not down.

If you have offers for lower interest cards, take them. Because I have significant debt but always pay on time and way more than required, I am deluged with offers of 0-4% interest cards or balance transfers for existing cards. The 3-4% transfer fee is worth it in the long run if you are transferring from a high interest balance. Other people might say to consolidate your debt to one card, but I don't. I have balances on 3 cards right now, and I move balances around as necessary to maximize the advantages of short term low/no interest offers. This does mean keeping an eye on things and remembering when interest specials change, but for me, it's worth it. Also, if you pay off one CC, simply add that payment to the next highest interest card so you are still paying the same amount each month.

Right before payday, if you have extra cash in your bank account, make an extra payment to your highest interest card. I also make my regular CC payments on my payday - I don't wait for the due date.

Keep your CC statements and periodically look back to see your progress. If I'm feeling like I will never get out from under this, I look back and see where I was a year ago, 5 years ago. It's a great feeling to see those balances come down - and see the difference in the monthly interest fees.

I started getting aggressive in paying down my debt 2 years ago. Even with approx $6K new debt added last year due to unforeseen emergencies, I will be done with it next year.

znachki
09-22-2010, 04:39 PM
Good suggesstions from everyone, here are a few other ideas.

Cut up the credit cards. If you must, save one for real emergencies (ie car repair), but put that card in a block of ice in your freezer - really. That way it isn't readily available.

If it is possible, you might think of consolidating some of the debt on a lower interest card.

Also, and you must be very careful about this, if you get one of those offers to transfer your balance at no interest for 6 mos, and there is no transfer fee involved (because that is where they can get you), and you can pay whatever you transfer off before the end of the period, you can do that. I did that once and saved a load of interest. But, you need to be extremely vigilant. It isn't for everyone.

Aceon6
09-22-2010, 05:04 PM
A few years back, I found myself with too many cards, too much debt and not enough cash flow. I got rid of it all in a year by focusing on one card at a time. I put myself on a strict budget and calculated how much I could have each month to pay on the cards. I paid the minimum on all but the one with the lowest balance until that was paid, then focused on the next lowest and so on. I was shocked at how painless it was.

Polymer Bob
09-22-2010, 05:06 PM
I pay my credit card bill entirely each month. Yes, it is a considerable expense, but the interest I save is well worth it.

Aceon6
09-22-2010, 05:12 PM
I pay my credit card bill entirely each month. Yes, it is a considerable expense, but the interest I save is well worth it.

I do that now as well, but there was a time when that was impossible.

danceronice
09-22-2010, 05:15 PM
I pay my credit card bill entirely each month. Yes, it is a considerable expense, but the interest I save is well worth it.

I was going to say...pay them off. I haven't carried a balance in years (and that was only about $1200) and the only reason I haven't paid this month's Amex in full is I'm going to have to dispute a charge if the issue's not resolved. (A hotel did not switch cards when they should have and now I either need to get a cheque from the person I paid for the room or she has to get the hotel to cancel my charge and rebill her. Fun fun fun.)

Don't use credit cards. I tend to use debit whenever I can as I prefer to spend money I already have.

And while I think he gets a tad overboard on some things, do check out Dave Ramsey's Financial Peace University. I don't have any debt (mortgage aside) but I find a lot of what he says very sensible.

Stormy
09-22-2010, 05:24 PM
I don't have any credit card debt, but I do have a chunk of student loan debt that I am chipping away at. Like you, one expense I am never willing to cut is skating. It's in my budget and that's non negotiable. Budgeting has helped tremendously. I use Mint.com and it shows exactly where all my money goes and where I need to cut if I do go over budget somewhere. Budgeting will help you cut expenses. There might be a place you overspend that you don't even realize. For me, I was spending a lot on food outside of regular grocery shopping. Once I realized that I was able to curtail that a lot.

I do listen to Dave Ramsey's podcasts and wheras I don't agree with everything he says, I think his debt snowball method has merit. http://www.daveramsey.com/article/get-out-of-debt-with-the-debt-snowball-plan/