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  1. #21
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    Quote Originally Posted by mpal2 View Post
    My main card has a point reward system so everything possible goes through it including groceries and bills for phone, electricity, water, etc. Then I do a full payoff on the card. I've managed to collect a lot of points that I can redeem for cash back on the card or gift cards to different stores.
    For those in Canada, dust off your AirMiles card. Many people seem to think it's only for trips or toasters, but there's another option: grocery gift certificates. We rack up the points on normal every day purchases, and several times a year end up with $200 in gift certificates, which really help out when you have a month where you are entertaining for example, and need to load up.

    If you have a mortgage, consider making weekly payments. We did this and saved a TON of interest, and were able to pay it off years ahead of the original schedule.

  2. #22
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    Quote Originally Posted by genevieve View Post
    When someone is asking how to eliminate existing debt, this really isn't helpful.

    "Pay off your CC balance in full" is great advice for how to avoid debt in the first place, but when someone's asking how to eliminate debt that's already there, not so much.
    ITA - the smugness of someone telling you this is unbelievable. Someone who wants to decrease the CC debt doesn't need someone to tell this flip advice.

    And one never knows what got someone in the CC debt in the first place. Maybe you lost a job and needed to pay for essentials, maybe you had medical expenses, etc.

  3. #23
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    I would recommend cutting out Christmas and/or whatever gift giving holiday you spend money on. I mean, don't cut it out for your daughter, but other people? Cut them off your list, but tell them, like, NOW, that you're skipping the gifts this year. Chances are they'll be relieved to hear it because they're probably stressing about it, too, and would welcome the opportunity to have one less purchase to worry about.

    I have just a handful of people I buy for, and when I do, it's a small but thoughtful gift that's meaningful to them. I don't buy generic meaningless stuff like candles and chocolates and whatnot just for the sake of giving a gift. I'm not interested in racking up more debt for generic doodads (especially Made In China ones) like that. If I'm in that situation with someone and can only come up with "candle" as a gift idea, then it just means that we shouldn't be spending money we don't have on gifts for each other in the first place.
    The fastest thing out of New Jersey since Tricky Nicky in a Muscovian handbasket

  4. #24
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    How to eliminate debt? The advice is generally the same.

    But my experience is that paying off debt is a little like...dieting. You pay it off (like losing the pounds off your body), then the good times come back and there you go...you want to spend again (kind of like gaining weight). Friends of mine have done this...getting out of debt only to get back in deeper.

    So what is it that keeps getting people back in debt? It's a habit/emotional/psychological issue.

    For a friend of mine, it's the problem of never knowing how to say "no". That's a matter of assertiveness training.

    An ex-boyfriend also has the same problem but thank goodness he compensates by not developing expensive habits. Just keep him away from sales people and he'll be fine.

    For me, I hate owing people favors/things. I feel like when that happens, they have power over me. That helps me to stay clean financially. I also hate the so-called "tree-huggers" who advocate green policy yet keep an energy hog of a house (which is full of stuff they only use once a year), so knowing that also makes me want to live a simpler life (which is also cheaper).

    While budgeting is a ##### and $$$$ issue, deep down it is a personality/psychological thing too. Falling deep in debt is kind of like alcoholism--people who are alcoholics don't like to admit their problems. So it helps to confront your innermost demons first.

  5. #25
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    Southpaw, ITA.

    We've got gift giving down to almost nothing (just the kids, and even now, that's going down now that they are teens who have jobs and buy their own stuff), and instead focus on having a great meal together, playing board games, etc. We also don't exchange gifts on other occasions (ie Mother's Day, birthdays, anniversaries) and instead focus on the time together.

    Saves everyone money, stress and time - and eliminates all the crap you end up with that you don't know what to do with anyway.

  6. #26
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    Quote Originally Posted by numbers123 View Post
    ITA - the smugness of someone telling you this is unbelievable. Someone who wants to decrease the CC debt doesn't need someone to tell this flip advice.

    And one never knows what got someone in the CC debt in the first place. Maybe you lost a job and needed to pay for essentials, maybe you had medical expenses, etc.
    But we already acknowledge in the other thread (re: student loan) that people have poor financial literacy (and hence a near-zero savings rate for quite some time). There're a lot of "smug" advice being tossed at skaters every day at FSU--like Caroline Zhang needs to fix her jumps. It gets old and unpopular and no one wants to hear it. That's all.

    Oh, and credit card owers are a touchy lot when it comes to their debt.

    Quote Originally Posted by Southpaw View Post
    I would recommend cutting out Christmas and/or whatever gift giving holiday you spend money on.
    I've tried doing that for years. No takers. I asked people not to give me things for Xmas and birthdays and they still give me things.

  7. #27
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    Wanted to add, one thing that keeps me from over spending is prioritizing. I really like computer gaming and going to a movie. So that's my "fun"...I don't do much else extra. I'd say it comes out to around 50-75 of "fun" money a month, which isn't bad. You just have to tell yourself no to any extra things, and then go do your designated "fun" thing to keep yourself busy.

  8. #28

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    FWIW, I have taken all the credit cards out of my wallet. I have a bit of cash, one debit card and my driver's license on me at all times, that's it. I have my AmEx number and CCV code memorized, should I need a card for a travel reservation or an online purchase.

    If I'm out and see something that costs more than a few bucks (I don't keep a lot of money in the checking account either), I'm forced to return home for a credit card. That gives me a chance to think about it as well as do research to make sure I'll be getting a good deal.

    I know this isn't for everyone, but it certainly helps me avoid impulse purchases.
    AceOn6, the golf loving skating fan

  9. #29

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    Quote Originally Posted by jlai View Post

    So what is it that keeps getting people back in debt? It's a habit/emotional/psychological issue.
    This is me. I've cleared out credit card debt twice, but I keep falling back in. I was doing well until last year, when I was taking kids to Europe and so many of them canceled, that I had to pay for my trip in full. ($4000 I wasn't prepared to spend...normally I go for free with students)

    But traveling is my weakness, I fully admit to that.

  10. #30
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    I know that this is not popular either, but those greeting cards are things that I could do without.

    My husband likes to give me cards for Valentine's day, etc. I give cards to my mom and dad. Typically these cards can be $2.75-5.00, personally for me I only keep the cards for a few weeks and would prefer to spend that money somewhere else. I have had to tell him, let's do a picnic lunch with wine in the park or something like that.

  11. #31
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    Nothing smug about it. Don't buy things you can't pay for. Once you rack up credit card debt (student loan debt is an entirely different category that is MUCH harder for most people to avoid--I don't have it, some of my friends from college don't, but some do, and the ones who went on to med school, yeesh) you can't pay for much of anything any more because you don't have any money--anything you have that isn't keeping your in a home and food and utilities belongs to the credit card company. You owe them the money, it's theirs. If that means no skating, no cable/satelite, no internet, no cell phone (or land line, if that's easier to ditch, and frankly it usually costs more anyway), well, there it is.

    One thing Dave Ramsey sometimes suggests, and I don't know if it always works but it can, is scrape together as much money as you can, call the credit card, and offer to make a lump-sum settlement to clear the debt. (Now, by 'as much money' that means a good chunk of the debt--like $5k on a $10k debt.) Sometimes, rather than chase you down and risk not getting anythign and going through the protracted process of getting a dribble at a time, they'll just take the lump sum. It obviously won't work on something like a car or a mortgage, but sometimes it's more sensible for them to take as much as they can get rather than try to keep squeezing out a dime here and there.

    Prioritize "need" versus "want", then prioritize the wants, too. Need = roof over your head, sufficient food to not die (no one NEEDS gourmet or organic), utilities where applicable, some mode of transportation (car, money for public transit which can get expensive some places, a bike, whatever). Wants = everything else.

    And then you stop spending. I have lots of things I'd like to buy/do, and maybe in 10-15 years when those bonds mature I will. (Or not.) But I don't have the money right now, so I don't. I need to worry about things like a new a/c and furnace instead.

  12. #32

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    In addition to cutting expenses, I found small ways to increase income. Our street had a large garage sale, where I made about $1000. It was a lot of work, but I unloaded stuff like unused Christmas decorations, small appliances, chairs, book shelves, an old exercise bike, clothes, etc. Unlike many of my neighbors, I bargained with anyone who was interested in something, just to keep from hauling it back into the house.

    I also sold off some gold jewelry that I don't wear anymore. Friends have made a few extra bucks here and there for watching kids/pets, shuttling older people around, and taking part-time jobs -- all things that take considerable time (which may be more important than earning a few extra dollars).

  13. #33
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    Quote Originally Posted by danceronice View Post
    One thing Dave Ramsey sometimes suggests, and I don't know if it always works but it can, is scrape together as much money as you can, call the credit card, and offer to make a lump-sum settlement to clear the debt. (Now, by 'as much money' that means a good chunk of the debt--like $5k on a $10k debt.) Sometimes, rather than chase you down and risk not getting anythign and going through the protracted process of getting a dribble at a time, they'll just take the lump sum. It obviously won't work on something like a car or a mortgage, but sometimes it's more sensible for them to take as much as they can get rather than try to keep squeezing out a dime here and there.
    But isn't that the same thing as paying it off (i.e., credit card debt)?

    ETA: Nevermind, I just re-read the part in parentheses about $5K out of $10K. Mea culpa.

  14. #34

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    I've used David Bach's DOLP plan to pay off my credit cards rapidly.

    http://finishrich.com/dolp/

    Since my biggest expense now is for travel, this works for me. YMMV
    I'd rather be thought of as absolutely ridiculous than as absolutely boring.

  15. #35
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    Quote Originally Posted by danceronice View Post
    One thing Dave Ramsey sometimes suggests, and I don't know if it always works but it can, is scrape together as much money as you can, call the credit card, and offer to make a lump-sum settlement to clear the debt. (Now, by 'as much money' that means a good chunk of the debt--like $5k on a $10k debt.) Sometimes, rather than chase you down and risk not getting anythign and going through the protracted process of getting a dribble at a time, they'll just take the lump sum. It obviously won't work on something like a car or a mortgage, but sometimes it's more sensible for them to take as much as they can get rather than try to keep squeezing out a dime here and there.
    But wouldn't this negatively effect your credit score for quite a while? I believe that the credit company would cancel the card and call it a charge off if this was done, which can (I believe) remain on your credit report for years.



    What worked for us was a complete change of how we looked at money. I have two checking accounts - one for bills and one for living expenses. The bills are all those things necessary for living (mortgage, utilities) and yes, credit card payments. They are non-negotiable for me, in that just like I can't borrow $50 from my mortgage payment, I also can't borrow $50 from my credit card payment. I do all my bill paying electronically now, too, which also reduces temptation to rob Peter to pay Paul.

    The other thing that we did is to move strickly to cash for everyday expenses. I would love to do what mpal does, but my family does not have the discipline. Where we would get into trouble is that we would use the debit card all the time, and then whoops! run out of money so that last tank of gas or whatever would go on the credit card. It's amazing how fast stuff like that can add up. Now I have a bunch of envelopes containing money for groceries, money for gas, money for me, and money for the kid. Hubby gets the same for his expenses and gas. This way I know exactly how much is left each week. I do sometimes move money between categories, but the total doesn't change.

    One last thing that we do is set aside a savings account for Christmas, and also another separate savings account for my son's hockey and golf, and hopefully for emergency items. Each account gets a set amount of money every payday.

    Oh, one more thing about our general spending money. I have a speadsheet that goes out a year with expected pay amounts, our "allowances" and cost estimates for things like expected vacations (or skating competitions) so I can see well in advance what is coming up.

    (PS - I tried the keep track of expenses thing, and it really didn't work for me. I found that I need to have the visual of there only being one $20 left in that envelope to make me make good choices. )
    Last edited by purple skates; 09-22-2010 at 07:23 PM.

  16. #36
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    I know this is getting away from CC debt and into general money management, but I'd also like to advocate for credit unions. I opened a checking/savings account combo with a credit union that was offering a 7.25% return on balances up to $500 - I only had to get electronic statements and make one electronic deposit a month. I have the money deposited straight from my paycheck so I don't miss it, and the only think I ever spend the money on is once I reach the $500 threshold, I make an extra payment to a CC (see it is related to this thread ). Having a small amount of money going into accounts that I don't use is a really fast way to accumulate savings (something else that was problematic for me in terms of getting rid of debt).

    On another note, last year I got a free financial planning consultation thorugh my workplace. I told them about my debt issues and trying to build savings. They emphasized building savings OVER paying off the debt. Not that they thought I shouldn't pay down the debt, but when I wondered if I should throw all my extra money at my CC debt, they said no. I found that surprising. Their take was that building savings WHILE paying off debt puts you in a much better position for that next emergency. As someone who was trapped in the revolving door of getting debt down and then getting hit with a large expense that I had no choice but to pay with a CC for several years, this really resonated.
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  17. #37
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    Quote Originally Posted by genevieve View Post
    I told them about my debt issues and trying to build savings. They emphasized building savings OVER paying off the debt. Not that they thought I shouldn't pay down the debt, but when I wondered if I should throw all my extra money at my CC debt, they said no. I found that surprising. Their take was that building savings WHILE paying off debt puts you in a much better position for that next emergency. As someone who was trapped in the revolving door of getting debt down and then getting hit with a large expense that I had no choice but to pay with a CC for several years, this really resonated.
    This is my exact situation right now. At first I considered just paying off the credit card debt with my savings, but then I came to this reasoning that I need to keep building the savings--especially if I need it for my house.

  18. #38

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    Quote Originally Posted by danceronice View Post
    ...

    One thing Dave Ramsey sometimes suggests, and I don't know if it always works but it can, is scrape together as much money as you can, call the credit card, and offer to make a lump-sum settlement to clear the debt. (Now, by 'as much money' that means a good chunk of the debt--like $5k on a $10k debt.) Sometimes, rather than chase you down and risk not getting anythign and going through the protracted process of getting a dribble at a time, they'll just take the lump sum. ...
    Also, I have heard that taxing authorities have been known to treat the amount "written off" as income. I'm not sure about this, so please check with someone knowledgeable.

  19. #39
    drinky typo pbp, closet hugger
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    I just got a notice that the Seattle Public LIbrary in my neighborhood is hosting a series of free workshops on "urban self-reliance" this fall. Two of the workshops are "Setting Financial Goals and Creating a Budget" and "Budgeting and Understanding Credit". I think this is very cool - might be worth checking in with your local library to see if they have anything like this.
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  20. #40

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    One more thing, possibly more in line with the OP's needs. For separating needs from wants, calculate how many hours you'd have to work to pay for the want.

    When my niece who has a minimum wage job after school was asked "If you worked 3 days and they handed you those jeans instead of a paycheck, would you feel it's fair?" she had the "ah ha" moment. Now, she does a lot of "how many hours would I have to work to pay for..." calculations. It's changed her whole relationship with money.
    AceOn6, the golf loving skating fan

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