Debt Dumpers - 2014

[SpaceGirl]

DH and I both make good money. But because of that, we also spend good money. I looked at DR and want to apply some of his ideas, but again, not all work for us, or do we want them to. We both have newer cars (I have 2014 Jeep Grand Cherokee, he has a 2011 Jeep Liberty, with the hopes of making it to payoff with his and keeping it for our DD). We have a lawn service, a cleaning lady. My daughter does elite travel soccer, my son just started mini mites hockey. We make enough to have all these goodies, and then some, but we need to curb back our spending and get back within our means.

We used to pay off our CC's every month. Then something came up, and we carried a small balance, and then it happened again, and apparently again and again and again, LOL. So now we need to tame the beast.

I've signed up for two 0% balance cards so far, just trying to hold off the crazy amounts of interest we've been paying. I'm going to try for another 1 or 2 this weekend to see if I can't get a huge chunk of the balances off the high rate cards! Then we need to attack and I'd like to try the snowball effect. Of course our lowest balance is already ON a 0% store card, so I'm keen letting that ride out until we pay that off before the rate change. Perhaps we can start with the smaller balances I'll have left on the high rate cards.

I'm guessing I can't be alone living in a world of "but I want this..." while trying to budget, LOL. My biggest issue is the sense of entitlement I have. I work for a reason, to live in a nice house, to drive a new car, and have nice things and do fun things and go places, etc. If I wanted to pinch pennies, I'd stop working ($20K in daycare savings) and stay home. So it's hard to strict the balance for me from extremes (Dave Ramsey for example) and excessive (me, LOL).

Here we go!

OK...your telling us you have your cake are eating it and yet the crumbs are flying everywhere...Reality Check and it sounds like your smart enough to already know this...You are in serious debt, Debt is when you are spending more then you make...you make very good money so this enables you to run up even more Debt. (not a good thing)

You want your debt paid off, yet aren't willing to change your lifestyle...(Ouch)

You want a budget yet you don't want to limit your spending on a budget.

You are now to the point of moving your debt around to new credit cards. (Opening two new cards so close together isn't a great thing to do for your FICO Score) Opening four will set off alarms to your other lenders, resulting in possible higher interest rates. So please be warned.

If you manage to transfer most of your current balances to new cards will you have time to pay them off in full before the offers end? While these offers are great for eliminating the high cost of interest remember the Credit Card Companies are betting you will not pay them off before the offer expires, at which time they raise your rates even higher. (In some cases these companies actually go back and add the entire amount of interest that would have been acquired during the grace period to your balance.)

You need to collect all your expenses and bills together and see how much you are dealing with each month. If you can transfer the balances to 0% it will help but you then need to start focusing on one account and put all extra money toward that account until Paid-in-Full then move on to the next.

Remember when all these bills are Paid-In-Full that's when you can LOL all the way to the Bank.

 

[SpaceGirl]

This is what I've been trying to do, at the risk of becoming an enabler. I just wasn't expecting it to take quite so long.

I know...but it just seems like maybe we aren't taking into account this is a very special person to you, that you care about his future.

My advise on it taking so long...is just do what you can for as long as you can. Remembering that you must take care of youself before you can help others. (Emotionally and Financially)

 

[waffles77]

My goal this year is to pay off our credit card bills that are higher than we would like them to be ($0 goal). I found this thread and it might just be the help that I need for support in this process.

I have read a bunch of pages already and have gotten quite a few ideas to get started.

Thank you all and good luck!

 

[southlakejr]

I'm guessing I can't be alone living in a world of "but I want this..." while trying to budget, LOL. My biggest issue is the sense of entitlement I have. I work for a reason, to live in a nice house, to drive a new car, and have nice things and do fun things and go places, etc. If I wanted to pinch pennies, I'd stop working ($20K in daycare savings) and stay home. So it's hard to strict the balance for me from extremes (Dave Ramsey for example) and excessive (me, LOL).

Here we go!

You are definitely not alone! Between what we spend on our spending money, cable tv, cell phones, internet, and other nonessentials, we could be cutting a lot from our budget and eliminating debt (about 12k) even faster. However, we would hate every single minute of it and I really don't see it going well for us. But, at the same time, I know that my "ooh, shiny!" approach to spending money isn't a good idea either. So we're working on finding a good balance between how much we want to spend and getting rid of our CC debt. We set kind of a deadline for when we would to have it paid off that fits with a reasonable and realistic life style for us, and went from there. Right now, it's looking like 12 months or so. It would be 5 or 6 if we cut out all of the nonessential expenses, but we would much rather work towards a plan that won't make us bitter and resentful. Good luck!

 

[AquaDame]

I think I posted in the 2013 thread before the holidays. I need to get a hole of our debt in a MAJOR way. We're sitting at $29k in credit card debt alone. Add in cars, student loans, etc, and we're in a world of hurt, LOL. Sadly according to mint we spent $13k in December ALONE! (I think several sports/activities checks posted this month).

DH and I both make good money. But because of that, we also spend good money. I looked at DR and want to apply some of his ideas, but again, not all work for us, or do we want them to. We both have newer cars (I have 2014 Jeep Grand Cherokee, he has a 2011 Jeep Liberty, with the hopes of making it to payoff with his and keeping it for our DD). We have a lawn service, a cleaning lady. My daughter does elite travel soccer, my son just started mini mites hockey. We make enough to have all these goodies, and then some, but we need to curb back our spending and get back within our means.

We used to pay off our CC's every month. Then something came up, and we carried a small balance, and then it happened again, and apparently again and again and again, LOL. So now we need to tame the beast.

I've signed up for two 0% balance cards so far, just trying to hold off the crazy amounts of interest we've been paying. I'm going to try for another 1 or 2 this weekend to see if I can't get a huge chunk of the balances off the high rate cards! Then we need to attack and I'd like to try the snowball effect. Of course our lowest balance is already ON a 0% store card, so I'm keen letting that ride out until we pay that off before the rate change. Perhaps we can start with the smaller balances I'll have left on the high rate cards.

I'm guessing I can't be alone living in a world of "but I want this..." while trying to budget, LOL. My biggest issue is the sense of entitlement I have. I work for a reason, to live in a nice house, to drive a new car, and have nice things and do fun things and go places, etc. If I wanted to pinch pennies, I'd stop working ($20K in daycare savings) and stay home. So it's hard to strict the balance for me from extremes (Dave Ramsey for example) and excessive (me, LOL).

Here we go!

This is us to a T with a few differences... I agree with what SpaceGirl said. Moving debt around is no way to help yourself, trust me. I too opened two 0% cards before our wedding to take care of incidentals (went for one, they convinced me to open a second one to replace a reserve account on my checking I had opened ages ago in case I ever went under on my checking - which I don't do anyway). Well guess what happened? We used one up, but its fine, we said, its 0% and we will certainly pay it off within 14 months. We didn't even touch the second one, how good were we?! Then we bought a house. Wanted air conditioning. Had opportunities for trips. And what do you know, 14 months later we were still just paying the minimum! In October we will have been treading water with that card for three YEARS (the APR is very low so other cards are more urgent) because we keep paying money to it, but keep adding it right back on.

My point is, having that 0% took away all urgency. Seeing us bleeding money every month keeps us motivated in ways that seeing the chart saying we're debt free in three years without any change in luxury can't. I wish I didn't know that so I could be freaked out and just DO it.

We have the same problem in that we make good money, and can afford it all on paper. We pay hundreds over our minimums every month, but all the "treats" keep us right where we started. The two weeks in Hawaii over Christmas was great, but man did it make short work of my bonus (which COULD have gone to a card!). I mean... look at my bloody signature! THREE MORE trips this year?! But I don't even drive a nice car (its 16 years old, but it runs so why add a car payment)! But we bought way less house than they told us we could! DOESN'T MATTER. The only thing that matters is that annoying needle not making headway down towards financial freedom. It's HARD! I wish I knew what its going to take to be serious about it!

 

[dayvewc]

I know...but it just seems like maybe we aren't taking into account this is a very special person to you, that you care about his future.

My advise on it taking so long...is just do what you can for as long as you can. Remembering that you must take care of youself before you can help others. (Emotionally and Financially)

Thanks. I know we'll make it. And we are better now than we were 3 months ago, and even better than this time last year. Just somedays it seems like it's two steps forward, two steps back.

And every now and then, I just need a place to go to scream and vent and whine and complain so I can take a deep breath and focus on what needs to be done.

Thanks again.

 

[zy144622]

Super excited with the way 2014 has started! We started to snowball late feb/early march 2013 and we are still on pace. Budgeting is becoming easier and hubby is 98% on board. This has taken some time but he's there. Missing 2% are ages DD5 and DS2 who love to get daddy to buy treats when stopping at the gas station. Seeing the progress feels great and I can't wait to be debt free! I'm still thinking it will be 2 years but I see the light.

 

[SpaceGirl]

And every now and then, I just need a place to go to scream and vent and whine and complain so I can take a deep breath and focus on what needs to be done.

Well this is the place to do all of the above, studies have shown that if you have a source for support from Peers you will save twice as much and reduce your debt.

 

[SpaceGirl]

Super excited with the way 2014 has started! We started to snowball late feb/early march 2013 and we are still on pace. Budgeting is becoming easier and hubby is 98% on board. This has taken some time but he's there. Missing 2% are ages DD5 and DS2 who love to get daddy to buy treats when stopping at the gas station. Seeing the progress feels great and I can't wait to be debt free! I'm still thinking it will be 2 years but I see the light.

Great status report looks like you will be debt free soon...

Your missing 2% are a big part of why you are doing this so they are really positives.

 

[dtr_angel]

For insurance first you need to determine rather you want Term or Whole Life a website with good information is SelectQuote.com it has information as to the differences of the policies.

I'm only posting this site so you can read and get the information that will help you make a decision of what type policy. The company you purchase from should be your decision.

Here is a short video clip on what Suze Orman says about life insurance:


http://www.youtube.com/watch?v=AIdG7cwHo04
and
http://www.youtube.com/watch?v=WzgtWfQngII

Thank you for the resources! That is the info I was looking for (type of life insurance not company) as for company I'll probably start with the one that our home/auto is through but get a few more quotes to make sure. Thanks again!

 

[SpaceGirl]

Thank you for the resources! That is the info I was looking for (type of life insurance not company) as for company I'll probably start with the one that our home/auto is through but get a few more quotes to make sure. Thanks again!

Your more than Welcome...

 

[dayvewc]

Super excited with the way 2014 has started! We started to snowball late feb/early march 2013 and we are still on pace. Budgeting is becoming easier and hubby is 98% on board. This has taken some time but he's there. Missing 2% are ages DD5 and DS2 who love to get daddy to buy treats when stopping at the gas station. Seeing the progress feels great and I can't wait to be debt free! I'm still thinking it will be 2 years but I see the light.

WooHoo to you!! 2 years may seem like a long time from now, but it'll pass sooner than you think! You got this!

Well this is the place to do all of the above, studies have shown that if you have a source for support from Peers you will save twice as much and reduce your debt.

Thanks. I think I have "all of the aboved" already. lol I knew there were studies that said support helped save more and reduce debt, but didn't realize it was quantified at 2x. That is pretty cool.

 

[LilSweetPeaPhoto]

You are now to the point of moving your debt around to new credit cards. (Opening two new cards so close together isn't a great thing to do for your FICO Score) Opening four will set off alarms to your other lenders, resulting in possible higher interest rates. So please be warned.

My credit is excellent (no joke, despite having large sums of debt). Exactly what will opening 2 new cards do to an excellent rating?

 

[SpaceGirl]

My credit is excellent (no joke, despite having large sums of debt). Exactly what will opening 2 new cards do to an excellent rating?

Many things effect the overall FICO Score but opening two cards the a short time will drop your score, because they both would require a Hard Pull or two inquiries (10% of your score) they will also effect your average credit age. Fifteen percent (15%) of your credit score is based on your credit age. There are two factors to your credit age. First, there’s the age of your oldest account and the average age of all your accounts. Opening a new credit card will lower the average age of all your accounts, especially if it’s been awhile since you last opened a credit account.

Opening a new credit card could raise your credit utilization if you make a big charge or transfer. If you charge a balance that takes up much of your credit limit, your credit score will take a hit. That’s because 35% of your credit score is based on how much of your available credit is being used. The more of your new credit limit you’re using, the more your credit score will hurt. But here you will be lowering your utilization on your other credit lines so after a few months this should even out as long as the other balances come down.

It's usually better to wait between opening cards by 6 months to a year so your overall score has time to recover before you lose points again.

As you already have the new cards not much you can do, after you have paid down your debt you will eventually come out of this with a higher FICO score because you have the additional lines of credit that will increase your amount of available credit.

When I carried my credit card debt my FICO score was also very good, now that my balances are paid off I'm in the top 1%.

 

[LilSweetPeaPhoto]

Thanks for answering. I guess I'm not too worried. I viewed all of our current standings. Our debt to max limit is under 20%, even w/ the one card showing a max/full balance.

I realize I'm just moving money around on paper, but I think this tactic will begin to help us make way at closing in on the mountain we have. Plus with these now smaller balances on some of the cards ($1k on a couple), it's much easier to pick a target to snowball. Having at card at $20k, and another at $6k made it a bit harder to focus on getting paid ASAP.

You know, we all need those little victories, LOL

 

[SpaceGirl]

I realize I'm just moving money around on paper, but I think this tactic will begin to help us make way at closing in on the mountain we have. Plus with these now smaller balances on some of the cards ($1k on a couple), it's much easier to pick a target to snowball. Having at card at $20k, and another at $6k made it a bit harder to focus on getting paid ASAP.

You know, we all need those little victories, LOL

Yes Victories are very important I know on my largest and last balance I went a year just paying and paying. The only victory for me was watching the Balance and what I was paying on the Interest get smaller and smaller that was enough to keep me going.

But at the time it seemed to take forever, so just remember it can be accomplished.

 

[gracie1]

Everyone is doing such a fantastic job!! Seems like 2014 has started out awesome
Luckily, I haven't had any unexpected items lately, which is a first for a while!!

Lilsweetpea - Spacegirl is right, as you see the balance actually going down that is what keeps you motivated! That was the best motivation for me

 

[McFlea]

Hi Everyone!
I'm so glad I've found this thread. Reading these posts has inspired me to check out Mint and YNAB, set up a spreadsheet, and create a budget for the first time ever. It feels good!
Goals for this year:
Cash only - no more pulling out the debit and credit cards all the time
Pay down cc debt
Stick to the budget I set
Save for Disney 2015!

Now, instead of freaking out every month, I'm actually looking forward to this year and seeing real progress.
Good luck to all!

 

[momtosam]

I've read Mary Hunt's book and really like her better than DR. She has a stronger philosophy about saving up an emergency fund, which appeals to me. DR's $1000 initial emergency fund just isn't enough to make me feel comfortable. I need to have more in the bank thank that to feel safe. I understand the whole gazelle thing that DR talks about, but I need to know I have a good safety net in place. (It's probably a woman thing. I think Suze Orman stresses savings more than DR, too.)

DH and I have decided to cash in a whole life policy we opened when we were first married. We were young and didn't know about the downside of whole life. This will give us a considerable chunk of money to pay off my car (yea!) AND put money into the emergency fund. Then we can throw money at remaining debts. (We are not shortchanging ourselves as far as insurance goes. We've since opened up term life policies and both have considerable death payouts through work.) I can't wait to walk into the credit union and write that big check to pay off the car!

 

[ruadisneyfan2]

Hi Everyone!
We're still making progress! After next pay we'll have restored our emergency fund, paid off the excess we spent at Christmas, and it's back to our snowball. Unfortunately, Christmas & my car repairs have pushed our final debt payoff date back another 3 months. We've barely spent $ on anything besides necessities this month so far so that's a big help. Hopefully by the end of the month I can throw some extra at our snowball.

Another good thing while I've been home sick with a tummy virus, I've had more than usual time to look over things and start planning our summer vacation. That's my one weakness I can't give up. Yes, I know this will push back our payoff date further. At least our airfare will be free with 1 standard award with SWA and enough points for 3 more RT seats.

Nothing extravagant, going out west to Zion Nat Park & Bryce Canyon in Southern UT and Glen Canyon in Northern AZ for some rafting down the Colorado River & touring a slot canyon. There are many ways to keep costs down. For one of our stops we can rent a cabin with a kitchen so having some home cooked meals not only saves $ but tastes better too. I can only take so much of 3 restaurant meals per day. Most hotels offer free breakfast & WIFI. We'll do a couple tours and maybe splurge on ATV rides if it's not too expensive. Who know, maybe we'll be too tired and just want some downtime? I'm trying not to schedule too much.

Just keep swimming everyone