Debt Dumpers 2024

[ruadisneyfan2]

Hard to build savings when I've got an $1,800 debt staring me right in the face. I'm trying to figure out the best way to get that taken care of because I don't have a car if I don't get it taken care of. I was getting debt under control until this came out of nowhere.

For the 40th time, learn about Dave Ramsey’s Baby Steps. It works.

 

[trenty]

Hard to build savings when I've got an $1,800 debt staring me right in the face. I'm trying to figure out the best way to get that taken care of because I don't have a car if I don't get it taken care of. I was getting debt under control until this came out of nowhere.

This is really tough, I know. You were given some good advice here - try a credit union for a loan to get the car fixed. Sell some things if you have anything worth selling (someone mentioned baseball cards). Then, when the car if fixed, follow the babysteps many have told you about:

Step One: Starter emergency fund of 1K. While building this, don't spend any extra money on ANYTHING. Pay only the minimum on your debts. Consider ways to make extra money - sell more things; get a part-time job for just the time it takes to get through this.
Step Two: List all debts from smallest to largest. Put all extra money towards the smallest debt. Pay only the minimum on the rest. Don't spend any extra money on ANYTHING. Once the smallest debt is paid off, work on the next one the same way.
Step Three: Build up a proper emergency fund of 3-6 months of expenses.
If you get through these, we can discuss the rest.

 

[WDW_fan_in_TX]

Yes, I just applied for a loan to get the car fixed. The email said they needed more time and would let me know. So, we'll see what they say. And I'm trying to do the baby steps. I paid off one CC already (paid off the one with the highest APR and annual fee at the end of September). We had $500 saved up as a small EF, but then we had to use it after we paid rent the first day of October to get through last week and this week. So, we start over there. But we'll plop another $500 down this week when we get our next paycheck. But I have paid off 1 CC. So I have started the baby steps process. But it seems it's one step forward, 4 steps backward.

This is really tough, I know. You were given some good advice here - try a credit union for a loan to get the car fixed. Sell some things if you have anything worth selling (someone mentioned baseball cards). Then, when the car if fixed, follow the babysteps many have told you about:

Step One: Starter emergency fund of 1K. While building this, don't spend any extra money on ANYTHING. Pay only the minimum on your debts. Consider ways to make extra money - sell more things; get a part-time job for just the time it takes to get through this.
Step Two: List all debts from smallest to largest. Put all extra money towards the smallest debt. Pay only the minimum on the rest. Don't spend any extra money on ANYTHING. Once the smallest debt is paid off, work on the next one the same way.
Step Three: Build up a proper emergency fund of 3-6 months of expenses.
If you get through these, we can discuss the rest.

 

[ruadisneyfan2]

Don't spend any extra money on ANYTHING.

This. ^
Unless it’s utterly necessarily for bodily functions and basic hygiene, it should be cut. That includes: new clothes, nail salons, hair salons, entertainment, any food not from a grocery store,
No excuses. Just do it.

 

[trenty]

Yes, I just applied for a loan to get the car fixed. The email said they needed more time and would let me know. So, we'll see what they say. And I'm trying to do the baby steps. I paid off one CC already (paid off the one with the highest APR and annual fee at the end of September). We had $500 saved up as a small EF, but then we had to use it after we paid rent the first day of October to get through last week and this week. So, we start over there. But we'll plop another $500 down this week when we get our next paycheck. But I have paid off 1 CC. So I have started the baby steps process. But it seems it's one step forward, 4 steps backward.

This is going to sound like a lecture, but I don’t mean it that way.
If you are budgeting properly you shouldn’t have to use your emergency fund to pay your rent or "get through the week" after paying rent. You should have paid your rent before paying off that credit card.

Pay your “four walls” first: food, utilities, shelter, transportation. Here is a longer explanation: https://www.ramseysolutions.com/budgeting/4-things-you-must-budget

 

[ruadisneyfan2]

Yes, I just applied for a loan to get the car fixed. The email said they needed more time and would let me know. So, we'll see what they say. And I'm trying to do the baby steps. I paid off one CC already (paid off the one with the highest APR and annual fee at the end of September). We had $500 saved up as a small EF, but then we had to use it after we paid rent the first day of October to get through last week and this week. So, we start over there. But we'll plop another $500 down this week when we get our next paycheck. But I have paid off 1 CC. So I have started the baby steps process. But it seems it's one step forward, 4 steps backward.

This wouldn’t be happening if you were following a budget. You shouldn’t have to raid your EF to pay monthly rent. This isn’t some rare occurrence; it is very predictable every month. Money from paychecks should be set aside so that when rent is due, you’re ready to pay it.

 

[focusondisney]

This wouldn’t be happening if you were following a budget. You shouldn’t have to raid your EF to pay monthly rent. This isn’t some rare occurrence; it is very predictable every month. Money from paychecks should be set aside so that when rent is due, you’re ready to pay it.

Agree. And if you don’t have enough money to pay those basics…you have to make hard choices. You need to cut even more expenses or find a way to increase your income. Cutting expenses means absolutely no eating out, getting by on ramen & peanut butter sandwiches if you have to, visiting a food bank, applying for rent or energy assistance programs for low income citizens if you qualify, cutting streaming & phone services. Increasing your income means selling anything of value, yes, including those baseball cards, taking second jobs. You may even need to look for lower priced housing. Time to cut to the bone. It will be short term pain for long term gain.

Edited for spelling

 

[princesscinderella]

@WDW_fan_in_TX I’m sorry you have had this unfortunate repair pop in your wife’s car, but please do not take out a predatory loan to get it fixed. Do you have a city bus or other transit system you can use to get to work while you save for the repair? You have gotten some good advice and if your credit score is 650 applying for a loan though a bank should not ding your score but help it in the long run if you pay it on time vs going straight to a payday loan. Could you ask your boss for some extra overtime work to make some extra money since you are friendly with them? I get not wanting to ask for a loan or advance. Do you or your wife have any skill or services that you could post on Fiverr or taskrabbit to make some extra cash?

 

[Bellex917]

@WDW_fan_in_TX I'm so sorry, I know you've been trying hard.

I think you need to sell more of your cards to pay for this, and cancel your Disney trip. I know you've said parts are paid for, but we just went to Disney for three days last week, and even with it all paid for before we went (budgeted, saved, and paid for in advance) we still spent a lot in 3 days on food and small expenses.

I think you need to fully tighten the belt- NO eating out (I know you've cut down a lot) except maybe 1x a month, not a few times a week. You can't do this loan with the loan sharks- remember how hard you worked to get out of that, and it was much smaller then!

 

[ruadisneyfan2]

@WDW_fan_in_TX I’m sorry you have had this unfortunate repair pop in your wife’s car, but please do not take out a predatory loan to get it fixed. Do you have a city bus or other transit system you can use to get to work while you save for the repair? You have gotten some good advice and if your credit score is 650 applying for a loan though a bank should not ding your score but help it in the long run if you pay it on time vs going straight to a payday loan. Could you ask your boss for some extra overtime work to make some extra money since you are friendly with them? I get not wanting to ask for a loan or advance. Do you or your wife have any skill or services that you could post on Fiverr or taskrabbit to make some extra cash?

This is a good idea. Even something simple like buying a long handle scrubbing brush, elbow-length rubber gloves, and go knock on neighbor's doors and offer to scrub out trash bins for $20 each. That is a chore no one likes to do. You could easily make $100/day on weekends.

Word of mouth travels fast. Dh put up mesh gutter guards on our house and a neighbor saw him doing it and asked him to do theirs too. He ended up doing like 4 houses on our street at around $600 profit each and it takes him less than 1 day to do, buying materials at Costco. Pros want several thousand so it helps both of them in the end.

 

[simonsayz]

@WDW_fan_in_TX I know I am a bit late into responding to this. I was trying to read up on your posts from this thread and the other thread about your CCs.

I didn't even read until @Bellex917 mentioned that you have an upcoming trip. How did you even pay for this?

You need to set your financials in order. I understand that you love collecting cards but saying that you don't do smoke, drink, or doing anything illegal, is just an excuse to keep this hobby. I don't do any of those things. The hobby you should be really focused on having is making $$$.

I never read Dave Ramsey, but all of this emergency fund stuff. makes no sense. An emergency fund is usually created AFTER you have your finance in order. I never created an emergency fund. I built enough credit to get a lot of credit card limits and that's my emergency fund. Makes no sense to have an EF when you have high interest CCs with balances.

Credit Score only make sense when you are getting a loan for a car or a mortgage. A car loan and a mortgage loan look at different things in the credit score.

As much as everyone here loves having trips to Disney, if you can't afford it, don't go. It's not a big deal not to go. Instead maybe just take a 2-3 day getaway somewhere close at 1/15th of the cost of your Disney Trip.

You need to speak to a financial advisor or someone that actually knows finance. You are getting good advice on here but it's mixed advice.

 

[goofytinkerbell]

1

 

[afan]

You need to speak to a financial advisor or someone that actually knows finance. You are getting good advice on here but it's mixed advice

As is yours. People save up an emergency fund so that they don't have to go into debt or further into debt when an emergency happens. Great if you want to use your credit cards as your sole emergency fund but it goes against the whole idea of the thread and dumping debt.

I feel much better knowing I have an emergency fund than thousands of open credit. I know what type of emergency I can handle without needing to replenish, I don't know if my budget could take huge credit card minimums for that same amount. And if my budget was done not to save but to spend it all, then when I run up that emergency fund credit card balance I'm screwed because I can't pay my bills.

 

[barkley]

I think you need to fully tighten the belt- NO eating out (I know you've cut down a lot) except maybe 1x a month, not a few times a week.

i honestly think in this type of situation that even 1x per month is out of the question and that includes buying prepared 'to go' stuff (just b/c you don't eat the food at the restaurant/cafe/sandwich shop/fast food does not mean it's not 'eating out'). habits have to change and if eating out with others is excused as the only or 'normal' means of socializing with others then there needs to be a new normal. i get going out 3 or 4 times a year for a birthday or anniversary (if it's not creating more debt) but i know folks who complain about meeting basic living expenses but every week they are eating out with their co-workers (or kicking in on having food delivered) or dining out after church without a thought to how much this adds up.

 

[focusondisney]

it might not be feasible to "just move to a cheaper place"

Maybe it’s not feasible in the short term. But he can’t afford to pay his rent & buy food at the same time. That’s not sustainable for the long term. If his rent is taking that much of his income, he can’t afford that place. He talks about mowing the lawn. Sounds like they rent a house of some kind. Maybe they need a small apartment until they get their finances figured out.

 

[simonsayz]

As is yours. People save up an emergency fund so that they don't have to go into debt or further into debt when an emergency happens. Great if you want to use your credit cards as your sole emergency fund but it goes against the whole idea of the thread and dumping debt.

I feel much better knowing I have an emergency fund than thousands of open credit. I know what type of emergency I can handle without needing to replenish, I don't know if my budget could take huge credit card minimums for that same amount. And if my budget was done not to save but to spend it all, then when I run up that emergency fund credit card balance I'm screwed because I can't pay my bills.

My advice is mixed and that is why I suggested talking to a financial advisor that can cater to his needs and put him on the right path.
It doesn't make sense to have an emergency fund if the credit card is carrying a huge balance with high interest rate.

I don't have a lot of credit cards, just like 6 cards with about $350K in available credits. I only actively use 2 of them.
I guess I might be doing something wrong with my strategy.

Using credit cards isn't against the idea of dumping debt if you know how to use it correctly.

Many years ago, I had $35K in credit card debt, plus $60K in student loans while making $41K a year in NYC where rent for a studio was $1600. I didn't have money to do an EF because it wouldn't make sense.
What I am suggesting is to focus on getting rid of the debt first and not worry about the EF.
What's the point of the EF of $1000 and you have $600 sitting in credit card debt and paying 5% above min. payment? Exactly, how is this getting rid of debt?

Once the debt is clear, all the money/income and less expense, you know how much you will have left over. I wouldn't necessarily say that's EF. Put in savings to make some interest, put it towards bonds, invest in it.

There are different types of debt. Credit Card debts are the worse, but if you know how to utilize the credit cards, you can benefit from it.

Someone here also mentioned if you the emergency funds is far less than what is needed, the difference needs to come from somewhere. So in this situatin, EF has been exhausted and need to borrow. I don't know how many people here that have EF of only $1000, because in today's economy, $1000 is barely enough to do anything.

I am not saying EF is bad but maybe it's better to save for an EF AFTER the debt is gone?

But what do I know...

 

[goofytinkerbell]

1

 

[ruadisneyfan2]

As someone who worked VERY hard to try and fix my credit rating and have had similar setbacks, I'm saying this: Talk to the bank, take the loan. Assuming you can get it of course. I know that you think it will hurt your score, but if you can keep up the payments it's likely to actually help long term.

Someone mentioned you have a Disney trip booked? I don't mean to sound harsh, but that's got to go. Based on what I've seen you posting, you just can't afford it. Cut what you can. I get that depending on the situation some of the suggestions being made might not be as possible as people think. It's easy for them to say "just" when they don't know everything. You might actually need both vehicles, it might not be feasible to "just move to a cheaper place" or whatever, but a vacation is a luxury you just can't afford... no matter how disappointing that might be.

To a point, yes. But that doesn't work long term. What winds up happening if you cut everything for an extended period is that most people will feel deprived and "rebel". You can only make yourself miserable so long before it actually harms your mental health. I'm not saying "go nuts", but if you can't go through the week without having to wash your office clothes (for example) twice, then you probably do need to break down and buy a couple things - but not $500 worth. Take out once every month or two as a treat is okay, but don't do it once a week... If there's no balance it tends not to end well, but major cutbacks are needed, I agree.

I agree with your point that it can't be like a crash diet but it isn't long term. It's long enough to get out of debt. Some of his cc's are only $350 balance and he is still struggling to pay. Working OT doesn't work long term either but it can help get you out of a hole when you're in a bind.

So again, going back to what DR says when you're not making ends meet, "you either have an income probem or a spending problem." JMHO but I think he has some of both.

 

[Nettlelondon]

For everyone commenting - don't forget that WDW fan is also trying to sort this in the face of his DW who isn't necessarily in the same place mentally on the debt dumping journey which must make things a heck of a lot harder to deal with.

But I will echo all the others - do not go to the high cost lender until you have ruled out every other possible source of funds. They are just highway robbers in suits. Avoid, avoid, avoid.

 

[ruadisneyfan2]

As someone who worked VERY hard to try and fix my credit rating and have had similar setbacks, I'm saying this: Talk to the bank, take the loan. Assuming you can get it of course. I know that you think it will hurt your score, but if you can keep up the payments it's likely to actually help long term.

Someone mentioned you have a Disney trip booked? I don't mean to sound harsh, but that's got to go. Based on what I've seen you posting, you just can't afford it. Cut what you can. I get that depending on the situation some of the suggestions being made might not be as possible as people think. It's easy for them to say "just" when they don't know everything. You might actually need both vehicles, it might not be feasible to "just move to a cheaper place" or whatever, but a vacation is a luxury you just can't afford... no matter how disappointing that might be.

To a point, yes. But that doesn't work long term. What winds up happening if you cut everything for an extended period is that most people will feel deprived and "rebel". You can only make yourself miserable so long before it actually harms your mental health. I'm not saying "go nuts", but if you can't go through the week without having to wash your office clothes (for example) twice, then you probably do need to break down and buy a couple things - but not $500 worth. Take out once every month or two as a treat is okay, but don't do it once a week... If there's no balance it tends not to end well, but major cutbacks are needed, I agree.

I own 5 sets of scrubs, so yes I do laundry every week. I used to own a lot more regular clothes but I've lost weight recently and had to buy more so now I own about 4 pairs of long pants and 4 pr of shorts. It's good enough for me and I don't even have debt. I could afford to buy more clothes but I don't need more. Two pairs of pants still have the tags on them and I'm considering returning one because even on a typical weekend, I can wear a pair for 2 days before needing to be washed. I just don't need a lot of stuff.

Anyone trying to pay down debt needs to weigh each purchase as a need vs. a want. Stop and think before you buy how much you truly need something.