I am now about 6 months into my debt payoff, and i would like to do a little report.
I have been recently listening to some Dave Ramsey podcasts and he has a segment where people call in to his show and talk about how they are debt free ect ect. Its great, people pay off 40k in 15 months, they scream and yell and its awesome, leaving me feeling a little depressed. I don’t have that much in debt sure, but i am not paying my debt off nearly as fast as that.
I know i can not make excuses. I lose focus some times. I buy things i do not need, i don’t pay as much as i COULD towards my debts, but i have come a long way since OCT 09.
As of this week i have paid off $2890.62 since October. This includes just about all of my debts, from my current Credit Card, to my old card i paid off, my car loan, and my loan from my parents. It doesn’t seem like much, but i feel better.
This month i have really dedicated myself to paying off more debt, by not spending my money on things i do not need.
NO entertainment, no movies, no eating out, no gadgets, no video games (That is a hard one, MAG comes out soon..) All in all i am going to start doing what DR says and live like I’m poor. I’m thinking about getting a second job as well.
I am striving to be a better example to those in debt. But at the same time truthful of my faults, and my declines.

You may have noticed the NetworthIQ Badge i have on the right hand side of the home page. I just recently added this as a feature. I feel it is a nifty idea and a great way to track debts/assets. I highly recommend you sign up for the service, it is free and is non intrusive.

I also have been updating my Credit Score almost monthly and will continue to do so. I use www.CreditKarma.com (The link is in the Side Bar) because it is free and has great features to help with understanding how a credit score is determined. This is for the sole purpose of demonstrating that making payments on time, lowering my Credit Utilization Ratio, and getting out of debt is overall beneficial.

I apologize for the lack of posts in the Month of December. It was the busiest time of the year for my Company. I will start posting more frequently. I will be getting some more Interviews, Debt Stories, and Payoff Plans in the weeks to come!

When you NEED money

A lot of people I have been talking to recently have been criticizing the fact that I cut up my last credit card. “What if you need the money?” they say. I respond with “There are a lot of places I can get money if I absolutely have to.”  For some reason, they cannot think of any. Here are places I go for money Before dipping into my credit card.

One place to start off with is Selling Belongings. I typically only do this when I am in a jam. The end of the month is near and I forgot a bill, or an emergency came up and I needed money fast. I can usually get away with selling something I own,   a book, video game, DVD, sports equipment, ect ect. Selling something will also show others you might ask for money, that you are in a tight spot and serious about getting out. Would you want to loan someone $500 who has 2 big screen TVs, an Escalade with Rims and every DVD on the planet? No, you would expect them to sell off some of their stuff before they asked for money.

The second option of getting money fast is returning something recently purchased. As mentioned in other articles, this is a fast way to accumulate some cash, if you bought with cash.

Dip Into Savings-Not such a good idea. If you have emergency savings, yes dip into that, because that is what it is meant for. If you only have money put away for a House, College, Kids, ect. I would avoid dipping into accounts like that. Doing things like this is a slippery slope, it makes it too easy to do it again and again.

I would next go to family or friends and ask for a loan. I know it can be hard asking people you are acquainted with for money, but they will most likely be the ones to help. For some people asking for money is easy, for others it is a pride issue. I on the other hand do not like the feeling of being a burden, so I avoid this as much as possible. The good thing about asking friends or family for money is they typically do not ask for interest in return, unless of course they are Loan Sharks. If that is the case, get some better friends. Some other benefits of borrowing from your family is that the loan will not show up on your credit report, it will not affect your credit utilization rate; you will not get charged late fees unless you belong to a mafia family. This clearly makes this option the most beneficial.

Now, we talked about constructing a plan earlier, but I am going to walk you through it. How can you pay off your debts if you do not know how much you owe? Good Question, so this is where we will start.

If you do not know how much you owe, this is probably the reason you sleep at night. Well get ready to lose some sleep. Log into your bank websites, open all your bills, or call your banks if you are having a hard time calculating how much you owe. They should make it pretty clear. Once you have all the info, compile it all into one list like such.

Now don’t wince, you knew this day would come, and it’s the first step to getting rid of it. Face it! You are a big kid now and this number was your doing. Now it is time to digest a little more info. For example, paying only the minimums (4% of the balance) on all these cards, and assuming you do not spend any more with them, will take 14 years and 8 months to pay off all three cards with a total of $7,149.95 paid in interest.

You probably did not think about this when you were at the club swiping your plastic to buy, that cute chick that was using you, drinks.

Let’s face it, none of us did.

The next step is to create a payoff plan.

A reason I kept spending while trying to get out of debt is that events would come up, typically unnecessary events such as movies, and I didn’t have cash. I rationalized and considered my Credit Card was an option. This is equivalent to trying to rock climb as someone chucks boulders at you from the top. You’re not going anywhere.

You can’t! Forget about it all together. Leave it at home, somewhere safe, and somewhere that isn’t easily accessible. This might mean in the attic, garage, basement, or buried in the back yard. (I don’t recommend the latter).  Keep it out of reach. I used to keep my CC stashed away in my room and even though it was out of my wallet it was much too easy to pick up when a friend called to invite me out. By using psychology against yourself you can keep from spending. People are lazy, even myself. If it means I have to climb a latter into my attic to get my credit card, I’m not doing that. I’ll go cash in my coins at the coin star, before I hunt for my card.

You might not have to go to such great lengths as I did but consider the idea if you tend to dip into your card for any reason. Emergencies can be a struggle, going to the hospital, or forgetting about your car payment and spending all the money can put you in a vise. I advise you exhaust all other options before relying on your credit card.

If you know you will use your card to spend no matter what, shred it.

At least you’re not kidding yourself.  I, honestly, had to do this with one of my cards. It’s nothing to be ashamed of. I would actually give you kudos for committing such an act. The funny thing is, even with my card shredded up, I tried to remember the card number to place an online order for something I “needed” . It did not work out, but there is the proof right there. If I had not shredded the card, I would have spent more.