Getting out of debt

[bucket-of-aids]

I've been listening to this financial guru named Dave Ramsey a lot ("Ask" channel 165 on XM, 12PM-3PM, M-F) He lectures about how to manage your money and he makes a lot of sense to me.

Anyone currently going through the patbattle against debt? Any war stories?

[whiskeydick]

yeah been getting him here on FREE RADIO forever. I paid off around $9000 last year while my wife was in school and not working. This year already paid off around $4000 wife out of school and working. His shit works, I just used some of his ideas though, didn't do the rice and beans shit.

[roche]

Clark Howard seems to say a lot of sensible things also.

[bucket-of-aids]

His shit works, I just used some of his ideas though, didn't do the rice and beans shit. Which of his ideas worked for you?

[whiskeydick]

did the written budget, sold a few thing I wasn't using, and drank at home more. main thing is the budget, you would be supprised how much you piss away. Also worked as much overtime as I could get in.

[Amazingkaddycap]

After my Dumb ass went into over $25,000 in Debt I deceided to File Chapter 13. One day I will be Debt Free.

[whiskeydick]

doesnt take long, I didn't think I was that much in debt till I started listening to him.

[hypes]

I don't listen to anyone "professional" about this stuff, but from doing my own research I found that just using a credit consolidation company works very nicely....we used a place called Auriton who shoved all our credit cards into one lump sum. It's saving us tons of cash, and we'll be debt free in about 3 years.

Plus, it doesn't fsck with our ability to get a new mortgage (we're looking for a bigger house).

-h

[whiskeydick]

yeah but if you consolidate your credit card debt you will more than likely be in the same boat a few years down the road. Its like dieting, you have to change your bad habits of spending more than your make.

[Bad Salmon]

After my Dumb ass went into over $25,000 in Debt I deceided to File Chapter 13. One day I will be Debt Free.

25k isnt a lot but you couldnt qualify for chap 7? Did you file before or after the new laws took effect?

Presuming you are a home owner and have some equity, it is always wisest to refinance and take some cash with it(30 yr fixed rate) to pay some accounts you dont want to include in the refinance for a possible better rate. If you have little equity and a lot of debt its best to have one payment rather than 12 different ones you can miss paying b/c even at a high interest rate you can still shave off a couple hundered dollars a month by going the 2/28 route(2yr fixed/28yr adjustable) and refinance after 2 years b/c your debts are paid immediately by the refinance, and your credit(FICO) and equity will go up within the 2 years fixed and before the adjustable kicks in which will enable a better rate and put you in a fixed account when you refinance once again at the end of the 2yr fixed term. Both ways you are able to stop paying just interest on those adjustable accounts like credit cards and credit lines and will allow you to put money towards principle. This is only if you pay that mortgage or loan company on time.

[Glenn Dandy]

I hear sucking cock pays well. but those bothersome AZT drugs cost alot... I guess its a wipe.

I prefere spending nothing and not working much.

My brother is a millionair work obsessed. has millions in propertys. a 130,000.00 motorhome.. you name it he has it... is he happy?









Of course hes fucking happy the dickhead!

[KillGreys]

I married a woman who used to be an accountant and had a good job.

I am a male whore.

[MattyIceGfunk]

need to refinance your house? Give me a call ;)

[invisible76]

Just about done bailing wife out of her years of debt from school.

best advice for getting out of debt: STICK TO THE BUDGET. When you sit down and look at how much you're spending on lattes from Starbucks in a year, its a real good motivator to change habits.

[Jolie]

I stopped using credit cards. If I can't afford to buy something out of checking, then I don't buy it. Period. The one exception is vacations. Those, I will occasionally pay for things like airfare and hotel on my credit card, but only after I have saved enough to KNOW we can afford the trip out of checking. Thing is, your credit rating really looks better if you actually carry a balance every once in awhile, and show you can make your payments on time.

Other than that, the cards never get used. My only debt is my house.

[generoso]

Took me years to get out of debt and get my credit score back up...I understand the school loans and no way to avoid them...Get on a budget and tight one ...GET RID OF THE CELL PHONE you don't really need it...I had one for excalty 1 month and tossed that fucker out...Stop eating out and cook the stove is there more than holding the fast food boxes you will be amazed how much you save there...Keep one credit card in a lock box just in case of emergency. Just because the Sandford and son dvd set came does not constitute a emergency...Like a car breaking down and you need to rent one...which also applies don't buy a new or used car from a dealer untill your back on your feet..put your debit card next to your credit card in the lock box...and carry only 10 dollars cash...Work over time and if you can a partitme job if only a extra 10 hours a week and put that extra money into lowering your debt not a perk....
This might sound harsh but I am single dad with a teenage son. i can strech a buck real far. My heat never goes over 65 most times it is at 60..I can go food shopping for the both us for $40 for the whole week..ya might have to shop at 4 differnt stores but i do it...I spend 2 hours on Sunday clipping savings...I live below my means instead of above them..You can save at one time I had about $60,000 in credit card bills..Took me years of working two full time jobs one was at Home depot at night stocking..every cent went to paying off the bills....Now all I have is my home mortage and hopefully in 10 years I will have that done....sorry for the long post just this brought it all back....

[Ploppy]

Thing is, your credit rating really looks better if you actually carry a balance every once in awhile, and show you can make your payments on time.


Once you stop using credit, you quit worrying about your credit rating. I don't know what mine is, and I don't care.

GENEROSO-- I'm with you on most of what you said except keeping the one card in case of an emergency. CASH works just as well as credit in an emergency. My wife and I have $1,000 set aside for emergencies. Christmas and vacations are not emergencies. An alternator taking a shit, or the refrigerator breaking down is.

BTW the $1,000 is just a start. The ultimate goal is to have 6 months of expenses put aside.

If you are in debt and want out, before you go to a consolidation or take out a "home equity loan" (which is a mortgage, but sounds much nicer) listen to Dave Ramsey on ASK 165 or at www.daveramsey.com and read his book "The Total Money Makeover" (about $15.00). It will change the way you handle your money and will get you out of debt.

[Bill]

Once you stop using credit, you quit worrying about your credit rating. I don't know what mine is, and I don't care.


Yes. But when it comes time to buy a house, having a good credit rating is important. Jolie is correct when she says that using a credit card every few months and paying the entire bill immediately is a good idea.

Learning how to use credit properly is almost as important as getting out of debt is.

[Ploppy]

Yes. But when it comes time to buy a house, having a good credit rating is important. Jolie is correct when she says that using a credit card every few months and paying the entire bill immediately is a good idea.

Learning how to use credit properly is almost as important as getting out of debt is.

I will never agree with you.

I was under the pile of credit bills. I've been there, done that. Not going back. I get to keep most of my paycheck. I learned how to use credit properly and that is to NEVER use it. Pay cash...owe no one.

Good day sir.

[Bad Salmon]

There is such a thing as good debt. Debt builds your credit. Our financial system is based upon credit and this goes back to our first secretary of the Treasury, Alexander Hamilton who created our system in the 1790's. Just dont miss payments which kills your FICO score and dont owe more than 30-40% of your income. Stay in this range and you will get better rates and any loan you want.

[flyerfan116]

Funy this thread was started b/c i just took a look at my financial position and made some changes. Took out a home equity loan to pay off the credit cards, so now the int. i'm paying is tax deductible with a set payoff time so between that, the car payment and student loans i should be debt free (other than the mort.) in less than 4 years with easlily manageable payments. Another thing i suggest is shop around for your bills...phone bill too high? i switched to vonage $14.99 a month, check out cell phone rates...also car insurance. i recently reviewed my policy and found that all state was overcharging me for an accident that wasn't my fault, they refused to help i went on geico last night and saved $1800 a year...thats $1800 more to help pay off debt...so shopping around and minimizing your monthly bills will help big time.

[Jolie]

Yes. But when it comes time to buy a house, having a good credit rating is important. Jolie is correct when she says that using a credit card every few months and paying the entire bill immediately is a good idea.

Learning how to use credit properly is almost as important as getting out of debt is.

Actually, you should use it every once in awhile, but take more than one month to pay it off. I set aside the money, know I have X amount, and pay it off over 2-3 months. They like to see ontime history, not just that you paid off the entire balance all at once.

[Bill]

Actually, you should use it every once in awhile, but take more than one month to pay it off. I set aside the money, know I have X amount, and pay it off over 2-3 months. They like to see ontime history, not just that you paid off the entire balance all at once.

You'd be better off making 2 or 3 smaller purchases over that 2-3 month period and paying off the entire balance each month. It looks the same on your credit report and you didn't pay any interest.

Credit card interest (along with DVD rental late fees) is something that I can't bring myself to every have to pay. My typical Visa bill is between $3,000-4,000 per month (with a couple months of $5K +). It always gets paid on time and in full.

The only things that I'm willing to pay interest on are my house and my car. With my current car, I'm only paying 1.9%. So, even though I have enough money in my savings account to pay it off, it really doen't make sense to do so.

[Bill]

I will never agree with you.

I was under the pile of credit bills. I've been there, done that. Not going back. I get to keep most of my paycheck. I learned how to use credit properly and that is to NEVER use it. Pay cash...owe no one.

Good day sir.

Just because you're incapable of properly managing you credit, doesn't mean that it's not an important life skill to possess. Since you've apparently proven to yourself that you are incapable of using credit to your advantage, I agree that you made the proper choice for yourself to stop utilizing it.

However, that inability to utilize credit to your advantage is going to cause you problems at some point in your life (like when a bank either won't give you a mortgage or charges you a higher interest rate on a mortgage or car loan because you don't have a positive credit history).

You would be much better off getting a low limit credit card that you use to pay another bill every month. For example, if you have cable, have the cable company charge your credit card every month and pay the credit card company instead of the cable company. You'd be establishing a positive credit history for when you need it, yet you haven't spent a single penny more than you would have if you didn't have a credit card.

Other than paying that one bill per month, don't use the credit card at all. Don't even carry it. Put it in a drawer or filing cabinet and leave it there. You'd be using that credit card only to build yourself a positive credit rating, nothing else.

That's properly managing your credit.

[Jolie]

You'd be better off making 2 or 3 smaller purchases over that 2-3 month period and paying off the entire balance each month. It looks the same on your credit report and you didn't pay any interest.

Credit card interest (along with DVD rental late fees) is something that I can't bring myself to every have to pay. My typical Visa bill is between $3,000-4,000 per month (with a couple months of $5K +). It always gets paid on time and in full.

The only things that I'm willing to pay interest on are my house and my car. With my current car, I'm only paying 1.9%. So, even though I have enough money in my savings account to pay it off, it really doen't make sense to do so.

And NOW you are just bragging. :-) I don't have a car payment. We bought both of our cars with cash. :-)

[Beeman99]

I hear sucking cock pays well. but those bothersome AZT drugs cost alot... I guess its a wipe.

I prefere spending nothing and not working much.

My brother is a millionair work obsessed. has millions in propertys. a 130,000.00 motorhome.. you name it he has it... is he happy?

Of course hes fucking happy the dickhead!

I agree, my grandparents own a chain of sex stores up here and they are millionaires many times over, but they are two of the unhappiest people I know. It's nice to have money, but if you base your whole life around it you are going to watching your life fly by without enjoying it.

[Exanimate]

When I was 20 years old I was in serious trouble. I had tons of credit cards. I bought everything on credit. I did good paying my bills for awhile, and then had some personal issues, and quit giving a fuck about anything. I had no choice, but to file bankruptcy. In those times without having credit I learned how to manage my money wisely. 10 years later my credit is great.

Yes my wife and I use credit cards these days. I have a Visa that my gym membership, and a few other small recurring monthly charges go to. We pay it off every month. We then have another Visa that has a huge credit limit that we keep put away, and use for emergencies. We have no department store credit cards. We have a credit card for Lowe's and one for Home Depot. The Home Depot one has a balance of around 2 grand on it from when we bought our appliances for our house on 12 months no interest. I am paying it off next week.

I currently do side jobs for a few local lawyers, and the money that they pay me I throw at the principal on my mortgage, or pay extra on the car payments.

We always put money aside for vacation, general savings, or if we just want to buy something that we want.

It is a nice feeling to know that you don't have to worry about where you are going to scrape up the change for the next credit card payment.

Fuck I typed to much.

[Bill]

And NOW you are just bragging. :-)

Nah. Other than my my mortgage and car payments, that Visa bill covers virtually every expense that I have. Every account that I have with other companies (DirecTV, AT&T, heating oil company, etc...), is just automatically charged to my Visa every month. If I had that kind of Visa bill on top of monthly expenses, I'd be screwed.

It just consolidates my bills so I only have to make one payment to cover nearly everything and pays me back 1% in Disney credit that I use every year when I go to WDW with friends. After a year, that ends up being about $500 of "found" money to help pay for vacation.


I don't have a car payment. We bought both of our cars with cash.

I don't see that happening for me anytime soon. I've always needed to take out loans for my cars. They've never been huge, but I've always needed them. With my current car, I had recently gone through most of my savings renovating and refurnishing my house. The engine on my old SUV died and I needed something immediately. Because my credit has always been good (just to bring this back on topic :) ), I got away with $500 down (on my Disney Visa) and a 5yr loan at 1.9%

[Baron VonGlooey]

Back when I was a strapping young lad of 23 years old, I somehow managed to get myself two grand into credit card debt. I was young and clueless, and the shit just snuck up on me. One minute I had like a 200 dollar balance, and then I turn around and it's 2000. I freaked. I was making like $25K/year at the time, and I thought my life was over... I was convinced I was going to be thrown into debtor's prison where I would be assraped daily until I died of AIDS. I didn't know what to do, I was a nervous Nelly and I finally couldn't keep suffering in silence and one day I broke down and confessed my predicament to my girlfriend. I thought for sure she was going to heap scorn and humiliation upon me, and then dump me instantly the second I told her. She just laughed, and then she went into the other room and came back with her credit card statements...

All told... $14,000 in credit debt.

This was a broad who worked in a nail and tanning salon and she would have been lucky to clear 18 grand in a good year.

This made me feel much better about myself, and I took control of my finances, buckled down, and dug myself out of the hole in less than a year. I learned a valuable lesson, and I've used credit wisely ever since.

The girlfriend? I dumped her dizzy ass about two seconds after she showed me her credit card statements. 14 grand?! What a loser! Who needs that shit in their lives?

[Bill]

Back when I was a strapping young lad of 23 years old, I somehow managed to get myself two grand into credit card debt. I was young and clueless, and the shit just snuck up on me. One minute I had like a 200 dollar balance, and then I turn around and it's 2000. I freaked. I was making like $25K/year at the time, and I thought my life was over... I was convinced I was going to be thrown into debtor's prison where I would be assraped daily until I died of AIDS. I didn't know what to do, I was a nervous Nelly

I'm exactly the same way, but probably worse. If I get a bill showing that I'm past due on something, I freak out, even though I know that it's wrong.

I have absolutely no understanding of how people like your ex-girlfriend can live from day to day in that situation. I would have an ulcer.

I guess that, sometimes, ignorance really is bliss.

[Baron VonGlooey]

I'm exactly the same way, but probably worse. If I get a bill showing that I'm past due on something, I freak out, even though I know that it's wrong.

I have absolutely no understanding of how people like your ex-girlfriend can live from day to day in that situation. I would have an ulcer.

I guess that, sometimes, ignorance really is bliss.

I hear ya' (tm) Club Soda Kenny

Not only was the dizzy slit NOT upset on a daily basis about the crushing financial load she was under, she laughed and joked about it! She got mad at a credit card collection agent who kept "harrassing" her, and she told him that it wasn't her fault that she owed so much money, it was the credit card company's fault because they kept, "...giving her the money." :icon_roll

She said that she was planning to pay off the debt with lottery winnings.

I shit you not... she actually said that.

Bye Bye, bitch! :action-sm

p.s.- Huntington Station huh? I'm a Port Jeffersonite. Have you been to Ope's brother's bar yet? I'm thinking about checking it out someday soon.

[Jolie]

I'm exactly the same way, but probably worse. If I get a bill showing that I'm past due on something, I freak out, even though I know that it's wrong.

I have absolutely no understanding of how people like your ex-girlfriend can live from day to day in that situation. I would have an ulcer.

I guess that, sometimes, ignorance really is bliss.

I HATE paying things late. Around the beginning of every year, I end up doing it though, because for some reason it seems certain bills never get to me on time during the holidays. My new HOA coupons didnt get to me until sometime in January, and the first one for the year was due Jan 1, and somehow I ended up paying two gas bills and two electric bills in january too. January sucked.

In general, though, everything for me is paid early. And starting this month, we are going to try to send extra principal with our mortgage on a monthly basis. Figured if we pay about 200 extra a month, we can pay off the loan in 20 years instead of 30.

[Little April]

To avoid late payments I use that auto-bill-pay that most credit cards offer. It used to be setup for the minimum payment. If I feel froggy I would throw some more dough to them. Currently one card is set for $1500 and the other for $1000 a month.. of course those aren't the minimum.. but I'm sick of being in debt and I'm trying a more aggressive approach.

[Ploppy]

Just because you're incapable of properly managing you credit, doesn't mean that it's not an important life skill to possess. Since you've apparently proven to yourself that you are incapable of using credit to your advantage, I agree that you made the proper choice for yourself to stop utilizing it.

Oh, I properly managed it. I properly managed to pay my bills every month. I also managed to see how rediculous it was to make payments with interest on items that go down in value every day (car, computer, tv..etc). But I do appriciate your condescending tone and your assumptions about me. Thanks.

However, that inability to utilize credit to your advantage is going to cause you problems at some point in your life (like when a bank either won't give you a mortgage or charges you a higher interest rate on a mortgage or car loan because you don't have a positive credit history).

Didn't have any problems getting a mortgage. I had paid my rent on time for 3 years. I've had the same job for 5 years. I put 20% down and had the VA backing my loan. I have a low fixed interest rate. I'm fine. I could have had a credit score of 0 and still qualified for a mortgage.

As far as getting a car loan...I paid cash for my cars. See, its called being patient and saving enough money (by not paying out a chunk of my paycheck to the credit card compainies) in order to pay cash for the car. Are they brand new cars? Of course not, but they are nice cars and while I'm driving them around, I'm saving up to buy even nicer ones. 100% down and $0 a month. With that plan, you don't have to worry about how you are going to make the payment when life happens.

This is from an earlier post in the same thread:

My typical Visa bill is between $3,000-4,000 per month (with a couple months of $5K +). It always gets paid on time and in full.


Good for you. I'm glad that you are doing well enough for yourself that you pay and average of $4,000 a month on goods and services. Not all of us are that blessed.:clap: :clap: :clap:


That's properly managing your credit.

Is it...is it really, Bill?

[Jolie]

Didn't have any problems getting a mortgage. I had paid my rent on time for 3 years. I've had the same job for 5 years. I put 20% down and had the VA backing my loan. I have a low fixed interest rate. I'm fine. I could have had a credit score of 0 and still qualified for a mortgage.

The VA has looser requirements than conventional mortgages. It probably couldn't have been 0, but it definitely could have been lower than what a conventional mortgage would allow. You are lucky - if you weren't in a position to qualify for a VA loan (ie, werent somehow involved in the military now or at some point) you may not have been able to qualify for a mortgage.

Additionally, you may have a low rate, but I am pretty sure its about 50 basis points higher than what it could have been if you could have gone conventional. The majority of VA loans are guaranteed by Ginnie Mae, and sold as mortgage backed securities to the investor community. The servicer of the loan (person you make payments to) typically gets 44 basis points as a servicing fee, Ginnie Mae gets 6 basis points as a guarantee fee and the investor gets the interest rate of the loan as his take. So if conventional loans are going for 5.5%, a VA loan is most likely going to actually cost YOU 6% - 5.5 for the investor, 44bp for the servicer and 6bp for ginnie mae.