topic Re: Trying to pay down debts and getting discouraged - next some inspiration in General Credit Topics

Trying to pay down debts and getting discouraged - next some inspiration

Anonymous — Sat, 08 Sep 2012 15:22:34 GMT

I am trying to pay off some credit cards/personal loans and I'm just getting discouraged. I could use some inspirational stories from others who are making progress in putting a dent in their debts. Anyone??

Re: Trying to pay down debts and getting discouraged - next some inspiration

Anonymous — Sat, 08 Sep 2012 15:32:31 GMT

Back in February, our family lost almost $700/mo in income. I tried to hide it from my wife and maintain our lifestyle, but that just added the debt pretty quickly. I was forced to admit the truth in May after a check advance situation went horribly wrong. (No CR involved, thank god). That left us really struggling through June and first part of July. I am now to the situation where I'm aggessively paying back the debt I had racked up and it feels good to watch the balences drop.

I made a spread sheet with all the balences, due dates, statement dates, and interest rates. I, because I see regular progress, went for the highest interest rate first and have dropped my util from 80% to 26% as of last reporting (waiting for the last CC I paid off to report, right now I'm showing 35%util, but it should update Monday).

The spread sheet allows me to play with paying down different cards, making sure none of them are above 80%, ect. I just made a plan and have stuck with it. You can do the same.

Re: Trying to pay down debts and getting discouraged - next some inspiration

Shogun — Sat, 08 Sep 2012 15:41:29 GMT

Inspiration? Had done the ostritch method of credit monitoring. Yes,, head in the sand. Decided to buy a new house. Was nowhere near it. In 9 months paid off 27,000 worth of old debt, worked like hell and got score up 150 points and bought a new house. How's that?

Re: Trying to pay down debts and getting discouraged - next some inspiration

Anonymous — Sat, 08 Sep 2012 16:00:55 GMT

This probably sounds really stupid but I am struggling with one "process" issue. I get paid every other Friday. So the way I look at it I have two options: 1 - Every payday take a chunk out and put toward the debt and just have to live off what is remaining until 2 weeks when I get paid again or 2 - I wait until the Thursday before the Friday payday and whatever is left in my checking account I take that money and pay towards debt.

And for whatever reason the thing that makes me feel like I'm making progress is not paying off one of the small balances - it's taking the larger balances and paying them down. So for example, I have 2 loans that are in the $9k range. So when I pay on those and get them down in the $8k range I feel like I'm making progress. It's just a visual thing for me that I would feel better if all of my balances were under $5k each. It just seems like a $10k balance is impossible but a $5k balance is something that I could definitely work on. Weird I know.

Re: Trying to pay down debts and getting discouraged - next some inspiration

tcbofade — Sat, 08 Sep 2012 16:36:28 GMT

There is no "right" answer here, but if you're paying attention and making the effort to reduce your debt, then you are on the right road.

Patience.

DW and I started this year with 30 balances on 30 cards...our goal was to pay off one per month, and we're just a little ahead of that...we've got ten of them paid off as of last month, and we're still werkin' on it.

Re: Trying to pay down debts and getting discouraged - next some inspiration

Shogun — Sat, 08 Sep 2012 17:28:50 GMT

@Anonymous wrote:
This probably sounds really stupid but I am struggling with one "process" issue. I get paid every other Friday. So the way I look at it I have two options: 1 - Every payday take a chunk out and put toward the debt and just have to live off what is remaining until 2 weeks when I get paid again or 2 - I wait until the Thursday before the Friday payday and whatever is left in my checking account I take that money and pay towards debt.

And for whatever reason the thing that makes me feel like I'm making progress is not paying off one of the small balances - it's taking the larger balances and paying them down. So for example, I have 2 loans that are in the $9k range. So when I pay on those and get them down in the $8k range I feel like I'm making progress. It's just a visual thing for me that I would feel better if all of my balances were under $5k each. It just seems like a $10k balance is impossible but a $5k balance is something that I could definitely work on. Weird I know.

YMMV of course. It's a matter of preference.

I did the opposite. Paid the smallest one first, then took the money I was paying on that one and threw it on the next smallest one. Having less and less to deal with just gave me inspiration.

Re: Trying to pay down debts and getting discouraged - next some inspiration

Anonymous — Sat, 08 Sep 2012 18:42:13 GMT

I would go and pay the smallest one first only if is it's doable within 2-3 months at max. Then as suggested, take the money you were paying that one with and pay off the second smallest one until you have a serious amount of money available to pay with monthly.

Once you reach that, then proceed to take down the highest apr.

Of course, it all depends on the balances but that's how I'd do it. The less accs you have to pay, the more you can pay in each one of them.

I hope you can bring yourself up again. Best of luck.

Re: Trying to pay down debts and getting discouraged - next some inspiration

DVH1980 — Sat, 08 Sep 2012 18:55:37 GMT

I know for me, not looking at the balances every month helps. I simply make sure the payment went through and then go about my day. I take a peek every few months and its nice to see a real difference. Anyone who has lost any weight knows how that works, you dont weigh in everyday, you do it weekly or every 2.

Re: Trying to pay down debts and getting discouraged - next some inspiration

DVH1980 — Sat, 08 Sep 2012 19:00:28 GMT

Another thing to maybe consider if your circumstances allow is geting a second part time job and using all that money to apply directly to your debt. Im not in a financial siutation to where I have to donate plasma but I do anyways. Its painless, takes 1 hour twice a week and in return I pay an extra 50 a week towards my auto loans,it adds up quick. I go in, lay back and read MYFico posts for an hour and im done. Getting paid to learn

Unfortunately in the credit game, there is no substitute for time and patience.

Re: Trying to pay down debts and getting discouraged - next some inspiration

Lynnst — Sat, 08 Sep 2012 20:01:58 GMT

As far as the process issue - I found what worked well for me was to get serious about a realistic but austere budget. I paid the debt first and did that as aggressively as possible. I set up automatic payments for every other friday when I get paid so the money is gone and applied to the debt before I could find something else I'd rather spend it on. I have a vigilant head out of the sand philosophy now. To each his own, but this method has worked well for me. Time and patience - you will get there.

Re: Trying to pay down debts and getting discouraged - next some inspiration

codimom — Sat, 08 Sep 2012 20:24:39 GMT

btdt.... you can do it! Patience is key here.

What I did during my get out of debt/rebuilding phase was I used a modified "dave ramsey" method. He touts the snowball method... make minimum payments on every debt except the smallest one.. this one gets the lion share of your payment money; when its paid off, you move that payment onto the next smallest one ,...and so on until you have 1 debt left and all the available funds go there.

I made a spreadsheet of all my debt... who I owed, how much, the monthly minimum payment and the INTEREST rate. I included my rent and a very tight food budget etc) i paid my highest interest rates first.
I also used no credit cards nor applied for any credit during the beginning of the payoff period.

After about 4 years of paying off debt, i started rebuilding my credit file (i'd gone all cash). I apped for a credit card... then i qualified for a first time homeowner program and bought my own home. Now..after 8 years i have a couple of really good prime cards in my wallet, i got a great interest rate on my last car purchase, and my savings account is growing.

You CAN do this...

Re: Trying to pay down debts and getting discouraged - next some inspiration

Anonymous — Sat, 08 Sep 2012 20:58:38 GMT

It sounds like you need a budget....once you know where the moneys going every week it's easier to figure out what's left over. It will be a constant struggle of what to pay first and wondering where your money went. I'd suggest googling hoffman allocated spending plan (may be a bit of overkill but it covers every aspect of life), Once you know how much you can put towards the cc debt look for a debt snowball calculator such as vertex42.