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Is there a way out of this debt??

Chris679
Established Contributor

Re: Is there a way out of this debt??

Of course I am assuming that you would have some way to cover yourself in an emergency. I just think it's fine for that to be a credit card. If all of your cards were balance chased or you were worried about that as a possibility then by all means have some cash. Absolutely be prepared for emergencies it just doesn't have to be the old piggy bank that you break open.
Message 71 of 87
Revelate
Moderator Emeritus

Re: Is there a way out of this debt??


@fordguy89 wrote:
Problem with a debt Avalanche is you see no progress for 6 months, in some cases a year. that does not work with the human psyche. In the future if your income changes downwards, your Avalanche pushes back on you. at least with a snowball once a Card or two are paid off, lenders may increase your limits or offer a balance transfer to hack at whats left.

I see you already have a personal loan another alternative route is to get a higher interest personal loan. It sounds like a terrible thing but if it's interest is less than the credit cards you would still save some money and your credit profile will look better as the debts not in revolvers but an installment loan.

Just pick smaller breakpoints than $0: doesn't have to be all or nothing and in this particular case with many of the balances being at roughly the same size, snowball vs. avalanche are effectively the same.  Mark it by every $500 paid off for example, or if something more tangible is needed mark it off by every 2 week paycheck amount... lots of ways to play with it to make it feel more winning-like from a psychological perspective and also get the best path from a financial perspective too.  $0 is an obvious line but there's nothing to prevent having other ones too to mark progress, actually now that I think about it I'd recommend to virtually everyone to do something like that, works in other areas in life very well, no reason it can't here either.

 

maiden_girl: I got nothing else to add to what everyone has already posted but I'm glad that you shared this; also this is only a temporary problem and the fact you're willing to admit it suggests you're going to be just fine.  Truly excellent spreadsheet and path that heavyjay posted too.

 




        
Message 72 of 87
MyLoFICO
Valued Contributor

Re: Is there a way out of this debt??


@TygerHawke wrote:

@Chris679 wrote:

@tax_society wrote:

https://www.daveramsey.com/baby-steps

 

 

Follow these steps to the "T"!!! Do NOT borrow from your 401K to help pay off your debt. Get a written budget and start telling your money where to go. Find out what you can cut out. Find out what you can sell. get a part time job if you need. Being debt free is more important than having a high credit score...credit doesn't build wealth. I guarantee if you follow those steps you'll be debt free in no time. 


Curious what the logic is behind funding an emergency fund while you are paying high interest on tens of thousands of dollars in credit card debt.  Also curious why it would be bad to borrow from 401k that may actually decrease in value while you are paying guaranteed high interest rates on tens of thousands of dollars in credit card debt. I would even comment on the snowball method, been there done that. 


I'm not a Ramsey-ite by any stretch, but I get this one - the fund is there to help prevent a sudden car repair or other emergency from forcing you to go back to using the cards again.

 

Cheers!


This. I am in a similar situation as the OP and yet I still maintain a Barclays online Savings account (Opened 6-2016) with a +/- $1k balance. It is linked to all my other Credit Union accounts so it can be moved quickly if the need should arise but I don't touch it. I think the key here is to not wait till you are in debt to your eyeballs to create the $1k emergency fund. But, socking away $10 a week or so is a good idea. Not all emergencies are $1k emergencies. I have $15 from each paycheck sent to this account and all of my Capital 1 cash back checks get put there as well. No checks and no debit card make it easy to leave alone. 


Experian: 677 (28) | TransUnion: 697 (27) | Equifax: 684 (6)
Gardening as of: 1-23-2018
Updated 1-25-18
Message 73 of 87
fordguy89
Valued Contributor

Re: Is there a way out of this debt??

I read another thread from a few months ago that Pennsylvania state employees have 8% deducted from your check automatically that is a solid way to look out for their own.  I'm quite jealous of public employees.  the pensions in California are amazing and that is what is bankrupting the state. The pensions are putting middle-class workers into the upper class  and the entitlement class is growing… then our third of us want to break off from the Union  It's the funniest news I've heard lol.  You can't have a civil war if your magazines Can Only Hold 9 bullets

Open one, close three. Open one, close three.
Message 74 of 87
Revelate
Moderator Emeritus

Re: Is there a way out of this debt??


@fordguy89 wrote:

I read another thread from a few months ago that Pennsylvania state employees have 8% deducted from your check automatically that is a solid way to look out for their own.  I'm quite jealous of public employees.  the pensions in California are amazing and that is what is bankrupting the state. The pensions are putting middle-class workers into the upper class  and the entitlement class is growing… then our third of us want to break off from the Union  It's the funniest news I've heard lol.  You can't have a civil war if your magazines Can Only Hold 9 bullets


Treading the line of politics here but I'm guessing that'll probably be over within a decade.  See Wisconsin.

 

That said short of finding a lady while I'm this impossible gig I'm probably looking for somewhere else to live in a year rather than Cali so there's that.




        
Message 75 of 87
ah20003
Regular Contributor

Re: Is there a way out of this debt??

It sounds like you are making the right moves. Most of these posts are spot on. I wanted to share my story with you.

 

After a few years of living in a big city, I realized that I had been grossly over spending. I had a great apartment, nice car, traveled all the time, and eat out/happy hour everyday. I always had an excuse to spend money. After 3 years of doing this I realized that I had about $20k in credit card debt. I was shocked and flipped out. I also had no baddies, no lates, etc.

 

Anyway, I made some real hard choices. First, I was able to open an awesome credit card with NFCU and transferred all my balances to a 0% card (my score was in the mid 600s w/ similar utilization as you and was approved at $15k for NFCU). I also opened up a line of credit with NFCU. My score shot up by 50 points instantly after the BTs. I was able to keep BTing until the balance was paid off.

 

I cut everything out. No more eating out, I walked to work, took my bike out, barely drove, starting bulk shopping at Costco, etc. I also moved to the hood and cut my rent in half (an extra $1k a month towards the card). It took me about two years, but I am now totally debt free (excluding student loans) and have my 800+ credit score back. I've also learned a very valuable lesson.

 

Good luck! I am sure that you can do it. Just buckle down for a few years. It sucks, but totally worth it in the end.

Freedom $5k I Freedom Unlimited $6.8k I Ritz Carlton $15.6k I Sapphire Reserve $10k I United Explorer $5k I Hyatt $5k I AA Red Aviator $10k I Citi AAdvantage Visa $13.5k I Citi Double Cash $5.8k I Citi AT&T More $8.4k I Citi Costco $5.1k I NFCU GoRewards $25k I Discover IT $5k I Merrill+ $20k I Fairwinds CU Visa $3.5k
F8 EQ: 801 F8 EX: 807
Message 76 of 87
fordguy89
Valued Contributor

Re: Is there a way out of this debt??

Yeah, politics detour, dont want to rattle anyone. anyone outside of California is probably not rattled. they just laugh...anyway...

 

8% is a near perfect amount on what to throw in savings. Sounds counterproductive to save some money while paying interest, but ill go back to the human psyche argument. Have to trick ourselves all over the place  to do the right thing long term.

Open one, close three. Open one, close three.
Message 77 of 87
MyLoFICO
Valued Contributor

Re: Is there a way out of this debt??


@fordguy89 wrote:

Yeah, politics detour, dont want to rattle anyone. anyone outside of California is probably not rattled. they just laugh...anyway...

 

8% is a near perfect amount on what to throw in savings. Sounds counterproductive to save some money while paying interest, but ill go back to the human psyche argument. Have to trick ourselves all over the place  to do the right thing long term.


I'm an FFL. I feel for my CA customers. It's only getting worse out there. 


Experian: 677 (28) | TransUnion: 697 (27) | Equifax: 684 (6)
Gardening as of: 1-23-2018
Updated 1-25-18
Message 78 of 87
heavyjay
Regular Contributor

Re: Is there a way out of this debt??


@MyLoFICO wrote:

@fordguy89 wrote:

Yeah, politics detour, dont want to rattle anyone. anyone outside of California is probably not rattled. they just laugh...anyway...

 

8% is a near perfect amount on what to throw in savings. Sounds counterproductive to save some money while paying interest, but ill go back to the human psyche argument. Have to trick ourselves all over the place  to do the right thing long term.


I'm an FFL. I feel for my CA customers. It's only getting worse out there. 


FWIW they can still own a Marlin Model 60.


FICO 08:Jan 18, 2017: EX 800 EQ 725 TU 799
FICO 08:Feb 10, 2017: EX 788 EQ 772 TU 791 (post New Year's app spree)
In the garden as of 1/4/2017. Will remain for all of 2017.
Message 79 of 87
fordguy89
Valued Contributor

Re: Is there a way out of this debt??

I know what sight to use.
Open one, close three. Open one, close three.
Message 80 of 87
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