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Debt... Everyone has it?
Aridhol
Daddliest CatchRegistered User regular
Daddliest CatchRegistered User regular
So....
I have about $4800 in debt total and I have an insatiable (sp?) appetite for technology and the debt never seems to go away.
How do you kill debt?
What goals must I set, what kind of trackers or measurements are availiable?
I own a house (via mortgage woo!) so I am not without hope but I never seem to make progress.
What mindset or daily/weekly/whatever routine has helped you get back into the land of the *black* financially.
Sorry if the OP seems incoherent but I am looking at my credit line statement and my already spent paycheck and wondering W.T.F. do I do.
Some specific reference:
I pay $1269 monthly for mortgage, assisted with $600 from my spouse and I make (take home) $2100 per month.
Cable/phone/interwebs is $150
$3400 is student loans
$1400 is credit cards.
Advice is encouraged, methods/behaviours to keep spending down and work towards saving would be excellent.
P.S. I have about $2200 in investments which I cannot move for another year unless I forgo a %25 grant from my company. (I buy three shares, they buy one. This doesn't take effect for another year)
I have about $4800 in debt total and I have an insatiable (sp?) appetite for technology and the debt never seems to go away.
How do you kill debt?
What goals must I set, what kind of trackers or measurements are availiable?
I own a house (via mortgage woo!) so I am not without hope but I never seem to make progress.
What mindset or daily/weekly/whatever routine has helped you get back into the land of the *black* financially.
Sorry if the OP seems incoherent but I am looking at my credit line statement and my already spent paycheck and wondering W.T.F. do I do.
Some specific reference:
I pay $1269 monthly for mortgage, assisted with $600 from my spouse and I make (take home) $2100 per month.
Cable/phone/interwebs is $150
$3400 is student loans
$1400 is credit cards.
Advice is encouraged, methods/behaviours to keep spending down and work towards saving would be excellent.
P.S. I have about $2200 in investments which I cannot move for another year unless I forgo a %25 grant from my company. (I buy three shares, they buy one. This doesn't take effect for another year)
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When you say you "pay $1269," do you mean that's your monthly payment, or do you mean that's what's left after your spouse pays?
What's the interest rate on your credit cards?
$1269 is the total payment, before spouse contribution.
Student loans is %0 loan which is why I still have em. My dad actually bailed me out when I was younger and saved my credit, he paid the entire amount outright and I am paying him back at $200/month no interest.
The trouble is, 6 months ago I had ZERO credit card debt and then I thought, hey I could use another computer and it just spiralled. I know that credit is evil and I am looking for what works for others to avoid that impulse purchase, "throw it on the card" mentality.
Edit: As an individual. As a business the trick is using other people's money to make you rich so borrowing rules will differ.
― Marcus Aurelius
Path of Exile: themightypuck
Step two: put your credit card in it
Step three: Stick in in the freezer and leave it the hell alone.
This works well as you'll still have your credit card (as opposed to cutting it up) but it will take several hours to access it, this will stop you impulse buying in stores and if you want to buy something on the internet you have 4 hours to figure out if you really need it.
Begining of the month (or whenever you get paid) Pay every single bill then. The money left over will be for food and fun savings, always set aside an amount for savings no matter what. If you are still really bad with money, get another account for food and another for fun, leave the one you don't need at home and switch over as you need.
Look at whether or not you need your toys, sell the ones you don't need.
Satans..... hints.....
I have tried in the last month to monitor my day to day spending but I just cannot see where the leak is.
I'm not in dire straits but it seems to me I should be saving more that $100 per month.
Stop buying shit you don't need (computers, technology, etc.). If you don't have enough money to pay down your credit card at the end of the month, don't buy anything.
Edit: You're only saving $100 per month? Start up an excel spreadsheet, or, better, a spreadsheet in your PDA (I assume you have one). Every time you spend money put it in that PDA, without exception. Even if it's $0.30 for gum at a convenience store, or a soda out of a vending machine.
I guess my main question is how do *YOU* keep financially responsible.
It's all well and good to say "well don't buy shit you dumbass" and I know that line. What methods do you people use to keep to that?
I understand that the solution to debt with a stable job is to just not spending money but I do, and I need help/advice to stop.
I'll try an excell spreadsheet with every purchase starting now.
Any templates?
That's an awesome idea, lol.
It doesn't seem like your expenses are that high. Are you forgetting anything like insurance payments or anything like that? Car repairs, gas? Do you go out to eat a lot (don't do this!)? Do you go to movies a lot?
I'll basically echo what others have said - track your expenses for a couple of months so you can see exactly where everything is going.
Edit: With regards to this:
Basically, I don't go out to eat a lot, I keep my driving under control, I don't buy movies (don't look at me like that, I just never watch movies - I mention this because some people have an out-of-control DVD purchasing habit), I finish my video games before buying new ones, I don't go out to movies, I don't go out drinking much and when I do I limit it to just a few beers...basically, I keep my entertainment expenses under control. Double edit: I have no debt.
The trick is to do this when the cheque arrives, so you are not tempted to spend it.
I'm going to presume you are using online banking/paper statements to see where the cash is going, and not just looking at the balance screen and going "huh".
Use a debit card so all your transactions appear, rather than just ATM withdrawls that could be for anything.
As far as managing your spending. write down every penny you spend for a month and then look at it and see where you can cut stuff out. Do you really need cable in the summer? Maybe you spend 100$ more per month eating out than you think you do. The other thing you should do is mark down any miscellaneous expensises like home repair, vehicle repair, lawn care, appliance purchases, etc... and then average them out over a year and start saving so that you have enough should an emergency arise. It is good to have a credit card for those situations, but you shouldn't rely on them.
I spend about $100 on beer per month(whee! not giving this up, I have a lot of parties)
I go out to eat about twice a week (trying to cut down on this)
I will try the lock away my credit card idea, I cut up my future shop card and never spent anything on it again..seemed to work.
I guess this thread is a bit of an overreaction but I really wanted to know how others keep debt free and manage their monies.
I don't spreadsheet anything, I have bassically figured out my expenses however.
I get paid 1700 (I think) and my account has six hundred dollars of "spare" money that just sits there incase I need to put something large on my savings account as soon as my cheque clears I pay my rent (I've set it up so it needs to be paid by monday and I transfer the money on wednesday). I know that I need around a maximum of $880 a fornight for food alcohol and fun and bills so I then subtract the total amount left in my account from 1480, this is my savings for the fornight. Additionally I usually try and put away each week a further 100 dollars. If everything goes to plan I can comftably put away around 750 a fortnight. This doesn't always go to plan however but I always manage to squirrel something away.
Keep in mind I don't have a house.
Satans..... hints.....
― Marcus Aurelius
Path of Exile: themightypuck
Column 2: Amount
There's your template. :P
I pay $100 per paycheck ($200 /month) into a share purchase plan where the company buys 1 share for every 3 I buy.
By that stage the card will be brittle and will be likely to shatter due to the low temperatures.
Also during those 30 seconds you get to consider the fact that you are attacking a block of ice with an ice pick to access money you don't have, to me that sounds just a little inane. Additionally unless you bring your freezer with you you can't do this while window shopping.
As for memorizing it, simple solution, don't, I don't keep my bills I black out the number and throw them out immediatly because I don't keep my card in the red.
Satans..... hints.....
I'm horrible at explaining it, but conveniently, the plan is laid out in one of my pastor's sermons available online...
http://www.lifechurch.tv/Default.aspx?p=39&SermonID=73&CategoryID=5
If you select week two there, you can see Dave Ramsey's financial plan for overcoming debt at the 18:37 mark. The whole sermon is full of good advice if you want to take the time to sit through it, but seriously, at least watch the financial planning. I've shown this to many of my friends and it has helped them, and I hope it helps you as well.
I mean, the basic strategy of the debt snowball is fine, but really, the finer details of it are pretty stupid. Also, the idea that people can magic money from out their ass isn't really realistic.
OK now you are just tripping. You have excellent financial habits. At this point I think you need a big screen 1080p tv and a ps3. I hear you can run Linux on a ps3...
― Marcus Aurelius
Path of Exile: themightypuck
Using an icepick to get it out is no more inane than freezing it an plastic isn't going to shatter at -4c. If the aim is to not have it with you when you are shopping, leave it at home in a desk or dresser drawer. If you make purchases online, chances are you've memorized your card number. There is no need for Oprah theatrics to stop yourself from using it, and again, if there is, you shouldn't have one anyway. You use the credit card to build credit, no take up space in the freezer.
Most of the things I buy, I think about for at least a week, especially if it's technology. If, after a week, I still want it, I start looking for deals. This may mean that I don't buy it for a month or more. For instance, I needed a new hard drive last summer; I waited all the way until Black Friday doing without, and got a 180GB drive for $25. I looked at LCD monitors for about two months, before picking up a 19" Viewsonic with pretty good specs for $120. The impulse purchases I make (a universal remote, a couple of smart cards for my camera, blank DVD-Rs on clearance) are generally ridiculously good deals, and I limit myself severely.
Fixed. (Get a nice armoire for it as well as this will smooth things with the wifey).
^^also disregarding my very sound advice, the post above is true wisdom.
― Marcus Aurelius
Path of Exile: themightypuck
True. Cognitive bias on my part equating "excellent" to "better than mine".
― Marcus Aurelius
Path of Exile: themightypuck
Satans..... hints.....
Well there ya go. Between that, movies, and beer, that's about $400 a month, or almost $5000 per year of your $25000 income.
I'm surprised noone has said it yet, but yeah you're living pretty large here (for someone with debt concerns, at least). Might want to consider cutting some of this back. Going out to eat in particular is a huge expense, especially if we're talking about you paying for yourself and your girl here. For the movies, consider borrowing DVDs from friends (sounds like they owe you for the beer).
And I'm able to do that because I just don't buy things if I can't pay for them. So the advice really is "don't buy stuff." Either put in a delay before buying anything that isn't necessary (meaning food, etc.), or spend more time with the things you already have. If you buy a lot of DVDs, get Netflix. Stop looking at review sites and getting caught up in technology hype, and spend more time enjoying what you already have. It's not so much a trick as just personal discipline.
I have a spreadsheet that has all of my expected expenses listed out (I spent several hours figuring this out... You need every single expense, from expected gas costs, to food, to car repairs, to heating... everything)... Then, after that, I put aside $200 a month of "extras" (surprises) that I only spend if needed, and if I don't spend it, I leave it in savings so it builds up.
Then, whatever is left over (it's usually a bigger number than you expect) is savings/stocks. I divide it by 4 (I get paid weekly). Then, with each weeks paycheck, the VERY FIRST thing I do (almost as if it were a critical bill that must be paid) is put 1/2 of that total into my stock portfolio and the other 1/2 into a high-interest savings account (I use ING Direct), and I don't touch it again.
I have 2 credit cards, but I treat them exactly like debit cards, and only EVER on expected expenses, never on miscellaneous items, like TV's and such... And if I don't know for certain that I have enough to pay them off, I don't use them.
This way, when I finally actually WANT something special (new computer, new TV, Xbox 360, etc.) I have a very large account that I can dip into and STILL have my high-interest savings and my stocks that are untouchable.
The primary thing, though, to curb spending is I treat every non-expected expense that isn't critical, such as a TV or computer (everything not on the spreadsheet) as a very important decision. I discuss it with my girl, think about it critically, always giving myself a minimum of 2 days of thinking. If after 2 days I still feel I need it, or desperately want it, then I get it, but only with CASH.
Just take a look at your debit or credit card purchases on their website and break down the purchases by type, and you'll spot it quite quickly
For me, the leaks were daily trips to the convenience store across the street from work (to the tune of nearly $200/month and eating out (to the tune of nearly $400/month)
Mainly it comes down to patience and discipline.
The OP's financial habits notwithstanding, I don't think his credit card APR is obscene. It's very typical. Here are the national averages. In my experience, unless your credit score is upwards of 800, it's not realistic to expect to get a card with an APR under 9%.
What is an acceptable rate for a credit card, however, would likely be obscene for any other kind of loan.
Aridhol, I'm curious about this stock purchasing program you're buying into: what's the most you're allowed to contribute? Do you have to hold onto the stock for a full year before selling it, or do you just have to work for the company a certain amount of time, or do they just say "in January, you're allowed to sell everything you bought the previous year?" What's the maximum they allow you to contribute?
Do you have a major name credit card with a fixed single-digit interest rate and no annual fee? If so, please share because the OP would probably like to apply for it. I won't be surprised if the low APR you take for granted is not offered to people with average credit scores. I'm not trying to be belligerent here so please don't take that as such.
The card's actual APR and an intro APR or balance transfer APR are two different things. Anyone can get a 0% on balance transfers. But it's not always a good idea.
Transferring your balance from one card to another is reported to the credit bureaus and affects your credit score negatively, because it denotes risk. You are applying for new revolving credit, which is reported, and this affects your score negatively too.
Also, part of your score is based on how long your credit relationships have lasted. Opening new accounts and closing existing ones will reduce your score.
Introductory rates (on balance transfers or purchases) will by definition eventually expire, and the new rate may be worse than the one on the card you transferred from
You may get charged a one-time balance transfer fee (percentage of the balance being transferred) -- check the fine print.
Transferring balances can still make sense for some people, but these are some caveats and reasons I've never done it myself. Not sure the OP should do it either since he thinks he'll have his card paid off this summer.