Need Some M O T I V A T I O N !

[Trippingbillies]

I need some motivation to become debt free. Current Situation:

Car Loan: $18,000
CC#1: $1,600
CC#2: $600

What are some tricks and tips to pay off debt without overthinking as I usually do? I know the credit card debt doesn't seem like alot but it is overwhelming and it seems like I'll never get out of it. How can I pay it off effortless without over-thinking it.

Thanks!

[bjl584]

Well, it won't be effortless. It will take a plan and dedication. But, you will need to post more information. Income? Any other debts? Breakdown of monthly expenses? Savings, if any?

[disneysteve]

Welcome. Can you give some more info? How much do you earn? What are your overall monthly expenses?

You say the $2,200 in credit cards is overwhelming. Seems to me the $18,000 car loan is over 8 times more overwhelming. What is the car worth if sold on the private market today?

Do you have any savings at all?

[bjl584]

Originally Posted by disneysteve

Welcome. Can you give some more info? How much do you earn? What are your overall monthly expenses?

You say the $2,200 in credit cards is overwhelming. Seems to me the $18,000 car loan is over 8 times more overwhelming. What is the car worth if sold on the private market today?

Do you have any savings at all?

We must have been thinking the same thing at the same time.

[Hector]

If you think you will never get out of 2200 CC debt, whats the point of having a car on which you owe 18k?

[maat55]

If you cannot pay all these debts off within 2 years, I would sell the car, get a 5k car and be debtfree within 1.5 years. Knowing your numbers would help.

[Trippingbillies]

I have about $1,000 in savings. I have over $2,000 but have to dish out $1,100 to the chiropractor yesterday. I don't have any other debt.

Income: $1,400/month after taxes, 403(b) and benefits
Expenses: $800/month, doesn't include gas, entertainment, clothes and such.

[disneysteve]

Originally Posted by Trippingbillies

Income: $1,400/month after taxes, 403(b) and benefits
Expenses: $800/month, doesn't include gas, entertainment, clothes and such.

Someone who takes home $16,800/year can't possibly afford an $18,000 car. One rule of thumb is that all of your vehicles (cars, boats, motorcycles) combined shouldn't cost more than 50% of your income so you are way out of whack in that department ($8,400 if this is your only vehicle). Another rule of thumb when taking a car loan is that the payment shouldn't exceed 10% of your monthly income ($168) and should be for no more than 3 years. You are way over by that measure, too.

I'd suggest selling the car and buying something cheap.

You also need a more detailed breakdown of your expenses. That $800 figure obviously doesn't include a lot of things.

[jerrycates]

The best motivation that anyone can have is to think positively that living a life within your reach or means is the best way to do it. Otherwise, you get in debts.

[Trippingbillies]

@ Jerrycates, thanks for the motivation quote. More information about me. I am house sitting for the next couple years for free. All I have to pay is utilities. The house also came with a second vehicle to drive around. My car is worth $13,000 so to sell it and owe $18,000 doesn't seem like a good stategy. I save $200 per month in my 403(b), $200/month in a savings account, $50/month in vacation savings and $50/month for Christmas savings. After all of that, I take home $1,400/month.

[wincrasher]

There really is no silver bullet to paying off debt.

You either pay more than the minimum at the due date, or you make small payments during the month (that exceed the amount due). Either way can reduce your interest expense.

Either pay more now, or earn more and pay more.

[jerrycates]

Stop spending! You should have thought of the debt piling right before you with CC#1 and yet you have CC#2 and a car loan? Did you not felt it? Should have felt it upon reaching a 500CC debt then maybe you could have stopped.

[skydivingchic]

Steve's right - the car is waaaaay out of whack. You say the house sitting job came with a car to drive around, so selling your car is really a no-brainer. Even though you say you are upside down by ~$5000, that would still be a HUGE dent in the debt. Get a loan for the difference and get rid of it. Viola - $13,000 of debt gone.

Second, you appear to have no idea what you are spending each month. You need to spend a month or two writing down every penny you spend. Then sit down and figure out where you can make cuts. Your CC debt is not that large and you should certainly be able to clear it in a year or less, particularly if you get rid of the albatross that you call a car.

You mention $200 per month to savings plus another $100 per month to vacation and Christmas savings. If you redirected part (or all) of that, it would help you knock out the debt a lot faster.

There are no easy magic bullets to paying off debt. Just hard work and determination. Decide what order you want to pay your debts off - either high interest to low interest (save the most money) or smallest to largest (get the psychological benefits of knocking down the number of debts faster, but may cost more over time depending on the interest rates). Once you decide, just do it. No more thinking, no more analyzing. Simply pay the minimums on all your debts and send every spare dollar to your current target debt. Things that can speed to process up are cutting spending to free up money to send to debt (that's where knowing where your money goes and making appropriate adjustments comes in), selling everything you possibly can, and taking a second job in which all income is directed to debt. Again, not "easy", but well worth it in the end.

[happygirl]

While I don't agree with everything Dave Ramsey suggests, I think his beginning baby steps fit your situation so I'd recommend going to the library and getting his TMMO book. It's very easy to understand and follow and will help you start thinking about money in a different way.

Good luck!

[Steel]

Just a little twist on thinking can give great result focus in the solutions not in the problems.

[DanielB]

If you stopped spending (temporarily) in the following categories, you would free up $6,000 extra in one year:

- $200/month to retirement plan
- $200/month to savings
- $100/month to vacation

This would quickly get you to a point where you can sell the car, and cover the difference between what you receive and the remaining balance on the loan. You can use the rest of the cash to payoff the credit cards.

One other thing: if you take home $1400/month and only spend $800 of it, where is the other $600/month going? That money would knock out your credit cards in less than four months! Your situation isn't hopeless by any means - you just need to discipline yourself...you could be debt-free in six months, buddy.

[Jetsetter]

I will give you one motivational aspect of paying off your debts.
Walking to the mailbox every day!
I used to walk there almost like a perp walk. Now I have no problem opening the mailbox. Seems crazy, but there is an emotional aspect of something as simple walking to the mailbox.

[Redraidernurse]

Sell the car. It's an obvious solution.

[Trippingbillies]

I've taken on a part time job to pay off debt. I am going to send in every paycheck I make at my part time job to help pay of the debts, along with sending in the currents monthly payments I make now.

[Frugal]

It takes some work, but there are no effortless solutions to paying off debt. Your best bet might be to sit down with family if necessary and plan a budget, allotting so much to debt payments. It might also be a good idea to talk to a financial advisor about what to do with the debt.