In need of encouraging words - and help!

**PetMom** · 09-02-2009, 04:12 AM

My theory is that you can never get out of credit card debt and stay off the credit cards until you get a very good emergency savings cushion.

This should be your first priority.

You would then not ever have a need for an emergency expense that would keep you running back up the credit cards.

You would be able to live totally credit card free.

Cut back or do whatever it takes to get an ef going, and it should be a bit higher than $1,000.00.

You also need to make sure you keep your debt payments up and not get late as the penalty for this is so costly now with raised interest rates.

Have built in your ef the ability to make these minimum debt payments for a few months in case you become unemployed.

Then you would be able to start paying down your debt.

I don't know anything about making money off of blogs but you have some good blogs there - the football one looks really informative - are you selling those items on there such as t shirts - that you package and send off yourself or is the income on the blogs going to be from ads only?

If these do start making money and you do have your ef set up - you would be able to put extra cash into paying down your debt.

You would be in a good position to make up for lost financial time as long as you do not give in to the urge to upgrade your lifestyle until you are debt free.

**am_vanquish** · 09-02-2009, 04:33 AM

Originally posted by mpweaver4 View Post

Expenses:

Rent: $413 /mo.
Utilities: $180 /mo.
Auto Ins.: $95 /mo.
Grocery/Gas/Living: $300
TOTAL: $1,088 /mo. (approx.)

Income:

Job: $2,400 /mo. (this is a base salary - sales gig with commission)
Blogs: $0
Start up venture: $0
Other: $0

I agree with PetMom in general, start an EF of about $1,000, tackle the debt, then go back to the EF and build it up to $2,500-$3,000 once you've gotten the debt under control. However, I'll say that something seems a little off to me.

According to what you provided above, you've got a monthly surplus of about $1200. I don't mean to offend here, but I'm a bit skeptical of the budget you've outlined if there's that much of a suprlus that you've been blowing through in the past (plus some to get to the debt). I understand that you don't want to deal with the past right now, but I'm simply asking if the above budget is truly realistic?

Also, is the income number that you listed gross? If so, provide your take-home amount. Does your employer offer a 401k with a match? If so, I strongly suggested contributing up to the match. Even though you're in the mindset of paying down debt, the employer match is "free" money ... you've got to take advantage of that. If the $1200/mth surplus really holds up, then I don't see why you can't pay down the debt and create a strong savings plan at the same time.

**arthurb999** · 09-02-2009, 05:11 AM

What was your college major?

**Radiance** · 09-02-2009, 05:45 AM

You gettting the help, here are the encouraging words:

I know what you feel, I came into that realization late last year. And I am 39!
At 26, and with your energetic and positive attitude you will get out of the hole in no time..

Moving forward is the way! I've forgiven myself, faced reality and I am working my way out, for me and for my son.

As per mistakes, you will make mistakes, as long as you are alive, and that is ok. The important thing is the growing and the lessons you take with you.

Don't beat yourself so hard, you are doing the right thing by reaching out and making a plan. Enjoy the ride!

oh, and congratulations in in understanding the importance of multiple sources of income!

**Broken Arrow** · 09-02-2009, 06:20 AM

So, you have something like $1200 left over at the end of every month right?

Yeah, an easy plan (a la Dave Ramsey) would be:

1. Save up $1000.
2. Pay off your credit cards, starting with the lowest balance first.
3. Expand your emergency fund out to about $6000
4. Pay off student loan.

I know this can take a while, but the plan is easy to follow, and in time, it will get the job done.

**mpweaver4** · 09-02-2009, 07:33 AM

Originally posted by PetMom View Post

I don't know anything about making money off of blogs but you have some good blogs there - the football one looks really informative - are you selling those items on there such as t shirts - that you package and send off yourself or is the income on the blogs going to be from ads only?

Yes, right now the only money that would come in is from advertising. Once your traffic get high enough - you can gain sponsors. It's actually endless and can be overwhelming - but fun at the same time. I've made a whopping $9 so far in two months - but it's one of those things that grows with time and the key to success is persistence.

**mpweaver4** · 09-02-2009, 07:36 AM

Originally posted by am_vanquish View Post

I agree with PetMom in general, start an EF of about $1,000, tackle the debt, then go back to the EF and build it up to $2,500-$3,000 once you've gotten the debt under control. However, I'll say that something seems a little off to me.

According to what you provided above, you've got a monthly surplus of about $1200. I don't mean to offend here, but I'm a bit skeptical of the budget you've outlined if there's that much of a suprlus that you've been blowing through in the past (plus some to get to the debt). I understand that you don't want to deal with the past right now, but I'm simply asking if the above budget is truly realistic?

Also, is the income number that you listed gross? If so, provide your take-home amount. Does your employer offer a 401k with a match? If so, I strongly suggested contributing up to the match. Even though you're in the mindset of paying down debt, the employer match is "free" money ... you've got to take advantage of that. If the $1200/mth surplus really holds up, then I don't see why you can't pay down the debt and create a strong savings plan at the same time.

What I did not mention is that my student loan payment is $620 per month. So that would give me a surplus of about $600 per month. I've paid ahead quite abit on my student loan so I can go a few months without making a payment. I have paid my car off as well.

I paid extra on my loan and car before I decided to get stupid with my money.

My employer does match 3% - which I just enrolled in b/c I was laid off in May and got a new job in July.

The above budget is truly realistic until I need to start paying my student load payments again.

Your help is awesome by the way - all of you

**mpweaver4** · 09-02-2009, 07:37 AM

Originally posted by arthurb999 View Post

What was your college major?

Operations Management from the University of Dayton

**am_vanquish** · 09-02-2009, 11:48 AM

Originally posted by Broken Arrow View Post

So, you have something like $1200 left over at the end of every month right?

Yeah, an easy plan (a la Dave Ramsey) would be:

1. Save up $1000.
2. Pay off your credit cards, starting with the lowest balance first.
3. Expand your emergency fund out to about $6000
4. Pay off student loan.

I know this can take a while, but the plan is easy to follow, and in time, it will get the job done.

Agreed (kinda).

Step #1 should be pretty easy if you've got the $1200 surplus and you can skip a month on the student loan. I don't see any reason that you can't accomplish this goal by 10/01/2009.

Step #2 - maybe consider paying the card with highest interest rate first instead of lowest balance first. If you really need the psychological boost of having paid off an entire card, then go with the lowest balance.

Step #3 - Agreed.

Step #4 - It sounds like you're going to be forced to do this simultaneously with steps #1-3. Not necessarily a bad thing. However, if you've got a good interest rate on these student loans, then only pay the minimum each month until steps 1-3 are finished.

Would you mind posting the interest rates on the debts? It probably won't change the plan above (but it might sway me on which option to use for Step#2). Finally, make sure that you're eligible for the company match on the 401k. Some companies (most?) require you to work for 1 year before they begin matching. If this is the case, then set that aside for a year & then pick it up again when you're eligible.

**inneedofhelp** · 09-03-2009, 11:21 AM

Just keep plugging away at the debt. You are a young person and you will eventually pay it off. It all seems insurmountable right now, but you can definitely do it (keep the good rent as well! great price!!).

It may take time, but when it is all paid off, you will be at a different place in your life and it will all be for the best.

**olga1311** · 09-14-2009, 08:30 PM

If I were you I would pay the smallest debt first. Psychologically it motivates you so much when you see a debt disappear. It motivates you much more then keep paying off the highest rate credit card for long time and not seeing the end of it. Also, do establish a small oh-**** fund (1000 or so). Pay minimum payments on all debts to keep them current and attack the smallest debt first.

**Broken Arrow** · 09-15-2009, 04:57 AM

Originally posted by am_vanquish View Post

Step #2 - maybe consider paying the card with highest interest rate first instead of lowest balance first.

I'm with you on this. Whenever possible, I always recommend to tackle the highest interest first, regardless of the balance. That's what I did. However, based on what I've read, I thought that perhaps the OP is feeling a bit overwhelmed. That's why I recommended the lowest balance approach instead.

**lovcom** · 10-07-2009, 12:01 PM

1. Build up 6-9 months of reserves first and foremost.
2. Pay off your lines of credit with more then minimum payments, paying off the one with the highest interest the most aggressive.
3. Put a moratorium on all descretionary spending, even for birthdays and holiday presents.
4. If possible get a 2nd job.
5. Go back and rethink why you majored in what you did. Perhaps you might want to study something else that can pay oodles of $$$. This may or may be the case...just asking you to rethink is all.
6. Make good financial changes for life....acquire a new lifestyle and mindset.
7. Don't get up hope and expect brighter days!!!!!

In need of encouraging words - and help!