Advice for a newbie

[snafu]

UTME: I suggest you and GF commit to a written spending plan and avoid Consolidators who can add to your problems and costs. You are within your rights and capable of negotiating a lower interest rate with creditors. Pay minimum on CC to keep them current but pay as much as you can, as often as you can to clear off the smallest balance. If you can work overtime, commit those earnings to the targeted CC. to get the snowball effect.

The holidays are coming so before the hype begins, I suggest decisions be made now to limit spending. Let family know you will celebrate without spending. Start researching community events you and GF enjoy that are free or nearly free. I know you can demolish this debt with determination and perseverance.

[Eric80]

If you are however in debt then consider going to a company that will be able to help give advice on how you will be able to manage this debt or give advice on how you can consolidate your debt. If you are unsure where your first point of call is I would suggest going to the citizen advice bureau and they will be able to guide you from there.

[snshijuptr]

Okay your electric bill and phone bill are way, way too high! We have 2 smartphones in my family and we pay only $100. Call up your phone company and ask if you can reduce your minutes or texting. They can do a quick audit of your usage and then tell you if a lower minute plan would work better. If not, you need to switch providers! Similarly, call up your electricity company. Ask if they have a plan to help you out. Or ask for an energy audit! Something is sucking power! Here is a website about saving electricity that is really, really helpful Saving Electricity: How to Save Electricity

[snafu]

UTME: Ramsey books and CDs are likely available at your library. Suggest playing CDs in car on commute or podcasts on computer. What is the plan to pay off $ 60,250. debt that increases without new purchases due to interest? What action have you & SO taken to bring down monthly expenses? Have you reduced cable? Eliminated land line? Committed to budget on paper? Got CC interest rates reduced? Reviewed fall/winter wardrobe to know what purchases will be necessary? Set a budget for holidays? What will be spent on cards? decor/entertaining? gifts? foods? travel? Will you keep to cash? No adding to CC? What other leakage can be stymied? Have you started to accumulate an emergency fund? What is the plan for upcoming pay?

Like stopping buying gum & drink while buying gas, this process is a l-o-n-g list of tiny steps to have YOU control your finances instead of having money or lack of it, control YOU. If you stay on your current trajectory, the end result is a passel of debt for items long discarded due to the cost of credit.

[UpToMyEars]

Personally, I would be selling both cars and replacing them with 5k cars or less. This would also lower your auto insurance.

I would look at selling everything that is not tied down, especially things you do not use or need.

I would downgrade cable to the basic 13.00 per month. I would drop the cell phones.

You really need to look at getting out of debt as a boot camp and your utmost priority. This will accomplish two things, a swifter payoff date and you will detox from your over-spending habits. Believe it or not, over-consumption and spending are addictions as well.

Keep in mind that these recommendations are meant to get you debtfree quickly and adjust your mentality towards debt and consumption. Once you have reached your debtfree goal you need to establish savings and emrgency fund goals. As mentioned above, you should have a 1k emergency fund to start.

You should never use your credit cards again until you have them paid off and enough money in savings to payoff any monthly purchases.

I highly recommend that you read The Total Money Makeover by Dave Ramsey.

I absolutely agree that overspending is an addiction!!I remember feeling a rush when I purchased things with my credit card.It was strange,because I knew I was putting us deeper in debt,but I could not control it.Honestly,it is a struggle everyday to stay on track with my budget.I leave all cards at home and carry only cash which is working pretty well.I am also reading alot of advice type website like this one.I have heard from many people that Dave Ramsey's book is a really good one.I do want to check it out soon.

[UpToMyEars]

Are these rates per month or per annum? sorry to ask Im from Philippines and compared to our loans here, those above rates are pretty stiff.

Per year I think.APR stands for annual percentage rate and yes the rates are quite high,especially on the one credit card with an APR of over 20%!!

[UpToMyEars]

Compliments for taking action to evaluate your finances. Please call CC providers to request a reduction in interest rates as paying 22.9%, 19.9%, 13.9%,13.74% is outrageous when savers get .09%. If you have CC statements add up just the interest you've paid recently and add in approximately sums going back to 1/1/11. Are you shocked?

I suggest you and SO develop a spending plan going forward; perhaps split regular, monthly expenses 55% & 45% for rent, utilities, food, 5% savings to get to $1,000. emergency sum & CC paydowns. However, each of you pay your own car and phone costs.

Perhaps it's time to develop cash flow plan to see clearly how much you spend each month on categories food [home & restaurant], entertainment, auto operation & maintenance, clothes, personal costs, gifts etc. When we learned average food spending was 17%, average transportation 15%, average clothes spending 4%, savings 5% we applied percentages to our spending. Of course gas has ramped skyward but we cut back on gift & entertainment category to keep in our targets.

Let us know how you're doing and we'll cheer you on and offer other suggestions to make this a bit easier.

Yes adding up all the interest we pay out in the past several months is shocking and makes me ill.I have made sure she is responsible for her car payment,phone bill,student loan and medicine.I am hoping to give her the electric bill and her car insurance as well.I have been trying to track my spending much closer than I used to and it is crazy how much simple purchases add up!For example,I used to stop at a gas station on my way to work to get gum and a drink.I have cut out that routine and only get my gum and drinks from a regular store.It is WAY cheaper and it saves time!Thanks for the words of encouragement btw.

[drglen]

Debt:
Cars: 13,000 and 23,000 @ 5.9% APR
BOA CC: 4,300 @ 22.9%
Citi CC: 1,200 @ 19.9%
Carecredit CC: 2,560 @ 13.9%
Personal loan: 7,200 @ 13.74%
Fifth Third CC: 7,050 @ 10.9%
HH Gregg CC: 1,500 @ 0%
Health One CC: 1,840 @ 9.24%
Student loan: 7,000 @ approx 3%

Are these rates per month or per annum? sorry to ask Im from Philippines and compared to our loans here, those above rates are pretty stiff.

[snafu]

Compliments for taking action to evaluate your finances. Please call CC providers to request a reduction in interest rates as paying 22.9%, 19.9%, 13.9%,13.74% is outrageous when savers get .09%. If you have CC statements add up just the interest you've paid recently and add in approximately sums going back to 1/1/11. Are you shocked?

I suggest you and SO develop a spending plan going forward; perhaps split regular, monthly expenses 55% & 45% for rent, utilities, food, 5% savings to get to $1,000. emergency sum & CC paydowns. However, each of you pay your own car and phone costs.

Perhaps it's time to develop cash flow plan to see clearly how much you spend each month on categories food [home & restaurant], entertainment, auto operation & maintenance, clothes, personal costs, gifts etc. When we learned average food spending was 17%, average transportation 15%, average clothes spending 4%, savings 5% we applied percentages to our spending. Of course gas has ramped skyward but we cut back on gift & entertainment category to keep in our targets.

Let us know how you're doing and we'll cheer you on and offer other suggestions to make this a bit easier.

[maat55]

Personally, I would be selling both cars and replacing them with 5k cars or less. This would also lower your auto insurance.

I would look at selling everything that is not tied down, especially things you do not use or need.

I would downgrade cable to the basic 13.00 per month. I would drop the cell phones.

You really need to look at getting out of debt as a boot camp and your utmost priority. This will accomplish two things, a swifter payoff date and you will detox from your over-spending habits. Believe it or not, over-consumption and spending are addictions as well.

Keep in mind that these recommendations are meant to get you debtfree quickly and adjust your mentality towards debt and consumption. Once you have reached your debtfree goal you need to establish savings and emrgency fund goals. As mentioned above, you should have a 1k emergency fund to start.

You should never use your credit cards again until you have them paid off and enough money in savings to payoff any monthly purchases.

I highly recommend that you read The Total Money Makeover by Dave Ramsey.

[disneysteve]

You may be locked into cell phone plans for awhile

You are never totally locked in. There is always an early termination option. Yes, you have to pay a fee for it but that fee is generally a lot less than it would cost you to keep the plan until the end of the contract. And I think the fee is pro-rated. So if the fee is $200 on a 2-year contract but you are one year in, the fee might only be $100 now. Check with your carrier for the specifics. Many people avoid cancelling contracts to avoid the fee and end up spending many times that much in the process.

[Obiwan]

I know what its like to feel like you're absolutely buried in debt, and sometimes it feels like there's no way out. I'm in the same situation. The one thing i've been told is to not lose hope, it can happen. You can be out of debt eventually. The minute you start feeling like its impossible...game over.

The one thing I would tell you is that you need to get rid of those cars ASAP. If you can get rid of both cars (at the very minimum, the $23k car), you'd be surprised how fast you can knock out the CCs with the freed-up monthly cash flow and with that feeling of knocking out over $30k in debt!!!

what kind of cars are they? Who drives which one? The reason i ask is that (1) depending on the type and age of the cars, it may actually make some sense to keep one, and (2) if possible, get rid of yours first b4 going for the one gf drives. you dont want to spook her with your new found intensity

[photo]

There is one thing you can do right now (and it's good for everyone in this economy) is to seriously cut down on spending. You may be locked into cell phone plans for awhile, but don't spend money on anything that isn't critical. If you can get rid of cable, you then have $130 more to put down on your credit card bills. With every dollar you spend, just ask yourself, "Is this an absolute necessity to buy?"

[UpToMyEars]

What led you to this amount of debt to begin with? Was it joint accumulation or something that was brought into the relationship? Have you stopped using them? If not, that's your first step. Everytime you use a card to pay, you're living beyond your means.

You've got a long road ahead of you, but it can be done. Can one or both of you pick up a second job for a while so you can make progress quicker?

It was definitely joint accumulation.We have been together for 9 years and the debt has got slowly worse.But yes we have stopped making new debt and have been using only cash.I should cut up the one physical credit card I still have,but want to keep it for emergency until we have some more in savings.
We both work in healthcare which used to offer all the hours you could work.That is not the case anymore in this area.However,winter time usually brings with it an influx of patients so I may be able to work a few extra shifts per month.Thanks for you input.

[riverwed070707]

What led you to this amount of debt to begin with? Was it joint accumulation or something that was brought into the relationship? Have you stopped using them? If not, that's your first step. Everytime you use a card to pay, you're living beyond your means.

You've got a long road ahead of you, but it can be done. Can one or both of you pick up a second job for a while so you can make progress quicker?