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    so mad at myself!

    Im so mad at myself right now! I worked hard all winter to finally have paid off my visa... and i racked it back up to 800 dollars again. I feel like crying! I always thought I would never be one of those people that were stupid enough to start going back into debt!

    I recieved my tax refund for 2000 dollars today. Should I pay off my debt? or should i put it towards my savings and work my butt off to pay off my debt as a punishment?

    My savings is only at a 1000$!!
    And I only make around 400 dollars every 2 weeks.


    And second question is... when my visa is paid off can I put my limit to 500 dollars? My limit is currently 2000 dollars and I do not trust myself.

    Thanks!

    #2
    Don't beat yourself up, learn and move on.

    Pay the $800 and put the rest in savings as an emergency fund. However, it is hard to gage your situation without all your numbers. Do you have any other debt, any expenses, etc.?

    And to answer you second question, Use your emergency fund if an emergency happens and don't lean on credit cards as a safety net.

    Comment


      #3
      Andrea, terrific that you realize that charging $ 800. on Visa wasn't smart. Rather than spend energy being upset, consider it a learning experience. When you realized you would be getting $ 2,000. tax refund, did you make a plan for the money? Was it to be used for University costs or? Mature, financially aware people don't spend $ 800. om impulse purchases on a $ 200. bi monthly income. Can you take anything back for refund to account? What interest rate is Visa charging you? The Visa bill will show your interest rate and any applicable fees.

      I'm guessing you already have a TFSA [tax free a/c] what is the plan for savings? Is it an emergency fund, or for university tuition or costs or?. Canadians put retirement savings in an RRSP [Registered Retirement Savings Program] which is somewhat similar to USA 401. Your Notice of Assessment comes in the mail and shows your eligible RRSP contribution. Where ever you have a chequing or TFSA a/c can open a no fee, self directed RRSP. Understand that all contributions to a RRSP cannot be withdrawn without penalties and taxes until retirement. It is not a save and spend a/c. It will allow you a tax deduction for the 2012 year when you file in 2013.

      My suggestion is to pay $600. of the Visa bill from the tax refund. The remaining balance in $ 100. increments from the next two paychecks since you have free accommodation, free meals and free utilities if that allows you to still cover your 'needs' allocation. It's very important for an impulse shopper to make a plan/give a job to every dollar under their control to curb spend-y tendencies until you're more in control. We want you to be successful.

      Comment


        #4
        I would pay off the $800 with the refund. You only make things harder on yourself if you punish yourself by taking longer to pay it off. There's no good reason to follow one financial mistake with another. If you really want to drive home the lesson you learned, perhaps you can force yourself to avoid the thing(s) that you spent that $800 on until you've added an extra $800 to savings or something like that.

        Rather than lower the limit on your card, I would consider closing the card entirely. A lot of people just have a hard time controlling their spending when they have a credit card. The best thing to do if you know you're one of those people is to just not have a credit card. It's not worth the rewards or cash back or other perks if you repeatedly find yourself carrying a balance and paying interest to the credit card company.

        Finally, I would suggest tracking your spending and trying to make a reasonable budget for yourself. If you plan out your spending in advance and stick to your plan, you shouldn't find yourself surprised at how much you spent in the future. Just make sure you allocate a bit of money for having fun so you aren't too tempted to break your budget and start spending like crazy.

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          #5
          You should only use your card for specific purposes. These should be figured into your budget to pay as you get paid. If cannot do this, you need to put the card away.

          Comment


            #6
            I'd pay off the card immediately.

            I would also focus on getting you EF up to a 6 month EF. Sounds like you would benefit from the cushion, and use part of it to pay for unexpected expenses.

            What was it that caused you to build up the balance?

            Comment


              #7
              Originally posted by Ambitious_Andrea View Post
              Im so mad at myself right now! I worked hard all winter to finally have paid off my visa... and i racked it back up to 800 dollars again. I feel like crying! I always thought I would never be one of those people that were stupid enough to start going back into debt!

              I recieved my tax refund for 2000 dollars today. Should I pay off my debt? or should i put it towards my savings and work my butt off to pay off my debt as a punishment?

              My savings is only at a 1000$!!
              And I only make around 400 dollars every 2 weeks.


              And second question is... when my visa is paid off can I put my limit to 500 dollars? My limit is currently 2000 dollars and I do not trust myself.

              Thanks!
              I would pay it all off with the refund. Then put the rest into savings. You should be able to lower your credit line, but it probably will effect your score. That isn't the problem anyway. What did you buy? If you had more of a cash reserve you wouldn't need to use your card. The limit on the card would be irrelivant. My number one priority would be to build up more cash after paying off the card.
              Brian

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                #8
                Since you are getting a $2,000 refund, that means that you paid in $2,000 more throughout the year than what was actually due. So each month, you paid in an additional $166.67 to taxes than what you should have (on average).

                You should look at adjusting your taxes so that you do not get such a large refund at the end of the year. What will happen then is you will take home a little more money each month. Hopefully the extra money on each paycheck will help you stay afloat better with your finances.

                The next question you need to ask yourself, and some of the others have touched on this...
                How did you obtain this debt?

                What exactly was it that caused you to overspend, thus charge to a credit card? Answer that question, get yourself on a budget, and adjust your taxes. This should help!
                Check out my new website at www.payczech.com !

                Comment


                  #9
                  Thank you for all the replies! I took your advice and I paid off my credit card and put the rest in savings. I have now gave my credit card to my mom so that I cannot spend anything on it unless its something that needs to be paid by credit.

                  I got my debt back up by impulse shopping all on food and clothes. Im a young female.. so its hard for me to resist a cute pair of shoes haha. But since I have given my card away I feel it will be harder to spend my own money.

                  My savings is up to 2200 now. And I have a school debt of 3000 in which I pay 50 dollars a month, but now that I dont have visa payments i can hopefully throw more money towards that debt!

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