Paying down debt, strategies to stay on track?

[~bs]

If you ever get off that ride, you'll realize what financial freedom actually means. Basically, financial freedom means doing what you want with your extra money at the end of the month, rather than figuring out what you want to do with the extra month at the end of your money.

I like that quote.

[~bs]

It sounds like you know what to you need to do (drastically cut spending and change your lifestyle) but you not fully willing to do it...
.............................

This is only meant to be helpful advice here... if your attitude doesn't change then nothing else will. But what do I know? I'm just one of those non-typical Americans who lives within my means while planning for my future.

He's basically asking how he can pay off his debts without making more money and without doing real meaningful cutbacks to spending, and likely in the end will end up reincurring the debts that he took a year or however long to make some payments on. That's like asking how do I win in a MMA fight with both arms tied behind my back while being blindfolded. Spending money that you don't have is like drinking. It's awesome while you're doing it and a hell of a lot of fun to do it in excess. But the hangover the next morning is a real bitch.

He's asking for options, but excess debt LIMITS your options and backs you in the corner, as opposed to having liquid assets & a positive net worth. Options: make payments on the debt, declare bankruptcy and lose everything, orrefinance/consolidate (and make payments on the debt). That's it, no magic bullets.

[snafu]

OP, I'm guessing you're 28 y/o and haven't yet learned from your past experience that you're living a lifestyle you can't afford. You need to understand that gross income isn't net income. You didn't like taking a 2nd job and clearing debt last time, why get in debt all over again for coffee and restaurants? I guess I can understand buying tangibles like car or even motorcycle but you know that other stuff goes down the toilet.

You know the drill, you know from experience what you must do. You know you need to clear the BB 0% debt before it reverts to high interest rates. You know you need to track spending on Mint or program of choice. You know you need to temporarily stop silly spending and concentrate on getting out of consumer debt. You know you need to accumulate an emergency fund for some level of protection when life throws nasty challenges your way.

Good luck

[JoeP]

You have 2 major tasks:
1. Pay down your debt
2. Change your spending habits so that you do not incur more debt

Paying down your debt requires applying money to the debt. Paying the minimums will take a very long time and you will be paying extra on the interest. Paying more enables you to knock more of the principal down, so you will get out of debt sooner. If you want to do the latter, you need to free up more cash, either by cutting back in other areas, or by selling stuff, or by both. It might make it easier to sell something you're still making payments on if you consider it is really not "yours" yet.

You should use your past experience ($32k in car debt? $270k mortgage? $12k credit card debt?) as a daily reminder of where you are, and where you never want to return. Maybe post them up on your bathroom mirror to motivate yourself to solve your debt situation. Then make a resolution to never buy anything unless you have the physical cash on hand.

Finally, the advice given in this forum comes from people who have been where you were and want to help. It is normal to push back when you get advice that goes contrary to what you've been doing, but consider where you allowed your habits to take you.


Philosophical Aside: Establish a "vision" of what your life will be like after your debt is cleaned up. You'll just be paying your recurring bills (utilities, food, mortgage, taxes, insurance, phone, etc) every month. You'll have a paid-for car in your driveway that you'll plan on driving for 10+ years. You'll set up automatic salary deposits to your bank or credit union so that when it is time to replace your car, you can buy a good used one for cash. You'll save money to go on your honeymoon and pay for it with cash. You can max out your Roth IRA every year, and put 15% of your pre-tax income toward your 401k. You'll have 6 months worth of expenses saved up in an emergency fund, so you won't have to panic if you lose your job, or scramble if your water heater goes. You'll have saved $5k a year in a "blow money" account for buying a TV or going on a trip or whatever.