What should we do?

[LivingAlmostLarge]

That would work charging your utilities to CC. So are you sending off payments to all the CC and things today? Clearing debt and reducing the cash on hand?

[porkpistol]

That would work charging your utilities to CC. So are you sending off payments to all the CC and things today? Clearing debt and reducing the cash on hand?

Yes I believe I will be taking care of all of that when I get home from work today. I will call each individual card company to get the updated balance and then pay them off. I will have to physically go to my credit union to pay off the personal loan I believe but that is no big deal either.

[creditcardfree]

I would personally only charge utilities to a card that you don't carry a balance on.

[porkpistol]

I would personally only charge utilities to a card that you don't carry a balance on.

That is exactly what I meant. The limit for one of my cards is $4600. When I pay it off there will be no balance on it, and that is what I will use to pay utilities. The totals monthly will be $450-$500. So it will only carry about an 11% debt ratio on it per month and be payed off in full each month before interest is applied. This is how it is supposed to be done right? I have never done this before. Currently I am managing 18 payments per month which gets a little daunting. After paying all my cards off, adding utilities along with directv and car insurance to this credit card I will reduce the payments to, mortgage, credit card, and car loan each month.

[porkpistol]

Well I should have done this a long time ago. I just sat here and worked out roughly what we will save each month with these cards gone and not paying even just the minimums. Total monthly savings will be $900-$950. That is including the personal loan. Either way, that is a huge chunk it will leave us with roughly $7400 of the 31k. I think I will pocked that money and get my savings back to 10k before I aggressively pursue paying off the vehicle loan. It would make me feel more comfortable. Thanks to everyone for your responses. It really helped me decide how to proceed.

[snafu]

I believe you've taken a giant step forward by realizing you are juggling too much [expensive] debt mostly benefiting those greedy providers charging $4 K at 22.5%, $1 K at 22%, $1 K at 22%, $2 K at 20%, $ 10 K (over two cards)at 19%, $1.5K at 13%. With DW onboard, you can make a plan and stop the torrent of money flowing to interest rather than benefiting you and the family. I suggest adding up the interest charges added to each debt for just August. Multiply that sum by 7 and you'll have a rough idea of how much interest you've already paid this year! When you compare that sum to what your savings have earned, you can see why you're not getting where you want to be.

I'm so impressed by your most recent post and your willingness to consider other people's point of view. I hope you understand we offer suggestions in hopes of being helpful and working with you through this difficult patch. We love to cheer your each and every step forward. Of course you need a minimum of 3 months Emergency Fund as you go through the process. Perhaps you would be willing to put a moratorium on new purchases for the short term, by making a list of items to buy which could be fulfilled when you're further along.

Since you feel your home is small, clearing clutter is a short term fix. It helps to go through each and every room of your home, each shelf, drawer, closet, cupboard and cabinet removing anything that is no longer used, no longer needed, no longer loved which is a practical definition of clutter. You may find it beneficial to hold a yard sale, sell some items on local FB sale page, Kijiji or CraigsList. Whatever sum garnered can be applied to CC debt. Take expired medications to a pharmacy for safe disposal. Clothes, housewares, equipment, decorations that don't sell can be donated to a charity shop for a tax deduction and to bless someone who will use and enjoy. Free up space for today's needs. We initiated a 'new item in, old item out' protocol in our condo and it's been of giant benefit. Most unexpected was that it stopped impulse purchases. I never realized how much buying was on impulse! It was an eye opener to have to decide what would be relinquished.

sorry to be so wordy...

[porkpistol]

I believe you've taken a giant step forward by realizing you are juggling too much [expensive] debt mostly benefiting those greedy providers charging $4 K at 22.5%, $1 K at 22%, $1 K at 22%, $2 K at 20%, $ 10 K (over two cards)at 19%, $1.5K at 13%. With DW onboard, you can make a plan and stop the torrent of money flowing to interest rather than benefiting you and the family. I suggest adding up the interest charges added to each debt for just August. Multiply that sum by 7 and you'll have a rough idea of how much interest you've already paid this year! When you compare that sum to what your savings have earned, you can see why you're not getting where you want to be.

I'm so impressed by your most recent post and your willingness to consider other people's point of view. I hope you understand we offer suggestions in hopes of being helpful and working with you through this difficult patch. We love to cheer your each and every step forward. Of course you need a minimum of 3 months Emergency Fund as you go through the process. Perhaps you would be willing to put a moratorium on new purchases for the short term, by making a list of items to buy which could be fulfilled when you're further along.

Since you feel your home is small, clearing clutter is a short term fix. It helps to go through each and every room of your home, each shelf, drawer, closet, cupboard and cabinet removing anything that is no longer used, no longer needed, no longer loved which is a practical definition of clutter. You may find it beneficial to hold a yard sale, sell some items on local FB sale page, Kijiji or CraigsList. Whatever sum garnered can be applied to CC debt. Take expired medications to a pharmacy for safe disposal. Clothes, housewares, equipment, decorations that don't sell can be donated to a charity shop for a tax deduction and to bless someone who will use and enjoy. Free up space for today's needs. We initiated a 'new item in, old item out' protocol in our condo and it's been of giant benefit. Most unexpected was that it stopped impulse purchases. I never realized how much buying was on impulse! It was an eye opener to have to decide what would be relinquished.

sorry to be so wordy...

It is not wordy, I appreciate the time, effort, and thoughtfulness everyone puts into their posts on this forum. The explanations and detail that go into the responses are very helpful. Trust me I would love to declutter my home. My wife loves to hang on to everything, so I guess that will be my next project to tackle with her.

In regards to the EF. As I was to understand it an EF is to cover 3-6mths of your expenses. This is not to match 3-6mths of your income correct? 3 months of take home income for us is $10,200 at $3,400 per month. Our expenses don't even come close to $3,400 per month especially now that we are paying off $900 per month in debt.

[doingitallwrong]

So it will only carry about an 11% debt ratio on it per month and be payed off in full each month before interest is applied. This is how it is supposed to be done right?

Not exactly, but you're on the right track. As long as you pay off the current statement balance before the statement due date, you won't be charged interest. So, let's say your due date is the 17th. Your current (September) statement balance will be $4,600 (or whatever), with a due date of September 17, but you're going to pay that entire amount off in the next few days. Anything you charge between now and your next statement closing date (which is probably a few days after the 17th, but we'll call it the same just to make it easy) will become the statement balance for your October bill. (Let's say it's $500.) As long as you pay that $500 by the due date (October 17), you won't pay any interest. In effect, you will have a balance on the card most of the time if you pay it on the due date. (Some people pay their balances off weekly or even daily, especially as they're getting used to the 'pay it in full' concept.) However, since you aren't "carrying" the balance (it's not the same debt rolling over month after month), you avoid interest charges.

It can get complicated and of course there's nothing wrong with paying your current balance instead of your statement balance if the current balance is higher. Just be sure to pay at least the statement balance by the due date and you'll be fine.

n regards to the EF. As I was to understand it an EF is to cover 3-6mths of your expenses. This is not to match 3-6mths of your income correct?

Different people have different opinions on that one. Technically yes, if you lost your job you'd be most concerned with covering your expenses, but keep in mind that other expenses might crop up that you didn't have before -- healthcare being the most obvious. Of course, many people have expenses they can eliminate if necessary (cable, internet, unlimited cell phone plans, etc.) that may even things out. In the end, we all find a number that makes us comfortable.

[Permanent Temp]

I'm glad your taking step to take care of all the debt!! Once you clear all this up don't forget about the student loans!! See if you can start paying on them earlier so you can reduce the balance and get rid of those too.

If they are not federal subsidized loans than they are racking up interest every day as well and if they are federal subsidized loans than paying on them early means your paying on the principal only clearing up the balance quickly before the interest kicks in when repayment begins.

[porkpistol]

Not exactly, but you're on the right track. As long as you pay off the current statement balance before the statement due date, you won't be charged interest. So, let's say your due date is the 17th. Your current (September) statement balance will be $4,600 (or whatever), with a due date of September 17, but you're going to pay that entire amount off in the next few days. Anything you charge between now and your next statement closing date (which is probably a few days after the 17th, but we'll call it the same just to make it easy) will become the statement balance for your October bill. (Let's say it's $500.) As long as you pay that $500 by the due date (October 17), you won't pay any interest. In effect, you will have a balance on the card most of the time if you pay it on the due date. (Some people pay their balances off weekly or even daily, especially as they're getting used to the 'pay it in full' concept.) However, since you aren't "carrying" the balance (it's not the same debt rolling over month after month), you avoid interest charges.

It can get complicated and of course there's nothing wrong with paying your current balance instead of your statement balance if the current balance is higher. Just be sure to pay at least the statement balance by the due date and you'll be fine.



Different people have different opinions on that one. Technically yes, if you lost your job you'd be most concerned with covering your expenses, but keep in mind that other expenses might crop up that you didn't have before -- healthcare being the most obvious. Of course, many people have expenses they can eliminate if necessary (cable, internet, unlimited cell phone plans, etc.) that may even things out. In the end, we all find a number that makes us comfortable.

Ok, I understand now. I might try it for a while and see how it goes in regards to using the card to pay bills. As for the EF, I suppose people do have their own opinions on the matter. For our expenses I think 10k is sufficient. Not saying we will stop there, because as you can see I saved like crazy before. I will probably aggressively save to the 10k once we pay all the cards, then cut it back. Continue to save a percentage of money, but put most toward paying the vehicle off asap.

[porkpistol]

I'm glad your taking step to take care of all the debt!! Once you clear all this up don't forget about the student loans!! See if you can start paying on them earlier so you can reduce the balance and get rid of those too.

If they are not federal subsidized loans than they are racking up interest every day as well and if they are federal subsidized loans than paying on them early means your paying on the principal only clearing up the balance quickly before the interest kicks in when repayment begins.

I actually have a meeting set up with my financial aid department Thursday to go over what I am looking at in regards to the loans! Thanks for the advice!

[doingitallwrong]

I forgot about the student loans. Yes, unless they're at a super interest rate (some are at 1-3%) I'd pay them off aggressively first, before the house. The primary reason is that, worst case scenario, bankruptcy will not wipe out student loan debt.

[porkpistol]

I forgot about the student loans. Yes, unless they're at a super interest rate (some are at 1-3%) I'd pay them off aggressively first, before the house. The primary reason is that, worst case scenario, bankruptcy will not wipe out student loan debt.

I actually just signed on to check out the status of my student loans instead of waiting until Thursday. I have more than I thought I was going to have and I am not finished with school yet. My current balance is $35,861. Some loans are subsidized some are unsubsidized. 3.4% on the sub, and 6.8% on the unsub. So I should probably start attacking the unsub loans correct? They are accruing interest.

[Permanent Temp]

I actually just signed on to check out the status of my student loans instead of waiting until Thursday. I have more than I thought I was going to have and I am not finished with school yet. My current balance is $35,861. Some loans are subsidized some are unsubsidized. 3.4% on the sub, and 6.8% on the unsub. So I should probably start attacking the unsub loans correct? They are accruing interest.

That's great that you caught it now. What are the balances and interest rates on each one?

Again there is snowball and avalanche. Also in this case some are accruing interest while others are not and all at different interest rates.

If you post up amounts on each loan, their corresponding interest rates and whether they are sub or unsub we could help you figure out a plan.

[porkpistol]

That's great that you caught it now. What are the balances and interest rates on each one?

Again there is snowball and avalanche. Also in this case some are accruing interest while others are not and all at different interest rates.

If you post up amounts on each loan, their corresponding interest rates and whether they are sub or unsub we could help you figure out a plan.

Thank you! I will get that to you soon. The website does list them all out exactly as you asked for.