Help with my get out of debt plan.

[JustinH]

Hey Folks.

I'm 24, and a college graduate at the end of 2004.

The day after christmas 2006, I was laid off from my IT job.

I have been on unemployment making a mere 200 dollars per week.

I finally start my new job on April 6th, making 11 per hour. 40 hours standard, overtime offered. This is a temp job for 4 months.

I'll be working all the hours I can get.

My girlfriend and I are moving from New York to Phoenix at the end of summer.

I am 2600 dollars in debt with citi credit cards.

I just got the bill the other day, my intro rate had expired, and it left me with a 18.99 fixed rate.

I called and demanded a new rate, which got me nowhere.

I applied online with American Express Blue, and was approved. Now I have 0 percent interest for 12 months with no balance transfer fee.

So now I owe the balance to AMEX, and my goal is to be free of credit card debt before we move.

I have significantly reduced my operating expenses so to speak.

Here is what I have done.

Deferred my two student loans. The first payment was 95 dollars per month, the second was 305 dollars per month. Around 400 per month total. The first loan is deferred for 9 months, the second is deferred for 6 months.

I drive a 98 F150, and I just made my second to last payment on it. The payment is 209 per month. I now owe 105 dollars on the truck (I made a few extra payments when i was fat on cash).

Also my girlfriend has agreed to pay the high speed internet bill, which is 46 dollars.

Finally I went from grocery shopping at the local fancy grocery store (Wegmans), to buying absolute necessities at the Superwalmart. I was spending 100-105 dollars per week on food, now I've got that down to 45-55 dollars.

My goal is to put 650 dollars on the card per month for 4 months, paying the debt down to nothing.

Then I will use the card for moving expenses, and my girlfriend and I will split the costs and pay the card off totally before the intro interest rate expires.

Sound like a well thought out plan?

Thanks,
Justin

[creditcardfree]

Justin, that sounds like a great plan!!

It would be a good idea to have some cash for moving, such as putting a deposit down on an apartment. Taking cash from your AMEX card would probably incur fees.

The only other thing to make sure of is that new purchases are also at the 0% interest rate.

Will you have a job when you move?

[anonymous_saver]

That's great that you can put $650 a month on your CC. However, since it will be at 0% interest, I think it may make more sense to save 1-3 months of an emergency fund first and then pay off the card. I would also cut all extra costs such as having a cell phone AND a land line, no newspaper subscription, etc. [I'm sure you get the idea, it already sounds like you are doing very well with the money you have.]

So lets say your expenses are $975 a month (I have no idea what the actual amount is, I am just using it for an example). So after 3 months, you could have saved up 2 months of an emergency fund. Then after that you could start paying off the credit card agressively.

What kind of job prospects do you have after the 4 months? Would you be able to get another temp job? What is your degree in - are you pursuing jobs that will utilize your degree? Trust me, I know it's hard, it took me two years with a M.A. to get a "real job" - I had 2 years of restaurant jobs and temp jobs. I would suggest thinking about working at a restaurant here and there to make some extra cash. Just an idea anyways...

[JustinH]

Thanks all.

It makes sense not to be so aggressive paying off the card, because it is 0 interest for a year, I will build my emergency fund back up.

Anonymous-- My degree is in computer science, and there are virtually no high paying IT jobs where I am. I was just doing the temp thing to get some more experience on my resume, and get by.

When i get out there I can temp until I get a job with the state of arizona (my hopeful job).

[Elgin526]

I agree about having some cash on hand for moving expenses, someplaces don't take credit cards for deposits.

I also wanted to sugest something I sugested to my brother when he moved to AZ from IL. Most of his furniture was all either second hand or pretty beat up. Rather than pay a moving company to move it, or rent a really big and expensive van to drive it himself and tow his car behind it, I suggested that he donate, give away, or throw away all but the esential stuff (clothing, electronics, books, etc) and just buy "new" second hand furniture once he got to AZ. That way he would only have to rent a small trailer to tow behind his Blazer, and he could by things that would fit in his new place. Overall he saved money and got "new" furniture. I think the only furniture he moved with him was his matress, since he had just bought a brand new one less than a year before the move. If you can get rid of enough stuff, you may not need to rent a trailer, espeically if you and your GF have two cars, just load them up until full, and if you have a box or two left over you can always ship it UPS!

[MirandaMarquit]

It sounds like you have a good plan going. If you can stick with it. Even the best laid plans go awry. However, I recommend a hybrid plan. Still aggressively pay off the credit card, but do it with a little less and build up some cash. Maybe plan to pay it off in six months (about $430 per month). You should still be able to get the balance down to have room for the move, and you will also have cash on hand. Just make sure that you use that whole $650.

[Ima saver]

I would also suggest that you have a good E.F. I cannot believe that all you will be paid is $11 an hour with a college degree. My husband pays his laborers $18 and they can barely read.

[th_tan]

45-55 per week on food, your doing an awesome job budgeting.

APR is always higher in most cases when taking out cash from a credit card.

[moi aussi]

where is ny are you? 11/an hour in new york???

[JustinH]

Upstate NY, suburb of Buffalo.

All the entry level IT jobs are 10-11 per hour folks.

Thats why I'm moving elsewhere.

My last job was 8.50 per hour, and that was a computer job as well.

I'm paying my dues here to get a real job down the road.

[Ima saver]

It does sound like you have a well thought out plan!

[jIM_Ohio]

Upstate NY, suburb of Buffalo.

All the entry level IT jobs are 10-11 per hour folks.

Thats why I'm moving elsewhere.

My last job was 8.50 per hour, and that was a computer job as well.

I'm paying my dues here to get a real job down the road.

Buffalo is western ny, not upstate. LOL go Bills. I was born in Cheektowaga.

I am guessing the budget does not allow too many trips to Duff's or the Chocolate Bar.

Do you have a 4 year degree in computer science? What type of IT are you looking for? I am in IT/ software, and might be able to make some suggestions. My company actually had an opening in Buffalo a few months ago for software applications engineer... not sure of exact details (wife shot down transfer even though her employer is headquartered in Rochester...)

[JustinH]

Buffalo is western ny, not upstate. LOL go Bills. I was born in Cheektowaga.

I am guessing the budget does not allow too many trips to Duff's or the Chocolate Bar.

Do you have a 4 year degree in computer science? What type of IT are you looking for? I am in IT/ software, and might be able to make some suggestions. My company actually had an opening in Buffalo a few months ago for software applications engineer... not sure of exact details (wife shot down transfer even though her employer is headquartered in Rochester...)

Nah I have to control my spending for a few months, and get back to square one.

I'm basically looking for internal helpdesk work, or hardware repair, etc.

I'm moving to phoenix in august, and the job I have now is going to get me out of debt and get me to arizona.

[nanamom]

My DH is a also an IT prof. He used to do the temp thing. If you are willing to relocate it can be very lucrative. I know people who only do temp jobs and have the company keep looking in a one hour driving radious fo the house they bought. One of the problems we found when doing internet job hunting even for temp jobs was that the companies all said local candidates only and didn't care even when we said we would pay all our moving expenses ourselves. We went to motel 6 and became "local". Then of course the job he accepted didn't care where you were from!

[Magicman]

Hey Justin, you're the man!

Yes, get rid of your CC debt ASAP. That credit card money is way expensive to carry. My advice is that after you get your debt squared away, start saving just a little every month to a savings account.

If you save just 4-5% of your income every month, when you are in your 40's you will have your financial goals met. The secret is to set aside a cetain amount every month and stick with it.

All the best --