Totally lost!!

[Moneywise]

Hi there. I've been trying to free myself from debt for years, but I have paid down my debt significantly within the last eight months by doing two things: (1) making the commitment with my boyfriend and (2) making the commitment in writing.

Doing it together has made all the difference in the world. It will never work when only one partner is working toward the goal. We wrote our goals down by writing the total outstanding debt in prominent display on a board in the kitchen so that we can see it everyday and see the progress as the number goes down.

We also have a spreadsheet of the debt with corresponding interest rates and outstanding amounts. We work on the highest interest rate first.

[snafu]

Like DisneySteve, I believe you must 1st figure out where your money goes. My guess is that you had been using your line of credit, loan, credit card to make up the difference between your income and your spending. When you do that you increase the problem for yourself.

My suggestion is to take your credit card and debit card[s] put them in a zip bag, in your freezer. On pay-day, 1st deduct the sums needed for your non-discretionary expenses [rent/mortgage, utilities, car loan, line of credit payment, loan payment and credit card minimum payment].

2nd, withdraw cash for jars/containers labeled FOOD, TRANSPORTATION, CLOTHES/GIFTS, PERSONAL. Divy up the cash so that you can buy food, get yourself to work and obligations, and buy items that are totally necessary. Using cash for discretionary spending and writing down where the money went, holds you to your commitment. This will cause a pared down Christmas but it will give you a big payoff.

Understand that FOOD covers meals at home, at work, at restaurants. TRANSPORTATION covers all Toyota operating costs, parking and any other transport you might use. I assume you have no savings and I would like you to add another jar for Savings/Emergency Fund. If you can put 5% of your discretionary - or anything left in a jar you give yourself a huge benefit.

I can't explain it but by using cash, you will be much more aware of money going. Writing it down in a cheque book register or note book really helps identify where you can make cuts that don't hurt. By using cash for discretionary spending and writing down where the money went holds you to your commitment.

You have worked hard and earned a lot of money if you add up your annual income over the years worked and you deserve to use your income to your best advantage.

[Tree0164]

Like all the advice above you need to keep track of your money. It is all about a budget at this time to get rid of the 40k in debt. Post your numbers in here and we can show you where you can cut.

I am also going to second the Dave Ramsey book as well.