New and seeking advice

**Petunia 100** · 11-02-2013, 09:31 AM

Do you have any money at all in a savings account?

While paying down debts is good, keep in mind that you are a homeowner now. If you have no spare cash you can access, how will you cover the next home maintenance bill? You want to break the cycle of needing to rely on credit.

I would look at each interest deferred debt, determine the due date for certain, pull out my calculator and see what I needed to pay each month to have the debt paid in full one month before it was due.

Can you afford to make all of those payments as well as your house payment and living expenses? If you will not be able to pay them all in full on time, then focus on those you will be able to pay in full. Better to avoid some of the deferred interest than none of the deferred interest. Keep in mind too, you do have other options. For example, you could transfer the balance to a credit card before the deferred interest period ends, possibly with a 0% offer.

But first things first. Let's start with a budget. I suggest you post your entire budget, not just your consumer debt details. What is your house payment? Does it include taxes and insurance? How much for utilities? Groceries? Gasoline? Car maintenance? Personal grooming? Gifts?

**snafu** · 11-04-2013, 05:07 AM

WOW! New home ownership $9,500 debt + plan to purchase a new fridge with low savings. Petunia offered important information and a terrific plan. I advocate including a small amount to savings from every pay. As a home and vehicle owner, you need to 'be prepared' like Boy Scouts pledge, for things to go wrong. I suggest
keeping your holiday season simple and as inexpensive as possible.

I'm confident you can put a plan in effect and stick to it.

**autoxer** · 11-04-2013, 06:08 AM

Originally posted by Stran704 View Post

So my plan is to put savings on hold

stop spending and pay off these debts because I am not about to pay interest on these. Except the car has interest though)
I planned to pay off debt2 first within two month. Then debt 1 by may2014 if I get enough from tax income. Then debt 3 by dec 2014 or sooner if unexpected income comes in. Good plan? That's my main goal to pay off these debts. By then the car will be at 12000? So should I roll over the money to pay off the car which would be at about $900? Or should I put that $400 into savings?

Right now our savings looks pretty ugly because we were living like we were still at mamas house

lol anyways once these debts
and car is pay off. I would like to start seeing my money go up plus start saving for retirement(right now it's empty beside $x in my ESOP) and I need a new fridge.

You have a good plan to pay off the debt, but make sure you address the spending problem, so you don't end up back where you started. Don't let the stores no interest, deferred payment plans encourage you to spend more than you otherwise would.

I know you felt that you had to replace all of the carpet, but it's not worth going into debt for. I felt the same way when I first bought my house, because the previous owners dogs had left their mark. I only replaced the bedroom carpet right away and let the rest of the house wait until I had more money. A cheap area rug may not look as nice as plush wall to wall carpet, but would function perfectly fine.

Separate your wants from your needs. You may need to replace your fridge, but you don't need the stainless steel one with a USB port. The cheap one at the end of the aisle will also preserve your food just fine. If you look at a $1,000.00 refridgerator, $500 is in the need section and anything above that is a want.

**MonkeyMama** · 11-04-2013, 06:20 AM

Originally posted by autoxer View Post

Separate your wants from your needs. You may need to replace your fridge, but you don't need the stainless steel one with a USB port. The cheap one at the end of the aisle will also preserve your food just fine. If you look at a $1,000.00 refridgerator, $500 is in the need section and anything above that is a want.

I would take this a step further. You can probably find a perfectly good fridge on Craigslist, to hold you through until you save up the cash to buy a newer one. When I Was 26, I hardly remember owning or buying anything *brand new*. 10 years later, we've upgraded most everything in our house (appliances, furniture & cars, etc.), BUT buying used kept us out of debt and allowed us to save substantial sums early on.

**Stran704** · 11-05-2013, 09:41 AM

Thanks for the replies and advices. I've been doing a lot of thinking and planning and I think I figured it out. I've planned to pay off these debts in one year excluding the car. I'll be doing a lot of nothing and telling the husband 'NO'. As I look at the calendar for next year it seems like it's going to go by so quick since I'll just be waiting for the months to pass so I can pay monthly bill. How exciting right?

**autoxer** · 11-05-2013, 11:15 AM

Originally posted by Stran704 View Post

How exciting right?

Actually... seeing the balance sheet improve is quite satisfying. You should track your progress, to help keep yourself focused. I use a spreadsheet to track my net worth every month and the more it grows, the more exciting it is to fill out.

Then the next time you wander into Best Buy, you should think about how buying a new refridgerator will screw up your balance sheet, and you'll be satisfied that you made the right decision to leave the store without one.

Don't make it seem like an ultimate sacrifice to stick to a budget, or it will be doomed to fail. Turn it into a game and it will be far more successful.

**asdf** · 11-05-2013, 12:38 PM

Originally posted by Petunia 100 View Post

But first things first. Let's start with a budget. I suggest you post your entire budget, not just your consumer debt details. What is your house payment? Does it include taxes and insurance? How much for utilities? Groceries? Gasoline? Car maintenance? Personal grooming? Gifts?

I second this suggestion.

**bzbee** · 11-05-2013, 07:04 PM

You need to pay off all the debts before you save for retirement, unless your job matches the contribution, then just do the minimum they match. Focus on paying off the debts, from highest interest to the lowest. To be able to pay extra towards the debts you need to reduse your expences, do all the frugal things, like watching sales, clipping coupons, use less, pack your lunch, use less electricity, don't drive anywhere unless you have to, and there are tons of other things you can do to save the money.

**psuicyde king** · 11-06-2013, 02:38 PM

Originally posted by Stran704 View Post

Thanks for the replies and advices. I've been doing a lot of thinking and planning and I think I figured it out. I've planned to pay off these debts in one year excluding the car. I'll be doing a lot of nothing and telling the husband 'NO'. As I look at the calendar for next year it seems like it's going to go by so quick since I'll just be waiting for the months to pass so I can pay monthly bill. How exciting right?

I find saving to be quite satisfying. As another poster stated, my savings is like a score in a video game to me, and it's satisfying seeing it go up. Other people like seeing a new tv in their living room, and I like seeing a higher account balance�which also means financial security.

I might differ from many people, but I don't advise paying off your car ahead of time unless it provide psychological or emotional benefit to you. I don't know the interest rate on your loan, but if it's reasonable (5% or less), you can stick your money into stocks - chances are good that you'll see higher growth coming in on the stocks than interest going out on the loan. That's a net positive and gives you more cash in the future.

New and seeking advice