Question: I’m wondeing is this group about living within your means.
See reason i am here and reason i ask is i have an excessive amount of credit card debt. I budget monthly i only buy what i need. I spend zero on myself.
And budget is tight, and i don’t know how to make it tighter.
Thought about bankruptcy i don’t think they’d let me with new laws.
Credit card counseling perhaps.
Don’t know what to do what do i do? My income has went down at work and i will possibly not make budget. As of now i have always made my debt payments and my credit is good except for the fact i have lots of debt. How do i not be a victim of the credit cards cause i know i miss one payment they’ll have me for life.
And no i haven’t used my card in a year and a half and about 90 percent of my payments have went toward interest, and i am really stressing.
Answer: You talk alot about how you know all about finance and budgeting. There are always things we don’t know that someone else has found out from experience. I am curious also as to how you feel you got into this credit card situation; knowledge of finance doesn’t mean we understand the emotional underpinnings of spending issues. (And I’ve been there, done that.) Also, how much debt do you have? As Suze Orman would say, you cannot be ashamed to say the number out loud. Own it…as a first step.
Be careful with credit counseling as there are a lot of bogus companies out there. There are free services that you can avail of and some of the top “get out of debt” books will advise on who to trust and who to avoid. Don’t forget that one of the best things you can do, especially if your credit is good, as you say, is to personally call up each of your credit card companies, tell them you are committed to paying your debt but that you would appreciate their working with you over the next year to keep your minimum payments as low as possible while you are addressing increasing your income and lowering your expenses. Say you do not want to file bankruptcy, but need them to team with you to get the debt resolved. Ask for a supervisor if the customer rep says they can’t do anything.
Then for resources, Dave Ramsey “Total Money Makeover” is one good source for reading with worksheets and tips. Additionally, a great resource is “Your Money or Your Life” which also comes with great worksheets and has study groups formed around the country. Check out the Simple Living Network at http://www.simpleliving.net/default.asp for a database of groups to join.
Ramsey and most others would say for someone in your situation who claims to have cut everything to the bone (“I spend zero on myself.”) except cable and internet (“my entertainment”) would first be to: 1) cut cable and internet! I know that sounds harsh at first to us wired folks. At least you could give up the cable and find the cheapest source of dialup around. There are many more forms of entertainment that are free and much better for you–mind and body. If your cable is $35/month, that is $35 each month yo could be using to pay a little over the minimum on each credit card. That’s $ $420/year! Additionally, internet is free at libraries. And remember, even if you pay only $5 over minimum payment, that can make the difference in the credit card companies raising your minimum or not. Worked for me!
Do you have a cell phone *and* a landline? What do you pay each month in cell phone charges? Could you reduce it by calling less and using a prepaid service like TracFone only for emergencies? I paid a total of $26, and I have 6 months of service and 300 minutes of airtime. Do you brown bag it to work? Or do you still buy a Starbucks every morning or several beers at the bar each evening? Remember the latte factor! Do you take the bus and drive your car less? For grocery shopping, do you consciously watch the sales at your supermarkets.
If you truly have designed a very strict budget, the only other source to reduce your debt is to increase your income…taking a second job, a part-time job, or creating a stream of income from at-home work. Are you skilled in some trade that you could use on weekends or in evenings, even for a few hours? Remember, the 2nd job wouldn’t have to last forever…and it could even lead to a better paying job than your current one.
Share some examples from your situation and I’m sure many of us can help with some ideas. I know it sounds as if you are depriving yourself so much. We in America really don’t know how to be frugal and live simply without a lot of conscious effort. We have so much. But you are only 27! If you make a concerted effort for three years (depending on your debt), you can be debt-free by the time you are 30! Think how great that would feel to begin the next phase of your life feeling such freedom.
You can do it! I’ve known people who’ve gone from over $225,000 debt to buying their home and cars for cash!! It is not an insurmountable problem! Keep the faith! (And if you have a faith, praying for some guidance and strength is also a great help!)
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