Have you heard of Power Pay? I know someone who used to be deep in debt and they strictly followed this and now own many rental properties and are quite wealthy.
You can do a search on Powerpay or look at this link PowerPay
TMW I am so excited for you being able to pay on your debt. That will feel so good!
Me 54 DS19 and DS17 Married 06/1989 Divorced 01/2011
Thank you SaraSic - that was a really short, simple, informative ideal.
And turning into power save - that's even better! Although I probably won't put AS much of what I'm paying for the credit card debt into saving - but much of it - same concept.
No matter which way I play it - if I don't use the credit cards (unless there is an absolute emergency of course), I could be debt free in 14 months or less!
EDIT: Actually, I could apply part into savings and pay a bit more to the car and student loan and get those paid off faster.
Also good on those so that when I refinance, it will be a lower payment / month.
Last edited by Toomanywords; 04/19/0607:13 PM.
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
Hey TMW - you sound awesome! I'm so happy for you.
You're thinking so rationally now - is it because you can see a way out?
FYI - Student loan interest is usually lower than credit cards, AND is tax deductible - but you probably already know that. Your idea to pay down the highest is probably the best idea, but you are smart enough to figure out what you need to do without us.
I thought the best part of your post was you saying that you already know how fast you can get our of debt. You have plans now. That is SO awesome. You're thinkin' about how to do this. Yes, you can! Yes, you will.
I hear in your posts a positive tone. I applaud you for being positive now. As hard as it was to make these decisions for yourself, you seem to have hit the ground running.
Getting out of debt is the hardest but most rewarding thing anyone can do. It empowers you. It makes you stop treading water and start living your life life you want to. It allows you to live life without paying interest for doing so. Live for you - not those creditors who want you to pay for their lifestyle. It cleans up your credit and makes people WANT to have you as a customer. If you can get out of this in 14 months - what a wonderful thing that is for you.
The reason I suggested that you pay down the highest interest loan first, is that it's costing you the most. For every $1000 of debt, you end up paying $1010 per month at 12% interest, or $1020 per month if you are at 24% interest. So for an example, if you have $3000 on a card that charges you 24% interest, you are paying $60 a month just for the interest. ($720 a year) So if you got rid of the balance on the 24% account, you'll get out of debt quicker, since more of your monthly payments are going to paying down your balance, rather than the interest. Usually the department store cards have the worst interest rates. The big cards like Mastercard, Visa, Amex, only charge you high interest if you've had a couple problems on your payments. Then they can get pretty bad.
Financial gurus basically seem to offer two different approaches to paying down the credit cards:
Approach 1 says to do as Second Chances says - pay off the highest interest cards first. All other things being equal, this definitely is the way to reduce the balances most quickly.
Approach 2 says to pay off the smallest balance cards first. Now, this doesn't necessarily pay them off most quickly, if those aren't the cards with the highest interest rates. I imagine the gurus who recommend this figure A) you'll be motivated by seeing individual cards getting paid off early and B) you'll gain a little financial flexibility (for emergencies) by reducing your minimum monthly payments more quickly.
I think there's a third consideration for someone like you, who doesn't have much of a safety net: if your Visa and similar cards are all near their max, you might want to pay one of them down first, so that you have some credit available for an emergency. (After all, you can't charge a major car repair on that Victoria's Secret card, can you? )
As you can see, the "right" answer for one person might be a little different than the "right" answer for another.
I'm so excited that I can even look at options to pay off/down debt
Oddly enough - my store cards have lower interest rates than 1 Visa & my Mastercard. Sears is the card that offered me a balance transfer at 5.99 until it is paid off. I'm sure after I pay that off, I'll get another similar offer.
Like I said, it's a huge juggling act. I think I'll pay off the Sears, pay off the computer (dell) and pay off the other, smaller visa. Then do minimum payments on the other visa and the mastercard and do large payments to my american express. As I pay down the american express, I will transfer balances from the visa and mastercard to it.
Then after that is done, I will make a little bit larger payments to my car and student loan - and put money into savings.
Bf took the dog yesterday when SD came home. SD called me, I called BF and BF went and picked him up. That way Elvis didn't have to stay locked up in the kitchen alone for 15+ hours. He had fun with BF and BF's mom and brother and dad. BF's brother was telling me how their mom was holding the dog and was on the swing on the back deck - and they both fell asleep. They were also telling me how BF was in their boat (it's small and was in the drive way while they cleaned it out) - and the dog was crying, so the dog had to be put in the boat with BF.
Then to my surprise, BF brought the dog up to Borders for when I got off work. Him and his brother were going looking for scrap and they figured it would be easier to bring him to me. How nice. What a change - thinking of someone other than himself
Since him and his brother aren't working right now - they are getting a ton of work done cleaning out their garage and then they will clean out their basement and attic and rooms. I'm very shocked at both of them - and their mom - for cleaning out and throwing away.
I revised my note the boss man at Borders - asking for maybe 10 hours a week. 1 weekday night and 1 weekend day. Because last night I was told that you work 2 or more days a week or you are just contingent. And you have to work X number of hours a month to be eligble for gift cards if the store gets them as a reward for high sales.
I have so much organization and elimination to do. I have cleaning and laundry to do. I just don't know where to start - on the organization and elimiation I mean
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
Had a surprisingly pleasant conversation with XH. I called him just to let him know the amount of overpayment on the mortgages. I had called and left him messages when I got the check, etc to make sure he got his. I told him I could keep the overpayment and he could pay less in the for sale by owner costs.
Now we have to wait for the escrow to be paid back to us and the overpayments. He has to wait for the water & sewer final bills to arrive and be paid and he has to show proof and he'll get another $200 back.
I let him know that my mom has his baseball/football/basketball cards. She took them from my stepdad's way back when - 1 day she stopped and SD was upset and down about money and when she spotted the cards, she thought it best to take the out of the house for safe keeping. But she failed to tell me, until she "refound" them recently. So I told XH I'll have them for him next time we meet - to close the checking account.
He asked how things were at Sd's. I told him fine - just wish I had more room, esp. cause SD wants to paint and do work and my stuff is in the way. I told XH that I will be organizing and stuff and if I find anything of his, I will let him know & we will arrange for him to get it.
He said he'd watch for any jobs with his company close to Sd's house. (there is an office that I could walk to, even in the winter it is so close) XH knows someone with the hiring.
It's a beautiful day today, I have some money in the bank.
Now I have to get caught up with work.
Always a balance.
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
TMW: I'm just heading out for a couple of days - to cottage, then 2 days of workshops. BUT - I wanted to tell you how impressed I am with your new outlook. Your improved positive attitude. It makes a difference. I am happy for you.
I wouldn't suggest working for Ex's company - too many problems. The further you stay away, the less likely you'll get hurt further. JMHO. Nice to see he is pleasant, though.
Wishing you continued happiness. Remember that today is the first day of the rest of your life. Make it count!
XH works for a very very large insurance company. He works in an office over an hour away.
He was trying to be nice since he knew that the company has a regional office that is RIGHT by SD's. I can understand some complications though - but if they were to offer me a job with good enough pay, I would seriously look into it. They have EXCELLENT benefits, they are flexible. I know XH has liked working for the company from day 1. Everyone in the company is just incredible.
But there are no openings - so don't have to worry about it right now.
Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
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