Credit Card Debt -- 5 Ways to help pay off Credit Card Debt

So you have all this Credit Card debt piled up and you are tired of making minimum payments.  Well now it is time to fix that.  Here are some ideas to help make it easier.

1.  Call your credit card companies to and see if you can get your interest rate lowered.  Every little bit helps here.  If you have been making minimums for a long time, this may not work out for you.  If you get denied, try making a few good payments and give it another shot.  I have seen people get rates dropped by as much as 12%, and I often see them drop between 2-5%.  

2.  Remember your debt snowball!

3.  If you are nearing bankruptcy and you owe a lot of money.  Give them a call before going to any of those debt consolidation services.  A lot of times they do more harm than good.  This is normally easiest if you have missed consecutive payments on several credit cards.  NEVER purposely miss these payments as they will hurt you in the long run, you are cheating yourself here.  You can call to see if they will settle.  Make a plan and present it to them.  You have to be honest here and you have to follow through with it.  A lot of companies will settle with you at a lowered cost because if you were to file bankruptcy, they will lose out on all that money.  Anyway make your plan, tell them how much you make, all your bills, and how you plan to pay it off (and how much your monthly payments are).  If you can do this properly you may save yourself a lot of money -- Good Luck!

4.  I hate this option but sometimes you have to do it.  Look for a card with a lower interest rate that will allow you to do balance transfers.  This is especially helpful if you have a high rate (high risk can be 30%+!).  Transfer the money and pay it off fast, take advantage of the low rate.  Beware though, don't turn into a card jumper as it may hurt your credit score too much.

5.  Swallow your pride and pay pay pay!  Give up going to the bar, smoke less (or help your health and quit), going out to eat, and live off of beans and rice for awhile.  Make minimums on all your cards except your lowest 1, concentrate on that card and finish it off.  Carry over the money to the next card and do the same.  Make a little ceremony for when you finish off a credit card.  Burn it, cut it up, do whatever you want to it and enjoy it.  That is one less worry you will have.

Be smart, take care of the debt, and DO NOT USE THE CARDS AGAIN!  Cash is king my friends... Cash is King

The Financial Diet

So you made the first few steps to setup a budget and to live by it.  This is exactly like a diet to trim a few pounds.  You have to do everything in moderation whether it will be spending or saving.  You just can't quit cheeseburgers and expect not to splurge.  So I recommend taking it easy and not going all out so you get burned out and max out your credit cards.  Set aside some spending money each month so you can still go out and enjoy yourself or buy a few things you want.  This will help keep you from spending more than you needed to.  Read back and maybe think about using the envelope method to help keep this under control.  Spending cash is easier to manage than swiping a card even if it is a debit card.

Second Job pt 3

Stress
60% of Americans are not satisfied with their job. Now if you already do not like your job, and you get a new part time job. Make sure you will like it. You are already dreading the 40 hours at job one who wants another 20-30 hours at the other. It may be okay for awhile but give it time, it will burn you out. This will not only cause your relationship at home to suffer but you will find yourself less productive. I have seen bad things come from this including increased drinking and in rare cases drug use. So if you feel that it will be too much of a burden to get that second job, please rethink it and make sure it is RIGHT FOR YOU! If you don't feel like you can do the job for at least 3 months keep looking until you find the right one. You should be able to modify your spending to help the days pass while you search for the job. You can also try doing odd jobs to increase your cash flow while you are searching.

Emergency Fund

We all have heard it... get an emergency fund... but how much?

If you are paying off debt still and you are riding your debt snowball downhill I recommend a minimum of $1,000.  This will normally cover any sort of emergency, or at least a good portion of it.  It should cover most car repairs, furnace repairs, house etc.  That is just a minimum recommendation though.  I highly recommend enough to cover most of your deductibles (health, auto, and any other type of insurance) with a little extra to spare.  

My emergency fund has saved me several times.  My car battery died at the end of the month where I had already used up my extra spending cash to buy some Christmas presents.  I transferred the money to my main account and went straight to the store to buy a new battery.  The same thing happened 1 month later when Brittany needed tires.  The emergency fund should only be used for emergencies.  Never use it to pay for vacations, buy toys,  or anything that you could live without.  Remember you need to make sure you have a house, food, transportation, and clothes before anything else.  Make your priorities.

When you are done riding the debt snowball and all you have left is your mortgage or no debt well then it is time to really save.  I recommend having at least 4 months worth of expenses saved up minimum.  4-6 months is best.  Most will say 3 but I like to play it safe.  Especially with the way the economy is.  You never know how long it will take to get a new job.

Build it, enjoy it, and wipe away that stress of wondering "what if?"

Getting Serious

Seriously!  Get serious and start planning your finances out!  If you are single this is much easier as you only need to convince yourself.  If you are married or in a very serious relationship you both have to be on board or it will never work!  My fiance and I went back and forth on the idea and it took awhile to get her to understand, but when she did it was all gravy implementing the plan.  

She loves to go out for dinner, many quick mini vacations to different cities (Denver, Kansas City, etc) and missing that bums her out everyonce in awhile... but deep down she knows it is for the greater good.  Live like no one today so you can live like no one else tomorrow.  In other words don't go all out when you are young and take care of that debt and when it is gone you have freedom to do whatever you want!  

Start thinking about change.  It doesn't happen over night and it is difficult giving up some of the fun things you do.  There are plenty of other fun things you can do for cheaper.  You just have to be creative.  Be smart, be serious, and BE DEBT FREE.  It doesn't happen in a snap but over time you can have much more fun in the future.

Snowball your debt

The fastest way to become debt free is to snowball it.  Just like a little snowball rolling down the hill, by the time it gets to the bottom collecting snow it will be giant!  The most effective way to pay off your debt is to really focus on the smallest and work your way to the biggest.  As you pay off credit cards, loans etc, use that money to add to your next largest debt.  Soon you will be making HUGE payments towards your debt and you will get a feeling of making progress.  As you watch the number decline over time, when you are finally debt free (long winding road to get there) you will have quite a few dollars coming in that you won't even know what to do with!  It is an amazing feeling and I am halfway there.  I have a projected 16 more months to become debt free and when that day happens... everyone will hear!

Second Job... Continued

2. Commitment! Unless you are single with no friends or family you don't have to worry about this as much, but for those who have to spend time with family etc second jobs don't fit in well. There is nothing better than maybe getting an obscure schedule from your boss at your second job. They may be short on the weekends, then you get scheduled Saturday and Sunday for 2 10 hour days. For most, the weekends are the only time we get off but now they are taken up by long days at that second job you most likely do not enjoy. That time needs to be spent at home with family so you do not miss out on all the little things. Although if you are struggling on your finances that bad... sometimes it is something you have to do. Now if you know you can't survive without the second job you have to do it, but if you are border line then it is still a tough decision.

The other problem with the commitment to a second job is time off. Now if it is nearing the end of the year on your 40hr job and you have to use your vacation before it expires, you have to try to schedule both jobs. Sometimes it is not as easy as you might think. Good luck in this department :)

Same goes with time off to care for sick children/spouse. I know my 40hr job will allow me to take it off and make up the time, but making up the time for my higher paying job may be skewed by the time left from the second job. This here is another reason why I started donating plasma. Yeah yeah, it may sound like I am trying to hype plasma centers up but I am not. I have just found it an easy, convenient way to get some extra money. We all have our little ways of doing it and this is mine, I hope you find yours.

Just a reminder that you are getting the second job to help balance your finances... get out of debt quicker, maybe have some fun money, but make sure of you take care of it right. Do not abuse it, use it for the greater good and hopefully you will get yourself out of the rut.

We should sit back and think of a life without debt (yes even without a mortgage!)... no payments other than gas, electric, car gas, insurance, food, clothes etc. Knock out that car payment and mortgage and look how much money you will have left over. Be sure to invest 10-15% of your income towards retirement and enjoy yourself!

PS. I am testing the fonts to see which one I like best for readability so please bare with me.

Second Job? More money will solve my problems right???

This is probably one of the most common questions asked when people are trying to take the right step to settling their finances. I have thought this over numerous times and I still have yet to get a second job. Is it right for you... I don't know... but this is what I have considered. Over the next week or so I will be going over some of the options of getting a 2nd job or avoiding the commitment.

1. Time! Time is so limited anyway if you are working a 40+ hour a week job. This might be different for people who do odd jobs, or work a part time job with no option of getting additional hours. For me I work 40-43 hours a week. My Fiancé Brittany works 20-30 hours a week and goes to school full time. We have time together right now but sometimes it just isn't enough! You know the feeling right? Is sacrificing time with family or loved ones worth a few extra dollars? Maybe temporarily but I would never recommend it as a full time solution. Maybe we need to adjust your spending budget?

Along with time, what do you value your worth? For myself I feel my time is worth at least $12-15 an hour if I am going to be cutting into family time or even ME time. We all know how important ME time is. If I am working for less than I feel I am worth... does that make me feel worthless? Not quite but close. I would constantly wonder what else I could be doing with my time.

My current solution:

Right now I get off work around 4:00 pm. Brittany is off work around 5:30 - 6:00. The plasma donation center is about 5-10 minutes away from work and isn't much out of my way home. It takes 1-1.5 hours per donation and I can donate 2 times a week totaling $55. 3 hours max = $18 an hour not bad right? It is also tax free cash. I donate twice a week 2 times a month for an extra $110 a month. This can go as far to covering overages on the budget, chipping away at debt, or even a little fun money. This is done all in time to make it home in time to be with my Fiancé.

There are many solutions to picking up the extra cash. It can come from many sources such as recycling the pop cans in your house. Buying/selling on craigslist or eBay. We all have too much clutter. Why not make a few extra dollars getting rid of it? Last year I made a profit of $500 with about 1 hour of my time. I was browsing the Computer section (IT is my specialty) on craigslist and found some business class hardware for $1 a piece. I was able to take it home, test it, clean it up, and flip on eBay for some quick cash. Think about what your specialty is, and see if you can do the same. A lot of handymen do the same with different tools, and I know someone who picks up older China at auctions and sells them on eBay for profit. This is done with the family and eBaying at home giving you plenty of time to enjoy yourself.

Welcome

I am creating this blog in hopes to be able to someday help someone reach their financial goals. I am not a professional at finances but this is my hobby. Helping people budget, and start making the right steps to becoming debt free is a passion! I can't tell you how much I love being asked questions about budgeting, becoming debt free, and eventually getting rid of those nasty monthly bills that shouldn't expect. As Dave Ramsey says... "Cash is KING!"