Debtors Anonymous?

killing the land line can really save a lot of money. look into it.

i was so broke my first year in the business - early 1980s. the only credit card i had was a Mobil gas card. i was making $180 a week pre-tax and paying rent & car payment.

when i ran out of cash before payday, i would go to the Mobil mini-mart near the paper and buy a bunch of those saran-wrapped sandwiches, a few bottles of pepsi, maybe a bag of chips or two and some M&Ms, and those were my meals until we got paid

good times

 

I haven't had a land line since the free one in my college dorm. And I definitely shopped for my cell plan/carrier when I got it a month ago.

I know I need to downsize my current apartment since my ex-roommate ditched me at the beginning of the year, so that's on my list (of course, borrowing money for the deposit might be needed).

Any tips on paying down past debts? How much of a paycheck should be going toward those (other than "as much as you can afford")?

I guess I partly don't know where to start with questions because I don't know what I should be asking.

 

I will respectfully agree to disagree with you. Always, always set something aside before you pay the rest of the bills. Even if it's a tiny bit, but you need to train yourself to save money as mandatory, not an option.

Otherwise it's too easy to make excuses later on not putting money away.

If you're stretched so tight, that's when it's time to start looking at cuts. Ditch the cable, ditch the cell phone - or land line, shop for new insurance, start clipping coupons, quit eating out, quit stopping at the coffee shop for your $4 cup of coffee....the list goes on and on.

On the savings thing, I am not willing to change my stance. It saved me more than once back in my single days.

 

I've become really good at saving money and budgeting -- the primary reason I've been unemployed for six weeks and I'll be fine until October if nothing breaks right away. As a result, the percentage of my paycheck that I use as disposable income hasn't changed much since I was living on my own in Chicago at 18 making $6/hour.

Of course, being the professional vagabond I am, I usually spend my savings every couple of years moving around -- or doing things like quitting my job in search of a new career path. I don't like to imagine how much money I'd have in the bank right now had I stayed in one spot the last 10-12 years. But, hey, ya gotta live a little.

 

Ducky, since you mentioned a roommate, or ex-roommate, I'm assuming you're single.

If you are that bad off, have you considered a second job? Back in my single jobs, I worked two jobs so I could keep my apartment without a roommate because I hated having a roommate.

As where to start, get yourself a notebook.

Write down how much money you have coming in.

Write down every bill you have, the entire balance due and the minimum payment due. For utilities and rent, there obviously isn't a minimum due.

Now, keep in mind if you are just paying the minimum on charge cards, you might have great-grandchildren before they are paid off.

Add up the debits (the bills) Add up the credits (the money coming in, your paycheck). Subtract the debits from the credits.

If you have a negative number, you already are screwed because you have no gas or grocery money.

If that's the case, second job is mandatory.

You can also call your credit card company (companies) and work with them to come up with a payment plan. If you call them, they are usually willing to work with you. Usually.

 

ducky, I'll chip in on the other stuff you talked about.

I used a debt consolidator (A New Horizon) about 7 years ago. I had seven credit cards, all maxed out and behind on payments. I was/am simply incapable of having credit cards. My willpower is nonexistent. So I got on a payment plan. I was paying $276 a month to them, and they paid probably about $150 of that to the credit cards and kept the rest for themselves. But it was the only way I could make it happen.

I was told I could not apply for new credit while I was in the program, which makes sense. Well, in the middle of it, I got my current job and I was told I had to have a credit card. Was not told prior to getting the job, b ut after. So I had to call them, get permission, and got a card. Had like a $1800 limit. I figured that was good for 2-3 road trips, and hopefully I'd get reimbursed before I had to put another on there. Well, that lasted about four months until I'd maxed it out with private purchases. So I got a second card, about $1200. Maxed it out in three months. I then got two more cards ($500 each) and both are maxed.

I spend more money than I make. Always have. I live at the same level now that I did when I was making $18K at my first job. I will never have disposable income, and I've come to grips with that. If I could just break my credit card habit, I think I could at least live month to month OK. However, I also know I'd rather eat out and hang out with friends and buy CDs and movies than put money in savings.

Those about to quote this and tell me everything I'm doing wrong...I know. But I also know I don't care enough to change. It's not a sacrifice I want to make. It's pinched my life many times...I couldn't go home to see my family this weekend on a four-day weekend because I didn't have gas money...I just got paid two days ago.

So ducky, I know where you're coming from. I hope you're not as far gone as I am.

 

I know that going through debt consolidation/counseling will help you rebuilld later, because they look at it as you being proactive.

If you want to try to do it yourself, cut up every credit card except one for emergencies, and make that one extremely hard to get to. Don't carry it. Give it to a relative or friend and tell them to make you justify why you need to use it. Make at least the minimums on every card to protect your credit report, and start working to pay down the one with the highest interest rate first. And call your card issuers and ask for a lower rate -- apparently it works fairly often, and that's free money.

 

As long as you don't get shot by Uncle Junior and are only able to call 911, but are unable to speak.

 

The very first thing you should do is ditch all the credit cards. Gone. Kaput. Cut them up into 90,210 pieces. They are not fucking worth it. Because having a credit card in your wallet and vowing to use it only in an emergency is like rooming with a naked nympo supermodel with 42DDDs and vowing not to have sex unless it's absolutely necessary. You find your definitions of "emergency" or "absolutely necessary" grow more liberal by the second, even if you don't intend to. It happens. Trust me (on the credit card thing, at least).

Get a bank card that takes directly from your savings account. If you don't have the money, well, then you can't buy anything. But if you rely on the credit card as an emergency fund, you WILL dig a deeper hole.

The next thing you need to do is call the credit card company/ies, throw yourself on the mercy of the bastards and ask them to work out a payment plan on zero pct interest. Tell them you're up to your eyeballs in debt, you no longer want credit cards and you just want to wipe your debt from your record as soon as possible. If they give you grief, tell them--as kindly as possible--that the only way for them to get what you owe is to do it on zero pct interest. They'll ask you all sorts of questions about your income and your monthly bills/debts and come up with a monthly payment plan.

There are a million conditions--you can't miss a payment, you can't sign up for or use another credit card--but it's worth it. Five months from now I'll be free of Master Card/Bank of America/whatever the fuck they're called now and free of credit cards debt. Unless I go broke before then, of course.

 

Ahhh.... to be without kids.

 

Oh, no doubt about that, Simon.

But I've also decided that one reason I'm not ready to have kids--or a house--is b/c I need to fix my self-inflected debts first. And if that costs me kids or a house, well, it's my own fault.

 

Not sure if I'd recommend one path or another, because what worked for me might not work for another.

What I did on CCs -- I had three, at my most -- was to pay them off, smallest balance to largest. It helped my peace of mind to get rid of one, then the other ... then finally tackle the big one. Just paid that one off in April, and have been able to throw some serious money (well, finally reaching four figures is serious for me) in my savings account since then. It's made a major difference.