Debtors Anonymous?

[luckyducky]

Alright, so I know money problems tend to be one of the more taboo subjects to talk about, but does anyone have experience with Debtors Anonymous, debt counselors or financial planners?

I'm watching True Life "I'm a compulsive shopper" right now...I'm not nearly as bad as these kids on here, but I know I need help reigning it in and getting life on a budget figured out before ... well, many things (it gets too out of hand, I share a budget with an SO, that kind of thing).

So I'm looking for thoughts on DA/financial planners, as well as general advice/tips and tricks that you wise folks might have to share...

 

[mike311gd]

Put the credit cards away, and keep them away. That's what I've been doing for the last few months.

I'm not in good shape. I'm making decent coin and paying off my debts all right, but because of medical bills, previously high living expenses and frivolous spending, I've had to cut back a lot. I do everything I possibly can do to save as much money, but cutting the credit cards out of my life -- unless they're essential -- was the best thing I did.

 

[forever_town]

Learn to cook. Learn to buy your own groceries. Learn to comparison shop.

Consolidate trips so you don't waste gas.

And Mike's right about credit cards. Only keep one for an emergency. And no, buying a 42-inch plasma TV doesn't count as an emergency. An emergency is if your car gets smashed up and it costs $1,300 of money you don't have to fix it on the spot.

 

[pallister]

Make a monthly budget broken into two segments -- one for each check of the month. Figure out what bills you need to pay in the first half of the month and what bills you need to pay in the second half, and if there's any room for savings, figure that in as well. Then, on the two paydays each month, first thing you do is write your checks for all the bills and put those withdrawals in the check register. At that point, what you have left is your spending/savings money for that pay period.

Also, as mentioned previously, use your credit cards judiciously. I only use my credit card about an average of once a month, but still, those expenditures tend to be relatively expensive. Just make sure you don't use your credit card for everyday stuff. If you need it as dispoable income, you're living beyond your means and it will get out of hand quickly.

 

[Rosie]

Pallister's advice is good except for one thing.

You ALWAYS pay yourself. Even if it's only ten dollars out of your paycheck, you put something in savings each and every paycheck. Pay it just like any other bill, actually deposit a check into your savings account if you must.

But always, ALWAYS set aside a little something for savings.

 

[buckweaver]

Pallister's advice is good except for one thing.

You ALWAYS pay yourself. Even if it's only ten dollars out of your paycheck, you put something in savings each and every paycheck. Pay it just like any other bill, actually deposit a check into your savings account if you must.

But always, ALWAYS set aside a little something for savings.

I agree, to an extent.

If you're in over your head, get to where you're afloat first. THEN pay yourself first and always.

 

[pallister]

I mentioned that what's left is spending money/savings. Nowadays, I always put away a percentage of my monthly pay, but there have been times when, after paying bills, I had maybe $50 left until the next paycheck. I at least needed to have access to some money for food/gas/incidentals if they came up before I got paid again.

 

[playthrough]

Re-examine every bill you have. Cable, Internet and phone bills are not always non-negotiable -- call and threaten to switch to other providers unless they can give you better rates. Worst thing they can say is no, but more likely they'll make you some new deals and save you a sawbuck here and there, and those add up. Or you can actually switch. Ditching the home phone entirely might also make sense if you live off your cellphone.

 

[pallister]

Another thing that helps is to call utilities and such and ask if you can get put on their budget plan. That way, you'll have the same payment every month, which makes budgeting easier, and you won't get caught unable to pay a $200 electric bill in the summer or $200 gas bill in the winter.

 

[forever_town]

I think if/when my grandmother dies, my family might ditch the home phone entirely. We're on a plan where we have to pay for each phone call we make on the home phone as of now.

If I lived on my own, I wouldn't get a land line. Then again, I probably also wouldn't get cable or anything similar. I'd be royally ****ed when Feb. 17, 2009 hits and all I've got are rabbit ears.

 

[buckweaver]

I mentioned that what's left is spending money/savings. Nowadays, I always put away a percentage of my monthly pay, but there have been times when, after paying bills, I had maybe $50 left until the next paycheck. I at least needed to have access to some money for food/gas/incidentals if they came up before I got paid again.

Agreed. That's exactly the "afloat" I was talking about.

 

[mike311gd]

My priorities are, in order: Rent/utilities/bills, gas, groceries, savings/spending money. That's how I'll be for a long while. Any extra money I've got, goes toward my debts for now.

 

[Stone Cane]

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

 

[luckyducky]

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.

 

[Rosie]

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.

 

[pallister]

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.

 

[Rosie]

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.

 

[imjustagirl]

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.

 

[ArnoldBabar]

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.

 

[Simon_Cowbell]

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

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