Just wanted to introduce myself as a new member and try to reap knowledge from those of you out there in the same boat I am. I have one credit card with a large amount on it – lord knows why they gave that to me. I am also buying a home and car. I find myself not making ends meet everymonth to cover the little things that seem to come up. Any advice on what is the most important step to make would help. Also, what have you found most useful in your quest to be “debt free”.
I’ve used FlyLady’s system for my home. Now we desperately need help for our finances. It seems like every plan we try to get out of debt is a dead end. I’m not sure what to do next–if I knew what would work, I’d do it faithfully. Any suggestions you all have would be appreciated!
Good on buying a home.
The mistake that you have done is buy the home with a large credit card debt. Most people buy the home and look at the mortgage payments and say to themselves that they can or cannot afford. This is 100% wrong way to look at it. When you buy the home, you also buy all the problems. It will require, based on some estimates, another 40% more to the monthly mortgage payment just for maintenece. Do not overlook this.
So when looking at your mortgage payments you need to factor in maintenece, etc. That is your true monthly cost. But having a large credit card payment every month will take away from your speandable cash so you cannot do your maintence on the home. Eventually you have to get more credit cards to pay for that broken water heater, etc. Before you know it you are way over your head.
The first thing you should do is get rid of that credit card. Especially since the minimum payments are doubling after the first of the year. Then start paying down your mortgage as quickly as you can. If you have no money at all you can get some urgent cash from here – ElcLoans.com: no credit check payday loans. This website offers great repayment options and high acceptance rates. They also have useful article on fast credit improvement here.
My biggest step was realizing that I was responsible for the situation I was in. NOT ANYONE ELSE. Your comment about why the credit card company gave you the card sounds like me before I faced my problem. That is, not living within my means. My situation was compounded by a dibilitating illness, so I have to fight that to work at all. However, I am making progress. I watch the big things (interest rate, taxes, car payments, repairs, etc) and the little things, (leaving lights on, thermostat, gas prices, meal planning, trips to town, etc). It all adds up to having the money to pay off MY debt.
Start today to re-evaluate your lifestyle and spending habits. A $3 latte every day is $1095 a year…really. Do you need the newspaper and the internet both? Do you need digital cable TV? Should you sell your car and get a smaller, older, more fuel efficient and insurance efficient car? Are you paying PIP premiums on your home mortgage that could be removed?
Watch every penny. (Notice whose picture is on the $100 bill? He was no fool.)
Hope this helps. Good luck and God bless you.
Yesterday I was asked a question:
Where is the best place to get someone to get my finances striaghtened out. Many years ago I went throught consumer credit – hubby had own bank account and blew all his money without my knowing it. I got that stopped in a hurry. CC was able to get us through. Then when my husband retired, his company totally screwed up his retirement ( eventhough it was in writing and they admitted a mistake) so half went to the IRS and his annuity is only 1/2 what he was to get.
I also suffered a heart attack that very next year and we moved which used his 401k. Well, after a couple years we were in trouble again and I made the mistake of going with “Jubilee” to reduce my debt. Yeah right! $250 fee every month, they were to handle everything but I got the collection letters and calls and they never contacted the companies. That hurt us worse than beggin to compromise direct with the companies! I did take them to the Attorney General and got back some of our money. So we then went to Consumer Credit (website) again and got help. I think one place we went wrong is that as soon as we got ahead I paid them off instead of putting the money aside.
Well, after a foreclosure on a home, two moves it has come around again. Yes this is a “don’t you learn?” story. I have the job I have always wanted and making good money. However, we lost the majority of the downpayment I had for a house with a mortgage broker that dragged us around for months in which I spent for 2 inspections, rent, storage and rent for my hubby to keep working in another state.
We ended up with a lease to own home. Love it but I had told them we could do $1000 a month but when the it came to getting the key they raised it to 1300. Hubby just got a job – so much for retirement and what really hurts if we have 3 years in Income taxes to pay. Sorry so long – I am sure others have been there. What do I do? We are supposed to buy this in October and I don’t know how – everything is late because of pay periods.
I guess I’ll be the first to give the standard ‘you have to keep track of your spending’ spiel.
But that said, welcome to the list.
I am currently involved with a company that designs a financial program for the handheld PC running windows mobile.
I understand that not everyone has one of these, but my theory on this is I take it everywhere I go, and if I could use a program to tap in how much money I spend whenever I spend it, that would give me a good idea on how much money I go through a day.
The rules of the software are simple.
A nice interface where you can quickly tpa in how much money you spent, as you are spending it. For instance. Say you stop at the coffee shop. Tap in $1.55 (that is how much mine is) and away you go. After a couple of weeks where you know how much money you’ve spent, you can start to reign it in.
With the hassle you’ve had with companies that are supposed to assist you, I would sugest that you attempt it on your own for a bit. At least until you get an idea on where you stand.
Deb has some great spreadsheets on the debtsteps website to help you track all kinds of things, I would suggest that you download those and begin assessing your situation.
Also, if you are afraid of purchasing this home in October, then by all means don’t do it. Either continue to rent or look for a place more in your price range. You may go ahead and purchase it, and then you will slowly dig yourself a hole and be in the same situation all over again.
But the first thing you need to do is write out all your payments you need in a month, and compare it to your income. This will give you an idea where you should start.
I hope this is a little helpful.
Hope everyone is having a good summer.
I took out a small payday loan in December of 2008 ($260). I paid on it for awhile, then fell behind. I communicated with the lender, who set up a plan for me to pay $25 every two weeks without further interest being added. Then I began having difficulty reaching the lender. I emailed and called, but received no response over a period of a few months. I presumed the company had gone out of business.
Yesterday a collection agency called me. They had bought the debt. I called the original lender, and this time was able to get through. They confirmed that I had made payments totalling $325.
My question is … what “rights” does the collection agency have at this point? I am probably going to have to pay them something, but they are asking for $425. I was able to get the original lender to send me an email confirming that I’d paid $325 on this debt.
I know the collections company will probably play hard ball, threaten to sue, etc.
What are my rights at this time? What can I do to ensure I don’t have to pay this collections company a large amount of money?
Well, I guess the best response is all of us have been in your shoes at one point along the way. First the way I understand the credit repair companies, they can’t fix your problem, only you can fix it, and really the fact if you have good or bad credit is the least of your worries. I did the 5 day course by mevelopes, its free and you don’t have to buy the program. I also got the books, they helped to put it all it perspective, though a lot of the info you need is in the 5 day course and the downloads from this sight.
The first thing I did was find out what we had, assets, makes you feel a little better, then what we paid, in order of importance, utilities food gas for the cars are at top, clothes and going out to eat in the middle, credit card bills at the bottom, because I cut them up at didn’t need them anymore to live. I use to think as long as there was room on the credit card we were okay, that is so very wrong.
You will surprise yourself how much extra you spend when you are not keeping track. My husband jumped on board too, we have a basket on the dresser for all receipts and weekly I put them in to categories(on a piece of paper it doesn’t take much time after you set it up and no expense for a computer program/service) to know how much we have spent and how much we have left for the week, if there isn’t a receipt(ie candy from the vending machine) it goes on a little piece of paper in the basket.
I added up all the big boys (insurance, taxes, membership dues, medical deductibles) that we pay yearly in big chunks and divided that total by 12, every month that goes into savings until the month I need to pay them. No more surprises, and it surprised me how big that amount was. It is a commitment that is an everyday thing, you start to cut eventually, but you aren’t to that point yet, you have to figure out how much you spend first, and it is going to drive you crazy trying to figure it out, just write it all down and be truthful, it will hurt to, but you can fix it, the hard part was realizing you needed to do something to begin with. So good Luck.
Hope that helped.
My co worker has two pay day loans she is struggling with. She has offered to pay them 100 dollars monthly and they are refusing to work with her. They told her she would have to do arbitration to request a different payment arrangment. I feel really awful for her, her husband abandoned her with 2 kids, no education and she’s living on just above minimum wage.
I know the pay day loan was a bad choice, but I know she felt she had no where else to turn. She doesn’t want to default, but needs a workable payment arrangment. Does anyone know what this arbitration process is, and will it help her? What about consolidating the loands, they are with the same place ? Options ? Can anyone give some advice?
Arbitration is a much more workable solution than going to court, however in this case, the Arbitration officials or organization is selected by the lending company. I would suggest that your friend pay $100.00 on her account until it is paid off.
Send the payments by mail, certified, return receipt, along with a letter explaining her situation and proposing the new repayment plan. Hope this helps. The deck is stacked against anyone who is foolish enough to pay off their debts. File bankruptcy and your credit score will return faster with less cost and hassle than if you negotiate a deal. Sad but true.
I would never call say that paying off one’s debts is foolish, it is the right thing to do if one can. There are occasions where a lender forces a person into bankruptcy court because the lender (or collection agency) won’t work with the individual. I have settled several debts through negotiation and have paid off all my debts over the past 4 years and watched my credit score climb rather quickly. HOWEVER, I do not intend to use the credit score to ever borrow money again except maybe on another house once I sell my current one. But only when I know I have 6 months expenses in savings and have at least an additional 20% down.
One would be very wise to read Dave Ramsey’s books about money and put them into practice.