After going without a job for nearly a year, I find myself in the same boat. Now that I am back to earning a pay check and can attack the debt that has built up. My plan is to go after the items that have the highest interest rate first. Also when I pay off one item I add the amount I was paying on it to the next one on my list. It starts slow at first, but soon it's like dropping a nuke and balances are dropping like crazy. It won't be long and I'll be debt free...with the exception of our house. I still take 10% of every check and toss it into a savings account that is my emergency fund and I set aside a little for going out with. If you put your self under to much pressure or to tight of a budget, you'll break.

Don't know if that helps you any, but I wish you the best of luck. Having a lot of debt hanging over your head can be very stressful. Hey...it's a short term sacrifice for long term gain.

:cheers:

[QUOTE=
Having a lot of debt hanging over your head can be very stressful. Hey...it's a short term sacrifice for long term gain.

:cheers:[/QUOTE]


Yes it is....well said Curtis.

The plan of adding the payment from the paid off balance to the next one is great advice, those balances will drop in no time at all and the credit score goes up like crazy. Never as fast as the card, but it will catch up and be looking good very soon after those are paid.

:cheers:

Curtis --

Good for you -- that's the way it's done buddy!
:cheers:

I have a very good friend - that I "help" him with his investments... the couple combined has never earned 80K a year... BUT he was ALWAYS a saver - and "debt adverse"... Now that he's near retirement - they have well over ONE MILLION DOLLARS in the bank (stocks / bonds / CD's) - ZERO debt including no mortgage. A pretty good "space" to come into retirement I'd day. The only reason they can do this - is because they always saved first.

So here's the problem that I argue with them about all the time --- he's saved for so long - and never splurged on anything - always used the old tv until it died - ditto cars - always used and paid cash etc... They've lived this way for SO LONG that now they can afford to "live a little", they WON'T... So they've done everything right - and now are frozen like deer in a headlight. They can't stand parting with a dime... That kills me!
:rofl:

But the one thing they do not have is any bit of financial worry. They don't have to worry if they can afford to fix something if it breaks. They don't have to worry about whether or not they will have the money to buy a new water heater, or a new furnace. They don't have to worry about money to pay for health insurance, or for a medication.

You say they don't know how to live, perhaps they don't know how to live for their stuff.

Check out anything written by Dr. Thomas J. Stanley, very interesting.

Happy New Year!
Bill

Oh I totally agree with you Bill... They have ZERO worries! But I'd still like to see them buy a new truck and trailer and go for a nice long trip... and they just have trouble even doing something like that - and yet they can afford to and deserve to.

That's what kills me... BTW - they have no children either -- probably why their hair isn't gray and they have money! :rofl: :rofl: Nobody to bail out - and nobody to leave a red cent to!

Another big Dave Ramsey fan and follower here. He says you should pay the lowest amount off first because it gives to mental accomplisment. As soon as the first one is paid off you go to the next and so on. The interest rate has very little to do with it when you are knocking out principle.

If you PM me your address I will set you his book Finacial Peace on the condition you pass it on to someone else in need when you are done.

Become adopted by Greg Weld:rofl:

Hey I'm all for getting the most for my money and making things last. Part of that is buying quality item that will stand the test of time. I could buy a new truck and very much so would like to, but my 2000 F-150 looks and runs awesome. Best part is...it's paid for. So I'll drive it till it dies and then get another one.

Dave Ramsey is 100% correct on the mental accomplishment thing, however I like my way a little better. It's really all in how you see it I suppose. For me the first one is always the hardest, but I take it in small doses and enjoy seeing the numbers ticking down. I figure the bigger the interest rate, the more it's costing me in the end. It might be a small amount in the big picture, but I want this gone...like now, so I'll take every advantage I can to knock it out. At the end of the day, I'm happy and that's all that matters.

You'd better become adopted by GWEN Weld.... Greg just sponges off of her!

LOL

I have to also add to this fun little thread... since I live in a land of AWE... It is estimated there are some 70,000 MILLIONAIRES in the greater Seattle area... and I can tell you that no matter how much you "make" --- you can spend more.

You wouldn't believe the amount of "epic fails" going on around here... and the houses that are for sale - and the cars... etc.

On topic a little more -- and I haven't done the math to back up my statement I'm going to make - but I think the math would back me up...

Some of these credit card companies are charging near 25% interest... so while you might feel better paying off the smallest amounts first -- the INTEREST is going to eat you alive while you're doing that.... which is why most advisors recommend you pay off the highest interest balances first.