A Long Road

Welcome to the Community Subigirl :D It sounds like you have had it rough, but have finally come through the other side!

I am glad for the direction you life has taken, and that you ar getting out of debt.

That's how I paid off my debt also. I started with the smallest amount, paid extra and paid it off. I then took that payment, added it to my next smaller one and so on. In doing it this way I was able to see some progress. Alot of people say to pay your highesst interest ones off first, but, I have to see progress soon, or I get discouraged.

Hope you will continue to post your experiences with debt and how you are dealing with it here on the Forums!!

This is how I recieved help- others sharing what worked for them and giving me support!! Good Luck in your new life..KAren

I am glad to hear that you are now in a happy marriage and everything is looking up.

ladybug

Thanks!!!

We have a financial guy that comes to our church, and gives us advice for free. He even suggests going after the smaller debts first. This not only helps keep you motivated by seeing progress, but helps you cut down on the actual number bill you have to manage. Not to mention...if you only have $50 to play with, applying that to your largest debt is not going to really get you anywhere. However, if you have a $500 credit card balance, that plus your normal minimum payment (say $20), and you can easily get rid of that one in less than a year! Then you have $70 + minimum to apply to the next card.

Things are getting ready to get real interesting for us! I got a raise a few months ago, but we haven't actually felt it yet, as the extra payments have been going to an attorney so that my husband can adopt my children. My ex-husband decided it best to just drop out of our lives completely...and we aren't shedding any tears over it! We have two more payments to the attorney. About the same time, another debt of ours which is about $100/month will be paid off...so we will instantly have about $350/month to apply to the other debts!!! We have 3 small cards which that will do some immediate damage (they will probably get paid off in less than 6 months). Add to that the fact I am coming up due for another raise, and my husband is way over due for his raise (his company always takes their sweet time with reviews, but thankfully has to give him a retro check for his raise back to the date his review was originally due). I see 2008 as the year for some serious debt damage! I can't wait until we can start making double car payments!

The idea is to get rid of enough debts so that we can help our oldest out with school. She will be graduating high school in a couple of years. She has a disability which assures her full grants for college, but we do not want her to have to work for money for food, clothes, gas, insurance, etc. It will be difficult enough getting through school with her disability, and she is going into a field that requires more than 4 years of college! We figure if we can get rid of a good chunk of our debt, and add to that what we currently spend on her each month, we can give her a monthly allowance so she does not have to work.

We are also working on teaching our kids to live debt free from the get go! The oldest is planning on utilizing grants to avoid student loans. She is also trying to get some scholarships. The other child, because of the career he wants to go into, has decided his best bet is to go into the military, which will help gain him training for his career, and get him money for school. We are already teaching them about saving and not buying stuff just because it's cool to have. We are hoping they will NEVER have to deal with collectors, because there will be no debts to collect on!

Thank you for sharing your story. I think the best thing that has come out of dealing with my debt is that I am taking the time to teach my son a better way. No more instant gratification. When you really want something work hard and save up for it. When we wanted to treat ourselves to Sea World this summer we took the food budget and gave up the extras for months. As the money we set aside started to grow we realized how much we would appreciate the efforts when we were sitting at that Shamu show! My parents never took the time to guide me about finances and I have vowed not to make the same mistake with my son.
Congratulations again on getting through such a hard time.

Both of you are both an inspiratioin for others and your stories need to be put on the thread entitled "success stories". Congrats to both of you. Mperez you have worked very hard on your debt, I have been keeping up with your progress and you have kicked some serious butt :lol:

ladybug

You have had a hard time, but it sounds to me like you have a wonderful plan now. If you keep it up, I don't think you will have any more trouble! Good for you and I'm glad you found us.

Hi Subigirl. I can't thank you enough for sharing your story. It has really inspired me. Sometimes I lose sight of how much of a difference a small amount of extra money can make and I start to feel sorry for myself. This has shown me, once again, that there is a way out, even if it's $25 at a time. Thanks again and much luck to you . :-)

Way to go Subi!!! You are proof that when it seems to be the darkest moment, there is always a light at the end of the tunnel. Thanks for posting that story!

Thanks to all of you with uplifting words!

I was working my budget out the other day. I was taking the money that was to soon become available because of paying off a couple of obligations, I started figuring out what I would pay off first, and how I would moving things around. I was in shock when I saw the serious damage!! I wasn't even figuring in raises or tax refunds, and in 5 years we will ONLY have our house payment, and still be able to enjoy life a bit along the way! Maybe even less than that, as I didn't figure in any extra payments on the cars. All of our credit card debt should be paid off in no more than 3 years! All of our small accounts should be gone by summer. I am just so excited! The part that really excites me is how much we are going to be saving in interest making this much larger payments!

Way to go! you are on your way up. Thanks for sharing your story. Let's others like me see that there is a light at the end of tunnel when dealing with debt.

Some don't realize what as little as $50 could do! May seem like a lot for some, but most spend that much on eating out for lunch and sodas during the work week. Say you had a credit card that was about $1000, with interest being about $35/month, and the minimum payment being $50. That means you are only paying about $15/month toward the actual balance! It is amazing how many don't see it that way...forget about the interest...and wonder why this thing is never going away! At this rate, it would take you over 5 years (67 months) to pay off this $1,000 credit card...if you continue to make the minimum payment (maybe longer, because as the balanced comes down, so will the minimum payment, and so many pay only that minimum payment). You will pay over twice your original borrowed amount in interest alone! So your $1,000 borrowed will end up costing you over $3,000!

Now, drink water at work, and forget about that Taco Bell or Micky D's every day. Instead of paying the minimum $50/month payment, pay $100/month, and keep paying that no matter what the minimum payment is. At the most, you are know paying this debt off in no more than 15 months....just over a year....and paying nor more than about $500 in total interest!!!! You end up saving yourself $1,500+!!!!! So now you have an extra $100 to play with every month, because you set up your budget where this $100 is obligated. You may have another credit card for $4,000, which you are paying $100/month, and interest is around $70/month. So, since you have also been operating with that other $100/month commited, you pay $200/month toward that $4,000 credit card. This card that would have taken about 11 years to pay off paying the minimum payments, will now take you about 2 1/2 years to pay off, and you save yourself well over $5,000 in interest payments!!!!!!

If you get a raise at work, you can start work on a second debt at the same time you are working the first. Get a tax refund? Dedicate at least half of it to a debt (use the other half to buy yourself something nice as a reward for doing so well on tackling your debts)!

Some think you should tackle the larger debts first, and this is where so many are wrong. By tackling the larger debts first, you can't do as much damage against them, and it takes you so long to see any real results to motivate you. You end up getting discouraged, and think what is the use...."I'll never get out of debt!"

If you tackle your debt from smallest to largest, you have the numbers on your side. If you start out with 10 credit cards, and can knock out those 3 to 4 smaller department store cards in the first 18 months, you then find yourself on a high! You got rid of 3 to 4 accounts!! If all of those minimum payments are about $30/month....and you take the original say $50/month you commited to get yourself out of debt....you now have $140 to $170 a month to attack your larger cards with, and you start seeing the balances come down!

Believe it or not, I actually have one card that has a balance of $13,000! Some may faint at that. I had to get a laptop to help support my job (a startup company, so the equipment they had just didn't cut the mustard for what they were requiring me to do mobile). Due to family stuff that was going on, we were making a lot of trips out of town....easily $2,000+ a pop when you consider gas, hotel, and food for a whole week for a family of 5, AND helping pay for my sister and mother-in-law who didn't have the money at all (this was the last couple of years when my husband's grandparents were very ill, and when they each passed away). There were other little odds and ends here and there. Interest on this card is $150/month (I have a pretty good interest rate). Minimum payment is $200. I'm paying $300/month. At the current rate, it will still take about 7 years to pay this off, so you see, I will need to be able to pay more than an extra $100/month to seriously damage this card!

According to my payment plan, I've only figured in 1 pay raise (though by this point, I should have 2). 1 year from right now, I will up the payment on this bill to $400/month, based on my pay raise. This is while I continue to work on the other bills. This one change alone, and this credit card will be paid off in 3 1/4 years!!! I'm saving myself about $5000 in interest!

To really put this in perspective. Minimum payment is only $200. If I paid only this, it would take me 21 years to pay, and cost me about $39,000 in interest! By paying according to my plan, I'm cutting the time to pay by 17 3/4 years, and saving $33,000 in interest!!!! That is money, that over time, instead of paying to some credit card company, I can keep earmarked as obligated, and put into savings for investments which can turn that money into much more!

I'm pumped, if you can't tell!!! It isn't a rocket science to figure out, but sometimes we need to hear it from someone else to really grasp the idea. I didn't believe it until we had the financial guy come to our church and explain this very plan to us. This is a man who IS debt free, and has millions! He is a self made millionaire....he didn't come from some rich family. He was telling us about when he and his wife met, they were both in college on loans, and he was making $1.45/hr at his job. He has been in heavy debt, and had to work his way out. He's had his ups and downs, and developed the principals he lives by today. His goal is to now help others get to where he is at, by helping them see there is hope, no matter where you are in life (he has done plans for people in their 50's, that have them with at least $1 million in their bank account by age 70). He believes we need to change the way the world thinks. Not to preach here, but so many think Christians have to be poor. He has shown us through the scriptures that is not true! No matter what your belief is, it is okay to be be successful and have money! We are supposed to be able to help others. We are supposed to leave a legacy for our children!! When we go, our children shouldn't have to worry about settling our estate with our creditors, and having enough money to give us a proper funeral. I want my children to receive an inheritance that they really don't need, because I have taught them to live debt free and build their own "legacy". I want the future generations of my family to not have to live paycheck to paycheck....not have to worry "What if I become ill". I don't want them to be spoiled brats (and that is where the other teaching comes in to pass down), but I want them to knowthey are free from the bondage of debt! I want them to know that if there is a child that needs a home, they can provide it...that if they have a friend lose it all, they can just say "Here, and don't worry about paying me back...this is a gift!" For many this is only a dream, because they are putting themselves in a box with their thinking. I'm seeing this as my future, my reality!!

I know this is long, but I am just compelled to share, after reading some of the responses here. It's time for us to stop making the banks rich, and make ourselves, our loved ones, rich! Maybe by doing this, we can start to influence the country, which is in more debt right now than any other time in American history, even when you take inflation into account! We have to stop the insanity!

Thank you, subigirl. I read every single word. You've got it going on! Your plan is excellent. Your outlook is excellent. I hope many others read this. It is an inspiration to all. :D

After reading what you wrote and watching a guy on Montel and a frugal family I am also really motivated.
I would love one day in the not so far future to have no debts at all.