The plan is to cut up this card but after making massive credit card payments every month, we can't seem to live on just our salaries. My average credit card payments are over $1500 every month. I keep thinking if I pay off all these credit cards I can start using cash only but I'm stuck in a cycle where I keep charging and paying things back.
Perhaps I need a new job. Most of my colleagues have been leaving our company and going to competitors. A couple of my friends both got $30,000 raises putting them well over six figures.
Will more money solve my problems? probably not but it sure would be nice :)
HS
15 comments:
Yeah, that is the way it goes it seems. No matter how much money you make (after a certain point), it never seems to be enough.
Maybe really bump up your savings for these little emergencies while you are paying off the cards.
I know it does not seem like the thing to do, but it is like what comes first - the chicken or the egg?
BTW, this card was also cut a couple of years ago..
http://www.ourdebtblog.com/2008/08/discover-card.html
The only way to get out of debt is to stop using the credit cards. The emergency fund is there for a reason....use it. But things like tires aren't an emergency...you should be saving up for those type of expenses.
You have mentioned that your combined salary is fairly good. Making more money isn't necessarily the answer...it could just cause you to spend more.
You really need to look at the budget and cut back. No trips, no dinners out. It is time to sacrifice. Tough love time.....the only way you will get out of debt is to stop creating it. I didn't think we could live without our cards either...but we do.
More money won't help. You need a behavior change and you know it.
http://www.daveramsey.com/fpu/preview/
I also think it's important to stop using the cards...even if that means you can't make a $1500 payment in one month. I write out my whole budget for the month and then see what I can put down toward my debt. Yes, push yourself and make sacrifices, but if you just drop a huge amount on the CC's and cross your fingers you'll have enough for the month, you won't be able to make it through, thus perpetuating the cycle of dependence on credit cards. (I know, I used to do this.)
HS.. I think you know intellectually that you need to pay off your debt and actually LIVE DEBT FREE. But KNOWING and getting results are two different things.
You SAY you want to do this, but the results says otherwise.
I know it hard.. It's just like losing weight. The concepts are EASY to understand but they are HARD to do.
You're getting some sort of payoff by continuing to use your cards. Whatever it is.. you have got to find that gratification somewhere else.. or delay it.
HS.. I will GLADLY GIVE you a copy of my ebook. My job is to motivate people to drop their debt and become millionaires. I'm on my way to doing just that..and I only make $53k a year.
Sometimes you just need to see the same information you know presented in a different and unique way to get it to STICK.
Please email me at davidbibby@debtfreemarriage.org if you are interested.
I live on about $20,000 a year and have no debt (except my mortgage.)
More money is not the answer.
Start by giving away 10% and saving 10%. Then live within the other 80%. If you can only make minimum payments on the debt until your emergency fund is fully funded that is ok, jus do not add to the balances.
steps:
1) make budget that includes giving 10% and saving another 10% (if necessary use envelopes with cash for each budget line, stop spending when envelope is empty.)
2) keep track for 30 days what you spend money on
3) have $1,000 emergency fund (this will cover most emergencies)
4) have 6 months of emergency fund
5) pay off all debt
In budget you need to add a line for car maintanance, this is not an emergency. Cars will need oil changes (4 a year), brakes, and tires every year or so. Budget for this.
Think of the choices you will have when debt free. You mentioned wanting kids, is it a goal to have one parent home with them? Without debt this is much more doable.
Are you for real? Is this blog a joke? I'm sorry but are you kidding me? I have the perfect solution. Just go 1 month-30 days without eating $100 meals for two and stop the "excursions" for 30 days...apply every dime to the debt. My mouth just hit the floor when I found your blog and read a few posts. Don't be offended...hey if you put it out there expect to get comments. You and your wife sound like two SPOILED BRATS! Grow up and buckle down. Buying groceries on credit because you had an unexpected medical expense for a child is one thing...buying groceries on credit b/c you spent your money on drinks, luxury meals, new tech devices, and tennis shoes is pathetic! I'd give you the Dave Ramsey spill but until you can at least acknowledge your juvenille selfishness and indulgent behavior no book or financial guru would help! As I read your post I envisioned a spoiled 2 yr old screaming on the floor b/c they didn't get candy at the store. Sorry to be such a kill joy but it's time to grow up and open your eyes!
Hi Julie... thanks for the visit. I know it sounds like a joke but that's the reality. We are trying to change but life just happens. That's probably the reason I hate posting now a days... I can't seem to change!
Have you ever started a diet only to quit a few days later? that's how it feels when we manage our finance :(
FWIW, your first step may be to sit down with your wife and write down everything you owe, and what you absolutely have to pay out each month (including minimum payments). This kind of reality check may help to understand where you are at. It also takes communication.
Been there, done that. We have two car payments and too many CC and old timeshare payments, I know where you are coming from.
A baby will cost around $10,000 for pregnancy/first year at least. Are you sure you are ready?
We are waiting to conceive for financial as well as health reasons.
GL, and Hugs
I was having a problem keeping our AMEX blue down. So in July I stopped spending. (you may recall my no spend month). it worked! I haven't needed to charge on the card because we caught up. You just need to bite the bullet for one month and "catch up". It will make a world of difference!
While i also agree that saving money is a major step towards financial independence, we all could use more money.
I think in the current climate, everybody can relate to this.
Doesn't seem to matter what you do, you always seem to be in debt.
The best way to keep on top of things is to keep a track of your credit report.
More money is certainly not the answer. I know people who have paid off over $18K in debt in 18 months, plus put 20% down on a house in that time, on JUST a teacher's salary alone- and that's with the wife staying home full time with two, and then three, babies. They went an entire year eating out only three times, no vacation, slim Christmas, no movie rentals, no cable, one cell phone..it was a huge sacrifice. But it was worth it.
At some point some people simply don't have enough money to get ahead. You are not one of those people. Trust me, I understand how hard it is to get, and stay motivated. I had several false starts, over a year, before I began to get serious about paying off debt. Two years later I finally finished it all off. In that time I worked full time, went to grad school full time, and the job I had I really didn't like but I did it because I had awesome health benefits and they paid for school and the tedium of work was worth not having the student loan debt. For one of those years I was making less than $30K pre-tax, single, supporting myself completely. For the second year I was making $35K pre-tax, still single, still supporting myself completely. And in that time I paid off $11,000 in credit card debt, bought a used car in cash for $4,500, paid off $1,500 in medical debt I acquired pre-health insurance, and paid off another $1,500 in tires and a computer I had purchased with credit cards.
You really, truly can do it. You just have to want it badly enough. It is hard. And sometimes it sucks. And yes, sometimes there will be days when you just think "I'm a failure, why can't I just NOT SPEND MONEY?!". I remember beating myself up so badly as I perused my online statement, noting all the money I wasted on eating out, going to coffee shops, and buying books. It takes a while to change the habit, and you have to work at changing it, but it can be done.
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