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Debt

Discussion in 'Off Topic [BG]' started by DreadyDiggs, Feb 8, 2016.


  1. It seems a lot of the TalkBass family is older than I, but I started early and as such I'm dealing with quite a few things now that the older cats have dealt with and pulled through, and that is why I'm not afraid to talk about things here. You have all dealt with it in your own way and are not afraid to share your story so that others may try to benefit from it.

    I'm 28, a homeowner, already once divorced, father to a 9-month old, and now trying to deal with this next challenge. My debt. Might not be as much as the next man, but it's bothering me and I kick myself for even letting it spiral outta my control.

    I've had a credit card since before I went off to college. I thought it was a good idea. I didn't have to ask folks for money, and managed to pay the bill. They'd raise the limit, bill got a little higher, no biggie, still manageable. When the divorce happened I stopped working to the point where I could only pay the mortgage and utilities. I've been under the table for years until now so I'm trying to file my taxes soon and decide who to pay.

    But of course my girl has different plans for "our money". I ain't even worried about that, cause I don't cave easily, what does bother me though is that your credit doesn't improve quickly no matter what you do. Stuff lingers. 7 years or something like that. But new activity weighs heavier, but with a poopy score you can't get new activity hahaha.

    I can't even refinance my house like I'm contracted to do, that's about the only thing I need credit for right now, but when they say no, there isn't much anyone can do.

    I don't believe I need to do bankruptcy and definitely don't want to, like I said, I know folks have dealt with way more debt than I'm dealing with, but today I got another call about a card entering collections (one that I had been in contact with the company trying to start getting it right) and it pissed me off.

    The trap is there, it's set. Credit card applications got passed out in my high school. I thought I was smarter than the system, but life intervened and humbled me.
     
  2. charlie monroe

    charlie monroe Gold Supporting Member

    Feb 14, 2011
    Buffalo, NY
    Get online and find a debt counselling service. Many are free, some are not.
    This just happens to be the first one that I saw:
    Debt Counseling

    Do not let the new girl compound your debt issues, stay the course.
     
    mbelue likes this.
  3. DiabolusInMusic

    DiabolusInMusic Functionless Art is Merely Tolerated Vandalism Supporting Member

    I do not think this gal broke in the States, pun intended, but she is all over Canadian TV. I love her show, Til Debt Do Us Part. She has a handful of books and her methodology works, it basically involves not buying stuff you don't need or cannot afford. I'm sure you can find an episode of her show online, she has great tips like using cash and detailed budgets. I know of plenty of people that have utilized her advice to great success, it does boil down to how committed you are though.

    Gail Vaz-Oxlade|Debt-Free Forever|Money|Book|Budgets & Personal Finances

    And plus a million to what Charlie said, stay the course.
     
  4. neckdive

    neckdive

    Oct 11, 2013
    If you haven't already done it, physcially cut the credit card with a pair of scissors (if you're really serious about getting rid of this debt). This reduces the temptation to use it to buy everyday items or support GAS purchases. Then, only buy using your debit card. Using less cash and only using a debit card allows you to see how much money is slipping through fingertips on a monthly basis. At the end of each month look at how much you're spending and compare it to previous months. Is it significantly different? Why?

    DON'T close the CC account though. This will work against you since older seldom used credit lines with little or no debt increase your credit score.

    If you have a tax refund coming you may want to sock some of it away for when things get lean (and they WILL) just in case. Calculate how long it will take to pay down the CC debt using an affordable payment but for a predefined term like 3 years (or whatever). Pack your lunch, eat out less at night, turn down the thermostat, get rid of TV cable services you don't use, etc. Apply these extra funds to you CC debt even if it's only $100 extra per month.

    EDIT: and DON'T use Debt Counseling Services. This info finds its way back to your creditors and reflects badly on you. Educate yourself from reading, asking, and listening to talk shows discussing personal finance. Just having the desire to do this is a big first step. 28 is still very young so getting on a proper financial path through education and practice at your age will pay off in 10 years.
     
    Tbone76 and devo_stevo like this.
  5. Gravedigger Dav

    Gravedigger Dav Supporting Member

    Mar 13, 2014
    Fort Worth, Texas
    Don't do the bankruptcy. That will hurt you more than any negative report from a creditor. And it isn't 7 years, its 10.
    One important thing in communications. Talk to the people you owe. Explain why you are having difficulties and what your plan is to repay them.
    So, that means you have to have a plan. Here is a very basic model. It can be tweaked, but this is the essential part.
    Sit down and determine what you have available to direct to debt service. Don't hold back because you really need this or that or I'm going on vacation or I need a new car. No, carve out what you need to meet housing, utilities, groceries, car expenses, and other necessary items. Cable is not a necessary item, for example.
    What you have left is what you can allocate to pay off the debts. Now look at the debts from 2 perspectives, balance owed and interest rate. If you have some very small debts you can know out quickly take care of them first. Then look at the interest rates and start on the ones with the highest rates. For those not on your priority list (1-3 items), pay the minimum the debtor will accept and pay down your priority list with as much as you can put toward it. When one gets paid off, have a small celebration, then redirect that money to the next one on the list. Keep that up until you are debt free.
    Then pay cash for everything. I haven't had a credit card since 2000. I have not suffered at all from not having one. I have a total of 2 obligations, My house and my truck. The last payment on the truck will be April of 2016. Once it is paid off, I will buy a toy with the May payment and after that, that money will go to savings so when I need another truck, I'll have a better down payment and lower payments.
    And, I've been there. I had to take bankruptcy in 1986. My wife and I both had good paying jobs and we were living well, but within our means. I lost my job and that cut our income in half. The local economy had gone south and I wasn't able to get the salary I was used to. From that I learned this rule. If you are a dual income family, life on one of the incomes and bank the other.
    It will not be easy, but at the other end of the tunnel waits Strawberry Fields.
     
  6. Helaskold

    Helaskold 100% Mediocre

    Jul 22, 2012
    Austin, TX
    Interesting... I always thought about cutting up my CCs but didn't want to have a closed account on my history. Never really considered leaving it open AND cutting the card. Good idea!
     
  7. devo_stevo

    devo_stevo

    Aug 2, 2006
    Northern Utah
    Builder: Brumbaugh Guitarworks
    This guy's got it right. There is some great advice already in this thread, and this post sums it all up nicely.

    Dave Ramsey is a good resource for this kind of advice. Check him out. You won't be disappointed.
     
  8. Gravedigger Dav

    Gravedigger Dav Supporting Member

    Mar 13, 2014
    Fort Worth, Texas
    Thanks, and yes, what I presented is a very condensed and simplified version of his program.
    Here is a link to his website.
    Dave Ramsey - Take Control Of Your Life And Money
     
  9. Ironbar

    Ironbar Banned

    Aug 24, 2013
    Tigard, Oregon
    I got out of debt fast by using the Dave Ramsey system- Total Money Makeover. You could probably find a used copy of the book at a Goodwill or used book store for pennies on the dollar.

    Literally cut your credit card(s) up and throw it away. Keep the account open, but don't use it.

    MAKE...A...BUDGET! Stick to that budget.

    Pay off the smallest debt you have FIRST with as much money as you can afford per month. Send minimum payments to every other debt. When the smallest debt is paid off, use the money you used to send to that debt to pay off the next smallest debt. When that one is paid off, use the money you used to pay the first and second debts to pay off the next largest debt and so on. When all the debts are paid off, (with the exception of the mortgage), start putting the money you used to use for debt payment into the bank. Build up a $1,000.00 emergency fund to be used for such things as car or household repairs. When you have the emergency fund in place then start another savings account to build up a reserve of six months worth of total household expenses which would be tapped in the event of a major life change such as losing a job or major medical. When that's done then start putting money into a retirement account such as mutual funds and/or IRA.

    Get to it and good luck!

    P.S. If your significant other isn't on board with all of this then you're doomed from the very start. Sorry to say it but it's true. If she's a spender not a saver and you can't get her to comply, then forget everything I wrote above because it won't matter one bit.
     
    Tbone76 and DreadyDiggs like this.
  10. Her spending habits bother me. I pay everything in the house. I get paid every week and of course being a mechanic I can make money on the side anytime I choose. The music world will bring cash every now and then and will most likely pickup in the summer.

    She gets paid every two weeks, and besides what comes out her check before she gets it, her responsibilities are groceries, daycare and her phone bill. All of which are inexpensive on average. Daycare is through her aunt. In a 3 month span, I will pay that phone bill once if not twice. Groceries if she spends a good amount once we can go awhile on that. But she can't keep any money from check to check. None.

    I appreciate all the advice so far and I do plan to look into Dave Ramsey. I've got some late night work setup for myself this week, and hope to get it done so I can really start paying the folks I owe.
     
    neckdive and Ironbar like this.
  11. Ironbar

    Ironbar Banned

    Aug 24, 2013
    Tigard, Oregon
    Again, good luck to you sir! My wife and I used the Ramsay system to good effect. The day I wrote the last payment to my student loan and credit card was like a day of liberation! I felt a freedom I hadn't ever known before and it was amazing!

    These days I have only my mortgage and a truck payment, and we still bank an average of $600 per month. We already have our six month household expenses bank account set, but I'm building it up just a bit beyond that. Once I do, I'm going to set up direct deposit to my Edward Jones account to begin further funding of my IRA.

    If I keep it up, I may actually get to retire at age 68!
     
    DreadyDiggs likes this.
  12. Sav'nBass

    Sav'nBass Supporting Member

    Jan 18, 2009
    Northern Va.
    That is going to be a problem. I now have total control over the bulk of our money because it took my wife 20 years (we will be hitting our 26th anniversary in two weeks) to realize that she is totally irresponsible with money.. We used to do the I pay this and you pay that thing.. initially we did the my bills your bills thing.. we tried the our bills thing... You guys need to get on the same page so that you both know the same things about money, credit and how it all ties in. Sooner rather than later.
     
  13. twinjet

    twinjet Moderator Staff Member Supporting Member

    Sep 23, 2008
    49
    I did this. My score went from a 604 to a 675 in a year. I mean, I still have plenty of debt, but it does help!
     
    neckdive and Ironbar like this.
  14. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    Dave Ramsey has his own iheartradio channel. Free and always on. It's a good start.

    Girl gotta tighten the belt. It's the "nickel and dime" stuff that gets you. 20oz drinks are almost two bucks these days. A combo at a fast food joint is almost eight. Buy a drink and lunch every weekday and you have spent $200+ on nothing. Pack lunches.

    If either of you smoke, drop it now. Total waste of cash.

    Songs. Watch them on youtube. Listen to broadcast radio. I bet your girl is downloading a lot of them.

    Little stuff like that will kill your budget.

    The short version is if you are in debt you are broke. Act like you are broke. If the two of you are together you are both broke. She doesn't seem to know own it. She needs to act like both of you are broke. Because you are.

    I say all of this with love. Y'all are broke! Spend money as if you are broke! In fact, broke just means you have no money. You guys are worse than broke. Zero would be an improvement.

    Have a serious talk. Make some changes.

    Best of luck.
     
    Scottkarch, GregC and Ironbar like this.
  15. Ironbar

    Ironbar Banned

    Aug 24, 2013
    Tigard, Oregon
    I'd like to expound on this. When I started the Ramsey system, my credit score was still in the 600's. Several years down the road we paid off the last of our outstanding debt as I mentioned before. Years after this, (last year in fact), we were at the point of needing a new vehicle because our van was crapping out, and we had just been given a late model vehicle from the estate of my wife's late grandfather. So we decided to get rid of both our old cars and buy a truck for me.

    I went on Credit Karma to check my score, thinking it still wouldn't be that great from a pair of previous stupid mistakes. Turns out my score was over 800! The Toyota dealership gave me a loan on my truck for 0.9%.

    As twinjet illustrated, getting those debts paid off and getting the balance(s) on any credit cards either paid off or at least down below 15% of your available credit limit will do wonders for your score!
     
    Scottkarch likes this.
  16. pacojas

    pacojas "FYYA BUN"

    Oct 11, 2009
    MEXICANADAMERICA
    rent out your garage, maybe. that's an extra $100- 200.00 per month around here.
     
  17. I fix cars iny garage constantly lol. So I make a lotta extra dough like that when I feel like working. Just got a heater for it so I try to go in there more often.

    twofingers, I myself have never smoked anything, but my girl does and refuses to stop. At least I got her to quit cigarettes...

    I have put some items up for sale and I have taken on some extra work to bring in cash in addition to my weekly pay.

    I can make this happen, and I am stubborn enough to not let what she does affect me too much.

    I did have a talk with her last night and she claims to be on board and to have already started cutting back, but I know a sale is hard for her to pass up. So we shall see.
     
    pacojas likes this.
  18. bolophonic

    bolophonic

    Dec 10, 2009
    Durham, NC
    It can be done. I paid off all of my revolving credit years ago. It felt awesome. I'm not the most frugal dude in the world, but my spending levels are more than comfortable. Good luck!
     
  19. fhm555

    fhm555 So FOS my eyes are brown Supporting Member

    Feb 16, 2011
    Having a side job in the house is nice just be careful about using too much unreported income for expenses that can be tracked. If you pay out more than you report and our Uncle catches on, it can be rough.
     
    DreadyDiggs likes this.
  20. Gaolee

    Gaolee Official leathers tester and crash dummy

    I don't have much to add except to wish you the best of luck. You will pull it off.
     

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