Talk to me about getting out of debt - Tips pls.

This is our year to get out of debt, and we are taking care of a good portion of it with our tax money that we get back.

What are some things that helped you lessen your debt over the years? Tricks to shopping? Anything you can suggest that may help us along.

I am a binge shopper. I will go weeks without buying anything and then BAM - go crazy shopping for my DS.

I should also add that we have a tremendous family and tons of friends. We usually have AT LEAST one party every weekend that we have to go to....and we usually buy generous gifts because my family is really generous with us.

PLEASE help us! I can't wait to start growing our savings again. I miss looking at that huge chunk of money in the bank!

Re: Talk to me about getting out of debt - Tips pls.

At one time I found myself with almost 10k of credit card debt. The feeling of it made my stomach drop!

I made a conscious decision to stop using my credit cards. I used my tax returns to pay off a chunk, then I made sure I paid at least $500 a month towards the card. If I didn't have the money to pay for something, I didn't get it.

We don't have any children so I'm sure it is a different ballpark when you have a family to support .

I am pretty sure that the financial guru Suze Orman says it's better to pay off your debt than to put your $$ into to savings.

Good Luck!!

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

The snowball method helped us reduce our debt by half last year. Beth has written a lot about it on here. It's a David Ramsey method. You pay what you can to your smallest balance debt and the minimums on everything else. Once that first debt is paid, you add the amount you were paying toward it to the next smallest debt. So for example, if you pay $300 to card A and your minimum on card B is $100, once card A is paid off you would apply $400 toward card B. It's definitely helped us tremendously. I know when things are going to be paid off and it's a great feeling.

Also, transfer balances to 0% or very low interest cards. Leave the credit card home in a safe place. Keep a spreadsheet with all of your bills/debts so you can get a full picture and watch it go down.

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

Especially with birthdays, you know whose is coming up and when. Shop the sale or clearance racks weeks or months ahead of time and put the stuff away. It will save you money and time!

Re: Talk to me about getting out of debt - Tips pls.

Posted by Diana1215

Posted by Jennifer907

The snowball method helped us reduce our debt by half last year. Beth has written a lot about it on here. It's a David Ramsey method. You pay what you can to your smallest balance debt and the minimums on everything else. Once that first debt is paid, you add the amount you were paying toward it to the next smallest debt. So for example, if you pay $300 to card A and your minimum on card B is $100, once card A is paid off you would apply $400 toward card B. It's definitely helped us tremendously. I know when things are going to be paid off and it's a great feeling.

Also, transfer balances to 0% or very low interest cards. Leave the credit card home in a safe place. Keep a spreadsheet with all of your bills/debts so you can get a full picture and watch it go down.

Thanks! We will be paying off a huge chunk with taxes so we will def. try this with the remainging balances!

Re: Talk to me about getting out of debt - Tips pls.

Diana, I suggest reading "Total Money Makeover" by Dave Ramsey. I saw a post from Beth a few months back and I just decided to get it a few weeks ago. In 4 short weeks, I've already started seeing a difference in our spending habits and we're on track to eliminating our debt.

Re: Talk to me about getting out of debt - Tips pls.

A big one is that I shop with peapod and actually look at their specials. I make a list throughout the week and just get what I need. It eliminates the inevatble window shopping that happens at the stores and the "moms, can I get this?" on the way out. Honestly, I save about $100 every week just by doing this.

Re: Talk to me about getting out of debt - Tips pls.

We have a big family as well, and since there was a baby boom in our family during the last two years, we decided to cut back with the gifts A LOT. We all agreed that we will be buying for kids only and within a reasonable price range. We all agreed that if we want to splurge, lets splurge on our own kids. And I'll tell you, this Christmas was so nice. All the kids got nice, thoughtful and age-appropriate gifts. Everyone was happy. You should maybe consider bringing this up in a conversation one day. With times like this, I'm sure there will be plenty of opportunities to do so. And the fact of the matter is that if you are in debt, you don't have the $$ to splurge. By doing so you are putting yourself more in the red. So its really up to you to decide what you want to do. Its hard, I know

Re: Talk to me about getting out of debt - Tips pls.

TOTAL MONEY MAKEOVER by dave ramsey!!!!!!!!!!!!!!!!!!!!!

you don't need ANYTHING ELSE! honest!

in the middle of a divorce, bankruptcy (stbx's), keeping a house i can afford,
so forth and so on... i thought i was going to drown!!!!

today, i am happy to say that i am debt-free except for the house and i'm working on building my emergency fund.

there is hope and it's called TMMO!
i participate on the message board on his website and my life is SO different.

i knew of dave ramsey years ago, but beth did re-introduce me to him last summer.

the book LITERALLY changed my life!!!

Re: Talk to me about getting out of debt - Tips pls.

It's time to cut off the expensive gifts. Talk to your family and simply explain you are paying off debt and it's time to set a limit on gift giving (for giving AND receiving). This way you won't feel bad if you buy a $50 gift and you receive a $100 gift from somebody. Just explain that you want to set a $$$ limit on gift giving.

Re: Talk to me about getting out of debt - Tips pls.

I used this calculator/plan to get out of debt. debt calculator
It helped to have a plan.

Re: Talk to me about getting out of debt - Tips pls.

Being frugal is key.

No more shopping spree unless you have the money.

This is what I do

- shop clothes for DS on sale from previous season. Only buy what is needed and DO NOT allow myself to buy more even if it's cute. For example, he has 13 T-shirts for this Summer. Why do I need to buy more? I do not shop at expensive stores. The clothes last the season and that all I need from them.

- Buy all toys for the following year when it's on super sale during the Holidays. DS' birthday is covered and some of his Christmas. I buy by age group, popularity and reviews.

- no more gift exchange with family members. Very little with it's needed.

- Much smaller presents for DH and myself. I only wanted a card for Valentine's Day.

- No big vacations. We did a 3 day Hamptons trip last year. It was great.

- Shop all groceries on sale for the week. Use coupons. Belong to BJs.

- No shoes, clothes shopping for me and I go for mix and match so I can expend my wardrobe.

- I do my own manicure and pedicure.

- I get my massages (the rare one I get) at cheaper places.

- No going to movies

- We reduced our take-out a lot. Now I cook a lot more. I make stews in teh slow cooker that do 3 meals.

- Limit my going out errands so I don't go out everyday and use gas. I plan my trips to be the most efficient with gas.

- When I get cabin fever, I walk with DS in my neighborhood so I don't get temptations from the mall.

- I did not put a foot in Target in 3 months. I save A LOT!!!! I go to Walmart for diapers (if they are not at BJs) and since I don't like the store too much, I can come in and out without woundering for hours like at Target.


I actually revised my whole attitude about material possessions.

I used to not be able to stop myself from buying shoes and clothes and bags prior to DS.

Now, I just live a simplier life. I still have some "dress-up" outfits though. But instead of feeling sorry for myself, I just try to enjoy my simpler life.

My jewerly used to match all my outfits. Now I use "timeless" pieces. Diamond studs, pearl necklace. Same for my dressier clothes.

Message edited 3/7/2009 7:49:43 PM.

Re: Talk to me about getting out of debt - Tips pls.

Sophie - all great tips! I really do alot of them now.

I do shop a ton of sale items for Jack. I won't buy it really unless it's on sale...because I know the next week it will be.

I do Peapod bc I save a TON of money when I'm not impulse shopping at the store!

We belong to Bjs and go at least once a month, sometimes every other week.

I never buy myself clothes anymore...anything new I buy my mother has me put on her credit card that I carry

I don't pay for gas (or my cell phone bill) - my parents still pay it....can you say ONLY CHILD

I never want to exchange gifts with DH and if we do we put a cap of 100 on it.

We do like going out for dinners though so that is something we do splurge on.

We do go out to eat with Jack probably once a week and order lots of takeout. We can def. improve in that area.

The only vacations we go on my parents have paid for in the last three years (although DH is the best man in a wedding in Mexico in May and it's such a friggin waste of money it drives me crazy....he is spending a ton of money for three days)

Target is my killer...it's 5 minutes from my house so every trip there is 100 bucks.

I don't do mani/pedis in the winter. Only summertime!

I def. need to cut down on the unneccesary spending!

Message edited 3/7/2009 7:56:07 PM.

Re: Talk to me about getting out of debt - Tips pls.

it won't make you a TON of money buy why not sell some unwanted stuff on ebay? you could use the profits to pay some groceries or put towards bills.

Re: Talk to me about getting out of debt - Tips pls.

from your post, it looks like you already know what the problems are.... 2 bad habits... buying gifts you cannot afford on a weekly basis, and and occassional binge shopping.

the word 'binge' is rather noteworthy, IMO. From an addiction standpoint, the same biochemical changes occur in binge shoppers as gamblers and drug addicts.... it's an overstimulation of the reward pathways of your brain.

There is no reason why you should feel obliged to buy a huge gift every week for someone. Baking some cookies should suffice. And there is no reason for your son to have more than a couple drawers full of clothing.

It seems that getting spending/shopping under control is the primary key for your success. When I was in my 20's, I got into debt becuase of some excess spending in the clothing dept... frankly, I didn't even wear all of it! I got over it in a very unique manner....

I moved into a small apartment. I had little storage... that way, I was forced to confront and find a use for everything entering my home. If you were to eliminate most of your storage (ex. for clothing: one dresser for every family member, and one coat closet for the entire family), you would be forced to confront your habits head-on, and within months, would turn over a new leaf...

after that, pay down the credit card w/ the highest interest rates... once you reach a zero balance, the rule of thumb is to never carry a balance again! Once you're done with that, avoid having more than 3 cards, and trash all store cards....

good luck!!!
HTH!

Re: Talk to me about getting out of debt - Tips pls.

Re: Talk to me about getting out of debt - Tips pls.

well I sm not in debt, and have never owed anything except a car and a house....

Do you eat lunch out? do you buy things that you dont need?

The best thig to do it make a budget and STICK to it...allow a certain amt for eating out/entertanment, a certain amt. for you to buy stuff, clothes etc each week. I find that doing it weekly is best to keep track...if you know you will need spring clothes, then you pool your weekly allowance for a few weeks etc...


I like to think of it as a game really...I love seeing hoe much I can save and what I can get and do for free...

Re: Talk to me about getting out of debt - Tips pls.

I don't have much advice bc I cut grocery coupons and always forget to use them . I don't even look at prices at the grocery store - if I want something I buy it. I can't even tell you how much a gallon of milk is..


BUT...I racked up a ton of debt in my early 20's (like 25K ) and I used a debt consolidator to pay it off. I have been debt free for over 6 years now and the only credit card DH and I have is an Amex that we pay off each month. I hated the feeling of debt - it can consume you. I only buy things if I know I can pay for them within the billing period or if I have enough money in my checking account to use the debit card. As you know I am a compulsive shopper too . I can shop anywhere - Bloomies, Target, heck even Staples. I don't discriminate I try not to use the Amex and just use my debit card. That cuts the purchases wayyy down. I have gotten a lot better on DD's clothes. I really try hard to only buy things on sale. Once in a while I cheat, but for the most part everything is always on sale.

Message edited 3/7/2009 11:18:53 PM.

Re: Talk to me about getting out of debt - Tips pls.

I try to avoid Target, Kohls, Kmart - any of those places like the plague

You go in there b/c you are having company and you want to get ONE nice inexpensive table cloth...and you come out w/ candles, decorative dish towel,picture frames, clothes you didn't think you needed...for about 200 bucks!

It is too hard to pass up, so if you need one thing, go someplace that doesn't have a wide selection of everything

also make a grocery list and stick with it and shop fast! I stick to the list and try to get in and out, or else I will grab some cookies, maybe some new cereal bars..etc. --- it then starts to add up

Re: Talk to me about getting out of debt - Tips pls.

I kept a notebook listing what I spent money on for a couple weeks. I took that, totaled it all into columns, then looked at where I could cut my expenses. A lot of it was on food out, and not dinners out either, lunch, coffee, candy bars, it all adds up. At the time, I treated myself to nice jewelry, trips, and good clothing fairly often too. I'm sure I didn't spend as much as some people, but I spent more than my means really allowed.

I put away my credit card and used debit cards for awhile. I bought no clothes for myself for over a year (except in cases where I needed something because what I had was really run down). Sounds crazy, but I saved so much money, and I had a lot of clothes, I really didn't need more.

Honestly, once I got myself out from under, I felt really good about it and proud to be debt free. So many of my habits from the time of reducing debt stuck--I don't want to be there again.

Kids stuff is hard, and my debt issues seem to be resolved since DS was born, so I haven't had to deal with this much, but I don't buy him toys all the time. I look at his clothes each season and figure out what he needs and pretty much stick to that.

As far as family, that's hard. You might want to talk to them and tell them what you are doing and say that you really need to reduce gifts for awhile.

Message edited 3/8/2009 8:36:40 PM.