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Tips for paying off debt?
Posted on 6/24/15 at 9:39 pm
Posted on 6/24/15 at 9:39 pm
I have some debt I'm trying to pay off. I'm trying to use Dave Ramsey's techniques but I'm interested to see if anyone here has any tips.
I have:
about $2,500-$3,000 in credit card debt (three cards total)
Roughly $8k in student loans
I also have a car note and mortgage but I don't necessarily look at those two as "debt" like I do credit cards and student loans.
Any ideas to speed up paying this off? I'm trying to pay a little more than the minimum payment amounts each month.
TIA![](https://images.tigerdroppings.com/Images/Icons/Iconcheers.gif)
I have:
about $2,500-$3,000 in credit card debt (three cards total)
Roughly $8k in student loans
I also have a car note and mortgage but I don't necessarily look at those two as "debt" like I do credit cards and student loans.
Any ideas to speed up paying this off? I'm trying to pay a little more than the minimum payment amounts each month.
TIA
![](https://images.tigerdroppings.com/Images/Icons/Iconcheers.gif)
Posted on 6/24/15 at 9:41 pm to King of New Orleans
If you're going by DR, then the credit cards first since they are the smallest. I'd also hit them too because the interest is likely the highest. Only thing to do is attack one at a time. Pay the minimum on everything except the CCs until they're paid off. Then take on the student loans.
This post was edited on 6/24/15 at 9:41 pm
Posted on 6/24/15 at 9:41 pm to King of New Orleans
There's no big secret...just pay more than you're paying now
Posted on 6/24/15 at 9:58 pm to King of New Orleans
To pay off the fastest and "feel" better about doing, pay off the smallest balance first, paying the minimum to others, and snowball it. Once the lowest is paid off, put that additional amount towards the next lowest balance, and so on.
To save the most interest, put whatever additional money you can toward the highest interest rate, regardless of balance.
Remember, student loans are very forgiving and tax deductible. Tackle the credit cards first. Don't put any more on that balance until it's paid off.
To save the most interest, put whatever additional money you can toward the highest interest rate, regardless of balance.
Remember, student loans are very forgiving and tax deductible. Tackle the credit cards first. Don't put any more on that balance until it's paid off.
Posted on 6/24/15 at 10:43 pm to King of New Orleans
Step 1 - Free up more monthly cash flow. Take a hard look at all of your monthly bills and fixed costs. Cut out any bills or features you can live without, and call to make sure you have the lowest rates on the stuff you want to keep.
Step 2 - Try to be as frugal as possible with daily choices while still enjoying life.
Step 3 - Put extra money towards debt. I have my own opinions on which to pay off first but I think it is more a question of your personality and tendencies.
Step 2 - Try to be as frugal as possible with daily choices while still enjoying life.
Step 3 - Put extra money towards debt. I have my own opinions on which to pay off first but I think it is more a question of your personality and tendencies.
Posted on 6/25/15 at 8:39 am to King of New Orleans
Step 1 - Create a payment plan:
Plan to pay off your credit card debt first as others have said. If you wish to pay the least amount of money overall go in this order:
1) Pay off credit card with highest interest rate, and proceed to next highest rate until debt is gone.
2) Pay off student loan with the highest interest rate. Rinse and repeat.
This is the order I would take, but the alternative is to knock out the credit card debt with the lowest balance. In that case you could free up extra money faster to pay towards the next debt. Credit card should be tackled first primarily due to it usually being a higher interest rate and it does not offer the tax benefits that student loan interest does.
Step 2 - Create a budget (probably should be Step 1):
As for preparing yourself to make the next step from living in debt to sitting on a comfortable amount of savings, begin to reevaluate all of your monthly expenditures. Creating a budget, logging expenses, and having the ability to analyze them at the end of the day really can help you excel from living in debt to building emergency savings. Things will begin to click such as paying bills on time, and not feeling guilty when you splurge on a nice meal from time to time. Another thing is to reduce any fees you might be getting charged by your utilities. Are you doing paperless billing? Have you set up auto-pay? Some companies reward you for choosing these options.
Step 3 - Break out the credit cards:
Now that you are debt free, make sure you use your credit cards to work for you. Get a rewards card (at least a cash back rewards card) that accrues rewards for each purchase. You will continue to improve your credit, all the while you are collecting rewards. And research the benefits of your card. Several institutions will offer purchase protection amongst other things when you use their card to make a purchase. Credit cards can be a good thing, but you need to be in a position to pay your statement every month before fully utilizing their benefits.
Plan to pay off your credit card debt first as others have said. If you wish to pay the least amount of money overall go in this order:
1) Pay off credit card with highest interest rate, and proceed to next highest rate until debt is gone.
2) Pay off student loan with the highest interest rate. Rinse and repeat.
This is the order I would take, but the alternative is to knock out the credit card debt with the lowest balance. In that case you could free up extra money faster to pay towards the next debt. Credit card should be tackled first primarily due to it usually being a higher interest rate and it does not offer the tax benefits that student loan interest does.
Step 2 - Create a budget (probably should be Step 1):
As for preparing yourself to make the next step from living in debt to sitting on a comfortable amount of savings, begin to reevaluate all of your monthly expenditures. Creating a budget, logging expenses, and having the ability to analyze them at the end of the day really can help you excel from living in debt to building emergency savings. Things will begin to click such as paying bills on time, and not feeling guilty when you splurge on a nice meal from time to time. Another thing is to reduce any fees you might be getting charged by your utilities. Are you doing paperless billing? Have you set up auto-pay? Some companies reward you for choosing these options.
Step 3 - Break out the credit cards:
Now that you are debt free, make sure you use your credit cards to work for you. Get a rewards card (at least a cash back rewards card) that accrues rewards for each purchase. You will continue to improve your credit, all the while you are collecting rewards. And research the benefits of your card. Several institutions will offer purchase protection amongst other things when you use their card to make a purchase. Credit cards can be a good thing, but you need to be in a position to pay your statement every month before fully utilizing their benefits.
Posted on 6/25/15 at 8:39 am to King of New Orleans
The best thing you can do is strip 90% of all your "wants" out of your monthly expenses. It will be hard as hell the first two or three months but after that it will become second nature to you. Before you know it, you will have made very significant progress using all that extra money each month. My brother is in a similar situation as yours and he refuses to give himself $500 a month to spend any way he wants. He doesn't believe he can do it. My wife and I live off of only $300 a month as "fun money" and everything else goes to paying off debt.
Once you make it a habit, it transitions from a hardship to necessity because you see the progress you make.
Do this and I guarantee you will be astonished at how you ever lived any other way before. Good luck!
![](https://images.tigerdroppings.com/Images/Icons/Iconcheers.gif)
Once you make it a habit, it transitions from a hardship to necessity because you see the progress you make.
Do this and I guarantee you will be astonished at how you ever lived any other way before. Good luck!
![](https://images.tigerdroppings.com/Images/Icons/Iconcheers.gif)
Posted on 6/25/15 at 9:17 am to King of New Orleans
Budget. Stop eating out. Stop going on trips. Stop doing unnecessary things. Keep your lights on and food in the fridge. After all monthly expenses are accounted for, throw everything that's left at the debt. Rinse and repeat. By having a written budget, you will find things you don't need to be spending your money on.
Dave would tell you to start with the lowest debt regardless of interest rate while paying minimum on everything else. It's a behavior thing. Once you pay something off, it motivates you to keep going, whereas, you may get burned out if you go with the biggest debt.
Pay more than that
Dave would tell you to start with the lowest debt regardless of interest rate while paying minimum on everything else. It's a behavior thing. Once you pay something off, it motivates you to keep going, whereas, you may get burned out if you go with the biggest debt.
quote:
I'm trying to pay a little more than the minimum payment amounts each month.
Pay more than that
Posted on 6/25/15 at 9:29 am to King of New Orleans
Depending on what your car note interest rate is, it may be prudent to pay it off before the student loans.
Definitely pay off the CCD debt first.
Definitely pay off the CCD debt first.
Posted on 6/25/15 at 11:28 am to King of New Orleans
Go check out Ready for Zero website. Im sure there are others, but it gets you to the quickest payoff using interest s the guide.
Posted on 6/25/15 at 4:01 pm to King of New Orleans
Have rich parents?
Posted on 6/27/15 at 1:55 pm to King of New Orleans
quote:
I'm trying to pay a little more than the minimum payment amounts each month.
Does not compute with:
quote:
Dave Ramsey's techniques
The debt snowball is very, very specific.
You set aside $1000 in an emergency fund
You then arrange your remaining debt balances from smallest to largest (excluding mortgage). You drop all but the smallest balance to the minimum payment and you THROW money at the smallest balance until it is gone.
Then you go to the next biggest balance, taking all the money you were paying on the first one and pay it until it is done.
It works every time - works like a charm and will go faster than you expect.
This post was edited on 6/27/15 at 1:57 pm
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