Debt Management

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Three easy rules

1. banks are not your friend, their job is to make lots of money for the bank. Advice from bankers is often better for the bank than for you. Not being mean to bankers, thats just how it is.

2. Come to terms with accepting how you want to live obviously doesn't match up with your income yet. It may be temporary , maybe not, but get through your head that nice shoes and cool engine parts and drinking with friends is a short term gain. You feel good for the momnet then realize you need to pay for the crap.

3. Avoid debt consolidation companies and pay day loan shops and swapping a card for a card. Again short term solutions that wont help. Go get real credit councilling. There is no shame in this, dont tell anybody if you think there is. Lots of people need to get help with lots of stuff. I cant fix a Bing euro carburator , but I can pay someone to do it with cash on hand.
Credit councilling is available in nearly every community, its generally free. Take advantage. You'll learn stuff. I always hear, its temporary....
 
crankcall said:
Three easy rules

1. banks are not your friend, their job is to make lots of money for the bank. Advice from bankers is often better for the bank than for you. Not being mean to bankers, thats just how it is.

2. Come to terms with accepting how you want to live obviously doesn't match up with your income yet. It may be temporary , maybe not, but get through your head that nice shoes and cool engine parts and drinking with friends is a short term gain. You feel good for the momnet then realize you need to pay for the crap.

3. Avoid debt consolidation companies and pay day loan shops and swapping a card for a card. Again short term solutions that wont help. Go get real credit councilling. There is no shame in this, dont tell anybody if you think there is. Lots of people need to get help with lots of stuff. I cant fix a Bing euro carburator , but I can pay someone to do it with cash on hand.
Credit councilling is available in nearly every community, its generally free. Take advantage. You'll learn stuff. I always hear, its temporary....
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Very true. I've never gotten good advice from a banker or a bank employee, it's usually advice motivated or driven by some sort of quota or target that they are trying to reach.
 
Thanks for the advice. I am taking it all into account.
It sounds like I wont consolidate. I am looking into getting the lower interest card. I already have one that is relatively low (PC mastercard).
What I will try to do is pay off that visa then put the rest onto that mastercard to save on interest. For now, I will work on that visa and pinch the rest of my pennies. Sorry dogs, no more raw diet for a few months. We all have to suffer on this one.
 
#1 Think outside the box because almost everyone that is saying they want to help is just working their own angle.

ie My daughter was taking a full time college course and found out she could get the same credits in the same time for less by doing the course in the evenings. She could then work full time. She dumped the day course and switched to nights and did well.

My wife saves us hundreds of dollars per month with grocery coupons. If we could get the coupon deals they have in the USA we would be eating for free.

Your start point should be an asset sheet listing your net worth. What you owe and what you own. You can run a simple spread sheet and update it regularly, often enough that you get a sense of direction. Assets should be listed as what you would get for things if you had to sell them. Furniture and clothing are virtually worthless unless you have inherited a genuine Duncan Fife pie crust table.
Jewelry is worth the weight of the gold and gems. The "Creative settings" don't matter when they get melted down.

I disagree with the concept of saving 10%. That's fine if you are established with a house but if an average Joe making $75K a year saves $75K for a downpayment over 10 years it it does him little good if house prices have gone up $80K. Fight for every penny.
 
Agreed. 10% is just not enough,

my personal savings rate is more like 60%. (which is a bit extreme)
 
OpenGambit said:
Agreed. 10% is just not enough,

my personal savings rate is more like 60%. (which is a bit extreme)
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I assume the 60% gets invested which increases income which means your personal spending percentage declines which means......
 
nobbie48 said:
I assume the 60% gets invested which increases income which means your personal spending percentage declines which means......
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that the savings rate will increase over time. Yes.
 
I don't know if people get amortization sheets anymore. They are an eye opener as they show how much is principle and how much is interest on every payment. At the beginning of the mortgage the principle paydown is miniscule. Towards the end it's the opposite.

On my last mortgage, throwing in a hundred dollars when the window was open knocked a year off the duration of the deal and knocked thousands of dollars off the total payout. Towards the end it didn't make that big a difference.

Money makes money. If you have extra coin you can buy up extra stuff when things go on sale. No coin you have to pay list when you run out. It just keeps getting better.
 
OpenGambit said:
Agreed. 10% is just not enough,

my personal savings rate is more like 60%. (which is a bit extreme)
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60%! Wow that's awesome! I used to be much better at saving but then I fell off the rails a little bit and went off track. I'm basically going back towards economy. I sold off my car and bought a new but much more economical/practical car which will help as I plan on driving this thing into the ground.

I've also been putting money away forever automatically...basically if you don't see it in your account you can't get tempted to use it.

As others have said, pay off the highest interest loans first...these are the ones where most interest is going so get to them first. IF you can then transfer to lower interest accounts and the ideal is the line of credit. Unfortunately credit cards charge interests on the TOTAL balance, not on the left over balance. So if you have 10k worth of debt, and pay off 5k...you're still paying interest on the 10k! With a line of credit...every reduction in the principle helps because the interest is now being paid only on the outstanding balance. If I'm wrong on this understanding someone please correct me.
 
Wow. I can see there are some people here who don't have a track addiction. Credit card everything, line of credit to pay off the cc balance each month and then October to April to pay down the line of credit. Although I get a $10K tax rebate every year so can usually count on this lump sum to help out.

Live for the now peeps. There's a bus out there with your name on it.
 
Fiery254 said:
Wow. I can see there are some people here who don't have a track addiction. Credit card everything, line of credit to pay off the cc balance each month and then October to April to pay down the line of credit. Although I get a $10K tax rebate every year so can usually count on this lump sum to help out.

Live for the now peeps. There's a bus out there with your name on it.
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Living on someone else's dime on the chance that you may pass before having to repay the debt is sketchy at best. Borrowing money to finance a hobby is not a financially sound practice, and I personally find it difficult to swallow borrowing money to have "fun". If your budgetary surplus cannot tolerate a hobby, you should probably find a more suitable hobby, or find a way to make it fit your budget. You can still enjoy yourself living on your own dime.

What a lovely credit culture we have cultivated in this generation.
 
Freestyle72 said:
What a lovely credit culture we have cultivated in this generation.
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Do you know how whiny and hypocritical you sound? Shagging around like some repressed man-ho and then bragging about it on internet forums. Moral code of a rabbit. Let he who is without sin..............
 
Fiery254 said:
Do you know how whiny and hypocritical you sound? Shagging around like some repressed man-ho and then bragging about it on internet forums. Moral code of a rabbit. Let he who is without sin..............
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What can I say, I have a strong biological imperative.
 
Fiery254 said:
Do you know how whiny and hypocritical you sound? Shagging around like some repressed man-ho and then bragging about it on internet forums. Moral code of a rabbit. Let he who is without sin..............
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LOL, no need to get ruffled Fiery, I think he is entitled to his opinion :D
 
Freestyle72 said:
Living on someone else's dime on the chance that you may pass before having to repay the debt is sketchy at best. Borrowing money to finance a hobby is not a financially sound practice, and I personally find it difficult to swallow borrowing money to have "fun". If your budgetary surplus cannot tolerate a hobby, you should probably find a more suitable hobby, or find a way to make it fit your budget. You can still enjoy yourself living on your own dime.

What a lovely credit culture we have cultivated in this generation.
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I have no problem with people having the freedom to waste their own money. It creates wealth for those that don't waste. Now I do get annoyed when someone spends themselves into welfare.
 
nobbie48 said:
I have no problem with people having the freedom to waste their own money. It creates wealth for those that don't waste. Now I do get annoyed when someone spends themselves into welfare.
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I wouldn't mind all this faux outrage and moral indignation if I didn't pay off my line of credit. But I do. So where's the problem? I can't afford my summers so I borrow and spend my winters paying it off. I quit my regular ski trips to allow me to do this. I took a vacation last year for the first time in about 10 years. I own 2 houses. I pay my mortgages and bills on time. I'm putting my daughter through school. Net result though is no debt carried forward. And I'm enjoying myself in the process.

Debt is fine as long as it's managed.
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