An idea??

rachelMcK · 03-16-2007, 02:25 PM

I don't know if any of you have done this or if i'm coming up with this myself...if you look at my signature you can see that we have pretty large debts. I find this really daunting, I mean, no matter how much we put towards it, it seems like we're going no where, very slowly...lol. I was thinking of splitting up the debts, just in our records (not actually splitting them up) into smaller increments to make it seem like we're actually making some headway...Do you think this is a good idea or just confusing? Dh thinks its kinda confusing but i think it might work.

For example, our $8k debt could be broken down into 4 $2k "debts", we'd bank the money (while paying the minimum) until we get 2k and then apply that chunk to the over-all debt while paying off the "debt"...does that make sense?

We just need to see our progress because when we don't we get depressed and spend...

rachelMcK · 03-16-2007, 02:28 PM

Oops...i didn't realize i posted this in Dave Ramsey, I thought I was in Debt reduction...sorry!!

ritabelle · 03-16-2007, 02:40 PM

If it works for you, I'd say great! go for it. The only thing is that the interest is racking up while you're paying minimums and banking til you hit 2k. Personally, I get depressed when I pay a minimum of say $25, and $24 gets charged as interest, so that I'm only paying down my debt by $1. Pbbt!

Another way to see the balances go down visually, would be to get a card that has a promo of 0% for balance transfers, to transfer as much as possible (gets the 1st card way down) and then not worry about that card for a few months (since it's 0%) while really hammering down the remaining balance of the 1st card. As long as you can be disciplined enough not to run up the balance on the new card... lol. That would be my problem!

Right now, we're focusing on 1 card at a time, not even looking at the others, just paying minimums and loading up the payments on the chosen card, then it will be cancelled and cut up, and on to debt #2.

Hope that helps!

Telephus44 · 03-16-2007, 08:22 PM

Personally, I'd find it confusing too, but if it works for you, go for it.

I'm working on student loans too, so I'm assuming that you probably have a pretty low interest rate and wouldn't really suffer from the extra interest.

I know I get a great rush every time I drop below another thousand - I know I'm not explaining this well, but when I drop from $7XXX to $6XXX - I pay $250 a month so when you add in interest it takes me 5 payments to do it.

Marie78 · 03-16-2007, 08:57 PM

For student loan debt I think that it would show you progress pretty quickly to save $2,000 and put it towards the debt, and your student loans are probably at a lower interest rate anyways. I have a cc debt right now that I used to think I could save a chunk of money and put it towards the debt so that it looked like progress. I never was able to save and continued to make the minimum payments. This last year I have been very good about putting any extra monthly money towards the cc debt and I am down over $1,000 right now from last year. For me it will be slow going, but I am not very good about saving lump sums of money...it always ends up going towards an emergency that I hadn't forseen.

mikandmari · 03-17-2007, 12:11 AM

I agree with Sara, I get excited to see the numbers drop below to the next hundred or thousand mark...

And it breaking into smaller increments works for you... then go for it! I'm also doing something similar. I read Dave Ramsey's book, and paid off the smallest debt first... but I have that Mastercard with a higher interest rate, I just can't stand it

So I'm working on it next, even though I have 3 accounts with smaller balances. I decided to make a chart listing the accounts with the "total" of the balances by month, and I can watch the totals decrease

. It's confusing to my husband because the accounts all have different closing dates. But it works for me, and the end result is the same!

chatterweb · 03-17-2007, 02:47 AM

for me, if I dwell on the debt too much, I get depressed!
I pay off our credit cards online early and then I wait for the new statement and it takes forever because I am dwelling on seeing the results online and I already know the results...
Same with this one card I want to mail a check in for the debt, I owe 790.00. Well, the due date is not until early April, so for 4weeks I have been waiting for the bill soI can mail it and am getting antsy and stewing in it...

Personally, I log into all my accounts everyday that I am not busy and I guess I need to get busier here!!

dwallyfam · 03-17-2007, 08:30 AM

As long as you are making progress to getting things paid off it doesn't matter how you split them up or pay the off, just as long as it gets done.

kaykwilts · 03-17-2007, 08:50 AM

Pay minimum on two and double up on the third if you can. You will see results.

Edna_E · 03-20-2007, 08:52 PM

Yeah. I inadvertently set up automatic payments on one of mine for double the minimum. At first I pouted about it, but didn't make time to call and change it, and then noticed that I'd dropped $100 of the balance while I was procrastinating. Then I decided to keep doing it - I notice 100's, it doesn't take 1000's for me. And this way, I get them about every 2-3 months - often enough to keep me motivated. The others, I'm still sticking to barely over minimum payments on.