The Problems Of Large Debt!

**UKMum** · 01-20-2006, 05:50 AM

I have been reading all the wonderfull posts about Dave ramsay and the snowballing effects.
But our problem is that each of our 3 debts is a HUGE ammount!
Is it best to start of with 1 debt and wait until it is clear, making minimum payments on the other two, or should you pay equal ammounts to the 3 of them?

All 3 of our debts are for around about the same ammount. So the interest levels are similar.

Also does anyone else ever feel like they arent going to get ontop of those debts

?

I know Im asking a lot of questions, but Im trying so hard to get onto some kind of plan...quickly!

Thank you!

**rebecca** · 01-20-2006, 05:56 AM

I have a car debt and I know exactly what you means. It seems as if you will never pay it off. I guess that's why Dave Ramsey calls it baby steps. Here I had just bad off my last car a year early and the engine went out. This is where it gets very discouraging to get another car payment. I tell myself it will eventually get paid little by little even though it seems forever.

**pammy** · 01-20-2006, 06:49 AM

I know exactly how you feel. I'm following Dave's way as well. When I started my smallest debt was over 10k. The other two debts were about 19k each. Those are some major steps, not baby.

Some wonderful ladies here suggested that it may help if you can make a graph, and gave different examples of them, to show your progress. It might help you so you don't get too discouraged. I'm dealing with not feeling any accomplishment, myself. The amounts feel so big and it will be a long time before even one is gone. Right now I'm trying to plan a visual accomplishment chart to help me see that I am getting somewhere, at least. You might want to think about doing something similar, it might help.

I'd say start with one and really tackle that one, keeping the other two minimum payments paid. When you work on three at the same time it could feel like a huge monster that won't ever go away. Work on one and you will start to see it reduce quicker and keep you fired up and going. Just my two cents worth.

**UKMum** · 01-20-2006, 09:14 AM

^^^
Thank you for the advice.
I am going to try and write down all the debt we have and make a chart about where exactly all our money goes!

I think I need to have a print out of everything in black and white.
I was reading an earlier thread and I loved the idea someone had of posting their chart on the fridge door...
Im going to try that approach and hope it makes me see exactly whats needed done to reduce the debts!

**Mamaw** · 01-20-2006, 05:12 PM

I understand how you feel. The little debts that I had were paid off andnow I am faced with the large ones. And I have several large ones.

I find that it helps me to compare the interest charge each month. As the balance goes down so does the amount of interest charged each month. You might see it drop down a dollar or so. That motivates me since I know that I am dropping the principal if the interest is dropping!

**AmyBoz** · 01-20-2006, 08:56 PM

Not to hijack your thread, but you wanna talk large debts?

Our mortgage is $321,545

When I talk about debt reduction, I don't even think about the mortgage. It seriously appears to be insurmountable to me, especially when I consider that we will eventually have 3 kids in college to be worrying about.

**missmollymayhem** · 01-21-2006, 03:06 PM

Originally posted by UKMum

Is it best to start of with 1 debt and wait until it is clear, making minimum payments on the other two, or should you pay equal ammounts to the 3 of them?

If you want to "see" some progress then I would definately pay the minimum payments on the two with the lowest interest rates and make big payments to the debt with the highest unterest rate.

**UKMum** · 01-21-2006, 04:18 PM

Originally posted by AmyBoz
Not to hijack your thread, but you wanna talk large debts?

Our mortgage is $321,545

When I talk about debt reduction, I don't even think about the mortgage. It seriously appears to be insurmountable to me, especially when I consider that we will eventually have 3 kids in college to be worrying about.

^^^
My goodness your mortgage is huge....
Im not even thinking about our mortgage right now either.....It's been taken out for 25 years

**kestrel91316** · 01-21-2006, 05:56 PM

Originally posted by UKMum
^^^
My goodness your mortgage is huge....
Im not even thinking about our mortgage right now either.....It's been taken out for 25 years

$340,000 won't get you a 2 BR "handyman special" in a BAD part of town where I live (Lost Angeles, lol).

**Lucky Star** · 01-21-2006, 09:14 PM

That's great that you're starting to look at your debts and being realistic about them - that's the first step towards being debt free! Here are some tips that have worked for me:
~ Write them down (I'm the one with my debts and progress to date posted on our fridge door, and that's been a great motivator/reminder for DH and me, lol

)
~ Focus on one at a time, even if it feels so large. You'll be able to see your progress that much more clearly. And eventually, when that first debt is paid off, it will be such a great motivation for you to keep tackling the other two!
~ Set intermediate goals. For large debts, it's easy to get discouraged since it takes so long to pay them off. So, set intermediate goals... for example: "by the end of February, I want this debt to be below X amount". And keep your eyes on that goal. Once you reach that threshold, create a new goal - to get your debt below a certain level. (Round numbers usually work well for me...

)
~ Do a rough calculation for how long it will take you to pay it off... you might be surprised that it's less than you thought! But when you have a realistic timeline, you will also feel a bit more relaxed knowing that it WILL be paid off eventually.

Again, good luck!

You're definitely on the right path... let us know if you have any other questions along the way, or if you just need to vent!

**motivated** · 01-21-2006, 10:44 PM

Hi UKMom,

Welcome from another Brit

I find the interest rate going onto your next bill and seeming to set you back a step each time totally disheartning. So when my debts were larger I used to keep a chart taking for example this months balance figure as the total debt and deduct my payment each month. You therefore see the amount going down all the time (this totally ignores the interest payment and yes it has to be paid eventually but by that time you debt will be much smaller). It does help if you make it a game so pretty up your chart, give yourself little rewards when you hit each of your targets. And when you get discouraged come on to the page and see that you are not alone.

**AmyBoz** · 01-22-2006, 06:57 AM

Originally posted by kestrel91316
$340,000 won't get you a 2 BR "handyman special" in a BAD part of town where I live (Lost Angeles, lol).

Here either! Prices are absolutely ridiculous for housing in our area.

**pammy** · 01-22-2006, 08:47 AM

Originally posted by AmyBoz

Here either! Prices are absolutely ridiculous for housing in our area.

OMG I don't know how you guys do it! *falls over* I can't even comprehend the amount the mortgage payment is a month. Yikes!!

To show severe extremes my parents bought their home 10 years ago for $5,000 cash. A 3bd/2bth decent home. Ours we got a very good deal on for $71,000.

**homesteadmamma** · 01-22-2006, 10:09 AM

When we had huge cc debt, we focused on our largest debt first and focused on that only. We made minimum payments on all our other debts. I made a graph and every extra penny we made went on that one debt only. It took a bit longer than paying our small debt first, however that debt had a very high interest rate.

Remember, it didn't start out large and it doesn't happen overnight to get out of debt. It will come though and once the big debt is paid off, watch the smaller ones disappear quickly when you snowball. It's amazing.

Amy, wow I feel for you. The most we've ever had to pay for a home was $70,000.00 in Winnipeg. Here we were able to pay cash for our present home at $26,000.00.

**Lucky Star** · 01-22-2006, 11:56 PM

Living in one of the most expensive areas of the country, our mortgage balance is also about $340K

And the thing is, our place is pretty modest - a 2 bedroom townhouse - although the location is very good. But we've seen home values rise substantially since we bought our place, so we're not too worried about it for now (although the monthly mortgage payments are BY FAR the biggest item in our budget).

For now, we've just been focusing on the other debts... once those are paid off, we'll need to figure out what to do about our mortgage.