Questions - Please read

**NoDough** · 07-29-2007, 10:44 PM

Okay, I am about $14,000 in credit card debt.

I owe close to $9,000 on one credit card... with this card I have zero APR for the next several months.

I have two other credit cards that both have finances charges. I owe $2,972 and $2,535 on those.

Which order would you work at paying these off?

Also, I have read advice that it is important to also save money when you're trying to pay off debts.

How much should I set aside for savings?

I work full time, and make $9.50 an hour if that helps.

Also, is there such a thing as mentors on this forum? I think it would be nice to consider pairing up differant members, or even getting into small groups where we can report to each other and hold one another responsible. Can someone let me know if we could start a special thread just for this? Or, let me know if there's already a thread like the one I desribed that I might have missed. Thanks!!

**Mom23boys** · 07-29-2007, 11:06 PM

I would start by paying the smallest debt off first and then snowball that payment into the next lowest until they are all paid.

You need an EF (emergency fund) of $1000 so that you don't have to charge to the CC anymore. When something comes up, you will have the EF to bail you out.

I believe that everyone on this forum is very supportive to each other. We are all a support group to one another. If you want a one on one mentor, you may want to start a different thread asking about mentors for paying off debt. Your question may get lost in the above thread, so a new one with the subject of mentors is a good idea.

**frooz** · 07-29-2007, 11:30 PM

I think the mentoring thing is a great idea. Debt-buddies! Love it!
Research the Dave Ramsey baby steps. It really works.

**bumplett** · 07-29-2007, 11:52 PM

~ I agree, read up on the Dave threads to get you started.

Good luck!!

**Michelle** · 07-30-2007, 09:42 AM

I have always paid down the cards w/the highest interest rate first while paying the minimum on the other card(s). It's one of the things where Dave Ramsey and I disagree.

Michelle is right...you need an EF in place so you can stop using the cards when something goes wrong. We paid off our HELOC balance because we had a 9% interest rate on it, while our CC's had much lower interest rates.

I have about $2K in an EF right now, and we'll be using part of that to fix our minivan. We add $300/mo to that at the moment, and we have it in an ING account so that it's earning interest and is more difficult to use (vs. say our ATM bank account).

As far as savings, we're taking out the max. allowed in 401K from Dave's check. We don't have any other savings besides the EF.

You need to do what works for you & your family. Good luck

**frugalfarmwife** · 07-30-2007, 10:04 AM

As you can see there's no "set" answer and different things work for different people. For me the satisfaction of seeing a bill GONE was the most important thing to keep me upbeat about digging out of the hole.

Another thing to keep moving and motivated is search around on here and join in on frugality, debt reduction and other threads, you'd be AMAZED how much you can cut bills by changing a mindset

As for mentors, I think a lot of times people get to be friends and even communicate in private about things, but a mentor area WOULD be neat.

I know that this whole forum REALLY helps me keep positive and on top of things, none of the people in my "real world" are like me except for my mom, and some days I REALLY want to wack others on the head for the excess spending and then griping about the bills, I just smile and know ya can't change the world.

BTW, glad to see you here and look forward to following your progress with you

kj

**lisettelovebug** · 07-30-2007, 11:23 AM

You can use this site to tell you how much interest you'll pay depending on if you pay off the debts by lowest amount owed or by highest interest first.
http://www.whatsthecost.com/snowball.aspx?country=us
Lisette

**Edna_E** · 07-30-2007, 12:12 PM

I'm game for "buddying". I actually have all my CCs on automatic payment, since the primary thing that causes me problems is late payments due to disorganization, but I occasionally pay something extra in addition to the auto-pays (and the auto-pays are set up for more than the minimum) so I am making progress. I need to establish an EF, and I'm beginning to think I may have to set up a separate account for it, since whenever I make headway, I seem to spend it on something that is not really an emergency.

**babymakes5** · 07-30-2007, 12:51 PM

I would pay off the credit card with the highest rate first, regardless of balance, but that is just because I don't like having to give any more money to the "man" then necessary.

**Luv2BeFrugal** · 07-30-2007, 04:34 PM

I would pay off the smallest first, but I like to have less to fuss with each month as they get paid off...and the gratification of seeing another one GONE.

I love your idea of mentors!! That is great!!

Maybe we should ask Sara if a whole category could be set aside just for that? Dh and I are still digging out...would LOVE a mentor!!

**Its_Donna** · 07-30-2007, 05:26 PM

We did Dave Ramsey's The Total Money Makeover and we started with the Emergency Fund First then we attacked the smallest CC Balance and paid off, then snowballed the other debts until they were paid off. We are currently on BS #6.

It is such a fire-starter once you get a bill paid off....it gives you that Gazelle Intensity to attack the next one with vengeance!

I wish you the best of luck! You can do this...you'll see