Need advice on my debts

[Xantippe]

I think this belongs on the thread about veiling.

The first line totally made sense, though!

Here’s a list of Dave Ramsey’s Baby Steps for the OP:

daveramsey.com/baby-steps/

There are some items that aren’t in the basic list (make budget, get current with bills, buy insurance, give to charity, buy house), but it gives you a general idea of the correct sequence to follow.

As you can see, this is a loooong process. Just the debt repayment process alone generally takes a year or two, but $12k is definitely not the worst debt story I’ve ever heard.

(One of the worst ones I’ve ever heard was a lady that spent $100k in the process of getting a doctorate in creative writing. Now doesn’t that make you feel smart?)

 

[7_Sorrows]

The first line totally made sense, though!

Here’s a list of Dave Ramsey’s Baby Steps for the OP:

daveramsey.com/baby-steps/

There are some items that aren’t in the basic list (make budget, get current with bills, buy insurance, give to charity, buy house), but it gives you a general idea of the correct sequence to follow.

As you can see, this is a loooong process. Just the debt repayment process alone generally takes a year or two, but $12k is definitely not the worst debt story I’ve ever heard.

(One of the worst ones I’ve ever heard was a lady that spent $100k in the process of getting a doctorate in creative writing. Now doesn’t that make you feel smart?)

unless she becomes a famous author!

 

[1990Domer]

DH and I lived and worked in Central Jersey and still have friends there. I know that transportation is mostly geared toward taking commuters into NYC. The state is weird that way.

I worry that you overestimate how much you may get for your car and underestimate how much you’ll save on bus fare now that gasoline prices have come down. Rent, for sure, is a killer. It was when we lived there in the early 1990’s. You can PM me and I can tell you more information openly.

I might be able to help you with more specifics.

God bless. You’re in my prayers.

 

[Xantippe]

DH and I lived and worked in Central Jersey and still have friends there. I know that transportation is mostly geared toward taking commuters into NYC. The state is weird that way.

I worry that you overestimate how much you may get for your car and underestimate how much you’ll save on bus fare now that gasoline prices have come down. Rent, for sure, is a killer. It was when we lived there in the early 1990’s. You can PM me and I can tell you more information openly.

I might be able to help you with more specifics.

God bless. You’re in my prayers.

That’s a very good point about gas prices.

 

[Isle_of_Avalon]

Thank you all very much for your responses. It gave me pause to think carefully about my plan to sell my Honda since I no longer have car loan payments and I fully own it. The advice to not sell the car because I might need it for a possible part time job is a very good point that I didn’t think about until now. Thank you for that. So today I’ve decided to keep my car and look into the alternatives to eliminating debt that you all generously offered, especially checking out Dave Ramsey’s system.

As I said yesterday, the car is really my only mode of transportation for getting around. The township I live in has a bus line that stops at all the malls but it would be a real hassle trying to walk to the bus stop every day because it’s not close to my apartment and I would have another long walk to my office. Plus it would not be safe walking at night after work and in the winter time with some portions along a highway and no sidewalks. I realize now that this would not work out at all.

In answer to PolarGuy’s questions, I’m a single woman, 56 years old, never married and don’t have children. I rent an apartment and I have a steady full time office job as a secretary. All my debt consists of credit cards, department store cards and revolving loans. I neglected to include in my original post yesterday that in addition to the $12,000 debt, I also have an $8,000 personal loan that I’m paying off from an online lender $335.00 each month, from previous debts last year. So the actual total I owe is about $20,000 to eight creditors. I put myself into this hole because of impulse shopping, buying clothes, shoes, furniture and electronics on credit, especially through TV shopping networks, that’s what got me in the trouble I’m in now. I had a decent credit rating up until about a year ago and I accepted many of the credit offers I was receiving. I’ve always been a spender and not a saver and bad with my own finances. All of this is completely stupid on my part and the stress/pressure I’m in now is all totally unnecessary.

I will look into part time work that I could do to bring in additional income and sell some of the stuff I have in the house. I’ll also cut out cable tv and Netflix. I’ll see if I can just pay a reduced bill for internet service without tv. And I’ll also follow the advice of getting rid of the Zipcar membership I recently joined. I agree that was not very smart. I was thinking along the lines of using Zipcar rental cars in the weekends to supplement the daily bus commute if I was going to sell my car. But I won’t be doing that now that I’ve dropped that idea.

Thank you again to all of you. Reading your answers calmed me down and made me realize my present situation is only temporary and not forever. I will do more praying about it too and thank you also for your prayers! God Bless!

 

[Xantippe]

Thank you all very much for your responses. It gave me pause to think carefully about my plan to sell my Honda since I no longer have car loan payments and I fully own it. The advice to not sell the car because I might need it for a possible part time job is a very good point that I didn’t think about until now. Thank you for that. So today I’ve decided to keep my car and look into the alternatives to eliminating debt that you all generously offered, especially checking out Dave Ramsey’s system.

As I said yesterday, the car is really my only mode of transportation for getting around. The township I live in has a bus line that stops at all the malls but it would be a real hassle trying to walk to the bus stop every day because it’s not close to my apartment and I would have another long walk to my office. Plus it would not be safe walking at night after work and in the winter time with some portions along a highway and no sidewalks. I realize now that this would not work out at all.

In answer to PolarGuy’s questions, I’m a single woman, 56 years old, never married and don’t have children. I rent an apartment and I have a steady full time office job as a secretary. All my debt consists of credit cards, department store cards and revolving loans. I neglected to include in my original post yesterday that in addition to the $12,000 debt, I also have an $8,000 personal loan that I’m paying off from an online lender $335.00 each month, from previous debts last year. So the actual total I owe is about $20,000 to eight creditors. I put myself into this hole because of impulse shopping, buying clothes, shoes, furniture and electronics on credit, especially through TV shopping networks, that’s what got me in the trouble I’m in now. I had a decent credit rating up until about a year ago and I accepted many of the credit offers I was receiving. I’ve always been a spender and not a saver and bad with my own finances. All of this is completely stupid on my part and the stress/pressure I’m in now is all totally unnecessary.

I will look into part time work that I could do to bring in additional income and sell some of the stuff I have in the house. I’ll also cut out cable tv and Netflix. I’ll see if I can just pay a reduced bill for internet service without tv. And I’ll also follow the advice of getting rid of the Zipcar membership I recently joined. I agree that was not very smart. I was thinking along the lines of using Zipcar rental cars in the weekends to supplement the daily bus commute if I was going to sell my car. But I won’t be doing that now that I’ve dropped that idea.

Thank you again to all of you. Reading your answers calmed me down and made me realize my present situation is only temporary and not forever. I will do more praying about it too and thank you also for your prayers! God Bless!

1. With the additional info about your age and gender, I am even more eager for you to keep the car. I was for some reason imagining that you were a 25-year-old guy, rather than a 50-something lady. Keep the car–unless you have no other choice.

All you have to do is fall on ice and twist or break something and you’d be in a world of hurt.

1. From past experience, I would encourage getting rid of the small department store loans as soon as possible–they create stress far in excess of their size, just because of the hassle of keeping track of them. One of the best things we did when we were paying off our debt 8 years ago was to kill the department store accounts. When they tell you 15-20% off your purchase if you take one out learn to say NO. I haven’t carried one recently, but as I recall, they tend to have 30% interest.
2. I think you may need some sort of counseling or support group because it sounds like you have been engaging in “retail therapy”. I checked online and I see there is a group called Spenders Anonymous and Debtors Anonymous. So poke around–you may be able to find IRL or online support.

(No judgment here–I did a lot of retail therapy when my oldest kids were little.)

A Dave Ramsey Financial Peace University course might also provide you accountability and support. (They do small groups.)

There are also a lot of good personal finance blogs with good comment sections.

1. Start putting some obstacles between yourself and purchases. Stop buying things the first time you see them.

If you like something, put it on a list or in your Amazon cart for later or plan to come by and see if it goes on sale. Let yourself cool off.

I’m also a natural spender, and I keep long, long lists with stuff I’m interested in. As money appears, I consult my list and it helps me figure out what our priorities are.

The trick is to de-impulsify spending.

1. Make a budget. Stick to it.

Consider an envelope system.

1. No more TV shopping networks! Make shopping lists! Buy the stuff on the list!

Good luck!

 

[pensmama87]

Even though you’re unlikely to get what you paid for them, one “benefit” of your debt is that you probably still have many of the items you bought on credit. Check out Craigslist or sales groups on Facebook to get rid of unnecessary items - depending on condition even clothing can be sold for much more than you’d get at a garage sale, and unlike eBay there’s no worries about shipping.

 

[Xantippe]

Selling stuff is good for at least two reasons:

1. you’ll get money
2. you’ll realize that most of your stuff lost 90% of its value when you walked out the door of the department store or opened the box.

I personally found #2 very chastening. It was like aversion therapy for shopping.

But please be careful about how you go about selling stuff. I sold a lot of stuff off of my front porch back in the day, but I have a lot more concerns about security now.

 

[Xantippe]

I’m not sure about how the seasonality of this works, but it occurs to me that you might not want to sell during the post-Christmas sales period.

But that depends what you’ve got.

 

[pensmama87]

Selling stuff is good for at least two reasons:

1. you’ll get money
2. you’ll realize that most of your stuff lost 90% of its value when you walked out the door of the department store or opened the box.

I personally found #2 very chastening. It was like aversion therapy for shopping.

But please be careful about how you go about selling stuff. I sold a lot of stuff off of my front porch back in the day, but I have a lot more concerns about security now.

Yes - it’s common to meet up in neutral places. It’s a little sketchy feeling to head out to the mall parking lot and say, “So hey, are you the guy who wanted the thing?” but it works out fine. When I have someone pick up something (that needs, say, a truck to transport), I make sure there’s someone else at home.

 

[CradleJourney]

I’m not sure about how the seasonality of this works, but it occurs to me that you might not want to sell during the post-Christmas sales period.

But that depends what you’ve got.

Actually, it can be a very good time to sell stuff depending on what it is. Many people get cash for Christmas, return things for cash or are simply bummed they didn’t get the “X” that they wanted.

Collectibles can be particularly easy to sell right now since collectors held off hoping their SO’s would give them what they wanted - but (in my experience) that rarely happens - so they are eager to go buy whatever it is that makes their world a little more complete.

I’ll also agree that a local FB sale group where you set up meetings in neutral locations is probably the easiest way to sell items.

Side benefit from getting a second part-time job would also be less time to impulse shop as well as directly having more income.

 

[Xantippe]

Makes sense.

Probably not a good time for red sweaters, though!

Actually, it can be a very good time to sell stuff depending on what it is. Many people get cash for Christmas, return things for cash or are simply bummed they didn’t get the “X” that they wanted.

Collectibles can be particularly easy to sell right now since collectors held off hoping their SO’s would give them what they wanted - but (in my experience) that rarely happens - so they are eager to go buy whatever it is that makes their world a little more complete.

I’ll also agree that a local FB sale group where you set up meetings in neutral locations is probably the easiest way to sell items.

Side benefit from getting a second part-time job would also be less time to impulse shop as well as directly having more income.

 

[1ke]

Definitely cut up the credit cards and get some credit counseling. Learn how to make a budget and stick to it. You have a loan to pay off prior loans, that is concerning.

Contact local banks and credit unions to see if they are offering any money management classes, also inquire at the library.

Ramsey’s stuff is good, but Financial Peace Univeristy is another couple hundred you don’t need to spend. Check his books out at your local library and read them.

 

[Deo_Gratias42]

Definitely cut up the credit cards and get some credit counseling. Learn how to make a budget and stick to it. You have a loan to pay off prior loans, that is concerning.

Contact local banks and credit unions to see if they are offering any money management classes, also inquire at the library.

Ramsey’s stuff is good, but Financial Peace Univeristy is another couple hundred you don’t need to spend. Check his books out at your local library and read them.

I wouldn’t cut up all your credit cards. Keep one and freeze it in a block of ice. Some places only accept credit (ie hospital parking lots).

 

[pensmama87]

I wouldn’t cut up all your credit cards. Keep one and freeze it in a block of ice. Some places only accept credit (ie hospital parking lots).

Or get a debit card. I have one tied to my checking account. It has a major credit card logo on it and I can use it exactly like a credit card - the money just comes directly out of the account. I primarily use it for gas (or unmanned parking if I don’t have enough change.)

 

[Burt_Macklin]

Or get a debit card. I have one tied to my checking account. It has a major credit card logo on it and I can use it exactly like a credit card - the money just comes directly out of the account. I primarily use it for gas (or unmanned parking if I don’t have enough change.)

Two major differences that I’ve found that warrant holding onto a credit or charge card.

• it’s very difficult to nigh impossible to rent a car with a debit card.
• You will not get refunded for disputed transactions on a debit card unless the merchant is willing to do so. Sometimes it’s helpful to have a credit card company fight for you rather than having to fight the merchant yourself.

For people who’ve had issues carrying a balance in the past I would recommend getting a charge card that you have to pay in full every month.

 

[Burt_Macklin]

Avalon, one thing that I can’t help but think is that it will take forever to pay off 20k in debt on what you must get paid as a secretary. I would start looking for ways to increase your take home pay. What I’ve seen several women in your circumstances do - and you can decide for yourself if it might work for you - is work as catering crew for the maritime or oil and gas industry. The major advantage is that you’ll make about 40hrs of overtime a week and you’ll be able eliminate the cost of room and board by living in a man camp or at sea. It isn’t for everyone and it may not be for you but it is something you can think about. It can’t be that hard to get hired either because it seems about half of the crew that I meet is either on work release or has an extensive criminal record.

 

[1ke]

I wouldn’t cut up all your credit cards. Keep one and freeze it in a block of ice. Some places only accept credit (ie hospital parking lots).

A debit card or prepaid credit card would work fine for those.

I am not opposed to credit cards, I have one credit card. I suggest cutting up ALL store cards and canceling them. They have extremely high interest rates and the stores bombard you with “savings” for using the cards-- 20% off, $10 off-- knowing people overspend and don’t pay off their balances. That “savings” is no savings.

In fact whenever I shop somewhere and the clerk tells me I “saved” $42 dollars", I say “no, I spent $37 dollars”… That always confuses them. Even the people who work there think of purchases in terms of “saving” rather than spending. A mark up in order to mark down is nonsense.

Reprogram your thinking!!!

 

[Burt_Macklin]

A debit card or prepaid credit card would work fine for those.

I am not opposed to credit cards, I have one credit card. I suggest cutting up ALL store cards and canceling them. They have extremely high interest rates and the stores bombard you with “savings” for using the cards-- 20% off, $10 off-- knowing people overspend and don’t pay off their balances. That “savings” is no savings.

In fact whenever I shop somewhere and the clerk tells me I “saved” $42 dollars", I say “no, I spent $37 dollars”… That always confuses them. Even the people who work there think of purchases in terms of “saving” rather than spending. A mark up in order to mark down is nonsense.

Reprogram your thinking!!!

Reminds me of a joke.

A man comes home to his wife

He says :” Honey, I walked home today instead of taking the bus and saved myself 2 dollars!”

The wife responds: ”You idiot! You should’ve walked instead of taking a taxi. You could have saved 20 dollars!"

 

[pensmama87]

Two major differences that I’ve found that warrant holding onto a credit or charge card.

• it’s very difficult to nigh impossible to rent a car with a debit card.
• You will not get refunded for disputed transactions on a debit card unless the merchant is willing to do so. Sometimes it’s helpful to have a credit card company fight for you rather than having to fight the merchant yourself.

For people who’ve had issues carrying a balance in the past I would recommend getting a charge card that you have to pay in full every month.

I think it depends on the bank. I’ve had to dispute charges twice, with two different banks, and had absolutely no problems. (My husband had one problem with a credit card and that took months to resolve.)

Never had a problem with a rental car, either, though admittedly that’s a rare occurrence.

ETA: As I said before, though, my debit cards have all had a MasterCard or Visa logo on them, so the terms are probably different due to their involvement (I don’t know how because I’ve never had a “plain” debit card although I know they exist). But really, it runs like a credit card any time I use it.