Credit Card Debt Anyone?
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never had one and not sure if I ever will.0
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Two Words.... DAVE RAMSEY. If you are 20 years old and are having this problem, use the advice everyone else gave you to pay off the credit cards and then read all about what Dave Ramsey teaches and you will have no worries about your future. You are still young, and lots of people make these mistakes when they are young. I did the same thing, Dave Ramsey changed us forever!!! Don't use credit cards either, cash for everything. If you don't have the money to pay cash, YOU DONT HAVE THE MONEY!!! I am sure your family will understand if they don't get an expensive gift for Christmas. After all, the holidays should not be about gifts, they should be about being with family and doing nice things for people and all that jazz
We used Dave Ramsey and paid everything off this year. Paying cash for Christmas this year. As long as you can pay off the credit cards in a timely manner, by all means use them. We cancelled all but one.0 -
Don't have a credit card. I have a thing called savings. Every Wednesday money it taken from my bank account & placed into a high interest savings account. Even while I was not working & could not afford to even save $10 I still had the money transfer over.
It's what normal people do.
Actually no.
I think that's very rare even among people with six figure (and higher) incomes.
It's a good idea but no, not the NORM
Correct.... As Dave Ramsey would say, BROKE is the norm. I don't know about you, but I don't want to be normal.
http://www.daveramsey.com/new/baby-steps/0 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.0 -
Unfortunately personal finance is like weight loss. There is often a lot of denial until the problem gets really bad, lots of special snowflakes, and takes time and dedication.0
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Do you even lift?
Just kidding.
When my wife and I were younger we worked our way into a more affluent circle and location, and of course while trying to keep up the appearance of it all we racked up a pretty hefty sum of debt. I won't even mention because people either freak or just don't believe it. But when we turned 30 I made a commitment to sure up our finances, and that meant a lot more sacrifice and less entitlement. That is, I used the "do I NEED it or just WANT it?" method when purchasing. With Xmas gifts I used the same principle and also set a spending limit. I tried to pay cash as much as possible.
We've been on 99% cash basis for over 10 years. We have had some good fortune along the way, but I like to believe that financial diligence leads to good fortune.
My first bit of advice is, set very low limits on your credit cards so you CAN'T spend a lot. Trust me, if you need more credit you can just call and ask and they will be more than happy to up the limits, but that is ONLY for emergencies. It also protects you if someone steals your card.
Also, even when paying off your cards, make sure you are putting something in savings so you can start moving towards a cash basis. Nothing is sillier than when I see people dropping HUGE payments on cards, but then having no cash saved up for anything new, so they just keep charging things. The finance charges are what kill you so you need to start buying as much as possible with cash. Savings is a discipline that is learned with practice.
The other thing that is important in overall financial responsibility is, learn how much something really costs. A couple cases in point here.
First, I had a friend who was buying a couple Starbucks fancy coffees every day. I was floored by this because she was pretty tight budget wise. She had not really thought about it except that $5.50 wasn't that much for a decent coffee drink. While that may be true when I showed her she spent over $4000 in a year JUST FOR THOSE COFFEES, she started making it at home for the smallest fraction of the price.
A second point is, what might sound like a lot, is NOT a lot of money. In terms of your future, you might think $100,000, $500,000, or $1,000,000 is just a God awful amount of cash. Realistically, you should have $1,000,000 as a goal for retirement. To break that down, if you had that $1,000,000 in a bond fund or something that is paying 6% return, your yearly income is just $60,000 a year. That is a good wage really, but think about what it takes to save up $1,000,000....or $500,000...or just $100,000. Think about it like this: Most people have no issue paying $150/month for a simple cell phone with data. If you were taking that $150 per month and sticking it in savings each month it would take you about 25 years of investing with a 6% return rate to just get to that $100,000. So $150 a month is a LOT of money, but conversely $100,000 in the long term is NOT. If that makes sense.
Bottom line is, just think forward more than the moment and watch the debt.0 -
zero, pay it off each month, use it only to acquire airline miles to fly out of Alaska.0
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Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.
This really isn't fair to assume that people in the early 20 range don't have $$ in the bank, which is kind of what I think you are doing.0 -
I've actually frozen my Visa card in water and stuffed it in the back of my freezer.
Christmas is always rough. This year I got smart about it. I looked into the rewards program through my bank for having a Debit card, my one credit card has rewards points and also my health insurance has an incentive program that allows gives gift cards for doing check ups, flu shots ..etc.. I spent $20 out of my own pocket for Christmas when everything was all said and done.0 -
Pay it off quickly. Compound interest is a bee-yotch, and she's eyeing you quite hungrily.
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
― Albert Einstein0 -
none here, learned my lesson early on... that hole just gets deeper and deeper if you don't watch it...
put your nose to the grindstone, knuckle up and pay it off, no going out, no splurging, get it paid off and don't go there anymore ... family will understand that you can't.. if they can't, then that's thier issue. write a nice letter or card telling them how much you appriciate them and their help. There will be plenty of time to pay back when you're on top in life.
side note, Mint is a good program, but I prefer Quicken. Main reason is that it allows me to budget for the future... for example if it is the 3rd of the month and I have a bill do on the 15th, I can input that into quicken to allow me to "pre spend" the money to see what I will have left until next payday.
from what I've found Mint doesn't allow you to "budget" like that.. Am I wrong? anyone found this.0 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.
This really isn't fair to assume that people in the early 20 range don't have $$ in the bank, which is kind of what I think you are doing.
That isnt what they were doing. However, it is true for many.0 -
Most banks have a Christmas fund program that I have used for years. It automatically puts aside whatever amount you choose to a savings account that can be used for the holidays. I recommend that!
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If you do some deep research into this you will find that that's simply not true. You don't need to carry a balance to raise your score. You don't get extra points for interest paid. What matters are the monthly balances that creditors report to the credit bureaus. These balances can be captured at any time during your credit card cycles. These balances are weighed against your available credit, and this debt-to-credit-limit ratio, or utilization, makes up about 30 percent of your FICO score, the most widely used scoring formula.
Why would I be incentivised with a higher credit score for agreeing to the penalty billing cycle interest? Answer: You are not.
Pay you balance in full. Don't pay interest if you don't have to.
Can you cite your source because when I was in the process of rebuilding my credit not only my financial officer but TransUnion, & Experian (2 of the 3 main credit bureaus) advised this on their own websites as well when I was a member.... or has this changed over the years?
They take snapshots when reporting your credit, if you pay it in full or leave a little doesn't change much for them, they just want to get a feel to your riskiness based on how much you have available and how much you are taking. The FICO nor the Vantage don't look into how much interest the company is making from you but how much they give you and you give them back.
The link below shows some of the break down but you can research it more if you are interested in the subsections. Remember a banker can easily red flag you for absolutely no reason and mess up your score, which requires a ton of work to fix sometimes.
http://www.bankrate.com/brm/news/debt/debtmanageguide/vantage-scores2.asp?caret=400 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.
LOVE this LOL 0 -
My wife and I have done this for years:
**Decide now what you are going to spend on gifts in 2014 (ie: $2000)
**Open a savings account
**Go to your HR dept and set up a split for your automatic payroll deposit (in this case, $167/mo; or about $77/paycheck if paid biweekly)
*** Catastrophic event in November costs you $2000.
***Pay CASH for catastrophic event from your emergency fund.
**Enjoy paying for all your gifts with cash!
Fixed it for you.:laugh:
Fixed again
I am liking you more and more.
How YOU doin?? :flowerforyou:0 -
That was/is my wife (except she likes her candy too). I wish I could tell you its easy to overcome. I mainly resolved the problem it put on the family by outearning her spending. She still has the issue though and discusses how she regularly needs to stop at Sephora to get her fix when she is feeling stressed. Might need a little ACTUAL therapy...
it's an ACTUAL legitimate problem I have. I remember 3 years ago- I had nothing- I was eating beans and rice and on partial unemployment and I bought a scarf and a pair of shoes. I called me mom in tears. I had immediate guilt over it- but I did it anyway.
Now I mostly have a hard time avoiding ULTA- ulta is the devil. I can't go in Sephora- it would be like instant death- like the guy who just threw himself over the railing in China about his girl's shoe problem.0 -
I've actually frozen my Visa card in water and stuffed it in the back of my freezer.
Christmas is always rough. This year I got smart about it. I looked into the rewards program through my bank for having a Debit card, my one credit card has rewards points and also my health insurance has an incentive program that allows gives gift cards for doing check ups, flu shots ..etc.. I spent $20 out of my own pocket for Christmas when everything was all said and done.
this does not solve Amazon- and on line shopping
seriously.0 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.
This really isn't fair to assume that people in the early 20 range don't have $$ in the bank, which is kind of what I think you are doing.
Well, if there HAD been $$ in the bank, then there wouldn't be 2G's in credit card debt.0 -
No, because having an emergency fund simply increases the number of emergencies that will occur. Do you even Murphy?My wife and I have done this for years:
**Decide now what you are going to spend on gifts in 2014 (ie: $2000)
**Open a savings account
**Go to your HR dept and set up a split for your automatic payroll deposit (in this case, $167/mo; or about $77/paycheck if paid biweekly)
*** Catastrophic event in November costs you $2000.
***Pay CASH for catastrophic event from your emergency fund.
**Enjoy paying for all your gifts with cash!
Fixed it for you.:laugh:
Fixed again0
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