Topic : Debt

Hello all,

I'm new to this, but i've been reading some of your issues and i can seriously relate to you.  I'm young and just now getting out on my own.  Last year, i finally got myself out of debt with CC's and that was such a wonderful feeling.  I was able to purchase my first car and start putting money away in savings, Life was finally looking up to me.  Recently, my job transferred me to another location and i had to move to Texas from VA.  That was a very big move for me.  I got a raise in pay, but it's still not enough to make ends meet.  Now, i'm back at living pay check to pay check.  Having to rob peter to pay paul.  I'm really worried that i'm going to fall flat on my face.  I got back into CC debt because I have all of these new expenses that i didn't have before i moved.  Plus TX is very expensive to live in compared to Virginia.  That i did not know when i moved here.  I'm trying to find ways to make some extra money, but with the type of job i have, it's not possible to work anywhere else part time.  Now, i find myself stressed out, crabby all the time, frustrated, and any other emotion that you can think of.  If anyone have any advise for a young female just starting out, i would greatly appreciate it.

I have credit cards as well and one thing I do is when I go to pay my payment each month, I look on my credit card statement at the "finance charge". (it ususally is in a dollar amount). I add the finance charge to my minimum payment and pay it. Sometimes if I have more money, I will pay more towards the credit card. If you dont add the finance charge to your minimum payment, and you just send in the minimum payment you will see an increase in your credit card balance because they will add that finance charge to it. (a creditor told me this). Also I send in my payments at least a week before it is due, due to the mail running late or holidays. If I dont it may get there late and they will add a late charge on it. Another thing I do is whenever I receive a pre-approved credit card notice, if it has a lower interest rate on it, I will transfer one of my higher interest rate cards on to it. I will pay on it until the interest rate goes up (after a certain amount of time) and then I will transfer it to another low interest rate card. There have been sometimes when I didnt have enough money to pay on my credit cards, so I would take a "check" from another credit card company and pay on one of my credit cards if I cant make that payment that month. I make the cards work for me. I always shuffle them around and find ways that make them work for me. I keep some of my credit cards open even though they are paid off  (thanks to another credit card transfer) but some of them I close out once they are paid off so it wont be on my credit report. I try not to do many credit reports from other companies, because the more credit reports you do, it will eventually go against your credit. (A Credit Union told me this). Always look for the lowest interest rate to do a balance transfer. I had one credit card application that was for 0% interest rate and I transfered one of my cards to it. It was 0% up until 8 months then it went to 7.9%, so I transfered it to another 0% interest rate and finally got it paid off. Just wanted to share some of my experiences.

Hi, just wanted to let you know that cancelling a credit card can damage your credit score.  Yes, for real!!!  Suze Orman said it once and then I just read it again in a magazine. 

I'm using Suze Orman's book The 9 Steps to Financial Freedom  to help me deal with my fears.  I've been spending years getting to this point.  One of the reasons I'm so in debt is because of my unhappiness at my job and with my life itself.  But I did manage to do something every so often to help to get to this point in my life.

SInce chosing this goal, I have learned many things:

1. Don't cancel a credit card.
2. If you owe more than 50% of your credit limit, your credit score is effected.
3. You figure out which credit card has the highest financial charge and you go after that first.
4. And that I know nothing about how my credit score is determined and how I'm going to get it back to the high score I had a few years ago.

Well, #2 isn't the highest, #3 has the lowest balance.  #4 means I'm going to have to learn - luckily, I signed up for something called CREDIT OBSERVER when I started to hear so much about theft identity.  It's an insurance type thing and it sends me a quarterly report of my credit report.

Now that I'm focused on this goal, I can now use their service to help me learn.  They have something called "Credit Education Specialists".  And they have a 1-800 too boot. 

My goal is to pay off the lowest balance and then begin tackling the next credit card.

I think that what shocked me the most was that my credit card companies had raised my finance charge %s and I never caught it.  I had one that was at 6.5% and now it's at 11.99%.  It happened to my mom as well and she has another credit card company. 

Have you attempted to track your daily spending? or are you good at that? My goal is to conquer my MINDLESS SPENDING by 10/1/05.  I'm doing rather good.  This was my first month to track my spending and it was surprising to say the least.   I was really off on "ALLOCATING FUNDS" - but it was my 1st attempt and now, I know that I can be more realistic than when I started.  (It's one of the things that Suze wants me to do.)

I know it's a strange goal but I got it from Suze Orman's book that I should be able to handle large amounts of money without having to throw my hands up and turn it over to someone to handle for me.  When I read it, I laughed because HAVEN'T YOU EVER THOUGHT ABOUT WHAT YOU WOULD DO WHEN & IF YOU WON THE LOTTERY.  I have and I realized that if I was going to get past my fears, I was going to have to admit I could win (and yes I'm on the family Lottery Ticket) I needed to be able to face my fears.

I'm just now getting comfortable with acknowledging that I need to understand "investments".  Luckliy, I'm still working Step 3 and Step 4 is wills/trusts and stuff like that.  (I'm doing Suze Orman's 9 Steps book).

But every month I receive numerous magazines and there are at least 1 article I can pull out and review to see where I stand.  It allows me to redefine my goals cause they always have numerous steps.  They also reinforce what Suze Orman said in her book - like tracking my daily spending and setting up a monthly allocation for stuff. 

For those of you who have ever bought a home - do you remember the escrow account the bank setup to make sure you paid your property taxes?  Well, when I was filling out the application to purchase my home, I picked up a brochure on ESCROW - it explained what it was.  I had the greatest financial AHA moment of my life! 

I mean, if the bank took out money every month from my house payment for the escrow account for taxes that were paid twice a year -- THEN WHY COULDN'T I DO THE SAME FOR MY HOUSE PAYMENT, WATER, SEWER, AND OTHER QUARTERLY BILLS/EXPENSES!  So I went home and figured out what I would have to pay for everything.  I included insurance payments -- everything!   I figured out all the expenses (for the 1st year I had to estimate water & sewer) and divided everything by 26 weeks. Then I went to the bank and opened a separate savings account and then had my bank transfer monies into it.

The house payment was so much easier for me to pay because instead of 1 big payment, I was able to split it in 1/2.   Before that, it seemed that 1 check I was POOR and then the next check I was better.

It was hard at first because I didn't have the ESCROW ACCOUNT BUILT UP - like the bank, I had to pay the first couple of months from my check until I got my 6 month car insurance bill and I was able to send them a check.  It took me a while to get myself NOT TO TOUCH the account.

I still do have the ESCROW account and I've added other things too - like vacations and car tags and car emergencies.  The latter isn't much but $10 a month for a couple of months does help me to not charge the full repair on my credit card.