My3sons's Personal Debt Cutters Thread

[My3sons]

Debt Cutters

How much debt do you need to reduce?

$18,307 - in 3/10 not including mortgage ($15,587 as of 7/13)

How did you get in debt?

car loan, using credit, 401K loan

You've accrued debt. What are the main factors that keep you from reducing it now?

We are reducing it, but sometimes fall back into using credit when the bank account gets low.

Have you created a budget?

yes

List your top 5 budget busters?

eating out, impulse shopping, too much miscellaneous shopping (convenience stores)

What is your plan to get out of debt?

stop using cc, pay extra on car loan, stick to budget

List your debt with balance, monthly payment, and interest rates.

Visa $5,200, no min. payment (8.5%) ($4,670)
Car loan $4,969, $200/month (6.5%) ($3,707)
401(k) loan, $8,000, $164/month (3.5%) ($6,983)
cc $227, ($227)

How much will you try to reduce your debt by this year?

$10,000 (in 12 months through 3/2011)

What kind of support do you need from fellow Debt Cutters to help keep you on track?

tips on reducing debt, ideas to produce income for a SAHM.

[My3sons]

These were my figures in March 2010. We took out the 401(k) loan to pay off our Chase card and pay for dirtbike repairs.

[My3sons]

We have about $1,000 in an emergency fund, and had $450 in savings until this weekend. We had to pay for a car repair that was $250. It felt good to use cash vs. credit card like we would have done in the past!
I have been paying down the cc as much as possible and throwing an extra $25-$50 to the car loan in addition to the minimum payment. Does anyone have an opinion about this? Do you think it is a good idea to make extra principle payments to the car loan or just send that extra $25 or $50 to the cc? I feel like I'm making a bigger dent in the car loan than the cc.
We cannot make extra payments to the 401(k) loan. Payoff is all or $164/month.

[ashlea729]

Well you're definitely heading in the right direction by starting this thread. I would say instead of putting $25 or $50 here or there, I'd start with one loan (be it car or cc) and put as much as you can every month. It's snowballing, and it's worked great for me! If you feel like you're making a bigger dent in the car than the cc, maybe you should knock out the car before moving on to the cc and the 401k.

[My3sons]

Thanks for the reply. I have updated my totals in red.

[ashlea729]

You're doing good!

[Spanelli8706]

I agree with ashlea. I'd focus on one debt at a time...the one you're most motivated with, which sounds like the car...and throw all extra money at that. Once it is paid off, move on to the next debt. Good luck!

[ncbrunet]

You should pay the extra to the car loan first because it is the smaller balance of the car and cc bills. It will go away the fastest.

You said you are putting $25-50 extra each month on it..you may want to ask your loan company if you can make small principal only payments at anytime during the month on the car loan. My loan company will allow any amount of payment at other times of the month, marked principal only payment, so if I get several good rebates in, I may send the car loan a $10 or $15 principal only payment. It does not go toward the monthly amount due but it drops the principal before the interest for the next month is figured and really drops the loan.

You should pay only the minimum on the other loans and put everything extra toward the car loan. Once that is gone, pay your credit card as you have been PLUS the full amount of the car payment (since it is already in your budget). That will make the credit card balance go away in a big hurry.

Good luck and keep up the good work,

Marsha

[My3sons]

Totals updated in red.
How much debt do you need to reduce as of March 2010?

TOTAL: $18,307 - ($15,134)

Visa $5,200, no min. payment (8.5%) ($4,548)

Car loan $4,969, $200/month (6.5%) ($3,499)

401(k) loan, $8,000, $164/month (3.5%) ($6,910)

cc $227, ($177)

How much will you try to reduce your debt by this year?

$10,000 (in 12 months through 3/2011)


$3,173 paid!, $6,827 to get to goal

[ashlea729]

O.M.G. You're doing great! :)