Getting Out of Debt in 2009 - What are your financial plans?

[MrsPinecone]

Since this kind of fizzled in 2008, I thought we could get a jump on 2009!

Tell us your plans!

[joannemturner]

I read about another poster last night who used the snowball method of getting out of debt and I was amazed! I sat down, recorded all our debt (not including cars and house) about 14,000 which is totally overwhelming for me to even think about and I figured we could be debt free by Dec 09. That is my plan. To stick to the plan I am going to put my debt $ in my sign of HCW, update it twice a month so that I can see the progress.

[MrsPinecone]

Duh, forgot to add mine.

For 2009, our only debt will be the mortgage and whatever medical bills we have from the birth of this baby.

We're planning to cut down the mortgage by adding 1/12th of a payment extra to each payment that we send in. One extra payment a year can cut over 5 years and $13,000 in interest off the life of the loan.

And since the hospital will do an interest free payment plan, we'll just double up on payments there, too.

[latamama]

Wow ok this is a scary number to me, not including home mortgage's (3 of them) we have 32,000 in debt. House one is only mortgaged in our name for my mom our 2009 goal is to get that debt out of our name and into hers, home 2 is our house we live in and we owe 105,000 and house number 3 is going to be used as a rental and we are paying cash for it and will be putting even more debt onto our credit cards. I would Love to say I can have this all paid off by this time next year but I am not sure we can do that. But we can try to get rid of our credit debt and move onto working on paying off the house next year. Good luck to everyone.

[turtlegirl115]

I'm embarrassed to admit it but w/o mortgage or cars, our debt is $26K. We are trying hard to use the snowball approach and have made a little progress. I finally talked to my husband and showed him the real numbers on paper. I should have done this a long time ago because it was such a burden to me. I didn't want to bother him with it but I think he's glad I did. Now we can work together more diligently as a couple. We have baby #1 due in April and need to work HARD to get some stuff paid off or I fear we will struggle with all of the added expenses that come with a baby. We are planning to sit down this weekend and create a specific plan so I will update later.

[neelia]

I've got about $14k right now, not including my car which is another $8k or so.

Just got laid off. Nice huh? I used a snowball debt calculator and at $500 a month (which is the MINIMUM i want to spend on CC debt) I'll get it paid off in 3 years. AH.

[Socsay36]

All we owe as of today is 10,999. We were looking at Feb. as our debt free month, but hubby will be laid off coming in the next few weeks. So now it is up in the air. We're squeezing everything we have to pay this off. I try not to get down about it, but it is hard not to. We been actively paying off debt for three years now, but it is kind of hard too when hubby gets laid off every winter and this upcoming lay off looks permanent.

[nancy_p]

can you share with me the snowball information that you all are speaking of?

[panthermom]

To snowball: Take all of your debts and list them smallest to largest. pay the minimum on all of the debts except the smallest. Put all money you can find and pay down that smallest debt. When it gets paid off, take the amount you used to send to the now paid off smallest debt and send it to the next one on your list.

Example:

CC #1 owe 1000 min payment $25
CC #2 owe 1200 min payment $36
CC #3 owe 2000 min payment $55
Car #1 owe 12000 min payment .....

All extra money goes to CC 1. When it is paid off, add that $25 (plus anything else you can come up with) to CC 2. Minimum payment (w/ snowball) would be 25 +36 = 61. That would be what you would pay until it is paid off. Still paying only minimum for the others down the list.

Then you would add that 61 to the 55 for CC 3. Your snowball would now be 116 towards CC3.

It really does get moving. Snowballing is super.

Of course, it works better if you have an emergency fund of $1000 so that if something goes wrong you don't have to use the CCs that you are never going to use again! It also helps if you have a budget and use cash envelopes.

[panthermom]

Dave Ramsey is the way! check out daveramsey.com.