Comments on: Get Financially Fit in 2010: Trim Away Your Debt http://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/ Personal Finance Blog, Your Guide to Financial Fitness Fri, 10 Feb 2012 01:50:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Laurenhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-8469 Lauren Sun, 24 Jan 2010 19:37:08 +0000 http://www.moneycrashers.com/?p=1744#comment-8469 I used the pay-the-lowest-balance method to pay off my debt. It worked for me because of the very reasons mentioned above. I liked the feeling of accomplishment I felt when I paid off one card. I became more motivated to pay off the next card. I paid everything off in less than a year. I used the pay-the-lowest-balance method to pay off my debt. It worked for me because of the very reasons mentioned above. I liked the feeling of accomplishment I felt when I paid off one card. I became more motivated to pay off the next card. I paid everything off in less than a year.

]]> By: Seanhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-8323 Sean Wed, 20 Jan 2010 03:31:33 +0000 http://www.moneycrashers.com/?p=1744#comment-8323 If you are in debt and have good credit still it may be worth looking for a promotional rate credit card with free balance transfer. I know these are hard to find these days, but this really helped me out. I was able to consolidate all my balances to a 0% card and then put all my credit cards in a locked drawer including the one with the balance (didn't want to take the credit score hit of closing them). This way I had one bill to attack and I wasn't racking up any new debt. I've been debt free for about 4 years now and still budget and use my credit cards just for the rewards. Good luck to anyone still in the hole, it's possible to get out! If you are in debt and have good credit still it may be worth looking for a promotional rate credit card with free balance transfer. I know these are hard to find these days, but this really helped me out. I was able to consolidate all my balances to a 0% card and then put all my credit cards in a locked drawer including the one with the balance (didn’t want to take the credit score hit of closing them). This way I had one bill to attack and I wasn’t racking up any new debt. I’ve been debt free for about 4 years now and still budget and use my credit cards just for the rewards. Good luck to anyone still in the hole, it’s possible to get out!

]]> By: Dale Wyrickhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-8143 Dale Wyrick Thu, 14 Jan 2010 13:50:28 +0000 http://www.moneycrashers.com/?p=1744#comment-8143 @Stephanie, Sounds like your on the right track balancing the two. Many people find student loans and mortgages as "okay" debt (if there is such a thing.) A few points to consider, 1. How soon are planning on buying a house? 2. Do you have any other debt, i.e. credit cards, auto loans? If all your other debt is paid off and you plan to buy in the near future (less than 2 yrs), you will have more considerable savings and financial stability if you save for a down payment and continue to make payments on your student loan. Outside of that scenario, continue to improve your financial situation by quickly paying down your debt. Home ownership will be easier if you are not saddled with other large debts. @Stephanie, Sounds like your on the right track balancing the two. Many people find student loans and mortgages as “okay” debt (if there is such a thing.)
A few points to consider, 1. How soon are planning on buying a house? 2. Do you have any other debt, i.e. credit cards, auto loans?

If all your other debt is paid off and you plan to buy in the near future (less than 2 yrs), you will have more considerable savings and financial stability if you save for a down payment and continue to make payments on your student loan.

Outside of that scenario, continue to improve your financial situation by quickly paying down your debt. Home ownership will be easier if you are not saddled with other large debts.

]]> By: Stephaniehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-8135 Stephanie Thu, 14 Jan 2010 05:34:32 +0000 http://www.moneycrashers.com/?p=1744#comment-8135 The one problem I have right now is that I've lost momentum. Back when my student loans were at 8% interest, I was super gung ho about paying them down. Now that the rates have dropped to ~3.5%, I'm less frantic to pay them down. The thing I'm trying to balance my debt reduction is saving money for a down payment. I know that mathematically, my total debt load will be less if I pay down my loans, but at the same time, I'd like to have the money to pay 20% down on a down payment for a home. I'll still be paying my student loans for quite some time, but the payments are very manageable, so I'm not going to be scrounging for money if I have a mortgage on top of my student loans. Wow, anyway, does that make any sense? I'd pay my loans off quicker if I felt that I could have enough for a down payment by the time I want to buy a house. Thoughts? The one problem I have right now is that I’ve lost momentum. Back when my student loans were at 8% interest, I was super gung ho about paying them down. Now that the rates have dropped to ~3.5%, I’m less frantic to pay them down. The thing I’m trying to balance my debt reduction is saving money for a down payment. I know that mathematically, my total debt load will be less if I pay down my loans, but at the same time, I’d like to have the money to pay 20% down on a down payment for a home. I’ll still be paying my student loans for quite some time, but the payments are very manageable, so I’m not going to be scrounging for money if I have a mortgage on top of my student loans.

Wow, anyway, does that make any sense? I’d pay my loans off quicker if I felt that I could have enough for a down payment by the time I want to buy a house.

Thoughts?

]]> By: Elizabeth Ihttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-8089 Elizabeth I Wed, 13 Jan 2010 09:18:51 +0000 http://www.moneycrashers.com/?p=1744#comment-8089 I definitely agree on the building the savings before paying down the debt. However, most people have poor budgeting. The look at their paycheck as the "budget". People need to look at their receipts as a starting point. Do most people know how much they spent in groceries in December? They should. Creating a budget can be daunting, especially in the beginning. However, once you get started it does not change that much. I definitely agree on the building the savings before paying down the debt. However, most people have poor budgeting. The look at their paycheck as the “budget”. People need to look at their receipts as a starting point. Do most people know how much they spent in groceries in December? They should.

Creating a budget can be daunting, especially in the beginning. However, once you get started it does not change that much.

]]> By: Ginahttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7376 Gina Fri, 08 Jan 2010 01:12:26 +0000 http://www.moneycrashers.com/?p=1744#comment-7376 I am definitely on the Dave Ramsey bandwagon. I find that when I start to get off track with my savings, if I listen to one of Dave's podcasts, I get reenergized to focus on my savings goal. I am definitely on the Dave Ramsey bandwagon. I find that when I start to get off track with my savings, if I listen to one of Dave’s podcasts, I get reenergized to focus on my savings goal.

]]> By: Karmellahttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7352 Karmella Thu, 07 Jan 2010 20:54:07 +0000 http://www.moneycrashers.com/?p=1744#comment-7352 That's really interesting, I initially felt I would feel the exact opposite - I would be encouraged by paying less interest on the highest interest debt. That last comment makes a lot of sense though - the interest rate savings probably is not so great that it's worth giving up the chance for the milestones of paying off the smaller debts first. I do see that as being a way to have mini-goals within your larger goal. That’s really interesting, I initially felt I would feel the exact opposite – I would be encouraged by paying less interest on the highest interest debt.

That last comment makes a lot of sense though – the interest rate savings probably is not so great that it’s worth giving up the chance for the milestones of paying off the smaller debts first. I do see that as being a way to have mini-goals within your larger goal.

]]> By: Conniehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7330 Connie Thu, 07 Jan 2010 17:58:50 +0000 http://www.moneycrashers.com/?p=1744#comment-7330 I found just having a budget and watching where my money went caused the money to be better behaved...lol. It's like a saying we had while I was working, "Whatever gets tracked, gets done (but not always the way you want)" I found just having a budget and watching where my money went caused the money to be better behaved…lol. It’s like a saying we had while I was working, “Whatever gets tracked, gets done (but not always the way you want)”

]]> By: Erik Folgatehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7332 Erik Folgate Thu, 07 Jan 2010 16:33:53 +0000 http://www.moneycrashers.com/?p=1744#comment-7332 For those of you that mentioned paying off the highest interest rate debt first, here's my take: If all of your debts have a similar balance like $1,500, $2,500, and $3,000, then yes, by all means, go with the highest interest rate first. But if you have 3 debts that look like this: $1,000, $5,000, and $15,000, and you start attacking the $15k one first because it's the highest interest, you'll get discouraged to pay it off quickly because it seems like such a bear and you have a smaller shovel of income to throw at it. If you knock out the $1k and $5k debts first, you'll gain a lot of mental momentum and you'll have more money to put towards paying off the big debt, which will make it go quicker. If you're aggressive with paying off the debt, interest rate savings won't be a significant issue or a big savings, I promise. For those of you that mentioned paying off the highest interest rate debt first, here’s my take: If all of your debts have a similar balance like $1,500, $2,500, and $3,000, then yes, by all means, go with the highest interest rate first.

But if you have 3 debts that look like this: $1,000, $5,000, and $15,000, and you start attacking the $15k one first because it’s the highest interest, you’ll get discouraged to pay it off quickly because it seems like such a bear and you have a smaller shovel of income to throw at it. If you knock out the $1k and $5k debts first, you’ll gain a lot of mental momentum and you’ll have more money to put towards paying off the big debt, which will make it go quicker.

If you’re aggressive with paying off the debt, interest rate savings won’t be a significant issue or a big savings, I promise.

]]> By: Daniellehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7308 Danielle Thu, 07 Jan 2010 05:58:08 +0000 http://www.moneycrashers.com/?p=1744#comment-7308 I'm a big believer in paying the higher interest rate off first, rather than the smallest to the largest. But I'm also reformed financially irresponsible and involved with CCCS. I feel particularly fortunate since I received a year-end bonus and I'm paying off my highest rate card when my payments are taken from my bank account later this month. That will feel like losing a lot of financial weight! Now if I could just motivate myself to get on the elliptical... I’m a big believer in paying the higher interest rate off first, rather than the smallest to the largest. But I’m also reformed financially irresponsible and involved with CCCS. I feel particularly fortunate since I received a year-end bonus and I’m paying off my highest rate card when my payments are taken from my bank account later this month. That will feel like losing a lot of financial weight! Now if I could just motivate myself to get on the elliptical…

]]> By: Mayra Cedillohttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7297 Mayra Cedillo Thu, 07 Jan 2010 04:19:32 +0000 http://www.moneycrashers.com/?p=1744#comment-7297 I was so inspired by the last biggest loser season, that I have started a journal to keep track of food intake and have ordered a body bugg to go to the next step: exercise. So far I've been doing well keeping my calories under 1600 for a month now, and I've noticed that eating more fruits and vegetables makes me feel so good as far as energy and mood goes. Also I've recently discovered craigslist and have sold a few things. Feels good to get some side money. I was so inspired by the last biggest loser season, that I have started a journal to keep track of food intake and have ordered a body bugg to go to the next step: exercise. So far I’ve been doing well keeping my calories under 1600 for a month now, and I’ve noticed that eating more fruits and vegetables makes me feel so good as far as energy and mood goes. Also I’ve recently discovered craigslist and have sold a few things. Feels good to get some side money.

]]> By: Mikehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7295 Mike Thu, 07 Jan 2010 03:16:02 +0000 http://www.moneycrashers.com/?p=1744#comment-7295 Selling things on Craigslist has helped us a lot. The more your debt is from buying gadgets, the more you can recoup. I have also found donating things you can sell to get the clutter out of your house helps to make things feel simpler. Selling things on Craigslist has helped us a lot. The more your debt is from buying gadgets, the more you can recoup. I have also found donating things you can sell to get the clutter out of your house helps to make things feel simpler.

]]> By: CMhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7292 CM Thu, 07 Jan 2010 02:22:54 +0000 http://www.moneycrashers.com/?p=1744#comment-7292 While getting out of debt as quickly as possible is important, I think it's unwise to set aside only $1-2,000 in an emergency fund. If you devote all your savings to paying off debt and then lose your income stream, you'll end up in even more debt than before. Try starting off with one month of expenses, or a minimum of $2,000, and then divide all the extra money you have--half to the emergency fund and half to the debt. Once you have 6 months of expenses saved THEN devote all your extra cash to getting out of debt. That way, if the worst happens (job loss, illness, etc.), you won't end up an extra $20,000 over your head because you have to charge everything to survive for 6 months. While getting out of debt as quickly as possible is important, I think it’s unwise to set aside only $1-2,000 in an emergency fund. If you devote all your savings to paying off debt and then lose your income stream, you’ll end up in even more debt than before. Try starting off with one month of expenses, or a minimum of $2,000, and then divide all the extra money you have–half to the emergency fund and half to the debt. Once you have 6 months of expenses saved THEN devote all your extra cash to getting out of debt. That way, if the worst happens (job loss, illness, etc.), you won’t end up an extra $20,000 over your head because you have to charge everything to survive for 6 months.

]]> By: Stuhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7291 Stu Thu, 07 Jan 2010 02:06:10 +0000 http://www.moneycrashers.com/?p=1744#comment-7291 Debt reduction is somewhat like joining a gym to lose weight, it start good, but after a couple weeks you lose interest because your not see any results. Same way if you start paying off your larges debt first. You lose interest when it doesn't happen over night. Start with your smalls debt and gain momentum Debt reduction is somewhat like joining a gym to lose weight, it start good, but after a couple weeks you lose interest because your not see any results. Same way if you start paying off your larges debt first. You lose interest when it doesn’t happen over night. Start with your smalls debt and gain momentum

]]> By: Lhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7279 L Thu, 07 Jan 2010 00:00:39 +0000 http://www.moneycrashers.com/?p=1744#comment-7279 What about paying off the debt with the highest interest rate first? Wouldn't that save money? It's like having one slice of cheese on your burger instead of 3, for the sake of the dieting comparison. :P What about paying off the debt with the highest interest rate first? Wouldn’t that save money? It’s like having one slice of cheese on your burger instead of 3, for the sake of the dieting comparison. :P

]]> By: Nancyhttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7271 Nancy Wed, 06 Jan 2010 23:40:13 +0000 http://www.moneycrashers.com/?p=1744#comment-7271 A great goal is to be both financially and physically fit! Both take planning, work and discipline, but the goal of dual fitness is worth it! A great goal is to be both financially and physically fit! Both take planning, work and discipline, but the goal of dual fitness is worth it!

]]> By: Cathttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7261 Cat Wed, 06 Jan 2010 23:26:26 +0000 http://www.moneycrashers.com/?p=1744#comment-7261 Debt's like junk food in another way: spending too much, like eating too much, is very much an issue of impulse control, and in either case, you'll keep binging until you decide to take action and don't look back. Debt’s like junk food in another way: spending too much, like eating too much, is very much an issue of impulse control, and in either case, you’ll keep binging until you decide to take action and don’t look back.

]]> By: Erik Folgatehttp://www.moneycrashers.com/get-financially-fit-in-2010-trim-away-your-debt/#comment-7267 Erik Folgate Wed, 06 Jan 2010 22:21:04 +0000 http://www.moneycrashers.com/?p=1744#comment-7267 So true, great point! So true, great point!

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