What do I pay off first cc or Loans

iVillage Member
Registered: 04-17-2003
What do I pay off first cc or Loans
2
Wed, 06-11-2003 - 12:07pm
We have been married for 3 yrs. Have 2 kids 4 and almost 2. He works days I work nights so we dont pay daycare. We live in a two bedrm apt. Tooo small want to buy a home everyone tells us no want to buy a van cars are to small They tell us no. we are about 8,000 total in debt. no carpayments. My question is should we continue to keep making the payment or ask ma and dad for a loan and pay everthing off and pay them. Ma nad dad said it looks better on your credit report if if you keep making payments.At the rate im going I FEEL we will be living here until i retire and im only 26 and he just turned 28. We have 4 bills. Sears one cc and two personal loans. Please help thank you. Angie
iVillage Member
Registered: 03-31-2003
Wed, 06-11-2003 - 2:35pm
Hi Angie,

Welcome!

Since everyone's situation is so different, it's hard for me to say what you should do.

One good tool is to use the Snowballing method here on the debt support group message board. It's a way to target one of your debts, to pay it off faster, then pay the remaining debts off faster too. That way you could start saving for the things you want for you and your family sooner.

What I personally try to do is split everything three ways: after living expenses, 1/3 of my paycheck goes to debt, 1/3 gets spent on my 'wants' list (mostly things for my old house or my hobbies), 1/3 goes into savings. That way I'm chipping away little by little at a bunch of things at once so I don't feel like I'm stuck in a tar pit so much. It also encourages me to cut back on my living expenses, leaving me more leftover to apply the Rule of Thirds to ;-)

Since you're part of a team, you and DH would probably want to discuss this together. He may be more comfortable with one or the other idea, or even come up with something better.

Good luck!

Lee Ann

www.werenotafraid.com

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Wed, 06-11-2003 - 9:51pm
I really like this methodology - you're covering all your bases rather than just one. The "1/3 Method" :)

Smart!

Danni

All my best,
Danni