Torn as to what to do
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| Fri, 02-25-2005 - 6:31pm |
We have been working hard the past several months to pay down our debt. All we have are 4 credit cards totally just over $22,000. We make monthly payments to the cc of $620. We have been barely making ends meet. We currently have $65 in savings and live month to month on paychecks.
I'm getting a small inheretance sometime in the next several weeks. It's not alot but it's enough to help. Actually it's enough that we could pay off all but $1500 of the cc. That could then be taken care of in the next 2 1/2 months.
But I'm so torn up inside. There is so much stuff that we need. My 4 year old needs a bed, we need to replace a vehicle, I need glasses, dh needs new work boots (his have holes). And I also really want to have some money in savings.
My first thought was to break it into thirds as recommended: pay off 3 cc at $6000 which would leave us the one big one left and then pay the $620 onto that. When I ran it through Quicken we would have it paid in April, 2007. Put $7000 in savings: $2000 in a regular savings and $5000 in money market or something. And then use the remainder to just spend.
But then I thought paying it all off would free up $600 a month to do all of the above.
My stomach hurts I'm worrying about this so much. I don't want to blow this, I want something to show for it.

Pay off all your debt.
you will not know how good you feel, until you do.
All possibilities are unlimited, when you are debt free.
There are no possibilities if you are.
Believe me. Be debt free.
You will see success upon success after that.
If it were me, I would put $5000 into a contingency savings fund, then take care of immediate needs in a frugal and cost-effective way, and then put every other bit of it toward the debt. I'd get the bed, the glasses, and the work boots. But I'd spend as if I didn't have an inheritance. I would not replace a vehicle until it became absolutely necessary.
Just my opinion, but taking care of immediate needs and getting a contingency savings going would be very satisfying, plus you could put a sizeable chunk to the debt as well. :)
Definately pay off the debt; them cut up all but one of the cards. Pay a little more than the minimum on the last $1500; take a chuck of the $620 you would have spent on MINIMUM?? credit card payments and sit down and make a list of all the things you need. Number each item off 1-whatever in order of high priority. Example: 1. work boots 2. new glasses, etc. Figure out what you need right this minute to enhance your earning power. Any work related needs, in other words should take priority. You mentioned that you need to replace one of your cars, and that your child needs a new bed. Does your child need to have a Brand new bed? Or will a good used bed suffice? Do you need to replace a car right away or can you wait and use one car and continue to shop around until you find a good deal? Rather than replace the car, could you get by with just fixing it for now. Take part of the $620 and use it for those immediate things.
The work boots, glasses, perhaps, and then put money away every month for a good used bed and a down payment on a car. It is suprising how, when you really sit down and weigh needs versus wants, how very few true "needs" there really are. Try this, you will probably be really suprised. Once you are completely out of credit card debt, you will have money to put into savvings every month as well. After that last $1500 is paid off, treat your savings account like a regular bill that MUST be paid every month. Change your mindset as savings being a luxury only for those with money to fund it. This is a MUST! People don't save because they have money; they HAVE MONEY because they SAVE! All the best to you!!
Maybe you can get the things you need without spending a lot of money. Do you have a "Shoe Carnival" or a "Payless Shoes" near you? Both of these stores have work boots. Also, unless he needs a very large size or hard-to-find width, work shoes can be found at most discount stores. My Mom used to buy my Dad's size 13, E width steel toe boots at Kmart for years.
For the bed, do you just need a frame, boxspring and mattress? The frame might be found at a Spring/Summer yard sale or a thrift/consignment store. Lots of teens ask for larger beds when they are older, and their twin frames are sold or turned in as donations to thrift stores. For mattresses, look for coupons and deals, or check the newspaper classifieds for deals. Some mattress companies offer free bed frames and delivery! :-D Sheet sets can be found inexpensively at discount stores also. I believe Dollar General stores (here in GA) sell twin sheet sets for as low as $5.00. With the warm weather coming, a heavy comforter or bedspread might not be needed for awhile, and could be purchased as a birthday or holiday gift later.
Hope some of these ideas help. :-D
Pat :-D
As far as the vehicle goes, that's a tougher one. But if you have only a little to pay off after the inheritance, you can buy a vehicle within a few months!
Good luck!
Thank you for your replies. I'm feeling a little better now. Had a good cry and talked to dh. It's just to have struggled for so long and then suddenly see a light at the end of the tunnel is really scarey.
We've decided that we're going to meet with a financial counselor. I've spoken with our Pastor and he's going to help us find a good one. We're also going to pay everything off. My fear comes from all the things that we've needed or wanted for so long and haven't been able to get. I know me and I know that I could very easily run out and just get it all, then we'd be right back where we are now.
There are some things we need. But we've done ok til now so we'll wait just a little longer. My ds has severe cerebral palsy and currently still sleeps in the crib, which is why we need to get him a bed. But it also needs to be something safe for him. We're also going to need a ramp for the house soon. We need a cell phone. There have been several occasions when the teacher or the home health aides have tried to reach me and haven't been able to. Also, we've got two vehicles. A 1990 Dodge Grand Caravan w/ 140,000 miles on it which we bought for $2300 two years ago. And a 1994 Ford Bronco II w/ 240,000 miles, a bad exhaust system, driver's door won't open, rear hatch won't open and CO2 leaks in b/c of the exhaust. I won't let the kids ride in it b/c it's a death trap.
This is why we decided on getting some help. Paying off our debt will free up more than $600 a month. That's a huge amount and it's enough that we need to plan for it.
I'm still scared though.