Where to begin??

iVillage Member
Registered: 08-03-2009
Where to begin??
6
Mon, 08-03-2009 - 7:04am

Hey all!


I am about to embark on reducing my debt and pulling my head out of my proverbial arse but would appreciate some solid "start here" suggestions from all of you.

Be the Change you wish to see in others.
iVillage Member
Registered: 07-05-2006
Mon, 08-03-2009 - 8:15am

The best way to begin is to figure out where your money is actually going. You have to start logging in every penny you spend. You can save your receipts in a box or jot things down in a notebook as you go, but you will most likely be surprised (as we all were) about where your money is going. I, for one, found out that I was spending around $500 dollars a month on eating out. I always knew that we ate out a lot, but I never would have guessed we spent that much.

The next thing you can do is figure out how much your spending on your bills, what your interest rates are on all your credit cards and the total amount of what you actually owe. Knowledge is power even if it sucks finding out! This helps you see if there are any bills you can either eliminate or reduce and which card to start with first. I switched auto insurance and changed my cell phone plan and saved approximately $500 a year (most likely more).

These are two easy things you can do to start.

iVillage Member
Registered: 08-04-2008
Mon, 08-03-2009 - 9:19am

I agree with Abbie, follow your money for a month to see where it is going.
While doing that, write down all expenses by category, and don't forget bills that come in quarterly or annually. Start with housing first (include taxes, insurance) transportation costs, food, healthcare, then go to debts.
Look at your total financial picture now, and start with getting an emergency fund together of at least $1,000 in a place you can get to it within 24 hours, but not too easily. Mine is in a savings account and also provides overdraft protection to my checking account, that I don't seem to have to use anymore since working harder on debt reduction.
Then develop a zero balanced spending plan, which means knowing where every penny of your money is going on every paycheck or every month. I do have a template in Excell I have created if you want it.
I have used cash since I started my debt reduction, I take out $80 a pay for gas, $200 for groceries and $100 for spending each two week pay check and make sure I only use that as my spending money. I no longer use a debit card or credit cards. Honestly feeling your money move through your hands makes it much harder to spend money you do not have.

I know, too much information, but stay with us all here, ask questions and you can get all the support you need for FREE! We love FREE!

-Marie




iVillage Member
Registered: 04-10-2003
Mon, 08-03-2009 - 10:27am

I agree with the PP's. They have given you great advice.


I would also add that you need to keep track of bills that aren't regular and put them into your spending plan. I have several free ING accounts that are set up for that reason (car repairs, licence plate renewal etc).


Good luck and post here often. The ladies here have a great ideas and suggestions for trimming the fat if you feel like posting your numbers!


Good luck to you!


Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."


Bex -

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 08-03-2009 - 11:04am

Hi there and thanks for posting. In addition to tracking your spending, it's definitely worthwhile to create a chart of your current bills. Know where you stand with all your statements this month. Then keep tracking them every month to see your progress. I only focus on one bill at a time, paying everyone the minimums due except for the one bill I focus on.

The other big "start here" pointer is to absolutely stop using any and all cc's right this minute. As soon as you commit NOT to use the cards, the balances have nowhere to go but down.

Keep posting here - it's a tremendous source of inspiration and motivation. These women are tremendous!

All my best,
Danni
cl-phocid, Debt Support Group



All my best,
Danni

iVillage Member
Registered: 08-03-2009
Mon, 08-03-2009 - 11:48am

Ladies,


First, let me say, you have already been a source of inspiration to me. I look at the debt tickers and think HOLY NUTS!!

Be the Change you wish to see in others.
iVillage Member
Registered: 11-17-2007
Mon, 08-03-2009 - 12:20pm

My advice is.


Study your credit card statements. You would be surpised on how much people do not pay attention to their statements.


Credit card interest is charged on a daily balance starting the day after the month's closing date. If you pay extra to that bill the day after your closing date you will save interest the next month and all the months after that. Depending on your rate it could mean as much as a couple of dollars a month which is like 25.00 a year going into your pocket not the banks.


Second check out the difference between what is your true balance "On Top" and the balance they are figuring interest on. "On the Bottom" In one case for me there was a 800.00 difference More at the bottom they were charging me interest on. I moved that money out to a different credit card.


Also don't be afraid of change. If you get a better deal at the credit union or a different bank down the street move your account. Same goes for the debt.