Comments on: should i use my savings to pay off most of my credit debt? http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/ Eliminate Your Debt From Credit Cards Fri, 18 May 2012 07:33:07 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Sigma http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/comment-page-1/#comment-767 Sigma Fri, 01 Jan 2010 02:11:25 +0000 http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/#comment-767 Heather's answer above is right. Keep $1000 in your account. This now becomes you mini emergency fund. Take the rest and pay off debts. List all of your debt smallest to largest on a piece of paper. This includes cards, student loans, car payments etc. Pay the minimum to everything except the smallest. Now, throw every dime you can find at the smallest debt or debts and get rid of them. Cut up your credit cards and use cash or debit for everything from now on. Stop using the cards. The next month, cross off anything you have totally paid off and make your debt list again in the same manor. Now, pay minimums to everything except the smallest. Put every extra dollar towards the smallest. This is called the debt snowball method. Do not worry about which one has the highest interest rate or what ever, just keep knocking the smallest ones off first. This gives you a sense of accomplishment and you will feel great once you start seeing fewer and fewer bill arriving each month. When all your debts are done, fully fund an emergency fund of 3 - 6 months of living expenses. This will be a lot easier to do once you get rid of all the debts you pay every month now. Now start investing in Roth IRA's and 401k's through your employer. There are a few more steps down the road like paying for kids college and paying off the house and stuff. Anyway, this is a plan calle the Total Money Makeover.Please read a bood by the same title by Dave Ramsey. It will change the way you look at money for the rest of your life. My wife and I ran across it about 6 months ago and we have not been the same since. We have stopped using credit cards completely, paying off massive amounts of debt every month and have our investments moving in the right direction. This is not a get rich quick scheme or you don't have to buy/sell stuff or anything like that. Well you have to buy the book. (or go to the library) It is just good old common sense financial stuff that your granparents would tell you. It is amazing how much of a change there has been in our finances. Now, it is not easy but definitely worth it. You have to change your spending habits. No more bars, restaurants, movies, vacations etc. until the debt is knocked out and you save and pay cash for them. You have to get mad a your debts and the guy in the mirror for getting you there. After reading the book, I looked in the mirror and saw a huge idiot looking back. No more useless spending on useless stuff. Your new favorite word will be NO. I know you think this sounds impossible. I thought the same thing at the start. Now we do not do anything that is not budgeted for and are winning the battle against our debts and stupidity. I hope you can find the same inspiration my wife and I have found in this plan. It will help set you up for life. Good Luck. I wish you all the best. Heather’s answer above is right. Keep $1000 in your account. This now becomes you mini emergency fund. Take the rest and pay off debts. List all of your debt smallest to largest on a piece of paper. This includes cards, student loans, car payments etc. Pay the minimum to everything except the smallest. Now, throw every dime you can find at the smallest debt or debts and get rid of them. Cut up your credit cards and use cash or debit for everything from now on. Stop using the cards. The next month, cross off anything you have totally paid off and make your debt list again in the same manor. Now, pay minimums to everything except the smallest. Put every extra dollar towards the smallest. This is called the debt snowball method. Do not worry about which one has the highest interest rate or what ever, just keep knocking the smallest ones off first. This gives you a sense of accomplishment and you will feel great once you start seeing fewer and fewer bill arriving each month. When all your debts are done, fully fund an emergency fund of 3 - 6 months of living expenses. This will be a lot easier to do once you get rid of all the debts you pay every month now. Now start investing in Roth IRA’s and 401k’s through your employer. There are a few more steps down the road like paying for kids college and paying off the house and stuff. Anyway, this is a plan calle the Total Money Makeover.Please read a bood by the same title by Dave Ramsey. It will change the way you look at money for the rest of your life. My wife and I ran across it about 6 months ago and we have not been the same since. We have stopped using credit cards completely, paying off massive amounts of debt every month and have our investments moving in the right direction. This is not a get rich quick scheme or you don’t have to buy/sell stuff or anything like that. Well you have to buy the book. (or go to the library) It is just good old common sense financial stuff that your granparents would tell you. It is amazing how much of a change there has been in our finances. Now, it is not easy but definitely worth it. You have to change your spending habits. No more bars, restaurants, movies, vacations etc. until the debt is knocked out and you save and pay cash for them. You have to get mad a your debts and the guy in the mirror for getting you there. After reading the book, I looked in the mirror and saw a huge idiot looking back. No more useless spending on useless stuff. Your new favorite word will be NO. I know you think this sounds impossible. I thought the same thing at the start. Now we do not do anything that is not budgeted for and are winning the battle against our debts and stupidity.
I hope you can find the same inspiration my wife and I have found in this plan. It will help set you up for life.
Good Luck. I wish you all the best.

]]> By: doreen k http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/comment-page-1/#comment-766 doreen k Wed, 30 Dec 2009 11:26:51 +0000 http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/#comment-766 Do not use any savings right now to pay off debt unless you already have at least six months, and preferably twelve months, expenses set aside. Unemployment is very high right now and expected to get worse in the short term. In these challenging financial circumstances, it is far more important to have cash on hand than to pay off your credit card debt from savings. Keep paying the $300 per month, that is great! But also keep building your savings until you have a safety cushion in case you lose your job. Do not use any savings right now to pay off debt unless you already have at least six months, and preferably twelve months, expenses set aside. Unemployment is very high right now and expected to get worse in the short term. In these challenging financial circumstances, it is far more important to have cash on hand than to pay off your credit card debt from savings.

Keep paying the $300 per month, that is great! But also keep building your savings until you have a safety cushion in case you lose your job.

]]> By: HEATHER http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/comment-page-1/#comment-765 HEATHER Tue, 29 Dec 2009 20:51:11 +0000 http://www.reducecreditcardbills.com/credit-cards/should-i-use-my-savings-to-pay-off-most-of-my-credit-debt/#comment-765 Keep $1000 in savings for an emergency. Send the rest to pay off cc and keep making your $300 payments until it is paid off. Then build up your emergency fund to about 6 months of living expenses. Keep $1000 in savings for an emergency. Send the rest to pay off cc and keep making your $300 payments until it is paid off. Then build up your emergency fund to about 6 months of living expenses.

]]>