- Personal Finance
Drowing In Credit Debt
Our lives would be so much easier if we had a never ending supply of money. If only those infamous money trees our parents used to talk about really existed it would be so much simpler. There would be no reason for budgets, unpaid bills, credit card debt, past due notices or the never ending, it's time to pay up phone calls.
As overwhelming a task it was I had to list my car loan, major credit card's, store credit cards and movie club in one column and my balances in the next, then came the interest rates of each, I then contacted their credit departments trying to negotiate either a lower interest rate or a fixed monthly payment. Some of the creditors were easy to work with and tried to give me the best possible deal. When asked why I had been missing my payments I told them straight out that there were emergencies that took precedence over those bills. When my boiler system went it took a little over $10,000 to replace and in the middle of a winter in New England heat takes preference. That wiped me out financially so the beyond the daily living expenses I wasn't able to make my payments. I even had to arrange a fixed payment on others bills like gas, electric, water and sewer. A few of the creditors made arrangements to have the late fees waived and gave me fixed monthly payments. The creditor who held the loan on my car couldn't change my interest rate yet was able to back end the past due payments if I was able to make my payments monthly, no late payments for 3 months. This extended my loan for 6 months. During that time I had to cancel my cable and internet. We would be watching dvd's at home and going to the library to use the internet.
So, I created a chart listing my take home pay, the standard living expenses and the monthly payments. I budgeted my grocery bill to $75.00 per week less if it were possible. I began buying the store brand items which were much cheaper than the name brands. I listed the credit cards and the new payment arrangements that were made. Added my car payment, made a side bar note - no late payments for 3 months.
I then reviewed what I owed to what I brought home and there was no wiggle room. I had to stick to my budget. There would not be any extras. I broke down what each payment was and determined what that would be if I paid weekly. Made a column listing the weekly payments, made a game plan that each Thursday night I would make my payments on line before grocery shopping and what was left over if it was less than $75.00 that was what I had to use. If it was more I could only spend the $75.00 and either make an extra payment if it allowed or put it in the savings account in hopes of building it back up.
I am not completely debt free but have managed to pay off one of my major credit cards, 3 of my store credit cards and have cable and internet back. I still budget on the groceries because the extra junk we used to buy we really didn't need. When budgeting for groceries make sure you check out local flyers, make a list of what each has on sale that you use or need, then make a road map of the stores you will go to and in what order. Also, check out the Sunday paper for coupons, surf the web for sites that provide free coupons and if you have a special brand that you prefer sign up for e-mail notifications and check out their website for coupons and free samples.
Also, if anyone has a credit card that they are in good standings with or may make late payment but still have credit available keep that card active. I found out that if you ever apply for a loan they don't see that you paid off loans, they see your credit score, payment status and what your debt is currently based on your outstanding or current debt.