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OP I like the spirit of what you're trying to do here. Posting these updates can keep you feeling motivated and can keep you "accountable" in a sense...but not if you lie.
Failing to put in the balance of a card with the rest of the list, when you were using it for your car stuff, that is cheating at the game you have created here, even if you eventually mentioned it. Someone mentioned an "addiction" element and there may very well be something to that.
Because it reminds me of the person who tells everyone that they quit smoking or tries to have some kind of accountability by letting other people know, but then buys a pack and just has one in secret when no one is looking, then before ya know it they are back to being a smoker... You have to be careful, the mind games are part of addiction and the struggle of an addict to stop an unhealthy behavior.
And the fact that you probably did not have any other way to get necessary car repairs done...then once they were done, your brain was in "green light- spend!" mode so you charged a few things you admit may not have been necessary...
Look all I'm saying is you need to be honest, not so much with us, we're just people on the internet, but with YOURSELF. Account for ALL of the debt and be honest with yourself about whether you actually have a sustainable way to make real progress on it and make it to the light at the end of the tunnel, or not, and how long it's actually going to take with your ACTUAL spending needs...no playing fiddly with the numbers, leaving off some accounts or leaving out some likely expenses or estimating more pay than you're likely to be able to earn without killing yourself. Because as much as you seem to be dead set against the idea of bankruptcy, it is there for a reason. For when you are so deep in the hole, for whatever reason, that getting out just is not practical or realistic.
I say this, because if you were to decide to do it, you are much better off pulling the trigger sooner rather than later on that decision. The sooner you do it, the sooner you can rebuild.
I had to declare bankruptcy once myself, after a tumultuous divorce. I have always been very proud of my good name, my hard work to manage my finances responsibly...it all went to hell in under two years because life went so totally sideways. Nothing was in my control anymore for a little bit there. And I tried so hard for about a year after the divorce, to juggle and game my debts, to try and shift them around to save on interest and use this to pay that and...I played that game for a while. I did not want to give up. But eventually I sat down and got HONEST with my numbers and realized how many years I'd have to spend working so hard on it, just like you, working crazy hours and not spending a penny I could avoid... I realized that it would have taken me quite a number of years and that is if nothing unexpected happened, and unexpected things do have a way of happening. And I bit the bullet and went to an attorney.
My credit score went UP after my bankruptcy. I got a new card right away and managed it with great care so as to rebuild my history. Now I use a CC for my spending for the cash back but it is paid in full every month, I have kept my debt and my score in fine shape for years, and the bad marks on my credit from the bankruptcy are starting to drop off. It was the right decision, at that point in time for me.
I don't believe that declaring bankruptcy makes someone a bad person, but you really...REALLY...should need it. Maybe you don't...it isn't for me to say...but you have to evaluate your numbers in a no-BS, no-games, honest manner, before you can know. Make the choice based on logic, not feelings. And, too, sometimes you have to forgive your younger self for making mistakes. No one has a crystal ball.
OP I like the spirit of what you're trying to do here. Posting these updates can keep you feeling motivated and can keep you "accountable" in a sense...but not if you lie.
Failing to put in the balance of a card with the rest of the list, when you were using it for your car stuff, that is cheating at the game you have created here, even if you eventually mentioned it. Someone mentioned an "addiction" element and there may very well be something to that.
Because it reminds me of the person who tells everyone that they quit smoking or tries to have some kind of accountability by letting other people know, but then buys a pack and just has one in secret when no one is looking, then before ya know it they are back to being a smoker... You have to be careful, the mind games are part of addiction and the struggle of an addict to stop an unhealthy behavior.
And the fact that you probably did not have any other way to get necessary car repairs done...then once they were done, your brain was in "green light- spend!" mode so you charged a few things you admit may not have been necessary...
Look all I'm saying is you need to be honest, not so much with us, we're just people on the internet, but with YOURSELF. Account for ALL of the debt and be honest with yourself about whether you actually have a sustainable way to make real progress on it and make it to the light at the end of the tunnel, or not, and how long it's actually going to take with your ACTUAL spending needs...no playing fiddly with the numbers, leaving off some accounts or leaving out some likely expenses or estimating more pay than you're likely to be able to earn without killing yourself. Because as much as you seem to be dead set against the idea of bankruptcy, it is there for a reason. For when you are so deep in the hole, for whatever reason, that getting out just is not practical or realistic.
I say this, because if you were to decide to do it, you are much better off pulling the trigger sooner rather than later on that decision. The sooner you do it, the sooner you can rebuild.
I had to declare bankruptcy once myself, after a tumultuous divorce. I have always been very proud of my good name, my hard work to manage my finances responsibly...it all went to hell in under two years because life went so totally sideways. Nothing was in my control anymore for a little bit there. And I tried so hard for about a year after the divorce, to juggle and game my debts, to try and shift them around to save on interest and use this to pay that and...I played that game for a while. I did not want to give up. But eventually I sat down and got HONEST with my numbers and realized how many years I'd have to spend working so hard on it, just like you, working crazy hours and not spending a penny I could avoid... I realized that it would have taken me quite a number of years and that is if nothing unexpected happened, and unexpected things do have a way of happening. And I bit the bullet and went to an attorney.
My credit score went UP after my bankruptcy. I got a new card right away and managed it with great care so as to rebuild my history. Now I use a CC for my spending for the cash back but it is paid in full every month, I have kept my debt and my score in fine shape for years, and the bad marks on my credit from the bankruptcy are starting to drop off. It was the right decision, at that point in time for me.
I don't believe that declaring bankruptcy makes someone a bad person, but you really...REALLY...should need it. Maybe you don't...it isn't for me to say...but you have to evaluate your numbers in a no-BS, no-games, honest manner, before you can know. Make the choice based on logic, not feelings. And, too, sometimes you have to forgive your younger self for making mistakes. No one has a crystal ball.
He's paying it down fast enough that I don't think he should consider bankruptcy. If he has to slow it down a bit, that's ok.
But several of us were concerned about him running up debt again (despite the net paydown).
But I think you probably nailed it when you mentioned the addictive quality to either the debt. Not including some of the debt up front is definitely dishonest. And trying to take shortcuts with 401k loans is a terrible idea (goes back to that addictive quality thing you mentioned).
5) Line of Credit = $12,000 ($738 @ 17.24% and $11,262 @ 15.49%)
6) Credit Card 5 = $15,501 @ 0% until 4/24 and then 29.99%
7) Credit Card 6 = $5,359 @ 21.99%
8) Credit Card 7 = $5,239 @ 19.24%
9) Loan 1 = $19,998 @ 9.9%
10) Loan 2 = $17,606 @ 15.99%
11) 401k Loan =14,528 @ 1.5%
12) 401k Loan 2 =8,068 @ 3.1250%
Total Debt = $130,842
Monthly Payments = $2,525 (not including 401k payment)
Monthly Interest = $1,324 (not including 401k interest)
SUNDAY 3/12/23 UPDATE
Quote:
1) My Loan 1 = $20,000 @ 15.99%
2) Her Credit Card 1 = $22,660 @ 0% until April 2024
3) Her Credit Card 2 = $12,200 @ 0% until November 2023
4) My Credit Card 1 = $2,619 @ 19.49%
5) My Credit Card 2 = $20,000 @ 2.9% until December 2024
6) Her Cash Loan = $28,000 @ 0%
7) My 401k Loan 1 = $13,856 @ 1.5%
8) My 401k Loan 2 = $7,763 @ 3.1250%
Total Debt = $127,098
WEDNESDAY 6/7/23 UPDATE
Quote:
1) My Loan 1 = $19,701 @ 9.99%
2) Her Credit Card 1 = $21,760 @ 0% until April 2024
3) Her Credit Card 2 = $5,600 @ 0% until November 2023
4) My Credit Card 1 = $2,513 @ 19.49%
5) My Credit Card 2 = $19,276 @ 2.9% until December 2024
6) Her Cash Loan = $26,500 @ 0%
7) My 401k Loan 1 = $12,774 @ 1.5%
8) My 401k Loan 2 = $7,394 @ 3.1250%
Total Debt = $115,518
SUNDAY 9/3/23 UPDATE
Quote:
1) My Loan 1 = $18,938 @ 9.99%
2) Her Credit Card 1 = $18,860 @ 0% until April 2024
3) Her Credit Card 2 = $0 --- paid off in July 2023 ($12,200 paid off in 4 months)
4) My Credit Card 1 = $2,260 @ 19.49%
5) My Credit Card 2 = $18,215 @ 2.9% until December 2024
6) Her Cash Loan = $25,000 @ 0%
7) My 401k Loan 1 = $11,824 @ 1.5%
8) My 401k Loan 2 = $6,961 @ 3.1250%
Total Debt = $102,058
SUNDAY 12/25/23 UPDATE
Quote:
1) My Loan 1 = $17,999 @ 9.99%
2) Her Credit Card 1 = $6,000 @ 0% until April 2024
3) Her Credit Card 2 = $0 --- paid off in July 2023 ($12,200 paid off in 4 months)
4) My Credit Card 1 = $0 --- transferred the balance to my credit card 2
5) My Credit Card 2 = $18,933 @ 2.9% until December 2024
6) Her Cash Loan = $23,000 @ 0%
7) My 401k Loan 1 = $10,734 @ 1.5%
8) My 401k Loan 2 = $6,461 @ 3.1250%
Total Debt = $83,127
SUNDAY 3/31/24 UPDATE
I paid off the final balance transfer I did on my sister's credit card. Now the only money I owe her is the cash loan.
I did the balance transfer on the debt I added that I spoke about in my last update post and have added it to this update. In order to try to curb my spending I have been keeping track of what I purchase and I think this is helping me to spend less. I'm still using my credit card for my purchases but I have been paying it off fully at the end of the month as to not add anymore debt.
Finally, I am in the process of doing another balance transfer on the 9.99% loan I have to reduce the interest rate.
Here are the numbers:
1) My Loan 1 = $14,319 @ 9.99%
2) Her Credit Card 1 = $0 --- paid off in February 2024 ($22,660 paid off in 11 months)
3) Her Credit Card 2 = $0 --- paid off in July 2023 ($12,200 paid off in 4 months)
4) My Credit Card 1 = $0 --- transferred the balance to my credit card 2
5) My Credit Card 2 = $17,869 @ 2.9% until December 2024
6) Her Cash Loan = $21,500 @ 0%
7) My Credit Card 3 (NEW DEBT) = $7,890 @ 0% until September 2025
8) My 401k Loan 1 = $9,913 @ 1.5%
9) My 401k Loan 2 = $6,082 @ 3.1250%
Total Debt = $77,573
I started this debt payoff journey in January 2023 and so far in 14 months I have paid off $53,269 (not including interest and fees). What an accomplishment!
I'll post a cleaner update of the numbers in April once the balance transfers have gone through.
But seriously, sorry that happened to you. As the other poster said, it sounds like you beat yourself up enough already so no bother in explaining what you did wrong.
Moving forward, I would pay down the highest interest rate debts first, use the snowball method. You sound highly motivated and prepared to face this challenge head on so let the numbers dictate your paydown decisions. Stay vigilant my friend!
Were in a similar situation, and are also following Dave Ramsey's advice. Most of our credit cards are about the same interest rate. We prefer to pay off the smaller ones first. The way I figure it, if a smaller balance is paid off, that's it, unless you run it up again. 30% of zero is zero! However, if you make a large payment on a card with a large balance, but leave a substantial balance remaining, well, the card will just run itself up again by piling interest on the remaining balance! It's compound interest in the bank's favor:rolleyes
Were in a similar situation, and are also following Dave Ramsey's advice. Most of our credit cards are about the same interest rate. We prefer to pay off the smaller ones first. The way I figure it, if a smaller balance is paid off, that's it, unless you run it up again. 30% of zero is zero! However, if you make a large payment on a card with a large balance, but leave a substantial balance remaining, well, the card will just run itself up again by piling interest on the remaining balance! It's compound interest in the bank's favor:rolleyes
But whatever plan works for you
big balance or small balance times the interest rate is the same interest .
only difference between retiring one card over a partial on another is the rate difference between cards .
paying a month more interest on the large card while paying off the small card is no different then paying off a partial on the larger card and paying another month on the smaller card.
it’s total balance times the interest rates.
you want to pay the highest rates off first no matter what the balance on the card is
Last edited by mathjak107; 04-02-2024 at 03:29 AM..
Were in a similar situation, and are also following Dave Ramsey's advice. Most of our credit cards are about the same interest rate. We prefer to pay off the smaller ones first. The way I figure it, if a smaller balance is paid off, that's it, unless you run it up again. 30% of zero is zero! However, if you make a large payment on a card with a large balance, but leave a substantial balance remaining, well, the card will just run itself up again by piling interest on the remaining balance! It's compound interest in the bank's favor:rolleyes
But whatever plan works for you
I can see how paying off your smallest balance cards first might be very motivating in terms of showing progress toward paying off one’s debt. While the mathematics of paying off debt might dictate taking one course of action, it’s not going to matter if one doesn’t keep plugging away and remain focused on the challenge at hand. In the end, the best way to eliminate debt is whatever approach actually would be successful versus the approach that would do it the fastest. Maybe an imperfect analogy is losing weight….a starvation diet might get you to your weight loss goal the quickest if you can stick to it. But if you can’t stick to that approach, trying to lose 1 lb a week over a longer period of time might actually get you to your goal.
Actually I'd pay off small balances just on the chance you get a balance transfer offer on it. As you pay cards off the CC companies start getting more competitive too.
The one thing that you'll unfortunately have to deal with is the stock market has been on a rip roaring run since early 2023. Those are returns you missed out on that you can't replace. Once you get to zero debt you will have to focus on saving more to overcome what you have missed out on in all likelihood.
Once the ball gets rolling, it's like making money.
That is the whole idea of the snowball method. Once you payoff items with small balance you have 1 fewer bills per month. You can use savings to start on 2nd bill.
Doing payoff with credit cards with large interest can get you some breathing room to make progress. With recurring charges may be difficult to get traction. You could get into a rut of treading water.
Eventually, yes, you get more money in your pocket. Then you get to decide what to do with it.
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End of March Update
