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Old 11-14-2006, 05:22 PM
gusmahler gusmahler is offline
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Join Date: Jul 2005
Location: Northern California
Posts: 4,799
Default Re: Tackling debt....Dave Ramsey...Suze Orman....others?

I am currently using the snowball method to get rid of debt.

http://en.wikipedia.org/wiki/Debt-snowball_method

It was tough at first to live below the way you used to live. But once the first credit card was paid off, I all of a sudden had a lot of extra money at the end of each month. And I've paid off two other cards in no time.

If you don't want to click the link: here's snowball in a nutshell.

Let's hypothetically say you have 5 credit cards each with a minimum payment of $100. You have $600 to spend on debt reduction. So you send $100/month to each of the cards except for one. You send $200/month to that one. After the first one is paid off, still spending the $1000/month on debt reduction, you can send $100/month to 3 credit cards and $300/month to the other card.

By the time you're on your last card, you're sending a lot of money to that card and getting rid of the debt.

The hardest part is reducing your spending. Previously, I'd send the minimum to all my cards, then I'd look in my bank account and see I have a bunch of money left over, so I'd buy stuff I didn't need.

Now, I just set up automatic payment. The same day I get the direct deposit from my employer, I send a set amount to the credit card companies. Now, I don't have extra money in the bank account, yet I'm still paying off debt.
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