Tackling debt....Dave Ramsey...Suze Orman....others?

[Prelude008]

Congrats on your progress and thanks for the info too. I remember awhile back Oprah had a Debt Diet series and they used the snowball method.

Also, I'm proud to say that because of Cubswin comment earlier..."Do not buy any products because that is most likely the sort of thing the exactly got you into debt... spending money on stuff you really dont need." I managed to stear away from Ramsey's sales team selling me the $80 "debt buster pak" and managed to track down a free copy of Ramseys book at the library - thanks. [img]/images/graemlins/wink.gif[/img]

Thanks for all of the input/links.

[Thremp]

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I would always just pay the minimum to all of them, and then put all my leftover money to the one with the highest interest rate. Wouldn't matter how large or small the balances are.

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There is a reason you are not in debt.

[prohornblower]

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Prohornblower,

Congrats on your 5 digit reduction in debt!!!!!! I have been listining to the recent online Dave Ramsey streams and I like him too.

Just curious, what your your biggest challenges in making your 180 turnaround?

Congrats again.

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Well, I got a LOT of help from my gf. Literally, one day I let her know how bad it was, and that I'd need to get a 2nd job. She said she didn't want me to have to get another job b/c we wouldn't be spending enough time together. So, she helped pay off my debt. Together, we nailed it. She probably gave me in excess of 5K. I'm not ashamed to admit that it took her help. I'm actually very proud to point out to people that my girl was willing to help. Now, I help her with her Roth and stuff.

Honestly, Prelude, my debt wasn't attributed to bad spending habits. I was a recent grad. back in March 2003 when I got laid off (beginning of Iraq war). My industry was hit hard and I was out of work for over a year. I was literally paying rent and car payments on my CC. It was a bad time obviously, but my gf and I got to spend a lot of quality time together that year. (Part of the reason she helped pay off my debt, b/c she encouraged me to not take a low-paying job just because). And, I learned a lot of valuable lessons. I learned more about life from getting laid off than I did in 5 years of college.

So, anyway, that is how I got into, and out of debt. Probably doesn't help you much, but do what you gotta do. If your sacrifices hurt, that probably means they are working. As D-Ram says, with money, "The good decisions ALWAYS hurt now, and feel good later."

[gusmahler]

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I would always just pay the minimum to all of them, and then put all my leftover money to the one with the highest interest rate. Wouldn't matter how large or small the balances are.

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Great idea. But, if the interest rates are similar, psychologically speaking, it might be better to get rid of the smallest balance first.

Let's say you have three credit cards. Two at 17%, one at 19%. The balances are 2000, 2000, and 10,000 (the 19% one). If you pay off the 10,000 debt first, you'll eventually get to debts of, e.g., 1800, 1800, and 6000. But if you pay off the low debts first, you have debts of 0, 0, and 9700.

Overall, you're in similar circumstances. But to some, the psychological impact of paying off 2 cards outweighs the $100 in interest you save. All depends on your personality, I guess.

[prohornblower]

I agree with that generalism. There is the mathematical factor of paying debt off, as well as the psychological factor.

Obviously, if one debt was $100 @ 6.00% and another debt was $1300 @ 8.25%, I would write a hundred dollar check, and be done with the one debt, then tackle the higher rate. It feels like I accomplished something, plus that is one less check to write each month.

Everyone's personal balance will be different, obviously. But I think there are instances where every one of us would pay off a lower rate first.