I think you do need to start fresh a bit though and pay off the credit card. How much is the interest rate?
You can rebuild the savings but you are digging yourself deeper into the hole if you are paying interest on a credit card.
I've also read that credit cards may be too easy and thus you may spend more money than you otherwise would if it was cash. You might want to try only using cash for a couple months.
Can you get another roommate? Can you move to a cheaper place?
Have you tried mapping out a budget with your expenses after your roommate leaves? After rent, utilities, constant payments, etc, how much money is left?
I feel so guilty whenever I take money from my savings. That isn't for regular day things. I worked so so hard to build it up, and had a pretty nice cushion for someone my age ( at least I thought I did ) and then I had to take 500 here, 500 there, then 3500 to pay down my CC. Whenever I trasfer money from it I just feel like such a failure cause it's not there for that.
It's not being a failure. You need your money to work for you, not against you. If your credit card interest is more than what you earn in savings - you are losing money every month. Doesn't that sound backwards? LOL It is!
Make a plan - pay off the CC debt, then cut up all your credit cards - except for the emergency one. Vow to not get yourself back into credit card debt, cutting up those cards makes it easier to stick to this.
Make a budget of what you can spend based on previous months records, and how much you can sock back into savings.
Whew boy.. I can relate to your situation being in debt is no fun especially when you're barely making enough to pay your bills as well and have to put food on the credit card for example after all the bills are paid for. My husband and I have worked two jobs at times including going to school and taking care of ill parents as well. It's not easy having two jobs plus all the other life commitments you may have as well but it is doable as long as you remember to get plenty of sleep! :-) First things first STOP using your credit card- use cash only or get a debit card, and my advice would be to use your savings to pay off your credit card since you're probably wasting a lot of money in interest alone. We just paid off more than half of our credit card debt by going into our savings account and now we have no savings but the stress is so much less now since our minimum payment is so much lower but we still send much more than what the minimum is so do that as well. Savings can be built back up. Then secondly track all of your expenses for a month- if you do cash withdrawals at the ATM write down the reason for the ATM cash so you know what expenditure to put it under. Third, little things like starbucks coffee, fast food meals here and there can add up. We figured out one month that we spent close to 300 dollars a month eating out and we have cut that wayyyy back and now eat at home which has actually done wonders for my heartburn issues and overall health. We are now trying to cut back on our grocery bill as well and we use coupons now as well. I really recommend David Bach's books. I got his Smart Couples Finish Rich Book about three weeks ago and it really has helped me and I feel not so clueless and it also really helped me learn about all kinds of insurance like what type of life insurance to get, disability insurance, long term care insurance when all of that is affordable for us and retirement savings and etc. I think you know what to do from what I've read from your posts.. You can do it!
I understand you not wanting to cannibalize your savings account -- you always want to have some emergency cash on hand. What I recommend is transfering all of your current credit card debt to a new credit card that has 0% interest for the first 12 months. There are tons of cards like that out there. That way you can pay down your debt interest-free for a year. I have actually done this twice -- transferred my credit card debt from college to a 0% card for a year, then I still hadn't paid it off so I transferred it to ANOTHER 0% card for another year. I finally paid it off, and didn't pay interest for 2 years.
If you don't want to do that, you can also just call your credit card company and ask for a lower APR. You'd be surprised how often they will give it you.
Important though -- don't add to your credit card debt any more. Live on the money you make, either through your debit card or cash.
I use Microsoft Money to track all of my spending. If you do online banking, you can just download all of your transactions, set budgets etc.
The most important thing is that you clear out that credit card debt. I know people who work two and even three jobs, but it doesn't help them--because they are so far in debt, AND they keep creating more debt!
trust me..i've been there...you NEED to get rid of the credit card debt. CC debt is esspentially wasted money. I use my credit card now...but i pay it off every month (i never carry a balance). I use to have over $2k in debt but worked hard to pay it off. Dh and i are on a strict budget (he's in school). We have quicken (although a pen and paper works just fine) to help keep tract of our money. We calculated what our total year end budget was and then broke it down according to food, bills etc. every week, we check to see how things are...ie if we spent to much on gas or food. We only have a budget of X a month for entertainment/clothes. So once that's used..no more for the rest of the month. I would highly recommend a budget and writing every expense down. Also, find ways to clip coupons and save money. But like i stated at the beginning...get rid of the credit card debt. Get an atm card to use for gas etc. Put the CC away for true emergencies. If you have 2000$ in debt you are probably ending up paying 200-300$ a month (or more) in interest. That's a lot of money when you think about it.
As for the roommate...its a scary thought...but there are places you can look for a roomie. If you are barely making ends meet now..you won't make them meet without a roomie. My friend just recently went thr that and didn't make it.
I think you can try the transfer of CC debt to another card...but if you do that....DESTROY the first card or you may just get yourself in more trouble.
good luck!
Last edited by GatorgalstuckinGA; 04-09-2008 at 07:58 AM.
I too have school loans out the wazoo. Picked up a book by Mary Hunt a few years back. You can probably find it at your local library too. Its called "Debtproof Living" and I have climbed out of the hole a couple of times with it. I am a planner/arranger by nature and love to figure things out and see the light at the end of the tunnel, even if only on paper to start. Her book talks about almost all of the things people have posted, but I think the biggest thing that helped me was her explanations of good and bad debt and her rapid debt repayment calculator. I have a hard time tapping my savings to blow out the debt as I count on that savings for emergencies too. The payment calculator speeds up your payoff with the minimum payments you're already making. Just another option to check out. She also has a website www.cheapskatemonthly.com. Good Luck!
Can I ask what kind of 2nd job you took? How many hrs a week is your 2nd job? How many days a week? Right now I"m trying to find something around 15 hrs and a couple days a week and maybe one day a weekend. Oh, and one I don't have to put forth too much thinking. I do that a lot at my full time job. I"m thinking like coffee house, book store, video rental place, movie theater, sales clerk at target, or some other store. Kinda a place where I can work with ppl around or close to my age.
I think all of the part time jobs you mentioned are worth looking into. I lucked out and got a really flex 20 hours at a hospital/computers... perhaps you could look on your local hospital website career/job section, for Medical Records, reception etc. there might be some part time weekend hospital jobs that don't require medical background and decent money... All of the jobs you mentioned may come with some 'perks' too, maybe 'free' movie rentals, coffee etc... It would be great to 'save' on that stuff in addition to earning extra... I know that Starbucks pays really well as well as benefits for part time.. at least in the Boston area they do... $11-12-ish an hour... You got a lot of good info here, put together a plan and GET RID of that debt, you will feel so much better... work on it now or the damage will haunt you for a very long time and pop up when you want to buy a home or new car... I'm going to make my last payment on a debt payment plan of $8500 and it feels great !!!
Oh there is one other thing that you might consider as a way of 'saving' I was so bad at saving that I increased my federal withholding taxes by $25 a week.. it doesn't earn interest, but I couldn't get at any of it until tax time. I didn't have the initial monies to do a CD but I always had a big return... plus the extra withholding... then I would put that return into a 1 year CD etc... You do have to be comfortable with the government having 'more' of your money for the year... I was ok with it and it worked for me at the time... all I did was ask my employer for a W4form. I don't know the lowest amount ?? 5 or 10 dollars maybe... might be worth checking out...
Geez... I keep thinking of stuff.... not only cut up the CC but call the credit card company and ask them to lower your limit... I cut up my 'cards' but never called the company then I would get 'increases' in the mail, call the company and order another card, at the time it felt like free money...now my ONE card has a $500 dollar limit, if I use it, I pay in full the next month.. and company has been instructed not to auto raise my limits etc....
