Living from paycheck to paycheck

[JEDI]

Talking to my sister (late 20's) bought up this subject. she told me she just passed the $20k mark in credit card debt. It was $16k a year ago. and she's living from paycheck to paycheck and only paying the minimum on the credit cards.

i tried to teach her how to cut down on expenses (food, xferring balance to lower rate cards, coupons, etc) but it fell on deaf ears. i know if i'm pay some/all of it, she'll just run it up again, thus i'm not doing it.

For those of you that used to live paycheck to paycheck, but overcame it, how did you do it?

THX

and no pics

 

[jadinolf]

I lived that way many, many years ago. The only thing I can suggest is a second job. I never did it but I should have.

 

[The Stigenator]

find a better paying job... consolidate bills and have only one card.

 

[MustangSVT]

although I dont/didnt have that problem i think best solution might be to get rid of all credit cards.

cancel cell phone, cancel cable TV. spend money only on essentials.

 

[JayPatel]

and no pics

LOL

 

[Wolfdog]

She could go to a credit counciling place. They could consolidate all the credit card payments into one lump sum. Thus paying less in interest and more on the debt.

 

[wampa]

Originally posted by: MustangSVT
although I dont/didnt have that problem i think best solution might be to get rid of all credit cards.

cancel cell phone, cancel cable TV. spend money only on essentials.

that sounds like a very good plan. if I was her (like you said) transfer the balance to low interest rate card and keep track of my budget by logging it down on paper or PC program. As well as cut up all credit cards except one for important emergencies.

Also you can try selling/Ebaying some the goods she no longer needs in her house to get some cash (as well as free up clutter) to help payoff some of the debt. You would be suprised at how much money you can make off some stuff you no longer need

 

[jjyiz28]

you've done everything possible. its up to her now. when "reality" hits her when she wants to buy a car, house, etc.. and she asks you to help her out, just say no.

 

[Ryan]

I was blwoing all of my money from paycheck to paycheck at one time. I never had any money saved up until last year, when one day I just got tired of not having anyhting to fall back on if I couldn't work - it really worried me. From that time on, I stopped eating out, buying softdrinks from vending machines, and basically becoming a tightwad. Now I have a nice little nest of $6k that I've saved up in a little over 8 months (was 7k, but I just had a ton of work done on my car). By this time next year I plan on having 12k is everything works out right

Jus the satisfaction of saving up that much from delivering pizza's makes me feel really good, it helps out my self esteem

 

[nutxo]

bah, tell her to file bankrupt and start over!

 

[waggy]

wow 20k in Credit card debt? wow.

I have 2 credit cards. one with a low limit that i use for online purchases ($1500 limit) and the other one while higher i use less. I pay both off every month.

I hate being in debt. i have seen 3 out of 4 of my sisters get in trouble with it. i will not make that mistake.

 

[FeathersMcGraw]

The best way to not rack up credit card debt is to cut up the credit cards. Although I've also heard of people freezing them in ice so that they're available but not too available (I'm surprised that doesn't damage the magnetic strips, though).

 

[TGregg]

Originally posted by: jjyiz28
you've done everything possible. its up to her now. when "reality" hits her when she wants to buy a car, house, etc.. and she asks you to help her out, just say no.

Bingo. One cannot change the behavior of another, and one is foolish to think otherise (not to mention setting up for a world of frustration). Set the stage for the future, advise her that she is on the road to trouble and that you'll be around to show her how she can begin her painful recovery. Let her know you won't be helping her further down the road to ruin by lending her money, giving her money, cosigning for anything or anything of that nature. Ever, even when she is recovering. But, you'll be there to offer sound advice when she is ready to turn her life around.

And whatever you do, don't send her to one of those nasty credit-fixers. Check `em out, most are nasty outfits. Find a good one before she needs it. Dunno how to find a good one (sorry), but do your research, and when she's ready, send her over.

 

[AgaBoogaBoo]

Originally posted by: TGregg

Originally posted by: jjyiz28
you've done everything possible. its up to her now. when "reality" hits her when she wants to buy a car, house, etc.. and she asks you to help her out, just say no.

Bingo. One cannot change the behavior of another, and one is foolish to think otherise (not to mention setting up for a world of frustration). Set the stage for the future, advise her that she is on the road to trouble and that you'll be around to show her how she can begin her painful recovery. Let her know you won't be helping her further down the road to ruin by lending her money, giving her money, cosigning for anything or anything of that nature. Ever, even when she is recovering. But, you'll be there to offer sound advice when she is ready to turn her life around.

And whatever you do, don't send her to one of those nasty credit-fixers. Check `em out, most are nasty outfits. Find a good one before she needs it. Dunno how to find a good one (sorry), but do your research, and when she's ready, send her over.

Good advice, do that.

Like he said, just give advice, otherwise it'll happen again.

One thing you can talk to her about is what she would do if her car broke down and the kind of financial trouble that would put her in.

 

[bleeb]

PICS first.. then CREDIT ADVICE.

 

[cliftonite]

Originally posted by: nutxo
bah, tell her to file bankrupt and start over!

Doesnt that screw her credit up for 7 years or so?

 

[Babbles]

Bankruptcy may be a good option, it really isn't as bad as it is made out to be. Yes, it is on your credit report for seven years but the deal is once you get your paperwork finalized the few folks I know that went thru it had no issue getting a mortgage, loan, credit cards or whatever. This is because the loan agencies know that now you essentially no bills therefore free money to spend on car payments, house payments or whatever. She could spend seven years just paying it off then it would still be on her credit report for five or so years after that. Not to mention she would have no money saved up what so ever.

 

[nn2000]

apply for a new credit card with intro 0% APR could save some money, some credit cards offer 0% intro apr till 2005, but if she has a lot of debt on the exsiting credit cards and don't have a good credit history, she won't get a high-limit one, probably as low as $300 credit limit.

 

[Ausm]

Paying the minimum payment on 20K of CC debt you won't paqy that off in three lifetimes



Sysadmin

 

[Pocatello]

I used to do that when I was a student.

 

[DaWhim]

Originally posted by: bleeb
PICS first.. then CREDIT ADVICE.

who do you think you are? RossMan?

 

[vi edit]

1) Cut up cards
2) Get second job and apply every penny of it to the debt
3) Cut back on current expenses in any way possible
4) If you have direct deposit, set up a special DD that goes into a checking account each paycheck dedicated strictly to your CC. At the end of the month write out a check from that account for your credit card.

It takes discipline, but it can be done. It may take two-three solid years of tough discipline though.

EDIT - also see if you can't do some 0% interest transfers to another card so she isn't getting hammered.

 

[AgaBoogaBoo]

Have you gone over all her bills with her? Show her how if she does something for a certain amount of months then how much sooner she can retire or something, you should try and help her out and stick it through her head, but I don't think you can easily change a person...

 

[TGregg]

Originally posted by: TGregg

Originally posted by: jjyiz28
you've done everything possible. its up to her now. when "reality" hits her when she wants to buy a car, house, etc.. and she asks you to help her out, just say no.

Bingo. One cannot change the behavior of another, and one is foolish to think otherise (not to mention setting up for a world of frustration). Set the stage for the future, advise her that she is on the road to trouble and that you'll be around to show her how she can begin her painful recovery. Let her know you won't be helping her further down the road to ruin by lending her money, giving her money, cosigning for anything or anything of that nature. Ever, even when she is recovering. But, you'll be there to offer sound advice when she is ready to turn her life around.

And whatever you do, don't send her to one of those nasty credit-fixers. Check `em out, most are nasty outfits. Find a good one before she needs it. Dunno how to find a good one (sorry), but do your research, and when she's ready, send her over.

I know that this might seem easy for somebody distant to write. Frankly, it is easy to write - it's plain as day what needs to be done. However, that does not make it any less true. You cannot change her behavior, she needs to figure it out for herself, then change it. You can only aid or hinder the transformation from where she is, to where she should be. And you do not aid that change by any sort of enabling behavior like loaning her money or somesuch. That only delays the change. She's not going to figure it out until it is forced upon her such that she cannot ignore the lesson any more.

Which gives you essentially two choices, let the lesson come in it's own time, or delay it.

So there you go. Good luck to you, I do not envy your tasks ahead.

 

[kranky]

Use one of the online credit card calculators to show her how long it will take for her to pay off her debt while only paying the minimum (you need to know the min. payment, her balance, and her interest rate) - and when the answer is 20 years or more, remind her that's only true if she never charges anything else! Try to find out how close to her credit limits she is.

Then show her what the total of her payments will be compared to her balance today. It's probably 3 times or more. And then point out that when she charges a $10 pizza, she's really buying a $30 pizza.

Ask her how she would survive if she got hurt and missed a couple months of work, or found herself unemployed for a few months.

And ask her if she's OK with all that, or would she like to change things for the better.