Need some advice w/ my finances

[Phoenix15]

Here's the deal. I'm getting married next September and I want to be debt free by then. I've decided to try and get all of my loans/credit cards etc.. paid off by May or so. I have about $550-$600 a month to put towards this (after paying the required amount on everything) Here's what I have to pay off:

$425 credit card 1
$480 credit card 2
$217 credit card 3
$380 credit card 4
$1500 loan 1 (109 monthly payment
$3000 loan 2 ($100 monthly payment)

I'm trying to get a idea on what to pay off first. The $3000 loan has some killer interest on it, so I've been thinking of just putting everything towards it. My other line of thinking is to pay off all the credit cards, thus lowering my monthly bills, allowing me to put more towards debt repayment every month.


So, what would you guys do? Any recomendations?

 

[vi edit]

What's the lowest rate interest you have out of all your CC's?

If you didn't have 4 CC's already, I would have told you to open a new one up with 0% balance transfers for 6 months to a year and move all the debts over to that one card so you aren't accruing interest on them. Still possible, but you have lots of credit cards, and that would be another one.

Specifically, what is the interest rate on the loans, and are they just generic loans, or are they school loans?

 

[Phoenix15]

Originally posted by: vi_edit
What's the lowest rate interest you have out of all your CC's?

If you didn't have 4 CC's already, I would have told you to open a new one up with 0% balance transfers for 6 months to a year and move all the debts over to that one card so you aren't accruing interest on them. Still possible, but you have lots of credit cards, and that would be another one.

Specifically, what is the interest rate on the loans, and are they just generic loans, or are they school loans?

Just generic loans. Not to worried on the interest rates on the cc's, because the balance is pretty small and they will be paid off shortly. I believe they are all in the vicinity of 12-13%. The interest that is killing me is the $3000 loan.

 

[ElFenix]

i swear i read that as "need some advice w/ my fiancees"


tip: set aside a "disposable budget" so that you'll still be able to buy random crap each month, because you know it will happen regardless of how much discipline you think you have.

 

[Ameesh]

what is the highest limit on your cards?

you can do a balance transfer on all of them onto 1 card (which will usually have a low rate) and if possible move the 3k debt onto a card with a balance transfer rate.

you'll save money and have less bills

 

[kranky]

You'll have to still make the minimum payments on each debt every month, but once you have that out of the way, pay all the extra against the account with the highest interest rate.

 

[RossMAN]

Exactly how much is this "killer" interest on the $3k loan?

 

[Phoenix15]

Originally posted by: RossMAN
Exactly how much is this "killer" interest on the $3k loan?

About 19%. I'm in the process of trying to get it lowered though. I phoned the company and talked to a advisor. I basically told him that I am trying to have it paid off within 8 months or so. I also pointed out that I had never been late on a payment and always sent in at least 20% over the minium payment. He is supposedly working on lowering it.


The $550 I mentioned is AFTER I pay all of the minium requirements on all of my bills. I also have cash set aside for everything else. (toys, entertainment etc..) For example If I ecided to pay it all towards the 3K loan, I'd actually be sending them $650 a month (550 extra+ 100 monthly requirement)

 

[Jzero]

I'm in agreement with what was already posted:
If possible try to consolidate as many accounts as possible into a single one.
Put as much money as possible towards the highest-interest account.

 

[MomAndSkoorbaby]

Originally posted by: Jzero
I'm in agreement with what was already posted:
If possible try to consolidate as many accounts as possible into a single one.
Put as much money as possible towards the highest-interest account.

I agree completely.
Set a monthly budget as well and don't make it too strict. Make it realistic. Allow room for silly spending and if you have the willpower not to spend the silly spending, then you have money left to put towards your debt. BUT if you feel the urge to spend, then you are not ruining your budget. Print it out and tape it on the fridge. That way, you are looking at it everytime to go and get something to eat. Some people recommend writing down everything you spend money on...that is scary though. You suddenly realize just how much you are wasting!

 

[BooneRebel]

There are two ways to approach it:
1. Pay off the highest interest rate loan first (saves you the most $$$) - this makes the most sense
2. Pay off the lowest balance first (i.e., pay off CC3 this month, CC4 next month, etc.) - this gives you more of a sense of accomplishment.

At 19% interest I'd recommend putting everything you can afford (after making your min pmt on the other accounts) onto the $3000 loan to get rid of it. Look into doing a balance transfer of the $3000 to your lowest interest credit card Most companies are offering 0% or low interest on balance transfers. With so many outstanding loans you might not get approved, but you might be able to split the balance by getting limit increases on two cards and then doing a balance transfer of half the balance due onto each card.

Start today by calling each of your credit card companies and asking for a lower interest rate on your existing balance. It never hurts to ask and if you have a good payment history you can easily get a 1 or 2% discount on your account. If you're asked why, honestly reply that you are attempting to consolidate and pay off your debt and are looking to close your high interest accounts. You should be able to get 9-10% on at least one account. While you're on the phone, ask about any balance-transfer offers that they have.

Once you get that out of the way focus on the highest interest rate loan, pay it off, and then CLOSE THE ACCOUNT. Despite your best intentions, if you leave the account open you will be tempted to use it again. With the six payments you make each month plus the $550-600 you're allowing to add into it, you have over $800 a month to put toward your debt. You can easily pay off all of these cards within 8 months. Make some calls, put together a plan of what balances you can transfer, and stick to your plan and pay off your balances. You can be debt-free by summer and still have several months to put back cash towards a ring (if that's not already on one of the loans above), the wedding, honeymoon, etc. I admire your ambition. I didn't get serious about getting out of debt until after I got married.

 

[SCSIfreek]

i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

 

[vi edit]

Originally posted by: SCSIfreek
i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

Hell, I'd be surprised if my wedding ends up costing more than $4,000. Honeymoon included.

 

[rahvin]

Originally posted by: vi_edit

Originally posted by: SCSIfreek
i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

Hell, I'd be surprised if my wedding ends up costing more than $4,000. Honeymoon included.

I'm a cheap bastard too, I'm just willing to admit it.

 

[CPA]

Originally posted by: SCSIfreek
i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

Elope to Vegas and get married, use the money to gamble

 

[RossMAN]

Originally posted by: BooneRebel
There are two ways to approach it:
1. Pay off the highest interest rate loan first (saves you the most $$$) - this makes the most sense
2. Pay off the lowest balance first (i.e., pay off CC3 this month, CC4 next month, etc.) - this gives you more of a sense of accomplishment.

At 19% interest I'd recommend putting everything you can afford (after making your min pmt on the other accounts) onto the $3000 loan to get rid of it. Look into doing a balance transfer of the $3000 to your lowest interest credit card Most companies are offering 0% or low interest on balance transfers. With so many outstanding loans you might not get approved, but you might be able to split the balance by getting limit increases on two cards and then doing a balance transfer of half the balance due onto each card.

Start today by calling each of your credit card companies and asking for a lower interest rate on your existing balance. It never hurts to ask and if you have a good payment history you can easily get a 1 or 2% discount on your account. If you're asked why, honestly reply that you are attempting to consolidate and pay off your debt and are looking to close your high interest accounts. You should be able to get 9-10% on at least one account. While you're on the phone, ask about any balance-transfer offers that they have.

Once you get that out of the way focus on the highest interest rate loan, pay it off, and then CLOSE THE ACCOUNT. Despite your best intentions, if you leave the account open you will be tempted to use it again. With the six payments you make each month plus the $550-600 you're allowing to add into it, you have over $800 a month to put toward your debt. You can easily pay off all of these cards within 8 months. Make some calls, put together a plan of what balances you can transfer, and stick to your plan and pay off your balances. You can be debt-free by summer and still have several months to put back cash towards a ring (if that's not already on one of the loans above), the wedding, honeymoon, etc. I admire your ambition. I didn't get serious about getting out of debt until after I got married.

Although psychologically I'd go for option 2, in the end I'd probably do option 1. It's very important to CLOSE the credit cards/lines of credit accounts after they have been paid off to zero.

 

[littlezipp]

Originally posted by: RossMAN

Originally posted by: BooneRebel
There are two ways to approach it:
1. Pay off the highest interest rate loan first (saves you the most $$$) - this makes the most sense
2. Pay off the lowest balance first (i.e., pay off CC3 this month, CC4 next month, etc.) - this gives you more of a sense of accomplishment.

At 19% interest I'd recommend putting everything you can afford (after making your min pmt on the other accounts) onto the $3000 loan to get rid of it. Look into doing a balance transfer of the $3000 to your lowest interest credit card Most companies are offering 0% or low interest on balance transfers. With so many outstanding loans you might not get approved, but you might be able to split the balance by getting limit increases on two cards and then doing a balance transfer of half the balance due onto each card.

Start today by calling each of your credit card companies and asking for a lower interest rate on your existing balance. It never hurts to ask and if you have a good payment history you can easily get a 1 or 2% discount on your account. If you're asked why, honestly reply that you are attempting to consolidate and pay off your debt and are looking to close your high interest accounts. You should be able to get 9-10% on at least one account. While you're on the phone, ask about any balance-transfer offers that they have.

Once you get that out of the way focus on the highest interest rate loan, pay it off, and then CLOSE THE ACCOUNT. Despite your best intentions, if you leave the account open you will be tempted to use it again. With the six payments you make each month plus the $550-600 you're allowing to add into it, you have over $800 a month to put toward your debt. You can easily pay off all of these cards within 8 months. Make some calls, put together a plan of what balances you can transfer, and stick to your plan and pay off your balances. You can be debt-free by summer and still have several months to put back cash towards a ring (if that's not already on one of the loans above), the wedding, honeymoon, etc. I admire your ambition. I didn't get serious about getting out of debt until after I got married.

Although psychologically I'd go for option 2, in the end I'd probably do option 1. It's very important to CLOSE the credit cards/lines of credit accounts after they have been paid off to zero.

Why would you want to do that?

 

[kherman]

2. Pay off the lowest balance first (i.e., pay off CC3 this month, CC4 next month, etc.) - this gives you more of a sense of accomplishment.

When it comes to money, you can't be emotional. If you are, you will loose in the end. Particuallrily true in the stock market, but it is VERY true here also.

 

[BooneRebel]

It's very important to CLOSE the credit cards/lines of credit accounts after they have been paid off to zero.

Why would you want to do that?

Otherwise the open line of credit still appears on your credit report. In a (bad) example, you could have 10 credit cards with a $1,000 limit on each. Say you're applying for a loan to a creditor: You have the potential to spend $10,000, placing yourself into debt and reducing your ability to pay on whatever new loan it is that you're applying for. As a result, you are considered a poor credit risk. Much of the decision to issue credit is based on your FICO score, an arbitrary scoring system which takes into account your history of making payments on time, number of open accounts, length of time the account have been open, etc.

 

[Koing]

Originally posted by: SCSIfreek
i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

wow what typeof wedding you going to have?

 

[GasX]

Originally posted by: Koing

Originally posted by: SCSIfreek
i have saved 20K for my wedding and i have yet another year to go that makes it 40K (roughly saving 2K per month) <----hopefully thats enough.

--SCsi

wow what typeof wedding you going to have?

I guess one that her father isn't going to pay for...