Your Questions About How To Eliminate Debts

Lisa asks…

How to get rid of debts?

I need to figure out the greatest debt elimination ways to get rid of them at once. Can I eliminate my debts in a short period of time!

John answers:

You probably can not get rid of all of your debts all at once, but you may be able to do it in a short period of time. Of course that depends on the amount of debt and your income.You can jump start your payoff by having a garage sale and selling anything that you no longer use and you should consider getting a temporary part time job until you get everything paid off. Here is a plan that will help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

Sandy asks…

How Do I get rid of over $20,000 of Credit Crad Debt?

Are there lower interest rates to pay off quicker? Other Ways of eliminating debt?

John answers:

Take out a lower interest loan from a bank or credit union to pay of the credit card debts. You will still be paying back a 20,000 debt however it will be at a much more manageable due to a reasonable interest rate.

James asks…

How can I cut down on “spam?”?

I constantly get messages about earning college degree, about eliminating debt, and about life insurance, etc. Is there a way to philter all these unwanted offers?

John answers:

You can not completely stop all spam, but you can help to put a big dent in it.
First, try not to open any of them, that only makes them send more and more to you.
Check mark them and click on ‘Spam,’ this should stop those addresses from being delivered to your inbox.
Use your spam filter and block address.
Look for the ‘Options’ link at upper right corner of mail screen and click on it

Options/ mail options / spam preferences
make sure spam guard is on, click on save changes

Options /mail options / blocked addresses
Enter the E-mail address you wish blocked and click on ‘add block’
you will never get mail from that address again.
This should help you to control your spam.
Other tips:
Never open E-mail unless you are absolutely sure who it is from.
Never give out your personal information to anyone.
If you are on a site and you absolutely have to sign up for something, check the entire page to make sure you uncheck any lines wanting to send you any other info, notices, catalogs, ads, and the like.
Added detail:
Yes, spammers change one item in their addresses a lot, so you might try blocking the entire domain, by putting in
*@ thedomainyouwanttoblock.com
for instance: *@seeyou.com
Hope this helps.

Helen asks…

How can i eliminate my debt and start to establish good credit?

As soon as i turned 18 i wrote bad checks, never paid my medical bills and some other stuff that ended up being reported to credit agencies. I really got careless, but now I need to get my life on track and want to know the best way to start that. Can any one help?

John answers:

Pay off your bills,you may need to file charter 13, get a loan, and make timely payments

Lizzie asks…

How can I consolidate or eliminate my debt?

I have about 4,000 in credit card debt (a combined total from store credit cards). I haven’t been able to make any payments in a few months and I have people calling my house all hours of the day and night. I have bad credit now so I can’t get any loans. What is the best way I can consolidate these cards with my bad debt?
I already got rid of my credit cards. I was just wondering where I can get a legit consolidation loan with bad credit?

John answers:

Read Dave Ramsey’s “Total Money Makeover” and start snowballing on your debt.

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2 Responses to Your Questions About How To Eliminate Debts

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