STYLETHREAD -- LET'S TALK SHOP!

fashionista L · Coach

Getting out of debt...

Hermione · Kate Spade

Hey Girl-

I totally understand how you feel. I've been there before, and am semi-there again, but my current debt is a mix of car repair, credit, student loans, medical bills, and just not making enough to cover bills!

BUT

1) if you can, consolidate your cards - this is a really easy way to make one monthly payment - they usually save you a ton on interest as well.

2) if this isn't an option, do it the suze orman way. she says this - lay out all your credit card bills.

- put them in order from highest interest to lowest interest.

- pay the mimimum payment on every bill but the one with the highest interest. on this bill, pay that plus some extra - as much as you can put, but at least $50 more.

- once this is paid off, move to the next bill, but continue paying out the same amount every month - for example

say you have cards a, b, and c.

mimimum payments on all are $20. c has the highest interest.

you will pay $20 on a and b, and at least $70 on C, for a total of $110/ month. (more if you can afford it)

once you have c paid off, move to the next highest interest, say B. continue paying $20 a month to a, but now pay $90 to b for a continues monthly total of $110.

once you have paid off b, pay a total of $110 a month to a, get it?

she outlines this in her "money book for the young, broke, and fabulous."

hope this helps!

Cortney1982 · Chanel

I have a few thousand on credit cards right now. Most of it is 0% interest since it was furniture, appliances, and my new tv. So I am working to pay it off ASAP before next year so I don't have to pay interest. Here is what I am doing:

Stop using your credit cards, even for small purchases. $20 here and there adds up. Don't buy anything but necessities. No more clothes or accessories (unless something really needs replacing and if so, use CASH.) This will free up lots of money, trust me! Every payday I set aside just enough money for my basic needs and insurances and car payment. Every extra money goes to pay my cards.

When I get my credit card bills and see $0 where new purchases are, I feel proud of myself! And quite surprised to see how much lower my balance is! It's more rewarding than the feeling of buying something.

lynnie · Chanel

i think Suze's way is good as far as reducing current debt.

as far as new expenses- i would look at some of your old statements and see what the pattern is. Do you spend too much on clothes? Do you spend too much on little conveniences/luxuries like coffees and nice body products? did a lot happen in the past few months that set you back (car breaking down, illness, etc.) do you simply not make enough to scrape by (if this is the case, maybe look into working another part time job or selling some stuff on ebay to make somre spare cash)?

i think once you see what you are spending it on, you can cut back. If you have spent say- $500 on clothes- maybe look at your closet now to make sure that all of these pieces are being used- if they are not, consider your money wasted. my mom used to say i should have burned my money if i was gonna buy things that i wasn't going to wear. harsh, in a way, but oh well. so if this is something that needs to be curbed, perhaps you could put yourself on a mini ban and work your own clothes in new ways- maybe have a friend come over and "style" your clothes so that you are wearing them differently. i want some girls to come over here and do this for me, simply because i'm lazy maybe cut your budget in half, take out the cash for it, and don't use your charge card, like courtney said. same for little luxuries- cappucinos, lunches out, movies- cut your budget by half and find ways to cut costs. only let yourself spend the cash that you allot for the month. i think there are some really good posts you can search on cutting corners and little ways to save money.

-- Edited by lynnie at 20:20, 2005-12-20