Comments on: A Plan to Be Debt Free http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/ Real Personal Finance for a Life Without Limits! Sat, 20 Mar 2010 15:01:41 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: * Should You Pay Off Your Debt Before Investing? http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-6608 * Should You Pay Off Your Debt Before Investing? Sun, 31 Jan 2010 20:49:41 +0000 http://ptmoney.com/?p=1790#comment-6608 [...] if you have any fixed income investments (e.g., bonds, CDs), you should likely sell them and pay off your debt as the return on those investments is likely to be less than the cost of the debt (unless you have [...]

[...] if you have any fixed income investments (e.g., bonds, CDs), you should likely sell them and pay off your debt as the return on those investments is likely to be less than the cost of the debt (unless you have [...]

]]> By: Michael http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-5697 Michael Sun, 29 Nov 2009 13:17:51 +0000 http://ptmoney.com/?p=1790#comment-5697 Having a good plan for reducing your existing debt is a good thing. Planning not to increase your debt is another. Often, when someone determines that they can pay an extra $50 to $100 a month to reduce their debt, they fail to realize that they are still increasing their debt each month by $200 to $300. Additionally, some people who start reducing their debt will get that feeling of success, especially once their nest egg starts to grow, and decide to celebrate and spend that nest egg on something frivolous. I suggest making two lists: “Things I Need” and “Things I Want”. The “Needs” list should contain your monthly bills, mortgage/rent, car payment, groceries, and everything associated with your debt reduction plan. Each item on this list should also include the monthly payment and a total at the end. This list should also include an item called “Pay Yourself First”. The “Pay Yourself First” entry is the amount of money you can comfortable add to your nest egg, after you have met your obligations, and still achieve the goals you’ve set in your debt reduction plan. The goal for this nest egg should be to build it up to approximately three times your monthly income. It will take some time. The idea is that if you lose your job you will have about three months to find another one. The time frame to find a new job increases if you will be eligible for unemployment or you can adjust your debt reduction plan a bit. The “Wants” list might include that new flat screen TV, or that new fangled iThingy, or a new computer. Include how much each item costs, and then consider if that cost will go down in the future. If an item on your “Wants” list replaces something you already have, will the item you have suffice until you can afford to buy the one you want. The cost of electronics almost always goes down over time, so wait and save. If your “Wants” list includes a new car, consider how much you are currently spending on your vehicle. Are you still making payments, is the gas mileage really poor, are you “paying through the nose” just to keep it running? Will the new car payment be more or less than you are currently spending? Having a good plan for reducing your existing debt is a good thing. Planning not to increase your debt is another. Often, when someone determines that they can pay an extra $50 to $100 a month to reduce their debt, they fail to realize that they are still increasing their debt each month by $200 to $300. Additionally, some people who start reducing their debt will get that feeling of success, especially once their nest egg starts to grow, and decide to celebrate and spend that nest egg on something frivolous. I suggest making two lists: “Things I Need” and “Things I Want”. The “Needs” list should contain your monthly bills, mortgage/rent, car payment, groceries, and everything associated with your debt reduction plan. Each item on this list should also include the monthly payment and a total at the end. This list should also include an item called “Pay Yourself First”. The “Pay Yourself First” entry is the amount of money you can comfortable add to your nest egg, after you have met your obligations, and still achieve the goals you’ve set in your debt reduction plan. The goal for this nest egg should be to build it up to approximately three times your monthly income. It will take some time. The idea is that if you lose your job you will have about three months to find another one. The time frame to find a new job increases if you will be eligible for unemployment or you can adjust your debt reduction plan a bit. The “Wants” list might include that new flat screen TV, or that new fangled iThingy, or a new computer. Include how much each item costs, and then consider if that cost will go down in the future. If an item on your “Wants” list replaces something you already have, will the item you have suffice until you can afford to buy the one you want. The cost of electronics almost always goes down over time, so wait and save. If your “Wants” list includes a new car, consider how much you are currently spending on your vehicle. Are you still making payments, is the gas mileage really poor, are you “paying through the nose” just to keep it running? Will the new car payment be more or less than you are currently spending?

]]> By: Should Father Open Line of Credit To Help Son? | Good Financial Cents by Jeff Rose Certified Financial Planner http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3950 Should Father Open Line of Credit To Help Son? | Good Financial Cents by Jeff Rose Certified Financial Planner Fri, 05 Jun 2009 05:09:00 +0000 http://ptmoney.com/?p=1790#comment-3950 [...] stated that this plan would make you debt free.  Not true!  You have simply moved the debt, which could jeopardize your relationship with your [...]

[...] stated that this plan would make you debt free.  Not true!  You have simply moved the debt, which could jeopardize your relationship with your [...]

]]> By: Debt Free http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3343 Debt Free Mon, 09 Mar 2009 17:56:35 +0000 http://ptmoney.com/?p=1790#comment-3343 If your homes value has risen versus other homes, debt consolidation can happen! A home equity loan can help you gain back the added value of your property. Isn’t that more creative than debt negotiation? If your homes value has risen versus other homes, debt consolidation can happen! A home equity loan can help you gain back the added value of your property. Isn’t that more creative than debt negotiation?

]]> By: Debt Free Hispanic http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3314 Debt Free Hispanic Tue, 03 Mar 2009 19:57:21 +0000 http://ptmoney.com/?p=1790#comment-3314 Love the tips on cutting debt. Especially making automatic debt payments, thats why online banking is awesome, I think online banking helped me gain traction when I was cutting my debt. Love the tips on cutting debt. Especially making automatic debt payments, thats why online banking is awesome, I think online banking helped me gain traction when I was cutting my debt.

]]> By: hECTOR http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3148 hECTOR Wed, 11 Feb 2009 22:04:48 +0000 http://ptmoney.com/?p=1790#comment-3148 A huge thing to keep in mind while you're trying to pay off debt is the transaction/pay date/or whatever the bank/creditor your paying calls it. What I mean is that there is usually a pay data box to select the date you're paying on. If your payment is due on the 15th, this box is usually set as the 15th. The tricky thing here is that if you're making your payment on the 10th you avoid interest for the next 4 or 5 days but if the box is already pre-filled with the 15th that makes you think that this is the only date you can pick therefore your transaction will be on time but you will be charged the interest although you paid early. Be sure to select the date you are paying on or the next day. This is something that Bank of America does (which I think they are crooks and are super greedy bank, even if some people disagree, my personal opinion) so keep an eye out for your creditor doing the same thing, you think your avoiding interest but in reality the bank is setting you up to pay up either way...... A huge thing to keep in mind while you’re trying to pay off debt is the transaction/pay date/or whatever the bank/creditor your paying calls it. What I mean is that there is usually a pay data box to select the date you’re paying on. If your payment is due on the 15th, this box is usually set as the 15th. The tricky thing here is that if you’re making your payment on the 10th you avoid interest for the next 4 or 5 days but if the box is already pre-filled with the 15th that makes you think that this is the only date you can pick therefore your transaction will be on time but you will be charged the interest although you paid early. Be sure to select the date you are paying on or the next day. This is something that Bank of America does (which I think they are crooks and are super greedy bank, even if some people disagree, my personal opinion) so keep an eye out for your creditor doing the same thing, you think your avoiding interest but in reality the bank is setting you up to pay up either way……

]]> By: Charis http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3132 Charis Mon, 09 Feb 2009 21:25:21 +0000 http://ptmoney.com/?p=1790#comment-3132 It's good to pay extra on an automobile loan. One thing to remember/check a lot of contracts state a payment must be made every 30 days.So when you pay more then your min. payment you pay less in interest and pay the loan off faster. This does not mean that if one month you are short on the payment that you are okay. Read the fine print. It’s good to pay extra on an automobile loan. One thing to remember/check a lot of contracts state a payment must be made every 30 days.So when you pay more then your min. payment you pay less in interest and pay the loan off faster. This does not mean that if one month you are short on the payment that you are okay. Read the fine print.

]]> By: Renie http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-3130 Renie Mon, 09 Feb 2009 19:20:00 +0000 http://ptmoney.com/?p=1790#comment-3130 Paying off debt is a huge deal and I think the strategies in this article and subsequent posts are excellent! Here's one I've used with great success: played "right", every month you'll have a certain amount that you could use to pay off debt. I advocate saving half that amount and using the other half to pay down debt. Why? This way if something untoward happens (like you get layed off or your hours get reduced), you're prepared. After a rough spot, I landed a great job and diligently started paying off debt, living on the very minimal amount that I could manage. About 14 months in, I was very close to being out of debt and **wham** my employer merged, I was "redundant" and lost my job. I had no savings (as I'd been using every penny to pay off debt) and so, to bridge the gap between actual living costs and unemployment, guess what? Yup - HAD to borrow to survive. Now that I've got another gig, I am again paying back at a good rate BUT this time for every dollar I pay back, I save a dollar - just in case..... Paying off debt is a huge deal and I think the strategies in this article and subsequent posts are excellent!

Here’s one I’ve used with great success: played “right”, every month you’ll have a certain amount that you could use to pay off debt. I advocate saving half that amount and using the other half to pay down debt.

Why? This way if something untoward happens (like you get layed off or your hours get reduced), you’re prepared.

After a rough spot, I landed a great job and diligently started paying off debt, living on the very minimal amount that I could manage. About 14 months in, I was very close to being out of debt and **wham** my employer merged, I was “redundant” and lost my job. I had no savings (as I’d been using every penny to pay off debt) and so, to bridge the gap between actual living costs and unemployment, guess what? Yup – HAD to borrow to survive.

Now that I’ve got another gig, I am again paying back at a good rate BUT this time for every dollar I pay back, I save a dollar – just in case…..

]]> By: When You’re Up to Your Neck in Debt | Debt Reduction Formula http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-2963 When You’re Up to Your Neck in Debt | Debt Reduction Formula Mon, 19 Jan 2009 16:23:09 +0000 http://ptmoney.com/?p=1790#comment-2963 [...] A Plan to Be Debt Free in 2009 [...]

[...] A Plan to Be Debt Free in 2009 [...]

]]> By: Jesse Bouche - Six Months to Debt Free http://ptmoney.com/2009/01/05/a-plan-to-be-debt-free-in-2009/comment-page-1/#comment-2949 Jesse Bouche - Six Months to Debt Free Fri, 16 Jan 2009 19:39:13 +0000 http://ptmoney.com/?p=1790#comment-2949 I'm a big fan of the automatic payments for my minimum payments (they all go out on the 30th, come hell or high water), but I send my extra payments as they come in. So, $100 comes in and $100 goes right out to the debt. I'm not a "lump sum" kind of guy. I’m a big fan of the automatic payments for my minimum payments (they all go out on the 30th, come hell or high water), but I send my extra payments as they come in. So, $100 comes in and $100 goes right out to the debt. I’m not a “lump sum” kind of guy.

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