How Fast Can I Become Debt-Free?

[Dante84]

The answer was 10 months.

Today I paid off the car; last month the credit card (it ballooned up to 2k after necessary flights and the holidays). I got a new job 6 weeks ago, as I mentioned in another thread, and it has been a Godsend.

Thanks for the thoughtful advice in this thread.

My next objective is to save my ass off. What are some good goals to shoot for? How many seperate piles should I be creating? (House, ring, future kids, retirement, etc..)

original post:

Spoiler!

How fast can I get out of debt? I'd like to start saving for a house and taking control of my finances, and though I don't waste money regularly, I'd like to get this off my back and get into the black as soon as reasonably possible. I want to be ready in case of an oops-baby, or if/when I need to buy a ring, or the car shits out, or if I break a bone... etc..

I really have no savings at this point, which is sad and scary. I have, however, knocked the shit out of my school loans and a stupid car payment from after I got out of school. I'm pretty proud, considering I graduated college in the worst economic climate in the last 100 years.

I'm 27 now, and I need to get to the point where I start saving money. What's your advice? What do you do that is helpful?

Debt Breakdown: $5,400

Credit: $500
Car: $4,300
School: $100
Interest Free Parent Loan: $600

Monthly Net Income: ~$3,100 (after benefits and taxes)

1st: ~$2,200
15th: $900

Current Monthly Bills: $1,430
Fixed- $980

Rent: $800, due on the 1st
Car Ins.: $100, due by the 15th
Phone: $50, due by the 15th
Gym: $30, broken in half on the 1st and 15th

Debt- $450

Credit: Minimum Payment of $100, due by the 4th
School: Minimum Payment of $50, due by the 15th
Car: Minimum Payment of $250, due by the 15th
Parent Loan: $50

I'm currently spending about $250/week on food, entertainment, gas, and general purchases. It's easy to spend a lot down here in Austin.

Also, the random $200 charge slips into a given month, for a plane ticket, car maintenance, etc... I know I've got a ~$700 tune-up in the next month or so...

Taking all that into consideration, what is a reasonable amount of time in which I can turn my debt costs into savings? I'm probably not going to track every penny, but a general plan of action is needed.

All bullshit aside, thanks for your advice and tips!

[Bearcat]

mint.com

[KCUnited]

You have a $100 minimum on a balance of $500?

[Hog's Gone Fishin]

OK . Take out a 0%credit card. I know you surely get offers . And pay off everything. Just honor your CC commitment and don't be late.

[Dante84]

Originally Posted by Bearcat

mint.com

I do have that, but the delay on those reports makes them irrelevant. I get updates with 2-week old info, and its never completely accurate.

I want to plan going forward as opposed to combing through incorrect, delayed reports.

[Dante84]

Originally Posted by KCUnited

You have a $100 minimum on a balance of $500?

Well, thats my minimum, that I set. I'm sure its something stupid like 30 bucks, but it's my highest interest debt source.

[Iowanian]

Debt snowball.

Pay off the smallest debt. Put that payment onto the 2nd lowest debt....
Find ways to save money, find ways to make extra cash.
Use that extra income for debt reduction and then eventually savings.

[Garcia Bronco]

I recommend several things and none are easy.

One, cut up the credit card
Two, eat at home and make your lunch
Three, see if you can delay (defer) any student loan debt until the credit card debt is gone.
Four, get a second job..something that is night work but has little time commitment
Five, do things on the cheap. Got a date? Take her to the park and do a light outdoor activity.

Attack your highest interest debt after you rid yourself on the small debt.

[Donger]

Looks like about six months if you are aggressive.

[Simply Red]

[Dante84]

Originally Posted by Iowanian

Debt snowball.

Pay off the smallest debt. Put that payment onto the 2nd lowest debt....
Find ways to save money, find ways to make extra cash.
Use that extra income for debt reduction and then eventually savings.

I like that idea, but do you suggest smallest first, or highest interest first?

[NewChief]

Yeah. Should be easy with discipline. I'd love for my monthly expenses and payments to look like you're. Damn kids.

[Bob Dole]

Austin?

4 words: Bull McCabe's for Smithwick's

(Ok...that did not help at all.)

[Bearcat]

Originally Posted by Dante84

I do have that, but the delay on those reports makes them irrelevant. I get updates with 2-week old info, and its never completely accurate.

I want to plan going forward as opposed to combing through incorrect, delayed reports.

Why is it 2 weeks old? Your accounts should update every time you log in, so I guess unless you're mailing checks or something, it should be up to date... and you can set budgets and goals, too, so it's not just a tool to view the past.

I'd hit the highest interest debt first, then like Iowanian said, use that payment amount to help pay off other debt. The biggest thing I do when I want to save some cash is stop eating out... when I first signed up for mint, I didn't even realize how much I was spending.... didn't have cable at the time, but more than made up for it with trips to BWW.

[Dante84]

Originally Posted by Hog Farmer

OK . Take out a 0%credit card. I know you surely get offers . And pay off everything. Just honor your CC commitment and don't be late.

I considered that, however, isn't there an extra charge for paying off a loan or credit debt with a credit card? If so, I don't want to incur more fees...