I am desperately trying to pay off approx $20,000 of credit card debt. My credit score is too low for a personal lone. I have contacted consolidated credit. They have come up with a plan I think I can handle and be debt free in four years. What is your advice? What would you recommend?


What is their plan?
They will get my creditors to lower the interest rates. I make a payment to consolidated credit in the amount of $525.00 per month for 48 months and they distribute it to my creditors.
There are many debt consolidation companies out there, some rated better than others. In looking up consolidated credit, it appears they're pretty decent from the brief overview I did. Kudos to you for taking this step to get control back over your finances and your life. I can imagine the stress level must be much lower now.

Other suggestions? - and having been at a place where I had very little money to spare, I'll admit you look at even 1 dollar as a lot of money. That hasn't left me.
Some of this should be obvious, but not knowing anything about you....

1. For work, when you get a raise set up another account at your bank and have the after taxes portion of that raise automatically transferred to that account (keep living off the old paycheck). Use that money to build a 3-6 month cushion for monthly expenses. I used to also increase the withholding on my W-4, even if only by $1. The good thing is you get a chunk back at tax time (more to save!), the bad thing it is tied up till then.

2. Reduce fees or increase interest on accounts. I like depositaccounts.com to research options and for basic accounts there may be a local bank with 5-10x interest options (compared to 0.1% interest) and still no fee. You should be able to link it on USAA to your USAA account.

3. Check if your company gets a break with your cell phone provider and lower your plan level.

4. The library is your friend for books and entertainment (DVDs, etc.), and it is free!

5. Brown bag it - nuff said. Your coworkers may be envious of what you bring in. Cooking with friends is also fun instead of going out.

6. Ditch the cable TV. I haven't had it in years and don't miss it at all (I realize if you are more rural the non cable options may make this difficult).

7. Live for life and people, not things. If you can do that it won't be so hard to do the other things because it won't be so tempting. I've always valued the things people made for me no matter how small or inexpensive they were because it was the time and thought they put into it that I appreciated so much.

8. Give yourself a break sometimes with a (small) splurge now and then. If you always feel like you are being denied things you will be very unhappy (but that is why number 7 is so important).

9. We do live in a material world and you do need money for things you need and want. The great thing is once you have paid down your debt that same monthly payment will be going to YOU. Hopefully by that time it will feel effortless to pay yourself.

You are worth doing this for yourself, never forget that!!

Merry Christmas - for the true meaning of that day and every day (sorry if that sounds schmaltzy).

Good luck!

Thank you all for offering some great advice for windy1!




If you do have any other questions. feel free to contact our Financial Improvement Team (FIT). FIT helps members with Debt Management, budgeting and building and maintaining good credit. If you would like to speak to this team, please call (800) 245-9360 between the hours of 8am-6pm central time. Thank you, Happy Holidays!