Pay Off Your Debt!

In order to prepare for a RTW trip, you pretty much need to have no debt.   At least no credit card debt.

I cleared out $25K in 1 year.

I make a good salary but many people make tons more than I do and had no debt to begin with.

Some things that I did:

I paid more than $2000/month towards debt.  It was hard.

I started to walk to work to get additional money.  That got me $400/month  I took a second seasonal job.  That gets me $2000/year.

I transferred credit card balances.  That made me focus on paying it off within the timeframe, otherwise that low APR goes to 14.9%, 19.9%, 24.99% and that starts from the day you applied for it.

You may need to make major changes in your lifestyle that I’m you may not be willing to do.  It won’t be easy.  You have to be honest with yourself and really devote MAJOR sacrifices in how you spend your money.  Don’t want you to get mad at me and I don’t think you will but are paying off your debts your priority?  It should be.  If it isn’t your priority, its easy to get messed up.  If buying the latest gadget is your actual priority, you may choose buy the latest HDTV or a case for your netbook over paying off debt more often than you should.  You will do that when you really need it for yourself.

If this is something you REALLY want to do, you need to take control of it.  Refinance.  Stop talking about it and do it.  Do NOT hire a cleaning person.  Do it yourself or let it go for a while longer.  Or make it a very rare occurence to hire them.  Cut out or have fewer dinners with friends.  Cut out one drinks from the bar.  Transfer balances on to a lower card asap and stop using credit.  MAKE SURE that the transfer fee is reasonable and maybe even has a cap (like $75).  Generally these days they charge 3% fee to transfer and there is no cap ( I don’t really think this is a good deal unless you know 100% that you will pay off the cc before the APR kicks in).  It used to be different and there is a chance that you can still find something like that.  Be more strict on parking rules.  Don’t lose $300 a year to parking tickets and moving violations.  Consider how much you are spending on a car that might not be what works best for your lifestyle, even if you can afford it.  Maintenance and gas costs are significant.  Try not to drive for 3 days in a row or something.  Combine your meetings so that a bunch of people you need to meet with could be done at one time and you can stop doing them one on one.

You don’t have to cut out everything but if something is important to you then you need to cut out elsewhere.  If a standing date is important to you, then cut out meals out with other people.  Cut out drinks with people.  Only meet with people for a coffee or something cheaper.  Have an actual meeting that isn’t over food or drinks.  Just stop suggesting all together that you and so-and-so need to get together.  You probably get invited to enough events that you don’t have to suggest it yourself.  Talk to more people them via phone or email, something that has the cost already budgeted in.

The point is every bit helps.

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