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LazyMe10's avatar

What advice would you give to a person paying off debt?

Asked by LazyMe10 (449points) July 22nd, 2018

This is a question I’ve always wanted to ask people who have paid off something big. I owe the Art Institute in the thousands still &I’m still slowly but surely starting back to make payments again. But it feels like forever.

Plus I have y own place so I have extra bills to pay plus I’m still trying to be human and do things that make me happy. I’m trying not to get over stressed like I use to & I’m trying to calm my overthinking about how I just owe places money An that I can never have fun cause I have to pay for crap. All advice is welcome on how to be consistent on making payments & how to stay positive about life.

For I wasn’t brought into this world to just pay bills & suffer day in and day out. Also, I don’t have a degree but I was accept to a University before I withdrew from Ai in 2015. Problem is they need my final transcript so I can finish college. But I must pay off Ai, an I owe them in the thousands.

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13 Answers

zenvelo's avatar

Pay off the debts with the highest interest rates first.

If you can refinance higher interest rate debts to get lower interest rates, do so, and then make the same payments so you reduce the principle owed.

If you get a bonus or large one time influx of cash, pay off debt.

ARE_you_kidding_me's avatar

It’s a lot like losing weight, there are many approaches but at the end of the day you have to run a calorie deficit. With money you have to end the day with a surplus that goes against your debt burden. Paying debt means not spending so much and also bringing in more income if possible (diet and exercise). Some do what is mentioned above and others do a “snowball” where you pay the minimums on the larger debts and put all the extra on the smallest until it’s gone. Then take on the next and the next until you are making huge payments on the remaining large debts. The idea is you start small and end big, this works for a lot of people.

LazyMe10's avatar

Thank you @zenvelo & @ARE_you_kidding_me :)
That’s why im starting with paying them off again. I was making payments every paycheck of $150 towards it last year. But then I stopped around holiday time cause I got busy & then again this year because of other situations that came up & me getting an apartment. But Ai is my main thing I want to pay off first then pay off what I owe the bank for a really old but been closed credit card.

chyna's avatar

I have always found that paying off a smaller debt first brings me a feeling of relief. “Whew, one down, 3 more to go.”
As said above, I would pay minimum payments on your higher debts and double up on lesser debts. When one is paid off, add the money you were paying to the next one.
If at all possible, consolidate all your bills under one loan or credit card with a low interest rate. Some cards will offer no interest for a year, but read the fine print and make sure you can transfer balances.
But first, pay yourself each payday. Not a big chunk of your check, but enough to go out and enjoy yourself at least once a week.
Also, I know things are tight, but put a little in savings each pay. Even if it’s just 10.00. It adds up and you will need it for emergencies instead of using a credit card.
Good luck!

Inspired_2write's avatar

With a repayment program you use money in your budget and pay off your debts without borrowing more money. Instead, when you repay your debts through a repayment program with a non-profit credit counselling service, your lenders will typically reduce or completely waive interest and fees going forward. That’s why you’re able to use the money in your budget more effectively, and get out of debt more quickly.
That is what I did on Student loan debt and within 4 yrs paid off entirely and not long after applied for new credit card after debts wiped off my financial records.
I used a Debt Counselling service which created a doable budget that allowed me to put aside an amount agreed upon for my convenience per month in order to enjoy life as well.
It was reasonable and lower interest rates plus some interest was waived by creditors through this service as a result too.This service will arrange a better and easier plan that made creditors and me happier in the end.

Jeruba's avatar

I agree with @zenvelo: highest interest rates first.

(it’s principal.)

When I was in heavy debt, I actually did the computation (rather than just trusting advice). I computed how much I’d pay if I paid off X, Y, and Z in turn, at the same steady rate. Sure enough, when I calculated paying the highest interest rate first (regardless of the balance), I paid out the least total dollars overall.

Because of course interest continues to accrue on the unpaid balance, and the highest interest costs you the most money just for the loan, regardless of what you bought with it or how much it cost. You can wind up paying the full original price of the purchase two or three times over before you’re done.

So when you charge that $300 sale item and then pay interest over several years, how much of a bargain was it?

In fact I did pay something on each account, even just a token amount, to show activity and keep them from threatening me. But I concentrated on the high-interest accounts in order to save the most in the long run.

And once they were all paid off, I swore never to let it get like that again. What a burden it was, worrying every minute of every day. Now, when I use a card just for convenience, I charge only the things I know I can pay for and not what I can’t.

MollyMcGuire's avatar

I’m glad you have made the decision to pay everything off. When you do that your life will greatly improve. SO, do this thing with as much gusto as possible. Live cheaply and pay as much as you can each month or weak or however you are doing it. Being debt free is wonderful. I taught my own children the importance of having access to credit but NEVER depending on it. It is for emergencies and must be paid back in the shortest amount of time possible. Find cheap and free things to do for entertainment. Walk. Get books and movies from the library. Buy bakery products at the day-old store. Buy other groceries at Aldi. If you don’t just have to have a car, don’t. Car insurance and maintenance costs a lot of money. I wish you complete and total success!!

kritiper's avatar

The sooner you start paying it off, the sooner you’ll get it paid off.
I had a school loan that took 10 years @ $55 a month.

KNOWITALL's avatar

I used the Dave Ramsey method. Pay off the smaller ones first, then take chunks out of the big ones, or make payment arrangements, etc… Got rid of all but a few credit cards, which I still use very responsibly.

Using this method, i’ve paid about $15k over the last ten years on mostly one income while maintaining current bills pretty well. Now it’s all paid.

TBH, I did not have much fun or spend money that wasn’t necessary until my debt was handled. No vacations for much of that time, I really buckled down to get a handle on it.

snowberry's avatar

We used Dave Ramsey’s course too. We are still working on becoming debt free, but we’re close.

KNOWITALL's avatar

@snowberry It’s the best I’ve practiced in my life. And it works. Good luck, I hope it works for you as well as it has for us!

Dutchess_III's avatar

Just keep plugging away at it.

kritiper's avatar

Always pay more than the minimum.

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