Debt Confession | Payoff Plan | Snowball Method | Dave Ramsey Inspired 

This is me too! Except add a few years to the time I’ve been carrying the debt. I’m so determined about getting this done in 2023!

Yes! You can do it 👏🏼👏🏼👏🏼

Congrats on the 42 points!! That's a huge jump! And yes, I want to try to get to 30% as fast as possible so that I only do minimums for a little while. I'm determined to have this all cleared out 👏🏼

Ohhh great advice!! Thank you for that! 🙏🏼

@@budgetmealex thank you for your transparency you've inspired me to start my channel and share my faith as well

@@budgetblvd @budgetmealex I worked in a bank as a banker and also a credit card company in the fraud protection department & this is correct but not known by many. You want to keep your credit cards open even if youre not using them since a big factor of your credit score is length of credit history and closing a card is terrible for your credit. If you're unhappy with the card you can usually call and ask if you're eligible for a card upgrade. You want to have your utilization under 30% for each one. If you call your credit card company you can ask for your billing period and when that ends on your account- typically earlier than due date. You want to pay before your billing period to avoid unnecessary interest(they'll charge you even for a day if you pay past the billing period)

You can close your credit cards. I closed all but 2 and my credit score is in 800s. You have too many right now. Keep one or two and close the rest.

Keeping the oldest credit cards are the key to not affecting your credit score as much.

Thank you so much!! 💖💖

Omg that's actually a really good comparison lol I never thought of it that way! Thank you so much 💕💕

Thank you so much! 💖

Thanks for watching! 💕

Yes! I really want to learn my lesson this time and not go wild the next time I see an available credit limit 😂

@@budgetmealex me too! I’m hoping that cash budgeting will help me!

Thank you!!

Yes, definitely lol One by one it'll all be gone 😌

Thank you for that!! 😭💕

Aw thank you! I’m actually super excited about it! Like I can see this will be going away soon 🥹

Thank you! You've got this! 💕

Omg that seriously motivated me. Thank you for your advice! I honestly appreciate that so much! I'll definitely implement something like that once I get these numbers down 💖 And congratulations on that beautiful credit score! I'm sure it took so much hard work! Proud of you!👏🏼

I'm realizing a little rejection could've done me some good 😂😂😂😂

@@budgetmealex girl me too! But I always get so mad when I'm rejected 😂😂

Exactly. I honestly don’t think there’s any shame in that as long as they can all be paid back.

@@budgetmealex I totally agreed with you hun!! As of today I’m a new subscriber I am so going to try this thanks for sharing 🫂

Aw thank you for that! We'll do this together 💕

@@budgetmealex Yes we will 🤗

Aw, you did it once and can do it again 💕

Thanks for sharing! 💕💕

Doing this together! 👏🏼

Aw thank you so much!! I really appreciate that! 💖💖💖

Yess, and we're all about small goals to stay motivated to reach the big ones 👏🏼

Yes! It feels less overwhelming and bringing them to 30% first, lowers interest which helps you save more in the end so you get these numbers down fast. Love that you're helping your mom!

Ohhhh that's a great tip! I honestly never thought of that, so thank you!!

Aw thank you so much! Love your videos 💕

Thank you so much! 🙏🏼🥰

Thanks for watching! I really enjoyed this one and I want to do monthly updates. So stay tuned for that 😄

I live by that. It’s so true 😅

Glad it was helpful!

Good luck to you as well! 😄

I think we all had that addiction 😅smh mines was trying to see who would give me the most money. Smh straight foolishness!

Omg sameeee 😂😂😂😂

So glad to have you! As I’m reading through my comments, there’s soooo many people who found themselves going through a payoff again so while it’s not ideal, it’s nice to know we’re not alone in this.

Thanks for watching! 💖💖💖

I'm all about the little goals until we reach the big ones 👏🏼

Thank you! Good luck to you as well!

Thank you! I'm determined to get this cleared!

Glad it was helpful! 🙏🏼

Thank you!! You've got this. We're going through it together!

I was HOOKED on all those payment plans lol I had every single one and I feel you! Everyday something else was being drafted that I wasn't keeping track of. Writing it all out makes everything look possible and less overwhelming. You got this!

Thank you so much! I really appreciate that 🙏🏼

Thank you, Lily! I appreciate that 💖💖💖

Aw yay! Let me know how it goes for you! 💕

Omg you’re seriously so sweet. Thank you so much! 😭💕🫶🏼

You've got this! I'm ready for the new year when I can spend so much less 😭

You're right! It's a bunch of ups and downs, but the goal is to just get better the next time around 🤗

I also somehow got back into credit card debt after paying off all of it Very common. Buy now - pay later.

Yes! But we did it once we can do it again. I’m there with you 💕

Omg thank you so much! Yeah it would be a good idea in asking for an increase. That’ll definitely look good on your score 👏🏼

Definitely ask for an increase on your card's limit. But also begin looking for a card with a lower interest rate. In general low limit cards are also high interest rate cards. Folks want to know you will pay off cards and also that you CAN pay off the loans they have extended to you. Do look at some of the cash stuffers and figure out a way to open a savings account if you don't already have one. Then add to the savings account balance. If someone is going to take a chance on loaning you money (every credit card charge is by definition what is called a "short term loan") there is much less risk to them if you've got some money (savings) to cover (cash it out, pay it off) the loan balance (principle). If you are still in debt but paying off your new charges, use the Dave Ramsey $1000 emergency fund concept as your savings account money. If you are not in debt and paying off charges right away, begin to finangle your budget towards the 15% of income in savings, retirement (the younger you start, the bigger the passive income pot at the end of the rainbow), and/ or investments. And yes, there are investments that even low income folks can participate in.

Thank you, Jada! 💖

Thank you so much! 🙏🏼💕

Yes, it lowers your utilization rate which in then turn, boosts your credit (even if it’s not totally cleared) and lowers your interest rates! I’ll be opening my Etsy shop soon, so I’ll have this sheet available as a digital download! 😄

Thank you! I’m trying to keep my goals small and attainable so I don’t lose motivation quick lol

So glad you liked it!

Hi! Thank you! Here's the link 💖 www.etsy.com/listing/1356196966/debt-tracker?click_key=40278cb7e9f9712cdd29165fecaf030074e27a73%3A1356196966&click_sum=1c877a3c&ref=shop_home_active_1&crt=1

Thanks for the advice!

It feels way less overwhelming breaking it up into smaller goals 😅

Yes! I like paying the little ones first because it feels so much faster to me. But yeah I need to really get some discipline with these things. Not using credit cards anytime soon unless I have the cash to pay it immediately 🥲

I’m glad! 😄

Omg that would literally be me 😂

Definitely considering that!

You've got this!! I'm thinking of implementing a monthly debt update. I actually really enjoyed doing this and want to continue.

Thank you! It's all about the small goals that will eventually lead to the big one 🙏🏼

Love your plan! It’s honestly such a relief knowing you can clear it all with money in the bank still. Proud of you!

@@budgetmealex thank you so much for sharing your numbers I know that must of been scary. You can do it and your not alone. I was the only one in my family willing to help the family member who was in debt. I looked at all of her interest rates and her income just wouldn’t of been able to stretch that far. My family said why would I do it, I said if it’s not me all she’ll end up with is a debt mountain she couldn’t ever clear. But yes will be debt free by my 25th birthday in March !

Thank you!

Yes, as soon as I open my Etsy shop this will be available as a digital download 🙂

You’ve got this! Inch by inch until it all gets done. I believe in you 👏🏼

Budgetmealex is concentrating on getting the cards down to 30% balance of thier maximum limits with a goal of maximizing her credit score asap. The snowball ball method is designed to reduce the total monthly minimums then snowball the minimums of paid debt into additional debt repayment; in part this is to eliminate enough minimums to be able to breath. The avalanche method concentrates on paying down the largest principle first with the goal of paying the least amount of interest by the time all debt (principle) is paid; and then turning what were presumably higher minimums to more quickly wipe out lesser balances. The adapted avalanche method is to payboff the highest interest bearing debt first; again to reduce the total amount paid on interest and automatically put more of the debt payment cash flow on principle. There is an additional tactic which is a little more loosey goosey and takes more work. And that is to put the primary goal as reducing minimums. For many credit cards and also variable interest rate loans, the minimum payment is based in one way or another upon how much principle is owed. Lower the actual debt or principle owed, and you lower the minimum payment. Each card or loan has different terms and it requires calling the debt owner to ask how you can lower your minimum payment. If you dont seem to get much of a response, then ask questions like if you put $X dollars towards an extra principle-only payment, what would your new minimum be? This should give you some targets to aim for on at least some of the accounts. Realize that if or when interest rates increase again, your principle pay down may not be enough to keep your minimums reduced; on the other hand, the increases won't be as high had you not reduced your principle owed. When and as you reduce your monthly minimum payments it is critical to also decide when it is time to utilize the snowball concept of wiping out the principle owed on one or more accounts; this reduces the monthly minimums by eliminating them in an account by account basis. Once you have the cash flow to make the minimums, often it can be a good idea to tackle the debt with the highest interest rates; all the more so if doing so further reduces thier minimum payment. In some cases however, some of the highest interest rate cards and loans have lower minimums considering the amount owed. And then you have to balance reducing minimum payments on less expensive debt vs savings on interest. - Right now, it looks like your primary "pain" is coming up with your minimum payments.

Oh man, thank you for that advice! I think what I'm planning on doing is lowering all balances and closing a couple. For the bigger ones, I plan on using them for business, gas, and groceries and just pay them off with the cash I have for those categories in my sinking funds. Seems to be the most responsible way I can go about it lol

Don’t close them.. leave them open. If u feel you’re going to go back to them just cut the card so you can’t go looking for it..

@@budgetmealex You got this! But I also would close any of them, but just cut them up as the other comment said. I have a few cards that I use during Christmas only to keep them open and pay them off and then never use them any other way, but years ago I did this. I had I think 9 cards and I closed two, just the ones that had the smaller limits and it still hit me hard credit wise because if you use your other cards, then your credit usage is higher overall because your overall credit limit is lower than it was before. Ex: You have six credit cards, all 100 dollars each and you spend 25 on two of them monthly. Well, you close one card and now you're using 50/500 instead of 50/600 dollars which is a larger percent. It's SO confusing but I would say leave them open and cut them up or I personally put them in my personal safe until it's time to use them. I do it around Christmas but you can also just use them when the company sends a letter saying it's been stagnant too long.

Yes Dave Ramsey teaches pay everything with cash, if you've got the money, you don't need a credit score

Never close your accounts or your credit cards ever! You get a hit on your credit score. Keep them at home safe and use them for small items once in a while.

Yesss! I have a plan to close the ones with monthly fees and no rewards. But I definitely have some good ones in the mix I'm willing to keep. I need lock all my cards in a drawer and block any credit cards ads so I don't apply 😂😂😂

Thank you! 🥰

I’ll be opening my Etsy shop soon, and will have this sheet available as a digital download! 🤗

Thank you!!

Thank you 🙏🏼

Thank you!

Thank you!!

I don’t want my credit to take such a huge hit in closing a few at once, but I do really want to close out the ones that are no benefit to me and keep the higher limit/rewards ones. I’m tired of having so many 😩

@@budgetmealex you’re right I would do it slowly over time. Just having so many open I would definitely get into trouble lol

I’m opening my Etsy shop the first week of January and it’ll be available then! 😄

Yes but this really keeps it from being so overwhelming for me and I do it step by step to keep myself motivated and reasonable to start. After I get them all there, I pay off one by one.

Aw yay, so glad to have you! 💖

Yes! I really hope I learn my lesson this time, because I'm tired of stressing myself out! 😂

Who care how someone got into debt. I think its called living beyond your means. Pretty simple.

Thank you!

I’m so glad you found this system helpful! 💕

Thank you for the advice! All really good tips!

look at trying to get some of your limits raised. Great advise for an habitual credit card abuser.

@@DavidEVogel Certainly for this segment of the journey, the emphasis is on paying down debt while retaining and increasing her credit score. And, yes it does sound like this is at least round two budgetmealex's of racking up then paying down debt. And that does lend one's self to the label of "habitual over spender". And yes, it does seem that more than one utuber out there classifies things I would call wants as needs with quite an assortment of rationale; and they encourage each other to do the same. But, it is a journey and we have yet to learn what money management lessons Budgetmealex has yet to learn.

Yes, thank you!

Thank you!

Yes, I have it available in my Etsy shop 🤗 www.etsy.com/shop/budgetmealex

Hi! Yes, I’ll have them available as soon as I open my Etsy shop. Estimating around the first week of January ☺️

I plan to only close the ones with monthly fees that don't give any rewards or cash back. But I do have some good ones I plan on keeping and utilizing responsibly once I can get my numbers where I want them.

Will you close most or all of the cards when they're paid off Why not toss them in the trash today?

Yes! It will be available in my Etsy shop in January 😊

Aw thank you! 🥰

It’s the interest fees that get me every time 😭

I made it, so I’ll have it available as a printable as soon as I open my Etsy shop 🙂