Fandy

When i stopped drinking, and the fog cleared...i realized not only how much $$$ i was spending on booze, but how much i frittered away on little things. I regularly take lunch from home everyday, grocery shop and cook fresh food.
Booze and fast food were costing me over $400. A month...(which about the price of cable-internet and my utilities). First year i decided to stop drinking i had to"see" my improvement so i made double mortgage payments every month. I improved my finances enough since 2010 to refinance to a 3%mortgage and just bought a new car.
I did not cut my credit cards up, but i take them out of my wallet and don't use them except for big things...(car repair,a new cellphone).

ArgentOfSilvae

Know how you feel, I guess most of us end up in the same boat.

I too have just stated looking at my finances, there are some great sites online with sound advice (moneysavingexpert), if you don't want to go down the bankruptcy/dept management route.

I personally am opting for paying as much as I can without going hungry, I have given up the booze, next on my list is smoking and take out, an taking my own lunch to work. All so I can put every spare penny I have paying off bills, I am looking at £10k but if i follow my plan and stay off the drink I CAN be debt free in 14 months.

Was pointed at a great site recently (google: snowballing debt. It's the first on the list) which I am using, simple thing really pay as much as you can on the high interest account and minimums on the lower interest, then when ones paid off shift it all to the next highest.

It's going to be a rough rough year, but I am sick of feeling like I work half my life for nothing

AoS

duane1

You should look up Dave Ramsey. Listen to his radio show if you can catch it. Very easy to understand advice on how to manage you money.

wheresthefun

A member here on SR has this Zig Ziglar quote in her signature, I LOVE it:

“The chief cause of failure and unhappiness is trading what you want most for what you want right now”

Also, a GREAT book:

Beyond Paycheck to Paycheck: A Conversation About Income, Wealth, and the Steps in Between

DG0409

What a great thread!

This makes so many of my own behaviors and attitudes towards money make more sense. And it gives me a sense of hope for the days ahead. I know I'll be saving tons not smoking and not drinking combined.

Dib42

You can't get out of debt by getting more debt. A consolidation loan doesn't fix the problem, you spending money on things you can't afford is the problem.


daveramsey.com Dave focuses on getting out of debt and building wealth in real world situations. At the minimum go to a used book store and buy "Total money makeover". You'll find his approach is alot more realistic than many other peoples. Focus on the baby steps first, and also read about the debt snowball, because that'll be the best technique to get those cards paid off.

Its time to make your new addiction attacking that debt.

first step will be aquiring an emergancy fund of $1,000. This money is ONLY to be used in an emergancy, its not something you dip into to pay back later, (you tried that with credit cards and it didn't work.)

Also with this you'll need a written budget, and you'll constantly have to adjust it, and you and your spouse will have to agree on it. Every dollar you make now has a name and a purpose.

Also you need to understand that its not the high interest rates on these credit cards that are killing you, its the fact that you used money you didn't have to buy things you didn't need. This is a behavior that will have to be corrected.

Cut up your credit cards, if you have them, they'll be a temptation, like a bottle of liquor to a sober alcoholic. You work on cash now, you'll find your more careful with your money if you see it as cash and not just a number on an electronic statement.

The next step will be your debt snowball, you'll pay the minimum on all your cards, except the smallest one, you'll throw all your extra money at that one and get it paid off ASAP, then you'll move on to the next card.

While you're doing this you will not go to resturants, you will not have premium cable channels, you will not buy things you don't need, you may pick up a second job, you will eat beans and rice, and other cheap meals. Sell everything you don't need or don't use. If its something you may need later, sell it anyway... if you pay these cards off, you'll be able to afford these things later when you need them.

Once those are paid off, you can start backing off the bare minimum life style a bit, and move to baby step three... but until then these two things will take most of your financial focus.

My mother was a financial counciler and I've learned a lot from her, and dave ramsey. If you need help or have questions, feel free to message me. I'm not a financial expert by any means, but I do know quite a bit.

Good luck to you, it will be hard work, but if you can get sober, you can get debt free!


Also, please tell me you don't have a car payment?

stinkycanuck

As said above, being sober will better equip you to manage the challenge -- and in my case the $600+ plus not spent on booze and in bars per month is a nice bonus! Just treated myself to a new guitar with some of the savings.

bryangt

Seems like a LOT of recovering alcoholics are all in the same boat when it comes to debt. I know I spent like a 'drunken sailor' when I was drinking. My credit card debt went up to about 30G's...took a long time to dig out. I haven't used a credit card in a few years now...If I don't have, I don't spend. It takes time to clean up the wreckage we created in the past, mentally, emotionally, financially & physically. Good luck & keep it simple.

ArgentOfSilvae

Some good stuff there dibs, I am glad my own research (and plan) is nearly exactly as you have written it

Dib42

Thats really cool! Sounds like your on the right track.

My private message offer is open to anyone, if anyone has any questions about budgeting or debt, or whatnot, feel free to ask. Like I said, I'm no expert, but I've been around a financial consultant most of my life, and read (not the hundreds my mom did) but a dozen or so of her top picks, so I've picked up a few things.

Natom

I had an awful lot of debt problems when I came into recovery. I had several payday loans (I'm not sure if you have those in America but they're just very very high interest short term loans) that I was defaulting on, a personal loan that I was missing payments on, and several finance agreements that I was months behind on. I essentially declared bankruptcy at the age of 22. I'm blacklisted on any credit searches and I'm under the restrictions of a bankruptcy order for another 3 months (I've done 9) but I'm a lot happier. I don't wake up in the morning worrying about money. I know my credit is crap but at the end of the day there's more important things to worry about. I went through a credit counselling service for all of this and it really helped me. This may be something you want to consider too.

Natom.

wheresthefun

Actually, a fair amount of financial experts will advice putting the extra payment towards the credit card with the highest interest rate first, then moving on to the next highest...

I'm not going to waste space here running the numbers with an example, anyone can do that for themselves, and they will clearly see the benefits of going in that direction - especially as credit card interest is "revolving".

Dib42

The most economic way to do this, is to throw the money at the one with the highest interest. However I personally feel that starting out you need some small wins. You need motivation to keep up with the process, that's why Dave Ramsey and I, advocate paying off the smallest one first, to get that knotch under your belt.

If you can stay disciplined, then yes by all means pay off the highest interest one first, however if we were disciplined, we wouldn't be talking about being in a lot of debt on a substance recovery forum.

If your cards all have a similar balance, do the highest interest first. Other than that, usually the extra amount saved by going the interest direction doesn't outway the motivation paying off your first card.

There is an emotional factor in money that a lot of financial experts ignore. There are a great deal of books written that are geared towards people making alot of money, but few (dave ramsey and zig being an exception) are really focused on people who have too much debt and too little income, and in this situation, your emotions play a lot into how you handle yourself financially.


*BTW my mother advocates paying the highest interest one first, but she has a level of discipline that far exceeds mine*

wheresthefun

I can see where that could give one a positive jolt, depending on the amount of their smallest balance.

But, remember we are all different. Yes, I had a serious problem with alcohol, but I've always been incredibly responsible and disciplined when it comes to finances. Go figure???

There are many variables that should be looked at first: interest rates, principles owed... Take the time and run the numbers with different scenarios, and then one could make a fully informed decision on which route they choose to take. Again, what floats one person's boat may be a ginormous iceberg to someone else.

AND, no matter what your situation, financial, addiction... it's NEVER too late.

Dib42

Good point(s) . . . it is never too late...

quitforme79

Thank you all for sharing your experience, advice and hope with me!! Dib, those are all great pointers and I will be using them Yes, I have a car payment and that stays....did get rid of cable though. I live alone and commute quite far so a reliable car is a necessity.