HELP !!!!!!! WHICH BANK ???

Okay the object here is to pay off your CC debt.

The first thing you need to do is get rid of those cards – but keep one ONLY! Get that card and put that one in a container, add water and put it in the freezer.

Now the second thing you need to do is to find out the most efficent way of paying off that debt.
Get a blank piece of paper. Make a large box for every Credit Card you have. In the box put the CC name, put the total balance and then the monthly balance. You then create a space for the pay off ratio. To get the pay off ratio divide the total balance by the monthly payment. So for example:

Debt Name: CC Debt – NAB
Total Balance: $20,000
Monthly Payment: $1,000
Pay Off Ratio: 20

Now after you have worked out the pay off ratio for all your debt, find the one with the smallest pay off ratio. Put a big 1 on the right/left hand side of the box. That will be the first debt you will pay off. Do the same for the rest of the boxes.

After you have done that add as much extra to the debt with the number 1. Don’t try and share it around all the CC. It dosen’t work. You have to focus on one debt ONLY.

Now after you have paid off that CC debt add all the monies you put towards that credit card plus the new money you have freed up and put it to work aginst number 2 on your list.

If you do this you will be debt free (cars, personal, credit, house) in 5-7yrs. And no I’m not joking. I use the same system.

The last step is to go and buy ‘Money Secrets of the Rich‘ by John Burley. And look up Chapter 23.

ThHe important thing is to do this. Thats it. If you run the plan you will not only be debt free you will have the discpline to become a powerful investor. Good luck and let me know if I can help.

Hellman

Assuming they want to make the necessary changes and sacrifices, success is theirs for the taking.
They have probably drifted into the current position by not managing their finances.

Firstly, they must clearly want to climb out of the hole. Otherwise, don’t bother.
Then they need a clear method of establishing their true financial position right now, and again on the same day each month, in order to prove progress and the success of the plan.
Then they need to apply themselves to a progress plan with clearly defined successive goals.

Suggested changes :
1. Increase the income by converting the wife from a dependant to an income earner, using day-care, child-minding, whatever.
2. Reduce expenditure to a minimum. There are volumes written on this. They must learn it and apply it.
3. Reduce the interest burden by consolidating the debt by switching to a succession of honeymoon rates credit cards, while paying down the debt.
4. Eventually, the deficit will become a surplus, and the plan must cover what to do with this surplus, otherwise they’ll spend it. While a small celebration would be in order at this neutral point in time, this would also be the time to start investing the surplus to save for a home. Don’t forget the FHOG. The financial record of this transition from deficit to surplus is the record of financial ability which the lending body will use to show the serviceability of a housing loan.
If they have the persistence, it is only a matter of time from buying the first home to buying the first investment property.
They need a financial planner as well as a friend like you.
good luck
thecrest

You cannot use a guarantor unless you are buying property. That does not seem to be the case here. If the in-laws are willing to go guarantor and qualify, would they consider just borrowing the money and using it to pay all the debts and then ‘YOUR FRIEND’ can make the repayments to their loan?

All the other information here has been excellent. I love the credit card in the freezer trick. I am going to do that!!! I have to order a new card first though because I have memorised all the numbers on the existing one.

TMA

may be worth a stab.
He’s on 45,000.00 and employed.
I have organised before (the company would have to like the person and this case they did)the company pays out the cards
( she tried to commit suiside for her debt) she pays the company back out of her wages at a reasonable rate ( hers woz zero)(she has been with the company 7 year currently and alot happier worker).

This will not work unless the person gets help( she did) and they throw all cards out (she did) and only uses the money in the bank at that time not even shop charge cards and in the agreement with the company that is part of the terms and conditions of the company loan.

worth a try but its hard work and needs a outside the square looking company who needs this emplyee.
she also is still a good friend and when I go to this company I always get a nice cup of coffee and a bicky

here to help

Foundation,

I beg to differ on your second point.

You can still be a good friend to someone in dispair without getting involved.
Ie. make a suggestion such as mine, offer practial help (eg. help them move house if they are shifting)
BUT they still have to navigate their own way out of the pickle they got themsevles into.

Its in situations like this that you really find out who your real friends are (a friend in need is a friend indeed!), even if they did create the problem for themselves.

Cath

I had a friend who had $130,000 owning on credit cards. Her husband was not aware. I help her reduce this down to about half of that and told her to cancel her cards. Told her husband to make sure she does too.

The next thing I know she has come back asking for help again as she had gone and bought her daughter a new car, bought another property and taken a trip to America.

Terryw
Discover Home Loans
North Sydney
[email protected]

I would go further & say no credit cards. Work out a budget with someone & write down every cent that they spend & add everything at the end of the month. That way they become aware of what they can cut out/reduce. By paying cash they become more aware of what they are spending.

No friends or family should lend them money; this doesn’t help as they spend that & are in the same position again. I have seen this happen.

One can be a guarantor on a car purchase. Don’t go guarantor for anyone. My husband trusted someone & came unstuck. It can mean the end of the money & the friendship, one can lose both. Say no, it saves trouble down the track.

Sell anything on ebay that they don’t really need.
Cook meals from scratch, there are some great budget recipes sites on the net & a huge amount can be saved, or use the library for cookbooks.

I have been told more than once that I couldn’t have what we have on our income. Even the bank told me I couldn’t do what I was doing. He asked how long I had been doing it – I said 5 years so he agreed.

I live in a nice house in a nice area & we always look nice. It can be done. Make a temperature chart thing like they show when they are trying to raise money. Fill it in as they pay it off.
Look at it rather as a challenge than a terrible chore; it will make it easier. Put the chart somewhere, say inside the wardrobe door – then it isn’t there for everyone to see.

If the children are old enough it should be explained to them what has happened. I’m not suggesting that they be told how much is owed; unless they are well into their teens. Small children blab. Just say that we are going to have a game of saving money. Have a treat every now & then when X has been saved, but make it cheap; like a picnic or whatever.

Sadly they have to want to change. It isn’t what one earns, it’s about what one spends & what the money is spent on. Some people on $100,000 can’t make ends meet.
It is a big challenge but not impossible & being young they have a lot of time ahead of them. Sometimes one has to be cruel to be kind – the kids can’t have what they want & it’s good for them to learn early that money should be earned,; it doesn’t grow on trees.

I hope for their sake that they change but it starts with them, it is their choice.
blossomoz