Re: What is a “normal” amount to save in a year?

Thanks for the positive message about not putting yourself down. It is easy to beat up on oneself for debt problems.

I have a problem with getting overdrawn, and the fees the bank charges. I have already trashed my credit, and am doing debt settlement, but have one judgement against me – so the only way I have to be in debt is overdraft fees. I know, I know, I could have the bank stop doing it (the bank allows you to get $200 overdrawn)- but I tell myself I can’t buy food, or cat food if I don’t have it there for me.

But I think the underlying reasons for continuing to get overdrawn are what needs to be addressed – just like some folks on here are facing their issues with spending.

like why don’t I have enough money to pay my bills? what do I need to do differently? I live with my kids, who are 23 and 20, and both of them are working. Yet I feel reluctant to ask them to help pay – probably because of the guilt I fee l about being divorces (they never had their dad in their lives and he stopped paying child support) – and my son has health and drug issues, and I never saved for their college – etc, etc, when I write this I see how ludicrous it is.

So, anyhow, it is good for me to see other people also facing in themselves how they got into their situation – but without blaming themselves unduly, and recognizing their need to change and move on – so thanks for letting me have this blog.

Don’t feel bad for them, you did the best you could for them. At this point in their lives though, it’s time to ‘cut the apron strings’ and allow them to start being productive members of society. You won’t be a bad mom if you charged them rent or for food.

I grew up in a single parent home, parents never divorced and my mom did not save for my college education. But I went to school somehow got a degree and I am about to go for my MSW.

Some how we feel pressure from all sides, and this world puts those who can’t deal with pressure in a financial trap-some how we have got to face the fact that either we may be addicted to retail or running from our financial responsibilities.

They are never going to go away…..Do what you can to uplift you and leave the rest to GOD.

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What is a “normal” amount to save in a year?

saving money

Last year I finally achieved a positive net worth for the first time in my adult life (I’m 34). I am not prolifigate or materialistic but due to some unavoidable personal circumstances I’ve spent the last 8 years paying off almost $200K in unsecured debt. This is SUCH a relief and I have to give myself credit for being disciplined about paying it off. But here’s my dilemma.

I am self-employed and made some good money last year but I feel like I ought to have more saved up at the end of the year. I keep track of every single thing I spend money on, business and personal, literally to the penny. So I know what I’ve spent money on and how much. But while I can see how I ended up with the amount I have, I just can’t shake the feeling that I should have saved more.

What I’m wondering is maybe I have cockeyed ideas as to how much I should have saved? ie, maybe I’m being too hard on myself or having unrealistic expectations.

So what I’d like to know is how much does a “normal” person save in a year? ie, not super cheap, not spending crazy, making enough money for thier expenses that they don’t have to lay awake at night worrying about paying the rent (been there, done that).

I’m looking for whatever you think, ie a percentage, an actual amount, etc. I don’t need advice so much as to re-calibrate my expectations.

Saving is hard enough without putting yourself down by telling yourself you should have saved more. I’ve had trouble saving money for years. Last year I decided to set a specific amount to save each week ($5)and I’ve been doing it. Maybe this isn’t much but my income last year wasn’t much over 12,000. It was more but I have 10% going into a 401k before taxes come out. Put over 2,000 into that 401k last year. I started out at 7% and have been increasing it by 1% every 3 to 5 months with the desire to reach 15% by the end of this year. I’m more concerned about having money to live on when I retire than having actual savings today although I want enough savings to handle emergencies like car repairs.

There is no set amount you have to save each year and no formula to figure it out. You decide what is a good amount then go for that and if you end up with more then you’re doing great!

personally, when my thoughts start going to kicking myself for what I didn’t accomplish or get done I’m working hard to switch over to complimenting myself for what I have done. For example, I start getting on myself because I didn’t get the laundry done and my kids and I are nearly out of clean stuff. I start listing what did get done like all of the dishes are clean, I made cookies, fixed a good dinner, found a great new book at the library, finished homework for my college class(es), etc. My ex was always putting me down and I’ve been working on breaking that habit now in myself by focusing on what I have accomplished instead of what didn’t get done. I refuse to trash myself.

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Decreasing cc loan amounts

I have a question about credit cards.

since I have had problems paying back credits cards lately it has negatively impacted my credit history.

one of the companies has decreased my total available loan amount. this is after I have reached the max with them.

so when I maxed our my credit with this cc company I was within my allowable credit amount. with this decreased credit amount I appear to be in excess of my allowable credit amount so now I am getting charged an over-the-max fee.

is this legal?

is there a way to fight it?

thanks for any ideas. you have always been such a help.

Did you go over the max with late fees? Since you haven’t been paying it, you fees or dues probably kept climbing and exceeding that limit. But if they moved it down close to your balance and then are charging you for being over, then I would say that is not legal. Do you have your contract?

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Weekly payments update

So a quick recap…

Splitting my CC payment into 4 saved me 10 dollars the first month.

The second month totals just came in and the savings increased to 17.00 This should dramatically decrease the time it will take for me to pay off this account.

Now I am applying this same method to both my cards..Will send an update next month once I know the impact.

Good Luck All.

I am not sure how this works. Can you explain. I have a Capital One with a balance of $400 as an example. My monthly minimum is $15 are you saying for this card you would pay $5 a week which would add $5 a month?

If I owed only $400, the minimums would only be about 12.oo or some. IMO, THAT is the one I would triple the minimums on and get rid of it soonest.

Meet the minimum on the due date, then in the middle of the month with your next paycheck, add another payment of something more, either another minimum or if you can, more..

IIRC, they were talking about a card with a big minimum and say $4700.00 would be about $200 and some a month. The poster would pay $100.00 2 weeks before the due date and then another $100.00 ON the due date.

First off NEVER NEVER NEVER only pay 15 dollars on a credit card, they will suck you dry with interest charges. But what I did and was trying to explain which you mayhave missed my original email a month or so ago.. but here it goes

My Minimum on the one card is 160, so i split that up into 4 equal payments, paying one of the equal amounts every week. What this does for you is reduces the amount of interest paid at the end of the month, thus giving you a bigger principal payment without having to actually fork out extra cash. If I continue to do this over the term of the re=payment I will save a ton of interest and pay it off much faster then I was currently doing. The minimums will continue to decrease and the principal payments will increase.

In your case you really need to sit down and figure where you can pull some extra doe from and get rid of that card, I wish I only a 400 dollar card to deal with… devote all your resources to that card, then you can move on to tackle anything bigger you have that is next in line.

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Interest Rate Reduction on Credit cards

Hello All, This is my first post to the blog after being a reader for some time. I have some serious debt to tackle after my spouse was laid off from her job of 15 years. I have noticed that most of the advice regarding interest rate reductions, called for continous and persistent telephone contact until you get satisfactory results. I have started doing this but wonder if it would also help to send my requests in writing. If so, does anyone have a sample format that I could use?

You would be wasting your time sending it in writing at this point. just keep calling and asking for someone who can make that decision.

I am in a similar position as you. Do you talk to the first human voice that comes on the line or do you need to ask to talk to a manager? All I’ve gotten from them is that it’s the best rate available for me at this time.

What I have done with some success is talk to the first person who answers, then move up their food chain to a manager. When I get the, “That is the best I can do” and I know it is not, then I usually say something like, “So you do not mind if I transfer this whole amount to card x which is offering me 9.9%? Once I do, I will close this account permanently.” At that point, they will either bid me a fond farewell or go back in and give me a better rating. Sometimes it’s a better idea to apply for one of those bad credit loans with guaranteed approval instead of getting new CC with higher interest rate.

If I cannot get a rating below 12 percent, I go packing and find another card, but I make sure to call the original company back, get a manager, and tell them to close the account and why.

Good Luck.

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I’m not out of debt yet but am current on bills at this time.

I’m not out of debt yet but am current on bills at this time. I have old debt to deal with and that’s my next project. However, I have to agree with Rich here – budget! We use a monthly cash flow sheet by Dave Ramsey and know where every penny is going to go before we get our hands on it. DH owns a 6 month old business and I work retail. Our incomes fluctuate and trying to pay bills on time has been a nightmare. Forget saving money!

But we started using the envelope system for our business and personal expenses and wow, what a difference that’s made! Today is the 7th day of March and the business rent, electric and phone bills are paid already. We paid the phone bill the day after we got it, our first time ever to do that. Between the cash flow sheet and the envelope system we have a great handle on our money for the first time in our lives.

I can’t strongly recommend enough that you use a zero based budget (call it what you want) and look at every penny you spend to see where they’re going!

I also would like some tips on how to get started. We have quite a bit of credit card debt, car payments, mortgage and medical bills, We tried CCCS but we couldn’t maintain the payments that they set up, so we need to try to negotiate with the creditors. Any tips or info would be appreciated.

Are the debts old or current or what? I’m a firm believer in doing Dave Ramsey’s snowball method of paying them off. Are any of them small enough that you could pay them off in one chunk? If you haven’t yet, list them all from smallest to largest. If any are small enough to pay off now, call that one and negotiate a settlement price, get it in writing and pay it off then start on the next lowest one.

I suggest going to… Scott Bilko is selling a few of his books on how to negotiate with Cc companies and the art of negotiating. Just a suggestion. I have the books and they will give you any information you need to know. I believe for all 3 it was like $25.00. Good Luck, if you have any questions let me know.

Here are the steps to successfully manage the debt. (as I would do it) Also, stay away from the CCCS and companies like that, you can do all they can do with some effort.

  1. Write it all down, use excel, whatever your comfy with. Write down the balance, monthly minimum ,etc.
  2. Sell the cars and get rid of car payments. :-) This is a tough step, but when the average car payment is over $300, that’s quite a bit of money going out the door for an asset that only goes down.
  3. Do a budget, a written plan for the coming month. Do food, shelter, transportation (car payment until sold) and clothing first. Then do all the other needs except for CC debt. Then, with what’s left at the end you determine how much you can pay the CC companies. At this point you also will call the CC companies and ask for a lower rate and ask them what the new minimum payment would be. Now, based on this information you can see if you can make minimums. If so, breathe a moment and add them to the budget. If you can’t meet the minimums, then here’s what we do. Add the balance of all cards together and then determine the percentage each card contributes. For example:

    Visa Citibank – 2000
    Mastercard – Wamu – 1000
    Discover – 6000
    American Excess – 1000

    So, Visa is 20%, Mastercard is 10%, Discover is 60% and AE is 10%

    So, if your available money for CCs is $200, you would divide it up amongst the creditors. So, Visa would get 20%, or $40, Mastercard would get 10%, or $20. Discover would be $120 and AE would be 420. You make a copy of your budget and send a letter every month with it stating that this is all I can pay.

  4. Sell stuff!!
  5. Get a second job

Hope that helps. It works well and will usually carry you for years though with extra jobs, selling the cars (and replace with beaters until you have the debt gone) you won’t need it to carry years.

One last reminder, always, always always, PAY HOUSING, FOOD, TRANSPORTATION and CLOTHING first!!!!!!!!!

P.S. clothing shouldn’t be top of the line stuff you can’t afford and food = no restaurants and no seafood at home :-) well, shrimp if it’s on sale with triple coupon 😉

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I need help making some decisions

I need help making some decisions, is there anyone here who can take the time to help, someone who is NOT in debt… someone who has recovered from debt.. thanks!

Hi, I am currently debt free except for my home. I have lived through mounds of debt and using most of the principals that Dave Ramsey teaches, I was able to get my life, and the life of my family straightened out. I would be happy to help you with any questions. Besides, it also gives me some practice.

I would love advise on how to stretch my paycheck to start saving money every pay day.

The best advise I can give you is the dreaded B-word! Budget Budget Budget.. or a cash flow plan if that makes it easier to swallow. But really, the best way to make money go further is to have a plan for that money. Back in the day I would use my debit card, my credit cards, or cash on a whim, with no idea where it went. Sit down for dinner at a dinner, stop for taco bell the next day for lunch, buy a new game here.. next thing you know, I’m like huh, where did my money go???

You have to sit down before each month begins and decide where the money is going the following month. I had tried to sell the idea to a young guy I used to work with and I’ll try to make the same point here. A budget doesn’t mean you can’t do what you want. On the contrary, it means you can do whatever you want as long as plan it out. If you wanted to put $200 a month towards comic books, you could do that, as long as you can afford it which leads me the next point, you have to be honest with yourself. You have to realize what is do able and what is not do able.

I don’t want to see a budget with $200 in restaurants when you’re only savings $50 a month and you have no emergency fund built yet. The next part is about discipline. If you have no disposable income, (income after you meet all needed expenses) then you have to look for ways to cut corners. Do you need Starbucks coffee every morning? Can you only eat lunch out once per week? I don’t know your situation, but I think those two examples can get you rolling. I play a game called City of Heroes which cost me $15 month, not much, but when coupled with Netflix, that saved me about $35 per month when I stopped them both while getting out the hole.

Now for the last part, you must making savings a priority in your heart and mind. It should be taken right off the top, almost like it’s not part of your income. If each paycheck is $600, make pretend it’s $550 and have that $50 automatically put into another account. I love those auto transfers, they really help! Well, I hope that helps you and if you have any questions about what I typed or of any other nature please go ahead and ask.

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Has anyone negotiated with credit card companies?

Has anyone negotiated with credit card companies on their own for a debt settlement? I have an option coming up at the end of March to withdraw money I had put aside for my kids’ college. I hate to do this, but hate even more to be so much in debt that I can no longer make the minimum payments, and if I get out of debt, then I will be in a position to restart college savings. That means that hopefully sometime in April, I will have between $10,000 – $12,000 in cash to try to settle over $20,000 in credit card debt, between three separate companies.

Does this sound doable? Would they settle for perhaps 40% of the balance? I’ve been unable to make minimum payments for the last 3 months or so, so I’ve been paying a smaller amount, to at least show I’m trying to pay something.

Thanks for any advice.

If you look through the archives you’ll find a lot of messages from people settling with creditors. My other half and I are in the process of doing that now and many are willing to take 30% just to get it off the books.

You can really get CC companies to take as little as 30%. Try to start around 25% and then negotiate from there. Give them a story, tell them how your dear old aunt left you just _____ amount of money and you want to send it to them to settle. :-) Either way, once they do agree to a settlement in full here are a few major things to remember.

  1. Don’t ever give them electronic access to your accounts, ever ever!!
  2. Don’t send any money until you get the agreement in writing!!
  3. Once you get the agreement, make a copy, sign and return to them with a check.
  4. Remember that forgiven debt is consider income and the CC company may send you a tax form at the end of the year and you will have to file it with your taxes. But I guess paying taxes on $15,000 is better then paying the $15,000.

One more thing I would add regarding taxability of any debt settlement. Any debt that you are relieved of that you are “insolvent” for is not taxable. See IRS Form 982 and Internal Revenue Code 108. When considering the amount of “insolvency” you can subtract from your assets your state’s exemptions. For example here in New York there is a $50,000 per person homestead exemption. Get some of Nolo’s books at the library on bankruptcy after exploring and

Also watch this video to find out more:

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Debt Settlement

Yes I am behind about 5 or 6 months or more

That is good, (well for you to begin a program). I wasn’t but maybe 1 or 2 months behind. So I had to wait awhile before they would start paying on my bills. IF I had of known that, I would of been saving that money, so I would of had a nest egg for emergencies. As it is now, We have NO savings…. so if my washer were to go out tomorrow, I’d be in trouble. I would recommend this to anyone, and then DO NOT create any more debt. I will pay cash from now on. Putting items on credit cards only adds to the cost of the item.

So far, I have suffered no ill effects of doing this, other than crappy credit, which my company will repair for me at the end of the program, at no cost to me. Having to pay 25% of the savings after it has doubled, in most cases, it just the price I have to pay of having had to live off my cards from having such crappy luck all these years.

Can you explain the myths?/facts? that working with such companies can damage your credt score instead of being a +effort to get out of debt.

ANY time you do not pay a bill or make a LATE payment it is reported to a credit reporting bureaus. Some places report to the THREE major ones (Equifax, Experian, and Trans Union). Some only report to one or two. I heard that there is a FOURTH one, but I do not know the name. YES, at first it has a NEGATIVE effect on your credit. The one I am with enrolls you in a credit repair clinic immediately upon completion of paying off the debts.

I used to worry about that…. but I no longer do, because CREDIT is what got me in this mess in the first place. Once I am out of the hole that I dug for myself, I will use a debit card, and use it sparingly. Anyone that has ever had a credit report pulled on them will notice that everytime you pay for something that was bought where you had to make monthly payments will be on there, even small ones that you may have forgotten about. My neighbor even had some magazine subscriptions on hers that she had forgotten about. If you are not too terribly far behind, and have made timely payments in the past, the creditor will work with you and won’t report the payment as being late, but only IF you call.

I have don’t want to discourage you, but each program has its pros and cons. But eventually the debts come off your credit, after so many years. I can’t say the same about student loans, and debts along that nature…. from what I have heard, you have to pay those back. I found mine by typing in debt negotation companies and debt settlement companies. I knew I didn’t need debt counseling, cause I was way beyond the counseling stage… much like someone who has been a severe abuser of alcohol for years is beyond AA meetings, and needs to be in a treatment center. All I can advise you to do is RESEARCH! Once you find a program you feel comfortable with, keep your nose to the grindstone, and do not take on any more unsecure debt!

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Do it on my own??? Where to start?

We have approximately 33K in credit card debt. We have done our best to stay current on our payments – but it’s been at the price of not being able to pay our regular living bills. THEN we end up buying necessities (food, gas) on the credit cards…and now their maxed…and so the ball rolls…

Anyway, I’ve been looking for a debt management company to work with but after I check them out, they always seem to be some sort of dubious effort to take advantage of someone in a time of hardship. My husband and I would really like to go about it on our own.

We have diligently gone through a monthly budget that we can handle. We wanted to start off calling our smallest credit card and seeing if they would settle and then go on from there. HOWEVER, we don’t have much built up to settle with yet, so any extra money sent to go toward a settlement will end up keeping us from being able to pay the minimum payment on the other higher amount credit cards as we go. Our concern is what will happen with those accounts while we are working on paying down/negotiating the smaller ones.

Does sending partial payments help? Should we contact them in writing and ask them to go ahead and close the account and waive fees? Or should we wait on that?

We are about 1 month past due on most of are cards at this point, so I know it won’t be worth negotiating with the larger ones until later. I also think that after we pay off the smaller ones (and get our tax return!) that we may be able to do a ‘snowball’ payment plan to pay off the remaining debt – but how much interest/late/overlimit fees would have mounted up by then???

Are we going about this all wrong? Sorry for all of the questions… I would just like some thoughts as to our idea to approach our situation. We really want to avoid bankruptcy if possible.

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