Comments on: Milestone – $10,000 Paid Off

By: Financial bondage

Financial bondage — Wed, 21 Jul 2010 00:41:37 +0000

good job. debt sucks. keep paying it down.

By: Abdul

Abdul — Mon, 07 Jun 2010 04:56:33 +0000

Congrats on reducing your debt by $10,000. Have you tried consolidating your debts under a lower interest rate? Or to pay off the remainder of your debt, you could arrange for a debt workout or extended repayment plan.

The most common arrangement between debtors & creditors is an extended payment plan (EPP). With the EPP, you would pay say a $1,000 debt that is due now in 5 equal instalment payments of $200 each. Other types of debt arrangement plans include settlements where the creditors have to lower the interest rate or totally eliminate it. Source: http://www.debtconsolidationblog.net These types of debt settlement plans are more difficult to work out and plan. An interesting feature of debt settlement plans is that the creditors sometimes settle for 50% of the debts owed, for example they will accept $500 to settle a $1,000 debt and call it even. In the below sections, we explore why creditors are willing to settle for less.

By: Michelle

Michelle — Tue, 02 Mar 2010 00:40:09 +0000

You are awesome…It took us about 16 months to get fully buffered, with murphy & setbacks along the way. But, you will find that being buffered magnifies the power of the snowball – you can identify and isolate the additional income that isn’t going to be assigned to expenses the next month and get those sent off to the debts. Good on you and here’s to the next 16%!!

By: Jake

Jake — Mon, 01 Mar 2010 19:46:57 +0000

Actually, if I were to keep getting ahead further, I wouldn’t be making any progress. There wouldn’t be much of anything left over for savings or snowballing, or my other debts in general.

By: Investing Newbie

Investing Newbie — Mon, 01 Mar 2010 14:54:38 +0000

Congrats Jake!! Pretty cool Gravatar too! Are you planning on getting even further ahead with your paychecks or just sticking to being 2 months ahead?

By: Jake

Jake — Mon, 01 Mar 2010 06:56:15 +0000

There’s actually a poll on the YNAB forums for how long it took people to build their buffers, and trust me, you’re not the only one. Good luck!

By: Stay at Home Mom CFO

Stay at Home Mom CFO — Sun, 28 Feb 2010 16:04:08 +0000

Wow – congrats to you! That’s awesome that you’re out of the cycle. It sucks. I think it may take us close to year to finally NOT be paycheck to paycheck, but it’s the bed we made. And once we are out – we will NEVER go back!!

By: Jake

Jake — Sun, 28 Feb 2010 02:59:11 +0000

Rule #1 is to stop living paycheck to paycheck – that’s it. The method used is building a buffer with your extra money (that you would otherwise use to pay down debt, or whatever) until it’s equal to one month’s expenses – not income. It’s also not the same as building an emergency fund, as you’re not moving it in to a different account, it typically stays in your checking account. Once you are completely living on last month’s income, your buffer is complete. For example, I don’t need to bring in any money in March to live through March, because I made enough in February. Whatever money I bring home in March will be used in April, rather than right after I get it.

By: Stay at Home Mom CFO

Stay at Home Mom CFO — Sun, 28 Feb 2010 00:51:12 +0000

Could you explain “rule #1″ of YNAB? I’m so anxious to get out of the paycheck-to-paycheck cycle too! I was thinking I would need to save 1 months pay(or be 1 month ahead in bills) to finally consider us not paycheck-to-paycheck. Is this the same method?