4. Dumping Debt – Insights

1970's Jaime Sommers came with cash...2013 Barbie now comes with a credit card!
1970’s Jaime Sommers came with cash…2013 Barbie now comes with a credit card!

Please note: These insights are intended for people going through Financial Peace University and are not a substitution or a recap of the coursework or presentation.

Dumping debt can be fun. I think that’s the underlying message I have. When I was in FPU I was getting money from relatives each month, taking out payday loans, and getting money from friends. Within 1 week of this lesson, I stopped doing all of that and stopped borrowing money to get by each month.

A few insights:

  • Post your Debt snowball where your household can see it – remind everyone of your goals! Mine is posted on my ‘big board’ in my home office. It’s frequently discussed.
  • Your cell phones may be debt – if you financed them seperately through T-Mobile, list them out on your Snowball and go online and pay them down seperately as part of your SNOWBALL. MyTmobile website will allow you to view your Equipment Installment Plan and pay them off apart from your monthly bill. It’s a new way to look at your cell phones. Many carriers are offering reduced service bills if you bring your own phone in. This is the way to go. Get them paid off, and then your cell phone bill shrinks. Never do the installment plan again – just start a sinking fund for that new phone and if your phone dies before hand, get a prepaid phone and have your service provider activate it as a post-paid (it can be done in many cases) and tie it to your account, then resume a ‘sinking fund’ approach to your new phone.
  • Watch the “Credit Sharks in Suits” bonus lesson on FPU Central and read the appropriate chapter in the book. I pulled my credit report and negotiated settlements personally with all my creditors that were in collections – and it was quite a few. $1600 settled for $1000, $800 settled for $600, etc. You can settle w/your creditors without a debt settlement company and come out ahead. It just takes a few hours to pull your report and make phone calls – if your debts have been assigned to outside collection agencies just have a positive attitude and set up payments. Often large settlements can be broken up into installments, $1000 = $100/month – two of my creditor agreed to this. You CAN do it yourself.
  • If you’re preparing to move to a high cost of living area such as New York City or California, dump your debt BEFORE moving. Take advantage of the cost of living where you are at if it’s low. I am located in Nashville, TN and re-signed my lease for another year, despite plans to move, knowing that dumping debt in a state with a low cost of living is like having an extra Gazelle by your side.
  • Fun Trivia Fact: As Dave Ramsey spoke about Monopoly and Life taking credit cards, and Barbie dolls coming with credit cards, I remember the days of the 70’s when Jaime Summers came with…Bionic Bucks!

Next Up: Buyer Beware