Is it beneficial to join Consolidated Credit Counseling Services? Im making my payments on time and I always pay more that the minimum but I just want to start saving a lil bit more each month. My credit score is also good so I was wondering if I should join this program to reduce and consolidate my payments. That way I can have more cash free every month. Anyone out there with a similar experience?
My goal is not necessarily to pay them off fast is to have more cash flow during the month.
Why would you do that? Combining them will do nothing to get them paid off quicker. It will open them all up so you can charge them up again.
Follow Dave Ramsey’s debt snowball. Pay the minimums on all of them. On the one with the lowest balance, put ALL your extra money toward it. When it is paid off, take that minimum payment, plus the extra you were paying and apply it to the next smallest debt. Keep rolling this until you are paid off.
MATHEMATICALLY it would make more sense to pay the one with the highest interest rate first. BUT, you don’t have a math problem here, you have a behavior problem. Paying the smallest one down will give you a quick reward and will encourage you to stay on the plan. Yes, you may end up paying an extra $30 or $40 in interest over the course of the plan, but you are already paying double or triple on that latte you charged a year ago.
In the future, only charge what you can afford to PAY IN FULL as soon as the bill arrives.
Also, get together a cash emergency fund so this won’t happen again.
We are debt-free except our house and have about 6-month’s worth of expenses in the bank. We drive two paid in full cars that are only a few years old and we pay for everything in cash.