Paying Off Debt From A Failed Home Business



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Oney from Colorado Writes:

"Due to some very poor choices on my part, a home-based business opportunity just about ruined our marriage, our finances and has done a number on our credit. I feel so guilty for this but I am beginning to get a grip on the guilt. We enrolled in a consumer debt repayment program and have whittled the debt down to far less than what we started with. But now, I have incurred another $4700 in credit card debt and have a child heading off to college August 2007."

I am sickened that I did this and the guilt is rising. I homeschool my other 2 children and babysit for another little guy.

I get $80 a week for babysitting and would like to know if it would be better to put that on the "new" $4700 debt each week or if it will make that much difference.

Obviously, we have not been able to save any money to help our daughter go to college.

I had such big plans and big dreams for that home based business… unfortunately, instead of being "in the pink" (hint) I put us very much in the red. *sigh*

 

Tawra: Yes, I would put every little bit that you can toward paying off your debt. It doesn’t seem like much to put a few dollars toward $4700, but it does add up! The only way we were able to get out of debt and pay off $20,000 on $22,000 income a year was by paying every little bit we got, even $20, onto the payment.

If we got an unexpected refund, it went to debt. If we got an unexpected cash gift, it went to debt. Everything we could come up with went to debt and we got it paid off.

Regarding the babysitting money – If the debt is in several places (multiple credit cards, etc.), I’d pay off the lowest balance one first.

By the way, don’t worry about paying for your daughter’s college. Not everyone can afford to do it for their kids and it won’t kill her to pay for her own. She will appreciate the value more and work harder if she has to pay for it herself.

Don’t beat yourself up. Everyone makes these kinds of mistakes. You just have to go on, get it paid off and learn from your mistakes.

From: Dig Out Of Debt

 

photo by: andresrueda

Comments

  1. Tonya says

    Extra tip: Since you’re paid weekly, make weekly payments to that $4700 debt. Assuming it’s on one card, make copies of the bill and send in a payment every week you’re paid for babysitting. Weekly payments to the card drive down the average daily balance, which is what card companies use to determine your finance charges. It may sound like pennies of a difference, but it will add up. I did this with a $3,000 debt and paid it off 3 months earlier than anticipated (my interest rate was very high).

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