Next steps?

I need financial advice. I realize this prob isn%26#039;t the best place to get it, but it can%26#039;t hurt. I am 25, a single mother with a 9 month old. Straight out of high school, I made A LOT of mistakes with my money. As a result, I now have about $8,000 in misc. credit card debt and a HORRIBLE credit rating. But, I jhave been working on it. My question is, how do I get started? I have been at my job for 6.5 years and have approx. $2000 in my 401(k) and $10,000 in my pension. I have a new car and have made all 8 payments on time. I have no open credit cards, all have gone into collections. So what do I do first? Build savings (I have about $5 in my savings) or pay off debt. And if pay off debt, how? One at a time? A little for each? HELP!! I am trying to do better!!

Next steps?

Hi, Don%26#039;t panic...you can correct this. It%26#039;s is gonna take some time though.

It takes about 12 months to successfully erase what happened in the previous 12 months. The credit history appears on your report on a month by month basis and each new month erases the one for the same month-one year ago.

The first thing you will want to do is to list all of your outstanding debts. This includes your current accounts, as well as your charged off or collection accounts. Write them down with the balance due on the account and the monthly payment amount. If you don%26#039;t have the information, call the creditor.

You can call any of the creditor that are now in charged off to see if they are willing to offer you a settlement. Call any accounts in collections and speak to a collections manager and make arrangements (something that you can afford). Keep a journal-who did you speak with, when, what was the amount you agreed upon...ask them to send it to you in writing.

Finally, count up the amount of all of the monthly payments that you now have to pay. Continue to pay your current accounts. Concentrate on one account at a time that is in collections (the one with the smallest balance-get it paid out first).

Example: Mortgage/rent, utilities, car payment, etc. Focus on the collection account with the lowest balance. Send the amount that you agreed upon until it is paid off. Then focus on the next highest balance...IF THE PAYMENT ON THE FIRST BALANCE YOU PAID OFF WAS $100/MTH...ADD THAT TO AMOUNT OF THE PAYMENT FOR THE NEXT ACCOUNT. You will pay off this second account that much sooner. Now the next account will get the payment for both of the previous accounts that you have now paid off...and so on. By the time you finish (This may take 2 years or more) you will find that you have maybe $300-400 or more that you used to pay out monthly in debt....that can now be placed in savings. You aren%26#039;t spending one penny more than you did when you first started paying off your debts....BUT NOW YOU ARE PAYING YOURSELF and can make purchases in COLD, HARD CASH!!

Next steps?

hey how are you.. well Im in the same situation.. when i was younger i spent tooo much money in misc and now i want to payoff for a better future.. What i have been doing is.. paying off the one I owe less...and snd 20 extra of the min due for the others.. whenever i have moneys left over I also apply into any of them.. like that Ive paid off 2 accts already and i have 3 to go! =) .. Im also saving because of unexpected situations.. is always good to put at least 3 mnth of expenses aside in case of an emergency.. specially with a baby.. good luck and hang in there ... it takes time..specially to clean up the rating but it will be the best..!!!

Next steps?

Sell your car. You cannot afford a new car, even though you%26#039;ve convinced yourself you could.

List your debts smallest to largest, pay the smallest first and then work your way up the list.