My Debt Resolutions for 2009
Dec 28th, 2008 | By Rob | Category: debt
As we move into 2009, I’ve been trying to set my new year’s resolutions for 2009 regarding my credit card debt and finances in general. Here’s my first draft - any thoughts would be welcome!
1. Save 10 percent of my income each month. It’s somewhat counterintuitive to be saving money if you are carrying credit card debt, because you are paying 15-30 percent interest in order to keep money in the bank that you are only earning about 2 percent on, but I think that unusual times call for some unusual actions. With the great deal of illiquid assets out there, I believe there will be a certain additional value to having cash on hand (or in your bank account). Besides, if I don’t start good habits now when I’m in debt, I’m not sure that I’ll be able to continue good habits when I get out of debt.
2. No late payments. I don’t want to give my credit card companies any excuse for increasing my interest rates and imposing late fees before the implementation of the Federal Reserve regulations in 2010. With automatic monthly payment options out there, there’s really no excuse to ever be late with a monthly payment. Plus, I don’t want to give my creditors any more money than I have to give them.
3. Pay more than the minimum on my credit cards each month. There are a number of financial calculators out there that tell you how many months it will take to repay your debt, and they all tell you the same thing. If you make the minimum payment on your credit card debt, it will take you a long time to reach a zero balance on your credit cards. So I’ll be making more than the minimum payment each month in 2009. I haven’t yet decided whether I’ll be spreading the extra amount among my credit cards or whether I will be focusing on my highest interest rate card, but I’ll work that out soon.
4. Ask each of my credit card companies to cut my interest rates. There’s no harm in asking your credit card issuers to cut their interest rate. While credit conditions may not be as good as they have been previously, and I expect one or more cards will tell them that they aren’t interested in cutting my interest rates, I expect that at least one of them will be willing to do so in order to keep me as a customer.
5. Carry a zero balance on one of my credit cards (that I use to carry debt) at the end of the year. That’s the big goal!
Now that I’ve listed my 5 debt resolutions, I have to ask:
What’s your New Year Resolutions for your personal finances?
