Mighty Bargain Hunter

The Carnival of Debt Reduction — Issue #1!

September 19th, 2005 | by mbhunter |

Welcome to the premiere installment of the Carnival of Debt Reduction! Thanks for stopping by, and a special thank-you to everyone who submitted a post this time!

It’s very easy to get into debt, but hard to get out of debt. With recent rock-bottom interest rates, it’s been easier than ever to obtain credit — and easier than ever to get into trouble with it, too. As Americans we owe more than $2 TRILLION in consumer debt. That’s pushing five figures for every family in the country. This is a problem!

As hard as it is to get out of debt by itself, it takes an unusually strong sense of purpose to blog about it as you reduce your debt. That’s the main reason why we started the Carnival of Debt Reduction — to highlight these brave men and women in their quest to be debt-free. Many of them are overcoming their debt, and people need to hear about this.

I hope that this carnival inspires more people to pay down their debts and get their finances in great shape. Without further ado, here we go!

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The “snowball method” for debt reduction is a common method that works well. It involves committing an amount per month above and beyond your minimum payments to knock out the debts one by one. The “snowball” gets bigger as you keep paying the same total amount on your remaining debts — they get paid off in a hurry that way! On No Credit Needed, NCN discusses which debts to tackle first in the post Simple Debt Reduction Strategies. He has paid back more than half his debt so far. It can be done!

FMF, author of the nationally-recognized Free Money Finance, posts several times a day on a variety of topics to help people build their net worth. All of the proceeds from his site go to charity, and he recently matched Katrina relief donations to the tune of $5,000 — congratulations! FMF had a two-part series showing how to Get Out of Debt in his early days of blogging (way back in May 2005). A collection of great ideas, any one of which will help reduce debt.

How do people get into debt in the first place? Lots of ways. Regardless of whether the reasons were within their control or not, they’re in debt nonetheless, and need to recognize that fact. Or, someone close to them points it out and helps them formulate a plan. Karen of K’s Financial Progress Report had that happen to her. Once owing $10k over fourteen credit cards plus a car loan, her boyfriend sat her down to formulate a plan. Now she has only two cards! Amazing how that works, once you realize that the first step is admitting that you have a problem.

Some ways that people get help is with a credit counselor. Ostrauder of Fighting Debt Blog discusses some of the issues in dealing with credit counselors in his post “When your credit history says you’re a financial moron.” This blog has been up for a couple of months now, and as of the beginning of September Ostrauder had a little less than $15k of “bad debt.” This is down from about $20k in mid-July according to one of the posts on the site, so this is a move in the right direction!

But, admitting that you have a problem is just step one. That first step is a step in the right direction, and sometimes it takes a while to move on to the other steps. If debt reduction were easy, we’d all be debt-free. “Broke” of Credit Card Victim talks about how Emergency Funds are BS. (Warning: BS is spelled out in the post.) It looks like “Broke” owes $22k (Australian Dollars, I’m not sure), which is an increase from the last time he posted how much he owed. He has a number of constructive comments on his posts. I’ve subscribed to his feed, and I’ll try to help as I can, as others have. “And let us consider how we may spur one another on toward love and good deeds.” (Hebrews 10:24)

Support and encouragement in reducing debt, just as with anything that’s worth doing, helps immensely. Me Against the Credit Cards, authored by kmac from Wisconsin, has this as part of the subtitle of the blog: “It’s me looking for support in order to get out of debt.” It looks to be about $10k in debt. When I checked the front page, every post had at least one comment. So, support is being given! It works! Recent posts talk about selling stuff on eBay and using the proceeds to pay down some of the card balances.

Motivation also does wonders. “Lpkitten” of Defying Debt has some grand ideas that work as Motivation for her. She’s knocked out about a third of her $20k debt, and is still going strong!

(As some comic relief, I saw that ~Dawn from Frugal for Life posted a link about a man who has nearly 1,500 credit cards and $1.7 MILLION in credit available to him. His credit rating is, surprisingly, almost perfect.)

Having a plan is key. It’s great to hear when people have their debt reduction plan still on track, like April, webmaster at Miss Money. She aims to get out of credit card debt in one year, and it looks like she’s also working to pay off student loans. She looks like she has her act together to make this happen!

Setting goals for debt reduction goes hand-in-hand with having a plan, as Frank at Hello, Dollar! says. Setting goals feels good — meeting them feels great!

Last, but by no means least, bookchiq of Frugal Underground talks about her Debt-Free Dream. This post is well-written, with a nice combination of advice and her personal experience with debt.

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Thanks for reading! No Credit Needed hosts the Carnival next week! I hope that you enjoyed your visit!