Getting Out of Debt with DR, Oct 2009 - Page 11

[annettemarie]

I haven't heard back from her yet. It's a WAHM and she really doesn't HAVE to refund me. I'm just hoping she'll be decent.

[LZP]

Hi Ladies,
I'd like to join "officially" starting in the November Thread, but thought I'd post here and ask a few questions to get acquainted before we dive in in November!

First, if we have a decent savings, can we count that as just having BS3 on its way, even though we still have some debt? Or should we keep only $1K and spend the rest on debt reduction?
I never felt so sick as when i totalled up what i thought was just a "small" debt and realized how much it really was. (when you include the car loans- sickening!)

Also, we are in a bit of a dilemma here.... our financial situation (now) is very stable. we both have good jobs with stable companies. my DH works in software, and he always has that "fear" so he likes to have a nice cushion in savings, regardless of our debt. it keeps him comfortable, and that makes money talks/decisions easier for us, if we have the "cushion."

But, I really really want to pay off our debt. we have stupid debt ("wow! 0% financing for this bed?! We'll do it!") now we have a monthly payment on an effing bed. it's a debt we could wipe out immediately, but means dipping into savings. (read: make DH uncomfortable.) it's $100/month

also, i am on a lease right now with my car. it's a cheap payment. $258/month. it ends in December, and the car isnt a great car- so I'd rather not buy out the lease. BUT, the buyout is less than the cost to buy a car of the same make/model/mileage. so technically, it's a "good deal." we are trying to have children.. to no avail as of yet... and ideally, i'd rather have something bigger/safer for a child. do we get something different now, (pre-owned) with a similar payment but finance instead of lease, or buy out the lease on current car, and hope that we can get decent trade in if we need (want) a new car if we're blessed with a child? my current car is OK, but i really dont feel that safe in it, and it's already making rattling noises at only 2.8 years old! there are some emotional issues here, too, like that i've given up so much for 2 years basically, in preparation to TTC, and feel like i "deserve" to treat myself to a car with heated seats. yes, trivial and spoiled, but i had to put it out there.

we also have student loans. each of us has consolidated (separately) about $15K of student loans, which might be down to about $12K each now? they are at 2.4% interest. there is another private loan that has a $160/month payment with a variable rate that infuriates me.. it's the first on the chopping block at about $7K I think.

BUT, if we paid the bed and the SL, it would eat most of our savings.

we dont go on vacations. we go out to eat maybe 3x per month at MOST, and in November, we're doing the home-cooked challenge- no going out to eat at all. Possibly, we'll do in December too, but that gets hard with holiday parties and get-togethers out the wahzoo.

we have phone/FiOS/internet combo, but the contract is up in Feb, and we'll eliminate the phone to save $60/month. yes, $60 for phone. insane. we're getting some VOIP thats a one time fee instead. we're going to haggle with the cable/internet company to get our price down since it's so much... right now we pay $200/month for phone/cable/internet. we have to keep the TV, it's DHs only "treat" he doesnt go out to bars, shop, spend on anything really... except trips to Wawa on the sneak for snacks.

we also have PMI on our mortgage, which we're finishing some last improvements to hopefully re-appraise and eliminate the PMI-it's 154/mo.


OK, so that's my long intro that doesnt even include everything!
my questions:

the car for me- what to do? "invest" in a good, reliable car now, (thinking of spending like $18K or so) or just buy out the lease and see what happens? buy out would be $12K that we would have to finance but could probably pay off in 2 years.

the debt- keep it and hold onto our nice emergency fund now (about $12K) or use the cushion to pay the debt, and then start on emergency again?

some of it seems counterintuitive to me- paying the bank before paying ourselves....

thoughts? suggestions?

sorry i'm so wordy!

[p1gg1e]

Originally Posted by mtm

p1gg1e, do a price holdback for the amount of a new roof.

You mean cash at closing for a new roof or adjust the sale price for a new roof?

The whole roof is fine a couple spaces that need painted ( metal.) . I'm thinking where the roof meets the chimney is where the leak is and that might be fixed by just sealing it...there are other things though that need to be fixed. I'm going to ask I think for $5000 cash back to fix the projects ( oh the list I have , a rotten window , some plaster in the upstairs from the leak ( the leak to me looks new)etc etc) . If they don't agree then oh well we won't buy the house. No biggy.

I'll kinda be happy though one way or the other when this is over.

[lalaland42]

LZP - One thing to consider on the bed is the company that lends you money frequently lends at 0% and if you don't pay it back by the end of the interest free period, they apply retroactive interest back to the beginning of the loan. I'd probably pay that off (at least) right now.

[CookiePie]

I started tying up the ends of our October excel sheet to carry over the remaining balance to November, & begin paying the mortgage & other early in the month bills. Something is off on my spreadsheet & I can't seem to find the problem. It finds me over $600 in the red! While both my checking account register & my online banking statement jive & show that I have over $2000 to start November. Very frustrating! I'm thinking that one of the cells equations must be wrong. Any ideas where to begin to find the error?

Both my girls have the flu, anyone else?

[LZP]

lalaland- thanks for the tip- we were informed about the 0% time being finite, ... but 0%- even when we have that funds to pay in full.. well, it's free money! so tempting. and we took it. anywho, we're paying that off before Thanksgiving. DH has agreed to use savings.

We are planning to sit down sometime next week and make a whole financial plan for 2010. it will probably be a modified version of DR, but with the ultimate goal being debt-freedom.

also- we are planning to re-appraise and get a refi to a 15 year mortgage- bc we could get such a reduction in interest rates, that our pmt would be about the same- I know in the beginning, we'd be back to paying all interest, but we're only 3 years in anyway... so, it's basically all interest now too. thoughts?

CookiePie- I think you might just have to look at each one that feeds the "total" field to see if any look off. a $600 error shouldnt be too difficult to spot. Are there any bills that are $600, that might have been counted twice?

[Rev1053]

Originally Posted by LZP

also, i am on a lease right now with my car. it's a cheap payment. $258/month. <....snip.....> there are some emotional issues here, too, like that i've given up so much for 2 years basically, in preparation to TTC, and feel like i "deserve" to treat myself to a car with heated seats. yes, trivial and spoiled, but i had to put it out there.

I agree with lalaland42 and pay off the bed first.

Car for you... I would take remaining in the savings and buy a car for you (leave $1K in savings). Dont get another car payment. Take the money you were paying to the flease and put it towards the $7K loan. So basically start the debt snowball. If you cant get your dream car, start a sinking fund to continue to save more money so that in a year you could sell the car you buy to get a better car. I wouldnt do another car payment, it just doesnt make sense financially.

DH didn't like emptying our savings account either. It made him EXTREMELY nervous. But it made him that much more motivated to pay off our debt. We paid off all of our debt in 7 months. DH worked overtime and cut all sorts of things so that we could get to BS3 that much more quickly.

Consolidate the private student loan? At least get them to settle on an interest rate. That would infuriate me as well! I would pay off the SL last, since the interest rate is so low.

Have you already taken a DR class? Or have you read the book? I would make a date with your DH to talk finances every week for a couple of months. Set a time limit. Read the book together and discuss what you like and dont like. Work together.

[LZP]

I would make a date with your DH to talk finances every week for a couple of months. Set a time limit. Read the book together and discuss what you like and dont like. Work together.

this is a great idea- rather than having it be something we have to remember to discuss, we can have a standing date.

i already said I wanted to start tracking every penny that left our house (since it seems that we make so much, yet still I had to "ask" if I could go to the grocery store on Monday... and the answer was, well, if you dont spend more than $x. ridiculous!) and DH said, "So, I'm going to hve to go through every receipt and itemize it?!" and I suggested we do it together. but it still didnt go over well


any recommendations for *free* software or programs that we could use to track our spending? I'm talking the minutae of our spending, something that could give more detail than "household" etc...?

should I just make a list myself, to track laundry detergent, vinegar, tooth brushes, baking soda etc?

is there any program that could do that for us?

ETA: and thank you for your great advice so far! sorry that i didnt say that first thing.

[Sarah8Jane]

How do we report spammers? I can't remember!

[Maluhia]

The red triangle on the left - I did it too.


Online there are places like MINT that are free for tracking.

[p1gg1e]

Well we are passing on the house...we came to our senses and are back on track...can't wait to be DF in the spring!

[Rev1053]

Originally Posted by LZP

any recommendations for *free* software or programs that we could use to track our spending? I'm talking the minutae of our spending, something that could give more detail than "household" etc...?
should I just make a list myself, to track laundry detergent, vinegar, tooth brushes, baking soda etc?
is there any program that could do that for us?

I honestly dont track every dollar that I spend. I have a set dollar amount for certain categories though. So I ONLY spend $400 a month for groceries and household expenses (toothpaste and such). I use cash and take it out on the first. Sometimes by the end of the month I am short but I just make myself wait till the first. Thats the hardest part of the budget part. Not buying stuff because I want to but because I had already planned for it.

As far as I know there is no program that is going to itemize your Target receipt for you... You have to do it yourself.

Honestly if you really want to track everything you have to work with cash. Give your self a set budget on each category you want to spend and only spend that. With debt cards you honestly spend more.

[Rev1053]

Originally Posted by p1gg1e

Well we are passing on the house...we came to our senses and are back on track...can't wait to be DF in the spring!

Oh P1gg1e I am so sorry! Its hard not to get what you want.

[p1gg1e]

Originally Posted by p1gg1e

Well we are passing on the house...we came to our senses and are back on track...can't wait to be DF in the spring!

Originally Posted by Rev1053

Oh P1gg1e I am so sorry! Its hard not to get what you want.

LOL NOW DH is talking about it again honestly ignore me I'll post after something has been set in stone

[Sarah8Jane]

Aww. You've got me on the edge of my seat!

I can just imagine the stress of such a big decision. Good Luck!

[ekblad9]

Subbing so I can join in November. I read a DR book a couple of years ago but it totally didn't click at all. Then a friend loaned me two more DR books, I read one of them last week, and bam, I get it. Duh! It took me long enough. We have 8 kids, one on the way, one income that keeps decreasing, pretty awful health insurance, and lots of debt. We live pretty skimpy as it is but can always cut out more. I'm anxious to start the debt snowball when dh gets paid next week. You guys here have always been an inspiration so thanks for that and I look forward to learning lots more from you!!

[akichan]

Must congratulate myself for not buying anything at the last Clinique Gift With Purchase promotion. I'm addicted to Clinique skincare products and especially the gifts - I think I've bought stuff to get one or two "free" gifts every year since I was in my early twenties, but this time I didn't need anything and even though I went to the mall several times during the promotion, I managed NOT to buy anything!

Makes me sound like a snob, but I'm having a hard time trading in my department store makeup and salon hair products for drugstore stuff. Really hard time. Help me stay on the wagon!

[Rev1053]

P1gg1e - I am officially ignoring you now. But I secretly hope Brian changes his mind. My fingers are crossed.

Akichan - Great job!!! Some things are harder to give up than others. Your doing a great! I couldnt give up my hair stylist, so DH and I agreed that I could continue to go to her, I just cant get my hair cut every 8 weeks..... I stretch it to every 12 or 15 weeks.

BS3 - 13% done! Yea! I still have my fingers crossed that I can get some of the money from the birth back, that would be a nice addition to BS3.

[CookiePie]

OK so I checked all the cells & they are all ok, I double checked the math & I balanced the checkbook...So Wehn I began trackingout spending Sept 1 I started from scratch as if we had nothing in out checking account when the month started (although we did). Well I went into that money when I paid bills this month so it's awesome that I won't be bouncing anything, but I also should have looked at the numbers & realized why I was off I did kinda leave that out for a bit of a cushin just in case I make math errors or something. Oh well I paid off a CC this month so I'm happy! This month our income will go way dow as our seasonal work will come to an almost screetching hault. So major stretching will be taking place for the next several months, I'll be hunting for clearances & thrift shops as I have for the last few months for Christmas gifts. Our eating out has gotten a little out of hand even with budgeting! I've found I'm saving so much on groceries that I'm like yeah ok lets get take out we didn't spend much on groceries this week! But even with that going from $40 to $160 (I know, I know) I still beat last months groceries & eating out expense by $430! But Imagine how I'll do if we cut it out all together? Unreal!