So I've read DR.. but it's back at the library and maybe I missed something about what to do if step 2 takes longer than X.
Nutshell:
Car Loan - $3k
Student Loan - $23k
Mortgage - $105k
Savings - $4k
Income - $40k
Obviously what we do is take $3k out of savings and pay of the car. Great! But then I loosely calculated how long it would take for us to pay off the student loan if we threw the entire car payment at it. 3 years and 7 months.
Now, 3 years and 7 months is WAY better than the 13 years we actually have left on the loan. I'm not complaining.
BUT... 3 years and 7 months is about twice what DR estimates this step should take. Argh. And I'm honestly a little uncomfortable going so long with only $1k between us and Murphy, as he puts it.
I do know that we're supposed to put every cent into it, go crazy, so it's supposed to be more than our car payment. And that's fine, but I figured even adding a full $200 EXTRA a month on top of that only shaves I think 3 months off. $200 extra a month is a lot.
I don't have the budget in front of me but suffice it to say that we have no lattes. We have no cable TV or even Netflix (all our TV entertainment is borrowing videos from the library - free), we pay $11/month for an incoming-only VOIP line, and $7/month for one cell phone for emergencies only. We have only 1 car and drive it so little that we have the low mileage discount on our insurance. Our clothing budget is $20/year, exclusively for DD to cover whatever her grandmothers's gifts don't cover (last year it was 1 pack of socks that she needed). DH shaves his head, I go 2 years between haircuts, and DH cuts DD's bangs. You get the idea.
We have valued being debt-free all along but "things happened.' Our mortgage was $85k but we had a major problem and faced remortgaging to fix it or to move (at a loss as well, no doubt). I'm not saying we couldn't have made any other choice, but our plan was to have an $85k mortgage which is obviously a bit more managable than the $110k that we ended up with (now $105k left). Same with the car, we drove one car until it bit the dust, bought a fairly cheap used car and paid off the note in 2 years instead of 4. Which was good for us, because 1 year after we paid off the note the car completely died. We planned to drive it for 10 years or so, it didn't work out that way. We faced a choice between buying a complete POS for $2k or researching the heck out of a somewhat nicer car that's supposed to last 100 years. We probably should have stuck with the POS but maybe you can understand why we didn't - our previous cheap car was NOT a good deal at all. We ended up with a 3 year old Vibe - chosen entirely for reliability, not because we care what our car looks like or anything. If we pay it off tomorrow, we'll have paid the note 1.5 years early. (We also paid off a smaller no interest student loan early - call us crazy but it was a loan we could get rid of so we did).
So anyway, that's how we've come to expand our budget to the point where, even though there are NO lattes, there's not a lot of room to maneuver. We're talking about how to maybe make extra income, and I'd be willing to go crazy doing it and never see DH and DD and spend all day and all night working, but honestly only for about 18 months. Call me selfish or not, that's my honest assessment of what I feel I can do. I would seriously resent spending 3 or 4 years like that. And it just seems like the numbers don't move much no matter how much I figure more and more extra hypothetical payments.
Sorry for the huge novel, I really do tend to write extremely long posts. I just feel like if I leave something out people will just say "oh, cut the lattes" or "oh, shame on you for clearly living beyond your means" and so on. The thing is, before we take the plunge and pay off the car with our savings, we want to be 110% committed. And I am in theory that committed but really deflated when I see how long it will take, like twice as long as DR estimates even for families that have that much debt in high interest credit cards alone (and we have none of that, thank goodness). The lifestyle of no lattes I can maintain pretty much forever, but we're already there and that doesn't help. It's the lifestyle of workworkwork all the time, never see DH because he's off fixing computers or because I'm holed up writing PHP code, and DD just having to put her most formative years of her life on hold being shuffled between us while the other is off on a job for years, I really just balk at that, selfish or not, I do.
Nutshell:
Car Loan - $3k
Student Loan - $23k
Mortgage - $105k
Savings - $4k
Income - $40k
Obviously what we do is take $3k out of savings and pay of the car. Great! But then I loosely calculated how long it would take for us to pay off the student loan if we threw the entire car payment at it. 3 years and 7 months.
Now, 3 years and 7 months is WAY better than the 13 years we actually have left on the loan. I'm not complaining.
BUT... 3 years and 7 months is about twice what DR estimates this step should take. Argh. And I'm honestly a little uncomfortable going so long with only $1k between us and Murphy, as he puts it.
I do know that we're supposed to put every cent into it, go crazy, so it's supposed to be more than our car payment. And that's fine, but I figured even adding a full $200 EXTRA a month on top of that only shaves I think 3 months off. $200 extra a month is a lot.
I don't have the budget in front of me but suffice it to say that we have no lattes. We have no cable TV or even Netflix (all our TV entertainment is borrowing videos from the library - free), we pay $11/month for an incoming-only VOIP line, and $7/month for one cell phone for emergencies only. We have only 1 car and drive it so little that we have the low mileage discount on our insurance. Our clothing budget is $20/year, exclusively for DD to cover whatever her grandmothers's gifts don't cover (last year it was 1 pack of socks that she needed). DH shaves his head, I go 2 years between haircuts, and DH cuts DD's bangs. You get the idea.
We have valued being debt-free all along but "things happened.' Our mortgage was $85k but we had a major problem and faced remortgaging to fix it or to move (at a loss as well, no doubt). I'm not saying we couldn't have made any other choice, but our plan was to have an $85k mortgage which is obviously a bit more managable than the $110k that we ended up with (now $105k left). Same with the car, we drove one car until it bit the dust, bought a fairly cheap used car and paid off the note in 2 years instead of 4. Which was good for us, because 1 year after we paid off the note the car completely died. We planned to drive it for 10 years or so, it didn't work out that way. We faced a choice between buying a complete POS for $2k or researching the heck out of a somewhat nicer car that's supposed to last 100 years. We probably should have stuck with the POS but maybe you can understand why we didn't - our previous cheap car was NOT a good deal at all. We ended up with a 3 year old Vibe - chosen entirely for reliability, not because we care what our car looks like or anything. If we pay it off tomorrow, we'll have paid the note 1.5 years early. (We also paid off a smaller no interest student loan early - call us crazy but it was a loan we could get rid of so we did).
So anyway, that's how we've come to expand our budget to the point where, even though there are NO lattes, there's not a lot of room to maneuver. We're talking about how to maybe make extra income, and I'd be willing to go crazy doing it and never see DH and DD and spend all day and all night working, but honestly only for about 18 months. Call me selfish or not, that's my honest assessment of what I feel I can do. I would seriously resent spending 3 or 4 years like that. And it just seems like the numbers don't move much no matter how much I figure more and more extra hypothetical payments.
Sorry for the huge novel, I really do tend to write extremely long posts. I just feel like if I leave something out people will just say "oh, cut the lattes" or "oh, shame on you for clearly living beyond your means" and so on. The thing is, before we take the plunge and pay off the car with our savings, we want to be 110% committed. And I am in theory that committed but really deflated when I see how long it will take, like twice as long as DR estimates even for families that have that much debt in high interest credit cards alone (and we have none of that, thank goodness). The lifestyle of no lattes I can maintain pretty much forever, but we're already there and that doesn't help. It's the lifestyle of workworkwork all the time, never see DH because he's off fixing computers or because I'm holed up writing PHP code, and DD just having to put her most formative years of her life on hold being shuffled between us while the other is off on a job for years, I really just balk at that, selfish or not, I do.
