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January 2011 Get Out of Debt Thread - Page 2

post #21 of 112

I am in too. I have 20k in debt for car,loans we have,and medical debt. I want to knock out at least the car and a few medical debt bills. The car is number 1 as it will save us $305 a month. We should be getting our taxes done in the next 2 weeks which will fund out emergency fund fully.

post #22 of 112
I've been up crying since 2am. It just hit me how seriously screwed we are. DH will be working full-time for the post office for 3 months because the carrier he works for is retiring. He has begun working 4 days a week and begins 6 days a week in a couple weeks. He's also working another part-time job and I am working a par-time job. We are $193,000 in debt. Without the mortgage, we are still $60,000 in debt. Today, I have to call DHS to drop Medicaid and Food Stamps. We also will stop receiving WIC for our three children. I have to cancel a genetic consult for my son and a psychiatric appointment for myself because we can no longer afford it. I will have to wean off my mood stabilizer because we have no extra money for prescriptions. The only care that we will continue will be for my daughter who is still having follow-up appointments from her heart surgery and who is still on Lasix and Enalopril.

I applaud you if you've made it this far. My two oldest are in the Head Start program (pre-K). We won't be able to do that anymore either because 1) we make too much and 2) we'll no longer have insurance for the kids. I don't see a way out of this hole. We owe ~$8,000 more than our car is worth and if we try to sell the house, we'll owe the realtors because we don't have enough equity and we can't afford the appraisal, anyway.

mecry.gif again.

I'm so sorry for being such a downer. I'm waiting for my kids to wake up so I can hug them and tell them how much mommy loves them. They and DH are the only positive things in my life right now.
post #23 of 112

*hug* motivatedmama That sounds really overwhelming and I'm so sorry!  

post #24 of 112
Thanks for the hug smile.gif I'm feeling a little bit better now. I'll just be joining the thousands of other people without healthcare. Thankfully, Rayne's heart surgery was fully covered; otherwise, I would have 50k+ to add to that total. We've been keeping up with our bills, so that's a positive. And with DH's extra income, perhaps the doctor's appointments won't be so bad. I'm just going to fingersx.gif that nothing bad happens healthwise in the next 6 months or ever.
post #25 of 112

Hi there everyone. I'm feeling really good as this new year starts. We did Christmas with money I had put aside so no surprises there, we just got some work done on the house (1100$) and didn't have to freak out about it! Yeah!! Also had a surprise bill for 1900 and I simply paid it. I love saving and thinking of creative ways to get what we need.


We are cc free and now need to pay off our car (10000) I am getting super serious about a budget. I have no idea why I haven't done it yet but oh well, it's a process, right? We need to stop using the debit card so much. it is just too hard to keep track.




post #26 of 112

Motivated mama- I am so sorry you are under so much stress (((((((HUG)))))))

post #27 of 112

Motivated mama-- so sorry you are under so much stress.  My dh suffers from depression, my heart goes out to you.  I would recommend staying on the mood stabilizers if you think you are not yet ready to go off of them.  My dh went off his meds and plunged further into depression.  You do what you feel is right for you though, and if you think you will be ok off of them, then go ahead and try.   

post #28 of 112
Originally Posted by Motivated Mama View Post

The vehicle I own has a trade-in value of $8300. We owe $17,500. What do I do?

 I have often wondered about this as well.

post #29 of 112

If you are upside down on your car, there are a couple of ways to get it out of it:  secure a loan from your bank or credit union for the difference or pay down the car to the point that it is no longer upside down and then sell it.  So in the $17,500/$8,300 situation....first determine what the private party resale value is, don't trade in a car.  So now you're $8,300 value may jump up to $10,000.  If you can secure a loan for $7,500 you sell it for $10,000 and combine it with the $7,500 to pay it off and then scrounge up $1k-$2k for a beater.  Yes you're still in debt on a car that you don't own but you've reduced your debt by $10,000 by selling the car.  


Here are some links on Dave Ramsey's website about cars and car payments, I definitely recommend watching the video in the first link:







I'm sorry that several of you are facing such daunting figures with debt/income/medical situations etc.  I know that about 5 years ago we felt the same way - every penny had a name on it and we had more "names" than "pennies", we had no savings, we have two kids with chronic health conditions (epilepsy in one and autism spectrum for both), etc.  That's when I decided that I needed to get creative with ways to make money from home and that's made a big difference.  My husband also began to study for career advancement in his "free" time (he has always worked 60+ hours/week - salary so no OT, etc).  This last year, 2010, was an amazing year for us.  I'm not saying this to brag but if you'd have asked me 5 years ago if I thought we'd be where we are today, I'd have thought you were crazy.  ;)


Sooo...as hard as it may be try to keep your chin up and keep plowing forward without looking back.  Dave Ramsey recommends a few books for those with a career crisis or those wanting to branch out on their own:  


48 Days to the Work You Love

Fired to Hired

No More Mondays


Thinking of you all!  *HUGS*

post #30 of 112

I'm IN...again...


So, last year was pretty fabulous. We managed to finish our FFEF at $10,000...along with start saving on our house fund! Woo!


THEN, well, life happened. The poop hit the proverbial fan. We blew through all of that money. Pretty much all of it. Now we're back at $1,500 in our FFEF and guess what?




Dh was going to a meeting on Monday and stops at a light. Dude behind him rams into our car, pushing us into the guy in front of our car, totalling our car. Dh gets all the info, we think all is well (or, at least have hope it'll eventually be 'well') and then we realize we were given false insurance information. We only have liability, and since the accident wasn't our fault our insurance isn't being very helpful. If we don't here back from progressive by friday (the at-fault guys supposed insurance) we'll be filing a police report.


In the mean-time we're left with $1,500 in our savings, a totalled 93 camry in our back apartment lot (old car, yes, but totally reliable! wah!) and stress. A LOT of stress.


I just found a car an hour away (where my folks live) and we're gonna look at it tomorrow. It's $1,800. We'd be borrowing the $300 from my ex (we'll pay him back on payday - the 14th). So, basically, if this works out we're back in the hole. At least for the next week.


I'm not happy about it, to say the least...but what to do? We need a car. If DH takes the bus he'll be gone an extra 2+ hours a day...which is, bs.


So yeah. I'm back in. Probably on bs1...woo.

post #31 of 112

Hugs to all of those in good and not-so-good shape and Happy New Year!


We're doing OK here.  Goals for 2011 are to get the FFEF half-funded up to $18,000 by May 1, then have our second babe and try to live on DH's income for the rest of the year while I take an extended maternity leave...we'll see.  We're still about 40K in debt, but we're holding off on paying down the rest of it until I go back to work.


DS's grandparents are starting college savings accounts for him and his new little sis or brother, so I'm pretty excited about that.


I'd wanted to put away 2K last month, but came up a bit short and put about $1400 in the saving account.  So we're now up to just over 11K in savings....four months and 7K to go!  Hopefully we can do it.


I was going to stay home full time from September until next April until the new babe turns one (at which point I'd feel really comfortable sending him/her to my son's very amazing Waldorf childcare program).  Staying home that first year just felt really good, but late at night as I lay in bed I'm second guessing myself and wondering how we're going to make it work financially.  DS's childcare does take one baby at a time and the care is excellent with only 5-6 children in the program at a time.  Probably need to post this somewhere else, but thoughts (from a parenting and a financial perspective) on sending such a small babe into childcare 1-2 days a week?  The financial benefit of 1-2 days earnings for me far outweighs the cost of the childcare.  Would love to hear thoughts.


Best to all of you!

post #32 of 112
Paid the mortgage today and plan to bring the cars to current over the weekend. Hopefully we'll have enough left over to pay the small stuff.
I think we'll probably just pay the car down. I doubt that we would be able to secure a loan because of our debt-income ratio. And I'm sure our credit scores are nowhere near as fabulous as they were 3 years ago when we bought our home. I will take a look at those links though - thanks!
post #33 of 112

Well, after a move to the East Coast for DH's schooling, he's decided the school thing isn't for him and we're back home. I'm happy he realized that when he did though, instead of three years and $30,000 later. 


We moved home because we can almost quadruple our income here compared to out East, where the job market left much to be desired. Because we rented out our house when we left, we can't go back until summer- which is good because it means we're living with my parents rent-free for a while so should be able to just attack our debt in a matter of months.


I've been getting more work as a supply teacher than I expected to (which is awesome!), and DH has a couple of job interviews coming up. He's still trying to decide where he wants to go career-wise from here. He'll likely get something menial until he decides what he wants to do in September (likely return to college for some sort of career change...I want to have cash for that- NO MORE SCHOOL LOANS, especially when we have the time and the means to do without them this time around).


My goal for this month will be to create a clear plan for ridding of debt. This little adventure really muddled our finances.

post #34 of 112



I just put it all on paper and DR'ing feels ass-backwards. I'm not sure DH will be on board because our smallest loans are gov't loans that he'd rather not deal with (one is interest-free and very small, the other is a tax oops, that he feels we should not worry about until next tax season). I'd like the mental clarity of getting rid of debt systematically and taking care of everything.


Here's what we have to tackle:


$400 interest-free gov't apprenticeship loan

$900 tax oops

$8,000 student loans (this includes moving expenses- I shuffled things around so that we didn't have anything sitting on visa, and we have some savings which should pay off the LOC and leave only this amount owing to student loans) ....that's a depressing figure....


Okay, that makes it quite obvious to DR the debt....when I see it all scattered about the way it's in accounts now it makes me not know where to start. Convincing DH to give money to the gov't will be interesting to say the least (they're not charging us interest or coming at it aggressively- anytime I've owed them a small amount, I've left it to even out next tax time and it's been a non-issue....I think I just need to wipe it clean for mental clarity though...and get someone who knows what they're doing next tax time!

post #35 of 112

I am kind of confused about the attitude of debt.....


I do not look at my mortgage as debt. I would have to pay monthly no matter where I live. If I lived in an apt, I wouldn't calculate the cost of renting over a year and then freak out that I was in debt. I just totally dont get adding a mortgage to a debt total.


I personally wouldnt care if I was upside down on a car. When I buy a car, I think okay, five years, then if it gets paid off early, great, otherwise, it is a montly payment. I wouldnt freak if my car was only worth 8 grand and I owed 17. Unless you cant afford the payment, you cant feed your kids, I think of it as an investment. That is a car you bought new, maintained and then will have for 10+ years.


And arent student loans over a ten year period? I will admit after CC's those are most annoying. But I didnt get bang for my buck, so I was bitter.


I get not wanting to owe anyone money....been there done that. But I do think CC debt is the only thing I would freak over....everything else is a loan that is fixed right?


I already got out of "debt," so maybe I am just out of touch. I will say that nothing depressed me faster than paying money on something long gone, so I have a different attitude. I just think debt has this whole stigma and there is nothing wrong with seeing some things as investments in your future.



post #36 of 112


Motivated Mama - Yay on getting the mortgage payment made and bringing the cars current, good news!


Eirual - Welcome "home" :)  I think that DR would probably say to put the tax oops at the top but you're in Canada, right?  His advise is based on knowledge of the IRS so it may not apply in your case.  I'm with you on wiping it clean for mental clarity, that gets my vote (FWIW hehe)


2cutiekitties - I'd rather not have a mortgage payment or a rent payment - that's my plan!  :)  Instead of sending $2k/month to the mortgage company I could drop that $2k into an investment.  So if you have a paid off mortgage you won't have a monthly payment - of course I'm not counting taxes, electricity, etc but the actual mortgage/rent payment would be gone.  


On the car front, watch the video in the first link I posted a few posts back for an idea of where I'm coming from.  I don't think of a car as an investment.  To me, an investment goes up in value and a car does nothing but go down.  Until recently I had $1100 a month in car payments - one for a Lexus we bought for $38k and the other a used Nissan we bought for $18k.  We have a pretty large household income so that $1100/mo wasn't much but we could have certainly made better choices with our money.  The thought on this is that consumers need to get away from the "how much per month" mentality and move towards the "how much" thought process. I couldn't afford a $38k car because I didn't have the money to pay for it outright but I could easily afford the $700/mo payment.  


So for me, debt is getting in the way of investing for my future. I know this isn't how everyone thinks and I'm totally OK with that.  My sister never takes out car loans, they save up cash for new cars and buy them outright.  They do have a mortgage and she puts all of her expenses on her Discover Card and pays it off monthly.  She has for the last decade and that works for her but it may not work for the next family.  


Thanks for asking your questions - I'm not sure if I answered them but it definitely got me thinking about why I'm focusing on getting out of debt and I appreciate it.  :)

post #37 of 112

I think DR would say to pay your stupid tax and get something you can afford. That's a choice you'll have to make though- personally, I find not having a car payment is dreamy!


URGENT: I have another quick question. I'm meeting with the bank today. The School Board gave me $2,500 to put towards retirement. Should I invest that in a GIC (more profitable than an RRSP) or use it to pay down this recently racked-up debt, then worry about investing?


Meeting's in an hour....I'm feeling like I'll invest, just 'cause if we don't now, I'm not sure when we will. But at the same time it would propel us ahead much faster and it might get us closer to being ready to invest seriously sooner! 

post #38 of 112

Oh yes, not having car payments is wonderful!  It felt like instant financial freedom even though we still have a few more things to finish paying.  


As far as the $2,500 goes, I'd probably make sure you have an emergency fund and then put the rest towards debt.  Do they require you to put it towards retirement, though?

post #39 of 112

It had to stay in an RRSP for 6 mos, but that time's up. I ended up keeping it invested though, because to take it out would mean we'd lose 1/4 of it to taxes.

post #40 of 112
I'd have done the same thing, I didn't realize there were tax implications.
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