January 2011 Get Out of Debt Thread - Page 3

[Eresh]

My big goal is to get right side up on our mortgage and start saving towards a down payment on a home we want to live in at least until retirement.  We don't have any CC debt but we do have a car loan and my student loans.  I'm not really following Ramsey's rules since I disagree with several of them.  DH and I both get employer matching on our 401k contributions so we're not passing up that free money.  And my student loan interest is less than the interest on my high yield savings account so it would be a net loss for me to pay down the student loan.  What I have been doing is splitting money between extra payments on the mortgage and savings. 

Right now I'm on unpaid maternity leave and we're actually drawing on our savings for me to stay home for DS2's first 6 months, so while we're not going into debt, we're also not doing any getting out of debt right at this moment.  We felt that having me home for him is worth the savings detour, though.  I go back to work in April, so once I pay off my my accrued health insurance premiums, we'll be back on track on paying against the mortgage.  I have to say that even when we can put an extra $400/month against the mortgage, it feels like it's just a drop in the bucket.  It's daunting having that kind of debt =\

I also need to start saving up for something special - maybe a wedding (MINE!) in the next year or so. I could do something very affordable thanks to my church having a decent-sized hall to use (holds 125 people), but it still would require several thousand dollars. Even if I was close to my parents (I am not), they wouldn't be able to contribute, plus at my age (41), it's a little much to expect them to contribute when I've been on my own for so long. My feller doesn't have a lot of money, and I'm not really sure about his parents' financial situation. He's an only child, so they could conceivably decide to contribute towards a wedding, but if they did, it would be icing on the cake. I'm just planning on saving for what the feller and I could afford.

My goal is to have cc paid off, teeth taken care of and paid for, and some money in savings (since current money in savings is for teeth) towards wedding by the end of this year. :)

Usually the biggest way to cut cost is to cut the guest list since catering is usually per plate.  The other biggest savings seems to be having friends who can do floral, cake, and so forth.  Ask around and see if someone you know has done good work in the past or knows someone who has who can cut you a good deal.  Not sure what kind of area you're in, but I'm in an outer suburb of a major metro area and I've been shocked at how gorgeous some of the wedding gowns are at Salvation Army (now would be a good time to look, btw, since there are more end-of-year donations for tax write-offs).  Another thought if you're going less formal is to look at the bridal party gowns at bridal boutiques and find one you like that you can order in white/ivory.  I've seen some that are simply beautiful that would be appropriate for a daytime wedding and significantly less than a wedding gown.  I watch "Say Yes to the Dress" sometimes and it floors me how much some people spend on a wedding gown.  Good luck with the planning and saving!

[eirual]

Originally Posted by sarah1122 

.... 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.

If you trust their caregiver and it makes financial sense, I think a few days a week is quite reasonable. In your case, I think the benefits way outweigh any risks involved (sending a one year old to a like-minded caregiver some days and being home with mom the others sounds like a wonderful balance- it's not like you'd be settling for full-time care that makes you uncomfortable for you to barely break even).

[chely7425]

I am anxiously awaiting being able to file our taxes... we are planning to pay off 100% of our CC debt with our return and are hoping to get a bit more to put some in savings and buy a few other things. Should be able to file the 24th...

[_ktg_]

I'm back!! and just getting caught up on all the posts. I'll be back to post my 2011 goals but I know one of them is slamming out 1 (HUGE) CC because of the insane APR %rate.  Unfortunately that means I'll be  really walking the DR talk as we'll have just 1k for emergencies only. 

It makes me so nervous to only have that, but if we can squeak out under the thumb of this CC debt (then I'll only have 10K in 2012 to payoff - easy cheesey then), I forsee "bluer" skies for us.  

As for morgages as debt - they totally are even if they are on a fixed rate.  You bought an item (i.e. house) with credit, just with a nicer APR rate often, so its just like credit card debt in my mind.  

[Pariah]

Originally Posted by chely7425 

I am anxiously awaiting being able to file our taxes... we are planning to pay off 100% of our CC debt with our return and are hoping to get a bit more to put some in savings and buy a few other things. Should be able to file the 24th...

I have a similar plan. I use TaxAct and their site says the earliest you can file is the 15th, so I hope I get my W2 or at least all the info I need to file ASAP. I'm using that money to get current on everything and I am so excited for this. I am so sick of wasting money on late things that just snowballed and I couldn't seem to fix it without something like tax time bringing a chunk of money to get all past due amounts paid.

[Motivated Mama]

I do think of mortgage as debt and my car. The reason I was concerned about being upside down on my car is because I was looking at maybe trading it in for something with a much smaller payment or similar payment with less months so I can tackle other debt. We just don't make enough to support our expensive home and vehicles. At least, there is no wiggle room. The reason for this is the change in career due to having a sick child requiring heart surgery.

We are going to receive transitional health care for the next six months. Our income has increased above the guidelines and I am so relieved that we won't be losing healthcare or going into more debt via medical bills for at least another six months I am almost current on all of my bills. We were able to catch one of the vehicles up and will catch the next one up with our paycheck in 2 weeks. We should be able to cover the rest of our monthly bills at that time too. I have gotten more of a grasp on the money flow in our household over the last week and will continue to just track over the next month after which I will take some serious action. I am considering my future, which hopefully will include paid medical school, three school-aged children, and my mailman, DH, in 3 years. I will need to budget in the MCAT this year, medical school applications next year, and travel for interviews the following year. Maybe I'll qualify for some waivers?

I think I'm off to a good start.

[chely7425]

Yeah, the earliest you can file is the 15th... but our W2 won't be available till the 24th.  Usually I can do ours off the end of December LES but since DH has been deployed part of this year I can't.

[laohaire]

I am showing different topics with bullet points.

• Motivated mama

Sorry to hear you're going through a rough time. I can sympathize because I'm the designated party pooper on these threads. It does feel overwhelming. You're not alone.

• Sinking funds, good news

A little good news from me for a change, our sinking funds are actually built up enough again that they are helping. We hit up 3 different funds this month, and they all had enough to fully cover the related expenses (we bought a cord of wood, some trash credits at our dump, and paid our water/sewer bill). Normally, this would de facto be a bad month for us just because of those expenses, but they have not touched our regular budget!

• Pantry, good news

Similar to sinking funds, I'm working on building a pantry so that we can at some point buy mostly from sales. When you don't have a pantry, you can't just shop sales (unless you are willing to eat anything, including processed foods, that is on sale). But if I have a dozen cans of red beans and only use one can a week, when they go on sale in 4 weeks I'll still have 8 cans left and can just restock again with sale prices. Etc. My pantry is still very small, but I feel happy looking at how it's growing - and all from sale prices.

• Health insurance, potential bad news

My employer is in trouble, and while my employment is looking ok (two contracts are 99% for sure going through) my boss said something about us "talking about" health insurance. I am super lucky in this regard and my employer covers 100% of the premiums. However, I really don't feel like we can afford even a portion of the premiums. Our savings are so minimal, and we desperately need them. DH and I freaked out for a few days about this but now have decided to just 1) wait and see and 2) if I do indeed have to "talk about" insurance, we have decided to ask to drop out of the plan and ask to receive whatever they were willing to pay, in cash. To be set aside in a separate account solely for medical uses. Risky, I know, but insurance has thus far been a very bad deal for us and our employer. Our insurance company has made over $10k a year off of us, since we end up paying out of pocket for everything anyway ($1k deductible). If in 6 months or a year the economy is bette and we can get insurance again, great, and we'll also have a nice little nest egg built up to cover the deductible in the future.

• The I-wannas have hit me

Amazingly, in this difficult time, the I-wannas have struck. I'm a saver by nature and don't usually want things. But I think we've just gone without for a ridiculous amount of time and it's finally hitting me. For example, we have no sofa or furniture. Also, we have a dining room table but it's so uncomfortable (the chairs are stools and it's not conducive to just flopping down at the table and playing a game or doing homeschooling or anything - it's just too high). We went to the furniture warehouse this weekend just to get an idea of the costs. Unfortunately, they are higher than I hoped. (Yes, I realize I can also shop Craigslist and such too). They had a loveseat there that was just perfect - the right size, color, style, and it was even a sleeper (we could definitely use a pull-out sleeper from time to time). $599. Which we probably would have most of from our tax refund. Plus my mother gave us $200 for Christmas. But I keep kicking myself - how could I consider buying this when I'm not even sure I'll have a job?? To be clear, this would be a cash purchase, not debt, but I really need savings. On the other hand, it would be a huge thing for our family, a place we can gather that is not the bed upstairs. A place we can relax. We could actually have guests, too. We've lived in this house for 6.5 years, it would be nice to finally have a sofa. And I don't spend money on the house at all, no paint, no bedding, no furniture (the dining room set was the ONLY thing we bought, and it was a bad choice, long story). Input invited, whether it's whacking some sense into me or encouraging us to go for it.

I noticed none of my updates were related to the main point - debt. Nothing really new to report there, we're chipping away at it slowly like always.

[lavatea]

Originally Posted by laohaire 

• The I-wannas have hit me

Amazingly, in this difficult time, the I-wannas have struck. I'm a saver by nature and don't usually want things. But I think we've just gone without for a ridiculous amount of time and it's finally hitting me. For example, we have no sofa or furniture. Also, we have a dining room table but it's so uncomfortable (the chairs are stools and it's not conducive to just flopping down at the table and playing a game or doing homeschooling or anything - it's just too high). We went to the furniture warehouse this weekend just to get an idea of the costs. Unfortunately, they are higher than I hoped. (Yes, I realize I can also shop Craigslist and such too). They had a loveseat there that was just perfect - the right size, color, style, and it was even a sleeper (we could definitely use a pull-out sleeper from time to time). $599. Which we probably would have most of from our tax refund. Plus my mother gave us $200 for Christmas. But I keep kicking myself - how could I consider buying this when I'm not even sure I'll have a job?? To be clear, this would be a cash purchase, not debt, but I really need savings. On the other hand, it would be a huge thing for our family, a place we can gather that is not the bed upstairs. A place we can relax. We could actually have guests, too. We've lived in this house for 6.5 years, it would be nice to finally have a sofa. And I don't spend money on the house at all, no paint, no bedding, no furniture (the dining room set was the ONLY thing we bought, and it was a bad choice, long story). Input invited, whether it's whacking some sense into me or encouraging us to go for it.

I noticed none of my updates were related to the main point - debt. Nothing really new to report there, we're chipping away at it slowly like always.

I say go for it since you can pay in cash. But I'm not hardcore. And I like to be comfortable. And I have the I-wannas, too.

No clue what's going on with the formatting.

[Motivated Mama]

I get the I-wannas too. That's why I'm so in-debt. I think I'm bipolar, but that's another discussion. For example, today I was organizing my cookbook and I have at least 4 green smoothie books and probably 30 or so cookbooks. When I decided that I wanted to be a doula, I took both birth and postpartum doula classes and I've bought all the associated books. I'm no longer pursuing this. Cloth diapers - I have tons - my bedroom floor is covered as I am trying to organize them for sale or gifts. My children will no longer wear them. DS is too sensitive for them and DD2 is similar. I have 4 breast pumps that I need to sell. Shall I go on? I've been great for awhile, but I'm also medicated My last splurge was last year when I juicefeasted and spent $15/day on food for juicing. I did this for 43 days. That's $645 on food for myself. I lost 40 pounds and then I gained 30 back, so what a great investment And the $625 Y membership that we used maybe 7 times... Things are much better now - I'm hoping mothering will help me to be accountable through these forums: no-spending, decluttering, low-income, get out of debt, etc...

[mtm]

I did it! Dh's bonus came in and we bought new boots and then put the rest in our tsfas for retirement. It was tempting to do other things with the money but the second it hit the bank account, I bounced it right out so we didn't waste it. I'll comment on everyone else's posts in a bit, I tried a multi-quote yesterday and then lost it. So frustrated with the new mdc.

[MyTwoAs]

Originally Posted by mtm 

I did it! Dh's bonus came in and we bought new boots and then put the rest in our tsfas for retirement. It was tempting to do other things with the money but the second it hit the bank account, I bounced it right out so we didn't waste it. I'll comment on everyone else's posts in a bit, I tried a multi-quote yesterday and then lost it. So frustrated with the new mdc.

CONGRATS!!  I find that bouncing it right out is the only way I don't get creative with "extra" money like bonuses.  :)

[Agatha_Ann]

Originally Posted by _ktg_ 

I'm back!! and just getting caught up on all the posts. I'll be back to post my 2011 goals but I know one of them is slamming out 1 (HUGE) CC because of the insane APR %rate.  Unfortunately that means I'll be  really walking the DR talk as we'll have just 1k for emergencies only. 

It makes me so nervous to only have that, but if we can squeak out under the thumb of this CC debt (then I'll only have 10K in 2012 to payoff - easy cheesey then), I forsee "bluer" skies for us.  

As for morgages as debt - they totally are even if they are on a fixed rate.  You bought an item (i.e. house) with credit, just with a nicer APR rate often, so its just like credit card debt in my mind.  

Sure mortgages are debt, but unlike a CC, when it's paid off you have something to show for it! I think there is a huge difference between investment debt like mortgages and student loans, and consumer debt like a Visa card.

I am so super excited to do our taxes this year. We are in a good position with our house and cars, and I am anticipating about 15,000 in tax returns which should pay off the student loans, yipee!

[Pogo0685]

I am also very excited to do my taxes, I am going tomorrow to get them done at H&R block because we owe the government money. Both DH and I claim married 1 on our w4's (I think that's what they are called) so that they take everything they can so that hopefully we will get a bigger refund at tax time, this is the first year we did that so HOPEFULLY it will work out like planned. We are back to where we started though, we don't have credit card debt but by my figures we are still going to be short $227 a month though and I just don't know where else I can cut from our budget. The job DH was looking at getting is not looking good and I just don't feel my sewing skills are worthy of being sold yet. And that leads me to another problem, my dogs broke my sewing machine last night - one of them got tangled in the cord and ripped it right off the desk so now it wont sew right and I have to take it in to get fixed. My plan was to sew up everything I have in my stash - so that I get really good at sewing and then start sewing stuff to sell but that's not looking so great anymore. Sewing was also going to be my form of gifts for everyone this year I was planning on making a quilt for every ones birthdays - I already got the material for all of them I just needed to buy the batting and thread. I have $100 that my parents gave me for Christmas so as long as its less than $100 to fix it I can continue on with my plans. I know I can do this and I know I can make it work but everything just seems so hard and so out of reach, like no matter how hard I try I just cant get ahead. I just told DH where we are with the budget and money and I told him we have to stop eating out, completely, and no more buying anything from convenience stores and the like, and his response was - "Oh so we should go out to eat tonight - you know one last time" I told him no, we have dinner at home all I need to do is put it in the oven when we get there. Well thanks for letting me vent, hopefully you all are having a better day than I am.

[Motivated Mama]

I have lots of knitted cloth diaper covers (longies, board short, skirties, etc). DH says I should just sell them since we only used each of them once or twice. I think I now agree. I just find it so difficult to sell stuff. I'm definitely not a sales person. I usually just end up giving stuff away! I'm iffy about taxes. DH paid in, but I didn't. I gave away 7 bags of clothes to Goodwill and a bunch of larger baby stuff to various people, so maybe if we itemize? Also, we have three children, so maybe?

[MyTwoAs]

A note to Americans on filing taxes - if you are filing with itemized deductions, the IRS will not be able to accept your return until mid to late February.  Here is a link with more information:  http://www.irs.gov/newsroom/article/0,,id=233910,00.html

Agatha Ann - Congrats on being able to pay off your student loans, that's a pretty hefty refund.  Have you considered altering your withholding to get an extra $1k in your paycheck every month or did you take advantage of special tax credits to get that $15k?

The "I - wants" - I had (and still fight) a bad case of those.  I still have a gorgeous custom embroidered wool diaper cover from back in the days when Hyena Cart first launched.  The bum that it fit is now on a 7 yr old.  I saved it because it is beautiful but also an example of my absurd spending (I think I paid $65).  

We made another payment on our debt today and we are in the teens - very excited.  I also just found out that my husband's commission for 1/24 is about $1500 more than expected.  The 5+ years he put into getting hired with this company have definitely paid off!

[Agatha_Ann]

Originally Posted by MyTwoAs 

A note to Americans on filing taxes - if you are filing with itemized deductions, the IRS will not be able to accept your return until mid to late February.  Here is a link with more information:  http://www.irs.gov/newsroom/article/0,,id=233910,00.html

Agatha Ann - Congrats on being able to pay off your student loans, that's a pretty hefty refund.  Have you considered altering your withholding to get an extra $1k in your paycheck every month or did you take advantage of special tax credits to get that $15k?

The "I - wants" - I had (and still fight) a bad case of those.  I still have a gorgeous custom embroidered wool diaper cover from back in the days when Hyena Cart first launched.  The bum that it fit is now on a 7 yr old.  I saved it because it is beautiful but also an example of my absurd spending (I think I paid $65).  

We made another payment on our debt today and we are in the teens - very excited.  I also just found out that my husband's commission for 1/24 is about $1500 more than expected.  The 5+ years he put into getting hired with this company have definitely paid off!

I'm self-employed (I run a daycare out of my home, and then I also am on salaried contract for another company) so I don't have anything taken out. The contract work I end up having to pay when I am doing the taxes, but my daycare far outweighs what I would owe otherwise. My husband pays in all year as well so that helps too. The great thing with my daycare is I can practically write off everything I buy. Every grocery, toy, paper towel, a huge chunk of our mortgage and utilities too. On paper the business takes a HUGE loss every year and it works out fabulously for taxes. We also bought a house in 2010 which will give up a pretty hefty credit too.

[BunnySlippers]

Pre-Step 1: Get current on your debts and do a budget
0.1 Commit to NEVER borrow $$$ again Commiting
0.2 Talk with spouse and get him/her on the same page as you concerning finances. N/A
0.3 Do a written budget Just need to proof and type up a hard copy
0.4 Temporarily stop all retirement contributions    I wasn't making any
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) done
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months Don't have toys
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. done a looong time ago!
0.8 Get current on ALL bills done!

BS1 $1,000 to start an Emergency Fund
1.1 Chop up/freeze CC's (You have an EF now) done

1.2 Get Health insurance NOW if in the US  N/A

1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. done
1.4 Amputate cars that you can't pay off within 24 months Car should be paid off this year!
1.5 Consider raising insurance deductables to $500 or $1000 I have no idea what this means

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest.
2.1 You can take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!)

Today I finished paying off the first of my loans 5 months ahead of schedule!

I had a question, but now I can't remember it.

 

[Motivated Mama]

Bunny - raising deductibles is in reference to insurances. By raising the amount you would have to pay out of pocket in case of an accident, you will lower your monthly insurance premiums.

[eirual]

I am stoked for what the next few months will hold. We have an $18,000 goal ($11,000 student loans, $4,000 college tuition savings for June- NO MORE STUDENT LOANS when we have alternative means, and $2,000 to make it to my brother's wedding in the summer). 

Work's been good for me, DH has had a few interviews and working with a friend in the mean time, and we are hungry to move forward so there's been a bare-boned rice and beans budget combined with living at the parents who have declined our offer to contribute to rent or utilities. The last thing I want is stuff (I've never felt like this before- I usually feel entitled and deserving of stuff for all of our hard work and sacrifices....but the idea of that is repulsive at the moment- I want FREEDOM!!!)