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Getting out of Debt in October! - Page 3

post #41 of 69

I made an offer on a house. The house was listed at $280,000 and I offered $290,000. Then I hear that someone else offered $340,000! At this rate I'll be looking for a house until they jump out of my price range. Then I won't be able to buy one. Too frustrated to have anything positive to say.

post #42 of 69

I just paid off a CC $2220 joy.gif We have just one CC left to go!  I also spent some time on the phone yesterday researching refinancing our house.  It turns out that we qualify for the FHA Streamline.  I started another thread looking for anyone that has done this I've received little response.  It will cost us an application fee of $255.  We will save just over 1%.  We need to come up with money for taxes and home owners insurance but will also get a check back form our current escrow account so it's a wash.  That's it though, no other fees or anything!  Sounds good to me but I want to do my homework first. 

post #43 of 69

Paying off a credit card is awesome, CookiePie!  I will check out your thread on the FHA Streamline now. Thanks!

post #44 of 69

So I have a question for those who are to the debt payoff step or beyond: do you try to put money beyond your snowball into your debt? We have all the money from the past debts we've paid going into my husband's student loans now, but we don't put any extra. It all just goes into the different categories for our budget. If there's money left over in the envelopes, do you just leave it there for future months or do you take it out and put it into debt? Or do you try to put away a certain amount extra into debt when budgeting? 

post #45 of 69
Quote:
Originally Posted by lactatinggirl View Post

So I have a question for those who are to the debt payoff step or beyond: do you try to put money beyond your snowball into your debt? We have all the money from the past debts we've paid going into my husband's student loans now, but we don't put any extra. It all just goes into the different categories for our budget. If there's money left over in the envelopes, do you just leave it there for future months or do you take it out and put it into debt? Or do you try to put away a certain amount extra into debt when budgeting? 

I think it would depend on where you are at in debt payoff and how large the debt, etc.

If you are down to a smallish debt at this point then you can either roll extra into debt payoff to get down to 0, or start bulking up EF. If you have money leftover in envelopes you can roll into debt, towards savings, or into envelope money.

 

For me - I was forced to pay off debts first (divorce drama and unpaid CCs....etc) then tried to work on savings.

I don't envelope....but i'm in a pretty stable financial situation now and I don't do a heck of a lot of spending....

food is pretty low, gas about once every 2 weeks, daycare, bills. No phone (work), no CC, car payment.

 

Right now I have auto transfer setup for when I get paid to move a big chunk to savings with every paycheck. When my situation changes to the positive (raise, job change with salary increase, daycare going down with little guy starting school...etc) I up the transfer to reflect.

When I get paid my bank txts me to alert me, and I check the bal. anything ABOVE my paycheck I xfer over to savings.

I've been moving chunks of my savings into a liquid investment account recently too.

 

I withdraw my child support cash monthly and drop into savings directly now too.

 

what I would do if I were you was make sure I have a good savings buffer and if I was on track to pay off debt and had smallish debt I would split extra to savings and debt. otherwise focus on paying off debt entirely.

If I had money leftover at the end of the month I would setup a new envelope for "overage" so you don't get used to having EXTRA in each area, but you have a little extra mad/emergency money. once that amount reached a point (say, 100?) I'd siphon off a part of it and move it to savings.

post #46 of 69

oh, and I should mention I was trying to pay for divorce/debt drama (cost me 30K in 2 years) while making 42k a year. Ex wasn't paying child support, and daycare was 1300/mth.

 

things were super tight and i'm STILL not sure how I managed to make things balance. I feel like i'm living a lot easier now and I can afford any major financial dramas or to splurge on stuff if I really want....

but my salary has gone up dramatically since that point. it's now 82/yr plus 6k in CS a year.

I'm still living off 40ish a year and putting balance aside and buying some bigger ticket items we've needed for years (appliences etc)

 

but by ignoring my financial situation improving and putting excess into savings before I even see it....i'm very happy living off much less, and my savings is now growing into a good nest egg :)

post #47 of 69

trekkingirl - I am sorry, how frustrating! Hope the perfect house comes your way soon.

cookiepie - congrats on paying off one of your CCs

 

So this is my first month on the DR journey really - with a budget etc.... and I had to use my credit card the other day. I just felt so disappointed :( 

My emergency fund has less than $80 in it and some emergency repairs came up that had to be done to the house -so I charged them.

 

I will keep plugging away at it!

post #48 of 69

I'm sorry orange :(

post #49 of 69

CookiePie, that is so exciting to have your credit card paid off! That must be a very exciting feeling! I will have to check out that FHA streamline as well.  Right now I am upside down on my home loan and because somehow a bank allowed me to have a home improvement loan on top of my first mortgage and home equity loan that I used to purchase my home, I don't qualify to refinance my home yet.  Need to get that little home improvement loan to go away!

 

lactatinggirl, right now if we have money left over in an "envelope" we have been putting it into savings for expected, but larger bills - car registration, Christmas/Thanksgiving travel, educational expenses.  We have just been using the "snowball principle" but we although we have paid off a couple credit cards, we haven't actually snow balled the amount we had been paying because food and gas seem to have sucked our extra away.  I am paying what the minimum was when I started the snowball, even though the minimums have dropped since I have been paying on them - Like one I pay $104 when the bill is now $100.  Every little bit helps.

 

orangemomma - you are making a difference in your financial picture by plugging away. Are you staying within your budget on the other day to day items? That will make a difference as you keep plugging away at your emergency fund.  I know how hard it is to build up the emergency fund - we just depleted $400 from ours to pay for new tires on my car because they kept going flat and were bald.  Building it back up to $1000 will probably take us until we get our tax return again in Feb/March.  You had an emergency that your emergency fund wouldn't cover.  You used a credit card.  As long as it was a real emergency and you don't start spending on our credit card for other day to day expenses, chalk this one up to a better use of your financial knowledge and keep on budgeting and living within your means so you can build up your emergency fund to cover things like unexpected household expenses.

post #50 of 69

It does feel good!  Just one left to go in the amount of $3800.  I know that the end of CC debt is near, & it feels really good!!!! 

post #51 of 69
Thread Starter 

Trekkingirl, that's friggin' CRAZY!!! I can only imagine how frustrating that must be!

 

Lactatinggirl, every spare cent went towards paying off debt. Definitely more than only old minimum payments from just payed off debt. Get angry at it, and KILL IT!!

 

Orangemomma, can you imagine how much further behind if you were already short that month, had 0 savings, AND had these repairs to deal with?! I hope it was a somewhat friendly number and not, like, a whole new roof!

 

Our savings are dwindling here....DH is in school and is kind of getting forced into a (paid) co-op term starting January. Not plan A, but it means he'll be bringing in income sooner than expected and we could really use the relief. ...unfortunately it also means he's going to be going to school over the summer, which is going to downright suck for us. We will have to bank as much as we can this term.

post #52 of 69

So I have been soul searching and had a heart to heart with my DH. I am so frustrated with the housing market here in San Francisco North Bay. I've been looking at fixer uppers that are at the absolute top of my price range. Assuming I could actually get into one without being outbid, i wouldn't have ANY wiggle room. I still have some debt I want to snow ball and DH wants to go back to school. I don't see how we can do these things in a house we can't afford.

 

 

So I decided to throw a curve ball and look at homes in another area of The Bay. This other area is in the opposite direction but only about 5-10 more minutes commute. I should be able to find newer homes there for half of the price. Hopefully that will give me some bidding power. Also if we get a newer house hopefully that will equal less repairs. The homes there all have AC because it is inland so the weather is quite a bit hotter. So my cooling costs will be a factor. We were looking at $1950 a mo mortgage over here so hopefully over there it will be about $1000 a mo. 

 

I have been off and on disability for the last three years because I have a bad back. It scares me to be so strapped with the possibility of having to get by on disability again. I'm pretty confident we would be just fine with only $1000 mortgage.

 

Any opinions on the situation?

post #53 of 69
Quote:
Originally Posted by lilacvioletiris View Post

 

lactatinggirl, right now if we have money left over in an "envelope" we have been putting it into savings for expected, but larger bills - car registration, Christmas/Thanksgiving travel, educational expenses.  We have just been using the "snowball principle" but we although we have paid off a couple credit cards, we haven't actually snow balled the amount we had been paying because food and gas seem to have sucked our extra away.  I am paying what the minimum was when I started the snowball, even though the minimums have dropped since I have been paying on them - Like one I pay $104 when the bill is now $100.  Every little bit helps.

 

Some of our envelopes have that purpose. For instance, we have a "car repairs" envelope that gets $50 a month specifically for repairs/registration on the cars. Really, most of our envelopes have the intent of gaining money (which only sometimes happens) and the ones that don't I keep cutting down (like I keep decreasing our grocery and eating out budgets trying to find the minimum we're happy with). So I guess my problem is finding the balance between saving for future expenses and paying down debt. 

 

Quote:
Originally Posted by eirual View Post

 

Lactatinggirl, every spare cent went towards paying off debt. Definitely more than only old minimum payments from just payed off debt. Get angry at it, and KILL IT!!

 

 

Do you save any for future expenses, like mentioned above? Right now we have an extra $230 going towards the student loans from our past debts. I just don't know how to add to that number without purposely upping it. If the money is there to spend (meaning not set aside for a bill), it gets spent. :-/

post #54 of 69
Quote:
Originally Posted by trekkingirl View Post

So I have been soul searching and had a heart to heart with my DH. I am so frustrated with the housing market here in San Francisco North Bay. I've been looking at fixer uppers that are at the absolute top of my price range. Assuming I could actually get into one without being outbid, i wouldn't have ANY wiggle room. I still have some debt I want to snow ball and DH wants to go back to school. I don't see how we can do these things in a house we can't afford.

 

 

So I decided to throw a curve ball and look at homes in another area of The Bay. This other area is in the opposite direction but only about 5-10 more minutes commute. I should be able to find newer homes there for half of the price. Hopefully that will give me some bidding power. Also if we get a newer house hopefully that will equal less repairs. The homes there all have AC because it is inland so the weather is quite a bit hotter. So my cooling costs will be a factor. We were looking at $1950 a mo mortgage over here so hopefully over there it will be about $1000 a mo. 

 

I have been off and on disability for the last three years because I have a bad back. It scares me to be so strapped with the possibility of having to get by on disability again. I'm pretty confident we would be just fine with only $1000 mortgage.

 

Any opinions on the situation?


Where in the bay area can you get a mortgage for 1k? Richmond?

I find the bay area frighteningly expensive!

post #55 of 69

trekkingirl, I'd go with the smaller mortgage. We got a house for WELL below what we were approved for and I still sometimes wonder if we should have gone lower. Beyond that, it's really difficult to improve your situation when you're stuck in a house you can't afford. 

post #56 of 69
Thread Starter 

Trekking, what's the catch?!? That's a significant price drop for being seriously only 10 minutes away!

 

Orange, the key is to "spend" every cent before it actually gets into your hands. We did it by making a modest budget, that number left over after everything's paid would HAVE to go into paying off debt!! If not, it would get spent and just flitter away.

 

With that being said, if you foresee a storm a-brewin', you could have separate savings for that. For example, if you have $300 left, maybe $75-$100 would go to car repairs/replacement and the rest to debt. If you have a newer car and are pretty safe and secure, you could take your chances on having only your mini EF available. DH needed to drive to work, we had/have an old, paid-off car so we decided car-replacement was a smart fund for us to have and paid off debt while building a car fund (at about a 3:1 ratio savings to car fund).

post #57 of 69

trekking, I would definitely go with a smaller mortgage - you don't want to be house poor - it is no fun putting every penny into paying for housing expenses when you know there are other important things where your money could give you satisfaction like your DH's education that you mentioned or just something special for your kids.

 

eiraul, I love your advice "Get angry at it, and KILL IT!!" when it comes to debt.  I am still trying to get DH in that mindset.

post #58 of 69
Thread Starter 

Lilacvioletiris (In my head, I never sort out those flowers, it comes out as some morbid milk virus: "lilactovirus"...I'll work on straightening that one out! lol): DH has never gotten angry at it. He's very blahzay about the whole thing. He likes to keep his head in the sand and let me handle it. ...he's never been a big spender though (thankfully) so that works for us. He didn't want to do DR, but saw that it worked for me and that we made progress even in the first month so was kinda "meh, whatever works". I had to fight with him tooth and nail to make an EF before paying off debt (because it is ass-backwards), but once he saw what a difference it made he was on board ... or kinda just goes along with it! lol

 

We have enough communication over the budget that he still knows what's going on, he just hasn't had to change his behaviour much. It was me who had a really hard time deciding what we NEEDED and what I WANTED. ...and that was super hard to work through with him because his approach is "we need nothing. spend nothing" and quite frankly, it's not quite that easy. I need the process of budgeting and prioritising for me to see WHY we can't have/don't need what I want/think we need. With his blanket "don't spend" I never knew when that was legit and when it was real. We are very much opposites who kind of even eachother out in the end. He'd gladly do nothing, spend nothing, and give "nothing to no one", he kinda misses the intricacies and little things of life: he keeps me from getting too caught up in them and I keep him living a little bit of life within our means.

post #59 of 69

I think maybe I am being too harsh on myself - this is my 1st month with a budget a la DR - and I just don't have it right yet. I underestimated some categories for the budget - will make adjustments for November. This month I had lots of extra hours at work so things almost balanced. I am worried about next month though - not a lot lined up for extra shifts.

 

With the credit card, I did only charge the physical supplies - I did and will be paying cash to the repair people for the house repairs. So that is something at least.

 

trekkingirl - I vote with the other ladies - smaller mortgage. 

post #60 of 69

Not to be a party pooper or anything but if the house is in or near richmond I would suggest spending a few days in the neighborhood and reading police and news reports from the area as well; it's as bad as east oakland there...

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