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anyone else ready to GET OUT OF DEBT? - Page 2

post #21 of 127
I'm in! The weight loss thread here at MDC has helped me lose weight so I'm all about cleaning up my finances as well! We do OK except we have one credit card that dh doesn't even know about. I used it a long time ago when I had PPD and shopping made me feel better. I've tried to pay it off ever since but the interest is unreal. Where do I go to get lower interest? I need to get rid of this CC debt. We're also paying off dh's car slowly and will be buying my next vehicle. I would love to own both the cars and have no CC debt in 5 years. Esp. since ds1 will be starting college in 6 years! Thanks for putting this thread here and for the honesty that's going into it!
post #22 of 127
ekblad - you can try calling your credit card company to see if they will lower the interst.

your other choice is to apply for a new card - many cards have a zero-percent interest introductory rate (usually for the first few months) on balance transfers. This will save you some money. Perhaps you could keep applying and transfering (i think someone else here said they do that). of course, you have to be good about not using them, and cutting them up when the balance has been transferred. but that way you will be able to get the balance down faster.

DH and I have started to keep track of every expense. We save all receipts. Ones purchased with cash are just marked "cash" and all debits or cash withdrawals are recorded each day on a sheet of paper. It's really helping us.

I also made a big effort this month to bring snacks and lunch to work with me each day. I'm amazed at how much it is cutting down on my weekly spending. I didn't think I was spending that much on food at work - and I'm an experienced budgeter. It really does sneak up on you!

I also think that part of being frugal is developing the right attitude. As in "we are broke - do I really need this?". You wouldn't believe the things I go without b/c they are just not necessary. And "necessary" really changes in it's definition. Just a few things I'd like to buy are: a hairbrush (we only have a comb and my hairstyle is different now), a hairdryer, a popcorn popper, a new bathmat (ours is looking really grungy, but I wash it regularly so oh well), new batteries (DH has a milk frother and uses the batteries from the TV remote when he needs it, instead of buying more batteries), maternity underwear (I only have three pairs, my regular ones are not comfortable, I just have to remember to keep them in the wash cycle), new bras (my current ones are showing alot of wear, but they work and nobody sees them).

Now none of these things are expensive - I could probably get a hairbrush from walmart for a few bucks: the problem is, when you add them all up together, you end up with about $40 worth of things. and the fact is that NONE of these are necessities. They aren't food or toilet paper. So I go without them for now. It does help that I know this is a temporary situation for us, and somewhat self-imposed (drastic debt reduction program going on right now in our house!), but still....I'm amazed at how much you really CAN do without, when you recognize the difference between a Need and a Nice to Have One.
post #23 of 127
Hmmm . . . other ideas . . . How about calling around to comparison shop and be SURE you're paying for the cheapest car and home insurance? They change, you know, so you might be able to save some there.

Also, we cut back on dh's withholdings each month, bc we were getting huge tax refunds every year, but decided we needed the cash flow instead. We did end up owing ~$200 this year, which did hurt, but was probably better in the long run than having the govt "hold" our cash for a year.

Are you guys already washing and reusing your ziploc bags? Bringing home extra napkins from take-out restaurants? (We do use cloth napkins, but when we have guests for informal meals, they get the Chinese and Subway napkins!) Visted your dollar store lately? Some things there are a rip-off, but they have paper plates, art supplies, gift wrap, tupperware, and yes, probably hairbrushes Piglet!

And ABSOLUTELY everyone should transfer their CC balances to 0% cards -- TODAY!

My two weaknesses right now are eating out and buying clothes for ds. We were the first of friends and family to have a baby, so we got no hand-me-downs. So every time he hits a growth spurt I have to (read, GET TO!) buy him all new clothes. Of course I hit consignment first, but Target is often cheaper, and way cuter, than second-hand around here. And I simply cannot do the thrift store thing. I cannot stand the musty, moldy smell, HATE sifting thru all the crap (my girlfriend thinks of it as "treasure hunting") and I think I have flash-backs to my childhood of having to wear thrift shop clothes.

But I don't buy jewelry or make-up or music or books or clothes for myself or, or, or . . . !!! (oops, forgot you guys are not dh!)
post #24 of 127
Thread Starter 
I took the kids to the Picture People yesterday with one of those free sitting, free 8x10 coupons, well, I liked 2 pictures- one of the 3 kids together and one of the baby alone, normally I would say "but they are pictures" and buy the baby's pic. too at $15 for one picture. But, I said to myself- NO- you have more coupons at home, and you can come back tomorrow if you really need another professsional baby picture this month.

I also thought ahead and took lunch with us to eat in the food court while we waited for the pic.s to be ready. I only paid for the kids to ride the carousel ($2) and a single small frosty from Wendy's that we all shared, granted I could've spent nothing- but I did do better than my usual $20-$30 trip for a free pictures .

I have to use part of my aforementioned life insurance cash in to cut down a dead tree in our backyard (it is completely dead and is huge, big enough to hit our house or the neighbors in a storm). The rest though- will pay health insurance and credit card debt.

YUCK! I can't believe we got ourselves so far into debt in only 5 years of marriage. I hope to teach my kids how to use money and not abuse it, and the best start to that is DOING better ourselves.

I am thankful to have you ladies here, I think we really can support each other.

Piglet- great points about need vs. would be really nice to have .
post #25 of 127
Going to try and transfer that balance now......
post #26 of 127
Originally Posted by Breathe
My two weaknesses right now are eating out and buying clothes for ds. We were the first of friends and family to have a baby, so we got no hand-me-downs. So every time he hits a growth spurt I have to (read, GET TO!) buy him all new clothes. Of course I hit consignment first, but Target is often cheaper, and way cuter, than second-hand around here. And I simply cannot do the thrift store thing. I cannot stand the musty, moldy smell, HATE sifting thru all the crap (my girlfriend thinks of it as "treasure hunting") and I think I have flash-backs to my childhood of having to wear thrift shop clothes.
I so feel you on the issue of not liking thrift store shopping, Breathe. There are a couple I have gone into where just the smell practically brought tears of despair to my eyes. But I have found a couple others that are better, where there is no smell and the clothes are in good condition and there are dressing rooms. I also agree about children's consignment not being so much better than discount stores--we have a Carter's Outlet near us where they sell lots of outfits for $5-7 each, and they are brand new and cute and nice quality. Versus the consignment store where the prices are very similar but selection is poor and things are already somewhat worn. I'd be lucky to save a dollar per outfit. So now I just go to the Carter's store. (I also shamelessly beg from friends, co-workers, etc., so we have fortunately not needed to buy much clothing.)

Okay, my stats: 35K in CC debt accumulated while DH and I were in school. I owned a money-pit of a house and had a car payment as well while I was putting myself through school--I got scholarships and student loans but they weren't enough. It seemed like the debt was going to a good cause, but neither DH nor I were fully aware of quite how much it was until I pulled my head out of the sand and started adding things up. We have an additional 75K or so in student loan debt. And another 10K on a car, although fortunately my car has been paid off for a couple years now.

Despite all that debt, I thought we were making good progress on it and felt optimistic enough to TTC last year. I was planning to SAH and we would be paycheck-to-paycheck for a while but we were both really emotionally ready to be parents and felt like it would be way too long of a wait for our financial situation to be "perfect." We thought it would be okay to just tread water financially for a couple years. We also thought I could figure out something to WAH to bring in a little income.

Little guy is here now and he is the light of our lives...but then DH was laid off when I was 6 weeks pp. I went straight back to work (at half DH's salary) and DH is doing the SAHD thing while I pump. It is mostly working out. Except for the part about how DH's unemployment benefits run out in two weeks and at that point there is no way to meet our bills on just my salary. The part that really kills is that I make a reasonable amount; we are very slightly above the income cut-off for things like food stamps or earned income credit. But if you were to subtract our student loan payments (total of $500/month) from my salary we would totally qualify for assistance. At the same time, the student loan folks don't consider us needy enough for deferment either.

I try not to worry about it too much because I will just make myself sick...but our situation is pretty scary. I want to pay back our debt because were it not for that we would be getting by okay right now. It would be tight, but doable. It is because of our debt that it is a crisis, and I hate that. Don't even know how to make a plan to get ahead when we can't even get by now.
post #27 of 127
I can totally relate! While we finally paid off student loans last year it took us forever to do it! So now we're scraping by (we don't live lavishly but we do have plenty to eat, wear, etc.). I stress about it a ton mostly because if dh really knew what we owed he would freak out. I know it's part of a "normal" live. One CC with $9,000.00 is a ton but about the national average. That's all we have besides the cars and typical bills. I just want that gone. We've paid it off a million times. I was so freaking depressed. Don't even know what I bought! Isn't that awful? I'm so embaressed. I totally drag dh down when it comes to money. He would've been fine had I not come into his life. Poor guy. I feel totally guilty.
post #28 of 127
Originally Posted by ekblad7
I totally drag dh down when it comes to money. He would've been fine had I not come into his life. Poor guy.
Oh yeah. Me too. Dh actually paid off my modest CC bill when we got married. So we started off well. But grad school really will kill your finances, won't it? I SO feel for you guys with school loans, and it makes me realize how lucky we are to have only the CC debt, which is soundling more and more reasonable. If you guys can pay off thousands and thousands of dollars, we can certainly manage our small debt, and you're helping me commit to really tackling it. Thanks for being so candid!

Oh, and this is not a way to get OUT of debt, per se, but if you do have equity in your home, you can use it to pay off CC or cars, and then write the interest off on your taxes. Just another stall tactic, I guess! We've also used a "courtesy deed of trust" which basically sold our car back to the credit union so we could get the cash out of it -- for home maintenance, another black hole for money! -- and then we paid pack the loan as if it were a car loan. Not a solution for a debt, but a way to get cash without CCs.

wakeUpMama, we're in NC too and also have a Carter's outlet . . . we could be neighbors! (But I think Target is even cheaper and the quality is just as good. Oh, my love/hate relationship with corporate America!)
post #29 of 127
I totally hear where you are coming from. We are living paycheck to paycheck, problem is the paycheck doesn't cover the bills, so I just went back to work nights so we don't have to pay for daycare.
post #30 of 127
Thread Starter 
Oh, yes, we too are making just enough money that we do not currently qualify for any services, the only one we want/need is the health insurance. Of course (rightfully so) they do not take into account credit card debt/payents.

I think the varying amounts of debt here are good, hopefully we will soon see some of us (not me ) get out of debt, which will encourage the rest of us to keep on plugging along.

I tell you though, if I didn't BF, cloth diaper, and make most everything from scratch- we would be in soooo much more debt.

I still think health insurance is a total crock, at least with the way my dh's current employer handles it. Grrrrr!

Do any of you get really depressed by your debt situation? That was what prompted me to start this thread- I couldn't take the guilt/worry anymore and MUST get out.

Ekblad- are there any saints to pray through for finances I can use all the help I can get!
post #31 of 127
I love money saving taticts! Breathe, thankyou so much for writing that about the home equity because we just got approved for doing just that today. I've been uneasy, wondering if this was truly the right thing to do.

We cut the interest rate down 1/2 percent. $6,000 of credit cards will be paid off. We're taking the grass out of the front yard and putting in rocks. Water is very expensive here and that will save us about $90 a month. We're putting in french doors which I think will add value to the home. And we're going to be able to finish the 1950 ford pick-up truck. And, we still have equity in the home.

Their was no way that we could've or would've purchased a used or new vehicle for my husband. So we found a gutted truck and are putting it back together ourselves. We'll have a brand new truck for about $7,000. My husband will always be able to repair it himself saving us more money in repairs. Now my vehicle won't need to be driven around so much since I've been taking him to work and back saving us money and mileage.

I don't buy clothes at thrift stores, but I've found pretty much brand new appliances at them. Washer and dryer, barbecue grill, lawn mower. I also hang the clothes to dry in the summer. I don't mind drying in the winter since the heat is on anyway.

My parents took on our 20k student loan and put it on their house line of credit for 4% interest. Why couldn't they have done that 3 years ago?
Hopefully, we can pay it off pretty quick now.

Medical bills drain our money and I have no idea how to solve that one. I think insurance companies are extremely dishonest and I loathe them. We don't have cell phones, we have cable but need a cable modem for DH work. The rest of our bills are water, electric etc. One can check out free movies at the library instead of renting. I grow as much food as I can which isn't much but that saves a little and is much healthier. Not going to stores also saves money. If you can't see it, you won't want it. I also have energy saving light bulbs in most lights I have. No lights are allowed in the daytime. A person can wet themself, turn off the water, lather, then rinse off. I do take an occasional bath with dead sea salts or a hot shower in winter though. This is a great thread.
post #32 of 127
Originally Posted by Piglet68
your other choice is to apply for a new card - many cards have a zero-percent interest introductory rate (usually for the first few months) on balance transfers. This will save you some money. Perhaps you could keep applying and transfering (i think someone else here said they do that).

You have to be really careful with this..... we tried it a few years ago, and after we had applied and switched a couple of times, our credit didn't look so good anymore .. because there were too many inquiries on it. Also, even though you close the account, or cut up the card, it may still show up on your credit rating. (we have a card on ours that was closed 5 years ago!!!) and you have to call the company to have them remove it.
If you are going to apply and transfer, just try and keep it to a minimum to protect yourself
We have transfered all of our CC to an airline card.. so we get free miles! and we are finally using it to pay for everything, and then paying it off each month ( or mostly) it is helping a lot!

I'd love to get rid of my 130K in student loans....
post #33 of 127
I've heard great things about Your Money or Your Life a book on assessing your personal goals and moving toward them.

I am a grad student. My dh is also a grad student. We managed to have an unplanned baby in the middle of graduate school. Although we were ALREADY financially strapped, needless to say we are more so. Before I got pg we had bought a house, so we couldn't move to a cheaper place...

our debt is:
~90 k student loans, most of which is in deferment.
2 k on a furnace (it is a good debt, reduces our gas bill, transferrable to next owner of house).
8 k on one car
4 k on the other
and about 5 k cc debt
(oh, plus our mortgage. silly me).

my financial tips:
  1. be aware of how you are spending your money --- track every darn cent.
  2. anything that is not on the list when you go to the grocery cannot be purchased until next week (we shop once a week).
  3. stop in a store like target right before you get to the checkout lane and take out of the cart anything and everything that wasn't on the list. When I began this was half the cart for me, now it is more like 1 or 2 items.
  4. when you are purcahsing something ask yourself -- can i live without it. can i pay cash? can i borrow it? can i find it used someplace?
  5. buy an electric thermostat and use it. they are easy to install, reasonably cheap (ours was 30 bucks) and likely your landlord would be ok with it as well.
  6. Once you are accustomed to using the thermostat, turn it down (heat) or up (ac) 1 or 2 degrees per week until you reach a reasonable level.
  7. Line dry clothes
  8. Skip the "snack" aisle at the grocery store - empty calories mostly. Buy fruit and veggies or yogurt, cheese, sandwiches, etc. for snacks. Some of these items are more expensive, but you are buying quality, not quantity.
  9. Leave your cc at home unless you are traveling more than 20 minutes from home.
  10. Water down juice. we like ours a bit watered down anyhow.
  11. better yet, drink water.
  12. Make a list of all debts and post it on the fridge. we are following a plan right now (will put more in a later post).
  13. Never run 1/2 load of dishes or laundry.
  14. Use 1/2 of things -- soap, laundry detergent, shampoo, toothpaste, etc.
  15. Get off the catalogs list.
  16. Stop purusing the trading post/ebay/your favorite online site when you don't need anything.
  17. Goodwill shopping -- great place to get toys in my town.
  18. Make a list of errands you run and try to plan them out so you aren't driving all over town -- saves your sanity, gas money and then you aren't stpping for fast food on the way.
post #34 of 127
Here's the debt reduction plan:
i made a list of every company we owe money to, their interest rates and the monthly payment. Left side of paper is longest term loans (student loans in my case). right side is loans that we will pay off more rapdily. So...listed down the page are the amount we owe to each company as of each month. I used excel to calculate what the amount would be with interest. As we pay off one company we take that $$ amount and apply it to the next company. In my case ---> pay 200 for honda each month. in a year we are done paying that. When that time comes, we take the 200 for honda and begin mailing 200 +200 we had already been paying for acura. So when we pay off acura we will take 400 bucks and add it to the cc. so cc will get 450 per month. I think we likely are not getting the absolute best deal in terms of interest, but I can't seem to shuffle the interest around without fooling myself into thinking we'll have more money...which always leads to more debt. Not counting our mortgage and our st. loans which are in deferrment, we'll be out of debt in 4 years.

I expect when we finish school we will continue to do the same thing. Although I REALLY would like a different car. Sigh...making do for now.
post #35 of 127
Yea! I found you all!

How did I miss this thread when it started? I had been thinking of starting one myself for several weeks and then chickened out. But, here I am, ready to come clean.

Well, we were doing really good until just recently. When DH and I were engaged, we went to a financial planner who had done a training at my work. it was the biggest wake up call. He was an american express consultant who said, you guys are screwed. He gave us some great tips though, which I will share at the end.

So, at that time, we had about $20,000 in cc debt between the 2 of us. Luckily his parents paid for all of his college, but I had loans on deferment. anyway, in about 3 years we cut that in half. We literally cut up our cc after the meeting. we stopped eating out and buying stupid stuff (like $900 kayaks! ah, when you are young....)

So, skip ahead and now we've moved across the country i stay home with dd, and dh is a self employed programmer. He gets big contracts but guess where his last $8000 went to? TAXES! being self employed has killed us cause we needed every penny so we didn't set tax money aside. now we have a dedicated account and we cut a check from every invoice paid- NO EXCEPTIONS!

Well, we were so happy when we moved to Maine (from California) cause we could finally afford to buy a house. We bought a great- while *extreme* fixer upper (as in 30 years of smoking in the house) on a lake. We got an extra $33,000 from the bank to do the repairs. We put everything on a mileage credit card so could cash in miles. smart huh? until we got the latest bill and we are $12,000 over our $33,000 fix up!! aggggrrr! I mean, it was stuff we had to do, and the appraisal will show it, but now we have *2* credit cards with over 10,000 on them. I'm not even counting my student loans, mamas, which are about 16,000. Honestly, i dont count that as real debt. Its a like a mortgage to me.

so, our hope is that when all the work is done, we will have the house reappriased and refinance and pull the equity out and *maybe* even pay off both cards. Then our goal is to start buying some rental property so we can work up to having passive income. but, that's later- another thread on creating positive cash flow! (anyone read Rich Dad Poor Dad?)

so- tips.

well, our consultant said that the thing that ususally gets people in trouble is all the "occasional" expenses- like the things that only happen a couple times a year, or once a year like birthdays and holidays. people are good at budgeting for the month but then- doh! its christmas, or the car breaks down, or whatever, and you pull out the credit card. So, he had us make a list of all that stuff that we could think of and add it up, then divide it by 12. this was the amount of money we should put aside every month into a "cookie jar" account. So, we had our checking account for *only* monthlies, and then the cookie jar account for everything else- including clothes. so, theoretically, if you are religious about putting money in, and paying appropriately out of it, you dont have to do the cc thing. Of course, it takes several months for the account to build up.

He said the above was more important that paying above cc minimums because it will help you from putting more on the cards. We have been inconsistent with it, but are about to get back on track with it.

Next was to have a back up account of at least 3x our monthly income. So, if our expenses are 4000 a month, we need to save 12,000. That was if one of us is out of work or incapacitated in any way, we again dont' need to rely on credit cards. This is major, i mean, how can i justify saving 12,000 before paying off my 12,000 in debt? so, i struggle with this. I definitely see the point, so we have revised it to be a little less, but still having a savings for emergencies. (not that we have done this yet- its all in the "intentions" pile). I'm interested in what others think of this reasoning.

oh, and he said everyone needs fun money. even if its only $15 a month, each person needs to have something for themselves, or people cave. we did do this for awhile, i think it was $25. Dh was good- he always saved his up. I blew mine in the first week! we need to get back on that track.

The other things i have thought of doing is really, for one month, spending *only* on necessities (like the stuff Piglet was talking about) and comparing it to a previous month when I was a little more, uh, "free" with the money and then comparing to see how much extra i was spending- and on what. mostly as a wake up call thing (as if i need another one!)

well, that's my novel, mamas. I am grateful for the thread and the tips given so far! let's keep it going!!!!

post #36 of 127
May I join in? I've been a disciple of the Simple Living Guide and YMOYL for quite some time....but, after buying a very expensive, new old house, our world is crumbling around us (literally in some rooms!). We bought for location, but I'm SO regretting it. It is the perfect money pit. We're drowning in cc debt now. We've stopped using them, and my dh has worked out a plan. I've been crying off and on for about a week. I'm expecting our third little one in Aug/Sept---my dh already works two jobs. My mil owes us $5K (which my dh took out a loan for), but you know that saying about loaning money to relatives......I'm angry, depressed and not seeing any silver on the edges of these dark clouds. Keep telling myself that if $ is my only problem, I'm blessed...but this is so pervasive---I can't shake the doom. And I'm hungry---I'm not used to not having lots of food around the house

Thanks for listening!
post #37 of 127
I had this really great post and ds3 walked up and hit delete. So, and hang in there. I'm sorry for your troubles.
post #38 of 127
Originally Posted by Breathe
wakeUpMama, we're in NC too and also have a Carter's outlet . . . we could be neighbors! (But I think Target is even cheaper and the quality is just as good. Oh, my love/hate relationship with corporate America!)
Breathe, I am near two Carter's Outlets--one in Burlington and one in the outlet mall near RDU airport. I love Target too, we got a great little pair of shorts there on clearance for $2!
post #39 of 127
Wow - You mamas are doing so well in facing your debts and handling it - I'm impressed! Sometimes facing it is the hardest part. I have become a diehard "Your Money or Your Life" person, and living debt-free is my ultimate goal, with just our mortgage left. I HATE paying that bill every month. YMOYL is connected to the Simple Living Discussion forums, which have a lot of likeminded folk that want to get away from the consumer culture. It took YMOYL to show me that any debt is not so great, that without debt, I would have so many more choices about my life!

Wakeupmama: Sounds like you might qualify for a forebearance or deferment on your student loan payments because of financial hardship and having young children. That would free up lots of money to manage this time of your DH being out of work. Call you lender and they can tell you more. They will also have a variety of payment plans available - graduated repayment, income contingent repayment...

kerc: There's a name for your plan of loan repayment. It's called "snowballing" when you pay off one loan, and then use that money to double up on payments for another loan. Good to start with smallest loans first to wipe them out and/or highest interest rate loans first.

A few years ago, DH started acting sorta weird and I couldn't figure it out. Turned out his business was about $7K is debt and he didn't know what to do, so he stayed silent. I freaked when he told me, but switched into high gear. He is self-employed and was having a hard time doing everything himself, so I took over the books. Took us about a year to pay it off. Then we put away money for any emergency fund, started an IRA for him, quit buying stupid things, and now am paying all extra $$$ toward the mortgage.

My IRL job is actually to counsel students on managing their student loans, so I figured that I had to get my financial life in order, so as not to be a total hypocrite!
post #40 of 127
Could you explain the Simple Living Discussions? is that a website/ discussion board, or a book, or...? I have heard of YMOYL and think I need to read it now that so many have mentioned it.

While I definitley want to be debt free, dh and I also want to make more money-ideally positive cash flow. Not so we can buy more stuff, but so that we can have more time for ourselves and our family, not be tied down to jobs, and be able to do meaningful things with the money- gift to non-profits, individuals who we think are doing important, meaningful work, and also so we can put in volunteer time ourselves. We know some folks who by managing and investing their money well have been able to turn thier "work" into incredible causes and are making major differences in the world (besides raising responsible, loving kids!). Is this on anyone else's screen too?

I know the focus of this is debt free, and I dont' want to change or take away from that, but I just wanted to share a piece of our bigger goal and see if it resonates with others.
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