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anyone else ready to GET OUT OF DEBT? - Page 4

post #61 of 127
I should really have come to this thread earlier - if you can get your money out of your retirement early without huge penelties I owuld do it. DH used to work for a company that helped people reduce debt in order to save for retirement and the first thing they had people do was pay off credit card debt even if it meant not investing. Once you have your debt paid off you can start auto investing. It will build faster. of course if you have 10 or less years till retirement then hoard everything you can. The theory is that your cc intrest will build faster and larger than you retirement intrest so you still lose money in the end.

some other big things you can do to save money. refinance everything to a non revolving intrest loan so that you are not paying intrest on intrest.

be sure you have term life insurance instead of whole life. (and be sure you have life insurance. it is not optional). Some people think it is a saftey net because they are squirrling away money but it is worng that you have to borrow your own money and pay someone intrest for the priveledge. use a savings account if you feel the need to squirrel money. it isn't worth it. term will take care of you and your family suffieciently at a fraction of the cost.

makeone extra mortage payment a year (this is especially easy if you get paid every two weeks because you can switch your payment to bi weekly and spilt the cost of your payment in half and you will never feel that extra payment) this will cut the life of your mortage by half. HALF!! 15 years if you are just starting out. you save just a crap load on intrest and build equity really fast.

have only as much taxes deducted as you will need ot cover your tax bill. don't have extra taken just in case. you can use a savings account for this and gain intrest until it is time to pay any extra you owe. it isn't thier money until april. keep it in the bank building intrest until then. also for the love of pete don't have extra taken out so you can get a big return. why should you let the government earn intrest on your money? and yes this is why they do this. that tax return is not a gift from the government. it is not a treat,. it is refund of what you over paid. Your boss can deposit in your savings account directly. you never have to see it or be tempted to touch it. unitl January if you so desire. and in the mean time it will be gaining intrest!! for you!!

Ok there is my speil for the night.
post #62 of 127
Wow! Thanks Lilyka!
post #63 of 127
I love this thread!

A couple of things: If you have a 30 year mortgage and make one extra payment per year, it will reduce the life of the loan to about 22 years, not in half. And it's probably always a bad idea to cash out retirement funds to pay off debt because you get hit with high taxes and penalties.

That said, EFMom has some great ideas to reign in the spending. I just found a volume of the Tightwad Gazette at a yardsale for a quarter, and it really had great suggestions. My sister's bridal shower is this weekend, and she's a complete spend-a-holic, so one of my gifts to her is four books to help her and her fiance with their finances ("The Tightwad Gazette," YMOYL, a Suze Orman book, and the Wall Street Journal Book of Personal Finances). I got all the books used to underscore the priniciples of simple living. Most of these book can be found cheaply by buying them used on amazon.com

NewMainer had some good points about the stereotypes of simple living folks. Simple living doesn't mean buying poor quality items that will end up quickly in the landfill. Part of it is living lightly on the earth. I have Garnet Hill sheets on my bed, but I got them on sale, they wear like iron, and I've had them for 8 years. My heavy down comforter was expensive from the Company Store, but it's also 13 years old. My clothes are CP Shades and Flax and Eileen Fisher, mostly gotten on sale or used on ebay. My shoes are Danskos and Clarks but I haven't needed to buy a pair in two years. I have shoes and clothing that are more than 10 years old and still look great. Good quality goes a long way and saves money in the long run.

My secret life is one of a writer and artist, and simple living gives me much more time to pursue these interests. It's getting to the point where I loathe going shopping! I'd much rather hike or write or garden. Last weekend, we spent a day building a pergola in our yard - chopped down standing dead locust trees to use, dug deep holes, scrounged the screws to fasten it together. And it turned out prettier than anything we could have bought. Simple living is good for my creativity in so many ways.

My financial goals are:

*Pay off our mortgage as quickly as possible (we refi-ed our 30 year into a 15 year mortgage and I'm making extra payments). When I told DH I would work to pay it off early, he laughed at me! Ye of little faith...
*Pay into DH's Roth IRA every year as early in the year as possible.
*Add more to our emergency cushion (currently at about six months of expense).
*Keep putting money to be matched by my employer into my 403(b).
*Keep tracking expenses using Microsoft Money.
*Stay out of anymore debt - which might get temporarily blown in the next year by building a barn for dh's business, but at least it adds equity.

What are your goals, and how do we reach them? Can we support each other to reach them together?
post #64 of 127
You guys have really inspired me! Thanks!

My goals are:

To pay off the CC debt ($9,000) ASAP

To pay off dh's car

To have money in savings

To live more simply and avoid buying things that we don't really need. (this is a big one. I'm a bit of a comfort shopper)

I would love to pay one extra mortgage payment/year. I always say I'm going to but then never do. That's a goal I could probably attain somewhat easily by putting money away each month.

Thanks again everyone!
post #65 of 127
Thread Starter 
OK- :

Goal #1- pay off......$22,000 in credit card debt :
Other goals which I will bother to put in order after #1 is done:
save for kids college
pay off cars
save for retirement
pay down mortgage
tithe (although I should probably be doing that all along)

I am planning a library trip tomorrow to get some inspiring books.

My biggest goal- to realize what we ACTUALLY have/can afford, and stop living as if we had more.
post #66 of 127
I know I posted before on this thread, but I just wanted to add that I am so glad to see others like me who are trying to get out of debt.

We have a mortgage, car loan, home equity line of credit, and a small credit card bill. The car loan and mortgage are manageable, but the equity line of credit has thrown us for a loop. We had to get our kitchen floors replaced (previous homeowner had done a terrible DIY job of laying Mexican tiles), the driveway started cracking and eventually buckled with huge chunks sticking up (from a tree root) and had to be fixed. We also have a trees that had to be cut down/pruned. All of that was several thousand dollars.

Our new dilemma is that our DD might have a learning disability and might need to attend a special school (she has an above average IQ with a learning disability which affects how she learns). That won't be cheap, and the school is 15 miles from our home. That would be 60 miles each day to take her and pick her up, not to mention about 2 hours total time out of the day just for transportation. So, we are thinking of moving to be closer to the school. I am also trying to start an online business to bring in some extra money and I might have to go to work on nights/weekends to help pay for the tuition.

AACCKK!! We are just very confused right now. We hate debt and for a couple of years, all we owed was the mortgage and car payment, but due to DH being out of a job for almost 2 months last year, we fell behind a little and are still trying to catch up!

Thanks to you all for sharing your stories.
post #67 of 127
ackkk. i'm having a week where I want to spend lots of $$ we don't have (to give you some perspective I'm talking 100 bucks at the mall, not $$$$$$$). i'm hoping that by posting here I will refrain from spending and actually save.

it does help me to think about transferring some $$ to my cc -- meaning I would go in and pay electronically 5 bucks or something to my cc instead of blowing it at the mall. off to do that now!
post #68 of 127
Quote:
Originally Posted by kerc
it does help me to think about transferring some $$ to my cc -- meaning I would go in and pay electronically 5 bucks or something to my cc instead of blowing it at the mall. off to do that now!
That is such a great idea!
post #69 of 127
Kerc - You rock!

One of the most profound parts of YMOYL for me was the idea that every time you go out and purchase something, you are effectively trading life energy for that object (you give life energy as work for money to buy stuff).
So when I buy stuff now, I think about "do I really want to trade my incredibly valuable life energy for this thing?" Most of the time, the answer is "no." And then it becomes easy to justify paying myself first - through debt reduction or by saving.
post #70 of 127
I just did it (payed a little on the CC) and it feels great! Thanks for the idea!
post #71 of 127
Woo hoo Ekblad! Paying down debt CAN feel better than shopping!
post #72 of 127
kerc- that is *such* an awesome idea. i'm going to make that a habit!!

Today we got a reimbursement check from the bank for some of our home improvement stuff, so at least 13,000 of that card will go away. seems easier for me to handle paying a mortgage than another cc.

Ok, so, goals. I know I listed my ideas before, but now the goals:

short term:
1. truly track what we are spending and get on a *workable* budget. i've made them a million times before but don't stick to them or track them.
2. dh and i meet weekly to review our finances, track our goals, etc...
3. find at least -3- ways to reduce our monthly expenses- apply toward cc bills.
4. continue paying extra on mortgage every month (we can't do the bi-weekly thing because of how our loan is structured)
5. start dd's college account before she turns 1 (less than 1 month. I figure $25 a month is doable and if we dont' do it now, we won't get the compound interest and we'll screw her future too).
6. start an IRA or equivalent for dh to squirrel money into- even if only $25 a month.

My goals are structured a bit different than what many have written. For me, it just doesn't work to have a goal of paying off our cc for good. thats' a no brainer. I need concrete things I can check off a list!! Like, ok, did I meet my reduced spending this week? yes! great! etc...

oh, and regarding the organic thing. yes, buying organic is definitely a privilege and its expensive. I know that we could save a lot of money by not doing so. but, I can't. i harbor absolutely *no* judgemental feelings toward others who don't. Like for me, I am not going to homeschool (though I undestand why others do and support it). But buying organic and local for me is really important in so so many ways. We give up other things- like we don't have a tv, so no cable. dh's cell is for work only. we have one car. we bought a smaller/cheaper house than we probably could have (ok, so we racked up a bunch of debt fixing it, but ykwim) etc... and ultimately, we can afford it, so i do- knowing full well that its a priviledge and i feel very grateful i can make that choice.

thanks mamas- this is a great thread!!
post #73 of 127
Thread Starter 
Very good point about small things you can check off a list to "feel" like you are really doing something- and that paying $5 here and there would be a great little motivator!

Maybe we could all check in once a week (although I feel a need to be here daily) to discuss the little progresses we make (like paying $5 off of our debt instead of buying another citronella candle at Walmart ).

And yes to newmainer- we all (I suspect) have something that we feel we need to splurge on- for you it's organic foods- for me it is security- which means we have a cell phone for emergency use and we have a security system. I could cancel both of those things, but then I would not feel safe, and that would not be worth it to me, KWIM? There have to be some things that are more imporatant than getting out of debt, we just have to make sure those things are few and far between and VERY important to us .
post #74 of 127
whew. only purchases after i left here: bag of charcoal (already on the "buy" list, 3 ears of corn on the cob for dinner, and 1/2 gallon of ice cream.

i'm having a hard time with the whole life energy part of YMOYL. For a handful of reasons, but it is just not clicking with me. I am doing well at thinking twice or trice about what i am spending money on though.

organic --> i aspire to be there someday. Honestly it is just not now. We just don't have the cash, it isn't worth it to move to a smaller house and well, dd was not planned. So we've been scraping by since she was born.
post #75 of 127
I guess none of our retirement (or at least that I know about) is in a retirement specific account so it would be benificial to cash it in if we were sirtting on cc debt. Ours is entirely in mutual funds that we purchased with out change jar and is building quite nicely.

One of the reasons we are in debt is because we bought thebusiness. which was a good thing. debt worth getting into you know. But being young and without a lot of money we have a crazy 5 year payoff on the place. (think a very large mortage with a 7 year payoff and what your payments would be) plus rent and employess who all needed raises. It is sinking us. if we can hold on for five omre years we will be able to to pay off all of our debt, including out home, every penny of it, in a few months to a year. It is really insane to think about. but that is if we don't go into debt anymore and can keep the business a float (it is a viscious cycle, we are out of credit so we can't buy the stock we need so we can't sell it and make money to pay off what needs to be paid to keep the business afloat. the previous owner made things out to be a little more rosey than they actually were) and tread water for another 5 years we will be home free. but that is hard when months go by without a paycheck and things come up and our paychecks aren't quite stretching . . .

but I do want to get out of debt.
post #76 of 127

Am so down!

I am new to this thread, but so glad i found it. My DH and i were doing so well for a while. We paid off everything, (We were living with my parents. though!). Then we bought a house and my husband took a pay cut and had to go back to school in order for him to keep his job as a teacher. We had another child, our new house needed a new driveway, and you know...the list goes on. We have a morgage, CC (A lot of them!), a student loan, and a car payment.

It seems that just as we think we are doing so well, something else happens. Like our stairs in the front of our house are rotten. It is not like we don't try. We are a family of six, living in a very small three bedroom lower flat. We rent out the upper for $600 a month, which means our morgage is only another $200. We could live in the whole house, but we are sacraficing our comfort for the money we need so much. My one year old does not even have a place of his own, he sleeps with us. That is fine for now, but in another year I like to move the kids to their own bed.

We would like to consolodate our ccs, but also don't want to make our selves worse off. Does anyone know if their is a safe way to do this. Right now we are paying so much in interest, and late fees. If we could just have one big payment I would be so much happier and I think in the long run we would be saving money.

Another question...Someone mentioned starting an at home job, what were you thinking of doing. I am so desperate for money. My DH works two jobs, so the only way I can work, is if I started work after 10pm or i worked from home. I already babysit in the home, but it is not steady pay.

I have to go pick up kids. I feel for you all! It is so nice to have someone to talk to, who knows what it is like and does not judge.


Depressed Mom of four beautiful kids
post #77 of 127
I dont have much to add today except that I admire and am impressed by you mamas with more than one child- I can't imagine! We definitely want another in about two years (well, getting pregnant anytime after dd is 2, and she is 11 mo now)- and that motivates me to get our butts on track. The stress of dealing with finances and more than one active child is beyond my comprehension right now.

Virtual hugs and hang in there to all!!
post #78 of 127
Well, we've had the big discussion about selling the family car. My dh company pays for his car (just like his cell phone plan). We owe a lot on the car. Getting a new car was idea b/c he wanted the security of knowing we were in something safe, as opposed to my old Honda. I my old Honda. Paid for is a beautiful thing.

Anyway, I'm not sure how we'd go about selling the car? Newspaper? Ebay? Dh thought about trading it in, but we'd be upside down if we bought a less expensive used car. This car is draining us. I don't even drive it more than maybe once a week. We live in a golf-cart community where everything we need is reachable by foot or cart. So, we paid waaaay too much for our house so we can save $ on gas

We're down to bare bones as far as bills go. What else can I cut??? Our internet contract runs out in Aug (to cancel it, we'd be out more than just keeping it the remaining few months). We don't have cable, heck, we don't even have a working TV right now. High insurance deductibles. We don't eat at restaurants. We do eat mostly organic, though we get it thru a farmers market very inexpensively. Dh takes his lunch. My mother buys my dc clothes.....I've stopped shopping for entertainment--if we don't NEED something, why be tempted? I really like the idea of moving into a smaller place, but financially, this will have to wait at least a year. My cell phone is $9.99 a month, which we think is a good trade-off for peace of mind with almost 3 children. I think a growing a money tree sounds like some agriculture I need to look into!

Anyone ever heard this saying---I really like it:

Use it up, wear it out, make do, or do without

Kinda runs counter to the simple living isn't deprivation, but it helps me make decisions sometimes

Thanks for letting me share waaay TMI If anyone has any car selling links or ideas, please let me know!
post #79 of 127
robin4kids - look up Primerica and see if there is one in your area.They do an evaluation of you finances, and let you know where you can save, they can refinance everything safely. you may have a slightly higher intrerst rate but since you will be paying htings off sooner it is OK (trust me) - just make sure they have you paying off everything sooner. Also by refinanceing you can drop things like PMI on your house and if you have full coverage on a car that doesn't need it (I don't know about here but if you have a loan on a car you have to have full coverage even if it is a pile.) These two things alone can add up to big savings even if you have a slightly higher intrest rate. There is no fee for thier services.They also fee l strongly that retirement saving and life insurance are not optional and will find a place for that in the overall plan.
post #80 of 127
Count me in!

It's amazing how quickly debt piles up! I have old bills and a credit card that's went to collections, his cc (which is slowly being paid off! yay!), plus my 76 year old Granny who lives with us (we combine our income to balance things out) has three credit cards,plus a couple store cards and about 4 lines of credit with mail order companies... the woman is a debt magnet and she doesn't understand where her money goes every month!

I've just started putting us on a budget and it's already made a huge difference in the way we live! I'm hoping that in the next 5 years we'll be completely debt free.... 2 years would be awesome!

Oh course right now we're adding to our debt... midwives, and we have to get another car (can't really see using a '92 mustang as a family car!), but we're doing our best to keep our expenses down and we're working on increasing our income so things are looking good We're staying in my little 3 room (3 ROOMS, not 3 bedrooms!) apartment for at least a year to save money (3 adults and a baby1) so we're definately making "sacrifices"... Now if only i could make DF understand that a new X-box is not essential when he already has a PS2 and a Gamecube and a gameboy and my puter.... lol The joys of loving a geek
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