It will take us 4 years to get out of debt

[alicenwonder99]

We used to be the kind of family that had no debt (except for mortgage). If I did buy something on credit, like furniture, we would pay it off within a couple of months.

I don't know what happened to us over the last few years, but our debt is just insane now. I feel it is all of a sudden out of control, so I'm getting into the "snowball effect" method of debt reduction.

I figured it out yesterday, and it will take 4 years to get completely out of debt (except for mortgage). I will not reduce our small savings (lol), but I'll reduce our retirement savings for the 4 years down to 4% (company will match). I'm still trying to figure out if we can get any Disney trips in...lol...I know that should be the first thing we cut out!!

4 years just seems soooo long from now. I don't think our cars will last that long, they're 2000 & 2002.

Just wondering if anyone else got themselves into such a huge debt like us, and it's going to take YEARS to get out?

 

[Jennifer823]

I know what you mean. It's not like we are spending our money frivilously, but when the prices of literally everything goes up and our salaries don't.. debt happens.

 

[lastminutemom]

We have kept almost all our cars for 10 years or more. There is lots of research out there about building wealth and automobile ownership. The longer you keep your car, the better. Both our cars have nearly 95000 miles and we fully expect to reach at least 150000 with them. Cars (for the most part) if well maintained last forever.

 

[GJM]

I would think your cars will last - our one car is a 1997 Honda with 120,000 miles on it. We try and keep our cars for as long as we can. I have a 2003 Toyota, and I am hoping that will last for a long time. My last Toyota had 160,000 miles on it.

 

[taraprather]

I also just got done reading Total money Makeover and just started the snowball affect. I can have all my debt, including 2 newer cars (2006 and 2007), our mortgage(which we just got in August of 2007), and 7 credit cards paid off in about 8 years. If I don't want to include my mortgage, it will take me 3 years. I'm so excited!
BTW, cars can last a long time if properly maintained. My mom has a 2005 Toyota Matrix that she bought brand new. She is now at 298,456 miles. She drives her car for work and goes EVERYWHERE! It is still running like new. She has never had anything major wrong with it. She has an appoinment to replace the brakes today. She's has an oil change like every 3 weeks and her belt changed frequently. So they can last a very long time! Especially Toyotas!

 

[theycallmered]

Honestly four years does not seem like a lot of time. The debt that you have incurred probably did not happen over night, thus you cannot expect for it to be dealt with overnight.

When it comes to your cars they should last. I have a 1993 Acura Integra that I am still driving around. Cars are meant to last if you take care of them properly.

 

[nuke]

If you don't start paying it down think about how much more in debt you will be in four years.

 

[Amy5000]

, so I'm getting into the "snowball effect" method of debt reduction.

So, can I ask what the "snowball effect" method of debt reduction is?

 

[jenm2878]

Four years isn't really that long. My DH and I don't have credit card debt, but we have massive amounts of student loans, a car loan, home equity loan, and mortgage. I calculated that we can have all but the house paid off in 7-8 years. It sounds scary, but the last few years have flown by - the next few probably will too and we'll come out in much better shape!

 

[Schachteles]

So, can I ask what the "snowball effect" method of debt reduction is?

The method is that if you have lets say three credit cards, one with a minimum payment of $50, one with a miniumum of $75 and one with a minimum of $150. You would start with the lowest payment and put any extras towards that $50 payment, when that is paid off you take that $50 you were paying on that card and now add it to the $75 minimum on the other card, so you would pay a minimum of $125 and just go down the line.

Hope that makes sense.

 

[MinnieGi]

Four years may seem long away, but just think of how many more years will be added to that four years if you don't start today!!!

Several years ago we cut up all our CC's and went into debt reduction mode and paid everything off in about 2 years. We did take one Disney trip in that time, but we raised the money in cash before we went and it was a "budget" sort of trip. Our trip was also toward the end of our debt pay-off.

Pardon me, but I had to laugh at your cars not lasting. Mine is a 1998 Toyota Avalon and DH drives a 1992 4Runner!!!!!! We make sure they have regular tune-ups as needed and at times they need more than that. However the money we pay for repairs beats have a monthly car payment!!! Its one of the reasons we are able to travel so much now. We go at least once and many years twice to Disney for 7 + day trips, plus we go to Hilton Head Island for a week, and make other smaller weekend trips in the mid-atlantic. Many friends and neighbors comment on how much we travel and how we can afford that - on of the big reasons we can do it b/c we do not have any car payments! All the trips are paid for in cash.

 

[nowellsl]

It took me 2 years but it was so worth it!

 

[Toby'sFriend]

well, sounds like you better get started

 

[Tnkrbelle565]

4 years really isn't that bad. 4 years ago, I determined that it would take us 5 years to get out of some serious CC debt (I unfortunately was in a situation where a family member stole my "identity" and took out CCs in my name and maxed them...in order for me not to have to pay them, this person would have been charged criminally). Well I'm less than a year away from paying everything off and it's a great feeling. We do not spend any unnecessary money during the year other than special occassions and we do treat ourselves to our Disney vacations every year. DH and I work opposite shifts in high stress jobs and we need to see each other (and DD!) at least one week a year.

 

[tinkarooni]

We have never been big debt people either. We built a new home and accumulated $6,000 on 0% interest card. We were ok with that and have been saving all year to pay it off, but about a 8 months ago decided to ramp up the pay off and savings. We will have this debt paid off before it's due in February, our car paid off in June and than our house paid off in 6 years. This is our forever house, we have no intention of moving until maybe we're too old to maintain it (10 acres). The point is that once we started rolling and picking up steam, everything else fell into place. I hate to say the roses smelled sweeter, our children were better behaved and DH and I loved each other more but IMO when you are in debt it colors who you are. I wasn't happy or comfortable where we were financially and wanted to fix it.

You can fix it and I have to say IMO you will be a happier person for it...and my children are better behaved. And yes I do think that it will be hard not to go to Disney but you will have such a better time and a lighter heart if you go when you can really afford it and pay cash.

Good Luck

 

[da-winnie-pooh]

Our cars are from 1993 (older than my teenaged dd!) and 1999 (with 160,000+ miles on it). We paid cash for both of them and are in no hurry to pay that much for a new vehicle again. In fact, our next vehicle will almost certainly be previously owned.

Four years isn't that long and it will be so great to be out of debt. You can do it!

 

[lisajl]

Good for you! 4 years is not really that long. I am giving up my trip to Disney this year so we can save and go to Ireland next year.
It was not that hard a decision to make, I have to cut corners and pay off our debt, too. But, I think when you have something in your mind (pay off debt so I can go to Ireland), it really sets you in gear.
I even called our CC company to see if they would lower our rate. The answer was no cause we are already at 9.9%.
So, I am looking for a way to get that paid off asap and get rid of that card.

Lisa

 

[WDWFRV]

I also just got done reading Total money Makeover and just started the snowball affect. I can have all my debt, including 2 newer cars (2006 and 2007), our mortgage(which we just got in August of 2007), and 7 credit cards paid off in about 8 years. If I don't want to include my mortgage, it will take me 3 years. I'm so excited!
BTW, cars can last a long time if properly maintained. My mom has a 2005 Toyota Matrix that she bought brand new. She is now at 298,456 miles. She drives her car for work and goes EVERYWHERE! It is still running like new. She has never had anything major wrong with it. She has an appoinment to replace the brakes today. She's has an oil change like every 3 weeks and her belt changed frequently. So they can last a very long time! Especially Toyotas!

But of course, I too have a 1998 Toyota Camry and it still purrs like a kitten, if you are smart you will buy the right kind of car to last you forever.

 

[solfan68]

2008 will be a big year for us, if all goes as planned. Our tractor is paid off this Spring and my wife's vehicle is paid off this summer. My little Civic(98) is still going strong at 150k miles. The vehicle payments will be refocused on our CC debt. Not sure we can quite dig out in 12 months, but its going to be my goal. Now if someone could just do something about those blasted gas pumps I need to visit periodically.

Good luck to everyone having a go at this undertaking !

 

[Irin997]

I'm still trying to figure out if we can get any Disney trips in...lol...I know that should be the first thing we cut out!!

Ding ding ding ding...yes, this is absolutely the first thing you cut. If you are in that much debt there is no way you should be spending money on a vacation. Think of where that $3000 could go instead of spending it on Disney....and how much that will cut off of your 4 years. And your reward 4 years later.....one slam-banging trip to Disney, paid in cash.