Debt Dumpers - 2017

[Ngwira]

I hear you. I was only out of work 3.5 months but it set us back more than I anticipated...and we even had/have an emergency fund too. Hoping 2017 will be a fresh start for us all.

Do you plan to look for a job closer to home in 2017?

 

[Eureka]

Do you plan to look for a job closer to home in 2017?

Nope. The place I'm at now is very stable and people tend to stay a long time, so I'd like to settle in for awhile. Plus I like what I'm doing and like the people. Next fall I'll be able to start teleworking at least one and possibly two days a week. And in five years, my youngest will graduate from high school so if we feel the need, we could look to live closer by. DC area traffic is terrible so there are not many options for "closer to home" anyway. My last job was half the mileage and took almost as long to get to.

 

[Dentam]

Well, my flight home was overbooked. I volunteered to take tomorrow evening's flight and in turn was given a $600 voucher from United as well as a meal voucher to get dinner before my flight tomorrow. And on the way out of the airport, I found a $20 bill on the ground! lol

I'll use the $600 for my flight to Orlando for my WDW trip next Feb/March. I should have enough leftover for another flight as well!

 

[KSR0330]

I'm in! I have a lot of cc debt that needs to be paid off. I get so upset with myself when I see all of the money in interest that I've been paying for years and years. My goals:
*stop take out. We don't do it a lot, but every penny matters!
*not waste food. I always buy things that I end up throwing out.
*NO needless spending!

I try to make a budget, but something always comes up and I get so discouraged!

 

[kleph]

2017 is my goal year for zero debt. Aiming for nailing it by mid-year. The reward? A stay at the Polynesian. Paid in full.

And instead of "debt dumping" call it "deleveraging." That sounds fancier.

 

[westcoastfldisneygirl]

I'm here! We want to pay off H's student loan by the end of 2017 It is definitely doable, we just need to stick with it!

 

[arlinar]

Got a lot of small Kitchen Appliances for Christmas this year meaning we can make more meals at home. We also want to try two new recipes a week. We got some giftcards for restaurants and only plan to use those as last resort.

My son got enough toys from my parents and grandparents to last him for the entire year.

In total we only spent about $230 on gifts this year. It includes his room set makeover (Mickey Mouse clubhouse themed of course)

 

[seb65]

I would like to join. We have built a nice cushion, and now we'd like to eliminate the credit card and my student loan. I am going to be positive and say it is doable. We'd like to eat at home more by planning better. Those crazy activity nights always throws us for a loop, a nd then we get takeout. Last, I am learning to buy my kids' clothes too big as they seem to grow at a rapid pace lately!

 

[hmack]

The good: DH and I were given a gift certificate for oil. Which is great because it tis the cold season and we'll be going through plenty of oil the next few months.

The not so good: While I managed to do mostly a cash Christmas, I did start pulling out the card towards the end and I'll confess to loosing track of my budget. I didn't buy anything extravagant (maybe spent $100 on some niece and nephew gifts I waited to pick up) but I still don't like knowing that my cc balance went in the wrong direction.

Anyone else waking up to a bit of a spending hangover this morning?

 

[kamerino]

I'm in. My goal is to pay off the debt I have and buy a home this year. Ideally, I'd love to be in my new house by summer!

 

[Aurora_Australis]

Anyone else waking up to a bit of a spending hangover this morning?

Yeah, the ladt few days before we had to buy for some people I wasn't expecting to buy for. Only $100 or so but still annoyed as I thought I was on budget.

We are spending more than we are earning next year though, with the travel we have on the cards, so will have to sit down and look at where we can cut back. I did just get DH to ageee to stay at a little family run place in Fiji after SILs wedding, rather than one of the huge resorts. That should help considerably.

 

[Miss Whimsy]

Anyone else waking up to a bit of a spending hangover this morning?

YNAB informs me I'm about $500 in the red thanks to Christmas. Sighhhhhhh.

 

[lemonsours]

I'm in! I was lurking on the 2016 thread for a few months, trying to get things under control. Now that I have a system in place, I need to set goals and stay accountable.

 

[Jen and Ashwin]

Warning: This post got really long.

DH and I just got back from 5 days of visiting the in-laws. Remember how DH's dad closed DH's student loan (since he was a co-signer) and transferred the balance to his Line of Credit, for no apparent reason after our last visit in May? Well, we can finally put all of this behind us. We had to take $4.7k in US cash with us over the border so that we could officially pay off DH's student loan and close his Canadian checking account and credit card. Basically, we took out all $5600 CAD from DH's BMO account and transferred the USD into CAD for a total of about $12k CAD ($9k USD). We then transferred all of the money into FIL's account for him to put towards the Line of Credit.

And during our visit, there were some very serious discussions about the in-law's finances. We found out just days ago that FIL has been on unemployment for about 3 months, which is putting a huge strain on their finances. And we learned for certain that they have very little retirement savings, which FIL put into a really terrible investment. FIL knows pretty much nothing about investing and has made bad choices in the past which resulted in lost money and stagnant earnings on what was left. Well, someone at Scotiabank talked him into putting their entire retirement savings into a fund that invests it in just 9 U.S. stocks (not diversified enough at all) which cannot be withdrawn for 5 years. FIL showed me the contract and seemed very proud, but got really upset when I voiced my concerns. It can't be revoked at all, not even with a penalty, so not much I can do there to find a better investment. I guess the only silver lining it is that FIL can't take out the money to use for something else. I am going to look at finding a brokerage firm to help FIL open an account for new savings going forward. I use Vanguard in the US and am very happy, so I will check out their offerings in Canada. If any of you Canadian debt dumpers have recommendations, I would appreciate any suggestions to research.

We also reviewed his auto insurance policies. DH is still on the policy even though he has been moved out and living in the US for almost 2 years now. And the car that we gave back to his parents in May now needs a transmission repair, so it has been sitting in the garage for over 6 months without anyone driving it because they don't have the money for the repair. But FIL was still paying $1000 a year to insure the car. I told him to call the insurance company and have them put the car on non-driving status, which will now save them $900.

FIL has basically been funding some of their expenses by continually refinancing his house every 5 years and taking out equity to pay down credit card and line of credit debt, which means that they owe almost as much on the house as they paid for it 10 years ago. The house has appreciated in value, but it puts them no closer to being ready for retirement. If the market ever drops in Canada like it did in the US, they would basically have no equity left. And during that 10 years, they have really let the house go into disrepair. They talk about selling it and finding a smaller place that they could afford with using the equity difference they would get from selling. But without some significant work, the house will not sell for what it could. And I don't think FIL and MIL would be able to do the work. DH and I keep saying that we will help, but their ideas of what is needed and my ideas are so very different. Plus, the market in the greater Toronto area is insane and I have no idea how they could find a place for $250k that wouldn't be bordering on a dump.

And then FIL showed me their life insurance policies. Life insurance seems a bit different in Canada. The policy premiums are guaranteed for 20 years and then the rates go up after that and can be extended up until age 100, rather than just having the term end (so it is different from a 30-year term life policy in the States). But after the 20-year term, the rates are pretty ridiculous (like it jumps by $4000 per year), so you wouldn't be likely to renew. FIL doesn't seem to understand the function of life insurance either. Generally, you would keep life insurance under certain circumstances, such as if you had large financial obligations like a mortgage that would burden your spouse if you died. Or if you have young children that are still dependent on you for support. Once most people retire and stop earning income, life insurance doesn't make much sense anymore.

So DH and I got pretty upset when we reviewed everything because FIL bought a policy around 2005 when they first moved to Canada. It cost just $700 a year, covered both him and MIL separately and the terms were good for 20 years, which would make FIL 67 when the policy premiums were set to increase. Well, then in 2010, some guy convinced FIL to cancel his old policy and buy new individual policies for FIL and MIL. The policies were only good for an additional 5 years (until FIL was 73) but cost an extra $2000 more each year. And then, on top of that, they guy sold FIL a last to die policy that would pay out only if both FIL and MIL died during the policy period (a pretty unlikely scenario). The terms were also pretty crazy, like if one spouse died, the surviving spouse would have to file within 45-days to have the premium reevaluated at prevailing market rates (i.e. higher cost) or else the entire policy would lapse. That policy cost another $2000 per year. At this point, DH is independent and BIL is within 3 semesters of graduating college. I feel like the last to die policy was unnecessary in 2010 since they each already had individual policies, but now it is just bordering on ridiculous, especially since that money is better spent paying down their debts and saving for retirement. So FIL called and canceled that policy yesterday. I told him at this point to keep the individual policies since they still have a mortgage and debt.

We also ran through the retirement calculator on the Canadian government website. I had looked a few months ago and realized that they would not be getting very much through social security because it is based on how many years you have lived and worked in Canada. They immigrated in 2004, so they will not have enough years for full benefits. I told that to FIL and he said I was wrong and didn't know what I was talking about, so I had to run through the calculator to prove it to him. It was a very measly sum, like poverty levels. I hope that woke him up a bit to their financial situation and possible future if they don't make changes.

And then we showed FIL and MIL our YNAB account and how it has helped us this year (paid off CC debt, paid off student loan, saved for IVF and emergency fund, etc.). We showed them how to use the software and helped them set up an account to help them budget. MIL has generally been completely out of the loop on their finances, so I think this will help make FIL more accountable to her. He spends lots and lots of money on personal hobbies (running races, collecting coins, camera equipment) that are obviously at the expense of their financial security. And BIL is spending an insane amount of money for his food at college, which all gets charged to the in-laws. He spends $600 a month because he doesn't cook at all. I was shocked since DH and I spend just $400 for the two of us. We put YNAB on BIL's phone so that tracks all of his spending too.

I am hoping that using YNAB will help them see how their spending is really problematic and how they can cut down and start getting more financially secure. There is no way they can even think about retiring until they no longer have a mortgage payment. DH and I are dedicated to helping them make better financial decisions, but as I told DH, we can advise them, but ultimately any changes have to come from them.

 

[Boardwalk Jedi]

I'm new here and wasn't expecting to find this! LOL. But I'm in. We've been paying off debt and have some more to go! This sounds awesome.

 

[Boardwalk Jedi]

Got a lot of small Kitchen Appliances for Christmas this year meaning we can make more meals at home. We also want to try two new recipes a week. We got some giftcards for restaurants and only plan to use those as last resort.

My son got enough toys from my parents and grandparents to last him for the entire year.

In total we only spent about $230 on gifts this year. It includes his room set makeover (Mickey Mouse clubhouse themed of course)

My BIL has 8 month old twins and they don't plan on opening half of them yet. Stretching it thought the year like you said.

 

[DisneyMandC]

Ugh, @Jen and Ashwin I'm sorry. That is so frustrating. You are right though, only they can make the decision to change. Hopefully it's not too late for them to turn things around. At least you could help them with the life insurance and get them pointed in the right direction.

I was also frustrated with my MIL in this past weekend during Christmas, though slightly different circumstances. FIL has not worked since his heart attack in June, and it's looking increasingly unlikely that he will ever be able to return to work based on his current mental status. Or at least not in the foreseeable future. He was self-employed and the breadwinner, so they are now down to MIL's salary. While it's certainly not poverty levels, it's the median U.S. income to support both of them and BIL who is 20 and living at home to take care of FIL during the day (so a full-time job in itself).

MIL insisted that she was going to buy us something for Christmas, so I finally agreed that she could get us an on-sale, very reasonably priced grill for our house. I gave specific instructions that she could only buy that and no surprise "Santa" gifts for the dog, as she usually does. So what does she show up to our house with? The grill. And a shirt for me, a new set of pots and pans for us, and $200 cash in an envelope! I don't mean to sound ungrateful, but I was literally so mad. She told me back when FIL had his heart attack that they had enough money to get them through the end of the year if he couldn't work anymore. Well, guess what? IT'S THE END OF THE YEAR. She kept trying to tell me how we needed the money to pay bills. No. We make THREE TIMES what you're currently making. YOU need the money. Not to mention the pots and pans. We have told all of my friends and family so many times not to buy us any household goods because we live in a very small one room log cabin and we literally do not have kitchen cabinets (not joking).

I really don't intend to be ungrateful or mean because I know she was doing this out of the kindness of her heart, but I was beyond irritated. I love my in-laws like they're my own parents, and I would have absolutely no problem whatsoever contributing to their household expenses if she told me they needed help. But don't just give your money away after you promised me you wouldn't do that! FIL spent 8 weeks in the hospital and is still receiving a lot of therapy and counseling, so I know the bills are only adding up. I would've been much happier if they had just shown up at our house for Christmas with nothing for us. It is a gift enough that my FIL is still alive to see Christmas.

ETA: Jen, I am glad you got the loan fiasco settled though! I know that was really frustrating for you both last year.

 

[Jen and Ashwin]

Ugh, @Jen and Ashwin I'm sorry. That is so frustrating. You are right though, only they can make the decision to change. Hopefully it's not too late for them to turn things around. At least you could help them with the life insurance and get them pointed in the right direction.

I was also frustrated with my MIL in this past weekend during Christmas, though slightly different circumstances. FIL has not worked since his heart attack in June, and it's looking increasingly unlikely that he will ever be able to return to work based on his current mental status. Or at least not in the foreseeable future. He was self-employed and the breadwinner, so they are now down to MIL's salary. While it's certainly not poverty levels, it's the median U.S. income to support both of them and BIL who is 20 and living at home to take care of FIL during the day (so a full-time job in itself).

MIL insisted that she was going to buy us something for Christmas, so I finally agreed that she could get us an on-sale, very reasonably priced grill for our house. I gave specific instructions that she could only buy that and no surprise "Santa" gifts for the dog, as she usually does. So what does she show up to our house with? The grill. And a shirt for me, a new set of pots and pans for us, and $200 cash in an envelope! I don't mean to sound ungrateful, but I was literally so mad. She told me back when FIL had his heart attack that they had enough money to get them through the end of the year if he couldn't work anymore. Well, guess what? IT'S THE END OF THE YEAR. She kept trying to tell me how we needed the money to pay bills. No. We make THREE TIMES what you're currently making. YOU need the money. Not to mention the pots and pans. We have told all of my friends and family so many times not to buy us any household goods because we live in a very small one room log cabin and we literally do not have kitchen cabinets (not joking).

I really don't intend to be ungrateful or mean because I know she was doing this out of the kindness of her heart, but I was beyond irritated. I love my in-laws like they're my own parents, and I would have absolutely no problem whatsoever contributing to their household expenses if she told me they needed help. But don't just give your money away after you promised me you wouldn't do that! FIL spent 8 weeks in the hospital and is still receiving a lot of therapy and counseling, so I know the bills are only adding up. I would've been much happier if they had just shown up at our house for Christmas with nothing for us. It is a gift enough that my FIL is still alive to see Christmas.

ETA: Jen, I am glad you got the loan fiasco settled though! I know that was really frustrating for you both last year.

I totally understand and I would be equally frustrated. We had a similar struggle when we got married. They wanted to gift us a bunch of stuff and money even though they didn't really have the money to give. DH really wanted his family to get to spend time at Teton and Yellowstone National Park right before the wedding (they don't vacation much), so he worked overtime for months and paid for their airfare, hotel, and activities for the vacation and wedding. So it made DH really upset for them to just turn around and give a large chunk of that cost back to us in cash. At that point, DH and I were definitely making more money. I understand them wanting to give us a gift, but it just didn't make sense. We just saved the money and have been using it to help them with things around the house. Last year we got them a snowblower since DH was no longer there to help clear the driveway in the winter.

Though the in-laws did not buy us anything much this visit, they did spend an exorbitant amount of money on food. They knew we were going to be visiting for just 5 days, but they got so much stuff. And expensive things like lamb and seafood. His mom spends more time in the kitchen when we visit than actually spending time with us, which makes me sad. I understand that to them, food is love. But I would rather have simple meals, know that they didn't put themselves out financially during our visit and spend more time together.

 

[mom2t]

I was doing good until September. Back on the train for paying off my final credit card debt. I am up a 1000 from where I was in September. I did take some money I had stashed back and made an 800 payment yesterday and will make another of at least 200 before the end of January. Part of the increase was putting our Discovery Cove tickets on my card but I saved over 100 on those. I did manage to pay off three other credit cards and thanks to my husband my car in 2016.

 

[piccolopat]

Can I suggest that you pay off the 401k loan first? Many years ago, we took out a 401k loan and paid it off as scheduled. I didn't know at the time that if I left my job or lost it for any reason, the 401k loan is due and payable immediately. If it isn't paid back then, the IRS will consider it a withdrawal and charge you taxes and a penalty.