Debt Dumpers - 2013

[pryncess527]

OMG, please help me convince DH to continue with the snowball method instead of tackling the higher interest rate/higher balance cards first.
the man is driving me nuts.

He does not see that I'm trying to make sure we have enough money to cover the $833 a month for the kids tuition. If I tackle the higher interest stuff first, I would need to throw several hundred extra dollars a month on them to get the balance down. I don't have that flexibility yet.

I'll admit, while I use the term snowball, when I use it, I really just mean throwing everything extra at one debt till its gone then moving on to the next. But we ordered ours by interest rate, not by balance. I appreciate the psychological effect that Dave is going for, but to me the practical thing to do was to tackle the one with the worst rate first.

Have you run the numbers both ways? Try the site unbury.me -- it lets you enter your debt and interest rates and then shows you the difference between both approaches. Depending on your specific debt and rates, running the numbers might highlight for your DH that the difference in interest is minimal -- or it might show you the long term cost of your approach.

I will say, your last sentence confuses me a bit. I'm not sure I understand how it makes a difference in flexibility which one you pay down first. If you make the minimum payments on each card and then throw everything extra towards one, I'm not sure I get how you'd need more extra money based on which debt you tackle first. I'm not saying you are wrong, just that I can't quite wrap my head around what you are saying.

I'll also take a second to recommend YNAB again - You Need a Budget - a budget-to-zero based software program that many of us in this thread use. I think it's really helpful for seeing the big picture and evaluating the trade offs we all have to make with our money.

 

[peel]

We've JUST started with YNAB, and before that we were absolutely terrible with managing money, hence the massive debt we have accumulated. I understand the reasons for both snowball methods--paying the highest interest cards off first or paying the smallest balances off first--but we're going to tackle the smallest balances and work our way up. I think even if we take a little longer to pay things off this way it will be a mental victory to see the first few cards with zero balances after a couple months and will motivate us to continue on with budgeting. Maybe once we clear the first few that have relatively small balances then we'll jump to focusing on the highest rate card after that. By that point we should be comfortable with the budgeting process and will be seeing results.

We picked the absolute worst month to pull our heads out of the sand though. We've had crazy expenses to cover that are not normally coming out of our bank accounts. DH had $2000 worth of car repairs, I owed for an overage paid to me in unemployment benefits last year, I've had a lot of medical tests that are not covered by our new (crappy) insurance, and our cat is still undergoing chemo. The way things worked out with timing, she's had two treatments this month instead of one (second one today), so that's $1000 gone. I talked about this earlier...it's painful to spend that much money but we'll do whatever we have to do to try and help her. She's a member of the family.

 

[aml3679]

Life happens to all of us and before you know it the debt is high. We have all been there and some of us are still in the same boat as you. One good thing is that your life events have been great ones.

When I started at the beginning of the year I paid the minimums on all of my debt and then every penny I could on a smaller bill. Within a month or two I was able to pay off something really small but to me it was a huge mental boost. Then I snowballed that into the next payment. This method works out great for me but it really is what works best for you.

Some weekends I get so frustrated that we are stuck at home because I put an extra $50 on a bill but when the statement rolls around again I feel better. It is all about finding what works for you. Three years is a long time (I will be right there with you) so I would consider breaking it down to one month goals or 6 month goals to keep the motivation high.

Looking forward to getting to know you on the Debt Dumpers board.

Thanks for your support.

 

[pryncess527]

Last day of the month post bump!!! Hope everyone made it through July okay. I know August/September is rough for many here with added back to school costs -- may everyone find awesome deals!! ixiedust:

 

[milwaukeemommy]

July was a GREAT month - between our refi and NO surprises in the house/ car categories! Yay! And for August, no mortgage payment! But -- BTS shopping (luckily I have boys who don't give a rap about clothes, they'll wear their stuff from last year thank-you-very-much) & older son is joining HS football so that is $100. Hoping to put LOTS toward debt this month!

 

[OhMari]

July was a GREAT month - between our refi and NO surprises in the house/ car categories! Yay! And for August, no mortgage payment! But -- BTS shopping (luckily I have boys who don't give a rap about clothes, they'll wear their stuff from last year thank-you-very-much) & older son is joining HS football so that is $100. Hoping to put LOTS toward debt this month!

I just wanted to say hi, I live north of Milwaukee.

 

[milwaukeemommy]

I just wanted to say hi, I live north of Milwaukee.

Really?!?!? Small world! Whereabouts? I'm actually just west of Milwaukee, near Waukesha but WaukeshaMommy just didn't have the same ring to it

 

[AuroraRora]

Welcome, OhMari!

July was an awesome month for me financially, but August is worrying me. I have a lot to pay for in the first two weeks of the month and not much work lined up thus far (which isn't unusual, but always unsettling). I'm going to try and be really proactive over the next few days, getting in touch with clients and looking for any extra hours and such.

 

[gracie1]

You guys are all doing a fantastic job! Looks like July was a good month for everyone

This month I will be hit with two dental bills and car insurance I forgot all about the car insurance coming up! Then in September and October I will be hit with my yearly vet visits, which are about $300 each

Oh well.... gotta love the costs to keep me and the pups healthy

 

[pryncess527]

I love the first of the month!! Our accounts are full (at least until about 2/3 of our bills autopay tomorrow morning, lol)

I'm amused by how much of a budgeting geek I've become in the last 3 months. It's such a radical transformation from my years of reckless spending.

DH and I will sit down and review the budget tonight -- see how we did in July and make adjustments for August. It's such a weird thing to be excited about but I am My car taxes will be due this month and I'm actually EXCITED to pay them because I've been budgeting for this expense since we started YNAB so the money is right there in the Beetle Car Registration Tax category waiting to be paid.

I'm also excited to be able to adjust that amount down in coming months. Since we started budgeting recently I had to divide the tax by 3 and budget 1/3rd each month till it was due. Now with a full year, I'll only have to put 1/12 of the payment in that category freeing up extra funds. It makes me so excited for next year once we'll have all our regular expected annual bills (plus some rainy day funds for less predictable bills!) planned out and budgeted for!

 

[BernardandMissBianca]

Does your dh read the DIS? Your dh is probably freaking out how much interest is being charged. Can you maybe switch that card to another card with free interest for a year? It would give you some breathing room at least.

Doesn't read the DIS and doesn't even handle the money. I have tried to show him our debt chart and he's just not interested. He doesn't even know what the interest charges are, he just throws these statements out there on occasion.

I'll admit, while I use the term snowball, when I use it, I really just mean throwing everything extra at one debt till its gone then moving on to the next. But we ordered ours by interest rate, not by balance. I appreciate the psychological effect that Dave is going for, but to me the practical thing to do was to tackle the one with the worst rate first.

Have you run the numbers both ways? Try the site unbury.me -- it lets you enter your debt and interest rates and then shows you the difference between both approaches. Depending on your specific debt and rates, running the numbers might highlight for your DH that the difference in interest is minimal -- or it might show you the long term cost of your approach.

I will say, your last sentence confuses me a bit. I'm not sure I understand how it makes a difference in flexibility which one you pay down first. If you make the minimum payments on each card and then throw everything extra towards one, I'm not sure I get how you'd need more extra money based on which debt you tackle first. I'm not saying you are wrong, just that I can't quite wrap my head around what you are saying.

I'll also take a second to recommend YNAB again - You Need a Budget - a budget-to-zero based software program that many of us in this thread use. I think it's really helpful for seeing the big picture and evaluating the trade offs we all have to make with our money.

What DH wants to do is to take the higher balance/higher interest rate cards and pay the minimum payment plus the monthly interest. All great and everything but that interest is $300 + dollars, almost 1/2 of the tuition payment. I don't want to rob Peter to pay Paul. I pay in terms of importance, Tuition, car payment and mortgage are the top 3 priorities then I divide the rest up after those 3 are paid.

He just tends to throw these comments around without looking at the big picture.

**************************

Some interesting developments though since yesterday.
The town is talking about closing our school and sending the kids to a neighboring town. Now my kids go to a Catholic school so the closing of the public school does not effect us but I will use it to my advantage and push the town to cover tuition at the Catholic School. If they will pay for the kids to go out of district, they will pay for my kids to go to their school.
I'm headed to town hall today to pay property taxes on the car so I'm going to talk to the First Selectman about it.

 

[pryncess527]

What DH wants to do is to take the higher balance/higher interest rate cards and pay the minimum payment plus the monthly interest. All great and everything but that interest is $300 + dollars, almost 1/2 of the tuition payment. I don't want to rob Peter to pay Paul. I pay in terms of importance, Tuition, car payment and mortgage are the top 3 priorities then I divide the rest up after those 3 are paid.

He just tends to throw these comments around without looking at the big picture.

Ahh, I see. I love it when spouses just want to throw money at a problem without considering where that money is going to come from, lol

Good luck with the First Selectman!!

 

[AuroraRora]

Good luck at the town hall, BaMB!

Gracie, I hear ya on those pet costs. My cat panics at the vet so much that last year, she gave him his 3-year shots and said not to bring him in for 3 years unless he was sick/injured. But his new favorite hiding place is on top of my closet, and every time I see him leap off it down to the floor, I have my own little panic. I feel like I should start a sinking fund for the inevitable broken kitty leg that's coming my way!!

 

[gracie1]

Good luck at the town hall, BaMB!

Gracie, I hear ya on those pet costs. My cat panics at the vet so much that last year, she gave him his 3-year shots and said not to bring him in for 3 years unless he was sick/injured. But his new favorite hiding place is on top of my closet, and every time I see him leap off it down to the floor, I have my own little panic. I feel like I should start a sinking fund for the inevitable broken kitty leg that's coming my way!!

I wish my vet would have me not come back for 3 years!! My lab is the worst..... she has to even take anxiety medicine if I am going to be gone longer than normal. And when my mom 'babysits' she will stay up all night and watch out the window for me Now my Chihuahua could care less... as long as she has a place to sleep and food to eat, she is happy!

 

[dreamin_disney]

July was not so nice for us. We had several visits to the doctors all the copays, meds and gas adds up. I didnt expect it to cost me a lot of my time and $600. Luckily I have a Flex account so I will get it reinbursed.

By the end of the month I should be caught up with my 52 week saving challenge and x-mas fund

I took a break from selling on CL since I was busy with dr. appt and running around. Hopefully when things slow down I can post more stuff on CL and make extra money.

 

[OhMari]

Really?!?!? Small world! Whereabouts? I'm actually just west of Milwaukee, near Waukesha but WaukeshaMommy just didn't have the same ring to it

40 miles north of you, little town of Lomira. My dd works downtown Milwaukee and lives up in Whitefish Bay and my son works on Good Hope and lives in Brown Deere. Now I need my youngest 2 to move on out.

 

[OhMari]

Doesn't read the DIS and doesn't even handle the money. I have tried to show him our debt chart and he's just not interested. He doesn't even know what the interest charges are, he just throws these statements out there on occasion.




What DH wants to do is to take the higher balance/higher interest rate cards and pay the minimum payment plus the monthly interest. All great and everything but that interest is $300 + dollars, almost 1/2 of the tuition payment. I don't want to rob Peter to pay Paul. I pay in terms of importance, Tuition, car payment and mortgage are the top 3 priorities then I divide the rest up after those 3 are paid.

He just tends to throw these comments around without looking at the big picture.

**************************

Some interesting developments though since yesterday.
The town is talking about closing our school and sending the kids to a neighboring town. Now my kids go to a Catholic school so the closing of the public school does not effect us but I will use it to my advantage and push the town to cover tuition at the Catholic School. If they will pay for the kids to go out of district, they will pay for my kids to go to their school.
I'm headed to town hall today to pay property taxes on the car so I'm going to talk to the First Selectman about it.

My dh is the same way. I tried so many times to sit down with me and look at the bills, but he isn't interested at all. He keeps looking at $350,000-$400,000 houses and thinks we should be able to afford one. I think he is absolutely crazy. Every penny we would earn, would go towards our house payment, insurance, taxes and utilities. We would be eating noodles every nite.

 

[pryncess527]

I've had a few friends who were successful getting their husbands to pay attention to the budget by calling it a "spending plan" instead of a budget. Sometimes a change in terminology helps encourage a change of behavior! It's more fun to think about a plan for how you'll spend, instead of thinking about being restricted by a budget, even though they are the same thing.

 

[milwaukeemommy]

40 miles north of you, little town of Lomira. My dd works downtown Milwaukee and lives up in Whitefish Bay and my son works on Good Hope and lives in Brown Deere. Now I need my youngest 2 to move on out.

I've been to Lomira a few times When I was a kid we lived in a little town called Slinger - Slinger Speedway .... Little Switzerland .... fun places, too bad I didn't know about them until we moved to Waukesha LOL. What can I say, I didn't get out much when I was a kid

 

[RayJay]

You guys are all doing a fantastic job! Looks like July was a good month for everyone

This month I will be hit with two dental bills and car insurance I forgot all about the car insurance coming up! Then in September and October I will be hit with my yearly vet visits, which are about $300 each

Oh well.... gotta love the costs to keep me and the pups healthy

Ha, I have one better...

Non budget hits in July

$600 - repairs to my Ford (throttle wire)
$1000 - repairs for my Honda (tires, brakes)
$400 - Assessment done for my LD child
$300 - Annual Glasses (son now needs em)
$300 - Doctor bills (deductible not met yet)

$2600 and I don't know what hit me

Sometimes I really wonder how people make it....thank god for savings
years ago this would have gone on a credit card...

It's months like these that don't let you get ahead, surely I'm not alone?

RayJay