Debt Dumpers - 2014

[xCourxCorex]

Thinking of altering my 2014 plan... right now, I am over halfway to my Emergency fund goal of 10k (have $6725).

My next step after getting the emergency account up to speed was to just immediately throw everything at a house down payment.. but I have these student loans just screaming at me to pay them down! Less than $13,000 total in 3 smaller loans. The smallest is $3,375.. I'm thinking I will tackle that after the emergency fund is at goal (since I have been getting side tracked with that account and used a big chunk of what I had previously saved to pay off my car, I really just need to reach this goal for my own peace of mind).

I think I can get that loan paid off by the end of June, leaving me with 2 loans each around $4400-4500ish... then I can split my $250 monthly payment evenly between the 2, that's knock it out a lot faster (right now I pay $68, and $71 to each of those bigger loans - once I clear out this one I can devote $125 to each!)

I was really content with leaving the school loans as they were, and focusing on the house down payment ... but I'm thinking, come on just get that small one paid off... plus that'll be better for down the road when it comes time to actually get the approval for a mortgage-less debt!

Also, I hadn't expected a WDW trip, which we are planning for January 2015 (for marathon weekend!) so that'll set me back around $1000... Meaning I'll definitely have less in the "house" account at the end of the year than I had originally planned, but with one loan paid off, and hopefully a little vacation in there too!

 

[Silvana]

With my student loan they consolidated them all into one so you might want to ask. If for no other reason than one payment is easier and a tiny bit less money than three. (Stamps, envelopes and check/MO cost. Yes it's only a few cents but even that can add up) Good job with your emergency fund and progress so far.

Just my thoughts on what might get you there quicker. Hope you have a good run.

 

[xCourxCorex]

Silvana,
Right now all 3 smaller loans are lumped into one monthly payment, at the moment I pay $110 towards the smallest one (the one I'm trying to pay off first), $68 towards a second, and $71 to the last. Usually they let me pay a lump on one whole loan amount, although I've found it's best to call since last time I tried to mail a check, instead of putting the entire amount on the one loan I asked them to, they split it evenly among all of the loans

And all this math/calculating got me thinking... I can be 100% debt free by the end of 2014 if I choose to focus on killing this student loan debt before saving for a house. It's driving me crazy to consider putting off moving out for X many months in order to do so, but it sounds SO tempting to know I could be debt free in a matter of months.

For the sake of numbers: I can pay off all student loans, save for the vacation, and hit my emergency fund goal by 2014, start saving for the house after all debts are paid, and have ~17,500 by October 2015. Or, just pay off the smaller loan, still leaving me with ~9,000 in loans, and have ~25,000 by October 2015 to go towards the down payment. Decisions, decisions...

 

[gracie1]

Having been out of work since November the debt has really started to show. I'll start the new job on March 17 but right now I feel like it's insurmountable. We owe 10k on a student loan (which payment is 140 a month), 310 a month on a car (which will be paid off in Sept.), 3845 on one card, 1230 on the other, 8k on a loan and 475 for rent. My husband and I split the bills and each pay their part with their paycheck. Whatever is left is theirs. He takes care of the loan, cc, auto insurance and other bills (like electric, gas, phone). I take care of the rent, car and student loan. My fast math (based on pay per hour and 20% for taxes) comes up to 760 a payday and I luckily have the car due where both rent and car don't have to be paid out of one check. My idea right now is 1st check 760-475(rent)=285-140(student loan)=145-100(low cc)=45 (for me for going out or fun) 2nd check 760-335(car+ late fee Feb.)=425-335 (car+ late fee March)= 90 (for ?) So I'll have to do this twice to get caught up and the car loan is being cool about the late and not talking about repo. My questions are 1. I'm planning on putting money toward the low cc to get that paid off faster but should I not do that in favor of putting that money toward the car. 2. Should I leave myself some fun money these first few check or again dump that toward catching up the car? After middle May should I put the money I've been putting toward catching up the car toward the low cc or paying off the car a few months early?

I wouldn't budget any fun money right now. Focus on getting your bills up to date first and maybe sink extra money on your car to get paid off early. Then the money used towards your car payment you can sink into the credit card.

 

[Silvana]

OMG! If I'm careful with groceries and I can do with no fun money and not feel like I'm working for nothing then I could have the car and both cc paid off by the end of the year. DH would have to deal with a lean Christmas tree but with no kids it would be worth it.

Suddenly feeling hopeful

 

[ceemys]

I'm starting to stress with the upcoming bills. sigh.

I bought my wedding dress last night. $427 On sale too!!

Put the $200 for the family Disney Honeymoon yesterday.

Going on the wedding venue tour on Sunday. NO idea how much that will cost. Its a destination wedding so I am going with someone that can do it all. I hope they will just take a down payment for now and not want too much.

I signed myself and my oldest daughter up for the Indy 500 5K! We will start training once the weather gets warm enough. (Dumb Indiana winter!) That was another $80. But it is something we have always wanted to do and the slots fill up quickly. I need something to push me to stay in shape so the dress will still fit in August. lol

 

[Chelley00]

I signed myself and my oldest daughter up for the Indy 500 5K! We will start training once the weather gets warm enough. (Dumb Indiana winter!)

We're neighbors!!!!

 

[ceemys]

OMG! If I'm careful with groceries and I can do with no fun money and not feel like I'm working for nothing then I could have the car and both cc paid off by the end of the year. DH would have to deal with a lean Christmas tree but with no kids it would be worth it.

Suddenly feeling hopeful

Sounds like you made a decision. Just making a decision and sticking to it can really help with the stress.

 

[ceemys]

We're neighbors!!!!

Hi! I'm in Fishers.

 

[mousehockey37]

Hallelujah to everyone doing well! Congrats on the engagement! Boo to bad neighbors- they can suck the life out of you really quick! Encouragement to those still struggling- it will get better.

I am frustrated and a little more than irritated. I have a LOT of student loan debt that was to be paid back starting this year. my first payment was due in February and in January I applied for a consolidation loan so that I can do the public service loan forgiveness (if you work in public service and pay your loan for 120 consecutive months on time they will forgive the balance). The consolidation said it would take between 3-4 weeks to complete. After consolidation loan payment would be $700, before loan consolidation loan payment is $1,200. Well February comes and still not finalized. Call numerous times and get no real response. Call mid February and they apologize for delay but look at account and say nothing is wrong and nothing I can do to speed it up but should be done by end of February. Friday (last day of February) I call and it is still NOT done! Now they are saying they need documents from one of my loan holders- call the loan holder and they say consolidation place has to request it. Consolidation place says no they don't do that. Try to call loan holder back but their officers are closed so I am stuck until tomorrow when I can call back. Super frustrated and irritated not to mention broke as i don't have $1200 to pay!!! Thanks for listening to me vent!

Are these private loans or federal loans or some of both? I worked for a prominent student loan servicer for quite some time. So feel free to PM me and I can help you out the best I can.

Anyway, you can't do a consolidation loan of private and federal loans. Also, don't count on the loan forgiveness. It's a very enticing offer that they dangle out there but it goes from month 1. So if you miss month 2, I'm pretty sure you're not eligible anymore. Remember, anything with loan forgiving and the federal government is going to be super sticky to get through.

 

[gracie1]

OMG! If I'm careful with groceries and I can do with no fun money and not feel like I'm working for nothing then I could have the car and both cc paid off by the end of the year. DH would have to deal with a lean Christmas tree but with no kids it would be worth it. Suddenly feeling hopeful

Sounds like you have a great plan!! Just remember to not get discouraged if Murphy hits! And were all here for support

 

[pryncess527]

Been busy at work since the year began so I haven't been around theDis as much, have some free time now and I'm trying to play catch up with everyone's progress!!

First of all, congrats on your engagement Ceemys, what exciting news!!! A destination wedding is a great idea, that's what I did and it was so much fun. When i see our wedding guests, even now almost 10 years later, they almost always comment on what a fun trip it was. It's such a unique kind of vacation to have your family and friends together like that.
and congrats on finding a great deal on a wedding dress! Have fun with the 5k

AlohaNow -- glad you are loving Zero-Based budgeting! It's been really transformative for my family, I know what you mean about the feeling of control. I didn't really realize it until we started that type of budget

Jenny105 -- good luck finding a new place to live!

Bigsis1970 -- great job on your debt reduction in 2013, that sounds like huge progress! Welcome to the thread

Gracie1 -- Good luck with the retirement party, and glad to know your furbaby is getting better.

ruadisneyfan -- what a great website, it's so nice to have a plan and know exactly when the debts might be gone.

LurkerGeoff -- welcome to the thread! Everyone here is so helpful, good luck getting out of debt.

Eureka -- Happy Birthday! I see that someone else has already answered your question about what a zero balanced budget is, I'll just reiterate how awesome I think it is. It's so nice having a plan for your money that includes long term bills and rainy day savings. After starting our budget, I realized that before when I asked myself, "can we afford this", I was really only guessing. Now when I ask that question, I know with confidence.

Crazycatstacy -- this website has some great information on PSLF, including how you can formally register to keep track of your eligible payments. They do not terminate you from the program for missing a payment. Certification is not required, but it made me feel better to fill out the forms and know that the system had me coded as someone working towards PSLF -- http://www.ibrinfo.org/what.vp.html#pslf


mommytoxzande -- I think I would pay off the CC and then put any leftover towards the house (since it sounds like your refund was more than the CC balance) -- but either way, congrats on being able to get rid of a debt!

LilacBerries -- congrats on paying off a CC!

PrincessKymm -- I hate those kind of frustrating moments! I have a line in our budget called "stupid tax" that I use every time I have to cover something like that, it drives me nuts when I have to use it, but it happens to all of us sometimes! Congrats on being one step closer to being debt free!!


zy144622 -- congrats on having a basic plan, it sounds like a good one. The good thing about an aggressive plan is that even if you fall short, you come so much closer than you would have with a more conservative plan. Good job for challenging yourself!

Silvana -- congrats on starting the new job soon. I know situations like this feel insurmountable --- we are still paying off debt incurred when my husband was out of work last year and we drained our savings.

xCourxCorex -- great job on that emergency fund!

 

[PrincessKymm]

I need some advice and guidance.

Most of you know I declared bankruptcy last year. I still have my car payment and my student loans to pay off. Once I get my refund I will have enough to pay off my car loan. This frees up $300 a month.

Now, I'm wondering if I should bank my refund and my car payment made each month to improve my credit. I'm not saving a ton on interest (interest rate is 1.75%) so I'm not sure if it's worth paying my loan off right away. I've got 1 year left on my loan so that's 12 more payments that will be made on time that can help improve my credit score.

I do like the idea of paying off my loan and having one less thing to worry about. My student loans start up next month. So that adds 2 payments each month.

Thoughts? Advice? Thanks!!!!

 

[zy144622]

I need some advice and guidance. Most of you know I declared bankruptcy last year. I still have my car payment and my student loans to pay off. Once I get my refund I will have enough to pay off my car loan. This frees up $300 a month. Now, I'm wondering if I should bank my refund and my car payment made each month to improve my credit. I'm not saving a ton on interest (interest rate is 1.75%) so I'm not sure if it's worth paying my loan off right away. I've got 1 year left on my loan so that's 12 more payments that will be made on time that can help improve my credit score. I do like the idea of paying off my loan and having one less thing to worry about. My student loans start up next month. So that adds 2 payments each month. Thoughts? Advice? Thanks!!!!

Personally I would pay it off. It would feel great and build momentum on your efforts.

Debt to income ratio is also important for your credit. Showing you can pay something off and not just get some more debt to fill that hole shows self control. You could then use your $300 a month towards student loans and or savings. With payments coming due for those it could soften the blow!

 

[gracie1]

I need some advice and guidance. Most of you know I declared bankruptcy last year. I still have my car payment and my student loans to pay off. Once I get my refund I will have enough to pay off my car loan. This frees up $300 a month. Now, I'm wondering if I should bank my refund and my car payment made each month to improve my credit. I'm not saving a ton on interest (interest rate is 1.75%) so I'm not sure if it's worth paying my loan off right away. I've got 1 year left on my loan so that's 12 more payments that will be made on time that can help improve my credit score. I do like the idea of paying off my loan and having one less thing to worry about. My student loans start up next month. So that adds 2 payments each month. Thoughts? Advice? Thanks!!!!

Hi princess! You are right, you really wouldn't be saving much with your interest that low. Do you currently have an emergency fund in place? If not, then I would just go ahead and put that in savings for your emergency fund. If you have a nice emergency fund, then I would go ahead and pay the car off. Then the money your saving on the car payment each month you can apply to your loans.

 

[zy144622]

Well there's always a catch right?!? LOL I was feeling great about dumping my entire tax return into debt and then...DD had 2 medical bills come in today... About $800 more than I was planning. I will manage but I would have loved another week not knowing

I also think I'm in the wrong line of work. I mean $3k for about 15min in an OR. That was the room fee alone. CrAZy!

 

[ruadisneyfan2]

OMG! If I'm careful with groceries and I can do with no fun money and not feel like I'm working for nothing then I could have the car and both cc paid off by the end of the year. DH would have to deal with a lean Christmas tree but with no kids it would be worth it.

Suddenly feeling hopeful

Hang in there! You're not working for nothing. You're getting caught up and while that takes time, just keep an eye on the progress you're making.
We've had kids for 17 yrs so we're used to keeping Christmas small. It's very doable and after a while I thought back to those years of excess and wonder why we felt the need to do all that spending. It doesn't prove we love each other any more than if we kept it small.
You will see once you start making progress, it's actually exciting on pay day to pay bills and see the amounts drop down to zero. I know it sounds crazy but it's true. I was lucky that our smaller debts were really small, under $500, and there was around 4 of those so I had a lot of success & "happy endings" within the first couple months.
You can do it!! It helps to get organized.

It was very time-consuming but it keeps me motivated. I made a Word document list of each paycheck & what bills get paid with each check. Luckily dh & I are both biweekly on opposite weeks so every week is payday for us.
It all started to run together and was difficult to read so I color coded each paycheck. Purple for 1st check of month, orange for 2nd, green for 3rd and blue for 4th. Each paycheck lists each bill but once it's paid off, I have that amount transferred to my Capital One 360 checking (formerly ING). There's no fees or minimum balances. So all of my snowball $ gets separated from regular bill money.
Now while I could consolidate the smaller amounts into one transfer each week, I prefer to keep it separated so it reminds me how far we've come.
So instead of transferring $130 once, I still let it make 4 monthly recurring transfers: $25 Sears, $65 my Kohls, $65 dh's Kohls, $75 Amazon, etc. with the names of the bills in the memo. (It does this automatically.) Once that payday is done and bills are paid, I put a strikethrough all the list for that week. (The line through the middle like I'm crossing it out which doesn't show up here on the Dis.)

So now I have to scroll down through 4 pages of strikethrough bills that started in October to find where I left off. It's work, but still it reminds me how far I've come. I could delete it so that my current paycheck is always at the top but I don't want to forget it. Nor do I ever want to go back to that.

I also still keep my original list at the top from smallest to largest, listing original balances and current balances and even though 5 of those are paid off, I like seeing all those zeros.
Ok, maybe I'm weird but it really keeps me motivated.
There's not a day that goes by that I don't look at The Plan.

Sorry I don't know how to work with spreadsheets.

 

[ruadisneyfan2]

Thinking of altering my 2014 plan... right now, I am over halfway to my Emergency fund goal of 10k (have $6725).

My next step after getting the emergency account up to speed was to just immediately throw everything at a house down payment.. but I have these student loans just screaming at me to pay them down! Less than $13,000 total in 3 smaller loans. The smallest is $3,375.. I'm thinking I will tackle that after the emergency fund is at goal (since I have been getting side tracked with that account and used a big chunk of what I had previously saved to pay off my car, I really just need to reach this goal for my own peace of mind).

I think I can get that loan paid off by the end of June, leaving me with 2 loans each around $4400-4500ish... then I can split my $250 monthly payment evenly between the 2, that's knock it out a lot faster (right now I pay $68, and $71 to each of those bigger loans - once I clear out this one I can devote $125 to each!)

I was really content with leaving the school loans as they were, and focusing on the house down payment ... but I'm thinking, come on just get that small one paid off... plus that'll be better for down the road when it comes time to actually get the approval for a mortgage-less debt!

Also, I hadn't expected a WDW trip, which we are planning for January 2015 (for marathon weekend!) so that'll set me back around $1000... Meaning I'll definitely have less in the "house" account at the end of the year than I had originally planned, but with one loan paid off, and hopefully a little vacation in there too!

JMHO, but really I would pay off those student loans before buying a home. Houses are money pits and while I love our happy little home, it's always something and everything is so expensive to have repaired or replaced and the quality of things are just junk any more. (Home Depot)
In 17 yrs we're on our 4th kitchen faucet, 3rd lawn mower, 3rd gas grill, etc.
We've painted interior many times & 2nd time for exterior next month, updated carpets, lighting, kitchen, both bathrooms, garage door & electric opener, roof, sidewalks, driveway, soffits, windows, furnace/central AC, built a shed, dug an underground drain next to driveway so water doesn't pool/freeze there. Luckily dh is handy and did all except roof & driveway. My brother did AC/furnace & my dad was a kitchen designer/project manager but still it just never ends. The first few months after we bought it, dh would say "we're hemorrhaging money." In that 17 yrs, our property taxes have gone from 3200 to 8700/yr.
To own a home and deal with all that plus student loans would be torture. again, jmho.
It's great you were able to save such a huge emergency fund.

 

[tinkerone]

Well there's always a catch right?!? LOL I was feeling great about dumping my entire tax return into debt and then...DD had 2 medical bills come in today... About $800 more than I was planning. I will manage but I would have loved another week not knowing

I also think I'm in the wrong line of work. I mean $3k for about 15min in an OR. That was the room fee alone. CrAZy!

ouch! I just had a complete hysterectomy and had a private room for three days. total cost to me was $84. your health care must be worse than I thought.
hope it all works out.

 

[zy144622]

ouch! I just had a complete hysterectomy and had a private room for three days. total cost to me was $84. your health care must be worse than I thought. hope it all works out.

My health insurance it pretty good. That was not my OOP cost. That was the amount the hospital billed my insurance company. She was literally in the OR 15min. She wasn't even gone 20min total before they told me she was in recovery.