Debt Dumpers - 2015

[Dentam]

The first year I owed, I changed my W-4 forms to hold out an excess of about $10 per week, or $50 per month. For both state and federal. I know that having extra held is just giving the government an interest free loan, but I struggle to save, so this way I never have to worry about paying AND by filing early enough it pays for spring break trips.

I always owe because I do freelance work that isn't taxed initially.

 

[dayvewc]

I always owe because I do freelance work that isn't taxed initially.

Ahhh, yeah, guess what I do wouldn't work for you, then.

 

[gracie1]

Good news, I got my taxes finished.

Less good news, I could have finished 2 weeks ago. The documents I was waiting for I didn't need - didn't earn enough in dividends to be reported.

Less bad news, I found an error I had made and my refund is about $500 less than I thought.

Bad news, I'm not sure I'll get enough on my refunds to pay off both credit cards and my spring break trip.

That's always a bummer when it's less than expected. Sounds like you will get enough back though to pay off your trip and one card? That's better than nothing! One less cc - and you can just roll that monthly payment to the next card.

 

[minnie45]

I don't know if I'm making a good decision or not....any advice would be welcome. Just don't be rude about it please.

I've been trying to dump debt over the last year or so. I did have a little sucess in 2014. I managed to pay off a $100 per
month bill that I was making payments on and paid all of my other bills on time. (Yea Me!!) I'm looking forward to even more progress
in 2015.

Problem is I'm not a very patient person, and would like to speed up the process. I'm looking into doing a refi at 4% and pulling 12K out
of the equity in my home. This would lower my mortage by $230 per month and the 12K I'm pulling out would pay off other bills and reduce my monthly bills by an additional $450 per month. (total savings of $680 per month) I hate the fact that I would now start back to square one on a 30 year mortgage. I may opt to pay $200 per month extra on my mortgage to lower the number of years I will need to pay on my home and apply the rest to my car note.

Additional info. After my refi I would still have about 17,500 of debt to pay on...(I owe about $7500 on my auto loan and 10,000 to DVC) I plan to use the extra cash to pay that off. I will also be getting a $300 per month raise in August which will also be used to pay down my debt. I figure I could get all of the debt paid off in 2 years by doing this.

What do you think? It looks like the refi will go through later this week...Is it the right thing to do? OR??? Advice?

 

[fbb]

I don't know if I'm making a good decision or not....any advice would be welcome. Just don't be rude about it please.

I've been trying to dump debt over the last year or so. I did have a little sucess in 2014. I managed to pay off a $100 per
month bill that I was making payments on and paid all of my other bills on time. (Yea Me!!) I'm looking forward to even more progress
in 2015.

Problem is I'm not a very patient person, and would like to speed up the process. I'm looking into doing a refi at 4% and pulling 12K out
of the equity in my home. This would lower my mortage by $230 per month and the 12K I'm pulling out would pay off other bills and reduce my monthly bills by an additional $450 per month. (total savings of $680 per month) I hate the fact that I would now start back to square one on a 30 year mortgage. I may opt to pay $200 per month extra on my mortgage to lower the number of years I will need to pay on my home and apply the rest to my car note.

Additional info. After my refi I would still have about 17,500 of debt to pay on...(I owe about $7500 on my auto loan and 10,000 to DVC) I plan to use the extra cash to pay that off. I will also be getting a $300 per month raise in August which will also be used to pay down my debt. I figure I could get all of the debt paid off in 2 years by doing this.

What do you think? It looks like the refi will go through later this week...Is it the right thing to do? OR??? Advice?

What is your current mortgage interest rate? And the rates for the car loan and DVC?

 

[minnie45]

What is your current mortgage interest rate? And the rates for the car loan and DVC?

Auto rate=6% DVC=10%

 

[gracie1]

I don't know if I'm making a good decision or not....any advice would be welcome. Just don't be rude about it please.

I've been trying to dump debt over the last year or so. I did have a little sucess in 2014. I managed to pay off a $100 per
month bill that I was making payments on and paid all of my other bills on time. (Yea Me!!) I'm looking forward to even more progress
in 2015.

Problem is I'm not a very patient person, and would like to speed up the process. I'm looking into doing a refi at 4% and pulling 12K out
of the equity in my home. This would lower my mortage by $230 per month and the 12K I'm pulling out would pay off other bills and reduce my monthly bills by an additional $450 per month. (total savings of $680 per month) I hate the fact that I would now start back to square one on a 30 year mortgage. I may opt to pay $200 per month extra on my mortgage to lower the number of years I will need to pay on my home and apply the rest to my car note.

Additional info. After my refi I would still have about 17,500 of debt to pay on...(I owe about $7500 on my auto loan and 10,000 to DVC) I plan to use the extra cash to pay that off. I will also be getting a $300 per month raise in August which will also be used to pay down my debt. I figure I could get all of the debt paid off in 2 years by doing this.

What do you think? It looks like the refi will go through later this week...Is it the right thing to do? OR??? Advice?

Also how many years do you currently have left on your mortgage?

 

[minnie45]

Also how many years do you currently have left on your mortgage?

25 years left on mortgage

 

[fbb]

25 years left on mortgage

What's the current rate?

 

[minnie45]

What's the current rate?

Current rate --can't remeber exact but around 5.5%

 

[dayvewc]

I don't know if I'm making a good decision or not....any advice would be welcome. Just don't be rude about it please.

I've been trying to dump debt over the last year or so. I did have a little sucess in 2014. I managed to pay off a $100 per
month bill that I was making payments on and paid all of my other bills on time. (Yea Me!!) I'm looking forward to even more progress
in 2015.

Problem is I'm not a very patient person, and would like to speed up the process. I'm looking into doing a refi at 4% and pulling 12K out
of the equity in my home. This would lower my mortage by $230 per month and the 12K I'm pulling out would pay off other bills and reduce my monthly bills by an additional $450 per month. (total savings of $680 per month) I hate the fact that I would now start back to square one on a 30 year mortgage. I may opt to pay $200 per month extra on my mortgage to lower the number of years I will need to pay on my home and apply the rest to my car note.

Additional info. After my refi I would still have about 17,500 of debt to pay on...(I owe about $7500 on my auto loan and 10,000 to DVC) I plan to use the extra cash to pay that off. I will also be getting a $300 per month raise in August which will also be used to pay down my debt. I figure I could get all of the debt paid off in 2 years by doing this.

What do you think? It looks like the refi will go through later this week...Is it the right thing to do? OR??? Advice?

25 years left on mortgage

Just me, but the reset on the mortgage is only 5 years. IMHO, in the grand scheme of a 30 year mortgage that's not that much. Lowering your interest rate by 1.5% I think is a good thing overall, definitely over the full life of the loan, but the rule of thumb I was taught was 2% or more. And like you say, you can dump extra into the payment to shorten the loan. I'm currently paying an extra $20 a month on my mortgage (first year I paid an extra $100) but I'm down to 23 years and have only paid on it for 2 years. So, yeah, I would go with the refi, payoff as much as you can with the equity, then keep paying the same amount to pay off the other loans, then apply all the payments to the house loan. I'd also probably NOT use the $300 raise in August solely as debt payments. Maybe split it $200 for debt and $100 for "personal use" so you aren't feeling quite so overwhelmed in making payments? I know that the way I keep myself on track to not have any extra is that I know a small portion of what I make is set aside for my "vacation fund" that lets me take a break. (There's a little bit more than that - I also have timeshares, and I have calculated that they are only cost effective if I take vacations every year. Otherwise, I just lose the investment and feel that I've paid the fees and taxes for no purpose).

 

[dayvewc]

Well, my former SO and roommate is moving out tomorrow. Still owing me something more than $15,000 that I've either paid or let slide over the past 3 years while SO has had difficulties finding and keeping a full-time job.

On the one hand, I want to jump up and down for joy that this financial nightmare is, if not over, at least entering a different phase.

On the other hand, I'd like to get a last minute life insurance policy on SO and then use a portion of it to pay someone to let me collect.

But it is what it is.

On the other foot, I now have a room available for rent for half utilities if anyone is interested in moving to the delta region of Arkansas. At least we'd know we have at least 1 interest in common!!

I couldn't think of something for the last foot. Just in case someone was counting appendages.

 

[gracie1]

Well, my former SO and roommate is moving out tomorrow. Still owing me something more than $15,000 that I've either paid or let slide over the past 3 years while SO has had difficulties finding and keeping a full-time job.

On the one hand, I want to jump up and down for joy that this financial nightmare is, if not over, at least entering a different phase.

On the other hand, I'd like to get a last minute life insurance policy on SO and then use a portion of it to pay someone to let me collect.

But it is what it is.

On the other foot, I now have a room available for rent for half utilities if anyone is interested in moving to the delta region of Arkansas. At least we'd know we have at least 1 interest in common!!

I couldn't think of something for the last foot. Just in case someone was counting appendages.

Just think of the money you will be saving with him gone! Your utilities will go down, food bills, etc!

 

[FFMickey]

2015 I think will be the year. I got my revolving debt down to a few thousand, but it is my goal to get rid of it to start saving for a house.

 

[gracie1]

25 years left on mortgage

I don't see why not refinancing - as long as you don't rack up the debt again on top of the new mortgage. Since you will be saving that additional amount each month you can apply that to your outstanding debt like the car loan or dvc to get them paid down faster. Once everything is paid for you can tackle paying extra each month on the mortgage to knock down the years. I throw extra on my mortgage each month - not much but it does add up!

 

[gracie1]

2015 I think will be the year. I got my revolving debt down to a few thousand, but it is my goal to get rid of it to start saving for a house.

Way to go!! Sounds like you've been working hard!!

 

[ilovemk76]

I always owe because I do freelance work that isn't taxed initially.

If you also have a job, then up the W4 to pay extra to cover the freelancing. If your DH or DW has a job, then change their W4. You can also make quarterly payments. This is a must for certain incomes and it prevents paying any penalties and interest.

 

[ilovemk76]

I don't know if I'm making a good decision or not....any advice would be welcome. Just don't be rude about it please.

I've been trying to dump debt over the last year or so. I did have a little sucess in 2014. I managed to pay off a $100 per
month bill that I was making payments on and paid all of my other bills on time. (Yea Me!!) I'm looking forward to even more progress
in 2015.

Problem is I'm not a very patient person, and would like to speed up the process. I'm looking into doing a refi at 4% and pulling 12K out
of the equity in my home. This would lower my mortage by $230 per month and the 12K I'm pulling out would pay off other bills and reduce my monthly bills by an additional $450 per month. (total savings of $680 per month) I hate the fact that I would now start back to square one on a 30 year mortgage. I may opt to pay $200 per month extra on my mortgage to lower the number of years I will need to pay on my home and apply the rest to my car note.

Additional info. After my refi I would still have about 17,500 of debt to pay on...(I owe about $7500 on my auto loan and 10,000 to DVC) I plan to use the extra cash to pay that off. I will also be getting a $300 per month raise in August which will also be used to pay down my debt. I figure I could get all of the debt paid off in 2 years by doing this.

What do you think? It looks like the refi will go through later this week...Is it the right thing to do? OR??? Advice?

Dump the DVC. DVC is a luxury and should not be financed. I would not do the refi unless you know you can control yourself and not run up the debt again. If you can, then do the refi and pay off everything but the auto. What is the % on the auto loan? I expect it is low. I would keep paying on the car and put the extra $450 into an emergency fund and pay the extra $230 back onto the mortgage, so you can pull in the loan.

Once you get ~$5000 in your emergency fund, then either start or up your retirement savings (Roth IRA, Roth 401K, 401K, SEP, 503B, etc.) to $250 and save the other $200 into your emergency fund until you get to 6 months of living expenses. Then add the $200 to your retirement. When you get the raise, then put 1/2 into your retirement saving and save the rest for a vacation or other want.

 

[minnie45]

Dump the DVC. DVC is a luxury and should not be financed. I would not do the refi unless you know you can control yourself and not run up the debt again. If you can, then do the refi and pay off everything but the auto. What is the % on the auto loan? I expect it is low. I would keep paying on the car and put the extra $450 into an emergency fund and pay the extra $230 back onto the mortgage, so you can pull in the loan.

Once you get ~$5000 in your emergency fund, then either start or up your retirement savings (Roth IRA, Roth 401K, 401K, SEP, 503B, etc.) to $250 and save the other $200 into your emergency fund until you get to 6 months of living expenses. Then add the $200 to your retirement. When you get the raise, then put 1/2 into your retirement saving and save the rest for a vacation or other want.

I do have a State Retirement (I'm a school teacher) and I also have a 403b and my emergency account is already fully funded.

 

[ilovemk76]

I do have a State Retirement (I'm a school teacher) and I also have a 403b and my emergency account is already fully funded.

Then save up that 6 month (some say 1 year) emergency fund rather than add to your retirement.