Debt Dumpers - 2016

[toystoryduo]

Guys...

I GOT THE JOB!!! I just got the call, the five people who interviewed me unanimously voted for me!! I am so, so thrilled! This is especially exciting for me because it's my first permanent job as my current job and my previous job were both one year term positions. Thank you to all of you who have listened to me complain about my current job and listened when I struggled! It has finally paid off, and I am so happy!

So excited, after yesterday my cc is 1/2 what it was last November. I am down to 9000. I will be retiring in a month and will get paid for my vacation days I have not taken. Another large payment will be applied. The end is in sight!

I don't post often, but as of today I'm student loan debt free!!! I'm happy enough to cry!!!

I paid off my smallest card! I have also paid all of my bills for the month. Everything now is "flexible" but we leave for WDW in 22 days so I will be punching my pennies to have more Disney money! I do have to pay June rent but that's for my next paycheck so yay! I feel like I'm making progress.

I am looking forward to June when I can pay a big chunk of my next card with the debt snowball. It's going to feel so good!!!!!!

WOW!!! Lots of GOOD news this week! Congratulations, everyone!!!

 

[xCourxCorex]

Late to the party, but wanted to join! My fiancé and I are getting married at the end of October. We have a mortgage together, and he has 8k on his car, and about 59k in student loans. (Thankfully my car and student loans are already paid off, so this is our only debt!) Right now, our extra income goes to paying for the wedding.

After October, we are focusing on the smallest balance/highest interest student loan (7.something% !!) which has a balance of just under 10k. We can knock that one out by April or May of 2017, and then the plan is to snowball that monthly payment to the other 2 (larger balance but the interest is better at 3.something) while we will focus on the car, which hopefully should only be another couple of months as well.
Unfortunately, we still have 5 months to go until we start tackling the debt full-time, but I like reading everyone's progress here, and it's making me excited to start getting rid of all this debt looming over us!

 

[dayvewc]

Late to the party, but wanted to join! My fiancé and I are getting married at the end of October. We have a mortgage together, and he has 8k on his car, and about 59k in student loans. (Thankfully my car and student loans are already paid off, so this is our only debt!) Right now, our extra income goes to paying for the wedding.

After October, we are focusing on the smallest balance/highest interest student loan (7.something% !!) which has a balance of just under 10k. We can knock that one out by April or May of 2017, and then the plan is to snowball that monthly payment to the other 2 (larger balance but the interest is better at 3.something) while we will focus on the car, which hopefully should only be another couple of months as well.
Unfortunately, we still have 5 months to go until we start tackling the debt full-time, but I like reading everyone's progress here, and it's making me excited to start getting rid of all this debt looming over us!

Congratulations on the wedding. And already having a plan!!

 

[publix subs]

Being a federal employee, I have access to a federal credit union that offers a pretty decent loan program with about a 7% rate. I've read to never replace debt with other debt, but what would you guys say about taking out a lower interest loan of about $8k to pay off other considerably higher interested debt and only have that one payment to worry about? seems like a no brainer but I'm not entirely convinced.

 

[ruadisneyfan2]

I am so impatient it's awful. I'm down to the last $1200 on the card that we used for a cash advance toward ds's car. It's a deal with 2% BT fee with 0% interest until Feb 2017. I should just let it ride and pay the min now and start hammering on the Parent Plus loan but I'd feel like it's hanging over me.
Since we switched from paying property taxes through an escrow account with our mortgage company to paying them ourselves quarterly, they returned our escrow cushion back to us. I've been very good to not touch it but our next tax bill isnt due until August and there's more than enough to pay this sucker off now.
It will take the next 4 weeks of my snowball payments to pay back my escrow account which is the same as if I was paying directly to the card but I'd love to just be able to cross it off the list and know we have not a single cc balance.
All that's left is the parent plus loan and ds's car loan which he can hopefully soon take over.
By then it will be something else. Dh wants to take out a home equity loan to close in our screened back porch and make it an office.
It sounds so nice. We're in a small rancher and could use more space.

 

[dayvewc]

Being a federal employee, I have access to a federal credit union that offers a pretty decent loan program with about a 7% rate. I've read to never replace debt with other debt, but what would you guys say about taking out a lower interest loan of about $8k to pay off other considerably higher interested debt and only have that one payment to worry about? seems like a no brainer but I'm not entirely convinced.

In my view, that is a valid option. I see it as being essentially identical to taking advantage of a 0% or low interest balance transfer if you open a new credit card. As long as you 1) can keep yourself disciplined to pay off the loan (or new card) while not running up new debt, and 2) it will save you money over the estimated payoff time frame (more applicable to balance transfers where they charge a fee for the transfer), then it seems like an improved plan over just continuing to pay the higher interest. That's my take on it anyway.

I am so impatient it's awful. I'm down to the last $1200 on the card that we used for a cash advance toward ds's car. It's a deal with 2% BT fee with 0% interest until Feb 2017. I should just let it ride and pay the min now and start hammering on the Parent Plus loan but I'd feel like it's hanging over me.
Since we switched from paying property taxes through an escrow account with our mortgage company to paying them ourselves quarterly, they returned our escrow cushion back to us. I've been very good to not touch it but our next tax bill isnt due until August and there's more than enough to pay this sucker off now.
It will take the next 4 weeks of my snowball payments to pay back my escrow account which is the same as if I was paying directly to the card but I'd love to just be able to cross it off the list and know we have not a single cc balance.
All that's left is the parent plus loan and ds's car loan which he can hopefully soon take over.
By then it will be something else. Dh wants to take out a home equity loan to close in our screened back porch and make it an office.
It sounds so nice. We're in a small rancher and could use more space.

I vote for the "stay strong and stay the course" option. You'll wind up paying less if you can lower the Parent Plus loan faster since the cc is currently at 0% interest. It may not be significantly less, but if you keep with the minimum payments (or, since it is 0% til Feb, that's 9 months to pay $1200, or $133/month to pay it out over the promotional period). Figure out how much interest you would save by paying any excess over that to the PP Loan, and then translate those savings into your next "vacation reward". Based on my reading of what you were saying - and I straight up may have completely misinterpreted how you meant it - but it seems like you would be able to pay about $300 a week. So, that would be about $1070 extra a month toward the loan, and over the next 9 months at the current rates of about 6.5% would save you roughly $261 in interest. That's almost 50 Dole Whips.

(I'm doing rough guess calculations on the interest rate, and I'm pretty sure that the $1200 over 4 weeks is not a permanent amount, but just until you repaid the escrow fund)

On the home equity loan ----- I can't offer any opinion on that one. It seems like about half the people I know who got one, used it for whatever remodel they were going for and then paid it back quickly, but the other half seemed to use it as an unofficial cc to borrow against and it just became an ongoing debt headache. I personally would opt to wait on the expansion until DS takes over the car loan, then use what you were paying for the car loan to build the "remodel" fund and avoid the HELOC. But, I'm not always the most disciplined with my finances (hence, why I am here so often for moral support, and look for so many ways to "trick" myself into saving more, or paying debt down faster).

 

[crazycatstacy]

I had a victory today. My daughter had a 31 party. I bought NOTHING. I didn't need or want anything but I usually feel obligated to buy something. This time I just didn't worry about it. Saved money and don't have a bag that I won't use laying around.

 

[ruadisneyfan2]

I vote for the "stay strong and stay the course" option. You'll wind up paying less if you can lower the Parent Plus loan faster since the cc is currently at 0% interest. It may not be significantly less, but if you keep with the minimum payments (or, since it is 0% til Feb, that's 9 months to pay $1200, or $133/month to pay it out over the promotional period). Figure out how much interest you would save by paying any excess over that to the PP Loan, and then translate those savings into your next "vacation reward". Based on my reading of what you were saying - and I straight up may have completely misinterpreted how you meant it - but it seems like you would be able to pay about $300 a week. So, that would be about $1070 extra a month toward the loan, and over the next 9 months at the current rates of about 6.5% would save you roughly $261 in interest. That's almost 50 Dole Whips.

(I'm doing rough guess calculations on the interest rate, and I'm pretty sure that the $1200 over 4 weeks is not a permanent amount, but just until you repaid the escrow fund)

On the home equity loan ----- I can't offer any opinion on that one. It seems like about half the people I know who got one, used it for whatever remodel they were going for and then paid it back quickly, but the other half seemed to use it as an unofficial cc to borrow against and it just became an ongoing debt headache. I personally would opt to wait on the expansion until DS takes over the car loan, then use what you were paying for the car loan to build the "remodel" fund and avoid the HELOC. But, I'm not always the most disciplined with my finances (hence, why I am here so often for moral support, and look for so many ways to "trick" myself into saving more, or paying debt down faster).

What do you mean by "stay the course"? Keep paying on the 0% cc?
I had been paying on that card since approx Oct when it originally was our March Disney cruise, the one that we missed when the tree fell on the house. Back then the PP loan was not in repayment. Then we added $7k for a car which is why I continued to pay it.

Now I'm having 2nd thoughts that this is silly to keep paying on it while the PP interest rate and balance is much higher and costing us more. Then again it's so close to being gone for good so that is tempting also.

The minimum payment for the cc is only $25 and our monthly snowball is approx. $1350.
So assuming it takes around 4 weeks of snowball to pay off the $1200, I would just keep making the minimum on the cc until maybe 8 weeks before the 0% expires, just to be on the safe side.
I'm really not good at calculating compounding interest to figure out how much savings it would be.

I wouldn't borrow from our escrow account if I were to change direction and aim for the PP loan. I only considered it for paying off the cc because I'm so close to the finish line for the cc and just want to be there. I would then have to make repaying the escrow account top priority because our taxes would be due in August and I really don't want to scramble for that, ever. Our taxes are big here so it's about $2300/quarter.

So I guess the savings in attacking the PP now would be a month's worth of interest since I would start paying on it now instead of June 9.

ETA:
Now that I wrote all that out it really had me look at the big picture. I'm now thinking that borrowing from our escrow account, which is earning interest albeit a tiny amount, to pay off a 0% cc would be the worst of the 3 options in regards to saving money.
Then again DR warns that it's mostly emotional and how paying off a bill helps keep you motivated. This is true too. hmmmm....

 

[dayvewc]

What do you mean by "stay the course"? Keep paying on the 0% cc?
I had been paying on that card since approx Oct when it originally was our March Disney cruise, the one that we missed when the tree fell on the house. Back then the PP loan was not in repayment. Then we added $7k for a car which is why I continued to pay it.

Now I'm having 2nd thoughts that this is silly to keep paying on it while the PP interest rate and balance is much higher and costing us more. Then again it's so close to being gone for good so that is tempting also.

The minimum payment for the cc is only $25 and our monthly snowball is approx. $1350.
So assuming it takes around 4 weeks of snowball to pay off the $1200, I would just keep making the minimum on the cc until maybe 8 weeks before the 0% expires, just to be on the safe side.
I'm really not good at calculating compounding interest to figure out how much savings it would be.

I wouldn't borrow from our escrow account if I were to change direction and aim for the PP loan. I only considered it for paying off the cc because I'm so close to the finish line for the cc and just want to be there. I would then have to make repaying the escrow account top priority because our taxes would be due in August and I really don't want to scramble for that, ever. Our taxes are big here so it's about $2300/quarter.

So I guess the savings in attacking the PP now would be a month's worth of interest since I would start paying on it now instead of June 9.

ETA:
Now that I wrote all that out it really had me look at the big picture. I'm now thinking that borrowing from our escrow account, which is earning interest albeit a tiny amount, to pay off a 0% cc would be the worst of the 3 options in regards to saving money.
Then again DR warns that it's mostly emotional and how paying off a bill helps keep you motivated. This is true too. hmmmm....

The way I understood your original post was that you were asking if you should 1) continue paying the minimum on the cc while you pay down the PP loan, or 2) pay off the cc with the money in the escrow account and then rebuild the escrow account using your snowball. I was saying "stay the course" from the point of go ahead and continue paying a minimal amount on the cc while you pay down the PP loan (option #1).

They way I handle 0% promotions is that I figure out how many payments I will be able to make, and then divide the total amount by that number of payments minus 1. So, if the balance is $1200, and the promotional rate is good through Feb, then you would be able to make payments in May, June, July, etc. Jan, and Feb. for a total of 10 months, so spread over 9 payments is $133.33 each month. This way, I don't ever run into a situation where I've made the minimum payments, and when life happens the month before the promotion ends I'm not trying to scramble a couple of really big payments - I just make the regular payment I've been making all along.

And I think I calculated the compounded interest incorrectly the first time through. It's what I get for trying to do it in a rush, but I calculated the total savings on the interest assuming that you weren't paying the $1200 a month all the way through Feb, and that is incorrect. You would only not pay the full snowball on it the first month (or 2, if the snowball total includes the regular payment).

But in my opinion, the order of options from best to worst (financially) would be:
1) make minimum payments on the cc with the bulk of the snowball going to the PP loan until a month or 2 before the promotion ends, then reverse the payments.
2) make equal payments on the cc out of the snowball amount until it is paid off (the $133/month) with the rest going to the PP loan, then increase the PP loan payment
3) make large payments on the cc now until it is paid off, with minimum payments on the PP loan to be increased after the cc is paid off
4) use money from the escrow account to pay off the cc and rebuild it with the snowball payments, making minimum payments on the PP loan until then

Now, emotionally, it might feel better if the options were ranked 3, 1, 2, 4.

But I agree that using the escrow money is probably the worst option anyway you look at it.

 

[ruadisneyfan2]

Dayvewc,
This is completely OT, but I just had to tell you. I'm calling for HS Biology tutors from a list provided by ds19's HS. (Ds15 attends a different HS in our district who does not provide a list and looks at me like I have 5 heads when I ask for one.)

Anyway, after leaving multiple messages and emails, I got through to one. Cost? $80/hour. Firm

I thought math & English were bad enough at $60/hour.

Then again, Bio is a state requirement to graduate. If it costs me a couple hundred $$ to get through it, it's worth it. If he fails, he has to repeat it.
UGH!

 

[dayvewc]

Dayvewc,
This is completely OT, but I just had to tell you. I'm calling for HS Biology tutors from a list provided by ds19's HS. (Ds15 attends a different HS in our district who does not provide a list and looks at me like I have 5 heads when I ask for one.)

Anyway, after leaving multiple messages and emails, I got through to one. Cost? $80/hour. Firm

I thought math & English were bad enough at $60/hour.

Then again, Bio is a state requirement to graduate. If it costs me a couple hundred $$ to get through it, it's worth it. If he fails, he has to repeat it.
UGH!

Wow. Can i admit i wish they did that here? It's just expected that we volunteer our afternoons to tutor students who need help. Occasionally we'll get paid, but it's a maximum of $25 an hour. Usually $15.

 

[ruadisneyfan2]

Wow. Can i admit i wish they did that here? It's just expected that we volunteer our afternoons to tutor students who need help. Occasionally we'll get paid, but it's a maximum of $25 an hour. Usually $15.

They do offer extra help either before school, after or during lunch. I should just let him suffer the consequences of his own actions of not seeking extra help but he says it's crowded and not much different than being in class. Ds19 agreed wholeheartedly.

So if you want one on one, you pay up.

 

[dayvewc]

They do offer extra help either before school, after or during lunch. I should just let him suffer the consequences of his own actions of not seeking extra help but he says it's crowded and not much different than being in class. Ds19 agreed wholeheartedly.

So if you want one on one, you pay up.

Hmmm, I stay after school 3-4 days a week and let all my students know I am here for help if they want it. I almost never have any students take advantage of the offer, and wind up using the 60-90 minutes to prep for the next day.

 

[DisneyMandC]

Just gave my notice! So long!

My boss took it well. I figured she wouldn't have much to say about it, and she just told me congratulations and she was happy for me. My last day will be next Friday, so I'll have a couple days off before starting my new job. DH suddenly realized last night that that meant I wouldn't be paid for those days and tried to freak out. I told him I could try to work the last week if he wanted me to, but I haven't had anything more than a sick day off since the honeymoon last April. Sure enough, my boss wanted me to finish up next Friday since that's the end of one of our cycles here at work. We have a couple thousand for emergencies, so there's no risk our bills won't get paid, it'll just take our bank account down a notch. I'll be saving money on transportation that week not going anywhere as well!

 

[stayhomemom77]

Just gave my notice! So long!

My boss took it well. I figured she wouldn't have much to say about it, and she just told me congratulations and she was happy for me. My last day will be next Friday, so I'll have a couple days off before starting my new job. DH suddenly realized last night that that meant I wouldn't be paid for those days and tried to freak out. I told him I could try to work the last week if he wanted me to, but I haven't had anything more than a sick day off since the honeymoon last April. Sure enough, my boss wanted me to finish up next Friday since that's the end of one of our cycles here at work. We have a couple thousand for emergencies, so there's no risk our bills won't get paid, it'll just take our bank account down a notch. I'll be saving money on transportation that week not going anywhere as well!

You haven't had a vacation in over a year? I'd definitely be taking the time off then!

 

[DisneyMandC]

You haven't had a vacation in over a year? I'd definitely be taking the time off then!

Yup. Both of my jobs have been one year positions that don't come with any vacation time. I took the bar exam in July 2014, started my first job four days later, and my boss was nice enough to give me a week off for the honeymoon in April 2015. I finished that job on a Friday and came to my current job the next Monday. I took one day off in October to go to a horse show and two sick days in February and that's it! So I'm going to enjoy that week off by doing absolutely nothing! I'm a homebody so I'm plenty happy to just stay at home and do things around the house.

 

[dayvewc]

Yup. Both of my jobs have been one year positions that don't come with any vacation time. I took the bar exam in July 2014, started my first job four days later, and my boss was nice enough to give me a week off for the honeymoon in April 2015. I finished that job on a Friday and came to my current job the next Monday. I took one day off in October to go to a horse show and two sick days in February and that's it! So I'm going to enjoy that week off by doing absolutely nothing! I'm a homebody so I'm plenty happy to just stay at home and do things around the house.

Like plan the 2 year anniversary trip to WDW?

 

[DisneyMandC]

Like plan the 2 year anniversary trip to WDW?

LOL you crack me up! Don't worry, I've been planning that every day in my office... it's the only thing that's kept me sane! It's more like the 3 or 4 year anniversary/giant family trip though I promise I'll take a vacation in between there though, DH and I have decided we'd like to see all 50 states so we're going to try to start on the west coast next year and work our way across.

 

[Dentam]

Staycations can be so relaxing - not like some vacations where you feel like you need a recovery period afterward! lol

Well, I just won $20 on a $2 scratch it ticket so that made my day! I had a couple of bucks in my wallet and decided why not get a scratch it? Woohoo! I'll be putting the money I won into my checking account!

I reworked my debt payoff spreadsheet. My family decided to hold off on the WDW trip we were planning for next spring to celebrate my birthday. We'll try for 2018 instead so we can have more time to save and not feel like we're extending ourselves too far financially. So... that money that I was going to spend this July to reserve the DVC will now go toward a cc instead. With my new plan, I can be out of debt by the end of next year!! Fingers crossed... this is assuming that my car will last that long which I have some doubts about.

 

[DisneyMandC]

My family decided to hold off on the WDW trip we were planning for next spring to celebrate my birthday. We'll try for 2018

I suspect you may have a better trip then anyways since hopefully more will be open! DH and I discussed going again this year, and probably could swing it, but honestly I don't really want to go right now with so much closed and knowing new attractions will be open. I'd rather put the money aside and go in a couple years when I can hopefully see Toy Story Land and Star Wars Land.