Debt Dumpers - 2017

[DLgal]

We paid 245k for 17 acres with a 1200 sq ft house on it. Can't believe some of these house prices!

Well, it's basically the most perfect place to live. So, there is that. Makes it palatable.

 

[DawnM]

We paid 245k for 17 acres with a 1200 sq ft house on it. Can't believe some of these house prices!

But salaries can be very different as well. We have done the comparison and the extra we make can go into mortgage and we will be fine. Our house won't be paid for as quickly, but we will be fine. DH and I will both make about 35% more each.

 

[DisneyMandC]

But salaries can be very different as well. We have done the comparison and the extra we make can go into mortgage and we will be fine. Our house won't be paid for as quickly, but we will be fine. DH and I will both make about 35% more each.

Oh believe me, not judging! About two hours north of me those prices aren't out of line. It's just crazy to me how much the prices vary around the country.

 

[AquaDame]

Oh believe me, not judging! About two hours north of me those prices aren't out of line. It's just crazy to me how much the prices vary around the country.

Or even in the same place... I wish we were adults ready to buy 10 years ago. We'd have saved a bundle! As is our house we bought 4 years ago is now "worth" another 100-150K if I believe the comps in the neighborhood. I didn't think the house would be our forever home at the time, but I sure do now. Trying to buy a different one closer in would probably bankrupt us.

 

[DawnM]

Oh believe me, not judging! About two hours north of me those prices aren't out of line. It's just crazy to me how much the prices vary around the country.

It is. Even here, we live a little bit out and have land and a large house. If we were to try to move 15 miles North, into the city, we would get NO land and about 1/3 the house for the same price.

In fact, there are condos near DH's work that cost the same as our large house.

 

[EilonwyWanderer]

The hits just keep on coming at the end of this month--thought I was done with classes but nope! There's a summer class I need to pay for. Just did my FAFSA. More student loans. Hooray.

 

[DisneyMandC]

Just found out DH will get his bonus this year! Not as much as years past, but his company was acting as though bonuses wouldn't be paid out this year at all. We don't rely on the bonus as part of his salary, but it's nice to get that money and set it aside! Since we've been loosely discussing a family Disney vacation for early 2019, we will hopefully put this money to the side for that.

 

[DrummerBoy523]

Question for all you money savvy people related to accounts in collections.

I have a couple from a few years ago when I was young and stupid with money. I saw a thing on Facebook (doubt it's legit, but that's why I'm asking) saying if a creditor has sold your account to a collection agency, that you are actually no longer obligated to pay it and since they sold it, they no longer can report it to the credit bureau and it can be removed to improve your score.

Is this any kind of true? It would take a few bad things off mine and I sure could use that.

This is NOT true. The only thing you are not obligated to pay are the increased fees they will try to charge you. My wife had a bad loan on her account and we had to let it sit for awhile. We finally called them up and settled for pennies on the dollar. We got a settlement IN WRITING from them and sent them a cashier's check so that we would have a paper trail.

 

[DrummerBoy523]

I'm late to the party, but I'm in. We just bought a new compact tractor for mowing and tilling gardens. Even though we financed it with zero interest, the payments are roughly $315 per month. My goal is to get my vehicle, house, DVC payments (less the monthly membership dues), and tractor paid off by the end of 2019. Any amount that I can work towards that goal will help tremendously.

So here's where I stand at this point.

Vehicle: Owe $11,375. Goal to pay $4260 on principle in remainder of 2017. Leaving $7115 to pay off in 2018 & 2019.
Tractor: Owe $17, 484. Goal to pay $2835 on principle in remainder of 2017. Leaving $14,649 to pay off in 2018 & 2019.
House: Owe $14, 525. Goal to pay $3015 on principle in remainder of 2017. Leaving $11,510 to pay off in 2018 & 2019.
DVC: Owe $8900. Goal to pay $1000 on principle in remainder of 2017. Leaving $7900 to pay off in 2018 & 2019.
CC: Owe $135. Paying off April 2017 and keeping a zero balance on it for emergencies.

Total: Owe $52,419. Paying $8495 on debts this year. Still owe $43,924 at the end of year.

Of course, I would love to pay these off earlier than what I currently have planned and I anticipate that I will be able to put a dent in what I owe well over the amount that I have planned. The house and DVC take main priority in getting paid off first. We are about to go on vacation in 3 weeks, but once that is over, every extra dime will be paid towards our debts. I hate that I can't pay it all off this year, but I will continue working on it so that I am completely debt free by the start of 2020.

In order to accomplish this, I will be cutting our expenses while also doing what I can to increase our income. Growing our own organic vegetables will help and I hope that we have enough this year to start bringing some to the farmer's market. Even if we don't, saving on our grocery bill will help since this is an area where I slacked off on in the past. I have cut out processed foods and am eating healthier so our food budget went way up due to that. I have quit smoking so I plan on using all of that money towards paying off debts too.

We plan on not taking a vacation in 2018 & 2019 in order to pay everything off in those years. Here's to buckling down and saving money.

Why not stack the debts smallest to largest and attack the smallest first, making min payments on the others and then work your way up the ladder adding the previous payment to your total payment amount each time. Instead of continuing to have 4 debts remaining at the end of the year, you might actually pay one or two off.

 

[DrummerBoy523]

Ugh, watching the credit card climb is making me so anxious. Little things and big things adding up fast. $600 for the car to get fixed. Ugh.

I feel like even when we make a "big" payment we're just blowing through it. I wonder if it would be better to make minimum payments (well, minimum + interest charge) for a couple of months and stash some money into savings to make some change on interest and then make a BIG payment. Will that keep us from making purchases on it for a bit? At least moreso than we do now?

Really, I just need to win the lottery!

IMO, you would be worse off stashing money in savings. The only thing keeping you from making purchases on a CC is the person in the mirror. Sounds to me like you need to buckle down and get yourself on a budget. Little things and Big Things do add up fast - but you can actually plan for emergencies or car expenses, etc. My wife and I sit down every month and try to "plan ahead" as best we can. We budget money every month for car expenses, home repair, etc., because assuming little things and/or big things WONT happen is not realistic.

We found a really good iPhone app that allows us to keep our budget online - it is called Every Dollar. I'm not a "die hard" Dave Ramsey follower, but we have been using some of his tools such as the debt snowball and this Every Dollar app.

You can do this!!

 

[Eureka]

Paid the mortgage today and made extra payments on both credit cards. Put more on the one with interest but did make a small payment on the one that's interest-free right now. Also, our home equity loan is under $600 (it's done in July)! I was tempted to pay it off now instead of making the CC payments but we're barely paying any interest on it at this point compared to the one credit card, so decided against it.

 

[EilonwyWanderer]

IMO, you would be worse off stashing money in savings. The only thing keeping you from making purchases on a CC is the person in the mirror. Sounds to me like you need to buckle down and get yourself on a budget. Little things and Big Things do add up fast - but you can actually plan for emergencies or car expenses, etc. My wife and I sit down every month and try to "plan ahead" as best we can. We budget money every month for car expenses, home repair, etc., because assuming little things and/or big things WONT happen is not realistic.

We found a really good iPhone app that allows us to keep our budget online - it is called Every Dollar. I'm not a "die hard" Dave Ramsey follower, but we have been using some of his tools such as the debt snowball and this Every Dollar app.

You can do this!!

We're actually on a pretty tight budget. It's hard because like 85% of our income every month goes toward childcare/kids stuff. Literally my husband's entire paycheck per month goes to pay for daycare ($4500/month for 2 kids)--and we're not even in an expensive one around here--and doesn't actually cover it all! It's literally eating away at our savings, which we thankfully had in place before we had kids. I've got a very detailed excel spreadsheet that has all of our monthly payments listed and tracks unexpected expenses, but there are just some months that the kids go through more diapers than usual for whatever reason ($80 right there for two boxes of diapers), or a kid has a growth spurt and suddenly needs clothes for a new season, or has to go to the doctor a few times to figure out what's wrong ($30 a pop for a visit or $150 for an ER visit, which we've had two so far this year!) and those costs end up being lifted by the credit card when we come up short. Tuition that hasn't been covered by student loans (oh god, so many loans) has also had to go on the credit card this year which, yeesh, adds up fast.

Eating out is our biggest vice, which we tend to do when we get stressed out about money of all things. But this month we really cut back on that and it should hopefully be better as summer rolls around and I don't have classes stressing me out (I work full time, have a part-time job, and I'm a full time PhD student).

I'm counting the days until the oldest is out of daycare. Hooray public school!

 

[Jen and Ashwin]

We're actually on a pretty tight budget. It's hard because like 85% of our income every month goes toward childcare/kids stuff. Literally my husband's entire paycheck per month goes to pay for daycare ($4500/month for 2 kids)--and we're not even in an expensive one around here--and doesn't actually cover it all! It's literally eating away at our savings, which we thankfully had in place before we had kids. I've got a very detailed excel spreadsheet that has all of our monthly payments listed and tracks unexpected expenses, but there are just some months that the kids go through more diapers than usual for whatever reason ($80 right there for two boxes of diapers), or a kid has a growth spurt and suddenly needs clothes for a new season, or has to go to the doctor a few times to figure out what's wrong ($30 a pop for a visit or $150 for an ER visit, which we've had two so far this year!) and those costs end up being lifted by the credit card when we come up short. Tuition that hasn't been covered by student loans (oh god, so many loans) has also had to go on the credit card this year which, yeesh, adds up fast.

Eating out is our biggest vice, which we tend to do when we get stressed out about money of all things. But this month we really cut back on that and it should hopefully be better as summer rolls around and I don't have classes stressing me out (I work full time, have a part-time job, and I'm a full time PhD student).

I'm counting the days until the oldest is out of daycare. Hooray public school!

Can I ask, where do you live? I could not imagine spending $4500 a month on daycare. I am having my first kid in October and signed up for a full time daycare that costs $1000 per month. If our costs were like yours, we could not even come close to paying our other expenses at all.

 

[EilonwyWanderer]

Massachusetts, just outside of Boston, which has some of the strictest childcare requirements for people providing daycares in the U.S. So, you're paying for quality (all of the teachers have to be very well trained), but wow are you paying for it. Infant care is the most expensive due to the low ratios of teachers to babies and our youngest is in the infant room until she moves up to toddlers in September so yeah, expensive! I'd love to have a third, but there's just no way we could afford it! Technically we really couldn't afford our second, but had managed to sock away enough in savings to mostly cover what we can't pay outright right now.

 

[Jen and Ashwin]

Massachusetts, just outside of Boston, which has some of the strictest childcare requirements for people providing daycares in the U.S. So, you're paying for quality (all of the teachers have to be very well trained), but wow are you paying for it. Infant care is the most expensive due to the low ratios of teachers to babies and our youngest is in the infant room until she moves up to toddlers in September so yeah, expensive! I'd love to have a third, but there's just no way we could afford it! Technically we really couldn't afford our second, but had managed to sock away enough in savings to mostly cover what we can't pay outright right now.

That just seems insane to me that you are spending just shy of the national median household income in just daycare expenses alone.

The $1000 per month for us is for infant care. There were some places that I looked at that cost upwards of $1800, but that is out of our price range and wasn't convenient location-wise. It will get slightly cheaper once the baby reaches 18 months, but I imagine that within 2-3 years, we will probably have baby number 2 on the way. Or that's the plan anyways.

 

[Eureka]

Massachusetts, just outside of Boston, which has some of the strictest childcare requirements for people providing daycares in the U.S. So, you're paying for quality (all of the teachers have to be very well trained), but wow are you paying for it. Infant care is the most expensive due to the low ratios of teachers to babies and our youngest is in the infant room until she moves up to toddlers in September so yeah, expensive! I'd love to have a third, but there's just no way we could afford it! Technically we really couldn't afford our second, but had managed to sock away enough in savings to mostly cover what we can't pay outright right now.

That area is very expensive. I'm guessing you're in Brookline, Cambridge or maybe Newton or Wellesley. (I went to undergrad in Waltham and grad school right in Boston). I live outside of DC now but far enough out that it wasn't quite that bad when mine were little. But we still rejoiced when they went to kindergarten.

 

[EilonwyWanderer]

That just seems insane to me that you are spending just shy of the national median household income in just daycare expenses alone.

It's crazy to me too! We might as well be sending them to college.

That area is very expensive. I'm guessing you're in Brookline, Cambridge or maybe Newton or Wellesley. (I went to undergrad in Waltham and grad school right in Boston). I live outside of DC now but far enough out that it wasn't quite that bad when mine were little. But we still rejoiced when they went to kindergarten.

You'd guess right! We work in one, live in the other. On top of everything, way back before we had kids we bought a one bedroom, 510 sq foot condo...right before the market collapsed. Been there ten years, two kids later it's pretty tight, but daycare means we can't afford to move! Argh! Snowballing debt will be MUCH easier when that daycare money is ours every month!

 

[DLgal]

We're actually on a pretty tight budget. It's hard because like 85% of our income every month goes toward childcare/kids stuff. Literally my husband's entire paycheck per month goes to pay for daycare ($4500/month for 2 kids)--and we're not even in an expensive one around here--and doesn't actually cover it all! It's literally eating away at our savings, which we thankfully had in place before we had kids. I've got a very detailed excel spreadsheet that has all of our monthly payments listed and tracks unexpected expenses, but there are just some months that the kids go through more diapers than usual for whatever reason ($80 right there for two boxes of diapers), or a kid has a growth spurt and suddenly needs clothes for a new season, or has to go to the doctor a few times to figure out what's wrong ($30 a pop for a visit or $150 for an ER visit, which we've had two so far this year!) and those costs end up being lifted by the credit card when we come up short. Tuition that hasn't been covered by student loans (oh god, so many loans) has also had to go on the credit card this year which, yeesh, adds up fast.

Eating out is our biggest vice, which we tend to do when we get stressed out about money of all things. But this month we really cut back on that and it should hopefully be better as summer rolls around and I don't have classes stressing me out (I work full time, have a part-time job, and I'm a full time PhD student).

I'm counting the days until the oldest is out of daycare. Hooray public school!

I have to ask the obvious question: Why is your husband even working if his ENTIRE paycheck is going towards daycare? That makes no sense. Why not have him be a stay at home parent until the kids are in school full time? You are probably paying more in taxes too with him working. You could be better off with him at home.

 

[EilonwyWanderer]

We actually aren't. Trust me, we've done out the math. If we want to remain a two income family (which we would want to be AFTER daycare), he has to work. Otherwise it's five (or more) years outside of the work force, entering back in at 40+ with a salary that's much, much less than five years of work experience, raises, and promotions. It would be a really, really, REALLY risky gamble.

 

[AmyAnne]

I have to ask the obvious question: Why is your husband even working if his ENTIRE paycheck is going towards daycare? That makes no sense. Why not have him be a stay at home parent until the kids are in school full time? You are probably paying more in taxes too with him working. You could be better off with him at home.

We were in this position with several of our kids--in fact, for about three years, it cost more to send our kids to daycare than I was bringing home in salary. But it still made long-term economic sense for me to keep working, because I kept my position and seniority. If I had stayed at home for a few years, it's hard to say what positions would have been open and what they would have paid at that point.