Debt Dumpers 2022

[jen7233]

Well, I already have to scrap one of my goals lol. Who know that you couldn't contribute to a Roth IRA if you file your taxes "married filing separately"? Not me. I opened them last weekend and put $100 in each and then learned that. So now I'm off to open a traditional and move the money there.

I'm not sure what I want my second goal to be now. I already have a 457 plan through work. I just started a health insurance with an HSA, so I suppose I could devote some more money to that. I do need to save more towards our future home renovations too.

After you mentioned that, I recall hearing it now on a personal finance podcast. At the time took no attention to it since we file jointly.

The spring real estate market seems like it's going to be competitive, where I am.

 

[barkley]

I'm not sure what I want my second goal to be now. I already have a 457 plan through work. I just started a health insurance with an HSA, so I suppose I could devote some more money to that. I do need to save more towards our future home renovations too.

saving in an account like that (we call it our 'reserve account') can sure take the sting out of unexpected expenses that pop up like appliance replacements and appliance/car repairs. it can also afford some money save opportunities-after we started on several years ago i realized our auto insurance carrier was tacking on $5 per month b/c we did a monthly payment so i went about to pay it every 6 months when the policy renews-i was thrilled to learn that by paying it full not only saved me that $60 per year but also qualified us for a nice discount on the policy. net result is better than i can earn for interest in a typical savings vehicle.

 

[MerissaAndMomLoveDis]

2022 Goals:

(1) Pay off credit cards each month--no credit card debt!
(2) Pay off car loan--about $2000 left.
(3) Cash flow all of Daughter's college expenses--no student loans!
(4) Pay property taxes on both houses in Jan 2022.
(5) Max out HSA contributions.
(6) Organize financial info for those left behind, just in case...
(7) Come up with something GREAT for DD's 21st birthday.We were scheduled to go on an ABD, but it got cancelled last week. We were supposed to go to Europe for three weeks for her high school graduation present, but I had to have back surgery and postpone that. I really want to come up with a great BIG trip for her for this summer.
(8) Earn Employer's Wellness Bonus of $300.
(9) "Porch project" at country house.
(10) Lose 20 pounds.

After meeting all of the financial goals above, put any extra money toward two mortgages. If "city" house sells, pay off mortgage to "country" house and do a bathroom reno.

Good luck to all the 2022 Debt Dumpers, and welcome to all those joining us for the first time this year!

 

[Skywalker3]

Set up the 529.

First of all, the money doesn't ONLY need to be used for college. The plans have expanded to include everything from private K-12 education to including ANY post High School continuing education expenses. Can be vocational programs, trade schools, certificate programs, community colleges, etc. If a child gets a scholarship, you can withdraw the amount of the scholarship tax and penalty free.

In addition, as mentioned, 529 funds can be transferred to another familial relative (sibling, parent) without penalty, so the money can be used be a different person than initially set aside for. My husband is using part of our kids 529 money right now to pay for a Masters degree.

Also, if for some reason you don't end up using the money at all, you are only taxed/penalized on the EARNINGS portion of the money withdrawn, which isn't always a huge amount. The earnings get added to your taxable income for the year. There is also a 10% penalty, but very few people open 529s and never need the money for someone in the family. You are never taxed or penalized for withdrawing the amount you contributed. It's like a Roth IRA that way.

529 plans don't "expire." You can keep them open and earning money as long as you want. Your kids might need money later in life if they decide to go back to school.

And finally, if for some reason your kids become disabled prior to turning 22 and you have 529 funds they won't use, there is a special type of account called an ABLE account, that you can roll over the entire 529 into, tax and penalty free.

You will make more money invested in a 529 plan in an aggressive portfolio than you will EVER get in a taxable retirement account or anything like a CD. We opened 529 accounts when our kids were born and have only put in $100/month to each one and they are each sitting at $55,000, 17 and 15 years later, respectively. Younger DSs account was placed into the aggressive portfolio from the get go, while older son's was in a more moderate portfolio until I changed it after the 2008 crash into the most aggressive option.

Thanks for posting all of that information. We did not ever set up a 529 for our daughter, who is graduating from high school this year, and as of now, planning on college. (we put all extra money into paying off mortgage early...hopefully this June!) We just started talking about possibly doing one for our son, although he is a freshman in high school, so not very long to add to it, but I guess better late than never.
This info helps us realize that 529s would cover several scenarios.

 

[crazycatstacy]

My husband and I were home all last week with covid. Spent a little unplanned money on food delivery and some meds but nothing too major. Paid off a card this month. Whoo hoo.

 

[pblack]

My 1st mid-month update:

My 2022 Financial Goals:

• Pay off our Camry loan (currently sitting just under $13k)....no change
• Continue to pay extra to our Highlander loan (especially once the Camry is paid off)....no change
• Save an extra $1000 towards my main savings account outside of my automatic monthly transfers....no change
• Create a cat expenses and gift expenses savings account for things throughout the year.....this is done.
• Save $$ for our Disneyland trip in May (most of which will be paid by our tax return), a long weekend in Mexico (maybe August, November, or January 2023...TBD), and the big family trip my in-laws want to do for their 40th anniversary (date TBD - location is tentatively Hawaii Feb 2023)....no real changes on this except that the big family trip has changed from Disneyland to Hawaii in February 2023.

My 2022 Personal Goals:

• Drain our pool, get rid of the black algae issue, and repaint the pool.....no change. Should hopefully be able to tackle this in the upcoming months though.
• Exercise consistently (I did really well for a good portion of 2021, but have kinda fallen flat the last couple months)...I'm changing this goal to be a little less vague. New goal is to exercise at least 4 times a week. I currently have an elliptical/recumbent bike, but I really want a treadmill. I think after vacation I'm going to look into buying one.
• Spend less money on items that we don't need....I don't feel like we've really bought anything completely unnecessary so far this month. We have bought quite a few things though in preparation for our cruise.

It's finally cruise week!!!!! Keeping my fingers, toes, and any other body parts crossed that we both receive negative covid tests on Thursday and we are able to fly out to Florida on Friday. I'm really looking forward to our dinner reservation on Friday night at Chef Art's Homecomin'. Our cruise leaves on Saturday and I'm so ready for some sunshine and warm weather. I think for the most part I'm packed and ready, my DH is a whole other story lol. I think once we are back from vacation I'll be able to focus a little more on our goals.

 

[slightly_obsessed]

My husband and I were home all last week with covid. Spent a little unplanned money on food delivery and some meds but nothing too major. Paid off a card this month. Whoo hoo.

Sorry you both were sick but congrats on the paying off the card!!!


Mid month check in
2022 Financial Goals
1. Debt - Focusing on Student loan #1 - balance is $9490. I am on track to pay this off Nov 2023, which would be 6 years early, but hoping to shave some more time off this! (One more student loan and a car loan after this, all of which should hopefully be paid off by 7/2024). Current balance is $9192.28.
2. Long Term Savings - Priced out the cost of replacing our windows, as well as part of our siding (masonite) and repainting the house. Extra $ will be split between goal 1 and this. No progress yet.
3. Budget Focus - Get food costs under control. I don't even know what we've been spending but it's too much. I need to do a better job of meal planning and intentionally buying only what we need. We have a full freezer and pantry to utilize, so I am going to do a pantry challenge for the rest of the month to jumpstart the process. I also think this will help with my health. I did an inventory of our freezer/pantry and have so far spent about 25% of what we spent in December on groceries/eating out. We might get sick of pork by the end of the month though.
4. Cash for Vacation - Currently putting away towards a Bryce Canyon/Zion/Grand Canyon Trip in the summer. Goal: $4550. $194.76/$4550 ($100 gets pulled out each paycheck and then extra will be thrown in from bonuses/tax refund/etc)
5. Retirement Contributions - Continue 401k, 403b and monthly non retirement investment account contributions. I want to put a chunk of our tax refund in the investment account, as well as any extra if/when SS/401K/403B max out towards the end of the year. No additional progress beyond our normal contributions that are already automatic.
6. Trust - really need to complete this. I dropped the ball and I know it needs to be a priority. We've met with an attorney, I just need to gather all the paperwork he needs. No progress yet.
7. Part time work/income - I think I am going to start substituting at my son's school but need to find out what I need to do to make that happen. The extra won't make up the difference from last year's income to this years, but it will be nice to have and get me back to working outside the house, something I haven't done in almost 12 years. No real progress, though I have gotten additional information from the school district. The huge increase in COVID cases in our area doesn't exactly make me want to speed up this process.

 

[disney-inspired]

Mid-Month Update

2022 Financial Goals
- Pay off $15,285.52 in Navient Federal Loans (I did pay off $4k this year) - No change
- Max out Roth IRA contributions - Decided to switch it up and contribute to my 401k through work
- Look for a new apartment - Right now rentals are $$$ and there really is no need to move. I give my parents money each pay day to cover expenses but they are financially stable as well so it's really just so I don't feel like a mooch. I'll stay here as long as my mental health allows it.

2022 Other Goals:
Health:
- Increase physical activity to be consistent 4x a week - slacking in this area. I'll get into it when I return from vacation in 2 weeks.
- Find feasible healthier eating options - working on this but struggling
Lifestyle
- Plan a cross-country trip now that I work 100% remote. - this will have to wait. I'm going to need new tires & alignment soon and already have a friend vacation planned for 2023. This may be a shorter trip to visit family in VA

 

[Shanna-like-Banana]

Can someone please point me in the direction of how to
1. Get annual credit reports
2. How the heck to read them
3. How to petition to creditors to get errors/mistakes fixed/resolved
4. How to enforce that creditor remove remarks/errors, etc

 

[amalone1013]

Mid January Update
$2000 Maternity leave cushion -
1/1: $750
1/18: $700 (-$50 change since beginning of year)
I reworked the budget a bit after I posted so this went down a little, but I have a plan that should easily get me here by the time I would miss anything out of a paycheck for my leave. Anything unused will rollover to a new goal.

Baby/Maternity Items -
1/1: Didn't exist
1/18: $307 (+$307 change since beginning of year)
Added this to cover things like clothing I need now baby items before and after arrival, things we want to use the registry discount on. The random expenses. I don't think I mentioned the hospital bills - planning to use our HSA for that. It's a healthy balance now and we've already planned to max our contributions again throughout the year. I got some estimates when our insurance enrollments were open so I could plan ahead, I was so sure this was the year I'd have to give up my high deductible plan with actual health expenses in the plans... but it was STILL a better deal than our 'better' plans.

$20,000 Barn savings -
1/1: $6779
1/18: $8249 (+$1470 change since beginning of year)
I updated this one to make the goal a little higher. If our income is similar this should be achievable.

Grocery/Eating out budget -
Grocery 1/18: 42% remaining
Eating Out 1/18: 71% remaining
We didn't edit these back yet, I'm going to see how these first few months go/do my freezer meal stash, and then go from there. I'm debating if I let any remainder roll over or not. We haven't eaten out a lot this month, and once my in-laws picked up the bill. Groceries I don't forsee needing a lot more this month. Watching sales and planning is what I need to get back to, so I did a run to Sam's for most meat for better prices last weekend. I also had $40 in gift cards from a work carpool thing - I get $20/month there but it depends on when they send the gift cards out. I also have $60 in Safeway rewards I need to use this month, so I may go stock up on some meat with that for the freezer meals.

Budget Meetings - minimum monthly
We didn't have an official meeting yet but did discuss which led to some of the above changes - plan to sit down last few days of the month and recap/look at Feb.

 

[DLgal]

Can someone please point me in the direction of how to
1. Get annual credit reports
2. How the heck to read them
3. How to petition to creditors to get errors/mistakes fixed/resolved
4. How to enforce that creditor remove remarks/errors, etc

You are entitled to free credit reports from all 3 major reporting bureaus once per year.

Go here:

Annualcreditreport.com

This is the site that FTC.gov sends you to, so it's legit.

The report will literally be a report with every line of credit/loan you have ever opened up. They will be listed by active ones first. The report will show whether you are in good standing or not with each account. You will also find out your credit score which can vary among the different bureaus. They all have their own way of figuring the score that is a but different, but all the scores should fall into the same general category. If you find an error, the website will walk you through how to file a correction/dispute. I've never had to do that in over 30 years so I can't speak to the process.

 

[pblack]

Took my covid test for the cruise this morning and it came back negative! 1 down and 1 to go! My DH can't take his until this evening when he's off work.

 

[BrerRabbit66]

Well, I already have to scrap one of my goals lol. Who know that you couldn't contribute to a Roth IRA if you file your taxes "married filing separately"? Not me. I opened them last weekend and put $100 in each and then learned that. So now I'm off to open a traditional and move the money there.

I'm not sure what I want my second goal to be now. I already have a 457 plan through work. I just started a health insurance with an HSA, so I suppose I could devote some more money to that. I do need to save more towards our future home renovations too.

Unfortunately, the Married Filing Separate (MFS) rules are designed to be prohibitive when it comes to investing as you have encountered with the Roth IRA. Traditional IRA's are good because they allow for you to claim a deduction (up to the contribution amount) on your tax return if your reported income is below certain thresholds. Unfortunately, if you file MFS and your Modified Adjusted Gross Income exceeds $10,000 you will not be able to claim this deduction.

I don't know if you were aware of this deduction possibility or if it played into your decision to open the Traditional IRA, just sharing some tax knowledge (not official tax advice as I do not know your specific situation). If MFS is the best filing option for you, it might be better to increase your 457 plan contribution or your HSA contribution if not already maxing these contributions.

 

[limace]

MID MONTH UPDATE
Financial:
-pay off both credit cards I have-about 10K. I’d like to head into retirement debt free. REDUCED FROM $10,600 to $8900.
-sell my old car
-get a will done!
-get on the same page re $ with DH. WE HAVE TALKED A BIT BUT NEED TO REALLY SIT DOWN.
-pay cash for our lodging etc for our Italy trip in March (if it can even happen….).

Personal
-lose 15-20 lbs-my Covid gain. DOWN 2.5
-continue walking every day before work. 12 OUT OF 15 days so far.
-declutter front of garage to make an exercise area for kids.
-finish painting the house

Sorry for the yelling -can’t figure out how to hold or change text color on my iPhone.

 

[DisneyMandC]

Unfortunately, the Married Filing Separate (MFS) rules are designed to be prohibitive when it comes to investing as you have encountered with the Roth IRA. Traditional IRA's are good because they allow for you to claim a deduction (up to the contribution amount) on your tax return if your reported income is below certain thresholds. Unfortunately, if you file MFS and your Modified Adjusted Gross Income exceeds $10,000 you will not be able to claim this deduction.

I don't know if you were aware of this deduction possibility or if it played into your decision to open the Traditional IRA, just sharing some tax knowledge (not official tax advice as I do not know your specific situation). If MFS is the best filing option for you, it might be better to increase your 457 plan contribution or your HSA contribution if not already maxing these contributions.

I'm actually waiting on an email back from HR on how to change my HSA contribution! Our employee website won't let me do it myself.

 

[Shanna-like-Banana]

Goals met so far :
Got an annual credit report thanks to y'alls help!

Goals continuing:
DH and I are going to agree and talk about how many nights per week we are going to cook dinner at home for the week coming up. So far our goal has been to cook dinner at home at least 5 nights per week and we have met that goal, one week we cooked dinner at home 6 nights. This will vary depending on schedules.
Getting take out/pick up has been part of our entertainment for the last two years, sometimes you just need a break.

In other goals:
We joined a gym! I am so proud of us. Being at home so much, we are more sedentary with work & school. I do not have any specific goals, except; to move my body. I told myself I was going to do walking for the first month until I build up a little bit and then we'll start doing more work out type routines.

 

[Tygerlilly]

So, apparently kids over 6 in Oklahoma all got a P-EBT card in the mail. It had money on it to cover lunches while they have been off. I didn't think we qualified since we homeschool, but apparently my daughter was sent one because she was enrolled in online public school last year and this was to cover the summer? Either way, I was super surprised to get one that had $375 on it. I immediately went to Sam's and got enough meat to feed us through Feb and potentially into March. My grocery budget for the next month will just need to cover fresh produce, milk, and bread. I luckily found everything I needed EXCEPT frozen chicken breasts. I still can't find those anywhere (which is weird, because I work at the distribution center and I know we've been shipping it). Excited to put the grocery budget towards our April trip now.

Dining reservations open in a little over a week for us. Sitting down now trying to decide where and when to eat. I've changed my mind drastically to a more realistic (and way less expensive) plan.

 

[BrerRabbit66]

Time for an update:

2022 Financial Goals:

• Max contribution to Simple IRA - this has already been adjusted thru payroll - $16,500 pre-tax. Consider this done.
• Medical Debt - UGH!! For 2021 I started with 6k of debt on a 0% card and paid it off in October. Plan worked great until the end of October when my DH passed out (blood sugar dropped) and his legs took mine out. In the end he was fine from his fall, but mine resulted in multiple breaks in my left arm and shoulder. So now for 2022, I have 7k of medical debt so far and this will continue to grow while I continue physical therapy. Trying to come up with a creative plan for this payment with the least amount of interest to pay it off without tapping into savings. I do have money in my HSA but I have that money invested so I'm loathe to pull from there. Time to look for a new credit card with 0% and use this bill to meet a minimum spend.
• Remain debt free on everyday expenses by paying off Amex and CSP monthly to build points.
• Replace wood siding with fiber cement board - this really needs to be done and I planned for it last year, but prices skyrocketed. Holding off for now but plan for this money to come from an existing HELOC...the draw period ends this year, so may have to pull the money and put in savings temporarily. The interest rate is low on this HELOC so I would still rather use the banks money instead of mine.

2021 Personal Goals:

• Regain full function of my arm and lose the electrical shocks in the nerves.
• Survive Tax Season 2022 - ugh! 2020 almost did me in and 2021 was not much better. I have hope this season will be better but challenging since I have one semi-functional arm.
• Eat healthier thru tax season by taking lunch instead of carry out.
• Travel....somewhere / anywhere...just take some time off and escape for at least a week.

 

[FQLover]

@BrerRabbit66 Oh, my gosh. I am so sorry about your arm/shoulder and your hubbie's fall knocking you down, etc. Good job trying to work out the finances with all that and still keep rehabilitating it so that you can get through tax season. Hugs going out to you!

 

[ruadisneyfan2]

Time for an update:

2022 Financial Goals:

• Max contribution to Simple IRA - this has already been adjusted thru payroll - $16,500 pre-tax. Consider this done.
• Medical Debt - UGH!! For 2021 I started with 6k of debt on a 0% card and paid it off in October. Plan worked great until the end of October when my DH passed out (blood sugar dropped) and his legs took mine out. In the end he was fine from his fall, but mine resulted in multiple breaks in my left arm and shoulder. So now for 2022, I have 7k of medical debt so far and this will continue to grow while I continue physical therapy. Trying to come up with a creative plan for this payment with the least amount of interest to pay it off without tapping into savings. I do have money in my HSA but I have that money invested so I'm loathe to pull from there. Time to look for a new credit card with 0% and use this bill to meet a minimum spend.
• Remain debt free on everyday expenses by paying off Amex and CSP monthly to build points.
• Replace wood siding with fiber cement board - this really needs to be done and I planned for it last year, but prices skyrocketed. Holding off for now but plan for this money to come from an existing HELOC...the draw period ends this year, so may have to pull the money and put in savings temporarily. The interest rate is low on this HELOC so I would still rather use the banks money instead of mine.

2021 Personal Goals:

• Regain full function of my arm and lose the electrical shocks in the nerves.
• Survive Tax Season 2022 - ugh! 2020 almost did me in and 2021 was not much better. I have hope this season will be better but challenging since I have one semi-functional arm.
• Eat healthier thru tax season by taking lunch instead of carry out.
• Travel....somewhere / anywhere...just take some time off and escape for at least a week.

This is awful but isn't the whole point of having an HSA to pay for out-of-pocket medical expenses? I don't have one because my employer only offers it with medical plans that have huge out of pocket expenses/high deductibles, so I don't really know much about HSAs. Why suffer with high medical debt when you have funds that are earmarked to pay for it?