Debt Dumpers 2024

[ruadisneyfan2]

This makes me start singing...

It takes 2 to make a thing go right...
It takes 2 to make it outta sight.

 

[WDW_fan_in_TX]

She had to turn off her card so it wouldn't be charged. If it had been charged, we'd have overdrafted our account and been charged an overdraft fee. So she did that becuase we didn't have the funds available. That'd be on Thursday then she'd turn it on Friday and the card would get charged. What she didn't realize is that even if a day late, they charge a late fee of $200. But we learned that this past weekend when she and I both sat down and talked to the loan shark.

Not that predatory lending practices aren’t crappy, but his wife purposely turned off her card on the days the payments were supposed to come. She attempted to take advantage of the lending company just as much.

 

[WDW_fan_in_TX]

No, it's not a credit card. So can't just transfer to another credit card. It's like one of those title loan places.

Also, is it possible to do a balance transfer from another cc to just pay it in full and have no future obligation to this company? Part of our paydown plan was getting a balance transfer on Discover cards when they were offering a 0% for 12 months promotion for a 2% fee. It saved a lot on interest charges while paying down other debts that were higher up on the list. By the time the 12 month promo expiration was getting close, those other debts were gone and I was ready to attack the Discover card balances.
This may not be possible if your credit score is low or your debt to income ratio prevents you from getting more credit.

The key to this scenario being successful is knowing that the Discover card (or whatever card) was strictly a vehicle to reduce the accumulation of interest and not as a credit card to charge additional purchases. That would completely screw up the plan and make the situation much worse. This is because future payments get applied to the balance transfer balance first, not to the purchases balance. Then the purchase balance keeps accruing more interest. So what starts out as let's say $1000 balance transfer at 0% interest, then you charge $50 to fill your gas tank, all payments go to the $1000 balance. That $50 charge keeps growing because payments are not applied to it but it still accrues interest because it's not part of the 0% promo. Yes, I learned this the hard way.
This requires willpower; hide the actual card so it's not readily available and stay strong in your commitment to debt reduction.

 

[WDW_fan_in_TX]

Yea, that's not going to happen. She's the type you can't just sit down and talk to. She'll say I don't want to talk about it and that'll be it. And if I try and have a come to Jesus meeting, I'll probably end up with a black eye or broken arm, lol. Not really.

I think it is time to have a Come to Jesus meeting with your wife about her not making good financial decisions. She’s making it very hard for you both to get ahead with her financial illiteracy and refusal to change. You absolutely should be putting that extra $50 toward the payday loan. You would have it paid off in no time if you did. Unfortunately she needs to not be in the position to make financial decisions that impact you both until she makes the effort to learn about finances and the commitment to help you dig out of the hole she helped put you in.

 

[ruadisneyfan2]

She had to turn off her card so it wouldn't be charged. If it had been charged, we'd have overdrafted our account and been charged an overdraft fee. So she did that becuase we didn't have the funds available. That'd be on Thursday then she'd turn it on Friday and the card would get charged. What she didn't realize is that even if a day late, they charge a late fee of $200. But we learned that this past weekend when she and I both sat down and talked to the loan shark.

Will they not work with you to set up payments to occur on payday?
If not, then you need to hold onto the money from a previous pay so that it's available when they take the payment.

 

[ruadisneyfan2]

Yea, that's not going to happen. She's the type you can't just sit down and talk to. She'll say I don't want to talk about it and that'll be it. And if I try and have a come to Jesus meeting, I'll probably end up with a black eye or broken arm, lol. Not really.

That is part of being in denial and unwilling to change her ways. I get it; it's hard but between all of us here, she NEEDS to sit down and talk about it.
This is why Dave Ramsey says getting into/out of debt is psychological. It's not about being unable to do the math.

My advice is to continue to do everything you can to attack this loan and keep paying minimums on all the rest until this thing is out of your life. JMHO. Once you can move on to debt #2 on the list, she might start to see the light when the balances are dropping.

Sometimes dh and I text or email things that are hard to say when you need to just get it off your chest. It's still communication.

 

[Nettlelondon]

Yea, that's not going to happen. She's the type you can't just sit down and talk to. She'll say I don't want to talk about it and that'll be it. And if I try and have a come to Jesus meeting, I'll probably end up with a black eye or broken arm, lol. Not really.

It must be really frustrating for you - you have reached something of a new understanding of finances and she is lagging behind. And reading some of the comments must feel a little disheartening. Please don't be put off - they are meant with love & care, and are generally coming from people who have "been there, done that - don't have the t-shirt because it was too expensive and they had turned a corner by then

Is there someone in your church who could maybe help by talking to her, possibly in more general terms, about finance? I am in the UK so things are probably a bit different but I know some churches run financial education courses and offer other support to assist people in moving away from pay day to pay day living, and get them away from the constant cycle of high cost borrowing just to stay afloat. May be something you can do together to help get you on the same page as to how you tackle the future - and at least give ideas of how to avoid some of the pitfalls you may encounter. Knowing the questions to ask in future like "how much does a late payment cost me?" at least makes it easier to make relevant decisions - late payment vs. overdraft charge for example.

Good luck, keep plugging away as best you can.

 

[WDW_fan_in_TX]

We refinanced and set it up to come out on Fridays. So good now. Everything we pay will be going to the payment and not late fees. Neither of us realized it was a $200 late fee, even if 1 day late. So neither of us realized we were not paying on the loan. The payment we've made every 2 weeks has just gone to fees and not the loan itself. But we realize now, got it refinanced for another 6 months and so are all good.

Will they not work with you to set up payments to occur on payday?
If not, then you need to hold onto the money from a previous pay so that it's available when they take the payment.

 

[slightly_obsessed]

We refinanced and set it up to come out on Fridays. So good now. Everything we pay will be going to the payment and not late fees. Neither of us realized it was a $200 late fee, even if 1 day late. So neither of us realized we were not paying on the loan. The payment we've made every 2 weeks has just gone to fees and not the loan itself. But we realize now, got it refinanced for another 6 months and so are all good.

Glad you got it figured out! I can't imagine how disheartening it was when you realized about the late fees but at least you have a reset/fresh start. You got this!

 

[ruadisneyfan2]

We refinanced and set it up to come out on Fridays. So good now. Everything we pay will be going to the payment and not late fees. Neither of us realized it was a $200 late fee, even if 1 day late. So neither of us realized we were not paying on the loan. The payment we've made every 2 weeks has just gone to fees and not the loan itself. But we realize now, got it refinanced for another 6 months and so are all good.

Good. Avoiding all bank fees was at the top of my list for ways to help pay down debt.
So next step is to apply any extra payments to the principal.

 

[barkley]

since the subject of fully understanding the terms of a loan has been brought up i want to share a practice that many consumers are unaware of until it impacts them to horrible consequences-

zero or VERY LOW rates over a multiple year period (retail installment payments)-

this is frequently used by furniture stores-you've seen the ads that tempt you with zero interest and VERY low payments for multiple years. what few if any who sign on for these notice is that in the fine print of the contract is a clause that allows that if a single payment is short by so much as a single cent, late by so much as a single day-the contract can revert RETROACTIVELY to an insanely high interest rate (in addition to incurring very high penalties and late fees). so that couch you've been paying for the last 3 years at 0% and your payment was a day late on gets the loan recalculated back to DAY 1 with a 30 plus percent interest rate on the original purchase price and you find out that what you thought would be paid off in 6 months now has a higher balance due than the original purchase price.

lousy practice but entirely legal.

 

[WingandPrayer]

You all have inspired me to do some financial goals for 2024 & to take a decisive step. (First of all--and I know I've said it before, but it's still true--I really appreciate the non-judgmental, collaborative spirit of these conversations about finances.)

2023 Accomplishments:
- bought our first house (now we have a mortgage, grateful, but, uff, hope we can refinance to a lower rate or that the monthly payment feels like less of a chunk of our NET soon)
- student loan forgiveness (have been paying for almost 20 years)
- started tracking our spending in fine-grained detail on a Google sheet
- eating at home all of our meals (ALDI supplemented by Costco)

2023 Christmas curve ball happened. We ended up spending something like $2000 on Thanksgiving & Christmas presents & car trips to visit family. And put it on the ccards. Was thinking of trying to stretch re-payment over months and then realized, nope, for our discipline's sake, we need to just use some of our emergency savings to knock that off. It's psychological. But we need it zeroed out to get back on the wagon.

2024 Goals:
- $7k of tax return to Emergency Fund to make up for Christmas Curve Ball 2023.
- Use credit card for grocery & fuel purchases, but pay off that same day. NO waiting until the end of the month, etc.
- Update spreadsheet w/grocery, fuel, discretionary purchases when they happen.
- Anticipate Christmas curve ball [credit card points for this?]
- continue developing frugal habits such that we don't have to think about them

2024 Aspirations:
- get a summer gig; use $ to pay down car payment

 

[slightly_obsessed]

since the subject of fully understanding the terms of a loan has been brought up i want to share a practice that many consumers are unaware of until it impacts them to horrible consequences-

zero or VERY LOW rates over a multiple year period (retail installment payments)-

this is frequently used by furniture stores-you've seen the ads that tempt you with zero interest and VERY low payments for multiple years. what few if any who sign on for these notice is that in the fine print of the contract is a clause that allows that if a single payment is short by so much as a single cent, late by so much as a single day-the contract can revert RETROACTIVELY to an insanely high interest rate (in addition to incurring very high penalties and late fees). so that couch you've been paying for the last 3 years at 0% and your payment was a day late on gets the loan recalculated back to DAY 1 with a 30 plus percent interest rate on the original purchase price and you find out that what you thought would be paid off in 6 months now has a higher balance due than the original purchase price.

lousy practice but entirely legal.

I think this practice is, unfortunately, very common. My husband had a school loan that had a chance of defaulting to a high interest rate (17%) from the first day he took it out if he chose a different field within his career choice, a different career altogether, or if he opted not work with an underserved population for the first 5 years after finishing his schooling (for us, this meant we had to move a few hours away). If he fulfilled the terms, the debt erased, but if he didn't it would go back and charge interest from when he first took it out 7 years prior. You have to be very sure of your career path and your ability to fulfill the terms... which in hindsight seems like a lot to expect of a 23 year old.

 

[piglet1979]

I think this practice is, unfortunately, very common. My husband had a school loan that had a chance of defaulting to a high interest rate (17%) from the first day he took it out if he chose a different field within his career choice, a different career altogether, or if he opted not work with an underserved population for the first 5 years after finishing his schooling (for us, this meant we had to move a few hours away). If he fulfilled the terms, the debt erased, but if he didn't it would go back and charge interest from when he first took it out 7 years prior. You have to be very sure of your career path and your ability to fulfill the terms... which in hindsight seems like a lot to expect of a 23 year old.

Was this the Teach Grant? I work at a college access program. We only advise students to take it if they are absolutely sure they can meet the terms. My son is going of to college next year and wants to be a teacher. One of the schools he applied to was trying to push this one and I told him not to do it. I can see him changing his major so it wouldn't be worth it. The councilor at the school that was pushing it didn't even know that it turned into a loan if you didn't meet the criteria.

 

[slightly_obsessed]

Was this the Teach Grant? I work at a college access program. We only advise students to take it if they are absolutely sure they can meet the terms. My son is going of to college next year and wants to be a teacher. One of the schools he applied to was trying to push this one and I told him not to do it. I can see him changing his major so it wouldn't be worth it. The councilor at the school that was pushing it didn't even know that it turned into a loan if you didn't meet the criteria.

No, his was in medicine. That is appalling that the counselor wasn't aware of possible repercussions!

 

[piglet1979]

No, his was in medicine. That is appalling that the counselor wasn't aware of possible repercussions!

It was very frustrating because they are pushing this on students that don't know any better yet. I haven't heard of the one for medical but something for us to look for when helping students.

 

[barkley]

- Use credit card for grocery & fuel purchases, but pay off that same day. NO waiting until the end of the month, etc.

- Anticipate Christmas curve ball [credit card points for this?]

we use a single card the same way for the same types of purchases. i let the points build up and if our expenses exceed what i have budgeted for for groceries/fuel for a given month i apply the points to offset. if our expenses are less for a given month i transfer the difference from my checking to a small savings account we use for higher expense months or that curve ball (but i also have a small amount budgeted monthly that is earmarked exclusivly for christmas).

- eating at home all of our meals (ALDI supplemented by Costco)

costco has some GOOD prepared items and they can be much less expensive than eating out (esp. if they are having a sale). dh is a fan of korean bbq so we get the big container and break it down into single servings to freeze. some of their prepared stuff though is overpriced and can be gotten for less if you look to the ingredients-2 we do this with is the street taco and gyro kits. it's much less expensive to buy one of their rotissery chickens, chop it yourself and season the meat/they sell bottles of the cilantro lime dressing so it nets a good savings (and you can also freeze the seasoned chicken for future use), they sell the gyro meat in double packs (also freezable) at a much lower per pound price so we grab those and grab pitas and tzatziki when we plan to have them.

 

[IAmAHiddenMickey]

since the subject of fully understanding the terms of a loan has been brought up i want to share a practice that many consumers are unaware of until it impacts them to horrible consequences-

zero or VERY LOW rates over a multiple year period (retail installment payments)-

this is frequently used by furniture stores-you've seen the ads that tempt you with zero interest and VERY low payments for multiple years. what few if any who sign on for these notice is that in the fine print of the contract is a clause that allows that if a single payment is short by so much as a single cent, late by so much as a single day-the contract can revert RETROACTIVELY to an insanely high interest rate (in addition to incurring very high penalties and late fees). so that couch you've been paying for the last 3 years at 0% and your payment was a day late on gets the loan recalculated back to DAY 1 with a 30 plus percent interest rate on the original purchase price and you find out that what you thought would be paid off in 6 months now has a higher balance due than the original purchase price.

lousy practice but entirely legal.

Another thing to watch out for is that the minimum payment for that loan may not pay the whole balance off before the end of the 0%. They do the same thing if you don't pay off the entire balance.

 

[WingandPrayer]

costco has some GOOD prepared items and they can be much less expensive than eating out (esp. if they are having a sale). dh is a fan of korean bbq so we get the big container and break it down into single servings to freeze. some of their prepared stuff though is overpriced and can be gotten for less if you look to the ingredients-2 we do this with is the street taco and gyro kits. it's much less expensive to buy one of their rotissery chickens, chop it yourself and season the meat/they sell bottles of the cilantro lime dressing so it nets a good savings (and you can also freeze the seasoned chicken for future use), they sell the gyro meat in double packs (also freezable) at a much lower per pound price so we grab those and grab pitas and tzatziki when we plan to have them.

We *love* Costco. I wish we could just go there for all our food prep--we're a family of 3, but really it's more like a family of 5 in terms of the amount of food we go through. I love the street taco tip and the gyro suggestion.

One of the lessons from this past year is that our journey to FI/RE rests on getting our consumption under control and that this is all a step-by-step process where we learn to adopt new practices one at a time. It took some time to learn, by experience, that we can successfully use credit cards for points IF we pay them off immediately after the purchase. Since we're so much more budget conscious now than at any other time in our family journey, we have to find meal prep *patterns* that are replicable and tasty. That means: meals that aren't hard to shop for, that I can make repeatedly & that we enjoy. But that also means: a different dinner every night.

 

[MamaBelleRN]

We refinanced and set it up to come out on Fridays. So good now. Everything we pay will be going to the payment and not late fees. Neither of us realized it was a $200 late fee, even if 1 day late. So neither of us realized we were not paying on the loan. The payment we've made every 2 weeks has just gone to fees and not the loan itself. But we realize now, got it refinanced for another 6 months and so are all good.

So glad to hear things are now on the right track. I give you HUGE props for tackling this debt journey while balancing your DW’s concerns about maintaining funds. Sounds like you’re doing a great job. Definitely keep tackling that debt and your snowball will grow!

You all have inspired me to do some financial goals for 2024 & to take a decisive step. (First of all--and I know I've said it before, but it's still true--I really appreciate the non-judgmental, collaborative spirit of these conversations about finances.)

2023 Accomplishments:
- bought our first house (now we have a mortgage, grateful, but, uff, hope we can refinance to a lower rate or that the monthly payment feels like less of a chunk of our NET soon)
- student loan forgiveness (have been paying for almost 20 years)
- started tracking our spending in fine-grained detail on a Google sheet
- eating at home all of our meals (ALDI supplemented by Costco)

2023 Christmas curve ball happened. We ended up spending something like $2000 on Thanksgiving & Christmas presents & car trips to visit family. And put it on the ccards. Was thinking of trying to stretch re-payment over months and then realized, nope, for our discipline's sake, we need to just use some of our emergency savings to knock that off. It's psychological. But we need it zeroed out to get back on the wagon.

2024 Goals:
- $7k of tax return to Emergency Fund to make up for Christmas Curve Ball 2023.
- Use credit card for grocery & fuel purchases, but pay off that same day. NO waiting until the end of the month, etc.
- Update spreadsheet w/grocery, fuel, discretionary purchases when they happen.
- Anticipate Christmas curve ball [credit card points for this?]
- continue developing frugal habits such that we don't have to think about them

2024 Aspirations:
- get a summer gig; use $ to pay down car payment

I’m 100% with you on the collaborative spirit. Talking about finances is still considered taboo by too many people and having a community to share ups and downs helps tremendously. And I totally feel you on the Christmas curveballs! That was certainly one factor that led us to evaluating our finances more closely. We looked closely and here we are!

It was very frustrating because they are pushing this on students that don't know any better yet. I haven't heard of the one for medical but something for us to look for when helping students.

Yikes! This was another factor that led us to completely reevaluating our finances. Our oldest is going to be a senior next year. When I started running NPC calculators and checked the interest rates of current student loans I She is our oldest of five and we have always planned on our kids covering their college expenses and we would help as much as possible. But with these interest rates, we are trying to see what other options we can manage. We had not been in a position to open 529s, but once we get these debts paid and ensure we are saving enough for retirement, we’ll open them for our other kids. We should also be able to cash flow a decent amount each year for her as she’ll be the only one in college for all four years she attends. And the other kiddos will have 529s so we’re hoping they can all manage college with minimal debt.


Continuing to plug away and grab all the extra hours I can! I worked yesterday and today for call pay, which will make a total of 50 extra hours on my next paycheck from call pay this week and last. This will go a long way to helping us jump start this debt pay off journey!