Debt paydown strategy?

[Chicago526]

Thank goodness we can spend the gift money, we don't need it for a down payment on a house, the equity in my condo will cover the 20% down payment on a house in our price range, no problem.

Don't forget taxes go up, insurance goes up, utilities go up (mine did anyway).

Oh yes, we've budgeted all of that! I can only guestimate utilities, I've increase them 50% over what we are paying now, they shouldn't be more than that and if it's less, all the better. I've also calculated the higher monthly mortgage, taxes, and homeowners, at least as much as I can until we find a specific house to buy. I'm taking the high number on all estimates. Fortunatly, even with all of our debt we are no where near living paycheck to paycheck. So we can afford the bigger house and still get our debt cleaned up and money in the bank in about a year. I just can't stand the debt any more, ya know? I really want to be credit card debt free before getting pregnant. Heaven forbid, if I don't have an easy time of it there could be medical bills, or I could be out of work for a while, and my disability only pays 2/3. Should the worst happen, if we could be free of the CC debt it would be a huge help.

 

[dvcgirl]

Chicago526,

I've read back and it seems that you have a firm grip on your finances and that you and your soon to be hubby are dedicated to paying down your CC debt. Here's my advice...

Don't worry about the honeymoon...stay at the GF. You're just starting out together and your situation of a little CC debt is not that unusual. You have already sat down and have a sound plan to pay it down. There's another thread going on where the OP has posted for help several times and then seems to just not follow any of the great advice given. You seem to have a good head on your shoulders...

Enjoy that honeymoon!

 

[chrismiss56]

Hi

Have been reading the thread and am getting excited about getting rid of our debt!!

Question - those of you who were offered 0% interest credit card for the life of the balance - were you sent this offer in the mail or did you find it on the internet?

Would love to take advantage of the offer!! Am in the middle of reading Financial Peace........

Have a Magical Disney Day!!

 

[poohj80]

Question - those of you who were offered 0% interest credit card for the life of the balance - were you sent this offer in the mail or did you find it on the internet?

Mine came in the mail. I get all kinds of offers to transfer balances in the mail, but one thing I always look for is an offer with no transfer fees.

 

[MrsPete]

My only advice would be to avoid pulling money out of your home to pay off your debts . . . And avoid the tempatation to buy a bigger house . . . There's such a sense of entitlement out there in the world now . . . Vacations to Disney World were a pretty rare thing when I was a kid

I agree completely. The average American's spending is way out of control, and we will all reap the negative effects one of these days. We can't continue to live beyond our means without consequences.

 

[MrsPete]

My concern is the honeymoon. We decided on the GF for 7 nights, before we got serious about paying down our debt. The honey moon will be about $4000, and we'll have to charge it. I'm hoping we "net" enough in cash gifts for the wedding to pay for most of it!

He'll be out of work 6 weeks, and his disability insurance only pays 2/3 his pay.

I think we get hung-up financially when we're talking about weddings and honeymoons. We get caught between the idea of "once in a lifetime" and the desire for financial security. Ideally, there should be a happy medium -- a spot where you're able to do something genuinely special and unique that'll be a wonderful memory AND you don't have to go into debt for it. Only you know where that happy-medium is.

About his upcoming surgery, have you considered picking up some supplemental insurance like AFLAC? We picked it up before we had our second daughter, knowing that a hospital stay was in the future. Because I had a quick and easy birth, it didn't pay off all that much, but I liked knowing that IF it had gone badly, I would've had an extra cushion.

 

[Chicago526]

I think we get hung-up financially when we're talking about weddings and honeymoons. We get caught between the idea of "once in a lifetime" and the desire for financial security. Ideally, there should be a happy medium -- a spot where you're able to do something genuinely special and unique that'll be a wonderful memory AND you don't have to go into debt for it. Only you know where that happy-medium is.

About his upcoming surgery, have you considered picking up some supplemental insurance like AFLAC? We picked it up before we had our second daughter, knowing that a hospital stay was in the future. Because I had a quick and easy birth, it didn't pay off all that much, but I liked knowing that IF it had gone badly, I would've had an extra cushion.

That's not a bad idea. I'm a big believer in insurance. My father says it's a bet. The insurance company is betting nothing bad will happen to you, while you bet that something will! We'll be sitting down with a lawyer to go over our estate planing and our insurance guy for our insurance needs after we get back from the honeymoon, so I'll ask him about it then.

I looked at the budget again last night, and we'll do just fine, as long as we stick with it. DFi says he's game, as long as he doesn't have to sell his truck. While getting rid of that payment would be a huge help, he just doesn't want to give up his "baby". He works so long and so hard that I just can't make him do it. So, the truck stays!

In house news, I was pre-approved for the mortgage yesterday (the house will be in my name only, DFi will not be on it and his income is not being considered in approval for the loan.) and the Realtor is coming over tomorrow tonight to see the condo. I plan to list next week after the holiday! I'm so excited!!!!

 

[nowellsl]

I think it's great that you're thinking about all this before you get married! Too many people don't and it causes big headaches later! Good luck and have a great wedding/honeymoon.

 

[Chicago526]

I think it's great that you're thinking about all this before you get married! Too many people don't and it causes big headaches later! Good luck and have a great wedding/honeymoon.

I told him we can talk about it now or fight about it later. I'd rather talk!

Thanks for the good wishes!

 

[MrsPete]

In house news, I was pre-approved for the mortgage yesterday (the house will be in my name only, DFi will not be on it and his income is not being considered in approval for the loan.) and the Realtor is coming over tomorrow tonight to see the condo. I plan to list next week after the holiday! I'm so excited!!!!

We did the same thing when we bought our first house. We purchased the house three days before our wedding, and by using only DH's income we qualified for a first-time home owner's loan at a good rate -- together we made too much money.

Do add his name to at least the title in the near future though. If you should die unexpectedly (God forbid), you'd want him to have clear ownership of what is -- in reality -- a joint purchase. This detail is too important to leave to the whims of the state, should a tragedy occur.

 

[luckofthedraw]

What GREAT ideas! Love the pay off any "leftover" funds on a debt the day before payday. I just wrote a check since tomorrow is payday.
We're down to owing only the mortgage, and have found a really cool tool. Have no affiliation with them, by the way. There is a company called manageyourmortgage that deducts your monthly payment into biweekly components. You end out paying 13 payments a year, but the savings REALLY add up. There is no charge to do this (they're making money off the float in your money). We have 21 years left on the mortgage, and if we do nothing else, we will save 3 1/3 years and 10's of 1000's of $$$. Of course, I'm cascading debt, snowballing debt, whatever you want to call it, so that payoff date will shorten even more. Now if I figure in this new idea (use leftover funds to pay off debt) that'll change yet again.
Wow! Can't wait to figure THAT one out. I am ready to get this house paid off and owe nothing but living expenses!!
Oh yeah: my tips on getting started. The 10-10 principle. Find ways to cut 10 expenses by $10, and you have an instant $100. I made it a mission when we first started cascading/snowballing, and found an extra $250 easily.
Second tip: do you get a tax refund? If so, call your accountant, and find out how much adjustment you need to make on your w-4's to get that refund on a payday-to-payday basis. Why loan the government your money, at an interest free rate, when you are struggling to live payday to payday? Think of what those two items alone can do to cascade that debt down??? However, do NOT do the w-4 adjustment without your accountant's help.
Good luck all! One day we should have a Cash-Only Gathering down in Orlando to celebrate our successes!

 

[justcruisin]

I just traded in my 2003 acura mdx for a 2000 honda crv. YIKES... no DVD in the back for the kids ... my "new" car does not even have a keyless entry. Dave Ramsey has really gotten to me!

 

[armywife]

I love this thread! You guys are so supportive and motivating! This may be off topic but- has anyone noticed how debt is such an accepted part of our society now a days?

I've been a little obsessive about being debt free the past few years and if I've ever mentioned paying off my cc or a loan all my friends always comment about how EVERYONE has debt & we always will. The comments sort of annoys me, but I let it slide off my back and think how someday I will have way more to retire on & hopefully traveling the world when they won't be able to retire!

Are these people justifying their debt/spending or are they secretly envious?

 

[tink2dw]

Anyone with a fico score of 500 and over, can Purchase or Refinance their Home.

The hardest scenio to fund a Purchase or Refinance is someone with no debt, no credit cards and no mortgage payment. It's next to impossable.

It's easier to fund someone with a few late payments. And even if you have some debt but pay your mortgage on time each month, that makes a Lender want to Loan you enought to refinance plus cash out to catch up that debt!!

 

[dvcgirl]

I love this thread! You guys are so supportive and motivating! This may be off topic but- has anyone noticed how debt is such an accepted part of our society now a days?

I've been a little obsessive about being debt free the past few years and if I've ever mentioned paying off my cc or a loan all my friends always comment about how EVERYONE has debt & we always will. The comments sort of annoys me, but I let it slide off my back and think how someday I will have way more to retire on & hopefully traveling the world when they won't be able to retire!

Are these people justifying their debt/spending or are they secretly envious?

Yes, debt is totally accepted in our society these days. Down the road this mentality is going to cause big, big problems in this country. I honestly don't know what people think is going to happen when the get older. The entitlement mentatily is another huge part of our psyche these days. Expensive car payments, expensive trips, tons of electronics...it's really out of control.

I'm in my mid 30s and I'd say that half of our friends are in debt, CC debt that is...along with car loans, mortgage and some are still even paying off college loans. I'd say that 25% aren't in serious debt, but they do have car payments and mortgages and spend nearly every cent that is left after those bills are paid. Another 15% aren't in serisous debt and even contribute the maximum to 401K plans for retirement...but that's it...nothing extra. And let's face, that won't be enough. Maybe 10% are debt-free (except for mortgage payment), max out 401Ks and actively save for retirement and college for their children.

Thirty years from now people will have to work well into their 70s....and not a little part time job, but a full-time job so that they can afford to eat.

 

[dvcgirl]

I just traded in my 2003 acura mdx for a 2000 honda crv. YIKES... no DVD in the back for the kids ... my "new" car does not even have a keyless entry. Dave Ramsey has really gotten to me!

Good for you JustCrusin! That's great!

 

[melaniemiller2002]

Anyone with a fico score of 500 and over, can Purchase or Refinance their Home.

Yes, but I am not too keen on paying 10% (or higher) for a mortgage. It makes for an ungodly mortgage payment, especially on a $350,000 house. Even with a FICO of around 650, which is neither really good nor really bad, you would be coughing up around 7.5%-8%. FICO scores won't affect us because we are using my hubbie's VA, but I still shudder to think what kind of mortgage payments some living around us must have.

Melanie

 

[Chicago526]

Do add his name to at least the title in the near future though. If you should die unexpectedly (God forbid), you'd want him to have clear ownership of what is -- in reality -- a joint purchase. This detail is too important to leave to the whims of the state, should a tragedy occur.

If we have wills, would I still need to do that? If I leave him everything, won't that automaticly give him the house anyway?

 

[Chicago526]

Oh, and in other news, my condo sold in 2 days for $3,000 under asking!

We get to go house hunting this weekend!

 

[geetey]

If we have wills, would I still need to do that? If I leave him everything, won't that automaticly give him the house anyway?

It would depend on how your will is worded. Our home is titled in my name only (even though we are both on the mortgage) but our estate will take care of everything if I should die before my dh.

and... CONGRATS on selling so quickly!