Debt Reducers

[yupikgal]

We have (two) mortgages with Countrywide, I should really get ahold of them, although our first one is low (under 6%) but it sounds like it's still worth a try? I've been considering rolling our cc into our mortgage, I'm not sure if it's the best idea though...

Kelly

 

[yupikgal]

Wow, $800/month extra is a lot! I wish I had that much extra to do something with other than just meet expenses. Yesterday I cut down on our cell service, saving $55/month. I also cut out an additional internet account I was keeping until everything got switched over, that was only $3, but everything counts, and one less bill I have to worry about paying! I am working diligently on trying to cut out expenses that could go towards debt. Wish me luck and keep it coming with the good ideas!! Kelly

It happens to all of us, jut get right back on track and you'll be OK. We'd originally planned on paying an extra $800 a month on our mortgage to get it paid off in 3.8 years and we did it for two months and it felt like the end of the world. I was constantly worried that some payment I'd forgotten about would post and bring our checking account below $250 and thus incur fees. I was a nervous wreck. Sooooooooooo, we've decided to pay an extra $100 a month on the mortgage and put the rest into different savings accounts (vacation, savings, retirement, college, etc.) With the extra $100 payments, our mortgage will still be paid off in 19 years

**WHAT DOES DAVE RAMSEY SAY ABOUT THIS??** (I wish I had read Dave Ramsey before and scraped the $$ together for a 15 year mortgage -- hindsight is 20/20 ),

Hang in there. We all have setbacks. Just make sure you pay off the CC bill before it's due so you don't incur and residual interest charges and then make sure you put the CC away.

Oh, and congrats on getting a Wii. They're so much fun!

 

[NCTWINSMOM]

Friends, I need help!

I blew the debt snowball and budget last week. I used a CC to buy a Wii. I didn't have room in the budget and didn't have anything saved for the expense so I found an old CC and just charged it. Why oh why did I do this? I know all the rules but just had a moment of weakness.

I plan to take my next pay check and use all of it to pay off the Wii.

Has anyone else had a weak moment and fell off?

The good news, I am half way through paying off the second CC and will be finished with it in two more payments. I am still not going to Disney until I can pay cash!

As the previous posters stated we all have moments. I've had small ones thus far but almost fell off this weekend...thanks DH!

Just get back to the plan and stay focused. Imagine how good it will feel to pay cash for it without having to worry about the consequences all 29% of them!

 

[NCTWINSMOM]

Wow, $800/month extra is a lot! I wish I had that much extra to do something with other than just meet expenses. Yesterday I cut down on our cell service, saving $55/month. I also cut out an additional internet account I was keeping until everything got switched over, that was only $3, but everything counts, and one less bill I have to worry about paying! I am working diligently on trying to cut out expenses that could go towards debt. Wish me luck and keep it coming with the good ideas!! Kelly

Remember every dollar counts regardless of what someone else can pay extra to a debt. I think $58 dollars is GREAT! With each extra payment that is lowering the debt altogether...

Try having a yard sale or sell items you can live without and apply to the balance of that bill. That helped us to pay off 2 cards. Now use that money to apply to the next (snowball effect). We are now up to an extra payment of $700. We started with $467 (we paid off the truck) and have built up after paying off two bills.

 

[akmom]

It seems like I am NEVER going to be caught up on my bills. I paid off the van and should have an extra $290, but I still can't seem to find the money to pay all this months bills on time. I hate being behind!!!

 

[NCTWINSMOM]

Have you written down all your expenses and subtracted what you make? Do you have an overage or not enough?

 

[ameraumi]

Our tax refund should hit the bank this week and then CC#1 will be paid off! Next up, Discover.

I had put the vacation money in our budget and I have transfered that from ING to the Disney card and the vacation is now PIF. I also had more in the savings then what I had thought, so we are in great shape for spending money! That feels wonderful to say.

I am in the process of redoing April's budget and move money around more. I am up to a $1400 snowball and I want more!

 

[tinaluis]

Wow, $800/month extra is a lot! I wish I had that much extra to do something with other than just meet expenses. Yesterday I cut down on our cell service, saving $55/month. I also cut out an additional internet account I was keeping until everything got switched over, that was only $3, but everything counts, and one less bill I have to worry about paying! I am working diligently on trying to cut out expenses that could go towards debt. Wish me luck and keep it coming with the good ideas!! Kelly

$800 is a lot, especially to us as a one-income family, and we decided that it was just too much. Sure, we would have been able to sustain it for a little while more but it felt like there was absolutely no wiggle room in our budget then.

What Dave Ramsey says about mortgages is to get a 15 year instead of a 30 year from the start. If we had done that, our mortgage would be paid in full in 2010. Since we started with a 30, then refinanced down to a 15 and then again down to a 10, we won't be paid off until 2014. Still better than the original payoff date of 2025 with the 30 year, but not as good as the 2010 payoff date on the 15 year. Of course, when we bought our home we couldn't even imagine coming up with any extra $$ on top of the mortgage payment. We thought we were living so lean then. Hah, we were wasting so much $$$ without much to show for it.

It took a period of being on umemployment to show us how lean we could really live. Fortunately we had $$ in savings as a back up, but we really cut our expenses to the bare bones and it was then that we vowed we'd accelerate our mortgage payments when things picked up for us work-wise. We tried that for a few months but it wasn't working for us so what we've decided to do is to save $300 a month in savings (ING), pay an extra $100 a month on our mortgage and transfer any remaining $$ over to easy access savings so we have it if we need it or if we want it. It may take us a little longer to pay off our mortgage, but not that much longer, and we're OK with the trade-off.

 

[barbmouse]

I'm in!!! This is a great thread...very inspirational!! keep posting all the success stories as well as struggles. They all help us realize that we can do this!

The debt claculator is great!!! Thanks for posting it!!

 

[StephMK]

Bumping this back up, need the inspiration. Congrats to everyone making progress!! Awesome rate on the mtg - wtg!

I got my first full paycheck & paid off a $500 balance. That card won't be used & probably closed eventually. Unfortunately, I got a little carried away paying stuff and had to transfer $200 from savings til payday. I will pay it back to savings Monday.

Anyone else get discouraged sometimes? I know we didn't get into debt immediately, but it'll take longer to get out than it did to get in. Dieting in any form just sucks and I get so incredibly mad at myself for this dumb mess.

How do you pick yourself back up when you feel the weight???

 

[disney-inspired]

Count me in!

I started at 2,517.03
Now I'm down to $1500.

I need to get rid of this debt so I can save guilt free for my next Disney trip!

 

[NCTWINSMOM]

Bumping this back up, need the inspiration. Congrats to everyone making progress!! Awesome rate on the mtg - wtg!

I got my first full paycheck & paid off a $500 balance. That card won't be used & probably closed eventually. Unfortunately, I got a little carried away paying stuff and had to transfer $200 from savings til payday. I will pay it back to savings Monday.

Anyone else get discouraged sometimes? I know we didn't get into debt immediately, but it'll take longer to get out than it did to get in. Dieting in any form just sucks and I get so incredibly mad at myself for this dumb mess.

How do you pick yourself back up when you feel the weight???

Reading how you jumped in and paid off your balance was pure inspiration to me! WOW what a feeling that is to pay something OFF!

As for discouraged yeah I do...I see this huge number looking at me and I see our plan for the next 21 months and it scares me. Can we do it? Will we fail or do something stupid to push back our payoff date? So yeah I'd say that we all get discouraged but hopefully sticking together will inspire us all to succeed and finally be rid of that "weight".

Next goal is to pay $700 to Best "Lie" on Friday!!!!!!!! One small goal at a time!

 

[jenm2878]

We have been snowballing and putting extra towards debt to the tune of $22,000 in the last year. That being said, now I'm torn about something. We have a savings account with a couple thousand in it ($2-$3k usually) that we use for 'didn't see that coming' events and vacations. My DH got a bonus that we knew about but got around 3 times as much as we expected. Right now we put it into savings because it's not enough to pay any one thing off. We've been talking about having kids next year so we need to save some $ for when I'm off work for 6-12 weeks. (ST Disability will only cover a portion)

Should we be using this cash to pay down more bills or is it better to sock it away for later? FWIW, we got a decent amount back from our fed return and put the entire thing towards debt. Like I said, it's a nice chunk of money but it's not enough to pay anything off, and our next thing we plan to pay off will still be done in Feb '09. This would only cut the payments down by 4 or so months. But that's 4 months the snowball could be going towards our scary student loans. (we're down to the mortgage, one car loan, LOC and 2 student loans. Student loans are huge but are at less then 3% interest)

 

[akmom]

Have you written down all your expenses and subtracted what you make? Do you have an overage or not enough?

Yep, I did that and according to that math I should have plenty of money. Where it all goes is BEYOND me.

 

[Chicago526]

We have been snowballing and putting extra towards debt to the tune of $22,000 in the last year. That being said, now I'm torn about something. We have a savings account with a couple thousand in it ($2-$3k usually) that we use for 'didn't see that coming' events and vacations. My DH got a bonus that we knew about but got around 3 times as much as we expected. Right now we put it into savings because it's not enough to pay any one thing off. We've been talking about having kids next year so we need to save some $ for when I'm off work for 6-12 weeks. (ST Disability will only cover a portion)

Should we be using this cash to pay down more bills or is it better to sock it away for later? FWIW, we got a decent amount back from our fed return and put the entire thing towards debt. Like I said, it's a nice chunk of money but it's not enough to pay anything off, and our next thing we plan to pay off will still be done in Feb '09. This would only cut the payments down by 4 or so months. But that's 4 months the snowball could be going towards our scary student loans. (we're down to the mortgage, one car loan, LOC and 2 student loans. Student loans are huge but are at less then 3% interest)

Well, a year or two a go, paying down debt that costs you more in interest than what you earn keeping it in the bank would be the sure way to go, you can always charge an emergency if/when it comes up. But, now with the credit crunch and reports of CC companies lowering credit limits of even their good customers, that may not be as safe a bet any more. If you pay down a CC and then they lower the limit, you may not have enough room to charge if you have an emergency and not enough in savings to cover it.

In your situation (planing to have kids), I'd bank the money (in an online bank account that earns a decent rate) to save for a rainey day. I'd only use the money to pay down debt if you were planing to stay kid free a while longer.

 

[NCTWINSMOM]

Yep, I did that and according to that math I should have plenty of money. Where it all goes is BEYOND me.

Hmmm...maybe you should try the envelope system (DR talks about that). We haven't had to do the envelope system because we've had the money at the end of the month, but maybe it would help you keep track and only spend what's in the envelope for each area of your budget?

Example:
Groceries Budget: $100.00 a week goes into the Grocery Envelope and you only spend that $100.00 on groceries and not a penny more.

Entertainment: $50.00 a week goes into that and so on.

Debt Reducer: $50.00 goes into that and is not touched for anything other than paying down debt(s).

Other things I recommend is record daily any spending done that day in an excel spreadsheet (you can also right it down daily in a notebook). Also have your spouse or other accountablility partners take a look at your budget, maybe they can see something you missed?

Just don't GIVE up until you get the numbers matching...it would drive me crazy not finding money that should be there!

...anybody else got any ideas / suggestions?

 

[NCTWINSMOM]

We have been snowballing and putting extra towards debt to the tune of $22,000 in the last year. That being said, now I'm torn about something. We have a savings account with a couple thousand in it ($2-$3k usually) that we use for 'didn't see that coming' events and vacations. My DH got a bonus that we knew about but got around 3 times as much as we expected. Right now we put it into savings because it's not enough to pay any one thing off. We've been talking about having kids next year so we need to save some $ for when I'm off work for 6-12 weeks. (ST Disability will only cover a portion)

Should we be using this cash to pay down more bills or is it better to sock it away for later? FWIW, we got a decent amount back from our fed return and put the entire thing towards debt. Like I said, it's a nice chunk of money but it's not enough to pay anything off, and our next thing we plan to pay off will still be done in Feb '09. This would only cut the payments down by 4 or so months. But that's 4 months the snowball could be going towards our scary student loans. (we're down to the mortgage, one car loan, LOC and 2 student loans. Student loans are huge but are at less then 3% interest)

First let me say WOW to the tune of $22K! That is outstanding and I {{{{{APPLAUD YOU}}}}}.

Second (IMO) I would not feel torn about keeping that money in savings for your baby fund, because you will need it! It's better to have the money in savings and use that when baby comes then using a CC to put you further in debt later (and more months behind).

I would continue paying down what I could of the debt but also increase the baby fund cushion to the tune of your maternity leave and what you will need monthly to cover your normal expenses plus baby expenses. Speaking from experience there nothing worse than "thinking" you've covered all bases only to have your children arrive two months earlier than you expected .

My point is just be prepared for the unexpected...plans have a way of coming unglued! Besides if you don't use all the baby fund it can finish paying off the debt and instead of 4 months behind it's 2.

 

[akmom]

Hmmm...maybe you should try the envelope system (DR talks about that). We haven't had to do the envelope system because we've had the money at the end of the month, but maybe it would help you keep track and only spend what's in the envelope for each area of your budget?

Example:
Groceries Budget: $100.00 a week goes into the Grocery Envelope and you only spend that $100.00 on groceries and not a penny more.

Entertainment: $50.00 a week goes into that and so on.

Debt Reducer: $50.00 goes into that and is not touched for anything other than paying down debt(s).

Other things I recommend is record daily any spending done that day in an excel spreadsheet (you can also right it down daily in a notebook). Also have your spouse or other accountablility partners take a look at your budget, maybe they can see something you missed?

Just don't GIVE up until you get the numbers matching...it would drive me crazy not finding money that should be there!

...anybody else got any ideas / suggestions?

Thanks for the encouragement. I'm not going to give up. I know we aren't living beyond our means. I just have to figure out how to get the bills on a system. I've been juggling late payments for so long it is insane.

 

[jenm2878]

Yep, I did that and according to that math I should have plenty of money. Where it all goes is BEYOND me.

What really helped us was using Quicken to track where everything was going. After doing that for a month or two it was easy to see where things were going and where we needed to cut back. I think I downloaded it off their website for around $20.

 

[jenm2878]

First let me say WOW to the tune of $22K! That is outstanding and I {{{{{APPLAUD YOU}}}}}.

Thanks. We have HUGE student loans but everything else is pretty reasonable. We live in a fixer-upper and continue to live like college students so it hasn't been too painful. (We live like college students partially because we're cheap/trying to pay down debt and partially because we just haven't gotten around to replacing hand-me down furniture and the like) We really wanted to move into a nice house in the next couple of years, but with the market the way it is it looks like we'll be here for a while. No matter, staying here will definitely help us to get things paid down.