It will take us 4 years to get out of debt

[crisi]

Thanks everyone for their words of encouragement. We used to live like the above, then stopped when our income jumped up considerably. I think that's what our problem was. I figured if we had a 6 figure income, I could stop cutting coupons and shopping the clearance items! Couple that with huge medical bills, and just living above our means...well, you get the picture.

This is SO easy to do. Its like a switch goes off and you say "I'm rich now, I don't have to worry about it." But a six figure income spends really fast that way, isn't that much money anymore (and I know there are budget boarders living on half that that will laugh at that, but it is true - especially once you convince yourself you are "rich" and therefore can afford expensive shoes or a brand new car or even just not bothering with coupons at the grocery store) - and if you start justifying things based on "being rich" you'll find yourself in lots of debt fast.

 

[crjack]

This is SO easy to do. Its like a switch goes off and you say "I'm rich now, I don't have to worry about it." But a six figure income spends really fast that way, isn't that much money anymore (and I know there are budget boarders living on half that that will laugh at that, but it is true - especially once you convince yourself you are "rich" and therefore can afford expensive shoes or a brand new car or even just not bothering with coupons at the grocery store) - and if you start justifying things based on "being rich" you'll find yourself in lots of debt fast.

Guilty of that as well.....that's why I check out the budget board to try and get back on track! I'm good with making sure the big things are covered like 401K's, 529's, etc. but it's the supermarket spending, kids clothes, sports items, etc. that need to be trimmed.

 

[britt54311]

We are in the same situation you are in, and it will probably take us four years to get out of debt also. We didn't have much debt when I graduated from college in '03 then I made so much more money and the spending got out of control (remodeling our house, few Disney trips and other stuff). I just feel sick to think how much debt we got ourselves into . Starting Feb. we will start our debt reduction, no more frivilous spending. Good luck!!

 

[FirstTimertoDiz]

We used to be the kind of family that had no debt (except for mortgage). If I did buy something on credit, like furniture, we would pay it off within a couple of months.

I don't know what happened to us over the last few years, but our debt is just insane now. I feel it is all of a sudden out of control, so I'm getting into the "snowball effect" method of debt reduction.

I figured it out yesterday, and it will take 4 years to get completely out of debt (except for mortgage). I will not reduce our small savings (lol), but I'll reduce our retirement savings for the 4 years down to 4% (company will match). I'm still trying to figure out if we can get any Disney trips in...lol...I know that should be the first thing we cut out!!

4 years just seems soooo long from now. I don't think our cars will last that long, they're 2000 & 2002.

Just wondering if anyone else got themselves into such a huge debt like us, and it's going to take YEARS to get out?

Well, if you would like some company on your journey, I will be right there with you- I actually have ours figured out to be paid in about 4 1/2 years, but since we are trying to have another baby, that could very easily change along the way. We should keep a thread to keep each other motivated along the way! Good luck to you.

 

[Misty89]

Wishing you good luck~ you can do it!
I am in the same boat, and it will take me 2 years ( or less) to get out of debt. i have my plan set up a bit different, I work x amount of hours extra ( in a job sharing program) to cover what i need extra for my debt reduction each week.
I did want to chime in about Vehicles however
I worked with auto emissions for 7 years, I worked w/ car that were brand new to cars that were 20 Y/O. take it from me.....your cars will make it. Cars ARE MADE to last as long as they are not abused. Change the oil on time, service it when it needs it,etc.
and my ramble for the day....
my first car was a 1988 T-bird and it was awesome, everyone told me not to buy it because it has 122k miles on it, and it was old - this was 1993 so the car was 5 years old.. Well, i had to have that car, it was so cool.... and guess what! I owned and operated that car for 10 years before i sold it with 198k miles on it, we took it to Florida and back to Wisconsin w/ 175k miles on it with out a single worry. I sold it because a 2 door car was not practical w/ 2 children at that point ( it was still running smooth and strong Btw) the kid i sold it to racked it up 2 mths after he bought it - my DH saw it at the Junk yard later that summer )
it would have ran forever had it not been smashed up.

 

[alicenwonder99]

Well, if you would like some company on your journey, I will be right there with you- I actually have ours figured out to be paid in about 4 1/2 years, but since we are trying to have another baby, that could very easily change along the way. We should keep a thread to keep each other motivated along the way! Good luck to you.

Yes, I'll start a thread called DEBT REDUCERS. We'll post as often as we can. It will be our "lifeline" in case we feel the itch to spend..lol.

 

[dcfromva]

I did want to chime in about Vehicles however
I worked with auto emissions for 7 years, I worked w/ car that were brand new to cars that were 20 Y/O. take it from me.....your cars will make it. Cars ARE MADE to last as long as they are not abused. Cjhange the oil on time, service it when it needs it.

Last night, I just read an article from Consumer Reports (dated October 2007), "Make your car last 200,000 miles It's easy and can save you thousands in the long run"
They had 6,769 readers reporting vehicles with 200,000 miles or more which they said only represented about 1/2 of 1% of the respondents in their survey. But, they figured far more could be hanging onto to their cars longer and saving money because the cars are built to last.
Mainly, the advice in the article was the same as you have given--don't scrimp on scheduled maintenance (follow manufacturer guidelines in the owner's manual) and above all change the oil when it is recommended.

DH has a relatively new van--purchased in 2002 (seems like yesterday), but it has about 125,000 miles on it. We don't want to replace it for at least 2 1/2 more years, so I am really hoping it will go to 200,000. ( DH is very good about getting the service done on it, so I am hopeful. )

 

[alicenwonder99]

Last night, I just read an article from Consumer Reports (dated October 2007), "Make your car last 200,000 miles It's easy and can save you thousands in the long run"
They had 6,769 reader reporting vehicles with 200,000 miles or more which they said only represented about 1/2 of 1% of the respondents in their survey. But, they figured far more could be hanging onto to their cars longer and saving money because the cars are built to last.
Mainly, the advice in the article was the same as you have given--don't scrimp on scheduled maintenance (follow manufacturer guidelines in the owner's manual) and above all change the oil when it is recommended.

DH has a relatively new van--purchased in 2002 (seems like yesterday), but it has about 125,000 miles on it. We don't want to replace it for at least 2 1/2 more years, so I am really hoping it will go to 200,000. ( DH is very good about getting the service done on it, so I am hopeful. )

Our 2002 is a Dodge Grand Caravan. The month we paid off the van, it need $4000 worth of work done. We were so careful with getting the scheduled maintenance done. Anyway, it has around 60,000 miles on it, so here's hoping it will last many more years to come.

Our other car is a 2000 Kia Sportage. My dh and our oldest dd drive it. It has over 85,000 miles on it. The car is just a pile of ****!! We don't think it's going to last too much longer. I'm hoping it will last at least 2 more years.

 

[hentob]

It just sickens me that I allowed our family to get into this mess. I say ME because I'm the one who takes care of the bills and the finances.

Thanks!!!

Please don't beat yourself up You are doing something about it, so don't look back...only forward

48 months is not so bad!

 

[dcfromva]

Our 2002 is a Dodge Grand Caravan. The month we paid off the van, it need $4000 worth of work done. We were so careful with getting the scheduled maintenance done. Anyway, it has around 60,000 miles on it, so here's hoping it will last many more years to come.

Our previous van was a 1994 Dodge Grand Caravan. (It did need a transmission replacement at about 60K thankfully, it was covered under warranty). We handed it off to a relative in 2002 with about 125K miles on it. It has not needed any major repairs and I believe it has over 200K on it now. So maybe the 4,000 you put into your van will keep you running for a while. (hoping anyway).

With DH's current vehicle, we had to put 2K into it this past summer--a compressor went out on it (along with a couple of other things) and before that we had to replace a front bearing, so it does start a person to worry--what's next?

But, I guess the key is to set aside some money for repairs because things do wear out.

The article I was reading in Consumer Reports listed an example of holding a Honda Civic EX for 15yrs vrs trading it off every 5 years. The maint and repair bill was $18,300 (for keeping the one vehicle for 15 years) vrs the new car ever 5 yrs with a maint and repair bill of $6,200. The biggest difference was depreciation. The 15 yr car suffered $14,900 vrs $35,500 for a new car every 5 years. And, the new car every 5 years paid more finance and interest, fees and taxes and insurance. CR estimated in their comparison a $20K savings (keeping the same vehicle 15 years) plus another potential 10+k in investment earnings (assuming you invest the savings).

 

[Disneyoverload42]

Both our cars (the ones that have over 170k each) are 99 dodge caravans - we bought them both at around 60K and probably have put maybe 5k of work in them over the last 7 & 3 years we've had them. It can be done
We don't follow the oil change recommendations terribly well but we do check all our fluids regularly. Seems electrical systems are what we've had the most trouble with.

but back to the thread topic, we paid them both off around August of last year and not having those car payments has helped our budget SO much. Even if we do a $1000 repair every 3 or 4 months, we are coming out ahead compared to what our payments were.

 

[housemouse]

The method is that if you have lets say three credit cards, one with a minimum payment of $50, one with a miniumum of $75 and one with a minimum of $150. You would start with the lowest payment and put any extras towards that $50 payment, when that is paid off you take that $50 you were paying on that card and now add it to the $75 minimum on the other card, so you would pay a minimum of $125 and just go down the line.

Hope that makes sense.

Actually, it's not the payment you look at but the balances.


say you have 3 credit cards with 1k, 2k and 3k balances and $50, $100, and $75 payment per month respectively.

You keep on paying each payment every month but all extra you can scrape up goes to the card with the lowest balance each month until paid off. Then take that payment and add it to the $100 payment on the 2k balance plus all extra you can scrape up and throw it at it til it's gone. Then you take the $150 payment + the $75 payment + all extra money you can find and wipe out the 3k. Make sense?

 

[KirstenB]

Hi, OP here!!

Thanks everyone for their words of encouragement. We used to live like the above, then stopped when our income jumped up considerably. I think that's what our problem was. I figured if we had a 6 figure income, I could stop cutting coupons and shopping the clearance items! Couple that with huge medical bills, and just living above our means...well, you get the picture.

Right after Thanksgiving, I started cutting my coupons again, shopping in the clearance sections again, and we're following our budgets (well, trying hard to).

It just sickens me that I allowed our family to get into this mess. I say ME because I'm the one who takes care of the bills and the finances.

Thanks!!!

OP, thanks for being brave and candid! We got into huge debt in college, and it took us 2 years to get out. 2 years of no restaurants, no movies, etc. Our situation was different because we were making relatively little money compared to our debt, so our reduction was pretty extreme.

DH's salary has gone up a lot over the last few years, so I can imagine what you're talking about. It's a bit like a kid in the candy store. He travels a lot for work, and I've been doing a lot of clothing shopping, etc. I really appreciate your reality check, and will try to scale back.

Anyway, I bet a lot of us have been in your shoes. No judging, just wanted to wish you luck.

 

[MrsPete]

It took us 13 years. When we were married in 1990, these were our facts:

$200 between the two of us in cash/checking account
A brand-new mortgage
A one-year old Nissan with a payment of $135/month
No credit cards or other debt
Plus two college degrees and two jobs

13 years later we were in a larger house with NO mortgage.
Three paid-for cars in the driveway
Emergency savings, college savings, and retirement savings are on track
Two credit cards, paid in full each month
Still two college degrees and two jobs

You have to do without things to make this happen. People thought we were nuts for sharing a car for the first three years of our marriage (and we lived way out where there was no public transportation), but it made SUCH a difference in our budget -- we didn't add a second one until it was absolutely necessary. We made-do with hand-me-down furniture, rarely went out to dinner, etc.

Every bit of effort was worth it. Our girls are a tween and a teen now, and we can afford to travel with them frequently. They won't have to worry about how to pay for college. Taking our oldest to the orthodontist wasn't a financial concern.

 

[T. Lynn]

Quicken has an awesome program that helps you keep on track of making extra payments. You just click on the accounts (if you programed them into quicken) that you want pay off and it figures everything out for you.

 

[wulfgeat]

The Debt Snowball really does work, too. There is such a feeling of pride when you get just one thing paid off. It energizes you for the next and then when it is gone you feel even better.

I occassionally run. When I have a set distance that I want to go I just keep thinking in terms of how little I have left to do. In your situation, think about how long your life will be. Then think about how little time to pay off your debt really is. I tell myself on the last mile, "10 more minutes. I can put up with anything for 10 minutes. Don't quit"

You can put up with anything for 4 years to get your debt paid off. Don't Quit!

 

[StephMK]

Hi, OP here!!

It just sickens me that I allowed our family to get into this mess. I say ME because I'm the one who takes care of the bills and the finances.

Thanks!!!

Yeah, I feel that guilt too because I handle our finances as well. Our mess comes from me being at home and only working PT while medical bills, moving expenses & house/kid,etc stuff bills keep creeping up. However, you, like us, are part of a family & I don't know about you, but my DH is pretty ignores our financial info. He knows about where we are overall but that's about the extent of his interest. It's hard for me to tell him no to stuff since he is the one bringing it home. I feel he's part to blame because he knows but chooses to ignore it most of the time. So it's probably not just you.

 

[Aristomommy]

Yeah, I feel that guilt too because I handle our finances as well. Our mess comes from me being at home and only working PT while medical bills, moving expenses & house/kid,etc stuff bills keep creeping up. However, you, like us, are part of a family & I don't know about you, but my DH is pretty ignores our financial info. He knows about where we are overall but that's about the extent of his interest. It's hard for me to tell him no to stuff since he is the one bringing it home. I feel he's part to blame because he knows but chooses to ignore it most of the time. So it's probably not just you.

Well, I know the person who handles the finances often feels guilty when money is tight or debt rises. But I would say that the other spouse who completely tunes out and doesn't participate and support the other one is just as guilty. Unless there is spending that is being hidden or something like that, I would put more blame on the spouse who doesn't participate. I usually pay the bills and for many years DH didn't participate. Now I want him more involved and we make decisions together. We have shared goals and know when we need to watch our spending, how much to spend on birthdays, lunches etc.

 

[0hmyheck]

Live like no one else so you can live like no one else. I gave the book to DH for a birthday present and he is finally excited. I am now reading it and can't wait to start.

I put my entire check into a credit union account and will do the same with the next one and I will have my emergency fund set up. I did this before reading the book because DH said it was one of the first things to do.

I haven't had time to read yet but am excited to see what is in store for me.

I know for a fact the DVC is going to get sold! The rest is just following the plan and paying off the debt.

My question is this: We have always kept seperate finances. Can we do the plan seperate or do we have combine all debts and income?

Good luck everyone!

 

[SarahTel]

The Debt Snowball really does work, too. There is such a feeling of pride when you get just one thing paid off. It energizes you for the next and then when it is gone you feel even better.

I completely agree. We tried DRs Snowball method a few years back & we definately felt it was working. As each small debt was cleared, we got a boost to take on the next...etc. Unfortunately for us, we were just in that much debt that we needed something with a little more umph! We ended up on an IVA with this company & we are currently 2 years into it.

It would have taken forever with the snowball method - but for people with a little debt (£100 - £10,000) it is a fantastic technique.