Official DIS Debt/Finance Support Thread

[disneysteve]

What's everyone else's reward for being debt free?

When I paid off my student loans, we finally got cable tv. We only got the limited basic service, but it was always something I just wasn't willing to pay for before.

 

[DMRick]

Good for the OP, starting a support group. Years ago, hubby and I taught financing to young mom and dads. The support group that came from that is still alive (and I bet it's been 20 years). Hubby and I backed off as much as we could, during the classes, once we started them out, and let the young marrieds talk with each other, and it's amazing the support they could show each other, as well as becmoing accountable to another couple or two. While we could give the tables, and suggestions on saving and not spending, that wasn't what they were after. They wanted the practical advise...how do I shop for food and not spend a fortune (they shared lists and recipes). What do we do in the evening to get ready for tomorrows lunches (so kids don't buy school lunch), and how do we make them nutritious, yet likeable. How do we buy those name brand clothes that are so important to a young teen (you trade among each other..you garage sale for each other, and you visit the mission...if many of the kids in the kids church parents are doing this..it becomes "cool"), and what do we do if something unexpected comes along..how do I not use the charge card. This was harder, but then the talk became, what do I cut to get an emergency fund started, that would stop me from using my credit card, or using store credit. Baby sitting got shared, as well as helping each other with chores and fixing items around the house. (That soon got spread to helping others in the church, that needed some work done, and trading for canned food made from gardens, babysitting, a ride, etc). Do any of you have a group at home, that you can start a group like this?

 

[EthansMom]

Subscribing....

DH and I started living frugally and using a budget about 6.5 years ago as a method to pay down debts so that we could go to a single-income household when we had kids. Since then, we've paid off all of our debt except for the mortgage, paid cash for home remodeling, paid cash for a new car, and weathered DH being out of work for 6 months. We did all of this by living frugally and using the Snowball Method to pay off debt.

I just wanted to let those of you who are just starting out that it can be done! It won't happen overnight, but you didn't get in debt overnight. And each debt that you pay off gives you a little more financial breathing room.

I'm cheering for everyone!

 

[tinker&belle]

Info: My husband and I are both 25. He contributes 4% to his 401k, which his employer matches. My employer contributes 10% automatically, I don't currently contriute at all. (I make about 50% of what he makes)

I am subscribing too...I've posted about this a few times, but I am glad that there is a thread specifically for this. We have been working on paying off cc debt for over two years (the whole time we've been married). We have one card that has 0% until September and will be paid that month, and another card at prime + 2% for the length that should be paid off a few months after that.

After that we are down to house, cars, and student loans (and one same as cash plan that we are diligently paying, man if we weren't that interest would bite us you know where in the end.)

I get a pretty big raise in July and I am planning on increasing our savings to build up a healthy emergency fund and then begin making larger payments on our car with a higher interest rate.

So I guess I have a plan, but it is nice to have a support thread to cheer each other along.
kfeuer and disneysteve have been a big inspiration to me, I have enjoyed reading their posts on the budget board, in addition to many others.

 

[barbmouse]

subscribing!!!!!!!!!!

 

[disneysteve]

We are on the budget plan for our gas and electricity. We were paying $86.00/month for gas. At the beginning of the year, we had a review of our account and they said $86 wasn't enough and they were bumping us up to $144/month. That was NOT something we were expecting or budgeting for. So then I just got our current bill and it turns out to be a credit instead of a bill. They way overbudgeted us and now we have a credit for almost 2 months. Our payment has now dropped to $84/month.

We ran into this a few years ago. We were on the budget plan and for the year, we were a few hundred dollars UNDER the budget so we got a credit on our final bill of the yearly cycle. We then got a notice saying that based on our usage the prior year, our monthly budget amount was going UP.

Well, that made no sense to me so I called them. The customer service rep told me that those letters are generated automatically by computer. She said I could make the budget amount whatever I wanted. So I made it about $20/month less than it had been since we were so far under the prior year. Worked out fine and we were just about even at the end of the next year.

So don't assume those budget amounts can't be changed or negotiated. If they hike your monthly amount and you don't think it is reasonable, call and ask them to lower it.

kfeuer and disneysteve have been a big inspiration to me, I have enjoyed reading their posts on the budget board, in addition to many others.

Thank you. Glad to help.

 

[scmickeygal]

Subscribing!!! This is a great idea!!

SCMickeyGal

 

[btass]

I just paid off the last credit card!!!!

Now all we have left in debt is my car! That should be done by the end of this year!

Just a reminder for eveyone: If you get a 6-Month Certificate of Deposit at your local bank during the month of June, if comes due during the month of December - Just in time for the Holiday season! I just got one and I am calling it my Christmas Club!

I got a 10 month CD too because my DS has Communion next year and that CD will pay for the party! (10 months brings us to next April, his communion will be in May).

 

[Tree]

Another budgeting tip that's helped us--add up all the expenses that come up quarterly, annually, etc. (things like car insurance, pest control, vet visits, etc.). Take that total and divide it by 12, then have that money automatically transferred to a savings account each month (we use ING). Then when those bills come up the money is already there for it.

We do this as well. It helps keep us on track and not stress out as much.

 

[lnh'smom]

Disneysteve - I had no idea about the computer and the budget amount! Thanks for the tip, I will call them tomorrow. Someone else just said something about thanks for all your advice. Add me too. I have been reading your posts since before I became a member and they always make sense, even if it isn't something you really "want" to hear! So I want to add my thanks to you and everyone else for your tips and advice!

 

[corie161]

I just paid off my car!!! This will be the first month I haven't had a car payment since...1993.
Hasn't sunk in yet, though.

Payoff Party! Congratulations!

 

[corie161]

I'm glad to see such an overwhelming response to this thread. It's always great to bounce ideas off one another.

I'm looking forward to keeping this thread alive. Don't forget to post when you've made a significant accomplishment so that we can all celebrate. Whether it be paying off a debt, adding money to savings or retirement funds, refraining from credit card use or whatever!

 

[alliecats]

Payoff Party! Congratulations!

Thank you!!!! I feel like I should have a party! But that would cost money, and I need that to pay off my cc!

 

[corie161]

Thank you!!!! I feel like I should have a party! But that would cost money, and I need that to pay off my cc!

Oh, but the parties here are free!
Food:



Beverage:


Entertainment


And best of all Mickey and Donald!

 

[Chicago526]

Oh, I just thought of something else we do to help us stay on budget.

Our insurance company gives us the option to bill us twice a year, or once a month. So we chose once a month for all our premiums (except homeowners, our bank makes us escrow, so that's paid once a year out of escrow, although we are paying it monthly which is basicly the same thing). It's free as long as do direct withdrawl for payment. If we didn't it's $3 a month extra. Either way it's a great way not to have those once-every-six-month bills sneak up on you. We also escrow our property taxes so we pay 1/12th of that every month, instead of half in June and the other half in August. Our bank makes us do it, but we would have escrowed anyway even if they hadn't. It's just easier to pay a little each month than to try and save for big lump sum payments. Sure, we lose a little interest but in the long run I feel we are much better off just not having to worry about it.

Now we only have a few yearly bills, like the vet, tags for the car and one or two other things. But they are all small stuff, if we did forget about them and they snuck up on us, it wouldn't be the shock that a $2000 tax bill would be and we'd be in a much better position to come up with the money on short notice.

 

[corie161]

Just wrote out a check to pay off a Medical bill that seems like we've been paying forever on. That free's up $80 a month to go towards something else.

 

[jenr812]

Great thread idea! We've been doing Dave Ramsey since the end of January and recently completed Financial Peace University. Using the debt snowball we've done a great job paying off CCs. They were mostly little balances (several hundred each on about 9 cards plus $1500 on HD) but they add up and with paying just the minimums the balances were going NOWHERE. I paid off Dillards and two capital one cards pretty quickly, and then transfered $1550 in balances to a 0% interest card (was SHOCKED I qualified!). I just paid off our Sam's club last month and will pay off Sears this month. That leaves only our Home Depot which will be paid off in December and the new 0% interest card will be paid off a month after I graduate woohoo!!

It is so rewarding to pay off these cards - especially since we'd previously been paying only the minimum with no glimpse of the light at the end of the tunnel. We will have all debt except the mortgage gone by Christmas 2007 I am so glad we're finally getting on the right track financially and just in time for our income to almost double after struggling for so many years so I could stay home with our kids. I hate that we're "behind" retirement wise but I have run several calculators and we should be just fine (not even counting on SSI - that'd just be extra!) I hate to think about the money we've "lost" by not investing sooner, but there's no use fussing over it! We'll have our 6 month emergency fund by Christmas 2008 (probably a few months sooner) and then we'll max out the retirement accounts and start on the kids' college before knocking out the mortgage. OMGosh I cannot WAIT to have no mortgage payment!! But that won't come for a while, since we are planning to upgrade to a bigger home in 3 years or so.

DH will stop paying child support in either 5 or 8 years and that money is going directly into our retirement accounts in addition to what we will be putting in at that point. I am really looking forward to seeing that account grow by that amount each month

For the financial experts lurking/reading/cheering us on in this thread, do you think it is wiser to add the child support money to our retirement right away or use it towards the mortgage til it's gone first?

Good luck everyone!

 

[ameraumi]

I'm not an expert, but I would think it would be better to use the child support money to go towards a retirement plan instead of paying off the mortgage first. Again, just my thought.

 

[disneysteve]

For the financial experts lurking/reading/cheering us on in this thread, do you think it is wiser to add the child support money to our retirement right away or use it towards the mortgage til it's gone first?

Definitely toward retirement. You need to take advantage of time and compounding. Paying off relatively low interest debt like your mortgage doesn't really benefit you compared to investing for larger returns.

 

[kinntj]

This thread is a nice idea! I don't have any debt I'm worried about, but I am trying to find ways to increase our retirement savings.

My DH is due for a raise in July. Whatever percentage raise he gets, I'm going to bump up our 401K by that plus one percent (i.e., if he gets a 2% raise I'll raise us 3%). We shouldn't feel it. If we keep doing this every year, eventually we'll get up to 15%.

I really have to thank disneysteve, dvcgirl and others for forcing me to realize how much of a priority our retirement savings need to be. I spent too many years in denial and we're going to pay for it!

We also put DH's raises into retirement accounts (starting this year) and don't spend it. We spend 1/4 of DH's bonus and the rest goes into our savings. We're slowly learning to not spend when our money increases. It's a great thing to get your 401K bumped up to the max.

I also thank those that already save, to make saving a little easier for the rest of us. Names mentioned above. Plus, we're also working on getting our college funds increased. This is 2nd priority, but still very important.