My Someday Debt Free Journal

[MelliPaige]

Last year my husband lost his job, we almost lost our house and we still haven't quite bounced back yet. It scared me so bad..what if we didnt have a home to bring our child to after he was born? On the brink of foreclosure, my husband got a low paying job and we are finally getting back on track. That incident was enough to scare me into thinking "Will we always have a roof over our heads?" Something I thought I would never have to think again after we signed our mortgage contract. So it's official, I'm paying off all my debt starting as soon as I can get a job. These bills are ridiculous, anyway, and if we didn't have debt our bills would be under $300 a month! How amazing would that be?
It does mean choosing between being a stay at home mom and a working mom, but I could pay it off before his third birthday and I think he would benefit more from a debt free childhood and being away from me for a few hours a day than he would with me home with him 24/7 struggling to pay bills! And I'm so sick and tired of worrying about money, anyway..I would much rather work than worry another second about paying a bill.
So here I am, starting my journey..I committing to it right now!

 

[MelliPaige]

A very kind lady sent me Dave Ramsey's book free of charge and I've taken a few goals from him, ok maybe this whole quest was inspired by him..but I've thought about being debt free for a while!

Financial Goals
1. Get caught up! [check!]
2. Save $1,000 (for emergencies )
3. Start paying off AT&T [check!]
4. Family Loan [check!]
5. Pay 5 years off the house ($7,157)
6. Pay 10 years off the house (Additional $7,868)
7. Pay more in principle than interest
8. Pay 15 years off the house (Additional $9,488)
9. Pay 20 years off the house (Additional $11,441)
10. Pay 25 years off the house (Additional $13,845)
11. Pay off house! (Additional 14,527)

(12/41) current loan maturation date
(05/42) original loan maturation date

 

[MelliPaige]

To help me in my journey I bought an app called Pay Off Debt to show me where I'm at in my goals, it also shows me how much time I have left on each debt I have and how much sooner I'd pay it off if we started paying extra..I really love this app..I keep going back and looking and playing with it haha. I also joined a payoff debt group on Facebook and got a free book on iTunes called debt mindset reset. The book has 7 steps to resetting what you think about debt.

1. What's your freedom number? How much money is going to debt payments?
As of right now, it's $658
$30 to AT&T
$100 to a personal loan from a family member
$528 to our Mortgage

2. Dream your dream. What would you do without that payment?
In no particular order...
I'd go to school, and pay in cash!
Send my husband to school!
Land our dream jobs!
Go to Disneyworld in 2020 (when my infant son will be old enough to love it)
Have another baby!
Start building our dream home!

3. Arm yourself. What's your "I never want to be in debt again moment?"
Almost losing our home!

4. Rome wasn't built in a day! It took a while to get here and it will take a while to get out. When would you be out of debt if you didn't pay extra.
We would be out of debt August 2042.

5. Narrow your focus. Pick the most pressing thing and start paying it off.
I would love to say this is my house, but its the personal loan from family. They helped us when we needed it, and now they need it!

6. Believe you can do it!
I believe it, I really really do! It will take sacrifice and discipline (and maybe a cheat month or two) but I can do this!

7. Confront reality. Brainstorm 3 alternatives to spending too much or borrowing money.
-eating in instead of out
-wait for the movie to come out in redbox
-finding a similar used item at a reduced cost

 

[Abz1982]

Its a really good feeling paying things off! OH was lucky enough to do a 3 week offshore stint so that made a debt in our debts, and then, thanks to that we refinanced the debt at like 1/3 the original interest rate and so it will save us 50% of the interest.

I was getting myself in a tizzle to try and clear it all off by April and basically us all living on beans, but we have sorted it to yes, it will take a year longer but it means that should an emergency happen we have spare cash (given my luck with cars its needed!).

 

[pansorie]

Have you looked into You Need a Budget? I go to their forums quite a bit, and the program is geared to people who are in debt and are budgeting to dig their way out of it.

Last year my husband and I were not in debt but still living paycheck to paycheck. I couldn't understand what was going on! After a year of using YNAB we have built an emergency savings, a car emergency savings, an entertainment fund, and are 1 month ahead on our bills. We no longer live paycheck to paycheck! It wasn't an easy thing, and it most certainly did not happen overnight, but I really think YNAB helped me with the progress.

Another excellent program is Mint. I could never get into it, but I know others who have sworn by it. Good luck! Hope you see good results in the near future.

 

[MelliPaige]

I haven't looked into it but I will!
It's amazing you did all that in a year..I wish we could! Maybe ill Look into that and be able to

 

[pansorie]

OK, sorry so long winded, but here goes:

Well, to be fair we have a lot of things in our favor that allows for us to save the way we do:

1) we live in a VERY low cost of living area
2) we have no debt
3) we have no loans, our cars our free and clear and we rent
4) we have not suffered anything catastrophic as you did, such as a job loss
5) when we started YNAB we started with a savings already

We also live a frugal lifestyle. We do not have cable, my husband rides his bicycle to work, we have a strict budget for entertainment. All of this allows for us to put away 43% of our net income into savings. Our goal is to increase. I don't think our method is for everyone, lol, obviously, but it is what works for us. We sound like boring people, but being so careful with the daily things has allowed us other pleasures (we traveled in Europe for a month, all paid with the money we saved).

To give you a more realistic scenario, though, on paying debt, I really think it is about prioritizing things, and being firm in your resolve. I can give you an example: My husband's father passed away while we were in Austria and we had to put $5k on a credit card to get home asap. We put half on my credit card, and half on his. His we paid off immediately.

Mine, for the month of October we ended with a balance of $2432.02. We decided since the card is at 0% until February to just carry the balance and pay it off before the interest hits.
My husband and I are paid bi-weekly on the same week, and we have a modest income.

So payment on the card has gone like this:


11/13/14 ---> $800
11/14/14--> $200
11/27/2014---> $200

So in one month we paid $1200 to the card.
I am paying another $400 to this card on Friday, as well as putting my husband's Christmas bonus ($450) to it. This will leave a balance of $582.02. This does not count the fact that we have two more checks this month, and that is another $400 that will go to the card. By January the balance should be less than $200, which will just be paid off.

This isn't easy, lol. This money that is paying the credit card is money that we would usually put in savings, or spend on us for fun stuff. The Christmas bonus is what hurts the most. I wanted a new purse!!! But I want this credit card paid off more, and that's what's important.

I don't mean to blabber, just know that you are being heard. I really believe everyone has it in them to be debt free, reach their financial goals, and be financially independent. It's just a matter of creating and budget and sticking with it.

I personally think that you should start savings for that $1500 emergency fund right now. If you get money from taxes, you can also use that for emergencies.

If you don't mind me asking, but do you have credit card debt? I don't agree with everything Ramsey says, but I do love his snowball method approach.

Cheering you along and good luck!

 

[MelliPaige]

No I don't have any credit card debt. Both of our families had constant debt and charged everything, and because of this were both too scared to get a credit card haha

 

[topsy]

good luck hun xxx

 

[MelliPaige]

My husband lost his job again.

 

[pansorie]

I am so sorry!!! Did he quit or was he fired? If he was fired he may be eligible for unemployment. Do you guys have immediate plans?

 

[MelliPaige]

We sold some stuff and paid off the AT&T
He was fired. He's going to the unemployment office Monday. He's also gonna sign back up for the job shop and seeing if he can get something soon

 

[MelliPaige]

I haven't updated in a while but the den payoff is going good!

We paid off the att debt and paid some on family. We switched insurance on our house, which lowered escrow, which lowered our payment to about $475 a month. We saved the thousand but spent it on an emergency so we're started from square on with our savings now. We also managed to pay enough additional mortgage that instead of being paid off on 5/42 our mortgage loan will be paid off 4/42!

Hopefully we keep it up!

ETA: I forgot I updated..he got another good job a month later but it was temporary and now he starts a new, more permanent job Monday. He's really excited about it! And it's a salary job, which has its downsides, but it's good for budgeting!

 

[MelliPaige]

Does anyone know how to do a strikeout on this forum?
(Putting a line through the words)

 

[BunNtheOven]

Does anyone know how to do a strikeout on this forum?
(Putting a line through the words)

Your suppose to be able to by using (it's purposbly spaced out, don't space it when you actually got to do this)

[ S ] TEXT [ / S]




but for some reason this forum doesn't do it. :/

 

[MelliPaige]

Oh "/ ill figure something else out for it then

 

[MelliPaige]

My husband loves his job and I started mine..we have plenty of money to go toward debt but stuff keeps coming up do it hasn't been as fast as we want it to..but he saved the thousand and paid the whole last year's off the house(up to 12/41), and then we had to use the thousand on a few emergencies that came up..so now were back to saving that. Then our bathtub started leaking so now we have to fix that and our has dryer went out and we got a eclectic dryer given to us..but to use the electric dryer we need a higher amp plug..so we have to pay for that...my job is seasonal so is starting to look like I won't be able to pay off much more debt before I term out..which case I will get a bonus and unemployment so maybe that can go toward debt

 

[pansorie]

Home ownership can be a nuisance that way, but at least you guys have been saving and not going more into debt.

 

[MelliPaige]

Home ownership can be a nuisance that way, but at least you guys have been saving and not going more into debt.

I know "/ hopefully this savings stool last us a while, we've decided to ttc #2 and I won't be working until new baby is older. Unemployment will only go so cat haha

I don't remember if I've mentioned my inheritance, but it's been tied up on court for 4 years. I don't know how much I'll be getting but it's in the ten thousands, well today was the last day for our opposition to file an appeal and she hasn't (to my knowledge) so hopefully within the next six months I get that and money won't be a big issue

 

[MelliPaige]

Another update! Baby #2 is here and he's sooooo perfect.
We melded a new car and got it in January, shortly after I got my inheritance and paid it off. We are back to only owing on the house and so far that will be paid off 12/41. My husband got a good job but we're still catching up.

I'm going back to school in the fall and an hoping I can go on grants scholarships and cash and won't have to go into debt. I've decided I want to be an Occupational Therapist which will be done before I know it with the credits I already have (at least hopefully lol)