Light at the end of the tunnel
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Anonymous
OP here, similar to PP above. We make about 260K. It's really not been as difficult as I thought it'd be, to be surprisingly honest with you. I created an excel budget spreadsheet in the beginning, listing all of our expenses - that was key with being able to future-plan on how much money would be left over (or not!) with each paycheck. That allowed me to roadmap out our initial short, medium, and long-term plans (I started the budget back in late 2014 and mapped out that we'd be done in 2018 - it felt like it would take forever to get there, but we're almost there now and time has just flown). Being able to see when our next debt will be paid off has kept us on track with each paycheck period. It definitely keeps us motivated, almost obsessively so. I can see on our spreadsheet that our final car payment will be on June 17, and I know that if we deviate from our spreadsheet plans, that means I'll have to move the "payoff" color on that box over to the right, which just makes me cringe. The sooner we can pay off the car, the sooner we can work on the next debt goal, and so forth and so on. We don't eat out for lunch anymore, though we still try to have a family night out once a paycheck or so. Cut out cable, all non-essentials, etc. Money is starting to be freed-up from not having as many day care expenses, so that helped, too. And with each debt paid off, that is more money that we can sock away at the next debt, which is also great. When we really started implementing the plan, just over two years ago, each paycheck resulted in around $1500-$2000 a month that we could sock away at debt. Now we're at the rate of socking away about $3000-$4000 a month towards debt, which will become more as more debt continues to be paid off. I think the key is having a current and future-state budget, and seeing how much money is left over from each paycheck so that you can have a plan for how to tackle the debt. And then stick to it as best possible. |
Anonymous
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OP - Can you share what your savings goals are once you come out from under the debt?
This is really inspirational. |
Anonymous
| Congratulations, OP! Keep up the great work! |
Anonymous
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This is seriously impressive. My hat is off to you! Keep at it and keep going on the right path once everything is paid off.
Do you reward yourselves when you meet your interim goals? How? Maybe just seeing the balances decrease is motivation enough! |
Anonymous
OP here, thanks everyone. Savings goal - that's a good question. Save save save is our goal, but no real hard numbers yet on how much or where at. Maxing out 401k is the most obvious that comes to my mind, but also maxing out IRAs. Our oldest will be 12 and we really haven't done a good job at all with college savings (read: debt plus child care costs in the earlier years), and I'm not sure it makes sense to contribute a ton into an actual college savings plan given the limited time we have for him specifically. Would probably put that money into an alternative forum where we can easily tap into it, without being severely penalized, once he starts college. We've had these sort of conversations with our financial advisor, but we've all been in immediate agreement that the first priority is getting rid of the debt. Once we get our heads out from the debt sandhole, we'll definitely be using this same aggressiveness to determine how we'll be saving and investing accordingly. College, as I mentioned, is a huge priority (we have three kids, 11, 8, 6), but we need a robust emergency savings amount, our house needs new windows (40 years old), and we'd like to take a nice family vacation to somewhere like Yellowstone, the Grand Canyon, or maybe even Europe one day. Not to mention replacing the disgusting carpet, 40 year-old curtains, 40 year-old floral wallpaper, etc.  Baby steps first, though.
In terms of rewarding, we do this almost by happenstance, which is still something we need to work on. It's almost like an impulse reward (example, we just spent $1000 on a new Weber grill, as our old one had recently died. We didn't budget for this, so that was $1000 we could have spent towards debt, but we decided to impulsively rewards ourselves instead because, dammit, we wanted a splurge after going so hard every paycheck). We really need to do a better job of this and discipline this out into our budget so we're not feeling guilt for an impulsive reward-buy afterwards. Make sense? |
Anonymous
| Thanks OP. This is inspiring. We're going through a really tough time right now with credit card debt and no savings. Unexpected expenses keep popping up that are high and result in less to payments to reduce our debt. Refreshing to see someone dig their way out of the hole. We're slowly chipping away at it but it has felt crushing at times. |
Anonymous
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As soon as you get it all paid off (including the house) your wife will divorce you.
That is what happened to me. Followed the Dave's plan... paid everything off... had all the wills and all other legal stuff all put together.... then BAM! She emptied out 150K from savings and served me with divorce papers. She got the paid off house and her paid off car plus all my 401K and all the savings. I got..... a lesson in life... I think that if I had not done such a good job building a stable financial situation that she would have not felt financially comfortable enough to do that. |
Anonymous
OP here, also happens to be the DW, no plans for pulling any rugs out from under my DH, at all. Sorry that it happened to you, though, that really bites. |
Anonymous
OP once again, found the original story I posted just over two years ago, here you go: http://www.dcurbanmom.com/jforum/posts/list/446553.page Being able to pay off the second mortgage and refinance the first mortgage was a huge step in the right direction and saved us about 800 a month. Paying off the one car and now very close to the second will also be freeing up about another 1000 a month. One less child with childcare costs = another 600 freed up per month. Plus all of the other little 100's here and 100's here per month (no cable, no eating out, no superfluous purchases), they all add up to extra money that we've been able to sock at the remaining debt. |
Anonymous
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OP - I remember your or final post, good for you.
Also, I know everyone was well meaning but it also goes to show there is more than one way to solve a problem. You kept your house and your cars and practiced extreme belt tightening and changed your relationship with money. |
Anonymous
| Reading your original post, it seems like you owned your collective mistakes and were planning active measures to take control of your financial future. Good for you. |
Anonymous
| I disagree with some of you here. Credit is your greatest asset. If it were not for credit from the banks I could not have started my business or owned a house. I still to this day have 40+ credit cards and take advantage of their offers to live a very good life. And my HHI is 100k, i fly first class, and stay in 5* hotels for free.. |
Anonymous
I think credit is a great asset as long as you don't let that credit card(s) turn into debt. |
Anonymous
| OP, please post an update! Did you hit your payoff target of 2018? |