If you have significant debt

[Anonymous]

OP, go to the library and get Dave Ramsay's book. Follow it. It's an excellent resource. It will help you set up a budget to pay down the debt and spend a few dollars on fun things each month as well.

[Anonymous]

Anonymous wrote:OP, go to the library and get Dave Ramsay's book. Follow it. It's an excellent resource. It will help you set up a budget to pay down the debt and spend a few dollars on fun things each month as well.

Thank you. I will look for this. I really appreciate all the helpful advice.

[Anonymous]

OP- would refinancing help at all?

[Anonymous]

Anonymous wrote:OP- would refinancing help at all?

Unfortunately we don't have enough equity in our house. We didn't put 20 percent down and it has not appreciated and maybe gone down a small amount.

[Anonymous]

New poster here. I just completed Ramsey's Total Money Makeover. It's definitely a worthwhile read,and something that I will be following to get debt free.

[Anonymous]

I paid off $18K credit card debt in a year, this past year. It's amazing how much crap I spent/spend my money on that I could very easily do without. I found out that many of the things I think I need, I already have but I was never patient enough to do the inventory before rushing to the store to buy more crap.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Are you still living beyond your means and adding to your debt? Are you saving anything? Retirement? How is your emergency fund? Do you have a budget and do you stick to it? Do you pay more than the minimums on the credit cards?

I can appreciate that it's hard to cut to really, really bare bones, though this is what I would do. None of things you list as "wants" strike me as necessary or even particularly important.

I'd allocate a small (couple hundred dollars) worth of "fun money" for every month, whether it's used on clothes, lunches out, whatever, and once it's done, it's done. Everything extra goes to debt.

Thank you. Great advice. You mention that none of the things I listed as "wants" strike you as particularly important. It is important to me that I provide my kids with lots of opportunities, such as travel (even cheap fairly local places), learning to ski, tennis lessons, movies, out to dinner occasionally etc. I had many of these things growing up and I wish I could give them to DC. Unfortunately we have not managed our money well and although we make enough to do a lot of these things, we now have debt that takes priority. It's hard to always say no to your kids, but I am grateful for what we have.

OP, I never learned to ski as a child. I took gymnastics at the local YMCA, and we traveled only rarely. As an adult, I have enjoyed traveling all over the world and do not feel like I had a deprived childhood because the first time I went to France was when I was 20. It would seem that your financial decisions have created an environment in which your experiences of a normal childhood are not going to apply, and I think it's important that you recognize that your child is not going to suffer because they cannot have private tennis lessons or go skiing every winter. Putting things like that in the same category as occasionally going out to dinner is crazy to me.

You can budget for movies occasionally - like, one summer blockbuster and one Christmas thing. You can go out to dinner occasionally. Even if you have a ton of debt, it is possible to create a budget for fun money (like one of the PPs suggested) that allows you to have these things as treats occasionally. It stops being an occasional treat when it happens once a week or even once a month.

This PP is absolutely correct, one of the most valuable life lesson you can teach your kids is how to manage their finances and live within their means. Skiing lessons, er, not so much.

[Anonymous]

[

OP, I never learned to ski as a child. I took gymnastics at the local YMCA, and we traveled only rarely. As an adult, I have enjoyed traveling all over the world and do not feel like I had a deprived childhood because the first time I went to France was when I was 20. It would seem that your financial decisions have created an environment in which your experiences of a normal childhood are not going to apply, and I think it's important that you recognize that your child is not going to suffer because they cannot have private tennis lessons or go skiing every winter. Putting things like that in the same category as occasionally going out to dinner is crazy to me.

You can budget for movies occasionally - like, one summer blockbuster and one Christmas thing. You can go out to dinner occasionally. Even if you have a ton of debt, it is possible to create a budget for fun money (like one of the PPs suggested) that allows you to have these things as treats occasionally. It stops being an occasional treat when it happens once a week or even once a month.

This PP is absolutely correct, one of the most valuable life lesson you can teach your kids is how to manage their finances and live within their means. Skiing lessons, er, not so much.

Yes, it's important to learn budgeting and money management, but when everyone you know skis, plays tennis, goes on trips for spring break, you want your children to fit in. Skiing and other activities may not be important to you but to some people they are important. I've accepted the fact that we won't be going skiing or traveling for a long time, if ever, but that doesn't mean that living an upper middle class life with all the trimmings can't be important to some.

[Anonymous]

Anonymous wrote: [

OP, I never learned to ski as a child. I took gymnastics at the local YMCA, and we traveled only rarely. As an adult, I have enjoyed traveling all over the world and do not feel like I had a deprived childhood because the first time I went to France was when I was 20. It would seem that your financial decisions have created an environment in which your experiences of a normal childhood are not going to apply, and I think it's important that you recognize that your child is not going to suffer because they cannot have private tennis lessons or go skiing every winter. Putting things like that in the same category as occasionally going out to dinner is crazy to me.

You can budget for movies occasionally - like, one summer blockbuster and one Christmas thing. You can go out to dinner occasionally. Even if you have a ton of debt, it is possible to create a budget for fun money (like one of the PPs suggested) that allows you to have these things as treats occasionally. It stops being an occasional treat when it happens once a week or even once a month.

This PP is absolutely correct, one of the most valuable life lesson you can teach your kids is how to manage their finances and live within their means. Skiing lessons, er, not so much.

Yes, it's important to learn budgeting and money management, but when everyone you know skis, plays tennis, goes on trips for spring break, you want your children to fit in. Skiing and other activities may not be important to you but to some people they are important. I've accepted the fact that we won't be going skiing or traveling for a long time, if ever, but that doesn't mean that living an upper middle class life with all the trimmings can't be important to some.

Great, if they can really afford it, without going into debt to do so. If not, then these people are not really "upper middle class" and shouldn't be mortgaging their souls to pretend that they are.

[Anonymous]

Re: refinancing - you might be able to even without 20% equity. Call a few trusted mortgage brokers.

[Anonymous]

Our mortgage is just under 6k a month. We make 400k a year and have zero consumer debt and lots of savings. Our jobs are secure. But, that doesn't mean we're not doing our darndest to pay that sucker down as fast as possible.

OP, I get that you want your kids to have the life that you had but they really need their parents to get their finances in order first. Personally, I tell my kids we can't afford things all the time. It's better for them to grow up appreciating what they have than being entitled...trust me!

[Anonymous]

I don't know where you people live, but family vacations to Europe is not the norm where I grew up nor where I live now. Nor are ski lessons. You cannot become victim to peer pressure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We had over $200K in student debt for both me and my husband and we make it a top priority to pay it off but not at the expense of bare necessities. I don't consider "cool clothes," movies, and other outings bare necessities so we do cut down on that alot. Because of our frugalness the last three years, we will be out of our debt within the next two years, which will be amazing.

$200K in two years sounds fantastic. May I ask what kind of work you and your husband do?

actually, I said that we've been paying it off for the last three years and it will still take another two... so total of 5 years. If that makes a diff.

[Anonymous]

Anonymous wrote:I don't know where you people live, but family vacations to Europe is not the norm where I grew up nor where I live now. Nor are ski lessons. You cannot become victim to peer pressure.

I grew up here and this was the norm and I live in nw dc and it is still the norm.

[Anonymous]

OP - we're on a three year plan to work through some huge bills that we incurred when we were both laid off in 2009 and then had to move to find work. Different techniques work best for different people, but for us the best way to deal with the debt is to pay it less aggressively than we could (but more aggressively than minimum payments) and leave small, but meaningful amounts of fun money and savings in the budget. Whenever we get too frugal and scrimp on too much in order to pay down the debts too fast, we end up blowing it and charging some ridiculous amount on the card. That puts you right back where you started and is very frustrating. So, until you have a decent rainy day fund in place, it's better to pay the debts more slowly (IMHO). Once you have some savings for emergencies or the occasional splurge, then you can be more aggressive with the debt. Good luck!