If you have significant debt
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Anonymous
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Just curious for those people with $6K mortgages...what is the term of your mortgage?
Our mortgage would be $6K if we amortized over 15 years, but it's about $3300 when amortized over 30 years. I pay about $4K per month on the mortgage and it will be paid off in about 22.5 years (6 years gone, 16 to go!), fortunately, just before our newborn twins are going to go to college! |
Anonymous
Our mortgage is about 6500, interest only. Will be adjustable next year. Hopefully rates stay low. 30 yrs--- 25 yrs to go |
Anonymous
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$6,500 interest only???!!! What will it adjust to when you actually start paying for the house?
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Anonymous
It's an ARM so it depends on the current interest rate. When we bought we planned on refinancing before the ARM kicked in, but then the crash happened and now we don't have enough equity to refinance. |
Anonymous
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. This PP nailed it. OP, you are not upper middle class if you have 19k in credit cards and 25k in personal loans are are struggling to pay bills. Your children will not be deeply damaged by growing up knowing that they are actually middle class and not upper middle class. They will not be on some therapist's couch in 20 years crying because they didn't go on regular ski vacations. Accept your financial reality and fix it before it gets worse. It will always get worse if you don't attack the debt aggressively. |
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Anonymous
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I agree with 21:00. Also - whether your kids "fit in" or not, is a function of a lot more things besides similar vacations.
DD was among the lower income at private last year and fit in just fine. Great when we can do fun things, but you better believe I am not going into debt for skiing. |
twentysomethingmom
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We had significant debt. We got rid of one of the cars, which helped lower our expenses a lot. I went back to school this fall and also got a job, which helped our budget tremendously. It's kind of insane how we work our schedules around one car, but basically I am going to school like 40 minutes away from where I work, AND my husband has work in the opposite direction (thankfully his work is near DC's school)
We also don't have cable, and we're on the smallest family phone plan possible. Our lifestyle is no fun right now, but we're down to 4K of credit card debt and our one remaining car will be paid off in February. |
Anonymous
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. This PP nailed it. OP, you are not upper middle class if you have 19k in credit cards and 25k in personal loans are are struggling to pay bills. Your children will not be deeply damaged by growing up knowing that they are actually middle class and not upper middle class. They will not be on some therapist's couch in 20 years crying because they didn't go on regular ski vacations. Accept your financial reality and fix it before it gets worse. It will always get worse if you don't attack the debt aggressively. I agree with these PPs. OP what you are teaching your children is that it's important to try and keep up with the neighbors/peers even if you can't afford it and are drowning in debt. That's such a bad life lesson. You are not upper middle class so stop trying to keep up the facade. I am also wondering whether your kids actually really want to go skiing etc or as I suspect you are pushing them into these things to maintain your false image. If you teach your children to live within their means then probably they will not end up in the financial mess that you are dealing with now. |
Anonymous
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What is the big deal about skiing?
When I was young we always went cross country skiing. The cost was zero. We had skis, not the latest or greatest, and my grandmother had a house in the country by the edge of the forest. Skiing was the simplest thing. Just walk out of the house and join the existing trail. The way you talk sounds like it is an annual Disney holiday. If it is a sport that you like and enjoy, what is wrong with it. Now I can understand the criticisms for a sport like golf, but that is a different matter |
Anonymous
| you can cut a lot of crap out of your budgets if you accept your income and lifestyle. |
Anonymous
I just wanted to congratulate you on working to pay down the debt. It might not be fun, but you'll feel so much better when the debt is gone. Take it from this forty-something who just lost her marriage indirectly because of debt.  Best of luck to you and your family.
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Anonymous
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Anonymous
What is your income? What's your current interest rate? I can't imagine taking a $6500 I/O mortgage. That seems like financial suicide unless you make about $300K annually. And you're underwater to boot. Is there any room in your budget to pay additional on your mortgage each month? Even $500-1000 monthly that goes directly to principal will help you get out from being underwater and may allow you to either refinance or sell without being a short sale. Then you can get out of this into a house you really can afford. I'd be worried that when the ARM kicks in that the interest rate will increase on you. |
Anonymous
We do make close to $300k and we are not underwater (depending on whose estimate you take) but our house has not appreciated like we expected. We can't pay any additional. I am worried about the interest rate. If they stay low then it will be ok, but if they increase a lot it's a problem. |
Anonymous
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Chiming in kind of late here...
When DH and I got married, we had significant debt- he had about $40k in credit card debt (!), I had an interest-free loan from my dad for grad school at about $20k, and when DH's car when kaput, we bought a new one at $26k (our only car). We paid all of this debt in about 18-24 months through a combination of luck, planning, and good salaries. First and most importantly, we didn't have kids, which are obviously a huge money drain if they're in daycare. We also lived in a condo right across from the Ballston Metro (literally steps away) and our landlord liked us as tenants and only raised the rent once in 4 years. We paid next to nothing for it- I think the most we ever paid was $1500 a month. Both of us are feds and we had decent salaries that allowed us to save a lot and pay down debt. Also, we only had one car and while it took us about 6 months to pay it off, not having monthly payments over a long period of time helped a lot. Because I had excellent credit (over 800), we were able to get interest-free financing and paid off the car quickly with no interest charged. With my husband's credit cards, I think we paid off the smallest balance first to give us more a sense of satisfaction. I know there's debate on whether it's best to pay off the highest interest one first, though. My husband ran up debt for 2 reasons- the first is that he went to private schools for both undergrad and grad school, which of course is a choice. He worked full-time at Wal-mart in college to pay for school, but still needed to partially live off credit cards. He also was fully employed in grad school, but went to GW, which is obviously pricey. Secondly, he was just a poor spender. His family doesn't have good spending/saving habits and I think once he started carrying some debt, he felt overwhelmed and hopeless, so he thought why not charge more b/c he'll never get out from underneath all that debt. I immediately put a stop to that thinking and we started saving very aggressively. Cut off his daily lunches (less than $7 a day, but that adds up); stopped his wanton spending on CDs, etc.; and we made up a State of Our Union sheet where we tracked our money and debt. We also said that if a purchase was over $50, it needed to be discussed/approved before being made. We didn't totally starve ourselves or do nothing fun, but most discretionary money went to paying down debt. As I said, a ton of factors figured into our being able to pay down debt quickly and I know it's hard. I'm not sure with kids and a hourse we'd be able to do the same today. |