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Debt Free: Paid off $115k

June 14th, 2012 at 08:48 pm

Well folks we did it...we will make our final debt payment tomorrow. We started our debt free plan in January 2011 and had just under $115 THOUSAND in debt not including the house. We got on the Dave Ramsey plan and went to work with getting our emergency fund in place and starting our snowball. We managed to make good progress pretty quickly by paying off $20k in 3 months. Then I made a decision to sell my car (which I still miss but don't want the payment) and that further propelled us. We stayed on a really strict budget which is very hard to do with a family of 5. Lots of grumblings and eye rolls, lots of "why can't we??!!" and every other remark you can imagine from young kids. I even felt like I was dragging my husband along at several times having to remind him of our goals. And I even found myself wanting to give up at times but I immediately realized that the alternative sucks worse than what we were going through. I am really done with consumer debt, no more. I have had enough of that to last me a lifetime and I am so glad to have that monkey off my back. I am in the technology industry and it seems like jobs are easily lost these days. While I don't want to be unemployed, I don't quite fear it like I used to. Before it meant disaster bc we had tons of debt and barely any savings. Now it means cutting back and some discomfort sure, but not as scary as before. I won't be sued or harassed by anyone bc there are no bills to pay other than for my basic needs.

We sold our house last month and made a pretty decent profit given the market. That money will go towards making our final debt payments in the morning. We are leasing right now and will be saving up for our emergency fund and a down payment on our next house. We plan to relocate out of this immediate area so we made the decision to sell now, get out of debt, save and maybe even have enough to pay for HALF of our next home....that would be awesome but not something I'm hanging my hat on at this point. We will see what we can do once we get about $30k in place for our EF.

So for now I am basking in our newfound freedom....but it will be back to the drawing board soon with getting a plan in place to save for our EF. I don't plan to be quite the task master and will probably loosen the purse strings a bit but I do want to create a plan so I can estimate how long it will take us vs when we hope to move and buy again, etc. I don't really look forward to this next leg of the journey but I know it has to be done. Question for you guys, WHERE do you put an emergency fund? I've heard it needs to where you can access it but probably not TOO easy to access so you won't be filching money from it, etc. any suggestions? Money markets or some ore type of savings vehicle?

Thanks for the support! I haven't posted much but I do read these blogs regularly and have gained a ton of inspiration and ideas, etc.

Budgeting and Debt

June 22nd, 2011 at 08:46 pm

Still plucking along with our budget spreadsheet...we started using a rigorous budget in January of this year and it has made a world of difference in our money management process. I was never really against a budget but I've never been taught to use one or even how to use one so I just assumed I was budgeting by balancing a checkbook and 'seeing' where my money was going. LOL -- that was clearly a massive failure b/c I was only 'seeing' my money fly out the window! Anyway, we are doing good and I am proud of our progress. We've been able to get serious about paying off debt and we've paid off everything except the cars and house. I am hoping to have 2 of the cars gone by next year but this topic keeps me on the fence. I am all for selling my car but my husband is not sold on the idea. He did drive the beater car for a couple of years and was sick of the 'issues' that come with a beater car. We aren't the type of people who need to have 'nice' cars but he would rather pay for them if we can, and not buy new again. Sigh....I'm more interested in getting that debt gone quicker so we continue to go back and forth on this topic.

Anyway, I am the planner and worrier of the family so this is something that throws a wrench in my budgeting plans. The fact of the matter is we could be getting our 6 month EM in place much sooner and begin saving/investing for retirement much sooner as well if the cars were gone now. I am 34 so I feel like I have to have these things firmly in place by the time I'm 35 and that just isn't going to happen until I'm closer to 36. I feel 'behind' and that is what is unsettling. He hasn't said "NO" don't sell your car but he is more concerned with us having to come up with the negative balance to pay off the loan (it is upside down) and find/buy an older car...and then deal with the older car issues that are inveitable. We would still have to get a loan to do that and while that is not ideal, we would be trading a higher car loan for a much smaller loan. I would be willing to do it - the new loan would probably be around $10-$12K (including buying a replacement car) and I could probably pay that off in a couple months.

I'm going to keep 'gently' discussing the topic -- but not nag him about it. He gets annoyed with me for worrying about our finances. He is onboard with doing the right thing with our money but he thinks I'm hyper-sensitive about the situation and impatient....which is true. I do need to relax and be patient...find more peacefulness and tranquility in my life. Stop worrying about 'stuff' and the future and whether or not we will be 'saving & investing' by the time I'm 35 LOL. These are normal things that I should be concerned about but I can't let them dominate my life and thoughts.

So I've already started making 'people edits' in my life and now I'm going to start making 'thought edits' as well. I will spend a small amount of time each day tending to our finances but I will no longer keep it on the brain and harass my husband about it regularly! :-) He loves me -- he knows it!!

And by the way -- I'm a relatively new blogger on this website and I was under the impression it was supposed to be about saving money, reducing debt, paying stuff off, etc., etc. Why are people on here talking about applying for credit cards and buying stuff using their credit cards? That is just strange to me...? Not judging -- to each his own, but it is strange given the context of this website...? agreed?

Easy on Paper, Harder in Real Life

June 4th, 2011 at 09:18 am

I do all my budgeting on paper and it appears to look/sound/smell/taste good but in real life it is a lot harder to make it work. I suspect it is b/c I'm not allocating enough money in addition to the fact that we ALWAYS have something pop up for that month. These little suprises have thrown my debt reduction plan off track b/c I'm regularly saving LESS to put towards debt. But I have a new plan now -- a 'take no prisioners' plan that will help me say NO b/c the money will NOT be there.

Original plan - stockpile money. I thought to save up about $3700 a month in my savings account to pay off the car in Sept/Oct timeframe -- in one lump sum. The problem is b/c that money is just 'sitting there' it is easy to pilfer from it. No more my friends -- that money will now go as a 'car payment' and it will be OUT of the JMONEY household system so we can no longer take $50 here, $100 there, etc.

I will only keep the $1,000 emergency fund and that will put things in very real perspective for me. You see, drastic measures are almost always necessary for me to get with the Gosh Darn plan that I put together.

wish me luck :-)

I got to talk to Dave Ramsey today!!

March 21st, 2011 at 09:36 pm

Well....I have been struggling back and forth with a financial question and I thought I would try to see if I could get in touch with Dave Ramsey on his radio show and I DID! I don't know why but I was so shocked when they answered my call and began to ask my question, name and location, etc. So I thought maybe they would do some kind of "question validation" to see if my question was worth putting on the air...and I guess it was b/c she said she was putting me on hold and would tell me when I was up next. My heart IMMEDIATELY went into crazy mode and I got SO nervous without even uttering one word to the guy. I was on hold for about 10 mins and my mind was racing about how I should best frame my question to him and how much detail I should share, etc. I had a pretty good idea of what he would recommend but I kinda wanted that validation anyway so the idea would LEAVE my head. My question is about cashflowing college tuition for my daughter this fall. Because I'm in the middle of my debt snowball and I still have some debt to pay off, an idea popped into my head to have her set up a student loan so we could defer the payments and then pay it all off after everything else. The thought process is to put that "cashflow tuition" money towards the debt instead of pulling it out of my snowball. But I couldn't fully rationalize it either way b/c I would be paying it off either way...just at different timeframes. Dave's recommendation was to go with my current plan and cashflow the tuition NOW so I don't run into issues later. I agree with this advise and will follow it...but it is tempting to put the extra $11,000 each year towards the SNOWBALL! Hopefully you are able to follow my explanation.

Anyway, I know he can be a little harsh sometimes on how people have gone into debt and WHAT was bought....I was scared to death he was going to ask me what kind of debt I had left. And with it primarily being car debt, I was so worried he was going to SCOLD ME and point out the fact that I would be the WORST MOTHER ALIVE if I 'borrowed' money to pay for my kid's education so I could have my stupid cars. I can honestly say "had I known then (when I got the cars) what I know now" I would never have purchased new cars. BUT we do have them, we are not interested in selling, getting a loan for the payoff difference AND then buying new "used" cars. We can make our payments today comfortably so the plan is to keep them, pay them off and not buy new again. For some reason I was terrified of explaining that plan to Dave...

Hope you are all having a great week - mine is off to a good start :-)

Yippy Skippy!

March 18th, 2011 at 10:55 pm

We had a garage sale today and got lucky with beautiful weather! We didn't think we had much of anything anyone would be interested in -- the typical "junk" collection. Turns out people wanted about $100 of our stuff! I was pleasantly suprised and am encouraged to open it again tomorrow morning for a few hours. We even had someone ask us about our swing set which my daughter never uses anymore. It is one of those nice wooden swingsets we got at Sams a few years ago. The lady asked me if I would consider selling it and I said SURE! However I didn't know how much to charge LOL! So she is coming back tomorrow with her husband to look at it since he is the one who will be taking it down & putting it back up. I'm thinking maybe $300 but I don't know if that is too much or not...? I guess I'll find out in the morning. She was a nice lady and bought an old patio table set we've had lurking in our backyard for years now. I'm just glad to see that thing going bye-bye. If they take the swing set, that is a double YIPPY SKIPPY for me b/c I'll get the $300 extra bucks and no more weed eating around that swing set anymore! The money or effort wouldn't matter if my daughter still wanted and used the thing but she doesn't and we asked her what she thought about selling it and she said she didn't care....so I guess we will if they want to pay $300 or even $250 for it.

Anyway - happy trails pardner...this chickie is going to bed now :-)

hello $1950.00

March 17th, 2011 at 07:48 pm

I hit a major milestone (for me anyway) this past week by paying off my last credit card. I started in January with a student loan, an orthodontist note, a bank of america credit card and a southwest chase credit card -- all totally around $20K. I started my TOTAL MONEY MAKEOVER in January and let me tell you, I have been GAZELLE intense! I am super happy to report that I sent the last payment to the southwest chase card yesterday and I'm anxiously awaiting the balance to hit $0 so I can close down that card. Total debt paid off since January is $20,114.00

Now I'm moving on to tackle the car notes and much later on, our mortgage (according to Dave Ramsey's baby step plan). Now that the other debt is gone, I'll have an additional $1950 each month to put towards getting cars knocked out quickly!!

Having a garage sale this weekend so I'm hoping to make a little extra cash. We have a few lingering projects to do around the house and I haven't wanted to take money out of the budget to do it b/c I was so intent on getting that $20K gone by April. I'm glad I didn't get distracted b/c I was able to knock it out a full month early! Hoping to get maybe $200 or so....but I won't be heart broken if I don't. When I have garage sales, my main goal is to get rid of stuff rather than make money. Sooooo....wish me luck!

BoA Credit Card BITES THE DUST!

March 7th, 2011 at 09:02 pm

Earlier today I paid off the last $500 of my BoA credit card. It was a little bit of a stressful situation b/c I accidentially doubled paid a truck payment and I wasn't sure if I was going to get my double payment money back so I could make this final payment!

If the balance is $0 tomorrow (for some reason it takes BoA a while to apply the payment...?), I'm going to call and close the card out...never to be opened again. And since I paid it off before the end of the cycle this month, I won't be paying anymore interest!

I'm glad it is gone - of the 2 credit cards I have, this one had the highest balance so I was anxious to get it paid off quickly once I decided to get out of debt and stay out of debt. Balance in January was $11,118.00. With the help of a $6000 tax return, I was able to attack it very quickly and get it gone forever.

That leaves me with the other credit card with a balance of $3500. My current plan is to pay $1750 on March 15th and then another $1750 on April 1st!

As previously mentioned, my husband and I were planning to put our house on the market...however we keep wavering back and forth so I don't know if we will be moving or not. I hate not knowing for sure although I know this is not a decision we should rush into. I'm just that way - once I get something in my head, I have to 'address' it in some way sooner rather than later...not let it remain unresolved and open ended for long periods of time. I'm hoping we will come to a mutual decision within 1-2 weeks and we can stick to the decision...whatever it may be. Fortunately the question isn't around 'can we afford the house' -- we can, it is actually a very affordable payment for us (total $1600 with taxes, 1st & 2nd note and insurance). The question is around whether we want to sell & make some money to pay off cars (the remaining debt after April 1st) and then begin saving about $4500 a month to pay CASH for our next house once we move in about 3 years.

I don't want to regre whatever decision we make...? Any suggestions out to on determining if you should sell or not?

Debt Update #2

February 27th, 2011 at 06:31 pm

Debt reduction plan started in January. To date, here is my status:

Orthodontics - $1130 = paid
Sallie Mae Student Loan - $3850 = paid
CC#1
*January balance = $3,550
*Current Balance = $2,950
CC #2
*January balance = $11,118
*Current Balance = $7,880 to be paid off tomorrow with tax return money + $1880 from payroll!

Cars 1, 2 & 3 = $80K
House = $150K

TOTAL DEBT PAYOFF FOR 2011 YTD = approx $16,700

As happy as I SHOULD be about paying off my stupid credit card tomorrow, for some reason I'm not that excited about it. I will pay it off tomorrow morning and then close the account once the payment is cleared and balance is $0. For some reason BoA can't seem to update the balances when you make online payments until a couple days later. BUT my money is definitely deducted as soon as I issue a payment....??

Anyway, I am glad to have that one gone. With such a high balance, my interest payment was always high and that always pee-peed me off. I'm glad it will be gone and I will never do that to myself or my family again. The other one CC#2 should be pay off by the first pay period in April. Same story there too - will close the card down once the balance shows $0.

That will leave my cars and my house. We are selling the house and have a plan to accelerate paying off the cars within 6-8 months. If we don't sell the house, we still have a plan to have them all paid off in less than 2 years....unless I need to sell one.

If the house does sell, we will rent locally and save money so we can pay CASH for our next house in 3 years once my middle daughter graduates HS. We think we will be relocating but not 100% sure just yet.

Anyway, while I have made great progress by getting "Gazelle Intense" and killing off this debt....for some reason I'm not feeling as excited or relieved as I thought I would be. I am very grateful but I think I'm probably feeling "behind" at this point since we don't have any money invested and no significant savings. Hopefully that will be drastically improved by the end of this year...and well underway going into 2012 & beyond.

This weekend was a giant suck-fest for me, hopefully the coming work week will be much better. It can only improve, right??

have a good week :-)

Off to a GREAT week!

February 22nd, 2011 at 09:22 pm

This was my "Monday" since I was off yesterday and it started off a little shaky. But things drastically improved as the day wore on and I quit working (I work from home) a little early so I could go to my daughters' (2 daughters on the team) high school basketball playoff game. We played a great game and are now advancing to the regional finals! This is a great accomplishment for our girls - the fartherest we've gone in the 4 years since my oldest (now a senior) made the varsity team as a freshmen! So proud of both of my girls & the entire team!

Annnnyway, we play our next game later this week but not sure who or when just yet. Fun times -- win or lose this will be a great week just b/c they've accomplished so much this year :-)

On another happy note, my oldest daughter turns the big 18 tomorrow! I can't believe she is a grown woman already! She's a great kid - very good heart, sensible & mature, not given to the dramatics and quite funny on occassion. I'm extremely proud to call her my daughter and I can honestly say she is a better person than me in some regards (doesn't let rude comments or gossip bother her!).

I'm proud of all my kiddos for sure but it is so strangly funny how they all turn out so different. All 3 of my girls come from different planets - they look like but that is where the similarities end for the most part.

The one thing I am going to work on with all my girls is teaching them to manage their money better than I have. Over the years my husband and I have made good money but we have mostly spent what we made, saving very little. Sure we have 401K's and pensions but there should be no reason for us to be in debt or not have more savings than what we have. VERY big shame on us...but we're getting better :-)

Annoying debt

February 21st, 2011 at 09:25 pm

I had the day off today and it was really nice b/c the kids were in school and my husband had to work too! Hopefully that doesn't make me a bad person - I just enjoy a quiet house every now & then :-)

For some reason this evening I have a nagging feeling about something being off....not sure WHAT is causing the feeling but I just have this feeling of mild annoyance and I guess I will chalk it up to my debt LOL. Payday isn't until the end of the month so I have a little bit to go until I can make another dent in my balances. I really do hate it that my debt distracts me and I find myself wanting to 'hurry up' my life so I can get it paid off. I do not want to be that person who misses TODAY b/c I'm too worried about the FUTURE! While I need to plan for the future I know I need to live in TODAY so I enjoy my life, my kids, my husband and the countless other blessings the Lord has blessed me with.

This is a blog-slap to myself...stop trying to 'hurry up' your life b/c you might miss out on the small stuff of today!

Remember to live in TODAY while planning for the future... Afterall, today is all we have :-)

Debt update

February 20th, 2011 at 09:24 pm

Today I meant to log into my other computer to get all of my debt balances to share with you all. I didn't get a chance but here is a run down of the estimated balances for what my husband and I owe:

CC #1 - $9,240.00
Game Plan: to use my tax return to pay $6,000.00 and get this bad boy paid off by my 2nd pay period in March.

On a side note, I now know $6000 is too much of a tax return. My husband and I have already adjusted our filing status to correct this. Thanks Dave Ramsey ;-)

CC #2 - $2950.00
Game Plan: My plan is to have this one paid off by the first pay period in April. I know DR says to pay off smallest to largest but I have a burning desire to get that CC#1 dead & gone ASAP. I figure paying this one off shortly after that first one won't kill anyone or anything.

This is the gasp part....we have 3 new cars we bought late last year (pre DR). We've looked into selling them but the upside down situation is not something we are wanting to deal with (unless circumstances drastically change). By the time we sell them, get new loans for the 'gap' and buy new 'old' cars....we decided that would be very expensive as well. The plan is to keep these cars just pay them off....never to buy new ones again.
Car#1 - $18,500.00 at 0% interest (daughter's car, going to college)
Car #2 - $31,000.00 at 0% interest (my car)
Car #3 - $34,000.00 about to be convered from a lease to a 'lease purchase' so I'm not sure about the interest yet (husband's truck)

Game Plan: once the CC's are gone in early April, the plan is to snowball the payments and add about $3000 a month to get the cars paid off ASAP. As we knock out payments, we'll have roughly $4500 a month to get this gone.

House - $150,000
Game Plan: My husband and I are actually in the process of preparing our home to put on the market. We are pretty sure we will be moving to a new town in a few years when my middle child graduates HS. Since owning a home is more expensive than renting, our plan is to find a rent house here locally and socking away money to pay cash for our new home...where ever that may be. We will stand to make a significant amount of money when we sell so we could possibly use that money to paydown car debt or just put away for our next house. If the house doesn't end of selling, we will take it off the market & try again later. Probably won't put it on the radar to pay off since we know we are moving later.

On a happier note, since I started my DR budget and snowball plan in january, I have managed to score a few quick wins by paying off my Sallie May student loan ($4000), my 2010 taxes ($3650) and mine & my daughter's orthodontic note ($1300)...go me!

The snowball is rolling...!!

Future goals:
MUST save more
MUST give more
MUST stay out of debt (the CC cards are cut up)
MUST stick to our budget
MUST have fun doing all the above

Have a great week everyone!
:-)

Is getting out of debt going to be fun?

February 19th, 2011 at 09:20 pm

I think so! I am so excited and looking forward to the immediate satisfaction that will come when I make my final payments to my creditors! While it will be TOUGH (and tough can be fun), it is with a very determined heart and mind that my husband and I usher our family into a new phase of our lives where we have ZERO debt and WE decide where our money goes down to the last happy little penny :-)

My husband and I are very fortunate to be employeed and we currently have no issues with paying our bills on time...however that would NOT be the case if I was to unexpectedly lose my job. I have usually been fairly decent with money and not racking up debt but as I've gotten a little older and made more money, I have noticed that I made some financial decisions assuming we could pay it off later. Now I look at our finances and my thought process and I am really shocked at how stupidly I've behaved and the money I've wasted. I can't do anything about THAT money but I can do something about the money God has earmarked for me in the future.

In January of this year we started the Dave Ramsey plan. I really do love that man -- so practical and so very right in his teachings. I prayed to God for helping in managing our finances and doing a better job and I KNOW WITHOUT ANY DOUBT THAT HE LEAD ME TO DAVE RAMSEY! He is so passionate about giving people HOPE for their future -- it is really a blessing to those who are seeking help! Thank you Dave!

So this blog will be my personal outlet to share my fun and exciting journey of getting out of debt. Will it ALWAYS be super fun...no. Will there be setbacks...sure. All I can do is the best I can for myself and my family and I know the reward will be the best thing I could ever do for my family!!

More to come on my numbers....wish me luck ;-)