Sometimes it seems so overwhelming

[Lindahfx]

My husband and I both have good salaries and we are able to cover all of our expenses, no problem. But we have lots of debt - cc debt (almost $13K), student loans (around $25K), and a mortgage ($240K). We're trying to pay off the cc debt first and have been focusing on our debt for the past 3-4months, but it all seems so overwhelming. We have some savings (in case I have another child it will cover expenses when I'm on mat leave) and we are contributing towards pensions/RRSPs, etc. But we don't have an emergency fund and aren't yet contributing towards an RESP for our daughter.

I read what many of you post on these forums and although it's all great info and inspirational, it's also a wake up call that we have so far to go to get anywhere towards where many of you are. I get so overwhelmed when I look at the big picture.

[Aleta]

Lindahfx: I would think that most of us felt overwhelmed when we looked at our debt. There are some here that have more debt than you do, so you're not alone. The good news is that you said that you and your hubby both have good salaries and can cover expenses. You just need to find a good book to get you started. Some here like Dave Ramsey. The main thing that you have to do is to just focus on one debt at a time and let the balances on the others go down as you continue your minimum payments on them. The mortgage is the last thing that you have to worry about right now.

Maxing out your retirement at least to the match of your employer, setting up a budget or spending plan, setting realistic goals, and tracking your spending to see where you can stop the bleeding will help with the debt problem. Alot has to do with your interest rates. Anyway, hang in there and know that its OK to feel as you do once in a while. You just have to look at the big picture and see what end game you want to see. Good luck!

[Joan.of.the.Arch]

When you say you can cover all your expenses, no problem, how does that apply to your credit cards? Are you not considering that part of your expenses? Do you mean you are able to make the minimum required payments on the credit cards? I'm just asking because I don't really consider myself able to meet expenses if I am not able to pay for the whole amount of what is on the CC when I get the bill.

I don't know, but it might be helpful to --in your mind-- transfer the debt to the category of "expenses." Not sure. If you think of your debt as an expense, maybe it can help you see whether or not you really have the money for more optional spending.

Also, it sounds like your husband might not be quite as ready to cut back and tackle the debt as you are. But if in the last 3 or 4 months you have managed to bring it down some, then, well, you ARE making progress, right? You probably really have changed some things to be able to do that. Sometimes it may be more successfullto change your old habits a little at a time in order toto adjust to new ones. Of course there can be circumstances when there is nothing to do but ruthlessly cut to the bone!

Anyway, I've seen some folks on this forum make incredible strides in getting their debts paid down. I so admire that because often the person who did it has made really significant changes in the way they live & spend. Maybe they made the changes a little at a time or maybe they dove right in and changed completely. Heck, I have a hard time just disciplining myself not to over-indulge by licking the spoon when I put away leftovers, much less to totally change the many habits that add up to licking the debt! (My only debt is mortage and car payment.)

[Hot dog]

I know the feeling. I want it and I want it NOW!! At least that is how I feel when I look at my debt. I want it all paid so I can start spending on things I want and have the security of no debt. It can be overwhelming and feel like why keep trying when everyone else seems to be spending willy nilly

[PrincessPerky]

Originally Posted by Joan.of.the.Arch

...and changed completely. Heck, I have a hard time just disciplining myself not to over-indulge by licking the spoon when I put away leftovers, much less to totally change the many habits that add up to licking the debt! (My only debt is mortage and car payment.)

Oh my it isn't just me who has trouble with that little bit of self control! the part on the spoon just seems to taste better....but I do it even when full on dinner sigh.

[Tree0164]

I am going to recommend Dave Ramsey's book. He lays down paying off your debt and building wealth in 6 steps.

Focus on the credit card debt at this time. Don't use the credit cards anymore-cut them up.

[Hot dog]

How much do you have in savings? Are you planning on another baby sometime soon? Have you transfered balances to lower rate CC? If you have high rates on those cc and a lot in savings you should really think about putting it toward the card and you will be able to build your savings much quicker without the cc debt especially if it is at 15% or more.

[Scanner]

Don't be too overwhelmed (I think you mean to say it's depressing or discouraging when you compare yourself to us).

Set your own goals and what makes you happy and don't compare yourself to what or where we are.

Benchmarks are valuable but they shouldn't be use to judge your own self-worth (net worth yes - self-worth - no)

We have people from all walks of life in here and each has had trials and tribulations. I know I have.

It's just money.

[loanstar]

you're not alone in this situation. if you keep to the plan and find as many ways to save as possible, you will certainly escape from debt hell.
Good luck!

[Daylily]

I have my debt (mortgage, student loan, auto) set up in a spreadsheet. I have each debt on a separate worksheet. I have calculated the entire payment plan including interest for each. With each month, I am able to see the affect of that month's payments. I am also able to do what-if scenarios to figure out how much I shorten the payoff period by throwing an extra $100 here or there. It really helps to see it all laid out so that I can see how long it will take and so that I can see each month the exact amount that I owe after making the payments.

[cptacek]

Daylily, I was going to say pretty much the same thing.

I have a business loan that is my highest interest rate, so I concentrate on paying that off waaay sooner than the scheduled payoff, after all my bills are paid for that month. I have a spreadsheet that has two amortization tables in it. The one on the right is the amortization table of how is was supposed to be paid off. The one on the left is how it is actually working.

When I got my first loan, it was for $52,402.63, 7.75%, to be paid off in 5 yearly payments of $13,044.98. Total for that loan was supposed to be $65,244.88 by the time I was done with it. I kept track of the payments I put towards it early, kept redoing the amortization table and saw with every payment, not only did the principal go down, the amount of interest accruing every day went down (that's the point of paying early, right?) Eventually, I paid that one off almost 2 1/2 years early, and I saved $6981.46 by doing that.

If I had looked at a $52,000 debt to begin with, it would have been overwhelming. But, because I kept track of my progress, not just with what I owed last time I payed, not just a snapshot in time, but a real record of what the impact of those small payments did, I kept pushing to get it payed off.

I got another business loan that I am attacking now, this time for $25,073. I got it in February of this year, and the first payment isn't due until April of next year. I have it set up to pay 2 yearly payments, each for $14,243.68. This loan is at 8% interest. But, I've already put $8746 on it, and doing that has saved me $1317 so far. The last payment I sent to it was only $101.75, which sounds like nothing compared to $25,073, but that payment dropped the daily interest from $3.76 to $3.73. Ok, only 3 cents, but it still shows me I am making progress. When I first started this loan, it was $5.57 a day!

I'm a numbers person, so keeping track of my progress is a great way to motivate myself.

[LuckyRobin]

I also have a massive debt load due to three years of medical issues that royally messed us up. The thing I have found that has helped me the most is blogging. It really sorts out so much about what I am thinking and feeling with all the debt and how I go about conquering it one bite at a time.

I never used to have an EF either. I started depositing $10 a week into a savings account. $10 doesn't seem like much of anything but slowly along the way I found other bits and pieces to put in with those weekly $10 deposits and now I have an EF of $1100. It's small compared to some, but I keep at it. And I will keep at it until I have six month's expenses, no matter how long that takes.

Same with the debt, I just keep at it. Blogging keeps me focused and we are like a regular support group over there. The forums here are great as well, but daily blogging has been the motivational tool I needed to make real progress and get out from the ever present feeling of being overwhelmed.

[Lindahfx]

I also have spreadsheets that I track our expenses and debt. But not as detailed as what some of you have... perhaps I need to start something like that. If you look at my blog (address in my sig) you'll see my past 3 months of expenses. We are trying to get better at reducing our monthly variable expenses but it's always a challenge. My husband isn't keen on taking lunches. I usually take mine 3 or more times per week.

Every two weeks, as payday is approaching, I look at the calendar of upcoming fixed expenses and see what I will have left over for the 2 week period. Then I mentally calculate groceries, special events (birthdays, etc.), etc. and then whatever is left over, I put extra on debt. We just have the one cc right now at 0% interest but we're focusing on paying on that one as the interest goes up to 19.99% in March. So I want to have as much of it paid off as possible by then. And when it comes to time for them to charge interest, I'll look to either put it on another card with lower rates OR a LOC or something like that. Once the cc is paid off, the next focus will be my husband's student loans. And then.... the mortgage.

[debtfreecb]

I am in the same situation - 34,000 home equity and about 32,000 in credit cards with a $1000 emergency fund. I picked up several books by Dave Ramsey who give some great advice for paying down debt, hanging in there with perseverance and lots of hope. It will take me 5 years to pay off my debt. I am totally ashamed of my financial status but I've learned a ton. I don't have any other advice but to share my experience with you. In the last 5 months I have paid off $7000 in debt. Hang in there, it takes time

[debtfreecb]

Try keeping spreadsheets to track your loans. I have 5 spreadsheets - 1 for my budget and 4 others to track my debts. I am fanatical about tracking my loan balances and payments. It is practially a part-time job. I act like a hawk and constantly evaluate where I can best place my money to reduce my debt.

Someone previously said that you should set up your own benchmarks/goals and I think that is the best advice to take. Figure out what success will look to your family and not what others have achieved on this blog.

I have moments when I totally panic about our financial situation but I am not giving in or up.

Give yourself a pat on the back for addressing your problem. I often wonder how many other people out there in my community have the same problems as we do.