My debt story...and progress on repayment

**papa_squat** · 03-08-2013, 02:14 PM

Great work! That's a huge differnce to make in the matter of a few short months. Keep up the good work. I feel for your wife though and agree that you want to feel like you deserve the nice thigns you work for, but remind her if you bought it on credit, you haven't truly earned it yet!

It's important to reward yourselves when something is paid off so you and your wife stay motivated. When we paid off one of my student loans last year, we went out for a nice dinner and a movie to celebrate. Considering we hadn't done that in months to save money for the debt repayment, it was a nice reward that wasn't out of perspective with our budget. We snowballed the monthly payment on that loan into my other student loan to keep it going, so the loan that was originally going to take me over 10 years to pay off will now be paid off in five. That is reward enough, but going out to dinner and movie made it feel a little more special.

**MonkeyMama** · 03-09-2013, 11:19 AM

Welcome, and congrats on your progress.

You are in the painful stage right now. If you stick it out for the "payoff" stage, she may be easier to convert. I grew up in an exceptionally balanced, debt-free household. I never identified with the "deprivation" side of things. You will learn to exchange your material things for time for your loved ones and the peace of mind of not worrying about losing your job. All that stuff is priceless. "Living like no one else." I think it's hard to understand until you start to actually live it. IT won't be the second you are debt free, but it will come when you build up your savings and start to see you have more choices and can weather storms more easily. {& lord knows we have some nice things too - it's not like you can't ever have anything nice!! The big shift will be prioritizing what is really truly important to you, and letting the non-important stuff go}.

**snafu** · 03-09-2013, 11:55 AM

Wow! Good on you both! Terrific progress in knocking down debt in a short time frame. Keep telling your wife she's terrific. Make dinner for her! Do some task you know needs doing without being reminded. Sunday you'll need to change all the clocks an hour forward...even the vehicles. Anything you can do to make your wife feel special and appreciated will go a long way in the direction you wish to proceed. Use something other than buying 'stuff' to create momentum.

**Baby_nurse** · 03-09-2013, 05:57 PM

Impressive work on the debt reduction.

Maybe once it's done, you can keep paying that some of that $ into a "fun fund" so that when you get the urge to splurge, you have cash available rather than using credit.

ETA: my husband is like your wife. If he has $, he spends it. After years of begging, cajoling , threatening and every other technique known to man, I finally came to realize that I couldn't control his way of thinking. It lead to resentment on both of our parts. The solution for us was to give him a cash allowance. I have zero say on what he spends it on. But when it's gone, it's gone. It only took 23 of marriage to get to this compromise.

**VanReb** · 03-09-2013, 10:58 PM

Great progress! Keep at it. Your wife is justified in the way she thinks, but if the spending goes overboard, talk to her about it rationally.

**bigdaddybus** · 03-11-2013, 07:23 AM

Thanks for the all encouragement!

My wife and I have been talking about rewarding ourselves after the truck is paid off. Heck, we almost had a celebration dinner out last weekend just because we were excited to be getting close.

MonkeyMama, there is alot value in growing up in a debt free home. We went through FPU with 5 other couples and several of them grew up in debt free households and the rest did not, the differences in household budgeting just in our small group was amazing. My parents are retired with the largest mortgage of their life (700K), if that gives you an idea of my financial role models.

babynurse, we each have an allowance for weekly "Blow" money. It works well, I've even given her a couple bucks a few weeks to help her get by which I dont mind as in the big scheme of things our spending is significantly reduced.

After our non-mortgage debt is gone in June I have to find the willpower to go after our mortgage debt. Current balance is 259K @ 3.75% on a house worth 325K.

**bjl584** · 03-11-2013, 09:23 AM

Congrats on your progress so far. It would be helpful if you posted up the rest of your financial picture as far as your assets. What are your ages? When do you want to retire?

**bigdaddybus** · 03-11-2013, 10:46 AM

Here you go bjl584, anything I am missing for a complete picture?

debts: (estimates of resale are conservative)
home: owe 265,000 resale of 325,000
truck: $6687 resale of $20,000
RV: $13,100 resale of $17500
2 CC's for emergencies: 0 balance

assets:
his 401K $75,000
her 401K $60,000
his roth IRA $17,500
her Roth IRA $6,500
college funds total $5000
savings account $5000
Checking min bal $1000
her minivan worth $10,000

other: both his and her pensions = 45% percent of the highest 5 yrs salary at age 62. Current combined salaries of $150,000. We also have $10,000 a yr in tax free income.

Both my spouse and I are 38. We want to retire no later than 62.

thoughts?

**debtupset** · 03-13-2013, 12:04 PM

My only thought is that you two are pretty set as far as retirement goes if you keep on going like you are now.

My wife and I are in the middle of debt repayment, and it's been about two years. We have another year and a half or so. Here's how we look at it, if we live as though we are dirt poor and put all our extra money towards debt, we will probably give up after a few months. But if we give ourselves some rewards (we just paid off the last $7,000 of a car loan thanks to a bonus and our tax return), like going out to eat, or a weekend trip for our anniversary, then we will press onward. We will still make progress. Instead of 18 months, it might take us 20. But at least we'll finish the race. You know?

Our experience is that it's easy to give up and indulge ourselves in worse ways (like charging up a credit card once it's paid off because we want to do something fun), unless we take some money and use it to enjoy ourselves once a month or so.

**bigdaddybus** · 03-14-2013, 11:12 AM

Originally posted by debtupset View Post

My only thought is that you two are pretty set as far as retirement goes if you keep on going like you are now.

My wife and I are in the middle of debt repayment, and it's been about two years. We have another year and a half or so. Here's how we look at it, if we live as though we are dirt poor and put all our extra money towards debt, we will probably give up after a few months. But if we give ourselves some rewards (we just paid off the last $7,000 of a car loan thanks to a bonus and our tax return), like going out to eat, or a weekend trip for our anniversary, then we will press onward. We will still make progress. Instead of 18 months, it might take us 20. But at least we'll finish the race. You know?

Our experience is that it's easy to give up and indulge ourselves in worse ways (like charging up a credit card once it's paid off because we want to do something fun), unless we take some money and use it to enjoy ourselves once a month or so.

I looked through your blog, I like the charts on the side. Nice work and persistance!

Getting out of debt is alot like the half marathon I am training for. Slowly building up my endurance, getting faster, getting leaner, and getting excited to cross the finish line.

looking forward to making that final truck payment next Friday

**grumpter** · 03-15-2013, 06:26 AM

I was reading through the thread and scratching my head on why someone was so eager to throw money at such low interest rates. I went back to re-read the initial post where I quickly found what I had missed the first read through... Dave Ramsey. Ugh. If it was 10, 20, 30 years ago then his advice to throw money at a loan would be good advice. At today's rates you are better off paying minimum payments and hoarding/investing anything extra.

**bigdaddybus** · 03-15-2013, 07:13 AM

Originally posted by grumpter View Post

I was reading through the thread and scratching my head on why someone was so eager to throw money at such low interest rates. I went back to re-read the initial post where I quickly found what I had missed the first read through... Dave Ramsey. Ugh. If it was 10, 20, 30 years ago then his advice to throw money at a loan would be good advice. At today's rates you are better off paying minimum payments and hoarding/investing anything extra.

I see where you are coming from, but from my perspective I am comfortable paying off my 2.1% and 2.75% loans rather than building up my .15% savings account and .10% interest bearing checking accounts.

What do you suggest? Piling money into dividend paying stocks in my trading account was a thought I had.

**Petunia 100** · 03-15-2013, 08:32 AM

Originally posted by bigdaddybus View Post

I see where you are coming from, but from my perspective I am comfortable paying off my 2.1% and 2.75% loans rather than building up my .15% savings account and .10% interest bearing checking accounts.

What do you suggest? Piling money into dividend paying stocks in my trading account was a thought I had.

Not trying to speak for Grumpter, but I was wondering about your retirement accounts. Are you contributing to your workplace retirement plan and/or IRAs for yourself and your wife?

**bigdaddybus** · 03-15-2013, 10:17 AM

Originally posted by Petunia 100 View Post

Not trying to speak for Grumpter, but I was wondering about your retirement accounts. Are you contributing to your workplace retirement plan and/or IRAs for yourself and your wife?

My spouse and I contribute 15% of our pre-tax income into our company sponsored 401K. Company match is around $2400 for the both of us, not great but better than nothing!

I put extra money towards Roths, I dont have a deposit set, same with College funds.

My debt story...and progress on repayment