$60,000 Debt Payoff Motivation

[TrueMaroonGrind]

My approach to debt and income may help.

I had a mortgage debt of 300k when I was 25, and paid it off when I turned 32. My wife had a student loan debt of 176k when she was 29, and paid that off before her 32nd b-day.

Secret trick.

Pick up extra shift/do overtime for anything you want to waste money on. Allocate your base pay toward debt/savings/living. Every time you want to go on a trip or buy something that is out of the ordinary, work for it first! You want to buy a high end computer?..work a few extra shifts for it. You want to go on a vacation?..add more shifts to that equation.

Use your jobs as a piggy bank instead of your own. Extract extra money from your work.

Very impressive. Congrats on paying off all that debt in such a short time.

I would love to get paid overtime but I am salaried, so I can work overtime but get paid the same no matter what.

I have been turning my woodworking hobby into a little extra cash. I have done odd jobs here and there and have gotten a little extra money to pay on my loans.

Thank you for the advice and encouragement.

[TrueMaroonGrind]

Singuy assuming you even have a job that pays overtime. Salary doesn't.

But a second job if you are young and have no kids is not a bad idea. You'll be working so much you won't have time to spend money. If debt free is your goal.

Yes I am on salary. I am 25 but have a 9 month old daughter, so getting a second job is not really in the cards.

[TrueMaroonGrind]

I did this worked a second job until recently. Built up a great emergency fund paid off my car and the last of my credit card debt. It's not easy though. Sometimes I wonder did I waste my the last of my young years on this since now I have 30K in debt again.

But oh well. The new debt is from house repairs and its a zero percent loan. Sometimes we just got to do what we have to do.

You can do this though don't get discouraged. At least its student loans and not credit card debt!

Yea I don't think a second job is for me. I don't want to miss the early years of my daughters lif unless I absolutely have to. I do work some side carpentry jobs for extra cash. I think that will be as close as I get to a second job.

Thank you very much for the advice and encouragement.

[PeggyHefferon]

Thanks for the encouragement. I really appreciate the advice on paying slower. I agree I don't want to completely give up all of my entertainment/vacation spending. I can see getting burned out really quick if I give everything up for the sake of paying off debt super fast.

HundredK didn't mention the reasons for deciding to pay it off slower. I wouldn't make the assumption that entertainment and vacations were the reasons.

I made an assumption as well when I read his post, but it was more geared toward retirement savings. I don't recall seeing you mention anything about this, but I believe the general consensus would be that you and your wife contribute to 401ks (if available) up to the company match. It is free money that you are throwing away if you aren't.

Good luck to you both

[TrueMaroonGrind]

Glad to see you are pushing hard to get your family in a debt Free situation!

Getting out of debt quickly does take sacrifice, but you must be careful you don't try to throw out the baby with the bathwater. Finances are mostly based on emotion. The side effect of over obligating your cash flow to debt repayment, or being too aggressive with your planning, is that you can set yourself up for failure. If you never actually hit the goals it can cause you to get discouraged, which can make you do a 180 back into living with debt. "I can't do it, I'll just live with payments" It happens all the time. Probably why a lot of people come here, get super excited at what numbers can look like on paper, but then find out they can't seem to make it actually happen.They think they are failures and can't do it. In reality, they simply planned to aggressive and it wasn't doable. You have to plan right to be successful.

To avoid this mistake, ease up on your goals if you haven't given yourself some wiggle room for unplanned things. Make sure you have some cash flow left each month. As you go along, put that money onto the debt if you don't end up needing it. This allows you to not get discouraged when life happens, but will boost you up if you end up hitting your goals sooner.

Just my .02$ Awesome job on what you've done so far!

Thanks for the great advice. So far it seems that $600 extra we are paying is on the sweet spot for how much extra we can pay. Anymore and I think we would be stressed out constantly.

I think the main financial strategy that helps us stay in front of unexpected costs is to expect them. I recorded in a spread sheet all the big ticket items that I know we will pay for every year. This includes cars, vacation, Christmas, pets, medical ...etc. I calculate how much this would cost me over the year and divide by 12. Boom we have an expected monthly payment for unexpected expenses.

Again thank you for the advice and encouragement.

[TrueMaroonGrind]

Kudos to you for making the decision to make clearing debt a high priority. Is your wife onboard? I've found it helpful to note every 'spend' on a list on my cell phone, it made me more aware of spending. I was surprised by how much l spent on incidentals. It's important to give every dollar a 'job.' If you're willing to list sums allocated we may be able to offer suggestions to make dollars 'stretch.'

I learned from experience that having a meal plan and buying loss leaders has an impact on our bottom line. We're less motivated to eat out if there is a meal prepped and waiting and we've stopped needing to throw out food that's droopy or expired.

Terrific to see you've already put in place $ 1,000. EF since it's reported 2/3 can't do that! I suggest you look for free or nearly free entertainment offered in your community. It's often subsidized with your tax dollars so you may as well participate. Have you every taken the role of 'tourist' in your day's driving range? We've taken a 'picnic' lunch/meal and explored places, museums, factory tours and festivals recommended to visitors. The point is to sleep at home, saving accommodation costs. We only go to restaurants that we've never tried for an appetizer or dessert for example. The point is to have a good time without extra expense.

With spring upon us, I suggest going room by room on a declutter mission. Try to identify items no longer used, no longer needed and offer them for sale on your local FB sell page, Craigslist or even a yard sale if there is a community event. We've always assigned 'snowflakes' [small bits of unexpected income or savings] to a specific financial goal. It makes a surprising difference.

I'm confident you can reach your goal. We're here to cheer your every success

Thanks for all the great suggestions. Yes the wife is onboard. We are both sick and tired of our debt shackles.

Food wise we try to cash out $200 per month and only eat out with that money. It is much harder to spend $50 bucks on dinner when you know that is a fourth of your budget for the month. We have also been trying to cut back on food waste, which is a personal issue with our family. It is sad we thrown out food just because we forgot about it, but we are trying to work on it.

Just recently we became members of the local Zoo. $60 bucks for unlimited access. We have been using that as our "free" weekend entertainment. They allow coolers and everything, so normally we bring our own food and don't buy theirs. I think we will have to try some other parks and whatnot so we don't get burned out at staring at pandas every weekend. We'll check out some of the awesome parks in the area I guess.

Great idea. My wife bought a spin bike/clothes rack that is begging to be sold.

[TrueMaroonGrind]

HundredK didn't mention the reasons for deciding to pay it off slower. I wouldn't make the assumption that entertainment and vacations were the reasons.

I made an assumption as well when I read his post, but it was more geared toward retirement savings. I don't recall seeing you mention anything about this, but I believe the general consensus would be that you and your wife contribute to 401ks (if available) up to the company match. It is free money that you are throwing away if you aren't.

Good luck to you both

I am contributing up to the company match. I haven't even considered going below that number. We also opened up a Roth IRA, but are only putting in $20 a month until we get some of our cash flow back from our debt. We are starting small with the hopes of making it big by the time we are 60.

Thanks for the advice and encouragement.

[TrueMaroonGrind]

A suggestion here, is every payment on the car and school loans is round up each payment and how much you round up depends on how tight your funds are. If you are just barely getting by, round up to the dollar so that $197.25 becomes a payment of $198. After a few months that you can see you have managed this, then round up to the nearest $5 so that bill you would now be paying $200. If that goes well, throw another $10 to that payment and then eventually $25, etc. You can still be throwing the bulk of your payment money to one bill in particular, but all the others are getting smaller at the same time as well.

Depending on how your bills are set up (I'm not sure if this works with student loans but does with cars and credit card bills) if you have more than one payday a month, make partial payments every pay period. Every bit of the principal that you can pay off the soonest, is less interest you will have to pay.

Doesn't seem to be doing much, but that is what I was doing this year. I knew my car payment would be done in July or August, but I started making extra payments and within a couple of months I realized that I had the cash to finish paying it off so I did! What a great feeling. If I hadn't made some extra payments, etc. the number would have been too high for me to pay off the car yet. Also got our smallest credit car bill paid off doing the same thing!

How do you eat an elephant? One bite at a time. Little by little it works and even if all you are doing right now is rounding bills up to the nearest dollar or $5 (and not adding TO the bill) you will see the minimum payment going down instead of the usual going up. It works. It isn't instant, but it works.

Great advice. You are so right. Paying off big debt is a loooooooong process. We will consider doing this with all of our loans. We are currently rounding up our mortgage and it has helped out immensely with building equity.

[Gailete]

We are currently rounding up our mortgage and it has helped out immensely with building equity.

Glad to be of help. Rounding up also helps make the math in your checking account easier to do. Working hard on our rental property pay offs as well right now. We have the mortgage and we had a loan for the work we did to the place, new roof, windows, kitchen, etc. (it was a place that is around 100 years old so needed some heavy duty work). I'm paying an extra $25 to both of the loans from the rent money each month, so it isn't coming out of our regualr income. With our income flucuating each month, it is hard to have a regular budget, so I know we can't always make extra payments like we would like, but even throwing an extra $5 at a bill makes me feel like I am doing something towards getting us out of some heavy debt.

Even though I can't come here every day, I find this site to be a great motivator since so many people in our non-internet lives don't know or care about making ends meet - at least that seems to be their attitude! One thing it has helped me to do is resist when things get bad removing anything from savings. Everything we have in savings, even if it isn't classifed that way, in my mind is for 'retirement'.

[jared521]

well i thought i would offer some of my experience. about 3 years ago. we were completely broke. making about 110k a year household income. buying groceries with credit cards. paying taxes with credit. and no extra money at all. and we were having problems with our electricity. thinking we would have to call an electrician. i remember that night like it was yesterday. hanging my head down and almost in tears. saying to my wife something has to change. so we did a debt consolidation. i dont advise this route. although it did give some relief. there are more efficient ways to reduce debt with out fees. fast forward 2 years. i start listening to dave ramsey. and commit to it in august of 2016. so far we have paid 13k in debt sense then. and hope to hit 20k by this august. were still 228k in the hole including our house. and should have it paid for in just about 4 years from now. and completely out of debt. we do give ourselves 40.00 a week each. some say thats too much. but it allows for a few coffees a week. and we eat out most Saturdays with a few friends. its a very modest restaurant. 25 usually covers us with a tip. we feel it just helps us keep our sanity through all of this. you can definitly do this

[commoncentsmike]

I have seen some posts on this forum to help people motivate themselves to pay off debt. I would like to share my story so far and start this motivational post to help keep my spirits up during this long debt payoff process.

My wife and I both attended college, where we met, and both accumulated a lot of student loan debt. I graduated in December 2013 with a BS in Engineering and 4 student loans totaling over $32,000(6.8%,10yr). My grand idea after school was to take out a $25,000(4.15%,6yr) loan to buy a new car.

My wife graduated in May 2014 with a BS in Animal Dairy Science and decided to teach. In December 2015 she completed her masters in Middle School education online while she was teaching. She had 2 student loans one for 5,000(4.00%,10yr) and one for 33,000(5.00%,30yr).

I know so many mistakes were made, but we are in this situation now and I am hellbent on removing this burden from my family. Here is the situation today:

- Car: $11,557(payment: $400)
- My student loans: 2 loans remaining at $5,986(payment: $90) and $6,229(payment: $93)
- Wife's student loans: 2 loans remaining at $4512(payment: $55) and $32,176(payment: $200)

In total it is a whopping $60,463 of pure debt burden. My goals for 2017 are to pay off the car and bring my total non-mortgage debt down to $45,000. Lofty goals I know, but easy goals are not worth striving towards.

Any motivation, personal stories or advice would be greatly appreciated.

Just interviewed someone last week who paid of $37K of debt in 16 months, so its definitely doable. Have you looked into consolidating your student loans into your car loan? If you have A+ credit, you can make it one large car loan with a rate somewhere around 2%. Its great when it works out, but not everyone has the equity in their car to do so. Regardless, good luck!

[TrueMaroonGrind]

First progress update

I have seen some posts on this forum to help people motivate themselves to pay off debt. I would like to share my story so far and start this motivational post to help keep my spirits up during this long debt payoff process.

My wife and I both attended college, where we met, and both accumulated a lot of student loan debt. I graduated in December 2013 with a BS in Engineering and 4 student loans totaling over $32,000(6.8%,10yr). My grand idea after school was to take out a $25,000(4.15%,6yr) loan to buy a new car.

My wife graduated in May 2014 with a BS in Animal Dairy Science and decided to teach. In December 2015 she completed her masters in Middle School education online while she was teaching. She had 2 student loans one for 5,000(4.00%,10yr) and one for 33,000(5.00%,30yr).

I know so many mistakes were made, but we are in this situation now and I am hellbent on removing this burden from my family. Here is the situation today:

- Car: $11,557(payment: $400)
- My student loans: 2 loans remaining at $5,986(payment: $90) and $6,229(payment: $93)
- Wife's student loans: 2 loans remaining at $4512(payment: $55) and $32,176(payment: $200)

In total it is a whopping $60,463 of pure debt burden. My goals for 2017 are to pay off the car and bring my total non-mortgage debt down to $45,000. Lofty goals I know, but easy goals are not worth striving towards.

Any motivation, personal stories or advice would be greatly appreciated.

Car:
$9,073
My SL 1:
$6,112
My SL 2:
$5,872
Wife's Small SL:
$4,210
Wife's Big SL:
$32,073
Total:
$57,351

Progress was made, but we did have some unexpected costs prevented us from paying $1,000 on the car every month. Challenges have presented themselves but we are very motivated and excited to reduce our debt total.

We are looking to have significant windfall payments in June and July. I get my bonus(fingers crossed) and my wife will be working this summer to get an extra paycheck for June and July. I also have a small savings account that I need to close and I will apply the balance to the car. I also will look to monetize my hobby of carpentry. Not a full on second job, but do some odd jobs when I have time.

We are a little behind where I had projected us to be but hopefully our windfalls will catch us up. I am I look forward to giving another update after the summer. Thank you all for the advice and encouragement.

[Gailete]

There will just about always have a few bumps in the road of paying things off, but don't let it derail your whole plan. Kind of like a diet and you sneak a bite of cake or a cookie and since you have already fallen, eat the whole cake or a dozen cookies and by the end of the week the word diet is out of your vocabulary.

That is why it is important to encourage each other, and to keep keeping on. Even if you have a tight week for whatever reason and the only thing you can do on your bills is round your payment up to a dollar or the nearest $5, you know you are making progress.

Today being Wednesday it is my official day in the week to balance the checkbooks, even though I do this every time I have gone shopping afterwards so I don't miss any debit card withdrawals. Well this is the week in the month when I used to have an almost $100 car payment to make. But the car is paid off! and yet another bill also comes in due during the third week of the month and while not paid off, the payment was made a couple of weeks ago. So, it came down to, I didn't have ANY bills to pay today! I have no clue when that happened last - for sure it has been years. So even with other bills owing, etc. I am making progress that I can feel. Oh, and the other big credit card bills that are owing for this month? I dumped between $550-600 extra on three of them this month. It is a snowball effect I guess.

[LivingAlmostLarge]

You are less in debt that if you did nothing. Keep moving forward.

[rdevansii]

. Have you looked into consolidating your student loans into your car loan? If you have A+ credit, you can make it one large car loan with a rate somewhere around 2%. Its great when it works out, but not everyone has the equity in their car to do so. Regardless, good luck!

I have never thought about doing it that way, but a unique approach to creative borrowing. Thank you for sharing!