Need pep talk

[corn18]

Read this book:

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474/ref=sr_1_2?ie=UTF8&qid=1515771635&sr=8-2&keywords=the+millionaire+next+door

You won't get a lot of sympathy here until you start to listen. If you think we are wrong, you could leave. I came here with an attitude almost 5 years ago. Almost left. Stuck with this crowd, listened and it changed my life. Your choice.

My debt profile. Can you guess when I decided to listen to the advice I got on this forum?

[Jluke]

About 4 years ago I was debt free.

Then I bought a house 90k, a new truck 32k and a tractor with two attachments 25k.

What I owe now: 2,600 House, 20k Truck, 20k Tractor.

Assuming we haven't lost you...

You lose me on the house b/c I can't tell if it cost 90k or if that was the loan amount after purchase.

You bought a property that seems to require the truck and tractor - no biggie in my opinion. Maybe your total debt was around 150k (still not sure on house/mortgage). consumer item debt isn't the greatest but you should have been able to manage it.

However in 4 years you've managed to only pay down 12k (truck) and 5k (tractor)? so DisneySteve is right asking about the rates and loan terms.

If you really did plow everything into the mortgage to go from 90k to 2600, that is where you may have gone wrong in trying to leverage debt.

[Gonzo]

You absolutely said you have a problem paying your bills:


As for a "pep talk", do you actually want advice or do you just want people to tell you everything is fine and you'll be okay.

You made some extremely poor financial decisions and are now dealing with the consequences. If you want to fix that, you will need to make some hard choices and sacrifices.

Your vehicles shouldn't cost more than 50% of your income. You earn 54K and spent 57K on vehicles. That was way more than you could really afford which is why you're struggling now. You need to sell one or both vehicles and replace them with more affordable options. That's the best way to dig yourself out of this hole.

If you share the rest of your budget, we'd be happy to give additional advice.

I said that because I was putting every extra dollar towards getting out of debt. All my bills are paid.

[Gonzo]

I'm curious about the interest rates on the 3 loans. That would also influence how the debts should be approached.

House was 4.05 fixed 30 year. Bought in either 2016 or 17.

Both Tractor and Truck are just a hair over 2%

[Gonzo]

You absolutely said you have a problem paying your bills:


As for a "pep talk", do you actually want advice or do you just want people to tell you everything is fine and you'll be okay.

You made some extremely poor financial decisions and are now dealing with the consequences. If you want to fix that, you will need to make some hard choices and sacrifices.

Your vehicles shouldn't cost more than 50% of your income. You earn 54K and spent 57K on vehicles. That was way more than you could really afford which is why you're struggling now. You need to sell one or both vehicles and replace them with more affordable options. That's the best way to dig yourself out of this hole.

If you share the rest of your budget, we'd be happy to give additional advice.

Pep talk does not mean advice. It does mean something similar to "You can do it"

[Gonzo]

Assuming we haven't lost you...

You lose me on the house b/c I can't tell if it cost 90k or if that was the loan amount after purchase.

You bought a property that seems to require the truck and tractor - no biggie in my opinion. Maybe your total debt was around 150k (still not sure on house/mortgage). consumer item debt isn't the greatest but you should have been able to manage it.

However in 4 years you've managed to only pay down 12k (truck) and 5k (tractor)? so DisneySteve is right asking about the rates and loan terms.

If you really did plow everything into the mortgage to go from 90k to 2600, that is where you may have gone wrong in trying to leverage debt.

Personal preference was to pay off the house and own a bunch of sticks and bricks or blocks as my foundation is made of. I plowed into the mortgage. I was able to drop the pmi with a substantial down payment and then put the blinders on and focused on the mortgage.

The mortgage is almost gone. I have to survive January and towards the end of February I should be able to pay it off. At the end of January I will owe 2600 and in February I'm expecting 2000 back in taxes. I believe b/c I focused on the long term debt I saved 10s of thousands of dollars.

[Jluke]

I believe b/c I focused on the long term debt I saved 10s of thousands of dollars.

Yep, been there done that with paying off a mortgage. But I did recently move and have a mortgage again.

I think we were all concerned when you said you didn't have money to put gas in the truck, selling items, etc.


over 30 years on a 90k loan at 4.05% it would have been 65k in interest

[msomnipotent]

You are going to get opinions here whether you ask for them or not and everything is up to debate. You can ask about changing a light bulb and 2 will say, "You don't need light bulbs everywhere. Go without." Two will say, I bought my light bulbs in bulk, on sale, at a cost of half a cent each 10 years ago and I borrowed the ladder from a neighbor." And two will say, "I hired someone to install LED's all over my house so I never have to change a light bulb again. My time is worth more than that.".

Welcome to the club.

[disneysteve]

Pep talk does not mean advice. It does mean something similar to "You can do it"

So you aren’t actually interested in advice?

I feel pointing out the name of the website might be appropriate here.

Good luck.

[Gonzo]

Yep, been there done that with paying off a mortgage. But I did recently move and have a mortgage again.

I think we were all concerned when you said you didn't have money to put gas in the truck, selling items, etc.


over 30 years on a 90k loan at 4.05% it would have been 65k in interest

I bought a book by Dave Ramsey. In it he said to allocate every dollar. Basically, anything extra has gone to the mortgage to quickly pay it down. I am in good shape in regards to the mortgage. Rice and beans, beans and rice. I must admit that it is hard to not spend. Like like no one so you can live like no one or something like that. A dish that I eat is fried tuna mixed with stuffing. Maybe a $2 meal.

There are some things that Mr. Ramsey has said that I didn't do such as tackling the smallest debt first. I also do not use the envelope method since I loath those who are super organized. My desk is messy but I know where everything is. Murphy has visited my house a few times and the baby step of having a grand in reserve was avoided which left me to sell some items to send Murphy packing.

In hind sight I think I should have tackled the truck payment first since it would free up slightly more money than paying off my house. With the house I will still have to pay land and (here in the taxed state of NY) a school tax that is approximately 200 a month. But, there is something about owning (except for taxes previously mentioned) a house. Home ownership was the carrot of this donkey.

Things I'm tired of:
-Rice and beans....passing up steak as big as a plate
-Buying used tires with great (almost new) tread at 1/3 the price of new. I manually change my own tires....it would be so much nicer to have the garage do everything for me albeit with a retail price
-Scrimping on Christmas.
-Retailers trying to steal from me. Have a dealership tell me that my cars computer could not be programmed and that dealership said that I would have to spend about 2500. I reprogrammed it for only 220.
- 25 cent toilet paper
-NFL players who make millions while disrespecting our military
-Not buying that new stove even though I know it will save me money in heating my home. The cost is approx 4500.
-Tired of doing overtime
Apology for the rant.
I've set up an appointment with my tax guy for February 14th. Hopefully the tax info will be in the mail soon.

[disneysteve]

I bought a book by Dave Ramsey. In it he said to allocate every dollar. Basically, anything extra has gone to the mortgage to quickly pay it down.

As you know, that's not what Dave Ramsey's book said to do.

Dave's system works. I have some issues with parts of his advice but his system definitely works but only if you actually follow it.

[Gailete]

I bought a book by Dave Ramsey. In it he said to allocate every dollar. Basically, anything extra has gone to the mortgage to quickly pay it down. I am in good shape in regards to the mortgage. Rice and beans, beans and rice. I must admit that it is hard to not spend. Like like no one so you can live like no one or something like that. A dish that I eat is fried tuna mixed with stuffing. Maybe a $2 meal.

There are some things that Mr. Ramsey has said that I didn't do such as tackling the smallest debt first. I also do not use the envelope method since I loath those who are super organized. My desk is messy but I know where everything is. Murphy has visited my house a few times and the baby step of having a grand in reserve was avoided which left me to sell some items to send Murphy packing.

In hind sight I think I should have tackled the truck payment first since it would free up slightly more money than paying off my house. With the house I will still have to pay land and (here in the taxed state of NY) a school tax that is approximately 200 a month. But, there is something about owning (except for taxes previously mentioned) a house. Home ownership was the carrot of this donkey.

Things I'm tired of:
-Rice and beans....passing up steak as big as a plate That is not the only cheap food in the world. I've been poor most of my life and I know I have never had beans and rice. Yesterday at WM I saw eggs for less than 70 cents a carton. High protein and amazing how many things you can do with them. We also make a lot of baked potatoes with toppings.
-Buying used tires with great (almost new) tread at 1/3 the price of new. I manually change my own tires....it would be so much nicer to have the garage do everything for me albeit with a retail price
-Scrimping on Christmas. This year at our house all Christmas gifts were either purchased at the thrift store or gotten by way of the reviews I do. My family has been getting more 'costly gifts' in the last few years when I haven't had money to spend at all than when my budget was about $25-50/person. You don't have to buy expensive items to prove your love and technically it isn't yours our their birthdays anyhow!
-Retailers trying to steal from me. Have a dealership tell me that my cars computer could not be programmed and that dealership said that I would have to spend about 2500. I reprogrammed it for only 220.
- 25 cent toilet paper I hear you there and a long time ago I decided to no longer buy the cheap stuff and for a woman that is doubly more important than for a man!
-NFL players who make millions while disrespecting our military
-Not buying that new stove even though I know it will save me money in heating my home. The cost is approx 4500. Please tell me that you aren't talking about a kitchen stove for $4500! Well made stoves can be had for much less than that. Our was originally $1300, but was half off at a scratch and dent sale at Sear about 17 years ago. I'm pretty sure you can still get a stove for less than $1000. If you are talking about a wood burning stove or something along those lines, I don't know how much they run.-
-Tired of doing overtime OT is something many of us do or did for various reasons. I did as much as I could which boosted my SSD check more than I would have had, but that wasn't why I did it at the time.
-Apology for the rant.
I've set up an appointment with my tax guy for February 14th. Hopefully the tax info will be in the mail soon.

If you are getting $2K back, then you are overpaying. You need to adjust what is being taken out of your paycheck for taxes. Why give it to the tax man for him to use all year when you could use it during the year. That is over $150/month!

Sorry, some of that is advice, and I can see how you can get out of this debt, but you do need to make some different choices in what you are doing, such as eliminating that tax refund. I never quite understood why people are so happy to get a big tax refund as in general it is all money that you have given to various governing bodies interest free for the year! You were the one that wanted to pay off your mortgage as quickly as possibly which you have just about done. I suspect that by just making the regular payments it will be gone this year anyhow. With The extra $150 by not giving it to the taxman ahead of time, you could be buying more groceries and having a bit more variety in your life. If nothing else, you could budget for a steak at least once a month. I find them marked down at the two stores that I go to that have decent meat. Last I checked WM added 15% water to their meat which makes for very expensive water by the pound.

I was once in terrible debt and just drowning financially. Our minimum payments on house, car and credit card bills was MORE than my take home pay. He told every one that he made $800/week -- yeah he did, 2-3 times a year. The rest of the weeks he would gross $300-400, and be taking cash advances from his pay as well. To get out of that hole, I filed for divorce and kicked Mr. Big Bucks (what my son called him) out of the house, sold the house, and started getting my life back on track. Unfortunately, I had some health issues and still do and haven't been able to work out for most of the past 16 years, and no way do we have the same financial problems that I had with the ex! We have financial problems but hubby doesn't come home with half his paycheck spent before we even see it. Hopefully in two months some of the tightness will ease up a bit when our rental property is paid off. It is good to have something to look forward to. Whether you take any advice or not, once your mortgage is done, then you can focus on those credit card bills.

[scfr]

It sounds like you are in good health (my apologies if my assumption is incorrect), so yea, of course you can do it.

One thing that jumps out at me from your posts is that what you write makes it sound like you think about things in extremes. Maybe that is not true, but that is the way it came across to me when I was reading. And I can't help but wonder if "thinking in extremes" somehow contributed to the predicament you are in. It seems like you might benefit from considering more moderate, middle of the road options sometimes.

I was going to type more but I think I'll save my time & energy unless and until I hear back from you IF you think what I say has any merit and IF you are interested in some suggestions.

[Like2Plan]

I've set up an appointment with my tax guy for February 14th. Hopefully the tax info will be in the mail soon.

If all you owe is 2600 on your house and you have that covered, it seems like you will be able to focus on getting your vehicles paid off in no time. That will probably do wonders for your cash flow.

I think msomnipotent made a good suggestion to hold back some funds to have an emergency fund and then add a little each month so you have some reserves.

I am curious, though. You seem like a do-it-yourself person--had you ever thought of doing your own taxes?

[myrdale]

I am failing to see the problem here. You have all but paid off 90k in 4 years on a mortgage. In another two years max the truck and tractor will be clear. Keep it up and in 20 years you stand to be a millionaire. Did I miss something?