Debt Dumpers - 2016

Well, the Christmas gift I was looking forward too for a jump start was not what it has been for ever, actually got a gift instead. Nice gift, don't get me wrong but not the one I was thinking. And I went in one store after Christmas shopping and spent less than 20. So a big deal for me who usually loads a shopping cart with "sales". So I will have the money January 4 to start my emergency fund. Will order one credit report (thanks for that tip). Then after dh gets paid on 15, time to start our snowball. ❄
So do I start with current debt or collections?
 
I'm joining in for the first time ever, too. We have never had credit card debt as a married couple, and we paid off my student loans and cars very early in our marriage, and we've managed to pay cash for subsequent vehicles. We paid our house off in 11 years and were completely debt free for a year. Horrible things are going on at my work, so we recently bought (using a HELOC on our primary residence) a precious, 85 yo home to renovate for me to have my own work place. Wham, we are now $230k in debt :crazy2: It needs a ton of work, so I expect that will soon be up to $300k. It should be a really good investment, when we decide to sell (in about 10-15 years), we should earn at least $200k in profit. It will have more offices than I need, so the plan is to rent those out to other practitioners which will cover the mortgage. The problem right now is that we are waiting on the city to approve the renovation permits; it's been a few months already, so we are paying the mortgage with it just sitting there earning no money. So, we are drawing more money off the HELOC to pay the mortgage.

And, since we are in debt now, a funny thing has happened... We are constantly thinking "We are in debt, what's another $x?!" So, we spent more on Christmas than normal, I've bought new clothes and things for the house, etc. I don't even know who we are anymore, lol!

So, I need a constant reminder to focus on this debt, like our hair is on fire, as MMM would say. Looking forward to the motivation from others!
 
Glad to join in. We have been following DR principles since August. I was more eager than my husband (who makes significantly less $$ but brought in a lot more debt to the marriage). After a few months & us having a goal, he is now completely on board. We have A LOT of debt, that's the bad news; the good news is that we have a nice income so we will be able to easily move through the debt & watch our balances shrink. Here is where we are right now:

Oh & we have two littles, ages 1 & 2.

Emergency fund: $3000

Personal loan: $3500
Credit card #1: $3500
Credit Card #2: 3500
Vehicle loan: $2700

Our first goal is to pay these off by March with our debt snowball & our tax refund. I had to take leave without pay for the first three months last year (after complicated pregnancy & NICU stay) so I was too afraid to adjust my taxes & am looking at a large refund. I have already adjusted them starting in Jan, hoping to not get such a big refund after this year.

Once these four "small" ones are paid off, we will attack a very large one that my husband owes his dad. Actually it is a HELOC in his dad's name & I HATE owing that. DR says to pay back family & IRS ASAP. I'm pretty sure we can make more progress by cleaning up the small ones first but after that, I will not stop until his dad is paid back. I may even transfer the debt to my name via personal loan from my bank when the balance gets down to where they will lend me the $$.

There is more debt but that will take at least two years so that is all we are focused on right now. After the HELOC gets paid, my husband owes the IRS & his vehicle, both will nearly be paid off but we will continue working the snowball on those two (IRS before car).

Of course, then it's the house. I hope that within 6 years, we can be debt free, including the house....not sure if we will but that is our goal.

Whew, I said it all. It's hard to admit but as I said, we are working together & we have a common goal & a nice income so hopefully our plans will work out for us.

I look forward to this journey with you all.
 
Joining again this year. Started strong thru July of 2015 and then Murphy took up residence in my home. Doctors, dentists, car repairs, home appliance replacements have set us back. Thankfully, we don't owe any more than we started 2015, but it is disheartening to start over.

So, major focus on snowballing credit cards totaling 30k. Attacking highest interest first which is also the smallest balance....and hopefully sending Murphy packing.
 
Joining for the first time ever!!

Our debt:
Car 1: under $5k (5%)
Car 2: under $5k (5%)
Credit card: $10k (9%)
Window loan: $1400 (0%)
Furnace loan:$4k (0%)



We moved thissummer... our family desperately needed a bigger house & better school district. We bought afixer upper to get into what we needed, hence the new windows and furnace (the windows were original to the 1932 house & the furnace was 28yo). We already have the money to pay off the windows. Credit card is also due to our move & medical expenses.

We'll be getting around $3k back at tax time & we VERY unexpectedly got $5k from my FIL tonight. I'm of the opinion we should pay off a car and roll that payment into our CC. DH says we should put it on the CC sincethe interest rate is higher.Opinions?


Welcome!! So it looks like the windows are basically paid for since you already have the money for them. The furnace is 0% interest - how long is that good till? Is that good till paid off? You could pay off one of the cars (how much would that free up each month?) and snow ball the car loan to the cc. Or you could take the money and put towards the cc and if you normally get $3k back in taxes you could put that towards the cc and you would only have $3k balance (I deducted $1k for your surgery).
 
Joining again this year. Started strong thru July of 2015 and then Murphy took up residence in my home. Doctors, dentists, car repairs, home appliance replacements have set us back. Thankfully, we don't owe any more than we started 2015, but it is disheartening to start over.

So, major focus on snowballing credit cards totaling 30k. Attacking highest interest first which is also the smallest balance....and hopefully sending Murphy packing.

Murphy is a big pain in the a@@! If it weren't for Murphy we would all get out of debt much faster!!
 
Well, the Christmas gift I was looking forward too for a jump start was not what it has been for ever, actually got a gift instead. Nice gift, don't get me wrong but not the one I was thinking. And I went in one store after Christmas shopping and spent less than 20. So a big deal for me who usually loads a shopping cart with "sales". So I will have the money January 4 to start my emergency fund. Will order one credit report (thanks for that tip). Then after dh gets paid on 15, time to start our snowball. ❄
So do I start with current debt or collections?


Have you sat down and made a list of all your debts - what the % rate is? Do you have a lot that are in collections?
 
Glad to join in. We have been following DR principles since August. I was more eager than my husband (who makes significantly less $$ but brought in a lot more debt to the marriage). After a few months & us having a goal, he is now completely on board. We have A LOT of debt, that's the bad news; the good news is that we have a nice income so we will be able to easily move through the debt & watch our balances shrink. Here is where we are right now:

Oh & we have two littles, ages 1 & 2.

Emergency fund: $3000

Personal loan: $3500
Credit card #1: $3500
Credit Card #2: 3500
Vehicle loan: $2700

Our first goal is to pay these off by March with our debt snowball & our tax refund. I had to take leave without pay for the first three months last year (after complicated pregnancy & NICU stay) so I was too afraid to adjust my taxes & am looking at a large refund. I have already adjusted them starting in Jan, hoping to not get such a big refund after this year.

Once these four "small" ones are paid off, we will attack a very large one that my husband owes his dad. Actually it is a HELOC in his dad's name & I HATE owing that. DR says to pay back family & IRS ASAP. I'm pretty sure we can make more progress by cleaning up the small ones first but after that, I will not stop until his dad is paid back. I may even transfer the debt to my name via personal loan from my bank when the balance gets down to where they will lend me the $$.

There is more debt but that will take at least two years so that is all we are focused on right now. After the HELOC gets paid, my husband owes the IRS & his vehicle, both will nearly be paid off but we will continue working the snowball on those two (IRS before car).

Of course, then it's the house. I hope that within 6 years, we can be debt free, including the house....not sure if we will but that is our goal.

Whew, I said it all. It's hard to admit but as I said, we are working together & we have a common goal & a nice income so hopefully our plans will work out for us.

I look forward to this journey with you all.


Keep in mind that the IRS will take prior debt, penalties and interest out of any anticipated refund. So, unless you and your husband file seperately, expect them to recover the debt and refund you the difference. Of course, I don't know enough of your details to provide tax advice, but in general I can say that filing jointly is usually better from a tax perspective.
 
Joining for the first time ever!!

Our debt:
Car 1: under $5k (5%)
Car 2: under $5k (5%)
Credit card: $10k (9%)
Window loan: $1400 (0%)
Furnace loan:$4k (0%)



We moved thissummer... our family desperately needed a bigger house & better school district. We bought afixer upper to get into what we needed, hence the new windows and furnace (the windows were original to the 1932 house & the furnace was 28yo). We already have the money to pay off the windows. Credit card is also due to our move & medical expenses.

We'll be getting around $3k back at tax time & we VERY unexpectedly got $5k from my FIL tonight. I'm of the opinion we should pay off a car and roll that payment into our CC. DH says we should put it on the CC sincethe interest rate is higher.Opinions?

Not sure what your monthly payments on each of the debts are, but with the information you've provided here's my two cents ;)

I would pay off one of the cars with the unexpected $5k gift (that's awesome, by the way!). If the payments are different, I would pay whichever one has the larger monthly payment. Then I would snowball that payment into the payment for the second car that you didn't pay off. Come tax time I would put the approximately $3k towards the second car to get you that much closer to having a second loan paid off. Once that loan is paid off you would then be snowballing two car loan payments into your credit card debt, which I would guess is a decent amount of money :)

Good luck in whatever you decide!
 
Murphy is a big pain in the a@@! If it weren't for Murphy we would all get out of debt much faster!!

Amen! We've had too many visits this year. Nothing life altering or serious, thank God, but enough expensive minor emergencies to be disheartening. We're also now trying to budget for a new (to us) van because I'm coming to realize I was perhaps too optimistic in thinking mine would get us through until I graduate. We've had to put a lot of minor repairs (battery, radiator) that aren't unexpected on a 10 year old vehicle with 180K miles, but the frequency has become problematic - being without a car for a couple of days every month or two is a pain, and lately I've found myself worrying about breakdowns which is a stress I don't need on top of a 100 mile round-trip commute.
 
I'm in for 2016 as well. I am really hopeful to make significant progress on our debt this year. We of course have some trips planned but have a tentative plan in our head to pay for them (my husband is going on a boys only fishing trip to Michigan with his family but only has to pay partial gas, his food, and partial hotel. Our daughter turns 21 in August and she and I are going to Vegas in September. We have free flights with miles and free rooms from a game played on facebook).

Our downfall is instant gratification and food. We could spend millions on eating out. We got some gift cards for Christmas for restaurants and we have committed to saving them and spacing them out. We always go out for birthday dinners so between that and our gift cards we should still be able to eat out once a month or so.

We both have fitbits and have them synced to the shop your way rewards for Kmart/Sears. We each get $5 a week in points that must be used that week or you lose them. We have been using it to stock up on hygiene products so that saves us money. I will use them in February to buy candy/treats for my 5 year old nephew who lives out of state.

We are planning on having Easter this year for the family so we bought the last hams at the grocery store for 99 cents a pound.

Our new years resolution is to be content. Content with what we have and what we can make do with. Easier said than done but hopefully we can make progress!
 
I'm not good about checking in, but I'm in for 2016 as well. I'm planning to have my student loans paid off in 2018, but hopefully I can build my emergency and vacation funds. I don't know yet if I'm getting a raise or bonus this year since our company decided to move the reviews out past the end of this year, but I'm hoping for a little something extra there so my budget isn't so tight every month.
 
Our downfall is instant gratification and food. We could spend millions on eating out.

Our new years resolution is to be content. Content with what we have and what we can make do with. Easier said than done but hopefully we can make progress!

These two things! This is us. Exactly. Best of luck to you in 2016!
 
Well, the Christmas gift I was looking forward too for a jump start was not what it has been for ever, actually got a gift instead. Nice gift, don't get me wrong but not the one I was thinking. And I went in one store after Christmas shopping and spent less than 20. So a big deal for me who usually loads a shopping cart with "sales". So I will have the money January 4 to start my emergency fund. Will order one credit report (thanks for that tip). Then after dh gets paid on 15, time to start our snowball. ❄
So do I start with current debt or collections?

Just my $0.02, I would start with the collections. The longer something is in collection, the worse it will reflect on your credit report - I think. It might be the case that you get the big "ding" for it going into collections and the length of time doesn't matter, but I don't think so.

While you are paying off the accounts in collections - making sure you continue to pay at least the minimum on the other debt obligations - make a list of who you owe, how much, and at what interest rate. Then, start your snowball at the top of your list and work your way down. Someone earlier outlined the two basic methods (smallest balance vs. highest interest rate). Pick one and organize your list that way so when you start paying them off you know where you are heading each month.
 
Well, I just updated my bank to transfer the last of my 53 week savings over to my second account on Thursday. That means I will have saved $1431 in 2015 using the plan. I also set up a new transfer to start on January 1 and happen every Friday during 2016, moving $40 a week. That will yield a total of $2120 over the course of the year. And other than this first week, where I get hit with both at the same time, I will actually be transferring less than I did each week than the last 3 months - so it will almost feel like a small "raise".

Except, I countered that with opening a second weekly transfer, also for $40, for retirement.

Here's to hoping I can be as diligent with the savings this year as I was last year.

ETA (Just a FYI - I actually will have managed to save $1825.57 this year. During the course of the year, I would buy something for my parents and if they paid me back I just deposited it into my second account so I would be less likely to try to spend it for something frivolous. I probably could have used that $400 to reduce some of my debts somewhere, but it was never all at once. It was $20 here, and $35 there, plus the 0.25% interest I earned).
 
I agree. Get rid of those collections. Dh had some old debts in collections when we were first married. We used a part of our wedding gift $ to pay it off. Having debt is one thing. Having it be ignored is another.
This was back in 1995 with no internet but we got a copy of his credit report and contacted everyone on the list directly to get the amounts owed and how to send in payments.
 
This is great to see so many newcomers!!

:welcome:

It's one heck of a rollercoaster ride here but feel free to ride along with us! Weeeeee!!!!

My New Year's resolution is to be done with this debt and start saving up a real cushion. I'm tired of having "just enough" in our checking account at the end of pay day. Of course, even if there were some leftover now it would go toward our debt but it keeps me motivated. :thumbsup2 We'll get there! ::yes::
 

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