What was the reason?

iVillage Member
Registered: 04-08-2008
What was the reason?
5
Fri, 04-18-2014 - 12:40pm

I remember the day very well. DS1 was 3 and going to preschool for the first time. DS2 was just 6 months old. I was walking in the pouring rain 20 minutes (I live on the West Coast). When I arrived home from my 40 minute round trip of walking, I noticed my baby had purple hands! When I touched them, they were ice cold and he just screamed. He cried for 20 minutes.

We went out and bought a second (used) car the next day.

And it was "too much" for us to handle. And so, here we are 3 years later still with $18K in car loans. We had a $20K loan on car1 and bought car2 for $16K.We put 3K from our efund on it. So we went from $20K in debt to $33K. And we decimated our efund...we still had $1500 but aaaah the days when it was $4500 ;-)

Then I tried to make more $ to pay for it. Hmmmm....I never finished that college degree. Back to school and another $500/month to pay for that. DH changed jobs and his pay went $800/month (but his yearly has gone from $36K to over $50K this year so it was worth it).

And I can't help but trace it back to that day. Was it a good thing or a bad thing? Yes, we started this debt journey...we had the other car payment but it was new and we were paying it of $800 mo and it was more than managable. OTOH, if didn't feel pinched, would he have changed jobs? Would I have gone back to school? In the next 20 years thos decisions will definiely pay off.

But it was the reason for all this. Do you have a defining moment or period like that?


Dee

iVillage Member
Registered: 04-10-2003
Sun, 04-20-2014 - 10:22am

Good question. Mine was when I was 25 and bought my first house. I was fresh out of school with $32K of student loans between my university and masters degree. I had an inheritance that would have allowed me to pay it all off, but I decided to buy a house because I had two people willing to rent rooms and that would cover the mortgage. I didn't account for all the stuff you need when you have a house (lawn mower, garbage cans, furniture because the house is WAY bigger then my crappy student apartments!!). I soon had $10K in CC debt to go with my student loans and my mortgage and I was too immature to really grasp what it meant. I knew I hated debt but I also wanted to live like a 25 year old. It didn't occur to me that I lost that right when I took on a huge mortgage that most 25 year olds wouldn't even consider!! Yikes!

So I found this board and starting my sinking funds ($20 a week to start). 90% of the time I would use it within the week but it was a start. I started increasing this number every raise I got. I also started to look for better jobs/ promotions and increase my salary. I made some bad choices (as some of the members of this board may remember). In retrospect I was clearly unhappy and looking for quick fixes (seriously, an SUV??? What the eff!!!). Karen used to tease me because my priorities jumped so much :) (I think she called me a fund flipper, lol because I was always flipping around my sinking funds !!!)

Fast forward to this summer. A terrible breakup made me re-evaluate everything. And it wasn't pretty. I had put myself in a job I hated and in a house that was draining because of wishy washy promises from ex-bf about where we were headed. So I took control and decided to change everything. I renovated and sold my house. I made approximately $60K after taxes/fees from when I bought it. That added to the equity I had meant I was able to buy my condo and pay off my car. Yay!

Then I started actively looking for a better job. I found an amazing job with a great company in October and it came with a company car. I was able to sell my car and pay down a good chunk of my student loan. They my old company gave me an unexpected bonus (they want me back) and I was able to pay of the rest of it!

In this entire time the one thing I didn't neglect was my retirement so I am in great shape there.

So now I have to reign it in (I've been spending way too much) and pay off the $2k that I aquired for Ireland. I also want to really work on my emergency fund. I have a tiny one and my best friend just got downsized. It made me realize that if I were to get downsized I would be in big trouble! So that is my next to do.

I have to say, it was a long journey but being debt free is so worth it. Next up is efund and then mortgage!!!


Bex -

iVillage Member
Registered: 11-14-2008
Mon, 04-21-2014 - 9:09am

2008, newly divorced, saddled with $30,000 grand in debt with two young children in an apartment crying in the tub trying to figure out how I was going to manage??

I owned my store back then. I got it out of debt too, the mortgage was still at $35 grand. And it helped me pay off my personal debt.

I met my current husband and he had $38,000 in student loans. We bought land and two new if not newer vehicles in there, lived off one salary, and had it all paid off by 2013. 

Plus we got married in there, I took a year off  work because we had a baby and saved $20 grand for my boys for their education total. 

Things that helped us. Spending one salary, small inherintence of 10 grand, my husband doubled his salary with job changes.

So now we have a nice dint in our land, I have sold my store and a promising new job, taking that money and are doing a new house, we have started our retirement funds  and are on fast catch up. As Norma says....LIfe is good! Dream baby(she will be 2 in July!!), dream husband(with a wonderful job with great benefits), dream marriage, dream house coming this summer, no consumer debt with retirement funds rolling in, and hopefully a very nice job this summer if I get the one I want. If I don't that is ok, i will work it out.

We accomplished so much in 6-7 years! Amazing!

I am now putting $20 extra a month on our land payment and we will reevaluate things when the house is settled and we find all of our numbers by Christmas I expect. What the hydro will be, what the house insurance number will be and property taxes, see if there is anything  left and go from there. The budget I have currently says no, but I might have a differenent job too so who knows.

Take care everyone. I think it is a great idea to revisit your "moment". When  you go back, you can see how far you have come and pat yourself on the back. It is important!

Community Leader
Registered: 08-25-2006
Mon, 04-21-2014 - 2:03pm

First answer, watching 'Till Debt do us Part'

I came to DS when my CC balance had hit $8,000.  It had been pretty much paid off a few years earlier, and I saw how quickly just a couple hundered dollars a month was adding up very quickly on a CC.  I did learn something, as I did not have any other CC.

I bought a vehicle, had to replace transmission, and have since paid all of that off.  But at a price.  My CC maxed out again at $14,400 and I have been in limbo at that amount for probably two years.  

Got married, and will no longer get large Head of Household tax refunds.

Why do I feel like I am finally starting?  Going to see the financial advisor that told us we needed to pay off my CC before DH opens a retirement account.  

Sort of a new beginning.  

Serenity CL making a marriage work

Serenity
iVillage Member
Registered: 04-08-2008
Wed, 04-23-2014 - 11:50pm
Still get the education tax credits tho ;-)
iVillage Member
Registered: 04-08-2008
Wed, 04-23-2014 - 11:51pm
Nice to hear everyone's story - thanks for sharing! Dee