Climbing out of the debt trap...

iVillage Member
Registered: 02-11-2008
Climbing out of the debt trap...
16
Wed, 03-14-2012 - 8:25am

I don't know if many of you have the goal of becoming 100% debt free eventually (including the house). That's our goal! It just seems like a vicious cycle. Work, work, work...pay interest...work some more.

The main reason for us...our future! Our children's future! It's a different world now. When I was a teen, worrying about your future financial being wasn't a big worry for the adults in my life. They also contributed to their 401k or IRA plus had SS to rely on. It's not that easy anymore. By the time we pay our "bills", what's left to save? We tuck away a bit of a savings, only to have to dip in it for an emergency!

I've completely changed the way I budget. Every regular expense is in the budget....eyeglasses, yearly Realtor fees/dues, clothing expense, birthdays/gifts/Christmas, vacation, car repair, house repair/yard work, medical expenses, plus all the regular household expenses. When I truely put these numbers together, it's no wonder we don't have much extra money in the savings. That was a real eye opener for me! I called this my TRUE budget.

I know this isn't going to be easy. Especially only dedicating $1500 month towards our loans (car, equity line and mortgage). According to my snowball calendar we can pay all this off by 2019...of course that's providing nothing happens...which we all know will! I'm giving myself 2 extra years.

Anyone else have a real eye opener?

 

      

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Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Wed, 03-14-2012 - 9:52am

My life-changing event occured in 2004, when I realized that even after I'd paid off all our debts (scheduled to happen in 2009), I wasn't going to be any closer to owning a home, sending my children to college, or having a retirement worth living for.

iVillage Member
Registered: 10-09-1999
Wed, 03-14-2012 - 10:28am

Great post!

Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Wed, 03-14-2012 - 10:39am

Cindy, I'm the same age (OK, a year older!).

iVillage Member
Registered: 11-14-2008
Wed, 03-14-2012 - 11:26am

I would say most of the people on the board have the goal of being totally debt free. However, most of us probably won't get there until we retire. We haven't even built the house we will have a mortgage on for years and years lol.

Unfortunately there is that reality of nothing being left after the bills are paid for a lot of families and the only way to improve is to make more money in the form of getting another job or a 2nd job or cut expenses. It sounds simple but often isn't and a concious decision to take one of these routes is often put off until it is too late.

iVillage Member
Registered: 12-31-2010
Wed, 03-14-2012 - 12:02pm
Been here since 2008 when we made the decision to become debt free. We have paid off over $115,000 of debts so far and are moving well now.
The greatest thing I did was to establish an emergency fund of at least $1,000 (it is bigger now) but yesterday's $360 car repair for my daughter's Taurus was no sweat, where years ago it might have meant juggling the budget or putting it on a credit card.
These boards and folks here are wonderful as we all have gone through our AHA moments and help one another day by day, week by week.
-Marie
#Marie
iVillage Member
Registered: 10-01-2008
Wed, 03-14-2012 - 4:01pm

In 101 weeks and 1 day, all we will owe on is our mortgage.

Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 05-09-2002
Thu, 03-15-2012 - 10:39pm
I don't mind having a mortgage. We bought in 2009 so our mortgage is ok debt be me. We don't owe on our cars. BUT we need to pay off credit cards and my student loans. Those hang over my head!! And I want an efund bigger than 1k!! Someday we will all reach our goals though. :)
Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Fri, 03-16-2012 - 2:34pm
ldp328 wrote:
I don't mind having a mortgage. We bought in 2009 so our mortgage is ok debt be me. We don't owe on our cars. BUT we need to pay off credit cards and my student loans. Those hang over my head!! And I want an efund bigger than 1k!! Someday we will all reach our goals though. :)

That's how I feel about it.

iVillage Member
Registered: 08-24-2007
Sat, 03-17-2012 - 6:08am
Hi heyaim,
I had a similar eye-opening experience, and that occurred when I started tracking every cent I spent. When I did my first annual report of my expenditures, I realized my budget didn't cover many, many items I spend money on. So, like you, I now have a TRUE budget that reflects and plans for everything.

I've been on the boards for about 4 years and I've paid off over $16,000 in credit card debt, so I'm currently debt-free. Of course, I don't own a house or a car, which is a big factor.

I personally agree that we have a lot of worries that our parents never had. My parents could afford to live on Dad's income, so Mom's entire income was extra money. Not too many people can afford to live on one income anymore. Additionally, jobs were easier to find, so unemployment wasn't a concern. I read an article recently that said 6-month income should be the smallest e-fund, since on average is takes ONE YEAR to find a new job. One year?!!! And they also didn't have to worry about Baby Boomers draining out pension plans (or social security in the US). It's a completely different world now.

The good news (for you) is that you can likely be completely debt-free in 7 years! That not a very long time. Imagine how wonderful it will feel to be so financially independent!

Kate


empty purse

iVillage Member
Registered: 04-08-2008
Mon, 03-19-2012 - 1:07am

Yes I would love to be debt free. It would offer so much more freedom and choices.

Back to your question, yes I have recently had an eye opening experience. My DH changed jobs to work eves & w/end to cut down on childcare costs (crappy hard labour job). His mother was babysitting 18 hours/week for $500/mo. She recently told us that she no longer wants to do it. So I went to look for childcare for the 3 days. Even with the PT hours, it will cost us $1000-1500/month. We'd have $50/month left!! That is with the TRUE budget, LOL :) So...we are contemplating our future.

I was born and raised here. My DH has lived here for over 30 years too. But we are seriously considering moving to a smaller town 4 hours away...where my mother can watch our children for free. (And I can be there for her as she ages and needs help) We visit there often and everything is cheaper - when we go ice skating it's $2 there and $10 here. Everyone there has fruit trees in their yards - I pay $10/box for cherries while my mother eats them all summer for free. It's tempting but INCREDIBLY scary. I have a couple potential options for jobs but DH doesn't. Though he's not giving up much with the job he has. He does have a few career leads for another career field - but that's either here or 2 hours south of my mother. So no childcare and that town is even smaller - so much scarier for me!!!

Sigh. No answers right now., just thoughts :)


Dee

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