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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iVillage Member
Registered: 03-15-2012
Thu, 03-22-2012 - 2:18pm

Thank you Norma!

iVillage Member
Registered: 10-01-2008
Thu, 03-22-2012 - 12:45pm

Hi Jiggy.....I LUV you attitude and I hope to grow more like you every day.

Norma


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


Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Thu, 03-22-2012 - 11:58am

I think for many of us, a change of attitude is key.

iVillage Member
Registered: 02-11-2008
Thu, 03-22-2012 - 6:02am
All the stories are great and very inspirational!!! We all have different goals and comfort zones! Our main goal is retirement!! And hopefully a little travel before we are to old to enjoy it!

 

      

iVillage Member
Registered: 03-15-2012
Wed, 03-21-2012 - 11:17pm

Hi, newbie (and an oldie) here!

Last fall I had a major eye opener!

iVillage Member
Registered: 04-10-2003
Mon, 03-19-2012 - 8:41am
Mine was graduating University and realizing that I had over $35K in student loan debts. I bought a house young (with inheritance money as a down payment) made some dumb choices and ended up in $15K CC debt, car loan debt etc etc.

It's been hard work (I've been on this board since about 2008) but have been able to really clean up my financial life. I am left with just over $21K on my student loans (5% interest, tax deductible) under 10K on the car loan (0.9%) and no CCs. I am on track to be debt free (minus mortgage) in 3 years. I could really speed that up, but have decided I need to have some more fun in my life and am going to work for more balance while I can!

Bex -

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

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

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: 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. :)

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