Life After Debt?

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Registered: 03-26-2003
Life After Debt?
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Tue, 06-21-2005 - 9:52am

Okay - we've all had the mini fantasies where we're debt-free and suddenly flush with cash.

All my best,
Danni

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Registered: 03-31-2003
Tue, 06-21-2005 - 10:18am

I thought I'd be a lot more 'flush with cash' than I actually am. DH and I were discussing this just this past Sunday. When I lived alone, it seemed I had WAY more disposable income, and a much better lifestyle than I do now. (I wasn't blaming him.) But it was only because I was living off my credit cards, so it *appeared* that I had more money than I did. Essentially I paid all my living expenses on the cards, so I spent my paycheck and dance income money on frivolities!

Now that I only have one lower-paying job, and don't use credit, I have to be much more vigilant.

Lee Ann

Lee Ann

www.werenotafraid.com

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Registered: 02-06-2005
Tue, 06-21-2005 - 10:59am

Life after debt hasn't been all we thought it would be in terms of having money to spend.

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Registered: 03-27-2003
Tue, 06-21-2005 - 11:06am

Great question!

Our debt repayment/wealth building plan is very directed and goal-oriented. We want a large piece of property in the country on which we plan to build our own house using permacultural methods and theories. To do so, we not only have to be able to buy the land, we also have to have enough cash and a business plan to be able to free ourselves from the corporate world without risking our financial well-being.

So, basically, once we are debt free we will not drastically change our lifestyle. We'll continue saving large portions of our income and socking it away in savings and then in investments, with our eyes on the big prize.

We hope to do this in the next four to nine years. So we have to really work hard and keep our spending within very tight limits. It would help if dh's company would ever come through on their promises for big raises, but oh well! My business is helping some, so that's good.

Thanks for asking. :)

Heather

iVillage Member
Registered: 03-27-2003
Tue, 06-21-2005 - 11:27am

Realistically, the budget amounts I work with now won't continue to work as the children grow older. I have a 6 YO and an 18 month old so I know food, clothing and entertainment will go up. We're also way behind on retirement savings so I'll want to see a chunk go towards that. We don't tithe 10% and I'll want to reach that. We also bought an older home and would like to do some renovation projects that are on hold until our debt is paid off.

DH wants a big screen TV.

Taleyna

iVillage Member
Registered: 08-19-2003
Tue, 06-21-2005 - 11:50am

OK I am sure eventually we will get debt free but it won't be for awhile. I have no idea what are goals will be at that time, but I am sure I will need a new car at that point since mine is now 4 years old. It just seems like we never can get ahead.

Unfortuanately we our house poor. We bought our house for $203000 in 2003, took our $40000 in equity to pay off my husbands truck that we should have sold, and pay $1600 mortgage. My husbands makes decent money, and I only work part time, so at this rate it will take years. But when are $20000 (cc, medical, small car loan) debt is paid off. I want to work on paying down the mortgage to be able to have a more manageable payment.(not payoff because we need the tax rightoff, but manageable) I want to BUild large savings accounts, for Vacation, Emergency, Home Improvements. Did I mention the house we bought is a big project, everything needs work or replacement. I call it the "Money Pit" WHich is where the credit cards have come in to play!!

It seems like we are a long way from having disposable income.

Shannon


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iVillage Member
Registered: 05-19-2004
Tue, 06-21-2005 - 12:13pm

That's a good question, I wrote a post simular a while back stating that I don't know what I will "obsess" over once out of debt. We since then paid off ccs and
right now have been piling money into our savings for the goal of building our home next spring. We still have 2 student loans, which I will pay mine off once the house is done ($2500 left)and slowly chip away at dh's. We plan on using any small profit from the sale of our current house to payoff our SUV.

The real goal is to use only DH's income for all bills when the house is done, so it's been hard finding inexpensive house plans to keep our mortgage down (and property taxes will be approx. $6k per year!)

After I payoff my st. loan~ I can then "obsess" by using my pay to put in savings/roth($300), extra mortgage principle($300), repair/holiday fund ($200), extra on Dh's ST. loan ($100), fun money ($150), gas money ($150)

It all looks good on paper but you know it hardly ever works out the way you want it to!

Nicki

Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Tue, 06-21-2005 - 5:32pm

As always, a very good question. I always like these questions that focus people on the psychological aspect of their debt.

4 years from now (probably sooner) my credit card debt will be paid off. That's an extra $1200 per month! But 4 years from now, my daughter will be entering her senior year of college, so my guess is that $1200 will be going into savings to pay for her tuition. If it happens sooner and my income increases enough, there are lots of home improvements our house could use.

Frankly, I don't ever see a frivolous future for us. While I recently made a career change that should keep our income increasing for a few years and keep it relatively high after that for as long as I choose to work, I'm 42yo and have 3 kids and a sizeable mortgage. By the time the kids are done with college, I'll be 58yo.

This doesn't really bother me. I should know within the next 2-3 years if there's a substantial windfall associated with my career change; if not, I'll still be comfortable. I'll just never have the money to live in a McMansion or have a flashy "fun" car - but that's OK.

Kelly

iVillage Member
Registered: 10-10-2003
Tue, 06-21-2005 - 5:55pm

I like these questions, too!
I know what I want, I want to live for the day, and when the day is done it is done!
I hate the feeling that we are stealing from tommorow to pay for yesterday. I want to have enough freedom in my budget to say, OK let do _________, and not be strapped for money because of that.

I suspect that it won't change tremendously. We live in Canada and our mortgage is not tax dedcutible, so we would like to work at paying it down. We also need ot build education funds for our kids...and retirement funds.

I hope that I lose the millstone and can live freely......

iVillage Member
Registered: 07-10-2001
Tue, 06-21-2005 - 6:17pm

To be completely honest, I don't believe that I will ever be debt free. By the time this divorce is paid off ($70,000 in CC debt) it will be time for my daughter to go to school, then my son...

Retirement is an impossibility. I'll never have the money for that, and the house won't be paid off anyway.

I do have enough life insurance to make sure my estate is debt free...that's the best I can hope for at the moment.

iVillage Member
Registered: 05-30-2003
Tue, 06-21-2005 - 7:16pm

Unfortunately, today is one of those "gee, it's gonna be 3,000 years before we're FREE" kind of days...aw, it's all good though.

I know that being debt-free will be very a strange feeling for both of us. Neither of us can remember back to a time where we didn't have ANY debt,and our paychecks were pretty much ours to play with. Personally, with this next birthday of mine (on 5 July), I will have been in debt for exactly HALF OF MY LIFE. ]-( I just realized that. Boy, howdy, is that motivation!

Since we're doing the "Dave thing," it'll be awhile before I'd call us debt-free. After the credit-card/loan debt is paid, then we're going to sock away money in a bigger emergency fund (step 3). Over on the Dave Ramsey boards, many who have gotten to steps 4/5/6 do say that they thought they'd have more money at the end of the month to play with, so at least I'm aware of that. Instead of paying debt, they're 'paying' retirement, college, and mortgages off. I don't know that I'll get as excited about doing those things as opposed to paying off debt. But, I'm willing to TRY, LOL!!!

I know that in the next few years that our money situation will improve vastly. DH only has 5 more years of paying child support/spousal maintenance to go. He also graduates from college in spring 2006, and plans on finding a better job. The one he's at now is nice because he can work out of the house, but he hasn't gotten a raise in 3 years.

Chances are that we won't be going nuts with the 'extra' money once we get that far. I always liked the theme in "The Millionaire Next Door" of just because you have the cash, doesn't mean you have to flash the cash. I actually LIKE driving used cars-I figure all the bugs have been worked out, and it costs less. Now, this is not to say that I would like to drive a spiffier car-I think I could learn to drive something spiffier than my Saturn! We're also planning on tearing down this house and rebuilding something else. Yes, it may cost more, but I can't even begin to tell you all how many problems there are with this house! From A=Asbestos to Z=Ze basement tends to have lots of water in it after the spring thaws (lol), it will just be easier to start OVER.

So, when we're debt-free, I plan on just doing what I do now, except I won't be taking my lunch to work with me, ROFL!!!

Lisa

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