Author Topic: personal debt  (Read 35650 times)

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Offline fatboy

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personal debt
« on: November 12, 2021, 09:23:45 AM »
I was just going through some receipts that I have in my office at work. I know that this is going to sound like gloating and maybe it is but I want to mention this slightly off topic detail because it's important to me.

In March of 2018, (3 1/2) years ago, we, Mrs. fatboy and little old me, had $35,000 in credit card debt, a $21,000 student loan balance for my daughter, one more year on a 15 year mortgage and thankfully, we had just finished (in Dec 2017) making car payments. That's a lot of debt and I should be ashamed to admit it because that's over $55,000 in consumer debt. Even the student loan was 7.9%, this was a government loan.

It was in that month (March 2018) that we said enough is enough and just stopped using cards, started getting serious about getting this under control. I remember thinking for years that there was no way we would ever be debt free so a little or a lot makes little difference but it really bugged both of us.

Just on my own I made the decision to pay off our mortgage first. So that is what we did, made double principle payments on that and minimum on everything else. Without realizing it I came close to emulating Dave Ramsey's debt snowball method. I knew about Ramsey but was unwilling to peek into his book because I was too depressed, too emotional about it to admit that we had gotten ourselves into this mess in the first place. He says pay off CC debt first leaving a mortgage for last but we were within a year of owning our house.

Once past that objective, we hit the CC with the smallest balance first very hard, with no mortgage payment left, that one was paid in 2 months. Then hit the next higher CC till paid off and so forth. One of our cards had $18K on it that one took a little bit but after bring that one to it's knees, we targeted the student loan. Made the last payment on that Oct 28th. What seemed impossible 3 years ago has happened, all of our CC and student loans are paid, we have a good emergency fund in the bank and we have fixed a few major problems with our home. The only consumer debt we have is a car payment and we are after that one with purpose.

On January 1 we will commence a strict budget with every dollar accounted for. Mrs fatboy and me have our hobbies, while not giving them up, we are, and in particular me, have reduced our hobby commitment, in particular my involvement in competitive handgun shooting, which is expensive.

One of the things we got rid of was cable tv. We use our service provider for internet and phone but that's all. I remember handing in the digital box, the lady at the cable company was sort of surprised someone would do such a thing but I cannot imagine we are the only ones doing this.

I don't consider myself a budding "prepper" but, we have started a humble emergency supply bunker. Little by little we are putting together a reasonably well stocked SHTF supply. Better late than never I guess. I find it upsetting that everything is costing more money these days but, and not to sound like a jerk, but I'm in general way more positive now that we have our personal finances somewhat under control. I have vowed to never use a CC again unless I'm stranded in some far off land and that is the only way home. If we use it, it gets paid off first billing cycle.


We do have a few additional challenges to take care of though. My main point that I would like to make is that our monthly balance sheet was bleak and depressing to look at but we made a plan out and stuck to it. I think that if you need to cut down a large oak tree and the only tool you have is a pocket knife, by whittling away a slice at a time it will at some point fall. May take a while but eventually it will fall.

There is not much we as individuals and family's can do about the way our government and society is sliding into the open pit but we can do a lot to get ourselves prepared to meet the challenges i think are coming. Do I think I have it all under control? No, but I have a lot more control today than I did in March of 2018. I want to be positive but I think we are headed for some hard times.
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17

Offline Drafe Hoblin

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Re: personal debt
« Reply #1 on: November 12, 2021, 10:13:14 AM »
Sounds like your mindset is ready... for 'an eventuality' beyond your control.

Things like gold will only be as valuable as the party you're dealing-with says it is, etc. 


Offline fatboy

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Re: personal debt
« Reply #2 on: November 12, 2021, 10:42:58 AM »
Sounds like your mindset is ready... for 'an eventuality' beyond your control.

Things like gold will only be as valuable as the party you're dealing-with says it is, etc.

I think it best to avoid putting large amounts of money into things I don't understand and I don't understand investing in gold. I mean I understand gold as a currency i just don't know how to buy smart and redeem smart. I think the same about crypto which I think could be like money in the bank if someone/some entity wants to devalue your bank account there isn't much we can do about it.
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17

Offline Texacon

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Re: personal debt
« Reply #3 on: November 12, 2021, 11:34:04 AM »
Congratulations!  That is tough to do and quite an accomplishment. You should be proud of yourselves.

My wife and I only owe on our house and we could actually pay cash for the balance today, but that interest rate is lower than the interest our money is earning.

It’s a great feeling.

KC
  Build a man a fire and he'll be warm for a day.  Set a man on fire and he will be warm for the rest of his life.

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Offline Mr Mannn

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Re: personal debt
« Reply #4 on: November 12, 2021, 01:56:39 PM »
 :cheersmate: Hi Five! I got out of debt myself. There is just a 1000 bucks left on one card, after that I am free!
without debt I am amazed as to how much money I have to spend.

Offline fatboy

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Re: personal debt
« Reply #5 on: December 01, 2021, 08:17:35 AM »
:cheersmate: Hi Five! I got out of debt myself. There is just a 1000 bucks left on one card, after that I am free!
without debt I am amazed as to how much money I have to spend.

I share in your joy Mr Mannn!

It is correct, it is amazing the amount we have when we have little or no debt to pay off. What a great feeling to have that burden off our shoulders.

Without having to make large debt payments it is a lot less stressful paying for things like car repairs that would normally cause intense grief. Plus there is more money to spend on beer!
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17

Offline fatboy

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Re: personal debt
« Reply #6 on: December 16, 2023, 12:30:18 PM »
Just to update on the current situation. I started this in Nov 2021, at that time we still had some debt and I didn't calculate a car payment and we also had a 403B loan and personal debt. All totaled we paid off between March 2018 and Dec 2022 $136K debt.

On Dec 6 2022 Sue and I were officially declared debt free mortgage and all. Everything. January 2023 started phase 3 of our plan that is to put some money into savings to have a cash reserve and adding a significant amount to our 401/403s. Instead of saying "wow we have no debt lets live a little" we buckled down even more and were able to save about 50% of our income. Some of that savings was one off stuff so that will make 50% a bit more difficult 2024 so to counter that we are looking for ways to make further cuts in spending.

The main thing for us was we stopped spending and started living below our means and made saving a priority. We just don't buy stuff unless we absolutely need it. This is hard to do.
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17

Offline Old n Grumpy

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Re: personal debt
« Reply #7 on: December 17, 2023, 01:30:05 PM »
Congratulations, being debt free is fantastic. I have learned to live below my means a long time ago and it’s not that hard or painful as long as you realize keeping up with the Jones’s is not important.

I am not a believer in buying gold, you pay a premium when you buy it and you pay one when you sell it.
If you bought it 15 years ago when it was about $600 an oz then it was a good investment. The theory is if there is a total collapse of the economy you can use it to buy what you need, to me that’s a fallacy.

If you want something to get you through a collapse of the economy get a gun and ammunition, then you can get what you need for a couple of rounds.

Life is tough and it’s even tougher when you’re stupid

Basking in the glow of my white Privilege, while I water the Begonias with liberal tears!

I will give up my guns when the liberals give up their illegal aliens

We need a Bull Shit tax to make the Democrats go broke!

Offline Texacon

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Re: personal debt
« Reply #8 on: December 18, 2023, 08:56:51 AM »
I love reading stuff like this. I want everyone to be financially successful. It’s a great feeling and it’s one of the ways to make others wealthy. My wife and I own a real estate company and the only way we make money is selling property to those who can afford to buy.

Amazing stuff. Keep up the good work!

KC
  Build a man a fire and he'll be warm for a day.  Set a man on fire and he will be warm for the rest of his life.

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Offline fatboy

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Re: personal debt
« Reply #9 on: January 03, 2024, 09:24:25 AM »
I love reading stuff like this. I want everyone to be financially successful. It’s a great feeling and it’s one of the ways to make others wealthy. My wife and I own a real estate company and the only way we make money is selling property to those who can afford to buy.

Amazing stuff. Keep up the good work!

KC

Thank you. And you are correct it is a great feeling and we likewise want others to have this experience. And I think most people (or couples) could get out of the debt pit, I mean we are not special, but it was a long difficult struggle, 5 years to pay off debt and a year now saving and investing.

When I look back at where our heads were before we started this endeavor, spending without any plan or thought and on that day when we looked at our dismal financial situation it looked really hopeless. I think the hard part was facing the reality and making the commitment to ourselves, from there on it was basically learning how to budget and handle money.

On the day that we made the last payment on our last debt, when I think about it, it brings tears to my eyes, but another big milestone was when our savings account balance exceeded our total credit card debt (credit cards were 1/5th of our total debt portfolio) that amount was $35,000.00 which is insane but that was where we were at.

The one beautiful thing that we learned and has become our habit now is living below our means and always putting something into savings. I'm maxing out my 401K, Sue is 15% on her 403B, we have a brokerage account, money in savings and we just started a new car sinking fund so we will not be going back into the pit for a new car.

We basically followed the Dave Ramsey 7 Baby Steps. Not to the "T" but close. For the last 3 years or so I have been reading a lot and always have a book that I'm reading on some aspect of personal finance. Most of it is actually simple but it is the hardest simple thing to do.
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17

Offline Texacon

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Re: personal debt
« Reply #10 on: January 03, 2024, 09:52:11 AM »
Thank you. And you are correct it is a great feeling and we likewise want others to have this experience. And I think most people (or couples) could get out of the debt pit, I mean we are not special, but it was a long difficult struggle, 5 years to pay off debt and a year now saving and investing.

When I look back at where our heads were before we started this endeavor, spending without any plan or thought and on that day when we looked at our dismal financial situation it looked really hopeless. I think the hard part was facing the reality and making the commitment to ourselves, from there on it was basically learning how to budget and handle money.

On the day that we made the last payment on our last debt, when I think about it, it brings tears to my eyes, but another big milestone was when our savings account balance exceeded our total credit card debt (credit cards were 1/5th of our total debt portfolio) that amount was $35,000.00 which is insane but that was where we were at.

The one beautiful thing that we learned and has become our habit now is living below our means and always putting something into savings. I'm maxing out my 401K, Sue is 15% on her 403B, we have a brokerage account, money in savings and we just started a new car sinking fund so we will not be going back into the pit for a new car.

We basically followed the Dave Ramsey 7 Baby Steps. Not to the "T" but close. For the last 3 years or so I have been reading a lot and always have a book that I'm reading on some aspect of personal finance. Most of it is actually simple but it is the hardest simple thing to do.


It gets addictive and becomes somewhat of a game to see just how much you can put back.  It's always interesting to me to go buy something and see the difference in price if I'm going to pay cash.  Prescriptions are one of those things.

Using my insurance for one of my prescriptions was costing about $90/month.  I started paying cash and that prescription cost me $90 for 4 months.  Imagine that.

KC
  Build a man a fire and he'll be warm for a day.  Set a man on fire and he will be warm for the rest of his life.

*Stolen

Offline fatboy

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Re: personal debt
« Reply #11 on: January 03, 2024, 06:02:26 PM »
I have started asking a merchant for a cash discount since the credit card processors invoke a fee on every transaction.
"We will bring back our jobs. We will bring back our borders. We will bring back our wealth - and we will bring back our dreams!" -President Donald J. Trump 1/20/17