View Full Version : Paying Off Big Debt - June 2018
Well, it turned out I did get a little windfall, in the form of a tax refund that was higher than expected, so I was able to reduce my debt by 37% today which felt GREAT.
However, I still have a sizeable amount to pay off (lowish 5 figures), and I'm a teacher on a ten-month contract so don't get regular paychecks in August and September. I put a little bit of the refund aside in hopes that will keep me from sliding into more debt this summer, and I'm also going to work on lining up another income stream for August and September.
I'd originally aimed to pay off my debt by next April, but I think if I stay focused, I can pay it off by next February now. I also will need to start saving an emergency fund.
Lots to do, but I feel like I'm finally making some progress.
Thanks to all of you out there who offered encouragement and suggestions in April. It's helped motivate me to keep living frugally.
Teacher Terry
6-3-18, 1:23pm
That is awesome!
Congratulations!!! Getting rid of debt is so empowering.
flowerseverywhere
6-3-18, 3:25pm
Wonderful news. Each step in the right direction is a great one, small or large
Excellent! Are you also have less withheld from your paycheck due to the tax cut?
Nice - glad to hear your good news!
Setting the goal that you have and being able to meet it are wonderful when they unfold as hoped. Wishing you continuing success!
It is remarkable to me how setting a debt-free goal and achieving it so so incredibly life-changing. I hope it is for you as well. Now we can afford to buy stuff cash, and we just don't care anymore.
Congrats to you on stepping up your timeline on your goal. May your summer be filled with joy and maybe some gifts of food so you can save those bucks!
37% is really great at one time. Good job in being dedicated to paying down.
Thanks, everybody, for your support! It really helps me stay focused.
I'm not sure how the new tax cut is affecting my paycheck because I have other things taken out - flexible spending accounts for dependent care and health care. Have to look into that.
Chicken lady
6-9-18, 2:15pm
Nice job!
i forgot all about the thread. I am doing really well on my car loan. Currently it looks like I will have it paid off by Valentine’s Day.
i was kicking myself because we went on vacation and I forgot to pay my cc on time. This is the first time that has ever happened to me. EVER. And it only cost me $7. So, while it was a wasted $7, i’m just looking at it as part of the cost of relaxing and not worrying about stuff on vacation, and letting it go.
dado potato
6-9-18, 2:55pm
If my household was receiving no paychecks for August and September, I would plan to save for the spending in those 2 months during the other 10 months. Getting a gig for those 2 months obviously would help a lot!
I took a look at Bankrate, and I see there are on-line banks which are FDIC insured and competitive with the APY they pay on Savings or Money Market Accounts. For example,
CIT Bank Money Market Account, 1.85% APY, $100 minimum, access via "People Pay".
Sallie Mae Money Market Account, 1.75% APY, zero minimum, able to write checks.
Marcus (brand name of Goldman Sachs Bank) Savings, 1.7% APY, $1 minimum, accessible by online transfers to/from your account at another bank.
I agree with the observation that having the savings in August and September would reduce (maybe even eliminate) the need to borrow (credit card being a high-cost, high convenience source of credit).
In general, I would prioritize reduction of loan balances before building a cash reserve, unless the cash reserve is highly likely to prevent added borrowing... as in the case of a seasonal "dry spell" for paychecks.
Kudos on making progress in reducing your loan balances... and thanks for being a teacher.:thankyou:
frugal-one
6-10-18, 5:50pm
Nice job!
i forgot all about the thread. I am doing really well on my car loan. Currently it looks like I will have it paid off by Valentine’s Day.
i was kicking myself because we went on vacation and I forgot to pay my cc on time. This is the first time that has ever happened to me. EVER. And it only cost me $7. So, while it was a wasted $7, i’m just looking at it as part of the cost of relaxing and not worrying about stuff on vacation, and letting it go.
Call them and ask the charge be removed.
Chicken lady
6-10-18, 7:20pm
I’m not sure the time and hassle is worth $7. Also - I was late. I went on vacation. I forgot. I see no part of that that isn’t my fault. The terms of the cc were clear and I agreed to them.
They will often let it go, but deciding if it's worth $7 is a factor.
Belated thanks, dado potato, for the recommendations of online banks. I have been using Capitol One.
Here's an update.
The good news: I got through my two months of no regular paychecks through both putting away about a third of my tax refund to cover summer and also by earning a bit of money over the summer through grants connected through my regular job. Also, with the help of that windfall tax refund in the spring, my current debt is 39% less than the debt I had when I started this thread.
The not-so-good news: I feel a little behind on hitting the benchmarks I reestablished after my windfall tax refund, so I don't think I'll have paid off my debt by February 2019 as I'd hoped. However, I made up new, pretty realistic (I think) benchmarks today, and if I hit those, the debt will be paid off by May 2019.
Thanks, everybody, for your support.
Teacher Terry
9-8-18, 3:47pm
You are still doing great!
Bravo EJ, and smart to be more realistic. 3 more months is a small amount of time if you stay on target.
Excellent job regrouping and coming up with a new plan you can live with:cool:
Chicken lady
9-8-18, 4:38pm
Minor setback ej. You are doing great! Your original goal was April, so it is really only one month.
i am still plugging away at my car loan. I get my next regular paycheck at the end of September and will start making extra principal payments on the house construction loan again then. We have paid off 20% of the loan we took out for construction of the addition (we have no other mortgage having previously paid that off), and last week dh ordered flooring and trim using funds set aside from cash flow.
Thanks, Everybody, for the support!
It sounds like you're making good progress too, Chicken Lady!
Chicken lady
10-7-18, 10:20am
Ejchase, how are things going?
i made my car payment and the extra on the house this last paycheck.
i still owe 1,373.89 on the car. (Plus almost $6.50/month in interest. :( ) i’m on target to pay it off in January though, so it will only cost me about another $20. Not pleased, but there it is. The amount is going down, so the $6.50 will too...
Teacher Terry
10-7-18, 12:11pm
We just paid off the car we had a loan on.
mschrisgo2
10-7-18, 8:00pm
I just paid off my car loan, 27 months early on a 5 yr loan. Woot!
Amazing how adding a couple hundred a month takes it down real fast.
Now all that amount can go in savings every month.
rosarugosa
10-8-18, 1:20am
Congratulations on the car loan payoffs!
It's encouraging to see so many people get rid of big loans!
It's encouraging to see so many people get rid of big loans!
It sure is! We just paid of a self loan from my husband's 401k and it feels really good. so out of debt for now; will probably take on a mortgage this fall due to advance our strategy to move closer to family.
It's encouraging to see so many people get rid of big loans!
It sure is! We just paid of a self loan from my husband's 401k and it feels really good. so out of debt for now; will probably take on a mortgage this fall due to advance our strategy to move closer to family.
Teacher Terry
10-8-18, 11:17am
T, how is the house hunting going?
Well, we just got back from dealing with parents' house and the nursing home, so we are waiting to catch our breath and then see if we can't buy something this fall in New England. A couple of great candidates, and I have concluded I can't handle moving to my parents to take care of them, even though dad kind of offered us their house. But I have two brothers who feel lots of ownership of the house, and I do not want them on my back or telling me what to do in my own house--it just won't work. If I were an only child or supportive siblings, I would do it. I am not up to bringing them home to live there with us, as they need more care than I can handle, and I do not think they would be cooperative if they were back in their own home again. (Last summer, for example, my mom, who has dementia, got herself on the new zero turn mower and crashed herself into the side of the house and was apparently black and blue on one side of her body--but no one ever let us know of this.) My dad will go back to drinking if he goes home and then the falls and extreme self neglect will begin again, except that I will be expected to caretake for them, referee, fix their giant house, mow the acreage--anyway, I am not volunteering for this as it will not work and my brothers will come along and either tell me what I am doing wrong or sue me, depending on which brother.
It would also end my marriage.
So, that has freed us up of this idea, that we move into their house. I cannot and will not do that.
I'd rather have a mortgage than be the family slave, which is where this was headed.
Teacher Terry
10-8-18, 12:20pm
Totally agree that it would be a bad idea to caretake your parents. This is your time to enjoy. Do the things you and your husband didn’t have time for, etc. I hope you can find a affordable home that you like.
Well, we just got back from dealing with parents' house and the nursing home, so we are waiting to catch our breath and then see if we can't buy something this fall in New England. A couple of great candidates, and I have concluded I can't handle moving to my parents to take care of them, even though dad kind of offered us their house. But I have two brothers who feel lots of ownership of the house, and I do not want them on my back or telling me what to do in my own house--it just won't work. If I were an only child or supportive siblings, I would do it. I am not up to bringing them home to live there with us, as they need more care than I can handle, and I do not think they would be cooperative if they were back in their own home again. (Last summer, for example, my mom, who has dementia, got herself on the new zero turn mower and crashed herself into the side of the house and was apparently black and blue on one side of her body--but no one ever let us know of this.) My dad will go back to drinking if he goes home and then the falls and extreme self neglect will begin again, except that I will be expected to caretake for them, referee, fix their giant house, mow the acreage--anyway, I am not volunteering for this as it will not work and my brothers will come along and either tell me what I am doing wrong or sue me, depending on which brother.
It would also end my marriage.
So, that has freed us up of this idea, that we move into their house. I cannot and will not do that.
I'd rather have a mortgage than be the family slave, which is where this was headed.
It sounds like you have made the best decision for you and your family, so at least Step 1 is checked off. It is truly a difficult decision, but I think yours is well thought out. I wish you the best in Step 2, Tybee, and I hope that you do find the house that's right for you in New England.
Thanks, guys, I appreciate the support!
iris lilies
10-8-18, 3:46pm
I am so glad my father-in-law’s situation was resolved without rancor amoung the siblings. DH’s little brother had made noise about making sure his dad never went into nursing care and he would stay “a few months” if necessary to keep that from happening. But when FIL beoke his hip and is now unable to walk, that quickly and irrefuteably squelched the idea of a “few months” of care in FIL’s home. FIL is permenantly in a wheelchair.
None of the other siblings would have stepped up to be caregivers, not because there is family ill will but because they all have their own lives and know their limits. It is such a relief that no one amoung the 5 siblings is dictating what everyone else must do.
DH’s siblings really have always been practical and easy to get along with.
None of the other siblings would have stepped up to be caregivers, not because there is family ill will but because they all have their own lives and know their limits. It is such a relief that no one amoung the 5 siblings is dictating what everyone else must do.
It's ironic that when there is a sibling dictating like that, it's almost always the sibling furthest away with the least "investment" in what got the cared-for to that point... :(
Chicken lady
11-2-18, 8:30pm
Paid on the car and the loan again. Less than $900 left on the car.
Chicken lady
12-4-18, 8:24pm
Ejchase, how are you doing?
one of my kids needs a little extra help this month, so I only paid $200 on the car. I can wait a little longer to pay it off.
Teacher Terry
12-4-18, 9:43pm
CL, I found that when my kids were younger and recently launched they needed occasional help and we always did.
Thankfully, both kids haven't needed help since launching - with the exception of the one who came back home for a spell.
How can the same set of parents raise two children so diversely different in so many ways! The same child is dangerously walking a debt lifestyle.
We have gifted generously, and I suspect they are anticipating holiday gifts ($$$) to offset expenses.
Chicken lady
12-5-18, 8:39am
I forced the help on this one.
we are still subsidizing the youngest (22) for health insurance and phone, but she just got promoted at work (after 4 months on the job!) and there is a plan to taper her off. The health insurance is a little annoying, because she can stay on dh insurance until she is 26. However, because her employer offers health insurance, we have to pay a premium to keep her in dh’s. If her employer did not offer health insurance, she would still be included on ours at no extra cost. Her employer’s insurance is not as good and the payroll deduction for her part of the cost would be more than the premium we are paying. So.... eventually, she will pay the premium. She will also take over the phone, but we are gifting her a year on that. She just finished paying off her car.
she is getting boots and baking dishes for Christmas.
iris lilies
12-5-18, 12:14pm
I forced the help on this one.
we are still subsidizing the youngest (22) for health insurance and phone, but she just got promoted at work (after 4 months on the job!) and there is a plan to taper her off. The health insurance is a little annoying, because she can stay on dh insurance until she is 26. However, because her employer offers health insurance, we have to pay a premium to keep her in dh’s. If her employer did not offer health insurance, she would still be included on ours at no extra cost. Her employer’s insurance is not as good and the payroll deduction for her part of the cost would be more than the premium we are paying. So.... eventually, she will pay the premium. She will also take over the phone, but we are gifting her a year on that. She just finished paying off her car.
she is getting boots and baking dishes for Christmas.
That is great that your daughter paid off her car. Does she have any debt at this point? She’s in a good place in her life if she’s 22 and has no debt and a job.
Chicken lady
12-5-18, 12:47pm
Two (plus one) of my kids have mortgages. The one who just paid off her car is a renter. I don’t know if two of the biokids, the bonus, or the in-laws have a car loans. Bonus kid has some student loan debt and one in-law kid might (or ds might have paid it off)
iris lilies
12-5-18, 12:53pm
Two (plus one) of my kids have mortgages. The one who just paid off her car is a renter. I don’t know if two of the biokids, the bonus, or the in-laws have a car loans. Bonus kid has some student loan debt and one in-law kid might (or ds might have paid it off)
Well mortgages – that is a different animal. Personally I consider a Mortgage to be undesirable debt, a noose around one’s neck. But financial wizards argue that having a Paid off house is silly when you could take that capital and invest it at a higher rate than the low mortgage rate of today.
Chicken lady
12-5-18, 1:22pm
I think if you have the money earning more interest than the mortgage is charging you, it makes sense. That is why we have a home equity loan - we could have used savings, but the savings is earning more than the home equity loan is charging. So basically, the bank is letting us use their money to make money for us. (The difference in the two interest rates) we could, at any time, give their money back (pay off the loan) and stop doing that, but why?
Teacher Terry
12-5-18, 2:24pm
As long as you don’t buy too much home I think it’s fine because otherwise you would be paying rent. You have to live somewhere.
Chicken lady
1-3-19, 6:35pm
Made my car payment and the extra home equity loan payment today. If there are no sudden, unexpected large expenses in January, I should pay off the car next month.(at most I have three payments left if I pay the minimum every month)
the house loan loan will be another 70 months at the current rate. I will not be throwing my “extra” car payment at it, we will just keep making payments or pay it off if that seems best at some point.
Hi ejchase! February is right around the corner. How are you doing on that early goal? Cheering for you to be debt free in 2019:cool:
Chicken lady
2-5-19, 2:49pm
I paid off my car!
:cool:
Ejchase, how are you doing?
iris lilies
2-5-19, 3:23pm
I paid off my car!
:cool:
Ejchase, how are you doing?
That is great!
I paid off my car!
:cool:
Congratulations! I know that feels wonderful!
rosarugosa
2-5-19, 10:11pm
Congratulations, Chicken Lady!
Another congratulations to you, CL.
Teacher Terry
2-6-19, 12:05am
CL, a awesome!
Chicken lady
2-6-19, 8:48am
Thanks everybody!
hopefully i’ve got another ten years to save up for the next one....
Money and Mountains
3-6-19, 10:57pm
It feels SO good to get rid of a lot of debt (https://moneyandmountains.com/student-loans/)! Hubby and I just paid off over $60,000, and it feels like a weight has been lifted. There are definitely times on the journey where it will get hard, but pushing through to the end will be so worth it! Keep on keepin on. Perhaps by now you have even become debt free!
You all can totally do it!!! What you set your mind to, you can achieve. We got drop-dead serious in late 2005. We had purchased our mountain cabin just 24 months before. Scrutinize every penny and keep your eye on the goal!!! Here is our landslide out of debt:
Dec-05
$ 165,878
Dec-06
$ 146,114
Dec-07
$ 118,647
Dec-08
$ 79,359
Dec-10
$ 43,989
Dec-11
$ -
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