Author Topic: Case Study - Digging out of the Debt Grave  (Read 25471 times)

diapasoun

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Re: Case Study - Digging out of the Debt Grave
« Reply #50 on: July 16, 2018, 10:45:14 AM »
Setbacks happen. It sounds like you're persevering on, though, and continuing to make changes and keep improving your finances -- and that's the important part. What you want is the overall upward trajectory; a few bobbles along the way are expected, and really, what a boring journey it'd be without them. ;)

That being said, I'm sorry to hear about your father. I hope you and your family are doing okay.

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #51 on: July 26, 2018, 03:25:29 PM »
Quote
That being said, I'm sorry to hear about your father. I hope you and your family are doing okay.

Thank you, I am doing alright. However, my mother is in a much different situation both mentally, emotionally, and financially.

Posting another update because something amazing happened!

My wife got a part-time job! Not as much as mine, but it will give us another $200 to $400 per month (still unknown exactly how much she just accepted it 2 days ago.) I know, it is crazy but I think this whole "making better moves with money" has spoken to her a bit. She has voiced some opinions that differ from mine, but I am slowly converting her.

I have looked and compared current spending budget with the prior attached spreadsheet. We are spending about ~$130.00/mo less than where we started. This is less than I expected and want to be at. However, we have made a pretty big overhaul to it where include more things on it than before. (I pay more attention to cost I never really tracked). I guess we are just being more organized? Like we included annual expenses like Dr's visits, professional development memberships, and such. I expect our "Grocery" category to decrease because this was including personal hygiene products, Toilet paper, and whatnot. I will attach the updated version as soon as I can. Gotta keep on keeping on!

diapasoun

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Re: Case Study - Digging out of the Debt Grave
« Reply #52 on: July 26, 2018, 04:51:45 PM »
I hope your mother can find her equilibrium soon. I can't imagine the trauma of losing a life-long partner.

Congrats to your wife, and it sounds like you're making real progress. Even if you're not cutting spending as much as you had hoped, the fact that you are moving to a more accurate tracking of your finances is BIG. That means that you're getting a much truer picture of your finances, and seeing their full breadth, not just everyday expenses. It's amazing how much those once-or-twice yearly expenses can add up -- think of a car insurance payment every six months! -- and seeing all of that can be very illuminating.

Hirondelle

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Re: Case Study - Digging out of the Debt Grave
« Reply #53 on: July 26, 2018, 11:18:26 PM »
Sounds like you're on the right track. $130 may not sound like much but it's a great start and as you said part of it might've been expenses you hadn't accounted for before. A decreased spending of $130 (with potential for more) AND an increased income of at least $200/month are both great steps.

Take you time and I'm sure you'll improve further soon.


I'm very sorry to hear about your dad. Glad you were able to spend some time with family. Those are the real important things.

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #54 on: August 12, 2018, 07:33:21 AM »
Attaching updated spreadsheets.

According to the updated spreadsheet, we have found $367.00/mo. (this is still without the updated grocery spending, still trying to find the average)

I also wanted to start notating where I began and how far I have come in the past year. When I started the debt BURN last year in August, my debt credit card load looked something like the list below. This does not include my wife's fed student loans, as it should be forgiven in 10 years (not super accurate 2017 list, but as close as I can get it):

Aug 2017
Levi Chase            6,500.00
Wife's Chase    10,500.00
Wife's SM 1    6,870.00
Levi Fed Loan    5,860.00
Wife's SM 2    10,725.00
Wife's Car    17,160.00
Debt load w/o Wife's fed loans $-57,615.00

Aug 2018
Levi Chase                0.00
Wife's Chase    9,800.00
Wife's SM 1    6,600.00
Wife's SM 2      10,500.00
My Fed Loan    5,700.00
Wife's Car    15,656.00
Debt load w/o wife's fed loans $-48,256.00

Onward we go!
« Last Edit: August 12, 2018, 08:11:19 AM by Levi421 »

CrustyBadger

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Re: Case Study - Digging out of the Debt Grave
« Reply #55 on: August 12, 2018, 08:02:17 AM »
You are heading in the right direction Levi!  Good job, and keep on going!

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #56 on: September 29, 2018, 03:21:58 PM »
Sept 2018
Levi Chase             0.00
Wife's Chase    8,300.00
Wife's SM 1     6,171.00
Wife's SM 2    10,144.00
My Fed Loan    5,700.00
Wife's Car      14,919.00
Debt load w/o wife's fed loans $-44,822.00
« Last Edit: October 01, 2018, 07:52:57 PM by Levi421 »

diapasoun

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Re: Case Study - Digging out of the Debt Grave
« Reply #57 on: September 29, 2018, 07:51:32 PM »
That's great! A 4k reduction in a month and a half - be proud of that! That's some real debt crushing.

CrustyBadger

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Re: Case Study - Digging out of the Debt Grave
« Reply #58 on: September 30, 2018, 06:53:01 AM »
That's amazing Levi!  How did you do it?  Did you sell your car or something?

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #59 on: September 30, 2018, 08:33:29 AM »
Thanks guys!

@CrustyBadger - No, It was basically luck this month. We got a random $1200 check from the Toyota between my last post and this one. They said we overpaid on one of the fees and that they tried to apply it to the loan, but the entity we financed through would not let the dealership make a payment. So Toyota said it is ours to do what we want with it. So, I applied it to the Credit card since it has a higher interest rate than the car loan. I have also been taking tons of extra shifts at my part time job since football season started. The one guy is going to all the LSU games and I am taking all of his shifts, lol.

(Please note that this huge decrease could have been a bookkeeping error, since I have only recently been doing this listing thing I started doing in my last 2 post.)

With that being said though, literally ALL excess money is going to our debt load. For instance, we have close to $2k in excess beyond normal bills in November all of which is planned to go toward debt.
« Last Edit: September 30, 2018, 08:48:46 AM by Levi421 »

Steeze

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Re: Case Study - Digging out of the Debt Grave
« Reply #60 on: September 30, 2018, 11:54:09 AM »
Way to go Levi! Good to see you are making so much progress so quickly. Keep up the good work!!

ItsALongStory

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Re: Case Study - Digging out of the Debt Grave
« Reply #61 on: September 30, 2018, 06:14:03 PM »
Just read through this, super awesome that you've turned the corner and are making huge progress.

AMandM

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Re: Case Study - Digging out of the Debt Grave
« Reply #62 on: October 17, 2018, 09:17:39 AM »
I have also been taking tons of extra shifts at my part time job since football season started. The one guy is going to all the LSU games and I am taking all of his shifts, lol.

I love this.

Congrats to both you and your wife on your progress!
And I hope your mother is beginning to recover. My mother died unexpectedly when I was about your age. It was hard on us kids, of course, but for my father it took several months just to come out of the fog. Hang in there.

zee dot

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Re: Case Study - Digging out of the Debt Grave
« Reply #63 on: December 26, 2018, 04:17:32 PM »
How's the debt looking these days, @Levi421 ?

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #64 on: April 14, 2019, 05:35:52 AM »
@zee dot. Honestly... Not so hot... We have added about $3k since my last break down. We have had tons of stuff come up. My car broke down again, and some other personal stuff that has cost us some financial setbacks. I have been trying super hard to change jobs to earn more income. I have been studying for entrance exams into the higher paying fields in my area. (Petrochem, and nuclear power). We will see what happens.

MySpaghettiFork

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Re: Case Study - Digging out of the Debt Grave
« Reply #65 on: April 17, 2019, 03:53:54 PM »
I read your case study last night and I was thinking about it on the drive home today.  It seems you want to live conventionally but yet you have a debt to income ratio that will only ever get chipped away slowly (if at all) unless you make some radical changes. You've got to live a little crazy, baby steps will still have you climbing the mountain past normal retirement age... we want to be on top of the mountain well before we're dead.

My life example: 19 years old, exactly $41 to my name, I take a job $0.25 more than the minimum wage to work on an organic farm. No car. No phone. I live for $120 a month in a not actually refurbished chicken coop with 3 other farmhands. I walk 3/4 of a mile when I want to use the payphone. I walk a mile to the bus stop to get non-farmed groceries, which I do about twice a month, breezing through the store until I make a $40 or less purchase, with zero feelings of lust over things I can't afford... I don't even want them. I couldn't think how to spend more money at the store if I tried. I wash my clothes by hand in a bucket. Less than a year later I've got several thousand dollars, which I used to go to Europe for 3 months. I could out-MMM Mr. Money Mustache himself. Fastforward 15 years and suddenly I spent $1200 for a family of 3 on food in just one month? What ?!! It's time to channel my inner farmhand saving for Europe, so I do. Drastically.

Now, maybe you don't have that to channel. You don't know how to do it, and my example isn't relevant to you. You're not a farmhand. Payphones don't exist anymore. Whatever. That's all 100% completely true. But, what is also Completely 100% true is that there's a conventional recipe that you're buying: two cars, insular household, phone, entertainment, etc. it's an easy recipe that's out there for anyone to try (with the help of credit cards). But to erase debt making what you're making in America, you need a different recipe. You'll likely need to take advantage of situation-specific things that we don't even know about, but really are there. And to do it, you're going to have to deliberately and continually step outside of your comfort zone if you want your comfort zone to change.

So, here's what I would focus on right now:
1. Get your wife on board. Get her watching those financial shows and critiquing other people's lives. She will jump the bridge to her own situation, too. Keep asking for that as suggested in other posts in this forum.
2. Step outside of your comfort zone, often. If you're not seriously exercising now, join one of those crossfit type classes where they force you to work out. (Often they have a free trial period, I'm not saying you have to pay for this all year-- the key is just go into a strange place to do something strange to you, that's also in itself conducive to change.) From there, branch out, continuously pushing those boundaries. Then apply that mentality to your finances.

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #66 on: January 11, 2021, 07:00:40 AM »
Jan 11 2021

SM loan - $13128
Rav4 - $29928
Mortgage - $164,500 (if I want to count it)

Got a new job late 2019 that played me $75000 last year.
With this year's projection, Rav4 and possibly the SM loan will be paid off by end of year. It's been awhile, I know. I Lost alot of weight and we had a baby. It has been hard to open up about this issue. But progress is going good since the new job.

Steeze

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Re: Case Study - Digging out of the Debt Grave
« Reply #67 on: January 11, 2021, 07:23:12 AM »
Congrats on the new baby, the weight loss, and the new job!!

Sounds like you are making a lot of improvements, keep it up.

Rav4 replaced Wife's Car? or you paid off Wife's Car and also bought a Rav4? Either way, keep those debt payments going and you will be in great shape by year's end. Just beware the lifestyle creep with the new job!

Congrats again!

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #68 on: January 11, 2021, 08:17:56 AM »
Thanks! My old car bit the dust. We paid off her car, I took it and we bought a rav4 for her and the baby and probably another baby in 2.5ish years.

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #69 on: August 16, 2021, 11:17:33 AM »
Aug 16 2021

SM loan - $0
Rav4 - $0
Mortgage - ~$173,000 (if I want to count it)


Just posting a stamped update. My wife and I got to this point about 1.5 to 2 months ago, but we have been catching some neglected things up the past couple months. Like vehicle maintenance and some home improvement stuff that needed to be completed that we put aside while achieving the debt payoff.

We took advantage of the Mortgage forbearance from the Cares Act (this is why the mortgage balance is higher), and my wife got a settlement check from an accident she had over a year ago. I also have earned almost $60K by the end of June from my job. Almost all excess dollars have been going to debt and we have achieved a pretty cool milestone. But I still have plans to save more money and make smart moves with it.

We decided to shift our focus to new goals on building up savings for the next little bit before investing which I have listed. I know it will strike controversy and many in this group will disagree but this is what we decided we wanted for our family. We want to move to another state in about 4 years and a slightly larger home 1800-2000 sqft I think would be the sweet spot for our family.

Annual deductible/OOM saved - $8500
6 mo job loss fund - $16000
Wife's IRA - $6000/yr
Son's IRA - $6000/yr hopefully
Child 2 IRA - $6000/yr hopefully
Moving Expenses - $5000 (Just a Guestimation)
Down Pmt on New House - $?
Invest after these are checked off on the list


diapasoun

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Re: Case Study - Digging out of the Debt Grave
« Reply #70 on: August 16, 2021, 11:31:08 AM »
Huge congrats on paying off the car loans! What a great thing to have off your back.

Imo it's very smart to save cash for something you know will be happening soon (like a move), especially if you know you won't be able to cash flow it.

Re the IRAs -- do your kids have earned income?

Morning Glory

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Re: Case Study - Digging out of the Debt Grave
« Reply #71 on: August 16, 2021, 11:39:25 AM »
Welcome back and congratulations on getting rid of the debt!!!

I think your plan is pretty good (I would at least do 401k up to employer match though, if you have it available). You can look at the bank churning thread or Doctor of Credit to get a little more return on your cash. Series i savings bonds are pretty good right now too. 

One thing: I don't think you can open an IRA for a kiddo unless they have earned income. You can check to see if your state will give you a tax break on 529 contributions. I'm in Minnesota and I get a $500 tax credit for the first $1000 I contribute, so I at least put in that much every year. Not everyone likes 529's but they are pretty good in my situation because it's easy to transfer beneficiaries or convert to an ABLE account if your kid has a disability.

TyGuy

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Re: Case Study - Digging out of the Debt Grave
« Reply #72 on: August 16, 2021, 12:15:25 PM »
I just read through your case study, you've made a complete 180!! @Levi421

Creating a savings/emergency fund sounds like a good next step for you until you get a reasonable amount of money invested. As others have suggested, make sure you are investing in you 401k to the maximum of your employers match, otherwise you are literally leaving income on the table. Additionally, what is the interest rate on your mortgage? Rates are currently much lower than they were when you bought your house and you could potentially have some significant savings if you refinance.  Keep up the good work, and I am excited for your money to start working for you now that all of your non-mortgage debts have been paid!

Levi421

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Re: Case Study - Digging out of the Debt Grave
« Reply #73 on: August 16, 2021, 03:03:38 PM »
@diapasoun - No, Not yet. My wife and I want to start a side hustle. She wants to flip shoes from thrift stores using our son as a model. I want to try my hand at woodworking. If we start a side business we can pay our kids a wage.

@Morning Glory - I will check them out!

@TyGuy - I am investing 12% of my wage and my employer is giving me their max of 5% match. Unfortunately, if we refinance we have to back pay all the missed forbearance payments from the past 12 months. So this isn't an option atm.
« Last Edit: August 17, 2021, 11:55:56 AM by Levi421 »

St Elmo

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Re: Case Study - Digging out of the Debt Grave
« Reply #74 on: August 16, 2021, 06:31:54 PM »
Congrats! You've made amazing progress, and it's fun to see the difference from your original post to the recent update. Thanks for sharing.