The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Bumfluff on December 04, 2013, 06:10:37 PM
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I know most Mustachians are extremely bodacious and well on their way to FI but I was wondering if there are a few others who, like me, are still paying off crappy debts and are thus a bit behind the eight ball?
I propose a support group (face punches optional) to help us inspire/motivate each other to nail the debt so we can get to the starting line of the MMM race for real.
Anyone up for it?
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I think this whole community is a support group for people in your situation :) There are tons and tons of people here with all degrees of debt-- and if you dig a little, there are some epic threads of people who have gone from "frightened and penniless" to serious badass results.
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I know what you mean iamlindoro but a lot of the threads I have been reading lately have (awesomely) been about complete FI etc. and it's nice to have support from people who are as messed up as you sometimes!
I'll do some digging to try and find others who have travelled a similar journey but if anyone wants to step out of the shadows I'd love some company overhear in Skintville. :-)
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My wife brought me $11K in student loans at 6.75%. We have knocked $2500 off in the last few weeks. The goal is to have it paid off by the end of February.
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I was swimming in credit card debt just 2 years ago thanks in large part to the snowball effect of trying to buy my ex's love and then spending nearly equal amounts on a lawyer in a custody battle. Down to zero credit card debt now. Still owe a mountain in student loan debt though.
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We paid off over $65,000 in debt over a two year period (2010 & 2011), so while we don't currently have any consumer debt, we were very recently in your shoes and can definitely empathize. Right now we're paying off our $65,000 mortgage balance, which is at a really high interest rate for mortgages in this day and age. So I'm happy to play along!
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(That should read over here, not "overhear"! The perils of typing with predictive text).
You're all doing so well. We have $38,000 (US) in debt currently.
Norrie paying off $65k over two years is phenomenal - how did you do it??
We have slashed our budget, put the debts on a snowball plan and I have started working part time (we have a very young family) to try and tackle our debt. What would you guys say are your top three tips/life changes for paying down the debt?
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MMM is a great forum for learning tricks to cut expenses.
This is one that I participated on a few years back when I was working to pay off our debt, long before I found this site. I just checked, they are still around.
http://notmsnmoney.proboards.com/board/40/women-red-racers (http://notmsnmoney.proboards.com/board/40/women-red-racers)
I found them to be very friendly and supportive. It helped motivate me to track my debt paydown progress every payday and to stay the distance.
My honey just got bored by the whole topic, it was really nice to have a community of people working towards the same goal to discuss ideas with.
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Bumfluff: you can do it! We recently finished paying off 160,000 in debt (consumer and student loans) over the past 5 years. It sucked but the other side sure is nice.
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Thanks Swordguy, I have just signed up to be a red racer - looks great!
Thanks so much for the encouragement Beckyemerson, it can sometimes seem like an impossible hurdle. Paying off $160K in five years is amazing! I calculated it will take us 3.5 years to clear our debt but with the numbers I'm seeing in here I think I need to step things up!
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Bumfluff, I'm new here as well, though I've been working on my finances for about 3 years now.
I must say, most people here seem super nice. The feeling you get of needing to step things up a notch is what drew me to MMM (and this forum) - the no-holds-barred, get your hands dirty, blunt honesty with a bit over over opinionated spice.
So, I guess I say all that to say; I think there are people here at all stages of their FI journey. The one thing we seemingly all have in common is the desire to push ourselves (and others) to do "even better".
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Yes, plenty of us are "converted" mustachians and have histories of bad choices and debts.
I turned my situation around after getting serious about a year ago.
We paid off at least 30k in credit card and medical debt (sold a car, cut costs, etc) in the last year.
It was hard and we are still a ways from being free and clear (mortgage foreclosure).
But we are trying and doing our best. Find support and stay positive.
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I am currently in law school and have about $50k of debt and rising. I will probably graduate with somewhere around $80k of debt. I'm also looking around for peeps in the same hole as I am in. Maybe the forum can have a stratified structure (just 3 or 4 dedicated threads perhaps) so the people who are in similar levels of badassity can congregate and encourage each other as we work to increase our mustachianism?
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3 years ago I had $5k of credit card debt and $23k of student loans. My only asset was $8k in a retirement account and a car that didn't run (I eventually sold it for $800) - net worth of negative 14k with $3000/month of income in a HCOL area.
Today I have a reliable modest car worth $4k, no debt and $50k in savings and $25k in retirement accounts. Net Worth of $79k.
It might be slow to start but you will get there.
I did the following:
-Side Hustles: mine was bar tending (while working full time). I worked 6 or 7 days a week until I had killed that credit card debt.
-Really strict budget: I advised my friends I was paying off my credit cards but I had a plan to do it in 12 weeks as long as I had their support. So I said, I will not do anything that costs money for the next 12 weeks, but we can have dinners at each others houses or go to the beach together but we can't do anything that costs money. It was hard but because I was honest my friends supported me. I also said no to everything - I even didn't replace my foundation when it wore out. If I forgot to pack lunch to work I didn't eat. I literally counted very penny to pay off 5k in 12 weeks (with earnings of 9k plus the side hustle of 1k in that time.) It sucked!!! But I realised on my income $5k could easily take a year or more to pay down and I didn't want to wait that long before I could start saving money. Literally "hair on fire" - before I even knew who MMM was ;-)
In the long term (after the "emergency" was over) I re-visited my choice in job and realised I was in a field where I would either stay poor (one of the many small fishes in the big sea) or work 80 hours a week (as one of the big boys.) But taking a slight lateral move I was able to net a 40% payrise. I'll never make as much as if I had pushed to the top in my previous job, but I am still significantly out earning old co-workers and expect to do so for a number of years (and savings are better earlier than later as they have more time to grow!). And in the future I will be making more than enough while working 40 hour weeks, while my old co-workers won't have any time to spend their money anyway ;-) I kept a lot of the earlier frugal ways, and I always remind myself of those times when I am being too spendy!
Good luck!
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Debt. Yeah, I got debt.
$51,897 in credit card debt (currently on two credit cards at either .98 or 0% interest until Sept or Oct 2014 -- I have good credit).
$156,000 in student loan debt for law school
I found MMM in May when I had my second anniversary of law school graduation and realized I was in worse financial shape in 2013 than I was when I graduated in 2011. I slashed my spending and now live on about 30% of my income. Since May, I've paid off two credit cards and paid one other way down and consolidated the debt. I also opted to do some renovations in the basement of my home so that I can rent it out and cover 2/3 of my mortgage. Thanks to my frugality, I've been able to pay cash for almost the whole renovation with about $2k on Home Depot and Lowes cards at 0% interest and $2400 at 0% for new carpet.
With the basement rent and rent from my daughter, who just moved back home, my monthly housing cost will be $75. Fingers crossed that I find a good tenant in the next few weeks.
Essentially, I spent much of 2013 restructuring, cutting, and repositioning. My goal for 2014 is to pay off all of the credit card debt (including newly incurred debt for the renovation). That's a $56,000. goal. Only then can I begin really tackling the student loan debt.
So, yeah, I could use some support too.
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Yes, I have significant law school debt as well as a mortgage. I know what you mean- I sometimes feel down when I realize how much farther along some people my age are. There's not much point in comparing yourself to the people who are almost FI, though. I'm just focusing on my goal for 2014.
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my husband and i got married in late 2012 with $53K of debt -- $15K underwater on a house we had a hard time getting rid of, $16K of credit card debt (him), and $22K of student loan debt (me).
a little more than a year later, we are halfway done! we paid off the loan we had to take to get out of the house, and we've paid off $10K of my husband's debt. he's finishing that up in january (i'm covering household expenses until then), then we'll switch and i'll knock out the student loan. FINALLY. seriously. in may it will be 20 years since i graduated college -- holy shit! so my goal is to have all the debt ERADICATED by may.
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my wife and I started this year with about 10k in credit card debt, we are down to about 3500, however what is left is all 0% for several months up to 2 more years. I have the cash to pay it off, but not sure we should, though that cash is just sitting in a crappy savings account earning 0.1 %.
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Yikes, eye-opening to see all the fellow law school grads out there with so much debt. I graduated law school with around $80K in student loan debt. Fortunately for me, I graduated in a very up legal market and obtained employment right away. Since then, it's been a slow and steady march to pay them off. I've benefited from a couple circumstances that helped to pay them down -- first, for 6 years, my employer paid a portion of my student loans under the federal Attorney Student Loan Repayment Program, which helped knock down the principle. Second, working in the public sector resulted in forgiveness of the $7500 of Perkins Loans I had, after five years. Finally, consolidating my Stafford loans (subsidized and unsubsidized) years ago to the federal Direct Loan program has helped tremendously in this low-interest rate environment. Direct Loan payments are calculated based on a formula that involves 90-day T-Bill rates, once each year on July 1. I've gone from a payment high years ago of @$420/month, to current payments (at 2.35% interest) of $177. This has enabled me to basically triple my monthly payments. Payoff -- still @$26K left -- should be in about 4 years.
I was also of the "fake it 'til you make it" school back then. Figuring I'd have a high-paying job out of law school, I racked up around $10K of credit card debt. When that high-paying job failed to materialize and I went to work in a low paying government job (while also having those $420/mo student loan payments, + another $50/mo. Bar Study Loan -- man, was that stupid), times were hard. I had to go into forbearance for a year on my student loans. When I finally said, "enough is enough" and knew in my heart that I would no longer use a credit card to finance any more purchases, I took out a fixed rate personal loan to pay off that credit card debt. Took me 3 years, but I got rid of it, and haven't carried any since (been about 12 years now).
Ah, but having strung my girlfriend along for many years (ahem, 16) before asking for her hand in marriage, I felt obliged (okay, she insisted) to make it up to her by buying her a gaudy 2-carat, high-quality diamond ring -- to the tune of @$15K. Yep, massive fucking Hulk-fisted facepunch appropriate here. And of course, I didn't have $15K -- only had around $2500 -- so what did I do? Yep, went to see my banker again for a $12.5K loan. Oh, the stupidity. But I paid it off, while also saving $15K for our wedding ceremony (a $40K affair for which her parents kicked in the balance). Again, sigh.
Despite all these mis-steps, I managed to contribute to my 401K from the very beginning (16 years ago), up to the employer match, and each time I got a pay raise, I increased my contribution and learned to live without that money. Eventually, my salary went from paltry to pretty fucking good, and before I knew it, I was contributing the IRS max (and increasing it to the new max every time the IRS bumped it up).
And so now, I find myself solvent and in a position to retire sometime between age 53-55 (I got a late start on education and career because of a 6-year stint in the military). And this website has fired me up and helped me to see a ton of fat that was still in my "budget" (I use that term very loosely) and to take steps to cut it out.
So take heart those of you who've made past mistakes. Especially if you are young(ish) (I was 32 when I graduated law school with a decidedly negative net worth), you have the time and energy to make it up. Just being on this website says that you are serious about doing something to better your financial condition, and that bodes well for your prospects.
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i'm in!! i need motivation, support, supervisor, gatekeeper ETC.!
i talk to my bestfriend, husband, mom about my debt repayment plan and they're all looking at me like i have gone insane. i need people to understand where im coming from!!!!
$110,000 in total debt mostly student loans, to be paid off in 4 years!
HERE I COME!
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My wife and I graduated law school 3 years ago with about $350k in student loans collectively (about $40k was from college) - and we got scholarship money! But we lived high on the hog in law schools, maxing out our student loan allowance and spending it each semester. Then we deferred payment on our loans for the full six month grace period after law school. It all piled up at high interest rates (between 6-8.5%). Once we started working in fall of 2010, the legal labor market was so shaky I was too worried to sink anything more than the minimum into the loans and put all my extra money toward building a cash reserve. We were lucky in that we both had good paying jobs in a time of great legal job scarcity.
In 2011, we lived in different parts of the country and spent a lot of money flying back and forth to see each other. In addition, we coughed up about $35k for our wedding and wedding rings and honeymoon. We were still pre-mustachians obviously. We went to one income for a while because she moved to my city, but we started making changes to our lifestyle to live more frugally and really tackle the debt. I started with our top interest rate loans and began chipping away, but the balances were so high that it felt like we made little progress. Over time, however, we paid off one, then the next, etc. Earlier this year I hit the jackpot - a family member agreed to use the equity in his home to refinance all of my law school debt. At 3%. Now we are really in no hurry to pay off the balance of $220k (though I promised him I'd pay it off in 8 years) since the interest rate is so good. Now we focus on maxing out retirement accounts and putting extra money toward our taxable investments that will give us passive income streams for early retirement. We made a lot of mistakes along the way (expensive wedding, new car, racking up debt while in school, etc.) and could still use a lot of improvement, but we are on the right track now. I guess the point of this is to say that even a seemingly insurmountable amount of debt can be hacked away significantly in a relatively short time period of 3 years.
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My wife and I graduated law school 3 years ago with about $350k in student loans collectively (about $40k was from college) - and we got scholarship money! But we lived high on the hog in law schools, maxing out our student loan allowance and spending it each semester. Then we deferred payment on our loans for the full six month grace period after law school. It all piled up at high interest rates (between 6-8.5%). Once we started working in fall of 2010, the legal labor market was so shaky I was too worried to sink anything more than the minimum into put all my extra money toward building a cash reserve. We were lucky in that we both had good paying jobs in a time of great legal job scarcity.
In 2011, we lived in different parts of the country and spent a lot of money flying back and forth to see each other. In addition, we coughed up about $35k for our wedding and wedding rings and honeymoon. We were still pre-mustachians obviously. We went to one income for a while because she moved to my city, but we started making changes to our lifestyle to live more frugally and really tackle the debt. I started with our top interest rate loans and began chipping away, but the balances were so high that it felt like we made little progress. Over time, however, we paid off one, then the next, etc. Earlier this year I hit the jackpot - a family member agreed to use the equity in his home to refinance all of my law school debt. At 3%. Now we are really in no hurry to pay off the balance of $220k (though I promised him I'd pay it off in 8 years) since the interest rate is so good. Now we focus on maxing out retirement accounts and putting extra money toward our taxable investments that will give us passive income streams for early retirement. We made a lot of mistakes along the way (expensive wedding, new car, racking up debt while in school, etc.) and could still use a lot of improvement, but are on the right track now. I guess the point of this is to say that even a seemingly insurmountable amount of debt can be hacked away significantly in a relatively short time period of 3 years.
This must be the record for SL debt!. Congratulations to you on your plan. Best wishes.
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This must be the record for SL debt!. Congratulations to you on your plan. Best wishes.
Unfortunately, this is far from a record. I have friends who went to medical school who graduate with $250-300k debt - for one person!
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We are in a transitional job change/business decision haze currently, so I haven't been ready to post any numbers yet. But we have student loans and a small amount on the credit card. I just found MMM this fall, so I am looking forward to getting started on early retirement as soon as we can! We totally have a negative net worth, but I am celebrating that our used car will be paid off next month. I can't wait to see how we all do in 2014!
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Thanks so much for all the shared experiences, support and motivation - this is EXACTLY what I needed!
I have been working at paying down our debt for a year and have cut the budget, shop more smartly etc. etc. but it's only seeing how the mustachians do it that I realise we can do much better. E.g. we still get takeout once a week - you can face punch me now - and have an entertainment budget. Time to get SERIOUS and get this debt nailed.
It's reassuring to read your story Dude, DH and I are 40 and have been kicking ourselves over not starting this journey earlier. Still, no point crying over spilled milk time to (wo)man up and grow that 'tache.
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Any others working on their debts?
Yep. Hoping to pay off my vehicle in the next year and be debt free (again)! I am never making that mistake again!!
"If I cannot pay cash, I cannot afford it."
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I owe a little more than $70k in federal student loans. It used to be worse, but I've been paying it down. I also have a mortgage, but the rate is so low on that (3.25%) that it's not a primary concern right now. The student loans are terrible, but that's why I have income, so it's acceptable debt. When it gets paid off, I'm throwing a party (a low-cost party, of course).
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Yes, yes, yes. It's not bad compared to a lot of people, but it's still debt. $15K car loan and $6500 student loans. The student loans are currently deferred since I'm working on another degree (paying cash as I go this time). I'm paying the student loan briskly anyway, and we're paying a bit over the minimum on the car. We'll get a big bonus in June, enough to completely pay off both and leave some extra for savings. Plus in Aug I'll be done with my program, so between the debt payments and no more tuition, we'll free up almost $1000/mo to invest. The car loan was ridiculous. My husband went through the dealership and agreed to all the extras. We recently refinanced the car through our bank, adding me to it since I have a better credit score, and it cut our total future cost by several thousand.
The good thing is, when the car is paid off, we will have 2 paid cars in great shape (Honda and Toyota hybrids), each with about 60-75K miles on it. They're both very reliable. Once my car was paid off, I dropped the excess insurance and we'll be able to do the same with the other one, cutting our insurance cost by about $50/mo. They should last long enough to let us build up plenty of cash to be able to buy a replacement when we need it.
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I'm always blown away by how much students debts are in the US, I really feel for you guys it seems very unfair to start your working lives so encumbered.
Moneycat I like the idea of a (low cost) debt-free party, think we will do the same!
I have just saved $214 per month by cancelling our health insurance (we have access to excellent free health cover thank goodness) so that entire amount will be thrown at the debt instead. I also sold our "Bumbo" (baby seat type thing) yesterday for $40 so will lob that at the debt too. I'm trying to find one big way and one small way to free up some cash each month.
What is everyone else doing to try and nail the debt?
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I'm chipping away at about 4K on a 0% credit card. It can be tough to decide a balance between that and adding to my small stash, but it doesn't really matter too much in the long run, it's all paying myself anyway. Throw a dart.
Oh and I still owe 30K at 2% on my house. This used to be a lot more, at high interest, for about 12 years, and I put everything I had toward it.
Mostly, I'm in cjottawa's boat which I think is a great way of looking at it. My debts are negligible compared to others' but I have been remiss in paying myself, time to catch up now.
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*raises hand*
We have $14k left to pay on my husband's student loan and a mortgage of $224K.
On the bright side, we've paid off nearly $100K in student debt in the past 7 years and a little less than $50K in mortgage principal in 4 years. Whoo boy, that's a huge number.
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I agree about being in debt to yourself (I am 40 years old and even debt-free will have a lot of catching up to do). I know I won't be complacent though as cjottawa mentioned, I think the psychological boost of being debt-free will put a rocket under me to really change our financial future.
Some of the numbers in here are incredible. I'd love to hear the actual methods used to create the extra money needed to pay down the debt, I'm always searching for inspiration on that front.
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I am currently dealing with nearly $72,000 in student loan debt, but it's my only debt other than our $340,000 mortgage (which is very cheap for our area). I am working very hard on getting rid of the student loans and I want to pay it down as quickly as possible so I can invest more. It's a little frustrating.
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I am rocking 92k in student loans, undergrad and grad for mech engineering. Recently got rid of 21k in debt in the form of a gas guzzling truck. My goal is student loan free before I turn 30 (3.25 years). Student loans are my only real debt currently, a few hundred on credit cards with no interest.
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My wife and I have just shy of $471,000 of total debt. The largest chunk of that is the mortgages on our principle residence and our former residence (now rental property), for about $403k of that total. Our student loan debt is about $60k, and I owe on a motorcycle for the balance (it's for sale, any takers?). The mortgages are being paid by their regular schedule, but we are paying an extra $500/month on our student loans.
This must be the record for SL debt!. Congratulations to you on your plan. Best wishes.
Unfortunately, this is far from a record. I have friends who went to medical school who graduate with $250-300k debt - for one person!
My best friend and his wife have combined about $430k of student debt, he has $350k from medical school and she has $80k. I don't feel bad for them, though, they are both surgeons. When he finishes his residency and fellowship in about a year and a half, their combined income should be over $400k.
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While technically no longer "underwater" having paid off my student debt a couple of years ago, I still feel I am "in debt" - I have a debt to my future self.
Nothing has changed about my saving and spending, except that my net worth has moved from below the X-axis to above it.
I often feel like I'm the only person on the planet who thinks this way. I have a LOT of saving to do to get to my "target stache" which is why I think of it as a debt (to myself) even though I'm not underwater.
If anything, I feel it's dangerous to get into the "yay! out of debt!" mindset because that breeds complacence; keep viewing your 'stache building as a debt emergency and you'll do fine.
This is such a good post. Well said.
A similar sentiment was made by Sol on these forums awhile back, I have saved in my good quotes folder. He wrote:
Personally, I consider myself "in the red" because I don't yet have enough assets to support my current lifestyle without working. I'm living on borrowed time, because my current consumption obligates me to continue working and saving to grow my stash. I won't think of myself as "out of debt" until I'm financially independent, because until then I'm borrowing from my own future.
So it may not be traditional debt as discussed in this thread, but I love the mindset of being in debt to your future self until you are FI.
To all of you working your way out of debt: keep your eye on the prize, and work hard. You'll get there faster than you think!
Right now you are pushing the rock uphill, and it's tough. Gravity (paying interest) is fighting against you. You'll reach the top though and then the rock will be rolling downhill and gravity (compound interest) will be working for you. Soon you'll have to run to keep up with it as it rolls faster and faster without even any effort from you.
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To all of you working your way out of debt: keep your eye on the prize, and work hard. You'll get there faster than you think!
Right now you are pushing the rock uphill, and it's tough. Gravity (paying interest) is fighting against you. You'll reach the top though and then the rock will be rolling downhill and gravity (compound interest) will be working for you. Soon you'll have to run to keep up with it as it rolls faster and faster without even any effort from you.
Fantastic encouragement, THANK YOU! I got goosebumps thinking of me chasing my rock downhill.
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While technically no longer "underwater" having paid off my student debt a couple of years ago, I still feel I am "in debt" - I have a debt to my future self.
Nothing has changed about my saving and spending, except that my net worth has moved from below the X-axis to above it.
I often feel like I'm the only person on the planet who thinks this way. I have a LOT of saving to do to get to my "target stache" which is why I think of it as a debt (to myself) even though I'm not underwater.
If anything, I feel it's dangerous to get into the "yay! out of debt!" mindset because that breeds complacence; keep viewing your 'stache building as a debt emergency and you'll do fine.
This is such a good post. Well said.
A similar sentiment was made by Sol on these forums awhile back, I have saved in my good quotes folder. He wrote:
Personally, I consider myself "in the red" because I don't yet have enough assets to support my current lifestyle without working. I'm living on borrowed time, because my current consumption obligates me to continue working and saving to grow my stash. I won't think of myself as "out of debt" until I'm financially independent, because until then I'm borrowing from my own future.
So it may not be traditional debt as discussed in this thread, but I love the mindset of being in debt to your future self until you are FI.
To all of you working your way out of debt: keep your eye on the prize, and work hard. You'll get there faster than you think!
Right now you are pushing the rock uphill, and it's tough. Gravity (paying interest) is fighting against you. You'll reach the top though and then the rock will be rolling downhill and gravity (compound interest) will be working for you. Soon you'll have to run to keep up with it as it rolls faster and faster without even any effort from you.
Well said, all! Your time is your fuel, for a pedestrian journey or rocket fuel.
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I just paid off a credit card that had a 0% balance transfer deal that was going to expire in Feb 2014. Approximately $423,563.76 to go!
(Two houses in there)
For consumer debt we've paid off $17,860.24 in 2013 thus far. Still struggling with gaining traction to really put that away. The ideal plan should have that at ~$24k/year.
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I am currently in law school and have about $50k of debt and rising. I will probably graduate with somewhere around $80k of debt. I'm also looking around for peeps in the same hole as I am in...
$156,000 in student loan debt for law school...
Yikes, eye-opening to see all the fellow law school grads out there with so much debt. I graduated law school with around $80K in student loan debt...
My wife and I graduated law school 3 years ago with about $350k in student loans collectively (about $40k was from college) - and we got scholarship money!
Crazy to see some of the debt that young lawyers are saddled with as they head out into the world! Add us to the same pile.
My fiancee graduated law school with a total of $115,000 or so in debt (about $110,000 in student loans) in May 2012. Repayment started in November of 2012, and we started getting medieval on them in the 2nd half of 2013.
As of our most recent journal post (https://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg175428/#msg175428), we're down to less than $60,000 - we're actually just about to hit the halfway point this week! IT CAN BE DONE, YOU JUST HAVE TO RESOLVE TO PUNCH YOUR GODDAMNED LOANS IN THE FACE.
Bumfluff- Suffice it to say, you are not tackling debt alone!
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I am currently in law school and have about $50k of debt and rising. I will probably graduate with somewhere around $80k of debt. I'm also looking around for peeps in the same hole as I am in. Maybe the forum can have a stratified structure (just 3 or 4 dedicated threads perhaps) so the people who are in similar levels of badassity can congregate and encourage each other as we work to increase our mustachianism?
If you can possibly swing it, or at least partially swing it, try to pay off the accruing interest while you are in school. That interest will capitalize, and then you'll be charged interest on the interest. It's a huge racket, and I didn't fully grasp it while I was in law school. I actually borrowed about $96,000, but when the loans went into repayment, I actually had almost $110k. At the time, I think the money didn't seem "real" to me. Now I think about what $14,000 represents, and how hard I'm working to pay the balance down (I'm ioseftavi's fiancee), I really wish I hadn't had that amount capitalize.
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If you can possibly swing it, or at least partially swing it, try to pay off the accruing interest while you are in school. That interest will capitalize, and then you'll be charged interest on the interest. It's a huge racket, and I didn't fully grasp it while I was in law school. I actually borrowed about $96,000, but when the loans went into repayment, I actually had almost $110k. At the time, I think the money didn't seem "real" to me. Now I think about what $14,000 represents, and how hard I'm working to pay the balance down (I'm ioseftavi's fiancee), I really wish I hadn't had that amount capitalize.
YES. I was young and had no idea what such large numbers actually represented, in terms of time and food and effort and emotions, and no understanding of what capitalization meant. It makes me livid now.
I've more or less paid off my student loans but my spouse brought $80k at ~4% to our marriage so that's what we're working on.
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Mega student loan here. Now at 85,723 down from 250+ mix of private med sch & college loan, personal loans (40) & credit card (35 -for tuition & living expenses): private loan is variable rate, it added 40k interest during school & residency at 8.5% but now down to 3%: Graduated medical residency 2010 to primary care. I paid the credit card & personal off within 1 yr by having a 2nd part-time job for a year.
Can't wait for this shackle to be gone. I'm interested to see if that's been the cause of my crazy insomnia.
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Amazing accomplishment!
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Thanks for sharing guys, it really does help to know that I am not alone. I was able to throw an extra $516 at the debt last month which I'm pretty pleased about. I won't manage much this month with Christmas and its related gift-sending (all of my family live overseas so even though I'm being frugal and spending small amounts and making some gifts the postage gets me) and travel etc. but I'm going to come back really strongly in 2014.
Have you all set a firm date by which the debt will be gone or are you just working on a month by month ASAP type affair?
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Thanks for sharing guys, it really does help to know that I am not alone. I was able to throw an extra $516 at the debt last month which I'm pretty pleased about. I won't manage much this month with Christmas and its related gift-sending (all of my family live overseas so even though I'm being frugal and spending small amounts and making some gifts the postage gets me) and travel etc. but I'm going to come back really strongly in 2014.
Have you all set a firm date by which the debt will be gone or are you just working on a month by month ASAP type affair?
Keep it up!! Just adding my voice to the "yes I have debt" chorus... I decided to pump myself up a little bit the other day by actually calculating how much principal I'd paid off so far on my student loans. I started paying them off in July 2012, the starting balance was ~$70k and I was excited to find I've killed half of that in the last 18 months!! From here on out it will only go faster since I started with the highest interest rates.
Re. goals/firm dates, I don't really have one but I sort of set mini/intermediate goals. Like, currently the loan I'm "overpaying" on is my last one that has an interest rate >7%. At my current rate (I've just been throwing $1500/month at all my loans since I started), it will be done by the end of the year, but my "goal" is basically to kill it way before then by throwing ANY extra cash at it. Getting those "you have paid off this loan" letters in the mail feels soooo good :)
Too long term ($12,000/year!) or too abstract ($400,000 by 2033!) and they're unhelpful. Give yourself an achievable goal each month.
You don't spend "a year in advance" - you're buying groceries (or dining out, or toys, or whatever) NOW - so you need short term goals that offset discretionary spending, otherwise you'll never make it.
Great advice!!
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Resurrecting this thread to see how everyone is doing with their debts?
Since my last post I have reduced ours from US$38,000 to US$20,765 so it's still a bit "slow and steady" but that period of time (18 months) also included an international move entirely funded with money we saved up so I'm not being too hard on myself. Not taking my put off the pedal though.
I sold all the "stuff" and the move (despite costing a fortune) will put us in a better position financially long-term as we now spend 40% less on rent. Starting to see some light at the end of the tunnel...
Hope everyone else is making good progress.
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I started mustaching in Jan 2012 with $371k in debt, mortgage + line of credit. Currently down to $214k debt, all on mortgage - so a reduction of $157k. When I started the monthly interest bill was over 2k, now its down around $800/month. Goal for mortgage paydown is at least 45k this year and next, then 50k/year. I achieved this by cutting expenses ( so much face punch worthy waste is gone), and determinedly autopaying extra every fortnight, so that I didn't ever see the extra money in my account. I haven't gone away for a vacation in that time, had staycations instead. Tax returns and any unexpected little windfalls go to the mortgage.
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When this thread was made in December 2013 my student loans were sitting at around $72,000. Today they are roughly $38,500.
Still some work to do, but I hope to have them gone in under 2 years now.
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You've both made fantastic progress! I should get a decent tax return in a couple of months so will lob it at the debt for a bigger step forward.
I just read that reader story about the guy who left Uni without a degree, went to prison, had loads of debt and didn't start his "proper" job until he was 35. He is now kicking financial ass - very inspiring!
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Hubs and I have been on here since January. We've now paid off $14,650 in debt. (He got a raise and I decreased my tax withholdings. We cuy spending a tad.) Next on the list is maxing out his 401k. After that, I have no idea. I'm going to have to learn more between now and the end of the year. I don't want to put more down on the mortgage because we live near an expanding airport and we will probably be bought out in a decade. We're so underwater on it, I think we'll be sinking money in for no reason. I'm currently a teacher, so no 401k for me. Maybe max out Roth IRAs and HSA?? Any suggestions, or is this a bad place to ask - being that we're on the debt side of MMM? :)
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We've been quite fortunate that we pretty much never had any debt except for mortgage. GF paid her way through school with p/t jobs, a while I decided school is too boring and dropped out.
Currently just working on 2 mortgages, our primary residence and an investment property. We're thinking of getting a 3rd soon but the market is just too high in our area.
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Still pushing that boulder uphill but I feel it's getting easier every month.
5 years ago I was $20k in debt with no savings.....this time next year I will be well over $100k net worth with an investment property or 2. ;)
It would have been more if I discovered this site sooner
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Oh look, something I can contribute to. I... I'm not sure how to feel about that one.
Debt 1 - Wife's Visa - Current Status: DEAD
My wife and I knew the broad strokes of our finances when we were dating, but it wasn't until we got engaged and moved in together that we sat down and laid out the details. For me it was a matter of protection. Years of careful and cheap living had resulted in an exceedingly padded bank account. For her it was a matter of embarrassment. Years of bad choices had resulted in a paycheck to paycheck life that crushed her self worth.
I was shocked at the debts she held. $10,000 on this account, $10,000 on another, $5,000 owing on that one over there, a car payment bigger than the mortgage. She was in a position where she made very good money, but was simply incapable of making more than the minimum payments on all of these debts. So I made her a deal. I picked the biggest two on the list and told her I would pay off one of them in full. That night. But she had to commit the payment to the next one on the list.
So she called the bank, confirmed the balance. I called my bank and delivered a backhanded blow to the $10,000 Visa balance that removed its head from its shoulders. She then called back her bank and cancelled the card.
Debt 2 - Wife's Line Of Credit - Current Status: DEAD
This was the second on the list. A $10,000 line of credit that had, once upon a time, been taken out as a "consolidation loan". The problem was that as soon as the LOC had been maxed out the bank had raised the interest rate from a comparatively conservative (but still painfull) 8% to a far more difficult to contend with 13%. Interest, of course, compounded daily. As agreed she was putting the former Visa payment towards it, whilst also saving/paying for the upcoming wedding. During the following year leading to the wedding-
Debt 3 - Wife's Car Loan - Current Status: DEAD
- Recieved its final payment. That money also started going towards the LOC. We held a social (a fundraiser for those unfamiliar) to raise money for the wedding. We turned a nice profit from the wedding as well. In the end an event that cost us $7,000 to put on gave us a return of $15,000. It was at this point we called the bank and got an update on the balance. We still owed $7,000. We cursed, we raged, we wailed and gnashed our teeth. We took the entire profit from the wedding and used it to pay off the Line Of Credit. And then we closed it and swore to never deal with that bank again.
Debt 4 - Wife's Loan - Current Status: DEAD
Time passed. I did sweeping renovations to the house, a two year project that has so far averaged $1,000 a month kn cost. Money was tighter, but as we considered this an investment we kept rolling. I had noticed paperwork, and my wife had passed comments, concerning a loan that had not come up during our original consolidation of funds. With other, more pressing matters temporarily resolved I found the time to dig out the paperwork and go over it. A loan, held for the last six years, slowly nickle and diming us to death. I approached my wife for details.
Back in 2009 she had been dating a bad dude. One day, to make a long story short, he had stolen her credit card and maxed it out before skipping town. When she reported the theft she was told, in no uncertain terms, the because he had used her PIN that meant she had given him the code. She was therefore on the hook for the balance. At 25% on a $10,000 limit.
She has gone to the bank, gotten a loan, and paid it out. The loan had been for a three year term and everyone had been very sympathetic. The payment was $200 a month.
A three year term.
That was on it's sixth year.
And still had a $4,000 balance.
By my math she had made $12,000 in payments on an original loan amount of $9,000. And she still had $4,000 to go. It turned out that every year they had been sending her paperwork that tweaked the terms of the agreement, and she had just been signing them and sending them back. Somewhere along the line they has tweaked things so that the interest rate had jumped five points higher than she'd agreed to, added insurance, and made it so interest compounded daily.
I was not a happy man. I went to the bank, pulled money from where I could, and beat that loan to death with a blunt instrument: my chequebook.
Debt 6 - My Car Loan - Current Status: STRUGGLING FOR AIR
Not much to tell on this one. I got a 0% car loan five years ago for too much money. I chose the smallest, most fuel efficient car I could afford for the lowest price possible. I now owe $600 on the loan. I'm just going to let those payments come out on schedule, there's only two more after all, because I have more pressing matters to contend with. Such as:
Debt 7 - Wife's Dental Loan - Current Status: MINOR INJURIES
My wife has a distinct lack of front teeth and has since she was a child. They had to be removed, for whatever reason, and she had been wearing a retainer with fake teeth for decades to hide this fact. The retainer broke and we made the decision to get them fixed permanently. At the time money was steadily coming in. By the time the work was done and the loan payments showed up (another $10,000 loan) we'd had a financial disaster and were not in the position we thought we would be. We were able to throw $1,000 at it right off the top, but since then have been making only slightly more than the minimum payment. On the plus side we've got it down to $7,000. On the crappy side we still owe $7,000.
Debt 8 - My Mortgage - Current Status: ON THE ROPES
Not much to tell. Purchase price of home was $35,000, bought from my grandparents. Ten year mortgage, paid 20% down, took a very aggressive tack. Currently owe about $16,000, but that hardly matters. The house was an investment. I have put $30,000 worth of materials into a full renovation, increasing the value to over $150,000. We intend to sell as soon as we finish the house, and get sufficiently into the bare minimum renovations needed in our second home which we already own. This other property, appropriately enough, just happens to be:
Debt 10 - My Wife's Mortgage - Current Status: HEALTHY AND IMPOSING
The purchase price of this home was $50,000. Thanks to the sheer volume of debt churning we have performed over the last 5 years both of our credit scores are remarkable. As such we were able to get a 25 year mortgage at 2.8%. We intend to utilize upcoming funds from the sale of the house to start the process of making this a 5 year mortgage.
I am suddenly realizing I could probably do a blog post on any one of these debts, as well as the stories behind them. But to make a long story short.
TL;DR -
Approximately $75,000 in combined total debt, including two mortgages.
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Debt. Yeah, I got debt.
$51,897 in credit card debt (currently on two credit cards at either .98 or 0% interest until Sept or Oct 2014 -- I have good credit).
$156,000 in student loan debt for law school
I found MMM in May when I had my second anniversary of law school graduation and realized I was in worse financial shape in 2013 than I was when I graduated in 2011. I slashed my spending and now live on about 30% of my income. Since May, I've paid off two credit cards and paid one other way down and consolidated the debt. I also opted to do some renovations in the basement of my home so that I can rent it out and cover 2/3 of my mortgage. Thanks to my frugality, I've been able to pay cash for almost the whole renovation with about $2k on Home Depot and Lowes cards at 0% interest and $2400 at 0% for new carpet.
With the basement rent and rent from my daughter, who just moved back home, my monthly housing cost will be $75. Fingers crossed that I find a good tenant in the next few weeks.
Essentially, I spent much of 2013 restructuring, cutting, and repositioning. My goal for 2014 is to pay off all of the credit card debt (including newly incurred debt for the renovation). That's a $56,000. goal. Only then can I begin really tackling the student loan debt.
So, yeah, I could use some support too.
Sigh. Reading this post from 18 months ago and checking my updated stats has me very depressed:
CC debt, 6/1/2015: $48265.00
SL debt, 6/1/2015: $150,912.00
I've made so little progress!!! I adhere to a Mustachian lifestyle (MVNO phone, no cable TV, no shopping, minimal eating out, old Prius, hang out laundry). Where are the leaks?
Since this post in December, 2013, I've spent $8552 on business travel (mostly unreimbursed). As many of you know, I'm a part-time staff attorney at my BigLaw firm and I have been trying to shift that into a full time associate position (40% pay increase). In early 2014, I decided to build my expertise in a specialty area of the law, hoping that would help. It didn't. For the last 6 months, I've been working full time -- hoping to prove I'm worthy (stopped that this month) and working 70-80 hours a week has taken a toll on my ability to be frugal. Now that I'm downshifting to part-time hours (still at least a 35 hour work week), I've got to rebuild my frugality muscle.
In 2014, I also spent almost $5k for a family trip for my parents' 50th wedding anniversary -- we rented a house in Big Bear California for a week. I don't regret that but it hurt.
I spent $4308k for a walkway and patio which is also related to the basement renovation -- my tenant was walking on grass and dirt, which was not popular.
Quite frankly, I'm pretty depressed about this and I need to figure out what has gone wrong. I'll have to report back after some analysis.
Edited to add: HUGE leak... for all of 2014, my SL's were on IBR. I was paying $983/mo JUST TO TREAD WATER. That's almost $12k simply up in flames. All my progress on SL's has come AFTER I refinanced them. Talk about pushing a rock up hill!
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You are spending for the wrong reasons bro.
Your parents didn't need you to spend $5k to celebrate their anniversary and you spent 4k on another unneeded addition to your home. You're in debt man....these things wait.
Over 8k for business travel? Huh?
When you start seeing those numbers go down you'll start to get motivated....believe me. But you'll never get motivated unless you really apply yourself.
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SarahMD428 I'm a Brit so have no idea about Roth IRAs and HSAs etc. sorry!
surfhb that's a real turnaround - how did you do it?
psinguine I love your analogies, you should definitely blog you have a great writing style.I read the whole post so you must have been engaging ;-)
Trulystashin son't be too hard on yourself, it's an uphill battle this one. Sounds luke you've had a bit of a lightbulb moment re your student loans. What is IBR - does it mean interest only repayments?
I am really cross with myself today. I've been Googling cheap holidays in Europe (I'm in the UK so they really are cheap) which I KNOW is anti-mustachian and foolish considering we still have debt but sometimes I struggle with the needs vs wants battle. It's been such a tough year (bereavements and other personal things) that I just want to whisk us all off for some R&R. Staying and fighting the debt instead is unappealing and a bit depressing. I need to re-focus on the short-term pain for long-term gain thing - will punch myself in the face now.
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IBR is "Income Based Repayment" and yes, it is essentially interest only. I refinanced my SL's in late December and cut my interest rate in half. Now, most of my $1580 monthly payment goes to principal. Thank God.
I have no trouble saying "no" to eating out or new clothes or pedicures. I struggle with saying "no" to spending on my kids and family. The 50th anniversary trip? That was me and my son spending a week with my brothers and their spouses and my nephews and my parents. My brothers and their families live in LA and we don't see each other often. A week together over Christmas? I'm just not going to say "no" to that and I'm glad I didn't. Those memories are priceless.
My youngest son just graduated from high school and we had a party at my house. That cost about $300 for food (homemade by me), lawn games, and drinks. I don't regret that.
My other son is graduating from Ohio State in August (MA degree) and in light of this reality check, I'm wrestling with the painful decision to stay home.
That's my biggest Achilles Heel. Especially when I consider that I'll be in debt for years to come -- best case scenario. Do I forego all milestone family events like this for the next five years? That is a VERY hard issue to overcome.
My second biggest Achilles Heel is that I've been trying to push my job to the next level. I've spent a lot on business travel and meals and a little on some new clothes (job interview suit). Since March, I've spent $434 on business meals -- almost all lunches with business contacts. I believed, wrongly, that putting time, energy, and money into this would result in a promotion with a 40% increase in pay. In the past month, it's become increasingly clear that I was wrong. The politics of my firm and my positioning within it are not in my favor. Unless I leave my city, I'm not likely to get there. It's not entirely a bad thing because I make very good money already. It's just that the insane "Oprah money" of BigLaw is not going to happen. I will stop spending money on this immediately.
Today's post from MMM is very timely for me. I will get back on track. Does anyone else really struggle with spending on family? I'd love to hear how you work through those questions.
Edited to add: my review shows that I was actually making pretty decent progress until this March. My CC debt was down almost $10k -- to $42k. In March, I started working a ton of hours (no additional pay) and both my focus and frugality muscle suffered. Just three months of unfocused spending unwound months of hard work!
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Debt - I hate that nasty little four letter word. We aren't terribly off but working towards improvement but we have a long haul before FIRE.
$1200 - DH's credit card, opened that when our moodle slipped a disc - was payed off last week
$1,400 - My CC - more vet expenses and a few wedding expenses (oops!) we will have this payed off at the latest September 4th, 2016
$4,485 - My car loan for my Honda FIT, already knocked off 2k and I bought it last August. This will be payed off August 2016 at the latest
$10K - My student loans - by the end of 2017 if we don't get an inheritance but the lines have been signed and I'm scheduled to receive almost this exact amount in November or so. It'll be going to wiping out the loans
$95k - Our house. He bought it in 2001 for 105k and refinanced in 2008 (before we met). Still debating what to do with this.
It can be intimidating staring down that long road. It feels like I'll never get to retirement, much less FIRE but we make a good team and I am young.
The eternal optimist in me just wants to tell everyone here to keeping burning you crazy fires :)
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Thanks for resurrecting this thread! I love updates.
I discovered MMM about a year ago, so I didn't contribute to the original thread. Our current debts aren't horrible, but still a monkey on our back:
19k--My student loans, at 6%. We have the savings to just pay this off, but DH is still laid off and work has been sporadic at times (esp through the winter), so I'm hesitant to diminish our savings. Maybe throw a few big chunks toward it?
24k--Investment property husband bought in 2001, interest rate is below 3%, so we will not be paying extra. Mortgage is a paltry $165.
62k--Investment property (duplex) I bought in 2006. Recently refi'd for a lower rate and not too concerned at this point.
55k--Our primary residence. Just purchased late last year for 70k and completely updating a bit at a time. Comps in the 'hood run 150k and up.
So overall, not too cringe worthy, but I want to knock those SL out so bad!!!! Time to get serious.
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My other son is graduating from Ohio State in August (MA degree) and in light of this reality check, I'm wrestling with the painful decision to stay home.
That's my biggest Achilles Heel. Especially when I consider that I'll be in debt for years to come -- best case scenario. Do I forego all milestone family events like this for the next five years? That is a VERY hard issue to overcome.
Well, is there a way to go on the cheap? Or have a party at home, if he's coming home after? How much does your son care about it?
My second biggest Achilles Heel is that I've been trying to push my job to the next level. I've spent a lot on business travel and meals and a little on some new clothes (job interview suit). Since March, I've spent $434 on business meals -- almost all lunches with business contacts. I believed, wrongly, that putting time, energy, and money into this would result in a promotion with a 40% increase in pay. In the past month, it's become increasingly clear that I was wrong. The politics of my firm and my positioning within it are not in my favor. Unless I leave my city, I'm not likely to get there. It's not entirely a bad thing because I make very good money already. It's just that the insane "Oprah money" of BigLaw is not going to happen. I will stop spending money on this immediately.
You should at least be able to deduct some of that, right?
Me? buried in debt. $69k student loan #1, $14k student loan #2, $97k husband's student loan, and $203k on mortgage. Hair on fire doesn't really seem to work super well. Living literally the better part of the next decade with crushing austerity is... unappealing. "Sell the house and move" is a theoretical option but similarly unappealing. I try to reduce expenses where I can but we can't, or just don't want to, cut out absolutely everything vaguely optional. It would be one thing if a year or two of that would accomplish it, but it won't.
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Trulystashin I have the same issue re family stuff. I'm happy to do without beauty stuff, haircuts, new clothes, all that personal luxury. We share a 2002 Ford Focus (bought with cash) and shop really smart. We don't pay much in rent and walk the kids to school etc. BUT I struggle to tell myself no with family activities. We do lots of outdoor stuff with a picnic so we are t going crazy but I do throw the kids a birthday party and pay for lunch when my parents visit for example. If I were in your shoes I would definitely be going to that graduation - unmustachian or not! I'd find a way to do it on the cheap and try and cut the budget elsewhere to cushion the financial blow.
Iamlittehedgehog - being young and on the same team is a MASSIVE advantage - use it! :-)
I love updates too Stachetastic, it's great to see others' progress and to remind myself how far I've come while simultaneously giving me a kick up the jacksie to keep going.
Merrie what is so unappealing about selling your house? We held onto ours for ages (because we loved it and didn't want to get off the property ladder etc.) but when we finally sold it (at a decent profit thankfully) it was a huge weight lifted. Even if we had just broken even, the reduced expenditure of not having a mortgage and buildings insurance etc. was fantastic.
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IBR is "Income Based Repayment" and yes, it is essentially interest only. I refinanced my SL's in late December and cut my interest rate in half. Now, most of my $1580 monthly payment goes to principal. Thank God.
I have no trouble saying "no" to eating out or new clothes or pedicures. I struggle with saying "no" to spending on my kids and family. The 50th anniversary trip? That was me and my son spending a week with my brothers and their spouses and my nephews and my parents. My brothers and their families live in LA and we don't see each other often. A week together over Christmas? I'm just not going to say "no" to that and I'm glad I didn't. Those memories are priceless.
My youngest son just graduated from high school and we had a party at my house. That cost about $300 for food (homemade by me), lawn games, and drinks. I don't regret that.
My other son is graduating from Ohio State in August (MA degree) and in light of this reality check, I'm wrestling with the painful decision to stay home.
That's my biggest Achilles Heel. Especially when I consider that I'll be in debt for years to come -- best case scenario. Do I forego all milestone family events like this for the next five years? That is a VERY hard issue to overcome.
My second biggest Achilles Heel is that I've been trying to push my job to the next level. I've spent a lot on business travel and meals and a little on some new clothes (job interview suit). Since March, I've spent $434 on business meals -- almost all lunches with business contacts. I believed, wrongly, that putting time, energy, and money into this would result in a promotion with a 40% increase in pay. In the past month, it's become increasingly clear that I was wrong. The politics of my firm and my positioning within it are not in my favor. Unless I leave my city, I'm not likely to get there. It's not entirely a bad thing because I make very good money already. It's just that the insane "Oprah money" of BigLaw is not going to happen. I will stop spending money on this immediately.
Today's post from MMM is very timely for me. I will get back on track. Does anyone else really struggle with spending on family? I'd love to hear how you work through those questions.
Edited to add: my review shows that I was actually making pretty decent progress until this March. My CC debt was down almost $10k -- to $42k. In March, I started working a ton of hours (no additional pay) and both my focus and frugality muscle suffered. Just three months of unfocused spending unwound months of hard work!
As a former Biglaw myself, I would confirm your decision to stop hoping for the associate (non-staff) position. From what I saw, staff attorneys can never make that transition. There are too many factors preventing it, the most important one being that Biglaw partly justifies its high billable fees by the resumes of its associates. So if you didn't make it to that path on the first attempt, it likely means that your resume will prevent you from getting there, at least until you can bring in clients. And if you can bring in clients, then it's probably financially best to hang your own shingle anyway.
Your unreimbursed business expenses are crazy. If those are self-imposed, stop immediately. You can get just as much benefit from a $5 networking coffee meeting as a $50 lunch. In fact, you are more likely to find time with really busy (successful) attorneys and to show them you respect their time by limiting things to a short cheap meeting. If your job requires it, and you work in Biglaw, it should be reimbursable.
For family events, I understand to a point. I'm not willing to reduce travel spending to see family. However, your costs seem extremely high. Does your family go out to eat a lot? Spend a lot on gifts? Are you covering the costs for other people? These things add up quickly. I've found that if you inject some mustachian ways into family affairs, you can usually reduce the cost of family visits quite a bit. Cook frugal and delicious dinners at the rental house. Take a hike for free instead of paying for zip lining. Ask family if they are interested in reducing or eliminating gifts, particularly given your costs of travel. Rent the nice-but-not-a-crazy-mansion rental house instead of the most expensive option. Learn how to hack credit cards to help reduce travel expenses. Bring your own food when you are on the plane. Stay with family whenever you can. Etc.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
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IBR is "Income Based Repayment" and yes, it is essentially interest only. I refinanced my SL's in late December and cut my interest rate in half. Now, most of my $1580 monthly payment goes to principal. Thank God.
I have no trouble saying "no" to eating out or new clothes or pedicures. I struggle with saying "no" to spending on my kids and family. The 50th anniversary trip? That was me and my son spending a week with my brothers and their spouses and my nephews and my parents. My brothers and their families live in LA and we don't see each other often. A week together over Christmas? I'm just not going to say "no" to that and I'm glad I didn't. Those memories are priceless.
My youngest son just graduated from high school and we had a party at my house. That cost about $300 for food (homemade by me), lawn games, and drinks. I don't regret that.
My other son is graduating from Ohio State in August (MA degree) and in light of this reality check, I'm wrestling with the painful decision to stay home.
That's my biggest Achilles Heel. Especially when I consider that I'll be in debt for years to come -- best case scenario. Do I forego all milestone family events like this for the next five years? That is a VERY hard issue to overcome.
I get it, I used to live 2000 miles from all my family. There are costs to this. Two MMMish options - don't see them as much, or move closer.
Travel around big holidays is insanely expensive and stressful. Don't do it. Period! I don't care that it's Christmas - I have spent many Christmases away from my family and I'm just fine. You can have a wonderful time with whoever's in the geographic area. When you do visit, do it during lower cost times of the year. Do things on a budget. Try to stay with family if you can instead of a hotel. Drive or look into other options (train?) instead of flying.
Above all, make it very clear to the family that you may not see that you still love them, you just can't swing it right now. If they can't understand it, that's their problem not yours. And they're welcome to visit you!
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Wow! That's amazing. Great job.
Thanks! There is a lot of truth to the saying that frugality muscles strengthen with use. I was pretty facepunch-worthy when I first started working, but have slowly improved my spending and investing decisions over the years.
Sounds like you're doing the most important thing- starting to look at spending very carefully. And believe me, I understand with the family outings. I'm reminded every time I hang out with my family of how far I have come in terms of frugality. Some other things I have done to help reduce costs:
- eat cheap. Seriously. Think Subway meals (with the coupons you can find online) if you have to go out, and bring as much food as you can to avoid going out. If it's an option, ask for a complimentary fridge at your hotel, and then get food from the grocery store. You'd be surprised how many hotels will give you a free fridge if you ask. If they don't, then get non-perishable items and just a few perishable items and store in the ice bucket.
- stay cheap. Sleep on an air mattress at your son's place or join Couchsurfing to find a place to sleep. If that isn't an option, are you familiar with Priceline? You can check a site called betterbidding.com (http://betterbidding.com) to optimize your Priceline/Hotwire strategy. If you have any friends/family that work for Radisson, you can also use the Friends & Family rate to get a $80 room at many of their hotels. See http://www.flyertalk.com/forum/hotel-deals/1006932-carlson-hotels-radisson-family-friends-rate.html (http://www.flyertalk.com/forum/hotel-deals/1006932-carlson-hotels-radisson-family-friends-rate.html) for more details. Also check AirBnB for cheap options. The great thing about AirBnB is that you don't get gouged with hotel taxes, and you normally have access to a full kitchen. If you take advantage of that, you end up saving a lot more than if you stayed in a similarly-priced hotel room and eat your meals out.
I've read some of your other posts, and it sounds exactly like so many of my and my friends' experiences in Biglaw. They will always dangle a carrot in front of you, but then have some excuse when you win the race and ask for your carrot. They will say they care about your future, but really only care about the firm's profit-per-partner numbers. They will avoid sharing money with you unless they want you to stay and think you will walk without it.
Importantly, however, it looks like you are setting yourself up to have a really sweet job in terms of hours & pay in a couple of years. Given that, you are probably wise to focus on reducing expenses and side hustles instead of chasing the path to becoming an associate. IMO, the extra money is not worth the sacrifices you have to make, but of course it is easy for me to say that now with the reduced loan balances.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Awesome work dude! I graduated shortly after you with $135k in loans. I also ended up borrowing $30k from my inlaws to buy a house. I just finished paying off that $165k at the beginning of this year (so a little over 3 years). It was very difficult but now the cash is rolling in and it's awesome. I've got a high paying job (taking into consideration my age and location) and am maxing out my 401k, my rIRA, my wife's rIRA and adding some to my post-tax 401k account as well (shooting to do the mega-backdoor 401k to rIRA conversion).
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Awesome work dude! I graduated shortly after you with $135k in loans. I also ended up borrowing $30k from my inlaws to buy a house. I just finished paying off that $165k at the beginning of this year (so a little over 3 years). It was very difficult but now the cash is rolling in and it's awesome. I've got a high paying job (taking into consideration my age and location) and am maxing out my 401k, my rIRA, my wife's rIRA and adding some to my post-tax 401k account as well (shooting to do the mega-backdoor 401k to rIRA conversion).
Congrats to you too! That is awesome. It must be an amazing feeling to have gotten the in-law debt off of your back.
Excited to hear about your progress as the years go on.
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I just wanted to let you guys know that I have kicked ass this month!
1) I got new tenants for my basement apartment. I've been very picky and as a result, the basement has been empty since March. Finally, I have a really great young couple moving in next month. I got their $900 deposit today. That's an extra $950/ month with a 12-month lease.
2) By the end of this month, I will have sent $4460 to debt payoff, which may be an all-time record high payment to debt. I'm very excited about that. By June 25, when everything clears, my CC debt will be down from $48,666 (June 1) to $45973 (July 1).
3) My combined debt/ investment equals 73.81% of NET income this month. Hell yeah.
That's called back on track, my friends.
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8k cc debt
60k student loan
And I live in one of the most expensive cities in the USA (2k/mo to rent a 700 sq ft apartment).
I have a net worth of about 50k though, and growing.
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I just wanted to let you guys know that I have kicked ass this month!
That's called back on track, my friends.
Cheers, TrulyStashin!!!
I felt a bit sad when I read your post from a few days ago. So thanks for posting this.
My family is all very close by - like living next door to my brother and his family with our parents across the backyard close. :) We get along so it is okay. A parents' 50th wedding anniversary party would be difficult to say no to and i don't think I would want to say no to something like this. My parents celebrated their 50th a few years ago now and it was held in the communal back yard. I consider myself lucky to be a part of events like this and you probably do too.
Awesome about that debt payment this month too!
Pachnik
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I just wanted to let you guys know that I have kicked ass this month!
1) I got new tenants for my basement apartment. I've been very picky and as a result, the basement has been empty since March. Finally, I have a really great young couple moving in next month. I got their $900 deposit today. That's an extra $950/ month with a 12-month lease.
2) By the end of this month, I will have sent $4460 to debt payoff, which may be an all-time record high payment to debt. I'm very excited about that. By June 25, when everything clears, my CC debt will be down from $48,666 (June 1) to $45973 (July 1).
3) My combined debt/ investment equals 73.81% of NET income this month. Hell yeah.
That's called back on track, my friends.
Nice job!
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Found MMM just a couple months ago and these forums a few weeks ago.
Diving in with $6400 credit card, $5500 car loan, and $180K mortgage at 4.125%.
First goal is get those stupid debts paid off by xmas this year, then tackle mortgage.
Go team MMM!
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Add me to part of the debt group! I've paid off 30k and the remainder of my student loans in the past year. I still have a truck and trailer to pay off. I live full time in the trailer and need the truck to tow it, they total about 95k in debt. I can definitely pay half that off this year. That'll leave me with about 45k at a reasonable interest rate I may hold off on paying. I should be able to mac my 401k this year as well. I've thought about downsizing truck and trailer, but even a major downsize would save me 30k and it would be sacrificing a lot. Once I stop traveling to for work I'll buy a house and sell the trailer, probably truck too.
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Excellent work TrulyStachin, you're beasting that debt!
Great to see others joining our gang too. We all seem to be heading in the right direction, looking forward to more updates as we each get closer to our beautiful debt-free moment.
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My only debt is a small mortgage with an interest rate so low that I've not thrown extra money at it. For years I wondered whether I was making the right choice, and now I'm glad that I saved and invested in index funds instead, as my soon-to-be fiancee recently presented me with a list of her outstanding student loans.
She's not financially savvy and had been telling me for months that she believed her debts totaled around $160k. This weekend she felt brave enough to actually log into her account (her med school loans have been in forbearance) and lo and behold, she actually owes $207k. Most of the loans carry 6.8% interest rates. We need to destroy the hell out of these loans as quickly as possible.
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Currently, we owe:
Just under $6,000 on car loan @ 2.64%. Will be paid off by the end of the year, leaving us with just student loans and mortgage.
Student loans: ~$25,000 @ 2.33%. About $6000 is my husband's and the rest is mine. Not a terrible interest rate, but it is somewhat variable so want to pay the higher balance down a bit in case the rate comes up any.
Mortgage: $64,500 @ 3.5%. Not a huge issue for me right now, but want to pay off enough to get rid of the PMI.
This is what remains after we have spent the last 9-10 months slaying our debt. In September of last year we owed $122,000 overall (and some more before I started tracking the totals.) That was higher balances on all the above plus $3500 in CC debt. Since the start of the year, we have paid off all CC and lowered balances on the rest. All to the tune of $20,000.
I share this because it is possible to make big changes. You just have to decide you want it and have the dedication to do it.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
This is gonna be harsh but I think you need a facepunch.
$5000 for a weeklong family trip!!?!?! That's insane!! How can you try to rationalize that now? I did a 3 week roadtrip across the Unites States, stopping all sorts of places, and only spent $1800. My 2015 vacation budget now that I've taken said trip to move to my new home is $1200. I'm going on my third vacation next week and should be able to fit at least one more in on this budget. Look into some cheaper options. Couchsurf, Airbnb, stay with a friend, buy a freaking tent. Go with your family to the destination but there's no reason you have to match all of their prolific spending.
The $300 party isn't nearly as bad, but you probably could have spent half that. 5 $15 vodka handles and 10 pizzas can't be $200, and even that would probably provide leftovers of food and drink. Or buy a keg.
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Sign me up for debt too! DH and I have $42k in student loans. $7k are his, I don't know the interest rate, but monthly payments are $100. I just graduated, so we're not paying on my $35k yet. Average interest rate on mine is 4.5%. No other debt.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
This is gonna be harsh but I think you need a facepunch.
$5000 for a weeklong family trip!!?!?! That's insane!! How can you try to rationalize that now? I did a 3 week roadtrip across the Unites States, stopping all sorts of places, and only spent $1800. My 2015 vacation budget now that I've taken said trip to move to my new home is $1200. I'm going on my third vacation next week and should be able to fit at least one more in on this budget. Look into some cheaper options. Couchsurf, Airbnb, stay with a friend, buy a freaking tent. Go with your family to the destination but there's no reason you have to match all of their prolific spending.
The $300 party isn't nearly as bad, but you probably could have spent half that. 5 $15 vodka handles and 10 pizzas can't be $200, and even that would probably provide leftovers of food and drink. Or buy a keg.
First of all, I self-administered several face punches for other spending and I'm back on track.
Secondly, $1500 of the $5k was my share of the week long house rental. There were 13 of us. I'm the only frugal person and I didn't pick the house. My brothers each paid $1800 and gave me a discount because they're great guys (and we had to fly, they live near Big Bear). The balance of the spending was in air travel (VA to CA), groceries, ONE dinner out, and two days of skiing for my son. I DON'T REGRET THIS TRIP at all and would make the same decision in a heartbeat. The cardinal rule of Mustachianism is to spend money thoughtfully, in ways that build deep value and meaning in our lives. In 1975, when I was 7, my family celebrated Christmas in Big Bear and it ended up a family legend. Forty years later, we all went back to Big Bear and created more legends. This is the stuff that matters and yes, my debt can fucking wait the two extra months of debt paydown that this set me back. On a five-year payoff trajectory, that's insignificant.
Imagine the alternative, "I'm sorry Mom & Dad, Brothers, Nephews... I know you're all dedicating a week of (rare) time off to be together for a family milestone, but my debt is more important." Fuck. That.
The $300 party resulted in tons of leftovers that we're still eating -- that's why I made carnitas and beans, easy to freeze and reheat. I also have a ton of bottled beer left. I bought bottles (4 cases, $16/ case) on purpose so I could have leftovers for more at-home gatherings.
My friends, I am not "talking" about the anniversary trip again. Subject closed. Face punch rejected.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
This is gonna be harsh but I think you need a facepunch.
$5000 for a weeklong family trip!!?!?! That's insane!! How can you try to rationalize that now? I did a 3 week roadtrip across the Unites States, stopping all sorts of places, and only spent $1800. My 2015 vacation budget now that I've taken said trip to move to my new home is $1200. I'm going on my third vacation next week and should be able to fit at least one more in on this budget. Look into some cheaper options. Couchsurf, Airbnb, stay with a friend, buy a freaking tent. Go with your family to the destination but there's no reason you have to match all of their prolific spending.
The $300 party isn't nearly as bad, but you probably could have spent half that. 5 $15 vodka handles and 10 pizzas can't be $200, and even that would probably provide leftovers of food and drink. Or buy a keg.
First of all, I self-administered several face punches for other spending and I'm back on track.
Secondly, $1500 of the $5k was my share of the week long house rental. There were 13 of us. I'm the only frugal person and I didn't pick the house. My brothers each paid $1800 and gave me a discount because they're great guys (and we had to fly, they live near Big Bear). The balance of the spending was in air travel (VA to CA), groceries, ONE dinner out, and two days of skiing for my son. I DON'T REGRET THIS TRIP at all and would make the same decision in a heartbeat. The cardinal rule of Mustachianism is to spend money thoughtfully, in ways that build deep value and meaning in our lives. In 1975, when I was 7, my family celebrated Christmas in Big Bear and it ended up a family legend. Forty years later, we all went back to Big Bear and created more legends. This is the stuff that matters and yes, my debt can fucking wait the two extra months of debt paydown that this set me back. On a five-year payoff trajectory, that's insignificant.
Imagine the alternative, "I'm sorry Mom & Dad, Brothers, Nephews... I know you're all dedicating a week of (rare) time off to be together for a family milestone, but my debt is more important." Fuck. That.
The $300 party resulted in tons of leftovers that we're still eating -- that's why I made carnitas and beans, easy to freeze and reheat. I also have a ton of bottled beer left. I bought bottles (4 cases, $16/ case) on purpose so I could have leftovers for more at-home gatherings.
My friends, I am not "talking" about the anniversary trip again. Subject closed. Face punch rejected.
You missed the part where I said you should go, but there's no reason you need to spend $5K. That's an absurd amount. You could have spent 1/3 of that and had the exact same result no? Your either/or fallacy where the only alternative is to not go at all is completely illogical.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
This is gonna be harsh but I think you need a facepunch.
$5000 for a weeklong family trip!!?!?! That's insane!! How can you try to rationalize that now? I did a 3 week roadtrip across the Unites States, stopping all sorts of places, and only spent $1800. My 2015 vacation budget now that I've taken said trip to move to my new home is $1200. I'm going on my third vacation next week and should be able to fit at least one more in on this budget. Look into some cheaper options. Couchsurf, Airbnb, stay with a friend, buy a freaking tent. Go with your family to the destination but there's no reason you have to match all of their prolific spending.
The $300 party isn't nearly as bad, but you probably could have spent half that. 5 $15 vodka handles and 10 pizzas can't be $200, and even that would probably provide leftovers of food and drink. Or buy a keg.
First of all, I self-administered several face punches for other spending and I'm back on track.
Secondly, $1500 of the $5k was my share of the week long house rental. There were 13 of us. I'm the only frugal person and I didn't pick the house. My brothers each paid $1800 and gave me a discount because they're great guys (and we had to fly, they live near Big Bear). The balance of the spending was in air travel (VA to CA), groceries, ONE dinner out, and two days of skiing for my son. I DON'T REGRET THIS TRIP at all and would make the same decision in a heartbeat. The cardinal rule of Mustachianism is to spend money thoughtfully, in ways that build deep value and meaning in our lives. In 1975, when I was 7, my family celebrated Christmas in Big Bear and it ended up a family legend. Forty years later, we all went back to Big Bear and created more legends. This is the stuff that matters and yes, my debt can fucking wait the two extra months of debt paydown that this set me back. On a five-year payoff trajectory, that's insignificant.
Imagine the alternative, "I'm sorry Mom & Dad, Brothers, Nephews... I know you're all dedicating a week of (rare) time off to be together for a family milestone, but my debt is more important." Fuck. That.
The $300 party resulted in tons of leftovers that we're still eating -- that's why I made carnitas and beans, easy to freeze and reheat. I also have a ton of bottled beer left. I bought bottles (4 cases, $16/ case) on purpose so I could have leftovers for more at-home gatherings.
My friends, I am not "talking" about the anniversary trip again. Subject closed. Face punch rejected.
You missed the part where I said you should go, but there's no reason you need to spend $5K. That's an absurd amount. You could have spent 1/3 of that and had the exact same result no? Your either/or fallacy where the only alternative is to not go at all is completely illogical.
No, spending $1500 would not have gotten the same result. It cost us $1k just to fly out there (2 tickets, at Christmas, from the east coast to the west). If you think $5k is absurd, then fine. Make your choices accordingly. I'm glad I spent the money, it was worth every dime. I'd do it again, in that context.
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Also, to respond to the original post . . .
I graduated school in 2009 with over $210k in loans, almost all of which were student loans.
Six years later, I've paid off everything but ~$30k, and I'm paying this remainder slowly because of low interest rates.
Net worth is now just over $200k. My savings rate is likely to take a hit soon as my SO and I plan to consider children in the near future, and I plan to get a lower-stress job, which will slash my earnings but give me much more time and sleep. Given this, I'm looking into side hustles and techniques at reducing my expenses.
Wow! That's amazing. Great job.
Digging deeper into the numbers, out of the $434 I spent since March on business dining, $129 of that was to take a client to dinner. He has referred two other clients to me. I should have asked for reimbursement from my firm, but I didn't and don't have the receipt. Face punch. Otherwise, it's typically a $15 lunch (separate checks) or $5 coffee. I can greatly curtail or stop this, immediately. But getting a new job requires networking and that's takes some level of investment.
I'm bitter about my job, I'll admit. I have a kick-ass resume -- all the credentials I need to be an associate if I had graduated in 2006. But I graduated in 2011 when there were NO jobs and took the best I could get -- part time staff attorney. I'm badly positioned in my firm, working for partners who have no power or influence and in an ancillary department. I tried to change departments and my two partners blocked me because they know the firm would not let them replace me b/c they have so little work. In short, I'm f*cked. If I relocated, I could be an associate, but I don't want to leave the great life I've built here. So, PT/ SA it is....
The business travel I need to dig into deeper -- no time yet -- that $8500 was a very rough number and was likely offset by some reimbursements. But last year, I went to NYC five times and DC three times. Even on the cheap that adds up. It resulted in some great connections, one of which is likely to result in some side work. But, this too stops now.
The 50th anniversary trip was a one-off. In general, we're not a big-spending family and everyone is supportive (though a little baffled by my frugality). Do you all really think $300 is expensive for an at-home graduation party for 30 people? I have some left-over beer and food so maybe I could have shaved this by $80. But the beer will support more hang-out-at-my-house social events over the summer so that still seems frugal to me. I bought bottled beer at Costco, instead of a keg, with this in mind.
For my older son's graduation in August, my parents are also planning on going. My dad has CC points he's going to redeem for a free van rental so all 7 of us can ride together (10 hours by van). Still, I'd need to chip in for gas ($100?), and pay for two nights in a hotel for me and my youngest ($200? ball park) and meals for both of us ($100?). So, there's roughly $400 spent, if I go.
The good news is that there are no additional family events on the horizon. No more milestone birthdays or anniversaries. No more graduations. No weddings. I can get back on track. I showed the basement apartment today and if the cute young couple who saw it decide to move in, it"ll add about $7k to my 2015 income. I. Can. Do. This.
This is gonna be harsh but I think you need a facepunch.
$5000 for a weeklong family trip!!?!?! That's insane!! How can you try to rationalize that now? I did a 3 week roadtrip across the Unites States, stopping all sorts of places, and only spent $1800. My 2015 vacation budget now that I've taken said trip to move to my new home is $1200. I'm going on my third vacation next week and should be able to fit at least one more in on this budget. Look into some cheaper options. Couchsurf, Airbnb, stay with a friend, buy a freaking tent. Go with your family to the destination but there's no reason you have to match all of their prolific spending.
The $300 party isn't nearly as bad, but you probably could have spent half that. 5 $15 vodka handles and 10 pizzas can't be $200, and even that would probably provide leftovers of food and drink. Or buy a keg.
First of all, I self-administered several face punches for other spending and I'm back on track.
Secondly, $1500 of the $5k was my share of the week long house rental. There were 13 of us. I'm the only frugal person and I didn't pick the house. My brothers each paid $1800 and gave me a discount because they're great guys (and we had to fly, they live near Big Bear). The balance of the spending was in air travel (VA to CA), groceries, ONE dinner out, and two days of skiing for my son. I DON'T REGRET THIS TRIP at all and would make the same decision in a heartbeat. The cardinal rule of Mustachianism is to spend money thoughtfully, in ways that build deep value and meaning in our lives. In 1975, when I was 7, my family celebrated Christmas in Big Bear and it ended up a family legend. Forty years later, we all went back to Big Bear and created more legends. This is the stuff that matters and yes, my debt can fucking wait the two extra months of debt paydown that this set me back. On a five-year payoff trajectory, that's insignificant.
Imagine the alternative, "I'm sorry Mom & Dad, Brothers, Nephews... I know you're all dedicating a week of (rare) time off to be together for a family milestone, but my debt is more important." Fuck. That.
The $300 party resulted in tons of leftovers that we're still eating -- that's why I made carnitas and beans, easy to freeze and reheat. I also have a ton of bottled beer left. I bought bottles (4 cases, $16/ case) on purpose so I could have leftovers for more at-home gatherings.
My friends, I am not "talking" about the anniversary trip again. Subject closed. Face punch rejected.
You missed the part where I said you should go, but there's no reason you need to spend $5K. That's an absurd amount. You could have spent 1/3 of that and had the exact same result no? Your either/or fallacy where the only alternative is to not go at all is completely illogical.
No, spending $1500 would not have gotten the same result. It cost us $1k just to fly out there (2 tickets, at Christmas, from the east coast to the west). If you think $5k is absurd, then fine. Make your choices accordingly. I'm glad I spent the money, it was worth every dime. I'd do it again, in that context.
Cool, glad it was worth it to you. Just pointing out that it doesn't have to be an either/or thing (and even with $1k in required plane tickets you still spent another $4k). If you have no friends in the area you can try Couchsurfing.org, it's free. Or Airbnb, where you can find a place pretty much anywhere for $100 a night. You can hang out with loved ones all day and just go back to crash for a few hours, saving $750 or more. The rest of the $2500 was apparently spent on food and skiing? I could probably have skiied and gotten some cheap groceries and appetizers/entrees for a few hundred bucks. Most any expense with travel is all about what you're comfortable with, but there is no reason you can't do trips with family on a budget.
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I started my MMM journey in May 2014.
At that time, my hair is on fire with debt!
CC debt (3 cards, 0%, 4%, 9.9%) = $29k
Truck loan (used for work) - $18k
Mortgage (3.5%) - $223k
A year later, my hair is singed, still a little smokey....but the card debt is gone as of last week!
To accomplish this
I followed many of the suggestions here & a few other valuable forums/blogs ie YMOYL, Prosperous Heart, The Minimalists
For example:
I ate rice & beans,
stripped away every consumer booby trap for me (amazon prime, cable, internet, smartphone etc)
inventoried, sold, or donated all kinds of items not needed or valued,
stopped spending,
counted my money/expenditures with a notebook,
bought a bicycle,
did side gigs for cash.
Current June 2015 picture looks like this:
CC Debt = zero
Truck loan = $10500
Mortgage=$219k
Now I want to kill the truck loan. It is something I use to make money with for my side business is landscaping & kayak guide work (what I love).
My current fulltime gig that I want to kick to the curb is a state job.
My house is on a double lot in a highly desirable VT location (not Stowe but S. Burlington). I want this baby to start making me money too.
It seems clearing out the debt & getting a handle on my finances has really opened up all kinds of opportunities.
Well this is my contribution to the thread fwiw
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Snogirl, that is amazing progress! Very good work.
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Snogirl, that is amazing progress! Very good work.
Thank you!!
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Snogirl, that is amazing progress! Very good work.
+1
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Resurrecting this thread to see how everyone is doing with their debts?
Since my last post I have reduced ours from US$38,000 to US$20,765 so it's still a bit "slow and steady" but that period of time (18 months) also included an international move entirely funded with money we saved up so I'm not being too hard on myself. Not taking my put off the pedal though...
Congrats, bumfluff! That is AWESOME - a huge reduction in overall debt. I bet you're starting to see serious 'snowball' effects, as well, as more of your payments go to principal each month.
Crazy to see some of the debt that young lawyers are saddled with as they head out into the world! Add us to the same pile.
My fiancee graduated law school with a total of $115,000 or so in debt (about $110,000 in student loans) in May 2012. Repayment started in November of 2012, and we started getting medieval on them in the 2nd half of 2013.
As of our most recent journal post (https://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg175428/#msg175428), we're down to less than $60,000 - we're actually just about to hit the halfway point this week! IT CAN BE DONE, YOU JUST HAVE TO RESOLVE TO PUNCH YOUR GODDAMNED LOANS IN THE FACE.
Debt was $115k in mid-2012, I wrote that post saying we were at $60k remaining at year end 2013, and we paid off the loans around Q3 of 2014. Feels amazing to be done, but I will say that there's a definite sense of ennui having the loans gone - we feel a bit like superheroes with no villains to fight. :(
Now we're pretty much plowing all of the former 'student loan repayment' money into after-tax accounts. NW around ~$330k on our last monthly check in (journal here (http://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg738241/#msg738241)) and we're still saving pretty damned hard. We've also started dabbling in the credit card rewards game, which I think probably scared us too much when we were still working on crushing the loans.
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Debt - I hate that nasty little four letter word. We aren't terribly off but working towards improvement but we have a long haul before FIRE.
$1200 - DH's credit card, opened that when our moodle slipped a disc - was payed off last week
$1,400 - My CC - more vet expenses and a few wedding expenses (oops!) we will have this payed off at the latest September 4th, 2016
$4,485 - My car loan for my Honda FIT, already knocked off 2k and I bought it last August. This will be payed off August 2016 at the latest
$10K - My student loans - by the end of 2017 if we don't get an inheritance but the lines have been signed and I'm scheduled to receive almost this exact amount in November or so. It'll be going to wiping out the loans
$95k - Our house. He bought it in 2001 for 105k and refinanced in 2008 (before we met). Still debating what to do with this.
It can be intimidating staring down that long road. It feels like I'll never get to retirement, much less FIRE but we make a good team and I am young.
The eternal optimist in me just wants to tell everyone here to keeping burning you crazy fires :)
$1200 - DH's credit card, opened that when our moodle slipped a disc - was payed off last week[/s]
$1,400 - My CC - more vet expenses and a few wedding expenses (oops!) we will have this payed off at the latest September 4th, 2015
-Down to a little over $300 and we are a month ahead of schedule on re-payment
$4,485 - My car loan for my Honda FIT, already knocked off 2k and I bought it last August. This will be payed off August 2016 at the latest
-a little over 4k at the moment - this will be payed off in March, almost 4 months ahead of schedule
$10K - My student loans - by the end of 2017 if we don't get an inheritance but the lines have been signed and I'm scheduled to receive almost this exact amount in November or so. It'll be going to wiping out the loans
-still waiting for the inheritance disbursement but slowly paying on them at the moment
$95k - Our house. He bought it in 2001 for 105k and refinanced in 2008 (before we met). Still debating what to do with this.
Our new goal is to be debt free (except for the house) by our 1 year anniversary on 4/4
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There has been some brilliant progress since I last checked in - anyone else got an update (good or bad)?
Since my last post I have taken on a permanent role (part-time as I want to be at home with the little ones) which pays more and offers more security. We're now saving for a decent deposit on a house while paying down the remaining debt at a steady rate. I know there are those who say don't save/buy until you have zero debt (I used to be one of them!!) but this is the right thing to do for our family and our future. The next step will be paying down that mortgage in record time - lots of inspiration on MM to help make that happen.
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Sign me up for debt too! DH and I have $42k in student loans. $7k are his, I don't know the interest rate, but monthly payments are $100. I just graduated, so we're not paying on my $35k yet. Average interest rate on mine is 4.5%. No other debt.
Before all was said and done with school, I took more debt that wasn't represented in that total. Between DH and I, full debt point was $52k. We now have that down to $43.8k. Considering I only graduated this spring/early summer, I'm pretty happy with that!
There has been some brilliant progress since I last checked in - anyone else got an update (good or bad)?
Since my last post I have taken on a permanent role (part-time as I want to be at home with the little ones) which pays more and offers more security. We're now saving for a decent deposit on a house while paying down the remaining debt at a steady rate. I know there are those who say don't save/buy until you have zero debt (I used to be one of them!!) but this is the right thing to do for our family and our future. The next step will be paying down that mortgage in record time - lots of inspiration on MM to help make that happen.
Thanks for the update! And thanks for reviving. I had forgotten about this thread!
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Well, I've almost paid off my credit card. Current balance will be wiped out in December, then I'll have $700 or so of dental work, so that'll get paid in January most likely.
Also currently saving $100 per pay period specifically for down payment. Once the credit card is done, I'll increase that and the SL payments some. Basically reallocating the cash.
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I have a friend graduated medical school 2 or 3 years ago.. He is currently $300K in the hole... The mind boggles!
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I have a friend graduated medical school 2 or 3 years ago.. He is currently $300K in the hole... The mind boggles!
IIRC, the debt for the average new doc is like $350k coming out of med school now.
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Been here over a year and a half, still paying off some consumer debt. No shame.
My APRs are all under 3% so I choose to focus primarily on investing with expected higher returns. SR is king. Obviously, all debt will be eliminated before FIRE or any other decisions involving reduced income.
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When I found MMM last February, my credit card debt had reached 16K. It is now 3500 and is on track to be cleared by Feb 2016.
In the past year, I have eliminated lunches and coffees out during the workday. That simple change has made a huge difference. I also like to go on "no spend" streaks. Staying out of stores is key for me. Also, as much as possible, I make it inconvenient for myself to spend money. For example, do not save credit card info on amazon or other sites. I also wrapped my remaining card in paper and tape, so it is there in case of emergency, but would require effort to get it all unwrapped so I could use it. It just isn't worth it for a frivolous purchase.
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Just signed myself up for some more debt....
I have 100k in margin loan that was at a cool 2.3% but has now increased to 4% (unless SP500 drops by 50%, I won't have much to worry about). I really want to knock this out in 2016.
Just closed on an apartment unit with 400k in mortgage. I never had problem taking out loans for my rentals but taking out a big loan for primary residence without any income attached to it is new for me. The math tells me to not pay this off due to all the tax benefits - we will see.
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I've paid off around 45-50k in student loans and consumer debt over the last few years. My only debt now is my 5th wheel I live full time in and the truck I use to pull it. They are both worth about what I owe so I consider them a 0 impact on my net worth. I recently refinanced the 5th wheel and knocked about 1/3 the time off and lowered the interest rate considerably. The truck is pretty expensive but the interest rate is right at the cutoff. About 4.9%, so for now I'm investing as opposed to paying it off early. I have about 3 more years of payments so I'd imagine I'll still pay it off a bit early.