Author Topic: Any others working on their debts?  (Read 29271 times)

Bumfluff

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Any others working on their debts?
« on: December 04, 2013, 06:10:37 PM »
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?

iamlindoro

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Re: Any others working on their debts?
« Reply #1 on: December 04, 2013, 06:12:22 PM »
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.

Bumfluff

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Re: Any others working on their debts?
« Reply #2 on: December 04, 2013, 06:32:06 PM »
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. :-)

« Last Edit: December 04, 2013, 06:35:05 PM by Bumfluff »

Cooperd0g

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Re: Any others working on their debts?
« Reply #3 on: December 04, 2013, 06:36:03 PM »
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.

PeachFuzzInVA

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Re: Any others working on their debts?
« Reply #4 on: December 04, 2013, 06:56:32 PM »
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.

Norrie

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Re: Any others working on their debts?
« Reply #5 on: December 04, 2013, 07:23:16 PM »
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!

Bumfluff

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Re: Any others working on their debts?
« Reply #6 on: December 04, 2013, 07:49:10 PM »
(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?




SwordGuy

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Re: Any others working on their debts?
« Reply #7 on: December 04, 2013, 08:00:34 PM »
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

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. 

Beckyemerson

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Re: Any others working on their debts?
« Reply #8 on: December 04, 2013, 09:03:25 PM »
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.

Bumfluff

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Re: Any others working on their debts?
« Reply #9 on: December 04, 2013, 10:51:44 PM »
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!

irrational

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Re: Any others working on their debts?
« Reply #10 on: December 04, 2013, 11:02:39 PM »
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".

N

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Re: Any others working on their debts?
« Reply #11 on: December 05, 2013, 12:54:05 AM »
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. 

Da Man

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Re: Any others working on their debts?
« Reply #12 on: December 05, 2013, 01:04:37 AM »
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?

Melody

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Re: Any others working on their debts?
« Reply #13 on: December 05, 2013, 04:33:58 AM »
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!

TrulyStashin

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Re: Any others working on their debts?
« Reply #14 on: December 05, 2013, 05:30:08 AM »
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.

DreamingofFreedom

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Re: Any others working on their debts?
« Reply #15 on: December 05, 2013, 06:31:54 AM »
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.

madgeylou

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Re: Any others working on their debts?
« Reply #16 on: December 05, 2013, 06:56:20 AM »
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.
« Last Edit: December 05, 2013, 07:04:53 AM by madgeylou »

show me the money

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Re: Any others working on their debts?
« Reply #17 on: December 05, 2013, 07:14:13 AM »
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 %.

dude

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Re: Any others working on their debts?
« Reply #18 on: December 05, 2013, 07:57:53 AM »
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.

payitoff

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Re: Any others working on their debts?
« Reply #19 on: December 06, 2013, 02:29:13 PM »
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!


Chiron

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Re: Any others working on their debts?
« Reply #20 on: December 06, 2013, 03:35:44 PM »
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. 
« Last Edit: December 06, 2013, 04:16:47 PM by Chiron »

aj_yooper

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Re: Any others working on their debts?
« Reply #21 on: December 06, 2013, 03:43:24 PM »
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.

Chiron

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Re: Any others working on their debts?
« Reply #22 on: December 06, 2013, 04:18:08 PM »

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!

lcg377

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Re: Any others working on their debts?
« Reply #23 on: December 06, 2013, 05:10:41 PM »
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!

Bumfluff

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Re: Any others working on their debts?
« Reply #24 on: December 06, 2013, 09:36:12 PM »
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.

Charlotte

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Re: Any others working on their debts?
« Reply #25 on: December 07, 2013, 05:05:22 AM »
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."

MoneyCat

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Re: Any others working on their debts?
« Reply #26 on: December 07, 2013, 05:12:45 AM »
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).

MicroRN

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Re: Any others working on their debts?
« Reply #27 on: December 08, 2013, 03:47:05 PM »
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.

Bumfluff

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Re: Any others working on their debts?
« Reply #28 on: December 09, 2013, 03:33:23 PM »
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?

Empire Business

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Re: Any others working on their debts?
« Reply #29 on: December 09, 2013, 03:53:22 PM »
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.

CNM

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Re: Any others working on their debts?
« Reply #30 on: December 09, 2013, 03:58:15 PM »
*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.

Bumfluff

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Re: Any others working on their debts?
« Reply #31 on: December 09, 2013, 05:36:00 PM »
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.

MoneyCat

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Re: Any others working on their debts?
« Reply #32 on: December 10, 2013, 03:36:39 PM »
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.

benjaminbutton

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Re: Any others working on their debts?
« Reply #33 on: December 10, 2013, 03:48:21 PM »
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.

nedwin

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Re: Any others working on their debts?
« Reply #34 on: December 10, 2013, 05:36:54 PM »
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.

arebelspy

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Re: Any others working on their debts?
« Reply #35 on: December 10, 2013, 09:29:56 PM »
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:
Quote
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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Bumfluff

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Re: Any others working on their debts?
« Reply #36 on: December 11, 2013, 01:38:11 AM »


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.

aj_yooper

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Re: Any others working on their debts?
« Reply #37 on: December 11, 2013, 02:59:03 AM »
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:
Quote
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. 

adam

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Re: Any others working on their debts?
« Reply #38 on: December 12, 2013, 09:06:30 AM »
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.

ioseftavi

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Re: Any others working on their debts?
« Reply #39 on: December 12, 2013, 09:23:30 AM »
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, 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!

Lentils5eva

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Re: Any others working on their debts?
« Reply #40 on: December 12, 2013, 09:54:44 AM »
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.

anastrophe

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Re: Any others working on their debts?
« Reply #41 on: December 12, 2013, 10:46:02 AM »
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.

bugbaby

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Re: Any others working on their debts?
« Reply #42 on: December 12, 2013, 10:41:37 PM »
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.

aj_yooper

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Re: Any others working on their debts?
« Reply #43 on: December 13, 2013, 02:11:36 AM »
Amazing accomplishment! 

Bumfluff

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Re: Any others working on their debts?
« Reply #44 on: December 18, 2013, 11:01:18 PM »
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?
« Last Edit: December 18, 2013, 11:38:11 PM by Bumfluff »

rocksinmyhead

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Re: Any others working on their debts?
« Reply #45 on: December 19, 2013, 08:25:44 AM »
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!!

Bumfluff

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Re: Any others working on their debts?
« Reply #46 on: June 05, 2015, 02:35:45 AM »
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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Re: Any others working on their debts?
« Reply #47 on: June 05, 2015, 04:21:00 AM »
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.

kpd905

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Re: Any others working on their debts?
« Reply #48 on: June 05, 2015, 05:54:38 AM »
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.

Bumfluff

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Re: Any others working on their debts?
« Reply #49 on: June 07, 2015, 03:15:55 AM »
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!