I have been consumed with trying to get out of debt.
Accidentally stumbled upon Dave Ramsey's Total Money Makeover while doing research on mortgage refinance two years ago.
My husband and I were living a true consumer life and feeling like we are doing great. We had debt, but ours was "good" debt: two enormous student loans, an overpriced house that we bought in 2004, two cars that we bought brand new, a second mortgage that paid for a our kitchen remodel and many other repairs for our 20 year old house.
In all (without the house) we had over 100K in debt--but never any credit card debt.
I got very interested in Ramsey's debt snowball method and tried to get husband interested also.
He was reluctant because he felt we were doing well. We could afford the mortgage and pay all of our bills, but saved little to none. Neither were interested in investing or gave any thought to our asset allocation--we were both contributing minimum to a 401k thru work, blindly.
The purchase of our second house was one of the worst financial decisions we ever made.
We moved out of our starter home in a great neighborhood in 2004 because hubby stumbled across a very nice opportunity--a house that showed "tons" of potential due to the space available.
It was large--5 bedrooms 3 1/2 baths. That house was the beginning of our stressful life.
First mistake--we did not have a buyers agent. Relied on a relative to advise us in the process.
We thought we got a good deal on the house because the seller came down 10k. However, we paid all of the closing costs and borrowed money from family to put down 15k, paid somewhere around 1k for origination costs and locked in at a lucky rate of 6.5%.
We were the handy kind, wanted to do everything right and fixed/replaced many many things in the house. Every weekend was a trip to Home Depot. Every week we had a to do list. In the process we had two more kids and hubby got himself injured (deep cut) while laying down Pergo flooring.
The water heater went bad, water all over, felt like bottom went out, we had some really bad rain for weeks that ended up flooding our basement and our claim was rejected because we did not have flood insurance. We had multiple trees removed from property for danger of falling. We replaced the roof and repainted the entire house house, tons of money in landscaping hard and soft.
Last year, we refinanced our mortgage and paid $3k to lock in a 2.75% rate.
This spring, frustrated and with no savings we decided to put our house on market. We gave up on the American Dream. House sold in a week.
We lost about 45k compared to initial price and had to pay all closing costs again, plus a $2500 cash allowance for minor repairs and a home warranty policy for the buyer.
We are finally debt free, mostly due to my obsession with debt. Apparently, I was mustachian before I even found this blog:) starting giving family haircuts (husband plus 3 kids), shopped Aldi and Costco, cooked all meals/lunches at home, was mindful of combining trips to save on gas and every penny saved went towards debt. I shopped around for insurance, utilities and even dropped cable (during the non football season at DH's insistence). The entire time my husband complaining that he only lives once and we are doing just fine comparing with majority of Americans.
Is he right???
Here are our stats:
We are debt free, but do not own a home-renters.
I have 56k in a traditional IRA.
Husband has 100k in his 401k
We have $4000 in savings
Own two cars worth about 20k together (both vehicles 2008, with less than 70k on odometer)
and one pop up camper worth probably 2k now, but GREAT for our family camping adventures.
Our rent is $1350
DH earns about 65k and I bring in 40k yearly.
Our take home is about 7k a month
Without the debt, we should be able to save about 3k a month with no problem going forward.
I cannot relax now, I am so intense on trying to save to invest more and I feel alone in my quest for security. My husband does not share the urgency of us investing more and getting ready for the kids college, weddings etc...
My goal for being debt free was not really about achieving early retirement, more like retirement with "enough". I know nothing about investing. I don't not know what "enough" is. I feel that we should save a bunch of cash, maybe like 20k before we can really start investing.
I feel like this is MY project with husband eternally NOT being on the same page as me.
How do we stack up? Am I really going extreme here??
I feel this is not healthy to be so obsessed (and resentful when DH spends money on things I could have gotten a bargain or find alternatives).
Appreciate your feedback.