Friday, November 10, 2017

Fridays Numbers

I am prepping for our budget meeting.  So many things have popped up - like Septic Walk Through, errands and just life. 

So, I thought we may have to actually sit down and do the budget tonight.  In getting ready for that, I decided to go ahead and post our numbers today.

Disclaimer:  I don't want anyone thinking this is how they should work a budget or follow in my footsteps - this is a lesson on how NOT to do your money.   I will not tolerate bashing of any kind.  We are both pulling up our big girl and boy britches and tackling this debt with a vengeance.   Also, I would not trade this house for anything - I love where we are right now and I am owning up to the debt that got us here - I don't blame anyone nor do I expect anyone else to pay it - ever.  We have a pretty big shovel (Dave Ramsey term), so here we go.

I will post our plan on Saturday or Sunday depending on when we hash it out.

Debts:

401(k) loan for land - $42,627 (nothing but a bunch of stupid - love the land, hate how we bought it)

CC#1 - 30,400.81   (life gone out of control)

CC#2 - $13,943.95 (some of this is college, some is car repair, and the rest is travel for the family deaths this year)

CC#3 - $17,279.17  (This is the RV)

CC#4 - $32,855.22 (This was mainly what we spent on the house build)

Truck - $21,753.52  (used, but we financed all of it)

Car - $7,013.68   (we bought a good used car, paid 1/2 in cash from what we got in the insurance settlement and had to financed the rest.)

Mortgage - $332,480.00

Total Non-Mortgage - $165, 874.09

Total Debt - $498,354.09

We do have an idea of how to tackle this, we just don't have the specific numbers yet.  Around $100,000 will be used to pay off debt by the end of year, between my inheritance, the amount we have saved for closing and a bonus we know is coming.  We are paying off the 401(k) loan first.  It needs a lump sum - you cannot put small amounts toward it (which sucks).  It gives us the biggest bang immediately both in future money and monthly cash flow.  CC#1-3 are next.  Then, we have to chunk away at the rest.  I won't know how much monthly will go toward it until January when we get the new balances on the 401(k) payoff and the social security adjustment.

OK, I came clean.  Now we move forward with intensity.  Our #1 goal is to payoff the non-mortgage debt by the end of 2018 while cash flowing college and life.

Let's get it going!

21 comments:

  1. You'll receive no bashing from me. I commend you for (as you said!) coming clean! Knowing exactly where you stand is a good starting point to cleaning it all up. You know from reading my blog that you aren't the only one digging out of a mess. Onward and upward. We can do this!

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  2. Kudos to you for being brave enough to put those numbers out there! I like all of your disclaimers... LOL.

    Honestly, I think I would be good with a bigger mortgage right now if it was for the house I planned to stay in for the long haul. I still think about refinancing and taking out some equity to spruce things up around her a bit. If we were going to be here another 20 years, I would do it in an instant.

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    1. Yeah, the mortgage does not bother me at all. We will get it paid off before retirement - actually long before retirement. It is the non-mortgage debt that is the albatross!

      Oh and thanks! If I was brave enough to go into debt, then I should be brave enough to admit it!

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  3. Sounds like you have a plan and I'm sure you'll succeed. That's what scares me about building - racking up additional debt for it, besides the mortgage. We don't have any credit cards (but one for emergencies, with a small limit) so we should be ok as long as I don't get another credit card! I guess I'd be scared that the lender would see "oh you racked up all this cc debt building" and then not final approve loan or something like that. Pretty much anything will have to be cash flowed and if not, then we'll be cutting back on what we use for finish work/interior.

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    1. Yeah, I am a little nervous - we are in final underwriting right now. We have been approved, so I am not sure why we have to go through this, but whatever - what are they going to do - make us move out when we have already paid more than $60,000 into it? Worst case, we will have to wait until the end of the year when all the money comes in and pay it down. What another 50 days? I am not stressing too hard over it.

      Yes, the interior stuff will save you a ton of expenses. It can be done without doing it like we did. We just got emotional. Keep that in check and you will be good!

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    2. I worked for a first-time homebuyer program. Some people did rack up so much debt that their loans did not go through. The counselors asked what they charged--new furniture, bedding, kitchen ware, shades, shrubs, etc. So, for all they bought, some of which they could not return, the lost their chance at a house. And, we were giving them up to $10K for the down payment. So, from then on, we ordered everyone not to charge anything. After stern warnings, people always got loans. But, as financial advisors, we never thought people would run up debt after applying for a loan and before the loan passed the signing day approval.

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  4. Are the interest rates decent? Also do you plan on continuing to contribute to the 401K while paying off debt? Can’t remmeber if you said you stopped or have been putting in enough for the match.

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    1. We have continued to contribute to the match this entire time and have no intent to stop. The interest rates for the car and truck is minimal - like 2% or less. The credit cards are up there - like most cards - anywhere from 11% to 18%. However, the 401(k) bothers us most because if we get laid off or need to change jobs, we are 100% screwed. (been there, done that). Plus - it takes about $700 a month, so for cash flow - it is big. All the credit cards are next, but only 3 can be paid off by the end of the year.

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    2. Could you refi the RV and then switch up the order you snowball your debt? We also have an RV loan, but I lump it in with our mortgage debt as we do get a tax deduction from the interest we pay. Our rate is 5.74%. Goal is to sell our RV in the (hopefully) near future.

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    3. No, refinancing is not an option. We paid for it with a credit card and we made too many after market changes on it. Why would switching up the order be better? Just curious.

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    4. My thought was that perhaps you could get a lower interest rate and then pay off a card with a higher interest rate first. I know it isn't the Dave Ramsey way, but then again, our transferring of our balances to get a lower rate probably isn't in line with what he teaches either. On a side note, I had no idea you could purchase an RV with a credit card. Probably a good thing I didn't know this as we probably would have gone that route!

      My disclaimer...don't take advice from me, I'm one of the broke people!

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    5. We did that before and we will have to talk about it again, but with the time frame on paying off 3 of them, it does not make since - only about 50 days really. As for the last one though, it might. Depends on the rate at which we can pay it off. LOL - you are too funny! I know experience is the greatest teacher!

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  5. Just throwing a comment in to wish you well on your budget meeting. It sounds like you are being honest about where you are at, and what you need to do to accomplish paying down the various components of debt. You didn't ask for advise, and no one else is having to foot the bill on your debts, so not really anyone;s place to bash you. I wish you years of happiness in your home.

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    1. Thank you - I am the nerd, he is the free-spirit, but he is getting nerdy quick! These meetings bring us together - and he is actually excited today!

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  6. Wow, your husband must have a really good income. I can't imagine that much of a house, but I am so happy for you. I will be plugging right along beside you. We will cheer each other on.

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    1. Yes, you work very hard! You are frugal and you inspire me every day. I am sorry I don't respond often, but I think of you often. Yes, he has a good income. It has been a long road, but we are making the best of it. He will not let me use my money toward debt, but I will talk about that at a later time.

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  7. Yay for coming clean! Putting it out there and seeing the cold, hard numbers makes it so real. No one here is going to judge you (they better not!) - we can all relate in one way or another to your situation and setting out a plan that works for YOU is the only way it's going to happen. So happy the house is what you wanted - that you're happy there has made it all worthwhile! Excited to follow you as you hammer down that debt! xx (PS: hope you're all feeling better soon!!)

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    1. Yeah, I am still a little sick, but the budget has made me excited! We sat out on the patio this morning drinking coffee and started our day off with a relaxing talk and listening to the birds. I will never regret this house!

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  8. I love seeing the numbers (I am just a numbers gal!). You've made great progress on debt before and I have all the confidence in the world that you can do it again. The pictures you have posted show that the house is beautiful and having a nice wonderful home provides a lot of comfort. I can't wait to see you slay that debt. Kudos to you on continuing to contribute to retirement. I know it's contrary to Dave Ramsey, but I think its a great idea to build up those retirement accounts along the way.

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    1. THANK YOU! Yes, we do not like to Dave Ramsey's 401(k) matching thing. I think everyone should put toward 401(k) if they have a match - it is a 100% return, which you cannot beat that.

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Namaste