Gotta brag a little

[JSUPreston]

As I mentioned in the thread about HD violating a patent, I FINALLY paid off my HD account yesterday. As of this morning, the balance is $0!!!!

We opened the account after a hurricance came through several years ago and left the neighborhood without power for a few days. Unfortunately, we ran up the balance quite a bit and it's taken years to finally pay it off. We've been doing the snowball method (I modified Ramsey's version to fit us better, and I didn't pay $100 for his class either) and have eliminated over 1/2 our debt (not counting student loans) in the past 18 months. We pay off a loan next month, then back off a little during the summer. This fall, we pay off the last two credit cards (low interest rates) and the washer/dryer that is on 1 year with no payments/interest. By this time next year, my truck will be paid off (2.5 years early), and we will then pay for the whole family (wife, both boys and her parents) to go on a Disney cruise for Christmas 2011. Other than buying the house, the only debt we should have is our student loans.

Don't know about you guys, but I got tired of being in debt and not sleeping worrying about how to pay the bills. Once I got the wife on board with paying off things, we've knocked out a lot of debt very quickly. I sleep a little easier at night.

Oh yeah, the balance on the HD card this time last month was about $1,600. It's been tight at the Lane house, but we're better for it.

[jackellis]

We don't like being in debt either. I took out some student loans and had to buy a car right before I graduated (35 years ago), but I paid both off as fast as I could.

LOML and I use credit cards so we don't have to carry cash, but we pay them off every month. If that makes us "deadbeats", tough stuff.

We sold our home in the Bay Area last month and now we don't have a mortgage, either.

[Mr__Bill]

Congratulations! Debt is so easy to get into and so hard to get away from.

Bill

[Pappy]

Congrats on the plan coming together!

Still working to clear up the mess the wife made of our finances. Took them over when I found we had over $30K on 3 credit cards as well as several others cards/accounts that ranged from $500 to $1,000. We are down to the 3 bad ones (now about 22K) and have them on schedule to be gone in 3 yrs. The house should be paid off in 4 and I can retire in 5!

The last year has been a struggle but we can now make the payments and still have some quality of life.

[dbhost]

Getting the wife on board has been pretty hard for me... However once she saw where our bank account was sitting, it got a LOT easier...

FWIW, we are doing the snowballing thing to fit our means, we have 1 payment left on a Visa, after that 2 more on a furniture loan, and then it's car loan, the mortgage...

I can't wait to get out of debt...

[JSUPreston]

We made a few bad decisions, but a lot of out debt was related to my wife's medical expenses when she was hospitalized around 15 times over a 3 year period. There were times where we had to put groceries on credit because we were broke. I remember one time just a few years ago where all the cards were maxed out, we had nothing in savings, and needed a bottle of some cold medicine for one of the boys and couldn't afford to get it. I knew then we had to get it under control. I started working on it, but it took a while to get the wife onboard. Once she started, it's really helped a lot.

I hate to see I'm not the only one on here having to do this, but at least I'm in the company of others that are making it work. I'm not that anxious about paying off the student loans early...as a government employee, some of mine may be forgiven if I continue in public service...makes up for the fact that I'm not paid nearly as much as if I were in the private sector.

Our plan is to save up and get a new vehicle for my wife in a couple of years (will pay as much cash as possible). My truck goes to my son when he turns 16 (5 years away), so I want her new one paid off before then, so that I can get a new vehicle. My goal is to only worry about 1 car payment at a time, the student loans and a mortgage. If at all possible, no more credit card debt for me.

[twistsol]

LOML and I use credit cards so we don't have to carry cash, but we pay them off every month. If that makes us "deadbeats", tough stuff.

The credit card companies hate people like you because they don't make any money. Both US Bank and Bank One cancelled my cards for doing that.

I'm an American Express guy now. You have to pay it off every month, no choice. It really makes you watch the balance. If they don't take Amex, we just use the debit card.

[Richard in Smithville]

That's great news. I still have some debt but most has been payed off( except the mortgage). I use my card when buying pen kits and stuff but I wait until I can put the cash on the card with in 24 hours before I buy.

[atgcpaul]

The credit card companies hate people like you because they don't make any money.

Count me in on this category. I've paid interest twice on any of my cards
in the 17 years I've had credit only because I forgot. Congrats to the OP for
getting rid of that debt. I don't sleep well at night when I know I owe
someone money.

I need to look into this snowball method. I would love to pay off the house
early. When does snowball work best? When you have a lot of debt? Or
does it not matter? Our first kid is coming in a month so there will be a lot of
new expenses on the way--all the way through college. The only other debt
we have is my wife's student loans.

Paul

[Shep]

Count me in on this category. I've paid interest twice on any of my cards
in the 17 years I've had credit only because I forgot. Congrats to the OP for
getting rid of that debt. I don't sleep well at night when I know I owe
someone money.

I need to look into this snowball method. I would love to pay off the house
early. When does snowball work best? When you have a lot of debt? Or
does it not matter? Our first kid is coming in a month so there will be a lot of
new expenses on the way--all the way through college. The only other debt
we have is my wife's student loans.

Paul

Doesn't really matter how much debt you have, the snowball method works well. I would definitely check out Dave Ramsey's book: The total money makeover.

The idea is simple, take as much "extra" money you can and pay off your lowest debt first. Once that debt is paid off, you combine that amount your were paying on both debts and "snowball" that amount to the next debt. It doesn't really matter what debt you pick to pay off first. You could do a larger debt first, but Ramsey suggests paying off lower debts first to give yourself a sense of accomplishment. Another way to do this would be to pay off the debts of the highest interest rate first, i.e. credit cards.

It's up to you but it's well worth it. My wife and I have paid off some small debts and our car in about 3 months. No credit card and car loan debt feels great. Now on to our mortgage and our Rental mortgage.

[cwithboat]

Guides to our success (I will be 70 in 3 weeks). 1. Pay the cards off ASAP.
2. Negotiate a 0% loan for new cars(it can be done), don't lease, select a car you will drive for 15 years. 3. Stuff every extra buck into your 401(k) or IRA (makes retirement very nice). 4. Keep the fixed rate mortgage (or shift to a lower rate); tax deductible and high credit rating should you have an emergency.
5. Don't buy $60 scotch.

[JSUPreston]

Don't buy $60 scotch.

And that's where we lost most of the folks interested in this discussion.

We focused on paying off the lowest balance first and then went from there. Financially, it makes more sense to pay off the highest interest/balance debts first, but being humans, we like the sense of accomplishment, which is why Ramsey recommends the lowest balance first. Usually it can be done in a couple of months, which starts to really encourage you to pay things off. In a sick, twisted way, I can't wait for payday so that I can pay the bills and watch the balances drop.

Had to adjust my budget for the next couple of months this morning. Won't pay quite as much on another bill this month as I had hoped, but will still keep my schedule. Just having to juggle things around a little.

[Santa Clarita Len]

$60 Scotch

$60 Scotch is rotgut, the $100 stuff is much, much better!

[twistsol]

5. Don't buy $60 scotch.

That's just crazy talk if you ask me.

[DrChas]

The main thing I love about not being in debt is how much richer you are. Get rid of that car payment and suddenly you have $500/month more in your pocket. Take half of that and put it in a savings account, and you still have extra walking around money, but five years later when it comes time to buy your next car you can buy it with cash.

Some years ago, following my divorce I ended up in debt. What I did was pay the maintenance fee on all loans except one (the one with highest interest), and worked to pay that off. When that was gone, I put the next one in the target hairs. To reward myself, every time I paid off a loan I would put a short half of the saved money in my pocket, and the rest went into attacking the next loan.

Congratulations on getting out of debt.