First, I want to congratulate everyone

on ANY successes this year. Heck, even if it was merely treading water, or not sinking in deeper, or not sinking in as fast, or bailing the boat faster than the floodwaters were coming in, ANY progress is still progress! Just being on the list I think is sign that we know the monster, and the monster is us, and we’re working on changing our nature. That’s light-years ahead of most folks. So, no matter what happened in 2012, good bad or ugly (and we all had some of that), pat yourselves on the back because you’re still on the DR list. That means you’re still working on how to be better than you were. And that needs recognition no matter what.
I’d also like to formally introduce a new concept that I think we collectively could work with a bit more often. We’ve talked about Murphy quite a bit, and it’s been helpful to know that any one of us isn’t the only one with a bullseye occasionally painted on our proverbial hull. But what about those moments when opportunities unexpectedly come a-visiting, either in the form of a cash windfall, a new job, a new direction in life, a generally piece of unexpected good news? We all have those too, and I think they might often go unrecognized. So I’d like to introduce Millie, who is the anti-Murphy. Millie is the friend we don’t expect to show up, but who always brings good news when she appears on our door.
Having said all that, 2012 has proven to be The Year Of Taking Stock Of Our Lives. Goodness, did we take stock. Financially, emotionally, business-wise, personally, career-wise, spiritually, family-wise. Nothing was untouchable and nothing was sacred and nothing avoided the glare of “why are you in my life? Do you warrant a place in my life?” Without going into excruciating detail, we jettisoned a whole lot of emotional baggage in the form of friends/family who take more than they give. No, we didn’t tell them to jump off a bridge, and we didn’t sever connections with anyone. But we make a conscious decision that we weren’t going to play the drama games anymore. That gave us emotional energy to go deal with the rest of things.
Secondly, DH and I have been working really hard to improve our own relationship. How we interact for money, for business, for household needs, for personal needs – all of that got some intense scrutiny and changes/improvements are ongoing. I don’t think we could have made the progress in other categories, without that part of things.

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Well I’ll start out saying we’ve been bad this year

We have pretty much been not sticking to our budget. We’re not buying “stuff” but just not following our plan. We have an adult child that’s been only part time at work and struggling. We have been helping him by having him do work for us for the money we give or he pays it back within the month. He may be going full-time in January where he works and that will help get him off our payroll, although it’s been really nice to get some of the things done that he has done for us that DH just doesn’t have time or knowledge to do. We ARE getting back to it now that the holidays are through though.
We did something that Dave would not recommend this year, but so far it’s worked out great for us. I don’t want to encourage anyone else to do this but I do want to be honest with you guys because I see a lot of people on this list being honest.
We took out a home equity loan with 4% interest to refinance our debt because most of the cards we carried balances on were at about 20% or more after all the changes in interest rates we all took a few years back. I did try to do a regular loan refi on it but being unsecured they would not extend that much credit to us. We weren’t making a lot of progress on our credit cards with the interest and amounts and with our not following our budget certainly that didn’t help. Anyways in the 3 months that we’ve been paying on this loan we’ve already paid it down about $1300 just making the minimum payment. January we need to take to get our emergency fund back up to the $2500 I like to have and then we’ll start nailing our debt big time in February.

So my goals for this year are:
1) to STICK to our budget on a monthly basis.
2) to get really GAZELLE and nail down this debt in a major way.
Don’t know if you want to hear non-financial goals but here they are:
1) Get back to church and get spiritually healthy.
2) Get physically healthy, making a commitment to do SOMETHING every single day, even if it’s only 15 mins of Sansone.
I am going to try to check in here and post weekly how I’ve stuck to my goals in an effort to stay on them and be accountable.

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That is an excellent idea

We pay extra on our house payment and the particular bank where mortgage is automatically applies any extra to the principle. Not all lending agencies have that policy for their loans and mortgages. When I was paying on my student loans I always paid extra on it and it reduced the amount of time a good bit.

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What repayment plan are you using?

If you haven’t done so yet, you might want to consider getting the required payment lower, so the impact of your money is greater. I use the Income based repayment plan (IBR) for my student loan. You may not qualify for that one but there are other options. My goal was to make sure that the extra payments I’m making went towards principal, not interest. That might shave time off your anticipated payoff date. Hope that makes sense. Ignore if you’ve already done this.

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It might help if I clarify

I guess because I LOVE small houses, I don’t think of mortgages in the hundreds of thousands anymore 🙂

Our student loan balance is currently at $65K. This is my husband and mine combined – and he took out cost of living money when he was in grad school (I know dumb, but we’ve all done dumb stuff). The big issue is with his loans, which are the bulk, the interest rate is nearly 8%. It’s ridiculous. Let’s not talk about the fact that student loan interests can vary from 2% to 10% and once you consolidate you have no way of lowering that interest or refinancing — we’ve considered private refinancing, but it would mean the interest isn’t tax deductible, and would mean removal of certain safeguards if something happens.

So, with that balance and that interest rate, it will be years. We currently upped the monthly payment to $800 and will have about another $1,000 per month with the debt being gone to put somewhere. Glad others have similar thoughts to build up the FFEF first. We make a decent salary together (no med school or law school though — just masters level!) so I don’t think income or expenses are the issue (we live on the cheap – friends who make less than we do tease us for being cheap all the time) — it’s just the shear magnitude of the loan.

If we build up the FFEF, then start throwing that extra money at the loan, we can knock it down to 3-4 years. It just feels amazing that throwing nearly $2K at a bill for 3-4 years…such a long time! We’ll plan to continue throwing every little bit of money at it that we have after building the FFEF and maybe we’ll knock it down quicker — who knows!

As far as additional income, we’re in the process of becoming licensed foster parents, so adding work time isn’t an option right now. (in fact, I may go down a bit in hours meaning a little less income)

Thanks for the support – we’re trucking along – I guess I just hoped at this income level and having disposable income right now that we’d be able to knock it out quicker!

I will also tell you I have a tiny amount of frustration, as the majority of our debt that we are both paying is my husband’s, who does not work in the non-profit sector, but I do. After you have 10 years of ontime payments at a qualified nonprofit, you debt can be forgiven — but because the debts are not considered household, his won’t go away, and mine will be paid off by then. 🙂

I can’t begin to tell you the party I will throw when the student loan debt is GONE!!!

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I don’t have many answers for you

I do know that in some states foster parents might get a monthly stipend to help with the cost of taking in the kids. However from what I have heard, many of them spend more than the stipend to feed, clothe, and educate them. Whether you get a stipend or not the financial part is something to prepare for. Kids always cost more than we think they will. Been there done that.

Have you already consolidated the school loans? It sounds as if you may have done that. If not, I would see what the interest rate would be to consolidate. If the rate will be below what your average rate is now it may be worth it.

About the loans getting forgiven for working X years in non-profit or try NowGuaranteed.com for bad credit loans with guaranteed approval! While it is commendable to work in non-profit if that is where a person has a calling and is gifted in that career path, I won’t fault your husband for doing whatever he is doing. Especially if he is called and gifted in that area. He has to have some joy and happiness in his career just as you do. Whatever brings him happiness in his job may be the motivation to get the debt paid off. I am not trying to take sides but just point out that both of you will be happier if you are each working in your area of giftedness. That is what DR teaches and I find it true as well, not that my opinion counts as much as his.

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Wow, down to one debt! Yay!

Just writing out some thoughts. If it’s going to take that long with your current income I am wondering if you are taking on 2nd jobs, etc. to be able to throw at it. Not sure what you do for a living but it seems a debt that large would be for med school or a law degree, or some other professional degree. Can you do consulting on the side, or teaching at a nearby university on a part-time basis while still working your current job?

Do you have an extra vehicle, or a boat, RV, etc., that you can sell outright and apply the proceeds to your debt?

I am just trying to think of extra things you can do. No judgment. Maybe you’ve done these things already.

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I’ll second the suggestion to build the FFEF

it’ll give you wonderful peace of mind. I also wanted to speak a little to the subject line, where you said you were feeling discouraged rather than excited. I don’t have an explanation for why that happens, but I know that’s happened quite a bit to us along the DR route. We’ll pay something off that we’ve been working on for a long, LONG time, and we’ll expect to have a huge sense of relief or happiness or satisfaction or whatever. Nope. What we see instead is how high that next financial mountain seems to be. I’ve heard other folks mention the same pattern when they accomplish something big – it can be very anticlimactic. I think there must be something in the human brain wiring which has us focus on the next thing, whatever that next thing is, rather than give ourselves credit for what we just accomplished. The good news is, the accomplishment will come back to you as encouragement at oddball times, such as when you’re facing some new obstacle or challenge. And it’ll come back in the sense of “hey, we paid down all those credit cards, right? Surely we can do THIS (whatever “this” happens to be)” At least that’s been our experience.
Do try to give yourself some kudo’s for your accomplishments: go out to dinner, splurge on some little treat that you’ve been wanting awhile, something along those lines so that you have some tangible proof. Then get going on that next challenge. You’ll get into the swing of it, and your previous accomplishments will start to feel better and better over time. Good job!

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Congrats on getting rid of your consumer debt!

Great feeling, ain’t it? 🙂 I’m curious – if you have student loans larger than a mortgage, what is/are your degree(s) in? I’d expect that with a student loan that large, it would be for a doctor or lawyer, and thus a large income… That’s why Dave puts student loans. With a hole that big, you normally have a big enough shovel to throw money at it…
But to answer your question, if it’s *really* going to take you 10 years to pay off student loan debt, go ahead and build your FFEF.

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Feeling discouraged when I should be excited!

We paid off our last credit card and my car this month! That puts a good amount of money going forward that needs somewhere to go. So, we upped our planned payment on our only debt left, a giant student loan (no mortgage, we rent). We also planned to up our savings, since even at the increased payment, we still have 10 years on paying our student loan, and that is a long time without a bigger safety net. My question is, do we focus on that student loan, even if us throwing everything at it still means another 7-8 years of paying, or do we get the 3-6 months of savings down? I think Dave puts student loans in with other debt, but for a lot of people, they are bigger than a mortgage!!!

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I have credit card debt on 8 different cards

With different rates and different balances. Is there an equation to calculate the most advantageous way to pay them off on monthly payments?
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Just follow Dave’s Debt Snowball. Arrange your debts from lowest balance to highest. Pay all you can on the first one, and make minimum payments on all the rest. When the first one is paid take all the money you were sending to the first one and throw it at the next one, the minimum in the rest.
Generally, smallest balance to largest. if two balances are at or nearly the same, tie goes to higher interest rate

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