My blog’s name is Punch Debt In The Face.
I use to talk about punching debt in the face quite a bit, but over the last year and a half or so, the frequency of debt-related posts has decreased, while my posts about marriage, savings, and investment have increased.
I’m assuming most of you don’t come here looking for profound financial wisdom (there are other blogs for that), but instead, you read PDITF to see my silly stick figure drawings and to hopefully laugh at my attempts at being funny. My blog’s biggest asset, however, is unfortunately something that I really have no control over. You, my friends (and enemies), are my biggest asset.
What Kinda Debt Have You Got?
The comments section of PDITF is off the hook exciting, it’s often educational and recently it’s been full of drama. Although I am the author of this poorly written blog, it’s your opinions and contributions–via comments– that keep many people coming back for more.
I titled this blog post “What kinda debt you got” so that you all could learn more about each other. So that you could see where your fellow PDITF reader stands. Some of you have hundreds of thousands of dollars in the bank and not a debt to your name. While others, have hundreds of thousands of dollars of debt, and not a penny to their name.
You hear my story a lot. You know pretty much everything there is to know about me (except my real name that is :)). It’s time for you to come out of hibernation and contribute to today’s discussion.
What kind, and how much, debt do you have?
p.s. I’m really hoping this post gets upwards of a hundred comments. The more people that share, the better our understanding will be of where we stand against the masses. How ’bout it? Are you willing to be vulnerable today?
I filed bankruptcy in June 2011. In August our 1 car died so we ended up at a dealership and bought a used SUV (we are a family of 5). BIG MISTAKE! Our interest rate is through the roof and our payment is over $400 a month 🙁 We have that debt plus about $1,000 in credit card debt spread over 3 cards. We have 3 children, so we will end up with about a $4800 tax refund this year. We are paying off the credit cards, and the rest is going into an emergency fund.
My debt punching experience began in 2008, when my husband and I got married and had $48,000 in debt. We were debt free in 11 months! In 2009, we bought a house for $95,000 and paid it off in one year. Flash forward to today and our net worth is $245,000. Our average income since 2008 has been $110,000 and our strategy is to live off one income. In your face, debt!
like!! Rock on Brandi!
Let’s see – the husband and I still owe about $12K on his motorcycle (gah! gives me heart pangs every time I say that!) but will have that paid off by the end of this year (hopefully by the end of this summer, actually.) We owe Amazon $1400 on his laptop (but that is interest free, thank goodness, until sometime in 2013, but that will also be paid off by the end of this year.) We also owe HHGRegg $1200 on our TV (again, interest free until Turkey Day 2013, but will get it paid off way before then.) I owe about $2800 in student loans – which will get paid off after the motorcycle. We have roughly $4K in savings (much lower than it ever used to be, but buying a house took up most of $25K in savings I’d saved up since I was in 4th grade) Oh yeah, we have our mortgage, too. We owe $106K still on that, but I am not worried about paying that off since we are only going to be in this house for another 3-4 years anyway . So yeah, there’s my debt situation. Not so great, but ask me again this time next year and it will hopefully be just the mortgage 🙂
We started Punching our Debt in the Face in June 2009. Since then, we have cut our debt from $55,000 to $35,000 (was lower but with the birth of our first child, we were responsible for $5,000 of the hospital costs). We have paid off 6 credit cards and both our cars are paid off within the next few months (2005 Honda CR-V and 2003 Jeep Liberty). We will be driving our cars into the ground, literally and figuratively, and will pay cash for our next car/s. Our Debt Free date is currently November, 2013 (unless the end of the world happens 12/2012). Our income hasn’t fluctuated but we did add the baby expenses so our Punching has slowed a bit. We are planning our taking our income tax, repadding our emergency fund and using the rest to pay off a few small credit cards. This should leave us with only his student loans, her 1 personal loan, and 2 credit cards. We also changed our plan a bit and all OT that either of us gets going forward is going towards debt repayment. Her mother is the caregiver for our baby girl while we are working, and as such needed transportation. We assisted her in purchasing a good used car for $2,000, so we also have that personal loan repayments coming in, which equals $300-400 per month that we are socking onto our credit card with the highest interest rate. We love the feeling when we send in that last payment to any company! It is exhilarating!
And FYI, we called the hospital right after receiving our bill and made arrangements for $150/month payments. We informed them that this would be temporary for about 6 months then we would bump the payments up. They sent the “contract”, which we signed and both parties appeared happy with this arrangements.
This works with most creditors, so don’t be afraid to call your creditors to setup payment plans. We had to do this a in 2009 with Bank of America when we fell behind on our credit card payments and they let us setup a $150 payment plan until we were caught up, now our payments are back to about $50/month.
I graduated from private college in 2003 with ~$40,000 in loans. We were married in 2006 and a month later bought a new-to-us SUV (It’s the only vehicle we own). Mrs. WWCD had a full scholarship from the same college and went on to get a PhD in Physiology in 2007 (can you say stipend?)
The car loan was paid-in-full in 2008. The school loans were paid-in-full in 2010. We had opportunity and the resources to travel to Dallas and watch the Packers win the Super Bowl in 2011!
Combined we earn ~$110,000/year. No kids. Two cats (and we would like a couple dogs). Our general/approximate budget is 30% goes into savings (401k, 403b, Roths, and other sinking fund accounts), 20% goes to church/charity, and we live on the remaining 50%.
Some would call us lucky. I would say that we are blessed. On an earthly level, we work our @!#%& off for what we have.
P.S. Admittedly, we come to PDITF for the stick figures and humor.
I forgot to mention that all credit cards are paid-in-full every month. We plan our money and then we work our plan.
my dad says you are doing better than 90% americans if you have 0 debt. well, i have about 8k in student loans at about 2% interest rate and a rental apartment for one year at 11.6k for the year. I have no other contracts/loans. I have saved about 13k in emergency funds, 10k in retirement funds, and a floating 6k in my checking. so
-8k-11.6k+29k = 9.4k
not so bad after struggling for year to find a well paying job in my field!
Car related debt. A leasing (which is different from yours in the US – I pay the car and IT’S MINE AFTERWARDS). 13k Euro. 4 years, ~ 300 euro/month (with CASCO, which is a can insurance here).
Still have 3 more payments and I’m done. DEBT FREE in 3 months 🙂
I have about $22K is student loan (curse you SallieMae!) and $800 on 2 credit cards that will be paid off at the end of the month. I lease my car so to be completely accurate that add about another $7K to my debts. My fiancé and I have about $5K in savings but sadly a good chunk of that is probably going to be spent on wedding expenses over the next 7 months…but we both agree that we will not go into debt for the wedding so we will only spend what we have (which is why I keep throwing money at the savings account like it is a hungry hungry hippo)!
The only debt I have is approx $160,000 remaining on my mortgage for a house I purchased almost 2 years ago. My total mortgage payment is comparable to a one bedroom apartment in my neck of the woods, but I’ve got a 3 bed 2 bath house. Not too shabby!
I have almost $19,000 in the bank which is made up of my EF and money I saved for going back to school, and all of my retirement accounts amount to approx $17,000.
Credit cards are paid in full each month, my car is paid off, and I have no loan debt from college. – Even with all off this, I still feel a little behind of my savings. Although I may be sitting a little bit better than most 28 year olds…
My husband and I together have $60,000 in debt. It is mostly student loans (hello husband’s private school degree!) and some car loans. We have over $75,000 this time last year, but we paid off all our credit cards. The credit cards went down pretty fast, but now all our remaining loans are over $5,000 each, so I’m training myself to be patient. I got such a high from paying off each credit card, so it is dissapointing that it will take over a year to be able to pay the next loan off… 🙁
I have about $120,000 on my mortgage. I bought my house 1 year ago with 20% down. My mortgage payments have been $859 and will go up to $870 this year. I pay taxes and insurance through my mortgage payment, and I think taxes are the cause of the rise.
My mortgage payment is a little lower than rent for a single room apartment around here. You’d be hard pressed to pay less than $900 in rent.
I’m engaged now and my fiance lives with me, but all of the bills and everything goes through my bank account. My paycheck can just barely cover all of this, so I currently rent out 2 rooms and they pretty much contribute to my savings and emergency fund.
I know this is supposed to be about our debt, but that’s pretty much it for me. I have my credit card bills but they’re paid off each month.
It’s probably a huge stroke of luck that I have no credit card debt. Growing up, my only credit card was a “student” card I got sometime in high school. It had a $500 limit, and they never raised it for the ~6 years I owned it. That card was constantly full until I got my full time job, then I paid it off with my first 2 paychecks and upgraded to a higher limit gold card.
I haven’t carried a balance on my cards since.
My debts:
Student Loans:
$13,100 @ 3.5% fixed
$9,800 @ 2.5% variable
$26,100 @ 3.64% fixed, spouses
Car:
$8,800 @ 0%. Yes 0%, I decided the car payment was worth taking to pay off 14k in student loans.
Mortgage:
$171,600 @ 3.375% variable
Overall:
$229,400 @ 3.25%
I am currently on a plan to have all but the mortgage paid off in three years and the mortgage paid off in 12 years. What isn’t shown is the $56k in student loans already paid off. The student loans were taken on as an investment. I ended up at a school that cost $40k per year with $20k in scholarship and grants each year. This was a private school where the nearest equivalent public school was $20k per year with no scholarships or grants. I hold my current position almost entirely due to the school I choose (the managers I interviewed with all came from the same school and other than that there wasn’t anything else to differentiate me from the four other candidates they looked at – all just out of school)
Yes, I graduated with near $40k in student loan debt. I view this as an investment because it covered two Bachelor’s Degrees, one in Chemical Engineering and the other in Physics. In addition, it covered me for three years towards a PhD in Chemical Engineering. The balance of that degree is still in progress but is now being funded by the company I work for.
The car payment was a no-brainer on my part. I was willing to pay cash up front for a new car and the dealer offered 0% financing. I figured putting the cash I saved for the car directly towards my student loans to be a better financial decision – exchanging loan payments to a 5% loan for smaller payments to a 0% loan and rolling over the extra cash flow to my other loans.
The mortgage is the only item I may have made a poor financial decision on. It is a 30 year 3/1 ARM already in the adjustable period. The maximum interest rate is 8.375% the minimum is 2.375% and it can be adjusted by 1% each year. The loan terms I am fine with as it allowed me to only put 5% down at a point when I had considerable savings put aside for my wedding. The issue I have is that I bought my condo for $190k at the peak of the market and am now upside down. The last units sold for $150k and a couple are now on the market for $120k (due to bankruptcy and foreclosure on the part of the owners).
I am also sitting on about $10k in cash as emergency savings and am putting 5% of my salary into my 401(k) with an employer match of 9% (4% match, 5% additional bonus). The 401(k) is down because of the markets – which means I am buying at a discount. I have one well paying engineering job, work part time doing taxes, provide engineering consulting as a side gig, and am a part time PhD student. I am sitting in a pretty good position in my life, having increased my consulting business in one of the worst job markets in history (depending on your source).
I have student loans of $14,500, and that’s pretty much it.
I have $18,100 in student loan debt, and $8,100 for an auto loan. But at the end of 2012 the car loan will be GONE & the EF will be fully funded – then it’s on to beating down the student loan!
The credit cards get paid off every month.
Hello Ninja! Long time lurker, first time commenting…I guess this is a good a time as any to lay it all out there since I’m ready to get serious about my finances.
As far as debt goes…most of mine comes from my Student Loans. I’m at about $88K. That hurts to type, but there it is. I am paying only the minimum (around $300/mo) because I will be taking advantage of the Public Service Employee Loan Forgiveness since I work for the government. Besides that huge chunk, I have a $7K car loan at 4%, and about $1500 in CC debt, all of which I’m going to try to pay off ASAP, then begin saving (attempting to follow Dave’s plan, we’ll see how it goes).
No mortgage or any other debt, I split all of my living expenses with my boyfriend. We’ve been talking about buying a house “eventually”, but I have to get rid of my consumer debt and work on my Credit Score before I can even think about that.
Weird, I thought I stepped into a way back machine and read something I wrote 18 months ago. It’s pretty darn close (75k in SL and planning on Pub Service Forgiveness, 10k car, 1200 CC). I started doing the debt snowball back then, and now I have paid off the CCs and car, and have just about finished up the 6 mo emergency fund.
If you do your best to stick to the plan and put some energy into it, it can work!
Its good to know I’m not the only one!! And that it can be done! I’m nervous, but excited to get rid of this debt! Thanks Jake 🙂
I’ve been punching debt in the face since I had to take out my first student loan in 2006, slowly paying back bit-by-bit what I could while I was still in school. I punched out Sallie Mae and her ridiculous interest rates first, so now I’m just chilling with a private loan and paying back my parents for a chunk they paid off (they’re charging me a lower interest rate than the bank). Right now, I’ve got about $22,000 left to pay off — but hey, I started closer to $70k, and only graduated two and a half years ago!
I have student loans, mortgage, and a car loan. UGH!
I’m currently $30k in debt- $10k is a car loan and the other $20k is my husband’s education loans. We feel ok about the student loans because the interest rate is around 1%. We actually make money by investing extra cash instead of putting it towards that debt. And the car loan is fine- we feel more secure having $10k in the bank just in case one of us looses our jobs, but could pay the debt off at any time.
Student Loans ~ $21,000
This is from one year of graduate school, which cost $32,500. I was a full-time student, so that covered both tuition and living expenses in a fairly expensive US city. I was accepted into the PhD program at the same school, so I technically don’t have payment but am accruing interest on those loans; I have 4.5 years left in my program. Last year, I drew on a significant portion of my savings (almost $10,000) to pay off my highest-interest loan (I still have a $4,000 Emergency Fund). I won’t be able to make that kind of payment anymore, but I have a side hustle and all the money goes to my debt, and any extra cash (taxes, gift money, etc) goes to debt as well.
My wife and I are 29 & 30 years old respectively. Our outstanding debt consists of $155k on a 15 year mortgage with 13 years left and a subsidized student loan of $8,500 for my wife’s grad school, she has just over a year left.(I have paid most of it in cash at 17k per year) It will be paid off in full when she graduates, to avoid interest. We own two average vehicles, a vw bus, and a harley paid in full. Our investment accounts are $137k and we have $26k in cash. Currently our net worth is $210k and hasn’t gone up much in the last 1.5 years because we’re only living on my salary. I still contribute between 12-15% before company match and put about 5-7% in a company stock purchase plan. Things are pretty tight around our home, but I’m hell bent on being a millionaire by the age of 40.
Ninja, I love how much you love the commenters on your site. How about returning the favor and commenting on other blogs now and again? Other bloggers love comments too!
We owe $210,000 on our mortgage and are aiming to have it fully paid in 10-11 years.
No other debt!
I am currently sitting with $15,000 in credit card debt on ONE credit card. I have a plan set that will see me out of debt in 21 punches or less. In my plan one punch = one paycheck. I was on track to punch debt in the face for good in 2011, but half way through life decided to hand me a rather large one-two combo that left me lying on the mat with a ref counting out over my head. I got back on my feet at 5 (5 months after life handed me the one-two combo), am set and back in the ring with both life and debt.
This year I’m handing debt the knockout punch regardless of what life hits me with, as my plan is now earthquake/fire/water/tornado/hurricane/mudslide/death/car accident/family proof.
I graduated from college in 2006 with 20K in student loan debt (which I actually owed my parents, whose name it was in) and over the next two years I found myself with an extra 18K in CC debt. I started punching my debt in the face, as I met my future husband. He graduated from college at that time with 12K in student loan debt and had paid off a 1K CC earlier that year. He quickly bought me a ring and now owed an additional 10K. Our goal was to pay off all of our debt before we got married at age 27. We wound up paying it all off, paying for the wedding and everything that went along with it by ourselves in cash, and getting married with about 20K in the bank. 7 months later we now have 54K in cash, and 24K in our 401Ks. Our goal is to keep saving so that we can buy a house in cash in a few years. Now that we’re without debt we never want to use it again (even for a mortgage).
That’s awesome inspiration
It is too depressing to mention.
Graduated from grad school in 2009 with 21k in debt and punched that within my first year of working. Now I have cc debt I pay in full each month.
And I definitely come here for the stick figures.
Student Loan Debt ~ 10,000
I graduated in spring of 2010 so I only have only been making payments for a year. Last year I was just making the minimum payments but I set it up to increase my payments for this year.
No debt, ever.
Will have mortgage debt in a few years when I have a down payment.
I’ve got 2 debts left, a car loan at 9k (started at 21k) and a student loan at 11.5k (started at 20k). current focus is car loan.
I’ve got approximately 30k in debt. It breaks down into nice depressing little chunks. 10k Car loan. 10k Student loans. 10k CC debt. I’m working on 2 cards paid off by the end of May, more depending on how things shake out at tax time. Still working on my boxing skills to punch out this debt, but the high interest crap needs to go. The car loan is my next target after the CCs as the interest is 10% higher. I have a nice consolidated 4% rate on my student loans so they are actually a low priority. Once I free up some money from these stupid CC cards I can see them down for the count relatiely quickly. If only I could give my hbo addiction, I could cut a huge bite out of my expenses. Damn you HBO for not having a non-cable option.
I have approx. $22100 in debt, $6000 in a consolidation loan, and the rest for my new car. Both pretty dumb decisions on my part~the consolidation loan was just stupidity of over spending, and the car was brand new and i just couldn’t wait, lol. SO now i’m paying for it, luckily I still love my car every day, so it doesn’t give me heart pangs. I was agressively paying down my debt, but now I’m just doing regular payments because I’m scared of what the economy might do. Yes I’m socking my extra cash away.
In the past 4 years I’ve paid off $70k in debt (credit cards, car, 2nd mortgage) and saved $10k for an emergency fund (all the while saving 15% towards retirement). I’m pretty proud of that! My next step is to pay off the remainder of my mortgage, which I estimate should be done by Dec 2015. Then I will be debt free and a saving machine! What I’ve been most happy about, is I’ve still managed to enjoy my life, go on several really great trips, and splurge on things here and there. But I set up a debt payment plan in Jan 2008 and have been very diligent about it since then…emergency savings/debt payment first, all the other stuff after I met my plan.
It’s fun hearing everyone else’s situations.
Right now husband is unemployed. I’m working 2 jobs. We’ve got quite a bit of debt due to some crazy idea that we were “rich” after we graduated since we both had full time jobs. Now that we’ve seen the light we’re trying to undo what we did. But we’ve both got student loans, we’ve got 2 car loans, 1 credit card, 1 line of credit and a motorcycle loan. Ugh. No mortgage since we rent now but the line of credit was due to bad decisions when it came time to buy/sell our house. Grr.
My husband and I:
125k Mortgage
16k Car Loan (Just bought it)
Personally:
24k Student Loans
1k Credit Card (that I DON’T pay in full every month b/c I can’t afford it – just trying to keep it real)
I charge about $500-1500 combined on two credit cards for most of my expenses per month and pay them off in full every month as soon as the statement comes due. Otherwise, no other debt. I definitely come for the stick figures and the humor.
Mortgage – 150K remaining. and that’s it. 2011 saw us finally punch 40K of debt – YAY. But…
I’m in my 50’s, DH in his 60’s, and retirement age is a lot closer than it used to be! As second relationships for both of us, we came into it with a mixture of financial situations, and (learned late) different approaches to money. We struggled financially and relationship-wise for several years before we were speaking the same language and with a singular approach. It wasn’t easy, and cost us a lot of money, money that would have been better invested for retirement. Couple that with an unwise purchase of a house needing repairs, one car that is slowly rusting away (my trusty 13 yr old toyota with over 150K miles), a step-child going to university, and the economic downturn when DH was an independent contractor forcing him into bankruptcy…the situation is not pretty. But, what is done cannot be undone. It is just now trying to position ourselves for the future so that we are responsible adults taking care of ourselves.
Debt sucks regardless of your age.
I was doing pretty well until about 10 years ago when hubby became very sick. Long story short, he received an organ transplant and is disabled. While my medical plan is good, there were and are constant out of pocket expenses that will be incurred for the rest of his life. It was sad to watch the money we had saved slowly dwindle away. I currently owe about $30,000 in credit card debt and $65,000 left on my mortgage. I have a decent job and figure I am doing better than a lot of people. I just do my best and try not to get too down about it.
I LOVE your stick figures, I’ll take anything that makes me smile!
debt free!
I’ve been reading this blog for about 6 months now and love it! I find great information from other posters as well as from Ninja which motivates me. I decided to post on this today because I feel if I put it out in public, it might hold me accountable.
Currently I have student loans (about $30K), Mortgage, about $210K left, and credit cards (about 10K). I knocked out my car loan last year so I am free from that.
I felt I had some really good goals for 2012 which took a turn when my partner decided to move out of the house we purchased together 2 years ago. I have been toying with the idea of taking on the mortgage myself or trying to find a roommate. I have been heavily leaning on taking it on myself, but may have to suck it up and find a roommate. Other than that, I am still saving the best I can, contributing to my 403(b) and living life!
Keep up the great work Ninja!
No debt.
House paid off in 2011. Bought two cars in 2011 with cash.
First the money then the purchase, never otherwise.
Hubby and I:
– both of our undergrad students loans are completely paid off
– no credit card debt or car debt
– we have 3K in an emergency fund
– about 6K in savings, but this will probably be dipped into this summer for moving expenses, new rent payment and law school bar exam prep
– hubby is in law school, we live off of my paycheck only (2K a month), took out the minimum amount of students loans for law school, so no extra money comes our way after tuition is paid for
– we are not really able to save during these 3 years, but are avoiding more debt by taking out min. possible loans
– when hubby graduates this year we will have about 100K in student loans. ouch. Plan to try and pay this off in 5 years if we live like homeless people 🙂
$17,000 student loans and that is it.
$165,000 left in our mortgage while paying an extra $125 to principal each month. Our goal is to pay off the 15 year not in 10 years.
$15,000 in 0% Credit Card. We usually pay the minimum each month and place the rest into a saving account to earn little to no interest. The 0% run out in September and December of 2012.
Yes, we could pay off the credit cards right now, but why pay it at 0%?
“What kind, and how much, debt do you have?”
In honesty, I don’t think this is the best way to phrase the question. The actual dollar amount of debt is unimportant. It’s similar to asking how much in actual dollars you contribute to your 401(k) each year, or how many pushups you do a day. But depending on your income and expenses, a 25-year-old who contributes $10K and has expenses of $25K on a salary of $40K may be preparing better for retirement than someone of 55 who earns $200K, spends $150K, but saves only $17K each year. Similarly someone out of shape aged 60 who does 5 pushups is doing more for themselves than the 25-year-old who does 20 identical 20 pushups a day without increasing their intensity or difficulty. In other words, what really matters in asking about debt is not the actual dollar amount but the proportion of debt to assets and to expenses, as well as the person’s age.
At age 63 I have two interest-bearing liabilities: a car loan at 3% which I expect to pay off in two years, and an adjustable mortgage that I have up to 8 years to pay and may try to pay off by retirement age or soon after. Otherwise these figures would give a truer picture of my financial condition than the actual amount in debt:
– Total debt as percentage of net worth (excluding/including real estate): 6.48% / 5.08%
– Total debt as percentage of total assets (excluding/including real estate): 6.08% / 4.84%
– Minimum monthly debt payment as percentage of monthly gross / net = 8.83% / 14.08%
Oh man this is a depressing question.
I am in a bad debt situation that I’m trying to get a handle on. I went to a private institution (graduated 2010) where the tuition to attend was pretty ridiculous – even with my parents taking out a loan to pay for my freshman year, I’m still about $80K in debt in student loans. Half my relatively low $2K paycheck every month goes to paying them off – the other half is taken by rent, bills, food, etc.
Additionally, I’m also an artist that sells handmade jewelry in a retail store and online, as well as a self-taught calligrapher, so that rakes in some small amounts of cash throughout the year. (website if you want to help feed me ;): http://www.ashtreecreations.etsy.com)
I don’t mean to be complaining or anything, I just worry about the future: especially since my BF and I talk about getting engaged, (my parents have no $$ for a wedding, so I’ll probably be paying for it) buying a house, putting away for retirement – all of it gives me minor panic attacks. But I subscribed to this blog to help me really take responsibility and hopefully be a bit more positive when I feel overwhelmed.
I did get some great contacts via old professors that I still talk to and have gotten me my job, I had the opportunity to study abroad. All I can do now is be smart about my money, save, get good credit, learn more about investing, and work as hard so one day I can to earn more and get this debt paid off. So thanks for this blog (the blogs and comments have been already so helpful!), and I’m hoping to punch my friggin debt RIGHT in the face!!
Ashely, when you do get engage, PLEASE consider a smaller wedding. I hate to see young couples spend thousands of dollars in a wedding when that money can be better spent. Obviously we don’t know each other but I just felt the need to encourage that a bit. I had a fairly small, inexpensive wedding but put the a higher value on the pictures and smaller number of people I truly loved who attended. I have never regretted that decision (the marriage on the other hand is a whole other story!)
Good luck to you. I’m in a very similar situation! I totally understand.
140,000 on mortgage. Thats the only debt. 70K in the bank, 20K in Roth and 35K in TSP (401K). In 2009 our situation was this: 11K car loan, 4K loan from my grandfather, 150K mortgage, 4K in the bank and 12K in TSP. What a difference a couple of years can make.
As of January 2012, my hubby and I have a $195k mortgage, $7k in credit card debt, and $5k in student loans (with no interest w/ my mom).
Last Feb 2011, we had a $6k car payment, a second car payment of $3k, $16k in credit card debt and $10k in student loans. We paid off $23k last year. I say that’s a big accomplishment for us 🙂
We have $13,000 in car loan debt which we could wipe out with our savings but since my husband is in college and we live off my income (which is a grant funded research science job) I want to keep as much cash liquid as possible.
I haven’t read your blog before, although I have seen you in the ‘sphere and at FinCon. I’m a HUGE proponent of humor. I have to laugh at the idiotic mistakes I’ve made because of my lack of education and common sense.
That being said, I have about $16,000 in credit card debt and around $45,000 in student loan debt (which is deferred because I’m, stupidly, in school and taking out more loans!) I was unemployed for quite a while so I haven’t been paying on my debt. I’m working hard to change that now that I’ve been bringing in an income.
Hey @Jessica – thanks so much for that comment. It’s definitely something that we’ve thought about, and we often debate on whether it would have an impact on how much fun the wedding is if there are less people, as well as offending people that would expect to be invited. We have very large families (I have a ton of cousins), but I don’t really speak to them, or see them at holidays. The way things are going, it’s going to have to be smaller – and I think having those closest to us would make it more fun, anyway!
Didn’t mean to monopolize the comments with a wedding discussion! I’m curious about the Ninja’s wedding costs / debts, though 😉
Debt: None
Age: mid forties
Paid off the mortgage last month.
Anything put on credit card (cash back rewards) gets paid off monthly!
That must feel amazing! Congrats!!!!
Okay – Here is goes:
$238K in mortgage probably about to refinance from 5% down to 3.75%.
$26K in credit card debt
$11K in lending club loan to replace a timeshare loan.
So right now, we’re at a total of $275K, but this is down $23K from October 2009, so we are working on it. We hit a few snags (aka – lost income) along the way that has slowed us down, but we’ve got a plan and we are plugging along.
What do you think of Lending Club from the borrower’s perspective? Did you compare it to other lenders?
I have two small $25 investments in Lending Club (free for signing up – just to see what it was all about) so I knew them as an “investor” (if you can call $50 an investment). So I already knew what they were like as a company and how P2P lending worked. So I decided to give it a try.
My timeshare loan was absurd. The interest was stupid and we were getting no where fast. So I bit the bullet. I opted for a 3 year loan instead of 5, knowing the payment would be higher, but I don’t plan on taking the 3 years to pay it off anyway – much less the 5 years.
So far, it has been a HUGE success for us as far as the numbers show. The only thing I don’t like has nothing to do with Lending Club itself – the payment hits at a weird time in my paycheck/billing cycle so I’m still trying to figure out how to manage the month without moving money out of savings for that payment and replacing it at the next paycheck. That is all determined by when the loan was opened though, so it’s not their fault.
They are easy to work with and honestly, the loan itself was hassle free. Despite the amount of my debt, we have a really good credit score, so we were able to get a decent rate and the process itself is seamless.
As a borrower, I love the fact that not only am I paying less interest, but the interest I am paying is going to people who are being responsible with their money by investing it and making it grow. I strongly prefer that over paying a big bank.
You can read about the numbers and how they have worked out in an older blog post here: http://mrsnespysworld.blogspot.com/2011/10/what-lending-club-did-for-our-timeshare.html
I would definitely recommend Lending Club as a lending source!
Sounds like you have had a really good experience. I was thinking of using them as a stop-gap when I redo my kitchen. Do you mind saying what the interest rate you’re paying is and how it compared to banks or other lenders you considered? Thanks.
Right now I’m at 9.99% but it starts around 6.78% for people in better financial situations than my own. It was a great way to get a loan without having collateral. It has put us in a really good place to pay off the timeshare we were stupid about buying in the first place.
I won a TKO on my debit!
Am now saving up for the biggy……… a mortgage!
I have $2000 left in student loans, which is at 0% and will be payed off in about 9 months, and $1000ish on my credit card which is paid off monthly. I am in no rush to pay off the remnants of my student loan, since its not accruing any interest, but I could pay it off in full tomorrow if I wanted.
Just my husband’s $22k (or so) school loan. I feel pretty good about our situation. I guess since I’ve never been in a LOT of debt or a very dire financial situation, I just treat this one debt like an extra bill. Don’t get me wrong, I would love to not have it, but it doesn’t stress me out too much.
Since racking up $15K in credit card debt from 1995-2002 (darn those vacations), I’m down to just $2K (11%). I have the student loans at $11K (6.25%), car payment at $8K (2.9%) and the mortgage at $75K (4.75%/20year). The CC will be paid off in April. Then I’m putting that extra $ to the student loans to get them gone for good. I figure in 5 years, the student loans and the car will be paid off, so that means double payments to the mortgage, baby!
I lived with debt because my parents lived with debt. I thought it was normal, but reading blogs like this one over the past few years have shown me that it doesn’t HAVE to be the norm. I’m watching my mom sink into the same debt hole I’m crawling myself out of, but she won’t take my advice. *sigh* I’m a lot more careful now about what I purchase and ask myself if it’s something I need or just want. That at least gets me to pause long enough to weigh the question, even if I decide to go ahead and purchase.
My debt:
Student loans
$6,833 @ 5.55%
$10,789 @ 5.55%
$4,674 @ 6.55%
$18,900 @ 3.25%
Mortgage
$298,000 @ 4.65%
Total debt: $339,290
I’m not trying to pay off any of the debt right now actually; I’m trying to save up instead. I’m not in a rush to pay off my student loans – I’ll pay them off once I have a comfortable savings account. As for my mortgage, I’m planning on selling my house within the next 5 years and buying another one so I’m not hurrying to pay off the mortgage.
If you plan to leave your house in a few years, shouldn’t you buy back some equity to decrease the amount of cash you have to bring to closing? Don’t forget seller costs like paying taxes, realtor fees, and any concessions on repairs.
I have just over $20,000 in Student loans and about $1,000 left on my car loan. My attack isn’t ninja like.. I am slowly stabbing the debt with little pins. (I’m double paying my smallest loan right now, then once that is paid of (in May) I will add that amount onto the next biggest). I make about $20,000 a year so it is difficult to scrounge up extra money to put towards loans…
Little or big, it sounds like you’re doing the right thing though – just paying off what you can as aggressively as your income allows. Amazing that you can pay off debt with $20K income and some people who make 6 figures live paycheck to paycheck. Keep it up!
Thanks! It kind of helps that I live alone and eat ramen noodles all the time! 🙂 But, I’d rather be out of debt than eat “fancy” foods!!
Amen to that! Great job!
A private student loan of $5300 and my car at $4900. Plan on paying off the car this March (yes, two months from now) and the student loan paid off by June (yes, in three months).
I was $25k in debt March 2011, six credit cards, three student loans and my car.
I make $42k a year. Big reason why I could do this? I swallowed my pride and moved back in with my parents at the age of 25, I just pay for water, gas and electric and my own food. Thanks Mom and Dad!
nearly $20,000 in student loans… it’s going down though. My net worth isn’t as bad. Rapidly approaching zero thanks to some good savings habits over the past few years!
Mortgage: $230,000
Car loan 1: $21,000
Car loan 2: $4,000
Student loan: $7,000
That’s the extent of my household debt. I do, however, have $3,000 of 0% interest debt. I have the cash to pay it off tomorrow, but don’t see the point when its not hurting me.
I never plan to say that I’m “debt free”. I think I will always (almost always) have a mortgage payment and will most likely go on and off car payments. I don’t have a strong desire to be free of those debts. However, the second car payments and the student loan are gonna hit the road ASAP!
Student Loan Debt: $13,000 and increasing last time I checked. Hubby’s in school for physical therapy & has two years left. The money earned from fixing & selling our house will cover most of school, but not all. Then we’ll prob have a mortgage to pay off when he gets out of school & we buy an acreage.
Lots of student loan debt, $12,000 left on a car loan and almost $5,000 of credit card debt. Goal for 2012 is to knock down as much Credit card debt and build at least a 6 month emergency fund.
Reading through all of these comments, I think my wife and I were made for each other. We both graduated college without any student loans, and I went on for a Master’s that someone else paid in full – of course we didn’t live a glamorous life at the time.
We currently have about $345,000 on our mortgage and $22,000 on our minivan. The car will be paid off about 18 months earlier than contracted. But, I don’t feel a sense of urgency to pay back these loans so fast as the car loan is at 1.9% (I’m earning 3-5% over last few years on investments) and my mortgage is at 4.625%, which is a lower rate than my first car loan. Besides, a 30 year loan allows me to pay back my obligation with cheaper dollars.
The only other long-term liability I keep track of is a 5 year charitable commitment that is down to about half of the original offer – I treat it like a 0% loan.
I do have credit cards that I pay off every month (only 3 exceptions in 8 years).
I’m 27 and have $68,000 in private student loan debt. I’ve been kicking debts face since 2008, when I graduated with a loan total of $106,000. I make $26,000 a year and live with my parents. I’ve been kicking debt in the face rather successfully considering my low income, but I am desperately unhappy living at home. I have extra money at the end of the month to throw at my loans, but not enough to pay for rent.
Wow. You’re doing an amazing job. Keep up the good work.
Wow. You’re doing an amazing job. Keep up the good work.
Just curious, do you think the 106K loan was worth it to make a 26K income? (maybe you don’t have a job yet in the field you studied?)
You ARE doing a great job punching debt with that 26K though!!!! 🙂
Oh god no, not at all. There were a lot of mitigating factors that went into that and I only actually borrowed $86k. My parents advised me to take out all private loans, I was told not to bother looking for an inexpensive school because I am smart, I was severely mentally ill when I was making these decisions, and I never thought I would be alive long enough to have to pay them back (not that I was trying to run a mini scam, I just never thought that far into the future). There were also a lot of things that I think none of my peers knew, like how those large loan payments would compare with the salary range we could expect; everyone seemed to say that those loan payments would be totally doable on even relatively low salaries.
Keep plugging away at it. I understand the frustration, but you’re still young so you have plenty of time to spend the money how you want once the debt is gone. =) I applaud you for sticking to it and being uncomfortable while kicking debt in the face!
I have about $77,000 in debt. About $53K is student loan debt, $8K car loan, ~$15K in credit cards, and the rest is made up of small misc. bills.
I have no mortgage debt, the house is paid for. Once these debts are paid (in about four years) I will never,ever have debt again.
Credit Card: $6,126.52
Student Loan #1 (Sallie Mae, ugh): $11,956.67
Student Loan #2: $4,354.35
Total: $22,437.54
Age: 29
Ew. The only good news is I now have a job that will enable me to pay all of this off over the next 1-2 years.
Okay, I know that this comment will probably create more drama (since you linked to things I said–thanks), but:
I have about 20k in credit card debt that I ran up when I was 21 and stupid. It’s all charged off and I will no longer be legally responsible for it after the end of this year, so I’ve made the risky and somewhat controversial decision to just not pay it. If I had 20k right now, it would be better put toward my (non-dischargeable, no statute of limitations, never ever gonna go away) student loans. I made mistakes in the past, not going to be using credit cards ever again.
I have 44k (originally about 42k) in federal student loans. I borrowed far more than I needed to over the years I was in college and took far too long to complete my degree, starting in 2002 and not finishing until 2010 (with two years off somewhere in there). The last year, when interest rates went up and loans were more than ever, I borrowed a ridiculous 11k. I borrowed as much in the last two and a half years of college as I had in the first four. Shoulda just dropped out after four years in college and saved what I needed to finish. Stupid, stupid, stupid. Now I’m stuck with this with absolutely no way to pay. I have one 8k loan and I want to pay that first since the rest of my loans are under IBR and if something should happen and I’m unable to pay any loans, the 8k loan would be the one in default. Depressing.
I owe my grandma $2500, which I’m going to pay back month by month until it’s gone. Only 2 years to go.
My assets are: possibly $1100 in savings which I don’t want to touch because I may be getting fired from my $9000 a year walmart job soon. I will have to live on those savings until they’re gone. If I don’t get fired, I want to keep saving as much as I can, but in all honesty, saving is impossible. Money just gets sucked into a void. No living expenses saved up, and my 401k has maybe $800 in it because I don’t contribute to it. When Walmart fires me I have an IRA I’m going to put it in, but unless I get a better job soon, it won’t be getting much bigger.
I don’t own anything of value. My car is worth maybe $1000, and because of where I live, no public transportation, selling it is not an option. It’s a piece of crap anyway that needs more in repairs than it’s even worth, and nobody would buy it unless they were crazy.
I’ve racked my brains and can’t think of anything else I have that is of value, honestly. I live with my mom who has 18k in unpaid utility bills which will soon be in collections, a house that technically belongs to my grandparents, and 63k in student loans that have defaulted and are getting bigger by the day. I learned from the best. She also had a ton of credit cards that charged off back in the 90s. So obviously, there was nobody to teach me how to manage money, and it shows. It really shows.
*sigh*
So just for clarification, you have a college degree yet work a 9K a year job at Wal-mart? That seems to be a point where you could potentially make some big changes. Isn’t there *anywhere* else near you that you could get gainful employment?
Not easily, no.
Yes, there are other retail stores and fast food restaurants, but as far as real jobs go, they’re hard to get and require much more than just a college degree. My GPA is also not going to impress anyone, nor my non-existent clubs and such from college.
I had several failing semesters and got hired in what was considered a hard to get job – even though it wasn’t absolutely a fantastic gig at the time. In 1999 it paid 9.24 an hour. Plus, I had to drive an hour to get there. Having worked in the same place for close to 13 years now, I’ve been in on hiring committees several times. Dozens even. Not once have I ever looked at GPA as a consideration. Mine sucked and I know I’m a hard worker. I’d rather have someone with a lower GPA than someone who has a fantastic one. All that tells me is that they know how to go to school well, test well, etc. Working hard and having a good work ethic means much more than having good test scores. I have also never looked at club participation.
Would it be tasteless to insert a “WELL Alice, we don’t ALL live in Wonderland” joke here?
I kid, I kid. : )
What you’ve said is very uplifting. I will keep it in mind. I think the biggest problem of all, and one I never really addressed, is that I went to college with no real idea of what I wanted to do for a living. I just went to college because that’s what people do after high school. I finished my degree to finish my degree. I didn’t have a clear idea of where I wanted to go with things, and it ended me up working a slightly above minimum wage job in a complete hellhole.
My advice to anyone would be don’t go to school just because that’s what people do. Know what you want. I didn’t and it got me in a lot of trouble. I switched majors so many times, took a lot of unnecessary classes and needless to say, wasted a ton of $$. I would hate to see others make the same mistake, though others are making it as we speak, as college costs rise to almost unbelievable highs.
Alice, your comment bugs me. High GPA doesn’t just mean good at studying/testing. I graduated with honors and worked hard for that spot. But, I do think you have a point that a low GPA isn’t all that matters. Of course, if I interviewed a candidate with a low GPA, I would have higher expectations in other areas or a demonstrated effort to improve. Some people get C’s in all classes, some get a few C’s in higher weight courses and lots of B’s – that could yield the same GPA. The transcript will tell you a person’s interests and work ethic.
Mike,
I’m sorry that my comment bothered you. However, I stand behind what I said. Mostly because GPA has never been a consideration for a hiring decision – and I’m in the higher education industry.
You said that, “The transcript will tell you a person’s interests and work ethic.” How, exactly? I’ll give you an example. “Lisa” attended college and maintained a 4.0, was a member of the honors organization, yet did nothing outside of going to class. She didn’t even hold a part time job while in school, only working summers in between school years. She went to class, back to her room and studied. After graduation, she went on to pursue her MBA. Again, no working while taking classes, only going to class and studying. No volunteer work, no advocating for causes. Only a good GPA. That’s all she’s got. After three full years of being ‘on campus’ in town, she finally decided to drive around and see what was in the town. She didn’t even know how to get to the grocery. Mom and dad brought her to campus on Sundays – with the car “in case she needed it”, then came on Friday afternoons to pick her up and drive the car home, “in case she needed it at home”.
All her good GPA does is tell me that she can go to class. It does NOT show that she can handle pressure or truly meet deadlines. The transcript would tell me nothing. Work and life experiences tell me what I need to know. Those were my points that I may not have made clear. There’s more to life than a good GPA. I’m proud of you for graduating with honors and I really can appreciate the effort it can take to get those – especially if you did more than simply go to class and study.
I should mention that when I was 22 I fell into a deep depression due to a broken friendship (was actually in love with said friend and got abandoned) and failed a year and a half of classes. Very bad luck.
Is that tmi? Probably. I don’t even care anymore.
I totally agree with your advice! I might also add that I work in the higher education industry – and wholeheartedly believe that not everyone belongs at college. It’s not for everyone.
I’m glad you can kid with me, and I hope that you can see that I’m not trying to put you down or be derogatory. I’ve been there. I mean, I have 53K in student loans. It took me 16 years (not consistently nor full time, lol) to complete my degree. I worked full time for a good portion of those 16 years and a LOT of the student loans I was taking out had nothing to do with student expenses.
I was in a marriage where my husband spent and spent without regard to what was owed, groceries, kids, etc. Believe me when I tell you that I know despair over owing what seems like an impossible amount of money. Our house was foreclosed on. This was a mile away from my childhood home. Embarrassing much?
I realize I’m in a good place now, even with the huge amount of debt I have. (See above post for breakdown, $77K total). Not everyone is in a position to have that amount paid off in four years.
But the point is, I have worked hard to get where I’m at now. I didn’t go into that debt over night, and I’m certainly not going to get out of it over night. I’ve worked two jobs at times, sometimes three. That debt doesn’t define who I am, but it is a part of me. It certainly does make me think twice before spending money now.
I hope that you can get inspired by what you’re reading here. Get mad at the debt, not your life. Be frustrated enough to make a change. Buckle down and get it done. You can do it.
It does sometimes help to know that I’m not alone in this, and my situation is actually very fortunate compared to others. My loans are federal loans and I don’t have a mortgage or a car payment. I have to focus on the good too, not just the bad. Still, it is hard sometimes and there are days when I just want to scream “WHY!???!!!”
While it is sad that you didn’t have a financial role model, I hope that your statements at the end of your comment are more an acknowledgement that you have to work for self improvement rather than a reluctant acceptance of your situation. I can always appreciate the difficulties people face, but my sympathies are lost on people who aren’t willing to grow.
I’ve actually come really far. I was despairing when I graduated in December 2010. I am now at a point where I’ve made peace with the debt and realized that I’m not going to pay it off without a plan.
That’s a critical first step.
It’s time to think outside the Walmart box. If you can’t find a job then you should create a job for yourself. Find something you love to do and figure out creative ways to monetize that skill. For example, I have played guitar for around 15 years. In order for my wife to stay home I needed to make some side money in addition to my regular job. I started teaching guitar and even more important, I spoke with other guitar teachers around the country (thank you internet) to become a better guitar teacher. I now charge 40 to 50 dollars an hour to teach guitar lessons!
I only have 4 students right now, but thats only around 5 hours worth of work a week and I make $640 a month. (~$8000 a year) If I pick up one more student a week I will make ~$10000 in a year. So I can work 6 to 7 hours a week at my side business and make the same as you make at Walmart. This is a real world example of how being creative and monetizing the skills you already have will make you so much more money than working for someone else.
Search within yourself for the thing that lights your fire and get out there and make money doing it. Good luck to you. If you know what that is but can’t figure out how to make money doing it, post what your skill/hobby is and lets see if we can help you get creative.
I’m a writer.
There are plenty of ways to make money writing but they are not easy. If I were you I would find the quickest way to start making money writing. Publishing a novel and making millions is not feasible. Look for online publications or journals that require writers and you can do freelance writing for them. Local newspapers and radio stations. Someone writes the scripts for radio commercials.
See if you can get yourself in contact with 5 other people on the internet that make money by writing from home consistently. Find out their story and how they did it. Then ask these 5 people for 5 tips on making money writing each. That will be 25 tips on making money writing. And that’s just the beginning… 🙂
Get out there and hustle!
I’m not that kind of a writer. I’m not a novelist.
It just kills me that writers who are so much shitter than me make money. It seems so unfair because I can write well and they cannot, yet I make nothing and they make a living.
C, maybe you’re not as good as you think. You’re only as good as someone is willing to pay…
Blah, blah, blah…
C’mon, C. Lutus is telling you the exact same thing I am. If you’re a writer, then write some things, build up a portfolio, and find out from Writers’ Market where to send the stuff. Everyone has to start somewhere. You’ve got to keep reminding yourself at every step of the way to fight through any feelings of victimization and self-pity.
Excellent side hustle Lutus!
I’m always impressed when people manage to find a way to combine a hobby or passion into a lucrative way to spend their time!
Alas, I’m not talented in that way, so I will have to figure out some other plan 😀
Maybe you can get a job being mean to people. You’d be great at that.
Wow – if you spent as much time working on finding work in writing, as you do on this site insulting people, and making irrelevant comments, you’d be much more likely to fix your financial problems.
I’m not sure what you’re looking for here? Are you wanting us to feel sorry for you? Are you looking for pity? You certainly don’t seem to be looking for ideas and help.
– I paid off over $5,000 in credit card debt last year.
– I started with $20,000 in student loans and now I’m down to $16,000.
– My husband will have $24,000 in student loans when he graduates.
– And my mom has $30k in parent loans for my education I want to help her pay off.
AH, it’s a lot when you add it up. I’m trying to do one thing at a time though so right now I’m working on paying off my own student loan debt then will help my mom and then my husband probably in that order. I’m hoping I can make some of this debt disappear sooner rather than later.
I think I win for the most debt, about $800k total.
$100k @ 3.5% with 8 years left for rental property #1
$300k @ 3.5% with 15 years left for rental property #2
$400k @ 3.75% with 30 years left for current home
It’s a lot of debt but we break even on the rental properties and housing in our area is expensive so $400k for a home isn’t bad. We paid off about $100k of debt last year.
It’s awesome if you have your rentals filled and they cover your expenses. Seems like in a few years you’ll be well ahead of the pack.
We’re hoping that’s true!
Never posted before, but figured this was a good cause if it keeps the stick figures coming. My husband and I are in our mid-30s with 2 kids, and I’m currently responsible for the sole income.
Debt:
~84K in student loans @1.7%. This started at ~113K, and we’ve also paid off a few thousand for my husband after we got married in 2005, so even though it’s still huge, it’s improving. Can’t wait to punch Sallie Mae myself, though given the interest rate, I’m not in as big a hurry as I was when it was higher.
~236K mortgage @4.9% (thankfully not underwater, but less equity there than I’d like)
Credit cards paid off in full each month.
Assets:
~35K emergency fund
~7K other savings
403(b) (like a 401K) worth roughly 29K and Roth IRA worth ~10K
529 college funds for my 2 kids, together worth ~14K
2 paid-for cars (used, but new enough that they won’t need urgent replacement.)
Net worth crossed zero sometime last year.
I’ve been paying off my credit cards in full since I was 18, 39 now. No debt. We were able to pay off our modest house about 3 years ago. Have two paid for cars, an 01 and 05. We have been spending quite a bit of money on home improvement lately. Looking forward to getting back to saving money instead of spending it.
$17.5k in student loans. And I rent, so an obligation to pay $1550 a month in rent, but that is it.
Oh, and a credit card balance that I pay in full every month. It makes tracking easier.
I am 25.
As far as assets go, I have around $5,000 in the bank, around $40,000 in shares and maybe $15,000 in superannuation (superannuation = retirement fund). I also have around $6000 in annual leave saved up if you want to count that.
In terms of debt I have a credit card balance of almost $11,000 and I am in the first few months of a car loan that will cost me around $27,000 over 4 years, however…
– The interest rate on the credit card is only 0.99% and I am probably going to make 20% on the shares I bought with that money (thanks to a pending takeover offer).
– I am investing the money that I didn’t have to pay upfront for my car and I am fairly confident that I will make enough money over the next 4 years to more than cover the cost of the interest on the loan.
You should get a less expensive car. Car loans are never really a good idea, imo. I think you know that too.
I suppose I could do that, but I’m not going to. I drive 600km a week (which works out to more than 15 hours a week in my car). I need something reliable and comfortable. Plus it’s not like I am strapped for cash or anything.
And $23k is really not that expensive where I live.
They are only a bad idea if used in the wrong way (i.e. buying a brand new car that you probably can’t really afford). As much as I don’t like paying interest, I don’t like having 15-20k of my money tied up in a depreciating asset even more.
Ultimately, you will have 27k worth of money at some point tied up in a depreciating asset. I’m not judging, just saying. When you pay for it, with money generated from stock or not, you’ll still at the end of the day have that number of dollars attached to an asset that is guaranteed to lose value.
Hell yes.
That’s true, but since I absolutely need a car it is unavoidable whether I buy a car outright or using a loan. All I can do is try and limit it by buying a used car (after the initial depreciation hit) keeping it for less than 5 years before selling (before it loses too much value) and then starting the cycle all over again.
For me, at the moment, capital upfront is better. Ultimately I will have $27,000 tied up, but that is preferable to having $23,000 tied up right now.
You don’t absolutely need a $27k (or thereabouts) car. That’s just ridiculous.
Oh hell no you do not need a twenty three thousand dollar car…that is absurd.
As I said, $23k isn’t that much. That’s just how much full size 6 cylinder sedans cost where I live. If you think $23k is bad… it is actually $35k brand new.
Mmmkay. Whatever.
Say what you want, but it’s ridiculous to take on that kind of debt for what, as others have pointed out, is a depreciating asset. And using the fact that you drive a lot to justify it.
You seem to think you need the very best car and you’re going to put yourself into a huge amount of debt for it. My student loans make me miserable but looking back, with my lack of financial knowledge and such, I couldn’t have avoided it. You willingly choose to take on what could become a crippling debt if your circumstances change. What if you lost your job? What if something else happened? My student loan payments are very low. Can’t say the same of the payments on a $23k car.
I think you’re making a huge mistake. But go right ahead.
And yes, twenty three thousand dollars is a lot of fucking (sorry, Ninja) money, and to wave it off as though it were otherwise reeks of bourgeois-esque arrogance.
I don’t know how many times I have to say it… my car is not that amazing. I live in Australia, cars are expensive here.
I am using debt to finance my car, but I have not ‘put myself in debt’. Did you miss the part where I said I had $45,000? I could pay off all my debt tomorrow if I wanted to.
Even with the car loan I make more than I can reasonably spend. I generally end up with at least an extra $1000 at the end of the month without even trying.
Consider that a car to individuals is more than an asset, just as a house is more than an asset. They are necessary evils if you want to travel longer distances at faster rates or have a stable-priced roof over your head.
BTW, your HVAC, refridgerator, and all other major appliances are depreciating assets, too. Should you avoid buying the more expensive (and more efficient) versions because you’re guarenteed to “lose” money on the investment? No, you want to be able to heat/cool your house and store food more than a few hours, etc.
It is about the value proposition when the life of the asset is considered, not the re-sale price for personal-use items such as these. I have no problem with a Car (or other loan) when you aren’t overstretching your monthly budget. That being said, I’m very happy with my 2010 minivan that we bought new with only 15% down.
Not sure why I can’t reply to C directly – but oh well.
C – you’re making an extremely emotional judgement on whether Nick “needs” a 23k car or not. Everyone has different priorities in life – Nick has chosen at this time, to prioritize getting a car that he enjoys driving.
We don’t have all the information – we don’t know how much the monthly payment is, as a percentage of his take home pay. We don’t know what his other expenses are, and how much he’s socking away into his RRSP’s and savings.
If all of those other things are being handled – then choosing to take on a 23k loan for a car that is fun to drive and makes him happy – can absolutely be the right thing for hiim to do.
Everyone’s situation is different, and it sounds like Nick has made a conscious decision to take on this debt, and a plan to pay it off, knowing full well what he’s doing.
Quite honestly, given your other comments, it just sounds like jealousy that you aren’t in a position to make the same choice. But you can’t judge his decisions based on your situation.
I am definitely not jealous of someone taking out a 23k car loan. But thanks for speculating?
What was that you said about how you can’t know someone’s such and such? And you can know my feelings how? You think because I’m poor as shit and have a ton of debt that I’m jealous of someone who can buy a 23k car?
I have no desire for an expensive car…so…wrong.
I’m not jealous of him at all. I just feel sorry for him. He could be getting himself into a fine mess.
You’re judging my feelings based on your speculation, so please don’t tell me what I can and can’t do. You need to worry about your own judgments.
And fyi, it’s never the right thing to take out a car loan. I thought that was just common sense, but apparently common sense is very rare these days!
C –
the vitriol you spew here, shows your emotions – all negative. Whether it’s jealousy or something else, you’re clearly a deeply unhappy person.
You come across as deeply judgemental and quite willing to criticize others – and make absurd statements like “it’s NEVER the right thing to take out a car loan” – there are no absolutes in life.
I think you are amusing and entertaining, but clearly not one to give advice to others! Hopefully you can learn from others on this site!
Okay, well, go ahead and take out another mumblety loan. You don’t know me at all, so whatever.
I have a $128,000 mortgage balance that I’m in the process of refinancing into a 15 year loan (from 30). I pay less on mortgage, taxes, and insurance each month than I would if I were renting. Rent in my area is super expensive. Also just took on a $15,000 car loan at 0% for three years. Not planning to pay that off any earlier since there is no interest on the loan.
I consider myself extremely lucky to have no other debt. My parents paid for my college education. I appreciated it at the time, but I really didn’t understand how significant that gift was until years later.
My main focus is now on saving.
I would never get a car loan, even if the interest was nothing. If I can’t afford it, I just won’t buy it.
That’s actually pretty shortsighted.
If you’ve decided to pay 15K for a car, and you have the cash in hand, and are offered financing at 0% interest (assuming no loan fees to keep it simple) – you have options:
1) pay cash for the car and drive away. now you have 15k less in your pockeet, and a sweet new ride
2) borrow the 15k at 0% interest. Put the 15k cash you have in your pocket into a savings account, term deposit, GIC, whatever floats your boat. Every month, pull out the monthly payment and leave the rest to sit in the account to grow.
At the end of the loan period in option 1 – you have a car. At the end of the loan period in option 2 – you have a car, and you have some extra cash from the interest on the 15k that you put into some savings account.
Granted – right now – you probably won’t make *much* because guaranteed interest rates aren’t that high.
Here’s another option – you don’t have the cash up front, but you can totally swing the monthly payment with ease – instead of putting that payment into a savings account every month for 3 years and taking the bus – buy the car for 0% and drive it for 3 years while you put the same money into the loan.
Some people just don’t want to be in debt – I can totally get that. But a 0% loan is free money – if your money is sitting in an investment paying you anything more than 0%, you actually lose money if you don’t take the loan.
Blah blah?
Blah and blahdy blah blahzy blah.
Comments like this don’t really encourage anyone to take you seriously. You are being terribly judgmental of others’ situations. None of us are in the same place. Some of us will never be where others have been. Some have been there and can teach us something about how to get out. We can each read each others’ comments for ideas, inspiration, or yes…sometimes even to be convicted of what we are doing wrong. But for you to outright tell someone that taking out a car loan is wrong for them – that’s not really your place.
Not sure how to respond to “Blah blah,” so I won’t.
Spiffi – totally agree with you. I don’t like the idea of sinking a large chunk of cash into a depreciating asset (which, by definition, isn’t really an “asset”). I’d much rather have flexibility with my money, so for me, a 0% loan is a no-brainer vs. tying up lots of cash.
I do see how this could be a slippery slope for some people. If you’ve worked really hard to punch debt in the face, taking on a loan might be the wrong thing to do from a psychological or motivational standpoint, even if it is at 0%. To each his own.
I would have to agree with spiffi and Australia Nick. Despite Ninja, C, and all the Dave Ramseys and such, my position is that debt is neither good nor bad. Debt is simply a means to an end – the end being, to acquire an asset you cannot afford otherwise, like a house, car, or something intangible like an education. In exchange for taking possession immediately, you agree to pay a higher total amount by spreading your payments out over time. Of course if you accept the debt agreement you’re expected to make the payments, so you try to get the best interest rate and term in years to match your income and other assets. But if you don’t want to meet these conditions when taking on debt, you can either save to acquire the asset with cash, or just do without. Nothing wrong with renting an apartment all your life if you don’t want the debt.
Credit card debt unless paid in full each month is invariably a losing proposition, because interest rates are always so high.
As for the depreciating asset thing with the car, that is important when doing business accounting but I question its relevance to one’s own balance sheet. If I buy a new car and plan to keep it 10 years (as I always have done), I couldn’t care less if it “loses value.” If it’s paid off in 3 years and I keep it well-maintained for 10, it more than pays for itself. As it happens, the car I bought in 2010 was cheaper adjusted for inflation than the same make and model I bought in 2000. So I put down 40% and financed the rest at 3% for a maximum of 5 years, which I can pay off in full any time if I want. Big deal.
21 year old student, Graduating this April.
student loan : about $25,000
Car loan: Paid off last September!
Credit Card: $400
Currently renting @ $670 a month with a room mate.
Plan is to pay off student loan in 2 years.
From 1995 until 2005 or so I was in debt. Between 2002-2005 I paid off the last $14k of my consumer debt, school tuition, tickets, etc. It wasn’t until 2008 or so that I could get an unsecured credit card again.
Since 2005 I have been debt-free.
I don’t have a mortgage or car payment because I don’t have a house/condo or car.
Also, ’til this day I am still very paranoid about ending up back in debt. I have a 6 month emergency fund funded out motivation of intense fear of being in debt again.
I have a morgage of 180K and that is it
Working on paying it off as soon as I can
I love this blog because it reminds me to keep thinking of Punching my mortgage in the face 🙂
My husband and I (26 and 25 yrs old) have the following:
$140,000 in student loans at ~4%
$1,000 in credit card debt at 0%
$5,000 in car loans at 0% (on my car – my husband’s is paid off)
$20,000 in Roth 401k (earning an average of 7%)
$5,000 in Roth IRA (not doing so hot, barely breaking even)
$20,000 in cash savings ($10k is our emergency fund)
We spent a couple years really building up our emergency fund / savings cushion since we didn’t know what the economy would be like and my husband’s job wasn’t secure. But looking at the numbers now, it looks like it’s time to get more aggressive punching that debt in the face!
Ouch on that student loan debt. Hopefully you went to a good school and/or have graduate degrees. Part of why my debt sucks so much ass is because it’s just an undergrad degree from a not that great state school.
Yep, basically just mismanaged finances and not having a job all through college…nothing glamorous or justifiable, like people working 80 hours a week while going to Harvard full time and trying their best. Just plain laziness and lack of proper planning on my part. lol.
About $9,000 in student loan debt at 3.5% that I am paying off slowly. I’ll also be acquiring about $70,000 in student loan debt this summer when I get married.
I would SO not marry someone who had that much debt, hypocritically. Mine is bad enough, can’t imagine almost twice mine.
Luckily I’m in no danger of marriage. lol. I’m not even in danger of going on a date. HAHA! That’s so funny I forgot to laugh.
No debt except for a small mortgage ($60K). It will be paid off in 5.5 years because I will retire at that time.
61k left on mortgage at 4.75%
22k left on our combined grad school loans at 2.65%
2 cars (’05 & ’06) paid off
2.5k savings
10k Roth IRA
6k 403b
Full pension for each of us
Finally getting our heads screwed on the right way – I feel like our entire generation was raised in a environment of all financial conversation being taboo; so after making some pretty stupid choices over the years, we’ve seen the light and fought to where we are.
I read blogs like this one because I have a visceral dislike of our debt, while my head tells me that growing our savings and preparing for our daughter’s college should be priority with these relatively low rates and types of debt.
Still… debt = ugh.
shanyo, how old are you to make the generation statement? I am wondering what generation this may be, I am assuming its Y (early 20s to early 30s)?
If so, I dont think its taboo as much as it an idea that everyone who goes to college is going to make 60k on their 1st job and have this plush office job.
I completely agree with your comment about people who expect their degree to guarantee big money right after graduation. I live and work in a place where people seem to feel entitled because they finished some form of schooling. Granted, the degree sets them up for more advancement and promotions and shows they are capable of learning, but it seems that many people who come out of college expect to make what their parents have worked 20-30 years for. I see it in the hiring work I do.
Actually, at 39, I’m smack in the middle of GenX. I guess I was referring to the taboo as our parents saw it – it’s been my experience whenever the subject comes up with anyone in our age bracket (not only my wife and me), that I find common stories about our upbringing where parents would be shocked or offended if children asked about family finances and no one ever talked about money – budgets, credit, debt, investment, savings, retirement – anything. Almost to a person we then commiserate over the inevitable blunders we made soon after, and how we later began to see a better way and continue to crawl out of the various holes we’ve dug.
Not to say that people in other generations don’t make these blunders (clearly we all do), it’s just that financial non-education (or anti-education?) seems to be a common thread.
In the beginning of 2011, I had 4 credit card debts totalling $11,000. A year on, I have closed 2 accounts, with $6,000 that I aim to punch by my 30th birthday in June 2012.
My plan is to own just one CC for work and travel related expenses, and I will pay for the other daily necessities by cash. And with debt out of the way, all the money is going to start funnelling and snowballing into my emergency fund, housing fund and hey-i-need-to-get-a-life fund!
Let’s see – in November 1999 I took out a loan for 26k for school. Finished my program at the end of July 2000 and started working in my new field at the end of August. In November 2000, I got into car loan debt to the tune of mumblety-thousand – quite honestly, I really don’t know how much that car cost me – I had never bought a car before, and ended up listening to the sales pitch of “only $326 per month – I do know that the loan term was for 4 years, which pissed me off because it was new car and the warranty was only good for 3 years – so I’d be paying on a car that was out of warranty!
I made the 326/month payment on the car, and started punching down my student loan. Luckily for me, the loan was in Canadian dollars, and I had moved to the US for work – at the time, the exchange rate was something like 65 cents US for every 1.00 Canadian – so I would sent $350 a month and pay off nearly $500 in loan!
Things were going well – my loan term for the student loan was 7 years, but I was trying to pay it off asap. Then our company started having financial problems, and employees weren’t getting paid regularly – so rather than put every spare penny toward my debt, I was making sure I had a cushion because I never knew when my next paycheque was coming!
This proceeded for a couple of years, until September 2003, when I sold my car – managed to sell it for about $1200 more than the loan amount, and moved back to Canada to start looking for new work – I could no longer afford my rent (what with not getting paid) and moved back to my parents’ house until I could figure out what to do next. I didn’t actually quit though – I continued to work for my company, as they were still trying to come up with a solution to the money problems, and I was averaging about 1 paycheque per month..
With my expenses reduced – I chipped in for groceries etc but wasn’t being charged rent – I was socking away any pay I did get against my student loan (with my mom’s full support) – and paid off the student loan in December 2003.
In February 2004 I got a new car (used this time) and borrowed the money from the bank, instead of financing from the dealership. If I recall correctly, I borrowed 11k, and the car was not collateral – just a standard bank loan. I had enough funds in savings to pay off the loan at any time, but was making the scheduled payments.
In June 2004, I had not had any luck in my (admittedly part-time) job search, was still getting paid about half-time, and had realized I would have better luck back in the US to find work in my field, and that I *wanted* to move back to California. So I paid off my loan, packed up my car and moved back down to the US, fully intent on finding a new job that paid on time.
In July 2004, the company restructured and we’ve been getting paid on time ever since 🙂 From June 2004, to November 2010, I had no debt.
In November 2010, I took out a mortgage for 199,000 and have been paying it down – my loan payment is $978 per month, not including taxes and HOA fees and insurance. I generally have been paying between 1100 and 1400 per month and my goal is to throw any additional funds I get (tax refunds, I’m looking at you) at the principal to get my loan paid off in 15 years rather than 30.
I am contemplating buying a new (to me) car in the next year or so – I haven’t decided yet if I will finance it and pay it off faster than the schedule, or pay in cash – I can do either, it will just depend on the interest rates.
Well, given this novella, your comments about that guy’s car loan make sense to me now.
thanks for reading!
surprised you don’t have any comments or judgements to make about my choices!
Mumblety.
Mumblety car loan junkie is about what I sum you up as.
Congrats on being a debtor for fun.
yay! I love how you came up with “debtor for fun’ – not nearly as vitriolic as I was hoping for – and wildly inaccurate – but hey, it’s late, and I’m sure you’re tired.
You don’t really matter enough to bother with. You’re just someone who wants to put me down, say I’m stupid about money, don’t know anything, and am miserable and useless, while not knowing anything about me. You’re not worth bothering with.
Have fun with your car loans.
I really hope these comments get deleted when Ninja logs on.
I just wish I didn’t have to argue with stupid people who decide to be mean to me.
You dont have to argue with anyone, but when you started to bash peoples posts about their debt and how they are “punching” their debt, they defended themselves.
I admit that it’s probably not any of my business what debt someone chooses to take on and I should avoid telling people what to do in the future. It’s just shocking how mean some people can be, telling me I’m “obviously a deeply unhappy person” and “amusing and entertaining.” It’s just rude.
Wow, someone is trolling it up tonight. Ninja, you got your 100+ post wish, it seems :-). I’ll offer up some stats to play along: 59k left on a student loan (down from 116k at 8.25%, ouch!). Been working multiple jobs for years to get it done, hope to punch every single debt-dollar in the face by 2014.
I’m sorry that you interpret my differing opinions as trolling.
C,
You consistently fail to bring useful discussion to these blog posts. Please see Larry’s comment above. That is a great example of someone who doesn’t agree with the post, or has an opinion that is different than mine. He is not rude, he doesn’t call people names, he doesn’t create drama. It is very clear from your comments you care more about getting under my readers’ skin, than calmly and rationally discussing your differences.
It’s reaching the point of blatant absurdity, and if it continues I will have to block you from commenting on my website. I don’t say this as a threat, it’s not meant to be one. But hopefully as a way to encourage you to continue reading and sharing your thoughts in the comments, but in a way that is not offensive and rude.
When literally every person that enters a dialogue with you tells you you’re crazy (and not one commenter has defended you), you have to start thinking to yourself “maybe they’re right?”
Okay, but is you and your friend Evan talking crap about me on twitter (seriously?) really very constructive?
I think the appropriate word would be “shocked”. Evan, myself, and many others honestly can’t believe some of the stuff that comes out of your mouth. Your the source of many “WTF” and head scratching moments.
I’ve blogged for 2.5 years, had over 17,000 comments contributed, but NEVER have I had to deal with someone being as harsh and offensive as you can be. You’re 80% mean, and 20% appropriate. Please flip flop those proportions and I’d be delighted to keep the comment forums open.
I have to work a shitty job and go through pretty much everything alone. Is that not enough pain that I also have to go on the internet and find someone who calls himself “debt ninja” and some other guy calling me a crazy bitch?
C, you brought that on your self. The things you’ve said, the language you’ve used, and the consistency of your message are almost always unhealthy. I give everyone the benefit of the doubt (why do you think I leave your comments up here, when I could easily have deleted them, or even blocked you from posting them in the first place?), but when you are going through 135+ comments and bashing people that chose to take out car loans, this isn’t a place for that. Respectfully disagreeing with someone is okay. Disrespectfully disagreeing with someone is not.
I wish you the best, really I do. I hope you learn not from this website since we don’t have much in common, but from your peers and your situation. I hope things improve for you. I hope you share not only your failures, but also your successes. I hope you keep commenting, but only if it’s in a tone that is appropriate for this blog.
Student loans.
I wonder if C’s attitude would be different if these car loans were 0%.
nah, see above.
I’m about to make you all feel great about your sensible choices. I am 31. My debt includes:
Student debt (bank LOC at prime rate + 0): $130000. Car loan #1 @ 4.9%: approx $5000. Car loan #2 @ 2.9%: approx $22000. No mortgage (rent = $1200/mo). No savings. No RRSPs. We do have $5000 in an RESP for our kids. I am a family doctor in my second year of practice, so things are slowly improving, but right now I feel like the textbook ‘what not to do.’. BTW, I’m in Canada.
“but right now I feel like the textbook ‘what not to do.’”
You are not. What textbooks are you reading? Inevitably student debt will make your debt load higher at a younger age. If things are “slowly improving,” come back in 10 years and let us know where you are.
I was under the impression that unless you were independently wealthy and have a trust fund, you really can’t get around this size of student loans if you want to become a doctor? And, I’ve always assumed (hopefully this is true) that the income you could expect to start earning made it feasible (although certainly not easy) to pay it off – so to me, this isn’t at all an irresponsible or “what not to do”.
You’ve made an investment in yourself and your future – hopefully you enjoy being a doctor and that the effort and investment is worth it!
I am 36, going on 37. Married, 2 kids. Own our home. Rough numbers are:
37k – Credit card debt
28k – Student loan debt (I have a Master’s degree…I just paid off my Bachelor’s 6 months ago!)
13k – Car loan
2k – Medical (special needs child)
So it is about 80k, plus 188k for the house.
Debt Breakdown:
32k – Student Loan
138k – Mortgage
I am currently Punching Sallie as hard as I can and then plan to switch that force to BofA.
Last year I was able to pay off the Car and a small loan that I had to get to replace the A/C on the house…you can’t live without A/C in Phoenix!
In the next year I plan on going 26k in debt to this little thing called student loans.
good luck! Personally, taking out 23k in student loans was the best decision I ever made – so here’s hoping it works out for you!
Thanks, unfortunatly by all the time its said in done I’ll by roughy 120k in debt from student loans, hopefully the job market will get better in the next four or so years.
My husband I have about 90K in student loans (undergrad and grad). I have an aggressive goal to pay off my own loans (50K) by the time his come due (Dec 2013). Even if I don’t meet the goal completely, it’ll be great to pay 80-90% of it by that time. We have about 20K in our emergency savings and $1350 in our short term emergency fund. We live in NYC which is a crazy expensive city so rent takes up almost a third of our paycheck which really sucks. We both work and go to school at the same time (part time while in undergrad and full time in grad school) but were unable to stay out of the evil student loan train. I’m really nervous to stop contributing to our long term savings but in order to pay off my loan, I’ll have to. Does anyone have any advice on how to do this? I am following Dave Ramsey’s plan but switched around a bit. We have a short term and long term savings but lots of debt. I have a retirement plan but hubby doesn’t yet 🙁 since he works at a crappy non profit. I’m also hoping to find a side hustle in the upcoming months and dedicate all of that income to paying off my loans. It is SO overwhelming when I start thinking about it but whenever I think of having all my money TO MY SELF and no paying to some stupid loan/debt, it makes me too excited for words.
12k – student loan debt (graduated 2009, will be paid off Feb 2014)
Husband is going to school on the GI Bill so instead of debt, he gets paid ~17k/year for school
273k – mortgage – just bought our home in June so it will be awhile since we’ve paid a good chunk off 🙂 we have 3 roommates so they pay about half the mortgage each month. I highly recommend it.
Both have cars paid off in full, some retirement $$, about 1k in stocks, $15k savings/emergency fund.
We are both 24.
That’s outstanding, Angela. You and your husband are making the kind of financial decisions that will set you up for life later on.
Thanks Allison 🙂
A lot of the time we feel broke, but we just need to keep it in perspective and realize we really are doing well. It is good to have friends that are even more strict on their budgets and spending than we are to keep us focused.
And yes, my parents (dad especially) focused on teaching me about finance, etc from a young age. Husband’s parents were the same way.
DS
Husband and I:
CC Debt – $26k
Car Loan – estimate around $10k
My Student Loan – $3400
His Student Loan – $12k
We are actively working on CC Debt – debt freedom will be happening in 2013
It is interesting to see the differences in the type of debts between different countries. Here is Australia we have not experienced a housing market crash like the US so we pay a lot more for our houses, but our education system is far cheaper and we rarely incur student debt. I decided to start university (college) late – at 23 – and was lucky enough to already be in the workforce with an employer who pays my tuition in addition to my salary. Employers here are also required to contribute at least 9% on top of our salary to a retirement account.
As a result of the above hubby and I have over $50k in retirement accounts and no student debt, but a whopping $373k left on our mortgage. We also have $16k in credit card debt, a lot of which was incurred while I was off work for a year when our son was born (our son was a surprise and we were ill-prepared as we weren’t intending to have kids for another 5 years or so, but we don’t regret anything for a second… And yes, we were being careful, but nothing is foolproof!).
The CC debt will be punched in the face by Feb 2013, the mortgage will take about 12 years.
First time commenter, long time lurker 🙂 My only debt is a student loan of $1175 at 5.5%. I plan to pay this one off next month! I’m so excited!
The original balance was $18,400 when I graduated college in June 2010. Needless to say, I have been brutally punching debt in the face.
I also have a couple of credit cards, but I pay those bad boys off every month.
How exciting! Will you be able to make that last payment in person to see the balance go down to zero right away?
No, I have to make it online. That’s ok with me though 🙂
29 years old with:
No credit card debt
No car loan debt
$25,375 left of student loan debt at 4.5% interest rate (due to master’s degree started at $40k), but planning to be DEBT FREE by the end of this year!!!
$12k emergency fund
$35k retirement
in 10.5 months and my fair share of living on ramen (does juice fit in the budget?) i have paid off:
$22.5k from salliemae @ 6.8% and
$10.2k loan from my parents @ 0% for “tiny car” and relocation costs
alas, my debt freedom has not yet been achieved! due to a freak spider attack from the bowels of hell, i picked up $900 in medical bills which i’m making minimum payments on. i was too pissed off to pay these bills immediately. so kids, remember, black widows don’t like to play nice, but if you get bit you’ll have a cool story and likely increase your street cred.
i’ve been very fortunate. right now i’m rocking my first kick-awesome big-girl job – my specialized engineering field pays pretty well – and i occasionally pick up tutoring gigs on the side.
p.s. 24 years old. looking to open a roth ira. any advice?
I opened a roth with Vanguard – lots of index funds available and low fees.
There’s one very depressing thing that I didn’t mention and I have no idea why I left it out since it’s so important.
In June of 09, I was sued and it resulted in a $1400 judgment which is collecting interest by the year, at the rate of $168 per year. So it’s something like almost $1800 now, and getting bigger.
I honestly have no clue what to do. I make $700 a month, have $500 in expenses and feel like paying my grandma is the most important thing, but I am honestly up shit’s creek with this.
I have no idea why I didn’t mention this in my original post. I guess I have some filter that blocks out incredibly depressing things (though if that were the case, how did my 44k in student loans get through? lol).
Maybe it will help to explain why I’m not a very nice person.
The lawsuit was over a credit card.
“I honestly have no clue what to do.”
Sure you do. First of all, debt to a business that accrues interest should take priority over debt to a family member. Grandma will have to wait. Second, I’m just going to repeat what I wrote to you several weeks ago, slightly cut and revised (in case it got lost in the shuffle):
My advice for you stands: for the short term, get whatever additional work you can, no matter if it’s Walmart, Target, K-Mart, the local diner, whatever. These jobs are not “beneath” you if they’re all you can readily find. You have far too much debt and far too much time on your hands not to be working more. There are plenty of people in this world who take on two or even three part-time jobs that they may find distasteful, simply because they have to make ends meet.
For the longer term, you major was not “worthless.” Get in touch with your college placement office, with every professor from your department, with every classmate in your major you used to know, and ask for their advice or help. College departments want to see their majors succeed, because that becomes a marketing tool for them to attract more majors. Google every possible combination of “jobs for humanities majors,” “jobs for comp lit majors,” etc. Look for any online forums where you can talk with people in similar situations. If you feel you’re a writer, build up a portfolio and look for writing opportunities using Writers’ Market to find where you can place your work.
Until you’ve exhausted all of these approaches, you can’t say you “have no clue what to do.”
OK, you have a judgment against you. That interest and the balance is growing. It honestly seems like you’re working harder at ignoring the problem than you are at facing it and getting rid of it.
$9,000 a year at Walmart works out to just less than 24 hours per week if you make minimum wage. Pick up more hours. Hate it there? I get that. Hate your debt more, suck it up, put on your big girl panties and deal with this debt. You’ve got to do this, or that judgment (and other things) will eventually turn into wage garnishments and then you’ll really be stuck. Take my word on this, you want to be the one ‘driving this car’ in terms of paying this off. You do not want them to take it before it ever gets to you. I’ve been there, I’ve had a wage garnishment. As a single mother of two teenagers – whose ex wasn’t paying child support.
I would like it if I could just settle with them, but once there’s a judgment, it’s not likely. I guess my only chance is to pay as much as I can right now and pay the rest off month by month.
The fact that this thing could be over $2000 by the end of this year if I continue to do nothing is scary.
What scares me more though is that if I pay this, I may have nothing for a bankruptcy if a sudden spate of lawsuits comes through for me this year. I have a number of other cards that pass the SOL this year. They may take their chance to sue, they may not. I guess I have to take a chance and pay the immediate problem, and if I get sued, worry about that later.
It’s not that I’m burying my head in the sand. I just thought the case would be thrown out. I didn’t understand that judgments stand. My mom, wonderful financial adviser that she is, told me to just keep telling them I had no money. I thank her very much for that, because in the meantime, the thing is going to double in size whether I’m “judgment-proof” or not. Okay, they can’t garnish my wages, but the thing is still growing.
I can’t even deal with my student loans until I get this shit out of my life. I don’t know what the hell I was thinking. I could have paid it all off by now if I’d just made better decisions. I’m such an idiot.
She told me to keep telling them I had no money and if I did that, the lawsuit and judgment would just go away. Obviously I must have had about the IQ of a doorknob to believe that shit.
When I finished grad school with a doctorate (7 years of college tuition and little income, yikes) in 2006, my wife and I had the following debt:
$16,000 in undergraduate loans @ 6.2%
$80,000 in graduate loans @ 1.875% (federal stafford)
$108,000 in private student loans @ 8.7% (variable interest rate)
$10,000 in credit card debt @ 11% (used as “emergency fund” while in school)
$9,000 auto loan @ 6%
I got a good job out of graduate school (+150K), but my wife stopped working to have a couple of beautiful daughters (now 5 and 3). I was punching debt hard in the face, at least until our girls started pre-school (why is pre-school as expensive as college tuition?). Now I feel like I am only lightly flicking debt’s nose, but I hopeful that when our older starts kindergarten this year we can get back to some serious punching.
After 5+ years our debt is now:
$16,000 in undergraduate loans @ 6.2% (been paying interest only)
$80,000 in graduate loans @ 1.875% (federal stafford) – (again paying interest only)
$38,000 in private student loans @ 3.25% (variable interest rate) + $32,000 on zero % balance transfer credit cards (which has helped pay this down a little quicker)
$0 in credit card debt (we pay our balances in full every month, other than the private loan 0% cards)
$0 auto loan (we own one car, but lease the other @ $220/mo).
We also max out our IRAs and 401(k) plans (my wife is now back at work) every year, so have built up a nice retirement stash. Here’s to punching the rest of our debt in the face soon! We wish good luck to you all as well!
€47000 in student debt, i became sick for 2 years and couldn’t work when i was fit enough to study again.
I hate it, but it is at 1,35% interest for the next 5 years and after that it might change for another 5 years, but it is a pretty low rate because it is a government loan. I have to pay it back in 15 years, can stop payments for 5 years if I wanted to, paying back will start in 12 months time for me.
Luckily I got a good job just after graduating a year ago, paying around €50.000 a year. I am living together with my husband who works parttime and is doing his masters degree, in a rented house for €400 a month. We have been saving his income and part of mine for a year now to build up an emergency fund. At the moment we are looking into buying our first house and although my student loans are big, I have budgeted for them.
Just a car loan – a recent thing (October 2011). It will be paid off in less than three years for sure, but I’m hoping for two. I think it’s at about $15K.
No student loan or credit card debt. And no mortgage.
We have $16,000 in student loans from my undergraduate degree. We have the money to pay them off entirely but we decided to wait until they are about to come out of deferment when I finish my PhD. In the meantime we have the money totally set aside and invested and are hoping for some kind of return. (More details in my link.) It’s risky but it was a carefully considered decision, not solely motivated by the dollars and cents.
I always trip over my tongue when people ask if we have any debt because we technically do, but it doesn’t feel that way since we aren’t saving up to pay it off or anything.
No debt – graduated that way a few years ago too. Work has me with a lot of cash flowing through my credit cards – this gets reimbursed and my CC’s get paid in full every month (free credit building!). As a result, I’ve taken on more credit cards/increased limits in order to reduce a high revolving debt. As I discovered the high debt/credit ratio pulls your credit score down despite all debts being paid off each billing cycle.
Over the next few years, I’m looking to take on debt in the form of mortgages. Since the name of the game is income generation – I’d like to think of it more as leverage.
Punched debt in the face in early 2011. Punched my $15k emergency fund in the face in Sept 2011 and am now punching investing in the face. (also maxed out my 401k last year! And am on track to do the same this year). Living beneath my means is a wonderful thing.
I think the problem is that I’ve never punched anyone. I asked my boyfriend to let me punch him for practice and after about 8 rounds of jumping up and down and yelling “OK! Here it comes!” I finally threw the weakest, pansiest punch ever somewhere above his solar plexus and collapsed in a fit of laughter. I guess I just don’t know how to be violent. So I’ve been meekly throwing dirt in my debt’s face since 2010. I started somewhere around $48K…now I’m at $34k and going down each month. I paid one debt in full before the end 2011 (yay!) and my next focus is two credit cards which total around $23K. The rest is my car and a student loan for a grad program I didn’t finish. I want to be back here soon to tell you my first credit card is paid in full (maybe 6 months?).
I set a reminder in my phone. I’m expecting follow up from you in six months, and not a minute later 🙂
I have a $7500 loan from my parents who lent me the money to pay off an overseas credit card (I lived in the UK for several years). I pay them $300 a month and hope to pay more every few months so that the loan is fully repaid in 2 – 3 years. I tried to pay the credit card off on my own but it had a 29.9% interest rate (yes, you read that correctly) and as it was in the UK, I had to suffer the currency conversion and international transfer fees. After spending two years getting nowhere I bit the big one and asked the folks for a loan. Other than that, I have no debt and plan on keeping it that way until I buy a house (I rent an apartment with my boyfriend at the moment).