Paying off Debt feels good :-)

[ZacFields]

I was excited about it, so figured I would share with everyone.

Paid off about $6,000 worth of debt yesterday. Both Ashley and my credit card, and a consolidation loan I got about a year ago. I've still got a little ways to go, but looks like the rest of it should be done by the end of next month at least.

Total savings: $260/month in payments. The rest of my debt costs me $238/month in payments. So hopefully by next month I'll have saved myself $498/month worth of payments, and then I'm going to apply most of that towards paying off my motorcycle.

Quick advice to those of you living with your parents, and thinking about moving out: Save a lot of money! Ashley and I bought a lot of nice stuff for our home because we plan to stay here for a long time, but we had about $6,000 saved up and bought about $10,000 worth of stuff, and still had things left to buy.

Either way, I was so stoked to pay off some debt yesterday and I had to share. It's no secret that once I was done spending and started saving, our economy went into recession. Relief is coming America! Zac and Ashley are back on the spending market a little (though no more credit debt this time!)

[TbTalon94]

The only Debt i've ever had, besides my mortgage, was my Best Buy credit card. I had 18months no interest to pay it off and i payed it off in 6months. It's nice to have that extra money every month but usuall it ends up going towards something else....like car parts. I haven't gotten anything for my car for awhile and man have I been saving all kinds of money!

Congrats Zac on payin off some loans ;)

[Inferno333]

I moved back in with my folks earlier this month. I also got a good job at John Deere.

I'm trying to pay off as much as possible right now before we move out again.

Congrats Zac!

PS: I still haven't been able to get a loan funded on Prosper... Makes me kinda mad.

[bowtiebuba]

i buy tools off the mac and snap on truck so i always owe some cash. but never to much :yawinkle:

[Domestic Disturbance]

2 years 10 months to go on my loan. ah I wish i remember what it was like to make profit

[96-eclipse-gst]

I can't bring myself to buy of the snap on or mac truck until I get some of my other expenses paid. Sears doesn't pay jack squat, and I think I'm gonna have to work at O'reillys part time or something. Shitty...

[ZacFields]

Domestic- Did you get a prosper loan too?

When Ash and I moved out, we put like $4,000 down payment on the house (not much, but we wanted to keep most of our savings for other expenses) and we kept about $4 or $5 thousand in savings. A major problem was that we got into some bad spending habits, like going out to eat a lot and such. Another problem was me paying about $95/month for CR:Underground hosting. The biggest problem though was buying expensive furniture, thinking that I needed a $700 TV, buying an Xbox 360 Elite and about 12 games in one month (totaling $1,300) buying a $700 camcorder, buying a $800 replacement bumper for my car (which is still sitting in my storage room), buying a $700 bar set matching my dining room table, $200 flat-screen to mount in the dining room, spending about $300 to replace all the light fixtures, $200 for the shower door I installed, $300 over-the-range microwave, $300 for two suits that I never needed up until I got promoted at work about a month and a half ago, about $500 spent on DVDs, then about another $1,500 for a lot of little random stuff like rugs, dishes, silverware, comforters for the bed, a DVD player in the bedroom... little shit like that.

Grand total: $10,900 in items that I can name. Debt was at about $13,000 before I started paying it off in August, so the rest of that can be attributed partly to Ashley working at shitty Nordstrom where they cut hours so much in the winter that she was sometimes only working 15 hours a week out of 40.

Moral of the story is this: If you're moving out of your parents house for the first time, especially with a girlfriend or fiance that you share finances with, either make sure that you're prepared to stop spending money like you were when you had no bills, or save up a butt-ton of money before you move out.

A lot of the stuff I bought was unnecessary, and when I first started paying the debt off I really regretted getting myself into that much debt, but now I'm glad it happened. It taught me a valuable lesson and has caused me to swear off consumer debt. If I can't afford to buy something in cash, then I can't afford it period. Credit companies make millions by tricking people into thinking they're buying something they can afford.

Any good budget should include at least $250/month savings. If you start that while you have the ability to do so, then it will be harder for you to get yourself in a bind. Paying $25/month sounds really nice and affordable, but can you really afford a $2,000 refrigerator?

Zac

[Domestic Disturbance]

I don't know the definition of a prosper loan.

Its high interest being my 1st loan, and being a 2000 hurt me too. Fixed rate 48 months. Figured living at home so it couldnt hurt to have it and build up my credit. I hate the idea of credit cards cause I know my spending habits and I know I'd bury myself in a week.

[Drifte]

not a cent of debt here, im goin on the tail end of 4 years of college. but i dont really "live"

i also have little money to my name...like pennies :(

[DustinsDuster]

i owe about $250 on my credit card yet, and i owe my mom a couple hundred dollars still on my Dart, but other that, i dont have much debt. the only downside is i dont have much saved, and its hard to buy all the car parts i want. i have well enough money to pay all of my bills every month, but not enough to do that AND live the life i want to and build my cars. so now i am searching for another job. or, if i can't find a decent enough full time job to go to, i want to pick up a part time job on the side.

congrats on the debt relief Zac; i know how good it feels to pay off a $500 credit card; i cant even imagine how good paying off $6k in debt...

[ZacFields]

Here's the best part about having savings. I think anyone who has any amount of savings would agree. Sometimes things just come up in life that you can't predict. Sometimes it's a good thing, and sometimes it's a bad thing. One day one of your old high school buddies might come into town and you'll want to go out to the bars with him a few nights, maybe have dinner with him a few times while you're in town. If you have savings, all that is as simple as logging onto your account and making a small transfer from your savings to your checking to account for the excess in spending you had while your buddy was in town.

Or better yet, it's December and you're out shopping for a christmas present for your girlfriend and you see the perfect gift. It's a good bit more expensive than what you wanted to spend, but you just can't pass this gift up. Not a big deal if you have some money saved up, transfer a little bit over to cover the gift and it's no big deal at all.

You could also accomplish all of that with credit cards... but then you'd be in debt. Debt's not a bad thing as long as you can manage it. $13,000 of debt seems like a lot to most people, but fortunately it was manageable for me. I don't have a car payment, I live in an affordable home, and I have a pretty good job. I never missed a payment, and my credit score is now about as high as it can get. The rest of our debt is actually in Ashley's name. lol.

Thanks for all the congrats guys. I am very relieved...happy to be a little closer to being debt-free. I think by June at the latest I'll be completely debt free other than my motorcycle payment. It's going to be a good time. I believe a party will be thrown :)

[JustinS]

I've got about $1,800 left to pay off on my motorcycle, should be paid off before July though. It's an awesome feeling knowing that you are paying off a 2 year loan in 8 months or less. :)

[Drifte]

i think dustin and i are kinda similar with our money. if i cant buy it out right its just kinda like eh, that sucks. and i dont get it. I just keep telling myself someday i will have the money. i thought picking up a 2nd job would be a good idea too, and it was, so good in fact i picked up a 3rd. i shovel snow now for my apt, just whenever for however long i want, its great.

reminds me, any of you guys remember Ian from prairie? dont know if i should put his last name on here, but hes getting married and having a baby real soon.

[Ricky]

i didnt have any debt my whole life. I took a lone out 3 months ago and i will be paying for awhile :roll:

[96-eclipse-gst]

i think dustin and i are kinda similar with our money. if i cant buy it out right its just kinda like eh, that sucks. and i dont get it. I just keep telling myself someday i will have the money. i thought picking up a 2nd job would be a good idea too, and it was, so good in fact i picked up a 3rd. i shovel snow now for my apt, just whenever for however long i want, its great.

reminds me, any of you guys remember Ian from prairie? dont know if i should put his last name on here, but hes getting married and having a baby real soon.

If thats the Ian, that I know. My mouth has dropped wide open.....complete and utter shock.

[ZacFields]

Yeah I know which Ian you're talking about. That's good to hear. Slightly surprising but not all that much. He was always a straight-shooter in my book. Always had a decent head on his shoulders.

For those who haven't seen my other topic, I have replaced the $260/month that I am saving by paying off that debt with a car payment. $150/month (5yr loan) and an extra $30/month for insurance. So I filled that $260/month with $180/month car payment with insurance.

There's only 3 things, IMO, that can be considered "good" debt.

1. Student Loans for school. Don't have to pay them off until you're done with school, but better make sure that spending all that money on school is going to make it so that you make a little more money when you're out so you can afford those loan payments!

2. Home Loans. Just can't pay off a home loan in full most of the time. Great thing about home loans is that you're building equity as you're paying it off. The interest that you pay on your loan is also tax deductible. Won't get all of it back, but you'll get some of it back.

3. Car Loans. This is the big "IF" of the group. A car loan is only a "good" debt if the car you bought is within your budget and is reasonable. A good rule of thumb is that you should try not to finance any more than 30% of your yearly income. So if you make $25,000/year you shouldn't finance anything more than $7,500 of a car. That's assuming you're getting a 4-5 year loan. So if you want to buy a $12,500 car, you should wait until you can put $5,000 down on it.

So in short, I'm cool with this trade-off. I paid off $260/month worth of bad debt payments. Then replaced it with good debt. I was going to need a car soon anyways.

Oh... That reminds me Andrew. Any good ideas on what to do with those struts now that I don't have the talon anymore? :) lol. Maybe someone will buy them?

[96-eclipse-gst]

You sold the talon??? Well hmmm, I just dont know. What did you end up buying?

[ZacFields]

Yah I traded that POS in for an 03 Ford Focus. Only 56k miles on this car. Just needed something that was going to be a little more reliable. Just couldn't deal with all the little stupid problems with it.

viewtopic.php?f=15&t=11272 (http://www.iowaautoforums.com/viewtopic.php?f=15&t=11272)

It's not a big deal though Andrew. Maybe we can throw an advertisement here on IAF and see if anyone wants them. I'm not strapped for cash or anything so it's not a big deal.

Zac

[DustinsDuster]

i just wanted to mention how much i hate my good friend Adam. he's been a computer engineer at Rockwell for a year now(had a job waiting for him right after college). right after school, he decided he should buy a newer, more realiable car to replace the 96 Monte Carlo he bought in highschool. he went out and bought an '02 Audi 1.8T for around $15k. he put $5k in savings down on it, and now, 7 months later, the car is completely paid off. what a jerk, right?

[ZacFields]

Your buddy sounds a lot like me and Ashley when it comes to debt. When we moved out and bought all this stuff for our house, we bought a ton of crap that wasn't really necessary at all (big TV, xbox, etc) and got ourselves stuck with a $13,000 debt bill at about $500/month total.

In our minds, the quicker we can pay off that money, the better. Even though our incomes are good enough that we can afford to pay all of our bills and all of our debt payments every month, the idea of paying all that money in interest annoys the hell out of me.

I'd just rather pay it off and save those monthly bills. If I've gotta dig into my savings to do it, then that's just what I've gotta do. In the long run, it saves me from having to pay a lot of interest. So in the long run, it's just more money in our pockets.

My dad completely disagrees with that logic. He believes that if you get a 5 year loan on a car, you should pay it off for 5 years. If you get excess money you should put it into savings. He has a good point about savings, but he only talks like that because he makes a lot of money and a couple thousand dollars in interest is just nickels and dimes to him.

I've always wanted to run a forum where young people can discuss finances. Maybe one of these days I'll get off my duff and start it up. Knowlege is power, when you're talking about finances. You don't need to make a ton of money to be able to look like you make a ton of money. You've just gotta know the tricks of the trade.