We are starting to head in the right direction. We are off like a herd of turtles, I tell ya!
So the newest plan.....
1) Personal loan that will pay off G-man's retirement loan (which isn't even in my master tally....it is auto deduct from his pay, so I never think about it).
2) Pay off retirement loan, and then in 60 days (per the terms of the acct), take out the max we can and pay off CC1 and Car. This should leave about 12k that we can use towards a refi.
3) Refi the house. In order to avoid PMI, we probably will need some cash (see #2). Hopefully we will still have a little left over to fund an emergency fund, maybe to pay off loan (see #1).
All of this, plus other changes we recently made, should increase cash flow. This plan will take us roughly until Jan. 1, which then we will see where we are. It is really all just a reshuffle of the deck. The debt really doesn't go away, just is redistributed. Once all the redistribution happens, THEN we are in a situation of repayment.
I think I will feel better when I start to see things decrease. I am still upset/frustrated/sad that we are STILL not at a place where we are breaking even. This plan makes us just go LESS in the hole each month.
Hey Mysti. OK..It seems we have had something to say on each of your posts today. You are timely in your writings.
ReplyDeleteIt sounds like you are way over-complicating this debt pay off. All these loans that pay off loans so you can get new loans...it is, like you said, shuffling the debt. I would simply list out my debts smallest to largest likse so:
Medical $1,873.00
Student Loan $1,795.19
CC 3 $6,793.74
Car $9,342.19
CC 2 $10,878.57
CC 1 $17,531.63
Student Loan $28,778.27
Make minimum payments on everything but the smallest debt (Medical 1,873). On that one, make the minimum plus everything else you have left over after the month. When that one is paid..you can cross it off and leave it for dead. Then, you can take the next debt (Student loan) and make the minimum payment, plus everything you were paying on the first debt and knock that away. You will get REAL victories in short order!
Don't sabotage it and complicate it by trying to run loan and loan after loan. I mean, credit has done wonders for all of us..why do any more :)
Secondly, you have to get on a budget and make every dollar have a name every month. Without fail (ok, you get to fail the first couple months, we did..lol)
We would be glad to walk along side you and help! We have paid off $30k in 1 year. It's totally possible (and, we aren't even that disciplined)
Trust me....I have read Dave Ramsey. The problem has been cash flow. Just taking the minimum payment on all the debt (not including gas, food, etc)....just the basic "fixed" items....we are already over our monthly take home pay. Our interest rates have screwed up everything.
ReplyDeleteWe tried to lower the rates, and it backfired. They cut our lines of credit and RAISED the rate!!
So we have to reshuffle to get lower rates so we can do the debt snowball. The reshuffle and the refi on the house will free up several hundred dollars towards gas, groceries.
I might not be explaining it well. But we tried DR as it is supposed to be, and we can't make the minimum payments, so there is no extra to go to debt.
Have you looked at putting your student loans on hardship deferral (if that is even an option). As you can tell, I am passionate about getting out of debt :) If I get too intense, just tell me to back off...lol
ReplyDeleteI said in the beginning I want to hear people's opinion. Friends and family tend to tell you what you want to hear. So have at it. I am a big girl (or at least I try and put my big girl panties on!! ;) )
ReplyDeleteHardship deferral isn't an option...already tried. We just redid the payment schedule, so the payments will be drastically reduced. We were paying $145/mo on loan 1...now that is $83 for the next 24 months.
I think once the deck is reshuffled we can debt snowball. We just needed to be able to free up some cash, hence the reshuffle. The reshuffle was never meant to reduce the actual debt...just get the monthly payments to a point where we may be able to breathe.
Even with stopping with retirement contributions for now? Yes, I'm just joining in here...
ReplyDeleteI've also heard about people renegotiating/settling medical debt. Not sure where you'd start on that, but... I think that's the one I feel for you on the most.