phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,410
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Post by phil5185 on Oct 14, 2014 19:57:40 GMT -5
"""You hate this feeling and vow to get out of this hole."""
But that may not be a good goal. First, your Net Worth went down only a small amount (mainly cuz your house equity went up) - so calculate your before and after NWs and compare them.
Then take an honest look at your attitude on debt - we were all raised to think that debt is "bad"- but is it really? If you can borrow at 4% and invest it at 11% I'll take that deal all day long. (Actually, I do/did and became wealthy).
This time don't prepay your house loan, keep it for 30 yrs - put your own capital to work elsewhere.
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edenky22
Initiate Member
Joined: Oct 10, 2014 11:35:15 GMT -5
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Post by edenky22 on Oct 15, 2014 8:13:15 GMT -5
That was me and my husband. We had just gotten married and between us, we could easily meet our bills, didn't completely combine funds, and just didn't pay that close attention to what the other person was doing. Then we started building our house and when we got done and we looked at our financial output and it was like crap, what in the world happened. It was a good wake up call. 8 years later, our income is only 70% of what it was, we have 2 little kids, and we've had over $40k in just out of pocket medical expenses, yet somehow we've managed (and thrived, our retirement has gone from $15k to over $100k) because that wakeup call got us to sit up and take notice and get our financial house in order. If you had told me 8 years ago how the last 8 years would go, I would have told you we would be bankrupt and curl up in a ball and cry. ![](http://images.proboards.com/new/tongue.png) But you know, what doesn't kill you makes you stronger and I truly believe that. ![](http://images.proboards.com/new/wink.png) This is awesome. Thank you.
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Deleted
Joined: Jun 25, 2024 23:00:56 GMT -5
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Post by Deleted on Oct 15, 2014 8:17:00 GMT -5
"""You hate this feeling and vow to get out of this hole.""" But that may not be a good goal. First, your Net Worth went down only a small amount (mainly cuz your house equity went up) - so calculate your before and after NWs and compare them. Then take an honest look at your attitude on debt - we were all raised to think that debt is "bad"- but is it really? If you can borrow at 4% and invest it at 11% I'll take that deal all day long. (Actually, I do/did and became wealthy). This time don't prepay your house loan, keep it for 30 yrs - put your own capital to work elsewhere.I didn't see anything about prepaying before.
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edenky22
Initiate Member
Joined: Oct 10, 2014 11:35:15 GMT -5
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Post by edenky22 on Oct 15, 2014 8:17:41 GMT -5
Have you sat down to run the #'s and have a general idea of where the money went and know that there are no more leaks now that your old home is sold? You spent $11,000 on the downpayment/closing costs so that is accounted for. With the rest of the money you had in savings, plus the $10,203 added in debt, that would mean that those 9 months before the house sold were costing you $2000 a month. As long as that is accurate in terms of what that house was costing you to, then make your new plan and you will be fine. If you know that house wasn't costing you $2000 a month, try to figure out any other 1 time moving expenses that dipped into your savings during that time and see if you can come up with a more accurate number. All of this is just to make sure that you haven't suffered from lifestyle creep. I know for me being a saver, that when I give myself the okay to spend I can easily overspend and trying to reign myself in can be difficult. Next step I'd say is to take the next month and track your expenses. You can still make your new budget in this time frame, but put the focus this month on tracking expenses, not on matching your budget exactly (but make sure you're not using the card either). This debt is directly related to the cost of the two houses (and mainly the one that just sold). I haven't bought anything new for my current house, and don't buy myself much of anything at all in general. I'm a nautral born saver. I like the security of it. As I menioned previously (I think) my job has always been stable, but right now is a scary time with that too. I just feel like it's a perfect storm happening in my life at the moment.
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edenky22
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Post by edenky22 on Oct 15, 2014 8:20:13 GMT -5
It's not clear from your posts whether you were able to write a check for $11K from savings or whether you had to take out a loan to get the old place sold. Once you find out how much is left over after you have paid everyone the minimum, you can start writing debt amortization tables and figure out how long it will take to dig yourself out of this hole. If you've never done this before, it probably sounds masochistic, but I can testify that it helps. It kept me sane when I had $200 in the bank, $14K of debt and was making $14,600 a year. Haapai's former situation and her story of digging out of her hole making so little money is one of the most inspirational stories here.
![](http://syonidv.hodginsmedia.com/vsmileys/thumbsup.png)
I cash flowed the $11,000. No loan for that. How do you write debt amortization tables? And Haapai....what you did was IMPRESSIVE!
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edenky22
Initiate Member
Joined: Oct 10, 2014 11:35:15 GMT -5
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Post by edenky22 on Oct 15, 2014 8:22:33 GMT -5
edenky22............this is not a "downtime" for you! Think of all the positives. You saved $20k and owned a house. You moved onto the next stage of you life and built a new home (hopefully the one you want!). You used the savings to take the next step. Now you move on to the next step of rebuilding your savings and retirement fund. There's nothing wrong. You didn't do anything wrong or bad. You moved on to the next stage of your life. Congratulations. Thank you! What a great, positive way to look at the situation. I really appreciate that you gave me a new perspective on this. I know you can never 100% predict life or plan for everything, but if it goes the way I want it to, I believe this is my forever home.
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edenky22
Initiate Member
Joined: Oct 10, 2014 11:35:15 GMT -5
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Post by edenky22 on Oct 15, 2014 8:32:03 GMT -5
"""You hate this feeling and vow to get out of this hole.""" But that may not be a good goal. First, your Net Worth went down only a small amount (mainly cuz your house equity went up) - so calculate your before and after NWs and compare them. Then take an honest look at your attitude on debt - we were all raised to think that debt is "bad"- but is it really? If you can borrow at 4% and invest it at 11% I'll take that deal all day long. (Actually, I do/did and became wealthy). This time don't prepay your house loan, keep it for 30 yrs - put your own capital to work elsewhere. Thank you so much for responding Phil. I respect your knowledge tremendously. I didn't prepay the last loan. The loss was from the decrease in Market Value from when I bought (2005) until I sold (2014). $7500 of the debt is on a 0% credit card. The other $1900 has an interest rate of 13.24% and the remaining (about $900) is at 15.24%. I feel more comfortable working your type of plan, when I know it is all low interest, and that I can pay off it at any time if needed. I do not feel that way currently. I konw you said you don't keep much of an emergency fund, but with the type of person I am, it is a mental need for me. I value financial security. If my financial situation was currently what it was a year ago, I wouldn't mind working the type of plan that you suggest. I hope to get there soon.
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Deleted
Joined: Jun 25, 2024 23:00:56 GMT -5
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Post by Deleted on Oct 15, 2014 8:34:19 GMT -5
"""You hate this feeling and vow to get out of this hole.""" But that may not be a good goal. First, your Net Worth went down only a small amount (mainly cuz your house equity went up) - so calculate your before and after NWs and compare them. Then take an honest look at your attitude on debt - we were all raised to think that debt is "bad"- but is it really? If you can borrow at 4% and invest it at 11% I'll take that deal all day long. (Actually, I do/did and became wealthy). This time don't prepay your house loan, keep it for 30 yrs - put your own capital to work elsewhere.I didn't see anything about prepaying before. says she made double mortgage payments for 9 months
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Deleted
Joined: Jun 25, 2024 23:00:56 GMT -5
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Post by Deleted on Oct 15, 2014 8:38:08 GMT -5
I didn't see anything about prepaying before. says she made double mortgage payments for 9 months Single payments on two houses trying to get the one sold.
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Deleted
Joined: Jun 25, 2024 23:00:56 GMT -5
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Post by Deleted on Oct 15, 2014 8:40:00 GMT -5
says she made double mortgage payments for 9 months Single payments on two houses trying to get the one sold. ah, I read it wrong then. I thought she made double mortgage payments on the one she sold and still had to bring $11k to the table
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Rocky Mtn Saver
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Joined: Dec 23, 2010 9:40:57 GMT -5
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Post by Rocky Mtn Saver on Oct 15, 2014 8:43:29 GMT -5
Haapai's former situation and her story of digging out of her hole making so little money is one of the most inspirational stories here.
![](http://syonidv.hodginsmedia.com/vsmileys/thumbsup.png)
I cash flowed the $11,000. No loan for that. How do you write debt amortization tables? And Haapai....what you did was IMPRESSIVE! You can find a lot of help with amortization and figuring out payoff plans at www.bankrate.com/calculators.aspx
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edenky22
Initiate Member
Joined: Oct 10, 2014 11:35:15 GMT -5
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Post by edenky22 on Oct 15, 2014 8:59:41 GMT -5
Single payments on two houses trying to get the one sold. ah, I read it wrong then. I thought she made double mortgage payments on the one she sold and still had to bring $11k to the table Sorry. I stated that poorly. MPL is correct. I meant I had my new mortgage payment, as well as the mortgage payment on the old house (plus taxes and utilies) for 9 months.
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edenky22
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Post by edenky22 on Oct 15, 2014 9:00:28 GMT -5
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Plain Old Petunia
Senior Member
bloom where you are planted
Joined: Dec 21, 2010 2:09:44 GMT -5
Posts: 4,840
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Post by Plain Old Petunia on Oct 15, 2014 11:29:30 GMT -5
ah, I read it wrong then. I thought she made double mortgage payments on the one she sold and still had to bring $11k to the table Sorry. I stated that poorly. MPL is correct. I meant I had my new mortgage payment, as well as the mortgage payment on the old house (plus taxes and utilies) for 9 months. Well, you should have no trouble paying off the credit card debt and rebuilding your savings now that you are done paying on the utilities and mortgage for the old house. You'll be back in good shape in no time!
Congrats on your new home.
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