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Getting out of debt

 
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amother




OP
 

Post  Wed, Sep 30 2020, 7:57 am
BH, I have a good job. But I feel silly for making the financial mistakes I've made over the years. Money is something that makes me a little nervous and I'd rather just not think about it. We are not the "lets get rich" type of people and we don't have the stomach for investing and diversifying. However, we do it to a minimal extent. We are so careless. We don't track our expenditures thus we don't balance our checkbook. BH, we can pay our bills as long as we both have jobs and we have a savings for the moment.

It's 25 years after my DH graduated college and 20 years after my grad school. And we both still have student loans. I previously was resigned to the fact that we will just be paying them until we are retired.

And because I've been thinking about this lately, I have realized quite late that our plan or lack of plan means we will pay twice the loan amount that we originally took out. Which makes me ill.

So, I am contacting a financial planner. We have kids in school and tuitions to pay.

I would like to hear from people who have had success with paying off their debts.
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NotLazySusan




 
 
 
 

Post  Wed, Sep 30 2020, 9:25 am
We were over $50,000 in debt - and not from student loans. Money was very tight and not managed well so our credit card debt ballooned from the high interest rates. We paid off about $30,000 of it by being frugal as well as getting better paid jobs. You can do it!!
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NotInNJMommy




 
 
 
 

Post  Wed, Sep 30 2020, 9:27 am
I've found a lot of good suggestions and inspiration from Dave Ramsey. It's easy to google his stuff online to see if any of his approach is helpful for you.
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amother




Aquamarine
 

Post  Wed, Sep 30 2020, 12:52 pm
amother [ OP ] wrote:
BH, I have a good job. But I feel silly for making the financial mistakes I've made over the years. Money is something that makes me a little nervous and I'd rather just not think about it. We are not the "lets get rich" type of people and we don't have the stomach for investing and diversifying. However, we do it to a minimal extent. We are so careless. We don't track our expenditures thus we don't balance our checkbook. BH, we can pay our bills as long as we both have jobs and we have a savings for the moment.

It's 25 years after my DH graduated college and 20 years after my grad school. And we both still have student loans. I previously was resigned to the fact that we will just be paying them until we are retired.

And because I've been thinking about this lately, I have realized quite late that our plan or lack of plan means we will pay twice the loan amount that we originally took out. Which makes me ill.

So, I am contacting a financial planner. We have kids in school and tuitions to pay.

I would like to hear from people who have had success with paying off their debts.


of course you can do it.

I also recommend checking out Dave Ramsey
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amother




Amethyst
 

Post  Wed, Sep 30 2020, 8:49 pm
Dave Ramsey is excellent!
Some tips from him...
Pay off your highest interest debt first
Or pay off your smallest debt first and go from there until you have fewer debts left. (Easier on the mind when there’s less to worry about)
Some from my husband;
1. track your expenses from one month by looking at bank statements, cc bills, other bills etc.
2. Make a list in the beg of the month of when your bills are due and when paychecks are coming in- make sure you have enough to cover everything
3. Read Dave Ramsey books
4. Don’t ever pay your cc bill late!!!
5. Get a cc with a good cashback like the citi doublecash or the American Express 5% cashback in your highest spending areas/rotating (or something like that)
6. Give an extra payment each year toward the principle amount on your mortgage- cuts off a few years + the interest you would pay
7. Finance instead of lease your car
8. Call your car insurance and see if you can get discounts for children who are students, don’t drive a lot, out the worse driver on the cheaper car...

Hope some of this is helpful!
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mother@4




 
 
 
 

Post  Wed, Sep 30 2020, 8:53 pm
Dave Ramsey And again Dave Ramsey. Use his app it’s free, you’ll feel so good knowing your income and expenses, and the main thing is, he is not against spending but he is against debt.
You can do it, we did it with 50k
Hatlucha
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amother




Blush
 

Post  Wed, Sep 30 2020, 11:26 pm
Serious question, what can Dave Ramsey do to help a Frum family if our debt is solely due to tuition? Ok, I can save $5 by buying toilet paper in bulk but how does that help when my tuition and basic expenses is more than our income?
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Goldie613




 
 
 
 

Post  Thu, Oct 01 2020, 12:34 am
Start by getting a handle on what you are spending and what your regular expenses are.

Gather up all your regular monthly bills and make a list of those. This includes rent, car payments, car/health insurance, tuition, loan payments, credit cards, utilities, cell phone bills, babysitters - anything that you know will be a standard expense of a generally consistent amount every month.

Next add up the monthly stuff that has more flexibility, but again is pretty standard from month to month. Think dry cleaning, haircuts/sheitel setting, transportation costs to get to work, costs of any regular doctor visits or maintenance medications your family may use.

Now here comes the more challenging (annoying?) part - write down EVERYTHING you spend over the next two weeks. (If you want it to be more accurate, maybe wait until the chagim are over before starting this). And when I say everything I mean exactly that - every pack of gum, every coffee run, every quart of milk from the store, every quarter for the parking meter.

Once you have all of that, take a good hard look and see what's going on.

Can any of your monthly bills get cut? Some companies will discount you if you switch to autopay. Cell phone companies sometimes run promotions that may be cheaper than what you have now, same thing with cable and internet. If your gas or electric bill seems out of line you can ask your utility company to help you figure out what's going on. If the water bill looks bad, check for leaks or dripping faucets. Also, see if you are getting charged any late fees or over the limit fees, as those are the easiest to remedy (while also being easy to overlook).

Are some dry cleaners cheaper than others by you? Can you wash your sheitel less often? Can you or your spouse cut back on transportation costs by going a different way (less tolls), taking a different form of public transportation or by using a gas station that offers a discount card or charges less?

And now we loop back to the hard one - the daily odds and ends of life. Take a look at that two week journal and see what jumps out. Are you stopping daily for a few groceries on the way home from work at the closest/easiest store, but paying an extra 5 or 10 dollars each time, vs what you would pay if you did a supermarket run once a week? That extra $5 a day is roughly an extra $100 a month, or $1200 a year. Are you both buying lunch daily as opposed to brown bagging from home? Add on few thousand there. Do you love buying the newest hardcover book as soon as it comes out? Wait for the paperback to be available to save half the cost, or borrow it from the library for free. You can CHOOSE to spend your money on the extras I mentioned above, but just do it because you want to, not because you had an "oops" moment and didn't realize what you were spending.

Once you know where your money is going, you and your spouse can figure out what makes sense for you and if you want to make any easy (or not so easy) changes to your budget.

Sorry for the megillah - hope it helps :-)
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mother@4




 
 
 
 

Post  Thu, Oct 01 2020, 12:42 am
amother [ Blush ] wrote:
Serious question, what can Dave Ramsey do to help a Frum family if our debt is solely due to tuition? Ok, I can save $5 by buying toilet paper in bulk but how does that help when my tuition and basic expenses is more than our income?

Very good question, but you really have to listen to his talk shows to understand it.
In short when someone knows and writes down their expenses and income, first of all you save more then $5, plus you know how much you’re missing and you know let’s say you need another $1250, when you know an amount and don’t tell me you know because you’re just estimating, it’s much easier to see and make a plan how to get there.
Anyway don’t know if I explained it well listen to him for long enough, I’m telling you you’ll get it, haven’t heard from anyone who didn’t like his way after really listening to him.
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NotInNJMommy




 
 
 
 

Post  Thu, Oct 01 2020, 8:08 am
amother [ Blush ] wrote:
Serious question, what can Dave Ramsey do to help a Frum family if our debt is solely due to tuition? Ok, I can save $5 by buying toilet paper in bulk but how does that help when my tuition and basic expenses is more than our income?


True you can't necessarily really meet some of his spending/savings goals per paycheck(X%, Y%), but Numbers have to add up. You can't spend more than you are bringing in, and you have to spend less to dig out of debt.

If you have to pay tuition, then you have to not pay for other things, or be more modest about other things within the budget. Or maybe you have to be more forceful in tuition negotiations.

Cheaper house? Cheaper car? One car? (if possible where people usually have 2) No car?

Smaller budget for simchas. Not making a wedding for a bar mitzvah. Not keeping up with the Jones'. Getting less take out. Do your own haircuts. (if possible...)

"If you will live like no one else [frugally], later you can live like no one else[without the worries and necessity to deal with debt later in life when one is more likely on a fixed income]."
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amother




OP
 

Post  Thu, Oct 01 2020, 8:40 am
All very helpful. I spent the night last night going through our bank statement and categorizing our expenses. First of all, yes it’s holiday time, but I can not believe how much we spend on food. And Amazon Prime is not my friend. My DH is even worse than me. I haven’t even talked to him about this “get out of debt” idea yet because he is so nervous about money and prefers to not pay the big bills. (I have to do that) and not pay off a credit card balance because it’s too much all at once. But we could if we wanted. I think it stems from his natural state of anxiety and for so many years, going through school and having kids, we were not really making it and had to rely on the state and parents to help out.
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4thebooks




 
 
 
 

Post  Thu, Oct 01 2020, 9:00 am
Someone told me of a frum financial advisor who is supposed to be great.

https://taubersolutions.com/
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amother




Blush
 

Post  Thu, Oct 01 2020, 9:14 am
Quote:
True you can't necessarily really meet some of his spending/savings goals per paycheck(X%, Y%), but Numbers have to add up. You can't spend more than you are bringing in, and you have to spend less to dig out of debt.

If you have to pay tuition, then you have to not pay for other things, or be more modest about other things within the budget. Or maybe you have to be more forceful in tuition negotiations.

Cheaper house? Cheaper car? One car? (if possible where people usually have 2) No car?

Smaller budget for simchas. Not making a wedding for a bar mitzvah. Not keeping up with the Jones'. Getting less take out. Do your own haircuts. (if possible...)

"If you will live like no one else [frugally], later you can live like no one else[without the worries and necessity to deal with debt later in life when one is more likely on a fixed income]."


We already do all of the above. We live very simply, very frugally. We already do haircuts at home. We rarely buy takeout. We make the smallest, simplest simchos of our social group. We live in one of the cheapest houses in town (on a block with no other frum families bc it was cheaper). We still have expenses that are unavoidable. We cannot bargain down our tuition any further. It is what it is. We need 2 cars, one to get kids to school and one to get to work. We've tried cheaper cars but they break down and need expensive repairs. You end up paying on either end.
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NotInNJMommy




 
 
 
 

Post  Thu, Oct 01 2020, 9:44 am
amother [ Blush ] wrote:
Quote:
True you can't necessarily really meet some of his spending/savings goals per paycheck(X%, Y%), but Numbers have to add up. You can't spend more than you are bringing in, and you have to spend less to dig out of debt.

If you have to pay tuition, then you have to not pay for other things, or be more modest about other things within the budget. Or maybe you have to be more forceful in tuition negotiations.

Cheaper house? Cheaper car? One car? (if possible where people usually have 2) No car?

Smaller budget for simchas. Not making a wedding for a bar mitzvah. Not keeping up with the Jones'. Getting less take out. Do your own haircuts. (if possible...)

"If you will live like no one else [frugally], later you can live like no one else[without the worries and necessity to deal with debt later in life when one is more likely on a fixed income]."


We already do all of the above. We live very simply, very frugally. We already do haircuts at home. We rarely buy takeout. We make the smallest, simplest simchos of our social group. We live in one of the cheapest houses in town (on a block with no other frum families bc it was cheaper). We still have expenses that are unavoidable. We cannot bargain down our tuition any further. It is what it is. We need 2 cars, one to get kids to school and one to get to work. We've tried cheaper cars but they break down and need expensive repairs. You end up paying on either end.


Yeah, I've been there. After buying older cars that came with unpredictable repairs (and living somewhere you need a car and being a single mom), I did ultimately decide to lease a couple years ago. I found a very good deal on a vehicle just big enough for us. My car insurance went up, but my fuel costs went down, and I was ultimately averaging less than what I was paying for all the repairs on the older car and car rentals when my older car was in the mechanic at I needed to get to work, etc.)

I think one key is keeping clear cheshbonos of what you're spending. Sometimes just doing that can uncover money you were spending that maybe you don't really need to spend. Or things you didn't realize you could do for cheaper.

Also, you just have to see what your budget is, and stay within it. After you take out all the other bills. You might find ways to be creative that you hadn't considered before. I know I did. I recently found much cheaper phone options (cell and VoIP) and have done a lot more shopping on FB marketplace or getting stuff through the local FB Buy Nothing group.
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