Paying off debt

smitty2919

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It's an interesting journey acquiring debt, working hard to earn a good salary then getting some things paid off. Going to Engineering school and graduating making somewhere around $850/mo in just student loans...

Thankfully my wife and I are on the same page when it comes to paying off bills and debt. We are mid 30's, no kids (not having them), two dogs, two cats and a horse lol. She has a equine hobby and I like to autocross and car hobby so things CAN be expensive but we are smart about it.

Just recently, we got through with a mortgage refinance going from 5.25% to 3% saving us $250 a month. With the cash out option for house equity we made a plan to pay off some debt.

Our previous "debt payoff period" was another ~5 years. Doing the refi and following the Dave Ramsey "debt snowball" mentality (we have been doing this for a while) we have been able to kick down the payoff period to ~2.5 years. My Corvette got paid off, her Lexus will be paid off in a couple of weeks.

We previously were putting $300 of extra payment on top of whatever minimum loan payment we were working on. Mortgage saved us $250, paying my car off freed up $350 so that allows us around $900 EXTRA payment on top of minimum loan payment. THAT makes me happy. The fact that if we have any car emergency or unexpected bill, we can simply put the $900 extra money onto that while still paying minimums on all our bills puts your mind at ease.

It takes patience and self control to NOT pocket the money you "freed up" after paying off a loan. We have found a balance of paying bills/saving/spending money for fun and we have made an effort to not increase spending. As of now the plan is to have no debt (other than a mortgage) in ~2.5 years. Then within 3-5 years either move to a house we really want or to build one, and upgrade to a newer truck.

No real point to this post other than sharing my excitement about this process and that there is light at the end of the tunnel!
 

MG0h3

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Good job.

I can’t stand payments, other than my rental properties since it’s such a nice write off as a business expense.

If you can swing it, keep the house you have as a rental property if you go to buy another house.

I was an “accidental landlord” at 20yrs old and it really has worked out.


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black92

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It really does take patience and self-control to not want to spend all the free cash you have after paying off debt, but it's really nice to see the bank accounts load up with money and know you are financially independent.
 

FJohnny

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Awesome! You and your wife sound on track for a really successful go at it. There's nothing better for a marriage than removing the single biggest stressor: money issues. Congratulations on making good life decisions. I like your chances.

Of course, when you both are nearing 45 and decide you need kids after all......

Just kidding. Again, well done!
 

VEGAS_SVT

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My wife and I are in almost the same exact spot as you guys. Mid-thirties, no kids, just refinanced to 3% lol. She has a Jeep that will not be sold, so just focusing on paying that off. I recently sold my super duty saving us $1000 month and I got enough cash out of it that I am looking to buy a terminator outright. We found Dave Ramsey about a year ago, and since then we have knocked out about $50k in debt. It's a great feeling. I don't agree with everything he says, but it completely changed my mind set. I plan to be able to "retire" in my 40's.
 

quad

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Many guys that go into trades (electrical, plumbing, carpentry etc.) end up better off financially than their buddies that went to college. However their bodies do get beat up. I am a college graduate myself and was fortunate because my dad's employer paid for all his children's college tuition and even provided funds for cost of living while in college. My sister went through medical school that way.

I feel for those that have student loans. Good luck and it sounds like you're making progress!
 

rotor_powerd

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Debt sucks, cash is king. Took me longer to figure that out than it should have but we kicked the debt habit a long time ago. Life is a lot better when your finances are simple and you have cash in the bank
 

CobraBob

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Debt sucks, cash is king. Took me longer to figure that out than it should have but we kicked the debt habit a long time ago. Life is a lot better when your finances are simple and you have cash in the bank.
Yes, it is. I'm at that point now. Our only debt is the balance on our mortgage.
 

Lambeau

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Great story. Congratulations, way to go OP.

I look back at vehicles we had and how we focused on our family in the earlier years. It was the right choice for us. We've been blessed and damn lucky.

Retiring early (62) is nice. Even if I kack, my wife will be in good shape with fewer worries - lol. It's also nice to spend time with kids and grandkids, and to be able to get them some extra "stuff".
 

smitty2919

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Having bills = having to go to work.

Yep. Something I noticed that without bills you don't have the pressure to make more and more money. All about the debt to income ratio.

Tradesman do seem to come out better earlier, but to some degree what is all the money in the world good for if you aren't healthy enough to enjoy it lol. My father emphasized using your brain more than your muscle. I'm in NO way looking down on tradesman because they make the world go around as well and sometimes I'm jealous of some tradesman I know spending money on hobbies like it's their jobs lol.
 

DSG2003Mach1

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good work OP!

Only thing I owe on is my house, I've been there 14.5 years, likely paid off before the 20 year mark. I keep getting the itch for a new truck and such (which i'll ended up "needing" to do sooner than later) but Id rather keep banking that money, take some little vacations and such. Now I just need to quit wasting so much money on bullshit fast food and stuff.
 

smitty2919

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good work OP!

Only thing I owe on is my house, I've been there 14.5 years, likely paid off before the 20 year mark. I keep getting the itch for a new truck and such (which i'll ended up "needing" to do sooner than later) but Id rather keep banking that money, take some little vacations and such. Now I just need to quit wasting so much money on bullshit fast food and stuff.

We are in a similar boat. Our truck is a 03 2500 Silverado 2WD extended cab. It's a solid truck and does the job but it's nearing 200k mi and with future plans of a goosenack horse trailer and an enclosed car trailer, a more substantial truck would be wise. 4 door 4x4 2500 would be our goal. Splurge a little for a "job well done" paying stuff off.
 

nickf2005

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Good move OP. I'm glad some of us barely millenials get it.

We got a hold of Dave a couple years out of college. Agree that I'm on board with his principles, for the most part. There's a few places where there's more than one way to skin a cat, and not as cut and dry as he makes it seem.

We're also a mid 30's couple (one child with a funded 529). Only a mortgage that should be paid off in 7 years. I can't imagine having that $3,500/month in our pocket.

I think one of the most overlooked things for mid-20's to mid-30's folks is investing for retirement, because it seems so far away and we "could use that money now for debt or life".

We've been shoveling in 10-15% for nearly 7 years now and the projected balance at age 60 is astonishing. We make decent money, but I never would have thought I'd potentially be sitting on $5M+ at retirement. I also get some profit sharing thrown in there every year, and that's definitely helped a lot too.

Keep it up. There's, almost literally, a pot of gold atthe end of the rainbow.



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