воскресенье, 6 ноября 2016 г.

How We Ditched $18,000 of our Debt in a Flash

How We Ditched $18,000 of our Debt in a Flash


How We Ditched $18,000 of our Debt in a Flash


Go girl! What is it Dave always says… Live like no one else now so later you can live like no one else? Or something like that? However it goes, you’re doing it! Rock that Sequoia! (Which looks tan to me, btw, lol.) You are an inspiration!


~Abby =)


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Thank you Abby!!! In the sun it looks tan but in our garage it looks purple. It’s technically called ‘Thunder Gray’.


I love your enthusiasm to get out of debt and your willingness to sacrifice! I would have kept the 401k, but it was yours to decide. Did they withhold taxes and penalty? If not, be prepared for that at tax time.


They withdrew the penalty but not the tax. We set the tax money aside to have it ready to go for tax time!


Good for you. A lot of times people just don’t realize things like that and have a rude shock at tax time. I have an ESPP through my work that causes me tax grief, because it’s so hard to predict how much money I will make on it each year and no taxes are withheld. So far, I’ve always managed to have put aside plenty to cover it, but it always makes me uneasy until I have completed our tax return.


I think you made an excellent choice. My husband got Gazelle and sold his motorcycle and truck and eliminated nearly $20k of debt within 72 hours. As much as I wanted him to get on board with getting out of debt, it did freak me out a little. I was just scared that he was rushing into it and it was happening too quickly. But a few days later we found a car that he liked and paid cash for it. It was absolutely the best thing we could have done, he “dynamited the log jam”.


PS- I say your new car is definitely a dark grey/tan, which I like!!


Thank you so much! I’ve decided that my car is a ‘mood ring’ color. It changes color depending on my mood. And awesome job on dumping the debt! He definitely did dynamite that log jam and it is a really awesome/slightly weird feeling knowing that we have zero car payments!


This is so awesome Jess! Congrats again, I know how hard this was to do- remember when I sold my 2007 accord for the ‘death trap’ 1997 accord- the one that growled when you locked the doors. I felt very humbled driving off the lot in that thing- but it was the best decision I ever made. Your going to love not having that payment


I miss your growling Honda!!! And I thought of you as we drove off the lot, you kept me going even in spirit!


I don’t know if Dave would’ve agreed with cashing out the 401K but I’ve been thinking of doing that too. To think that my 401k could get rid of my student loans now is mind blowing. I think of all the money I could save if I weren’t paying loans. Crazy! That’s a mortgage right there.


Do you mind me asking how much you lost by cashing out your 401k? Example if I have $20k in my 401k, would I get 50%/$10k? and then all those penalties. I have no idea where to even begin.


On a separate Dave Ramsay praise story, I got my finances in order last February and have been attacking (successfully and unsuccessfully) my CC and student loans. I know where my money is going now. This year I took a leap of faith and gave sacrificially. Then I received a letter from a creditor that I owed my school another $15k. I was sad for a minute, and then decided that I was sure I didn’t owe it because I’ve been honoring God with my finances and know exactly where my money is. Turns out it wasn’t my debt, even though they were coming after me! That’s $15k that I potentially got myself out of. Thank God for Dave Ramsay!


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I know it must have been so hard to give up that Tahoe but what a smart decision! Our family lives off of one income so I can stay home with my kids. God has been so good to provide what we need and He’s the number one reason it works. Besides that the best reason we can afford this is not having a car payment. I’d rather be content with a decent car instead of my dream car.


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This is awesome! You have to do what works for you and your family. You ditched $18K and I’m sure you are all feeling wonderful. We just bought our new to us minivan this last week too and we paid it cash. Great feeling! Again, great job and keep it up.


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That’s an amazing feat! That’s like the equivalent of a part-time job you don’t have to work now. Congratulations on taking such a huge (and humbling) step towards being debt-free.


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First of all congratulations on your new car !! What a relieved not to have that huge number debt on your back.


We have done the same things ! We used to lease a brand new Honda Pilot ! What a big mistake. But like wise said we all learn from our mistake and some humiliation. We let go the Honda Pilot and my uncle gave us his almost dead machine Toyota Camry sedan and amazingly last for almost a year until it totally dead and we sold it to a junk yard. After that we bought cash Honda Civic Hybrid “new to us” and so far we love it and very economical especially with the gas price now days.


Most of all we don’t owe anybody and its ours.


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Good for you! Sometimes we have to make those sacrifices for long term gain.


God will bless your obedience.


Wishing you a lovely day.


xoxo


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Congrats on making such a bold move. It is freeing to be free of having to make a car payment every month. I miss that feeling a lot, but in all due time.


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Kudos to you! I went through the financial peace course a couple of years ago as I was preparing to purchase a home. I believe the biggest sacrifice, as Dave says is living like noone else now so that you can live like noone else in the future. Great post!


My husband and I are working on getting out of debt as well and your blog has been a great encouragement. I know this wasn’t easy we have thought about selling our car to get rid of our car payment but keep changing our mind. Good Job!!


Thank you Irina! I’m so happy that my blog has been an encouragement. Getting out of debt is a challenge but it is so worth it.


We had a yukon xl we sold to get out of debt. Except we just lived with 1 car. Squished all 5 of us into a honda fit LOL. Also, its a stick shift and I refuse to/can’t drive it.


But we paid off the loan, rest of the hospital bills from baby #3, got three months into emergency fund. Within 5 months (& with our tax refund) we had the ef closer to 6 months and bought a used second vehicle for our family.


Definitely a good decision. Being debt free is so worth the temporary pain {although it wasn’t bad being stuck at home this winter because it was SO cold for SO long!}


Oh goodness! I couldn’t imagine 5 people in a Honda fit! That’s so awesome that y’all were able to do so much in such a short time frame! Heck yea!


My husband and I did the same thing about six years ago. I decided to go back to school, which meant I cut back on my hours at work and this all happened around the time the economy collapsed. My husband is a tradesman and work was becoming scarce. In order to make ends meet we decided to sell our 2006 Toyota 4Runner and buy a little sedan. We only had a couple grand to spend so we bought a 98 Honda Civic. This was a HUGE adjustment for me. I was used to driving brand new cars with all the bells and whistles. The Honda, on the other hand, was stripped of any extras and the automatic locks were the only modern thing in it. It took me a while to get over being seen in it because I felt people would judge me negatively. I tried to focus on the fact that we no longer had a car payment and that the little car got exellent gas milage. When our financial situation turned around, and we traded the Honda in for the Subaru I now drive, I actually felt a little sad leaving the little green car behind in the dealership lot. It was a humbling experience and I feel like it taught me to not care about such silly things like concerning myself over what others think or feeling like I needed to have a car with the latest features. I look back on all the money we’ve wasted over the years buying new cars and I feel like we could be further along if we hadn’t focused on a need that really isn’t one. Thanks for sharing your experience! I actually think your Sequioa looks great and the color is better than the Oscar the Grouch green Honda I had.


Thank you for sharing Jess! It is such a humbling experience and I’m learning to love the car more and more. When I did our April budget and saw how much more money we suddenly had I was like ‘Heck freaking yes! Peace out Tahoe!’. I love that called your Honda Oscar the Grouch. My BFF had a Honda Accord that literally growled at you when you hit the lock button. I was awesome and would scare the crap out of people.


Great job! We did something similar and sold our 2009 Altima and bought a 1999 CR-V. (http://www.notyourmainstreammama.com/debt-free-series-june-2013/)


I loved the budget you posted in an earlier post, especially since it is VERY similar to mine, except we have 2 incomes to maintain ours. One of the main differences was gas and the car note. I know your Tahoe was a hybrid though, so I’m curious now what your gas is going to run in the Sequoia? Just curious!


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I haven’t had to fill up the Sequoia yet but I will be this weekend on our camping trip. I’m nervous to see how much it will cost! :-/


I’m sure it was tough, and this is probably a silly question; which felt better, having the car with all the stuff and the debt or having a car that gets you to the same places as before without all the debt?


You guys made the right, and smartest move. Great job!!!


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Thank you Terry! It definitely felt better when I went to make the April budget and realized we didn’t have a car payment.


Two years ago we ditched our Dodge Grand Caravan and bought an old plymouth off craigslist in cash. I’ve told my oldest to buy his first vehicle with cash just to start off without having to do payments.


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Oh yes! My first car was paid in cash, sadly though, I fell victim to society pressures and kept “upgrading” to other vehicles (7 in fact, I’m not even 30 and I’ve had 7 cars….seriously, that is just sad. :/ ). Getting rid of my Tahoe was hard but I am so happy I did. I actually now love my Sequoia more than the Tahoe and wouldn’t go back to that Mac-Daddy Tahoe for anything.


Wow! What a great decision. Timely for us as we’re fixing to go car shopping for the first time… our car is hideous but we’re crunching numbers to save for our first home. Kuddos to you! (And I don’t think the purple / gray / blue one is so bad.)


Thank you Angie! The color has definitely grown on me.


Years ago we decided we needed to sell my Surburban. It was paid for but the gas was killing us. Although I did not want to get rid of my Suburban, I knew financially this was the best decision for our family. I just asked, please, not a green minivan with no rear air. Guess what our neighbor offered to sell us in mint condition, low miles and unbelievable price–a green minivan with no rear air! I happily drove it knowing I was helping our family financially and giving God a good laugh.


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Oh yes! God loves to throw us curve balls once in awhile! God bless you for going from a Suburban to a Mini Van. That would be a difficult transition for me. You’re awesome!


That looks like a new vehicle. In all honesty, that is hardly downgrading(unless you photoshopped the pictures of it. I was expecting to see a real beater. No shame in driving that.


Oops, missed a bracket after “pictures of it”.


Great blog by the way.


Thank you so much Theresa!


It’s definitely not a beater and I actually now love it. It was just difficult going from a fully-loaded car that was dream car to one I had zero desire to drive. Well worth it in the end.


That is so smart! We sold my VW Golf (sad face) and even though it was already paid off it helped us pay for some big expenses during a move. We also don’t have to worry about maintenance costs, gas, insurance etc. It is a bit harder sharing a car but so worth the financial benefits!


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Heck yes Alisha! That is awesome!


We became completely debt free when we sold our Explorer back in April. It was an emotional buy (bought from my grandfather’s estate) and we tried to justify keeping it for way too long. When we realized the difference of what it was worth & what we owed would pay off my student loan too, it was a no-brainer! Our time in FPU made us really look at our spending habits and see things from a wiser perspective.


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Love it Molly! I definitely hung onto my Tahoe wayyyy longer than I should have. You are so awesome and wise for getting ride off two debts!


In 2006 I had to sell my beloved 2001 Jeep Wrangler. I’d financed it for 6 years in 2002…so I was still 2 years from paying it off, but my payments were $525/month at 18.5% interest. I was an idiot when I bought it and never even looked at how much I was being charged in interest. So I sold the Wrangler and bought a purple 1997 Jeep Grand Cherokee that I financed for three years. The payments were $215 a month. I saved more than $6,000 in over those three years. And you know what? It turns out I loved that old purple Grand Cherokee! It was warm in the winter, had plenty of storage and seating and was actually more loaded than the Wrangler! It lasted long enough for me to buy a (nearly) new VW Passat that has been paid off for a year now. 2014 was my first year since 1988 that I drove a car that was 100% mine! It’s still running great (knock wood) and I plan on driving it until the wheels fall off!


That is amazing Paula!!!!! I love now love my Sequoia, I hated it when I was giving up my dream car for it but now, I wouldn’t take back that Tahoe for anyone’s money. I love your story – thank you so much for sharing!


I’m a little late to the party here – but saw this on Pinterest and had to comment. I totally agree with cashing out a 401k. My company requires we put a minimum of 3% of our income into a 401k (which they then match at the end of the year). If I had my choice I would not be putting any into a 401k at all. I do not believe in the stock market’s stability, and would rather just put my money directly into savings where I don’t touch it. I think you made the right choice by cashing in your 401k and paying off the debt you already have – you can start a 401k later when you aren’t piled under thousands of dollars of debt.


Thank you Alicia! I hate investing in the stock market and have little belief in it’s stability as well.


I know this is late, but we dumped $11,000 in debt the same way! My parents always ALWAYS had a car payment growing up. I thought it was normal. But, FPU changed all that! I was driving a fleeced 2012 Lancer. Sold that and bought a 1997 Toyota 4Runner that we love. My husband and I still high five each other for driving cars we own outright! It’s so freeing. Through our story, we helped 2 of our friends do the same thing!


Heck yes Leslie! Congrats! It is so very freeing no longer having those debts over our heads.


WOW reading your article sent my body into a panic attack. My wife and I have a suburban and it is really nice and it is so convenient (4 kids)… I am super proud of you and your husband. just the way you write about him i can tell you give him a reason to do anything necessary for you and your family.


I understand how hard it is to sell your dream car. I had a 2006 Ford Expedition King Ranch. It was fully loaded and the nicest car I’ve ever owned. My husband and I decided in order to get out of debt we would have to make some major changes. I sold my Expedition, used half the money to buy a 2007 Toyota Camry w/ no options and used the other half to pay off a loan. Then we sold our boat, four wheelers and golf cart. Those were VERY painful for my husband and it took him over a year to finally agree. Then we started paying off our credit card in chunks of money that we saved from the payments on all those toys. To date we have paid off over $50,000 worth of debt. It was hard and painful to give it all up, but once we were debt free it was a huge weight lifted. And now if we want something, we save our money and pay cash.


Our reduction of $15,000 worth of debt was a little more radical – we returned our Jeep Liberty, paid the $1500 difference, then drove around in a 1980s Honda Civic with 300,000 miles for a year. That was completely humbling!


April @ A Simple Life Too recently posted…Celebrating Biblical Holidays: The Feast Of Tabernacles


I love your story April! Thank you so much for sharing – you’re such an inspiration!


I feel your “pain.” Two and a half years ago my husband and I got the crazy idea to sell our almost 3,000 square-foot, 5 bedroom home and move into a 3 bedroom 1,020 square-foot apartment in order to cut our bills in half and start to work toward our dream of adopting children.


I struggled with the decision for a few weeks and then I decided that if it was going to happen I would have to get rid of some of my stuff, mostly my beloved books! So, I went into my office/school room and started taking books that I could part with off of the shelf. Within 15 minutes I had a huge pile of over 200 books that it would not hurt me to part with.


We moved two years ago, and although there have been some hiccups along the way that have delayed our plans, I’m so glad we made the decision and are much closer to making our dreams come true.


Blessings!


Paula Farris


Oh I love your story Paula! I’m a book lover as well and you’re so incredible for getting rid of your books – I don’t know that I would have been able to do that!


Dave Ramsey warned me. Dave said that it would take sacrifice and that it would not be easy. I just did not know how difficult it would be.


“Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change.” -Dave Ramsey, The Total Money Makeover


My husband and I decided in January of this year that we were going to dump $18k in debt in a flash by getting rid of my fully loaded Tahoe. We would be exchanging it for a paid for vehicle. We scoured the internet looking for cars and we found plenty of options. The only issue was that we were having a hard time finding a dealership that would match our trade or come close to it.


Over the course of two months, we went to various dealerships, called numerous sales reps, and crunched numbers. My husband works in catastrophic claims for commercial real estate and he has had to work almost 24/7 for the past two months. Finally, on my birthday he had a day off which gave us the chance to go car shopping.


I am a firm believer that God has a way of humbling you. A Tahoe has always been my dream car and I never imagined that I would have to give it up for the ugliest car I have ever owned. We found plenty of Tahoes within our price range but no dealership was willing to match our trade. Therefore, we could not afford another Tahoe.


Instead, we purchased a 2002 Toyota Sequoia that is the oddest color. I swear it is purple, our neighbor swears its blue, and my husband swears it is gray. The wood grain on the inside was horrible and destroyed (the photo does not show how bad it was). It was an emotional day knowing I was giving up a 2008 Tahoe Hybrid that had every bell and whistle you could possible want, for a car whose inside was not up to my standards.


It may seem silly to some but it was difficult to drive off in that car and leave my Tahoe behind. It was my idea to get rid of the Tahoe and I am the one that wrote the check. No one made me give up my beloved Tahoe. As hard as it was to drive away in a car that I truly did not want, I am extremely happy that we did it.


We dumped $18,075.06 of our debt in a flash by getting rid of my Tahoe. The car we got runs great and my husband has done some ‘remodeling’ to it, which has improved the look of it tenfold. I am super grateful for the skills of that man!


How did we do it?


I cashed out my 401(K) from the company I used to work at. I know that many disagree with doing something like that but after extensive research, we decided it was the best option to get us out of debt fast. We now only have my student loans and our mortgage that we owe.


What is the hardest thing that you have had to give up in favor of bettering your finances? How did you do it?


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Original article and pictures take http://thebudgetmama.com/2014/04/how-we-ditched-18000-of-our-debt-in-a-flash.html site

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