What are you doing to get out of debt faster?

Discussion in 'Homesteading Questions' started by farmwife, Jun 3, 2006.

  1. farmwife

    farmwife Well-Known Member

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    We want to pay off our house quickly, but with prices, taxes, ect always rising, what are you giving up?

    We have electric, phone/internet bill, mortage, bills from starting a business, insurance on homestead, medical, car. Of coarse taxes, too. Other than that we can control what we spend for the most part. We have our own meat, garden, and milk. So I hardly go to the store except for things I can't produce.

    We stay home a lot! We can't wait to get out of debt. How freeing it will be?
     
  2. TxCloverAngel

    TxCloverAngel Happiness is Homemade

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    well, we just made the BIG choice to NOT buy a new home to put on our land to replace our old tiny hurricane damaged house.

    This house is too small for 5 kids.
    needs new wiring
    better insulation
    many things fixed.

    But with this house.. we will be paid off on our land free and clear in about 7 years. The new house would mean a new 30yr mortgage. Not something we want.

    A nice new bigger house would be wonderful, but we would be paying for it for a looong time.
    And I don't know many people who will have their homes/land 100% paid off in their early 40's :) I figure its a good trade.

    We can upgrade/update things in the house as time ages by.
    **sigh** sure was a nice dream tho....
    Oh,.. and we DO NOT USE any type of credit card. Debit, yes, but nothing on credit. thats a great way to start.
     

  3. hmsteader71

    hmsteader71 Well-Known Member Supporter

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    To get out of debt faster, any extra money goes to pay toward bills. Medical, credit card, etc. As soon as I pay off the smallest bill I will add that to the amount I am already sending to pay another off and so on, the snowball effect. Other than that, we live in town so we are just now getting 2 rabbits to breed and sell, maybe some chickens. I would love to have a goat for milk, cheese and soap. I cook everything I can from scratch unless I already had convenience foods boughten. I will sometimes get the kids a box of twinkies or something for a treat but not like we used to.
    I make our bread (I still buy a couple loaves at the bread store for toast). We have a big garden, with only what we would eat, and I know how to can and preserve. We have not used our air conditioning yet even though we are on the equalizer because we are going to try to get our bill lower by this time next year. This past year we installed a woodstove and only heat with that. Instead of $400 heating bills this past winter we had $50 heating bills.
    I hope this helps. I don't know a lot of ways but I am constantly open for new ideas. There are some good books that might help. The Tightwad Gazette I, II, and III.
     
  4. mike3367

    mike3367 lost in my own mind

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    i wouldnt consider a house a bad debt, but dotn buy a house you really cant afford though. i don't buy new cars and the credit cards i do have are used wisely. if you are in debt as i was i paid the ones i could pay off all at once then saved enough for the ones i couldnt pay off at once. my favorite card is my home depot card i alwasy buy when there is a 6 months no pay on some thing big i need and i alwasy pay if off before the 6 months it due so no intrest is added that away
     
  5. Cyngbaeld

    Cyngbaeld In Remembrance Supporter

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    Procrastinating! Don't buy today what you can put off till tomorrow. Unless it will save a lot of money tomorrow, try to delay spending on anything. Obviously, I'm not talking about putting needed maintenance off. But if you are thinking you need new furniture, put it off. New clothes, wait till later and get it on clearance or skip it altogether. New car, see if you can squeeze another yr out of the old. Avoid going to the store for one or two items and don't go frequently. Try not to go more than once a month, six weeks or two months is even better.

    The only debt I have now is a mortagage on a house that I am renting out till it sells. Our home and vehicle are debt free and I have no cc at all.

    If I could do it, anybody can do it. You just have to make your mind up.
     
  6. fin29

    fin29 Well-Known Member

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    Two words: Dave Ramsey
     
  7. cast iron

    cast iron Well-Known Member

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    Exactly correct. The only debt we've had for years now is the balance owing on our mortgage. Why would I pay off 4.5% money with money that is earning 6% or better?? Not to mention the tax write off of the interest. That would be financially irresponsible.

    Although I can understand it perhaps from an emotional viewpoint I guess.
     
  8. Beeman

    Beeman Well-Known Member

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    All of the bills you listed will still be there along with repairs to a house that is now older and taxes that have risen. I sold a house and land in an area that was getting expensive. I took the equity and paid cash for the place we have now. I often think of how much more the other house would be worth now since the prices kept rising. I've posted before how even when your house is paid off the bills will keep coming and the increases will make up for the difference.
     
  9. arabian knight

    arabian knight Miniature Horse lover Supporter

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    A few months ago I pulled money out of my 401 and Paid them off. They are All gone now, Course so is my 401K :Bawling: Oh well at least I am not in debt anymore. :happy:
     
  10. Terry W

    Terry W Duchess of Cynicism

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    Are you SURE you are getting a tax write-off on that interest? Many people do not understand the "subject to" part of the tax codes-- and IF they get their taxes prepared by a professional preparer-- the Schedule A will be filled out and charged for, though not used--because the standard deduction is a better deal for the taxpayer.. the preparer never tells them where the fionmal numbers came from-- and I include CPAs in that statement-- many of whyo erroneously put unemployment benefits under "Wages" instead of "other income"
     
  11. Mid Tn Mama

    Mid Tn Mama Well-Known Member Supporter

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    That's right! Your tax benefit for holding debt is very little cents on the dollar. If you are in the 30% tax bracket that means you get back .30 for every dollar you SPEND on morgage taxes.
     
  12. scaryguyoy

    scaryguyoy Well-Known Member

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    Try getting the book "Your Money or your Life" from the library,or pick it up 2nd hand.It was written by Joe Dominguez and Vicki Robin.I dont know when Dave Ramsey started but he seems to be saying the same thing that these 2 authors were saying 15 yrs ago.There is a list of 100 hundred different things to get out of debt and or save money.It is a very good book, i used it to get out of debt myself.
    Scaryguy
     
  13. Deb862

    Deb862 Well-Known Member

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    I actually worked 2 jobs (averaging between 65-70/hrs a wk) for about 13 months to pay off all my debt (well, most anyway). It definitely worked. It was hard for that year because all I basically did was get up, go to work, go to 2nd job, work, come home, and sleep but the rewards were awesome at the end! I was very far in credit card debt and now carry only a very minimal (under $1000) balance that is getting paid off a little more slowly as I only work only 1 job. I did not really want to "give up" any of the comforts I enjoyed so decided that by sacrificing my time instead for that 1 year would still allow me to continue my lifestyle in the end without having to permanently give up creature comforts I liked. Now, at least, I can enjoy the things I like to have but am a lot wiser about credit management and just about debt free :dance: !
     
  14. Queen Bee

    Queen Bee Well-Known Member Supporter

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    Working longer hours and paying off one bill at a time. With in two yrs. we will have everything paid off and have enough money in the bank to build a barn, coop and do lots of fencing...

    I think a house would be one the best investment you could have.. I would hate to pay rent money Never would get back a penny)--at least if you have a house you can (almost) always resale it for what you have in it.. Land and lots are another good investment. I have a friend who lives in CA. His mom gave him some money to invest. He purchased 10 lots in a developement and built small 'spec' houses on 6 of them, sold the houses,--In one yr. he had clear/free over 1 million dollars . Then tried to buy 6 more lots and they were sell for 5 times what he had paid for his! So he sold the lots for 5times what he paid for them. Went to another area/developement and purchased 10 more lots and made boo-coodles of money on them.. I couldn't beleive what he was making on these lots and he wasn't holding them but for one yr or less/
     
  15. beorning

    beorning Well-Known Member

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    We don't have a lot of debt. The mortgage, and one car payment that we have because we needed to establish credit and needed a car. The car will be paid off next april. Then some standard bills.

    Mortgages aren't bad debts, but if you calculate how much of your payments will go towards interest over thirty years, you quickly find a reason to pay off a mortgage ahead of schedule. Particularly when you look at the money saved over the long term versus the money spent.

    We try to put all of our "extra" money towards the principle on our mortgage. Tax returns, those four extra paychecks we get every year from three paycheck months, any windfall money that comes our way.

    The other end of things is trying to avoid unnecesary spending at all costs. We try not to buy anything new if we can help it. I just found a $5 wheelbarrow last week at a thrift store. Been looking for one for a year and a half. We made due rather than going out and spending $40 for the same thing new. While the $35 dollars saved doesn't seem like much, you have to imagine how much we save when most of what we buy is purchased used at 5-20% of the original value of the item. Particularly if the item will end up saving us money in the long run, through it's use.

    We've never had to deal with excessive high interest debt, so I can't offer any real advice on that, other than the obvious, which would be to pay off the higher interest debts ASAP. Even if it means tightening the belt and doing without a lot of things for a while. Then never accept any high interest debt again. We keep a credit card for emergencies, but have never paid more than a month of interest on the balance before it was paid off.
     
  16. clovis

    clovis Well-Known Member

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    I strongly recommend Dave Ramsey. He has a radio show, books, and a pretty cool website.
    clove
     
  17. jill.costello

    jill.costello Well-Known Member

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    We recently moved to our "Stepping Stone" property. We call it that because we realised it would not suit our needs for the long term, but with a bit of TLC and some creative hard work, we could re-sell it in 3-5 years and THEN have the means to purchase what we really need.

    So with THAT BIG goal in mind, I gave myself about 50 little goals to achieve in the meantime:

    REDUCE DEBT= increase credit score

    PAY ON TIME, EVERY TIME= increase credit score

    PAY MORE THAN THE MINIMUM= less spent on interest

    LIVE A "PREVENTATIVE" LIFESTYLE= keep the livestock safe with good fencing/ up-to-date on vaccinations, worming/ and keep ourselves healthy and not do dangerous projects alone/ keep the vehicles serviced/ etc. to PREVENT unexpected emergency bills!!

    EVERYTIME WE PAY OFF A DEBT, take the amount we WERE spending on that debt and apply it to another.... i.e. no 'celebrating'

    Also, I sell 1-3 expensive German foals each year (when all goes as planned), HOWEVER, I have had to take a hard look at HOW LONG I can keep these little guys on the farm before they sell. The last one I sold I got $10,350.00 for....BUT, she was a THREE YEAR OLD and I had alot of time, money and effort into her over those 3 years! So now, my goal is to sell them before they're yearlings, and accept that I simply cannot afford to wait for that perfect buyer with $10K in their pocket; If someone has $6k, or $7k, I need to remember that it is money I didn't have yesterday and I should be grateful!!
     
  18. Looking4ewes

    Looking4ewes Well-Known Member

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    "We want to pay off our house quickly, but with prices, taxes, ect always rising, what are you giving up?"

    We gave up car payments! We only buy used vehicles for CASH! This freed up an incredible amount of money to put towards our mortgage. The Dave Ramsey method of debt snowball is very simple and effective. Simply, it works! We have been 100% debt-free since Christmas. The burden of debt has been lifted off our shoulders and life seems lighter and freer. Easier to breathe, less stress, more enjoyable. Do it!
     
  19. jnap31

    jnap31 garden guy

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    Limit my wants. Just about only buy used items always. Put all available $ that DW does not spend and does not go for regular bills to paying off the mortgage our only debt. Helps to be able to buy $300 worth of seasoned hardwood cut to size delivered in a huge truck load that heats our house in AR for almost three years. Need to get off grid when I get home so I can get away from the regular bills at least till I have plenty of $ coming in from selling at the farmers market.
     
  20. Madame

    Madame Well-Known Member Supporter

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    I'm trying to sell both houses (been carrying a double mortgage for nearly a year), will use profits to pay most other debts. Otherwise, no land phone, no cable, no internet, get movies free from the library, etc.