Here for motivation- again

[freedomseeker]

I haven’t been back here for quite some time and in during my time away it seems I lost all the good sense I had received with all the good advice and encouragement. The motivation from this site helped us pay off 80,000 in debt and gave me the discipline to follow the DR envelop system.


Flash forward to 2010. I can’t own these mistakes because my husband went right down the wrong path with me. We were on track to pay our house off in 8 years at most. Had a good emergency fund. We had upgraded everything in the house. Our plan was to pay it off and he could go part time so we could finally have time off together (our schedules never allow for days off together). The end result was to be a second property out by the ocean. Not expensive, just a little cabin.



Well for some reason we got fed up with commute times. (that was our excuse I had really been wanting to move to this small town for several years) and put our home on the market in summer 2010. It sold quickly. We had selected a short sale- took us eight months and much drama but we closed on it eight months later. Great neighborhood. Awesome little town. More expensive to live. Bigger house and bigger yard- more money. Bank paid nothing at closing-more money. Home inspector down played some major issues that needed addressing, 30k worth. I could go on and on. We thought we were just going to remodel some cosmetics and we love to do that but that didn’t happen for awhile. Currently we thought what the heck- lets redo the kitchen (OMG we did it again). Another bad financial decision.


Today our proceeds are almost gone 100k. Our mortgage is 370k (screaming at myself HOW???). and now we have more medical expenses that have arisen. Our mortgage is just at the 25% of our take home. Prior to this house we were at 12%.
I am now back to the forum for education a motivation again. We lost sight of the prize and I feel like we have totally changed our future options. I really do not know if we will ever recover from this series of poor decisions.


It makes me so sad. It is what it is- must make the most of it and go back to the frugal behavior that is somewhere buried. Here for encouragement and motivation again- thanks to all. You are inspiring!

M

[Selah]

Hi, Freedomseeker/M! Welcome back! First, the biggest challenge you will face is not to pay off your debt and reduce spending, in my opinion. The biggest challenge will be for you to forgive yourself for making the choices that got you here. Feeling regret and remorse is very common in these situations, and I and many others here on these boards have gone through the same thing. But remember, like YMOYL says, "no shame, no blame."

Once you work through that, you will be able to think more expansively and creatively, with more optimism. Perhaps you'll be able to generate some really radical solutions to your debt situation. Yes, it may feel like two steps forward, one step back, but hey, just coming back to these boards means you do remember that it can be done by you, and has been done by many others before you. And remember, chances are there are people reading these posts who are in even worse financial situations than you, but who have never once had the experience of digging themselves out of the hole you did once before. They may be feeling even more ashamed and overwhelmed than you are.

There is hope! I was in a bad financial situation myself but managed, after many years, to get myself out of it. Now I'm going to have to trash that hard-earned awesome credit score through a short sale or a deed in lieu of foreclosure on my house in America. Not fun, but necessary. But I just keep telling myself, the quicker I face the situation and deal with it, the sooner it will be resolved, even if it takes years. The same was true with my debt. You've taken the big leap by getting real with yourself about your situation, so the battle is already half won.

Good luck, and remember, you are also inspiring! Please keep us updated on your journey, the good days and the bad.

[razz]

wow, it is hard to control the purse strings once they are cranked open, isn't it?
You have done it before and will get the debt down again. One day at a time...

Pesonal philosophy gained over time - life happens and is the best education that one can get. Sometimes it costs more than other times but there is always a cost. How many people came out with similar debt for a degree that doesn't help with getting job, have addictions, have additional unexpected family liabilities or health expenses...?

Life happens but don't let it get you down. You have learned some very important insights and values, now apply them diligently every day and you will turn things around.

[cjones]

Hi Freedom, Agree with what Selah said about processing and self-forgiveness. Remind yourself the pluses of your new situation -- the nice town, the shorter commute times -- and consider some financial counseling to help you look at the bigger picture and discover if there are some solutions you haven't thought of to help make this easier to deal with. Do you have other debt besides the mortgage? Look at your past accomplishment of paying off that $80,000 debt. How long did it take you to pay off that $80,000? You have some skills already that you can apply to your current life. Most of all--I know this is hard and I should follow my own advice---don't look back.

[freedomseeker]

Thank you all for your kind posts and words of encouragement. I must look ahead and accept it- there sure is no way to change it now. I am thankful- we have not other debt because of the principles we learned here. Our income dropped since we purchased. DH job was effected by the housing market peripherally. I took a paycut for a telecommute job with a large company (but saved money on pet sitter, gas and bridge tolls).

Our primary unpredictable expense is not medical- 400/mo in prescriptions and 200/mo or so in MD visits. I have a high dollar deductible HSA plan and save for it monthly but its just not enough. I als put in the max to get the max of my 401k. We used to be good about saving for retirement but thats declined. Our dining out budget is our only fun money- we probably do to much of that I know. We could tighten up on that. Gifts and a few online purchases here and there but we pay them off monthly. Cell/cable to be reduced. I would be ok with cable but cell hitting where it hurts- darn smart phones oh how I love the.

We do give 300/mo to charity. DH does not want to budge on that, me I am not sure given the lack of discretionary funds at this time. I can't recall how long it took us to pay off the 80k- two or three years I think.
The outstanding balance is so hight on this mortgage- ick. 370k (choke- gag- ugh). The only way I can see getting out of this house is to keep it for at least 10-15 years and then sell. Once we ar

[Blackdog Lin]

Welcome back Freedomseeker.

I have no concrete advice to add. But you have taken the first (and hardest) step, by acknowledging that there IS a spending problem. And by rejoining this forum, you have come to the right, and best, place for motivation and encouragement!

You got out of a financial hole before, and you can do it again! One day at a time, you can do it again. I wish you peace and luck and success on your journey.....

[Paige]

My husband once said to me, "We are are own charity for a while" and we quit donating money. $300 a month would go a long way to paying off your debt or setting it aside for your prescriptions or whatever... a step in the right direction.

[chrisgermany]

Could you earn some money with the house? Like renting out a room to a summer student for some weeks or doing airb&b?
DH + friends have rented a house in France for vacation some time ago - it turned out that the owners lived in a caravan all summer and rented their home out to summer guests in June, July and August of each year. Thus their house almost paid for itself.

[cjones]

Freedomseeker, The bigger mortgage is a number that is going to make you feel bad every time you let your mind dwell on it. Could you try to put that number aside for a time while you concentrate on organizing your life so that you can pay your medical bills and move towards upping your retirement savings?

Gifts, online purchases, and cell phone---I know you know that changing these purchase habits will give you greater peace of mind. I was shocked at how much money I was spending on these categories once I started tracking my finances on Mint.

Regarding that charity: I am struggling with this in my life too. I commend your DH for his commitment. If it is a pledge that you have promised for a given span of time (I'm thinking in terms of church pledging, where you promise to give X dollars a month for a year) then I would see that as non-reducible until the pledge is fulfilled, barring extreme and drastic life events. If it is not a pledged amount, then could you reduce the amount and give time and talent instead? Just a thought.

[freedomseeker]

Thank you all for you helpul ideas and feedback! It is truly appreciated. I like the idea of putting the big number out of my head and focus on the day to day expenses. I am sure we can tighten the up with some efforts. We have done it before. Must adopt some healthy behaviors. I am thankful at this point we are able to pay everything off monthly.

Would anyone sugest putting 401k on hold for now-I know that is a touchy subject. We put in just enough to get the ma from the employer. for me that is 6percent

[SteveinMN]

Would anyone sugest putting 401k on hold for now-I know that is a touchy subject. We put in just enough to get the ma from the employer. for me that is 6percent
Not if it's at all possible for you to keep funding it. First, your employer is giving you free money (yeah, I know it's not truly free, but still, you're leaving money on the table to not take it). Second, you lose the habit of saving because something always comes up which encourages you to push off for a few more months climbing back on the savings bandwagon. Third, you lose the compound effects of those additional contributions over time. No, I'd find a different way to apply more money to the mortgage.

[Fawn]

I am w/ SteveinMN...do not give up employer matching on 401K. Think of it as a big raise...that you do not get to access for a few years. It is still a BIG RAiSE.

[try2bfrugal]

Here is a good link on when it might make more sense to save versus paying down a mortgage or other type of loan. It is just a general guideline and you have to plug in your own interest rates to know what is best for you, and also keep in mind that the current low rates of returns on investments may increase over the remaining life of your mortgage.

http://www.bogleheads.org/wiki/Paying_down_loans_versus_investing

[freedomseeker]

Thanks for the input on the 401k and the link!