Comments on: I don’t dream anymore

By: Eileen Nemeroff

Eileen Nemeroff — Sun, 12 Oct 2008 22:31:11 +0000

I too have a 7 year plan to be totally debt free and that includes mortgage and 2 student loans. I was recently laid off from my job after 10.5 years and they hired me back. I am still on track and my plan is to pay down the debt with the highest rate and then apply that to the next debt. Snowballing my debt. By the time this is done we truly will be ready for retirement or semi retirement assuming we don’t get any more debt. I wish I started thinking like this earlier.

By: Jon Kepler

Jon Kepler — Sat, 11 Oct 2008 16:13:12 +0000

Don’t worry, the true purpose of your post hasn’t been lost on me, but I find it really interesting that so many people dream about lottery winnings.

While you may think this is crazy, I personally worry about winfall. I occasionally fill out contest forms without really reading what they are. If I were to win even $50,000, my business credibility would be shot in my own mind. If I went on to make $30 million through hard work and perseverance, people could say “well, he had 50 grand at just the right time – he’s just lucky.” While I don’t think about it often, it’s actually one of my concerns. If I won even a small amount of money, I would most likely funnel it through a family member in hopes that it wouldn’t be traced back to me.

By: neimanmarxist

neimanmarxist — Fri, 10 Oct 2008 17:50:25 +0000

that is really impressive! congrats on your amazing debt reduction. we had a kind of nasty wake-up call too. i think after years of grad school we took the existence of a salary as a green light to go bananas. the damage is done now, but we’re still pretty young and so glad we discovered the desire and motivation to live in a different way. we feel so much better and more fulfilled now that we are.

By: Clever Dude

Clever Dude — Thu, 09 Oct 2008 14:08:14 +0000

@Philip, in my situation, I can’t take student loan interest off as a deduction anymore as we make too much. If you can still deduct student loan interest, that’s something you need to account for in the calculation.

The logical path would be pay down the highest effective interest first. By “effective”, I mean what the rate equals after tax deductions. I hate math, so I’ll let that up to you to calculate.

The emotional path says to pay down the student loans because it’s an mentally achievable goal. However, if you go back for your MBA, you can get your loans deferred.

By: Philip

Philip — Thu, 09 Oct 2008 14:03:50 +0000

I keep thinking that I am debt free, but I think I am lying to myself. I have a mortgage (very manageable), about 22,000 in student loans plus about 3,000 that I owe my parents (paying this back very quickly, probably in january be done).

But now I am starting to entertain the idea of an MBA and that would add lots of debt back on or at least not let me knock out the student loans how I would like.

Just out of curiousity, would you pay off student loans at 5.25 or mortgage at 5.875 first? Obviously the student loans I will pay off eventually, likely won’t live in the house long enough to pay it all off.

By: Financialnut

Financialnut — Thu, 09 Oct 2008 03:59:28 +0000

I love what you said about continuing to increase your education and worth! Certainly this type of thing takes time and may not even pay off monetarily right away, but the long-term ramifications can be huge! Increasing your marketability in any job field is key.

Thanks for the post. I like what you have to say.

By: Susy

Susy — Thu, 09 Oct 2008 03:53:28 +0000

Great job finally making the switch.

Fortunately we never got into much debt, house, car Mr Chiot’s has $12,000 in student loans. We’re trying to pay off our mortgage right now and hopefully in 2-3 years it will be gone. It will be so great to be 35 and have no debt -yeah!!!

I never dreamed of winning anything though, perhaps because my parents were always great examples, work hard, save hard and do without.

By: EasyChange

EasyChange — Thu, 09 Oct 2008 01:46:16 +0000

Cleverdude, this is really hitting home for me. I’ve found myself also ratcheting down the ‘dreaming’. Not because I don’t have hopes for the future, but because it doesn’t seem like something that requires the lottery anymore.

I also stopped buying as many mega millions tickets…even though I am staring down at three loser tickets as we speak. Its good to know that this is not just a matter of getting finances in order, but also changing attitudes. It seems to me that this mental shift is a big step…and that is not necessarily tied directly to how the money is handled. Its this realization that you get to once you realize that you don’t need a winning ticket to make things ok.

By: Benjamin

Benjamin — Thu, 09 Oct 2008 00:31:38 +0000

Your story sounds very much like mine.

In the fall of 2003 I had a dramatic realization. Even with a healthy income my family and I had managed to accumulate over $90,000 of non-mortgage consumer debt.

We were completely out of control and heading for disaster. Desperate to right the ship before it sank, I got my hands on every piece of financial literature available at the local library.

We developed a plan, and within two and a half years all our debt was paid off, we had an emergency fund, and a strong down payment for our new house. It wasn’t easy (even with our income), and there were many sacrifices along the way. But the end result (being debt free except the mortgage) was one of the best things we’ve ever done.