Somewhat Z related...

polarity

I'm always interested. I'll give you some back story aswell since you were so polite as to share. My wife and I started out with me doing IT and her working in a physical therapy clinic, she was doing office work/pt tech (therapist assistant type stuff), between the 2 of us we made maybe $40,000 a year.

All of the sudden we hit the jackpot, I landed a job making over $100k a year. I worked for 2 years then got her on, so we bumped to over $200k a year. Going from having no money to lots of money we went nuts, bought anything and everything we wanted. Took spur of the moment vacations, etc. We were independant contractors so taxes weren't even held out of our checks. So checks were coming in for just short of $20k for a month. My first couple years and her first year we went retarded and blew through cash like it was nothing. Then come tax time realized what we had done. Took us 2 years to correct that mistake (as well as other mistakes we made before the job with dumb credit decisions).

After about 3 or 4 years in we got smart, decided it would be a good time to buy ourselves a home, get the cars we wanted, plan a budget for when this work ended and we did. Another year goes by and we decide to quit the work and move back home (this was 7 days a week, 12 hours a day and constant travel, literally you didn't go home for a year at a time or so). So we move home, I go back to IT, she goes back to work at the hospital.

Now we have our house payment, and our 2 cars (she drives an 08 accord and I drive the Z). We pay our bills just fine, we have some savings and we go about our lives, but looking at the paychecks coming in getting debt free just doesn't even seem realistic at this point.

For the record I'm 26, most of the dumb things I did were years ago I've had every type of bad habit imaginable and lots of money went to those things. I don't claim to be smart these days, just smarter than I was before. People sharing experiences in my opinion is the single best way to learn. If I told you that bears and kill you, you file it in your mind and move on. If I talk to you about a friend who was eaten by a bear and give such detail that it burns in your mind, you will damn well remember forever that if you hear/see a bear it's time to hit the highway. No, I don't have such a story, it just seemed like a good way to get the point across.

kannibul

At 26, you're ahead of me. At 26, I was still racking up debt, and floating by. I'm 31 now...

Give yourself some time, use those tax returns to knock out debt...and seriously, track what you're really spending your money on outside of paying bills and debt.

The little ****, literally was like a 1" hole in a 5 gallon bucket for us.

When I bought the Z, I thought that would kill our debt payoff plans. At the time, I had figured that I could spend, including insurance, $750/mo on a "midlife crisis-mobile" - lol. At the end of the month that would leave around $250 to float us by. I was going to depend on our tax return this year to knock down debt for a bit of breathing room. Stupid, I know.

I bought the Z. My payment is 642/mo. My insurance went up $85/mo. Pretty much nailed that target.

3 months later, and a lot of discussion with the wife about how much we should really be spending for groceries and cutting out extra ********...and I'm chucking $1K/mo at credit debt - IF NOT MORE, depending on when our checks hit.

Some people think it's odd to not have cable. To be honest, I'm sort of missing it. Mostly the DVR, but the jitter bugs me sometimes. I almost signed up for AT&T U-Verse ($250 rewards, $95/mo...) - but then thought, why? I'm paying $19.99/mo for internet, and the other crap is FREEEEE - sure I don't have the channels, but when is there anything on worth watching? Not having it also does something else strange...I've been talking/spending more time with my wife and plotting and planning more. Amazing!



Basically the plan is something like this.

Cut out unnessicary expenses. Think "ramen and kool-aid" - ie, what you need to survive. Keep an inventory of what you eat for the week at home...so when you get groceries, you're only restocking, not buying.

Take your highest interest rate item. Pay it off as fast as you can, make minimum payments on everything else. Rinse and Repeat as needed.

If you can refinance something, consider it only if you can knock out another debt (or two), and get a lower rate than both of them, and have a lower payment, which frees up money NOW, to use to pay off yet another debt.

Be aggressive about it...plan it out to where you can see the end in sight for each milestone...to the point where you debate going to Subway for a $5.00 sammich, because it might throw your whole plan off track, and you'd have to recalculate everything to find out when each debt will be paid off in time...

For example, our credit cards are done, March 12, 2010. That's not including our tax refunds, which will go to her Civic (next highest interest rate). Once that's gone (approx August, again not including the tax return), the Z is next.

Once that's gone, house - though, more than likely, I may get a new vehicle around then (replace 1997 Ranger w/ new small-sized truck)


Also, my wife an I have an easier time coming up with money to pay a bill, than we do to save money. I basically created a "bill" that we have to pay. It works for us.

Lastly, you are ahead of me in one aspect - you have savings, and might have retirement stuff you're contributing to - that I am not (yet) doing - but, all things considered, you could leverage your 401K for a low interest loan that you could use to pay off a higher interest debt. I think the interest you pay on your 401K Loan is added to your 401K, not a banker's pocket...

Anyhow...