Somewhat Z related...

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...