Debt Dumpers - 2018

[Gr8t Fan]

Actually I've had the most luck starting it first thing in the morning, then it tends to die once I've been driving it awhile and stop somewhere. Thought I was going to have to have it towed yesterday but it started one more time for me so I got it home and into my garage, up on ramps. It wouldn't restart at all yesterday and I tried multiple times throughout the day.The engine code it gave last weekend when I had the battery replaced showed the crankshaft position sensor was bad. They wanted $125 to fix it then and it would take a couple hours since they needed to get the part. I ended up buying the sensor for $15, but now I'm thinking I should have just had them do it since it's not easy to find... have to crawl under my car... fun, fun. Getting ready to walk to work now (definitely feel lucky to live close to work) and it's below freezing out.

ETA: I've been walking to work all week, but needed to run to the bank yesterday morning and hoped my car would have one more trip in her before I worked on repairs this weekend. Almost had to call a tow truck to the bank parking lot when it wouldn't start after trying for about half an hour. Decided to give it one final try and it started and got me home.

Sounds like the alternator is bad and is draining the (new) battery which would explain why it starts up OK in the morning but diminishes throughout the day. Have you had your alternator checked?

 

[ariel1025]

Congrats to all those getting a refund on their tax returns!!

We were able to put an additional $486.32 (in addition to normal minimum payments) towards debt in the month of January

We are in the group of those getting a tax return, but have a few abnormal expenses already lined up the for the month: new tires for one of our cars, registration due on the other, school events that require money, soccer sign-up fees etc. At least we are in a position that we won't have to finance anything even if it stalls out our snowball a bit. And, in a weird way, it motivates me to be even more creative with ways to pull in extra money this month

Good luck to everyone for February!!

 

[Dentam]

Sounds like the alternator is bad and is draining the (new) battery which would explain why it starts up OK in the morning but diminishes throughout the day. Have you had your alternator checked?

I don't think that's it since it happened right after they installed the battery. He tapped on the starter as I was trying to start it and that got it going. Thought I'd start by replacing the sensor if I can and if that doesn't work the starter. But they should have tested the alternator for me when they did the new battery. He said maybe I had a dead spot in my starter, but at that point he was just like, sorry, good luck. Grr..

One thing I did see when I looked up the signs of the crankshaft sensor going bad is that it will start up better when the engine is cold. I am really hoping it's just the sensor... just need to figure out how to get to it.

 

[dayvewc]

Chiming in on the life insurance question.

The short answer is, if you have children, life insurance is ESSENTIAL, and you should take as much out on each of you, for the longest possible term, as you are able. Do NOT get "whole life" insurance. It's just about the worst "investment" there is.

Get a Term Policy. Get it for 30 years (or 35, if you go through AIG, which is the only insurer that offers 35 year terms).

Max it out. Underwriters will insure you for a maximum of (Annual Gross Salary x 25). This is how much you should have. It allows for your family to be taken care of in the event that one or both parents pass. It allows for enough money to settle debts, pay off houses, and invest the money and live off the interest income.

Get the policy NOW, do not even wait one more year. Rates climb astronomically every year you get older.

Here's our story:

We took our 20 year term policies at the age of 27. At the time, our kids were 3 and 1. My policy was for $500,000 (I am a stay at home mom) and my husband's was for $1.1 million. Mine costs $19/month, DH $42/month (he is military so he is higher risk).

It's been 10 years. Since then, both our boys were diagnosed autistic. What this means overall is, we will need to continue supporting them WELL into adulthood and at this point, it's about 50/50 whether they will ever be fully independent. We are 39 now. I freaked out realizing that in only 10 more years, our insurance was going to expire. I also realized we were VERY underinsured. DH's salary has doubled in 10 years and if something happens to me, $500k won't go very far.

We took out NEW 30 year term policies last fall to supplement our original policies. The agent I worked with confirmed that our current insurance levels were way too low, and we needed the new policies to make up the difference. So, we got an additional $1.5million on DH and $1 million on me. Costs: $89/month for mine, $135 for DH. Luckily, we got in while we were both still 39 years old. The agent told me if we had waited until we turned 40, our rates would be DOUBLE those! Yikes!

I am comfortable now with the amount we have going forward. 30 more years will take us to age 69, and at that point, we should have a very nice nest egg to pass to our (adult) children when we pass.

LIfe insurance should be a non negotiable monthly expense. It is as essential as utility bills and housing, IMO. In the end, it's a small price to pay. We pay about $300/month total now, and I consider it "$10 a day for peace of mind."

Not meaning to quibble, but why do you not like "whole life" insurance?

I kind of have the same feeling toward term life, or "death insurance" as I view it. You paid $7,320 over the first 10 years, will pay $34,200 over the next 10 years, and then $53,760 during the 20 years after that. By the time you have reached the end of all the terms, you will have paid $95,280 total and if both you and your DH are still alive, you lose the entire thing. It is only a benefit if one or the other or both of you die.

What I personally see as the best option is to get as large of a term policy for as long as possible as young as possible to cover any contingencies of family survivors. And to also get as large a whole life policy as young as possible as a benefit for near and after retirement to supplement a surviving spouse.

So, it's possible to have multiple policies? We both have our work ones, I'm going to look into getting us each one in the next month when I can afford the payments, but I'd like to take out an extra one in a few more years as well.

I swear this is the crap they should teach you in school...

I currently have about 5 total policies. Yesterday I had 6, but I let one lapse. It was getting too expensive to keep. I'm not sure what classification it fell in, but it was neither whole nor term life. It was renewable as long as I paid the premiums, but the premiums increased every 5 years. The policies I currently have are a small policy my mother has on me, 2 small policies through different banks that I use, 1 "equal to salary" policy through work, and then another that I have on my own for the same amount.

 

[KSR0330]

Hi everyone. I posted this on another thread, but think it's most appropriate here. Here's my story. I have gone on mindlessly for years overspending (on credit cards) and paying the minimum. Now I have credit card debt to go along with my student loan debt. DS is going to college in August so now I'm freaking out and trying to pay down as much as I can. I'm using a combination of smallest balance/highest percentage to pay off in an order that makes sense to me.

Here are my 2018 (and a bit beyond) goals in order of how I'll complete them:

Financial:
1. Pay off Disney Visa. I've been working on this and almost there! I'll continue to use it for groceries and gas only and pay it off weekly. I love the Disney Rewards!
2. Pay off Discover card by end of April
3. Pay off 2/3 of my student loans by end of May. These balances are small as I've been paying on them for MANY years!
4. Pay off Capital One card by end of October. This may be lofty. I'll have some spending to do to get the boy to college
5. Pay off Bank of America by early spring 2019
6. Make final payment on last student loan.

I have really changed my spending ways so I really think I can do it! I don't buy anything we don't absolutely need, no more wasted food and I've really cut down on the grocery bill. I use Swagbucks, Shopkicks, Fetch, Ibotta and just started Bing to earn some extra cash (mostly in the forms of Target gift cards that I use for groceries).

Well, that's it! Thanks for reading. I look forward to updating my progress as I go!

 

[DLgal]

Not meaning to quibble, but why do you not like "whole life" insurance?

Because it is extremely expensive and the investment value is low. You cannot choose how the money is invested and the plan management fees are astronomical compared to something like a mutual fund. You pay several hundred dollars per month for a piddly death benefit.

My husband foolishly took out a Whole Life policy when he first commissioned as a military officer. His monthly premium was $200. The death benefit was $200,000. Once I realized we were basically throwing money away, we cancelled the policy and the "cash value" was a joke. It was something like 60% of what he had paid in, but at that point, it was worthwhile to cut and run. We did far better by investing that $200 in his Thrift Savings Plan, by increasing his contribution percentage. His TSP performance has averaged about 20% growth since we did that many years ago...

I'm glad we did, because the company the plan belonged to was sold off and the investment fund being used by the new company has something like a 3% return, which is terrible.

I have never heard of a financial advisor worth his (or her) salt that thinks Whole Life policies are a good idea.

 

[Ngwira]

I noticed a $60 increase in my bi weekly paycheck due to the new tax law. I also did our federal taxes (sick kid at home ) and we’re getting $4800 back.

 

[DisneyMandC]

DH had an extra $90 in his paycheck today. Very surprised to see that!

 

[Dentam]

DH had an extra $90 in his paycheck today. Very surprised to see that!

Probably from the tax law change. Mine was about $40 more. Every bit helps!

 

[ml sumner]

I had an extra $31 in my weekly check. We received our tax refund on 1/31 and I paid off every dime of our credit card debt. I hated to spend it all, but made myself do it. Now the goal for us this year is try not to incur as much credit card debt as we have this past year. I'm hoping between the extra tax money in our pay checks and my upcoming yearly raise that we will do much better. Now waiting on our state refund so I can buy our Disney tickets!

 

[Gr8t Fan]

Finished filing our income tax returns and received notice that both were accepted. Got an extra $28.10 in my semi monthly check a few days ago. Based on the new withholding rate, the new tax rates for 2018, the increase in the standard deduction for married couples, the elimination of personal exemptions for 2018, the doubling of the child tax credit (and my losing the ability to claim one of my kids because she'll be 17 later this year), etc., I calculated approximately what our tax refund will be for next year. It's going down significantly if my calculations are correct. Just a heads up that the lower tax rates may not be enough to compensate for the elimination of personal exemptions, especially for those of us with kids we can no longer claim the child tax credit on. We still won't owe, so that's a good thing, but I'm glad I figured things out early because it's a big reduction in our refund based on only a small amount more in our paycheck over the course of the year. Thankfully, we normally just put the refund into savings, so we'll have to make adjustments elsewhere, if we can, to make it up.

 

[MamaCoop]

I am very excited hearing about everyone getting a little extra in their paychecks! I will be getting mine on the 9th. Hoping to see some of the same results!

 

[Ngwira]

I just did our state tax return and we’re getting back $650! So happy. Between that and federal refunds were looking at almost $5500 back. Will be using half to pay down DH’s car loan. The rest into savings.

 

[imbatman]

And I'm out of the Batcave to check in with you. But first:

That situation has me thinking: my fiance is going to be 47 in a few weeks and I'll be 33 this year. We aren't really "old" yet, but we definitely aren't young anymore. What is a good amount for a life insurance policy? Should I take out separate ones in addition to what we have thru work? I know things can happen in the blink of an eye and I think we need to be better prepared for anything that may happen.

Tygerlilly...this isn't in response to the life insurance, but do you even have a will yet? If not, that is HUGE, depending on the state and your/his family, should something happen to one or both of you. Sounds trivial, but my mom's family taught me the importance of one and sometimes how people revert to the almighty dollar. Even a simple will is better than nothing. We just had ours updated for $40.

Back to the Batman:

I have been drudging through the snowball spreadsheet, the bank spreadsheets, and the CC ones at least twice a week. DH gets updates. We've come to realize that we are horrible at tracking what we spend. In January alone, I was able to build up a baby money bumper of $600 in the account for "emergencies." Yes, I could fling that at the CC debt, but having nothing in the bank and living paycheck to paycheck is not happening for us anymore. That said, I was able to double up on CC1 payment for January.

If I put our noses on the grindstone, I could pay off CC1 in February. But the "what-if's" frighten me with two teenage daughters. I'll leave that emergency fund alone and hopefully build on it. That said, I'll be able to pay off CC1 in March, a full 2 months early! Woohoo!

We switched a lot of our auto deduct bills to the new AA CC for points and met the $1000 within 3 weeks, so hallelujah for 2 free airline tickets for December! I'm paying off the new AA cards every two weeks, to the penny. Next month, the companion tickets and 80k miles will post. I'll buy one set of tickets with one card and the other set with the second card, to maximize the miles we earn.

Keep chipping away at those numbers, people! They do shrink. It's fun to watch.

 

[Tygerlilly]

And I'm out of the Batcave to check in with you. But first:


Tygerlilly...this isn't in response to the life insurance, but do you even have a will yet? If not, that is HUGE, depending on the state and your/his family, should something happen to one or both of you. Sounds trivial, but my mom's family taught me the importance of one and sometimes how people revert to the almighty dollar. Even a simple will is better than nothing. We just had ours updated for $40.

We do not have wills yet. It's definitely something we need to sit down and do. We are going to visit his family in 2 weeks, so I think while we are there, we're going to sit down with his brother and sister in law and ask if they would be willing to take guardianship over the girls should something happen to us. Not something we really want to ask over the phone.

 

[Tygerlilly]

Double posted.

But, I think I may have found the suv we wanted for 4k cheaper than the last place wanted. Now, to hope they still have it in 3 weeks when I get my tax return back.

 

[Jen and Ashwin]

We do not have wills yet. It's definitely something we need to sit down and do. We are going to visit his family in 2 weeks, so I think while we are there, we're going to sit down with his brother and sister in law and ask if they would be willing to take guardianship over the girls should something happen to us. Not something we really want to ask over the phone.

This is the exact conversation that DH and I had with my brother over Thanksgiving. He and his wife are by far the best people to take care of DD in case something were to happen to me and DH. But I didn't want to ask him over the phone. It just felt like something I should ask face to face. He instantly said yes. I really had no doubt that he wouldn't. And I feel very confident that DD would be so well cared for if it ever came to that.

 

[DisneyMandC]

@Jen and Ashwin are you back you from your trip? We want details!

 

[Dentam]

@Jen and Ashwin are you back you from your trip? We want details!

I was wondering the same thing! I was reading the DAH thread and some people who went to that also went to the DVC Moonlight event too this week. Sounds like both were great! Looking forward to hearing how Jen's trip was!

 

[ruadisneyfan2]

This is true to an extent. These types of assets can be passed on but may not be tax free. As far as I know, they are only tax free if they're rolled into existing retirement accounts. Life Insurance provides tax free liquid cash that can be used immediately as necessary, or invested for the future. Someone will pay tax on investment accounts, either the estate or the beneficiary, if the money is cashed out at the time of death.

I just wanted to add, if only 1 spouse dies, the retirement fund goes to the other spouse but I believe it still stays as a retirement fund. So if I lose dh, his retirement account becomes mine but that doesn't give us extra $ to use immediately. That is, unless we wanted to accept the penalties of early withdrawal. It's not really "new money" coming in, just a technicality in name change compared to assets we have now as a couple. It won't help me pay our ridiculous property taxes as a single parent.

When we're both gone our kids will get it but who can predict how much will be there at the time? I've never borrowed from our accounts but simply because our need has never been great enough. I'd like to think it will never happen but we can't predict the future.
Like you said, life insurance is immediate cash income. Only if we die at the same time would our retirement accounts become more immediate income to our kids, as would all of our liquid assets.