If you make it to the bottom of today’s post, there is a reward for you! True story.
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My wife and I are in the process of refinancing our house. When we bought the home a year ago, it was about as painless of a process as buying a home can be. There was some grunt work on our parts, but by and large it was what you would expect; chasing down bank ledgers, getting statements, providing numbers, signing papers, etc.
This year we wanted to refinance. It has only been a year, but the interest rates have dropped enough that it meant freeing up some cash each month that we could then focus on debt in the short term, which was critical given our situation.
What we have found is that the process of refinancing has been FAR more imposing than the original purchase. Not only has it taken months of work to make it happen, but it has also required me to provide what seems to be the same information several times over.
At a certain point in the refinance process, I was also working on getting some debts consolidated at a much lower interest rate (%29.99 > %13.99), but before I did this I asked our loan officer if this would affect anything. I was told it would be fine, since my credit rating was already verified and the interest rate of the refinance was locked.
Smash cut to Thursday morning when I got a call from the same loan officer asking me why there was brand new debt on my profile. I remined her that it was the consolidation loan, and here response was, “Well, Dave, you personally took this debt consolidation loan out, and when you had originally asked me about it, I thought it was to consolidate your own debt. Instead you used it to pay off debt that was in your wife’s name, hence it now shows as new debt on you, and thus we probably can’t secure the loan for you at this time.”
But the really killer thing is that you can do it! No matter how bad off you think you might be, there are ways to dig out. Seek guidance, ask for support, read and learn, and find ways to solve your financial problems. The sacrifices to do so might sting quite a bit, but they’re only temporary, and then you’ll have the life you want to live.
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For the most part, I would say that anyone I’ve let in on my personal financial crisis and efforts to remedy that crisis have been wildly positive. Close friends and family have told us they are proud of our efforts, some have told us we’re finally “adulting,” and still others have said we have inspired them to get their own financial lives in order. All of this is GREAT!
But there’s always one…
There’s always the butthole in the crowd who has to throw shade. I borrowed that term from my dear, personal friend, TayTay, or as she’s commonly known, Taylor Swift.
So in our case, it was one person who just had to make a comment about how much money I bring in from my job. It went something like this:
“Well sure, it’s easy for you to project paying off $50,000 this year. We don’t all get bonuses and stock vests that we can just throw around.”
I distinctly remember the “throw around” part, and while it initially made my blood boil, after I had calmed down a bit, I realized I may be causing folks to have a skewed perspective of me.
So here goes…
Let me begin by saying that I make a great living, and I feel incredibly fortunate. As a guy who spent the first part of his young adult life working an insanely difficult manual labor job on a cattle farm, I understand that I have very little to complain about both when it comes to my income and the environment that I now work in.
The next thing I’ll say is that I do make more than the average person, and I also have more debt that the average person.
So instead of focusing on dollar amounts, let’s talk in percentages so that nobody focuses on income or anything like that.Read More »
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Welcome to another “Tuesday Tip Jar” where I will share awesome savings and financial tips as I find them. I might not have something for you every Tuesday, but when I do, you’ll find it here!
If you’ve got a financial tip you think others would benefit from, please send it to me via my contact page at the top of the blog, or leave it in the comments below the post!
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I’m in New York this week on business travel, so apologies for shorter posts, but at least this is one that could really save your bacon!
Back in January when the poop hit the fan for us we were in a bad way, and when I say that I mean there was real concern that we were going to lose our house. It was a really big fan, and there was a lot of poop hitting all at once!
My uncle in-law happens to be a life-long financial planner, and when we went to him cap-in-hands and pleaded for him to help, one of the things we all quickly agreed on was that we need some short term cash, and we needed it now.
That’s when he suggested reaching out to our banks and asking them to move a payment to the end of our loan.Read More »
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You don’t have to spend every dime you make, and if you invest wisely enough you won’t have to worry later in life about making every dime that you want to spend.
Starting Debt (01.01.19): $124,310.77 Current Debt: $107,793.15 Total Paid Off: $16,517.62 Income Going to Savings: 1%
I was probably a spoiled kid.
Both my Mother and Father grew up with next to nothing. They lived humble lives in very rural environments, and they learned to work hard and make their own way in this world.
I was born into modest settings as well. Not long after birth, my father bought a piece of dirt and put a double-wide trailer on it. He had just started a trucking business, and took out two loans to pay for a new home for his family.
Hold up for a second…
There is the making of a really good country song in that paragraph. You’ve got trucks, a double-wide, and dirt. If I can figure out a way to retroactively add a rodeo in there, Garth Brooks has his new smash hit!
Anyway…
In my early years, we didn’t have much. However by the time I hit around 11 or 12 years of age, my Dad was making a pretty good living, and our quality of life improved dramatically. I had more junk than the average kid, and if there was something I asked my parents for, I usually had it in a relatively short amount of time.
You can call that spoiled for sure, but I truly believe that because both of my parents had very little growing up, they decided that their kids would never know that feeling of wanting something you couldn’t have. This is a totally understandable frame of mind given their childhoods and while it’s an incredibly wonderful position to be in when you’re a kid, what they didn’t realize by giving us everything they wanted is that they weren’t ever allowing us to get a taste of the struggle that they went through.
If I wanted a new toy (I was a big Transformers nerd), my parents didn’t say, “Well then save your money up and go buy your little Optavius Prime Rib then!” Instead they just bought it for me. As a teenager I didn’t have to save for my own car, instead they just bought me one. I didn’t have to pay insurance for it either. Hell, I didn’t even have to pay for my own gas!
Now let’s just record scratch this blog post for one second and make something very clear: I’m not for one moment blaming my current financial situation on the fact that my parents treated me awesome as a kid! I had it really well, and I totally get that.
My point is that I spent a good portion of my young life being trained that if I wanted a thing, I got that thing… and usually right away.
So now I move out on my own, and I get married, and guess what? It turns out all of those things cost money when you don’t have parents to give them to you!
Not only did I have to pay for all of the fun things, but I actually had to pay for really lame stuff too like electricity and food. OH AND GET THIS… I had to actually pay for the GAS IN MY CAR!
The reality of this set in, and I couldn’t cope. I still wanted to have fun stuff and I wanted to have it now. So I started taking out credit cards, and lots of them. I didn’t actually save for anything, but instead just took out high-interest loans and bought the stuff I wanted instantly. It was really easy!
We know that old Garth Brooks smash hit. I won’t sing it again… for now.
So as part of this journey out of debt, my wife and I have decided to help educate our children on what we’re learning as well. This means that my kids will be opening savings accounts, and that we’re actually going to ask them to save for things they want.
As an example, my son recently decided that he “needs” a cell phone. With our cell plan, we get a third line for free and can get a heavy discount on a phone. So we told him that if he saves for the phone, he can use the third line. He’s now putting money aside and meticulously tracking it so that he can purchase the phone.
I’ve also told him that a portion of the money he saves must go into a separate savings account or he can use it (with my help) to purchase some shares in companies when he saves enough. The point is that this percentage doesn’t get used for things like phones or other “necessities.”
My daughter is a bit younger and isn’t on the hunt for anything quite as extravagant as a cell phone, but she’s saving money too and will also be buying some shares of her own.
I want to slowly but surely engrain in my children the importance of saving money. You don’t have to spend every dime you make, and if you invest wisely enough you won’t have to worry later in life about making every dime that you want to spend.
Fellow parents, please keep this in mind as you raise your kids. Just because you can buy them lots of stuff doesn’t mean you should.
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Digging Out with Dave Johnson 