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Thread: Getting rid of Debt

  1. #1

    Default Getting rid of Debt

    It has been a while since I've been active here. Life gets complicated and seems to move much faster as you get older. I am 36 years old, to some of you that is young and to others it is ancient. I am also a US citizen, which is a familiar concept to a majority of you. Being from the US means that I've lived in a culture which is primarily wasteful, short sighted, and has an entitlement mentality.

    Through painful experience I learned that some things are not guaranteed. I lost a job a few years back and with it lost my income. This was a shock to me as I had worked steadily since I was thirteen years old. With that I lost the ability to pay for basic necessities like shelter and food. Now this was not a crisis for me concerning myself, but looking into the face of my young son and wondering how I was going to feed him terrified me.

    I did find another job, but it was months later and not before I had to depend on others for basic needs. I've never felt so helpless or as much like a failure in my life. Couple this with the harsh reality that I was barely making enough money for shelter and food. I had debt collectors harassing me at every waking moment and no way to pay them.

    At present I am gainfully employed and volunteering to work as much overtime as possible to the tune of having fifteen hours a day, five to six days a week tied up in work. Even working like this it may take me three years to become debt free and develop a healthy savings account, but that is my goal.

    This is a heartfelt plea to those of you in your teens to your golden years to evaluate the risk of debt and the benefit of savings. I thought I would always have a paycheck and I was wrong. I thought debt was OK as long as it was manageable, until I found that that I didn't get to decide what manageable was the next week or month.

    I went through an event that scared me, shook the ground on which I stood and while not a natural disaster like many have braved it was no less a personal tragedy.

    Are there any other people here who have made similar commitments, with or without crisis, and if so what advise or encouragement would you share with someone making risky fiscal choices?

  2. #2

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    I have Khaymen. It was September in the year 2000. I was the music director to a slowly dying Methodist church. I had made the mistake of staying there 20 years. In September, the minister and the head of Pastor Parish met with me to tell me that my job was going to be greatly reduced to part time, paying about $6000.00 a year. Our daughter was still in college having an entire year to go. At the same time, I learned that our golden retriever was dying of cancer. I was devastated. I told them I would leave, having nothing to go to.

    I had taken some accounting classes, and I thought that at least I could find a book keeping job, but I soon learned that no one was interested in me. They were hiring young, good looking women. To be honest, I had a suicide plan. If I didn't find anything by March, I was going back home to my beloved Jersey shore, look at one more sunrise across Barnegat Bay, and slit my writs. I even went on line to find the best way to cut.

    Two things happened. I discovered John Edwards, the spiritualist who reads the dead. He gave me a lot more faith in God than the organized church ever did. I went back to school and took enough classes to get certified as a teacher. I think God was watching, and I got a job as a part time Methodist music director, starting salary $20,000. Shortly after, I was hired as an assistant to the IT Director at my wife's junior high school where she was head of Special Education.

    My dog lived until March, and I felt that my mom was close by, somehow connected to the dog. For whatever reason, I was watched over during those difficult months. I did my student teaching but decided I didn't want to be a teacher. The other two jobs fell into place at about the same time. I'm back with the church, but I perceive God outside of the church. Death is a doorway, and while we're here, we have work to do. Some of that has lead us to this site. We are lead to others in the world, being there for each other. We simply have to find our way.

  3. #3

    Default

    I can speak from both sides of this, actually, especially since I'm making very risky investments right now (i.e. I do not yet have employment and I'm all-in on refurbishing a formerly-abandoned duplex in Detroit). My thought: Have an exit strategy and a Plan B for how to make money. In my case, the improvements I've made to the property should allow me to sell it more easily if I have to. I have other assets that I could sell if worse absolutely came to worse. I am also planning to pick up a trade that, while meant to allow me to tackle some of my renovation work myself, might allow me a Plan B if I need one.

    So yeah, judge the risk and your level of comfort. Have an exit strategy for whatever investment you make. Have a Plan B for making more money in case Plan A fails.

  4. #4
    acorn

    Default



    Quote Originally Posted by Khaymen View Post
    ....
    At present I am gainfully employed and volunteering to work as much overtime as possible to the tune of having fifteen hours a day, five to six days a week tied up in work. Even working like this it may take me three years to become debt free and develop a healthy savings account, but that is my goal.
    ....
    This would worry me, on paper your plan works perfectly, this is a far cry from reality. I fear that for as strong as you feel you are, you face being totally burned out should you last as long as three years doing this.

    Not so much as putting the proverbial boot in….more so….do as I say and not as I did. I once worked eleven hour shifts - seven days per week, for some years. What I can tell you is that there is a psychological cost to this.

    While there are some differences between your circumstances and mine; You need to factor in to the equation your emotional health with regular holiday periods of rest. If doing this would prolong the time-span of your recovery plan, it is still time well spent - as you have a dependant to think about also. Maybe something to think about?

  5. #5

    Default



    Quote Originally Posted by acorn View Post
    This would worry me, on paper your plan works perfectly, this is a far cry from reality. I fear that for as strong as you feel you are, you face being totally burned out should you last as long as three years doing this.
    I appreciate the concern. Unfortunately, I've worked like this most of my life. I worked three jobs and went to school cramming a four year degree into six years in the process. This is just the first time I've decided to limit my spending and use my income toward a long term goal rather than short term gratification.

  6. #6

    Default

    Have you considered bankruptcy? I am in the process of going through that myself. I had health issues earlier this year which required a couple of operations and a lengthy recovery time. I was uninsured, and it unfortunately resulted in me losing my job as well. I quickly racked up $100k in medical and credit card bills. I realized it would take me forever to pay this off. Although it will trash my credit for the next eight years, I will have the debt burden relieved and will be able to build myself back up. I initially felt bad for doing this, but realized that I really have no choice. Companies make allowances in their finances for people in this situation, and I just happen to be one of them.

    - - - Updated - - -

    Oh, and I agree with your comments on the entitlement culture and people being wasteful. This financial scare really taught me the value of money, and how to hold on to it. I wound up downsizing to a small studio apartment, getting rid of a ton of "stuff" in the process. I also sold my car, which was a luxury I didn't need in a large city. Now, I have money left over after paying expenses that I can save for a rainy day, and a heck of a lot less anxiety.

    When I see people driving huge expensive cars or living in a McMansion, I wonder what they could have done more constructively with that money...

  7. #7

    Default

    Well,

    Getting rid of debt, more importantly, not getting more...is great...

    I myself only have a small house loan...but have used most my savings on medical bills...

    Luckly, I've never had credit cards, no car loans, etc...

    And if even some of my endeavors work would be debt free end of next year...albeit without much savings...

    I used to work tons of hours...and it does take a toll...

    Just give yourself a break once and awhile...

    Every year I'd take the least amount of work for a month or so, just to relax a bit...

  8. #8

    Default

    I have found there is two kinds of debt.
    First is the kind that is forced on you ie health problems, disasters like storm damage to your house.
    The second is self imposed. You see something you want and just can't wait until you have the means to get it. This is the one that usually gets you in trouble.
    There is also the problem of getting a model outside of your income such as a house or a car.
    I agree things happen that effect your income. Keeping your debt low is not easy but in the long run is better.

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