Note: Nicole recently emailed me the following and no longer wants to be considered for the position:
“I had submitted a post to audition for Blogging Away Debt, which was posted a few weeks ago. That post alone and the comments that I received was a blessing! After reading the comments, my fiance and I changed our financial priorities and decided to take a large chunk of the savings we had for a house down payment and apply it to my student loan debt. With that, I should be debt free within a few months. There were so many great submissions it’s unlikely I would have been selected but I wanted to let you know that I should no longer be in the running, just in case 🙂 Thank you for the opportunity to audition and good luck selecting the next contributor(s)!
Hello everyone! My name is Nicole and I am in debt. Not as badly in debt as I once was, but still, a good, healthy – or rather unhealthy – amount in debt.
Currently, my debt stands as the following:
- US Bank credit card (0% interest until April 2015): $3,108
- CARE credit card (financed my LASIK eye surgery) (0% interest until October 2015): $1,398
- Student loan (9.2% interest) (yes, seriously): $21,349
Two years ago, I owed an additional $17,000 in credit card debt and had an auto loan with a $450/month payment. What can I say, I was reckless in my 20s. There is no other excuse for the debt situation I got myself into. The last two years, I have been throwing as much money as possible at my debt and have managed to reduce it dramatically. Blogs like this one helped to keep me motivated and I always thought that writing about my own finances would help to not only keep me motivated and accountable, but inspire me to try new things that would allow me to do better.
In the last year, some amazing, wonderful things have happened. First, my then-boyfriend and I decided we want to buy a house. Second, my then-boyfriend proposed to me and we became engaged. These are such blessings but they are blessings that cost MONEY. I want to own a home (preferably with a reasonable mortgage payment and before home prices climb much further) and I want to have a wedding (nothing fancy, but an occasion to spend with our friends and family). But, the priority remains, I want to be OUT OF DEBT. My fiancé and I are ready to start having kids ANY SECOND NOW and I know I will want to be a stay-at-home mom when that happens. That absolutely is not possible until I get rid of my debt payments. Oh, and also, bringing a truckload of debt into a marriage is not the healthiest thing I could do for my relationship.
My fiancé does have one remaining credit card balance of about $1,200. He will have that paid off in full in a matter of the next few weeks because he is applying his entire tax refund to the balance.
So, here I am, trying to save for a house (I live in California where home prices are NOT cheap), save for a (very DIY, as cheap as possible) wedding and PAY OFF MY DEBT once and for all. I am in a challenging – and sometimes overwhelming-feeling – situation of wanting to do all of these things in the next year to 18 months. A large part of me believes this is possible, but I’m just not quite sure how.
I know usually bloggers come to this blog with a laser focus of paying off debt, but sometimes life brings in other areas to focus on. Previous blogger Beks had a baby during her debt paydown journey and Claire went through a divorce. That is life. I’m looking for you guys to keep me accountable on making progress for all of these things, which means I need accountability on not paying for things that aren’t necessary: clothes, trips, and wine…precious, precious wine…
I look forward to getting to interact with all of you and having you help me develop a plan!
Jeffrey strain is a freelance author, his work has appeared at The Street.com and seekingalpha.com. In addition to having authored thousands of articles, Jeffrey is a former resident of Japan, former owner of Savingadvice.com and a professional digital nomad.
Thank you for taking the time to put your finances out there. here are my questions:
1. Salary and expenses?
2. Are you going to try and buy a house and have the wedding while paying down debt, or are you going to pay down debt first, then work on those other two? Which of the three is the most important at the moment?
3. Your want to do them all in the next 18 months, but you say you’re not sure how. Have you made a plan or run any of the numbers yet?
Good luck to you.
Hi Danny- thanks for the questions! Our salary combined is about $80,000. We currently pay $800 rent and our other expenses include $75/mo in utilities, $50/mo in gas, $150 for cable and internet, $25 to feed two cats, $400/mo in groceries and my monthly debt payments.
We are going to try to buy a house as soon as possible while paying down debt because prices are only going up and we live on a very, very sketchy block. Our cheap rent comes at a price – ie robberies, homicide, etc. I’m not exaggerating. As far as the wedding, that I don’t know. And that is where I’d need help from you guys.
Our current plan is to save as much money as humanly possible…how much that is, I’m not sure. Not much of a plan, I know…
My parents have been broke my whole life and I refuse to bring kids into similar stress. Now is the time my fiancé and I need to get our act together. It’s never too late, right?
Is your fiance on board with you “baring it all” on the blog? Is he willing to write on occasion or have his opinion scrutinized too?
Honestly, I think you have your priorities a little mixed up.
1. Pay off your debt – with every single possible penny being thrown at it. Do not let that interest keep taking your hard earned dollars.
2. Wedding, house and babies can all wait until you are out of this debt and have a NICE SAFETY NET. You want to stay home with the child and live off one income when you have no idea how to get out of debt with two incomes – get a budget, get focused.
If you are bringing home together 4000$ a month and your expenses are $1400 a month plus debt repayment – you could have that debt paid off in LESS THEN 12 MONTHS!!!!
Questions:
1. Have you done a spending journal?
2. Who is the spender in the relationship?
3. What are you spending on that you refuse to let go of?
Babies cost money – if you cant afford to be on one income now renting , you cant do it with a child and a house. And if you decide that working would be better – what about daycare?
ditto, ditto, ditto.
(embarassed that I didn’t fully read this comment before posting my own below that covers much of the same territory)
Thanks, Joe! Don’t be embarrassed – hearing something repeatedly makes it even more food for thought. You guys are thinking about things in a way I haven’t. We are looking forward to getting into a house largely because our apartment is in such a sketchy area and it seemed to make sense and we would really like to own a home. But as Olivia pointed out, a mortgage is going to be way more than our rent…we need to determine our priorities first and foremost and the sacrifices we’re willing to make to achieve them. And, what is new to me as a 30-something now HAVING to make decisions with another person (not accustomed to this after so many years of just having myself to worry about), is my fiance and I need to get on the same page as to what those priorities are.
Yes my fiancé is very supportive. We both want to do better.
Olivia: yours is the kind of feedback we need 🙂 we have been saving $2500/month toward a house down payment and I’ve paid off $27000 in debt in the last two years BUT there is still a lot of debt to go and I’m finding myself torn with priorities on the money. Because the other priorities – house and wedding – are very emotional.
1- we have a white board where we write down everything we spend each day.
2- I’d say we’re both spenders on our weaknesses: namely eating out and taking trips.
3- those are probably what we’d have the hardest time saying no to. To stay home instead of accepting invitations out would be HARD.
Prioritizing these exciting things in our life vs doing what the readers on this blog believe to be right is our biggest struggle right now.
You don’t have to spend a fortune to have a wedding. This coming from someone who did have a big wedding 20 years ago. I will tell you I don’t have a SINGLE friend my age (40 something) that doesn’t wish they had had a smaller, more intimate wedding. Focus on the commitment you are making and you can have a fun STRESS FREE (weddings = stress) day!
Just my two cents. 🙂
Phaedra – you are a voice of reason for me! I can’t imagine spending a lot on a wedding, but I know myself and I know the second I start looking at dresses, decorations, etc. I WILL WANT TO DO EVERYTHING!! Fortunately, I have a fiance who would divorce me before we were even married if I got too overboard but I still need positive outside influences to keep me accountable 🙂
Julene: I didn’t answer your entire question. My fiancé would write if the readers were interested but I would be the primary contributor as far as writing the posts go. He hates writing even thank you notes 🙂
Congrats for all the recent fantastic life events!
From what you’ve outlined (and obviously we don’t know all the details), I’d personally take that $2500/month you’re saving and you can knock out the entirety of your debt in less than a year!
Another month or two of savings could easily cover a very nice DIY wedding.
$800/month for rent is way cheaper than any home you can buy. The housing market may go up or down a little bit in one year, but I don’t think anybody thinks we are in the middle of a bubble or anything like we were back in 2005 or so. Not sure if I’d agree with the urgency of having to BUY NOW.
Am I missing something? I just don’t see a strong case for buying a home and taking on that sort of debt and (perhaps even more importantly) financial inflexibility, especially with kids perhaps on the very near horizon.
This, of course, is where details like job stability, exactly how bad the rental situation is, etc, etc. could make a big difference. Looking forward to your comments if you get picked!
Hi Nicole! Just out of curiosity I must ask: Would you buy a house or an apartment as your starter home? I am not American and in my country owning houses is an expensive thing. We mostly live in apartments and they are less costly to maintain. Large expenses such as new roofing, external paint jobs and etc cost less when you live in an apartment complex. In here anyway.
I agree with Joe and Olivia. I understand that you would like to get married soon but starting a life together with a clean page makes a lot more sense to me. Wish you well…
Hi TPol! We would buy a house. In America, owning a house is expensive too! And I’m only beginning to learn how expensive (thanks to reading Buying A Home for Dummies). But my fiance is extremely handy and we’re looking at a small size home – which would help…somewhat…
Nicole-I think you would be a great contributor as well! As a young married person with similar debt it would be great to be inspired by your commitment to getting debt free. As someone who had a ridiculously expensive wedding that I wish I could do over I agree with all the comments who say that you don’t need to spend a lot to have a fabulous time at your wedding. The fun is bringing all the different parts of your life together. That is the rare gift of a wedding. We also purchased our first home quickly and wished we’d waited, as we bought when prices were high 7 years ago and are now quite underwater. I don’t think the market is going to change that much, REALLY, that waiting a year or two wouldn’t make a difference. Why not just move to an apartment that you like much better in an area that you like. Babies also don’t need houses or whole rooms to themselves-that’s very much American/western thinking. Kids are expensive and I know the biological clock is ticking for you. One thing to think about is what if you aren’t able to get pregnant the “normal” way? That has been our experience, so suddenly having a family is going to cost us 20-30K of fertility treatments and that is not something we can even consider until we pay off more debt. I know you want to have kids right now, but make sure you are the healthiest person you can be while paying down your debt in the next year if you can, which seems feasible, then move forward with the potential house buying. Houses aren’t going anywhere! There will always be wonderful places to live. Finding the right person to live with…now that’s another story!! 🙂 Hope to be reading your posts!! I vote for Nicole as well!!
Kerstin – It sounds like you and I have a LOT in common!! My fiance and I have actually been trying to have a baby for a year with no luck. I of course didn’t put that in my initial post because there is only so much information you can give in an initial post before that post becomes a novel 🙂 So, yes, conceiving naturally is a question for us. And thus, you can see how my mind just spins when thinking about money – I am soo blessed in that everything we are considering is a blessing but we want to be smart about things and the voices on this blog have already helped us so much with different perspectives, opinions and cold, hard facts 🙂
And thank you so much on your perspective on the wedding. It’s wonderful to hear everyone’s different perspectives having planned one.
I think Nicole would be a great contributor! Thanks for sharing you story.
I agree with some of the others. A debt paid off is better than a wedding picture on the mantle but that’s a hard thing to tell someone much else have someone do. If the right house comes along at the right price, you sometimes can’t pass it up when you begin thinking long term.
Out of all the potential bloggers I find myself most attracted to Nicole’s fresh and straight forward voice. I think the place she is in, having overall goals but without figuring out the steps to get there yet, is a great starting place for a BAD contributor. She seems open about her spending, committed to paying off debt, but still wholly human with desires and challenges that we all face when it comes to getting out of debt! (I myself have $15,000.00 left to pay off of what was originally $40,000.00 of debt) She has my vote.