Whoa oh here she comes
Huzzah! A new baby is on the way to bring our grand total of children (demons) to three in all, we didn’t budget for this. January is the doom date, just kidding, we are super excited… because it’s our first girl. We’re excited and we’re in debt. A lot. Did I mention that we are in debt? Like most American’s we’ve been shackled to debt and have routinely looked at it as a tool instead of a hindrance. Having car payments just a natural way of life for my wife, to me charging up common expenses with the mindset of “eh, I can afford it, I’ll pay it off later.” A few years go by and more mistakes are made.
I look at credit as plastic and any cash based transactions as paper. So my Paper Lion was born, largely with the intent of documenting our family progress but ultimately I believe that when we get to the end of this, this website will help other’s discover their “Paper Lion.”
While we’re trying to fight through Dave Ramsey‘s Baby Steps AND figuring out how to really get a grip on our budget we are hoping to get a few steps along in the process before our REAL baby hits her first steps!
The lay of the land – $82,761.93 in debt minus mortgage(s)
Debt as far as the eye can see Simba! Wow, it’s wonderful father! No it’s not Simba, I see a storm on the horizon and we’re going to get trampled.
“But dad, what if we Budget?” said no ever!
Poor choices on credit cards, trading a vehicle in on another vehicle (loan rolling eeesh… so bad), a rental home (hers prior to our marriage), our current home, her student loan.
Debt breakdown, pfft what Budget?
Credit Cards (mother of god)
|We’re idiots, TOTAL:||$26,799.94|
$14,262.10 @ 6.5%
$41,699.89 @ 1.99%
Together we make roughly 80k after taxes with very little opportunity for overtime. So I, personally, am looking to sell a lot of the crap I’ve accumulated over my 35 years of credit based existence. It probably is not going to garner that much but it’ll help get the claws out on this thing and start opening it up. Sorry if that *feels* a little graphic but I want to absolutely f**king destroy this debt.
Current Circumstances (following Dave Ramsey)
- $1000 in emergency savings
- I am currently going to school part time as well through the use of my GI Bill and pay very little out of pocket
- I will be going full time soon and receiving a stipend soon that will help out.
- I’ve stopped all my 401k investments
- I’ve elected to distribute dividends from my 401k stocks to come to me (Bi-annually it’s nearly 2k, 4k total per year)
- I’ve begun selling things from the home that we no longer need on LetGo/Craigslist
- Her house, worth around, potentially 60-70k, we owe around 35k on that.
- Our current house (would like to sell and move within the next few years) is worth about 165k, we owe around 135k.
Our problem is this; with our third child on the way, we feel like we need a minivan (two boys; nearly 5 and a newborn) to replace either of our cars.
My car 2012 Honda Civic is paid off, worth 6k.
Her car, 2015 Nissan Altima 14k owed, worth 11k.
Crappy truck, 2003 Ford Ranger, paid off, worth about 2k.
The truck is really bad and would take about 2k to get back to “reliable and safe”.
I *feel* like the best thing for us to get this minivan is to sell my car, sell the truck and take the proceeds and buy a used minivan outright at about 8k but that gains us no ground on paying down any debt, it only gets us a van (and probable slight insurance reduction).
I believe the correct way ahead may be to:
Get a real estate agent out to the rental house and get an honest assessment of value and market. (The house needs work). If we have the potential to make a profit after closing, fees, and taxes then use this a potential jump off point to do a few things.
- Sell the Nissan next, pay off difference with some of the house proceeds (2-4k)
- Get the used van we want (8-10k)
- Sell the truck and I keep my paid off Honda until it falls apart.
- Apply truck/rental sale proceeds to the credit card debts.
- Rough estimate would be after the dust settles; 14-18k applied to debts, car payment gone, insurance down a little (home and auto).
- Debt left to pay, roughly: 64k – 68k.
If we do the above plan we alleviate small amounts of insurance but also a 317 per month car payment. Based on our current, roughed in budget, we’d be able to pay about 2-3k per month on top of minimum remaining payments.
Based on our circumstances, do you have any other ideas on what we could do? Without extra jobs or overtime (I cherish my time with my kids).
But we believe we are on the right track with our debt plan and want to move a bit further on our progress through the baby steps.