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I joined the TMF back in early 2005 with the following Financial Balance sheet.
Consumer Debt: $44,953:
Credit Card $33,795
Depart Store $4010
Orthodontics $1170
Personal Loans $5978
Secure Debt:
Auto Loan $13,560
HELOC $29,644
Parent (Student) Loan $25,300
Mortgage $149,304
Total Debt: $262,761 with Combined Net worth of -$15,860

With lots of support for TMF DW and I focused on and paid off all consumer debt in May of 2006.

Link to Happy Dance for killing Consumer Debt
By Appling the same principles of Living Below our means, focusing on building Net worth and paying off all debt including the mortgage. I am happy to say that we are now Totally Debt Free. Just paid off our auto loan on 2017 Nissan Rogue today.
It was very scary back in early 2005 having a Combined net worth of a negative $15,860 me 44 years old DW 46. Now around 4-5 years from retirement 58 years old DW 60 we have combined net worth of $738,837 averaging 105K Gross Income for the last 14 years. Net worth not quite enough to call ourselves FI (financially independent) but with no debt now within a few years should reach that goal next and be in the position to pick our own type of retirement instead of the other path to financial ruin that we were on.
Originally we planned to pay the mortgage off shortly before retirement sometime in 2023-24 time periods but with the way my work has been downsizing, with no notice. Last year we decided to keep 401K contributions just enough to hit our planning goals and throw everything possible at the mortgage we did have some help DW inherited some land in southern Missouri along with her siblings that we all thought would never sell. There were times that I went down to property with a 4 wheel drive truck was still very hard to get on land with all dirt roads in parts about a ½ mile off main gravel road, any rain virtually cut off access. However, we timed our sell perfectly, a Wood Pallet Company needed land right when we listed and it sold in a week. Her father before he passed had tried to sell property several years using many realtors with no luck. We applied almost all $45,300 of the sell to the mortgage would have had mortgage paid off before this last Christmas but DWs cars just could not make it so we used 8K of property sale on auto and financed the remaining 10K since we had already applied most of the sale to the mortgage. Still we have been paying around 4K per month on debt for the last year so was able to payoff auto loan today after finishing mortgage on January 11th. I turned in 100 hours work leave to pay off the last $3625 today.
Looking at our new budget, we should be able to live nicely on 70% of my income and save 100% of DWs income. Just increased 401K contributions from 10% to 30% (Maximum) and planning to save up a large Brokerage account 70-100K outside of retirement while still working so that when we do decide to stop working as our main source of income we can maximize social security by DW taking hers at FRA and me at 70. Depending on when we fully retire will draw on retirement investments and brokerage account to keep taxes low until I am 70 then with my social security and pension being well above our monthly budget needs should only use RMDs for fun extras/gifts charity etc.
We will probably do some Roth Conversions etc, later when incomes are lower so that RMDs don’t move us into excessive tax brackets so that we can pass on a legacy and not let the fruits of our hard work go to taxes instead of our children. Anyway, post is too long and I am rambling on… very exciting to see all the hard work budgeting and LBYM now moving into overdrive of building Wealth with little friction from debt.
…Thanks again for all the help back in 2005 when we had an almost certain financial disaster as a future. It’s a great feeling to be free of debt maybe not the most optimal way to make it to financial independence paying off a 15 year 3.5% mortgage in 6 and a half years, but, for us the added security and the memories of how crushing debt was back in early 2000’s this works for us getting out from under all debt.
Just One Piece of sage advice to those working Debt Snowball – those early years of killing the CC debt with strong support from TMF to make it all the way through to killing consumer debt (making it to zero so to speak) they were the best training program ever for building wealth. At times in this last 13 years it was easy to let up a bit, spend a little and that’s Ok as long as its LBYM, at times when I tended to relaxed a bit too much. I would always draw on that experience from killing off the CC debt - glance at the numbers and old posts and it would drive me forward knowing I could always do better saving and keeping focus at the next Goal on the list even though doom was no longer on our heels.
This LBYM stuff really works, just keeping focused on finances - giving every dollar a name, keeping a budget to stay on track and make adjustments as things change and/or we get smarter investing or learning better retirement planning. Soooo much better then living life clueless… enough preaching to the choir… FI here we come … Not exactly FI/RE but good enough
Happy Dance
P.S. rewarded myself by buying new book “ The Next Millionaire Next Door” first book was an eye opener back in 2005, helping to change spending behavior now looking to be the millionaire next door – it’s all about financial freedom not being burdened by too much stuff….rambling again…time to get on my exercise bike…going to Yellowstone in fall and need to get in shape for hikes
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