Debt Dumpers - 2017

[dayvewc]

thanks for that tip! i'll have to see if we can do that as well.

I have to scan and upload the bill to be able to claim the credit in the future. I called and asked a while back and was told there is no time limit on the reimbursement, as long as they have the documentation.

 

[dayvewc]

Just had the last procedure on my back (for now). Can I say OUCH!!!

Hoping this will help long-term.

 

[Dentam]

Speaking of backs, I threw mine out on Friday morning - just leaning over to get something - not lifting anything. Anyway, it is day five now and the improvement is very slight. Just seems to be a muscle strain that will take a lot of time to heal. Not good timing with work, but I am powering through with thermacare wraps, arnica cream, and aleve.

 

[javeyloveschelsi]

AAAANNNDDDD...this month is shot budget wise. Just hoping to keep from adding anymore debt ...We had to have the exterminator come spray and set up outside traps--still haven't gotten that bill, carpet cleaner came today (this was an optional expense, but we REALLY REALLY needed to do it and our shampooer just wasn't cutting it anymore) and still haven't gotten that bill either...And, our van is only blowing hot air in the rear A/C, so I called and there was a recall on the module. I went yesterday, they fixed the module and I got in the car and it hadn't fixed the rear A/C. So, I lugged all the kids back into the dealership and they looked at it again. The actuator in the back is blocked and the warranty and recall only cover the passenger side, not the rear one, so that is going to be a $250 bill to get that fixed. And then, last night, the seat in my van will not move forward or backwards now, but will still move up and down. Of course, it stuck like this when I had the seat pushed back and when I went to get it forward, it just won't move. I'm only 5'1", so this is a pretty big problem and will have to figure that one out, otherwise I am driving with my big toe. We have also been getting in the graduation invites and it's teacher appreciation week and mother's day coming up, plus DD #1 turns 10. Also had to buy #1 and #2 ball gear and spent way too much at the grocery store and have used our eating out budget already and I have summer classes for the kids to pay for this month, not to mention trying to save anything for out mini vacation (family reunion type vacation) next month...Ugh...Sorry, just had to vent!

 

[brooke789]

Hi all! No real update from me, but we're still saving away! We just have our mortgage and two (zero interest) payments monthly for work we had done on our house. We're hoping to be making some major changes (this summer would be ideal) but as someone just said upthread moving and debt dumping don't mix. So, if all works out we'll likely be taking on debt to move to a new area! Otherwise we're just trucking right on along putting a good chunk into savings every paycheck now that we don't have any debt to pay off early!

 

[Tygerlilly]

Finally some good news! Hubbys glasses broke last month. He's been using super glue to hold them together because his new glasses were more than we could swing while on leave. Found out his HSA account will cover the cost of new glasses. So happy about that, so we will be ordering those and a spare pair of contacts next week.

I also randomly got a super nice double electric pump show up on my doorstep. Apparently insurance ordered it automatically after H was born and it got sent out. Since I'm using the same on from my first daughter (It's only 18 months old and in fantastic condition), I'm actually going to return this one to Wal-Mart for store credit. That's an extra $200 I can put towards groceries and I can take $200 from my grocery budget to put towards our October trip!

 

[MrsTurnerLovesDisney]

Lets talk term life insurance I've been listening to a lot of Dave Ramsey lately. I got a quote of $500K for $23 a month for 25 years. That seems super reasonable but DH is like $50 a month for same policy/term.

I'm thinking I should drop him down to maybe $200K he has a small policy thru work (I think $100K but need to double check). I might even drop mine down because honestly I don't know if I need $500K we only owe like $100K on our house and we live in a rural place cost of living isn't a lot.

So question if we start with a small policy like $200K each can we bump up to a bigger policy down the road? Right now we have 1 child and might have 1 more.

 

[Jen and Ashwin]

Lets talk term life insurance I've been listening to a lot of Dave Ramsey lately. I got a quote of $500K for $23 a month for 25 years. That seems super reasonable but DH is like $50 a month for same policy/term.

I'm thinking I should drop him down to maybe $200K he has a small policy thru work (I think $100K but need to double check). I might even drop mine down because honestly I don't know if I need $500K we only owe like $100K on our house and we live in a rural place cost of living isn't a lot.

So question if we start with a small policy like $200K each can we bump up to a bigger policy down the road? Right now we have 1 child and might have 1 more.

You can add additional policies later, but the cost is based on your age, so the longer you wait, the more expensive adding additional coverage will cost. Also, you want to base your coverage on what your expenses would be if you no longer had your spouse's income and for how long you would may need that income before you retire.

Consider things like cost of living, mortgage, childcare costs, college savings, retirement savings, etc. Also consider inflation rates (a $200k policy might sound like a lot now, but in 20 years, it might not cover nearly as much). Generally, a policy should last until your expected retirement age, because that is generally when you would no longer need income replacement anymore.

We will be looking into policies soon as well, since we have the baby on the way. We will also be drafting a will and power of attorney documents too. So many things on the to do list.

 

[javeyloveschelsi]

Lets talk term life insurance I've been listening to a lot of Dave Ramsey lately. I got a quote of $500K for $23 a month for 25 years. That seems super reasonable but DH is like $50 a month for same policy/term.

I'm thinking I should drop him down to maybe $200K he has a small policy thru work (I think $100K but need to double check). I might even drop mine down because honestly I don't know if I need $500K we only owe like $100K on our house and we live in a rural place cost of living isn't a lot.

So question if we start with a small policy like $200K each can we bump up to a bigger policy down the road? Right now we have 1 child and might have 1 more.

I used to work in insurance, so maybe I can help out a bit. Think of it this way...Yes, 500k or even the 200k may seem like a lot for you, but there are several things to consider. Do you stay at home with your child? If so, then if something were to happen, childcare costs would come into play (even if you work, child care would have to be covered somehow). Also, there are funeral expenses (not cheap!), the child(ren's) college expenses, just the basic costs of raising kids, inflation, any outstanding debts to cover, if you would want anything set aside for kids weddings, cars, etc., plus if something were to happen to you both, coverage to care for the kids by another party and money to supply them with everything they will need to take care of the kids. Also, who does the majority of the housework? Would you need funds to help cover a house keeper or someone to take care of the yard? All things to consider...

 

[DLgal]

Lets talk term life insurance I've been listening to a lot of Dave Ramsey lately. I got a quote of $500K for $23 a month for 25 years. That seems super reasonable but DH is like $50 a month for same policy/term.

I'm thinking I should drop him down to maybe $200K he has a small policy thru work (I think $100K but need to double check). I might even drop mine down because honestly I don't know if I need $500K we only owe like $100K on our house and we live in a rural place cost of living isn't a lot.

So question if we start with a small policy like $200K each can we bump up to a bigger policy down the road? Right now we have 1 child and might have 1 more.

It is usually advised to get the highest coverage that you can afford for the term of the policy. You really can't have "too much" life insurance (literally...the underwriters will not let you over insure yourself) You have no way of predicting the future.

We have insurance of over $1.5M on DH and $600k for me. I worry that it isn't enough. We are looking to add another policy shortly, as our policy only has 10 years remaining on the term, we are still young (under 40) and our 2 kids have special needs and will likely require continued support well into adulthood (something we didn't know when we purchased the 20 yr term policy 10 years ago).

You cannot change the coverage of a policy once you purchase it. You are locked into both the premiums and the benefit.

 

[DLgal]

Update:

I got my first paycheck from my first week of my part time scoring job. And just like that, savings account went from $0-1000. I worked my butt off...50 hours. I'm on track for 50 hours again this week. I feel like my eyeballs might fall out, but gotta make the $$$$.

Our large CC debt is down to $11,000 from $13,000.

We scored amazing airfare for our quick San Francisco road trip in June (had to ditch the road trip due to DH not getting as much time off as we hoped.) That whole trip should come in well under $2K which was the goal. I think it will be more like $1500.

I brought our monthly spending down by $600 ($3400 last month vs. $4000 the month before). On track to spend only $2800 this month...$1200 less than two months ago. This next month will be easy to keep expenses down because DH is gone on a training exercise until early June, so I am buying less food and we aren't eating out or doing much else (and I'm glued to my computer working like a madman so...)

Still waiting on DH's promotion. The military promotions are happening at a snail's pace...we were hoping he would pin on in July or so...now looking more like September. Sigh.

 

[MrsTurnerLovesDisney]

@Jen and Ashwin @DLgal and @javeyloveschelsi

thank you all so much for the input those are all very good points to consider. I think I will def take the $500 on me the cost isn't that much and will see for DH after we figure out what his job offers. We have super small policies thru my work like $30K each but I know that's not nearly enough but mine is free and his is like $1/mo so I won't complain

 

[DisneyMandC]

@Jen and Ashwin @DLgal and @javeyloveschelsi

thank you all so much for the input those are all very good points to consider. I think I will def take the $500 on me the cost isn't that much and will see for DH after we figure out what his job offers. We have super small policies thru my work like $30K each but I know that's not nearly enough but mine is free and his is like $1/mo so I won't complain

$23/mo is very reasonable too. I pay $27/mo for 500k and I've rarely seen prices lower than that! Definitely sounds like a good value for you.

 

[DisneyNutzy]

Lets talk term life insurance I've been listening to a lot of Dave Ramsey lately. I got a quote of $500K for $23 a month for 25 years. That seems super reasonable but DH is like $50 a month for same policy/term.

I'm thinking I should drop him down to maybe $200K he has a small policy thru work (I think $100K but need to double check). I might even drop mine down because honestly I don't know if I need $500K we only owe like $100K on our house and we live in a rural place cost of living isn't a lot.

So question if we start with a small policy like $200K each can we bump up to a bigger policy down the road? Right now we have 1 child and might have 1 more.

If you are listening to Dave and agree with him the best way to look at life insurance is income replacement and to cover childcare costs for a spouse that is a homemaker. To make the #'s easy lets say you make 50 K a year, Dave would reccomend at least 500K of life insurance. That 500K invested would ideally yield approx 10%. This would replace the 50K salary without touching the principal. Obviously the market will have up and down years but over the long haul 10% is not an aggressive expected return. Many people under insure the person who stays home to raise the kids not realizing how much it will cost for full time childcare or to replace the working spouse's income if they decide to stay home with the kids. The best thing is you already know about Term Life, never mix your life insurance with investments in a whole life or universal policy.

 

[DLgal]

If you are listening to Dave and agree with him the best way to look at life insurance is income replacement and to cover childcare costs for a spouse that is a homemaker. To make the #'s easy lets say you make 50 K a year, Dave would reccomend at least 500K of life insurance. That 500K invested would ideally yield approx 10%. This would replace the 50K salary without touching the principal. Obviously the market will have up and down years but over the long haul 10% is not an aggressive expected return. Many people under insure the person who stays home to raise the kids not realizing how much it will cost for full time childcare or to replace the working spouse's income if they decide to stay home with the kids. The best thing is you already know about Term Life, never mix your life insurance with investments in a whole life or universal policy.

Just to add, most underwriters won't insure a Stay at Home parent for more than $500K. We were told that that is the maximum, unless you can prove extenuating circumstances (like disabled children). This is how we are hoping to boost my life insurance, by citing the fact that both our kids have autism, that they were too young to be diagnosed with at the time we got our first policy.

A 10% return on investment IS pretty aggressive. I always thought the number to use for investments in terms of almost guaranteeing returns is somewhere between 4-8%. The stock market, over time, has averaged a return of almost exactly 7%. Of course, you can diversify and all that, but I think most financial advisers use that as a ballpark in order to estimate future earnings.

In addition, if you were investing a life insurance payout that you needed to rely on for long term income, you would likely invest in much safer, lower risk avenues, which would get you returns more around 4% over the long term. It would be foolish to put that kind of money in even a moderate risk investment category.

 

[Jen and Ashwin]

Just to add, most underwriters won't insure a Stay at Home parent for more than $500K. We were told that that is the maximum, unless you can prove extenuating circumstances (like disabled children). This is how we are hoping to boost my life insurance, by citing the fact that both our kids have autism, that they were too young to be diagnosed with at the time we got our first policy.

A 10% return on investment IS pretty aggressive. I always thought the number to use for investments in terms of almost guaranteeing returns is somewhere between 4-8%. The stock market, over time, has averaged a return of almost exactly 7%. Of course, you can diversify and all that, but I think most financial advisers use that as a ballpark in order to estimate future earnings.

In addition, if you were investing a life insurance payout that you needed to rely on for long term income, you would likely invest in much safer, lower risk avenues, which would get you returns more around 4% over the long term. It would be foolish to put that kind of money in even a moderate risk investment category.

I completely agree with your investment assessment. 10% is not a realistic rate of return. To get that, you would have to be invested in much riskier investments, which you would never do for money that you would need to be spending down over the years. I would not expect $500k to last indefinitely to insure a $50k yearly income. You would honestly need something more like $1.5 million for that, given a 3.25% annual withdrawal rate and an average of 7% returns over time (some years might be better, some worse).

 

[DisneyNutzy]

I completely agree with your investment assessment. 10% is not a realistic rate of return. To get that, you would have to be invested in much riskier investments, which you would never do for money that you would need to be spending down over the years. I would not expect $500k to last indefinitely to insure a $50k yearly income. You would honestly need something more like $1.5 million for that, given a 3.25% annual withdrawal rate and an average of 7% returns over time (some years might be better, some worse).

Everyone has a different tolerance for risk and I was just using some generic #'s based on the ideology for Ramsey since he was mentioned in OP's post. I personally wouldn't consider money from life insurance a short term investment. I wouldn't consider the S&P 500 a risky investment and that has averaged 10% since its inception in 1924 but that is just me. I actually don't invest in index funds and have gotten much better than 10% for over 30 years. Ups and downs of course but you don't lose unless you sell. JMO.

 

[Jen and Ashwin]

Everyone has a different tolerance for risk and I was just using some generic #'s based on the ideology for Ramsey since he was mentioned in OP's post. I personally wouldn't consider money from life insurance a short term investment. I wouldn't consider the S&P 500 a risky investment and that has averaged 10% since its inception in 1924 but that is just me. I actually don't invest in index funds and have gotten much better than 10% for over 30 years. Ups and downs of course but you don't lose unless you sell. JMO.

This is actually wrong. Adjusted for inflation, the historical average annual return for S&P 500 is only around 7%. And this figure is based on the Consumer Price Index, whose numbers many analysts believe vastly understate the true inflation rate. That means that the rate could likely be less than 7%. This doesn't take into account investment costs either.

And any money that you are drawing upon for current living expenses would be considered a short term investment, since you need at least some of the funds immediately.

 

[DisneyNutzy]

This is actually wrong. Adjusted for inflation, the historical average annual return for S&P 500 is only around 7%. And this figure is based on the Consumer Price Index, whose numbers many analysts believe vastly understate the true inflation rate. That means that the rate could likely be less than 7%. This doesn't take into account investment costs either.

And any money that you are drawing upon for current living expenses would be considered a short term investment, since you need at least some of the funds immediately.

I apologize for taking the thread OT and won't debate investment strategies any further. It wasnt my initial intent. That runs a close 3rd to views on politics and religion with causing arguments in my circle.

To the OP who mentioned Dave Ramsey I would simply suggest listening, reading and then make your own opinions on his advice. I think something everyone can agree on is having life insurance is important for most people.

 

[MagicallyMom]

Paid off my student loans, whoop!