I know it’s been a while since my last update. That’s because there really hasn’t been much to report, nothing good anyway. However, as of today, we DO have some good news, and I’ve received a couple of inquiries, so I thought I would give you all an update.
Before I get started with our particular update, I want to note that there are a few characteristics that are pretty necessary if you are going to get out of debt on a low income. Number one is patience. The Dave Ramsey stories you hear about people paying off $85,000 in debt in 6 months…well, that just isn’t mathematically possible on a $36,000/year income. It just isn’t. So for us, we had to recognize that it’s going to take us more time and patience. That’s okay. The important thing is that we are moving in the right direction.
Secondly, you have to realize that no matter how things look on paper, you are likely to experience setbacks. Cars break down. We may have unexpected doctor bills, unexpected expenses. You might move across the state and have a house you can’t sell or rent that you’re still making mortgage payments on.
Okay, that last one might be a little less common, but it’s what happened to us. We tightened our budget and made our get-out-of-debt plan. But then everything changed as we moved across the state and had to find another $440/month in our budget as we had to continue paying that mortgage on top of our living expenses here. Let me tell you, that is a bare bones budget for a family that was already on a pretty tight budget to begin with!
Student Loan Debt
In my last update, I shared that we’d found renters. Unfortunately that did not work out as a long term solution. The house was rented for 5 months, so that income did help us to continue chipping away at my student loan and as of TODAY, we sent away the last payment of my second student loan!!!
This means that on our bare bones budget, we have paid off nearly $20,000 in student loan debt in a little less than 2 years!!!
This is a great milestone for us, and a very exciting moment. We even splurged on Italian last night to celebrate :)
We are still whittling away at the remaining $56,200 that we owe on our house mortgage. We’ve tried renting it, which isn’t ideal. We’ve also tried selling it. In the 7 years we’ve owned the property, we have had it on the market for 7-8 periods with 4 different realtors. (do the math–most of the time we’ve had the place, it has been on the market!). We’ve also tried to do an auction this past weekend, setting the reserve below what we needed to break even, and we were going to use our savings to make up the difference.
Nothing has been successful. Finally, the latest agent said that she feels the house is basically “unsellable” because of the difficulty to obtain financing right now (it’s a double-wide), and a few other factors. She recommended that we contact our lender again and see if they could offer us any options. I had called before and was told basically that if we were up to date on our payments, they would not do anything for us. I was also told that since we aren’t living there, they couldn’t do anything for us.
I called this week and the woman I spoke with was very helpful. She feels like our good payment history and circumstances (job transfer 250 miles away) would probably allow us to be approved for either a short sale or deed-in-lieu. This hasn’t been our first option, because we want to feel like we’re doing the honorable thing by our lender. However, if they allow us to get out of it and mark the debt “paid-in-full” which they can do if they choose, then this is an option for us. The woman I spoke with actually said we should have called them from the very beginning. Which I did, but apparently didn’t talk to the right person.
So if things go as planned, and we are approved to proceed with a short sale and/or deed-in-lieu, then we could potentially be debt-free within 6 months or so. At that time, we can start saving more fully for the small place in the country that our family so desires.
At any rate, we’re taking baby steps, but in the right direction.
I can’t end it without saying this. God Provides. Every step of the way, God has provided for our needs to be met. He deserves all the glory.