Get out of debt, already!

Roper · Senior Bucketkeeper

RE: Get out of debt, already!

Cat Herder · Understander of unimportant things

Now see, while I'm not begrudging you that perk roper, IMHO the government should not be forgiving loans to one sort of employee if there are not provisions made to have that same thing apply to all employees (regardless of field or employer). This sort of thing ends up being a special exception that only benefits a small number of overall borrowers, relatively speaking. Sure, everyone could in theory go teach school in a Title 1 school for x number of years (or serve in the peace corp or what have you for x number of years), but for a teacher, they get to work in their professional field closer to an employer of choice and get all that benefit and intangible career pluses, but for everyone else (say an engineering major or a busines major or a communications major or a political science major), if they do that, they put themselves at a serious competitive disadvantage professionally.

The question I have, is it really forgiven, or does the school district end or some government agency within education end up paying off the loan in your behalf? In that case, I say it be shown as an employer perk. Most student loans are actually financed by banks, and they are not in the business of saying "you're such a noble person, we'll let you out of this fiscal obligation". Most student loans (even those that come from the DoE and are paid by the borrower back to the DoE) are simply underwritten by The Department of Education who is a guarantor to the bank that they won't lose the money that has been loaned out should the borrower default. Otherwise, banks would not be willing to assume the risk with all the defaults that occur on student loans.

Fregramis · Senior Member

For those of you who are debt free, does that include your mortgage?

Just curious.......

Roper · Senior Bucketkeeper

Cat, the program of which I have knowledge is run by the Federal Government. They pay the lender on a graduated scale which, iirc, is 15% first and second years, 20% third and fourth years, and 30% fifth year. It applies to Title One schools, which are already receiving Federal funds. Title One schools are usually located in communities with high poverty and crime, and they have difficulty attracting and retaining teachers. Most teachers leave after their first or second year in a Title One School.

Companies do this all the time to attract professionals to jobs for which there is a high demand or unfavorable working conditions. Since teachers have salaries which are set by the state or district, schools are fairly limited in their options to attract the best and brightest. Which brings me back to this point: I think education should begin the transition to a market enterprise.

Mahonri · Senior Bucketkeeper

My mortgage was paid off 5 years ago. (I had it paid off in '98, then I had to use the house for a business loan in 01... that only took a year and a half to pay off)

Thems what understand interest earn it. Thems that don't pay it.

Mahonri · Senior Bucketkeeper

I am one of those that believe that teachers need a break whenever we can give it to them.

Teachers should be paid 3 to 4 times what they are getting. Their salaries have not kept up with inflation over the past 20 years and I think it is a shame. That is the only thing I would want to pay more in taxes for.

glumirk · Senior Member

also if you go into medicine they will pay off your student loans if you go to a hospital in a higher need community, like a smaller town, or an Indian reservation.

Cocobeem · Keeper of the Holy Grail

Yes, including mortgage.

Roper · Senior Bucketkeeper

We have my student loan and our home mortgage left.

For those of you who have paid off your mortgage, how did you do it?

We send a seperate check every month with an extra couple of hundred dollars and mark it "for principal reduction only."

I've heard several financial "gurus" say that you shouldn't pay off your mortgage, but that you should use that money in other investments. The reasoning, as I understand it, is that if you are ever sued, the first thing they will go after is your home. And it's better if it's not paid off in that case.

Sister Roper and I trust the Prophet more than the gurus, so we're working to pay off our home early.

We recently re-ran the numbers. With our home paid off and no other debt, our family of six could continue our middle-class life on about 24K/year.

Cat Herder · Understander of unimportant things

I think education should begin the transition to a market enterprise.

I don't understand what you mean. From my standpoint, education and academia is already very much into the free market, capitalism enterprise model. Take a university, for example. They make money off the students. They make money off the athletics. They make money off of prestige. They make money off of alumni. They make money off government and private industry via research grants. They make money off of patents derived from research.

But, with all that, as long as they have a pipeline for more revenue source, universities won't do all they can or should to make sure all student consumers of their service and product are prepared and placed adequately in the "real" world.

Anyway, back to the topic of getting out of debt. I think it is wonderful for those who have sufficient control of their expenses to make additional payments towards principle on a mortgage. That is wise in my book. That will be an ideal situation in my book when we have removed the other areas sucking the money from us taken care of to where we can start doing that. If we have no additional economic dings, maybe we'll have gotten everything else taken care of within 24 months. Of course, it would be nice to be making about 10 - 15K more a year, as increased cash inflow would definitely give more cash to pay off debt.

Roper · Senior Bucketkeeper

Cat Herder wrote:

I think education should begin the transition to a market enterprise.

I don't understand what you mean. From my standpoint, education and academia is already very much into the free market, capitalism enterprise model. Take a university, for example. They make money off the students. They make money off the athletics. They make money off of prestige. They make money off of alumni. They make money off government and private industry via research grants. They make money off of patents derived from research.

Cat, for higher ed you have some valid points. I was thinking more of public primary and secondary ed.

mirkwood · Senior Bucketkeeper

Roper wrote:

Sister Roper and I trust the Prophet more than the gurus, so we're working to pay off our home early.

Bro and Sis mirkwood believe this as well. An extra $200/mo vs. principal. I'd pay more if I could afford to. Our mortage will be paid off before I retire (I'm eligible at 51). OUr only other debt is our car, which will be paid off in 4 years. Then the home principal payment will go up by the car payment amount.

bokbadok · Senior Bucketkeeper

Earlier coco asked about the difference between wants and needs. How do you define a need vs want?

Roper · Senior Bucketkeeper

We have some forum members who have lived with the challenge of unemployment. I'm guessing they have some pretty good insights on wants vs. needs.

Cocobeem · Keeper of the Holy Grail

Clothes, for example can be a big black hole for money. I'm going through my mom's closets with her right now and MAN! She loooooves her clothes. Comes from that modeling stuff in her early life. But seriously, most of my family's clothes come from the DI or some other thrift store. You have to do some sifting, I'll grant you that. But really, no one would have a clue that we shop there. Unless they are shopping there, too and see me. It's interesting who shops there. I haven't always shopped there. I used to think I had to go to Dillard's or Nordstrom because they have the best petite departments. I used to think more about how I looked to other people. Then you realize by the time you actually run into another person that can spot a fake Tissot for instance, you wonder what's the point? You realize it's really a distraction. The scripture, "Having food and raiment, let us be therewith content," is really a sound piece of advice. (I Timothy 6:8)

We don't buy all our clothes there, just for your information. Shoes are seldom bought at thrift stores. But there's a difference between $40 shoes and $440 shoes when the function is the same. "Do not spend money for that which is of no worth," (2 Nephi 9:51) to me means the extra $400. Seems you are doing it for the praise of men. Which, in the end, means less than nothing. No need to look like a slob, but no need for this waste, either. And I realize that if one's job involves a certain "image" to be successful, you need to be mindful of that.

There is also some satisfaction in using someone else's cast offs. It feels good to recycle instead of just throw away. It feels like you are more grateful that way, or something. I think the Lord likes it when we try to use things more instead of throwing them away.

Furniture, too, may be a big money sucker. Our front room, for example-- Modest piano was purchased for a modest price. Couch #1 was free from my parents who were upgrading. Couch #2 was free from our Stake Pres. across the street who was upgrading. La-Z-boy was free from neighbor next door who was upgrading. Lawyer bookshelf #1 was a purchase from '92. Lawyer bookshelf #2 was free as a gift from my parents. Oil paintings MrCoco got at the Salvation Army (or some other place) in Denver for less than $20 total. Antique sewing machine and halltree free from my parents. (And before you think of how expensive antiques are, my parents picked up their antiques for free or for very little mostly during the 60s and 70s when antiques were not "cool.") Area rug purchased by MrCoco when we got married for regular price.

I mean, you can go on and on with food, cars, pretty much everything...

bokbadok · Senior Bucketkeeper

I agree coco. Mooching is very effective as a cost saving strategy. Why should I pay for things if I can get others to do it for me?

Cocobeem · Keeper of the Holy Grail

Hey, one person's trash is another's treasure.

bokbadok · Senior Bucketkeeper

Have you ever heard of "The Tightwad Gazette" by Amy Dazycyn? It has endless ideas for how to cut costs and corners.

Roper · Senior Bucketkeeper

We have that book! Some of the ideas are a bit hokey, like reusing plastic wrap when it costs like, what, 99 cents for a hundred yards. Most of the stuff in there is really good, though. The book sits in our bathroom. So if we are ever so poor that we can't buy TP, then the Tightwad Gazette will fulfill its destiny.

rayb · Hot Air Balloon

As a country we constantly borrow more than we can afford. Further we charge things beyond what we're really entitled to own. Take for instance things like environmentalism--leaving the children to deal with our junk, instead of living frugal junk free lives. You could take the principle of staying out of debt far beyond the idea of just keeping from bouncing checks or borrowing money.

Clearly there are times when debt suits us. Heck none of us would've chosen mortality were we overly concerned about debt... cuz we're all in debt to God.

--Ray

Mahonri · Senior Bucketkeeper

Ray wrote: "overly concerned"?

Sorry I don't buy your pre-existence to mortality comparison. (we were in debt there too.)

I'd say if a prophet of God talks about it regularly... (like Gordon B. Hinckley has) we should all be concerned enough to take steps to get out of debt.

mirkwood · Senior Bucketkeeper

bokbadok wrote:

I agree coco. Mooching is very effective as a cost saving strategy. Why should I pay for things if I can get others to do it for me?

Cool concept, can I eat your food storage?

Mahonri · Senior Bucketkeeper

Mirk,

If you don't have any and I still do, yeah you can have some of mine.

(I just know Ray is telling is wife to pack their bags so they can move to Phoenix...

)

Cocobeem · Keeper of the Holy Grail

mirkwood wrote:
Cool concept, can I eat your food storage?

Hey. I only "mooch"... and you know, that's really not the right term, because we just take stuff people are getting rid of anyway. You know, saving them a trip to the DI. If it's on the sidewalk, it's fair game, right?

MrCoco and I were dumpster diving once (did I tell you this story?) and it was the middle of the night... he he... I found some deal and was carrying it back to our free '78 Chevy Luv. It was kind of big and I had it over my head (sheesh, can't even remember what the thing was now). Anyway, this house I was going by had its sprinklers on when it was not watering time. A lady came out just then to turn them off and spotted me going down the sidewalk. We both just paused, her getting caught for watering violation and me for... whatever, stealing garbage I guess... then we both gave a knowing

and kept going about our business.

But yes, you can come get food if you need to.

Yes, I've read The Tightwad Gazette. Some ideas are good - I'll admit I wash some of those nicer Ziplock bags to reuse. But using half the recommended laundry soap? Umm...no. But my mom rips dryer sheets in half. I rip baby wipes in half. And when we mix up frozen apple juice we add 6 cans of water instead of 3. But don't try that with orange juice. Any more than 4 and 1/2 cans water and it's yucky!

I'm with ray about the environment. Sometimes I look at the bag I'm taking out to the garbage can and I feel really guilty or something. It seems like it's all packaging. A total waste. Anyone see the movie The Postman? I can't stand Kevin Costner, but the movie is kinda' interesting. It's an end times movie and people are setting up little communities to survive. People are rooting around for "junk" to make things out of, etc... All of a sudden I may be grateful MrCoco is a packrat.

bokbadok · Senior Bucketkeeper

I reuse lots of things. Plastic grocery bags line all the small trash cans in the house. Paper grocery bags are used to hold paper recycling until I take it to the collection site. We also use paper bags to wrap family presents, and then draw or stamp on them to decorate. We compost yard and kitchen waste. Empty plastic food containers are saved to hold seeds, fertilizer leftovers, birdseed, etc.

We used to have a neighborhood boy that would collect metal and aluminum cans once a week and take them to sell at the recycling center. But he moved, and I haven't found anyone else who wants them. I haven't done it because the gas to get there would cost more than we'd get for the cans, unless we saved up a mountain.

Roper · Senior Bucketkeeper

We bought a good paper shredder last year and now I shred all our paper and put it in our compost.

I'm really want to try vermicomposting next year. I understand it can't be beat for fertilizing gardens. Anyone here ever tried it?

Cocobeem · Keeper of the Holy Grail

You're telling me one pound of these worms turns into one THOUSAND pounds of worms IN ONE YEAR???

I'm... in awe. Never tried it. Looks like horse manure comes in second, and we have lots of that. wink

bokbadok · Senior Bucketkeeper

I did it on a very small scale years ago. I didn't produce enough vermicompost to be able to tell if it was really superior to plain ole compost or not. Plain ole compost is lower maintenance, so I just go with that.

rayb · Hot Air Balloon

Hey Bok, so what will your debt be after you get a Prius!? biggrin

--Ray

Cocobeem · Keeper of the Holy Grail

Good question.

bokbadok · Senior Bucketkeeper

rayb wrote:

Hey Bok, so what will your debt be after you get a Prius!?

--Ray

Higher than it is now.

Valhalla · Profuse Pontificator

I hate the whole debt thing and want to pay stuff off sooner, have a mortgage, student loans, and a car.

I earn decent money, but after tithing, offerings, taxes, insurances, mortgage, car and student loan payments, utilities, and gas for getting to work (124 mile round trip), groceries, etc, there is not a lot left. What there is left is used for clothes here and there (Walmart), food storage and preparedness, etc. I would love to through an extra couple hundred to the mortgage principal, but there is no way.

Dyany · Senior Member

I am the last person who should talk on this topic....I am terrible with money...but it should be noted that as I understand it, most bankruptcies from the middle class arise from medical debt. Considering that a simple hysterectomy for me turned into over $30,000 in bills (blessedly most of which were covered by medical insurance, but not everyone has medical insurance or good enough medical insurance), I can totally see how this can happen. One car accident or serious illness and instantly all your money is gone and then some. I'd have to see the statistics from Utah to know if this applies to the majority of their bankruptcies, and I know that some people are just BAD and get themselves into trouble of their own stupidity, but i would be careful before I judged those who declare bankruptcy.

And bok and coco, I do love you guys. I'm glad you made up.

bokbadok · Senior Bucketkeeper

And bok and coco, I do love you guys. I'm glad you made up.
We haven't. The enmity just went underground for awhile. I am confident that we will engage in additional acrimony in future. Stay tuned. rolleyes

Dyany · Senior Member

We haven't. The enmity just went underground for awhile. I am confident that we will engage in additional acrimony in future. Stay tuned.

Ma-an.

Cocobeem · Keeper of the Holy Grail

See how she is? rolleyes

fear of shiz · Profuse Pontificator

Let me know when that is so I can