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The New Debt Plan


First off, thank you so much for your constructive advice over the last couple of weeks while I sorted out my priorities and created a new debt plan payoff. (You can read my last debt number update here.)

So without further ado, here is the new plan with estimated pay off debts. The debts are listed in new priority order with current balances and estimated pay off dates with new plan:


Name Balance Interest Rate Minimum Payment Estimated Pay Off
Line of Credit $623 15.95% $218  Aug, 2014
Joint Account $807 0% $0  Oct, 2014
Car Loan – NV $30,762 6.79% $696  Mar, 2017
Retail Card #2 $3,297 25.99% $99  May, 2017
Car Loan – Honda $1,900 0% $0  Jul, 2017
Credit Card $5,083 13.9% $150  Jul, 2017
Student Loan $31,687 2.88% deferred  Oct, 2019
Retail Card #1 $0
Property Tax $0

I ABSOLUTELY HATE that I am looking at Oct, 2019 for pay off…so after much review and soul searching there is more to this story…I AM PUTTING MY CAR UP FOR SALE!  On Tuesday of next week I will clean up the car, get the state inspection and put it on the market.  That $696 payment and $30K debt is going away!!!

That is why the car loan is currently #3 as I believe I will be upside down when I get an offer so I neat to get as much paid off as a I can and then I will look at a small loan from my local credit union to make whatever difference is needed.

With that in mind, and with some extra income this month, I anticipate both the Line of Credit AND the Joint Account paid off by July at the latest.  So if those two are paid off as expected AND my car sells for close to asking price, this will be my debt pay off plan.

Name Balance Interest Rate Minimum Payment Estimated Pay Off
Car Loan – Honda $1,900 0% $0 Sept, 2014
Retail Card #2 $3,297 25.99% $99 Dec, 2014
Credit Card $5,083 13.9% $150 Apr, 2015
Student Loan $31,687 2.88% $218 Apr, 2017
Car Loan – NV $0 SOLD
Line of Credit $0 PAID OFF
Joint Account $0 PAID OFF
Retail Card #1 $0 PAID OFF
Property Tax $0 PAID OFF

This will expedite my debt free life by 2 1/2 years…BEFORE my boys would go to college!!!

Now with this in mind there are a few caveats regarding the car sale…

  1. In selling my car, whenever we have the twins’ siblings here, we will be stuck at home except for places we can bike too. Ugh!
  2. After selling my car, I will have to learn to drive a manual because that’s what the Honda is.  Ugh!
  3. I will not be able to take any foster/adoptive placements because the Honda only seats 5.
  4. And of course, I will need to pay it off ASAP, but will only carry liability insurance on it so my property tax/insurance costs should go WAY down.

I am fully prepared to make these sacrifices for now.  I have spent a lot of time thinking about it and looking at the numbers.  I can’t say that I don’t HATE the thought of not being able to help some kids in need, but I know this is the right course of action for right now.

This plan will allow me to 1) pay off debt on my credit report (helps my debt to income ratio,) and should 2) clear up some credit issues as accounts show paid and closed thus raising my credit score.  Can you guess where I’m heading?

I will start dealing with the housing issue this fall after I begin on the second debt plan…woohoo!  (And I may have some news on that sooner as well.)  The earliest the twins will get driver’s licenses is the end of next February.  At that time, I will revisit the car situation and consider purchasing a USED larger car MAYBE.  Hopefully you will stick around to guide me.

So tell me, what do you think of my plan? I AM SO MOTIVATED by those pay off debts!


  • Reply Allison |

    Great idea! That car payment was drowning you! Sacrifice now so later you can live with peace of mind and financial freedom! 🙂

  • Reply Denise |

    Wow. I’m impressed that you made this change because I understand just how difficult it was for you, emotionally, to shift gears. I think it’s a good plan. A very good plan.

  • Reply KK |

    I must say I LOVE how committed you are to paying off your debt! Before reading the entire post I saw that 2019 debt-free date and was a little bummed for you, it seems so far away! But, after reading through it all, I am so impressed! I think it’s definitely the right choice for right now to get rid of the car, it’s created such a burden for you.
    I think a larger used car is definitely a good thing to look into once the twins have their license. That way you (and they) have more mobility and you can go back to helping more children (which is such an honorable thing!).

  • Reply TPol |

    Congrats! I think, this is a great decision. You seem to have your priorities straightened out. I admire the way you like helping others but that can be done so much easier when one does not have any debt to worry about. Very good plan indeed!

  • Reply Kili |

    Kudos to you, Hope. I know it is a huge sacrifice giving up the car, but it will really help you gain momentum I believe. That’s one huge obligation nixed. Hope you’ll find a buyer fast.

  • Reply Den |

    Wow – you are “walking the walk” for sure – great job!! You’re going to start knocking off those smaller loans so quickly – it’s going to feel great!

  • Reply Teri |

    That is SO AWESOME Hope! Great decision.

    Imagine what you’ll be able to do and how you’ll be able to help kids when you don’t have the debt weighing you down……In the long run, you’ll be less stressed out and that’s going to be better for everyone. Proud of you!

  • Reply Mary from SC |

    Your post shows your spirit and determination to kick some serious debt to the curb. It’s hard to “give up” what we feel we really need but your sacrifice will pay off in big ways. If you keep up this intensity, I believe your payoff dates will be even sooner than you anticipate. You are constantly striving for ways of finding new income and also cutting expenses. Those two things will be your recipe for success. I’ll be here following you along on your plan – you are doing great things for your family!!!

  • Reply Jean |

    Hope, I think there were a lot of us that weren’t on board with your decision to still consider other foster/adoptive placements (it was your non-negotiable in a previous post), considering the financial situation you are in. I’m glad to see that you have taken another look at things and will forego that option in the short-term, to benefit your long-term goals. Just because you say ‘not now’ doesn’t mean that you’re saying ‘not ever’. Once you get your finances in shape, you’ll be in a better place to care for other children. Kudos to you for making that tough decision. It will pay off in the long run.

  • Reply Den |

    Another thought…..and I don’t want to add to your goals and dilute them, but have you thought about starting a “car savings fund” to purchase a used smaller vehicle next March with cash? Maybe once your smaller debts are paid off, but before you start tackling the student loan debt? Just something to think about….

  • Reply scarr |

    Great plan Hope! Every time you posted your debt breakdown, that car loan stuck out like a sore thumb. I think this is a sacrifice but you are resourceful and totally capable of making this work for you.

  • Reply Mary |

    Smart, smart, smart! I love your new plan! What’s great is that the action plan you outlined is in line with your main goal of getting the house in your name. Congrats on the decision to sell your car and to not take in more kids for now. I know those weren’t easy decisions but I do believe that putting more foster kids on the back burner, doesn’t mean never, it just means not for now. Deferring goals was the most important financial lesson I ever learned.

    As part of my job, I occasionally work with women on their finances and creating a strategic plan. One important piece is that your action plan must reflect and be in line with your goals. Now your action plan is in line with your goal. Once you get your mortgage and get on better financial ground (emergency fund and debts paid) you’ll be in better shape to handle more foster kids or to make a different decision on a car.

    Very proud of you Hope. I know these decisions weren’t easy.

  • Reply Felicity |

    I’m proud of you too! It’s great to see how focused you’re becoming and how much you’re willing to sacrifice now for a better future. I think you’re making a great choice for your family’s future.

  • Reply Financial Fan |

    Wow, true grit, Hope! You are going to see some serious traction on that debt very soon! Good for you.

  • Reply Tania |

    Indeed, those payments were very high… much higher than my parents’, and that was only $410. Did you consider refinancing, or was that no good at all either? I think selling it is a good move… who knows, maybe in 2 years you would have enough saved to buy (or put down) for a much cheaper car. I think you’ve picked a really good decision. I’ve heard manual stick isn’t that hard, but my dad would never teach me. Ha. Best of luck with the road ahead! I too would pick that choice if my situation was the same.

  • Reply Matt |

    These are all great steps toward the goal of being debt free. I’m really impressed at the sacrifices you are willing to make. Keep up the great work!!!!

  • Reply Alexandria |

    I think it is awesome that you are selling the vehicle! I know I strongly encouraged that line of action. That said, just remember that it doesn’t have to be so all or nothing. You can get a fairly nice minivan for $10k-ish. I wasn’t particularly expecting you to be without all the room you need. I just knew there was a whole lot of middle ground. But I think this is a step in the right direction and you will figure it out. Good Luck!

    • Reply Christi |

      I would suggest this as well. I would not want to be in a situation where I couldn’t transport everyone at once if an emergency arose. There are lots of cars out there that will seat everyone that cost less than $30k.

      And start learning to drive the stick now, don’t wait! I learned to drive on one when I was 14, and did not own one with an automatic transmission until I was 39 years old. I really miss my stick shift, but they are much harder to find now and not available at all on the SUV I drive.

  • Reply debtor |

    i think it’s great you took the time to sit down and really figure out what you wanted to achieve in the next couple of years. Good job, and remember, it’s not sacrifice if it doesn’t hurt a little.

    Think of the health benefits of the added biking too!

  • Reply Katie -DC |

    CLAP! CLAP! CLAP! You mad a difficult decision, and your determination and commitment shows. Pat yourself on the back, you are changing your life and your children’s for the better!

  • Reply susan |

    I’ve driven sticks for about 30 years. It really is easy; the only drawback is when you are stuck in traffic and your ankles will get a workout form all that shifting. Also, I hope you aren’t one of those ‘brake with the left foot and gas with the right foot’ kind of people. That obviously won’t work. Lastly, it’s a good skill for your kids to know. 1. none of their friends will likely drive a stick, so they won’t be driving your car and 2. They will never be ‘trapped’ in a place because they couldn’t drive a stick and that was the only available car to use. It’s also cheaper to rent a stick when you visit other countries.

  • Reply Jill |

    Great job working on a better future life! The only thing I would maybe change is to keep full coverage insurance on your car. If you had an accident would you be able to get another one? Just a thought.

  • Reply Jason Eastorn |

    Very informative. You need to use a debt plan in order to deal with your personal debt. It is vital to know what type of plan suits your situation so you can find out the best way to get rid of your debt quickly.

So, what do you think ?