GreenDragon

This is just a note to celebrate the good turn in my life right now

Here's the current situation... my husband was out of work for 5 years, so we were cash poor, and didn't have enough income for our expenses, and built up quite a load of debt.

Therefore, I have been working 3-4 jobs the last 5 years, and now that he is working again, we are beginning to pare down that mountain of debt.

Here's the good news:

My parents are moving in with me (retiring from SF) into a larger house, and supplying most of the down payment. This allows us to take the equity in our house (the value doubled in three years!) and pay off all that mountain of debt, with some left over.

This means that first, I don't have to pay ALL extra income to paying off that debt every month (was about $1500 a month going to it!), and second, I don't have the debt to begin with !!!!! WOOHOO!!! What a load off the shoulders!

That means that, with a couple months savings each year, we can take a vacation every year (instead of every 5!) to wherever we want -- Europe (my favorite), Asia, Africa... my travel bug can finally be fed.

I'm a very very happy camper. Just wanted to share.

Jocelyn_P

Congratulations!

Just a friendly warning: you may never get enough to satisfy your travel addiction. We used to go every two years, then I pushed so I got every year, now we're going twice a year, and I'm starting to wonder when I'll get tired of those long plane rides...

TexasAggie

Congratulations about getting all of your debts paid off As an accountant, it is scary to see how much some of my clients pay to credit card companies in interest fees and financing charges! The charges are so high they can't ever seem to make any real headway on getting the principal amount of the debt paid off.

It's just a suggestion, but what about putting *some* of that extra money into the new house or a retirement account? In my experience, even extremely intelligent people are vastly underestimating the amount they will need to accumulate before retiring. We are living longer these days, and it is likely that whatever nest egg one builds up for retirement needs to last for 25 to 30 years or longer (while kicking off sufficient income to live on).

In any case, congratulations once again.

jsmith

More scary to me would be dependent upon parents, inlaws or children. Good luck.

Sally

Good luck, but a word of caution- my mother moved in with us and broke her hip ten days later. It was very difficult. We did this for two years, but it has been a great relief to me since we( my brothers, my mother and I) made the decision for her to move into an assisted living center.

I hope it will work out well for you. Make sure that you and your husband have "your own space" and enough time spent separately from your parents.

Congratulations on easing your financial situation and enjoy some trips!

bob_brown

sounds to me like you are headed right back where you came from -- from under Debt Mountain.

ira

Good for you, Green.

GreenDragon

Thanks for the cautions. Yes, our plan is to start the 401K at my company (we're in our early 30s) with much of that extra money. The house itself will be paid for half/half between me and my dad (the two main money-makers). Parents are both JUST retired, in their early 60s, and very vigorous.

Since I just found my dad 5 years ago, this will be a wonderful chance to get to know him. He and my mom finally got married for the first time 3 years ago (in Las Vegas on the Starship Enterprise!). We all like the same movies, books and music, and are all technogeeks that love to travel. (if you want the whole romantic story, click on the 'Green Dragon's Cave' link at the bottom of www.greendragonartist.com, and go to the 'Me & my family' page.

My husband and I have our 'wing' and they have theirs, meeting in the middle. We even have our own living room area. We specifically looked for that so we could have 'space'. The house is 2800+ square feet -- even room for a baby (oh, and built-in babysitters).

If my parents were to lose their retirement income (still double my working income!) for some reason, I could still afford the house. I wouldn't have much left over, but I wouldn't be in the red, either. We did that on purpose, too.

bob, why am I headed under debt mountain? The credit cards will be paid off and not used except for emergencies. The house will be paid off more quickly when my dad sells his house in San Fran -- and he has about $100K equity in it, halving the new house debt. Are you saying I will just spend everything again? Ain't a-gonna let that happen!!!

I look foward to my travel bug being let to fly, even if it DOES mean I just want more

tuckerdc

Good for you! Sounds like you have a right to crow over your turn of good luck after a run of bad. Stay sensible...and stay travelin'!

Christina

I think this makes it clear why you were in debt already at such a young age, and I also think you are headed that way again.

I presume you never intend to move, do not intend to have children, and want to be dependent and live with your parents forever. Well, maybe you do, nothing wrong with those things, but I notice your priority is just to go on lots of expensive vacations now, not to build any savings or stability. If you intend to blow two months savings on a vacation every year, it seems you aren't saving anything else and given your husband's work history, I hardly think that a wise idea.

Leely

Good for you and your family, GreenDragon. Sounds like you've had a rough number of years.

What's that Butler quote? "He has lived best who has enjoyed life most"? (Certain I've just mangled all that, but you get the idea.)

jsmith

This has to be one of the more fanciful and sorriest postings for a while.

GreenDragon says "we were cash poor and didn't have enough income for our expenses". Did manage to get to England, Scotland and Wales in August 2000 and to Ireland in April 2002 and planned a honeymoon to London in Sept. 2003. Obviously, terribly deprived.

I'm only surprised she had to buy plane tickets. I thought the broom would be sufficient or am I confusing witches with witans.

cd

I too think you are headed for debt again as you have not learned how to be independent of parental help and this time you will have zero equity. But then again you've not asked my opinion so I guess I should not give it.

Sally

Sounds like you have thought things out pretty carefully. It could work out well for all of you. A lot of retired parents would be very happy to not have their children live across the country from them.

Just keep your lives as independent as possible even though you are sharing the same roof. And if it doesn't work out , you can always rethink and make a change in your life plans.

Good luck and have fun, too.

ncgrrl

Congratulations on getting out of debt. I've known people who were in a tough spot due to a layoff. Though, they didn't have to go through 5 years of unemployment.

Make sure you put at least the company match into the 401k plan. Also think about other retirement savings options. At your age, compound interest is your friend. I recommend borrowing financial planning books from the library and reading up on the subject. A little savings now could lead to a better retirement.

JJ5

Buy Suze Orman's last book. It will be money well spent.

TexasAggie

Hi Green,
Read your last post... it sounds as if y'all are in your 30s and are just starting to save for retirement. Is that correct?
If so, you might want to talk to a financial planner or use some of the many free financial planning tools online. If you really don't have anything saved for retirement yet, you are behind by thousands of dollars...
I am only 25 and have been putting money into an IRA for 7 years now, as well as other investments after I finished grad school and got a "real job". I recommend that my clients have their teenage children start putting money away from their summer jobs as early as age 16.
It really is true that we are living longer and longer these days. It is not unreasonable as a woman to expect to live into your 90s. If you want to retire at age 65 (later than many people wish to retire), you need to have enough wealth amassed to be able to live off it for 25 to 30 YEARS... in other words, you need to have hundreds of thousands saved in income-producing assets if you want to be able to draw $30k to $40k per year for all those years.

Indygirl2

I'm a bankruptcy attorney and wanted to give a word of caution, not specifically to GreenDragon b/c I don't really know her situation, but to everyone generally. I often hear people say that they've paid off debt when, in actuality, they have merely taken out a home equity loan, typically at a fairly low rate, to pay off higher interest credit cards and other bills. In other words, they haven't paid off the debt but transformed its character. That's not a bad plan necessarily, as long as the person's income remains stable and they're able to make their house, tax and insurance payments. Otherwise, it's a really bad idea because they've converted what would have been unsecured debt into secured mortgage debt. If there's a financial downturn, they stand a chance of losing their home rather than simply defaulting on their credit cards. This is especially dangerous for people who don't change their underlying spending habits. They end up with a higher mortgage payment, yet continue to use their credit cards, and wind up in bigger trouble than they started with.

elaine

I think GreenDragon got more than she
bargained for in these responses, many of which seem both kind and informative.
I'll add this:
Please make sure that your parents, however healthy they are, have taken care of a will, insurance beneficiaries,
mortgage insurance, pension beneficiaries, etc and that you have done the same. Too many of us pretend that we're going to live forever, or, that we're going to stay healthy until we're 90, and we can take care of this 'later.' Too few of us do.

Jocelyn_P

Good advice, elaine. Add living wills to that list, though.