So I decided to start this blog as an accountability tool to keep me motivated in our debt free journey.
How did we get here......
In 2009 we had committed to following Dave Ramsey to get out of debt... It's 2016 now... and as it's 2016 and I'm just starting this blog... you guessed it.... we didn't stick with it. If only we had... oh wow things would look different.
We made a lot of mistakes prior to 2009 and after.. We have had foreclosures... yes two of them... our primary home and a home that became a rental home of sorts....
Our first home purchase in Nevada was a condo that I loved it was about $110,000. But less than a year into it an officer next door home became available. This is offered to officers, teachers, firemen, at a 50% off discount for $100 down... but the home is typically in a less than desirable area of town and in need of a lot of work. We had several other police officer friends who had done it... enough to make us think it would be a good move because of the discount offered and the bonus when we could sell it three years later (you had to live there 3 years without owning anything else). So we sold our condo to get this "deal" of a house (which I'll call the blue house). When we walked away from our condo we had to pay to get out of it. That was a bad experience.
The blue house ended up being a pretty huge mistake if I'm being completely honest. I wanted to run away the first time I laid eyes on it... however, it was too late a contract was signed and we were stuck. And so there ya go..... Our older daughter got really sick in this blue house... she ended up needing to have a liver transplant (at 2) - she is 12 years post transplant and doing wonderfully. As you can imagine there were hordes of medical bills and hordes of crazy emotional stuff when you go from a totally healthy kid to a kid that 6 weeks later needed a liver transplant. During this time our insurance benefits exhausted and we lost her insurance coverage. All told a liver transplant alone with after care expenses was about a half a million dollars, not to mention adding in the cost of hospital re-admission, blood draws, home nurses, rejection treatment and the cost to live in CA for 70 days (some of that with a friend but most of it in a hotel).
So just financially things were rough. But after time we bounced back and had a new kind of normal. The insurance plan for the police department my husband works was amazing to us, they also got her benefits back again and changed the transplant after care benefits for the entire department, it was a Christmas miracle.
We were living there with an affordable mortgage like less than $800 a month. But we took out a HELOC.. Yes I know what you are thinking... dumb diddly dumb dumb dumb. But yes we did it.. It gets worse because the cars we paid off with that HELOC we didn't even hang on to down the line and the debt we paid off was accumulated again.
We had saved up some money to put down on a manufactured home we wanted to have "built" in a small town outside of the city and had already started making payments of $100 a month to the land owner until we got the construction loan to roll the land costs into. The land was $99,000 I think for 2.5 acres and the house was about $230,000 or so.
My brother (who had been living with us since he moved to Nevada) agreed to rent the blue house for a while with roommates. Prior to him moving out to buy his own home we listed to sell it, but the market here had crashed hard. We were competing with forecloses all of a sudden and we couldn't sell it... couldn't short sale it either though we tried and it ended up in foreclosure. That was a pretty horrible emotional time. I was pregnant with our youngest child then and the lender was less than kind when they would call and threaten me daily. I get it now looking back, they wanted their money. But we tried like heck to exhaust all possible options before foreclosure happened. We tried renting it out but people didn't want to live in the area period. There ended up being a small paying class action law suit we took part in as our lender had blocked us from pursuing a short sale by "unethical practices". We had a valid offer with money on hand in an escrow account but they wanted no part of it. After a lot of heart ache and work, that chapter eventually closed.
We had left the city to start living in a small town where we thought was our dream home and dream location.... Again other officers had relocated there from my husband's police department, so it seemed like a good idea. Houses in the city that we liked were already out of our budget, or so we thought, in retrospect we should have looked harder in the city. As I recount this I'm reminded what Dave says about who you take advice from and man we should have sought some more varied advice verses relying on the positive experiences of the friends who had already relocated out there. Some of our friends and realtor said this small town move would be great. My parents not so much. Should have listened to Mom and Dad.
Out in the small town, our mortgage eventually rose to about $2600 which was about the time when we started to have issues (it rose a bit from our original quote and the interest rate was like 7%). Concurrently Bry had taken a pay reduction because they had eliminated training officers (of which he was one, it was a loss of 8% of his pay). He was also having health issues from driving up and down the mountain (back and neck pain galore). We reached out to our mortgage company and they told us to there was no help unless we became delinquent. We didn't want to do that. We tried varying avenues to refinance but no one would touch a manufactured home. Initially both our lender and realtor told us that a manufactured home converted to real property would be the same as a stick built home. We found out that was not to be the case and were stuck with the loan as it was. (It was a 30 year mortgage 7 percent interest). We really loved our house and the beauty of the wide open space. And so we tried to hang in as long as we could.
Four years after living out there we decided to pack up and move back to the city...we prayed hard before doing so and God gave us a huge answer.
Our realtor told us that she could list the home but no way it would sell for what we owed on it. We didn't consult another. Not sure why. We felt we could trust her. She listed the home and back to the city we went. Surprise surprise it didn't sell. Still a sea of foreclosures everywhere. It ended up selling for $78,000 at auction. That was a kick in the face, but it was what it was.
Our homes back in the city....
Rental 1: A 5 bedroom home for $1800 a month. Our family car tanked at this point. But a huge positive was finding a great church and a huge huge surge in our faith. And so we just hung in there a bit. My parents came for a visit and my Dad co-signed a car loan on a mini van for us. Which we have faithfully paid on and will pay off soon! Thanks Dad!
After a year we opted to move to a less pricey rental payment to be able to save money.
Rental 2: Offered by our property management company by a retired CA police officer. He gave it to use for $1400 a month. It was 3,330 sq feet. Big house meant big heating and ac bills for sure. It was a lot to take care of. And we felt led to downsize and to save money.
Rental 3: A house Bry found, was $1000 a month for 1,100 sq feet. Deal was made on a handshake and our landlord was great. She understood we were using this as a place to rent while we saved for our next home purchase and waited out the rest of the foreclosure timeline. We lived here 2 years.
Four years later we got with a new realtor who was a super nice guy. We found him through an advertisement with the police union. We got a special offer which had the realtor and lender chip in a certain amount of money for police officer home purchases.
The home we purchased is 2290 sq feet, 4 bedroom. It was $269,000 I believe and we did a 30 year FHA loan as we had less than 20 percent down, ugh (I know what you are thinking - I'm sure Dave would give us a shake).
Our payment with insurance and taxes and PMI is $1741.00 a month. We love our house, our neighborhood and neighbors and we feel a huge sense of emotional peace knowing that we don't have to make any more moves when leases expire and such. And I know for me this is a pride issue, but the rentals never felt like "home" probably because I know they were temporary. And it always felt like we were saving to move to the next house.
So recently I was bitten again by the Dave Ramsey bug. We had known about Dave since 2009 but our following of him pretty much didn't go beyond a written zero based budget. I was always negative in the check book from over spending. Ya know how Dave says get sick and tired of being sick and tired. Well I got to this point. I think it was seriously some Godly intervention to be honest. Because really there can be no other explanation for me pulling the Total Money Make Over down off the shelf.
I started listening to Dave's podcasts on Itunes and was moved to tears by each Debt Free Scream. And man I felt motivated. I talked to my husband and said, okay I want to do this.... How do you feel about it? He always wanted to be debt free so he was more than game to jump in. And then we sat and started to get things in motion.
Now me, I need to see progress. I need to see that I'm making headway in tangible ways. I made a budget notebook with debt pay off thermometers for each debt, including the car loan. I made a wall of motivational stuff and also our debt hanging up there so I can see it and not forget in the dining room.
And I am gazelle intense baby! I am committed to debt freedom! I was the anchor keeping us from being debt free before, but no more!
~May your day be blessed~
