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Discussion Starter #1
You guys have been so kind and knowledgeable that I am hoping you might give me some more advice.

I have written on here before that I finally “got it” that debt is generally bad. Sadly, before we got it, my husband and I have aquired 2 car payments, a credit card and owe 95K on our house. Stupid, I know. I wish we had figured it out sooner but at least we did. Anyway, I was looking at the Lexington foreclosures and found we can actually get a house in a decent neighborhood fairly cheap. I mean, 10K or less. Our housing market is still doing ok here and we could probably sell and get what we owe on our home. But it is going down slowly. We have lost most of the equity due to the downturn and will take a hit BUT we can pay cash for a foreclosure house. Keep in mind too that my hours were cut and my husband’s job is iffy as to whether it will be outsourced or not. And we have friends in both cities. No family in either. Heck, no family in this state!

So, Pros:
No house payment – can pay off other debt quickly
Larger yard for our dogs and a garden
Be much closer to our work places
Might could afford a vacation/BOL within 5 years. (if it lasts that long)

Cons
Live in a much larger city
Don’t like Lexington as much as we like Gtown
New neighbors tho only 1 neighbor are we close to
Have to get ours ready to sell. Will cost a bit.
Neighborhood may not be as safe as our current one, but it won’t be horrible

I hope I have stated this well enought for you to tell me what would you do. Stay in current house or go? Thanks for any input!
 

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Forever Vigilant
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First, you are going about this in the wrong way. Your home is your shelter, and it is barely OK to have a payment on it. What is not OK are the car payments and the Credit Cards. Immediately cut up the credit cards and close the accounts. Create an emergency fund (in cash) that is equal to 2% of your net income or $1000, whichever is more. Sell the cars today, even if you are upside down on them. Buy some cheap junkers that run, drive, stop, and can pass an inspection. PAY CASH FOR THEM. Focus every penny of extra money to paying off your credit cards.

Once you have all of those debts paid for, then you can focus all extra money on your mortgage and it will be paid off before you know it. If you think you can sell without getting hosed, then by all means, do so. Just make sure you can get a new loan or pay cash.

Cut your lifestyle to the bone to reduce cash outflow - no eating out, no movies, cancel the cable, no manicures, no gym, no parties, etc. Get extra jobs and sell everything that you do not absolutely need to generate extra income. The more income, the faster you can pay off these things.
 

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Learning more each day
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I was looking at the Lexington foreclosures and found we can actually get a house in a decent neighborhood fairly cheap. I mean, 10K or less.
There is livable housing in a decent neighborhood in your area for under $10,000 ? that is our land costs here for 1/3 acre lots. Do you have links to these properties?
 

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Discussion Starter #4
Skyy, look on Realtytrac.com. The listings are on there. You can even check for GA. It tells you whether that's the estimated auction or if it's the loan balance that the bank wants to get rid of it. They do charge a fee to look at all the information but you can get an idea with the information they provide for free.

SMM123- sound advice. Thank you
 

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Red, be careful about buying foreclosed homes. If you're experienced, go for it. If not, I wouldn't recommend it unless you've REALLY done your homework. You can run into all kinds of problems. Dh and I once considered doing this, but after we did some research we decided not to.

My advice for what it's worth is this: Gather all the credit cards and transfer their balances to just one account with the smallest interest rate you can find. Cut all of them up except that one card with the balance, and start paying it off as much as possible every month, on time. Resolve to pay in cash only for future purchases.

As someone stated earlier, save up until you have at least a $1000 emergency fund. If you don't do this, the next time you have an emergency, you'll be tempted to use the credit card again.

It might help you to set up an envelope system. I know it sounds so simple, but it works! I started doing this several months ago when I switched to paying cash for everything. Label the envelopes for groceries, preps, gasoline, car payments, mortgage, etc. When the money in that envelope is gone, you are done spending in that category for the month. If you must pay by check, deposit only the amount needed for the bill and write the check for it.

Hope this helps.
 

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the first rule of getting out of debt is pay yourself first! 10% of what you make. Keep it!
with that money you can use it to make more money. put that money to work for you.
1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. In other words, a person should put away 10% of his or her income for the future as a bare minimum. This rule is so incredibly fundamental, yet only a small minority even bother to follow it.

2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. If you invest your money well, your money will simply make more money. Again, a very simple and obvious rule, but one that many people never get to because they didn’t follow the first rule.

3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling. This rule encourages cautious investing, or at least encourages the investor to at least be informed. In today’s era, one can turn to the internet for plenty of investing information.

4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those who are skilled in its keep. This goes hand in hand with the third rule: if you invest in stuff you don’t understand, you’re likely to lose money. Don’t buy the latest hot stock from your stockbroker; investigate and invest where you want.

5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. The worst option is to invest in anything that promises absurdly good returns, or anything that you’re heavily pressured into buying. These investments are scams and won’t stand up to serious research.




1. Start Thy Purse to Fattening
This rule says you must pay yourself first, which means you must
arrange your budget to where your expenses don’t exceed 90% of your
income. The remaining 10% is yours to keep. This extra is to be used
for investments only, not to be dipped into for any reason. If you
are deeply in debt take half of the 10% and pay down debt and use the
other half towards investments.

2. Control Thy Expenditures
How is it that someone who makes $200,000 per year is often no
better off financially than when they earned $45,000 per year? It’s
because they spend $199,512 of it throughout the year, leaving little
or nothing towards their future. You must sit down and devise a
budget. List all of your living expenses, study them thoroughly, keep
what is necessary and cut out all non-necessary expenses which rob you
of the extra 10% you’ll need as seed money to provide for your
magnificent future.

3. Make Thy Gold Multiply
This piece of the puzzle is absolutely necessary in order to
gain future financial security. You must make every dollar you save a
soldier that works to compound itself over and over. This will
provide a future income from your investments that you can live off of
should you choose not to work.

4. Guard Thy Treasures From Loss
Your investments must be such that you don’t risk your valuable
principal (stock market from the years 2000-2002, ouch!). Therefore
you must start small, seek knowledge of investing from wise people,
and invest in what you know best (hey, how about real estate and
notes) before moving on to bigger investments.

5. Make of Thy Dwelling a Profitable Investment
There is a great sense of pride in owning your own home, eating
fruit of you own tree, and working in your garden. Make sure it’s a
good investment and not so lavish that you can’t live within the 90%
necessary to make this plan work.

6. Insure a Future Income
There is one certainty we can all (hopefully) count on, and that
is we are all aging. Therefore, it behooves us to set up this plan
early in life and stick to it while we are in our peak earning years.
That way we can provide for our future needs with the income we make
today. Even if you are not young, it is never too late to start on
this plan.

7. Increase Thy Ability to Earn
The ability to earn is the rocket fuel for this plan. You must
show more interest in your work, improve concentration on your tasks,
and have greater persistence in your efforts. Thus the seventh, and
final, cure for a lean purse is to cultivate your own powers, to study
and become wiser, and to constantly be working on your skills. In
doing these acts you’ll acquire confidence in yourself and you
abilities to achieve, which will naturally lead to more income,
helping to fund your magnificent future.

the place where this came from is a book called
The Richest Man in Babylon by George S. Clayson
 

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Discussion Starter #10
Yup. So far I am doing some of the things suggested. I listen to Dave Ramsey :) Smart man. Anyway, we do have $1000 emergency fund. We only have the one credit card. We just got new cards but I didn't activate them. In to the shredder they went until it's paid and I can close the account. We continue to "trim the fat" out of the budget and we account for every dollar. I guess we just need to continue to be patient. We didn't get in this mess overnight and we won't get out of it overnight. As for the cars, we both drive 100+ miles a day. If we can find a clunker we can pay cash for, I'll try, otherwise, they have to stay for now. Because honestly, having to get a loan to pay these loans off because they are upside down, just doesn't make sense to me. Maybe after I ponder it some more... Like for my car, I'd have to sell it for 5-6K less than what's owed because of mileage and it will be paid off in a year anyway. Just doesn't seem wise to me. And it's a Toyota. It will last forever once it's paid for. Dh's car?? Well, he's the problem there.... I'm working on him. He doesn't feel the stress that I do because he only glances at the budget and finances and says, whatever you think.. Sigh....

Becka, thanks for the warning. We are doing a lot of research but still aren't decided. It helps to have opinions of those smarter than me or have had more experience.
 

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Red, I tend to agree with the rest of the advice the others gave. Becka had a good point about doing your research. I've bought property for back taxes but you always need to research who else may have liens against what you are buying. I would pay off the cc and make sure there was no yearly cost for having it and lock it up. There may come a time you need it, the important thing to realize is, what's important to use it for.
 

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I agree with most these posts, you're home is you're best investment, don't go to a questionable neighborhood, get rid of the luxuries instead. It amazes me that folks think cable TV,satelite,cell phones,new cars,extravagant living are neccessities.
Do away with these and the credit cards, go to one vehicle if you must or can, then use you're money to pay off home mortgage debt.
You can't borrow you're way to prosperity.
 

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First, you are going about this in the wrong way. Your home is your shelter, and it is barely OK to have a payment on it. What is not OK are the car payments and the Credit Cards. Immediately cut up the credit cards and close the accounts. Create an emergency fund (in cash) that is equal to 2% of your net income or $1000, whichever is more. Sell the cars today, even if you are upside down on them. Buy some cheap junkers that run, drive, stop, and can pass an inspection. PAY CASH FOR THEM. Focus every penny of extra money to paying off your credit cards.

Once you have all of those debts paid for, then you can focus all extra money on your mortgage and it will be paid off before you know it. If you think you can sell without getting hosed, then by all means, do so. Just make sure you can get a new loan or pay cash.

Cut your lifestyle to the bone to reduce cash outflow - no eating out, no movies, cancel the cable, no manicures, no gym, no parties, etc. Get extra jobs and sell everything that you do not absolutely need to generate extra income. The more income, the faster you can pay off these things.
In my opinion this is an acurate course of action......
but sometimes easier said than done...
But still very acurate in my eyes
well said SMM
 

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Discussion Starter #14
Thank you every one.

Randy - I do want to say we don't have new cars. We at least bought used but we did buy one's that we didn't have the cash to pay for them. We work in 2 different towns and live in another one so going to one car wouldn't be feasible. Have to work where the jobs are. We have cheap internet, no home phone, etc. Lest anyone think we haven't trimmed a lot of the fat. We don't live extravagant by any stretch and less so with each passing month.

I guess we stick to the original plan. You guys ROCK and thanks for slapping me back to levity. I am a red-head and tend to think too much. :)
 
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