I saw my good friend this weekend. I've mentioned her before back when they took out a 401K loan. Of course, I encouraged her then not to do so.

I found out they are paying cash for Christmas. They aren't using any credit. It seems she is finding some great deals. She found a very pretty dress for a niece on clearance. Regular price was $50, marked down to $14.99. She had a $10 coupon, so she paid only $4.99 plus tax for a very nice gift. She's a good shopper...thus the amount of debt!

They have paid $400 for an appraisal on their home. They are hoping for a minimum appraisal of $119K, but are hoping for closer to $130K. Similar houses in the area have sold for $114K to $140K. The refinancing could save them anywhere from $300 per month to $800 per month. In her words, $800 a month would be a game changer for them.

They already both work full time and part time. I just wish them the best. I think this has definitely taught them a lesson in frugalness.