Help me be debt free so I can stay-at-home!

[ceeveg]

I have recently had to go back to work due to financial reasons. Placing my DD into daycare has been really difficult. How can I work towards debt-freedom most efficiently given our expenses? Here is the breakdown:

DH: $50,000 annually
ME: 32,000 annually

Outgoing Fixed Monthly

Mortgage - $950
Car - $300
Health Insurance - $798 (no benefits offered at our jobs)
Daycare - $870
Utilities - $300-350
Student loans - $300/mo
Credit Card - $200

Then we have varying costs for food. Mostly, what hinders me from being a sahm is our debt. Here is our overall debt:

$108,000 mortgage
$15,000 car
$40,000 student loans
$8000 credit card

We could deal with the mortgage if we didn't have these other things, but our biggest monthly expenses are health insurance and the mortgage.

Thank you so much!

[Denvergirlie]

I would assume that your DH brings home close to $3,200 a month net, so let's do some math...

$3,200 net monthly income

Mortgage - $950
Car - $300
Health Insurance - $800
Utilities - $350
Student loans - $300/mo
Credit Card - $200


If you deduct the above, there should be left over $600 a month for gas/ insurance for car, food, savings, clothing, gifts, etc, etc. Removed day care costs as that wouldn't be needed if you are now a SAHM.

Where is all your money going now? What do you do with your income?

[RollerCoasterMama]

Originally Posted by ceeveg

I have recently had to go back to work due to financial reasons. Placing my DD into daycare has been really difficult. How can I work towards debt-freedom most efficiently given our expenses? Here is the breakdown:

DH: $50,000 annually
ME: 32,000 annually

Outgoing Fixed Monthly

Mortgage - $950
Car - $300
Health Insurance - $798 (no benefits offered at our jobs)
Daycare - $870
Utilities - $300-350
Student loans - $300/mo
Credit Card - $200

Then we have varying costs for food. Mostly, what hinders me from being a sahm is our debt. Here is our overall debt:

$108,000 mortgage
$15,000 car
$40,000 student loans
$8000 credit card

We could deal with the mortgage if we didn't have these other things, but our biggest monthly expenses are health insurance and the mortgage.

Thank you so much!

If you could live on your DH's income absent the car, student loans and credit card debt...then put every penny of your income towards those debts. It's also good practice to see if you can really swing it on one income or if you'd need to find a little extra income after you quick working full time.

The classic baby-steps:
1. Make a budget together. Agree to it. And discuss any variations together. If you don't both sign off on it, this will never work.

2. If you don't already, make sure you have $1000 (maybe a little more since you'll have a couple of years at this at least).

3. Paying the minimum on car and student loan...put every bit extra you can on your credit cards. Just slam it as hard as you can. Tax refunds, those extra paycheck months if you're paid every two weeks. Declutter and selling stuff on craigslist. Anything to help you get some extra momentum.

4. Once your credit card is paid off...put all that extra money on your car. Slam it until it's gone. That should take you a year-ish.

5. Then roll it over and all you'll have left is the student loan and you'll be putting everything in your paycheck into it. That should be another year-ish.

BTW, me listing those steps is easier said than done. It's Hard Work. Really hard work. But it can be done. And you'll get lots of practice living on your DH's income. You'll have to agree that Christmas and birthdays will be small. Really small. Cookies and breads for relatives. No more than $50 for you both and the kids. That kind of thing. Sacrifices like that will get you there years faster!

Also, make sure when you budget, that you allow for a bit of fun money. A little bit of cash that each of you can do what you want and not have to account for. Maybe $20-$50--equals coffees, work-lunches, a small purchase. Little splurges that keep you from getting so frustrated that you give it all up.

GOOD LUCK!!!!

Oh, and celebrate the small successes! You need to see the steps on your journey! One little step at a time and you'll get there!!!

You'll probably have a time when JUST when you made some headway, the dishwasher dies or something and you'll have to stop your momentum and fill up your emergency fund again. But you'll have the excitement of knowing you HAD an emergency fund in place to save you instead of going further into debt.

Hope that helps point in a direction!