I just don't get it!

[stretchmark]

I was reading a post in PG by bamboogrrl about how she got her finances straight and her husbands business straight too.

It was inspiring and got me thinking about a few things.
She mentioned how she doesn't buy new furniture and a few other things and I looked around my house.

We are in debt BTW and looking at how to get out.

Here is my houseful of stuff:

*loveseat-40$ at thrift store
*couch-200$ at moving sale
*TV-200$ at same moving sale
*rocker-FREE from in-laws
*my computer desk-FREE from curb in Boulder, CO
*DH desk-FREE from curb here in Taos
*shelves-FREE left over from previous home owner
*kitchen table and chairs-220$ yard sale
*fridge-120$ used
*telephone table-FREE, exchanged at consignment shop for a coat of mine
*TV table-FREE, from my childhood
*my bed-150$ king-sized bed, bought from an ex-Days of our Lives actor in town
*DDs bunk bed-FREE, left from previous owner
*bench by front door-35$ at resale shop
*wool rug-FREE (well, Dh did a small work exchange)
*shelves by bathroom- FREE, neighbor gave them to us
*Duvet cover-2.00 at thrift shop
*Duvet-FREE (gift)
*ALL 4 chest of drawers- 60$, 30$, FREE, FREE

I think you get my point

I own no new clothes, neither does DH.
Kids have a few new things.
All coats are used. Shoes are usually new but bought rarely.

My car was a work exchange between DH and an employer but would have cost 3,000 new and his truck was a salvage from a junk yard for 900$ many years ago.
We even got a brand new shed from Sears for 50$ because our neighbor couldn't figure out how to put it up.

So it's not like we live some fancy lifestyle.

We have no health insurance and up until now have done childcare exchanges for FREE.

Am I blind? I just don't see where in the world our money goes.
I do have crafts that cost some money but not a whole bunch. I just joined the gym for yoga classes and can't give up one night of yoga to save money 'cause then I'll go insane even more.

It goes to the creditors.

We pay so much in finance fees each month and are working on getting rid of those debts but I would just think that we'd have a lot more to show for the amount of debt we have.

Anyhow, have to run

[ilovebeingamom]

I wanted to say, strechmark, that i love you name. When I saw it I laughed out loud. Go mama!

Anyway, do you have microsoft money (or something similar)? We started tracking our expenses and I figured out that we spend 1600 on eating out every year, etc. Those day to day expenses of grocery shopping, etc. add up.

What does PG stand for? I don't know what forum that is.

[meco]

PG=Personal Growth


I find the more I track my spending, the more I am aware of how a little goes here and a little there.


The one wonderful piece of advice my mom gave me was NO credit cards, and while I mostly listened I have about $600 in C/C debt....not adding any more to it for a very, very long time.

Also, eliminating things like landline (have a cell) and cable save me a ton every month. My only bills are C/C, electric and internet (my one luxury).

I finally learned skimping is not fun, but a must to keep my head above the water.

[bluey]

Credit cards = We are in the process of ditching all but one of the cards. We are also in the lucky position of having a house we can sell for a much higher price than we paid so we are relocating to a less expensive area to lower our living costs. Not always an option for everyone but we are going to make it work

[carolsly]

Rollover..whenever we dh gets a raise (military) we roll it over to our highest interest debt (usually cc). Every penny...we do this with every penny we get. We don't mess around with it. As soon as the one we are concentrating on is paid off, we take that money and roll it over to the next debt. Dh does this, I don't. I am horrible with money so I'm on an allowance and he controls the finances.

Writing down what you spend, down to the penny. That makes a difference for us, although we track it with Quicken (dh uses this for check writing etc and it is linked to our bank so we can download all purchases, interest etc.).

Do you have someone in your family who is wonderful with money (my mom is our finacial advisor)? It helps so much. Suze Orman is a great reference too. You can check her books out at the library. The Complete Tightwad Gazette is the BOMB! I have saved so much money and resources by taking her advice.

It sounds like/looks like you are doing a great job. I'm not trying to slam you just trying to give you some ideas.

[DesireeH]

Do you own your house? Would refinancing or selling and relocating work? That is the only way we were able to get out of credit card debt (30K).

Another thing I do now with CC (I still use them for airmiles but I pay them off EACH time I use it, to the exact amount so it still comes out of my bank account like a debit card would and I never have a monthly balance) is I set up bill pay with paypal. With any paypal that I make (ebay, or whatever) I instantly put it to my credit card. THat would be a good way to get it paid down. If you eat out alot, for each time you dont, just online pay that to your CC right away. It adds up fast and starts coming off your CC fast.

[kerc]

Originally Posted by DesireeH

I set up bill pay with paypal. With any paypal that I make (ebay, or whatever) I instantly put it to my credit card.

Tell me more, or give me a link. I get very lost on ppal's site. I can have paypal directly pay my cc each time? Is there a fee?

[bamboogrrrl]

Hey everyone - Checking in on these cool new threads!

Probably the thing that really got me to rein in expenses was keeping track of them (I use Miscrosoft Money). I think I started doing this once DH came clean about his business debt. There's nothing like seeing exactly where your money goes to show you where to cut back. I looooove going out to dinner - those days are mostly over. I also love books and music and renting videos - all of which I can get from the library. In "Your Money or Your life," the author refers to our weaknesses as "gazingus pins" or rather the things that tempt you. For me it's going out to dinner, and buying books and CDs, That means I have to find alternatives so I don't get tempted: making sure there's good food in the house and that I get to the library often. For my SIL, her gazingus pins are bath and body products. Everyone is unique.

I've said it before, I love the book "Your Money or Your Life." I also recently read Dave Ramsey's "Total Money Makever" which shows exactly the steps, one by one, for getting out of debt. It's definitely not easy. You can read about his "Baby Steps" at his website. For debt reduction, he asks that you save $1K as a first step, and if it seems impossible, get creative about finding the $$ - sell something if you have to, go to one car, add another job... That emergency fund of $1K will prevent future debt. The second step is to list out your debts from smallest amount to largest and "snowball" the debt payments. When the smallest debt is paid, take that payment and add it to the next minimum payment. Keep doing that until everything is paid off.

For more ideas about where to cut expenses, I've learned a ton from the people at the Simple Living Network, based on the principals in "Your Money or Your Life." You can visit their forums at:
http://www.simpleliving.net/forums/default.asp

Stretchmark - you're gonna get there, but it will take some time. There are lots of people here and at the Simple Living Network to provide support. One of the hardest parts is probably seeing the reality of what you're spending and where - at least it was for me. Even if you keep a little notebook to track your expenses, you'll know exactly where everything is going and you'll probably have a few revelations... When all of us are debt free, we will have many more options!

On another tangent - I work at a university helping college students navigate the world of student loans. Our state passed legislation that credit card companies are no longer allowed to solicit on college campuses - yessss!

[stretchmark]

Thanks all, to address a few things mentioned above, yes, we do own our own house, well, the bank does :LOL
I've thought of selling and relocating before but the thing is this: We live in a growing tourist area and we are part of the "historic district" which makes the value of our house rise a lot every year. We got the best deal in town that I have ever seen. We paid 135,000.00 2 1/2 years ago and that is unheard of here now for a crummy modular home, they are selling for about 189,000.00 now. We know our value has gone up to about 180,000.00 already due to some appraisals in the area.
Dh looks at it this way: We may be in debt and our house value is going up a lot every year so that helps relieve the pain.

I have tracked our expenses before by writing down everything and it just didn't provide a ton of insight.

There was a guy on Oprah a while back who was talking about getting out of debt. He was talking about lattes and how if you buy on everyday it is ..... amount of money a week, year, etc.
He said that people need to identify their "latte factor" and get rid of it.
For us that must be going out to eat. I just can't figure out how to stop this. We have cut down our expenses when we do go out, sharing a dinner and getting only water. I just have a hard time cooking every night of the week in addition to lunch and breakfast. One day maybe I'll get the hang of it.

I know that if I was really motivated to get out of debt I would cut whateer corners necessary. There is some part of me that thinks 1,600 a year on out to eat is better than having a breakdown because I am overstressed. KWIM?

I am going to start writing everything down again and really take a look at where it all goes. I am half relying on DHs raise that is to happen soon to take care of things.
If that actually comes to be, I'll be turning to you all for some serious advice.
Our weekly paycheck is suppossed to go up 50% but Dh may decide to keep the extra money in the business.

We are getting tax money back and are going to pay off the two low-balance CCs with it.


THanks a bunch.

[bamboogrrrl]

Stretchmark - Coolness on your home. Sounds like you should stay and that it's a great investment (as long as you don't keep taking equity out). I looove Northern New Mexico - truly one of the most beautiful places... Hung out quite a bit in your neck of the woods when I was younger.

I can't remember exactly how he phrased it, but Dave Ramsey talks a lot about how financial fitness is 20% knowledge and 80% behavior. Sounds like you know how to start your debt reduction, but the behavior changes are rough. Like you said, "I know that if I was really motivated to get out of debt I would cut whatever corners necessary." What would motivate you? I liked Ramsey's quote "Live like no one else now, so you can live like no one else later." To paraphrase: Tighten your belt now, so you have great adventures later.

If eating out is your gazingus pin, some people cook a big pot of something on Sunday to help you eat through the week without going out. If you can freeze meals, it will make life less stressful. The Simple Living Network has a whole section devoted to food, so maybe they would have some suggestions there. Also, people often post their entire budgets and other posters have at it with suggestions. Sometimes others can see better what we can't.

You know, it's weird. I'm practically allergic to debt and DH doesn't even notice until it gets really bad. I've always been naturally motivated about paying off debt. Maybe it's because I'm a writer and an artist with a dayjob, and until our debt is gone (home mortgage included) my time will never truly be my own. That's MY motivation...

I was confused about your dh - is he employed or self-employed? My Dh is self-employed and that's quite an adventure in financial planning!

[MamaMonica]

"The Latte Factor" is form the guy who wrote "Smart Women Finish Rich." I can't remember his name!

This is a great book and it has a worksheet in the back to track your net worth. He also does a value-based system. This book and "Your Money or Your Life" got me back on track. Both books are available at the library. The first time I read YMOL years ago I didn't do all the exercises. This time I did- that's the key - to do the steps even if they are a real pain.

[DesireeH]

Stretchmark- What if you refinance and take out the amount of debt you owe since you have alot of equity in your house? Example: you bought your house for 135,000, say you have 25K in debt, then you refi and get a bank loan for 160,000. Pay off your debt. Your house payment might go up a tiny bit but depending on how much debt you have it may be worth it. Figure out the minimums you are paying toward your debt and see if that would be less than a house payment increase. Sometimes it doesnt even increase because you can get a lower percentage rate. You still would have a lot of equity leftover in your house for later if you decide to sell as well.

Kristin- On the paypal screen you can click and go to "Withdraw" then it has a bunch of options: transferring to your bank account, check, etc.....the very last line is "pay your bills online" Click on that. You can enter your billing information there. Then you can instantly pay to your CC whenever you get extra paypal. Some months it is a huge help. This month I got an extra 300 dollars that way. I paid in advance toward my CC and then I had a credit of 300 so I used that to buy my groceries/gas for a couple of weeks and nothing came out of my actual bank account.

[bamboogrrrl]

It's usually not a good idea to refi and pay off debt that way, especially for folks who already struggle with debt. You would be trading unsecured debt for secured debt, and basically endangering your home without changing the habits that got you into debt in the first place. While this might be the American way these days (I know sooo many people who do this), it's not a good option for getting out and staying out of debt. Debt takes time to accumulate and time to get rid of. There are no quick fixes unfortunately.

[khrisday]

stretchmark,

If eating out is your downfall, what about freezing some pre-made meals to have on those nights you just can't cook? Making double batches of something is usually not that difficult, and you woudl be eating healthier as well as cheaper. Crockpot id great for buys days as well. If you can spare 25-20 minutes in the morning (or less), you can come home to a hot, homecooked meal!

[stretchmark]

I hear you all about the freezing food and crockpot thing.
I am working on this.

I also hear you bamboogrrl about the refinancing the house thing not being the best idea.

We are considdering getting a loan from my in-laws and paying them back at a higher %age then they are currently getting on their money but lower than our CCs.

I somehow feel like this is a BIG life lesson on how to get ourselves out of what we got oureselves into and nobody is going to help us.
That is all fine with me and we are making big efforts to get out of debt and start wondering what we do with our extra money (a place we've never been before).

I just went the the library and got a few books (kind of crappy library so not much available) but did find: your money or your life, tightwad gazette II, 9 steps to financial freedom, and a David Ramsey book.
They are inspiring.

I am going to have to check out Microsoft Money.

You know what is really crazy? I had a 40,000 inheritance waiting for me (a long story) that my dad used when he was found guilty of hiding assets in his bankruptcy case. He used mine and my brother's $ (he had 40,000 too) but didn't touch his own money and then lied and said the court made him use ours. A story for another thread perhaps but it just irks me to think about.

[spsmom]

here's what we did...

i do understand bamboogrrrl's point about refinancing but we did it and it was the smartest thing we ever did.

before refi-ing, what we were doing worked but it was a slow process. we payed minimum balances on all c/c's and put all extra money towards lowest balance c/c. we were able to pay off 2 c/c that way.

we finally got to the point where we couldn't pay our bills with what dh was making (i sah)

we were able to refinance. but we only took enough extra out to pay off our debt. we paid our c/c bills and our car payment and our house payment only went up $100. (we were paying almost $700/month in c/c and car payments so now all we have is our house payment and utility bills. it is such a relief to be able to breath every month!


good luck. i know how much it sucks to be in debt! eating out was a big one for us, too!

[thistle]

If you are current on those debts (I am assuming they are credit cards), have you called ot see if you can lower the interest rates? The will tell you no, then you tell them you want to cancel the card then all of a sudden they can. This will only work if you are current on them.

You might also consider transferring some balalnces to lower interest cards and then cnacelling the higher interest ones. This only works if you are very disciplined and stil pay the same amount monthly as you have been, just at the lower rates. This more goes to principle.

Dave Ramesy's book is a good one.

Also, check out simpleliving.net and ask there. Those folks are great!

Good luck.

[DesireeH]

i do understand bamboogrrrl's point about refinancing but we did it and it was the smartest thing we ever did.

Us too Jeannie. Well we didnt refinance but we sold and bought another house and with the profits paid off all our debt and our car, etc and got a new house. My house payment is more than my old one but not more than what i was paying before with the CC debt/car. That was 8 months ago and we have not added any debt since. We actually have a nice savings and can breathe. I think it is different for us though because we are in southern CA where the equity goes up 5,000 a month due to the ridiculous house market jumps! If equity wasnt so easy to get, I totally would not recommend it. My inlaws used to refi all the time (in a slower area in another state). I think they did it 4 times on their last house. When they sold it they made nothing. Their house payment was always ridiculous too because they added dumb stuff to it all the time.

[DesireeH]

Also, check out simpleliving.net and ask there. Those folks are great!

I second that too!

The crockpot idea is great too. I save tons of money by having chilis, stews, soups all ready to eat so we are less likely to eat out.

[dharmamama]

I have an 8-week meal plan that is basically 3 meals and one wild-card night. I make doublt batches of the 3 meals and we eat each two times in that week. On the wild-card night we have leftovers or pasta soup. That way I am only cooking 3-4 nights a week.

Namaste!