We hit our bottom

[tynme]

Ok mama's, I need your help. I think we finally hit our bottom financially. We are almost 20k in debt with credit cards alone. I am seeking your advice and opinions. Here is what we have coming in:

DS brings in about 2400 per month. 1100 of that automatically gets sent to our other checking account for our mortgage per month.

I bring in about 400 from my regular job per month, and I do respit work which pays $15 per hour, but the hours are sporadic. I work about ten to fifteen hours per week respite, but the checks are irregular.

I also get about 500 per month in child support per month, that to, though, is irregular.
So, that comes to about 2200 per month, not including respite.

I primarily picked up the respite work assuming that that would be "extra" to go specifically towards bills.

Now, here is our debt:

Credit card 1: 5900 (payment 148)

Credit card 2: 1000 (payment 33)

Credit card 3: 4200 (payment 120)

Credit card 4: 6000 (payment 80)

Credit card 5: 4000 (payment 88)

Dental bills: 950

Insurance per month: 130 (car and life)

DH's motorcycle payment: 165 (owe 7k)

DH's boat payment: 170 (owe 11k)

Student loans: (no payment, owe 8000)

Cell phones 75

Internet: 50

Electric: 120

I think that's about it. My DH works four days a week, about an hour away. I am a full time student, taking classes online, so we need to keep the internet. I work Mondays (doing respite) which is an hour away, tuesdays I have school, wednesday and thursdays I work an hour away making 9.92, fridays I do respite an hour away. Sometimes I do respite on the weekends or during the mornings. DS either comes with me or stays with DH, so we don't pay childcare.

Up until today, we were getting coffee every morning, paying 3.00 per day, but I told DH I am at the end of my rope. Enough is enough, I can't take it anymore. I literally froze all of our credit cards, I'm done. I want to go hide in my room and cry and never come out. I hate debt, I married into 90 percent of this debt, and I feel so helpless. We have (since our relationship) payed off two auto loans, last month we sent almost 700 to one credit card, but now we got hit with 1000 in dental work, and it's like the straw that broke my back. I don't know what to do. I don't see the end of this tunnel. Help please.

I told DH I want to sell his motorcycle (I sold mine over the summer) but he says he owes to much to sell it. I think we could probably break even, but with the season being winter, we'd have to wait until spring to do it.

DH works over time when he can, but it is not something he has a say over, if it is available, he gets it, but not guaranteed.

I thought of picking up more work, but I can only do so much. I feel like all I do is work, work, school, clean. I am so stressed out, I want to cry just writting this. I feel like I am cracking, I am short with DH all the time, I can't even stand to be home much, because my house is dirty because I never have time to do it, and I can't stand to sit around and think about our debt.

I am an attached parent to my ds, he is my first and foremost concern. I have never worked out of the home for 40+ hours, in my location, the most I would make in a "typical" job would be 10, at the most. Plus, I would have to pay day care. It would break my heart into a million pieces to be away from DS that much, and quite frankly, I don't think he would handle it well either. Plus, I want to HS him, but if you think it is in our best interest to get a full time job out of the home, I will do it. As long as there are no negative affects to DS, I am open to anything, just please help me.

Edited to add gas: DH drives 120 miles a day, four days a week for work. Closer work for him is not an option. He is a city employee with very good pay and benifits.

I drive 120 miles per day, four days a week. Two of those days, I work four hours (or more) for $15 per hour, two days I work for 9.92 an hour.

One day I drive about 45 miles total for school.

Average gas price today is 3.45 per gallon.

We drive a honda accord and a chevy tahoe. Two of those 120 mile days, we have to take both vehicles.

I have been thinking of quiting my 9.92 an hour job and finding something closer, as I'm not quite sure it pays to take BOTH vehicles SO far.... ?

[holidaymama]

Well I don't have a lot of advice, but I am throwing you some :

I think the fact that you have admitted to the problems is a big first step.

Getting rid of the credit cards

Maybe you can talk to a credit counselor about consolidating all of the debt.

What about your mortgage? I know now is not the best time to sell a house, but it looks like your payment is almost half of your income...is that right? Can you find less expensive housing?

I would say it's time to get rid of the motorcycle and boat...even if you lose a little on them, you still wouldn't owe as much.

Do you have a plan worked out with the dentist?

Are the credit cards something you could pay off in a year if you REALLY worked at it? Maybe you could find a cc that offers 0% interest for the first year and move all of your other balances to that card and get it paid off. Or do you think somehow you could get a loan that had a lower interest rate than the ccs to put all of the balances with so at least you would have the lower interest?

What about your other bills like groceries and entertainment as well as clothing? Could you post those so we could help you whittle those away?

Since you are a student, do you qualify for WIC or Food Stamps?

[earthmama369]

OK, so ignoring the student loan and the dental bill, I come up with $1021 left after paying the mortgage, insurance, credit cards, boat, bike, and utility bills.

From there comes groceries, misc. expenses, gas and car maintenance, dental bills, etc.?

That looks tight, but workable. Would you mind posting a sample monthly budget of everything that goes out over 4 weeks or so?

My gut reaction is that if money is getting tight, you don't have savings or enough to put something into savings every month, and/or your dh's job or your own look to be in jeopardy, the bike and the boat should go. They are luxury items, and pretty big ones at that. But I can see the point that selling in the winter could be a bit harder than selling them in the spring. It depends on how close to the edge you are.

[tynme]

Forgot to add: we do have $1000 in savings, I have thought of getting a personal loan for the CC's, but haven't looked into it.

We probably spend about $200-300 per month on food, and that may be high. We don't eat out alot, and I make alot of our food.

We don't go out, we don't do frivilous things, we buy our things second hand from craigslist, thrift stores, or my favorite, garage sales.

About 4500 of our credit card debt came from purchasing a pellet stove, hardware, and pellets to heat our home, as we have oil, and that is way to expensive.

I agree on selling the boat and the bike, but we wont be able to get our "top dollar" until the spring, even then I will have to convince DH, and those are his babies.

Holidaymama, the 2200 income does not include our mortgage payment. We bring home about 3300, not including whatever extra money I make from respite (at least 600 a month).

The hard thing is that I know we have *enough* money to do it, but for some reason, we don't seem able to do it. Part of the problem is (with the exception of my main job which brings in the least) that my income is so sparadic. One month I will get child support on the 15th and 30th, the next week I will get it on the 25th and 30th, kwim? I can't depend on that money, because I don't know when it will show up, which makes budgeting hard.

[tynme]

ALSO............................... (yes, there's more!)



We are in the process of becoming foster parents, although it pays out barely $10 per day, it will be something. Again though, income that isn't to dependable.

[Belleweather]

1. Get rid of the boat. Holy cats, that's a luxury item that you really don't need and can't afford.

2. Get rid of the motorcycle. Sell it if you can, return it to the lender if you must.

3. Buy a copy of Dave Ramsey's "Total Money Makeover" and start a debt snowball plan. Because your debts are mainly in credit cards, you're really ideally suited for it and it can make SUCH a difference!

4. Look at re-shopping all your insurance. I'm not sure what your situation is, but it's possible that you can find a better plan online or with a higher deductible if you need to. Even when I wasn't changing coverage, I've always been able to find at least a slightly better deal when I reshopped so I try to do it yearly.

4. Look at switching to a prepaid cell phone if that's reasonable thing given your usage patterns.

[Paxjourney]

I thnk you may have hit your bottom but your DH has not if he is unwilling to get rid of the boat and his bike. Thats 17K of debt plus the cards. Yes you might not make top dollar but getting rid of it etc would free up some cash.

Along with that your Ins would go down as you would no longer be paying for the bike and boat.


If you factor in student loans that comes to a little over $30K. You guys will be able to pay it off and make it buy you need to be focused.

[tynme]

I agree that we need to sell the bike and boat, and come spring, we will. It is something that HAS to happen. They were purchased before my and DH's relationship, and our priorities have since changed.

I am a huge fan of Dave Ramsey, I think I will look into getting his book, thanks for the tip!

Our insurance covers two cars, the motorcycle, the boat, and my life insurance. 35 dollars is for the life insurance, and that will drop 11 dollars in November : ) We shopped around within the past six months, and this company was the cheapest we found. We will shop around again, though : )

Prepaid cellphones won't work. I am very close to my family, but don't see them much, and with DH and I working opposite shifts, we talk alot on the phone, and I want to keep our lines of communications open. We will be looking at changing providers for cheaper rates once our contract is up.

Okay, we've decided the Boat and Bike are going!

[kasey08]

Driving 120 miles a day for that job does not seem worth it at all. There must be opportunities in your area that would pay around $10. Right now it seems like you'd have more money by just staying home!

The way I see it, DH got to spend all that money and do whatever he wants up til now and you didn't even get to enjoy spending it but now you have to help pay for it - he needs to get serious and want to pay this all off so that you can have a better life in the future.

Also, buy a coffee maker! That money really adds up. I just started making it at home.

[sbrinton]

Yes, good move to sell the bike and the boat!

Consider selling the Tahoe and getting something more economical. Or find a closer job. Everytime you drive the Tahoe to work it costs at least $35 for gas. It is NOT worth it to spend more than $35 to drive to work to earn less than $10 an hour.

Are there other alternatives for commuting - bus, carpool, rideshare?

Could you survive with just one car? Hard choice to make, but it would be VERY NICE to get out of debt

Make your budget based on the income you can count on. I would put whatever you earn from respite care towards paying off debt.

If you are having trouble sticking to a budget, you might consider doing a cash budget for a season. Literally put the amount of cash you have to spend in envelopes for "food" "gas" or whatever else and if you run out of money, you are out. The credit cards need to stay in the freezer.

Look at your spending more closely to see if there are other categories - like coffee - where you can easily save a few bucks. Stopping the daily coffee fix will save you over $90 at the end of the month.

I would also look into consolidating your debt onto a lower-interest credit card or loan if this is possible.

So the way I see it, if you sell the boat and motorcycle you will save at least $300 a month. If you stop the coffee habit, that is another $100 a month in savings. If you build your budget around the income you can count on, then you can come up with another $600 a month from respite care. All together, that is $1,000 a month - or $12,000 a year.

If you get out from under the boat and the motorcycle AND you do not go any deeper into debt (keep those cards in the freezer!), then you should be all the way out of debt in about 2 years.

[tynme]

Originally Posted by kasey08

Driving 120 miles a day for that job does not seem worth it at all. There must be opportunities in your area that would pay around $10. Right now it seems like you'd have more money by just staying home!

The way I see it, DH got to spend all that money and do whatever he wants up til now and you didn't even get to enjoy spending it but now you have to help pay for it - he needs to get serious and want to pay this all off so that you can have a better life in the future.

Also, buy a coffee maker! That money really adds up. I just started making it at home.

Yes, yes, and YES!! I agree on all aspects.

I too, have been thinking of quiting my job that pays 10 per hour, and finding something local when DH works, so we don't have to take the tahoe.

[milletpuff]

Have you tried posting either to see if they will sell? I agree that you will get more for them in the spring, but if you have to pay interest on the balance PLUS the money going to bike/boat payments means less for credit cards, you have to factor in your credit card interest. PLUS you have to count how much you will spend to insure them between now and then. So you may be better off selling now for, say, 11,000+7,000 vs waiting till spring and getting 12,000+8,000, even though on the surface it looks like you woul d"get more" waiting till spring.

Another thing is to make sure you are not having too much withheld from paychecks. If you generally get big tax refunds, then you should adjust your withholding to make more available for debt payment each month.

There are some areas missing from your budget, like how much are you actually spending on gas? What about food? Gifts?

[tynme]

I would love to go down to one car, but I don't think we would be able to do it. My DH works 12 hour days, four days a week, plus travel is 14 hours, I can't stand to think of being isolated (we live in the deep country) for fourteen hours a day, plus if there was an emergancy, and it doesn't make financial sense (or does it?) for me to take him to work and pick him up.

We actually tried selling the tahoe, for several months (very recently), and even dropped the price all the way down to 2800, but it just didn't sell. I think we are going to keep it for now until the market picks up a little. We need something reliable, especially with the miles we put on.

We live in the middle of nowhere, carpool and rideshare isn't an option, especially with DH's odd hours (and always the chance he will stay on OT).

Do you think we could go down to one car?

I would have to quit the 10 per hour job, as it is when DH is working, we already ride together on Fridays, I just stay at my MIL's until he gets done with work.

I actually started the respite work with the intentions of all of that going towards debt, and so far, with the exception of the last check, we have been able to do that. Last month, we put almost 700 towards one credit card.

We used to do cash only, and when it was gone, it was gone, maybe we will go back to that. It's hard for me to judge what an accurate amount would be for gas and food. Maybe I just need to try harder : )

My aunt works at a bank, I think I will call her tomorrow and see if it is possible to get a personal loan to cover the CC's.... we have two vehicles to use for collateral, we should get approved...

Thanks everyone, for your advice, I REALLY REALLY appreciate it. I think part of my hitting bottom is that we were starting to do good, sending large chunks to debt, getting our savings up to $1000, then WAM! we get a 1000 dental bill : It's like we bust butt and work hard for nothing. to get nowhere.

Your making me feel almost optimistic again...

[tynme]

Originally Posted by milletpuff

Have you tried posting either to see if they will sell? I agree that you will get more for them in the spring, but if you have to pay interest on the balance PLUS the money going to bike/boat payments means less for credit cards, you have to factor in your credit card interest. PLUS you have to count how much you will spend to insure them between now and then. So you may be better off selling now for, say, 11,000+7,000 vs waiting till spring and getting 12,000+8,000, even though on the surface it looks like you woul d"get more" waiting till spring.

Another thing is to make sure you are not having too much withheld from paychecks. If you generally get big tax refunds, then you should adjust your withholding to make more available for debt payment each month.

There are some areas missing from your budget, like how much are you actually spending on gas? What about food? Gifts?

We don't do gifts, food is roughly 200-300 a month, but I think that's high, gas would be around 145 a month, a rough estimate at the least. This is our first married year, and we have had lots of changes(new house, marriage, loss of EIC, etc...), but according to our tax agent, we are right on track.

[milletpuff]

Are you sure that gas estimate is accurate?? It looks like you are driving about 1000 miles a week total -- even if you are getting 25 mpg, then that comes out to almost $140 a WEEK on gas!

Do you buy gas with a credit or debit? Go back over your statements and add it up -- I think it will be much more than you think!

[tynme]

your right! My estimate was per week! Thanks for pointing that out!

[sbrinton]

It might not be possible to have one car. It's just something to look in to. At the very least, I'd suggest driving the honda more than the tahoe and carpooling whenever you can.

The market is hard for the boat, motorcycle and Tahoe. But you could always list them online and see if anyone is interested. Craigslist is free...

[tynme]

Yeah, we had the Tahoe on craigslist http://madison.craigslist.org/ctd/838789098.html see see, here it is : )

No takers though.

I suppose I could list the bike and boat on craigslist now, if they don't sell, they don't sell, but at least I'd be trying!

We do take the Honda whenever we can, but twice a week we have to take both vehicles, each 120 miles per day.

I could always drop a shift at my ten dollar per hour job, and then we would only have to take both vehicles one day a week, and I could work saturdays from 9-1230 at the same job where I make 12 per hour. The extra two dollars an hour might make it worth it.

Thoughts?

[Poddi]

Just curious: why did you buy a house so far away from work? With the current gas price, your location probably end up costing $400 more every month than a house close to work would be. Plus all those time and energy used for driving. Would $1500 get you a house close to work?

[heatherweh]

Originally Posted by Belleweather

3. Buy a copy of Dave Ramsey's "Total Money Makeover" and start a debt snowball plan. Because your debts are mainly in credit cards, you're really ideally suited for it and it can make SUCH a difference!

Wait! Get it from the library- FREE! Resolve to not buy books or movies or music from now on when it can be gotten from the library or borrowed or copied or traded, etc....

Sorry, everyone else can save you the thousands- my contribution will be to save you $10 on a book.

I feel your pain- DH and I just hit bottom too. Its not a good situation either- I'm desperately working the budget and asking my part-time job for more hours... I'll be putting that book on hold at the library too!