We hit our bottom - Page 3

[marisa724]

Everyone has good advice, so I'll just add a little one of my own.

If you're in an area where it's not feasible to ride the motorcycle in the fall/winter months, consider taking it off your insurance for now. It may only save you a few bucks a month, but it's a few bucks that could go towards something else. You would just have to find out from your provider if it would make a difference in your rates.

Where we live (NJ) motorcycles are only practical about half the year, so DH - when he had his motorcycle - would only insure it from about March to September. The rest of the year it was locked up in our shed.

[tynme]

With the motorcycle, we can't drop insurance becaue we have a loan on it.

The reason I want to wait until spring before we sell the boat and the bike is because we owe more than what they are worth. If we sell them during a "hot season" like early spring when people are getting that itch, we may, MAY be able to break even. Otherwise, we'd have to come up with at least 1500 to make the difference of the bike.

My question of the day is: Instead of putting our extra money towards CC debt, until we get the bike sold, should we be putting that money in a savings account to cover the difference of the bike loan? We owe 7k, if we sell it for 5k, we will need to come up with 2k difference. How would you advise doing that?

Right now, DH works from (including travel) 2pm until 3am, (four day work week), I've tried working the the AM's, from like 8-1, but DH gets soo tired, I don't feel safe leaving DS with him alone, basically, from 330am until 9 am is DH's night. Even then, he only gets about 5.5 hours of sleep a night. On his days off, I do work more. My dad watches DS when I work wed. and thur. which is part of the reason I drive sooo far is that I don't have to pay daycare.

In two weeks, he is being transfered to first shift, which will be from 5 am-6pm, four days a week, but I'm already working in the evenings. Except now maybe I can find something closer, maybe as a waitress, from 7-close three nights a week, local. Then he can watch DS.

You all have no idea how much sanity and stability you are giving me. Thank you so much. I wish I could hug you all.

[sbrinton]

I know there's a lot of information in here. I hope it can be helpful!

If I were you, I'd try to focus on one area of change at a time. Start with the things that could make the biggest difference and go from there.

Before you decide not to sell the bike and boat soon, or at least to try to sell them soon, figure out how much money you will waste on insurance and interest payments between now and then. It might be worth it to sell sooner, but you will have to figure that out.

You are probably paying more interest on your credit cards (sometimes more than 20%) than you would earn in a savings account (usually 1-3%). If the difference is between paying 20% interest for 6 months ($400 on $2000) or earning 2% in savings ($40), the choice is clear in my mind. But you do need to figure out how you could come up with that money if you were underwater.

The first step is probably trying to see if you can transfer the balance on your credit cards to a card with a low interest rate. There are lots of cards out there with a 0% teaser rate for 12 months. This could be very helpful - as long as you use this time to pay down the credit card balance instead of to go deeper into debt.

Or alternatively, consider debt consolidation or a home equity loan. The benefit of a HELOC is that the interest you pay is deductable, but it depends how much your home is really worth and how much your mortgage is. If - despite falling prices - you still have at least 20% equity in your home, you might be able to get a HELOC. This could be a smart move IF you can be disciplined to pay off your debt in a timely manner.

[Freefromitall]

"With the motorcycle, we can't drop insurance becaue we have a loan on it. "

You might be able to get non-operating insurance on it. Basically, if it's in a moving accident, you're SOL(b/c it's supposed to be well, not operated)...but you're still covered if it's stolen or the garage falls in on it or something like that happens.

I wonder if they have something similiar for the boat?

[madskye]

I just wanted to give you some support! Good for you for trying to get all this under control--it can be really hard to face these things head on.

I work in sales and went through a period where I was counting on my yearly bonus to pay off CC's every year. That's great until the economy takes a nosedive and the bonuses stop! I am no frugal wizard, I have tons of bad habits--but I find when my CC bills start to build the best thing to do is the "snowball" and pay off the little ones first and then add those payments to the big one until they are all gone. I don't have the Dave Ramsey book, but I think it's his concept.

I also meal plan--and that helps with the grocery bill--as someone mentioned above, it's not "somewhere around $300" which can easily turn into $350 or $400 before you know it. It's all accounted for and I really enjoy sticking to my food budget for the month!

[Dewberry]

Wow! I have no advice but I sure did get a lot on this thread.

Good Luck to you guys.

[SquishyKitty]

Originally Posted by sbrinton

I know there's a lot of information in here. I hope it can be helpful!

If I were you, I'd try to focus on one area of change at a time. Start with the things that could make the biggest difference and go from there.

Before you decide not to sell the bike and boat soon, or at least to try to sell them soon, figure out how much money you will waste on insurance and interest payments between now and then. It might be worth it to sell sooner, but you will have to figure that out.

You are probably paying more interest on your credit cards (sometimes more than 20%) than you would earn in a savings account (usually 1-3%). If the difference is between paying 20% interest for 6 months ($400 on $2000) or earning 2% in savings ($40), the choice is clear in my mind. But you do need to figure out how you could come up with that money if you were underwater.

The first step is probably trying to see if you can transfer the balance on your credit cards to a card with a low interest rate. There are lots of cards out there with a 0% teaser rate for 12 months. This could be very helpful - as long as you use this time to pay down the credit card balance instead of to go deeper into debt.

Or alternatively, consider debt consolidation or a home equity loan. The benefit of a HELOC is that the interest you pay is deductable, but it depends how much your home is really worth and how much your mortgage is. If - despite falling prices - you still have at least 20% equity in your home, you might be able to get a HELOC. This could be a smart move IF you can be disciplined to pay off your debt in a timely manner.

She said it all much more eloquently then I did. You are paying more in interest on those CC's then you are making with the money sitting in savings.

As another poster said, use the snowball effect. Pay off the little ones, use the money from those payments towards the bigger ones.

But get rid of the high interest ones first.

If you are positive you won't break even with your bike/boat until the spring, but you are sure that you can break even, or even make a bit of profit then, I would hold off on selling them until the early spring months. It makes no sense to sell them if you'll still end up paying on them. However, a PP is right that you can get non-op insurance on them if they aren't being used during the winter months.

I don't know anything about boats, but can you store it somewhere and get rid of all the insurance and such on it? It might be an eyesore, but can you store it in your backyard or driveway through the winter, and eliminate any storage fees you have on that?

[tynme]

We already store our boat in our yard : ) No costs there : )

I will check on the no-op insurance though: )

[Hebaume39]

You're getting so much wonderful advice. I love reading these posts. I know most people would go nuts doing this but we only have one car and we use to live about half and hour from his work and about once a week I take him to work, run the errands in town, and kill time until I pick him up again (then we moved to a city, pout). The rest of the time I just hung out at home. Also I have a super thrifty German grandma (think ultra clean and ultra thrifty). It doesn't cut much cost but if you need recipies for home cleaning products let me know. Also the cook book "more with less" (its mennonite) is an amazing little book. Good luck with your troubles.
Addie

[sunnysandiegan]

I am new to this part of MDC. I see you have already received so many great practical ideas and your attitude/outlook seems to shine more and more. GOOD FOR YOU!!!! :

I'll offer a different kind of idea for you to ponder...

Try calling your plan a "G.O.O.D. plan", which stands for Get Out Of Debt. Keep the focus on the "GOOD" word. Anytime you write it down or say it aloud or type it, etc...refer to it as "my GOOD plan" or "our GOOD plan". Watch the positive influence take over...
(I've gotten myself and a dozen friends and a business from deeply in debt to flourishing using this technique. I firmly believe half or more of the success came from the terminology.)

Try writing your goals in terms of what you WANT (in positive words) on a piece of paper and repeating them over and over several times a day every single day. Something along the lines of, "I am so happy and grateful now that I have financial freedom." Add details on what financial freedom means to you. Just keep it all framed in the positive, the here and now (present tense), and focused on what you want versus what you don't want.

Best wishes!!!!