feeling the pressure to get out of debt vs savings - Mothering Forums
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#1 of 16 Old 01-24-2014, 05:46 AM - Thread Starter
 
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I still struggle with following dave ramsey vs doing my own thing.

Here is where I am

2619 a month I get from ex plus 60-80 a month from a side gig.

October will be my last alimony payment and 2619 will go to 1124. I am not working atm but hope to find something come august
Either a teacher or a para. I am secretely alarmed neither will occur and struggle woth idea of building a savings now just in case I dont land a job or it doesn't work out. As it stands barebones I need 2000 $ a month maybe 1900$.

My debt has doubled due to taking college courses
It is about 11200 atm.
My savings is 300 $. I have about 600 $ a month for extra s, debt, savings. Last month I put about 300 $ to a class I need and 550 $ I paid on debts dentist /ccs/ one student loan. Sooo. What would you do? I have decided my main focu for feb is to build my EF so I am hoping to get 500-700 more in there next month.

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#2 of 16 Old 01-24-2014, 01:06 PM
 
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Hmm... it's hard to say without a closer look at your actual expenses. I go back and forth with the DR thing vs my own as well. Is there anything low enough you could pay it off with your extra money between now and Oct? Or maybe a way to bring in a little extra between now and then like babysitting at home maybe? I'd definitely work on the savings in your situation or whatever i could get rid of to lower monthly expenses. I'd also be looking for ways to lower some of those expenses. Maybe there are ways to lower lights, water, or other bills. Could you move to somewhere that would be cheaper to live? I'd also look at some of the smaller bills that you might could prepay to take the stress off like paying the years garbage bill or water bill at tax time so you could float until tax time again on that one. If you feel comfortable posting a detailed budget maybe some strategies could be brainstormed.

 

Oh... just wanted to add if you are currently in school you shouldn't owe anything on student loans right now. i understand wanting to pay them down but i'd focus on things you have to pay and let them wait for now.


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#3 of 16 Old 01-24-2014, 07:49 PM
 
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hi i just wanted to say that DR does recomend having a 1000 baby EF before paying back debt so i would put more in your fund. also i second the recomendation of putting off paying off the student loans until your out of school. They shouldn't be due yet. that should let you pay of other debt and get your EF up so you will be able to look for work.

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#4 of 16 Old 01-25-2014, 02:47 PM - Thread Starter
 
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February  Budget

 

These are all my bills/food/gas, it doesn't include any extra like clothes, school things or holidays/gifts etc

 

Rent 895$ 
Netflix: 7.99
Water/trash/recycling(mandatory): 80.00 Range 75-85
Gas:  120.00 for Feb (higher in winter, average is about 75, but lowest it has been is 38$ in the summer
Internet: 46.00$ 
Dental payment plan: 150$ a month 1350$ balance (this will be paid off in full in October or i will get charged all the back interest now it is 0%
Health insurance for me 112$
State loan: 42.43 (not deferred) 1326.00$ 
Cell Phone: 0$ (150$ a month every 3 months next payment due in March)= or 50/month
Credit card: minimum is 27$  a month, balance is 2800$ and has 0% interest until July
Electric bill: 120$ variable 80-140
car insurance:  68$
300$  FOOD/household items etc
100$ GAS (may need revision) usually just use 75$ a month fill up every three weeks so half a tank carries over to the next month

Dept store cc I will need to pay off this month 70$

 

FEB total=  2077$

 

Student loan 2: deferred until April 21st then I will be paying 70$ a month 2529$ balance

Student loan 3: deffered until June 1st then I will need to pay 75$ a month 3300$ balance

 

I am only enrolled in one class this semester so my deferrment is ending. The 1st loan was never in defferrment. 
 


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#5 of 16 Old 01-25-2014, 03:35 PM
 
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The title caught my eye because I struggle with that too.  We have no way of trimming our budget over here or making more $ w/o seriously disrupting our life.  My realization is that I need to just accept that it will be some time before we can be out of debt.

 

Ideas...applying for economic hardship deferment on all student loans until you are steady on your feet with a new job & income

...finding a way to sell something to get a little extra cushion in your EF

...having faith that things will work out with finding a job

 

Even if you can only put a tiny amount extra toward a debt & a tiny amount toward savings, you are getting somewhere.  

Hugs as you figure this out!!  I know what a challenge it can be!<3

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#6 of 16 Old 01-25-2014, 05:06 PM
 
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thanks for posting. ok I usually go with DR smallest debt to largest, but because of the 0% interest til oct on the dental changes things. that one will back chrge the interest. so i would pay that one off first because i have no idea what the interest rate will be or how much back interest will come to. then i would go smallest to largest debt but you really need the 1k Ef just to feel abit more relaxed as you pay off the debt. i think you can do this :)

wondering if your only doing one class this semester if you could get a pt job now just to help pay off the debt faster?

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#7 of 16 Old 01-25-2014, 11:32 PM
 
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Okay here's what I'm looking at as a possibility so far:

 

Total income roughly $2700 per month. 

 

Feb total bills = 2138.42 - send $561 extra to savings to bring it to $861

Mar total bills (paying cell phone at $50 per month for now)  = 1968.42 - extra $731 to dental payment (new balance $589)

Apr total bills = 2038.42 (inc payment on SL2) - extra $589 to pay off dental; $73 more to savings = $934 savings total

May total bills = 2038.42 - extra $662 on SL1 (new bal $664)

Jun total bills = 2113.42 (inc payment on SL3) - extra $586 on SL1 {would leave new balance at 78 but should be paid off from monthly payments up to now)

 

Now the fun part: 

Jul-Oct total bills = 2070.99 - extra $629

This gives you a chance to get just over $2500 extra from Jul-Oct. 

 

Now looking at your expenses you could potentially defer the two student loans again for financial hardship and apply for food stamps. This would lower your monthly bills if we say $100 month for household/misc to $1725.99 mo. - your $1124 child support and you have a monthly deficit of $601.99. If you put the $2500 extra from Jul-Oct in savings with the previous $934 savings and any other extra over the next 9 months you should have enough savings to cover 5-6 months of the deficit. Hopefully you get a tax refund??? If you do that would float you until then. This should at least give you 5-6 months to find a job. 

 

Other thoughts... is there any possible way you could move and get a lower rent? That is really your biggest money suck and would help a lot if it could get lowered. I'd price check car insurance to see if you could maybe get a better rate. Look for ways to save on and lower the water, electric and gas bills if possible. 

 

As far as making money have you considered babysitting in your home? Another option I like if you can have child care for your kids to manage it would be in store demos or possibly doing direct sales. Either way gives you the opportunity to make a decent amount of money for little time spent. I would definitely look for ways to start making money now to add to that savings total and start paying off more debts before the extra money is gone. Another idea too if you can get more money coming in extra would be to pay up set bills for a while like cell phone, garbage/recycling, netflix, etc. 

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#8 of 16 Old 01-25-2014, 11:36 PM
 
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Another thing... you didn't say how many kids you have and family size. I would check limits for your area and see if you might qualify for food stamps or even WIC now. Any little bit will help you get some extra money for now. You said you'd be looking for a job as a teacher or para. Could you maybe do tutoring or something similar starting now? Don't over look options like K12 online schools or Sylvan type things for jobs either. What type of teaching are you trained for? There may be some other way to use that like editing jobs, translating jobs, etc depending on your skill set. 

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#9 of 16 Old 01-26-2014, 06:31 AM - Thread Starter
 
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Should I try for a balance transfer on my huge cc? In july. I have good credit so I know I will qualify.

It is me and 2 kids

Rent is decent price for my area. The only way I could save is to rent a 2 bedroom apartment and even that would nt save much I got an incredible price for my place plus I would have to get deposit money etc.

Pretty sure I cannot get any assistance food stamps is like 1200 $ for my areas and I am over double that.

Getting side jobs is near impossible due to thefact I jhave my kids most the time and no family or reasonable price d sitter. Tutoring pays 10 $ an hour which is what I would have to pay that much for a babysitter.

I think I will try straight talks 30 $ plan in March which will lower that bill further
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#10 of 16 Old 01-26-2014, 06:33 AM - Thread Starter
 
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I have things I can sell just waiting for warmer weather. ..at a yardsale
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#11 of 16 Old 01-26-2014, 07:14 AM
 
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Quote:
Originally Posted by crazyms View Post
 

Apr total bills = 2038.42 (inc payment on SL2) - extra $589 to pay off dental; $73 more to savings = $934 savings total

May total bills = 2038.42 - extra $662 on SL1 (new bal $664)

Jun total bills = 2113.42 (inc payment on SL3) - extra $586 on SL1 {would leave new balance at 78 but should be paid off from monthly payments up to now)

loved your plan , but if she paid off dental in april her may and june bills will be 150/m less because no more payments to the dental.

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#12 of 16 Old 01-26-2014, 09:24 AM
 
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No I calculated bill total without any debts then added debts by the month they would be owed. Actual bill total minus any debt but including a $50 mo cell phone bill is 1898.99. The monthly total in Jun goes higher because it includes all the debts with the two currently deferred student loans. 

 

Okay how old are your kids? If they are 5 and under or either one is then they would still qualify for WIC. Not as much help as food stamps but still a good bit of food help - you'll get bread, milk, juice, cereal, pb or beans, eggs, cheese, veggies/fruits. It's a decent little chunk of food and the income limits are higher for it. I don't remember the Straight Talk for sure but isn't the $30 mo plan a limited number of minutes etc? Consider looking at Red Pocket. It's not quite as convenient since you can't pick up refill cards at the store - need to call or pay online - but I switched to them a while back. They have the $50 mo unlimited but they also have a $30 mo plan that gives me unlimited talk and text with just very limited data. That's fine for me but at least don't worry about running out of minutes on my phone. They also have a range of plans where I can pay for just a week or two weeks of service at a time also. That way if I'm short on cash or my bill comes due during a non paycheck week and I needed it I can refill for like $7 or $14 bucks and then get the monthly plan when the check comes in. You can keep your same number even if you switch but it might be worth a look. 

 

I understand the childcare issue. Consider advertising for childcare swap with another mom or maybe doing childcare at home if you're comfortable with that. Some other options then maybe:

Swagbucks - use it and get points to use for amazon/other gift cards for gifts and such

WIC breastfeeding peer counselor - if you qualify and depending on your state; some states this is a mostly work from home job (only out of home 2-3 days per month) and it pays hourly plus mileage when you do drive. I made $300-500 mo doing this from my home, only had to have breastfed around 6 months

Laundry - Check local hotels for workers staying there. Here they would pay $10 load. Pick up one day a week, wash/dry/fold, and return. Could bring the kids with you to pick up and drop off and it can bring some decent money depending on how many you have to wash for.

Mystery shopping - can make decent money depending on job availability for your area. Even if there aren't enough jobs in your area for you to make money you can earn a little treat on occasion. 

 

Check for online tutoring options as well. There are some of those jobs you can do from home.


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#13 of 16 Old 01-26-2014, 09:45 AM
 
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Monthly breakdown so you can see what I calculated better - 

 

Bill total with no debts is 1848.99 for Feb plus 289.43 debt payments (dental, SL11, credit card, and department credit) (Total = 2138.42)

Bill total for all other months is 1898.99 including the $50 mo cell phone so:

 

March 1898.99 + 69.43 debt (SL1, credit card) No dental monthly amount since you're making a large chunk on it (Total = 1968.42)

April 1898.99 + 69.43 (SL1, credit card) + $70 SL2 starts. No dental monthly since you're making chunk to pay it off. (Total = 2038.42)

May 1898.99 + 97 debts (SL1, credit card + SL2), Chunk payment on SL1 (Total = 2028.42)

June 1898.99 + 172 debt (SL1, credit, SL2, SL3). Chunk payment on SL1 should pay it off. (Total = 2113.42)

Jul and later 1898.99 + 172 (credit, SL2, SL3) (Total = 2070.99)

 

This would have you paying off the department store in Feb, the dental plan finished in April and finishing student loan 1 in June. From July on the only debts are the credit card, student loan 2 and student loan 3. 

 

There are of course a number of other ways to do this but I didn't see any way to pay off more debts without leaving low savings. There's no way with current income to pay off all debts before Oct and even if the debts were paid off normal bills are more than income will be starting with Nov. My thoughts with this are to pay off the two lowest debts and then hold as much as possible for savings to cover monthly expenses until more income comes in.

 

OP I would consider doing a balance transfer. Is this the only credit card you have? If it is getting a second wouldn't be crazy and could give you another 6 months to a year to have that interest free. Actually not a bad idea.

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#14 of 16 Old 01-27-2014, 06:58 AM - Thread Starter
 
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I am thinking a balance transfer is a good idea come july, I have other cc's but they are at 0$ balance.

 

I will plan to pay of the dental bill first starting in march. As of now it has 111$ in accrued interest just in 3 months. I will also plan on shutting that one down as soon as it is payed off. If i need to pay for more dental work before I get more income, it would be better to open up a new 0% major  cc for 12 months because it does not accrue interest like this plan does. They also approved me for an insanely high amount and i do not like having that high of an account open. 

 

I think I can lower my grocery budget a little, not by a lot, but if i cut out some items i could free up 50$ I think from that area. 

 

Thanks for all the suggestions! I think getting someone else's feedback has really helped me figure out which way to go and which debts to tackle first!

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#15 of 16 Old 01-27-2014, 03:09 PM
 
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Great glad it helped you. Sometimes getting someone else to look at things helps you to reevaluate. I hope things work out for you. Good luck on the job search too!


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#16 of 16 Old 01-29-2014, 11:52 AM
 
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Babysitting for a couple hours on weekend or evenings can be done when your kids are home. That could go towards EF and you wouldn't need childcare for your kids for that time. 

 

- The food /grocery budget.. Could you try to reduce that a bit.. say, at least $50 somehow. Maybe cook a week from pantry or fridge until there's nothing in it and then go back to the store to get some grocery.

 

- Look for food ministries, food banks in your area and talk to them. 


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