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aargh. I can't stand this financial stuff. I just need to vent and maybe pick your brains.<br><br>
We have a car payment, a mortgage, a home equity loan, and a large medical buill (about $8000). We also have satellite TV, high speed internet, and the usual electricity, oil, propane, etc. DH does not want to give up the satellite or the high speed internet. We do what we can to save on electricity, etc- energy star appliances, etc. We don't spend money on frivilous things (other than those mentioned above). Our debt breaks down as follows:<br><br>
car: $13,000<br>
medical: $8000<br>
credit card #1: $1000<br>
credit card #2: $1500<br>
credit card #3: $7000<br>
home equity loan: $23,000<br><br>
The home equity loan has a low percentage rate. We are applying for an increase in that to consolidate the other debt and that will lower our payments by about half. The difference would cover all but our car loan.<br><br>
If the home equity loan does not go through, what would be our best approach? Should we pay off the lowest credit card balance first, and then put that monthly payment toward the larger credit card debt (the $2000 one), and go from there?<br><br>
I am so bad with money. It is a long story but I was in the hospital for a while, we only had one income at that time, and that is where the $7000 debt came from. I am a basket case over this.<br><br>
For the record, we have destroyed our credit cards except for one that we have frozen for emergencies. Help!
 

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I guess there are several approaches you can take....<br><br>
first i would call the medical bill, see if you can get some $$ knocked off the balance... is the medical bill accuring interest? if not just make very small payments on that<br><br>
Personally i know its better to pay the highest interest rate item first then min's on the rest but some people like to pay the smallest first then roll those payments into the next largest... kinda like a quicker gratification...<br><br>
my head is spinning right now, ill post more later
 

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but have you checked out Dave Ramsey? He has a daily radio show. You can listen online. You should read his book "Total Money Makeover". Reserve it at the library. Your DH should read it too.<br><br>
To sum up. Get rid of credit cards, cut them up. Use CASH. Work on a budget. Start paying extra on the smallest bill first. When it is paid off, put that amount towards the next smallest. This is called Snowball method. If your DH is concerned about the debt, he'll have to make some changes.
 

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<div>Originally Posted by <strong>maisiedotes</strong> <a href="/community/forum/post/7937606"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">The home equity loan has a low percentage rate. We are applying for an increase in that to consolidate the other debt and that will lower our payments by about half. The difference would cover all but our car loan.<br></div>
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I would not do this. It may lower your minimum payment but it lowers the amount that you are paying down and lengthens the time you will be in debt if you then slip into paying only the minimums. Further, a common pattern is to do this and then charge up the credit card again the next time there is an emergency.<br><br>
You can get out of this. Right now, if you add up all of the minimum payments on your credit cards and HELOC and car can you meet them every month? If so, pay the minimum and then apply everything else to either the lowest balance (snowball method) or the highest interest.<br><br>
Then I would seriously *consider* the following:<br><br>
-Selling the car and replacing it with a cheap, older but reliable vehicle (like an older Corolla, Civic or Camry.) If you have 2 cars, seeing if you can make it with one instead.<br><br>
-Adding some extra income with a pt second job that go entirely to the debt.<br><br>
-Cutting out TV service and replacing your internet with something free (is NoCharge.com available in your area?)<br><br>
-Selling stuff at a yard sale to put towards a reserve fund or paying down debt.<br><br>
-Getting really frugal on groceries and eliminating as much eating out as possible.<br><br>
Note, I said consider. Not that these solutions will work for each person. Maybe an expense is a need- like high spped internet for telecommuters, big car for certain families to jobs etc. Only you can decide what your family can do without to get out of this debt.<br><br>
And I agree on the medical- see if they will reduce it or take very small, interest free, payments.<br><br>
You can do this!
 

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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">I would not do this. It may lower your minimum payment but it lowers the amount that you are paying down and lengthens the time you will be in debt if you then slip into paying only the minimums. Further, a common pattern is to do this and then charge up the credit card again the next time there is an emergency.</td>
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I completely agree with this.<br><br><div style="margin:20px;margin-top:5px;">
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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">Selling the car and replacing it with a cheap, older but reliable vehicle (like an older Corolla, Civic or Camry.) If you have 2 cars, seeing if you can make it with one instead.</td>
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I do not agree with this. Replacing a new car with someone's old problems is not a solution. Used cars tend to be used for a reason. You know the history of your current vehicle. Giving up the second car is an option IF you have public transit available where you live and really think you can do without one. Money made from the sale of that car should be put toward the bill in which it will make the largest dent toward being paid off.<br><br><br><br><div style="margin:20px;margin-top:5px;">
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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">-Cutting out TV service and replacing your internet with something free (is NoCharge.com available in your area?)</td>
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Yeah, it stinks, but you really need to do this. Think about the $100 or more you spend. Going to dial-up or a free service and cutting the type of tv service you have will be cheaper. Remember, when things are going well again, you can get it back. We did this.<br><br><br><div style="margin:20px;margin-top:5px;">
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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">-Selling stuff at a yard sale to put towards a reserve fund or paying down debt.</td>
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We have a huge yardsale with a friend EVERY YEAR. We put the money away for our taxes or pay a bill.<br><br><br><div style="margin:20px;margin-top:5px;">
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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">-Getting really frugal on groceries and eliminating as much eating out as possible.</td>
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Yes, yes, yes!<br><br>
Clip coupons, shop the sales. Look to see which store has the best prices on the largest amount of stuff you need and go there. Bring your own grocery bags. You can save .05 per bag at most stores. Go to a place that has double coupons.<br><br>
Buy in bulk. If you have a warehouse club card (Sam's or Costco) do the cost comparison for buying the big size vs. the regular store size. Yeah, the money up front might sound pricey, but you will make fewer trips to the grocery store. If you aren't there, you don't buy things you don't need.<br><br>
Make a list and stick to it-- Use the grocery store adds as your weekly meal guide so you can plan your meals and shop for that stuff. Also, check out Cindy'sPorch.net. Her good rule of thumb is "shop at home first".<br><br>
Don't buy pastry, cookies, etc. Make them at home.<br><br>
We have been excavating ourselves out of our hole for a while now. We got into difficulty when dh lost a job that made nearly double what I currently make now. Then he went back to school to change careers. We spent three years living off my salary, whatever substitute teaching pay he could get, paying tuition, and trying to meet our bills. It is tough, but you can do it.
 

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Discussion Starter #6
Thank you all so much! I am feeling better about it. The hospital bill is no interest. I have come to terms with the fact that it will take a long time to pay off, but they seem content with as much as I can send as long as I do some each month. I send at least $50 a month.<br><br>
I just went through my cabinets and decided I am NOT going to the grocery store for at least 2 weeks. I have so much in my cupboards- 5 boxes of pasta, tons of whole grains, flours, dried fruit, lentils and beans... not to mention a freezer full of pasta sauce, veggies, a fridge full of yeast, condiments, soy milk, etc. There is plenty for me to use up. I have found that when I go to the grocery store, if it is for one thing, I wind up spending $50 easily. Now I am making a very detailed list and if I forget something, I am out of luck.<br><br>
Thank you all again. DH and I dug out all our statements and are going to be paying down the lowest credit card first (which happens to have the highest interest rate) and going from there. I appreciate everyone's input!<br><br>
ETA: I had started getting things together for a yard sale for last summer and it just didn't happen. This year wil be the year! I have all the stuff in a pile, waiting to be priced.....
 

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You are already on your way!
 

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<div>Originally Posted by <strong>mirlee</strong> <a href="/community/forum/post/7938498"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
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I do not agree with this. Replacing a new car with someone's old problems is not a solution. Used cars tend to be used for a reason. You know the history of your current vehicle.</div>
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Not to get too far off topic, but I tend to recommend considering this because I see families with $300-600 in car payments they can't afford for more car than they need. Brand new cars are typically a waste of money and older (say 98-2002 model year Toyotas), reliable cars can be purchased for less than $7000. Whenever we buy a car we pay $50 for our mechanic, who we trust, to give the car a total evaluation. Then we know if it is worth it. If the car payment is small or the particular model car is needed, it might not be the way to go for the OP but most people with car debt simply could deal with less car than they currently have if they needed to. Many people sell cars that are not lemons- they move out of state or simply have up-sized or downsized. It is not true that only new cars are reliable.
 

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I agree about the cars. We drive older cars and they've served us well for a very modest cost. I can't even imagine trying to make car payments like that every month and pay full coverage insurance and I have a very solid upper middle class income. Really, I just don't know how people do it.<br><br>
And really, I would work on the Internet, satellite TV thing. They aren't needs. And as long as people think things like that are necessities, they'll stay up to their eyeballs in consumer debt.
 

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I'm just putting my head in to suggest ditching the Satellite TV and replacing it with a subscription to Netflix. I pay 16.83 a month for unlimited movies, two at a time. They have TV shows available, too...we've seen every episode of CSI by ordering the DVD's, as well as Sopranos, Desperate Housewives, etc, and the turnaround time for new videos is extremely fast.<br><br>
This way you would spend less, but still have a source of entertainment. Like previous posters have said, you can always get your tv service back later.<br><br>
Good luck with this! You're not alone. We are steadily paying off consumer debt and student loans here too...I can't believe we did this to ourselves. My husband jokes that we're the only 30-somethings he knows with "college furniture!"<br><br>
Holly
 

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I second (third? fourth?) getting rid of the newer car and buying an older one. We sold DH's newer Honda Civic before we got "upside down" - the car was actually worth a couple hundred more than we owed. We used one car for a while til we saved up $3,000. Then, I became an expert in used cars (LOL) and searched the entire southeast region for a reliable vehicle with a good history. We got a good deal on a '94 vehicle. We paid $3K, then put about $800 into new belts, filters, brakes, etc. We had it totally checked out so we knew what we were getting.<br><br>
We couldn't be happier! Even if it needs a few hundred dollars repair, it's still less $$ than the car payment was on the other vehicle. Also, our insurance went down by $30/month because we only needed basic liability on it. It would cost more to fully cover the vehicle for 1 year than it would to buy another. AND, a surpising bonus - the emission inspection is just the safety check since it is older, which costs $12 less each year! <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/orngbiggrin.gif" style="border:0px solid;" title="orange big grin">
 

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We have netflix, too! We love it! I'd certainly consider selling the car and getting something cheaper if you can, work on your budget and try to pay off at least one of those cards!
 
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