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Discussion Starter · #1 ·
I'm reaching out for desperately needed advice.

DH and I bought our home when he was 19 and I was 20. It was big enough at the time withit just being him and I. We had two children and our house was getting too small so our choices were to keep the house we have now and renovate our basement (around $10,000) to include some bedrooms down there or buy a new home (which would be in the $300,000's). We chose to renovate our basement. So late 2008 and early 2009 DH and I saved and saved and saved and got enough money to do the basement reno. We got quotes and went with the company with the best reputation. The big part of the house reno was going to cost us $5300.00, the hydro vac to take the dirt out of the basement was going to be $2000.00, the lumber to frame plus the insullation plus the drywall was going to be $1500. We saved more than that so we had money leftover in the bank. Anyways, the hydro vac company screwed up royally on the job and our foundation collapsed. House insurance screwed us over and we were unable to sue. So our renovation job that we budgeted $8800.00 for has cost us, to date, $31,000. We haven't even drywalled or put flooring in because we can't afford it.

Our basement has sat the same way for a few months. The framing is done, the insulating and vapor barrier is done...but that's it.

We also did our electrical panel because we were only at 60 amp, so that cost us $2000.00 plus a $800 fee from the electrical company.

I just paid the bill from the electrical company fee, PLUS our city utility bill from the year which was $720.00 and payday was today. We are sitting at minus $1100. By next payday we will be at minus $2000. This is all on our overdraft.

We have no credit cards, so the only cc/overdraft debt we have is the $1100.

It seems no matter what, I can't get us back into the positive in our bank account. I think we've been in our overdraft for the past 4 or 5 months. On payday we usually have a few hundred dollars positive, but by the time we pay morgage, car insurance, etc, we are back in the negative.

Should I start up another section on my bank account and keep money in there to spend? I just don't know how to do it.


I broke down our payments and they are as follows:

BILLS

Cell phones - $87.00/month (I need my cell phone for work calls, DH has a long drive so it's a comfort for me knowing he has one)

Preschool - $115.00/month

Mortgage $892.82/month (paid bi-weekly)

Truck loan - $327.74/month (paid bi-weekly)

House insurance $68.81/month (can't find a cheaper rate because of our house insurance claim)

Bank fee - $13.00/month

Phone/Internet/TV - $153.00/month

Truck insurance - $126.51/month (can't get a cheaper rate because in BC we can only go through ICBC)

Car insurance - $159.55/month

Gas bill for house - $141.00/month (will go down now that the weather is warmer)

Power bill - $75.00/month

car/truck gas - $500.00/month (averaged it out over 4 months)

food - $550/month (averaged it out over 4 months)

TOTAL - $3209.43

Income coming in

Daycare subsidy - $100.00/month
Child tax credit - $162.76/month
DH's income - $3650/month (averaged out over 4 months, paid bi-weekly)

TOTAL - $3912.76

My income fluctuates. Some weeks I work zero hours, some I work 40. Things have really slowed down for my work so I'm counting my income as zero.

Anyways.....if anyone knows a plan of attack, please let me know.
 

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With your income and expenses, your budget looks doable - but not if you start out negative every month...

It wouldn't help out a ton, but I'd drop at least the home phone and cable if at all possible (I know sometimes there are contracts, but it may be worth paying the fee to break it).

Any chance of selling your truck? That's a high payment every month; though, I realize it is likely a necessity for work.

Your insurance on your car is a lot. I assume it's paid off b/c I didn't see a payment going towards it. Even with a bad driving record (like me), there should be a lot cheaper options, I think (at least in the US, I guess that may be low for Candada, but yikes!).

Best of luck figuring out a plan. Does your bank charge a bunch of fees for overdrafting? I hope you can stay out of the red in the future.
 

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Discussion Starter · #4 ·
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Originally Posted by Leav97 View Post
It looks like you income/bills are ok. Is the problem that you went negative and bank fees are dragging you down every month?
Yes. A few years ago DH had an overdraft of $10,000. We were in ALL $10,000 with a $3,000.00 credit card bill. We don't want to slip back down any farther. We were FINALLY in a great financial state with the extra $20,000+ in the bank when the house reno happened and that's a kick in the pants.

Quote:

Originally Posted by Drummer's Wife View Post
It wouldn't help out a ton, but I'd drop at least the home phone and cable if at all possible (I know sometimes there are contracts, but it may be worth paying the fee to break it).

Any chance of selling your truck? That's a high payment every month; though, I realize it is likely a necessity for work.

Your insurance on your car is a lot. I assume it's paid off b/c I didn't see a payment going towards it. Even with a bad driving record (like me), there should be a lot cheaper options, I think (at least in the US, I guess that may be low for Candada, but yikes!).

Does your bank charge a bunch of fees for overdrafting? I hope you can stay out of the red in the future.
The cable we just signed a 3 year plan with last year and we'd pay $500.00 to cancel it. Home phone I can defenitely get rid of the long distance plan...but I would have a really hard time parting with call display ($5.95/month)

The truck....ohh...the truck. We just bought it last May....RIGHT before our house renovation. We figured since we were in a good financial state we could finally get DH a truck that he's wanted for the past 10+ years! If we sold it, we would owe more on it than we could sell it for. I think it would be more feasable to sell my car and then use that money to pay down the truck since my car is older than DH's truck.

Car insurance is stuck how it is. It's really really dumb. I was in a car accident when I was 19. I was t-boned by a 16 year old who was driving with 4 of his friends, so it was my word against the five of them so my premiums went up. There's no way around car insurance unless we pink slipped our vehicles and there's no way we could do that.

The $13.00 bank fee includes our bank fees plus interest charged on our overdraft. There's no fee for going into our overdraft...just interest.
 

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your income is $700/month greater than your listed expenses. as long as you stick to this and don't go do any spending outside the budget, that $2000 overdraft would be gone in 3 months. i understand that other expenses may pop up, and the bills you listed may not really cover everything in your budget, but even if you need an additional $200/month for little extras, the overdraft is gone in four months - or sooner, if you're able to get work.

i'm sure it is scary to see that negative balance, but up until this unforeseeable disaster, you did an awesome job of staying out of debt and building up that savings. you can get back there - and getting out of the red is not far away. you'll be back in a position to save again very soon.
 

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Discussion Starter · #6 ·
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Originally Posted by doubledutch View Post
i'm sure it is scary to see that negative balance, but up until this unforeseeable disaster, you did an awesome job of staying out of debt and building up that savings. you can get back there - and getting out of the red is not far away. you'll be back in a position to save again very soon.
Thank you. I know this....it's just so scary knowing our history of being in debt.
 

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In your position, I'd be tempted to either get a real loc from the bank or take advantage of a new credit card low interest offer. Then stick strictly to the budget, live in the black in your bank account, and make regular payments to the loc/credit card to get it paid off in a few months. If you see the debt as another bill rather than as living constantly in the red, it might be easier to get rid of it. Close the cc/loc once it gets paid off.

Ok, reading again and seeing that the $13 includes interest, I think I'd make some sort of chart for myself which shows the highest point of the overdraft being reduced paycheque by paycheque until it's gone. Stick to a budget and it should be paid off fairly quickly.
 

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I agree with the others. Although there are certainly areas you could cut back on, you're not so far in debt that you need a long-term plan. A short-term plan should suffice. I think the idea of making a chart is a good one. It will feel so good to see the debt amount going down. Hopefully it will help you to feel more at peace to know that you have a plan, and that you'll be out of debt again soon.

BTW- I still think your story is un-freaking-believable. Pure craziness. Quite honestly, although you're still having problems, I'm so happy that all of this is slowly being resolved.
 

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Discussion Starter · #9 ·
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Originally Posted by annethcz View Post
BTW- I still think your story is un-freaking-believable. Pure craziness. Quite honestly, although you're still having problems, I'm so happy that all of this is slowly being resolved.

Hehe, your telling me! I still can't believe it all.

I should post some new pictures of the basement. It looks great! I'm so thankful that my DH is so handy with tools and he was able to do the framing and such himself. That itself is a huge money saver!

I'm going to bring the kids outside and work on a chart. I can do this! Thanks everyone!
 

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OK just a few things I have noticed..

Who is your phone phone through? 153 is a lot for TV/Cable/Internet especially bundled... I just switched my phone from "T" which was $44 a month with the Caller ID to shaw which has a promotion that any existing customers that have bundled services with them can go for a year at $14.95 which includes the Caller ID. And after that year it is an extra $5...

So all my services are now with shaw and I have all 3 tiers on my cable PLUS the digital package, full speed cable internet and now the basic digital phone and tops I will be paying $125 a month.

And why can you only go through ICBC for your insurance. I don't know where you bank but I am with CCS and not only are there no bank fees (I understand your interest is different) but they will look at what is cheaper with insurance and some years it is cheaper to do half ICBC and half private through CCS...

And your food budget looks doable with prices but that extra money is going somewhere and it could be to food?
 

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Discussion Starter · #11 ·
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Originally Posted by brymommy View Post
Who is your phone phone through? 153 is a lot for TV/Cable/Internet especially bundled... I just switched my phone from "T" which was $44 a month with the Caller ID to shaw which has a promotion that any existing customers that have bundled services with them can go for a year at $14.95 which includes the Caller ID. And after that year it is an extra $5...

So all my services are now with shaw and I have all 3 tiers on my cable PLUS the digital package, full speed cable internet and now the basic digital phone and tops I will be paying $125 a month.

And why can you only go through ICBC for your insurance. I don't know where you bank but I am with CCS and not only are there no bank fees (I understand your interest is different) but they will look at what is cheaper with insurance and some years it is cheaper to do half ICBC and half private through CCS...

And your food budget looks doable with prices but that extra money is going somewhere and it could be to food?
We don't have shaw phone here....all we have is telus. We bundle our phone internet and satellite together with telus. I'm going to bump our satellite down to light and save $30 and get rid of our long distance which is another $10. I would put our internet down to light speed but I think that would just do DH in, lol.

I just realized that we can do BASIC ICBC coverage and private extended coverage. I'm going to look into that because it really really sucks knowing we spend almost $400.00 in car insurance! ACK!

Food budget will go way down in the summer. I grow a huge garden and we have a apricot, peach, and apple tree so we very rarely have to buy veggies and fruit in the summer and a couple months after summer because I can and freeze.
 

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Is the interest on your overdraft better than the interest you'd pay on a credit card or LOC? I'm only asking because it seems like you'd have to consciously overspend if you didn't have overdraft protection? Like if you had to pull out a credit card or transfer money from your LOC, maybe it would just be one extra step to spend the money you don't have? Not that I think you guys have been irrresponsible or anything - it sounds like a heap of bad luck and unforseeable circumstances, not a habit of getting take out three times a day has gotten you into this situation. I agree though, it looks like not overmuch panic is required to get yourselves back in to the black.
We bank through PC (Superstore/Extra Foods/Loblaws/why the heck don't they have the same name all across the country!?), no fees at all. Ever. 13$/month isn't that much, really, but it all adds up, right?

I hope your basement gets sorted, pronto. I remember reading about it when it all caved in and craziness, and can't believe you haven't been compensated yet!
 

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Quote:

Originally Posted by doubledutch View Post
your income is $700/month greater than your listed expenses. as long as you stick to this and don't go do any spending outside the budget, that $2000 overdraft would be gone in 3 months. i understand that other expenses may pop up, and the bills you listed may not really cover everything in your budget, but even if you need an additional $200/month for little extras, the overdraft is gone in four months - or sooner, if you're able to get work.

i'm sure it is scary to see that negative balance, but up until this unforeseeable disaster, you did an awesome job of staying out of debt and building up that savings. you can get back there - and getting out of the red is not far away. you'll be back in a position to save again very soon.
I was going to say this, but doubledutch said it better than I could have. Just don't spend anything other than necessities, and you should have that paid off in no time!
 

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I'd be stupid and make one of those thermometers they have for fundraising drives with $0 at the top and -$2000 at the bottom and have the whole family color in as you get out of debt in the next three months. Make it fun to track 'cause there's nothing fun about any of it otherwise! I remember your basement, that totally sucks. I can't believe it's been so long and is still not reimbursed.
 

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You can definitely trim down your excess.

* Get rid of satellite tv and just get basic cable, or go without (even for a few months to get back on your feet)

* Hydro is high, especially when you're also using gas. We average about $80/month but we have electricity for everything. Find ways to reduce usage and save.

* Your vehicle gas is huge! Can you carpool or take transit some days? Do one big errand day a week/a month, to save on some gas.

Good luck!
 
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