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Money, Business & Finance Ground >> My Debt Situation - Hopeless?


2/1/12 8:11 PM
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nostripewhite
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Okay, so, let's say I clear 1350 a pay. It's sometimes more, but usually that.

Expenses

845 - Mortgage + Property Tax
316 - Monthly Car Payment, 0%, 16 months left
155 - Car + House insurance
185 - Monthly Power bill
40 - Monthly Water Bill
150 - Cell Phones
150 - Cable/Internet/Home Phone

I also have a loan that comes off every paychec. 148 a pay, loan totals 9500.

I also have a 10000 debt on credit card, currently at 0% interest for another 3 months, which I've been holding off on but unable to pay much towards, due to all the other stuff above.

On a day to day basis, I pay for everything with my AMEX 2% cashback card, pay it off with my line of credit so I don't accrue any interest. Have about 1000 on that LOC right now.

My bank offered to roll together the 9500 and the 10000 but it would equate out to a monster payment I'm not sure I can afford, and mess up my day to day as I would have to give up my line of credit.

Any suggestion? We're budgeting 400-500 for groceries/gas/misc, but we've got a baby on the way.

Likely I'll try and cut back on the cell phones, but there are contracts. If I cut down on cable and the home phone, probably save 25-50 bucks. Probably can't get rid of internet, need it too much.

My girlfriend works on taxes every year, makes some good money every so often but it's not regular income and there's a chance she may have almost no work this year.

Okay.. I'll let this stew. Thanks everybody.
2/3/12 12:35 AM
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OneScoup
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I paid off $100k in debt, which peaked at a $3k/month payment. I then built up 3+ mos reserves, started saving/investing 15% or more of income and eventually bought a house. I'm still saving at a high rate and about to buy a second rental property.

Learn to live on a budget, no whining, no bankruptcy, just man up. You can do it.
2/4/12 12:54 PM
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Dysqo
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So you 'clear $1350' every month after taxes and the loan...

Yet you have @ $1550 in monthly bills before your cell phone, cable, internet. Not to mention food...

2/5/12 1:25 PM
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Mind's Eye
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Kill your cell and home phone. They definitely sound like luxuries given your assessment of the situation.

Keep your internet and just pay for minimal Skyping, and keep that low as well.

2/6/12 9:26 PM
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Beezulbubba
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One thing that helped me tremendously when I was behind the 8-ball was snowballing the payments.

Cancel all the stuff you don't need home phone/cable/etc. KILL the cable & home phone if you have to. then put all that extra money towards your car, trying to get that cleared up ASAP as it is your smallest, but a decent chunk of change each month. Try to put an extra hundred a month on it somehow.

Find extra money anywhere you can, anyhow you can. Put it on the car. Once that is paid off, put that payment $316 + say, $100, on your next bill. If you can get the car payment to $425 (payment +cable/phone/any extra) it will be paid off in a year a year. Since you then have two close to the same go for the higher interest one first, probably the CC.


Try to find another 0% card to transfer that CC debt to. That interest is gonna kill you if/when you have to start paying it. But if you wait to find one and you make a late payment then you may have trouble getting another 0% chance, plus the interest on that one will skyrocket.

If you can do that, then try to transfer that check deducted one back to the now open card for 0%. Then if it's for a year, divide the total by 12 and try to pay that pay that each month, so it will be paid off in a year.


By then you should have the 148 (check) + 316(car)+ 100(?) (phone/cable/etc.)=$564.

The check loan should be around $8g left, and by snowballing that, you should have that paid off in a little over a year.

Save money anyway you can on items you buy. Buy store brands instead of name brand, use coupons for things you do buy, but don't be an extreme couponer. And spending less will not help you, but when you spend "less" call and transfer that amount, no matter how small, into a savings account. Saved $20 at the store by using the shopper's club and coupons? Transfer it to the savings.

Pay cash when ever you can. Throw all the change you get into a jar, then put that in savings at the end of the month. Most likely get an easy $50 a month there, it adds up fast.

Take all that extra found money (change/grocery savings/whatever else) put that on the current bill your working on. You may even find an extra $100 a month between these.

Do you live in a deposit state? if not, save your cans, don't send them to the garbage, send them to the recycler. Have single family members/buddies/college friends that party/drink regularly, have them save the cans for you. It's small but it's something. Or it can be large if you have a few people giving them to you.


Buy clothes at thrift stores. Put what you saved into the found money fund. College text books? Sell them on Amazon or trade them in. Rent movies? Stop. Get Netflix. make sure you have no leaky faucets. Especially a running toilet. That can really hit the water bill hard.


You don't have to follow this 100% as that would suck, but do it as closely as possible. Especially the snowballing part, and try to save/find money as often as you can.

I know it sucks saying that a year here, another year here, but otherwise you can turn your debt into decades of being broke or bankruptcy/divorce/child support.


Just try to stick it out the best you can, find extra money anywhere you can, SNOWBALL the payments, cut back on unnecessary spending.



2/11/12 1:05 AM
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OneScoup
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I got rid of cable and cellphone when I was in trouble, in your case it's likely $250/month savings. Add to that your car payment when it's paid off next year and you're putting $566/mo to debt on top of minimum payments.

$566/mo will pay down debt fast as long as you commit to making the same total monthly debt payment until your debt is truly $0. Then when it's zero take that monthly "snowball" and put it in:

* savings until you have 3 mos reserve

* put a portion in 401(k)/IRA, ideally equaling 10-15% of income

Then you can up your spending each month. In a few years you'll be in excellent financial condition, similar to what I did.
2/17/12 9:41 AM
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traneufcisback
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 One Scoup,
What was your monthly takehome pay (after tax) to be able to pay off $100 000?
2/22/12 3:35 PM
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germ
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Are you talking bi-monthly? $1350 is barely more than min. wage. If so you need a new job and/or a second job for a while. You have a baby on the way, there are bound to be emergency expences coming.
3/4/12 12:08 PM
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OneScoup
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At that time $65k, but I lived with my fiance and she paid for food.
3/4/12 1:37 PM
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OneScoup
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$65k per year that is.
4/22/12 3:56 AM
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nostripewhite
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Just as an update..

We killed the home phone, got our cable down to 100 a month, and cut back the cell phones so that we're only paying 90 dollars for the two of them.

I had all my loans put together with a new bank (better interest rate) and since my old bank had charged me insurance on the loan, I was able to get 700 dollars back, which along with my income tax return gave us a couple thousand dollars to tuck into the bank.

After a pay increase (and a somewhat larger one coming in August), we're looking at just under a thousand a month after bills + loan payment to go towards groceries, etc. The new loan payment isn't perfect, but I'm hoping with getting more money on it, working good OT and whatnot, to get it down about 5 grand, roll some of it onto my line of credit, then re-finance the loan again to get a much smaller payment.

So I took half the advice from the thread, sort of, and I appreciate it. Things are looking better, and we have a surplus every month.

Also, we had a wonderful little baby boy, who pee's on me almost daily.
4/22/12 3:56 AM
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nostripewhite
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And yes, it was 1350 bi-weekly.
4/22/12 8:38 AM
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walbjj
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man, thats why people get into the shit, u were having terrible financial issues,and then u compound that negative situation by having a child.
i have no sympathy for people like that. get ur own life in order before u think about bringing a new life into this world cos chances are ur setting them up for a rough start.

i applaud u for the efforts being made, but its that type of poor decision making that really makes u wonder whether ur responsible enough to raise a kid when u struggle to take care of ur own needs.

btw, i see examples of it everyday, and more often than not they are a drain on society more than an addition
4/22/12 8:01 PM
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nostripewhite
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I wouldn't call having my child a negative situation, but thanks for your input.

Go find your shift key.
4/23/12 1:12 AM
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Beezulbubba
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Yeah, my method was rather Spartan, but you can still use the snowball magic to work wonders.

Walbjj does have a point, but on the flip side if people didn't have children until they felt they were financial prepared then there would be a lot less children in the world. So you don't have 100g under your mattress, but had a kid,well, that's actually normal.
7/23/12 1:07 AM
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pcuzz
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I dont get why people are hurting yet refuse to give up cable tv...I wasnt hurting and gave up cable 3 years ago and havent regretted it since.
8/5/12 6:59 PM
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freddie/mercurys/straight/subconscious
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nostripewhite - Just as an update..

We killed the home phone, got our cable down to 100 a month, and cut back the cell phones so that we're only paying 90 dollars for the two of them.

I had all my loans put together with a new bank (better interest rate) and since my old bank had charged me insurance on the loan, I was able to get 700 dollars back, which along with my income tax return gave us a couple thousand dollars to tuck into the bank.

After a pay increase (and a somewhat larger one coming in August), we're looking at just under a thousand a month after bills + loan payment to go towards groceries, etc. The new loan payment isn't perfect, but I'm hoping with getting more money on it, working good OT and whatnot, to get it down about 5 grand, roll some of it onto my line of credit, then re-finance the loan again to get a much smaller payment.

So I took half the advice from the thread, sort of, and I appreciate it. Things are looking better, and we have a surplus every month.

Also, we had a wonderful little baby boy, who pee's on me almost daily.


Hope your doing well....a little advice if i may..

STOP borrowing on a line of credit to pay off debt, why would you borrow money to pay off borrowed money? Its a vicious cycle. STOP

I get the fact you want to look like your moving the needle but if you cant move the needle and your doing the right things it will all work itself out in time.

Borrowing on a LOC to pay off other borrowed money is NOT how your going to get outta debt.

You need to incorporate dave ramsey into your knowledge box, and if you have already follow everything he says.
8/10/12 4:54 PM
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Cookie Monster
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Is a second job or income source out of the question? To fight out of a hole, some people will make the necessary cuts to keep spending at an absolute minimum, AND take a second or part time job/ business to make extra money, wherein every dime made goes to debt elimination.
10/24/12 9:48 AM
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SiftMyMind
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OneScoup - I paid off $100k in debt, which peaked at a $3k/month payment. I then built up 3+ mos reserves, started saving/investing 15% or more of income and eventually bought a house. I'm still saving at a high rate and about to buy a second rental property.

Learn to live on a budget, no whining, no bankruptcy, just man up. You can do it.

Good post and congrats!
10/24/12 10:42 AM
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freddie/mercurys/straight/subconscious
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I love dudes that ask the OG for advice and rather then flaming them they get solid quality advice then they seemingly ignore it then don't update those who offered help... Phone Post
10/24/12 2:53 PM
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freddie/mercurys/straight/subconscious
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Wes_Mantooth -
freddie/mercurys/straight/subconscious -  I love dudes that ask the OG for advice and rather then flaming them they get solid quality advice then they seemingly ignore it then don't update those who offered help... Phone Post

That is the nice thing about this sub-forum, people give good advice here without the typical BS that you get on the OG.
That wasn't really my point but based on what I see, your statement is valid. Phone Post

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