Introduction

iVillage Member
Registered: 08-24-2006
Introduction
9
Sun, 01-15-2012 - 2:03pm
Hi, I'm 33 and I live in Seattle with my SO who is 36. I have a 12 yo DD who visits for winter and spring break and summer break. I recently filed for a chapter 7 bankruptcy due to medical debts. I have had the hearing and am waiting for the discharge at the end of Feb. I do have one credit card with a zero balance. I can't use it right now, and the account may get closed due to the bankruptcy. If it doesn't I plan to just use it once a month for something inexpensive and then pay it off to help rebuild my credit. But anyway, as for the reason I'm here... I also have a private student loan I have to repay. It's in default and with all the collection fees it's around 20k. I have a federal loan that is down to 1500 and that one' s in good standing.

I work in a nail salon 3 days a week. I can't work any more than that because my DD and I are on my bf's insurance and they will only cover me if I can't get insurance through my work. I used to get insurance through my work but they switched from group plans to individual and the plans offered were far too expensive with far too little coverage to work for me. I also can't do nails anywhere else because we sign a non-compete. It's worth it to stay here because I've been here almost four years and make decent money for working 27 hrs. a week. If I started working FT somewhere else I'd be making less than I am now for quite some time. Between my paychecks and tips and some occasional artwork sales I make enough to pay all my bills, but not enough to make a dent in the defsulted loan.

So I just got a job at Subway in downtown Seattle. It's close enough to walk. I don't know what my schedule will look like after training but the minimum wage here is $9.04 an hour this year, which is good. I am expecting between 12 and 24 hrs a week based on my availability. That should give me the stable income needed to stick to a budget and have a lot left over to put toward the debt.

I am having a couple of issues planning this out though. First, I can't decide if I should first put the extra toward my federal loan so I can pay it off and concentrate on the private loan, or if I should keep making the minimum payments ($50) on it.

Second problem is I think the idea of a cash system would help a lot with budgeting, especially for food, but I have had my purse stolen and cash stolen from me more than once so I really hate carrying more than minimal amounts of cash now. If cash gets stolen you are screwed. I'm really bad about keeping track of how much I'm spending with my debit card though. I can't figure out a solution to this problem.

I am having a tough time coming up with a budget too. I find that I keep forgetting things.
iVillage Member
Registered: 08-24-2006
Sun, 01-15-2012 - 4:28pm
Forgot to mention... The biggest thing I have problems with overspending on is food. Not so much at the grocery store, but more like getting things to eat while I'm out. Smoothies, sodas, frozen yogurt, deli sandwiches, etc. Even just a few times a week can really add up. I don't have a car and take the bus or walk, so sometimes I'm gone for too long to eat at home. It's especially expensive when DD is with me. My grocery bill also goes way up when DD is here because she stays home when I'm at work and I have to keep around plenty of food that she can prepare herself. Plus she just eats a lot in the first place.
Avatar for poorboy2011
iVillage Member
Registered: 10-02-2011
Sun, 01-15-2012 - 6:36pm

My financial situation is somewhat simpler than most, so my thoughts may not apply. With that caveat:

1. I'd pay off the loans with the highest interest rate. Some people feel a sense of accomplishment when they pay off a debt totally (a "win"), I don't. I just like knowing I am saving the most amount of money. So between the federal and the private loan, I'd hit whoever is taking the most from me in terms of interest rate, even if it takes longer to pay off.

iVillage Member
Registered: 11-14-2008
Mon, 01-16-2012 - 11:48am

Hello,

I would pay off the $1500 loan first. It may motivate you to keep going on the larger loan. What is the loan for? To go to beauty school or was it for something else?

I love it that you have two jobs and are trying really hard. Good for you.

I would break up the large loan in to smaller goals in your head and celebrate each accomplishment, say every $3000. By celebrate I mean a nice dinner or something inexpensive. That will keep you going.

As far as not using cash. You could keep a spending journal with you in a small notebook in your purse when you use your debit card with the balance after each expenditure. That way you will not lose track.

iVillage Member
Registered: 08-24-2006
Mon, 01-16-2012 - 4:40pm
The smaller student loan was for beauty school. Used to be over 3500. The larger loan was from getting an associate of arts.
Community Leader
Registered: 08-25-2006
Mon, 01-16-2012 - 6:08pm
Welcome! I am from Oregon and yes, I think we have two of the highest minimum wages. I think our is $8.90.

Your name seems familiar, have we "met" on another board?

As far as the cash, I am also a bit leary of carrying too much around in my purse. How about one of those pre-loaded gift cards. Impossible to overdraft. There are few minor disadvantages, like I don't think you can swipe them at a gas pump, so have to use it at a station with a store. But for the most part it might be an option for you. Not sure if you can register those, or not. If not, it may be a mute idea and no better than cash.

I think you can set up your debit card so it won't let you OD. Just an idea.

I have been here 2 years now and I wish I could say I have made alot of headway, but I have taken baby steps towards my goal of being debt free. Alot of wise and wonderful gals here.





Serenity
iVillage Member
Registered: 08-24-2006
Mon, 01-16-2012 - 6:57pm
I post on a lot of other boards here, so we've probably crossed paths before.

I haven't overdrafted my account in a while so I'm not too worried about that. I just need to figure out how to manage my spending on certain things so I have enough for others and don't have to use the money that should be going to debts. Cash is the simplest way for sure. Maybe if I just leave it at home unless I need to use it and keep a small amount on me all the time just in case. Then if I have to use it I could take it out of whichever envelope the purchase fell under or something.
iVillage Member
Registered: 08-24-2006
Mon, 01-16-2012 - 9:12pm
I think I found a solution! I saw on another money managment site someone said there are envelope system apps for smart phones, so I looked it up and found a free one. I just searched for envelope budget and there were several of them. You just input any time you spend money and the app keeps track.
Community Leader
Registered: 08-25-2006
Thu, 01-19-2012 - 7:41pm
ohhhh, that sounds cool.

I have litterally used envelopes when traveling in the past. I would keep some in my suitcase and in the hotel room, and some in my purse. Figured if I got ripped off one way, I would still have some cash in an alternative location.

Serenity
iVillage Member
Registered: 08-24-2006
Sat, 01-21-2012 - 1:06pm
It's called the Easy Envelope Budget Aid. So far it's working out great for me. I get a small amount of my tips in cash and before they would always just get spent on who knows what. Now I can just deduct the money from the "envelopes" in my app whether I use cash or my debit card and I know how much I have left to spend.