About To Hit Rock Bottom.....

iVillage Member
Registered: 02-24-2005
About To Hit Rock Bottom.....
29
Tue, 08-02-2005 - 12:17pm

Hi Ladies~


Its been quite some time since I've checked in...sorry about that.

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iVillage Member
Registered: 02-24-2005
Tue, 08-02-2005 - 2:14pm

Oh yes, the $800 per month is for gas for our cars, eating out, clothing, and whatever other activities or entertainment we want.

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iVillage Member
Registered: 08-19-2003
Tue, 08-02-2005 - 2:59pm

So the $400 you cut from the spending money can be put on your debt?

Shannon

Shannon


Pregnancy%20ticker
iVillage Member
Registered: 02-24-2005
Tue, 08-02-2005 - 3:17pm

Yes it can but the reason I cut that is so I can pay the minimum on most of the debt.

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iVillage Member
Registered: 03-27-2003
Tue, 08-02-2005 - 3:47pm

Hi Nahla,

Welcome to the board! Wow, your post racked up the responses really fast! LOL

I wanted to emphasize that you're making a good, positive step by coming here and looking for support, encouragement, and advice. As you probably already know, there are a lot of really great folks on this board with tons of wisdom and insight.

At the risk of repeating myself (because I know I say this about ten times a week, lol), I am not a proponent of paying cc debt with loans taken against a home. It is a dangerous, and usually extremely costly, option. Most people end up back in cc debt within a matter of months or a couple of years, with a hefty mortgage payment to continue paying. Plus, by amortizing the payments over 30 years (or more, in the case of interest-only mortgages), you end up paying for your debts over and over and over again. And, perhaps most significantly to me anyway, is that you risk losing your home if anything ever happens and you're not able to make your payments.

I also wanted to answer your question about others who at your age were in similar circumstances. Yes, I've been there. We racked up tons of debt for several years (right in our late 20s) because we kept thinking that the big raise was right around the corner, then that my business was bound to pick up any day, and so on. Then suddenly we were hit with a complete job loss, just after our first son was born, and things went swiftly down hill.

Things *have* worked out in the long run, but only because we finally, finally pulled ourselves together and made some very difficult choices to stop spending our future on today, and get our house in order.

Some things we did include selling many of our belongings, (we didn't stop using the ccs, because there was no credit left to use--however, we have never started using them again even now that we have tens of thousands of dollars of available credit), my getting a horrible (but well-paying) night job waiting tables at a bar, moving to a cheap apartment from our duplex, reducing our monthly bills to the bare minimum (no cable, no cell phone, no long distance, cheap dial-up internet for dh's work, etc.), and reducing our grocery spending to $200 a month (we still do that, with four people in the family. Check out my website www.heather.careyhead.net and look under "activism" for a detailed explanation of how we do that).

For eight months, we never saw each other. I got to sleep between the hours of 3:30 am and about 6 am, and, if I was very, very, very lucky for about an hour in the afternoon if my ds took a nap. I missed my son terribly while I was at work. He missed me terribly. Dh and I barely saw each other except to hand off childcare duties. The apartment was a wreck because neither of us had a chance to clean up with our terrible schedule. There was nowhere to go with my son during the day, because the apartment had no child-friendly areas, and I couldn't drive because we couldn't afford the gasoline.

I know I'm painting a grim picture, and it was pretty grim for a while. But now, three years later, we are really living very well. Dh has since gotten some raises, and we're still paying off our debts. But we've managed to learn to manage our money so well that on a very modest income we live in a lovely house with a gorgeous back yard across the street from a pond and wooded hiking trails, we eat quite well (still on $200 a month), we took a week-long vacation at the beach and are taking another to visit my family in Colorado this month, and we still have money for niceties like Christmas presents and home improvements, and games and occasional nights out (and I do mean occasionally, although recently I've reworked the budget so that we can go out twice a month on a date night, but we keep it under $30 each time).

I'm pleased with our lifestyle now, and delighted not to be spending our future on today, though we are still paying for yesterday's mistakes, at the rate of $540 a month (not counting car and mortgage). We expect to have the remainder of our debts paid in two years or less. And only one mortgage to pay. My dh, in case you're wondering, makes $50k a year, plus some minor bonuses. I make about $6,000 a year on my business, from which I also pay my business expenses. When we began repaying our debts and working out of the hole, we had $32k in debt and dh was making only $28k a year.

Anyway, I want you to know that you can do this too. It's hard work, and it requires some difficult choices, but better now than, like we did, having to make those choices with a small child to consider as well. If I could go back and do it over, I would go back to before ds #1 was born and start living on dh's income alone and setting my income aside entirely. Then we would have all this money set aside as a cushion, and would never have to go through what we went through while he was so tiny and we should have just been enjoying his childhood.

I have a ds#2 now, and he is 17 months old. I gotta tell you--it's such a delight to be able to just enjoy him. No financial troubles hanging over our head. No creditors calling. No crummy apartment to bang our heads against. No endless hours in front of the television because we can't think of anything else to do in our crowded apartment. No. We spend our days digging in the garden, poking at weeds in the pond, wandering through the woods, running up and down our stairs, visiting friends, visiting the library down the street, and generally enjoying life. And I feel good knowing that he, and ds #1 too, will never have to take care of us in our old age or worry about supporting us financially. Because we're taking care of that for ourselves. Instead, we can spend our time looking for ways to support our kids as they grow up and develop into the people they want to be.

It's a good feeling.

Thanks again for joining us, and I hope you find something useful here. Good luck, and many blessings,

Heather

iVillage Member
Registered: 08-19-2003
Tue, 08-02-2005 - 4:07pm

Every month will get easier and easier. Continue to post, it helps you stay focused. Make getting out of debt your hobby.

A part time job will help free up some spending money. But I personally would take $100 spending money and $343 for your snowflake. Every month your minimums will go down and the snowflake will get bigger.

Nice Job on re-budgeting. I think down the road it will be easier and a faster alternative to get out of debt then refinancing your house. Even if this road takes you 5 years its way faster then 30 years and a few more refinances.

Shannon

Shannon


Pregnancy%20ticker
iVillage Member
Registered: 03-22-2005
Tue, 08-02-2005 - 6:13pm

"Plus, xmas is coming too...."

This may sound harsh, But I have done away with Christmas presents (receiving and giving). If you do not want to be so drastic, there are still little things you can give such as homemade cookies (flour and sugar are relatively cheap). Or as I have posted somewhere else before, you can also give homemade coupons to friends and families for baby sitting, dog sitting, manicures for girlfriends, and massages for your DH, etc. The other option is, again, get a part-time job, even if it is only for a couple months during the holiday season. Somebody in my office works part-time at Target and she got some of the stuff for Christmas for next to nothing.

iVillage Member
Registered: 05-30-2003
Tue, 08-02-2005 - 7:32pm

Sorry you've been overwhelmed-it does tend to make everything look way worse, doesn't it?

I think that you've gotten some excellent advice, but I'll add more (because I can, LOL!).

In your posts, what shines through most for me is that you are embarrassed by how much debt you have, how out of control you feel your finances are, and most importantly, what others will think about you all if/when they find out how bad things are for you.

So what?

Don't be embarrassed by how much you owe-especially here! Criminy-we've pretty much ALL been there, done that, and it doesn't help. What helps is to have a plan to get yourself out of the jam you're in. If others want to judge you by a number-let them. It doesn't mean anything, because like Jerrold Mundis says in his book, "How to Get Out of Debt, Stay Out of Debt, and Live Prosperously," --You are NOT your debt. It's a number that tells how much you owe, not what you're worth!

I know you don't want to take another job, but it's not for forever. Just for now. Whatever it takes to get yourself out of this situation--with the exception of refinancing. I wouldn't want to roll unsecured debt into secured debt, mainly for the reason that I don't want our home put at risk if something goes wrong. You may have to really think outside the box, and be willing to be radical-remembering all the while, IT'S NOT FOR FOREVER.

The mere fact that you are worried about the mortgages being interest only is a major red flag to me. Yes, it would free up $300 a month, but how soon would it be before that money got eaten up by 'needs'? I'd highly recommend working the snowball, and surfing credit card balances as needed to keep the low APR's. And, once you're done paying a card, you can close it out.

It seems that part of the problem is the fear that you have of your family finding out. Well, maybe they already have an inkling that all is not well. When we started digging ourselves out of debt, it seemed that we were labeled as the "poor" ones of the family. Sure, we don't have a whole lot of extra cash-YET. But we will, and we won't have the debt the others do. It doesn't matter what others say about you and your family. You all have to do what is best for YOU, not them. Maybe you'll decide to sell your house. If your family has a problem with it, you can come up with a good reason, or you can say, "You know, we've been going over our finances, and right now, this is not working to our advantage." Or, you also have the option to smile and decline to explain...

Anyway, I guess the lesson from the soap box today is: No need to be scared, or ashamed-you're with friends here (who sometimes pull out the soap box, LOL)

Good luck-
Lisa

iVillage Member
Registered: 03-27-2003
Tue, 08-02-2005 - 8:00pm

Wow...you've gotten a ton of advice today-I'll just pick one thing so I don't add to the overwhelm.

I'm married to a vegetarian who doesn't like vegetables, I also have an encopretic DD who needs a high fiber cheeseless diet. Here are some of the vegetarian options that you might like-

I scramble eggs, add black beans and salsa maybe some sauteed onions and green peppers and wrap up in a whole wheat tortilla. If you don't have to avoid cheese, then you could use a small amount of cheese.
Grilled cheese sandwiches and tomato soup
The book Tightwad Gazette or several cookbooks have universal casserole recipes so you can pick the ingredients and mix it up.
Beans and rice
Spaghetti w/ lentils instead of ground beef
Shepherd's pie

Personally, I would suggest checking out a cookbook or looking online for some vegetarian recipes that don't mimic what you normally eat because that way you won't constantly compare. For example, if I try meatless meatloaf (yes, I have such recipes) I'm going Oh, it doesn't taste the same but if I try pasta salad w/ chickpeas and tomatoes I just don't notice.

My grocery budget is $200 and my eating out budget is $80 for 2 adults and 2 kids. I get a helping hand because DH travels for his job and so I don't have to feed him some days.

Taleyna

iVillage Member
Registered: 05-02-2005
Tue, 08-02-2005 - 10:34pm

Hi Kim,

I can certainly understand your reluctance to letting your family know what's going on with your finances. However, the strain of pretending everything is fine is another stresser. Possibly even discussing it with some of your family may actually help. I know you mentioned your folks would want to bail you out, but if they see that you're willing to go it alone and take care of it yourselves, this can only earn you total respect. Their knowing will also help them to understand if you can't do the expensive vacations, dinners and gifts.

Good luck,

Della

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