Scared
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| Wed, 10-26-2005 - 8:23pm |
I, like everyone at this board :), am in debt up and over my head.
I have resulted to asking my boyfriend (who will eventually be my husband) to co-sign a loan for me, and I'm TERRIFIED to ask him this. He and I have very different issues and ideas about money... I for one, suck at money, he's a pro. I need to be more like him... which is ultimately why I've come to him... and because I have exhausted all other options.
I have borrowed money from both sets of grandparents, my sister,a friend and my aunt. The amount that I owe these people combined is 9690 dollars. !!! I know. My sister I make 200 dollar payments to a month because I bought my car from her, and didn't want the sticky-ness of a loan. Plus, if I can't afford 200 that month, she lets me by with what I am able to afford. The rest of the people I have schedules set up with to pay them a certain amount each month until they are paid off. My friend wants me to deposit money into an account each month until the full amount is reached. They are all more than happy to do set up this schedule with me, and I respect them by paying them on time.
I owe $2700 in credit card debt that I hope to be out of within the next year.
I owe $4000 in CASH ADVANCES that I was so stupid to take out. Luckily, I can pay them back a little each time, however it makes my payments higher.
I owe $700 in back rent from my last apartment.
I owe $300 for tuition for the rest of this semester, and somehow have to find a way to pay for next semester.
I've really gotten myself in TOO deep this time. I can't get a loan because my credit score is only 580... the LOWEST it's EVER been. I checked three months ago and it was 630... and I really wasn't very happy with that score either!!
Bottom line is, I'm scared. I'm more than scared, I'm terrified. I honestly want to go to sleep and never wake up, as dramatic as that sounds. That's how I feel... buried and consumed and that is what the evilness of money will do to you.
I'm scared to as my BF for fear that he will see how bad I am at life and not want to marry me. I'm scared. I've exhausted all my other options already. My credit cards aren't maxxed out, thank god, but I still owe quite a bit.
I have tried selling clothes at Platos Closet. I even took my palm pilot, stereo, CDs, DVDs and DVD player to a pawn shop to get cash, not a loan. I'm at my witts end.

Kelly
Kelly
I think setting a budget is your first priority, and taking a look at where all of your money is going. If you have more money going out each month then coming in, you have to eliminate some things. Next thing I would do is maybe think about a night job or weekend job, they are hiring places just for people as seasonals for the holidays, or waitressing is a great way to make very good cash. You have to want it bad for it to go away, but you CAN DO IT!!!! Check out the books by dave ramsey from the library, financial peace and total money makeover, i promise you they will light a fire under you to do whatever you can to get out of debt. What about getting a roomate to share expenses? You can cut back on groceries. Learn to make some dishes that are cheap and healthy. You have to make a commitment to no longer do anything on credit, only pay cash for things and only if you have the money left over after all of you budgeted expenses are paid.
Best of luck to you, I have my own financial struggles and I know how scary it can be, I am trying to follow the above principles and it is definitely a journey!
Shannon
Oh, one more thing i forgot, dave ramsey says you should first and foremost start an emergency fund, say $500 to $1000, that you build up quickly however you can, and then that money is what you use for those emergencies that come up (and they always do) instead of credit cards, but you always have to pay it back after you use it. HTH!
Shannon
Kelly
Kelly
Hi.
I know how you feel...I've felt that way sometimes too. Like there's no way out. But there is, and you'll find it, one step at a time.
There's only 2 ways to get out of debt: Make more money, or spend less money. Usually doing both works best. Are there areas in your budget that you can cut back on? Right now I am trying to cook everything from scratch and we are eating a lot of very healthy, plain meals. We've cut our grocery budget down from spending over $300 per month to spending about $120 per month.
Can you talk to your friend/family and slow down the repayments until you've paid off the payday loans - ie. instead of giving your sister $200 a month, give her $75 a month. Not that your family and friends aren't the most important, but I think the payday loans must be very stressful.
What are you doing in school? If you are in 3rd/4th year, sometimes you can pick up extra cash tutoring other students. If you're in 1st/2nd year, you can tutor high school kids, you just can't charge as much. Or can you pick up overtime at your job?
Sorry I can't be more helpful, just wanted you to know you're not alone.
Hi Scared, :)
I'm so glad you've joined us. You're going to be SOOOO glad when you've nipped this in the bud. I had kids, a spouse, and was in my 30s before I figured out that I needed to fix my problem.
I know you feel scared right now, and I remember that feeling ooooooooh so clearly. Couldn't sleep at night even though all I wanted to do was sleep and forget, I felt anxious and scared all the time. It was horrible.
But it can get better, and you'll feel better just for having taken the first few steps. The first step, as someone has already pointed out, is going to be to write down what you owe, preferably in some sort of a spreadsheet, your interest rates, your minimum payments, and the totals.
Then you need to write down your income, and your monthly expenses. You may need to go back through your records or track your spending for a month or two to get this exactly right (which is a good idea anyway, and although a lot of work, very worth it). In the meantime, just get it as close as you can by estimating and looking at past bills.
Is your income more than your expenses? If so, you're in luck! You'll be tracking your spending, so you're going to find out where the money is slipping through your fingers. Once you stop the slow (and fast) leaks, you can begin targeting one debt for elimination. I liked the idea someone suggested of paying your sister less per month for a while. It sounds like she's willing to work with you. I think you should be honest and set up something in writing--for instance, you'll pay her $75 a month for six (or eight or twelve or whatever) months (until your target debt is paid off), then go back to the $200 a month.
If your income is less than your expenses, please don't despair! It's going to be a bit tougher, but you can still do it, and you'll be so proud (and have great war stories to share to help others). You've got to figure out how to get your expenses down (this board has LOTS of great ideas--there are also some budgeting and frugal living boards that can help) and your income up. You may have to sell some things (as you've already been doing) to get some of your worst debts paid off. A night job might well be a good idea. Remember that it's temporary, and that it's a badge of honor to be taking control of your life again.
Now, the big issue I've been dancing around: your boyfriend. Okay, first of all, I think you should come clean with him. There are many folks on this board who have hidden debts from their significant others and it can get really awful. The guilt and shame are terrible! And hiding something, anything, from a spouse can really tear up a relationship. BEFORE you marry him, he needs to know what's going on, and he needs to know he can trust you. So, lay it all on the table. And then lay out your plan (which you will have already written out) for fixing it. If he's worth his salt, he will admire you (after he gets over the shock) for recognizing a problem and resolving and planning to fix it. If he doesn't handle it well, then at least you found out NOW before you have a wedding ring and children to worry about. I'll tell you, when I found out my spouse had been hiding debt, I was angry about the debt, but worse than anything was the feeling of betrayal that he had hidden it from me for so long. I still have trouble trusting him with certain things, and it's been three years. If he had shared his problem right from the start, I would have been upset about the money, but I would have respected him for letting me help.
Now, about that help. I'm not sure asking your BF for money, even a loan, is a good idea. I know it sounds like the easiest solution (right now, it might even feel like the *only* solution), but I feel about it the same way I feel about people taking out equity loans against their homes to pay off credit cards and vehicles. It fixes the symptom--i.e., erases the painful debts--but doesn't fix the underlying problem--i.e., poor money management skills. On home equity loans, statistics show that of people who take them out to pay credit card bills, two years later 80% (yup, eighty percent) are right back where they were before with the credit cards, and they've got that massive equity loan on top of it! Why? Because by "paying off" a debt with "easy money," they lose the opportunity to learn valuable long-term money management skills.
I know this has been true for us. When we both had jobs and lots of money coming in and no children, we blew money left and right. It was easy to keep paying our debts and running them back up again.
It was only after we hit rock bottom and I had to go to work in a bar at nights while dh worked a job he hated and then watched our son at home while I worked nights; after we moved to a cheap apartment; sold nearly everything that wasn't nailed down; learned to eat on $180 a month; called all the credit card companies and worked out payment plans (or not, but I talked to them even when they were nasty with me); and learned to eliminate lots of expenses; that we finally learned how to really manage our money well.
Now I'm proud of the progress we've made, and I'm glad not to have to ask for help.
One thing that borrowing from your BF does *not* have in common with a home equity line is that you are not putting your home at risk should you not be able to pay your bills. That's good. On the other hand, you may be putting your relationship at risk. Let's say he loans you the money. You do great for a bit, but then you start spending--just a bit, just to make ends meet here and there--on your credit cards again. It gets worse, and you're embarrassed to tell him, so you decide to take care of it yourself and you take out a payday loan to pay the credit card. And so on. Finally, he finds out (maybe you're applying for a mortgage together and he sees your credit report--this has happened to people on this board). Pretty bad stuff.
On the other hand, by telling him now, but then taking care of it yourself without a loan from him two things will happen: one, you'll feel really, really good about yourself and two, you'll learn lots of valuable life-long financial skills that will keep you proud and financially sound for all your life. Oh, and you probably won't ever be in the bad scenario I just described.
Now, I must just add one thing here so I don't sound like a hypocrite. When dh and I were at our darkest hour, we *did* borrow some money from my dad. It *did* help us. So I'm not totally against borrowing money from friends and family. It can be a really big help, and maybe in this case it really is what you should do. When we borrowed the money from my dad there were a couple things that made it work well. One was that we had a written agreement with him, and we paid a certain amount of interest (10% which went down to 7% when interest rates dipped). Another was that we had a definite "calling it quits" point--that is, we agreed in advance that when we hit a certain amount of borrowed money from him that we would not borrow any more; as we approached that number, we began taking drastic measures, knowing that we soon would have no cushion left--it helps that I know my dad is a very by-the-books guy and would *not* change our agreement just because we wanted to. Another was that we allowed him a peek into our financial situation and he helped us learn the skills we needed to do better, and he held us accountable right up until we paid him off (which was recently--we paid him with a credit card that we had completely paid off and received a low interest rate offer on--he knows that is how we paid him, and agreed that it was probably in everyone's best interest for several reasons including the fact that we have proven ourselves over three years to have learned the skills we need--it also gave him some cash to keep working on the house they're building and gave us a lower interest rate than we had been paying to him). Another factor was that we did not use the money to pay off our other debts--we used it at first to help fund the business we were starting, and then as our options began to run out, to manage our living and moving expenses while we rearranged our lives to live inside our means (funny how it costs money to save money). So we still had to learn to deal with our debts.
Anyway, I'm not saying that borrowing from your bf is necessarily a bad idea. I just think you should think it through very carefully, and plan carefully so you won't end up in a worse spot than you are now.
I know this is a hard place to be in. You're doing great to come here and show a readiness to clean up the mess. Hold your head high, and do what you have to do. You can do it!!!
Blessings,
Heather
Hi there and welcome back to the board.
All my best,
Danni
I also suggest reading. Go to the library and visit the financial planning section. I like Suze Orman. I actually like any book that analyzes why we handle money the way we do.
I would also come clean with BF, but not ask for a loan. Show him you are being responsible and try to work on your finances. If you ask for a loan, he might see it as a red flag. Money can't buy happiness, but it can destroy a relationship.
Good luck.
Sandra