So desperately in need of help
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| Thu, 05-11-2006 - 9:56am |
Hi Everyone,
I have not posted in a long time. I am in serious debt and trying to come out of it with paying down the debt with dh and my salary. We owe 59,000 in a home equity loan and then also owe our home mortgage of 118,000 together our payments are $1389 not including $600.00 a year for home insurance, $800.00 a year for flood insurance and $3000.00 a year for property taxes. My husband makes about $1100 net a week and I make about $400.00 net a week. I don't know how I can pay off my debt because we have so many other expenses as well, like groceries we spend about $800.00 a month and then we have two cars that are already paid off but we spend like $100.00 or more in gas a month. And then there is the school lunches for three kids and also the utilities of $100.00 in electric, 150 in gas, cable, telephone and internet are 120 a month and car insurance is 395 a month and I am feeling really overwhelmed here. I am so proud of the home that we have been living in for 3 years now but feel maybe that we rushed into a single family home and now have no rental income. There is no way that my husband would every go into a multi family home because he loves his privacy but I just want to have no debt at all. I want to become free of this debt. I also just took a pay cut I was making $30,000 a year and now I am only making $26,000 a year. Sometimes I look at some people in my family and they make so much less than what we make and yet they seem to be doing much better than us. Does any have any ideas? I also remember seeing a snowball spreadsheet once here but now I can't find it. I really need to get my financial life in order. My husband recently found out how much we are in debt, before he just passed over the check and expected me to pay all the bills. I have no organizational tools whatsoever, I used to just let the bills fall behind and only get to them when they were in collection or when things were going to be shut off, but now he is in charge of the bills and finally realizes how much it takes to run the household. I have never not had money in my pocket and now I find myself asking him for spending money. I have thought of getting a second job but want a flexible job that I could do on my own time and not worry about having set hours. Has anyone been going through the same thing or have any good advice for me???
Diana

I think your first step is to try to get a better understanding of where your money is actually going. From the numbers you posted it seems like you guys should be fine. (I'm not being critical or unsympathetic, just trying to get a better idea of what your situation is.) Adding up all of your expenses that you listed, even when prorating the flood insurance, property taxes, and homeowners insurance, I still came up under $3500 per month. And you two are netting $6000 per month. I know that not every little thing you spend money on is included in the things you listed, but is there a major expense you forgot to list?
You and your husband need to sit down and create a budget every month, allocating where every dollar from your next paycheck is going. It really does help.
And yes, I think most of us here can relate to being total overwhelmed with debt. And some of us can also relate to the "what did I get myself into" as far as the house goes. I bought mine 3 years ago also, and on some days I am really glad I bought when I did because the prices have shot up so much over the past few years. Other days, like when I pay the mortgage, I think that I am in way too far over my head, and that the mortgage company was insane to even approve me for the amount they did.
Heather
I can share what I am doing to cut back on expenses while I work to pay off my debt.
*No cable. This saves about 50/month.
*Dail up internet, no extras on the phone service and phone cards. If you have a walgreens near by, they have their phone cards B1G1 at least once a month. When I lived by Meijer they would have their cards B1G2 every couple of months at their Super Sat sale. That way you pay less than 3 to 4 cents a minute. My long distance ends up costing less than 10 a month so my total bill for the phone, cell and internet is 100/month.
*If you live in a metro area, get rid of the cell phones. I just had to get one because it is 20 miles into town and no pay phones anywhere if we have a problem but I got the smallest (cheapest) plan they had.
*I cut mine and my son's hair. This saves at least 40/year
*Conserve as much water and electricity as you can. Before we moved, my water bill was 3.46 a month. Now it is 65.00 no matter how much we use which sucks because it kills the motivation to have people conserve.
The best thing to do is see where your money is going and look for creative ways to not spend it. I love sushi and started making my own since it is cheaper over the long run for me.
Good luck, you can pay everything off with patience!!
Things can definitely feel overwhelming at times.
Becky
CL of 4th, 5th & 6th grade Scoliosis
Diana:
Just a quick question - Do you have any cc debt at all?
lvhunnie2005
Can you check with your insurance company about getting a better car insurance rate? 395 seems awfully high for two vehicles. I drive a 2005 Chevy Equinox, and my Dh drives a 2000 Chevy Monte Carlo SS, so they're both relatively new vehicles (the Equinox still has payments), and we only pay $127.55 a month with Allstate. I'd definitely shop that around to see if you can get a lower rate somewhere else. Once you've gotten the best rate, call your existing insurance company and ask if they'll match it. If they won't, go ahead and switch.
Is there any way to bring your grocery bill down a bit? I know it's hard with school lunches and a larger family (we only have one kiddo to feed), but maybe coupons or discount grocery stores, if there are any in your area? Our Super Walmart seems to have good prices in grocery items. Do you have one of those in your area?
For spending cash, can you bake or make a craft item to sell? Maybe provide childcare during the summer for your children's friends? If their parents work, it might be cost effective for them to have you watch them at a lower rate than a daycamp or childcare center might cost. That could help you bring in some much needed money. You might be able to help neighbors with their childcare also. Maybe offer to babysit in the evenings so neighborhood couples can go out for "Date Night"? If your neighborhood has an announcement board or a newsletter, maybe you could post your job interest there. In my opinion, if I had the choice of a local teenager or a Mom with three kids of her own to choose as my son's babysitter, I'd choose the Mom. At least then I'd be certain that if there were any emergency (health or homewise), she would be prepared to handle it.
Wishing you the best!
Pat :-D
I have three children ages 15, 12, 8 that is why the grocery amount is so huge. Also I think my insurance is high because right now I am a step 19 I've had a few accidents in the past. You guys are great witht he support, thank you so much. I am going to review my bank statements to see where all my money is going and also have started logging everything I buy.
Diana
Hello Diana,
I understand your situation, especially with the paycut.
Regarding your income, based on the info you've provided you make:
DH: $4400 / month
You: $1600 / month
-------------
Total: $6000
Debt:
Mortgage: $118,000
HELOC: $59,0000
Bills:
Home Insurance: $600
Flood Insurance: $800
Property Taxes: $3000
Groceries: $800
Gas for 2 cars: $100
Natural Gas: $150
Electric: $100
Cable / Phone / Internet : $120
Car Insurance: $395
Suggestions:
Do you have home, flood, and car insurance with the same company or different ones? Insurance companies often offer multi-line discounts if you have more than one policy with them. I noticed that life insurance is not included in your list. Do you have life insurance? With a large income ($6000 / month) and several kids, this is a necessity.
You mentioned that you have two paid off cars. Congratulations on having them paid off already! Is there a way you could sell one, (check the kelly blue book private value) then buy a $2000 reliable car that runs fine but isn't the prettiest vehicle, so you could use the difference to help
Sincerely,
Lindsey Schocke
Geeks on Tap: Mission Accomplished