What a mess!!
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| Wed, 05-28-2008 - 7:22pm |
Honestly its like I just woke up yesterday and realized that things weren't quite as peachy as I thought they were. Here's my story:
My husband and I started out our relationship with no credit and no debt whatsoever. We lived with no credit for a long time having decided it was the root of all evil. UNTIL we were pregnant with our second child and decided we wanted to buy a house. We built up a little credit, bought a new car and moved states (because we couldn't afford to buy where we were) and bought a house. In the first year in that house it was credit craziness, everyone was trying to get us to sign up and we ended up using credit to pay for the property taxes and some dental work. Then we both got credit cards with WAMU and used those cards like idiots. We finally realized that we were incredibly homesick and wanted to move back to our home state. We rented the house out and borrowed another 10 grand to move us back across the country. That is basically where we are right now. Here is how it looks on paper.
ford - 7.99% APR - $17,215.20
Wamu #1 $2000
Wamu #2 $3500
Capital One - $2126.94
Care Credit - $2,325.31
Orchard Bank - $300
Citi Financial - $4,140.81 (was 7k 9 months ago)
Bank of America - $9,000
Home Loan - $214,000
Ambulance bill - $1500
We also owe $4000 in property taxes for this year, hoping to cover that with our tax rebate which should be about the same. This is already late and total climbs each month we are late. We are waiting on forms to finish filing our taxes.
Our monthly outgoings are:
$450 childcare (this is about to go away)
$150 electric
$135 cable
$170 trash, water, utilities
$1950 rent (this is about to go up to 2800 because we have to move)
------
ford $450
Wamu #1 $150
Wamu #2 $200
Capital One - $200
Care Credit - $200
Orchard Bank - $35
Citi Financial - $450
Bank of America - $430
Home Loan - $1800
Ambulance bill - $0 (haven't arranged a payment plan with them yet)
I make little bits of money here and there but nothing much to even consider income and my husband makes $9100 a month before taxes. Also the renters in our house cover $1500 of our $1800 a month mortgage but we have no savings to speak of.
We have next to nothing in the 401k but I just started to add $200 a month. The house is all we have for any hope of retirement and right now we are 1 month behind on our mortgage with no clear way of paying it within the next month because we are moving. Credit has been going to pot, we have missed a few payments on many things and been catching up with things sporadically. Both wamu accounts have been closed due to non payments, as of today the bank is up to about $219 in overdraft fees and we cant put money in the account until Monday (could end up being close to $600 by then), so basically we are at the top of the landslide and the ground is giving way.
When we move I plan to not hook up the cable and we are going to stop eating out and traveling. I am trying desperately to make things work but the car payment and the two big loans are costing 400+ dollars each per month. If anyone has any suggestions I would love to hear them. Thank you so much if you have read this far!! It feels good to get it off my chest!!
Edited 5/28/2008 7:27 pm ET by gal_nuby

The bills you have posted total about $6800 a month.
Hi there. First of all congrats on posting your numbers. That can be the hardest part of the process (facing your demons).
From the looks of things I think the problem could be that you have never had to worry about budgeting before and perhaps you feel a little overwhelmed?
Bex -
"The bills you have posted total about $6800 a month. That leaves a lot left over each month if your dh is grossing $9100. You need to start tracking your expenses and then you need a budget.
If you're not working, why are you spending $450 a month on child care? What are you spending on groceries, supplies and personal care? Entertainment? Insurances? Gas for your vehicles? Car payments? "
I have written a letter to withdraw my son from childcare and so we wont be making any more payments on that now, thankfully. We thought I was going to work full time but it didn't work out, my son really likes it there and wanted to stay so he has been in there even though he didn't need it. Time to nip that in the bud though, I miss him anyway, even if he would rather hang out there.
I did the numbers today and we are definitely spending far too much on eating out/entertainment, I was shocked. I counted $894.30 for last month. Then $654.65 on groceries (We have baby and pet supplies included in there). $392.80 in gas.
We have banfield $16.95 a month, car insurance $169.18 a month home insurance $80 per month.
Banfield is about to go because I have to give up my dogs due to moving. We can cut out pretty much all those entertainments costs, we are a vegetarian and vegan family so we end up eating at expensive places. That can go.
Thanks for your response and waking me up to our entertainment budget, phew that was a shocker!!
I think you're definitely right about me being new at this, when you don't have credit its so much easier to see what you have and not overspend. I am absolutely overwhelmed, I can't believe how much action that bank account sees each month!!
My husbands wage after taxes is $6503, now that I see where those little bits are going I can see where the problem is. It seems we can only just afford the life we have without the extravagances. I want to get an evening/weekend job but my husband really doesn't want me to do that. We live close to my husbands work so that is good, but I don't really live in a large enough place to have other kids in my home. I can definitely try to sell some stuff over the course of the move and I will.
I don't really know how to get current with the mortgage until the taxes come in or until we will already be overdue for next month too and I know that paying it will put us behind on something else, likely those two big loan payments. The mortgage company will only talk to my husband and not me because I'm not on the deed and he is useless at calling them, so now they call all the time with no response. I keep telling him how bad that is but he is always too busy to call.
Thanks! I have read some of the stories here and having heard about what some people here have overcome, I know we can do this, its just a matter of tightening our belt strap and
not letting this happen again. We have been incredibly careless and we have not accounted at all for the fact that we moved to a much more expensive part of the country, we have carried on living like we are in the old place. I just hope and pray the mortgage thing gets sorted soon so that I can concentrate on fixing everything else.
Thanks for your advice!!
Here is my two cents.
First I would cut for the next three months or so the 401K down to like 50.00 a month. Get all the money you can and pay off the bank and close the account.