I have no idea where to start... Help?

[nmboone]

Cataconico- I am not going to flame you here I promise! I genuinely hope that your situation gets better soon. You seem to have a lot of issues that have come up recently that would look daunting to anyone. But it seems that you have seen at least some light or you would not be here asking for help (if that makes any sense).

This is what I would do in your situation with the creditors and some of the other stuff.
1. Pick and choose from the advise given that sounds the best for your situation. Don't worry about what anyone says about your husband. If you love him and you know that you both are trying your best then leave it at that.

2. As far as the creditors go, anyone on here will tell you that technically they should all be paid, but life isn't as seemingly perfect for some as others. Let the older ones drop and once you have some extra funds try to pay off the newer ones. Some of them look like small debts that can be paid easier. I would focus on those.

3. Please please please stay away from the rental places. Pay Aaron's off and do yourself a favor and never go back. I'm not saying that you're stupid or anything, but those places are pretty much bad news (but I think you know that now!)

4. You seem to think that having some savings is bad or futile, but it's always a good thing to have a nice backup. I'll agree with you that some very frugal people beat themselves up over the smallest amount of money (sometimes I do it too!) Try to get up a little EF and make saving fun for yourself, but of course like you said if you never splurge ever what's the fun in life?

Good luck with your financial journey and hope that everything starts to fall into place soon!

[catatonico]

NM,

I really appreciate what you said, and everyone else on here, has said. I know that, even though we are maintaining right now, it wouldn't take much to leave me scrounging to pay for an emergency right now.

My husband and I have discussed our bills and gone back over our spending habits and have managed to locate some definite areas for spending less. I don't have anymore *wants* besides a better place to live and a better car (the car is extremely frivolous though, so that will just have to wait until I can save for it). With strictly watching what we spend, I can find about $600/month to put to savings (or some of those creditors that won't be dropping off in the next couple of years). I know that its not a lot, but it is a beginning for me. My income increases by about 7.5% every year (and my review is in a month and a half), so that will definitely help.

I would like to do what was suggested earlier, and "pay myself first", but I'm not exactly sure WHEN to start doing that. When I decreased my income to account for any savings, it threw my 6-month bill plan out of whack and started showing that I go negative some weeks. I think that's just a matter of double checking the dates that I have in there to pay items on, because I know that the money is there somewhere. I think I'll just bite the bullet and start hiding the money and make adjustments as I need to (there are a few bills that I pay well before their due date because I don't like having to pay bills the same week that I have to pay rent). Oh well.... I'll figure it out.

At least I know that my job is secure for at least the next 5 years.

Is there anything anyone else can think of that I need to plan for (besides car maint, which I always forget)? I would like to try to avoid any nasty surprises.

[minnie1928]

Here's a variation of paying yourself first, without making yourself short. Here's what I did, I used to get paid every 2 weeks so I would take my paycheck and do the following as an example:

$1000 paycheck #1
-$300 mortgage (budget)
-$100 auto expenses (budget)
-$200 groceries
-$100 utilities
-$100 savings
________
$100 remaining

say during the next 2 weeks, some incidentals come up and I'm left with $75 on the night before my next paycheck. I would send the $75 to whatever debt/savings goal I was aiming towards. That way I've still sent money towards my goal, without feeling "broke" all the time. But at the same time, it did become a game to see how much I could send from each paycheck. But, basically this approach has you starting at $0 before your paycheck hits, every time. I did this for years and it really worked for me.

The best way to figure out what categories you need to budget for is to look at where you've spent money in the past and to track how you spend money in the future. I think an important thing to remember when starting a budget is that is will be a work in process. It could easily take 6mos or more for you to really get your budget down to a science.

[bjl584]

Originally Posted by catatonico

My husband is not the problem here. He contributes more to our way of life and well being then his working could ever contribute. And he has nothing against taking whatever legal opportunity comes his way to make a little extra cash. Unfortunately, EVERYONE in this area is hurting and doing the exact same thing.

I desperately want to figure out how to save a little money, but at the same time, I want to keep the little that I have built back up after losing everything that we had.

Everyone says cut out all of the unnecessary expenses. I have read posts of people that have 6+ months of savings and little debt berating themselves because they spent $100.00. I have a very difficult time wrapping my mind around the concept of saving money just to have money. I can understand the desire to save money for stability and for the future. But what good is saving and scrimping and scrounging and working your tail off for years if you have absolutely nothing but a bank account full of money to show for it, but no fun memories of the journey? Its like a diet... when you are dieting and you stop allowing yourself any of your favorite foods or rewards, most people end up binging or simply just giving up.

One of my main concerns is trying to get us out of this hell-hole that we live in. There are some items that can definitely be cut down and will be as soon as possible (the cable will be completely dropped when we move, as we are already as low as our contract will allow, without paying fees that would end up not saving us any money). I am trying very hard not to add anything else negative to my credit, as there is a chance I can qualify for an FHA loan in a couple of years. I am concerned about our lack of an EF (I don't count my 401k, since I pretend its not there and its not a lot, anyway) and would like advice, specifically, on what to do with the collections on my credit.

Are there baby steps to saving? To be quite honest, this "spoiled princess" is finding the idea of cutting absolutely everything that she enjoys out at once extremely daunting and more than a little scary.

Feel free to flame away

I would have to say that the purpose of scrimping and saving just for the sake of having money would be to NOT end up in the self described "hell-hole" that you have found yourself in. As far as being a "spoiled princess." Drop it and grow up. How can things honestly be any worse than they already are? Do you really think that not having cable or internet will make things any worse or less stressful than they already are? Doubtful. I think that your husband can start his own side business and pull some income in for your family. Place an add in the paper. "Grass mowing, painting, contracting, etc. Honest, dependable. Please call, 555-1234." You get the idea.

As far as the collections go, you will have to make a moral judgement. Many will say that you incurred the debt, so therefore you are responsible for paying it. Others will say to lay low and let the SOL runout. That's up to you though. Personally, I've never incurred a debt that I didn't pay back, but's just how I feel. Either approach will get you out of debt I suppose.

There are babysteps to saving. You have to start somewhere. Start with cutting the excess in your budget and then go from there. Next, work on increasing your income and your husband's income. Next, start saving diligently every month without fail. You get the picture. Most people don't have an income problem. They have a spending problem. They have this idea that they are somehow "entitled" to live a lifestyle that their income does not support. Change this way of thinking and it will change your life for the better.

[catatonico]

I know that some of you are trying to help, and have offered sound advice, but there are also others that have sounded more judgemental then helpful. Sure... there are things that I could give up. But not everything some of you see as frivoulous really is. Some things are necessary for my job and for my school. And somethings are kept because other items have already been sacrificed.

The "hell-hole" my family lives in now was a deliberate downgrade from a nicer place. It was not because we couldn't afford a nicer place, it was because I had a couple of larger debts that I wanted to get taken care of. Those are now done and over with.

Morally, yes. I should re-pay everyone. But the biggest debt that I have is not something I should even owe. The smaller ones, I have no problem paying, as most of them could be paid off quickly, without the need to settle.

I came to this forum for advice, which a lot of you have provided, and I appreciate it. I was hoping to find a little understanding and maybe someone else that has had to work through some similar hang-ups regarding finding the middle ground between saving and still being able to maintain some luxuries, at the same time (which is my biggest problem). I don't think I've found that yet. Thanks for trying, though.

[cicy33]

The last thing at this point I would be worrying about is past debt. You have more important things to worry about, like feeding your family. Once you are out of the dark area and have a little money saved up and life is a little more manageable, you can worry about paying those off. I tend to agree with part of what you said regarding the savings thing. I also feel that having a huge savings and getting an ulcer spending a dime of it is detrimental. but it is important to at least have a little bit of money set aside. even if it is only 1000.00 I would attempt to achieve that number. as far as the cell phones go. if you want to cancel them do it. what is the worst they can do? make your credit worse? I don't think that is a major concern at this point. but that is your choice. I don't personally recommend anyone cancel cable completely only because I do like my tv when I want to watch it. if you are not a tv person then by all means! and internet is just as important to me. these are my entertainment! the one area I would say to cut out completely or at least limit to once a month is eating out or going out. for a while my so and i were eating out regularly. not only was it bad for my checkbook but my butt, waist and thighs! not to mention we no longer appreciated it. once we settled down to eating out about once a month we found that we really enjoyed it again. and you can eat at places for a reasonable cost these days, split meals, drink water, etc. you don't have to give up everything but yes, you will have to cut back some places if you want to get ahead. that is just part of life.

[catatonico]

HaHa! Well... I am not in such a bad place that I have difficulty feeding my family. We are able to pay for the things that we have now, but its the past stuff and lack of savings that weigh heavily on me, though they do not weigh so heavily that I am willing to give up the few things that we have managed to get back.

I think I will set my goal low, and then work towards that, first. That method seems to work best for me, especially it would allow me to not lose anything else.

I may also try to split my monthly bills up into their weekly amounts (at least some of them) and see what I have left after that.

Thanks for the advice!

[cicy33]

Originally Posted by catatonico

I know that some of you are trying to help, and have offered sound advice, but there are also others that have sounded more judgemental then helpful. Sure... there are things that I could give up. But not everything some of you see as frivoulous really is. Some things are necessary for my job and for my school. And somethings are kept because other items have already been sacrificed.

The "hell-hole" my family lives in now was a deliberate downgrade from a nicer place. It was not because we couldn't afford a nicer place, it was because I had a couple of larger debts that I wanted to get taken care of. Those are now done and over with.

Morally, yes. I should re-pay everyone. But the biggest debt that I have is not something I should even owe. The smaller ones, I have no problem paying, as most of them could be paid off quickly, without the need to settle.

I came to this forum for advice, which a lot of you have provided, and I appreciate it. I was hoping to find a little understanding and maybe someone else that has had to work through some similar hang-ups regarding finding the middle ground between saving and still being able to maintain some luxuries, at the same time (which is my biggest problem). I don't think I've found that yet. Thanks for trying, though.

I am the same way. while I want to be more debt free I will not make my life miserable achieving it. I have seen people die with no warning. I don't want to do that. you know, pay, pay, pay, no fun and then be gone. I want to enjoy life. For me the luxuries are cable and internet. (and a little casino gambling) for you they might be different. the one area that I mentioned earlier, the grocery budget, is the one area I try to cut as much as possible so that I can afford other things.

[cicy33]

Originally Posted by catatonico

HaHa! Well... I am not in such a bad place that I have difficulty feeding my family. We are able to pay for the things that we have now, but its the past stuff and lack of savings that weigh heavily on me, though they do not weigh so heavily that I am willing to give up the few things that we have managed to get back.

I think I will set my goal low, and then work towards that, first. That method seems to work best for me, especially it would allow me to not lose anything else.

I may also try to split my monthly bills up into their weekly amounts (at least some of them) and see what I have left after that.

Thanks for the advice!

dont' get me wrong, I totally understand! I am personally working daily on fixing my past errors. we all have them and sometimes it seems to me on here that others either never had them or don't remember having them. I look past those posts and focus on the ones that actually help me. It sounds to me like you are doing the best you can and handling things just fine. I agree with starting small with goals. 1000 is probably high, I know it has been for me in the past. Maybe 250?

[catatonico]

Cable and internet are my luxuries, as well. My cellphone is nice, but I had a regular boring one until my company started needing me more.

We could definitely stand to cut way back on going out to eat and some of the groceries (I lump household items and some of my kid's necessities in with our grocery budget, too, though). We spent $200 in the last month on dining out (which is ridiculous). We did well this past weekend, though. We didn't eat out at all, which is unusual. My husband, son, and myself even cooked together, which was pretty fun (ever seen a 4-year old cook? funny!). And we only go to the movies about once every 6 months or so (I hate theatres, so I will only go when certain movies come out that I have waiting forever for). For me, it really is finding a balance between saving a little money and maintaining some quality of life for my family.

[bjl584]

Originally Posted by catatonico

I know that some of you are trying to help, and have offered sound advice, but there are also others that have sounded more judgemental then helpful. Sure... there are things that I could give up. But not everything some of you see as frivoulous really is. Some things are necessary for my job and for my school. And somethings are kept because other items have already been sacrificed.

The "hell-hole" my family lives in now was a deliberate downgrade from a nicer place. It was not because we couldn't afford a nicer place, it was because I had a couple of larger debts that I wanted to get taken care of. Those are now done and over with.

Morally, yes. I should re-pay everyone. But the biggest debt that I have is not something I should even owe. The smaller ones, I have no problem paying, as most of them could be paid off quickly, without the need to settle.

I came to this forum for advice, which a lot of you have provided, and I appreciate it. I was hoping to find a little understanding and maybe someone else that has had to work through some similar hang-ups regarding finding the middle ground between saving and still being able to maintain some luxuries, at the same time (which is my biggest problem). I don't think I've found that yet. Thanks for trying, though.

A lot of the people here have found middle ground between saving and enjoying luxuries. It all can be traced back to having and sticking to a budget. Anything left over after saving, paying your bills, and taking care of your necessities falls into the fun money column. Perhaps your idea of a luxury differ from what mine are. Let me give you an example. I would love to have a 52 inch flat screen tv, but at the moment I can't afford it. By that I mean that I can't pay cash for it. I could easily go put it on my Visa and then worry about the payments on it later, but I choose not to take that route. I could also, choose to stop contributing to my retirement account for the next few months and go buy the tv, but again I choose not to do that. Instead, I've chosen to sacrifice having the large tv, be satisfied with my old 19 inch set, and put away a little bit each month until I can go out and buy my tv. That example is basically the mindset that you will need to develop when it comes to buying pretty much everything from this point forward. Luxuries will come, but they need to be earned. Barring catastrophic circumstances, the reason that most people have overwhelming amounts of debt is because they are living above their means. They bought a house that was too big and too expensive, they bought a car that they couldn't afford, they bought that tv as soon as they got it in their head that they "needed it." I would say that now is the time to buckle down, make the hard choices, and dig yourself out of this hole. Luxuries can come later. And, you will enjoy those luxuries all that much more when you know that you can truly afford them. You just need to think outside the box. I put myself through Grad school using the local library's internet access, printing my term papers out at work on my lunch break, and pretty much living in my car. It sucked, it was a pain, but at the end of the day it was worth it. I have an MBA, and I saved a ton of money in the process by not having computer or internet costs. That kind of mindset is probably what you will need to get yourself back on your feet. Stop smoking, stop eating out, stop everything that costs money that isn't absolutely necessary for the survival of your family. Until you can embrace that lifestyle, it will be very difficult to turn things around. It won't have to be that way forever, just until you turn the tide. Like I said, luxuries will come later, and they will be much more rewarding.

[cicy33]

I think that one thing that is really important to understand and remember that all changes need to come slowly. If you try to go crazy and become totally frugal in one day you will go crazy and blow money (or maybe that is just me!!) It is like a diet, if I try to be super good and no junk at all I go crazy and binge. I feel that this is the same thing, at least for me. there may be people on here that say you MUST do this and that. but in reality all people are different and all ways of doing things must be done differently. You are more like me. I need to have some fun and luxury in my life while I am rebuilding my credit and paying off debt and of course saving money. I can't go cold turkey like that. I need some reward for doing well. that is why I do things more slowly than most people on here. I think it is great that others can do what they do but I know I can't so I don't pretend to be something that I am not. I accept my limitations and work with them and I think that is the best thing. You have to stop beating yourself up for not being perfect and appreciate what lengths you are achieving. It took me a while to get there!

[jpg7n16]

Originally Posted by cicy33

I think that one thing that is really important to understand and remember that all changes need to come slowly. If you try to go crazy and become totally frugal in one day you will go crazy and blow money (or maybe that is just me!!) It is like a diet, if I try to be super good and no junk at all I go crazy and binge. I feel that this is the same thing, at least for me. there may be people on here that say you MUST do this and that. but in reality all people are different and all ways of doing things must be done differently. You are more like me. I need to have some fun and luxury in my life while I am rebuilding my credit and paying off debt and of course saving money. I can't go cold turkey like that. I need some reward for doing well. that is why I do things more slowly than most people on here. I think it is great that others can do what they do but I know I can't so I don't pretend to be something that I am not. I accept my limitations and work with them and I think that is the best thing. You have to stop beating yourself up for not being perfect and appreciate what lengths you are achieving. It took me a while to get there!

It's not just you

It's about behaviors. In behavior modification they call it "shaping." (see Shaping (psychology) - Wikipedia, the free encyclopedia)

Dieting is a behavior. Running a marathon is a behavior. Getting to work early is a behavior. And spending money is a behavior. In any of them, if you try and make too drastic of a change too soon, it is easier to say "this is too much change. I can never stick with this." And so you fall back off. What is a drastic change for some people may not be for others. That's why you have people who can just go on a diet for a month and cut out all sweets, fat, etc. And others who struggle with going 3 days without their Starbucks.

For long term change, it's always best to start small and gradually move slowly towards your ultimate goal.

[BlackDiamond]

Originally Posted by catatonico

Everyone says cut out all of the unnecessary expenses. I have read posts of people that have 6+ months of savings and little debt berating themselves because they spent $100.00. I have a very difficult time wrapping my mind around the concept of saving money just to have money. I can understand the desire to save money for stability and for the future. But what good is saving and scrimping and scrounging and working your tail off for years if you have absolutely nothing but a bank account full of money to show for it, but no fun memories of the journey? Its like a diet... when you are dieting and you stop allowing yourself any of your favorite foods or rewards, most people end up binging or simply just giving up.

One of my main concerns is trying to get us out of this hell-hole that we live in. There are some items that can definitely be cut down and will be as soon as possible (the cable will be completely dropped when we move, as we are already as low as our contract will allow, without paying fees that would end up not saving us any money).

Are there baby steps to saving? To be quite honest, this "spoiled princess" is finding the idea of cutting absolutely everything that she enjoys out at once extremely daunting and more than a little scary.

Feel free to flame away

Okay. I am the person who was freaking out over spending $100 on symphony tickets.

Yes, I have $6500 cash in the bank. No, my $12K debt is not debilitating. But it is still there and preventing me from moving to a nicer place.

Why would I freak over $100 in concert tickets? Because I too want to get out of the "hell hole" I live in. Unlike you, I will never have the luxury of having my own home. I live in the Boston area and quite frankly, in order for a single person to have a single family home here, you have to be making at least $100K a year. That is, if you want to actually be able to afford your house…I know plenty of people who only make $60-$70K a year and they have houses they now can't afford. I make less than them. Owning a home (that I can actually afford) on my pathetic income is simply out of the question for me.

But I can certainly obtain a semi luxury apartment (you know with a pool and a doorman) if I am very frugal and don't blow money on stupid things. So that is my current goal. I would also like to travel. To me, these things are bigger and better than cable or going out to the pub with my friends.

In the end, I went to the symphony. It was an enjoyable occasion. I'm glad I went. But that will probably be the last "fun" thing I do all year.

This "spoiled princess" cut out all frivolous, non necessities and actually sold all of her belongings (well is in the process of doing so). I don't miss the "stuff". I sometimes miss going out with friends but my true friends understand and stick by me and cheer me on.

Accepting reality was the first baby step to saving. I found it horrifying and pathetic that at my age, almost 34, I have 0 in savings, tons of debt and basically was a complete loser compared to most of the people around me. I decided I didn't want to be that way anymore. So I fixed it by making money my main focus in life. As for giving up going out and selling all my stuff, that didn't suck nearly as much as I thought it would.

[Joan.of.the.Arch]

It sounds like our original poster has been working on changing behavior for some time. Six years ago she had a bankruptcy, so perhaps just before then she started making changes. The house fire and difficulty in her husband getting work are newish and probably have pushed them into seeing they need more changes. She sounds ready and willing to make some changes.

Go for it, catatonico. Some things are hard, but worth doing. Some things get easier as you go along, and I hope this will be one of them. If you choose, you can actually find adventure, pride, and pleasure in living in a way that secures your future and teaches your child to be more financially competent than others his age will be.

[LivingAlmostLarge]

I think a budget is a good way to keep luxuries while setting guidelines "limits" on things. I made the suggestions earlier to cut the cell phones, cable, etc.

Truth is I think if you need it for work great, but get the cheapest plans possible, and if your husband isn't working, why does he need a SmartPhone with fancy stuff? That's a small savings that can add up.

That and cutting the grocery bill, etc. That will make up for him not working, and I have nothing against a stay at home parent, I am sort of. I plan on being one eventually, and that's how I stretch our money in a very expensive area as well, I think it's worth doing.

These are just my thoughts and suggestions.

[catatonico]

It really is more about modifying the behavior. I've done it before (after bankruptcy) and we were doing really well for a time (and I mean, spent no more than 60% of our income, had a year's worth of savings in the bank, and were able to pay cash for most items - house and car w/ 0% interest being the exception). But yeah... both of us losing our jobs when the economy crashed, having the house fire, and then trying to continue to pay for the home and pay for another place to stay while trying to fight the insurance company and the state investigators ate it all up.

Yeah.. Diamond.. I was referring to your post I think its great what you have done, and I can tell that it brings you a lot of pride in knowing that you are digging yourself out. I wish that I could say I could do it, too, but I'm pretty certain I can't... YET

I'm going to start with those baby steps (my husband and I gave up our video games *GASP* but the accounts are canceled and that is $40 less a month that we spend). We actually sat down and watched a movie together last night, with popcorn and all. It was nice. I know.. pathetically small step, but its a start. Now we are driving our cable and cellphone company nuts negotiating with them (that one isn't going so well, though... Verizon and Comcast). Oh well.. we'll keep trying.

[bjl584]

Originally Posted by catatonico

It really is more about modifying the behavior. I've done it before (after bankruptcy) and we were doing really well for a time (and I mean, spent no more than 60% of our income, had a year's worth of savings in the bank, and were able to pay cash for most items - house and car w/ 0% interest being the exception). But yeah... both of us losing our jobs when the economy crashed, having the house fire, and then trying to continue to pay for the home and pay for another place to stay while trying to fight the insurance company and the state investigators ate it all up.

Yeah.. Diamond.. I was referring to your post I think its great what you have done, and I can tell that it brings you a lot of pride in knowing that you are digging yourself out. I wish that I could say I could do it, too, but I'm pretty certain I can't... YET

I'm going to start with those baby steps (my husband and I gave up our video games *GASP* but the accounts are canceled and that is $40 less a month that we spend). We actually sat down and watched a movie together last night, with popcorn and all. It was nice. I know.. pathetically small step, but its a start. Now we are driving our cable and cellphone company nuts negotiating with them (that one isn't going so well, though... Verizon and Comcast). Oh well.. we'll keep trying.

Comcast is easier to negotiate terms with than Verizon. At least from my personal experience. Comcast offered me a break on my bill by offering me a six month promotional offer. Verizon on the other hand wasn't as receptive to the idea of giving me a break. The only way to reduce my bill with them was to cut back my plan and to block text messages.

I was able to significantly reduce my electric bill by replacing all my bulbs with CFL bulbs. The price of them has really come down recently, and the last time that I was in Lowes they had a sale on them. I bought enough to do every bulb in my house. It has made a difference surprisingly. I would also suggest investing in a programable thermostat. You can get a decent one for $50 or so. That has made a difference too.

[catatonico]

Comcast did offer us a 6 month discount, but only for about $15.00/month. Oh well. At least its something.

We don't leave many lights on in the house, or run the AC alot. Our dryer heat coil is going out though, so my husband really needs to replace that for me (we have to run the dryer at least twice just to dry a small load of clothes). Unfortunately, hanging our clothes out isn't an option where we live at (they would disappear quickly!), though we used to do that.

Oh... and yeah.. we already have a programmable thermostat. That does help a lot.

[wincrasher]

Change is hard. Especially "downsizing" your life.

You are not entitled to any "luxuries" - none. You save the money first, then splurge a little when you can afford it. And from the sounds of it, you can't afford any right now.

Get your head around this though - job security is an illusion. Ask the folks who worked at Enron and Lehman Brothers. Nobody is safe, no matter the contract or how big their company is. I've been working with people who had secure contracts, but got laid off and replaced with other people. It happens.

Sacrifice is worth it in the long run.

Good luck!