Financial adviser

singinjeannie · #1 (**permalink**) 10-03-2004, 05:29 AM

It's obvious my hubby and I need a financial adviser. It seems every Tom, Dick and Harry are financial advisers these days.

How do we find a good one and one that won't just take us further into debt by charging us an arm and a leg???

Thanks!
Jean

terry1156 · #2 (**permalink**) 10-03-2004, 06:24 AM

It's a tough question. Even what were considered reliable sources to get good credit counseling have been <A HREF="http://www.consumeraffairs.com/news04/responsible_credit.html">called into question recently</A>.

You're at a point where you still have some options since you have the retirement fund. I would take all your information to a few and ask them what their recommendations would be for your current situation. Hear them out and see which one you feel gives the best advice.

The two of you will also have to commit to reducing your debt. I don't want to sound harsh, but quickly deciding that the retirement fund should be tapped makes me think you haven't thought through how you are going to change your habits. There isn't going to be an easy way out...and the truth is, you can figure everything out yourself if you really want to. All a credit counselor will do is give you a few suggestions of different paths to take...in the end, you're going to have to change in some way not matter what.

I don't know how comfortable you feel laying out your current financial situation in a forum, but if you are willing, I'm sure there are plenty of people who will tell you where you need to cut your expenses. If you don't know where all the money is currently going, then you know what the first step is.

I know this is probably not what you wanted to read, but better to hear it now than when you don't have any alternatives. Lay out your debt and expenses and let's see what everyone can come up with. At the very least you will have a lot of ideas to ask the credit counselor when you meet and be in a better position to judge whether or not they know what they are doing.

rabbitfoot · #3 (**permalink**) 10-04-2004, 09:15 AM

Jean,

You seem to be in a similar position to me. I have asked some friends for recomendations, but haven't come by any real help that way. I also don't feel right asking some people. I don't want them to know about my current troubles.

I know that I need to take steps, but I'm having a hard time taking them.

Tree0164 · #4 (**permalink**) 10-04-2004, 01:47 PM

Jean,

Most financial advisors are looking for people (customers) to make an investment and make a commission. I worked in the field for many years. I think you are more looking for someone to help with reducing your debt and what strategies. There are debt counselors out there but most of them charge crazy fees. Consumer Credit Cousneling which is a non-profit maybe able to help you. Look in your yellow pages. However, I think most people with a bit discipline can probably do it themselves. Educating yourself is absolutely essential.

edited after reading Terry's response

I agree 100% with Terry. Do not touch that retirement plan. You and your husband really need to set down and set up a budget. You need to look at every single dollar coming in. You will even need to sit the older boys and get them to buy in. Life is going to be tough. But I see lots of excuses that you are making for them on not gettting in the plan. Money problems are tough and the number one stresser on marriages. But touching that 401k may solve the debt temporarily but it help with the budget overall. You could be in the same place 1 to 2 yrs down the road because you didn't learn how to budget. This time no safety net because you cashed out the the 401k. Feel free to post some real numbers either on the board or to me via PM.

singinjeannie · #5 (**permalink**) 10-04-2004, 05:20 PM

My hubby and I have sat down, looked at all the depressing numbers and tried to come up with answers. It's very true, there are no easy answers.

I have written down every expense I can think of, coming up with a $1300 deficit each month, if you count all the stuff we normally spend money on. The killers are the unexpected expenses! Dental bills and car repairs top the list. We have also begun to write down everything we spend.

We've already agreed we won't use credit again. (Easier said that done.) It seems there are always hundreds of dollars worth of unexpected bills. Like, I just had the car inspected today. While I knew it needed front tires, it also needed brakes and shock absorbers. The repair place wanted $171 to do the brakes and $157 to do the shocks. The inspection and just replacing the tires we already owned cost $98.00! Hubby said he'd do them himself to save money, but cars are not his forte, and time is something he doesn't have. (He works 10-12 hours a day and gets called into work pretty much every day once he comes home. [Get's paid lousy for all the work he puts in, I might add.] Outside of this, he coaches his kids baseball teams....and life happens...)

We have come up with lots of ways to cut the current monthly outgo, but they included using the 401K to pay off the van and two credit cards to get the bills managable. Now that we can't use the 401K... Well I have no idea.

Get back to all of you later when I have more time to write this stuff down.

Once again, I really, really appreciate the advice. We need all the help we can get.
-Jean

terry1156 · #6 (**permalink**) 10-04-2004, 05:55 PM

You have taken a very important first step...writing down where all the expenses are going. That is one of the biggest hurdles and will help quite a bit simply by knowing where the money is going. It's also good that the two of you have talked about it and are on the same page.

The more detailed you can be about where the money is going, the more suggestions we can give to ways of saving money. I guess the first question is how much money is going out for your rent/mortgage. Hopefully it is not taking up a huge portion of your monthly income (this seems to be a place where many people run into problems).

The next issue is how much do you have on the credit cards and how much are you currently paying on each of them each month. Also, how is you credit rating at the moment (have you missed some payments lately, etc?) and what percentage are you paying in interest on them?

I think I read in one of your posts that you have two cars, but at the moment you are only using one? is that right? I know that using one is probably a huge hassel compared to two, but would it be possible to continue doing this for awhile? If it is, then you could sell one of the cars (hopefully that would cover the loan if you still have one on it and maybe bring in a little money. It would also reduce your car insurance and car repair bills (since there would only be one instead of 2).

The more detail you can give, the easier it will be for us to try and give some suggestions. It is amazing the creative ways that people have cut expenses from reading boards in the past and I'm sure we can come up with some ideas that you and your husband have not thought about (brainstorming with a large group always brings out more ideas than two people by themselves).

globetrotter · #7 (**permalink**) 10-07-2004, 07:51 AM

Quote:

Originally Posted by singinjeannie

I have written down every expense I can think of, coming up with a $1300 deficit each month, if you count all the stuff we normally spend money on. The killers are the unexpected expenses! Dental bills and car repairs top the list. We have also begun to write down everything we spend.

$1300 deficit not counting unexpected expenses is a huge problem. You need to find a way to cut $1300 a month at a minimum. Sometimes it helps if people from the outside take a look. What we think we need and what we really need are often not the same.

singinjeannie · #8 (**permalink**) 10-07-2004, 08:21 AM

Hi Everyone:

Okay, the $1300 IS counting an estimate for all "unexpected" or rather, unusual expenses. For example, I've budged as follows:

Dental / Doctor bills: $100 / month
Auto repairs: $120.00 / month
Gifts / Christmas: $ 85.00 / month

We have cut expenses in the areas of Cable TV, Internet provider, the kids are no longer getting allowances, we don't eat out at all, we've seriously cut back on our actual "spend" money, not buying something unless we believe it's absolutely necessary. (Toilet paper would count as absolutely necessary! HEE HEE)

If I count in every expense I can think of, that's where we get that $1300. We've pretty much stopped giving gifts and we're trying to creatively come up with ideas for Christmas for the kids. (A great deal of our Christmas expenses would normally come from entertainment --- the work party that costs $65, the MANY gatherings at friends houses that require bringing a dish and an expected to participate gift-exchange, sending out cards, baking cookies and special breads...) We don't go crazy for our kids gifts. Maybe spending $200 for all four of them for Christmas gifts is about average. I have recorded all Christmas spending for the past 10 years, so I know what I'm talking about, here!)

I've called Geico for an auto insurance quote and they are $150 more than I'm paying right now!!! (not gonna help me!) I've also called several other insurance companies for new quotes on home-owner's insurance, and they are all higher than what I'm paying now.

This is the first month we've really tried to cut down on Groceries and get down to $400 a month. No easy task. The first pay, we spend about $300. Sigh. This isn't loaded with chips and snacks, either. Just that diapers, formula, fresh fruits and veggies cost alot. I shop at a discount store near my house (ALDI's) and they are really reasonable, but my bill is STILL very large. Face it, 2 adults, 1 teenage boy, 2 kids and a baby take a lot of food to feed.

I have two credit card with lots of money on them.
#1, balance = 6776.00 with a minimum payment of $60 / month
#2, balance = 10,858.69 with a minimum payment of $100 / month

I have a mortgage and a line of credit on my house:
Line of credit = $12,521.00 with minimum payment of $ 90/month

I already gave you the morgage amount = $934.00 / month
(Does not include tax withholdings)

I have a car payment of $245.00 a month with a balance of $12,027

My cell phone, home phone and internet are all one bill for $156.00/month
(If we drop the cell phones - 2 of them are included for this price - we have to pay a huge fine and we won't get the discounted price on the home phone bill and the internet bill. We will end up close to the same cost.)

Gosh, sorry this is so long! So very much to consider here!

-Jean

globetrotter · #9 (**permalink**) 10-07-2004, 08:39 AM

Your phone/internet bills seem high to me. I pay $50 a month for high speed access for the Internet. I would get rid of the cell phones (even if you have to pay a penalty. If you have them, you'll use them), get basic no frills local phone service and then buy a long distance calling card. The card makes it so you'll think before you make a long distance call. Then I would shop around for Internet and see if you can find something better.

I would also take your credit cards out of your wallet. My favorite is freezing them in a big block of ice in your freezer. Then if there is a real emergency, you can thaw them out. Otherwise, you can't touch them.

singinjeannie · #10 (**permalink**) 10-07-2004, 08:52 AM

The $156 includes: Regular phone bill with all toll calls included (everything is a toll call from where I live, don't know why...)Internet connection and two cell phones. The cell phones have free long distance, so we use them if we have to call someone long-distance that doesn't have an 800 number. We have enough "free" minutes that we never get an overage charge. I am considering this expense, though, as an optional one that might end up going away.

I love the "freeze the credit card" idea. That's cool! (no pun intended!) Now - to think of a way to get them to stop sending those checks...

-Jean

Tree0164 · #11 (**permalink**) 10-09-2004, 04:16 PM

Jean
You can get a lot cheaper phone wise especially if you are with the big three. For comparsion sake, you can look at my siggy.

Also call the cell phone company and ask them if you can get a lesser plan -less minute. Most people think that their cell phone save them on long distance- they really don't. The typical cell phone customer pays about 39.99 and uses 500 minutes a month local/long distance combined and that paying almost 8 cents a minute. I have my phone for emergencies with 3 little ones-I pay 19.99 and rarely use it. But I have it. Opex who uses the AT&T network just came out wiht a month to month plan for $9.99 for 30 minutes. As soon as my contract is up I am switching. There is also tracfone and virgin mobile which are prepaid plans.