Help Needed

[lieweheksie]

Another item that sticks out to me is is cable- have you thought about cutting it down or even better cancelling it - you may find it easier to agree to do this for a short time and make sure the whole $80 goes to yor credit card. In our house we don't pay for TV
Internet costs do seem high- we have to have internet( leased line) due to Dh's job as a sysadmin- so I try and use the internet to save me money- send off for freebies, enter competitons, and of course check out all the amazing money saving sites out there
Have you got a plan for paying back the credit card debt- check out Jeffrey's guerilla plan- basically you pay minimum on all cards except one- pay everything into one card- card A, when that is cleared you add the minimum from card a to card b and so on
Can you cut back the clothing - only replacing socks and underwear- most of us have too much clothing anyway. Try not buying any clothes for 6 months and when you do buy again- only on sale
Good luck into getting that debt down

[maxfleischer]

If you do decide top try consolidating with a home loan, PLEASE be sure you have the control NOT to use your cards again -- otherwise you'll end up owing on your home loan AND your credit cards,m and be in worse shape than you are now.

[liveandchi]

Originally Posted by maxfleischer

And what is your net income for the month? That way we can see how close you are to the edge, so to speak ...Can you tell me what the "other" category includes? And why is gasoline so high? Is public transporation available for work? How many more payments do you have on your car? And how much are your toal credit card balances and the interest rates for each?

Net income is $3000 a month and we usually get an end of the year bonus ove a couple of thousand dollars.

Other is everything that kind of comes up. A night out with friends, renting a movie, gifts for a party, etc.

Gas includes for 2 cars. DH has a pretty long commute and that is why it is a bit high. Public transportation won't work due to the distance.

There are still a couple of years on the car payments.

Credit card balances are high...over 10,000 and interest rates are nor very good. All are in the 15% to 20% area. We have a few dings on our credit with late payments, but everything has been paid. Nothing is in default yet.

[liveandchi]

Originally Posted by txjman

So what is the edge, and is bankruptcy the only option at that point?

We have considered bankruptcy, but don't want to if we can avoid it. I'm not sure if it is unavoidable yet or not.

[terry1156]

<b>One question (for anyone) is it smart to pay your credit card daily or weekly (whatever is possible) since interest is accumulated daily? I was thinking about trying. I use homebanking which allows an unlimited amount of transactions. For example if my minimum payment is $60 I would pay $2 everyday of the month. Will this reduce my interest charges?</b>

It would have very little effect. BUT paying an extra $5 (or $65 in this case) would have a big effect. I can see the frequent payments having a positive effect if they would otherwise be wasted in other areas if they weren't placed toward the credit cards on a regular basis. What I'm trying to say is that if you make the daily or weekely payments and this will increase the chance that you can pay more than the minimum payment toward your credit cards, then you should do it.

[terry1156]

liveandchi: It seems like you need to make some reductions, but it doesn't look to be out of the question. I would focus on trying to make it so you are at least breaking even each month. If you can do that, then your holiday bonus can go toward paying down debt.

I would also consider starting a home business as <A HREF="http://www.savingadvice.com/forums/showthread.php?t=2096&page=2">I explained in another thread</A>. This will give you a nice tax refund which can also go toward paying down debt.

[asrai]

Is the car your DH driving the best on gas possible? If you have an expensive car that is getting many many miles the value of the car is going to be destroyed.

Call the CC companies and see if you can get the rates reduced or get them switched over to another card that gives the low rate for changed balanaces. You can tell the CC company that you are going ot change cards if they don't lower your rate.

If you can't get expenses down you need to get your income up with a second job or something.

[maxfleischer]

Well, I'm assuming you have already refin'd your mortgage, or are unable to refi to a lwoer rate. So let's look at fixed expenses:

mortgage, car payment, garbage/sewer, electric, gasoline (since you explained the long commute), RE taxes and insurance. That's $2240 without even paying the credit cards/student loan payments.

First thing I'd do with those is to call your credit card agencies and student loan underwriter to see if you can get lower rates. Check out low-interest credit card rate offers at bankrate.com and see if you can transfer a high-rate balance to one of those. Just be sure you're not late or your rate can skyrocket to nearly 30% (I think 27-28% is the highest allowed now). If that fails, you mnight want to try and transfer the balances from your two highest-interest cards to the lowest interest card. to at least save a few dollars per month on the payment. You must, of course, stop using your credit cards now.

The easiest and most obvious cuts that I see (and I say easiest because you CAN live without them or with a lesser version of what you've got) are cable (cancel it for now if at ALL possible -- preferable to bankruptcy and ruining your credit for 7 years, isn't it? or at least reduce it to minimum); internet -- if youa ren't using this as your primary business connection, reduce it to dialup for $10 a month at netzero or one of the other inexpensive providers; phone -- with dial-up, you need a land line, but remember how we all got along with out cells just a few years ago? Cancel your cells. Don't get a long-distance carrier - buy a calling card from BJ's or Costco, etc. Groceries -- for two of you, you can easily cut $100 from this bill per month, adn more if youa re willing to eat at home and brown bag every day. Get a crockpot and cook while you're at work. Use leftovers for the enxt day's lunch. CLothing expenses have got to stop. Inventory what you have and how the items can be combined in different ways. Try rummage sales -- the ones held by churches in affluent neighborhoods have particularly nice (and cheap) items. Electric -- not much you can do there, except regular conservation stuff, like turning off lights, TV, etc. when not in room, adn converting one-by-one to fluorescent bulbs. Other has also got to stop. Look online (google) for inexpensive gift ideas, use the internet for coupons and deals (fatwallet.com is a good site to try), or make gift mixes in a jar, or another homemade item, like truffles or bread -- anybody can stop off at a store, but who cares enough to take the time and effort to actually MAKE something as a gift? Rent movies from the library. Have potluck IN with friends -- not as glamorous, but way less expensive, and if you tell your friends you're cutting back, you may find they are happy -- and even relieved -- not to have to spend a lot themselves for an evening out. Also check your local paper for free events at local colleges, etc.

So: reduce your groceries to $200/month; cut out cable; drop all but one land-line phone and get a long-distance calling card; recduce the internet to dialup; cut out clothing -- at least for now; and cut other to $75/month ... again, for now. That's a savings of $605 that can be used to put toward your debt payments, which total $610/month. Assuming you can cut groceries another $5/month, you will just break even. When youg et those year-end bonuses, put them toward your highest-rate credit card RIGHT AWAY, without even cashing the checks -- just deposit them and immediately write out checks to that card for the same amount as your bonus (OK, maybe keep out $50 for each of you for a treat for being so good). Another option is to put that money into an emergency account to cover you in case something goes wrong, but I have a feeling you might find lots of "emergencies," as we all do ... better to pay the cards right away.

This is a great site, and there are lots of others on the internet -- for others in debt, check out ivillage.com's money boards ... they have a debt board there where people commiserate and share tips, experiences, etc. They also have a budget board and a bankruptcy board.

Just out of curiosity, what do you use for heat? I didn't notice oil or natural gas listed, and if you're heating with electric, $100 seems awfully low, unless you are in the southern states ...

Coupla other questions: have you tried lowering your credit card rates or moving the higher rate balances to your lowest-rate card? Did you try reworking your student loans? Sometimes lenders will extend your loan period to make payments easier. Do either of your employers have any holiday overtime you might work? Have you considered raising the deductibles on your insurance for the time being? Are your honme and cars insured with the same compnay (usually you get a discount if they insure both)? Are you making sure you are credited with all the items you have (like ABS, anti-lock brakes, theft deterrent systems (home and car), etc.)? Did you get a tax refund last year? If so, you can adjust your withholding on your W-4 at work to increase your take-home pay. Are you paying PMI with your mortgage? Do you have at least 80% equity in your home -- if so, most lenders drop PMI.

[Tree0164]

For the social/entertaining stuff.
You do not need to keep up with the Jones. If you do, you are ruining your credit.
Go to the library and get movies from there. Invite your friends over for the night and play a board game instead. You can make up some cheap spaghetti and sauce for under $5, if they want wine they can bring it themselves.

Take the bonus that you are getting at the end of the year and sock it right towards the debt.

It is a one day at a time thing.

Good luck!

[liveandchi]

Everyone pray. I cancelled the cable TV and I'm just waiting to hear the storm when my husband comes home and finds out. I know that it is a must do (and I know I can convince him of it too eventually), but I also know he will not be happy when he finds out. I'm not sure whether to tell him before hand or just let him figure it our for himself.

Thank you for all the other hints. I will try to do as many as I can. I just want to get this first one under our belt before trying any of the others.

[Tree0164]

Good luck... it is a one step at a time.

Keep us updated and remember there is a light at the end of the tunnel.

[liveandchi]

I survived the cable fiasco. As predicted, my husband wasn't very happy when he found out we no longer had cable TV, but it wasn't as bad as I thought it would be and we ended without him demanding that it be reinstated. One area down.

The next step will be the credit cards. I'm not sure how much luck I will have in getting the rates lowered since we do have a few strikes against us in that department. I guess a call can't hurt. I read a few ot the other threads and I'll ask to talk with a manager. I hope i can lower the rates even a little bit.

[lieweheksie]

Well done- one step at a time
Keep talking to your husband - you can do this but only as team- dream a common vision, set your goals and then take the steps to achieve this- what will being debt free mean to both of you
Are you both working, or just him?. Is it possibe either , or both ,of you could get a part time job for a short while to ease the crunch- the festive( aka the busy retail) season is coming.

[liveandchi]

This is a problem. It seems that I am taking this all on my own. DH knows where we are at financially and nods with what I am trying to do, but has left figuring everything out pretty much up to me. he isn't being a hindrance in the process at least so far, but he isn't making an effort to help out more than following my directions. Is there a good way to get him more involved. I think if he were more involved, we would have an easier time reducing the debt. I am a bit afraid if he does join that it may be harder in that he'll disagree with some of the cuts that have to be made. It is a difficult situation. Any advice?

[vendigirl]

My only thoughts are these:
1)As Suze Orman says- make a financial date with your partner. Light candles, put on soft music, maybe a bottle of wine and then pull out the budget and bills. If nothing else, he oughtta be into it for the ambience.
2) Establish a reward system. Get him into the process of deciding on a goal and a resulting reward. This works especially well with the kids if they're old enough, but DHs like it too.
3)Give him a task or two to complete each week or month. Could be tracking the CC balances, net worth or paying some bills. Maybe if he's responsible for one activity he'll catch on to that and it will inspire him.
Best of luck.

[liveandchi]

I tried to get the rates of the credit cards lowered with mixed success. I got one of the cards lowered, but the other two I couldn't. What would be the best next step to take? Should I see if I can transfer some of the balance on the higher interest cards to the lower interest card? Is there any bad thing that can happen if I try this?

my next step is to try and get DH more involved. Sometimes I feel like I'm dealing with a child, but I don't think I can do this all on my own. Please keep your fingers crossed again for me.

[Lori63]

We're all rooting for you. I saw Dave Ramsey on 60 Minutes last night-have you checked out his site?
When we had our third child our credit card debt was $25,000. We needed a bigger house, a different car, etc. So we cut back on everything -we were able to eliminate most of our debt. We have a bigger house now,etc. and we are still in the frugal mode. I understand what you mean about hubby being like a child-when we first starting working on our debt he would be mad because to him it was me telling him he couldn't have something. Good Luck to you!

[jeffrey]

Try calling the two companies that didn't lower the rate again. Sometimes it takes a couple of calls. Since you are thinking about transferring the balances, let them know that. Also, if you didn't get past a customer agent, ask specifically to talk to a manager. They will have more authority to help. If it doesn't work the second time, then you can consider transferring, but if you did get them lowered, they may be even better than your other card rate.

[Tree0164]

My husband doesn't get much into this saving money and prepare financially for the future either. If you need to take things into your own hands then just do it. Keep him updated of your progress and maybe he will get excited and pumped up as well.

Lori- I missed 60 minutes the other night. I meant to watch it but life (meaning 3 boys) interuppted. I enjoy his website very much as well.

[Lori63]

Isn't having three boys fun? Never a dull moment.
I must be doing something right-my 16 year old son and I were shopping for clothes for him since he can no longer wear shorts everyday (high of 40 degrees today). Anyway, he tried on a pair of jeans, then saw that they were $40 and said that was too much to pay for a pair of jeans! Hubby took him to JCPenneys and found several name brand pair on sale. I hope sons 2&3 also know the value of a dollar.