Buried Beyond Belief!

[scfr]

Two heads are better than one. Please sit down and talk things over with your wife. You'll probably have to make some hard decisions, and they should be made together, such as: Does your wife go get a full-time job with benefits, or do you move to a much less expensive house? (Is relocating to a lower cost part of the country a possibility? Do you do all of your work from home?)

I'd agree that at least one of the cars needs to go. As long as you keep good mileage records, there probably isn't a reason you can't use one car for personal and business. (Ask your CPA first just to be sure.)

I would strongly recommend that you let your daughter take on the cost of her own education from here on out.

Do whatever you need to to keep the health insurance.

Attack all of the budget items line by line. It sounds like it's time to take drastic measures to reduce costs. That is where you can exercise some immediate control, while you are working on increasing your income.

As others have recommended, there are some good books out there that can help you understand the "big picture" of personal finance. You will come to understand that you are not a lesser man if you live in a smaller house or drive a less expensive car, or if your daughter has to pay her own way to The Fashion Institute.

Good luck!

[czubmeister]

Let's see if this works. I've uploaded my quicken yearly report into an Excel format.

[minnie1928]

It sounds like your wife needs to make a change to her job. Either find a related job somewhere else that's FT (preferably w/ benefits) or at the very least get more hours.

You mention that your daughter is returning home from college. Are you paying for college or is she? At this point I would strongly suggest that she pay for college and if she stays at home then have her kick in a little room and board. If she isn't already, she needs to start managing her own finances (income and expenses) or she may end up in the same situation down the road.

Your utilities are way out of whack. You can do your own energy audit. Check to see how much water your showerheads use per minute, look for leaking windows/doors, etc. Many energy saving techniques can be implemented without a professional. You may have to shell out some cash, but based on your bills I think the payback would be large and fast. I would strongly look at water usage (new showerhead and aerators for faucets). Electricity - I understand that you are running servers and computers. Do the computers need to run 24/7? What about printers? Are you unplugging all your chargers when they are not in use? How about installing a programmable thermostat?

Another thing to help with the utilities is to dress appropriately. Wear a sweater, use blankets, etc. In the summer, use fans to help keep the house cool and keep all the blinds/closed closed that get the summer sun. In the winter, open the blinds while the sun is coming in those windows for some additional heat.

I would strongly recommend that you and your wife look at Dave Ramsey's Total Money Makeover or Financial Peace University. It may be worthwhile for your daughter as well. This is a huge undertaking and you can not do it alone, you will need complete support from you family in all aspects. My thoughts are with you and your family and I wish you the best of luck.

[mrpaseo]

My second tour in Iraq there was an incident. I believe they called it a Catastrophic fire which burned our building (Work and sleep) to the ground at 0530 early one morning. That day is the day I realized that our belongings are just stuff, stuff that can be replaced.

Your house is stuff, it can be replaced if need be. Listen to these folks, there is a lot of great advice here. If in the end you do end up filing bankrupt, please come back and we will help you stay on the right financial path.

Good luck,
Ray

[cicy33]

but selling a house is not always the answer. First of all he would still owe whatever was left. But mostly renting is outrageous! I am paying $1250 for a small 3 bedroom house. Now granted I live in Durham NC and that is pretty much what it goes for unless you want a tiny little apartment and those are about $800 and up. I can however, see serious deductions that can be made. groceries for starters. Light bills can be put on a payment plan to help for moment. payroll taxes are the same way. Don't know if you knew that or not. You will pay a penalty and acrue tax but you can pay them out. You can also reduce the light bill and what not by making sure everything is turned off. Have you considered one of those debt payment places? I heard that a good one can help considerably. Bankruptcy is always an option but it can have bad consequences, for one they can require that you sell any valued items that are paid for to help pay your debt.

[disneysteve]

but selling a house is not always the answer.

I agree, and I'm usually the last one to suggest that option, but in this case, I don't see how they can do anything else. They earn $84,000 and have an $800,000 mortgage! I don't think they could possibly afford that no matter how much they cut their other expenses.

It is really disturbing that any lender allowed that to happen. That really shows why we are in the mess we are in today with housing and credit. I don't know what the heck the banks and mortgage companies were smoking when they approved these loans.

[maat55]

The reality is that you have to make drastic changes. As stated above, your house and some cars need to go to get major traction. Most people are slow to change because of what they think other people will think. You need to get past this and sit down with your whole family and make a plan for major debt reduction through selling and budgeting.

The longer you linger, the worse it will get.

[czubmeister]

We have four cars but they are all paid for except for the Lexus which we just bought off a lease for 20,000.

I drive the '94 lexus which is worth less than $4,000 and has 100,000 miles on it.

My daughter will drive her truck to school and work when she gets home for college in a few weeks.

My suburban is worth about 5K and I use that for the Boy Scouts.
My son is turning 15 1/2 and will probably want to drive something so he can use one of the cars we aren't using.

Some good stuff happened today. I started helping my brother who is a dentist with a dental assistant school we started out of his front office dental buildings on Saturdays. He is giving me $500.00 for anybody I get signed up to the 2,350 10 week course. He paid me $2,000 today.

Our next class is Jan 24th so I'm working the phones and placing radio ads. Hoping to get a 15 person class for the next one.

I tried to talk to the credit card companies yesterday but they said they can't do anything unless I'm 2-3 months delinquent.. then the collection calls come and said I could negotiate the bill at that point.

Same thing when I called the holder of my 1st and 2nd note. They won't talk to me right now.l

I have a check for $7,000 coming in any day now from a project I did but it cost me $6,000 to do the project... and of course I put the cost of the project on a credit card. Now the question becomes, pay off the card with the money I get or pay half and keep the cash. I know the right thing to do but keeping the cash to stay afloat seems important now.

My wife just told me that my daughter called from school and said that she was minus $125 in her checking account. I told my wife to tell my daughter that she's on her own.. as if I have anything I can give her to bail her out anyway.

Thanks for the comments. It's all great stuff. So far I've cut my expenses back $425.00 month so far. Cut my sprinklers way back which should save on my utility bills and I'll start turning off my computer equipment at night.

Thanks for the suggestions.. you guys are great.

[Tree0164]

You don't need a separate car for Boy scouts either sell the Lexus or the Suburban. You can not afford to buy (or save) a car for your son when you are struggling this much financially.

For the $7000 if you are behind on the mortgage or utilities pay that and any extra towards the CC

No more charging

[minnie1928]

My suburban is worth about 5K and I use that for the Boy Scouts.
My son is turning 15 1/2 and will probably want to drive something so he can use one of the cars we aren't using.

You need to dump this vehicle for several reasons:
1. Maintenance & gas
2. Let someone else be the taxi for the boy scouts...I'm sure someone else owns a large vehicle.
3. Insurance (now & future) - insuring a teen is astronomical!
4. You need the money from this vehicle (and anything else you can sell) to stay afloat and keep your HOME. Your son's desire to drive a vehicle should be somewhere around #98 on your current list of priorities.

Good work on cutting your expenses so far! Keep up the momentum!

[disneysteve]

My son is turning 15 1/2 and will probably want to drive something so he can use one of the cars we aren't using.

You can't afford to keep a spare car. Your teen doesn't need his own car. When he starts driving, he can learn on one of the other cars you have and can borrow one when it is free. If he wants his own car, make him work for the money to buy it, insure it and maintain it.

I started helping my brother who is a dentist with a dental assistant school we started out of his front office dental buildings on Saturdays. He is giving me $500.00 for anybody I get signed up to the 2,350 10 week course. He paid me $2,000 today.

That's great. Congrats. I hope that keeps up. The extra money will help a great deal.

I have a check for $7,000 coming in any day now from a project I did but it cost me $6,000 to do the project... and of course I put the cost of the project on a credit card. Now the question becomes, pay off the card with the money I get or pay half and keep the cash. I know the right thing to do but keeping the cash to stay afloat seems important now.

Both that money and the money from the dental thing need to go to reduce debt. Normally I'm a 'highest interest rate first' kind of guy, but in your situation, I'm going to recommend the Dave Ramsey route and pay the smallest balance first to get rid of it and reduce your monthly payment obligations.

My wife just told me that my daughter called from school and said that she was minus $125 in her checking account. I told my wife to tell my daughter that she's on her own.. as if I have anything I can give her to bail her out anyway.

Good for you. An able-bodied college student can get a part-time job. She may even be able to find work right on campus.

So far I've cut my expenses back $425.00 month so far. Cut my sprinklers way back which should save on my utility bills and I'll start turning off my computer equipment at night.

Good start. That's over $5,000 that can go straight to debt reduction in the next year. Do you really need sprinklers? Is a green lawn more important to you than getting out of debt?

[segmond]

So The Real Question From Me Is This --- :-)

How Much Are You Trying To Sell Your 04 Ls430 For, What Package Does It Have? And Do You Have These Options, Navi? Mark Levi Sound System? Dynamic Cruise Control? Cooled Seats? Reclining Rear Seats? Fridge In The Back? Smart Key?

[tripods68]

So The Real Question From Me Is This --- :-)

How Much Are You Trying To Sell Your 04 Ls430 For, What Package Does It Have? And Do You Have These Options, Navi? Mark Levi Sound System? Dynamic Cruise Control? Cooled Seats? Reclining Rear Seats? Fridge In The Back? Smart Key?

For you a lot

[Goldy1]

This is over my head. I wish you well and give you lots of kudos for regognizing the problem and keeping detailed records so you know where the cash is going.

I agree the big bills like the mortgage are an issue. It doesn't do me any good to say why couldn't you have seen this coming.

As a person with a degree in education(though not currently using it) I know outside getting a state job teaching, your wife's income is likely next to nothing.

This post goes to show that it's not just what you make, but what you spend.

Eating out and no restraint of food budget is bad.

[Ima saver]

I live in a fairly large home, 3600 square feet of heated area and my bill is never over $160 a month. I turn off my hot water heater when not in use, to conserve on energy too.