Crushing Debt - Need advice paying it off

[me in socal]

I would like some advice on paying off my debt. I am putting my budget down here along with my income (UI checks these days...)
Monthly Expenses
CC 1 $136 (Bal. $6,602.09 @4.36%)
CC 2 $250 (Bal. $11,450.65 @6.25%)
CC 3 $279 (Bal. $13,345.73 @ 9.24%)
Student loan $229 (Bal. $23,511.43 @6.625%)
Water $50
Electric $25
Gas-home $45
Phone/DSL $45
Cell $45
Trash $14
Life Ins policies $109
AAA (memb) $14
Groceries $375
Medical $75
Gas-car $75
Target $50
Costco $25
Gifts $25
Dining out $35
Cash $50
Car maint fund $20
Kids swim class $98 (only until april, then done)
total $2069

Income:
UI $1620 (we thought it would be $1800, thus the $2069 budget)
Spouse $270

There are many things missing here because I'm married and whatever isn't shown here, DH pays. I'm not really looking so much for advice on how we should split our bills, because we still maintain separate accounts, but more as to how to tackle my debt. We did this budget after I got laid off, which we pretty much saw coming. There are a few things on here that I cannot do without, the life insurance as I bought it before I had health conditions and now no one in their right mind would insure me and the medical. They are pretty much bare minimums.
The amounts that I am paying on the cards now are the minimums. So they go down a few dollars each month.
Thanks in advance for your help. My DH is anxiously waiting my post and the responses...

[LivingAlmostLarge]

Why do you have separate accounts when you are married? I get it if you had enough income to pay for everything, but as a married person who made very little, my DH and I combined into one account because otherwise we wouldn't have made it.

We were living paycheck to paycheck so without joint account there would have been zero in both or not enough to pay certain bills.

[me in socal]

Long story on the separate accounts. Been married almost 10 years and so far it's worked out ok for us.

[me in socal]

Budget addendum-other half

I am adding my DH portion below mine.
Monthly Expenses
CC 1 $136 (Bal. $6,602.09 @4.36%)
CC 2 $250 (Bal. $11,450.65 @6.25%)
CC 3 $279 (Bal. $13,345.73 @ 9.24%)
Student loan $229 (Bal. $23,511.43 @6.625%)
Water $50
Electric $25
Gas-home $45
Phone/DSL $45
Cell $45
Trash $14
Life Ins policies $109
AAA (memb) $14
Groceries $375
Medical $75
Gas-car $75
Target $50
Costco $25
Gifts $25
Dining out $35
Cash $50
Car maint fund $20
Kids swim class $98 (only until april, then done)
total $2069

Income:
UI $1620 (we thought it would be $1800, thus the $2069 budget)
Spouse $270

DH Portion:

Mort $2000
Prop Tax $250
Car Ins $200
Lunch $200
Dining Out $250
Netflix $10
CC $500 (no balance)
Gas-car $250
Skype $10 (our long distance)
Daycare $615
Spouse $270
Total $4555

Income $5000 (net after savings)

[boosami]

What's the Target and Costco amounts? And what's with the $100+/mo life insurance policy?

[noppenbd]

-I'm curious as to why your spouse is paying $450 a month on lunch and dining out and you are spending $35?

-Why are you paying for daycare when unemployed?

-Your car insurance is very pricey, can you raise your deductibles in the short term and look for a cheaper policy in the long term?

-Your husband's credit card bill for $500 a month is unaccounted spending. What is he putting on the card each month?

[Lindahfx]

I would approach this as a family and figure out a plan of attack together. You can still maintain separate accounts but agree on a plan to reduce debt.

Some items same as other plus my comments:

- what are the Costco and target items?

- I see there are 2 gas budgets. Do you have 2 cars? If so, consider selling one.

- why do you have daycare if you are unemployed?

- consider eliminating the following: AAA membership, netflix, and car maint. fund

- reduce both lunch and eating out budgets

- take everything left over and pay off the cc's in the following order:

CC3 first
CC2
CC1
Student loan

- determine the balance and interest rate of your DH's cc and based on that, include it in the cc payoff pla:

[swaymonae]

CC 1 $136 (Bal. $6,602.09 @4.36%)
CC 2 $250 (Bal. $11,450.65 @6.25%)
CC 3 $279 (Bal. $13,345.73 @ 9.24%)

Look into getting an intro 0% and doing balance transfers

Water $50
Electric $25
Gas-home $45
Phone/DSL $45
Cell $45
Trash $14

Take shorter showers, either replace bulbs with energy efficients or make sure nothing is ever left on,.. you can also unplug things like computers when you're not using them because they do continue to use power. $45 on gas? Why is that so high??? Can you combine your cell, phone & dsl for a lower price?

AAA (memb) $14

AAA is per month? I pay $50 per year..

Groceries $375

I hope you're not buying groceries at Safeway or Albertsons. You will save up tio 50% if you shop at Target, Walmart and Trader Joes.. they don't all have everything so sometimes you have to go to a couple of them, but it will save you big time.. Say no to safeway! Also, spend some time looking into cost-friendly meals.

Target $50
Costco $25
Gifts $25

Why?

Kids swim class $98 (only until april, then done)

Awesome

Income:
UI $1620 (we thought it would be $1800, thus the $2069 budget)
Spouse $270

Do you have stuff that you can sell on Ebay?

[swaymonae]

DH Portion:

Car Ins $200

What's your deductable?

Do you have an EF?

Lunch $200
Dining Out $250

$550?! This is crazy!!!!!! Bring a microwave and stop eating out.. You don't think this would help with your CC bills?

Gas-car $250

WhY?

Income $5000 (net after savings)

How much are you saving a month? If you have a sufficient EF, lessen the amount you're saving and start focusing on getting out of debt!

[mommyof4]

Put student loans on hardship deferment.

[me in socal]

Thanks for advice

This is exactly what I wanted, fresh sets of savings-inspired eyes to view my budget and critique it. Thank you so much!

Boosami - target/costco are usually household items: TP, paper towels, cat litter, kid vitamins, fruits/veggies, etc. Usu I stay under these on a monthly basis sometimes they are more. Isn't that a good way to buy those things? Does anyone buy paper goods at the grocery store? Seems so expensive.

Noppenbd - I dunno why he pays that much, eats out most every day is all. We still have the kid attending pre-school 2 days per week. Kindergarten starts in Sep, I consider Pre-K an investment in her future, maybe I'm wrong? Car insurance, we have 4 cars and a motorcycle. All paid for in full. We are trying to get rid of 2 cars and it's just a tough market as no one is buying. Not sure what he puts on his cc each month, maybe he can answer. ;-)

Lindahfx - see above for costco/target and car. DH works 50 miles away and we are in the burbs. I cannot NOT have a car. They are all paid for at this point. I drive as little as I can and combine trips too. I think downgrading our AAA would be good. We need a min amt of protection in case of breakdown.

swaymonae - my cards' limits seem to evaporate as soon as I pay down debt. Mind you, this summer when we bought our house my FICO was at 715. Now I wonder if it's 615. I can try to apply for 0% but I am going to have a tough time. One was 0% and just reverted to 9. I take most of my showers at the gym now. We have replaced all bulbs with CFLs when we moved in. Gas bill is the last few months when we've been running the heater. It's much lower in the summer, but then electric goes up for AC. Cell is verizon, phone(basic svc)/dsl are ATT so I can't combine them. AAA is $150/year but I budget $14 month so I'm saving that for the annual bill. We can bump down to a lower svc level. I do shop at TJs and Target for groceries. Only a few items come from Ralph's ($10-20/wk.) Gifts are budgeted for all the kids parties we get invited to, often there are months with none, then all of a sudden 3 in 1. I used to budget $20 for a gift now I'm down to $10. I have stuff I sell on amazon but nothing is going now. I'm afraid to post on ebay bc the last few things were going for pennies. I have some nice clothes to post but haven't had any luck lately.

swaymonae (2) - deductible = $500 cars 1-2, cars 3-4 don't hv collision. DH will hv to speak to his work dining out and we need to cut back on our family dining out. gas- he drives 100 miles to work every day. he gets 28MPG which isn't so bad for his car. I do not have my own EF but I think DH has one stashed away. I need to work on my debt before my EF, no?

mommyof4 - I am loathe to put SL on deferment. Reason being is that I stupidly 'consolidated' in 2001 not understanding what the terms were. I just don't want to stop paying on them because they gave me a 20 yr term. I need them to be gone. If worst comes to worst, I will defer.

Does anyone else think I should defer? I am scared of extending that payment further into the future.

So I think these are some concrete steps to take with your suggestions: -Reduce AAA memb to basic level (now or at renewal in Oct)
-Reduce family dining out
-Try to sell more stuff on ebay/amazon, put reserve if necessary
-Look into 0% bal xfers on CCs

More questions:
-If i reduce my car maint fund, how do I pay for oil chg/repairs, etc?
-The credit card/student loan debt is mine to pay off, so how do we go about doing the rest of the budget as a 'family' since we've always had separate accounts?
-Aren't budgets the max you expect to spend in a given month? If that is the case, isn't my Gas-home correct at $45 since some months it will be $14 and others $55?
-Regarding some budget line items like 'costco'. If I don't spend that in a given month, do I carry over the amount to spend later or do I commit it to savings or cc pymt? In other words, what do you do with budget underages (in the hopeful case they occur...)?

Thanks again everyone!!!!

[mdcrim]

How much are the cars worth? Sell the 2 most valuable cars and the motorcycle. Use that money to pay off CC balances (and your insurance will go down as well).

Pull the kid from preschool-since you're not working, find moms groups, library activities and other free stuff that you can do with your child. That will save $615 per month off the bat. Use that to pay off your debts.

Some very personal questions, though-was this debt incurred before the marriage or during? If during, isn't he just as responsible for it as you? Do you and your husband look at the bills like "yours" and "mine" and your debt like "yours" and "mine"? If so, why?

Since you are married, I am confused as to why this is your issue alone to tackle. None of my business, so sorry for getting personal, but I would think that you should be working on this situation as a team, not an individual.

Sorry for being so blunt. Good luck.

[disneysteve]

You are buried in debt while your husband is spend $450/month eating out. Sorry but I've got a big problem with that. Marriage is about 2 people working together, functioning as unit, not 2 individuals who happen to live in the same house. I suggest the two of you sit down and work out a budget that takes into account ALL income and ALL expenses, including ALL debt.

And definitely get rid of all the extra vehicles.

[jIM_Ohio]

Long story on the separate accounts. Been married almost 10 years and so far it's worked out ok for us.

if one of you is in debt, it is not working out OK

[Russell]

Let's focus on the techniques you can use to pay off the debt.

I think you should defer the SL payments as someone suggested because that'll free up $229/mo to apply towards your highest interest cc. once that's paid off snowball the second highest cc and so on. If you can rollover the balance to 0% card that would help accelerate the payoff.

If you pay $229+279 per month, it'll take you 30months to pay off your highest interest card. With 0% it'll take 27months

Then for the second cc at $229+279+250 per month it'll take you 16 months to pay that off at it's current rate.

Finally the third will take you about 8 months to pay off.

So you're looking at about 4 years to pay off the $32k of credit card debt. After which you should be able to pay off your student loans fairly quickly. The key here is to not accumulate any other debt.

Your husband must be a horrible person to not help you...