Need help is getting rid of debt

[disneysteve]

Any suggestions on using the money we get from our wedding to pay off debt or put in savings?

Do you have any savings at this point? If not, I'd set aside a small emergency fund. $1,000 is the typical recommendation for a first step. Everything else I'd use to attack debt.

There isn't really a delicate way to do this but I'd tell as many people as possible that what you really want for gifts is cash. The last thing you need is a bunch of junk like picture frames, vases, panini presses and other assorted stuff that people often give as gifts. Don't create a bridal registry anywhere. When people ask what you want, you can tell them that you are really trying to get your financial house in order rather than your physical house. Cash or gift cards to general retailers like Target or Wal-Mart would be greatly appreciated. Supermarket or gas gift cards would be great, too, as it is stuff you have to buy anyway and would allow you to free up some income for debt payments. Make sure your parents know this so that when people ask them what to buy you, they can be told the same thing.

[minnie1928]

Do you have any savings at this point? If not, I'd set aside a small emergency fund. $1,000 is the typical recommendation for a first step. Everything else I'd use to attack debt.

I totally agree with everything that DisneySteve said.

Is it safe to assume that family is paying for the wedding or are you going to incur more debt for the wedding expenses?

[disneysteve]

Is it safe to assume that family is paying for the wedding or are you going to incur more debt for the wedding expenses?

Great question. I didn't even think of that. If you are paying for the wedding yourself, FORGET IT. You can't afford it unless you are simply paying someone to officiate and legally marry you and that's it - no reception, no honeymoon.

If family is paying, I would still cut back to the bare minimum. If they want to spend money on you, let them give you a cash gift that you can use to pay off debt rather than blow thousands on a party.

[elessar78]

BTW, if you're getting married, consider registering at Bed, Bath, and Beyond because you can return gifts purchased from your registry for cash!

[am_vanquish]

You need about $269 total per month for 5 months to pay Best Buy off before the 0% expires.

I agree with what everyone else has said, but I'd emphasize this point about the Best Buy card. Keep in mind that because the 0% offer is "expiring" doesn't necessarily mean you haven't been accruing interest. For most offers like this, they've been accumulating the interest since you bought the item. If you pay it off before the 0% expires, they eat the cost. If it's not paid in full when the 0% expires, you get hit with all the interest that's been accrued since the purchase.

I'd check to see if this is what they're doing. If so, be sure to get that paid off before they tack on another couple hundred dollars in interest.

[americangolden]

Our family is paying for all the wedding so that is all said and done and don't have to worry about that.

We are going to put anything we can up on ebay that we dont need and put it twords the debt we have.

With the best buy loan yes I think we are going to get nailed with all the added up interest if we don't pay it off before the 0% promotion is done .

These are debts in both of our names we have had our money combined for a while now so this is all the debt nothing is missing from what I posted.

[skydivingchic]

You have a serious cash flow problem. Adding up your monthly expenses comes to $2302 (assuming the $74 for water utilities is what you have to save/pay each month) or $2277 if the $74 is total for 3 months. Either way you have more outgoing that incoming.

As has been mentioned, the house is killing you. At 42.5% of your income for just the mortgage, you will never get any traction. The rule of thumb is no more than ~28% of your income to mortgage and no more than ~32% to total debt repayment. You are at 55.5% total debt to income ratio. And that is just the minimums.

The things I see in your budget which could be cut - cable, the gym membership, going out, and cigarettes.

As others have said, start selling anything that is not an absolute necessity, get part time jobs, pick up random jobs like mowing lawns, babysitting, etc. Every month you continue like this you will add ~$300 to your debt. Can you get a rent out a room in the house to help pay your mortgage?

If you get money for your wedding, pay off the Best Buy card immediately to avoid the back interest charges. Then put $1000 into savings, then pay off as much else as possible.

Ultimately, you need to be saving around 20% of your gross pay. At LEAST 10% to retirement - 15% would be better. The rest should be used to build a 6 month emergency fund, paying off debt, and saving for mid term goals.

[snshijuptr]

BTW, if you're getting married, consider registering at Bed, Bath, and Beyond because you can return gifts purchased from your registry for cash!

This is absolutely NOT TRUE! I registered there and they would only give me $900 back. They told me never to ask again for money. Register at a universal registry for items that you really need, such as stuff that will need to be replaced in a couple years or items for home maintenance then encourage cash. Tell both parents and all your attendants. If your fiance has a shower, be prepared to receive awful gifts if you don't register.

[Ima saver]

I agree. Start a small emergency fund with the wedding money and use the rest to pay off all your credit card debt.
I love dogs too, but $50 a month for food seems a lot to me.

[cicy33]

Best buy was for a fridge and stove for when we moved into this house. I set aside a bunch of stuff to sell like a nintendo wii+games+fitness board lots of old baseball, football & basketball cards and some other useless stuff I dont need anymore.

We were also thinking of using all of the money we get from our wedding to put twords debt but not sure if it would be better to put this into savings?

American family insurance is for 2 cars full coverage.

Getting rid of all that sounds so easy but so hard at the same time.

I know I am going against the grain here but I don't agree with selling off your stuff like your wii and stuff. Instead, why don't you set up wii parties? Lots of people love to get together and play. This could cut down on going out and that would save money. My reasoning for this also is this. you have already bought it. You won't get your money back and when you are out of debt you will buy it again, thus wasting money. I understand getting rid of stuff that is useless but this could be a money saver with friends and having fun at home. we have one and I love it!

[americangolden]

You have a serious cash flow problem. Adding up your monthly expenses comes to $2302 (assuming the $74 for water utilities is what you have to save/pay each month) or $2277 if the $74 is total for 3 months. Either way you have more outgoing that incoming.

As has been mentioned, the house is killing you. At 42.5% of your income for just the mortgage, you will never get any traction. The rule of thumb is no more than ~28% of your income to mortgage and no more than ~32% to total debt repayment. You are at 55.5% total debt to income ratio. And that is just the minimums.

The things I see in your budget which could be cut - cable, the gym membership, going out, and cigarettes.

As others have said, start selling anything that is not an absolute necessity, get part time jobs, pick up random jobs like mowing lawns, babysitting, etc. Every month you continue like this you will add ~$300 to your debt. Can you get a rent out a room in the house to help pay your mortgage?

If you get money for your wedding, pay off the Best Buy card immediately to avoid the back interest charges. Then put $1000 into savings, then pay off as much else as possible.

Ultimately, you need to be saving around 20% of your gross pay. At LEAST 10% to retirement - 15% would be better. The rest should be used to build a 6 month emergency fund, paying off debt, and saving for mid term goals.

I guess this is my main problem, having more bills than what we make in money each month at the moment.

[americangolden]

I know I am going against the grain here but I don't agree with selling off your stuff like your wii and stuff. Instead, why don't you set up wii parties? Lots of people love to get together and play. This could cut down on going out and that would save money. My reasoning for this also is this. you have already bought it. You won't get your money back and when you are out of debt you will buy it again, thus wasting money. I understand getting rid of stuff that is useless but this could be a money saver with friends and having fun at home. we have one and I love it!

It was a waste of money we bought it used it for a week and it has been sitting there so even if we lose out on some money selling it we will come ahead a little bit with the extra money we can get from it.

[cicy33]

then definitely sell if not using! We go through periods of not using but for the most part use it. We are actually considering a second base unit because I use it mostly for exercise and then of course no one else can use it. I keep it in my bedroom cuz I am a little shy about working out in front of others. this is our entertainment as we don't really go out.

[elessar78]

This is absolutely NOT TRUE! I registered there and they would only give me $900 back. They told me never to ask again for money. Register at a universal registry for items that you really need, such as stuff that will need to be replaced in a couple years or items for home maintenance then encourage cash. Tell both parents and all your attendants. If your fiance has a shower, be prepared to receive awful gifts if you don't register.

Really? See we returned all the gifts we had doubles or didn't need and did not come close to $900 but they gave us cash. Did not think there would be a cap on it. Thanks for the heads up. I think we got about $400 back.

We weren't out to get cash out the deal either. We needed the stuff we registered for, but it was nice to be able to get cash back instead of store credit.

[creditcardfree]

I guess this is my main problem, having more bills than what we make in money each month at the moment.

Additional employment will make a huge difference. Both of you should be looking for additional employment and other ways to bring in cash.

Can you take a break on paying your Dad? That money could go to those credit cards.