Need help is getting rid of debt

[RAYT721]

Look at the Numbers!

Are you aware that your 2nd loan figures doesn't balance? You are stating 43 months x $40/month to pay off $3789.02? Even without interest 43 x $40 = $1720.00.

[cicy33]

Are you aware that your 2nd loan figures doesn't balance? You are stating 43 months x $40/month to pay off $3789.02? Even without interest 43 x $40 = $1720.00.

I ran the numbers on this with the 8% on a site and the amount with interest at 8% is only about 1983. I would definitely check this. or perhaps a typo?

[creditcardfree]

Are you aware that your 2nd loan figures doesn't balance? You are stating 43 months x $40/month to pay off $3789.02? Even without interest 43 x $40 = $1720.00.

Since this is a second mortgage, it could have a balloon payment at the end of the loan term. This is another thing to watch out for as the loan term comes to an end.

[snshijuptr]

If you want a snowball calculator, CalcXML has a great one through helpmefinancial.com

Restructuring Debts For Accelerated Payoff | HelpMeFinancial.com

I punched in your numbers with the current 0% rate on best buy, $100 extra toward your debts, and $1000 from your wedding and it says it will take you 9.3 years to pay it off. It gives you a schedule of how much to pay to each debt every month and when the rollovers will focus on that debt. It also lets you know how much you are saving from any overpayment. With $100 overpayment, you will save $16,708 and 4.7 years.

[americangolden]

Awesome thanks!

[fe2o3ez]

First of all, good luck. This is always a tough position to be in, but you have all of your best earnings years aheaad of you, and if you are smart, it will be fine. (that goes for finances AND marriage!)

Second, I'm not big on telling people how to live their life, but from a financial standpoint, it seems you are shooting yourself in the foot by paying for a gym -- and smoking. they seem to counteract each other. Obviously, smoking is bad for your finances in a number of ways, including the increasing prices for cigarettes, lighters, health insurance, etc. Do what you can to stop (or to help your fiancee stop). It may be $30/ month now, but at age 24, and with inflation, just imagine how much it will cost you financially over your lifetime. And if you say that you will eventually stop, so it wont be for your WHOLE life, then why not stop now. Anyhow, enough of the soapbox.

In regard to the fitness center, it is a great perk. It can get you going in the morning, and is a great way to keep healthy habits going. HOWEVER, there are a thousand exercises you can do around your own home to stay in shape. Go to menshealth.com and search for some of them. Cancel the membership and use the $65 toward your debt.

I also agree with increasing income. Any second income will do. Sell furniture 3 nights a week. Become a bartender. Offer to become a part-time handyman for those that have projects, if you have the skills. Stores are always looking for part-time people to stack shelves on nights or weekends. $20 here and there will add up quickly.

(besides, if you work more hours, you get the social aspects of going out but dont have the time to do so. The "going out" amount will go down too!)

I don't know if I agree with the concept of selling your house yet. There are better ways to manage your debt and live below your means for now, and I am afraid in today's market you would take a bath that would be even harder to recover from - especially with a second mortgage sitting out there.

One last thing (I promise): dont forget to contact your credit card companies and ask them to lower your rates. The Visa and Old Navy will kill you in no time. My snowball order would be Best Buy, Old Navy, then Visa...

Oh, and I would put aside 20% of any additional income into UNTOUCHABLE savings for future emergencies. It wont seem like much, but in time you will be in good shape.

Let us know how you do!!

[americangolden]

Thanks for the advicve and yes we'd never sell the house that would be taking a step backwards lol

[woodie96]

Be careful....Never say "never"
Although it may appear now as a step backwards.....with your current expenses, you are spending about 50% in home expenses. That is a killer and makes it really hard to get ahead, or even break even.
IF, IF you were at the "norm" per say of no more than 30% in home expenses, then you would have an additional 400 bucks free each month to kick this debt down.
But I do understand the emotional aspect of feeling that it would be a step backwards.

[Joan.of.the.Arch]

Selling his house to move to something more reasonable need not be thought of as a step backward. How about thinking of it as stepping off of a wrong path, or a stony, hilly path and onto a right path or a clear, level path?

The choice of words we use can influence how we feel. Could be important to look for more positive words. In a society where people have moved domicile on average every seven years, I think it's possible to have a good attitude about moving, even from a house that you really like---especially when doing so could allow you to not only catch up with debts, but get ahead.

[BlackDiamond]

Thanks for the advicve and yes we'd never sell the house that would be taking a step backwards lol

Paying less than 50% of your income for a place to live is not taking a step backwards.

I pay $400/ month to rent.

I bring home $2442 every 4 weeks. I almost always make another $400 from my Ebay business, but we'll say at least $200 for the sake of argument. So let's call my monthly income $2600 to round down AND lowball my Ebay earnings.

I am paying just over 15% of my monthly income towards a place to live. I pay 21% if you count my basic utilities. That is way less than the norm. And I am perfectly comfortable and really like where I live. In fact, my best friend lives in the unit below me. And after all my bills are paid each month (housing, util, car, insurance, parking garage for commute, debt ), I have close to $1200 left over for gas, food and whatever else I please ("whatever else I please" is usually split between extra payments on my loan & savings).

I live way below my means as far as housing goes because I know WAY TOO MANY people who are paying more than 1/2 of their monthly income in housing expenses. My fiance thought it would be a super idea a few years ago (before we met) to purchase a house with his siblings. They are now 80K under water and all 3 of them paying more than half their income each towards the house.

If I were to buy a home now, I'd be taking a step back, IMO. I'm near Boston. My housing expenses would nearly triple. So as you can see, renting is not always a step backwards.

[americangolden]

I never thought of it the way you guys explain where you are saving money where you live. We'd prefer to stay in our home though even if it may take longer to pay everything off a home is a home to us and the apartment life was not for us. Thanks for the info

[Homebody]

If you cancel the gym, going out and cigarettes, you are under $2000.00.

Are these real numbers or your "budget"?

Ask you dad if you can pay him a little less each month and pay the difference on the Best Buy.

Try raising the deductible on your car insurance. Are you locked in on the cell phone for a period of time? What about cable and internet? Can you cut back there.

I am not jumping on the sell the house bandwagon because who knows if it would even sell?

Have a garage sale and put everything towards the Best Buy, then snowball everything after that.

$240.00 is not bad for groceries, but what are you feeding the dog? Is it a big dog or more than one? My daughter I think spends $50.00 on two large dogs. Costco has reasonably priced good food.

If you hunker down, you can do this. DF hopefully is spending her off time doing everything she can to be frugal, like cooking! I want to commend you also for being here at such a young age. If you start out minding your money and spending you will be so far ahead of many your age. Working together with your fiance/wife you can do it. (My SIL and daughter are your age with a baby!).

[americangolden]

I agree ^ we are working on getting rid of all the non-necessities we currently have (gym, cellphones, internet, cable, going out, cigs) and plan on selling a lot of stuff we have aquired over the years in a garage sale or ebay/craigslist. There are a few things that we are stuck in a contract to for a while yet which I don't think we can get out've early(gym, cellphones)?

Thank you, we are both very happy that we are this far ahead in life to have our home, vehicles & dog living happy at our age. Like you said though we want to get our money straightened out before we are married in a few months so we can live a long happy life .

Thanks again everyone here for all the help & answers!

[Joan.of.the.Arch]

Some of those contracts might be cancellable for a fee. And the fee might be less than the cost of the remaining months on the contract.

This may seem a weird thing to bring up, but regarding the hope to get cash gifts for your wedding--are you the only couple you know who are under-employed right now or are some of your friends & family having similar problems? (Would you necessarily even know if they were in the hole?) If they are, then the gifts you get may be more modest than what you have heard of others getting in the past. Even among those who are well-employed right now, there has been a movement to pay off debt and to increase savings. That, too, could influence the size gifts you get at your wedding.

So while it would be nice if your wedding could help you get ahead on the debts, plan for it to make no difference.

[BlackDiamond]

Some of those contracts might be cancellable for a fee. And the fee might be less than the cost of the remaining months on the contract.

This may seem a weird thing to bring up, but regarding the hope to get cash gifts for your wedding--are you the only couple you know who are under-employed right now or are some of your friends & family having similar problems? (Would you necessarily even know if they were in the hole?) If they are, then the gifts you get may be more modest than what you have heard of others getting in the past. Even among those who are well-employed right now, there has been a movement to pay off debt and to increase savings. That, too, could influence the size gifts you get at your wedding.

So while it would be nice if your wedding could help you get ahead on the debts, plan for it to make no difference.

This is true. Don't count on big gifts. I give friends picture frames and family $25 tops. I see no need for extravagent gifts and I certainly don't expect them in return.