What should I do?

[disneysteve]

Well, I always hope that the replies to those kinds of posts help some other reader, perhaps someone who is on the verge of making the same mistake but will come to understand that they need to do things differently.

Yep. If one person can learn from someone else's mistake, that's a good thing. That's one value in sites like this.

[terces]

Disneysteve,

I made that comment to her regarding adding and extra child to take care of the deficit once and for all. It's on the table however legally she couldn't take on another infant because the laws state she can have only two infants at one time (one is hers).

I understand that she can't take on another infant because of state laws. I operated a home daycare in CA and had the same ruling regardin no more than 2 infants. But what about additional older children? They have an income problem and they should be looking at ways to increase that income. She could probably easily become a licensed home daycare and take on a couple additional kids. Then have the added benefit of deducting many of your daily expenses cause you are now operating a business. Its a great stay at home business for a mom....it was for me at the time.

[littleroc02us]

It would be interesting to see their budget laid out. It doesn't mention what they have for cars and their value or how much their mortgage payment is. I'd also like to know what the ratio for the mortgage is versus his income. If that is to high, maybe they need to sell.

[Debt Relief]

These peeps will likely have to make some major lifestyle changes to mak up a $9K/year deficit on basically a single family income (if you consider the wife's income a wash for not having to pay daycare expenses).

They are going to need to change big ticket items... They should start by tracking EVERY expense for a month or so.

If they have a car payment they may need to sell the car and get something more affordable.

If they have a house payment (or even rent) then they may need to sell the house or move somewhere with lower rent.

If they own a house, there are a LOT of expenses that go along with doing so like fixing stuff that breaks, homeowners dues, maintaining the house and yard, etc. These expenses can often be avoided if renting. You just don't get the tax break at the end of the year on interest paid.

They should look at possibly raising deductibles on car insurance policies. It's not likely they will want to do that for medical insurance since they have so many kids.

Sounds like they're in a bit of a pickle. Interested to see how it turns out.

[Ashleywatson]

I am not going to suggest you any shortcuts, there is no short cut to earn money. Do work heard ,this is only the answer here,make your budget and spend accordingly.best of luck.

[wincrasher]

Same old story.

Having kids they knew they couldn't afford. Do it anyways, expect "magic bullet" solution.

"Entrepreneur" mindset - takes big risks, hoping for reward, never really pans out.

I have a buddy who's self-employed. Always full of big talk, plans on how he's gonna make all this big money. Never has 2 nickels to rub together, and probably never will. He currently owes me $1500.

Here's the same old tired advice - either cut expenses or make more money or declare bankruptcy and start over.

[Kris Jarczyk]

It is rough now and we all have to tighten our budgets, including me!

[m.f.walters]

a 14 year old can work a bit to help pay his/her own expenses. Wisconsin has lots of snow that needs to be shoveled! Teenagers can be expensive, and frequently financially strapped parents don't want to say no to spending money on them. Bring the 14 year old into the financial crisis and have them pitch in!

[Mr Nice Guy]

a 14 year old can work a bit to help pay his/her own expenses. Wisconsin has lots of snow that needs to be shoveled! Teenagers can be expensive, and frequently financially strapped parents don't want to say no to spending money on them. Bring the 14 year old into the financial crisis and have them pitch in!

Amen. Never let a good crisis go to waste. They should use this opportunity to teach all of their children about how important personal finance is, and how important a good work ethic is. By the time they graduate high school, they will be better prepared than 99% of their peers.

[CarePlus]

The Solution

The last thing to do is use savings to cover minimum payments. That is a one way street to disaster. It is not a solution but a band-aid over arterial bleeding. If it is not possible to immediately create more income to cover the deficit then I would recommend doing debt settlement. It may be possible to use the savings to become completely debt free using this approach.

[loansta]

Stop having kids. Snip those tubes.

[fe2o3ez]

If they own a house, there are a LOT of expenses that go along with doing so like fixing stuff that breaks, homeowners dues, maintaining the house and yard, etc. These expenses can often be avoided if renting. You just don't get the tax break at the end of the year on interest paid.

With 3 kids and a single, minimal income, tax deductions should be the least of their worries.