My Payoff plan - tips?

[riverwed070707]

I will talk with my wife about what she can do to help. I'm not sure where she would work or how to even find it, but I suppose it's out there somewhere. The bummer part about if I were to pick up extra shifts is that they are 5pm to 9am, and my shift is 9am to 5pm, so I would be gone 24 hours. We will work something out.

But as others have said you don't have to pick up at your current job. Between the two of you, you can mow lawns, babysit, or other odds and ends for neighbors. Serving would be a perfect job for her -- the hours are flexible and she can work as many or few shifts a week as she wants. How many days a week do you work? Is there a reason she can't be working on the weekends if you work the week or vice versa? In my experience people who work 12 hour shifts usually only work 4 days a week -- what is she doing those 3 other days?? You have a whole lot of excuses as to why it can't work and all that's going to do is keep you exactly where you are. If there's a will, there's a way.

ETA and I've never had a serving job where I haven't made way over min wage -- usually averaged $12-15/hour. Granted you don't necessarily put in 40 hours, but you certainly can bring in $400+ a week if you're willing to work the busy shifts and pull a double once or twice a week.

[uRabbit]

I work 9-5 M-F, but the other shifts are 5-9 any day of the week.

She says that since she is breast-feeding, the extra stress and what-not could put a damper on her milk supply. Daughter is a few months from being off the boobie too. Hmm... I could pick up more hours till then.

As to what my wife is doing. Well, she has a full-time job as well - she's a mother and a house wife. Unfortunately, it's not paid in currency.

Well, thank you all! The wife and I have a lot of planning to do. And thanks all for helping me figure some things out.

[riverwed070707]

I'm not discounting the value of or hardwork done by SAHMs but you could use her help and it's not fair for her to put this all on you. FWIW, my going back to work when DD was 8 weeks and working 40+ hours a week didn't hinder me from breastfeeding my daughter until she was 23 months. It can be done. Yes it's stressful, yes it's hard but so is being in debt and living off your in-laws. If you're happy with your situation then by all means continue on, but you came here asking for help -- most would interpret that mean you want to change your situation.

Also, rereading, I'm confused about the work shifts. I quickly read it to mean there were 2 12 hour shifts avaiable but you only work an 8 hour shift...why if you pick up do you have to pick up a 16 hour shift making your work day 24 hours long? That doesn't make any sense.

[uRabbit]

Riverwed, you are absolutely right. I just don't like hearing it, apparently. I have found out today that I can practice massage in a neighbouring city (10-20 miles away, depending on the city). So I am going to work on my resume and cover letter tonight. I will also speak with my wife more - see if there's something she can do. I know she would like to create some things to sell on etsy, but I also know that it takes a small investment to do that.

My work schedule is 9-5 M-F. I work in a facility that provides 24-hour care to DD adults. The other shifts, therefore, are 4 on 3 off, 5pm to 9am.

Good news! Called my credit union and applied for a credit card with no-charge balance transfers. It seems I may not get it, but who knows. I have been emailing the store manager and he is working on it. He did have great news - they can take over the auto loan and lower if by $26/mo to $100/mo! That's $26 more towards the cc!

[jpg7n16]

Credit Card - $973 - $30/mo - 24.24%
Auto Loan - $3,293 - $126/mo - 14%
Personal Loan - $966 - $100/mo - 9%
Student Loan - $12,000 - $150/mo - 6.9%
Student Loan - $1,667 - $40/mo - 6.6%
Student Loan - $385 - $9/mo - 6.6%
Auto Loan - $11,500 - $200/mo - 0.0%

First keep about $1000 in savings as a buffer against life (temp emergency fund).

Then, I have readjusted your ordering of these debts into the order I would pay them off in. Pay the most you can on the top debt, and the minimums on all remaining. When the credit card is paid off, take what you were paying to the CC and pay it to the auto loan, etc.

Once the final student loan is gone, start building the EF up to 5 or 6 months expenses. You're married with a child and need a larger EF after the expensive debt is gone.


If things are super tight, there is potential to sell the car (tied to the 11500 loan) and buy a $5-6k car, as long as it cuts your payment to $125 or lower. That would free up $75/month for use on living expenses and debt paydown.


Other things to consider that are easier to do:

• Transfer the balance on your CC to a 0% interest rate offer
• Refinance the car at 14%

Good work on the progress you've already made!

[uRabbit]

Here's a question. I'm getting regular haircuts nowadays. Every six weeks. How would I budget that? Just take the total cost of the haircut and divide by 3 in order to get the per-paycheck cost, and add it in that way?

[LittleMsMom]

How much are you spending on groceries above and beyond what WIC is providing? I did not see any in your budget besides Starbucks. PS Starbucks sells their coffee at Wal-Mart...Much Cheaper to make your cup of coffee at home then go for a walk carrying your coffee for your "entertainment".

Do you have Medical and Dental Insurance? I did not see that in the budget either.

You would prefer if your wife did not work outside the home...You want her to be a SAHM at least until your child no longer needs Breastmilk to avoid the added cost of Formula. Are your parents available to help watch your child at all? You could look into your wife working from home as a reservation specialist for Enterprise rent a car or something else. What skills does your wife have that might translate into a job for pay. If we know what skills she has we could make suggestion on ways to minimize the daycare need.

I would try to reduce the cell phone expenses. Is this for two cell phones, since your wife stays at home it might be cheaper to have one prepaid cell phone for you and a landline at home for your wife. Even if you have a contract depending on how long is left the fee to early cancel might be less than what you pay by having a such expensive plans.

I would call around until I found cheaper car insurance, you have an emergency fund of $1,300 so how much is your deductable?

You said you work 9-5 M-F, Have you considered asking IF you could work one shift on Sat and/or Sun? Is there a way to be placed on a list that if someone calls in sick or would like a Sat/Sun off that they could call you? Unless your employer/co-workers know you want the work, they cant help.

But my BIG suggestion would be:
You said there is a 10-12 hour shift available which would result in you working four days then getting 3 off. I would suggest talking to your HR person and switching to that schedule than getting a job working the other 3 days, fast food, food service or retail would work well.

I realize not having a day off would be tough, but I would suggest you look at the fact that all the pay from the second shift could go to debt payoff and to calculate exactly how long you have to work to get the debts paid off and just keep telling yourself every morning "you are only doing this until _blank_ date you can do it!"!!!


Good Luck! Keep us informed on your progress.

[uRabbit]

I have considered switching to a night shift. I worked it for four years. But it took such a tremendous toll on my back (sleep on air mattress at work on that shift), that it was hindering my home life and I was fearful of having to visit a specialist. I have a straight spine (no lordatic curve) and neck, so it's pretty sensitive to sleep habits. I will look into it again though. I have a great report with my employer.

Edit: As for groceries (and toiletries), we spend way too much. So what I've done, is budget for $15 per paycheck for each category. We have been slacking on planning meals and sticking to shopping lists. So we are going to buckle down on that. Also, why are natural products so expensive?! We have been using Burt's Bees because they are - so far - the cheapest natural hair and body products (shampoo, conditioner, body wash, toothpaste). Also, does anyone know of a good body wash applicator? We currently use a 'poof' and it seems to not distribute the body wash well. Anything else we could use to get the most from our body wash? It's only lasting about a month currently.

Allstate has been the cheapest for me. It went down recently, even, by $30/mo. I will be getting lower and lower rates because of the loyalty discount. However, it is so high due to some stupid mistakes and one absurd accusation a couple years ago. They are about to drop off my record though. Also, my deductible is $500 across the board.

GREAT NEWS - I applied for a credit card with no-charge balance transfer at my credit union. The did not approve the card, but were able to approve me for a $4,300 auto loan (covering the 14% auto loan and balance on the 24.24% credit card) at 4.99%! I can't display how excited I am! This will bring my monthly payment on that loan to what it is currently on my 14% auto loan! This will not only allow me to payoff the loan faster, but will raise my score by paying off the card. Woot!

Question! Upcoming expenses:
- mirror for car (broke off by other driver, claim denied because they can't get ahold of him - bull!) $118
- car alignment (tires wearing on outside instead of inside) $60
- tires for car $350

The mirror and alignment, I am planning on doing with the next paycheck. The tires can wait (since I'm doing the alignment) for a few months. Should I save for the tires or use money from savings (while applying the rest of the money toward the new loan)?

Edit: Budget updated. Values are now truer and I did not leave out any expenses. https://spreadsheets.google.com/spre...ZZS0E&hl=en_US

[Frugal]

I feel for you. Like a lot of people on here, I have a college degree, too, and have also had a hard time finding work. It is even harder without having a degree. There are tons of people out there trying to make money in any extra way possible...selling stuff at garage sales (just about every other house in our neighborhood! And they are NEWER!), putting stuff up on E-Bay, etc. There is no shame in trying to bring in a little extra income. Kudos to you for getting by on one income...we are doing it too, and everyone says it can't or shouldn't be done. However, I am still managing to pay down debt pretty well. I just don't go out or buy as many fun things as I would like to. I have no-spending, no-driving days for about half the week or so each week. I use coupons, and shop sales. I try to rarely buy anything full=price, except for necessary food like tortillas (had to pay full price last week, as they are rarely on sale).

Yes, as people here have said, usually you need some extra income to pay down debt faster, but there are ways around that. You don't need to take on another 9-5 or 9-2 job to do that. You can deliver newspapers, start your own website or blog, open a business out of your home (much more risky and more liability in these days!), have a wife babysit, perhaps, sell baked goods, etc. You could start a pet-walking business, etc. There are always options, even in an economic depression. Try not to get too down. We are all out there going through the same thing, and it is hard to stick to a budget when there are NO extras or frills whatsoever...I am doing the same exact thing.

[LittleMsMom]

Personal Loan - $966 - $100/mo - 9% (Paid off - May 2012)
Student Loan - $12,000 - $150/mo - 6.9% (Paid off- ??)
Student Loan - $1,667 - $40/mo - 6.6%(Paid off- ??)
Student Loan - $385 - $9/mo - 6.6%(Paid off- ??)
Auto Loan(CU) - $4,200 - $126/mo - 4.99% (Paid off- ??)
Auto Loan - $11,500 - $200/mo - 0.0% (Paid off- 2015)

Question! Upcoming expenses:
-haircuts Every six weeks
- mirror for car (broke off by other driver, claim denied because they can't get ahold of him - bull!) $118
- car alignment (tires wearing on outside instead of inside) $60
- tires for car $350

***
I updated your debt list, so I can ask a few questions:
Is there a way to consolidate/refinance your student loans for a better interest rate? The interest rate is not too bad BUT every bit helps. I hate to suggest this BUT if you can't consolidate/refinance for a lower rate can you apply for a forbearance or deferment on the student loan payments. Then you would be able to apply the extra $199 student loan payment to the 9% loan and have it paid off in 3 months.

Haircuts- How much are you spending PER cut? I would suggest buying a razor at Wal-Mart and cutting your hair yourself, atleast until you have either increase income or decreased debt. If you do not want to try a DIY haircut I suggest doing 1/3rd per paycheck and putting the cash in an envelope for just that.

mirror-Hummmmm can you get a used mirror, is it power operated? My Ex-Husband drove a car without a side mirror for years. Not sure if that is legal in your state but I would wait on the mirror until more time has passed for you to contact the other party/insurance provider. Does this have to be done now or can it wait...If you paid the 9% loan instead you saved 9%, pay the 6.9% loan you save 6.9% etc etc.

car alignment - How much wear is left on the tires? How much out of alignment is it?
It would be silly to align bald tires just to pay for another alignment with the new tires, better to align when you put on the new tires.

Car Tires---How much time do you have left of the tires? If they are done NOW then I would take the money for the new tires and the alignment out of your emergency fund for now, if not then I would start budgeting for it.

Are these 3 year tires? If so $350+61 (411) divided by 36 months is $11.41 that you should start as a minimum putting into the budget (savings) for car repairs.

Expenses such as tires or car registration should only come out of an Emergency Fund ONCE, after that they are not an Emergency they are a Failure to plan/budget.

[uRabbit]

Personal Loan - $966 - $100/mo - 9% (Paid off - May 2012)
Student Loan - $12,000 - $150/mo - 6.9% (Paid off- ??)
Student Loan - $1,667 - $40/mo - 6.6%(Paid off- ??)
Student Loan - $385 - $9/mo - 6.6%(Paid off- ??)
Auto Loan(CU) - $4,200 - $126/mo - 4.99% (Paid off- ??)
Auto Loan - $11,500 - $200/mo - 0.0% (Paid off- 2015)

Question! Upcoming expenses:
-haircuts Every six weeks
- mirror for car (broke off by other driver, claim denied because they can't get ahold of him - bull!) $118
- car alignment (tires wearing on outside instead of inside) $60
- tires for car $350

***
I updated your debt list, so I can ask a few questions:
Is there a way to consolidate/refinance your student loans for a better interest rate? The interest rate is not too bad BUT every bit helps. I hate to suggest this BUT if you can't consolidate/refinance for a lower rate can you apply for a forbearance or deferment on the student loan payments. Then you would be able to apply the extra $199 student loan payment to the 9% loan and have it paid off in 3 months.

The $12,000 loan is in my father's name and is in forbearance. I have never made a payment on it.

Haircuts- How much are you spending PER cut? I would suggest buying a razor at Wal-Mart and cutting your hair yourself, atleast until you have either increase income or decreased debt. If you do not want to try a DIY haircut I suggest doing 1/3rd per paycheck and putting the cash in an envelope for just that.

$20 per cut. The only person I've found that won't cut open the mole on the back of my head. Haha. I would do a DIY cut, but I am not skilled. My wife, however, is. And she said she will give it a try next time (haircut today). I would miss my stylist now, though, as he has become a friend. Also, his word of mouth would greatly help me in my future career in massage. Today, I am going to speak with him about trading - a haircut from him for a massage from me.

mirror-Hummmmm can you get a used mirror, is it power operated? My Ex-Husband drove a car without a side mirror for years. Not sure if that is legal in your state but I would wait on the mirror until more time has passed for you to contact the other party/insurance provider. Does this have to be done now or can it wait...If you paid the 9% loan instead you saved 9%, pay the 6.9% loan you save 6.9% etc etc.

The mirror needs done. I've already been issued a fix it ticket. "/ I went to the salvage yard and found ONE car with my mirror. However, upon attempt of removal (using the instructions I found online), I broke the mirror. So, I guess I can't do it myself. And I LOVE DIY projects!

car alignment - How much wear is left on the tires? How much out of alignment is it?
It would be silly to align bald tires just to pay for another alignment with the new tires, better to align when you put on the new tires.

Car Tires---How much time do you have left of the tires? If they are done NOW then I would take the money for the new tires and the alignment out of your emergency fund for now, if not then I would start budgeting for it.

The alignment is bad enough to have warn the outside of the tires more than the inside, which it should be the other way around. Having it this way shortens the life of the tires. Also, an alignment is not typically needed at a tire change. Usually just a balance.

Are these 3 year tires? If so $350+61 (411) divided by 36 months is $11.41 that you should start as a minimum putting into the budget (savings) for car repairs.

I am not sure. They were on the car. The new ones that I will be getting are Low Rolling Resistance with a 6yr/100,000 mile warranty. Since they are made to last that long, it would take me 8 years to drive 100,000 miles.

Expenses such as tires or car registration should only come out of an Emergency Fund ONCE, after that they are not an Emergency they are a Failure to plan/budget.

Good point! However, how do I partition savings? Should I have more than one savings account, or simply budget it out like I do my spending money (checking account)?

Thanks so much!

Okay, the wife made a grocery budget today. Boy, am I proud of her! It uses the money that we receive on food stamps. I think she did pretty well. http://bit.ly/lh4Y58

[BuckyBadger]

However, how do I partition savings? Should I have more than one savings account, or simply budget it out like I do my spending money (checking account)?

I have an escrow account for a lot of stuff. Although it is all one pot of money, I know what all the parts of it are for. I have it for things that aren't regular payments. For example, mine looks like this"

Property taxes: $5000 (not taken out as part of our mortgage payment)
Small Animal vet (2 cats, 2 dogs) and pet boarding: $1500
Car maintenance, 3 cars, includes tuneups, etc: $1500

=$8000/26 pay periods = $308

So we put $325 into a separate account every pay period and then we pay these bigger non-monthly bills out of that account. Specifically, I pay the big bills out of my linked checking account after transferring the appropriate amount out of the savings account into which I make my escrow payments.

Pretty much everything else is monthly except the water bill, which is quarterly, but isn't very much money so I just pay it when it comes in.

You could make yours the same way. Take whatever you spend that isn't monthly, figure out how much you spend per year, divide by the number of times you get paid, and put that money into a separate account. It doesn't matter if they are big bills, like I do, or small bills like your haircuts.

[LittleMsMom]

I would suggest openning an additional savings account (no-fee, no-min-bal) for the non-monthly bills, Car Registration, Car Repairs, Gifts, Clothes, etc.

If you have it in checking you might forget how much is ear marked for future bills, or accidentally spend the money because you see it sitting there.

I guess it depends on your will power.

I love keeping things seperate, I have like 7 different savings accounts with ING. It just makes me feel better....But you will need to find what works for you.

I could not get your grocery budget to open...But it is wonderful that both you and your wife are working together to create a budget and live it.

Good Luck

[uRabbit]

I do not have a weak will power. Here's what I'll do: I use an app on my phone that acts as a checkbook register (PocketMoney), and has charts for spending categories and what-not. It has really helped me realize our spending. Anyways, I will create separate accounts on it for my savings.

[papa_squat]

It seems as though life hit you all at once. Good job lowering your expenses in just the course of your conversations here. You definitely seem motivated to get this debt under control, but you also need to look at some of the things that are still holding you back.

I know SAHM is a full-time job without pay, but that doesn't mean that she absolutely cannot work if you are living off your parents and a single income that goes primarily to debt repayment. SAH is a LUXURY for anyone. She really should consider taking a waitressing job while you are off work and at home with baby. Do you have any friends your age with young children? Consider working out deals with them for watching kiddos for each other from time to time. Forgive me if I missed this in your posts, but does your wife have parents nearby who can help with some free child care every now and then? If not, can they provide any kind of financial assistance to take the heat off you and your parents? Income is a big problem here and you both need to be doing your best to up it as much as possible.

You have to change you mindset about some of this as I'm sure you know this current lifestyle is not comfortable and obviously not sustainable, but it blew my mind when you said that you have a coffee maker and yet you still have Starbucks in your budget! You need to find a time to sit down with your wife (and maybe the parents, too) and break down your monthly expenses so you have some hard numbers. If you're not doing this closely already, track your spending and savings each month (no estimating!) using a checkbook and Excel spreadsheet. Posting a real budget with your monthly expenses in here could do you a lot of good. Tighted your belt as much as possible to get it under control.

It may seem pretty bleak, like you're not allowed to have fun while you're in debt repayment, but that's not true. You have to be more creative about having fun on the cheap. Summer is great for that. Parks and the library are obvious, cheap entertainment. Making friends with other familie with babies is a great way to grow your support system and to make new friendships. The next few months will be challenging to say the least, but the sooner you pay off that debt, you can finally start putting your paycheck toward fun money, savings and moving into your own place. I'm sure you already do this, but hank you parents for helping you out and repay them by doing all you can to get rid of your debts. Good luck!

EDIT: It looks like you've already started working on you budget numbers. You are definitely on the right track! You definitely seem to get it and I'm glad you keep posting back here with good news .