Advice for a newbie

[UpToMyEars]

Hi,
I am new to this site.I have been reading posts and have begun to evaluate my finances more seriously.
I am 29 yrs old,soon to be 30.As I approach my 30th bday,I have found myself wanting to move ahead and become debt free.I would appreciate some advice from you all.Please give me your input.I apologize in advance for making such a long post.

Income
Mine: around 2,700 monthly
Hers: between 2,500-2,800 monthly


Debt:
Cars: 13,000 and 23,000 @ 5.9% APR
BOA CC: 4,300 @ 22.9%
Citi CC: 1,200 @ 19.9%
Carecredit CC: 2,560 @ 13.9%
Personal loan: 7,200 @ 13.74%
Fifth Third CC: 7,050 @ 10.9%
HH Gregg CC: 1,500 @ 0%
Health One CC: 1,840 @ 9.24%
Student loan: 7,000 @ approx 3%

Monthly bills:
Rent: 625
Electric: 130
Cable: 130
Phones: 170
Loan payment: 208
Car payments: 660
Car insurance: 225
Student loans: 300?
Credit cards: 550
Groceries: 300
Doctor bills: 100
Medicine: 100
Gas: 120?

Honestly,I am not even sure how much my g/f pays for her student loans,gas or medicine per month so that amount may be off.She also has several bills in collections on which she has not made any payments.
I sometimes become very discouraged because I don't think she has the same commitment to getting out of debt that I do.She is absolutely horrible with managing her money so,her monthly contribution to the bills is not what it should be.I have talked with her repeatedly about getting our finances in order so we won't have to struggle forever,but it's like she does not really care.
We were looking to buy a house a couple of months ago,but her credit was too low and so the house would have been in my name.Both cars are in my name already so I was afraid to do that.It was probably a blessing that we were not able to get the house.
I am currently using a mixture of methods to pay off my debt.I am primarily using the snowball method,but have thrown a bit of extra money toward my medical bills.I am focusing on the Bank of America card as it has the highest interest rate.I have made some decent progress on paying down that balance from 5,300 in July to 4,300 today! I have also been able to pay off a couple of minor medical bills this month too.We basically have nothing in savings and were thinking of putting a little toward that and the most of any extra money toward the debt.Does my plan sound ok?Any advice on how to fix debt when your spouse/SO may not be on board with the plan?
One major thing I started doing was packing my breakfast and lunch for work.I realized I was spending from 7-10 bucks every time I worked!I can already tell a difference just from that one change.

[ktmarvels]

First of all, I would think long and hard about the situation you are in with your girlfriend. She doesn't appear to be on the same page financially or wanting to do her part. Perhaps if you talk about your future and all the things you want (house, vacations, etc) it can help motivate her to come to the savings/paying off debt side. Otherwise, you may need to consider if you are prepared to have that battle for the rest of your life. People won't change unless they want to. You, however, CAN make a change (deciding you are going to do it for the both of you, or leaving the situation).

That said. I think you are already on your way to paying down debt. It will take you a while, but it probably took you a while to get here too. I would continue paying the minimums on your card, but get something in savings to cover those unexpected costs ($1000 is what most people say). Then attack those CC! Paying the higest interest rate one makes the most financial sense. Also, give them a call, ask them to lower the interest rate. Some may, some may not, but een a little bit helps.

You also have a lot of car debt. Consider selling one and buying an older, used, less expensive car. Even if you are upside down on the cars, having $5000 at 5.9% is better than having $36,000 at 5.9%. Also remember, if your name is on both cars, you own both cars. It may require some tough love for you to convince your girlfriend of this (and I might add, only do it to her car after you've done it with your car...or see if you can give her the loan).

Good luck! It will be a hard road, but you can do it.

[photo]

First, many will disagree with me, but I think it's a huge mistake to combine finances with anyone other than a financial partner in a business or an actual spouse. Situations can get extremely messy, and you're just at the beginning of that because you have different financial goals than your girlfriend and already you're buying a car for her. Until you get married, keep those finances separate.

Your rent looks great. If you had no debt and lived frugally, you'd be on a quick path to wealth. But, you have one rather expensive car loan with some expensive extras, like phone bills (2 people -- $170? That's outrageous) and cable.

After separating your finances, pay off your highest interest rate first and move down. Do any of the lower rate cards have a 0% transfer rate? I frequently receive offers of transferring balances to existing cards with 0%, but I don't have any debt. But I'd take advantage of moving any balances to lower cards when you receive those offers.

[Bob B.]

With the amount of debt you have together, and your current payoff rate and current interest rates, it will take you between 6 and 7 years to pay off, and you will probably spend at least $15,000 in interest during the payoff time. And, that's assuming no more debt.

[UpToMyEars]

First of all, I would think long and hard about the situation you are in with your girlfriend. She doesn't appear to be on the same page financially or wanting to do her part. Perhaps if you talk about your future and all the things you want (house, vacations, etc) it can help motivate her to come to the savings/paying off debt side. Otherwise, you may need to consider if you are prepared to have that battle for the rest of your life. People won't change unless they want to. You, however, CAN make a change (deciding you are going to do it for the both of you, or leaving the situation).

That said. I think you are already on your way to paying down debt. It will take you a while, but it probably took you a while to get here too. I would continue paying the minimums on your card, but get something in savings to cover those unexpected costs ($1000 is what most people say). Then attack those CC! Paying the higest interest rate one makes the most financial sense. Also, give them a call, ask them to lower the interest rate. Some may, some may not, but een a little bit helps.

You also have a lot of car debt. Consider selling one and buying an older, used, less expensive car. Even if you are upside down on the cars, having $5000 at 5.9% is better than having $36,000 at 5.9%. Also remember, if your name is on both cars, you own both cars. It may require some tough love for you to convince your girlfriend of this (and I might add, only do it to her car after you've done it with your car...or see if you can give her the loan).

Good luck! It will be a hard road, but you can do it.

Yes it has taken us quite a long time to get into this situation.I have actually thought about putting the car in her name,but how do you go about doing that?Would I do a refi and put it in her name then?
Also,I am glad you mentioned a savings account.That is something I did not know if we should do before paying toward the debts.
By the way,thanks for your encouragement.

[UpToMyEars]

With the amount of debt you have together, and your current payoff rate and current interest rates, it will take you between 6 and 7 years to pay off, and you will probably spend at least $15,000 in interest during the payoff time. And, that's assuming no more debt.

Thank you for this.The interest is a sobering number to look at!I needed to see that.Definately motivation to not accumulate any more debt!!

[UpToMyEars]

First, many will disagree with me, but I think it's a huge mistake to combine finances with anyone other than a financial partner in a business or an actual spouse. Situations can get extremely messy, and you're just at the beginning of that because you have different financial goals than your girlfriend and already you're buying a car for her. Until you get married, keep those finances separate.

Your rent looks great. If you had no debt and lived frugally, you'd be on a quick path to wealth. But, you have one rather expensive car loan with some expensive extras, like phone bills (2 people -- $170? That's outrageous) and cable.

After separating your finances, pay off your highest interest rate first and move down. Do any of the lower rate cards have a 0% transfer rate? I frequently receive offers of transferring balances to existing cards with 0%, but I don't have any debt. But I'd take advantage of moving any balances to lower cards when you receive those offers.

I think I agree that mixing finances is not the best idea.I hope to God it does not come back to bite me in the rear!I will seperate the finances as much as I can.

I agree about the phone bills.Mine is around 60 bucks/month.She has a smartphone with all the data plan crap to go with it,so it gets pricey.Also,we have extras on the cable bill that we could drop.
I really wish I could transfer the higher interest credit card balance,but I am so close to the credit limit on the other cards that I can't do that.

[UpToMyEars]

I have good news on my situation.I actually had a great talk with my g/f this morning.Funny how this happened right after I posted here.Anyway,She just got paid today,so we set up a spreadsheet for her like I use to manage the bills.She flies blind so to speak when it comes to tracking her bills.It was light I saw a light go on in her head when she had the numbers right there organized for her to track.It is possible that she may be on board with the plan.
We went through each bill together as she paid on them.I made sure to also remind her that once we are out of debt,we could build wealth quickly.Then we would be able to return to Florida where we went on our one and only vacation together.
She seemed motivated and then told me she thinks she could put about 400 bucks into savings per month!My goal is to get 1000 bucks in emergency savings that one of you mentioned.I will remain a bit skeptical because I know how she is about money.However,this is the most serious she has ever been when we discussed money.

[riverwed070707]

What led you to this amount of debt to begin with? Was it joint accumulation or something that was brought into the relationship? Have you stopped using them? If not, that's your first step. Everytime you use a card to pay, you're living beyond your means.

You've got a long road ahead of you, but it can be done. Can one or both of you pick up a second job for a while so you can make progress quicker?

[UpToMyEars]

What led you to this amount of debt to begin with? Was it joint accumulation or something that was brought into the relationship? Have you stopped using them? If not, that's your first step. Everytime you use a card to pay, you're living beyond your means.

You've got a long road ahead of you, but it can be done. Can one or both of you pick up a second job for a while so you can make progress quicker?

It was definitely joint accumulation.We have been together for 9 years and the debt has got slowly worse.But yes we have stopped making new debt and have been using only cash.I should cut up the one physical credit card I still have,but want to keep it for emergency until we have some more in savings.
We both work in healthcare which used to offer all the hours you could work.That is not the case anymore in this area.However,winter time usually brings with it an influx of patients so I may be able to work a few extra shifts per month.Thanks for you input.

[photo]

There is one thing you can do right now (and it's good for everyone in this economy) is to seriously cut down on spending. You may be locked into cell phone plans for awhile, but don't spend money on anything that isn't critical. If you can get rid of cable, you then have $130 more to put down on your credit card bills. With every dollar you spend, just ask yourself, "Is this an absolute necessity to buy?"

[Obiwan]

I know what its like to feel like you're absolutely buried in debt, and sometimes it feels like there's no way out. I'm in the same situation. The one thing i've been told is to not lose hope, it can happen. You can be out of debt eventually. The minute you start feeling like its impossible...game over.

The one thing I would tell you is that you need to get rid of those cars ASAP. If you can get rid of both cars (at the very minimum, the $23k car), you'd be surprised how fast you can knock out the CCs with the freed-up monthly cash flow and with that feeling of knocking out over $30k in debt!!!

what kind of cars are they? Who drives which one? The reason i ask is that (1) depending on the type and age of the cars, it may actually make some sense to keep one, and (2) if possible, get rid of yours first b4 going for the one gf drives. you dont want to spook her with your new found intensity

[disneysteve]

You may be locked into cell phone plans for awhile

You are never totally locked in. There is always an early termination option. Yes, you have to pay a fee for it but that fee is generally a lot less than it would cost you to keep the plan until the end of the contract. And I think the fee is pro-rated. So if the fee is $200 on a 2-year contract but you are one year in, the fee might only be $100 now. Check with your carrier for the specifics. Many people avoid cancelling contracts to avoid the fee and end up spending many times that much in the process.

[maat55]

Personally, I would be selling both cars and replacing them with 5k cars or less. This would also lower your auto insurance.

I would look at selling everything that is not tied down, especially things you do not use or need.

I would downgrade cable to the basic 13.00 per month. I would drop the cell phones.

You really need to look at getting out of debt as a boot camp and your utmost priority. This will accomplish two things, a swifter payoff date and you will detox from your over-spending habits. Believe it or not, over-consumption and spending are addictions as well.

Keep in mind that these recommendations are meant to get you debtfree quickly and adjust your mentality towards debt and consumption. Once you have reached your debtfree goal you need to establish savings and emrgency fund goals. As mentioned above, you should have a 1k emergency fund to start.

You should never use your credit cards again until you have them paid off and enough money in savings to payoff any monthly purchases.

I highly recommend that you read The Total Money Makeover by Dave Ramsey.

[snafu]

Compliments for taking action to evaluate your finances. Please call CC providers to request a reduction in interest rates as paying 22.9%, 19.9%, 13.9%,13.74% is outrageous when savers get .09%. If you have CC statements add up just the interest you've paid recently and add in approximately sums going back to 1/1/11. Are you shocked?

I suggest you and SO develop a spending plan going forward; perhaps split regular, monthly expenses 55% & 45% for rent, utilities, food, 5% savings to get to $1,000. emergency sum & CC paydowns. However, each of you pay your own car and phone costs.

Perhaps it's time to develop cash flow plan to see clearly how much you spend each month on categories food [home & restaurant], entertainment, auto operation & maintenance, clothes, personal costs, gifts etc. When we learned average food spending was 17%, average transportation 15%, average clothes spending 4%, savings 5% we applied percentages to our spending. Of course gas has ramped skyward but we cut back on gift & entertainment category to keep in our targets.

Let us know how you're doing and we'll cheer you on and offer other suggestions to make this a bit easier.