Announcement

Collapse
No announcement yet.

In a financial mess.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    In a financial mess.

    Here's a rundown of our situation-


    Debtor Balance Interest Rate

    Cars
    Federal Financial $4,352.00 29.99%
    Capital One $10,781.26 9.08%

    Credit Cards
    Chase 1 $181.83 23.24%
    Chase 2 $411.00 23.24%
    Sams $828.28 22.90%
    Capital One (A) $176.31 17.90%
    Citi $1,459.67 16.49%
    Capital One (S) $429.00 0.00%
    Sams $338.09 0.00%

    Student Loans
    Sallie Mae 2 $2,767.89 9.500%
    Sallie Mae 1 $4,587.52 9.500%
    Nelnet $9,550.63 9.15%
    Ed Financial $1,144.82 7.25%
    AES $18,252.41 6.98%
    MyEdAccount $18,267.31 6.88%
    Chase SL $5,887.13 6.75%




    The 29.99% is my car. We only had one car, and desperately needed another. We've paid over $700 beyond the normal payments to try to reduce the amount of interest.


    I make 51000/year and my wife is a stay at home mom.

    I bring home barely over 3000/month.

    Our expenses

    Car Payment 1 $227.44
    Car Payment 2 $255.00
    Car Insurance $208.00
    Verizon $100.00
    Citi $34.51
    Sam's Club $38.00
    Rent $640.00
    Renter's Ins $12.42
    Sallie Mae 1 $105.40
    Sallie Mae 2 $63.19
    AES $133.69
    Nelnet $125.00
    Ed Financial $50.00
    Electricity $90.00
    Capital One (A) $15.00
    Capital One (S) $25.00
    Chase SL $45.22
    Water $25.00
    Gas $120.00
    Food $300.00
    MyEdAccount $165.70
    Cable $100.00
    Chase 1 $20
    Chase 2 $20

    This comes out to about $2950/month.


    The CC debt came from major repairs on a previous car, and just trying to survive to finish college. I graduated, but my wife never did.

    Any suggestions to help us dig out of this hole?

    I'm thinking about using my employers tuition program to pursue a second bachelors degree (I have a BSME, I want to pursue a BSEE.) to defer my student loans and possibly benefit from scholarships.
    Last edited by Incognito815; 05-03-2012, 05:13 PM.

    #2
    Originally posted by Incognito815 View Post
    my wife is a stay at home mom.

    Any suggestions to help us dig out of this hole?
    My first suggestion is to fix this problem. You can't afford to have a stay at home parent. Your wife needs to get a job. It doesn't matter if she has a degree or not.

    You should also be looking for a second job to boost your income.

    If you can defer any loans, do so. If you can get any loans on an income-based repayment plan, do so.

    How much is each car worth today in a private sale? Check kbb.com and autotrader.com for estimates. If either car is saleable for enough to pay off the loan, sell it and replace it with something cheap.

    Why are you paying $100/month for cable? Cancel it tomorrow. You can't afford it.

    Let's start there.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


      #3
      I agree with DS. At the very least she can get a job working nights. How long until the kids are in school? There's very little to cuts so I think you've got an income problem.

      Comment


        #4
        I would take a different approach first, although I don't disagree that a 2nd income would certainly help.

        I would look to reduce your current Budget by 10% - 20%. You CAN DO THIS! For example, with Food, you can make sure that you 1) eat breakfast at home; 2) bring lunch to work; 3) Avoid going out to dinner; 4) Avoid buying daily latte-cafes. You will me amazed at how many (not all) of your budget items can be cut to the bone. You are in dire straights, and this is something that you have control over. Reducing your monthly budget by 20% is like infusing yourself with a 20% salary increase.

        Next, take this new-found money and apply it your debt. Come up with a plan to eradicate this debt (maybe a 3-5 year plan), and stick to it. And stop using those darn credit cards - they are poison. Cut them up, and learn to pay cash/check for your essentials. You have to condition yourself into realizing that plastic is not an endless source of cash.

        Good Luck!

        Comment


          #5
          Originally posted by Incognito815 View Post
          Here's a rundown of our situation-


          Debtor Balance Interest Rate

          Cars
          Federal Financial $4,352.00 29.99%
          Capital One $10,781.26 9.08%

          Credit Cards
          Chase 1 $181.83 23.24%
          Chase 2 $411.00 23.24%
          Sams $828.28 22.90%
          Capital One (A) $176.31 17.90%
          Citi $1,459.67 16.49%
          Capital One (S) $429.00 0.00%
          Sams $338.09 0.00%

          Student Loans
          Sallie Mae 2 $2,767.89 9.500%
          Sallie Mae 1 $4,587.52 9.500%
          Nelnet $9,550.63 9.15%
          Ed Financial $1,144.82 7.25%
          AES $18,252.41 6.98%
          MyEdAccount $18,267.31 6.88%
          Chase SL $5,887.13 6.75%




          The 29.99% is my car. We only had one car, and desperately needed another. We've paid over $700 beyond the normal payments to try to reduce the amount of interest.


          I make 51000/year and my wife is a stay at home mom.

          I bring home barely over 3000/month.

          Our expenses

          Car Payment 1 $227.44
          Car Payment 2 $255.00
          Car Insurance $208.00
          Verizon $100.00
          Citi $34.51
          Sam's Club $38.00
          Rent $640.00
          Renter's Ins $12.42
          Sallie Mae 1 $105.40
          Sallie Mae 2 $63.19
          AES $133.69
          Nelnet $125.00
          Ed Financial $50.00
          Electricity $90.00
          Capital One (A) $15.00
          Capital One (S) $25.00
          Chase SL $45.22
          Water $25.00
          Gas $120.00
          Food $300.00
          MyEdAccount $165.70
          Cable $100.00
          Chase 1 $20
          Chase 2 $20

          This comes out to about $2950/month.


          The CC debt came from major repairs on a previous car, and just trying to survive to finish college. I graduated, but my wife never did.

          Any suggestions to help us dig out of this hole?

          I'm thinking about using my employers tuition program to pursue a second bachelors degree (I have a BSME, I want to pursue a BSEE.) to defer my student loans and possibly benefit from scholarships.
          What Steve said. Wait on school. Even if you or your wife get a part-time job in the evenings making minimum wage, you could bring home a mninimum of about $500 a month. Using that money:

          Months 1-7: Apply additional money to Federal Financial. Pay off car. Roll over car payment to other bills.
          Month 8: pay off Chase #1, Chase #2 and Capital One (A).
          Month 9: pay off Sams #1.
          Month 10: pay $750 to Citi
          Month 11: pay off Citi.
          Month 12: pay off Sams #2 and Capital One (S).
          Month 13: pay addl 700 to second car
          Month 14: pay addl 700 to second car.
          Month 15: pay addl 700 to second car.
          Month 16: pay addl 700 to second car.
          Month 17: pay addl 700 to second car.
          Month 18: pay addl 700 to second car.
          Month 19: pay addl 700 to second car.
          Month 20: pay addl 700 to second car.
          Month 21: pay off second car.
          Month 22: pay 1/2 Sallie Mae 2.
          Month 23: pay off Sallie Mae 2.

          Now you got a little more breathing room, no? Another year and you can pay off Nelnet and Sallie Mae 1. Good luck.

          Comment


            #6
            Cut the cable and verizon. Food already seems pretty tight with $300/month but make sure your shopping sales and with coupons.

            Stay at home mom's can make money too by working part-time in evenings and working out of the home. I did daycare out of my home to be a SAHM. Just watching one additional kid then your own can bring in a decent income

            Comment


              #7
              Originally posted by Incognito815 View Post
              I bring home barely over 3000/month.
              Make no mistake about it, your problems are from your debt (and your debt from your past and present over-spending)

              Of your $3000/month, 1323.15 goes to debt payments (42.68%). How can you get ahead with such a big burden? (Keep in mind that it is a self-created burden) How much easier would your life be without those debt payments??

              We've gotta do something there.


              The long term answer is to fix the underlying spending issues. But to see what short term measures we can offer:

              1) Since this isn't addressed anywhere, what assets do you have?

              How much in:
              -checking account?
              -savings account? your's? her's?
              -CDs?
              -Roth IRAs?
              -401k?
              -savings accounts for the kids?


              2) What size refund do you get on your taxes each year?


              3) What does your credit look like?

              Have you considered a 0% balance transfer option for a new CC? You have $3057.09 on interest charging CCs. Total interest each year is roughly $600, based on your current rates. That's an extra $50/month you could save just by moving the debt around to a 0% card.

              What did they tell you when you tried to refi the car? (or if you haven't asked, do so)

              Comment


                #8
                Credit score: about 650. Inquiries (trying to get a BT) and cc utilization. I think a BT is not possible at this point.

                Have not tried to refinance my car, I don't know of anywhere that will refinance my car (it's 14 years old).

                The cable is cable+internet. My wife strongly disagrees with getting rid of them, as we don't eat out, we don't go out much, but we do watch tv/surf the internet in our spare time.

                I pack my lunch to work everyday.

                Would doing IBR on our student loans really be a good long term idea?

                We have a dog which we're trying to find a good home, this will drop our rent $15/month.

                We're also going to call the car insurance company as our rates were reduced when we called a month ago, and then brought back up this month (new term began).

                We have no savings at the moment, 401k is less than $1000 (been employed 6 months, graduated college a year ago).

                My wife is trying to find a part time job, but no immediate luck.

                Our cell phones are just basic family plan, with 1000 text messages each (keeps her from going over on minutes).


                I'm definitely listening to all the advice, and I will try anything/everything to fix this situation.

                Comment


                  #9
                  It appears that much of your high interest debt is on small balances. Deliver pizza's or any part-time work you can find.

                  Part of getting out of debt and establishing good financial skills is to sacrifice on things you want. Cells, internet and cable are not needs. The idea is to get out of debt quickly and regain your luxuries after you have won the battle.

                  Your battle comes with many small victories, if you are truly serious about winning, cut all your luxuries and get extra work.

                  IMO, it is a fact that personal finance is more about habits than skills. At your age, this is a good time to establish sound principles and priorities. You know how this works, it is more income and less outgo.
                  Last edited by maat55; 05-04-2012, 05:51 PM.

                  Comment


                    #10
                    Originally posted by Incognito815 View Post
                    I don't know of anywhere that will refinance my car (it's 14 years old).
                    You have a loan on a 14-year-old car? How long have you owned it?
                    What is each car worth today?

                    My wife strongly disagrees with getting rid of them
                    What part of 'you can't afford it' doesn't she understand?
                    Instead of vegging in front of the TV or computer in your spare time, you both need to be working in your spare time. Sorry but I don't buy the excuse that she hasn't been able to find work. There is always work out there if you look hard enough. Walk dogs, mow lawns, babysit, deliver papers or pizzas, flip burgers, wait tables, mop floors... whatever you have to do to make a buck.

                    Our cell phones are just basic family plan, with 1000 text messages each (keeps her from going over on minutes).
                    Cell phones are a luxury, plain and simple. You are spending $100/month on them. Get rid of them and get a land line. It will cost you a lot less than $100/month and free up much needed cash for debt repayment.

                    Remember, all of these cuts aren't forever. They are just until you beat down some of this debt and get yourselves some surplus and breathing room.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                      #11
                      Originally posted by disneysteve View Post
                      You have a loan on a 14-year-old car? How long have you owned it?
                      What is each car worth today?


                      What part of 'you can't afford it' doesn't she understand?

                      My car: I've had it for 4 months. It's worth about what is owed on it according to edmunds/nada.

                      Her car: It's an 08 pontiac vibe with about 87k miles, and it has depreciated quicker than we've been able to pay it off. I'm pretty sure we owe about 2000 more than it's worth.

                      The cable and cell phone issue just pisses her off if I even bring it up.

                      Comment


                        #12
                        Reply

                        It doesn't seem to me like you have a spending problem. Yes, there are a few items that would be considered luxury items, that you could cut from the budget. The main reason you are struggling is you are living on an income of 51k a year. I understand your wife wants to stay at home with the kids, but this is not the time to do that. I would suggest she gets a job at nights to help out. This may be not be a job that she really wants to do, but desperate times call for desperate measures my friend.
                        After reviewing your debts, it looks like many of them have really small balances. I would focus on paying those off and freeing up some monthly income to gain some breathing room.
                        You don't have a spending problem, the issues lies with the amount of income.

                        Comment


                          #13
                          The cable and cell phone issue just pisses her off if I even bring it up.

                          If she wants to keep those items then she needs to find a way to earn the income to keep them. She can work at night doing customer service from home. She can work at a fast food place that is open all night. She will be tired, but that is what she will have to do if she wants to have those luxuries. And, her income requirement is the amount needed plus the amount of luxuries that she wants to keep.

                          Working at night can be done. I did it. I worked at night when my children were small. I worked from 1 am to 6 am and then came home and was "mom" all day long. When they got a little older, I homeschooled them. All three of my guys are the kids that need extra attention (one is special needs, one is dyslexic, and one is semi-genius). I ran 20 to 22 hour days for 6.5 years. It wasn't easy. But, that is what I needed to do to get us into the black. The only thing we owe on now is the house and that will be paid off in four years.

                          Comment


                            #14
                            Originally posted by Incognito815 View Post
                            I make 51000/year and my wife is a stay at home mom.

                            I bring home barely over 3000/month.

                            Are you saying your tax bill each year is $13,800 or roughly 27%? That seems really steep to me. Don't try to get a tax refund at the end of the year. That's just an interest free loan to government. Not a good plan seeing as they are currently charging you 9.5%

                            Comment


                              #15
                              Originally posted by Redraidernurse View Post
                              Are you saying your tax bill each year is $13,800 or roughly 27%? That seems really steep to me. Don't try to get a tax refund at the end of the year. That's just an interest free loan to government. Not a good plan seeing as they are currently charging you 9.5%
                              I asked about the refund but got answers to my other questions. (Thanks by the way it brought up good conversation and eliminated some options)

                              If you remember the $51k is before SSI, fed and state tax - its possible. I'm guessing it's around $3100. And also guessing they get a refund.

                              https://onlinepayroll.intuit.com/ext...alculators.jsp - use the personal salary one.

                              With the SL interest, tuition credits, standard deduction, extra dependent deduction (sah-MOM) they better be getting a big refund. If they didn't they may need to consider refiling.

                              Moral of the story is I agree with you, there is room for improving the income picture by eliminating the refund. (I'm still assuming they got one)
                              Last edited by jpg7n16; 05-04-2012, 09:14 PM.

                              Comment

                              Working...
                              X