For your critique

[Northerner]

Hi everyone, I'm new to this forum. Have been lurking for quite some time and there seems to be a lot of good advice given and I'm looking for some help. Currently we have credit card debt that we are trying to wipe out. We no longer use our credit cards. I hate it that we have so much credit card debt but I know that we only have ourselves to blame. It truly sickens me though and I desperately want to clear it off. We use a budgeting program and I'm doing the snowball method to pay off credit cards.
Here's our monthly budget:

Income:
Min 2400 up to 4000
Min 1000 up to 1400
Other income 113.78
Our income varies each month
Emergency fund 1500

Hydro 200.00
Gym membership for kids 60.00
House Ins 71.87
Car Ins 157.55
Cell phones 210.00
Water heater rental 20.00
Gas(home) 35.00
Mortgage (includes taxes) 742.00
Line of credit 200.00
Student loan 100.00
Kids allowance 80.00
Credit card 625.00. (Minimum)
Vehicle gas 150.00 (2 vehicles)
Cable 120.00

I budget for the minimum income, and then anything above is placed on the credit card. We have two vehicles which are paid for. The kids allowance, they get that and we buy them nothing else unless it's a necessity or a birthday.
We currently owe 143,00 on our mortgage. We could sell today for $170,000. That would clear away a small portion of the debt but not sure that is the answer. To rent something, would be around 1100 per month plus. About our vehicles, the truck is 20 years old and the car is 7 years old. We would like to keep the car as it is very reliable.
The credit card doubt is over a couple of credit cards. The rates vary from .99 up to 9.99 percent. Getting a family loan of any sort, is out of the question. Okay, hopefully I've provided enough info. Thanks!

[bjl584]

How much do you actually owe on the cards?

I see some things that should probably be cut or at least reduced until you clean up your finances. Cable, cell phones, gym membership, allowances.

Why are you renting a hot water heater?

[Northerner]

We owe 25,000 on the credit cards.
The line of credit is 10,000 and student loan is 10,000
When we purchased this house 6 years ago, the water heater was rented and we left it as such. When we moved here, the intent was not to stay so we figured we would just keep renting it as opposed to putting out a lump sum to buy it. Just noticed that I messed up. The 20 dollars is for a 3 month rental on the water heater.

I could look at reducing the cable. The gym membership is for 2 kids. They go there approximately 3 times a week so I would hate to cut that out.
The cell phones are iPhones and I'm not sure I can get them each below $50 a month.
Reducing allowances? Each child currently gets 10 a week.

[disneysteve]

Hydro 200.00
Gym membership for kids 60.00
Cell phones 210.00
Cable 120.00

I'd start here.
What is Hydro?
Why do your kids need a gym?
How many phones are on that plan?
Change cable to the limited basic plan, which they probably don't advertise. You usually need to ask for it. It should be in the $20/month range.

[Northerner]

Hydro is electricity.
Kids go to the gym to go swimming and to use arcade and wii games.
There are 3 phones on that plan. No home phone at all.
The cable is TV and internet. Could pry reduce it.

[porkpistol]

Hydro is electricity.
Kids go to the gym to go swimming and to use arcade and wii games.
There are 3 phones on that plan. No home phone at all.
The cable is TV and internet. Could pry reduce it.

I would definitely look into cancelling that gym membership. There are other ways for kids to remain active for free. How old are your kids that are attending the gym?

[Bob B.]

I'm looking for some help. It truly sickens me though and I desperately want to clear it off.

I had a huge CC debt four years ago. We finally got it paid off a year ago. But for the three years in between, we really had to sacrifice. We completely cut our satellite TV, and haven't gotten it back. We didn't do anything extra for most of that three years. Yes, we did start to loosen our belts a bit at the end before it was all paid off, but for most of the time we really had to change our mind set.

Expenses that you think are critically important, it turns out, are not. Kids really do get a more valuable lesson when they learn about financial sacrifice. They don't need all the extras.

[creditcardfree]

Expenses that you think are critically important, it turns out, are not.

This is so so true!! I just wanted to emphasize this to the OP. Read it over and over until that sinks in.

[Northerner]

Thank you everyone and you are right, I need to change my mindset. I was just cleaning the house a bit and thinking about the kids allowances. They are 10 and 14. I realized that they do absolutely nothing to earn their allowances. So, that will be cut out immediately.
I'm thinking that the gym will be cut as well.

I am going to contact the cable company and make some changes.

I think I can cut down on my grocery bill too by not purchasing as many packaged/convenience snacks.

I offered to sell my car but dh didn't agree.
I also offered to sell my house and rent for a couple of years but I'm not sure that is the right way to go. Thoughts?

[Bob B.]

We currently owe 143,00 on our mortgage. We could sell today for $170,000. That would clear away a small portion of the debt but not sure that is the answer. To rent something, would be around 1100 per month plus.

I'm not sure that your situation is dire enough to justify selling your house. Think of the transaction costs - closing costs, moving costs. Especially if you have to pay more in rent than you are paying for PITI.

Buckle down for several months, spend no extra money, send every dime that you can toward your highest interest debt, and revisit your situation after six months.

[Petunia 100]

My phone bill is right at $65 per month for two smart phones and one dumb phone. Just sayin'. Yes, I had to buy the phones and pay an early termination fee, but I still came out ahead.

https://zli3im7fc.ting.com/

I would not sell the house. After expenses, you will not net very much and then need to pay more than PITI to rent. Why bother? Your housing costs are reasonable. Cut other spending instead.

Is your credit rating good? Chase Slate is currently offering 0% for 15 months on transferred balances with NO balance transfer fees.

https://creditcards.chase.com/slate-credit-card/learnmore-apply?CELL=6RRW&jp_cmp=cc/03BrandedSlateMBR/sea/na/03ChaseandSlate&adgrpID=1628931146&kwdID=23614729826&ef_id=U@K2ZAAAAWTrcCY7:20140827213258:s

[frugalredhead]

I wholeheartedly agree with cutting the allowances, My 7 year old gets $3 a week, and that's if he does all his chores, which are cleaning his room, the playroom, putting his laundry away, and watering the vegetable garden. If he doesn't do his chores, he doesn't get the money. So if your kids aren't earning it, they don't get it! They absolutely don't need a gym to be playing Wii games and using an arcade. I wonder if there's a community pool in you town that would be cheaper? I can appreciate the desire to have access to a pool.... mine are little fish and we're lucky enough to have one in our neighborhood.

My cell phone for DH and I is $126, so $210 for 3 lines seems high to me. Even without going to something like Ting or Republic Wireless (who can have spotty service depending on where you are), I'm sure you can get a cheaper plan.

You can do this! You have far less debt than me (I started with $75,000 on my credit cards) and I have paid off $8K in 8 months. We have found that our kids, ages 3 and 7, get far more out of free things like hikes, parks, and just playing in the backyard than they did when we paid $100 to go to some festival and out for lunch. Your kids can learn to appreciate free ways to be active and have fun. Good luck!

[HappySaver]

Is there a place (like a local ymca/rec center) where the kids can swim for less money? This may be worth exploring.

Are you outside of the U.S. (maybe Canada)? I've never heard electricity referred to as hydro in the U.S. If so, the cost of some things may be different than what we're used to seeing.

[Northerner]

Thank you for the encouragement. I am very motivated to do this and am currently checking into a 2nd source of income. Allowances have been cut!
Yes, I am in Canada. Love this forum though as there is a lot of good advice

[snafu]

hi, welcome to SA. I wondered if there is anything you can do to generate more income. Could you or DW manage some type of part time work? There were no sums listed for food, non edibles, auto maintenance, home maintenance, water, clothing or entertainment. Can I presume that you're using CCs to boost your standard of living? How much is going out the door in interest each month? If recent/upcoming back-to-school costs will be added to CC you've a problem.

When our DSs were about the ages your your guys, we were using a chore chart + sum to be earned for completion without being reminded. We were trying to teach team work and how income was earned. The boys chose the tasks they preferred from a list like mow grass, weed flower borders, water [timed] yard & indoor plants [summer], shovel driveway & sidewalk [winter], laundry [collect/sort/load W/D, hang/fold as appropriate, deliver each basket to correct rm], wash floor old fashioned hand and knee per room rate, organize pantry according to shelf labels, same story DH's garage work bench, vacuum car, vacuum per room. Seasonal change-out garage and under-the-stair storage was a team task with either dad or me. We based pay on minimum wage X our determination of how long it should take to complete the task. Poker chips were collected and exchanged for $$.

DSs were required to maintain their rooms, set and clear dinner table just because we're a family. They got paid for set-up and clean up whenever we had guests for dinner.