So Far Behind - How Do I End This Cycle?!

[dkbc14]

First off, I will say I know this is my fault. Somewhere along the way I let one bill slip by and then it just spiraled out of control. My husbands income should be more than enough to cover our monthly living expenses but maybe breaking it down and getting advice from people on the outside will give me some helpful insight and find a way to get us out of this serious rut. I refuse to let my children suffer because my husband and I have mismanaged our finances.

Our bank account is overdrawn by $700.
We have a $500 cash advance from one of those terrible paycheck loan scam places, BIG mistake!
My mortgage has been paid late 2 months in a row.
My husbands truck payment is late, schedule to be paid on 9/5.
My SUV payment is a few days late, still in my 10 day "grace period."

Clearly we are a sinking ship. My husband brings home $1950 biweekly and also receives a check for gas but thay varies based on his travel. So we have seen checks as large as $850 & as small as $300.... It's been brutal not knowing how much we will be getting back. His travel for work is not predictable; some weeks he's traveling hundreds of miles every day, some weeks he only travels 50 miles a day.

A breakdown of our recurring monthly expenses:
Mortgage - $1200
Truck - $730
SUV - $590
Car insurance - $220 (this is for 3 vehicles, one is owned outright)
Utilities - $250 - $ 360
Cell phones - $175
Home phone, tv, internet - $200
Credit - $350

For the last month our account has been overdrawn by the time payday rolls around so we are left with maybe $1000 to pay bills. We have two children, a toddler & an infant. We have learned to budget each week with $50 - $100 for groceries but it's a challenge with diapers and formula. I know this is my fault, I don't need to be reminded a million times. But what I do need is any advice I can get on how to fix what we have done wrong. We are not big shoppers, we rarely buy anything for ourselves. As far as I can tell we have done a very very poor job managing our money. Hell, we're still paying on credit cards my husband had from at least 8 years ago.

HELP! PLEASE!

[PRICEPLUS]

Your husband brings in 1950.00 every two weeks for a total of 3900.00

Adding up your budget at the high end of utilities and groceries you are spending according to your figures 3925.00 per month. Additionally, your husband appears to have to pay for gas and is reimbursed at a later time. (At least that is my understanding.)


3900 comes in and 3925 goes out for a deficit of ( 25 ) plus gas money that has not yet been paid. So you have to make some changes. Where can you make cuts in your budget? In order to find ways to cut your spending go over this site as well as sites such as Dollarstrecher.com

Buy only that which you NEED to buy. You may have to make some sacrifices for a bit. Is there any way to increase income? From this point on if you can't pay cash you can't have it. ( Emergencies excepted.)

You can turn your finances around. I did. It will require sacrifice and hard work.

It is as simple as making cuts and trying to increase income.

[porkpistol]

First off, I will say I know this is my fault. Somewhere along the way I let one bill slip by and then it just spiraled out of control. My husbands income should be more than enough to cover our monthly living expenses but maybe breaking it down angetting mg advice from people on the outside will give me some helpful insight and find a way to get us out of this serious rut. I refuse to let my children suffer because my husband and I have mismanaged our finances.

Our bank account is overdrawn by $700.
We have a $500 cash advance from one of those terrible paycheck loan scam places, BIG mistake!
My mortgage has been paid late 2 months in a row.
My husbands truck payment is late, schedule to be paid on 9/5.
My SUV payment is a few days late, still in my 10 day "grace period."

Clearly we are a sinking ship. My husband brings home $1950 biweekly and also receives a check for gas but thay varies based on his travel. So we have seen checks as large as $850 & as small as $300.... It's been brutal not knowing how much we will be getting back. His travel for work is not predictable; some weeks he's traveling hundreds of miles every day, some weeks he only travels 50 miles a day.

A breakdown of our recurring monthly expenses:
Mortgage - $1200
Truck - $730
SUV - $590
Car insurance - $220 (this is for 3 vehicles, one is owned outright)
Utilities - $250 - $ 360
Cell phones - $175
Home phone, tv, internet - $200
Credit - $350

For the last month our account has been overdrawn by the time payday rolls around so we are left with maybe $1000 to pay bills. We have two children, a toddler & an infant. We have learned to budget each week with $50 - $100 for groceries but it's a challenge with diapers and formula. I know this is my fault, I don't need to be reminded a million times. But what I do need is any advice I can get on how to fix what we have done wrong. We are not big shoppers, we rarely buy anything for ourselves. As far as I can tell we have done a very very poor job managing our money. Hell, we're still paying on credit cards my husband had from at least 8 years ago.

HELP! PLEASE!

A couple things I would recommend looking into:

1. Sell at least one of your vehicles. Your total vehicle debt per month is about 33% of your husbands income. What is the vehicle that is owned? Could this be used to drive daily instead of the SUV or truck? If you owe more on the vehicles than they are worth, would it be possible to sell the vehicle that is owned to make up the difference when selling the other 2?

2. You sell one or both of the expensive vehicles your auto insurance will most likely go down, so that will help.

3. Do you need the phone, TV, and internet package? You have cell phones. Could you cut the package and use Netflix, hulu, etc. Or at the very minimum call your provider and discuss different package options. Our TV and internet package is $100 per month. I have corporate phone, but we have my wife's phone and a tablet for $90 per month. Those 2 together are less than your TV package alone.

You have quite a few options to try and save some money. Right now your current budget wouldn't allow you to allocate any extra money toward repaying debt. In my opinion you really need to try to get rid of one of the vehicles if not both.

Also, I assume you stay at home with your children. Would it be possible for you to pick up a part time job. One that you could work weekends or nights to allow your husband to be home to watch your children so you don't have to pay for daycare?

[dkbc14]

Thank you so much for your replies. I forgot to say that I am a stay at home mom, I have considered getting a part time job - I would actually like to work nights to help bring in some money. When I've mentioned this to my husband, he was not as interested in that idea as that would leave him to stay with the kids & have to wake up with the baby. He works 10-12 hour days & usually comes home exhausted, so I understand to an extent that he doesn't want to give up sleep but I sometimes feel he doesn't understand how much I sacrifice or how much weight is on my shoulders. Sorry, rant over.

Unfortunately he needs his truck for work. We could live without my suv - it's only a year old so I'm not sure how we'd be able to trade it in without being completely upside down. Having kids I would need at least a small car still, my husband travels out of town and we aren't close to any bus line. And the third vehicle, I hate. I have asked my husband to sell it since the day he got it. It has been a major point of contention between us. He thinks he needs a "hobby, something for him." And I get that... but why not something so large, expensive and time consuming? It's a turbo mustang with a manual transmission - completely useless to me with 2 small children & he couldn't use it to tow or haul anything for work with it. I'm thinking now that I've written this all down that this is a conversation that needs to be had, yet again.

The tv, internet & phone package; I've heard it's more expensive to separate but will call Comcast today to see what other packages would be more affordable. They are the worst at randomly increasing fees and adding "equipment rental charges" without letting you know when or why. I should probably just ask to speak directly to a manager to try and get something done with them. Thanks for that suggestion.

I really appreciate your suggestions. This debt and stress over money has been making me physically ill. I think a major part of that is that I take on this stress alone. My husband is stubborn & doesn't see things the way I do. He was raised poor & when he started making decent money he thought "I make good money, I shouldn't have to worry about how I spend it." And he has honestly said that before. Ugh. Sorry for complaining. Thanks again & I will start with a call into Comcast.

[Retired To Win]

Your Vehicle Situation HAS to Change

PorkPistol in his reply brought up the main comment I was going to make: you simply cannot afford the vehicles you have at your take-home income. That situation has to change.

Your vehicles are costing you $1540 a month, WITHOUT factoring in maintenance and repairs. Add that in and you are probably closer to $1800 a month for vehicles. You simply cannot continue doing that on less than $4000 a month take-home pay.

So here are some hard pills to swallow...

(1) Your husband may need a truck for work, but not THAT $730-a-month-payment truck. A decision to change it for something less expensive is necessary.

(2) You need a back up car for yourself and you have one -- in your husband's "hobby" Mustang (which I assume is paid for). So you need to get over being afraid of the car, your husband needs to teach you how to drive it so he doesn't go nuts about you driving it, and then you need to sell that $590-a-month SUV.

Like I said, hard pills. But taking those pills will lower your monthly nut by $800 or more and cure your financial situation.

Good luck.

[disneysteve]

Truck - $730
SUV - $590
Car insurance - $220 (this is for 3 vehicles, one is owned outright)

HELP! PLEASE!

I think your problems can be solved right here. These numbers are insane. First off, you have more cars than you have drivers. Sell at least one of them to get down to 1 car per driver.

Beyond that, though, the debt load is ridiculous. How much is owed on each vehicle and how much is each worth in a private sale according to kbb.com? Also how much is the paid for car worth? Give us those numbers and we can suggest how best to get yourself out of this situation. If you can free up a few hundred dollars per month by reducing your auto debt (and insurance charges), it will go a long way in solving your problem.

Also tell us how much is still owed on the credit cards.

[doingitallwrong]

when he started making decent money he thought "I make good money, I shouldn't have to worry about how I spend it."

Yeah, I thought that, too. Then one day I woke up and had $250,000 in unsecured debt. Trust me, you do *not* want to face that!

So we have seen checks as large as $850 & as small as $300.... It's been brutal not knowing how much we will be getting back.

Do these checks generally cover his gas expenses? I don't usually advocate credit card use for people with financial issues, but you don't seem to have credit card debt other than what your husband carried over from several years ago, which would indicate you aren't using them right now, which is good. Is it possible for your husband to use a credit card (separate from the ones you're paying on now) only for his work-related gas expenses? That would give you a little bit of a 'float' so that when the check comes in, you can pay off the card before any interest is due, and you aren't borrowing from yourself.

Obviously you'd still want to take the steps others have suggested to lower your monthly expenses. You might look into Ting for your cell phones -- a lot of people here use them and the rates are much, much lower (in the tens of dollars per month).

You are in a position where you can make some changes and get back on top of things before they become too bad, but if you can't get your husband on board it's going to be difficult.

[disneysteve]

Unfortunately he needs his truck for work.

Sorry. I made my post before I read this.

Okay. He needs A truck for work. Does it really need to be THAT truck? $730/month is a ton of money. How long is that loan? When will it be paid off?

We could live without my suv - it's only a year old so I'm not sure how we'd be able to trade it in without being completely upside down.

You would definitely be upside down but it may still be worth selling it (NOT trading it in) if you could get a small personal loan to cover the difference.

And the third vehicle, I hate. I have asked my husband to sell it since the day he got it. It has been a major point of contention between us. He thinks he needs a "hobby, something for him." And I get that... but why not something so large, expensive and time consuming? It's a turbo mustang with a manual transmission - completely useless to me with 2 small children & he couldn't use it to tow or haul anything for work with it. I'm thinking now that I've written this all down that this is a conversation that needs to be had, yet again.

You guys are running a deficit each month. That is not a sustainable plan. Sit down and show him the numbers. Does he know that payments are being made late and new debt is being used to finance your lifestyle including his "hobby" car?

The tv, internet & phone package; I've heard it's more expensive to separate but will call Comcast today to see what other packages would be more affordable. They are the worst at randomly increasing fees and adding "equipment rental charges"

Make sure you aren't renting any equipment that you could buy instead. For example, are you renting a cable modem? You can buy one online and own it outright for what you're spending to rent it for 4 or 5 months.

[bjl584]

The car loans are killing you. You need to dump one or both of the vehicles.

I understand that your husband needs a truck for work, but does it need to be one with a $730 a month payment? There are plenty of less expensive trucks out there that will probably do the job just fine.

[Bob B.]

My wife is a SAHM. We're about 10 years ahead of you in children's ages, and about ten years ahead of you in salary. When my kids were as young as yours, I made about the same as your husband.

Four years ago, we had a 24K CC debt problem. Joining this site, among other things, including fiscal discipline, helped turn things around.

You and your husband have made a choice that you will stay home and raise your children. As I had to figure out the hard way - that means you have also decided to live without certain luxuries. An extra hobby car is one of those things. And, car payments totaling $1,320 per month is another thing you have to live without.

Your car payments should not exceed 10% of your monthly take home pay - no more than $390 per month in your case.

I applaud your decision to stay home and raise your kids. But, as Dave Ramsey puts it - you and your husband have to act your wage.

[Eagle]

HELP! PLEASE!

Hi Dkbc14! Welcome to the forums.

Hang in there you can beat this. You've come to the right place.

1) Re: Vehicle situation
I agree with others you cannot afford your car payments. Option A: Your husband agree to sell off the mustang and the money is used to pay down one of your loans. Option B: You learn to drive the Mustang and sell your SUV. Option C: Sell husband's truck and get a smaller/cheaper/older vehicle. Or some combination of these options. I had a cousin who was in a similar situation. Her husband manned up and sold the fun car. He says today it was a good decision.

2) Re: Home Phone
You don't need a home phone. What are the contract terms for termination? You can't afford it right now. Get rid of that feature ASAP and use your cell phones. Do you get decent cell phone coverage in your area?

3) Re: Satellite TV
You don't need satellite TV. What are the contract terms for termination? Try to get rid of it ASAP. You can't afford it right now. Streaming Netflix only costs $8 a month. Amazon Prime costs about the same. Amazon Prime might be a better option see #5 below about diapers and other baby items.

4) Re: Budgeting
You haven't included in your expenses above what you guys spend on entertainment, what he spends eating out, what he spends on gas, the "toy" hobby of the mustang, etc. You haven't listed expenses such as what your husband spends each month on the "toy" mustang? Does he also eat out a lot? Consider tracking your expenses with www.mint.com

5) Re: Amazon & Diapers
You can sign up with Amazon Mom to save 20% on diapers a month. They also deliver it to your home. If you sign up for Amazon Subscribe and Save you can also get a discount when you purchase at least 5 items a month - think wipes and formula. I think it's a 15-20% discount.

6) Re: Debts, Balances, Interest Rates, & Minimum Monthly payments
Please list all your debts with balances, interest rates, and monthly minimum payments (truck, SUV, credit cards, etc.)

You can beat this thing. We will try to help you.

[DVDFreaker28]

I agree with everybody else, get rid of the cars, $730 and $590 a month is way too much money

[JulieAlbright]

I'm just going to note here that the OP is correct in that canceling services from Comcast often makes your bill go UP.

But, I think she is still way overpaying. She needs to call and get herself the package rates they are advertising for their new customers. My Comcast bill is $55 a month for the basic cable package (10 channels) plus their Internet Blast package. We don't even have the comcast tv box hooked to a tv because we use direct tv (which is $59 a month for Total Choice plus free NFL Sunday Ticket). But if I canceled the TV portion of that Comcast package, they would raise my bill by $10 a month. But my main point is, I actually have internet plus TWO TV packages and I'm paying nearly half as what the OP is paying.

Ridiculous I know, but that's Comcast for you.

The OP needs to get on the phone with the Comcast Customer Retention department and say … I've been out on the internet and I see people paying way less than what we are for these packages. I need these rates lower right now. Give them the SAHM poor economy eating rice and beans we just can't afford this spiel. Play it up big and they will likely find discounts to offer you.

OP, here are my bills for your comparison

Comcast (High Speed Blast Internet plus Basic Cable) - $55

Home Phone - $0. Google Voice.

Direct TV (Total Choice plus Sunday Ticket) - $59

4 SmartPhones, 2 with unlimited 3G Data and Unlimited Text and Talk, 2 With WiFi Data and Unlimited Text and Talk - $87 a month (Republic Wireless). Just a note here that we did have to buy the phones up front so that does account for some of the money savings.

So as you and your husband are wrangling over the car issue this week (and I agree with everybody else, Holy Smokes your car payments are higher than your MORTGAGE!) I think you need to get out your bank statements for the past couple of months and attack everything and find ways to get all the other payments lower.

[Bob B.]

If you're not familiar with the concept of Debt to Income Ratio (DTI), Google it, and learn about it.

Most personal finance advisers, and it used to be most banks and other lending institutions, recommend a DTI of 36% or less. Banks would not lend money if your new payment resulted in more than 36% of your income servicing that debt and existing debt payments each month.

Your monthly debt service is $2,870. Your monthly income is $2,900. Your DTI is 73.5%. In other words, with the amount of debt you're servicing, you would need an income of about $8,000 per month (8,000 X 0.36 = 2,880), or $96,000 per year.

There are only two ways to improve your DTI: increase income, in your case by about double, or decrease the amount of debt you are servicing.

Best of luck to you and your husband.

[Permanent Temp]

You are paying for more the cars than the mortgage does your husband know that? Is he okay with losing the house to have his toy car and almost $800 a month car payment truck?? Is there something special about the truck that he needs? Is it that it needs to be towing truck or something along those lines and is there a way he can get what he needs for work without spending that much money monthly?

The first thing you need to do is plug the holes. Sit down with your husband and show him the situation. He grew up poor but does he really want that for his children?
Putting all your debts on the table and listing them is a good way to look at the picture too. Payments are one thing but when you look at those thousands of debts numbers it might help to make him understand. Have you looked at that picture yourself?

For example listing it out as such:

SUV 28K at 5% monthly payment 500+
Truck 52K at 6% monthly payment 700+
Credit card 1 7000 at 29% monthly payment 70
Credit card 2 500 at 9% monthly payment 25
Mortgage 500K at 4% monthly payment 1200 etc
Payday loan 500 at 30% monthly payment x
Overdraft 700
Non mortgage debt: $88700
Debt including mortgage: $588700

Maybe if you list that out and he sees the grand total of debt including and not including the mortgage and a sum of utilities that might help him realize that your current set up is not working. He can't just think of himself here he has a family to think of. You two need to find a way to effectively communicate about this situation or it will never be fixed.

You also keep saying this is your fault but it’s not just you. He makes the money but you manage the household. He needs to be privy to how much money it takes to keep the household going and afloat. It doesn't sound like he gets the full impact of what is going on financially and you've been shouldering it for a while being unable to contribute financially. That is very frustrating. You need his help to make it happen; everyone needs to be on board. It's not as if you don't want him to have a good time with his money it’s just that as a household you currently only make x amount with you staying home and every last penny can't be spent on whatever he pleases. You have a roof over your head that you'd like to hold on to and children who need to be feed and clothed as well. He just has to cut back for a while so that the old debts can be repaid. And he has to be sensible and get a huge reality check about what is comfortably affordable given the current income. As others pointed out having that large of car payments is just not sustainable. I know people who make 100K a year and don't spend nearly that much on their car payments, if they have a car payment at all.

Talk to him again about you bringing in money at a part-time job. I get that he'd be waking up with the baby but what is that like 2-3 hours out of his day after a full night's rest? Also there are small things you can do now to earn money. There are phone apps that will give you money for scanning in receipts (takes a while but its money you wouldn't have had otherwise). You can get coupons for groceries easily and you can pick up a few mystery shopping jobs. This would bring it maybe $30-$50 a month depending on your schedule (most live shops won't let you bring kids along.) But at this point any little bit helps. See if there are any telecommuting jobs you could do that still allow you to care for the kids like being a virtual assistant.

Track all your expenses using Mint.com or something similar after a month you can have another meeting with your husband to show him what's going on with the numbers.

One thing if the 3rd car is a toy why is it insured? Does he drive it often? If he refuses to give it up outright you might need to just talk to him about a) letting you drive it so you can sell your car and afford the bills while still having a viable option for transportation so you can go to the grocery store or get the kids to the hosptal in case of emergency or b) you get a commuter car and he doesn't drive the toy on the road for a few months to save on the insurance for now so you can plug that $700 deficit and $500 payday loan ASAP. Maybe after not driving it for a while he will be more malleable about the discussion. In any event make sure you are getting all possible discounts on insurance as well and shop around for other cheaper options.

Is that $350 minimum payments on the card? If it isn’t cut that to minimums to immediately get rid of the overdraft hole and the pay day loan. Once you plug that hole try to put at least $500-$1000 in a savings account so that you can pull from that instead of pulling from payday loans and the overdraft.

As far as the SUV goes sell it ASAP. Go look to see its value see what you can trade it in for vs sell it for and get something else or use your husbands car if that works out. If he won't budge on the car thing the kids are little see what you can do as far as getting something smaller that a car seat can still fit into.

I'm sure you can figure out cheaper utilities just call around. Try switching to a cheaper cell phone plan and cut out Tv and the phone.

Also use Mint.com or whatever you choose to use for tracking expenses to budget for his gas expenses and pay them as a regular bill. You could then pocket that money to quickly build an emergency fund and or pay off debt. Don't rely on that money to boomerang back to cover expenses.

This is a trying situation but it is not impossible to get out of. Reason with your husband and start anew. It might seem like a sacrifice to him but make him understand that it pales in comparison to losing your home and/or filing for bankruptcy.