Help With Budget!!!!!

[jIM_Ohio]

Whether looking at this from an asset standpoint, a debt standpoint or a cashflow standpoint, I think the OP needs to advise what he is willing to do.

He has negative equity on rentals... whether one or two rentals are negative, this problem needs a solution. Raise the rent, sell the rentals or similar.

He has huge cc debt which is $2600/month. WOW!. He needs to either get a second job to pay this down, have the rentals start generating a profit to pay down the OTHER debt, budget better (so the $2600 is increased to $4000 or more per month), or take on other significant steps to improve this problem.

Both problems need a finite, defined solution. The OP should not be looking for one solution to fix both problems.

[Snave]

CCFREEDOM,

You keep asking for advice and when you get advice you don't like, you seem to get upset. Again, YOU asked for the advice and people are wieghing in. There is no magic bullet to clear up your cc debt. The fact is that that you have so much coming in and so much going out. Short of you making more money (and a lot of it), the only way to cut your cc debt is to have less money going out so that it could go towards paying off this debt. Because you have so much money going out with mortgages (primary and rental), this is the logical place others on this board can look to try to cut costs. I am not trying to be mean with this question, but what kind of advice were you looking for? You are getting the most logical advice, it is just not what you want to hear.

[LivingAlmostLarge]

I agree with Disneysteve. What is your complete real budget? Are you making $11k or $15k net or gross?

What are all your rents coming in? Don't you have to pay taxes on it? What are you losing on each rental?

How much is your credit card and car debts @ what %?

I think it might be in multiple different posts throughout the thread but you've really lost me.

I also think $3800 is a lot of $11k but not so much of $15k, more in line almost 25%. So your income is a huge factor.

Also what savings do you have in case of emergencies?

No way I'd be carrying rentals without a six month buffer for each property.

[maat55]

The reason we conflict with your solution is because we are fixing it from a good business, non emotional view point. You are only coming from an emotional view point.

Many of us are prospering because we have learned to balance the emotion with good business sense. Until you learn to do this, you will struggle.

If you were to step back and look at your finances from a business aspect, with no emotional ties, you might be surprised at how easily you could render a positive out come. All these homes in the end are only assets. Eliminating and rearranging could fix your problem quickly.

In the big picture, you need a better plan to go by. Many here carry no balances on their credit cards and only PIF each month. If that were your mindset, what would you have had to do to not have 79,000 CC debt right now? I think most everyone here would not purposely own rental property that is a negative investment. Many here have an emergency fund of 3 to 6 months expenses. Many here live on less than they earn no matter what. Many here will only pay cash for a car, some will only finance 3 years or less. Some of us choose to live debt free.

These are all examples of a financial plan. Setting goals and staying within certain boundries, keeps us from the edge of bankrupsy. Only changing your mindset will change your outcome. Good luck.

[disneysteve]

Many here carry no balances on their credit cards and only PIF each month. If that were your mindset, what would you have had to do to not have 79,000 CC debt right now?

In defense of the OP (who I've been beating up on the whole thread ), most of us here are not small business owners. It is quite the norm for entrepreneurs to finance start-ups by maxing out their personal credit lines, whether it be credit cards, home equity or both. It may not be a good idea, but it is the way it is usually done.

[LivingAlmostLarge]

Actually DS, I have to respectfully disagree. I discussed extensively he wants to start up a business. If so it will be a LLC so we don't go bankrupt. Also we won't be financing our business on CC or HELOC. Either he gets financing or we use cash savings that is not our EF.

The point is to have a profitable business, but not drown while doing it. Lots of small start ups are great, but usually poor business skills sinks it.

Plus with security it makes it easier to run a business instead of constantly worrying how to make ends meet.

[scfr]

I've not read anything that led me to believe CCFREEDOM was angry at any suggestions presented here ... In fact, s/he has expressed thanks for all suggestions.

OP has also stated that s/he views real estate as their primary investment and they do not want to sell. That's not my cup of tea, and it may not be the preference of the majority of this board, but that doesn't mean it's wrong. No, investing primarily in real estate doesn't fit the standard 80% stocks & 20% bonds formula, but there is nothing wrong with having an unconventional approach.

Sometimes it seems as tho people come here asking for advice, and the board jumps on them so hard that they just disappear, so I applaud CCFREEDOM for sticking around!

I disagree that the rental properties are the main problem. As the wife of a small business owner and a former small business owner herself, it sounds like the problems started when OP started racking up CC debt to start up a business. Ideally, the start-up money and an ample amount of living expenses would have been saved up BEFORE the business was started. However, it's too late to close the barn door once the cows have escaped, hence my emphasis on working on a budget and trying to find a way to keep all the balls in the air.

CCFREEDOM, can you come up with a plan that would allow you to keep your primary residence, your rental properties, your business, and pay down your cc debt within a couple years? It may be doable.

If you crunch the numbers and cannot find a way to make it work, then you may have to give up something. But there's no reason to start running around madly, listing homes for sale or shutting down the business, without trying to figure out a way to avoid that.

[maat55]

In defense of the OP (who I've been beating up on the whole thread ), most of us here are not small business owners. It is quite the norm for entrepreneurs to finance start-ups by maxing out their personal credit lines, whether it be credit cards, home equity or both. It may not be a good idea, but it is the way it is usually done.

I keep forgeting that the CC debt is business related, but it doesn't excuse poor judgement on the rentals and some home expenses. I personally believe that before a person chooses to take on large business debt they should look inward and shore up their personal situation.

To clarify, I would sacrifice my home and use the equity for a business venture in place of credit. And I would have got rid of the rentals before hand also, so to scale down possible problems. Too many pans on the fire to keep up with.

OP seems to make a bad decission for every good decission, kinda needs to make a few good decissions for a while.

[disneysteve]

Actually DS, I have to respectfully disagree. I discussed extensively he wants to start up a business. If so it will be a LLC so we don't go bankrupt. Also we won't be financing our business on CC or HELOC. Either he gets financing or we use cash savings that is not our EF.

The point is to have a profitable business, but not drown while doing it. Lots of small start ups are great, but usually poor business skills sinks it.

Plus with security it makes it easier to run a business instead of constantly worrying how to make ends meet.

I don't think you are disagreeing with me at all. As I said, it isn't a good idea to finance a start-up with personal credit, but still it is a quite common thing to do.

[cptacek]

Could you go to a bank and show them your business plan (you have one, right?) and get a business loan from them to pay off the credit cards (only if the interest rate is lower)? It might take a few rejections but you might find one willing to finance you until you get on your feet, especially if the current business has any tangible property they could put a lein on.

I would sell the dream home and use the equity to clean up everything else, kick the people in the rental property out when their lease is up (even if they are good tenants...be a business person, not a charity case worker) and live in that house. I would then save up the money to make sure I could keep afloat for 2 years even if the business tanked. Then, save for retirement and then the dream house again.

[CCFREEDOM]

Thank you SCFR for your nice comments and no I am not upset at anyone. I asked for opinions and I am getting them. My type of business I can make anywhere from $12,000 to $15,000.00...cant really predict. I could sometimes make $3,000 in just one day.

Today I was able to pay one credit card and crossed that out of my list. It was for just $974.00..but nevertheless, I paid it. Since Friday, I've put away $400 in in my EF. Havent spent any extra money on anything except a few budget programs that are kind of worthless to me since I developed my own through Excell and I am able to write down all that I spend on a daily basis.

The end of the week I plan to pay off another bill for $765.00 and get that out of the way.

I am scheduled to make about $4,000 this week so I will pay all that I am scheduled to pay for this week.

Next month I will tackle another bill for $4999.00 just have to work really hard at getting some business to make that payment. Make extra calls to my present clients and see what other business I can generate.

I have another bill for the same amount and I am planning on at least paying 1/2 of it in September.

So I think that if I work at this aggressively and get from under these credit cards..I can think better about my income properties. I do have a plan and I intend to keep at it. There wont be any extras for me..but I will feel so much better when I am at least hafway through.

I know I can do this and I know some of you have done it with a lot of sacrifices.

I will continue to deposit into my EF fund each week.

I am paying $2600 in credit card payments each month. I plan on paying an additional $2,000 each month on them..I dont know how I am going to do it..but I will.

[disneysteve]

I can make anywhere from $12,000 to $15,000.00...cant really predict.

All budgeting should be based on the lowest anticipated income. If that is 12K, than that is what you should be budgeting for. Then, in months where you make more, use that "extra" income to pay down debt and build your EF, though mostly to debt.

Assuming income remains steady (or improves), you can have that CC debt paid off in under 2 years easily.

[LivingAlmostLarge]

So you have no EF for the rentals? I'd be nervous with a renter who isn't reliable, then I'd be more likely to sell.

[OverSaver]

It seems like you have a hefty load to deal with! There are a lot of options on clearing up your credit card debt. You could look into a debt consolidation loan.

It will be better to clear this up first because the economy is shakey and you don't want to get stuck in a rut.

[scfr]

Today I was able to pay one credit card and crossed that out of my list. It was for just $974.00..but nevertheless, I paid it. Since Friday, I've put away $400 in in my EF. Havent spent any extra money on anything except a few budget programs that are kind of worthless to me since I developed my own through Excell and I am able to write down all that I spend on a daily basis.

I'm not surprised to hear that. A little notebook for recording your spendings and Excel (or an old-fashioned columnar pad which is what I use ... It's the cavewoman version of Excel, used back in the day when there were not computers in every home) is really all you need as far as material stuff. The primary ingredients are the will and the plan, and no software program can provide those.

It sounds like you are off to a great start. Keep focusing on building up the business, tracking expenses & sticking to a budget, paying off the evil CCs, and building up an EF.

Try not to fret about the "extras" that you are missing right now ... The long-term goals (financial freedom & prosperity) are worth so much more than any latte, electronic good, pedicure, etc.

Hope you'll stick around and keep us updated on your progress. When you start looking for ways to trim expenses, I think you'll find lots of good ideas here.