employment break and again cc debt went back up..

**noppenbd** · 02-10-2009, 11:44 AM

FoolfromAZ,

You have posted a number of times with pretty much the same info, last time you were given a number of suggestions to reduce your expenses and you did not heed them. Will you listen this time?

Easy things:

-Reduce or eliminate cable (watch more Netflix instead)
-Don't pay someone to clean your house or maintain your yard
-Buy your own pest control supplies
-Cut back on beauty parlor
-Wash your own car
-Don't spend as much on eating out/entertainment

Radical:
-Sell car and buy used

If you are willing to go radical, I would suggest temporarily stopping the 401k (even though you lose the match) since your credit card debt is too high. You do not seem concerned about your CC debt, but my feeling is until you change your lifestyle you will never be able to eliminate it. Remember, CC companies can change terms at any time for any reason. If you do all of the above, I bet you could get to nearly $3K a month to hit the CC debt with.

**ceejay74** · 02-10-2009, 12:01 PM

I would cut housecleaning and landscaping and try to take care of those yourselves as best you can. Don't know what Cox and SRP are. Cut Netflix down to one movie at a time: $9.65, or cut it completely. If Gerber is health insurance, OK, but if something else, cut it. Don't know what HOA is. Cut back on beauty parlor; I get a nice haircut for $15 every five weeks and I'm a girl. Don't know if it's cheaper to wash your own car but I imagine it is. Cut all that and you have about $185. If any of the three I don't know are cuttable, even more.

Good luck!

**jIM_Ohio** · 02-10-2009, 12:26 PM

Originally posted by FoolFromAZ View Post

first and second mortgage, tax/insurance - $2000.00
car payment +auto insurance - $ 700.00
CC min payment - $ 700.00

Cox $67.56
House Cleaning $65.00
SRP $100.00
Utilities $60.00
Gas $100.00
Pest Control $17.50
Landscaping Maintenance $20.00
Netflix $18.37
Day care $700.00
Cingular $60.00
Gerber Insurance $19.08
HOA $58.00
Beauty Parlour $82.00
Car Oil Change/Maintenance $20.00
Car Wash $10.00
Car fuel $175.00
Groceries + Restaurants + Entertainment + Medical $800.00

Total = $6515

I have only $1500 left to pay off the debt every month.

my wife is contributing $360 every payperiod to 401K to get the match $120

I am not contributing anything to 401k as i dont get the match.

we have around 14K in 401K and roth ira.

any suggestions or advice?

Yes- the most important advice I can give you is to take some of the advice we give. I agree with prior poster that it does not look like you heeded the advice given before.

Money will control you until you learn to control it.

The red items above need to be justified (IMO)- you could eliminate each of them and probably save close to $440 per month. If you are serious about getting out of debt, this $440 can drop your debt by $5k in one year.

Is the day care paid pre or post tax (the blue item). If paying this post tax now, I suggest looking for an equivalent which gives you a tax deduction- this will save you another $2100 in taxes for 2009.

It's wierd seeing health care lumped in with groceries. Eat or go to hospital? HMMMM. No entertainment should be used until you are out of debt.

IMO you should look to be debt free in 2 years (Feb 2011). That means coming up with 2k per month to pay into the debt beyond the minimum payments. If you are not willing to take bold action, then the debt will control you for a long time.

**FoolFromAZ** · 02-10-2009, 01:02 PM

Thanks for the response guys.

COX is for home telephone and internet. I dont have cable. I had dish network earlier, then I have disconnected that service. I have taken netflix for that. currently I have 3 movies at a time plan.

SRP is for electricity.

House cleaning, landscaping, beauty parlour.. I have put the amount in the list. but most of the times we have been doing it ourselves.

in the sense, house cleaning we have been doing for the 6 months, but this month we had to call.

landscaping - I did that myself for few months, but somehow it did not work out well.. so we had to call landscape guy to do it this month. got notice from HOA that they saw some weed..

beauty parlour - my wife feels she needs it. she did not go to parlour for nearly 3 months tho.

weekdays we start at 7 in the morning to work and by the time we reach home it wud be around 7 pm. so its not possible to do anything during the weekdays.. during the weekends we are busy cooking food for the week, laundry, going to friends place, etc.,

daycare expenses, we will put that as part of expenses when we file tax returns. we hardly eat out. maybe once in 2 weeks. my daughter gets sick very often as she goes to the day care. every month we spend average of $150 to $200 towards copay, medicine, etc.,

entertainment, we go out for movies once in a month. we take our daughter out for some children event,etc., so average around $100 per month.

gerber insurance is for my daughter. she will get $30K for education when she turns 20. we dont want to stop that.

cingular cell phone service, we downgraded from $90 per month to $60 per month. we cant go any further down.

car wash, like house clearning.. i do it most of the times myself.. I have to remove that from the list i guess.

**DebbieL** · 02-10-2009, 01:10 PM

I agree with the previous advice. I also find it odd to have a budget line with groceries, restaurants, entertainment and medical. What does medical have to do with groceries? This makes it hard to see how you break out that $800, but I suspect there is plenty of room to lower this amount.
I would figure out how much grocery money you need monthly (and I mean packing lunches for work and cooking almost all meals at home) and make that a line item.
Restaurants - well, nobody is perfect (most of us aren't anyways), so I'm not going to tell you to NEVER eat out, but I would drastically cut this down and avoid it when possible. This would be a separate line item for me (and I would try to keep it very small).
Entertainment - many things are cheap/free. I would seriously look for hobbies that can be done for free. I jog, ride bicycles, play guitar, walk, read books, etc. All of which (besides a good pair of runners every year or so and the guitars which my parents bought me over 20 years ago) cost me nothing. The other good part about these activities is that they keep me very fit. Get together with friends to play cards or games or something. Fun and cheap.
Medical - I think this should be its own line item.

**FoolFromAZ** · 02-10-2009, 01:29 PM

here is the breakdown

entertainment - $100
medical - $150
restaurant - $100
Groc - $400
misc expenses - $ 50

**ceejay74** · 02-10-2009, 01:51 PM

Sounds like you've cut what you comfortably can. Well, if you're consistently putting $1500 per month toward the CC ($1600 some months that you skip landscaping/beauty/car wash), and there's a certain amount being paid off in the $700 monthly payment, you'll make good progress. One thing that should be easy to do: when that $700 bill begins to decrease because of decreased principal, pretend that it didn't. Keep paying $700 as your minimum and $1500-$1600 extra. You'll snowball and pay a little more each month. Keep a spreadsheet so you can watch your progress--it will be encouraging.

Try coming up with incremental ways to make money that don't take a lot of time or effort--go through your DVDs, CDs and books, and list the ones you can part with on Half.com or eBay.

And Keep Track of Your Budget! Your expenses will creep upward without your noticing if you don't. I track mine daily, to the penny. It's the only way I'll learn.

**neatdesign** · 02-10-2009, 03:21 PM

Originally posted by FoolFromAZ View Post

House cleaning, landscaping, beauty parlour.. I have put the amount in the list. but most of the times we have been doing it ourselves.

With your level of CC debt, you should be doing these things ALL of the time, not most of the time.

in the sense, house cleaning we have been doing for the 6 months, but this month we had to call.

Why did you HAVE to call? If there was a flood or massive mold or some other catastrophe that required professional clean-up, that's one thing. But there is rarely a reason that someone HAS to have a maid service come and clean the house. This is a want, not a need. (Eliminate $65/month = $780/year savings)

landscaping - I did that myself for few months, but somehow it did not work out well.. so we had to call landscape guy to do it this month. got notice from HOA that they saw some weed..

I'm sure there are some teenagers in your neighborhood who would be happy to do your lawn for a fraction of what a professional landscaper would charge you. See if you can find someone to do this for 50% less than what you're currently paying. (Eliminate $18.75/month = $255/year savings)

beauty parlour - my wife feels she needs it. she did not go to parlour for nearly 3 months tho.

Again, this is a WANT, not a NEED. If she has a medical condition which requires her to have a professional put a wig on her or apply specialty make-up because she's a burn victim or something similar, then a monthly visit to the beautician would be justified. Otherwise, she needs to find ways to do these things on her own for less; Hair Cuttery does women's haircuts for around $20. (Eliminate $62/month = $744/year savings)

we hardly eat out. maybe once in 2 weeks. ($100/month) ... entertainment, we go out for movies once in a month. we take our daughter out for some children event,etc., so average around $100 per month.

Having fun is a necessity, actually -- it keeps us all sane. However, you're spending $200/month on entertainment. There are lots of things that you can do for free or for very little money. You need to be creative and perhaps join forces with your friends' families to think of new things to do for less money. Eating out is a luxury -- you're paying someone to cook to order and clean up for you. Spending so much on entertaining and eating out when you have so much debt calls for you to cut back. Make it your goal to cut back by 50%, at least for the short term. (Eliminate $100/month = $1200/year savings)

car wash, like house clearning.. i do it most of the times myself.. I have to remove that from the list i guess.

Yes, definitely remove it from the list! (Eliminate $10/month = $120/year savings)

If you add up all those amounts that I suggest cutting out, here's what you'd save:

Eliminate $255.75/month in spending = $3,069/year SAVINGS

Please know that if this sounds harsh, it's only because I'm hoping you'll see that there is SO much more you could be doing to help save and/or pay down your debt more quickly.

~ Jenney

**jIM_Ohio** · 02-10-2009, 03:27 PM

If you are spending $150/month on health care ($1800/year), I would do a few things:

1) try to get this money pre-tax using an FSA or HSA
2) consider switching health plans (an HDHP might be cheaper)
3) How much do you pay for employer health insurance?

My wife and I work split shifts and still manage to watch twin infants, get all the household stuff done, and react to the HOA complaints about weeds and similar. Manage your time better and it will save you money:

no more landscaping
no more housekeeping

Another issue you have is "how deep a hole are you digging or avoiding"? I see a light at end of car payment tunnel- when the $700 car payment is freed up you should also have the cc debt eliminated with $2200 coming into the budget (more than 25% of take home).

You do not have an income problem, you have a significant spending problem. Cut back and make sure the debt whole does not get bigger (instead of taking on another 10k in debt, consider eliminating costs like daycare, landscaping, beauty and similar). Keep the hole from getting deeper and you might find its easier to get out of the hole.

**jIM_Ohio** · 02-10-2009, 03:28 PM

Originally posted by neatdesign View Post

With your level of CC debt, you should be doing these things ALL of the time, not most of the time.

Why did you HAVE to call? If there was a flood or massive mold or some other catastrophe that required professional clean-up, that's one thing. But there is rarely a reason that someone HAS to have a maid service come and clean the house. This is a want, not a need. (Eliminate $65/month = $780/year savings)

I'm sure there are some teenagers in your neighborhood who would be happy to do your lawn for a fraction of what a professional landscaper would charge you. See if you can find someone to do this for 50% less than what you're currently paying. (Eliminate $18.75/month = $255/year savings)

Again, this is a WANT, not a NEED. If she has a medical condition which requires her to have a professional put a wig on her or apply specialty make-up because she's a burn victim or something similar, then a monthly visit to the beautician would be justified. Otherwise, she needs to find ways to do these things on her own for less; Hair Cuttery does women's haircuts for around $20. (Eliminate $62/month = $744/year savings)

Having fun is a necessity, actually -- it keeps us all sane. However, you're spending $200/month on entertainment. There are lots of things that you can do for free or for very little money. You need to be creative and perhaps join forces with your friends' families to think of new things to do for less money. Eating out is a luxury -- you're paying someone to cook to order and clean up for you. Spending so much on entertaining and eating out when you have so much debt calls for you to cut back. Make it your goal to cut back by 50%, at least for the short term. (Eliminate $100/month = $1200/year savings)

Yes, definitely remove it from the list! (Eliminate $10/month = $120/year savings)

If you add up all those amounts that I suggest cutting out, here's what you'd save:

Eliminate $255.75/month in spending = $3,069/year SAVINGS

Please know that if this sounds harsh, it's only because I'm hoping you'll see that there is SO much more you could be doing to help save and/or pay down your debt more quickly.

~ Jenney

good post
excellent advice

employment break and again cc debt went back up..