Need advice on personal finance

[disneysteve]

Re: Need advice on personal finance

True and yes...Red flags waving here also. And yes, we do rely on his bonuses and if they would happen to stop coming in, then yes, we would be in big trouble!
I am trying to prepare for the worst case and get the debt paid off and save, save, save!

Not only do you need to get the debt paid off, but you need to lower your regular living expenses to match his base pay, NOT including any bonuses.

You are already on your way. Between the life insurance, the 529, and the cable tv, you will have cut spending by $180. In 5 months, the medical bill will be gone and reduce your costs by another $60. CC#3 will be gone in December to free up another $270. That's already $450/month less you will be spending by January. That will at least give you some breathing room if DH's bonus happens to be smaller this year. And assuming the bonus is the same, then the money can be poured into further debt reduction which ultimately lowers your monthly costs more.

The big problem is the need to live within the base pay.

I think you are on the right track.

[amberbamber]

Re: Need advice on personal finance

When I do get the cash payouts from all of the policies, what do you advise we do with it?

Put some in savings, and the rest on the CC's?

[disneysteve]

Re: Need advice on personal finance

When I do get the cash payouts from all of the policies, what do you advise we do with it?

Put some in savings, and the rest on the CC's?

I'd put it all toward debt reduction. You need to get rid of those credit cards.

[amberbamber]

Re: Need advice on personal finance

The CC's are from this house. It was a repo when we bought it. We've put almost $30,000. into it. Stupid, but again, a bad decision.

[amberbamber]

Re: Need advice on personal finance

I'd put it all toward debt reduction. You need to get rid of those credit cards.

Will do!

[greedy4chips]

Re: Need advice on personal finance

I also question how you got a mortgage based on $1200 biweekly take home checks. My bank would not consider bonuses as income, hence the term "bonus".

You have $45,000 in vehicle debt...that is insane too, but you already know that. Whatever you can do to get out of that lease HAS to be done. Your hubby could try to refinance his truck also to lower the monthly payment. This is only advisable if you understand that you must repay your loan asap after other debts are paid off, otherwise you end up paying so much extra in interest.

You and your hubby want a stable/reliable vehicle and a cell phone in case of emergencies. These feelings are quite understandable. However, you do not have the same level of stability with regard to your budget. A bonus is just as secure as a used vehicle in that it could be useless tomorrow.

Does your hubby read these postings?

1. [x] Drop whole life
2. [ ] Sell house
3. [ ] Get out of van lease
4. [ ] Pay off/transfer CC#2
5. [ ] Pay off DH's truck
6. [ ] Pay off 8.8% student loan
7. [ ] Pay off other CCs and transferring balances to 0% before promotional periods end

Sale of the house will net you 15k max after realtor fees and paying off mortgage. Cashing out whole life policies will net ???. Bonus will net you 35k if/when you get it...exactly when do you hope to get the bonus??? Total net possible = $50 - $52k

You have $68000 in debt if you can replace the van with a $3000 vehicle and a $5000 loan...consider another 0% CC for the $5k loan. The 68k comes from all debt minus the van plus a different vehicle loan.

So you are really only $13k short. Very doable in the next year (after the sale of the house) if you have a rock solid budget!!!

I figure $680 for monthly bills you have listed minus the whole life policies and 529 + $800 rent + $400 food + $250 gas = $2130 in payments.

Income is $1200 biweekly (does this mean 26 paychecks per year or does he get paid twice a month on the 1st and 15th, which is only 24 paychecks per year and $2400 less/yr)

I am going to assume he gets paid every other friday. This means you get 1 extra paycheck per month 4 times per year an additional $400/ month if properly budgeted. So your hubby brings home $2800/month in this scenario...$1200 + $1200 + $400.

$2800 - $2130 (payments) = $670/month for debt repayment.

Could you increase your income by doing daycare/babysitting for friends. I know you have 3 kids under 4 but 1 additional kid for 8 hrs a day ($100/wk) would be a great extra to help your budget.

My personal favorite...donate/sell plasma. Deliver pizzas on the weekend when the DH can watch the kids.

I think you will be debt free within 1 yr of selling your house if you stick to a plan!

[greedy4chips]

Re: Need advice on personal finance

I will not be made to feel guilty.

Don't feel guilty! You haven't done anything that a hundred million others haven't done or will do in the next couple years.

Many here have been in worse situations financially. We all want the best and believe it will work out in the end, but bad things do happen and realizing your mistakes and FIXING them is what is key.

You should only feel proud of yourself at this point, since you are obviously making the effort to get things figured out and headed in the right direction.

[Ima saver]

Re: Need advice on personal finance

So you really only have $600 a week to live on, that is tough for a family of 5. It is impossible to have a $30,000 plus price car, on only $600 a week. You must learn to live on $31,000 a year, not $95,000! When you get your bonus, you need to pay off as much debt as you can. What does he do to get a $35,000 bonus! Plus, that is still only $66,000 a year in earned income.

[greedy4chips]

Re: Need advice on personal finance

So you really only have $600 a week to live on, that is tough for a family of 5. It is impossible to have a $30,000 plus price car, on only $600 a week. You must learn to live on $31,000 a year, not $95,000! When you get your bonus, you need to pay off as much debt as you can. What does he do to get a $35,000 bonus! Plus, that is still only $66,000 a year in earned income.

That is all after taxes, which I am sure the bonus gets killed by the taxman. That is why I think they need to look at the income tax refund for additional income.

[amberbamber]

Re: Need advice on personal finance

I also question how you got a mortgage based on $1200 biweekly take home checks. My bank would not consider bonuses as income, hence the term "bonus".

We did have good FICO scores before the house. Around 745. And it's Bank of America...????

You have $45,000 in vehicle debt...that is insane too, but you already know that. Whatever you can do to get out of that lease HAS to be done. Your hubby could try to refinance his truck also to lower the monthly payment. This is only advisable if you understand that you must repay your loan asap after other debts are paid off, otherwise you end up paying so much extra in interest.

I agree it is insane...my husband's truck payment is $100 a month. When we lived in Indiana we took a HELOC out on our house there and paid half of his truck off...which in turn made our next payment due in December of 2008. So, right now we do not HAVE to pay any payment, but I always send in $100 a month to keep paying it off.

Does your hubby read these postings?

1. [x] Drop whole life
2. [ ] Sell house
3. [ ] Get out of van lease
4. [ ] Pay off/transfer CC#2
5. [ ] Pay off DH's truck
6. [ ] Pay off 8.8% student loan
7. [ ] Pay off other CCs and transferring balances to 0% before promotional periods end

No, but I tell him about all of them!!!!!

Sale of the house will net you 15k max after realtor fees and paying off mortgage. Cashing out whole life policies will net ???. Bonus will net you 35k if/when you get it...exactly when do you hope to get the bonus??? Total net possible = $50 - $52k

Cashing out the policies will get us almost $3000. Bonus will arrive in Jan.

My personal favorite...donate/sell plasma. Deliver pizzas on the weekend when the DH can watch the kids.

I am selling books, taking on kids after school, selling our gently used kids clothes, having yard sales, hubby is getting extra jobs on the side, we are going to start recycling aluminum cans for money. I will see about selling plasma in our city! Thanks!

[amberbamber]

Re: Need advice on personal finance

Don't feel guilty! You haven't done anything that a hundred million others haven't done or will do in the next couple years.

Many here have been in worse situations financially. We all want the best and believe it will work out in the end, but bad things do happen and realizing your mistakes and FIXING them is what is key.

You should only feel proud of yourself at this point, since you are obviously making the effort to get things figured out and headed in the right direction.

THANK YOU!

[disneysteve]

Re: Need advice on personal finance

Amber - Can you clarify the van lease? Do you actually still have $30,847.80 in payments remaining, or is that just the original purchase price on which the lease payments were based? If your monthly payment is $435, you would be paying for nearly 6 more years for payments to total that much. That doesn't sound right to me.

How many actual payments remain in the lease term?

Speaking of the lease, I don't know the details but I know I've read about companies that will buy out your lease or find a new owner to take over the lease for you. You might want to look into that route as a way to get out.

[creditcardfree]

Re: Need advice on personal finance

You stated you don't have to make a payment on your DH truck until 2008. I think I would use that $100 to put in my snowball on debts. I would list the debts smallest to largest and just snowball it. I think you said you were putting $270...why not make it $370? Obviously, the return of your whole life premiums will put a big dent in things in those debts!!

I would be careful about using another company to take over my lease...so many things could go wrong...since the original contract would still be in effect. That needs to be terminated to be free of any obligation.

Just my thoughts.

[amberbamber]

Re: Need advice on personal finance

[QUOTE=disneysteve]

Amber - Can you clarify the van lease? Do you actually still have $30,847.80 in payments remaining, or is that just the original purchase price on which the lease payments were based? If your monthly payment is $435, you would be paying for nearly 6 more years for payments to total that much. That doesn't sound right to me.

That is correct, it's the original purchase price on which the lease payments were based.

How many actual payments remain in the lease term?

60 more payments. We leased it for 72 months. And we've had it for exactly one year.

In going over all this with my Dh last night. He is unwilling to turn in the van for a used vehicle under 10,000. Not sure if that would really save us much to pay $5000 and then another $10,000 on a loan for a car. He would rather lease the van and save to pay cash when we go get our next vehicle in 5 years. This is going to have to be our compromise because he is not willing to get rid of the van.

His reasons are somewhat valid. He wants me to be safe driving with our three young children. He isn't always available say if something were to break down on the side of the road, he couldn't rush to us and help me. So I'd be stuck with 3 children. Plus we take trips back home almost every 3 months (to Indiana from North Carolina) so we need a reliable vehicle to get us back and forth.

I guess I need to save for the over mileage and other things regarding the vehicles.

[amberbamber]

Re: Need advice on personal finance

[QUOTE=creditcardfree]

You stated you don't have to make a payment on your DH truck until 2008. I think I would use that $100 to put in my snowball on debts. I would list the debts smallest to largest and just snowball it. I think you said you were putting $270...why not make it $370?

Normally his payments are around 569.00...this way if I can keep ahead of it then this won't bite me in the butt when it comes around due. We're still paying 5% interest on this...so I kinda feel like I'm paying this down too, even though it's little by little.

Obviously, the return of your whole life premiums will put a big dent in things in those debts!!

Hopefully we'll have at least $3000 to put towards the debt. Meaning that CC#3 will be almost paid off!