How do you start when you feel so overwhelmed?

[noppenbd]

I guess the next thing I need to tackle is the rental... (I'm still hesitant on the minivan... but baby steps)... if we sold the rental the HELOC would be gone too. But when I last talked to the realtor about selling, it would take $22K to sell and that is if we got our asking price. It could probably go for $250-$275K and we owe $226K on the first mortgage (we pay $1695/mo with taxes/PITI/insurance/etc)... well and then another $255/mo on the HELOC. Plus $20/mo on HOA fees, and $152.50 on the property manager. And we only charge $1525/mo in rent cause that is what the market is for the neighborhood and the house.

We have good credit so I don't want to mess it up on a short sale or anything... but don't know what to do... hence, we've kept the rental and just got by. I have a feeling if we got rid of the rental and even broke even we'd be a LOT better off just by doing that.

Honestly I would not worry about your credit score. You are in way too much debt as it is and do not need to be borrowing anything. If you can get out of the rental with a short sale consider yourself lucky. The way I read it you are losing $600 every month! And that is without setting anything aside for maintenance or vacancy! Adding future repairs and lost income due to vacancy you may be talking about $10K a year losses on this property.

Right now you owe $250K on the house. It sounds like you might be able to get that or slightly more if you got asking price. So I'm not sure how you are arriving at $22K in the red, even after commission. You should consider getting another opinion from a different realtor.

It is definitely a tough situation as you are selling near the bottom of the market. So there is no great solution. But you have to ask yourself, would you rather be $22K in debt with a ding on your credit score, or $250K in debt and losing $10K a year on your investment. I know it is very hard to let go of the college strategy but I think you have to admit it is not working.

[disneysteve]

(we pay $1695/mo with taxes/PITI/insurance/etc)... well and then another $255/mo on the HELOC. Plus $20/mo on HOA fees, and $152.50 on the property manager. And we only charge $1525/mo in rent

OMG. You are losing $597.50 each and every month that you keep that property. And that doesn't include any maintenance or repairs. And you call that an investment? You need to put that sale sign up ASAP and get out of that deal. Once it is sold, you will have that extra $600/month for other needs and debt repayment. By adjusting withholding, you could get up to $750/month, though probably a little less to avoid owing in April, so let's say $650 there, too. That's $1,250/month that you will free up or $15,000/year. That will do wonders in correcting your debt problems.

[AmbitiousSaver]

Ok, next question... since I just looked on the balances again and the total I owe is $249K now... I looked at the $22K the realtor quoted me and $15000 of that is commissions to realtors. So that is where the most of my problems start... and she listed the realistic selling price as $250,000 and $2500 in CCA. But listing at $259,900

But she quoted $22K loss when we owed $252K... so I guess I'm looking at $19K loss now. Question though is... where/how would I find the money to come up with $19K at closing if I got $250,000?

[Ima saver]

Do you have an emergency fund? You should have 6 months of expenses saved up. I would definately sell the house (rental) even if I had to take out another loan to pay it off at closing. I had 3 rentals and I had to sell them all for a loss, but not having that pressure on us was worth it.

[tripods68]

You can always shop for brokers that will list your house cheaper. There are several websites that will list your house for 1.5% - 2.0% or sell it on your own (FSBO no commission). When we bought our house, we asked our realtor to lower her commission and the buyer agreed (4% instead the usual 6%) so we can be within our price range. They gladly accommodated us. Tough times call for tough measures. Good Luck

[noppenbd]

But she quoted $22K loss when we owed $252K... so I guess I'm looking at $19K loss now. Question though is... where/how would I find the money to come up with $19K at closing if I got $250,000?

Talk to your local bank or credit union. With good credit you may be able to get an unsecured personal loan. The interest rate will be high but this should be one of the first debts you tackle so hopefully it will not cost you much as you pay it down quickly. You should also consider the short sale although if your HELOC is through a different bank than the 1st mortgage, the HELOC lender will likely not go for it (since they will end up with nothing). But don't assume that, after you put it on the market and start to get offers then you can talk to the banks about the short sale.

[Petunia]

Problem is... I keep wondering, what caused this... if I can't figure out - I can't figure out how to never get back into this. For awhile I thought, marital problems... we spent more when we were unhappy. No, can't be JUST that... not to this extent. And as much as I like to blame DH.... I realize, the problem is me.

He had it right all along... sit down at the beginning of the month with a piece of paper & write out everything, and then you can't go overbudget. But when we went thru marital counseling and I complained that DH wouldn't let me touch the money and he complained I wouldn't let him eat whatever he wanted in the house... the counselor suggested I take over the finances and DH could eat whatever he wanted in the house and we could "just buy more"

It also wasn't fair... DH had no idea of the finances to the point he has to call me to ask how he's going to pay for a tank of gas... meanwhile I resented the fact this burden was mine alone and he just had to come to me like a child asking a parent. That's probably where we also went wrong.... he'd bug me and bug me for this and that... saying how he was unhappy with the house, the car, the... whatever. So I'd resist and say no... but like a child the tantrum or unhappiness would stew... and I'm not a parent, I want to see my partner happy... so eventually I'd cave. How else do you get 15 cars in 8 years?

When DH gets home... we're going to go over it together... everything is going to be a joint decision now. Our finances will be on a piece of paper clear as day on the refrigerator & anything ANYTHING we spend will go on that.

I'm really in no position to give advice, but these two things jumped out at me. I also have a spouse who avoided dealing with money and our financial situation, and I let that go on for way too many years.

It sounds like you and your DH are now able to get together and work out a mutual plan for your benefit. I second the person who suggested Dave Ramsey. A lot of what he has to say seems to be geared to get couples to work together, and he has information on how to get that ball rolling.

Oh, and I also agree with the person who said your counselor was out to lunch.

While it seems overwhelming now, I have every confidence that your situation will improve. You're here and taking steps to make things better.

[Scanner]

I read maybe 70% of the posts. . .skimming by. . .but the one thing that struck me was you admitting to denying your husband $50 for a pair of shoes (which is on the high side of reasonable for sneaks, very reasonable for dress shoes). I consider this a request for an essential expense and then you dropped $50 on a Pampered Chef item, which like what. . .they charge $50 for a pair of salad tongs?

And then, the poor guy wants to make a peanut butter and jelly sandwich in his house and you deny him? What's that about? Would you rather eat every meal down at the diner?

I'd be frustrated too if I were your husband. . .I don't have the answer but I think the answer is a more of a psychological shift vs. a financial shift.

Sorry if this came across crass.

[noppenbd]

I read maybe 70% of the posts. . .skimming by. . .but the one thing that struck me was you admitting to denying your husband $50 for a pair of shoes (which is on the high side of reasonable for sneaks, very reasonable for dress shoes). I consider this a request for an essential expense and then you dropped $50 on a Pampered Chef item, which like what. . .they charge $50 for a pair of salad tongs?

I'd be frustrated too if I were your husband. . .I don't have the answer but I think the answer is a more of a psychological shift vs. a financial shift.

Sorry if this came across crass.

I agree that this sounds like a double standard, but I am guessing (correct me if I'm wrong) that this may come out of not having a clear plan, and alternating between panic ("We need to stop spending now!") and rationalization ("I work hard, I deserve it.") I think this can be solved by having clearly written and agreed upon goals. You may want to consider having some amount of fun money each month that is not accountable to the other person. It may take a little longer to pay off the debt this way but it will lessen the stress a lot.

[Scanner]

And I would set one boundary - don't go to those Pampered Chef, Candle, Basket, etc. Female-Spend-Your-Money-Under-The-Illusion-of-Socializing-Parties.

I am tired of my wife getting invited to "parties" where there is an implied social expectation to drop some coin.

Let's see how it goes over if I have a Power Tool Party with a keg and I invite DisneySteve and JimOhio over and I ask them to drop $70 for a rasp after I demonstrate how to use it.

Yeah, that will go over real well.

[Scanner]

You can see I am a real barrel of laughs with DW.

[AmbitiousSaver]

LOL Scanner... no trust me, I get your point. I know part of it is a psychological shift too... I'm kinda thinking most irresponsible spending starts that way anyway. The fridge thing though... to be fair... was 9 years ago when we FIRST got married. I'd buy things to make for dinner and then he'd get the "munchies" and start eating stuff I had planned to use for dinner. But ... I was 18 at the time and we were newlyweds. I don't do that anymore... yeah, sounds incredibly stupid to admit we started listening to that counselor 9 years ago and just never changed our ways till things got this bad.

But noppend had it right... I'll do the finances, panic and say we can't spend any money... then I get comfortable and am like "Oh we can afford this".... and I haven't completely let my husband go deprived.... he may lose the smaller ticket items more frequently, but when he guilts me long enough I tend to give in and when I do it tends to be for a lot. Thats how he got 2 motorcycles that we had to end up selling a year afterwards because we bought them when we couldn't afford them.

I win more often on the smaller/everyday ticket purchase items. But yeah, its time to end the double standard... and I told him that myself and he just looked at me like "Umm yeah, I've been telling you this for YEARS" Needless to say, I think we're both finally coming to a point in our marriage we are both realizing that we are both at fault.

Oh and I found out the HVAC does not need replacing in our rental, so I was excited that I could put that cash from the stimulus to paying down the CC... so now its down to $10K instead of $12500. Small milestone but I was happy about it

[maat55]

Thanks guys.... I just got off the phone with him and mentioned about the withholdings. Its amazing, I think for the first time we're both 100% on board that something has to change with the finances. Cause he'll come to me and ask me for a pair of shoes for $50 and I tell him we can't afford it, but then I go to a Pampered Chef party and spend $50... so I told him I recognize I have no accountability. But I mentioned the W4 like you suggested and he actually sounds willing to do it... just said he's worried about them not taking enough out in taxes and then having to owe at the end of the year.

How do we figure out what the right withholding amount is? I claim 2 and make around $40K, he claims 0 and makes $33K taxable income (but he gets like $20K additional in untaxed benefits from the military)... and we have a family of 6 now.

When his check is about 173.00 more you will be on track. Along with your debt you have a spending problem. When getting out of debt is your QUEST, you will look at spending 50.00 on shoes as horrible and so on. Between your savings and his extra pay you have 1400 more to pay off debt, not including the money you cut from your budget.

Remember this, when debt freedom is more important than petty wants, you will achieve it, happily. The day you stop looking at the want adds will tell you you are ready. Feel free to search for coupons that you need not want. Good luck.

[disneysteve]

Let's see how it goes over if I have a Power Tool Party with a keg and I invite DisneySteve and JimOhio over and I ask them to drop $70 for a rasp after I demonstrate how to use it.

I see two problems with that plan.

1. A rasp is not a power tool.
2. I don't drink beer.

Other than that, thanks for the invite.

[scfr]

This may sound like it's coming from out inn left field, but my suggestion is that instead of just randomly coming up with drastic ideas (sell the car! sell the house! stop eating!) you and your husband sit down and come up with a set of financial goals based on what you both want in the future, then come up with a plan of how you are going to get there.

If you don't have any idea how to do that, you may want to go together to the library and pick up a personal finance book geared towards couples that appeals to you both. [One to check out is Smart Couples Finish Rich ... And I would also suggest that you go to a bookstore and buy the workbook that goes with the book ... Even tho it would mean spending some money, it would be money well spent.] Then start reading the book together, share your thoughts, and come up with a plan. I think any plan you come up with the 2 of you together is much more likely to "stick."

Make a plan and work as a team.
Good luck!