Can't take all this debt...help!

[neguy11]

Alright, this is very embarassing, but I need help! I am college educated, but I have gotten myself into deep debt due to my stupidity and recklessness. All I can think about anymore is this debt debt DEBT! It is making me sick. I'd like any tips, ideas, or advice you have. Oh yeah, I am a single male in my 20's willing to do just about anything, except drop my internet access. I absolutely positively refuse to do that! But other than that I'm open to ideas. Ok this is kind of long, but I want to give you all my information, I am warning you it's not too pretty:

Assets:
$2600 retirement as of 1/9/09 (401k)
$1800 health savings account

Income:
$970 first two weeks
$970 second two weeks
$1940 Total Income (after taxes, health insurance, dental insurance)

Monthly Expenses:
$620 Rent (lease expires April, can renew w/o increase, no roomates allowed, live in Jax, FL)
$200 Car payment (22 months left)
$73 Cell Phone (only phone, no home phone)
$30 Internet
$75 Electric
$55 Private Student Loan 1 ($2600 @ 5% fixed)
$62 Private Student Loan 2 ($7400 @ 4% variable)
$62 Private Student Loan 3 ($13770 @ 4.25% var; estimate pmt incr to $110 in March)
$1177 Total Expenses

Minimum Credit Card Payments
$145 Credit Card 1 ($9700 @ 17.99%)
$136 Credit Card 2 ($8475 @ 18.99%)
$136 Credit Card 3 ($6625 @ 1.87%; estimate pmt incr to $180 in May)
$50 Credit Card 4 ($2400 @ 11.24%)
$467 Total Credit Card Payments

$296 left over each month for food, household products, gas, entertainment. Monthly budget is:

$80 food (pasta, oatmeal w/ skim, frozen veggies, chicken, soup, whatever fruit is on sale)
$20 household goods
$40 gas (actually have $60 in gift cards so should't need this in budget for next 2 months)
$20 entertainment (2 movies / month)
$136 left to make extra credit cards pmts.

The above numbers are all based on what I've done so far:
1. Stopped tithe (sorry God!)
2. Shredded all my credit cards and vowed to NOT USE THEM ANYMORE!
3. Stopped 401K contributions (I was putting in 5% of gross income)
4. Stopped $30 biweekly contribution to HSA (have $1800 in account; insurance deductible is $1200)
5. Cut back internet to 768k per month (was $53 per month; now $30 per month until July when modem is paid for, will be $19.95)
6. Stopped cell phone insurance plan (was $7 per month)
7. Shaved my head (no more haircuts)
8. Saving on electricy as much as possible: not using heat or AC, unplugging all appliances when not in use, etc.
9. Didn't renew magazine subscriptions
10. Cancelled Netflix

Future problems/expenses:
1. Private Student Loan 3 is currently in grace so pmt is interest only. When loan goes into repayment in March, I estimate monthly payment at $110 pery month (15 year term)
2. Credit Card 3 is a 1.87% balance transfer; interest rate will increase to Prime + 17.99% in April, new payment will be an estimated $180 per month.
3. In April, my car insurance will be due again....last time I paid in full, but when I renew in April I will pay it monthly. I expect it to be $120 per month.

I'd like any ideas you have for how I can improve my situation. It's all my fault, I was stupid and reckless, but I am vowing to stop using credit. I know my monthly budget is extremely tight, but I view it as a challenge. I already eat lights meals and am willing to eat lots of pasta if it means getting out of debt.

Ok here are my main questions:

Until my expenses increase, which debts should my $136 extra each month go to?

I'll be getting a $500 pre-tax moving expense bonus from work next week. I also expect a tax refund of a few hundred and a bonus from work of a few hundred. As much as I want to put all these extras right towards a bill, part of me wants to put it into a savings account since my monthly expenses will be increasing in the future and I want to be sure I'm able to pay all the bills in case my estimates are wrong. What should I do?

Also, Credit Card 4 has a limit of $2500, so almost maxed out, but I also have a balance transfer offer of 4.99% interest for life...so would it be in my interest to put as much extra to credit Card 4, then use the check towards one of the higher interest cards?

I work 8-4 M-F and am looking for a weekend/evening job. I already submitted an app for a movie theatre. Any other ideas?? Legal that is I'm also planning to sell some books/DVD's on Amazon.

[LivingAlmostLarge]

Won't the $136 be eaten up by your car insurance soon?

[neguy11]

Correct, so I want to make sure that extra I'll have for the next few months goes to whatever is most beneficial. Maybe I can get a lower rate on the insurance or decrease my coverage. Here is what I currently have:

BODILY INJURY & PROPERTY DAMAGE LIABILITY
BI $50,000 EACH PERSON - $100,000 EACH ACCIDENT
PROPERTY DAMAGE LIABILITY - $50,000 EACH ACCIDENT
COMPREHENSIVE ACV LESS $500 DEDUCTIBLE
COLLISION ACV LESS $500 DEDUCTIBLE
RENTAL REIMBURSEMENT $30/DAY FOR MAX OF 30 DAYS
UNINSURED MOTORIST NON-STACKABLE
$50,000 EACH PERSON - $100,000 EACH ACCIDENT
EXTENDED PERSONAL INJURY PROTECTION
$10,000 LIMIT $1000 DEDUCTIBLE
NAMED INSURED ONLY

[maat55]

Your a prime candidate for a second job and to read The Total Money Makeover by Dave Ramsey.

Cut up your cards, get rid of the cell, find a second job. These are possitive ways to better your situation.

[neguy11]

Do you know if I cancel the cell phone, can I port the cell phone number a to prepaid cell? I know I can't port it to a land line because it's a different area code.

[Fizgig]

Yikes that's a tight budget and I can't imagine eating on $80/mo.

Perhaps you can lower your cell phone plan - mine costs $35 with Sprint and is also my only phone.

Is your car worth more than you owe? If so, maybe you can sell the car and use the proceeds to buy a $1000-1500 beater for cash. Any extra profit could go towards debt, and you could also get cheaper liability only insurance.

I agree with you that you need a second job, or a higher paying one. Your income will not support your debt level.

Are there cheaper apartments available, or perhaps you could rent a room/garage apartment? Often the utilities are included.

[neguy11]

Thanks for your responses.

I am working on finding the second job. I'm working some overtime this weekend at my current job so that will help. I've been listing some books/DVD's on Amazon and have sold some already.

I will look into a cheaper apt and cheaper cell phone.

[jIM_Ohio]

SL1 or CC4 could be paid off before April. The tax refund may aid this- this should help with car insurance.

$120/mo for car insurance is high, I think. Can you lower it?
Which months have 3 paychecks? Use the third to pay off car insurance, then the other to pay down a debt.

[creditcardfree]

You have done a good job cutting your expenses thus far. I would shop around for better car insurance. Your deductible amount is about right, if you had more in savings I might suggest a $1K deductible...but that's too risky right now.

Since you will be working a part time job, maybe the $20 for entertainment could go to the payoff too.

I would start with CC 4, it has the lowest balance. All extra money should go there. Keep paying the minimums on the other cards and loans.

Are you eligilbe for any deferrments on the student loans? That would help for awhile.

I think it would be okay to put some (1/2) of the money aside in savings until you find a part time job. I say this because it is most important to keep paying the payments on time when possible.

You really must find part time work. Sign up for surveys. Save your change. Sell anything you can legally get your hands on.

Good job realizing where you are and doing something about it. That's great!!

[pearlieq]

It sounds like you're doing a good job getting a handle on this!

As everyone else has said--2nd or 3rd job! Anything at all--you're not too proud at this point. The job at the movie theater isn't a bad idea--extra income and free movies, which, evidently, you enjoy a lot.

As long as you're current on all of your bills, I would take any extra money and put it in a savings account. You'll need at least $1000-$1500 to cover any little crises that pop up.

After that, start in on paying down your debt. The second job will help for both income and for keeping you too busy to be out spending money.

Good luck!

[cptacek]

also, take any opportunity to make a little money on the side. Shovel snow for the neighborhood. Mow lawns during the summer. Any special skills? Apply to work at Walmart in the evenings. I hear they are booming right now. Can you ref at a YMCA?

[Goldy1]

My single male friends spend and spend and don't think let alone write down an action plan. it ticks me off too. It's like too boring for them. Don't get crazy and spend too much on dating women either .

[red92s]

What did the $28,000 in credit card debt go to?

You have identified that there is a problem, and realize you need to correct it, which is usually one of the most painful steps in this process.

[anonymous_saver]

(1) Restart your 401(k) contributions as soon as possible! Only up to your employers match though. Seriously do this, this is free money. Think of it this way, would you rather pay 19% interest on a credit card, or get a 50% match on your 401(k) investment.

(2) I'm farily confident you could get a cheaper phone. Good job on not having a cell phone and land line though.

(3) What about pets, going out to eat, birthday gifts, or random extra costs that come up, how do you pay for these kinds of things.

(4) This one is gonna be the hard one. With that much credit card debt, I see no way out of this situation any time soon, UNLESS you sell your car. Apparently there is a decent transit system where you live Welcome to JTAFLA. Would you consider this option? If you did this combined with getting a roommate, you could definitely cut down the time it will take you to pay your debt off.

(5) I would actually INCREASE your food budget just a bit. I'd be concerned that with spending only $80/month on food, that you are probably missing some area of nutrients that you should be eating.

Let us know what you plan on doing! Good luck!

[ktmarvels]

Hey, nice to see another Jax person here! I would second the remark about finding an overnight job at Walmart. I actually just met a guy on the airplane who is working a 2nd job there. Other than that, just keep up the good work. Realizing the problem is half the battle.