Back again....need to turn things around

[LivingAlmostLarge]

Let's talk cars. What is going on with $41k car? Is it that expensive? Can you sell it and get something else? I think that perhaps it's time to think about getting cheaper cars.

[GoodSteward]

Have fun sifting through the responses here. You have a lot going on, so you will get a lot of feedback.

I'll share some of my thoughts. You look similar to my situation 5 years ago.

#1. Life isn't over, don't cut back so far you feel like it is over and you give up on change. I noticed you don't seem to pay for cable and satellite. If your wife homeschools(mine does too) do you really think cutting $12 a month is really going to build your savings at the expense of pretty much no outlet for her or the kids? I used to be like you and thought every $1 i could save was needed. I found out later some cuts don't have the return you hoped for and cut you down so much you feel helpless. I say reward yourself for not paying the ridiculous prices of satellite by getting to have Netflix. If you cut too deep, and it affects your wife more than you (your gone, and may not miss it as much) it WILL affect your marriage. I know some think this is a first world problem and everybody can just go outside(and you should). Funny, they would never consider that for themselves.

#2. You are definitely car poor. However, people talk about dumping cars like it's just a bad habit. I know when I was in a mess, I was so upside down and no cash to offset it I was stuck. If you can change this I would, but that just depends on what can be done. What the car is worth, your credit, etc.

#3. You need to change cell phone setups. Go to Straight talk. $55 a month for 10gb LTE and unlimited other things. Unlimited slow data after 10GB. Cell phones are needs at the base level, but plenty of data gets into luxury. Nobody NEEDS massive amounts of cell data. This is always an easy place to cut back big. I used to be a page plus dealer. I am big on prepaid. Let me know who you have, what phones you have, and if you owe on them. Also, if she is at home she should have internet.

*I just realized you have no internet listed. I assume you fill in that gap with your cell phone which explains why it is so high? If your wife is home all day that is not a good trade off IMO. Home internet is more valuable than cell data for a family. You may feel differently.

#4. $200 Groceries. You must be joking. You are willing to spend $45 a month on tanning, but you think you can feed a family 3 meals a day for $50 a week?(This is me all over again from 5 years ago). One of the areas you need to work on is cutting back some things to up this one. If you are eating too low of quality you will have more dr visits and health issues later. Do your family a favor and eat better. I have a famly of 6 and I budget ~550 a month(food only) and that is even hard to stick to a lot of times. We do not eat out at all hardly during the week. As a side note(I've seen it before)Be careful you are not eating well(eating out) during the day expecting your family to eat cereal every meal at home. I don't know if you are, but IF you are....change that.

#5. Ipsy - I know people are barking at this one, but again, considering your wife is home all day with your children homsechooling (unlike you where you get to leave and have a change of scenery) don't make her feel punished. It's very stressful to be home all day where the house needs work and keeping up with kids. These are little things on your budget, but they can sting deep in a marriage if done wrong. The cuts have to be beneficial long term. Please remember your wife and consider what she is facing when cutting things. The gym makes more sense since you can technically go for a walk orj ust do some simple weights at home. That is replaceable. Your wife can't use magic markers in place of maketup.

[Snydley]

I also think you should keep the gym membership, ipsy, and netflix. They are reasonable and won't change you situation much by dropping them.

Tanning - definitely needs to go, and your phone bill is nuts. I have two smartphones on TING and pay between $40-60/month.

How do you eat for $200/month? How? Are you eating out sometimes and charging it and not counting it in that total?

Try to sell your expensive car to lower your payment.

[Eagle]

Thanks GoodSteward. I know what you mean. I know what to do. I just like being able to share with people who are also doing the same thing. There is literally no one I could talk to about this. Thank you for the encouragement. I do feel like sometimes it is so much to look at, and it is nice to get other peoples perspective.

Here are my monthly bills, and my account balances.

Monthly Bills:
750 - Rent
560 - Car 1
330 - Car Insurance
320 - Car 2
280 - Phones
250 - Gas
200 - Groceries
150 - Walmart CC
120 - PGE (Electricity)
100 - Lowes CC
100 - Furniture CC
90 - Life Insurance
80 - Water/Sewer
80 - Capital One CC
50 - Student Loan (Wife's)
45 - Tanning
40 - Oil Changes
40 - Haircuts for me and my 2 boys
30 - Cap 1 CC
30 - Teamsters CC
30 - WF CC
30 - BofA CC
30 - Kohls CC
30 - Care Credit CC
30 - Trash
20 - Court Fine
20 - Gym
12- Netflix
10 - Ipsy (Wife's makeup subscription)

Installments:
47,000 - Student Loan (Me)
41,978 - Car 1
14,040 - Car 2
1,100 - Napa Fine (Court fine from 2008)
732 - Student Loan (Wife)

Credit Cards:
5,256/6,000 - Walmart CC
3,724/3,800 - Capital One CC (Mine)
1,215/2,900 - Lowes CC
1,079/5,000 - Furniture CC
578/600 - Wells Fargo CC
498/500 - Teamsters CC
192/300 - BofA CC
160/400 - Kohls CC
110/4,900 - Care Credit CC
94/200 - Capital One CC (Hers)
0/7,600 - Kay Jewelers CC (Mine)
0/1,000 - Kay Jewelers CC (Wife's)
0/500 - Victoria Secret CC

Total:
12,906/33,700

Just typing this out makes me sick. Between this month and next month, we will have about $1,200 after expenses (work bonus). I plan on using that to pay off the small cards like Capital One (94), Care Credit (110), Kohls (160), BofA (192) and Teamsters (498). That is 1054 total and will save us $150 a month. I also plan on cutting out some expenses, like tanning (45) and haircuts (40). Her ipsy subscription is actually just a normal expense because it domes with a lot of makeup every month that she would normally buy anyway. Also the gym is basically my only outlet from life, and 20 is a really good deal. It is also month to month. Netflix is for our kids because we don't have basic cable or Comcast, DirecTV, etc. As for our phone bill, I am waiting for the lease to be up which should be in another year.

Next, I would like to save $1000 in an EF. I know it is small but it will be a big peace of mind knowing we have some emergency cash without having to use a CC like always.

What do you guys think about life insurance? I got term life insurance, 30 year term at a 89$ rate which includes me, my wife and 2 kids. I could cancel it but it seems like with the amount of driving I do, plus her not having a career, that is is a good insurance to have. It would knock off 90 a month though if we did cancel it.

Welcome back! I agree you are in a similar position you were when you joined.

1. Paying off the credit cards is a good idea. However, if you have an emergency you'll just go back to the credit cards. I'd say save the $1000 and put $200 towards the CC.

2. So $560 for Car 1 and $320 for Car 2? That's $880 or a quarter of your budget on car payments. Can you guys get by with just one car for a period of time?

3. Is $330 a month for car insurance typical in your area? We pay less than that for two vehicles.

4. Stop using your credit cards. Put them in a box in water/ice in the freezer. You have too many credit cards. I'd reduce your credit cards to 2-3 at most. Preferably none until you can get your emergency fund up to at least 3-6 months worth of expenses.

5. Did you defer your monthly payments of your student loans? They're not listed in your monthly bills.

6. Yes on the life insurance with 2 little ones a third on the way. Congrats by the way! We are due in June too.

7. You can probably get an electric razor for $30-60. The hair cuts would be simple at first. But maybe your wife could learn to cut you and the boys hair? Does she not get her hair cut? You didn't list that as expense.

8. Grocery list is a bit light at $200. It's probably closer to $400-600 a month. Are you tracking your bills with www.mint.com

9. Income is an issue. I know you have this other job lined up in the future. Can you do anything else to increase your income until this new job pans out? You need to start making changes now BEFORE you get an increase in income. Otherwise you'll just spend whatever extra you make.

[Joan.of.the.Arch]

You sound optimistic, but don't count your chickens before the eggs crack.
https://www.bls
.gov/oes/current/oes472152.htm

.

[disneysteve]

60k salary household

41,978 - Car 1
14,040 - Car 2

I could pick through every item on your list but here is your problem. You have car loans that nearly match your annual income. That's insane!

Is Car 1 actually that expensive or did you roll over previous debt into that loan? How much are the cars worth today? If could get out of Car 1 and replace it with something for about $10,000, your situation would instantly be drastically better.

The other thing I would do is start closing credit cards. You've got 3 cards with $0 owed. Close them right away. They're for luxury items (jewelry and lingerie). You don't need them. You shouldn't be using them. And it cleans up your balance sheet to eliminate them. Yes it will drop your credit score a bit but I wouldn't worry about that now. You're on a sinking ship. Your credit score isn't important at the moment.

[Guppy Tender]

Welcome Back

We will continue to be here to encourage as much as we can. You are the one that must apply yourself to making change.

Wise thing to do is to live on the amount you are making now. Then as income goes up, apply as much as possible to getting rid of debt. Once debt is gone you will feel a great amount of freedom. $1000 dollar emergency fund, also very good idea.

We can give great suggestions, lots of experience.

Very encouraged to see that you already know where the money you are spending is going. Excellent start.

[disneysteve]

Very encouraged to see that you already know where the money you are spending is going. Excellent start.

Great point! I meant to mention this. Congrats on having such a detailed record of your spending. Most people don't have anywhere near that good of an idea of where their money is going.

[msomnipotent]

The one Kay's card has the highest available limit, so won't it affect his credit rating if he closed it? A lot of the cards are near their limit, so closing accounts that have no balance will only increase his debt ratio. It would also hurt a lot if it was his oldest account. With small credit limits, I would assume that the credit scores need to be worked on, which might help bring down the cost of auto insurance at least. And it would help if he needed to take out a loan in the future.

Doesn't Netflix need internet? I don't see a monthly charge for internet service.

[PeggyHefferon]

Doesn't Netflix need internet? I don't see a monthly charge for internet service.

It is possibly an oversight but could also be using mobile to access Netflix.

[PeggyHefferon]

Multiple people have mentioned your car payments and that is definitely your biggest issue.

Ignore the comments about giving up the gym membership. The benefits from actively going to the gym far exceed the $240/year you are paying. And yes, $20 is a good deal.

[hehateme000]

Thank you everyone for the replies.

I just had a talk with the wife today and she is on board. I will stay on track and be a lot more present on this site so I am constantly reminded how important it is.

The expensive car was because we traded a car in that we were under water with. I jumped the gun and did it because otherwise we would have a small sedan between the both of us for us and the 3 kids. I know it was not financially smart at all but in order to get a bigger car we had to trade in for something that was more expensive. Stupid car decisions over the past 7 years led to this and it sucks but it is our family car. I would say the first car is worth 9k to the 14k owed, and the 2nd car is worth 25k to the 41k owed. I would rather try and pay our first car off since the loan amount is only 15k.

PorkPistol, thank you for the suggestions. I actually changed my phone plan (actually got more data) and it went from 280 to 240 a month. In 4-6 months, we will be able to get new phones. We are paying 25-35 a month for each phone because of how we purchased them. But they are also newer iPhones so in a few months I will switch to something that costs less. after looking at the prices today, I should be able to get the phone plan down to around 150 a month. I am also going to cut haircuts off and have my wife do mine and the kids hair. I don't need a $20 haircut every 3 weeks.

The wife went and canceled the tanning today. We still have to pay another month since it is a 30 day cancellation, but it is nice to know that we will get rid of that debt. It also reassures that she is on board. She was against it at first but after we talked she no understands and it OK with it.

I put $40 for oil changes because we have 2 cars. I drive about 2,000 miles a month. She drives maybe 600 miles a month so I guess I can take it down from $40 to about $20.

I think I agree about the Netflix, gym and Ipsy subscription. Those 3 "luxuries" we have are a grand total of $43 a month. I really feel like they add a lot of value for the expense. I personally work out about 4x a week, and the boys get to have Netflix after finishing school, chores, etx. And yes GoodSteward, she cannot use magic markers. Lol that comment made me laugh.

We live with her brother and part of his rent is to pay for the internet bill. That is why I did not list it.

As far as eating, I think you all made me realize that $200 is a joke. I definitely think we eat out and don't account for that, so I know we probably spend around $300-$350. We do live very close to her family, so she gets to eat over there and gets treated by her brothers fairly often. But still, food is important and I hate not having my fridge full. It is one of the most basic needs for my family and I am cutting corners on it. Your replies really put it into perspective for me so thank you.

For the Kays card, I really would like to keep it. She has her jewelry and I have no intention of spending it, but it really does help my credit by having a large credit limit. The only thing I need to do is go clean a ring at the store for $30 once a year and the card will stay active. I know the score is not important now but I really believe that I will not be tempted to use it. Knowing me, I should have that card maxed out, but luckily I am somewhat smart. Or maybe because I have already spent thousands on jewelry for her that I am over it, lol. I will put the cards in the ice though so we do not use them.

[hehateme000]

Welcome back! I agree you are in a similar position you were when you joined.

1. Paying off the credit cards is a good idea. However, if you have an emergency you'll just go back to the credit cards. I'd say save the $1000 and put $200 towards the CC.

2. So $560 for Car 1 and $320 for Car 2? That's $880 or a quarter of your budget on car payments. Can you guys get by with just one car for a period of time?

3. Is $330 a month for car insurance typical in your area? We pay less than that for two vehicles.

4. Stop using your credit cards. Put them in a box in water/ice in the freezer. You have too many credit cards. I'd reduce your credit cards to 2-3 at most. Preferably none until you can get your emergency fund up to at least 3-6 months worth of expenses.

5. Did you defer your monthly payments of your student loans? They're not listed in your monthly bills.

6. Yes on the life insurance with 2 little ones a third on the way. Congrats by the way! We are due in June too.

7. You can probably get an electric razor for $30-60. The hair cuts would be simple at first. But maybe your wife could learn to cut you and the boys hair? Does she not get her hair cut? You didn't list that as expense.

8. Grocery list is a bit light at $200. It's probably closer to $400-600 a month. Are you tracking your bills with www.mint.com

9. Income is an issue. I know you have this other job lined up in the future. Can you do anything else to increase your income until this new job pans out? You need to start making changes now BEFORE you get an increase in income. Otherwise you'll just spend whatever extra you make.

Thanks Eagle. I do not think we have a choice about the 2 cars, for now. I had to roll my old loan into the new car loan and it would be easier and faster to cut back on all the other expenses and pay off all the credit cards I think. After that, I would like to start making extra payments on the cars.

The $330 for car insurance is because we both have a couple points on our record. Mine is speeding and she got in an accident with someone on a bike a couple years ago. He did not get hurt but it still got reported. We were paying about $480...and just got it cheaper. I will continue to try and get better rates.

I will stop using my cards. I have always thought it was silly to put them in water and freeze them but now I realize how that helps. I have always relied on credit cards to get us by but I am tired of it!

Lastly, yes I did get a forbearance on my student loans until I can really start affording the payments. I also want to keep our life insurance. I told her that as soon as I cancel it, I will get in a wreck and die and she and the kids would be screwed. However I am thinking of taking her and the kids off (150k for her, 15k each for the kids). We have a 500k on me, and it makes sense to keep it for me since she would definitely need help. But if she died, I would really not need much hep financially. But I will look into that next week and see how much cheaper the rate would be.

[hehateme000]

You sound optimistic, but don't count your chickens before the eggs crack.
https://www.bls
.gov/oes/current/oes472152.htm

.

Hey, trust me I have researched this a lot since it would be a huge career change for me. This is where I get the info for the union and the pay:

http://www.ualocal38.org/?zone=/unionactive/view_article.cfm&HomeID=513316&page=UA20Local203820Training20Department

The pay is from $57-$68 an hour, depending on your work assignment. I think that means whether I am in pipefitting, plumbing, or HVAC. It also might be dependent on the area I work in. Either way, I am only 10 people away from getting called and I have confirmed a lot of my questions with the training center down there in SF. If I stick with this and use the advice you guys give me, I can have a pretty solid retirement lined up.

I actually already have a pension lined up from my other job. I did 5 years which got me vested. It will not be much, but I think it comes out to about $500 a month when I am eligible (55 or 65 years old). I know it will only be worth half as much in todays dollars, but it is still something. I also have a passive income from my brothers business. I get paid quarterly and it ranges from $150-$500 every 3 months. I always budget for me to get $150 and from here on out, anything extra can go toward debt.

[hehateme000]

Multiple people have mentioned your car payments and that is definitely your biggest issue.

Ignore the comments about giving up the gym membership. The benefits from actively going to the gym far exceed the $240/year you are paying. And yes, $20 is a good deal.

Thanks Peggy. It really is the only thing that keeps me sane