Author Topic: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!  (Read 24686 times)

tofuchampion

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Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« on: November 03, 2014, 03:55:11 PM »
Hi.  My name is tofuchampion, and my hair is on fire.  I've known this for a while, but only recently decided to, y'know, DO SOMETHING about it.  My husband and I started using YNAB in July, and in that time, broken the horrible cycle of overdrafting every paycheck (we were about $800 in the hole at the worst of it), gotten caught up on all our regular bills (we were a month behind on everything, all the time), and paid off an additional $500 of debt on top of the overdraft.  So we've improved quite a bit, but we still have a metric asston of debt, and are still living paycheck to paycheck.  We want to kill the debt, have some money in the bank even at the end of the month, and eventually become super badass.  My tentative goal is to be debt free in 5 years and FI 10 after that (I say "my" goal bc he is pessimistic and doesn't really think this is possible).  We are 29 and 31 now, so this would put us at 45ish.

In case it matters, he's a prison correctional officer and I'm a nursing assistant at a hospital.  I would like to go back to school this winter and start working on my RN, but I'm not sure how that would work financially.

Here's a nice breakdown for ya... thanks in advance for the advice and facepunches!  I've noted the obvious facepunches and provided explanations/plans to deal with them below.  :)

Net Income:  $3900/month, soon decreasing to $3300/month.
His - $2700/month, could be up to $3300 if he maxes out available overtime.
Mine - $1200/month right now, but we're having a baby at the end of this month and I'm only going back to work part-time after that, so as of January I estimate it'll be between $480 and $800/month, depending on how many shifts I actually work.  I've committed to one 12-hr shift per week and am willing to do more if needed, which I will be.  I'm going to aim for $600/month net.

Regular Expenses:
Rent - $655 (2br/1ba townhouse; this includes a $30/mo pet fee and trash pickup)
Electricity - $96 (this is on the equal payment plan bc I like consistency; facepunch me if this is a bad thing!)
Water - $30
Internet - $25
Cell phones - $145  FACEPUNCH! #1
Groceries - $400
Toiletries/household goods - $100
Pets - $100 (dog + cat + guinea pig)
Gas - $200 (FACEPUNCH!#2)
Car + renter's insurance - $135  FACEPUNCH! #3
Spending money - $200 ($100/ea)  FACEPUNCH! #4
Medical - $120 (he is type 1 diabetic; $85 of this is insulin, testing supplies, and insulin pump supplies)
Clothing - $50
Entertainment - $8 plus tax for Netflix; anything else comes out of our individual spending money

total = $2264/month


Debts: (aka one giant facepunch)
Car loan - We owe $9156.01 as of today.   $327.24/month payment on a 2009 VW Tiguan at 22.03%.  BIGGEST FACEPUNCH EVER!!
Student loans - ~120K total, mostly his.
Medical bills - $3K total; again, mostly his due to a couple of diabetes-related ER visits.
Credit cards - $5670 total, all mine.  :(
Misc - $2K total?  (this is a couple of old utility accounts, $400 I owe a friend, just random stuff)

total = $139,826 (ish)

I am not 100% sure of all the numbers for debt, mostly because a lot of it is defaulted/in collections/whatever and I need to sit down and go through everything to see exactly where it all is and what's owed where.

Assets/Savings:  $516.55 in a 403(b).  I've been at my current job putting in 2% for a year and a half.  That's all we have.  There is no employer match because they have a separate pension program.  I just upped my contribution to 10%.  It's still not much because I don't make much, but I wanted to have more than $26/mo being set aside.

FACEPUNCHES!

#1 - cell phones.  We are currently in a 2-year contract with US Cellular; it's up in August.  With the early termination fees, it wouldn't actually do any good to cancel now in favor of Republic/Ting/etc., so I've resigned myself to sucking it up for the next 9 months, but the day that contract is over, we're switching.

#2 - gas.  We live 30 miles from my husband's job, and our car is not exactly a gas-sipper.  It also requires premium grade.  Our current lease is up in May, at which time we plan to move to the town where he works.  My hospital also has a campus there, so I'll be able to transfer - and even if I can't right away, I'll only be making the drive once or twice a week, instead of the 4-5 nights he does it now.  I usually bike to work, though at 38 weeks pregnant, I'm temporarily driving.  On nights when we both work, he drops me off and picks me up.

#3 - insurance.  This is because of that stupid car, which I'll address more in a minute.  It's through USAA.  I've been with them for years and always been very happy with the customer service, but I'd be willing to switch if we could save money.  Unfortunately, the quotes I've gotten from other companies haven't been any lower.

#4 - spending money.  This is actually an improvement for Husband, who tends to be something of a spendthrift.  He used to spend closer to $150/month, and it's all on silly things like energy drinks and video games.  Mine covers my athletic pursuits - Aikido club dues, events such as powerlifting meets, 5K runs, workout clothes & gear, etc. - as well as craft supplies and any little stuff I want (I may or may not be typing this from a coffee shop, sipping a $4 mocha, but that happens maybe once a month).  We also have a gym membership through my job, which costs us $20/month, and that amount is deducted from my paycheck, which is why I didn't list it above.  Facepunch me for that if you want, but working out is a sanity-saver for me and I feel that $20/mo is worth it.

#5 - that stupid car.  Obviously it's a subprime loan.  Our $1100 beater died last year and we had no savings to pay cash for a replacement, and couldn't get a decent loan.  We couldn't even get a subprime loan for a $5k car, which is what we wanted; the lender said that in case we defaulted, it needed to be something more valuable so they could get more of their money back.  I want to sell it.  I really really really do.  It's too big, too expensive, etc.  However, it also has about 115K miles on it, as well as some minor cosmetic damage, and I'm not sure it's worth what we still owe.  If we could at least break even, and had the cash, we could sell it and buy a smaller car outright.  But we don't have the cash right now.  Our second choice is to refinance with our credit union, which would bring our interest rate down to 4.75% and our monthly payment to $219, according to the calculator on their website.  But his credit score is about 525 and mine is about 600, so I really really doubt we'd qualify for anything right now.  We're hoping that if we keep going in our current direction, in 6 months or so we might be able to do this.  Or, even better, have a low enough balance and enough cash on hand to just sell it and replace it.

#6 - all that debt!  He went to a private college and paid out-of-state tuition.  Some of those loans are cosigned by family members.  His uncle paid one $10K loan off for him and we're about to start paying said uncle back at $200/month.  His mom also paid one, I believe.  Even though these two aren't costing us interest, they're ruining family relationships, and it's high priority for us to get them taken care of because of that.  The rest of it... well.  We were just stupid; there's no excuses.  We were both underemployed for about a year, which contributed to getting so far behind, but there were so many bad decisions both before and after that, that it still should never have gotten that bad.  I'm trying to look forward instead of back, though - and hey, at least we're only 30 and not 50, right?  There's still time.  BTW, my student loans are currently on forbearance (or deferment?  I forget which is which).  This is one reason I want to go back to school in January - not only could I start working towards the next stage of my career, but I'd only need to take 2 community college classes at a time (for $180/semester total, plus books) in order to keep those loans deferred while we tackle our other debt. 

Random:  I have some small side hustles (MTurk, Swagbucks, mystery shopping, etc.) that collectively bring in about $80 a month, depending on how much I do.  This isn't included above because I keep it separate.  It goes towards birthday & xmas presents, extra debt payoff, and pretty much whatever I think is important at the moment.  Lately it's almost all gone towards baby stuff.  :)

Speaking of - when the baby comes, I'll be breastfeeding and cloth diapering, and almost all the clothes & gear we have were bought secondhand.  The reason for only working part-time is to avoid paying for daycare, which would negate any additional income.  My husband works a set rotating schedule, so I can arrange my shifts around his pretty easily and one of us will always be home with the baby. 

So.  What do we do now?  What changes should we make?  Would it be worth it to go ahead and switch cell phone plans now?  What about the car?  I'd love to get rid of those 2 things right now, but I really don't know if it's feasible.  Is going back to school, even part-time at first, a bad idea?  What else do you see that I'm not seeing?  Should I even bother with 403(b) contributions right now?  Like I said, we've made a lot of changes (the current house is smaller and $150/mo cheaper than where we used to live!), but I know we could do more. 

I'm looking forward to all the input.  Thanks in advance!

----------------------------------------------------------------------------

UPDATE!!

I've gone through our actual expenses, and some are less than what I had above.  Like the "toiletries/household" - that has been high because of things like last month, Husband decided to replace our old quilt with a new comforter, and buy me a body pillow to try to help with my inability to sleep comfortably.  That was $65 total.  We also bought a (used!) washer/dryer from craigslist, and a couch (we didn't actually have a couch; our old one was falling apart and wouldn't fit in the car, so we left it behind when we moved last spring).  Both craigslist finds; the couch was $60 and the w/d was $130 for the set (and is kind of necessary with a baby coming, esp if we're cloth diapering).  But all that got put under "household."  We are not actually spending $100/month on shampoo and laundry soap! 

Clothes has been higher because of maternity stuff.  Husband also had to have some alterations done to his work uniforms, and that went in the "clothing" category, too.

Basically, we've had some uncommon expenses in the past few months, and I was just looking at recent history, so the numbers are skewed.

I've decided to close the separate checking account I have, and my side hustle money will be factored into the main budget.  I don't like the idea of not having "my" money, but there is no reason for me to keep this out. 

AWESOME NEWS:  As I suspected, US Cellular's ETF is per-line.  So $350/ea, or $700 total.  That's not the awesome part.  The awesome part is, it's pro-rated.  So since we only have 9 months left on our contract, our ETF would be $262 total, which is doable and would be paid for in the savings from using a cheaper carrier.  I've compared carriers and talked with Husband, and we're going to go with Ting.  We can't bring in our current phones (literally no one that I found will let you use a US Cellular phone), but we can get 2 refurbished ones for $87 total, and then our monthly bill would be $30.  They'll also reimburse us for 25% of our ETF, bringing that down to $196.50. 

ETF after reimbursement @ $196.50 + new phones @ $87 = $283.50
Minus $59 for selling our old phones = $224.50 to switch
Current monthly cost $145 - new monthly cost $30 = savings of $115/month
This would pay for itself in less than 2 months.  Woohoo!

Here is a breakdown of our monthly expenses, implementing a ton of changes and with more accurate estimates.  Changes, etc., are in italics.

Income = $3900 net  this assumes he maxes out overtime, I work an average of 2 shifts per week, subtracted health care premiums, and including my side hustle money, which I no longer plan to keep separate

Expenses:
rent = $655
electricity = $75  I'm stopping the equal payment plan because I know we can use less than $96 of electricity every month, and I'd rather have that money now than at the end of the year
water = $35  assuming this will go up a little when I'm washing diapers every other day
cell phones = $30
groceries = $300  toiletries, etc., will be included in this; bigger household purchases will just be put off as much as possible
gas = $200
car/renter's insurance = $135
pets = $60
medical = $100  for now - this will change in January
spending/entertainment = $50  including Netflix

total = $1640

surplus = $2260

So that's $2260/month to put towards debt.  Holy cow.  We can do this!

I'm not sure how we'll break down the debt snowball just yet; he & I need to look at everything together and prioritize.  Right now all I know is that we need to start repaying his mom & uncle, and we need to put as much as possible towards the car.
« Last Edit: November 04, 2014, 03:52:36 PM by tofuchampion »

Prairie Stash

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #1 on: November 03, 2014, 04:16:07 PM »
Pick up the phone and book an appointment with the bank. Quit saying you probably won't qualify and find out.

I also love school. Of course RN's make mega cash around here, it biases my thoughts. If you have the chance to become a RN you should.

4alpacas

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #2 on: November 03, 2014, 04:33:44 PM »
So.  What do we do now?  Cut back!  Save as much as possible!
Facepunches coming.  You're planning to cutback hours, decrease your income, and increase your expenses (babies are expensive).  I'm really concerned. 

What changes should we make?  I would start with the toiletries/household goods/personal care and grocery bills.  We spend $200/month for all of it.  Start cooking in bulk.  Stop buying expensive household goods.  Stop buying prepared food items.  Cook from scratch.
Would it be worth it to go ahead and switch cell phone plans now?  It depends on the ETFs.  What phones do you have?  Consider how much you will save each month, how much the new phones will cost, and how much you can get for selling your current phones. 
What about the car?  SELL IT!  Debt at 22% is insane!
Is going back to school, even part-time at first, a bad idea?  How much would daycare cost?  What types of programs are you looking at?  How much does it cost?
What else do you see that I'm not seeing?  You say that the $200/month you spend on frivolities is saving your sanity, but YOU'RE HAVING A BABY!  Bringing kids into this debt emergency is unfair.  You need to focus.
Should I even bother with 403(b) contributions right now? Do you have a match?

Good luck!  Keep us posted on your life changes.

themagicman

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #3 on: November 03, 2014, 04:43:18 PM »
I am new here so I am not sure how much help I will be but my wife and I are close to you all's age so I'll give it a shot!


Regular Expenses:
Rent - $655 (2br/1ba townhouse; this includes a $30/mo pet fee and trash pickup) This is good news! Do you think you would be able to keep it around this cost if you move to the new town?
Electricity - $96 (this is on the equal payment plan bc I like consistency; facepunch me if this is a bad thing!)
Water - $30
Internet - $25
Cell phones - $145  FACEPUNCH! #1 I would look at how much it costs to cancel your contract. Also if you have nicer phones now you might be able to sell both of yours on ebay and have enough for the cancelation and two new republic phones ($99 each) Thats what we did!
Groceries - $400 Seems like it might be a little high for just you two. We spend about $275 a month on foodand go out to eat a lot! What groceries stores do you shop at? Is there an Aldi near you?
Toiletries/household goods - $100
Pets - $100 (dog + cat + guinea pig) Any way to get this cheaper? Cheaper food or buying in bulk?
Gas - $200 (FACEPUNCH!#2)
Car + renter's insurance - $135  FACEPUNCH! #3 GEICO was much cheaper for us! We pay $90 for two cars that are worth more than yours and we are under 25, so they charge a premium. I think you can get it much cheaper than what you are paying!
Spending money - $200 ($100/ea)  FACEPUNCH! #4
Medical - $120 (he is type 1 diabetic; $85 of this is insulin, testing supplies, and insulin pump supplies)
Clothing - $50 Might get rid of this category and use each of your spending money when clothes are needed
Entertainment - $8 plus tax for Netflix; anything else comes out of our individual spending money

total = $2264/month



Also, I would definitely look into how much your car is worth and try to sell it! 22% is EXTREMELY high and anything you can do to get rid of it would be great.
I am not sure if you could get a 0% intro APR credit card, but that could help you with not having cash now. You could do something like using a serve account for each of you (Let me know if you are unfamiliar with this) to get $2,000 interest free for 12-18 months and buy a car with that money. you could do it two months if you needed $4k to find a car for you (but I think you can get one cheaper)

What is your husbands degree in? Does he see himself staying at the same place for long?


Future Lazy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #4 on: November 03, 2014, 05:03:28 PM »
Yeowch on the student debt, mostly. Quick question on that:  What did your husband actually go to school for - was it for what he currently works in? If not, why doesn't he work in his degree field?

#1 - When we switched from ATT to Republic, I saved $1800/year on it. Your current bill is about $50 less per month than mine was at ATT, but if you get used phones going into Republic or Ting (can you reuse your phones here? Hmm), I bet you actually WILL save money over 9 months. Here's some math, using Republic since that is what I am familiar with:
$145 * 9 months = $1305
$58 * 9 Months =  $522, a difference of $783 in that time.
$24 * 9 Months =  $216, a difference of $1089 in that time.

So, unless the cost for termination fees is more than $700-1000, cancel cancel cancel!

I used $58/mo on republic as comparison to having a fancy contract plan with lots of data or whatever, and the $8 is the taxes and fees on my bill above the $50 for service. $24/mo is an estimation as to what it might look like if you cut data out away from wifi, where the extra $4 is taxes. Price points are pretty similar with Ting and others, so this should repeat itself in any switching situations.

#2 - Solid plan here, IMO. Wait it out. Talk the husband into walking or biking after the move; continue to bike the commute yourself.

#3 - Look into Progressive's Snapshot plan. This is more of a pay by the mile option, and should be cheaper. Especially after you move, and especially especially if you convince the husband to ditch the driving.

PS. If you're both driving, do you own two cars? If the answer is yes, ditch the more expensive one after you move.

#4 - Ahhhhh. Ahhh. Ahhhhhh. Nooo.

Sorry babe your hair is on fire. You don't get to have mocha lattes and gym clothes and craft supplies. The husband doesn't get to have video games and beef jerky. No, this money needs to go to putting out the hair fire! Debt paydown! Going cold turkey on treats is hard, hard, hard, and honestly I think it's unhealthy even if your hair IS on fire. But it needs to be waaaay less. Set a budget on this - maybe $25/mo for each of you, and that's all. That doesn't mean you can't EVER have these things. But you don't get to play in the sprinklers in the yard when you don't have enough water to drink or flush your toilet. Wait until the debt is under control, and you actually have a surplus. Then, you can lead a luxurious lifestyle.

Savings: $150/mo, or $1800 over 12 months.

#5 - Attempt a refinance - even if they tell you no, that's the worst that can happen. In the meantime, use the ~$2000 you just freed up on phones and spending (Right? Right?) to aggressively pay this down until it's no longer sub prime. Like most on here, I'm not completely disgusted by a car loan. At the point that you've got it aggressively paid down, you'll have moved and be able to assess your real car needs - For example, if you're both biking to work, is a car completely necessary? At that time, decide to either sell it and go carless, or take it back to the dealer and trade it in for something smaller and cheaper. Then drive it as little as possible.

#6 - Do a debt snowball. Pay down the car, and put that money toward the credit cards, and put all that money toward the medical bills, etc, etc. Pay your family faithfully with what you've agreed to pay them, and throw in extra when you can, but your focus should be on eliminating debt with interest.

If the family members start to stress about being paid back, show them your finances - show them your car loan or CC statements from Nov 2014, and then from ??? month in the future when they get antsy. Show them you're turning responsible.

This might seem counter-intuitive, but if an RN is what you really, really want to be, then go for it. Earning more is just as important as cutting back. But, definitely run the numbers. For example, if you make $12,000 a year now, but you would make $25,000 a year after school... and school costs you $32,000 - then:

25,000 - 12,000 = $13,000.
$32,000/$13,000 = 2.4 years to pay back using just the surplus income from getting a better position.

Just make sure you actually follow the plan to use the surplus income to pay back the student debt. Otherwise, it's just going to dig a deeper hole.

Random: Run the math on your side hustles to make sure they're not losing money instead of gaining any - for example, mystery shopping doesn't do you any good if you have to drive to the fast food joint, and maybe end up buying extra food or generally using more gas/time than it's worth. Remember, sales and discounts aren't saving you any money if you're using them to buy things you weren't going to buy in the first place.


Hope this input helps you!

rmendpara

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #5 on: November 03, 2014, 07:25:26 PM »
Others have already addressed a few of the key points, so I'll just add this perspective.

Short term, your focus needs to be on cutting down to a reasonable minimum and finding hacks to be more efficient in eating, commuting, insurance, whatever else. Budget, budget, budget. You didn't get into debt overnight with one bad decision. It was a series of bad decisions over several (perhaps many) years that got you here. Accept that it will take equally as many smarter decisions over several (perhaps many) years to dig your way out. There is no quick fix. Don't hide from your mistakes. Rather, put them out in the open. Accept them, and then move forward.

Long term:

It doesn't take a genius to tell you that paying off 140k debt on a net income of 40k (3300x12) is a very, very steep uphill battle. You made some poor decisions on the student loans, car, and several other things, but those will hold you down if you don't work to develop some real marketable skills (at a reasonable cost, or slowly and pay for most of them with cash) that will increase your earning power over time. A RN program will be good, but remember than if you overpay, then you'll just continue falling deeper and deeper.

Be dedicated, be smart going forward, and use your past mistakes as fuel to get it right this time around.

Also, congrats on the new baby. At the end of the day, everything you're doing is for the little rugrat, and that will be a daily reminder of why you're working so hard.

Good luck!

MDM

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #6 on: November 03, 2014, 07:47:31 PM »
You have a guaranteed 22% investment opportunity.  Your choice whether to exercise it by selling the car and getting a more affordable one, or paying off the loan ASAP.

It might be worthwhile to edit your OP to start with gross income and include whatever deductions are getting you to your net income.  Based on other case studies, there can be opportunities there (e.g., incorrect tax assumptions, missed 401k matches, etc.).

historienne

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #7 on: November 03, 2014, 07:54:26 PM »
For your credit card debt and the debt that is in collections, etc: do some internet research on how to negotiate this, and then try to cut a deal.  Save up enough to pay back something like 20% of a given debt, then call the collections agency up and say that you are willing to pay them that much in exchange for their written promise to forgive the rest of the debt.  This is a thing that people do.

For your husband's debt, have you investigated loan forgiveness options?  Does he work directly for the state, or for a private company?  If the former, look into the public service loan forgiveness programs.

Jags4186

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #8 on: November 03, 2014, 08:06:08 PM »
You have a huge uphill battle but at least you realize it.  You are probably a perfect candidate for the Dave Ramsey plan.

First thing first--I would NOT go to school for your RN if it means you have to take out more debt.  It's not worth it.

Your husband needs to work max overtime every week, possibly get a second job on weekends.

You need to work as much as possible after you have your child...even if it's a night job when your husband can watch the baby or a weekend job.

Regarding the phones you might be able to switch to t-mobile and have them pay the termination fees...then turn around and cancel with them and go on a super cheap plan elsewhere.  This you'd need to look into this in detail to make sure it makes sense.

My electric bill is around $40 a month...maybe see why yours is so high?

And like everyone else said...sell the car.  The other possibility you could try and swing is take out a 0% APR credit card, buy 10k of gift cards over a month or 2, liquidate them for cash (you can find tutorials for this online) pay the car off that way.  You'd in essence transfer the debt to a CC which you would get 15 months of no interest payments and after that an APR less that 22%...worse comes to worst at least the credit card is unsecured debt vs. a car loan.

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #9 on: November 03, 2014, 08:35:11 PM »
I'm at work, but I have a few minutes of downtime and am going to try to address some of the points y'all are bringing up. 

First:  thanks for all the input!

Quick question on that:  What did your husband actually go to school for - was it for what he currently works in? If not, why doesn't he work in his degree field?

Nope.  Ministry/pastoral studies at a Christian school.  He doesn't work in it currently because 1) there aren't many jobs out there, and he'd probably make less money even if he found one, and 2) he has no interest in actually doing it for a living.  Don't ask me why he picked that major; I have no idea what the thought process was there.
Quote from: KaylaEM
#1So, unless the cost for termination fees is more than $700-1000, cancel cancel cancel!

I looked it up and saw $350.  I assumed that was per line, but if it's for the whole account, we'll definitely cancel.  Not sure if we can bring our current phones with us (they're the same - LG something or other).  I know Republic doesn't do that anymore, but maybe there's another carrier where we could? 

Quote from: KaylaEM
#2 - Solid plan here, IMO. Wait it out. Talk the husband into walking or biking after the move; continue to bike the commute yourself.

#3 - Look into Progressive's Snapshot plan. This is more of a pay by the mile option, and should be cheaper. Especially after you move, and especially especially if you convince the husband to ditch the driving.

PS. If you're both driving, do you own two cars? If the answer is yes, ditch the more expensive one after you move.

Unfortunately, Husband doesn't have the option to bike, even when we live closer.  There's no place to change clothes; he has to be in uniform ready to go when he walks in the front gate, and his superiors would not look kindly on him biking in uniform - not to mention, it would be incredibly hot and uncomfortable, since we live in a hot & humid place, and he'd arrive sweaty & dirty every day, which would come across as pretty unprofessional.  So I think the best thing to do there would just be to get the commute as short as possible.

We only have one car.  He has a set schedule and I pick my own shifts, so I just schedule mine around his.  When they do overlap, like if he picks up overtime, he'll drop me off if I'm not biking.  The downside to that is that he has to be at work at 5:45 and I don't have to be at work till 6:45... and of course he's a billion miles away.  Plus he insists on leaving 30 minutes earlier than he actually needs to, because he's paranoid that there'll be traffic and he'll be late.  So tonight he dropped me off at the coffee shop that's a block down from the hospital, I brought the laptop so I could write up this case study, and I just stayed there till 6:15ish when I walked over to work.  It's stupid and inconvenient, but I'll be on maternity leave in 2 more weeks, so we'll only be doing it a couple of times.


Quote from: KaylaEM
#4 - Ahhhhh. Ahhh. Ahhhhhh. Nooo.
Yeah.  I know.  FTR, the coffee is a once-a-month thing.  And we used to have a budget category for "sports/fitness," which is what I used for athletic stuff.  Also, I can't actually remember the last time I bought craft stuff.  Workout clothes - well, mostly biking.  I bought a few maternity items over the summer, all on steep clearance, because obviously at some point my regular stuff wasn't going to cut it,

My point is that me having a spending money category is a new thing (like, new this month), and the idea is that I'd have a set amount for my regular personal stuff. 

To be honest, part of the reason I wanted that was because if there is money in the bank account, Husband will spend it.  He has stuck to his agreed-upon amount exactly once.  I got him to take it out in cash, but when the cash ran out, he would just use the debit card... and spent $140 last month on god knows what.  So I figured if I had an equivalent amount to play with, I could just put it in a separate account (which I did), and it would basically be a way for me to hide money and ensure that we weren't totally drained.  I also used part of it, plus some side hustle money that I keep in the same account, to pay off a small ($90) credit card balance today.


Quote from: KaylaEM
#5 - Attempt a refinance - even if they tell you no, that's the worst that can happen. In the meantime, use the ~$2000 you just freed up on phones and spending (Right? Right?) to aggressively pay this down until it's no longer sub prime.

Yeah, I guess we could at least try.  The way I look at it is, it's not just them saying no, it's a really humiliating conversation where I feel like I'm being judged as an idiot for my past mistakes, I get a hard inquiry on my credit report, and in the end, the whole thing was a waste of time.  I mean... seriously, look at our credit scores.  They were about the same a year ago when he got the loan (it's actually in just his name, not both of ours) and we couldn't get approved except with that horrible interest rate, so I honestly don't see why we would now.  I'm not trying to be negative or make excuses; I just want to be realistic.

Quote from: KaylaEM
#6 - Do a debt snowball. Pay down the car, and put that money toward the credit cards, and put all that money toward the medical bills, etc, etc. Pay your family faithfully with what you've agreed to pay them, and throw in extra when you can, but your focus should be on eliminating debt with interest.

It's only his family that we owe money to.  Honestly, they'd be happy to get anything; they're not going to bug us about the amount.

Quote from: KaylaEM
This might seem counter-intuitive, but if an RN is what you really, really want to be, then go for it. Earning more is just as important as cutting back. But, definitely run the numbers.

I would make roughly 2-3x as much as an RN.  The tricky part is getting through school without incurring any more debt, but that's the only way I'm willing to do it.  My plan is to do all my prereqs and general ed classes at the community college, then transfer to the state school in town to finish my BSN.  The community college classes, I could pay as I go, part-time if necessary, and hopefully by the time I get to the university part, we'll be in a better position to pay cash for those last 2 years.

Quote from: KaylaEM
Random: Run the math on your side hustles to make sure they're not losing money instead of gaining any.

Yup!  The company I do most of my shops with does a lot of grocery store assignments, so I try to do one every week.  I don't spend any more on groceries than I would otherwise, and I get $14-$20 for it.  


I am new here so I am not sure how much help I will be but my wife and I are close to you all's age so I'll give it a shot!


Regular Expenses:
Rent - $655 (2br/1ba townhouse; this includes a $30/mo pet fee and trash pickup) This is good news! Do you think you would be able to keep it around this cost if you move to the new town? 

Yes!  That's one reason I want to move.  I've looked at craigslist to see what's out there, and there are fewer options (much smaller town), but there are options that fit our budget.  We might pay slightly more, closer to $700-750, but the amount we'd save in gas, plus not having so many convenient opportunities to spend money, would make up for it.


Cell phones - $145  FACEPUNCH! #1 I would look at how much it costs to cancel your contract. Also if you have nicer phones now you might be able to sell both of yours on ebay and have enough for the cancelation and two new republic phones ($99 each) Thats what we did!

See above.  The fee I was told, I assumed was per line, but it recently occured to me that it might be for the whole account.  I'm going to call tomorrow and clarify this.  Our phones are decent.  Mine has a cracked screen, but they're otherwise in good shape and we should be able to get at least a little for them.  Alternatively, there might be a BYOD carrier that would be a good option.

Groceries - $400 Seems like it might be a little high for just you two. We spend about $275 a month on foodand go out to eat a lot! What groceries stores do you shop at? Is there an Aldi near you?

Nope, no ALDI.  That is high, but I was looking at just recent spending.  We can, and usually do, spend less than this.  The numbers I put in for the case study are the high end of recent averages. 

We just got a Costco membership, and we're going to start getting bulk stuff there once a month and then fill in the gaps at Harris Teeter, Trader Joe's, and Target.  It's also high right now because I've been working 60 hours/week, in 12-hr overnight shifts, all summer, and between that and being pregnant, I haven't had the time or energy to cook.  But yeah, this could definitely come way down. 

The toiletries/household goods part of it has also been higher because of things like replacing our POS couch (with a $60 craigslist find), as well as buying a cheap used washer & dryer - can't really do cloth diapers if you have to go to the laundromat every day, and all those quarters added up!



Pets - $100 (dog + cat + guinea pig) Any way to get this cheaper? Cheaper food or buying in bulk?

We just got a 40-lb bag of dog food at Costco for $29; it should last 2 months.  He's a big (65-lb) dog!  When our current stash of cat food & litter run out, those will start coming from Costco as well.  The guinea pig... well, I don't know.  I need to compare prices to see if I can get his stuff cheaper on Amazon or something.  That $100/month includes $20 set aside every month for flea meds for the dog and cat, which we need every 6 months, and are $120 total each time.

Car + renter's insurance - $135  FACEPUNCH! #3 GEICO was much cheaper for us!

I'll try Geico.  I haven't tried every company, just 2 or 3 (Progressive, esurance, and I think one other?) and the quotes I got were almost exactly what we're paying now. 

Also, I would definitely look into how much your car is worth and try to sell it! 22% is EXTREMELY high and anything you can do to get rid of it would be great.

Yeah, that stupid car...  *sigh* He doesn't want to try to sell it yet.  He thinks there's too much we'd need to fix first.  There's really not.  The windshield is scratched, but you can get a kit to fix that for $30.  And there's a little dent on the hood, but you can't see it unless you're looking for it.  There's also some scratches & chipped up paint on the rear bumper from a very minor fender-bender.  Again, would be cheap to fix.  All of that could probably be taken care of for a couple of hundred dollars, but he just won't do it, and since it's not actually my car at all, I don't feel like I should.  There is also the issue of mileage.  I honestly think that, even with the high mileage, we'd be able to fix the little stuff and at least break even, if not make a little money.  I'd be happy to have a $1k car again for a year, and with the money we save, have enough to buy a $4-5K car in 6 months to a year.

I am not sure if you could get a 0% intro APR credit card, but that could help you with not having cash now. You could do something like using a serve account for each of you (Let me know if you are unfamiliar with this) to get $2,000 interest free for 12-18 months and buy a car with that money. you could do it two months if you needed $4k to find a car for you (but I think you can get one cheaper)

I doubt we could.  Again, our credit scores are 525 (his) and 600 (mine).  He got the subprime car loan because it was literally the only option; we didn't have the cash and no one else would lend us money.  I am not familiar with a serve account, btw; fill me in?


I would start with the toiletries/household goods/personal care and grocery bills.  We spend $200/month for all of it.  Start cooking in bulk.  Stop buying expensive household goods.  Stop buying prepared food items.  Cook from scratch.

I agree, this is too high.  Although, the past few months have been higher than normal.

What about the car?  SELL IT!  Debt at 22% is insane!

I agree, it is insane!  The problem here is that we do not have cash or access to credit to replace it, bike commuting is not an option for Husband, and I am not sure that we'd make enough from selling it, to have enough left for a new (old) one.  I really feel like we're stuck until we can either save up a few grand or improve our credit enough to refinance.

Is going back to school, even part-time at first, a bad idea?  How much would daycare cost?  What types of programs are you looking at?  How much does it cost?

No daycare; I can do almost all of my basic/gen ed classes online, and when I need to be on campus, schedule around my husband's shifts.  I'm looking at  2-year pre-nursing AA at a community college, then transferring to the state school in town to finish a BSN. 

As of right now, half-time would be $486.25/semester (plus books), which is probably all I can do with a newborn.  Full-time would be $966/semester (plus books).  I'm not sure about the university costs, but they'll change by the time I get to that stage, plus we'll be in a better financial position. 

My work provides some tuition assistance, and I should qualify for at least a little in grants, etc.


You say that the $200/month you spend on frivolities is saving your sanity, but YOU'RE HAVING A BABY!  Bringing kids into this debt emergency is unfair.  You need to focus.

I'm not spending $200 a month on frivolities.  We agreed to limit our personal spending to $100/ea.  I cannot get him to spend less than that; he usually goes over by a good amount.  Mine, I use for things that we were previously budgeting separately for; this just puts a limit on the total I can spend on all of it.

The sanity-saving comment was referring to my work gym, which costs $20/month for a family membership.  Fitness stuff is pretty much my only time to myself and/or social interaction.  The work gym is dirt cheap, is open 24/7, is incredibly fancy with tons of, and includes free childcare.  I look at this as a way to get out of the house after the baby's born.  Husband and I can go together as well, and have some couple time, without paying for a babysitter, and get a workout in the process.  So I think this will stay.

I do agree, though, that my normal spending on sports/fitness stuff needs to be cut way back.  I pay $35/month for my aikido club membership which gives me unlimited classes.  This will be dropped till at least January, or whenever it's feasible to return postpartum (physically, as well as time-wise).  And I know I can't go to every seminar, etc.  Just basic classes.  Same for other events.  It's not the daily cost of training/working out that gets me; it's stuff like marathon entry fees, traveling to do stuff.  I do that because I enjoy it and it motivates me to train, but I definitely can't afford it right now.  So I guess for the next year or so, at least, I'll stick to just the basics. 

Like I said, this is my main hobby and only social outlet, and I do think it's worth $55/month.  OH!  Actually!  If I go back to school, I can pay the student fee for aikido, so that'll only be $25 instead of $35.  So $45/month, and again, that includes Husband on the gym membership. 

Cycling club is $10/year; that can stay, too.  It's easy to spend extra there because we do coffee stops, Sunday morning rides that include breakfast at Panera, etc., but I can ride and just not eat at the stops, or bring my own snacks.


Should I even bother with 403(b) contributions right now? Do you have a match?

No, because there's a separate pension plan.

Regarding your initial comments about reduced income, etc.:  If I were to stay at work full-time, two things would happen.  One, I'd end up paying for daycare, because I wouldn't be able to work around my husband's schedule all the time, especially with the amount of overtime he's started going.  Two, that would mean switching to day shift instead of night shift, so I'd lose my shift differential, dropping my pay from $11.60/hr to $9.70.  And it would difficult to do overtime on a regular basis.  I did the math to see how much my net pay would be, and it would be enough to pay for daycare.  Maybe not even that.  I'll bring home more money working 1-2 shifts a week than if I did 3-4, because on a part-time basis, it will be easy to arrange my shifts so that I only work on nights when Husband is off.  Also, he has started maxing out his overtime, and his check at the end of this month should be roughly $3300 net.  So if he does that every month, and I can pull in $600, there's no loss of income.  :)

I do know that kids can be expensive.  I have a 9-year-old already (though he is from a previous relationship and is currently living with his dad, so we only have him during school breaks & summers).  This isn't my first rodeo.  I do think that by eliminating the need for daycare, and doing simple things like breastfeeding and cloth diapering, we can keep the expenses to a minimum.  Kids don't have to be obscenely pricey, especially at first.

Pick up the phone and book an appointment with the bank. Quit saying you probably won't qualify and find out.

I also love school. Of course RN's make mega cash around here, it biases my thoughts. If you have the chance to become a RN you should.

I think selling the car is a more realistic option than trying to refinance, but I have to get Husband on board with that, as well as find out what it's really worth.  We owe less on the loan than I thought we did, which is good.

School needs to happen if I don't want to make $10/hr for the rest of my life.  It's just a matter of how I'm going to pay for it, and what kind of pace to go at.

resy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #10 on: November 03, 2014, 08:40:20 PM »
Hi!
I am also "new" here, been reading the blog and implementing needed changes in my life for over a year, active in forums for a few months now and let me tell you that you have come to the right place. Welcome! :) If you are truly down with the lifestyle and philosophy, you will find that the community here is a GREAT support.
My hubby and I are your ages so I get a lot of it, and yes ots never too late! Yay!
You have gotten great advice from previous posters, things I had thought about and then some so no need to repeat those facepunches! But PLEASE seriously consider making the suggested changes, they are great starting points.
I do however want to add one tidbit: COULD YOUR HUSBAND AND YOU BUCKLE DOWN FOR A FEW YEARS INTO A ONE BEDROOM LIVING SITUATION? Just while you get yourself together and then get a little ahead. Dont get me wrong, what you are paying now is really cheap...but it is still a pretty good chunk of your income and your income will be decreasing when baby comes for at leadt a few months. I have a 9 year old and I really wish I wouldnt have insisted on him having his own bedroom the first few years. It isnt really necessary and a one bedroom place will always be cheaper than a 2 bedroom, and he/she doesnt have to sleep with you guys, he could have a little baby matress on the floor (call it a la montesorri style lol) or a crib. Then in say 3 years you could transition into a 2 bedroom place (for space as well as privacy) but ahead financially. Just a thought.
Best of luck!

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #11 on: November 03, 2014, 09:29:02 PM »
Oh boy.  So many replies!  Luckily it's an uneventful night so far, so I have time to read & reply.  I'm going to just address the points instead of all that quoting I did earlier. 

School:  I absolutely will not go into debt for this.  That's why I want to start at the CC, do part-time at first, etc.  If it takes me longer to get through, that's okay; it's worth it to be able to get out of debt at the same time, and once I finish, I'll have the huge increase in income without any additional debt.

Debt Stuff:
Husband does work for the state, and it JUST occured to me today that he might be eligible for some kind of loan forgiveness.  This is a new job - he was hired in August.  We're still figuring stuff out.

Regarding settling, I have always heard that's a bad idea because it shows on your credit that you settled for less than the original amount, and that doesn't look good.  Although I suppose it would look better than what's currently on there! 

Work:  Can't do a night job because my current job is a night job.  So is Husband's.  He works 6p-6a, and I work 7p-7a.  The upside to this is that we both get a shift differential.  The downside is that when you have 12-hour shifts, especially several days in a row, it's hard to fit in a second job.  Basically, it's work, eat, shower, sleep, back to work.  It's easier for both of us to just pick up as many extra shifts as possible.  Like I said in my OP, I've committed to one shift a week post-baby, but they know I'm always willing to come in extra when possible.  I'll probably end up doing 2 most weeks, sometimes 3.  I'm not sure what Husband's max is, but he's been doing 4-5 lately.

Housing:  I have thought about doing a one-bedroom.  Since my older son is living with his dad now, it would just be us + baby for most of the year, and we might be able to swing that.  Baby will be in our room for the first year or so anyway.  I don't know what Husband would think, or what we'd do in the summer when the big kid is with us, but it's worth a conversation.

Bills:  The t-mobile hack is a good idea!  I'll look into it. 

The electric bill is high because Husband is from Iowa, but we live in NC, and he has no heat tolerance.  The A/C ran WAY too much over the summer.  Hopefully during the winter it'll be easier to get him to agree to keep it down... although it's been 60*F outside lately, and yesterday he had the heat on, so who knows.  I hate being cold, but I'd rather put on a couple of sweaters than pay more.  Of course, since I'll be home more soon, I'll have more control over this.

Car:  Just looked it up on kbb.com, and they estimate its value at $6461.  So if we were to sell it, we'd need to either get a lot more than that somehow, or have cash saved up to pay off the remaining $2500ish, PLUS enough to buy something else outright.  Or, pay it down to where we'd at least break even.

I'm willing to try, but I just don't think refinancing is going to be an option with our current credit.  I think we need to bump the car loan to the top of the debt snowball, because this thing needs to go away as soon as possible.
« Last Edit: November 03, 2014, 09:39:06 PM by tofuchampion »

YoungInvestor

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #12 on: November 03, 2014, 09:41:13 PM »
120k for a Ministry degree? Seriously?
22% financing for a car?

Anyway, consolidate loans at a lower global rate if at all possible. If not, pay the ones with the highest rates ASAP while making minimum payments on the following ones. Expenses look decent, except for the phone plans. You're poor, you don't need 2 expensive smartphone plans, you need none. Especially not yours if you're going to stay at home for most of the week.

Can you sell the car, buy a cheaper one and pay off a large part of the loan right away? Consider insurance and gas savings in the equation as well.

100 per month for pets? Seriously? Just give them away. Maybe keep the least expensive/most enjoyable one, but that's ridiculous.

Insurance : Google a list of all the companies you can find in your region and call them all. All of them. Including USAA: tell them you're looking around and want to make sure that the most recent price was still appropriate with the recent events in your life (marriage, kid).

Good luck!

potm

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #13 on: November 03, 2014, 09:52:14 PM »
It sounds like you need to get your husband on board more. He needs to realise the extent of your situation.

In your budget you listed expenses but not the total interest cost on your loans. What is the actual amount you are able to put towards debt repayment currently?
At the moment with 140k of debt and the current level of income and expenses it does not look like you'll be able to make much if any inroads towards the debt.

Your only way to increase your income at the moment is for you and your husband to take as many extra shifts as possible but there is a limit to that. You have to reduce expenses.
Consolidating loans on a lower interest rate would be a good way to do that without any sacrifices but if that's not possible then sacrifices will have to be made.

Without any significant changes, your target of 5 years to debt repayment does not look realistic, I'm sorry.

Radagast

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #14 on: November 03, 2014, 10:50:51 PM »
You need to and can slash spending by $600 per month. Examine all expenses and adjust your priorities to meet that goal. Period. This will give you a little tiny snowball to throw off the mountain to trigger the anti-debt avalanche.

The vehicle is your first priority, higher than everything else including 403(b). Every last penny should be sent towards ditching it. Huge predatory loan, poor mpg on premium fuel, it is just bad. Getting an inexpensive high mpg vehicle (30 mpg is ok for the right price) for cash could save $500 a month. Now your snowball is rolling at $1100 per month. Do not increase spending.

Continue rolling the snowball at your debt, highest interest rate first. Do not increase unnecessary spending, just keep on rolling. $600/mo, $1100/mo, $1300/mo, $1700/mo, just keep growing it and rolling it. In addition to eliminating, consolidating, and reducing interest rate on all possible debt by other means. If you are successful at those last you just might get there in five years.

Exflyboy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #15 on: November 03, 2014, 10:53:30 PM »
what are your current phones now?.. are they GSM phones (the ones with the SIM cards)?.. If so set the same phones up on airvoice wireless on the $10 a month plans.... Need more minutes than that?.. Sorry you can't afford them.. cut back so you spend no more than $10 a month.

The rest everybody else has pointed out..

Basically your in a world of hurt.. You can dig out but it will take discipline.

There is NO spare money for frivolity... get serious!

Get rid of that stupid car and buy a gas sipper.

Frank

Allie

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #16 on: November 03, 2014, 11:31:29 PM »
I commend you for tackling this debt.  I'm going to be the downer who points out that the primary breadwinner in your growing family has Type 1 diabetes, which can be fine for years or can wreck havoc on your middle age.  I would recommend you tackle as much debt as possible ASAP and get your RN to secure your earning power in case your husband's health takes a turn for the worse.  I have a close friend with a diabetic husband and this was central to their planning even before his health started to decline at 34. 

I hope your husband and family is healthy for many, many years to come.  Good luck!

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #17 on: November 04, 2014, 01:02:14 AM »
I'm going to be the downer who points out that the primary breadwinner in your growing family has Type 1 diabetes, which can be fine for years or can wreck havoc on your middle age.  I would recommend you tackle as much debt as possible ASAP and get your RN to secure your earning power in case your husband's health takes a turn for the worse.

This is a big motivation for me.  TBH, he is not great at taking care of himself (see also: the daily McD's stops after work), and while his body is holding up for now, I know that when it hits him, it'll hit all at once.  Working in a hospital, I've seen this way too many times.  I wish he would take better care of himself, and that would help us financially as well, but I can't force him to be responsible, with health or money.  I've been trying for years, but the constant worrying and nagging was ineffective, wearing me down, and driving a wedge between us.  So now I just try to mind my own business and hope that he'll eventually get it.  We'll see.

Regardless, I know I can't count on him being around and providing forever.

It sounds like you need to get your husband on board more. He needs to realise the extent of your situation.

I know.  This has been the biggest challenge.  He's a little better than he used to be, and he sees the effects of the changes I've made, but somehow it's not enough to get him to give up the constant junk food, impulse entertainment purchases, etc.  Honestly, if I knew he was going to keep all that under $100/month, which is high but what we agreed on, it wouldn't bother me so much.  At least it would be controlled & predictable. 

Quote
In your budget you listed expenses but not the total interest cost on your loans. What is the actual amount you are able to put towards debt repayment currently?

3900 income - 2264 expenses = $1636, assuming no irregular/unexpected expenses, and we maintain this level of overtime. 

Quote
Consolidating loans on a lower interest rate would be a good way to do that without any sacrifices but if that's not possible then sacrifices will have to be made.

Our credit is way too shitty at the moment to get any kind of loan.  This is something I want to look into in a year or so, though.  And Husband should be able to consolidate his student loans, at least the federal ones, and then get on an income-based repayment plan, which will help tremendously while we work on the car, etc.

[quote[Without any significant changes, your target of 5 years to debt repayment does not look realistic, I'm sorry.[/quote]

Oh, I know.  :(  I think it's possible, though.  I just need to get Husband on board, and we both need to be motivated to make these significant changes.  I don't know how to do that, and it's not something I can do on my own, obviously.  But think of what we could do if we really worked together on it!
[/quote]

what are your current phones now?.. are they GSM phones (the ones with the SIM cards)?.. If so set the same phones up on airvoice wireless on the $10 a month plans....

I think they are.  I'm not actually sure.  Will find out and report back!

Quote
Can you sell the car, buy a cheaper one and pay off a large part of the loan right away?

Well, I can't sell the car without the cash to make up the difference between what it's worth and what we owe, because I would have to pay off the loan completely in order to get rid of the lien and sign the title over to someone else... so no, this doesn't actually make sense to me.  I would have to have that extra $2500 on hand first, plus enough to buy a cheap car. 

Believe me, I know the importance of getting rid of the car!  If I could do any one single thing to help the situation, it would be to get rid of the car.  The problem is that Husband doesn't get it.  And since it's his car, in his name, his loan... I can't do anything about it.  I've shown him the numbers, but he just doesn't think it's possible.  So he doesn't try.

The car is out of my control.  Everyone keeps saying, "sell the car!" but I can't unless he agrees to that, and I don't know how to get him to agree.  I've been trying for months.  I didn't want him to buy it in the first place.  But now it's here and I'm stuck.

happy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #18 on: November 04, 2014, 02:42:51 AM »
1.You could try some no-spend challenges. Make it a fun game. Design some challenges that appeal to you e.g., no spend on clothes (I'm nearly finished the second year of a no spend on clothes), or one of a variety of grocery challenges e.g. - no spend for a week,  or for as long as you can go, or  spend only $21 this week. Other ideas don't drive the car this weekend - recently launched by MMM himself,  see how long you can make a tank of gas last. etc etc etc.

These have a few functions -  you save some money, you find out what you really need to survive which should save you some money  in an ongoing fashion,  they strengthen your ability to be satisfied with less, stoicism etc.

2. Have you any stuff you can sell?

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #19 on: November 04, 2014, 04:06:24 AM »
I like the idea of the no-spend challenge.  This is something I've done personally on occasion (no-spend November and that kind of thing).  Maybe we could do something like see how long we can go without spending on junk food (him) vs coffee (me).  Actually, no, that's not fair, I'd win easily.  Haha.  We can talk it over and come up with something.

I also think it would help for him if there was an alternative, less temptation.  Like, if he wants energy drinks, it would be cheaper to buy them in packs at the grocery store or wherever.  It's still a silly use of money, but at least it's less money.  If he wants a sausage biscuit in the morning after work, I can make a bunch and put them in the freezer so he can take one with him.  I can't force him to give anything up, but

We really don't have anything to sell.  I don't, anyway.  We sold a lot of stuff when we moved, bc the new place is smaller and has less storage space.  I have a few clothes that need to go on eBay.  I have several books listed on Amazon; I've sold about half of them and am just waiting for the rest to go.  I have a Kindle that I got for Christmas a few years ago... I want to sell it because I never use it, but Husband bought it for me and I don't want to hurt his feelings by selling it.  I also have a fairly decent point-and-shoot camera that, again, I just don't use.  I could probably get at least $50 for it.  Husband doesn't want me to sell it because he's convinced we'll want it when the baby comes, no matter how many times I point out that phones take just as good of pictures as P&S cameras these days.

So I might have about $100-$200 worth of stuff if I can sell it all. 

Husband has literally over a hundred DVD's.  He won't sell them.  We don't even have a DVD player; they are just taking up space and don't get watched, but he won't get rid of them.  I don't know why and I've given up trying to understand.

Stashing Swiss-style

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #20 on: November 04, 2014, 05:00:49 AM »
Great advice from lots of people and I can't add anything new, but I wanted to say WELL DONE !  It's awesome how you are dealing with this - you're in a shitty situation, with a new baby coming and a husband who's not completely onboard yet.  Despite all that, you are not complaining, you're not a victim and you are going to kick ass !  I've made soooooo many mistakes with my finances, but finding Mr MMM and the Forum has woken me up big time.  First step is recognising the need to change things, 2nd step is making the changes and then the other steps follow one after the other.  Good luck, and keep posting in your journal.

theadvicist

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #21 on: November 04, 2014, 05:06:04 AM »
Welcome! And well done on the changes you have made so far.

Regarding selling stuff: If you never use the Kindle, how would he know if you sold it?

And you really don't need your husbands permission to sell -your- stuff. If you don't want a camera, you are free to sell it. I can understand you need his agreement to sell the car (since it's in his name), but on these other small things you are either giving him too much power, or using it as an excuse ;)

Leading by example is honestly the best way, in my experience. If you want him to start taking food to work, make sure you are doing it yourself. If you don't want him to spend any money on incidentals, make sure you aren't. If he can see how much you are giving up, it will reinforce the gravity of the situation.

For example, going for coffee before work. I can see how that came about - you were early, you needed somewhere to wait. But could you instead: go for a walk in a park or the hospital grounds, go to a nearby library, use a cafeteria in the hospital (hopefully cheaper), sit in a staff room and read your Kindle (ok I'm joking now!). The coffee shop isn't the only solution to that problem, is what I'm saying. And yes, it's only a couple more times before maternity leave, but if he drops you off and you say, "Please drop me at the park, not Starbucks", and he says, "Why", you can simply factually state, "Coffee isn't in the budget, I'll go for a walk instead". It's easy to pretend small changes won't make a difference (it's only one time! I'm finishing soon! He won't listen!) but you have to really walk the walk for him to comprehend you are serious. (and don't use the 'it's dark' excuse. There must be somewhere safe in the hospital you can wait for free, even in the evening).

I also just have to say $100 on personal / household is very high. What are you buying? Since you are going to use reusable diapers you clearly understand that disposable stuff is costly in many ways. Are you using dishcloths instead of paper towels? Have you stopped buying all brand name cleaning / laundry products? We are two people and I put all our household spending in with groceries. We spend under 200 ($320) a month, and we eat very well.

Final groceries tip - do not go to the store unless you are actually OUT of food. If there is something, anything, in the fridge you can cobble together a meal with, do it. Your hair is on fire, 'I don't fancy x' is not an option.

Also, buy a pack of energy drinks, and put them in the trunk of his car. Laziness often wins, in my experience, if you make it easy for people to do what you want them to do, they often will.

Hope this isn't too harsh! Been there, done that, with the debt repayments. The good news is it has turned me into an incredible saver (and I can and still do make a meal with whatever is in the fridge, and it has improved my cooking skills no end).

Also, congrats on your impending arrival!

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #22 on: November 04, 2014, 05:25:16 AM »
Can you look at some opportunities to become a home health care worker?  It seems that type of job (esp on the private side) would pay a LOT more. Heck, if I were you, I'd get out of the mindset of working at a hospital with established roles and create my own role as an independent supplier of home care services. If you can build up a small clientele, you can even hire some help. Once you hire other people, that will free up some of your time to take classes and get your RN.

You seem pretty intelligent from your posts, so put some thought into some needs that aren't met by the hospital, and fill those needs. Don't feel guilty about making more money than you would have otherwise. If you go independent, remember to charge what the hospital would charge for your services--not what you get paid. That's how I jumped from $60/hour to $185. It's a life changer.  You may even be able to partner with the hospital and hire some of their RNs to make home visits. It's a growing field and if you think of yourself as a business person, you don't need the license to run the business.

Have you ever worked in a small business or do you know someone who could help you get started?  Just jump in and figure out what you need to do to survive. Soon you'll change focus on what you need to grow.

Pigeon

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #23 on: November 04, 2014, 06:12:40 AM »
Home health care workers make very little money and typically have no benefits, I'd avoid that like the plague.

Since you are in the health care field, you probably have done this, but I would  make sure you've researched thoroughly the job market for RNs in your area.  The job market for RNs seems extremely regional.  I've got two step sisters who are RNs.  One wanted to move to a different state and spent six months looking for a job to no avail as there is a  glut of RNs there.  She came back here and had three job offers inside of a month.

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #24 on: November 04, 2014, 06:42:41 AM »
Pigeon - yeah, I've done home health before, and while the work is easy, I wouldn't want to not have benefits.  Doing it privately as opposed to for an agency would be better money, but then you have to factor in that I don't have the backing of an agency - I have to find my own clients, I have to provide liability insurance, etc.  Most people who do it for themselves do it under the table, at least the ones I know.  And they have no liability insurance, they're not bonded, and legally, you put yourself at a lot of risk.  Of course, you can figure out all the legal stuff, but that would cut into the amount you're taking home.  There's also taxes & stuff to consider.  And to be honest, I really don't want all the hassle of doing it right, and am not willing to take the risk of doing it under the table.

Besides that, I love the hospital.  I love the environment, the energy, the camaraderie.  It's different from any other NA work I've done (nursing home, home health, assisted living, rehabilitation - I've done a little of everything), and in a good way.  If I were to stay in Wilmington, I'd be at a great hospital that's very well-respected and doing well financially, that offers amazing benefits, and not only would they help me pay for school, I could stay on as an RN after I graduate. 

I'm not sure we want to stay here - well, I do, because of the work/school situation - but Husband wants to move to Raleigh and work in federal corrections, because the local stuff is pretty much a dead end.  But once I'm where I want to be, that might not matter as much.  Or he could do the training to be a cop instead of a CO.  Regardless, me going back to school would give us a ton of options.

theadvicist - You're right; I do need to lead by example more.  I tend to get frustrated by his spending and feel like there's no point in me trying to save.  And I get resentful that he does whatever he wants while I don't; almost like my saving is enabling his spending (because if I do cut back & save money in one area, he'll see more money in the bank account and think it's available to spend).  It's silly and counterproductive, but there it is. 

Anyway.  I could go on.  I have a ton on my mind right now, but I just got home from work and I've been awake since 4am yesterday, so I really really need to sleep.  I'll come back to this tonight once I've got my thoughts straight and update the original post with some new numbers and a game plan.

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #25 on: November 04, 2014, 07:33:59 AM »
I think going for your RN degree would be good as you will make more money. But why is your plan to get the BSN? Why not just get your AS in Nursing? The pay is basically the same in most areas and you can then work as an RN while you are going for your BSN.

PloddingInsight

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #26 on: November 04, 2014, 07:40:29 AM »
I'm not 100% certain of the details of how debt in marriage works, but my main advice is to make sure as much debt as possible are in your husband's name only and not your responsibility, and do as much as you can to get assets in your name only and not available to your husband's debtors (personal tax-advantaged retirement account?).  That way if he croaks and/or files bankruptcy, you are in the best possible position to recover.

Does anybody know for sure if she is at all liable for husband's student loans if he dies and/or stops paying?

EDIT:  I'd also get clear on exactly what would happen if he was too sick to work and went on disability.
« Last Edit: November 04, 2014, 07:42:12 AM by PloddingInsight »

GardenFun

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #27 on: November 04, 2014, 07:43:48 AM »
At least you know your hair is on fire. :-)

You need to make as much money as possible.  Fighting over $100/mo spending is moot if you can make $500-$1000 more a month that goes directly toward debt. 

No 401k/403b match?  Don't contribute to retirement at this stage.  You have too much debt at high interest to pay first.  Remember - your car loan is charging 22% on the large balance, while your retirement fund is making 10% max on a small balance.

Reducing the car loan is a two-stage process:
- Call a few credit unions and explain your situation.  They should be able to tell you what credit score is needed to be eligible for a lower loan rate.  Also realize that there is a HUGE difference between a 10% loan and a 22%, so while the loan may not jump immediately to 4%, any % reduction helps. 
- Sign up for Credit Karma.  You can check your credit score (and your husbands) at any time.  It will also show you the fastest/best ways to improve your credit score.  Depending on the results above, you now have a real goal to achieve.

Daycare:  Considering both of you work night shift, is there any family/friends in the area who would be willing to help out with daycare during the day?  If you continue to show a solid plan plus real progress toward achieving that plan, they may be willing to help. 


Future Lazy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #28 on: November 04, 2014, 07:46:52 AM »
Quote from: KaylaEM
#4 - Ahhhhh. Ahhh. Ahhhhhh. Nooo.
Yeah.  I know.  FTR, the coffee is a once-a-month thing.  And we used to have a budget category for "sports/fitness," which is what I used for athletic stuff.  Also, I can't actually remember the last time I bought craft stuff.  Workout clothes - well, mostly biking.  I bought a few maternity items over the summer, all on steep clearance, because obviously at some point my regular stuff wasn't going to cut it,

My point is that me having a spending money category is a new thing (like, new this month), and the idea is that I'd have a set amount for my regular personal stuff. 

To be honest, part of the reason I wanted that was because if there is money in the bank account, Husband will spend it.  He has stuck to his agreed-upon amount exactly once.  I got him to take it out in cash, but when the cash ran out, he would just use the debit card... and spent $140 last month on god knows what.  So I figured if I had an equivalent amount to play with, I could just put it in a separate account (which I did), and it would basically be a way for me to hide money and ensure that we weren't totally drained.  I also used part of it, plus some side hustle money that I keep in the same account, to pay off a small ($90) credit card balance today.


Quote from: KaylaEM
#5 - Attempt a refinance - even if they tell you no, that's the worst that can happen. In the meantime, use the ~$2000 you just freed up on phones and spending (Right? Right?) to aggressively pay this down until it's no longer sub prime.

Yeah, I guess we could at least try.  The way I look at it is, it's not just them saying no, it's a really humiliating conversation where I feel like I'm being judged as an idiot for my past mistakes, I get a hard inquiry on my credit report, and in the end, the whole thing was a waste of time.  I mean... seriously, look at our credit scores.  They were about the same a year ago when he got the loan (it's actually in just his name, not both of ours) and we couldn't get approved except with that horrible interest rate, so I honestly don't see why we would now.  I'm not trying to be negative or make excuses; I just want to be realistic.

#4 - First thing on payday morning: Pay bills. Pay bills. Pay bills. Write up a budget, write down all the bills for the next 2 weeks (or until the next paycheck) and pay bills.

Cash - Bills =/= Spending Money --- Cash - Bills = Extra money to pay off debt.

So: $2264 - $100 (cut phone bill) - $150 (cut spending money) - $50 (clothing is spending) - $200 (cut groceries)$1764, a difference of $500/mo.

$3300 - $1764 = $1536 - Normally I would call this surplus cash, but you don't have the luxury of surplus cash. Your obligation, then, is to be putting this $1536 toward debt every single month. As soon as you get a paycheck, you should be paying a credit card. You said it yourself - if the money is in there, it will be spent. So remove it. Pay debt with it.

If your answer to that is something like: If the cash isn't there, the DH will just use a credit card for McD's! Well - too bad, because your next bit of homework is to take the credit cards out of your wallets and freeze them in a big chunk of ice in the freezer. The bigger, the better. That way, you can melt it for emergencies, but they aren't there in your pocket for spending. No more spending.

This will make a very, very good habit. I promise. If you do it this way, then something magical will happen. One day, you're going to get a paycheck, and you're going to go to pay down debt, and there won't be debt to pay. With a gigantic smile on your face, you're going to instead transfer your newly claimed Surplus Cash to a savings account, and it will feel amazing. Paying debt first will train you to pay yourself first later, when you're able to save.

#5 - Then be realistic: Realistically, the worst that happens is they tell you no. Bummer. Pick up and move on. You're clearly over your mortification enough to post about it here, on a forum specifically geared toward financial face punches. It'll be okay! Just try it out.

Quote from: KaylaEM
This might seem counter-intuitive, but if an RN is what you really, really want to be, then go for it. Earning more is just as important as cutting back. But, definitely run the numbers.

I would make roughly 2-3x as much as an RN.  The tricky part is getting through school without incurring any more debt, but that's the only way I'm willing to do it.  My plan is to do all my prereqs and general ed classes at the community college, then transfer to the state school in town to finish my BSN.  The community college classes, I could pay as I go, part-time if necessary, and hopefully by the time I get to the university part, we'll be in a better position to pay cash for those last 2 years.

Pick up the phone and book an appointment with the bank. Quit saying you probably won't qualify and find out.

I also love school. Of course RN's make mega cash around here, it biases my thoughts. If you have the chance to become a RN you should.

...
School needs to happen if I don't want to make $10/hr for the rest of my life.  It's just a matter of how I'm going to pay for it, and what kind of pace to go at.[/color]

$1200 x 2 = $2400, about equal to the numbers I ran above.

$1200 x 3 = $3600 - which means an income of about $43,200 instead of $12,000 yer year.

$43,200 - 12,000 = $31,200 more money per year.
$32,000 to attend school/$31,200 extra earnings = 1.02 years to pay back using just the surplus income from getting a better position.

The estimated 32k to attend school does not factor in pell grant, other grants and tuition assistance from your employer. It also doesn't factor in some of the debt forgiveness that happens in some fields these days, like childhood education majors. Is RN one of these?

Once again, the key is to have the confidence to pay back the debt. This is a great example of good debt. Yes, there is such a thing. School debt is only stupid and bad if you pick.. I dunno, 120k worth of Pastoral Studies, maybe?

Or, in other words, it's okay to spend on school, but you're just not going to be able to pay for it out of pocket on your current wages. 


Get rid of the animals, you can't afford them.

I want to suggest this, too, even though I think it is really harsh and uncouth. Like, you don't suggest to poor people who have kids to get rid of their kids because they're expensive, so it's kinda crappy to suggest getting rid of your pets. However, I do think you should examine your pet spending extremely closely. Cut where you can, and if you can't cut enough, then... Cut completely.   

I've heard a crapton of excuses in this thread.  At some point, you need to take responsibility for your own life.  And don't say that the vehicle is in your husband's name so you can't do anything about it.  You're married!!!  His financial ruin is your financial ruin.   It's sad enough that he doesn't think enough of you and his family to take care of his own health... and his own poor health (made worse by trips to mcdonald's) is going to make this debt even worse.

Even after everything that has happened, you have a choice.  Start making good decisions, and stop making excuses. You have to do this 100%.  If you just tinker around the edges, we all know how this story will end.

   ^---- Yes

IMO, if your DH doesn't see the light... Well, you're going to have to force him to see the light - at least the light of how important financial stability (should be?) to you. Maybe by splitting your finances down the middle and having separate bank accounts, so he only spends what he makes and you only spend (or save!!!) what you make. That's how I'm handling it, until my DH quits the soda, beef jerky and video games. Just an idea.

I'm not 100% certain of the details of how debt in marriage works, but my main advice is to make sure as much debt as possible are in your husband's name only and not your responsibility, and do as much as you can to get assets in your name only and not available to your husband's debtors (personal tax-advantaged retirement account?).  That way if he croaks and/or files bankruptcy, you are in the best possible position to recover.

Does anybody know for sure if she is at all liable for husband's student loans if he dies and/or stops paying?

EDIT:  I'd also get clear on exactly what would happen if he was too sick to work and went on disability.

Having debt in his name and assets in your name doesn't matter - if there's a paper trail to prove that DH was helping pay for a house, for example, even if the house is in the wife's name, the paper trail shows joint ownership and responsibility. It wouldn't make a difference either way, they could come after both of you in any case.

Student loans cannot be transferred to a spouse, for the same reason they don't go away in a bankruptcy. That knowledge (and the debt accrued by getting it) is considered to be stuck to that person for life.
« Last Edit: November 04, 2014, 07:49:56 AM by KaylaEM »

Jags4186

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #29 on: November 04, 2014, 07:50:26 AM »
I'm not 100% certain of the details of how debt in marriage works, but my main advice is to make sure as much debt as possible are in your husband's name only and not your responsibility, and do as much as you can to get assets in your name only and not available to your husband's debtors (personal tax-advantaged retirement account?).  That way if he croaks and/or files bankruptcy, you are in the best possible position to recover.

Does anybody know for sure if she is at all liable for husband's student loans if he dies and/or stops paying?

EDIT:  I'd also get clear on exactly what would happen if he was too sick to work and went on disability.

Unless she cosigned the loan she would not be liable.  If he were to pass away his estate would have to cover the debt.  Putting everything in her name that is worth something and everything in his name with debt is not a bad idea.

I'm not sure if someone else mentioned this but I would consider stop paying on the credit cards and try to negotiate down.  In your situation you're not in a position to take on any more debt so you don't need a good credit score.  If in 7 or 8 years you're out of this mess and want to buy a house...well 7 or 8 years from now your credit will have recovered.  You need to be on a cash only budget.  Theres no reason ever to have to use the credit cards again at this point so I'd cut them up.

skunkfunk

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #30 on: November 04, 2014, 07:52:04 AM »
Sooo, what happens if you just turn the car over and let it repo? They knew you probably wouldn't pay, that's why it's 22%. Probably an unpopular opinion but I'd like to hear why it won't work before I decide it's the worst option.

Regarding the husband no bike thing - electric bike with a trailer can get you pretty far. Or hell even a cheap motorcycle would save you money at this point. Or a 1992 ford festiva. Doesn't matter, get that cost down. If you can't get there that way, you're too damn far from your job anyway. New job or new home.

TrulyStashin

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #31 on: November 04, 2014, 08:42:23 AM »
There's tons of specific actionable advice here and it's mostly on point.   Sift through the advice and take the bits that will work and be helpful.  Make a business plan for your life.   Know that you don't have to get it perfect and that you're on the right track.  FWIW, I think you're right about:

1) You're stuck with the car for the next 6 months or so but if you restructure your spending and throw $$ at that debt and pay your bills on time then in 6 months you may be able to refinance or sell it.  Meanwhile, stop putting premium grade fuel in it.  Put midgrade fuel in -- it won't matter.  6 months will be here faster than you know.

2) Your back-to-school plan -- great idea.   I was in grad school when my son was a newborn and you'll manage it ok (I used to nurse him in the library stacks!)

I'm mostly writing to bolster your spirits.

You can do this.  It's hard but very rewarding.  Over the next year or two you're going to grow emotionally and spiritually and become much more resilient.  You'll develop a faith in yourself and your abilities that you don't have right now.   

Check out this journal for tips on helping your husband get on board.  http://forum.mrmoneymustache.com/journals/stealth-saving-%28lentils5eva-ioseftavi%29/

Create a plan, take it one step at a time, keep posting.  Good luck!

Future Lazy

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #32 on: November 04, 2014, 11:05:02 AM »
Debts: (aka one giant facepunch)
Car loan - We owe $9156.01 as of today.   $327.24/month payment on a 2009 VW Tiguan at 22.03%.  BIGGEST FACEPUNCH EVER!!
Student loans - ~120K total, mostly his.
Medical bills - $3K total; again, mostly his due to a couple of diabetes-related ER visits.
Credit cards - $5670 total, all mine.  :(
Misc - $2K total?  (this is a couple of old utility accounts, $400 I owe a friend, just random stuff)

total = $139,826 (ish)

#4 - First thing on payday morning: Pay bills. Pay bills. Pay bills. Write up a budget, write down all the bills for the next 2 weeks (or until the next paycheck) and pay bills.

Cash - Bills =/= Spending Money --- Cash - Bills = Extra money to pay off debt.

So: $2264 - $100 (cut phone bill) - $150 (cut spending money) - $50 (clothing is spending) - $200 (cut groceries)$1764, a difference of $500/mo.

$3300 - $1764 = $1536 - Normally I would call this surplus cash, but you don't have the luxury of surplus cash. Your obligation, then, is to be putting this $1536 toward debt every single month. As soon as you get a paycheck, you should be paying a credit card. You said it yourself - if the money is in there, it will be spent. So remove it. Pay debt with it.

What a debt snowball might look like for you after cutting spending:

Misc - $2,000/$1536 = 1.302 months to pay off, frees up ?? extra/mo
Med Bills - $3,000/$1536 = 1.953 months to pay off, frees up ?? extra/mo

I'm going to assume paying off the above clears up about $100-150 extra a month - which means $1536 + $100 = $1636

CAR, big ugly car- $9156.01/$1636 = 5.596 months to pay off, frees up $327.24 extra/mo! Then, of course, sell this car, and use that money to purchase something that doesn't suck (gas)!

$1636 + $327 = $1963, aw yea.

CC's - $5670/$1963 = 2.888 months to pay off, frees up $200++?? extra/mo!

So far, that's $19,826(ish) of debt eliminated in a total of 11.739 months, or before your kid's 1st birthday.

Student Loans - $120,000/$2163 = 55.478 months, or apx 4.6 years to pay off, which means you would be officially debt free. Woohoo!

That's a total debt of $139,826(ish) destroyed in a total of 67.217 months or 5.6 years.

It can be done, and you can do it..

Cassie

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #33 on: November 04, 2014, 11:38:17 AM »
Getting your RN will definitely improve your financial picture. Ignore the people that say get rid of your pets.  They are your responsibility for life-just don't add anymore to the mix & look for ways to cut costs in regard to them if you already have not.  Also you need to have some $ to settle with CC companies. Say they settle for 10% they want the $ at once or in a few very large monthly payments. If you do this make sure you save the letters at the end saying your debt was satisfied.  Also prepare to pay taxes on the amount they forgive because they report this to the IRS.  CC companies really vary in the amount they will settle for.  Some will be as low as 10% and CAP ONE will not settle for less then 70%. It will not hurt your credit as much as you think.  Good luck with the new baby and new financial life!

skunkfunk

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #34 on: November 04, 2014, 01:48:34 PM »
Pro tip - buy big bags of chicken feed instead of cat litter. Works the same. If you find that your cat doesn't cover it well enough to keep the smell down, add a half a thing of baking soda to the litter box and it's basically the fancy stuff.

Seriously, some of the fancy cat litters are just overpriced ground corn, which is chicken feed.

Allie

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #35 on: November 04, 2014, 01:53:27 PM »
I'm sorry to hear your husband isn't caring for his health.  I noticed that you have a higher, although still low, credit score than your husband.  May I suggest that you don't consolidate any of the student loan debt under your name (or any of the other debt for that matter, but certainly not the student loans).  It may seem like a good idea.  You may get a better rate.  But just don't do it.  Ever.  You don't want to accept that debt in case something happens to him. 

Allen

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #36 on: November 04, 2014, 02:23:12 PM »
Dave Ramsey isn't for everybody, but for you right at this moment it is perfect.

Suspend retirement contributions.
SELL the car.
Get "Gazelle intense". 
Get a baby emergency fund of $1,000 in the bank.
List your debts from smallest to largest and ATTACK the smallest as fast as you can, then put what you save onto the next one.   I personally wouldn't include the student loan in this debt snowball.
Drive clunkers. You don't see the inside of a restaurant unless you are washing dishes.

These sound-bite quips that he repeats over and over and over are sometimes annoying but there is good wisdom behind them.  You have a behavioral issue not a math issue. 

Once you have all the debt but house and student loan paid off, and positive monthly cashflow, I would leave the dave ramsey method and come back to the MMM method.  In the meantime, MMM style RADICAL expense cutting is worth adopting, too.

Sid Hoffman

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #37 on: November 04, 2014, 02:40:07 PM »
I don't think selling the car is an attractive option right now since they still need a reliable car.  They said it's only worth $6461 but have a $9100 loan.  That's over $2500 of negative equity and they would then STILL need to come up with money to buy another car.

OP is smart to see that their hair is on fire.  I see the cell phones and pets (especially the dog, as in the past I have found dogs to cost me a lot more than an indoor-only cat) as the biggest issue.  If OP isn't overly attached to the animals, I would consider giving them to a no-kill shelter along with a donation to the shelter.  That ends the expense to the OP permanently and still gets the animals in a home they may be adopted from.

So I see the statement that the OP's husband may consider a job in law enforcement or corrections.  Did you know that if you work for the government for 10 years, you may be eligible to have your student loan debt eliminated, no matter how much you owe?  The general term is "Public service worker student loan forgiveness."  Here's a link to one of many articles on the topic:

http://criminaljusticeonlineblog.com/05/eliminate-your-federal-student-loans-in-10-years-not-25/

That one is specifically for criminal justice, which it sounds like the OPs husband may have interest in.  They restructure your student loans to be repaid according to your income, not according to outstanding debt.  So if your job only supports repaying $70,000 in 10 years, that's all you have to repay, no matter how much you owe.

Allen

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #38 on: November 04, 2014, 03:01:01 PM »
I just saw 2009 VW Tiguan and assumed that was worth a lot.  I went to KBB and assumed it was a base model in 'good' condition with $200,000 miles (kind of a worse case everything) and the dealer trade in (also worst case) was only $3k!!!!!

OK you might be stuck with the car, so every single dime you can must should go to pay it off.

22% guaranteed investments are rare and a better use of your money than almost anything else.

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #39 on: November 04, 2014, 03:14:25 PM »
Well, after being awake for 29 hours, I only slept for 4 1/2 because my brain will not shut up about all of this.  So I'm at work now, with 2 hours till my shift starts, with a $1.44 cafeteria coffee and my laptop.  It's gonna be a long night...

Sid - He already works in corrections.  He's at the local/county level now and wants to move to federal in a few years, or maybe over into law enforcement.  I don't know why I hadn't thought of the loan forgiveness programs earlier, but he's off work tomorrow and I will ask him to contact someone and see what he needs to do.  Not all of his loans are federal; he has a couple of private one and a Parent Plus, but I'll take what I can get right now.

I agree with you about the car.  We can't not have a car, it's just that we really can't afford the one we have.  Of course, we can't afford to replace it right this minute.  I pointed out that it's one of our bigger debts and it's our highest interest rate, though, and he is on board with paying the loan down as fast as possible so we can get rid of it.  I'm anticipating a good-sized tax refund in a few months, too, and that should help. 

Allie - I am not touching his debt with a 10-foot pole!  Nope nope nope.  Especially the stuff where family is tangled up in it.  He had that before we were together and I'm not getting involved.

KaylaEM - thanks for that!  We started setting up a debt snowball in YNAB; he added all of his loan & other accounts, along with the amount owed.  It's really depressing, and I still need to put mine on there.  It's going to be awesome to see it go down, though!

The credit cards I mentioned in my OP aren't being used currently.  They're closed and the balances are in collections.  On the bright side, they're not accruing interest, so... yeah.  I do have a secured Capital One card with a $200 limit; the only thing I use it for is reimbursable stuff (shipping when I sell things on Amazon/eBay, etc.), and it's paid off when I get paid for that stuff, so I haven't paid interest yet.  :) 

The pets are staying.  They're family.  I don't believe that animals are disposable, and that's not a lesson I want to pass on to my son, especially since he sees that kind of behavior from his dad, who has gotten rid of several animals just because they weren't convenient or he was too lazy to train them or whatever.  Whoever above said that it's a lifetime commitment, that is how I feel about it.  Besides that, they're young.  The dog and guinea are both 3, and the cat is 5.  So let's say that their care slows down my debt repayment by... a year?  And that's stretching it.  I have at least 10 years left with the dog and cat, and 2-8 with the guinea. 

I did re-calculate what we're actually paying for them, though, and it's less than I thought.  I also compared prices through Target, Costco, and Amazon, to figure out what's cheapest for everything we buy regularly.  Turns out our actual pet costs, if we stick to the cheapest sources for food, etc., will be $60/month, not $100.

Overseas Stache - I'm aiming for BSN instead of ADN because where I live, the nursing programs are crazy competitive, and the shorter ones are worse.  We're talking 300 applicants for 50 slots every year.  I have a friend who just graduated with her ADN, and it took her 3 tries to get in - and in order to apply, you have to be an active student, so that whole time, she had to keep taking classes just for another chance.  At the BSN level, though, there are about 110 people applying every semester for 50 spots - and it's every semester, fall and spring, not just a fall start.  Basically, this would probably be faster for me.  Average GPA of successful applicants is usually 3.6-3.7, which I know I can do, and I'll get some extra points on my application for my CNA experience.  I'll apply for the ADN program at the same time just in case, and would likely do that if I got into both.  But given the numbers, the BSN would actually be the faster option.  And since I want an MSN eventually, it makes sense to go as far as I can on the first round.

GardenFun - Our credit union gives the same interest rate to all members.  :)  So if they approved us for a refinance, we'd have the 4.75%. 

Sorry if I missed anything, but I think I've addressed the main points.  I'm gonna go update the OP with new numbers...

mm1970

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #40 on: November 04, 2014, 03:30:27 PM »
already some really good ideas here, not much to add.

First, I like the "no spend challenge" idea - might be easier for your spouse to deal with if he thinks it's temporary. I'm not sure how to get him to stop spending - seriously, he uses his cash AND then the ATM?  Can you have a zero balance on your checking account so he can't do that?  So maybe temporary is good.

The energy drink thing - I used to have a major diet coke habit (luckily pregnancy knocked it out of me).  I took baby steps.  I went from buying 2-3 20-oz bottles at $1.25 each from the soda machine (per day).  I started to decrease my costs by buying 12-packs of soda on sale.  Then I switched to 2-L bottles.  Then I switched to making tea from 3 cent tea bags.  Now I drink free coffee at work. 

Big changes are how to get to where you need to go.  But small changes are easier - so do both.  Big changes for short periods of time (no spend weeks or months), small changes on other things.

Why does he stop at McD's?  What does he buy?  Can you send him with snacks so he won't stop?

Also, when you have the baby, how will you handle child care?  You both work nights - do you work different days?  The same days?  Who will watch the baby during the day?  Will you have the baby on your sleep schedule?  Do you adjust your sleep schedule?  I ask because I have two kids, and lack of sleep is brutal. I've known people with kids to work nights, and to switch their sleep schedules every weekend, etc.  What I want to make sure you think about is how you will handle being awake most of the day when you've worked all night.

Which begs another question on income.  It may be hard to work more shifts, but as your child gets older, would you be able to do babysitting for extra cash?  Date nights for others and things.  I belong to a local facebook group where people sell things. Mostly it's used items.  Apparently there is money to be made on FB or Ebay.  Some of the people on there make crafts and sell them - baby hats or blankets, costumed hats for Halloween, personalized jewelry.  I don't know if it's something you'll want to do with a newborn (first 2 years, exhausting!!)

amyable

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #41 on: November 04, 2014, 03:40:59 PM »
I just want to say that once you get started on this journey, it will get easier.  Best of luck! 

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #42 on: November 04, 2014, 03:47:35 PM »

Why does he stop at McD's?  What does he buy?  Can you send him with snacks so he won't stop?

Also, when you have the baby, how will you handle child care?  You both work nights - do you work different days?

He generally gets a couple of sausage biscuits, hash browns, and a coffee.  I know this because he leaves the receipts in the car.  And he does it, I guess, because he's hungry, tired from working all night, and he passes right by McD's on his way home, so it's way too easy.  It's just become a habit.  Next time I go grocery shopping, I'm going to get some sausage, and make breakfast biscuits that he can take from home.  I'm also going to see if he'd be willing to leave his debit card at home - he used to do that to avoid spending.

As for the baby & our schedules - he works a rotating schedule over a 2-week period.  The first week, he works Monday, Tues, Friday, and Saturday.  The next week it's Sunday, Wednesday, and Thursday.  That just repeats.  My schedule is flexible - my hospital uses a program called eShift for nursing staff; I go on the website a couple months ahead and sign up for the shifts I want to work.  Management has to approve it, of course, but I generally get what I want.  So since I know his schedule in advance, I just pick days when he'll be off.  I'm not sure how we'll handle the details when the baby comes, tbh.  I'm going down to a lower FTE, and will be only obligated to work one night a week.  I'm going to keep it to nights when he's off 2 in a row, so that I'm not wanting to sleep after coming home, while he wants to sleep to get ready for that night's shift.

It's going to suck at first, I know that.  But my limited hours will make it easier; I can suck it up for a day every week.  When we get into a routine, it'll get easier (I hope!)

mm1970

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #43 on: November 04, 2014, 04:11:34 PM »

Why does he stop at McD's?  What does he buy?  Can you send him with snacks so he won't stop?

Also, when you have the baby, how will you handle child care?  You both work nights - do you work different days?

He generally gets a couple of sausage biscuits, hash browns, and a coffee.  I know this because he leaves the receipts in the car.  And he does it, I guess, because he's hungry, tired from working all night, and he passes right by McD's on his way home, so it's way too easy.  It's just become a habit.  Next time I go grocery shopping, I'm going to get some sausage, and make breakfast biscuits that he can take from home.  I'm also going to see if he'd be willing to leave his debit card at home - he used to do that to avoid spending.

As for the baby & our schedules - he works a rotating schedule over a 2-week period.  The first week, he works Monday, Tues, Friday, and Saturday.  The next week it's Sunday, Wednesday, and Thursday.  That just repeats.  My schedule is flexible - my hospital uses a program called eShift for nursing staff; I go on the website a couple months ahead and sign up for the shifts I want to work.  Management has to approve it, of course, but I generally get what I want.  So since I know his schedule in advance, I just pick days when he'll be off.  I'm not sure how we'll handle the details when the baby comes, tbh.  I'm going down to a lower FTE, and will be only obligated to work one night a week.  I'm going to keep it to nights when he's off 2 in a row, so that I'm not wanting to sleep after coming home, while he wants to sleep to get ready for that night's shift.

It's going to suck at first, I know that.  But my limited hours will make it easier; I can suck it up for a day every week.  When we get into a routine, it'll get easier (I hope!)
Not money but a health thing - yeah, I was trying to lose weight and my old office had a soda machine and a vending machine.

For three months, when I really didn't have control over my own urges, I literally went to work every single day with NO cash and NO ATM card.  The only thing that I had was a credit card for emergencies, and well, you couldn't get a candy bar with a credit card.

One day a week should be easier.  I work full time, so there's the challenge. 

The Architect

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #44 on: November 04, 2014, 04:52:44 PM »
Overseas Stache - I'm aiming for BSN instead of ADN because where I live, the nursing programs are crazy competitive, and the shorter ones are worse.  We're talking 300 applicants for 50 slots every year.  I have a friend who just graduated with her ADN, and it took her 3 tries to get in - and in order to apply, you have to be an active student, so that whole time, she had to keep taking classes just for another chance.  At the BSN level, though, there are about 110 people applying every semester for 50 spots - and it's every semester, fall and spring, not just a fall start.  Basically, this would probably be faster for me.  Average GPA of successful applicants is usually 3.6-3.7, which I know I can do, and I'll get some extra points on my application for my CNA experience.  I'll apply for the ADN program at the same time just in case, and would likely do that if I got into both.  But given the numbers, the BSN would actually be the faster option.

This is an ok idea as long as it's not adding to your debt load. RNs get paid RN rates, BSNs get paid like $1-3 more (around here anyway). Be aware that you might not be doing *real* RN work right away, and might likely make $5-15 below hospital pay as a new grad.

Quote
And since I want an MSN eventually, it makes sense to go as far as I can on the first round.

Why? They don't really make any more money, and grad school is expensive. If you want to keep going to school, go for a CNP or something.

Cell phones: I use T Mobile's pay-as-you-go plan. $3/month with 30 minutes/texts and additional at $0.10 each (basically keep your number for $36/year). It works with any phone (smart or not) that will work on T Mobile's network. Use free wifi for data purposes.

tofuchampion

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #45 on: November 04, 2014, 06:18:32 PM »
Quote

Quote
And since I want an MSN eventually, it makes sense to go as far as I can on the first round.

Why? They don't really make any more money, and grad school is expensive. If you want to keep going to school, go for a CNP or something.


MSN/CNM.  Midwifery . That's why.

galliver

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #46 on: November 04, 2014, 07:33:02 PM »
Housing:  I have thought about doing a one-bedroom.  Since my older son is living with his dad now, it would just be us + baby for most of the year, and we might be able to swing that.  Baby will be in our room for the first year or so anyway.  I don't know what Husband would think, or what we'd do in the summer when the big kid is with us, but it's worth a conversation.

My family immigrated to the US when I was 6 and I remember living in 1 room with my parents when I was little. My bed was walled off from the room by a bookcase or wardrobe and I had a cozy little alcove and I loved it. My dad grew up in a small 1BR apartment with his parents, which was considered fairly luxurious: he had his own room, and his parents unfolded/set up a futon every night in the living room. Based on books, movies, and stories, that was fairly common in that time period. I'm sure that to this day, plenty of families live all in 1 room, somehow. Basically, I'm sure you can figure out a way to make 1BR work for you for a few years, especially if you were going to keep a baby in with you anyway!

N

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #47 on: November 04, 2014, 08:38:48 PM »
I think its great that you realize your hair is on fire and you are motivated to figure it all out.
I went thru the same thing 2 years ago. You can do it. We also had to sell a car we had a loan on, I also have a reluctant spouse...I really relate to your  posts. So I want to cheer you on. Congrats on already solving your cell phone problem! Keep it up!
I recommend doing a journal here on the forum. you can get a ton of great support, its so nice to have a cheering section, and ask for advice.

N

NewMustachian

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #48 on: November 04, 2014, 08:41:43 PM »
Hi Tofuchampion, if you are looking to cut food costs and save time, may I suggest Budget Bytes? Not every recipe is my cup of tea, but it has really helped me slash my food costs by almost 50% and also has saved me a lot of time. 

Also, this -

"Big changes are how to get to where you need to go.  But small changes are easier - so do both.  Big changes for short periods of time (no spend weeks or months), small changes on other things."

I have a 7 month old and most of the time all I can manage are small changes.  But they really do add up.  Good luck!

horsepoor

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Re: Reader Case Study: HOLY SHIT MY HAIR IS ON FIRE!!!!!!
« Reply #49 on: November 04, 2014, 09:32:35 PM »
You've gotten tons of great advice so far, so I won't repeat any of it.  But I saw this article the other day and it occurred to me that it might be a good approach for your husband.  If he saves $5 a day by avoiding the McD's and the energy drink, immediately put that money towards the car loan, and maybe set up a spreadsheet with a running total of how much interest has been saved with the "snowflake" prepayments, in addition to watching the shrinking principal on the loan.

use-the-snowflake-method-to-whittle-down-debt

Also, I don't know about subprime loans, but understanding that they can be predatory, do make sure you've read all the fine print so you don't get blindsided by some weird pre-payment penalties or something.  Good luck!