Author Topic: Case Study - Debt Emergency + Biological Clock  (Read 12610 times)

wooljaguar

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Case Study - Debt Emergency + Biological Clock
« on: February 19, 2018, 11:23:06 PM »
~ Ongoing updates to this story can now be found in my journal. Most of the info here is a bit out of date. :) ~

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My life is basically a dumpster fire right now.

I actually found MMM after Googling "how to make money selling soap on Etsy" or something like that, because I am bored to tears with my entire current life situation, and I have a sudden and desperate interest in having offspring and doing some kind of fun, plant-based work-from-home kind of work instead of my office job. Complicating factors to achieving ANY of that include the fact that I am currently on my way OUT of a marriage (though we are great friends, he and I now disagree on having kids) and am kinda considering eventually doing the kid thing on my own since age (36) and impending singleness are a factor.

I currently share a one-bedroom apartment with my husband, but our lease is up come June, and I'll be trying to find a roommate situation or studio/efficiency apartment. I've been very financially stupid for a very long time and in the past few months have been trying to spruce up my frugality—I only discovered MMM last week and read the entire thing. These stats are based on my current Mint budget

Life Situation:
IRS filing status - Currently married filing separate, expecting to be single next year
Number & ages of dependents - 0
State/country of residence - Los Angeles, CA; though my job is based here, I am not opposed to moving somewhere cheaper, up to and including in with relatives back East
Age - 36

Gross Salary/Wages: $1923.07 every other week

Individual amounts of each Pre-tax deductions:
- Just 20.35 for the cheapest health insurance offered. My company is small and doesn't offer 401k

Other Ordinary Income:
- I get a fluctuating amount of royalties from books I've written twice per year (historically $800–$2800)
- I have a temporary side hustle writing some blog posts for a friend ($300–$375 per month), which I don't expect to last longer than a year because they rotate bloggers
- I get paid $5/mo in Amazon credit for doing a 10-minute longitudinal survey
- While not "ordinary," once in a while I'll get a windfall like getting paid $500 for a photo shoot, or $20 from a gig with my band, or $800 for a yearly bonus at work

Adjusted Gross Income:
- It's hard to say...? To be conservative, maybe leave off the "other income"?
- My dependable take-home per month is about $2822, with two months having an "extra" paycheck.

Taxes:
Federal - $200.48/paycheck
State/local - $89.15/paycheck
FICA - $147.11/paycheck

Current expenses, monthly: I'll put after the slash what I expect them to be when I move back out on my own...
My half rent/water/trash - $808 (one-bedroom apt) / $800 (room for rent, if findable) – $1200 (tiny studio apartment)
My portion of car payment (2015 Ford Fiesta hatchback) - $50 / $0*
Car insurance (non-owner policy) - $54
Gasoline - $20
Lyft (due to shared car) - $30 / ??
Utilities (gas/electric, my half) - $59 / I expect this to actually go down because I use way less energy than he does
Cell - $50 (pre-paid 5GB-before slowdown unlimited talk/text/data plan through Straight Talk on an iPhone 6)
Band Costs - $24 (my portion of the hourly practice space rental, website costs, and data storage)
Personal Data - $2 (Google Drive)
Food & Dining** - $145–200
Therapy - $110 / $0 (this was marriage counseling that will be no longer a factor)
Yoga (via Groupons and coupons) - $15–33 (willing to consider free internet yoga, but I do it with a friend and it's motivating for both of us to do it that way)
Renter's Insurance (my half, required by current lease) - $9 / $0
Personal Care*** (vitamins, toiletries) - $6–40
Pet Costs**** (2 house rabbits, 2 cats) - $70 / $50
Music (Pandora & Family Spotify) - $20 (I pay the whole Spotify in exchange for access to their Netflix)
Gifts - $0–$300 historically, trying to trim that down but I'm more generous to others than I am to myself
Other - I put $20 on a public transit card every few months

*My portion of the payment is so low because I put the lion's share down. Come September, we were supposed to even out to both paying $89, but I intend to suggest to him, since we're still friendly, that he can keep the whole thing if he continues to pay for it and let me borrow it occasionally for hiking and educational day trips to make up for my equity. The hatchback part is super important because we are in a band together and use it to haul gear.
**Mostly medium-fancy pescetarian groceries such as organic veggies, tofu, frozen seafood, and dairy; occasional cheap tacos under $5
***I am already a super low-maintenance person who does not shower very often and uses a diva cup. The rare $40 months are a touch up for my laser hair removal (approx. every 3 months) which saves on razors and shower time, and makes biking tolerable for me.
****Hoping to get the dude to take custody of the rabbits when we part ways. Yes, I know I am too poor for pets, but I am very emotionally attached to the cats, and I didn't know till last week that I was too poor.

Assets: I'm not much of a "stuff collector"
- I have four cheap-range musical instruments (a 4-string bass, a 5-string bass, a 6-string guitar, and a clarinet). I mostly play the 4-string but tend to noodle on the others occasionally to improve my skills.
- Medium-sized circa 2015 flat-screen TV, not currently used much but I'll use it to cast Netflix (which I share a friend's account for free) when I'm in my own place
- 2012 MacBook Pro upgraded in 2014 with 1TB SSD and extra RAM, useful for working from home. I do most of the work on it myself except once when there was a spill.

Liabilities:
- Back Taxes (2013/2014) - Balance was $4,589 in March of 2017. I've been paying $100/mo on it since and need to re-check the balance now. I expect any refund I might be due to be gobbled up by that like it was previously.
- Student Loan #1 - $10,000 / 3.25% /$10,597.16 / 10 yrs / $110 (this loan is not federal and my mom co-signed in 2003)
- Student Loans #2 & #3 - I actually don't know what they started at, as I consolidated / 5.62% / $66,401 / IBR payments / $271 (the non IBR amount would be $722, but I didn't think that was possible until reading MMM; IBR is scheduled to go up to $358 in July due to a raise last year)
- Bank Line of Credit - $454 / 21.90% / min is $25 but I'm paying this off completely with my next couple paychecks due to MMM principles
- CC #1 - $10,596 / 14.24% / $244 min
- CC #2 - $6,921 / 12.99% / $152 min
- CC #3 - $2,275 / 12.74% / $47 min
- CC #4 - $2,473 / 11.15% / $50 min

A few notes about the positive stuff I'm already doing as of relatively recently:
- I live less than 5 miles from work and bike in any case other than illness/injury, even in the rain with special rain gear; I would keep up this habit after the move, as I value my biking
- I almost always do store errands on foot and buy food supplies only for every couple of days
- I shop for clothes VERY rarely, and either at Goodwill or at Target if Goodwill doesn't have the exact thing I need; I take a lot of hand-me-downs from a fashionable, easily bored friend
- I buy shoes only when my existing ones in that category wear out (have been using the same workout shoes since 2007 and make a pair of high-end boots function as work/rockin'/hiking shoes all in one). I don't even wear heels, much less collect them...
- Most household supplies come from the dollar store
- I've stopped dyeing my hair recently and have cut it myself for years
- I've always been a big DIY proponent and tend to try to fix my own stuff rather than replace it (in the past, this has led me to learn how to install car stereos, replace blower fans and hoses, do my own bike maintenance and computer upgrades, sew, and more, including my last phone dying in a fireball because I tried to replace the battery myself—lesson learned there)
- I rarely drink anymore unless it's free; my friends are often happy to provide me with booze in return for my company
- I mostly use the public library's e-book collection for books, though I occasionally do succumb and buy a hard copy (usually used)
- I wait till someone has given me a gift card to top off my supply of fancy makeup, and have been using it less and less lately anyway
- Long before I discovered MMM, I have been low-maintenance about laundry, showers, nails, perfume, etc.

A few notes about my weaknesses:
- Travel. I get a lot of offers from friends to crash or that they'll pay for everything but my plane ticket, so I totally overspend on plane tickets. My yearly holiday (read: pricey air-fare) trip to see my family and watch my nephews grow feels non-optional to me, but I'm willing to cut most/(all?) of the rest of it out.
- Classes. I have a habit of dropping $20–$50 occasionally on classes to learn more about plants, like instructional hiking tours, etc. I have been supplementing those with some free volunteering and free stuff, but the paid instruction has taught me so much more that I still crave more.
- Admission. Once every few months, I buy concert tickets, and once per year, I go to the Ren Fair (sneaking in my own mead under my floofy skirt).
- Windfalls. Up until VERY recently, every time I got a windfall, I immediately decided it was an excuse to live like a "regular person" until it ran out, including sushi, movie tickets, drinking benders, gifts plane fare, etc... A lot of this is also in the form of generosity, as I feel bad usually being broke and want to "pay back" friends who have bought me meals, drinks, lodging, and nice gifts when I haven't been able to afford it.

Additional comments:
- Though I moved back here for work and increased pay and responsibility, my job has previously let me work remotely for a couple of years, and I believe there's a possibility they might let me do that again. It might be in exchange for a pay cut and/or going back to 1099, but that might make sense, depending on WHERE I go.
- I believe I am currently UNDERPAID for my job, and I am DEFINITELY pinched by the constraints of only 10 paid days off per year. But I'm not sure I want to try to find another job doing the same thing, as I am already bored with the work and at least like the people here and have some loyalty. I also just got a $5k raise less than a year ago, so I'm not sure how soon I can ask for more...
- Though I never, ever pay late, I have a bad credit score just due to my available credit ratio. Literally all the credit-score analysis sites I've visited say "excellent" in every measure but this one. So I don't qualify right now for any personal loans or lower interest-rate cards. It's super frustrating, because I know that the only thing standing between me and 800+ is my balances. Any tips on finding a way to transfer my debt in this situation would be very helpful. Otherwise I guess I just pay down till it DOES go up on its own, then try again...
- My main use of the car is for reaching nature locations for hiking and plant classes. I've discovered a bus route that takes me into the foothills of the mountains, so this may scratch that itch.

Specific Question(s):
- Obviously not at this very moment, but is it possible for me to be able to crawl out of debt quick enough to afford a child or two, possibly on my own (via sperm donor), before it's no longer a thing I can physically do? It's important to me, especially since I am ending my marriage over it.
- What kind of capital and safety net would I need to have to transition from a 9-to-5 that I used to love but now bores me, to a home-based entrepreneur job as a maker? That's the dream for me at this point—not yet to retire, but to do work I love, from home, indefinitely, while I raise a child.

I know I have a debt emergency. The best places I can see to trim fat are these
- Try to find the cheapest roommate situation that will also house my bike and cats; if none available, get cheapest roach-hole efficiency and a hot plate.
- Replace class yoga with internet yoga and chalk the diminished social time up to a cost of having been stupid
- Stop ever using Lyft or borrowing the car (so as not to replace gas)
- Cut out the cheap tacos out and replace with cheaper tacos at home
- Add more rice and beans to the diet, and less organic veggies and frozen seafood
- Cut out all non-family air travel
- Sell my TV and watch Netflix on my laptop alone; go to friends' houses if they want to watch together
- Stop taking plant classes and focus on learning all I can from the books I've already purchased; make additional books known to be my gift preference from here on out instead of more makeup
- I could stop attending concerts until at least my CC debt is paid off, unless the ticket is a gift.
- Feel out my boss on the remote working situation for a few years, and move to a cheaper area and/or move in with my (also recently single) mom back East), therefore also cutting out air travel

Sorry that's all so long! Any help appreciated! :)
« Last Edit: April 13, 2018, 12:27:04 PM by woolgather »

formerlydivorcedmom

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #1 on: February 20, 2018, 10:13:58 AM »
I'm sorry your marriage is ending, but I completely understand your reasoning for doing so.  I would not rely too much on sharing the car with your ex.  While you might be getting along now, that may not always be the case.  Since you paid for half of it, shouldn't you be entitled to half the equity...thus moving some of the debt to his side of the balance sheet?

What caused the credit card debt?  Travel?  There isn't a line item for that in your budget.

You have zero assets (those possessions don't really count) and no emergency fund.  You need some kind of emergency fund, especially if you plan to get rid of renter's insurance, and if you have a high-deductible medical plan.  Even $500 in savings would be a good thing.

It looks like you are anticipating your expenses being about $219/month less when you move out.

You probably can't afford to be in a band right now.
You can't afford to borrow the car (great job finding a bus route that gets you closer to where you want to be).
You can't afford to spend a lot of money on gifts.  Give the gift of time or home-baked cookies.
You probably can't afford yoga either.  Can you substitute more hiking or more walks around town?
Getting rid of all of this would give you $131-431 back each month.

Add that to your anticipated single-living savings, and you are looking at 350-650/month in increased cash flow.
If you throw ALL $650 of that at your debt, in 12 months you could build a $500 emergency fund, and pay off your bank loan, CC #3, and CC #4, and cut CC2 in half.  By the end of the second year you'd have cc2 and cc4 paid off.

That would leave you with just your student loans, and you'd now have $1168 extra cash flow per month. 

If you can reduce expenses further by working remotely and living back east, you might be able to get that done even faster.

The only other thing you can do is try to make more money.  You want to do some kind of at-home job.  What would that look like?  Is that something you could do evenings/weekends to a) make sure you can make money at it and b) make sure you really like it?   

Can you get a second job right now?  Work retail on the weekends, work at a landscape company on the weekends/evenings? 
If you can find an extra $300/month in income to throw at the debts AND you are still throwing $650/month in savings at it you can have all the credit cards and the bank loan paid off in 18 months.

You can definitely do this, but it's going to be painful for a short time.

Nick_Miller

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #2 on: February 20, 2018, 12:46:46 PM »
I'm sorry to hear about your marriage ending. Judging from your hobbies and interests, you sound like a cool and creative person. It is awesome that you are in a band and write books. I am a bit of a writer myself. -waits- I am being nice to soften the blow.

You're going to have to work your butt off for 5-10 years to turn this around. But I think you already know that. But I mean work...your...butt...off. If you could move in with family for a year or two, that would help. I know it would suck, but you really need to dig out of a big hole and your shovel's not that large.

I think you need to pick up an additional part-time second job tomorrow. Kids are expensive, and although I know you feel you don't have time to wait much longer, I think you need to devote at least 12-18 months to starting to dig out of the hole before adding daycare, increased food/medical to the equation. Make it a game; track how much your debts go down each month. But it's going to require laser-like focus. Laser! Pew! Pew!




MrThatsDifferent

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #3 on: February 20, 2018, 12:58:48 PM »
Ughhh, I hate being harsh, you’ve asked though. You’re not remotely ready to be a parent. I’m sure you’d be a great one and there are plenty of single moms making it work. But don’t, please don’t put a kid through your life right now. You’re in a ton of debt, your marriage is ending and your income stream isn’t ideal. All of that can be fixed, and I get the ticking clock thing, I do, trust me. Ask yourself what’s driving your need? Is it to replace the love of your husband? Something else? Because you’re not dumb or cruel, you know you’re not ready for kids. No one who knows that their life is a dumpster fire should throw a child into that fire. So, put that on hold. If you could, the best thing would be to get your eggs frozen but I’d hate to see you take on more debt. Focus on getting your life back on track, get yourself out of the hole, put that fire out and love yourself, truly. Consider counseling to work through what’s happening and understand your parental need. Good luck!

Novik

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #4 on: February 20, 2018, 01:09:40 PM »
Liabilities:
- Back Taxes (2013/2014) - Balance was $4,589 in March of 2017. I've been paying $100/mo on it since and need to re-check the balance now. I expect any refund I might be due to be gobbled up by that like it was previously.
- Student Loan #1 - $10,000 / 3.25% /$10,597.16 / 10 yrs / $110 (this loan is not federal and my mom co-signed in 2003)
- Student Loans #2 & #3 - I actually don't know what they started at, as I consolidated / 5.62% / $66,401 / IBR payments / $271 (the non IBR amount would be $722, but I didn't think that was possible until reading MMM; IBR is scheduled to go up to $358 in July due to a raise last year)
- Bank Line of Credit - $454 / 21.90% / min is $25 but I'm paying this off completely with my next couple paychecks due to MMM principles
- CC #1 - $10,596 / 14.24% / $244 min
- CC #2 - $6,921 / 12.99% / $152 min
- CC #3 - $2,275 / 12.74% / $47 min
- CC #4 - $2,473 / 11.15% / $50 min

- Though I never, ever pay late, I have a bad credit score just due to my available credit ratio. Literally all the credit-score analysis sites I've visited say "excellent" in every measure but this one. So I don't qualify right now for any personal loans or lower interest-rate cards. It's super frustrating, because I know that the only thing standing between me and 800+ is my balances. Any tips on finding a way to transfer my debt in this situation would be very helpful. Otherwise I guess I just pay down till it DOES go up on its own, then try again...

Even though you can't get a new loan to transfer/consolidate balances, could you shift the money you owe around on your cards to reduce your average interest rate? ie. put all spending on CC#4, and shovel all extra repayment at CC#1 (then 2, then 3). A dangerous game and you'd need to have the credit room and track spending carefully, but would save you a few hundred dollars per year.

Dicey

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #5 on: February 20, 2018, 01:31:45 PM »
Dear woolgather,
What I love about this forum is that I know others will jump into the math and offer great suggestions.

I have a lot to say, but I'll focus mainly on the topic in your case study that hits home the most. Background: I am from SoCal and lived in LA from '80-'92. I am the oldest of six children. When I grew up, I had no interest in marrying young or having a family. Then I had a rare form of cancer. I realized what matters in life is the quality of the relationships you build. Not job status, not money. Well, not quite. Money was what was going to protect me from a recurrence of cancer, or at least make any future treatment decisions easier. So I set out to make myself financially independent before FI was a "thing", and to find myself a spouse and then have four children. Yup, four.

I worked at this for decades. I dated tons of men of every stripe. Eventually, I decided to step out of my career position and work at Nordstrom in the Men's Department, just to meet more men! I took a huge pay cut, but damn, it worked! It was great meeting new people of the male persuasion every single day. I met tons of guys with great careers and a wide variety of interests. It was fun, and several became long term relationships, but none of them was "the one". The older I got, the more it bothered me. I knew I was not a candidate for single motherhood, primarily because it costs so damn much to live in LA and my income wasn't high enough to go it alone.

Finally, as I got a little too old for childbearing, I said "Fuck this, I need to earn more money." I got the hell out of retail and never looked back. I still dated, but since they weren't coming to me every day any more, I tried online dating, word of mouth, community activities, everything I could thing of. I really, really thought the lesson of cancer was to slow me down and re-focus me in time to be able to find a great partner, build a strong marriage and have a family. Apparently God was busy laughing at my plans.

I was sad, but determined not to be Debbie Downer about what I didn't have. I traveled, did fun stuff, and enjoyed what I could do without dwelling on my dreams that clearly were not coming to fruition. Pretty soon my friends, single and married, were saying that they wanted to have my life. Huh.

Fast forward to 2012. I was 54 and all hopes of children were long gone. Thoughts of marriage were pretty dim, too. However, FI was finally on the very near horizon. I had everything figured out but health insurance (this was pre-Obamacare + pre-existing conditions). I had a chat with a guy I'd known for years. (I let his family use my address to get their kids into a better school district years before, after their house sale in the district fell through.) He was a recent widower. I asked him if he'd consider letting me be his imagionary domestic partner so I could quit my job, buy a motorhome and travel the country.

He readily agreed and then shocked the hell out of me by saying he'd even marry me on paper if that would help, because of what I'd done for his kids. He then said his healthcare plan covered his whole family for the same (almost zero) cost. Plus, he had a motorhome! What the hell??? We went out to dinner to discuss what a crazy-ass idea it was. One dinner led to another, and then dinners somewhere became dates, then we fell in love. We eloped a few months later.

Fast forward five years. We are happy beyond our wildest imagination. His daughter got married and had a baby, making us grandparents! Remember that line, "If we'd known how much fun grandkids are, we'd have had them first"? It's completely true! I was never a mom, but now I get to be a grandmother. I'm here to tell you, it is awesome. I never dreamed any of this, but I am ridiculously glad it turned out this way. I am actually completely comfortable now that I did not have kids of my own, because I don't think I would have been a great mother, much as I was sure it was my destiny.

So that's the short version of my story. Here is my advice: The kid thing is going to sort itself out one way or another and either result will be something you can live with. For now, take care of the relationship that appears to be ending. Figure out your new housing arrangements. Decide if your job pays enough for what you give up. Fix your credit. (Can you become an Authorized User on someone's credit long enough to shape up your own credit?) Work on being the best "YOU" you can possibly be. Everything will fall into place in its own time. And it will be good, even if it is nothing like anything you ever imagined.
Best wishes,
Dicey
« Last Edit: February 20, 2018, 05:02:08 PM by Dicey »

Novik

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #6 on: February 20, 2018, 01:34:07 PM »
@Dicey: That is one of the most kind, thoughtful, genuine pieces of advice I have ever read. Thank your for being a generous contributor to these forums.

marty998

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #7 on: February 20, 2018, 01:55:51 PM »
Snip!

That's such a beautiful post @Dicey. Lovely :)

mustachepungoeshere

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #8 on: February 20, 2018, 02:10:20 PM »
Dear woolgather,
What I love about this forum is that I know others will jump into the math and offer great suggestions.

I have a lot to say, but I'll focus mainly on the topic in your case study that hits home the most. Background: I am from SoCal and lived in LA from '80-'92. I am the oldest of six children. When I grew up, I had no interest in marrying young or having a family. Then I had a rare form of cancer. I realized what matters in life is the quality of the relationships you build. Not job status, not money. Well, not quite. Money was what was going to protect me from a recurrence of cancer, or at least make any future treatment decisions easier. So I set out to make myself financially independent before FI was a "thing", and to find myself a spouse and then have four children. Yup, four.

I worked at this for decades. I dated tons of men of every stripe. Eventually, I decided to step out of my career position and work at Nordstrom in the Men's Department, just to meet more men! I took a huge pay cut, but damn, it worked! It was great meeting new people of the male persuasion every single day. I met tons of guys with great careers and a wide variety of interests. It was fun, and several became long term relationships, but none of them was "the one". The older I got, the more it bothered me. I knew I was not a candidate for single motherhood, primarily because it costs so damn much to live in LA and my income wasn't high enough to go it alone.

Finally, as I got a little too old for childbearing, I said "Fuck this, I need to earn more money." I got the hell out of retail and never looked back. I still dated, but since they weren't coming to me every day any more, I tried online dating, word of mouth, community activities, everything I could thing of. I really, really thought the lesson of cancer was to slow me down and re-focus me in time to be able to find a great partner, build a strong marriage and have a family. Apparently God was busy laughing at my plans.

I was sad, but determined not to be Debbie Downer about what I didn't have. I traveled, did fun stuff, and enjoyed what I could do without dwelling on my dreams that clearly were not coming to fruition. Pretty soon my friends, single and married, were saying that they wanted to have my life. Huh.

Fast forward to 2012. I was 54 and all hopes of children were long gone. Thoughts of marriage were pretty dim, too. However, FI was finally on the very near horizon. I had everything figured out but health insurance (this was pre-Obamacare + pre-existing conditions). I had a chat with a guy I'd known for years. (I let his family use my address to get their kids into a better school district years before, after their house sale in the district fell through.) He was a recent widower. I asked him if he'd consider letting me be his imagionary domestic partner so I could quit my job, buy a motorhome and travel the country.

He readily agreed and then shocked the hell out of me by saying he'd even marry me on paper if that would help, because of what I'd done for his kids. He then said his healthcare plan covered his whole family for the same (almost zero) cost. Plus, he had a motorhome! What the hell??? We went out to dinner to discuss what a crazy-ass idea it was. One dinner led to another, and then dinners somewhere became dates, then we fell in love. We eloped a few months later.

Fast forward five years. We are happy beyond our wildest imagination. His daughter got married and had a baby, making us grandparents! Remember that line, "If we'd known how much fun grandkids are, we'd have had them first"? It's completely true! I was never a mom, but now I get to be a grandmother. I'm here to tell you, it is awesome. I never dreamed any of this, but I am ridiculously glad it turned out this way. I am actually completely comfortable now that I did not have kids of my own, because I don't think I would have been a great mother, much as I was sure it was my destiny.

So that's the short version of my story. Here is my advice: The kid thing is going to sort itself out one way or another and either result will be something you can live with. For now, take care of the relationship that appears to be ending. Figure out your new housing arrangements. Decide if your job pays enough for what you give up. Fix your credit. (Can you become an Authorized User on someone's credit long enough to shape up your own credit?).Work on being the best "YOU" you can possibly be. Everything will fall into place in its own time. And it will be good, even if it is nothing like anything you ever imagined.
Best wishes,
Dicey

Incredible story, @Dicey. Thanks for sharing.

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #9 on: February 20, 2018, 03:01:47 PM »
Hi guys,

Thanks for the responses.

I'm gonna take some time to read through all the responses carefully, but from what I've skimmed so far, it's clear to me that I must have left out the fact that I don't mean to add a child right now. Like, I think I realistically have about two years before it becomes a serious issue, and I actually know a lot of women who started at 38 or 39. I even know two women who accidentally got pregnant at 41 and 42! So it's not a "let's get this done yesterday" kind of issue like the debt is. I'm definitely at least prying myself out of the credit card debt (which I believe CAN be done in a couple years, if I'm a hard-ass about it) and recovering from the end of my marriage before I start.

Will reply to the other stuff in more detail in a bit when I have more time!

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #10 on: February 20, 2018, 06:28:19 PM »
I would not rely too much on sharing the car with your ex.  While you might be getting along now, that may not always be the case.  Since you paid for half of it, shouldn't you be entitled to half the equity...thus moving some of the debt to his side of the balance sheet?

I could talk to him about it. He's in a rough spot financially, himself (though he makes more than I do and has less debt). Since I'm the one leaving, I don't want to leave him super stranded either.

What caused the credit card debt?  Travel?  There isn't a line item for that in your budget.

The credit card debt was mostly caused by these things:
- Desperately needing to change my living situation at one point, so I put a security deposit on a card via PayPaling it to a friend and getting cash back.
- Since that terrible idea worked so handily the first time, I did it again to finance a 1997 Honda hatchback for a few thousand dollars because I (mistakenly) believed at the time I needed a car. The clutch on this died after pulling a trailer across the country, and it barely passed smog upon arrival, so I sold it for $500 a couple years later—$100 more than anyone else was offering.
- Move costs being above what I'd asked my company for.
- Lots of frivolous spending on plane tickets, makeup, and nights out. It's kind of shocking to me, looking back through my Mint, how much I used to spend on booze.

You need some kind of emergency fund, especially if you plan to get rid of renter's insurance, and if you have a high-deductible medical plan.  Even $500 in savings would be a good thing.

So, from what I've read on this site, isn't it better to throw that $500 at a credit card (or, better yet, my line-of-credit at the bank) and use THAT if I really need it? That way it's not costing me interest, but is there if I need it? (i.e., "springy")

You probably can't afford to be in a band right now.
You can't afford to borrow the car (great job finding a bus route that gets you closer to where you want to be).
You can't afford to spend a lot of money on gifts.  Give the gift of time or home-baked cookies.
You probably can't afford yoga either.  Can you substitute more hiking or more walks around town?
Getting rid of all of this would give you $131-431 back each month.

The band, I dunno. There's a chance it'll break up anyway when my guy and I do. We're actually on hiatus right now because our drummer quit, so practice space costs are down. So maybe I can find some source of additional income to cover it.

Car, gifts, and yoga, all of that seems super doable. I'm good at cookies. :) And I can maybe catch rides to the places I need to be with other hikers, etc., as well. Or ask for gas money from them if I do drive the car.

Add that to your anticipated single-living savings, and you are looking at 350-650/month in increased cash flow.
If you throw ALL $650 of that at your debt, in 12 months you could build a $500 emergency fund, and pay off your bank loan, CC #3, and CC #4, and cut CC2 in half.  By the end of the second year you'd have cc2 and cc4 paid off.

Yeah, I was thinking that 2 years, if I'm diligent and throw all my extra paycheck money at it PLUS my two royalty checks I'm expecting, was about how fast I could be done with the credit card debit. IF I'M DILIGENT. Which this site seems to be teaching me about.
 
If you can reduce expenses further by working remotely and living back east, you might be able to get that done even faster.

This is definitely something I'll need to number-crunch. I'm up for a review sometime this spring, so I should know around the time I move out of my current place whether a raise is on the table. It'll cost me money to get there, of course, especially without my own car and with pets to transport. So I'll have to weigh a negative of 12 months of rent plus a positive of possible raise vs. a positive of little-to-no rent (live with mom) and a negative of potential pay cut and travel costs.

The only other thing you can do is try to make more money.  You want to do some kind of at-home job.  What would that look like?  Is that something you could do evenings/weekends to a) make sure you can make money at it and b) make sure you really like it?   

Can you get a second job right now?  Work retail on the weekends, work at a landscape company on the weekends/evenings?

If you can find an extra $300/month in income to throw at the debts AND you are still throwing $650/month in savings at it you can have all the credit cards and the bank loan paid off in 18 months.

I actually have a ton of food and beverage experience (bartending), know a landscape architect, and have enough writing and transcription experience that some of those kinds of gigs on CL and freelance sites have supplemented me in the past. When I incurred most of this debt, I was making only $14/hr and living more of a high life than I am now. I'm not sure about a STEADY second job (like retail or service) just because in high competition areas like this, the good shifts tend to be for seniority, and the crap shifts conflict with my real job, but some combination of that gig work could possibly net me $300.

I could definitely try the making/selling thing too, though I'd want to have a bit more of the debt paid down before I invest in the supplies. That's the part that scares me—I don't wanna dig in any deeper!

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #11 on: February 20, 2018, 06:30:35 PM »
Even though you can't get a new loan to transfer/consolidate balances, could you shift the money you owe around on your cards to reduce your average interest rate? ie. put all spending on CC#4, and shovel all extra repayment at CC#1 (then 2, then 3). A dangerous game and you'd need to have the credit room and track spending carefully, but would save you a few hundred dollars per year.

Sadly, I pretty much do NOT have the credit room. Getting close to my available balances is really one of the things that woke me up to trying to live more frugally in the past few months. Though I didn't accelerate to the ideas I am currently holding till I discovered the blog. It's a great idea, though!

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #12 on: February 20, 2018, 06:33:53 PM »
So that's the short version of my story. Here is my advice: The kid thing is going to sort itself out one way or another and either result will be something you can live with. For now, take care of the relationship that appears to be ending. Figure out your new housing arrangements. Decide if your job pays enough for what you give up. Fix your credit. (Can you become an Authorized User on someone's credit long enough to shape up your own credit?) Work on being the best "YOU" you can possibly be. Everything will fall into place in its own time. And it will be good, even if it is nothing like anything you ever imagined.
Best wishes,
Dicey

Thank you so much for your kind letter. It made me tear up. I think I am going to like this forum.

blinx7

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #13 on: February 20, 2018, 06:45:42 PM »

Can you tell us more about the "live with family back East" option?

If you could get rent to zero you could be done with all the debt other than student loans in less than a year. 


wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #14 on: February 20, 2018, 07:16:13 PM »

Can you tell us more about the "live with family back East" option?

If you could get rent to zero you could be done with all the debt other than student loans in less than a year.

Here's the deal:

My mom is also going through a separation (I don't know if she'll go all the way to divorce because of moral concerns). At the end of March, she's supposed to regain her house (currently being rented while she lived in her husband's place). There's a second bedroom and a whole attic sort of area (which I briefly occupied as a teenager between the time she bought the place and my graduation).

I know that she charged my brother and sister SOME KIND of rent while they lived with her (I'm the only one who did not stay a long time or rotate home again in adulthood . . . yet), but I think it was minimal, and if I had a hardship, she might waive it in exchange for labor or something.

But the problem is that a) I don't know if I would have to go back to 1099 and take a pay cut in order to work remotely, since they moved me here in early 2016 with the raise, full-time status, benefits, etc. being contingent on my being in the office. b) The move itself will probably be expensive. The last bunch of times I did a cross-country move (five and possibly counting), I had '90s Hondas to stuff with pets and crap, so it mostly cost me gas, or, in a few cases, also a small trailer. This time, I have no car, so it'd be a rental—super expensive one-way. c) I don't expect my mom to put me up rent-free for an EXTENDED period. Eventually I'd definitely start paying something.

I've been thinking about using my own and my mother's separation (plus the birth of TWO nephews coming in May) to plead with my boss for a sort of working family leave, where all remains the same except my location, and then I come back when my situation is less dire, maybe six months to a year. I'm not sure how that will fly, but it's a thought I had. It would certainly scuttle my chances of a further raise, though, possibly for two consecutive years. So I'm not sure whether it works out in the long run.

snacky

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #15 on: February 20, 2018, 08:58:51 PM »
You are badass. You have done all this amazing shit. Digging your way out from under debt and building the life you want is just the next awesome thing for you to do.
I'm looking forward to watching it happen.

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #16 on: February 20, 2018, 09:21:28 PM »
You are badass. You have done all this amazing shit. Digging your way out from under debt and building the life you want is just the next awesome thing for you to do.
I'm looking forward to watching it happen.

:D Thanks for the vote of confidence!

cats

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #17 on: February 20, 2018, 09:36:22 PM »
It sounds like you are getting some great ideas on the financial front, so just throwing my two cents in on the parenting front. I have a 2 year old, and a husband, and even when my husband drives me up the wall, having him around to share the load is waaaaay better than going it alone. Having a kid is a constant job. I wouldn't advise choosing to single parent if you can avoid it, and if you do go that route make sure you have some supportive and healthy family or close friends nearby.

HappierAtHome

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #18 on: February 21, 2018, 02:28:40 AM »
You're already getting great responses here, and I'm not going to offer maths / expense cutting advice as I'm on a different continent. My advice is: start a journal here. Heaps of lovely people will comment with support and encouragement. They'll help you stay accountable for making the necessary changes. They'll come up with inventive solutions to your problems. It's pretty much the greatest.

Bee21

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #19 on: February 21, 2018, 02:48:51 AM »
I also left a long term relationship because he did not want to have kids and it was the best decision ever. I did find prince charming a couple of years later and had a family, so it all worked out well. Mind you, I was early thirties with no debt.

the ticking biological clock is a thing, it is hard.

On top of paying off your debt, investigate the costs of ivf, childcare fees etc, etc. I think if you are serious about having a baby on your own, it will be a strong enough motivation to sort out your finances,


marty998

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #20 on: February 21, 2018, 03:33:17 AM »

Sadly, I pretty much do NOT have the credit room. Getting close to my available balances is really one of the things that woke me up to trying to live more frugally in the past few months. Though I didn't accelerate to the ideas I am currently holding till I discovered the blog. It's a great idea, though!

I am going to nail you on this. You cannot think of credit as being "available". Sure it's there for an emergency, but it's not "available" for spending that you incur interest on.

Change your mindset on this one.

vogon poetry

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #21 on: February 21, 2018, 06:12:44 AM »
Hi woolgather!
I am also in the process of splitting up with my significant other and trying to figure out how long I have got until I am out of time to decide on the kids thing--I don't think I want to do it all by myself, but I am also 37 so I have a limited amount of time to work with to do it other ways.
I agree that getting rid of your debt is your first priority, but that putting the first $500 in the bank to have as a fall back is an important first step. You need to stop using your credit cards. Having the $500 to fall back on will be handy for this. 
I'm envious that you're earning royalty income --I think a good plan might be for you to try, outside of work, to build more of that. Its something that can help you in your current debt situation and possibly provide you with income in a couple of years when you take time off to have a kid too!

snacky

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #22 on: February 21, 2018, 06:34:58 AM »
Regarding the single parenting gig- kids are hard and doing it solo is no joke, but it's possible and can be really good. I have been doing it since my kids were babies and frankly I wouldn't have it any other way. Not getting to share the labour is hard, but not having to share the benefits is awesome.
I hope you find the right sperm at the right time, wether it be attached to an involved human person or not.

Mesmoiselle

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #23 on: February 21, 2018, 08:24:29 AM »
You need some kind of emergency fund, especially if you plan to get rid of renter's insurance, and if you have a high-deductible medical plan.  Even $500 in savings would be a good thing.
So, from what I've read on this site, isn't it better to throw that $500 at a credit card (or, better yet, my line-of-credit at the bank) and use THAT if I really need it? That way it's not costing me interest, but is there if I need it? (i.e., "springy")

It depends on the person, is the answer, as well as what methodology really works for you. People sometimes  have problems with credit cards because they didn't know how to use them to their benefit.  So they learn how to use them, and BAM, they're working the CC companies, churning left and right, and racking in the rewards. That was me. I have something like 16 credit cards, no interest bearing balances, paid in full every month. haven't paid interest on a CC in 3 years. I'm a terrible CC customer ;) I think in this one area, I'm quite mustachian. I definitely use the CCs for emergencies--- it gives me enough time (6 weeks) to scrape up actual money. Like selling investments/stocks or calling in personal loans I've given to people. Which is something I recently did when I fronted the entire cost of my Mother in Laws 10k Funeral and I didn't have a lot of free cash at that exact moment.

Some people manage to consolidate their debt, finally free themselves of the CC grind, only to put a charge on a CC in an emergency, promising to themselves they'll pay it right off. 1 year later, they are back where they started.  These people, the slippery slope people, should probably swear off using credit cards at all. Nearly ever. Until they have their life so on track that maybe they could pick up ONE card with a good Rewards Back Program. These are the sort of people who might find Dave Ramsey's "CCs are the devil! never use!" methodology more to their mental style.

Now the question is, Which one are you? not, which one do you want to be?

westtoeast

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #24 on: February 21, 2018, 09:39:17 AM »
I don't think this has been asked already. Is adoption or fostering with intent to adopt on the table for you? Asking because those options would take a bit of pressure off the biological clock piece. But of course, these options are not for everyone!

Mezzie

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #25 on: February 21, 2018, 11:32:43 AM »
I was also going to ask about your feelings regarding adopting or fostering (bonus: you can get them school-aged and skip the diaper and daycare stage!). I'll note that I appear to have NO biological clock, so if this is offensive in some way, I apologize. I work with a lot of awesome foster youth in need of loving homes. Because of the abuse some of them have endured, a single female can be the ideal parent for some.

It sounds like you are thinking through your options logically. Stick around and keep us posted. These people give good advice. :)

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #26 on: February 21, 2018, 12:29:15 PM »
You need some kind of emergency fund, especially if you plan to get rid of renter's insurance, and if you have a high-deductible medical plan.  Even $500 in savings would be a good thing.
So, from what I've read on this site, isn't it better to throw that $500 at a credit card (or, better yet, my line-of-credit at the bank) and use THAT if I really need it? That way it's not costing me interest, but is there if I need it? (i.e., "springy")

It depends on the person, is the answer, as well as what methodology really works for you. People sometimes  have problems with credit cards because they didn't know how to use them to their benefit.  So they learn how to use them, and BAM, they're working the CC companies, churning left and right, and racking in the rewards. That was me. I have something like 16 credit cards, no interest bearing balances, paid in full every month. haven't paid interest on a CC in 3 years. I'm a terrible CC customer ;) I think in this one area, I'm quite mustachian. I definitely use the CCs for emergencies--- it gives me enough time (6 weeks) to scrape up actual money. Like selling investments/stocks or calling in personal loans I've given to people. Which is something I recently did when I fronted the entire cost of my Mother in Laws 10k Funeral and I didn't have a lot of free cash at that exact moment.

Some people manage to consolidate their debt, finally free themselves of the CC grind, only to put a charge on a CC in an emergency, promising to themselves they'll pay it right off. 1 year later, they are back where they started.  These people, the slippery slope people, should probably swear off using credit cards at all. Nearly ever. Until they have their life so on track that maybe they could pick up ONE card with a good Rewards Back Program. These are the sort of people who might find Dave Ramsey's "CCs are the devil! never use!" methodology more to their mental style.

Now the question is, Which one are you? not, which one do you want to be?

I would say that I get VERY determined when it's time to get a thing done. I have in the past been a "pay balances in full" person, so I know I can do it. I just have had a dark time for the past four years. I'm not sure it's a coincidence that that is also the amount of time I've been with my husband...I think his bad habits rubbed off on me.

To me, the way I think about it is this:

OK, so, say I put $500 in an emergency fund instead of paying it toward my highest interest rate card (which I'm also never using anymore). I'm still paying the 14.24% interest on that $500 portion balance of the card. My emergency comes in a year (to make this calc easy), so I pay the $500 out of my fund. The fund is wiped out. I have to start over with building that. But over that year, I've paid $71 in interest to the card on the $500 I didn't use the emergency fund for.

If, instead, I put the first $500 toward my remaining balance on that card, then when my emergency comes a year later, I use my card. Even if I *do* need to carry that $500 additional balance forward into the next billing cycle—I can't pay it back right away—I still have $71 less debt on that card than I otherwise would have.

Is that flawed understanding?

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #27 on: February 21, 2018, 12:30:30 PM »
You're already getting great responses here, and I'm not going to offer maths / expense cutting advice as I'm on a different continent. My advice is: start a journal here. Heaps of lovely people will comment with support and encouragement. They'll help you stay accountable for making the necessary changes. They'll come up with inventive solutions to your problems. It's pretty much the greatest.

Hey, thanks! I actually already did that yesterday. :)

Anyone interested can peep it here: https://forum.mrmoneymustache.com/journals/process-progress/msg1907105/#msg1907105

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #28 on: February 21, 2018, 12:35:17 PM »

Sadly, I pretty much do NOT have the credit room. Getting close to my available balances is really one of the things that woke me up to trying to live more frugally in the past few months. Though I didn't accelerate to the ideas I am currently holding till I discovered the blog. It's a great idea, though!

I am going to nail you on this. You cannot think of credit as being "available". Sure it's there for an emergency, but it's not "available" for spending that you incur interest on.

Change your mindset on this one.

OK, sure. I actually struggled with what to call that, and decided that's what they call it when I log into the accounts, so that's what people would understand it to be. What's the preferred term around here?

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #29 on: February 21, 2018, 12:48:54 PM »
I don't think this has been asked already. Is adoption or fostering with intent to adopt on the table for you? Asking because those options would take a bit of pressure off the biological clock piece. But of course, these options are not for everyone!

I'm not, like, 100% opposed? But I kind of want to go through the entire experience (pregnancy, etc.) start to finish. And I've also heard that those are generally (not across the board, but on average) more challenging parenting situations, and I'm nervous about that. I only recently changed my mind and want to have a kid, so I'm not one of the ones who has had a super strong nurture instinct from the beginning. I'm not sure a higher risk of challenge is something I'd opt-in for willingly. But it's a thought...

Dianalou

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #30 on: February 21, 2018, 12:51:08 PM »
I can totally understand the biological clock piece, and just having that gut feeling that you were meant to be a mother. I broke up a relationship (though not a marriage) because he didn't want to have kids and I had never pictured my life WITHOUT kids! I now look at my husband at least five times a week and say, 'I don't understand how single parents do this.' We have two, a 2.5 yo and a 1.5 yo and they are tough. Like some days I cry as much as they do kind of tough. As another poster said, your kid could be acting like a total monster, but just having that other adult in the room or sending supporting texts makes all the difference. Now, my husband was raised by a single Mom from about 2yo on and he borders on sainthood, so it's not like you're destined to raise a serial killer, it's just harder. 

You seem really open and enthusiastic about making the changes which will get you so far! And you sound like my kind of personality where you can turn the saving or paying down debts as a kind of game. As far as the more income, soap making (speaking as a soap maker myself, who apparently was doing it in tandem with Mrs.MM and then read the post like, what!?) isn't something that you can do with kids around or even pets, think buckets of oils and lye sitting around. Plus the competition is fierce on etsy! Sounds like you have a great source of income in your writing, since you already have a foot in there, sounds like you could seek out more of those gigs. Or the teaching english online? I've seen those posts but haven't looked a lot into it.

I'm sorry about your marriage, and the tough spot that you're in right now. You seem to have a really great attitude about it all at the moment, and I'm sure you can make the cuts where needed and pick up more gigs to supplement the income. You can do it!

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #31 on: February 21, 2018, 12:51:44 PM »
I hope you find the right sperm at the right time, wether it be attached to an involved human person or not.

😂  I love it! Thanks!

former player

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #32 on: February 21, 2018, 12:58:23 PM »

To me, the way I think about it is this:

OK, so, say I put $500 in an emergency fund instead of paying it toward my highest interest rate card (which I'm also never using anymore). I'm still paying the 14.24% interest on that $500 portion balance of the card. My emergency comes in a year (to make this calc easy), so I pay the $500 out of my fund. The fund is wiped out. I have to start over with building that. But over that year, I've paid $71 in interest to the card on the $500 I didn't use the emergency fund for.

If, instead, I put the first $500 toward my remaining balance on that card, then when my emergency comes a year later, I use my card. Even if I *do* need to carry that $500 additional balance forward into the next billing cycle—I can't pay it back right away—I still have $71 less debt on that card than I otherwise would have.

Is that flawed understanding?
Not flawed, you are right. A true emergency fund as the term tends to be used around here is for people with cash to spare who like to keep enough of it liquid (ie in a savings account rather than invested in shares) that if a big expense comes up unexpectedly they won't have to sell shares at what might be a bad time in the market.  But you have a hair on fire debt emergency and need to put every penny towards putting the fire out as soon as you can.  The problem with this is when "emergencies" which go back on to the card cancel out any progress you make on paying off the debt. 

I think the way to deal with this is to understand what your regular but not monthly expenses, or expected one-off expenses, are and to save up for them by putting regular monthly amounts in a "sinking fund", so that any eg annual expenses don't come as a surprise (or "emergency") which has to go back on the credit card.  After a year you should have savings amounting to the annual cost of these irregular expenses.  This manages your cash flow, and creates what is really a sinking fund but which can also act as an emergency fund if needed.   The sinking fund goes into a savings account and gains you a little bit of interest.

Everything from your monthly income which is not monthly expenses plus contribution to irregular expenses then goes towards paying off debt.  It should be the same amount each month, which allows you to plan your debt payments.  Any additional income can also go debt, which means that any additional income puts you further and further ahead of your debt pay-off plan each time it comes in.

Having the sinking fund to hand means that you never again need to use your credit card to pay unexpected or unplanned-for bills or for planned consumer expenses, other than for expenses which you can pay off within the month.  It means that you never need to carry interest-bearing consumer debt.


wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #33 on: February 21, 2018, 01:00:31 PM »
I can totally understand the biological clock piece, and just having that gut feeling that you were meant to be a mother. I broke up a relationship (though not a marriage) because he didn't want to have kids and I had never pictured my life WITHOUT kids! I now look at my husband at least five times a week and say, 'I don't understand how single parents do this.' We have two, a 2.5 yo and a 1.5 yo and they are tough. Like some days I cry as much as they do kind of tough. As another poster said, your kid could be acting like a total monster, but just having that other adult in the room or sending supporting texts makes all the difference. Now, my husband was raised by a single Mom from about 2yo on and he borders on sainthood, so it's not like you're destined to raise a serial killer, it's just harder. 

You seem really open and enthusiastic about making the changes which will get you so far! And you sound like my kind of personality where you can turn the saving or paying down debts as a kind of game. As far as the more income, soap making (speaking as a soap maker myself, who apparently was doing it in tandem with Mrs.MM and then read the post like, what!?) isn't something that you can do with kids around or even pets, think buckets of oils and lye sitting around. Plus the competition is fierce on etsy! Sounds like you have a great source of income in your writing, since you already have a foot in there, sounds like you could seek out more of those gigs. Or the teaching english online? I've seen those posts but haven't looked a lot into it.

I'm sorry about your marriage, and the tough spot that you're in right now. You seem to have a really great attitude about it all at the moment, and I'm sure you can make the cuts where needed and pick up more gigs to supplement the income. You can do it!

Thanks for all of this! Yeah, the problem with the writing thing is . . . I'm mostly just kinda BORED with writing for other people, and I dread it and get all procrastinate-y. It's a large part of why I want to get out of the line of work I'm in: writing too much drudgery. There's also the issue that the stuff I get blog income and royalties for is not super marketable in a wider sense. One is educational children's books I was commissioned for, but is also kind of a dead-end street. The other (on the complete opposite side of the spectrum) is erotica blogs, which is a limited gig. (Haha, could those two things get any more different?!) But I do LIKE to write and COULD do it freelance for some extra dough. I'm looking into it.

I've done editing and a few writing gigs back when Elance was a thing, and the thing I noticed most was the competition and underselling were so fierce that it was very hard to make decent money for my time. But maybe that's changed, and maybe "decent money for my time" matters less when I just need money and should be making money rather than spending it in my "free time" anyway.
« Last Edit: February 21, 2018, 01:07:13 PM by woolgather »

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #34 on: February 21, 2018, 01:05:55 PM »

To me, the way I think about it is this:

OK, so, say I put $500 in an emergency fund instead of paying it toward my highest interest rate card (which I'm also never using anymore). I'm still paying the 14.24% interest on that $500 portion balance of the card. My emergency comes in a year (to make this calc easy), so I pay the $500 out of my fund. The fund is wiped out. I have to start over with building that. But over that year, I've paid $71 in interest to the card on the $500 I didn't use the emergency fund for.

If, instead, I put the first $500 toward my remaining balance on that card, then when my emergency comes a year later, I use my card. Even if I *do* need to carry that $500 additional balance forward into the next billing cycle—I can't pay it back right away—I still have $71 less debt on that card than I otherwise would have.

Is that flawed understanding?
Not flawed, you are right. A true emergency fund as the term tends to be used around here is for people with cash to spare who like to keep enough of it liquid (ie in a savings account rather than invested in shares) that if a big expense comes up unexpectedly they won't have to sell shares at what might be a bad time in the market.  But you have a hair on fire debt emergency and need to put every penny towards putting the fire out as soon as you can.  The problem with this is when "emergencies" which go back on to the card cancel out any progress you make on paying off the debt. 

I think the way to deal with this is to understand what your regular but not monthly expenses, or expected one-off expenses, are and to save up for them by putting regular monthly amounts in a "sinking fund", so that any eg annual expenses don't come as a surprise (or "emergency") which has to go back on the credit card.  After a year you should have savings amounting to the annual cost of these irregular expenses.  This manages your cash flow, and creates what is really a sinking fund but which can also act as an emergency fund if needed.   The sinking fund goes into a savings account and gains you a little bit of interest.

Everything from your monthly income which is not monthly expenses plus contribution to irregular expenses then goes towards paying off debt.  It should be the same amount each month, which allows you to plan your debt payments.  Any additional income can also go debt, which means that any additional income puts you further and further ahead of your debt pay-off plan each time it comes in.

Having the sinking fund to hand means that you never again need to use your credit card to pay unexpected or unplanned-for bills or for planned consumer expenses, other than for expenses which you can pay off within the month.  It means that you never need to carry interest-bearing consumer debt.

OK, yes, this makes sense to me. I was already doing this on a small scale previously for my yoga, because I tend to buy a package of classes at a discount through Groupon or a sale all at once, and I was taking what that costs per month on average, and putting it in a savings account. Similar thing with my band expenses: there are five of us, so there are months when there are only four weeks and it's not my turn to pay for the practice space. I divert an average to my savings account, and when it is my turn, I pay it out of that.

I think it's basically the same idea, but broadened to include stuff like plane fare to see my family once per year, groceries for a special birthday dinner for someone special, my half of the car registration, stuff like that, yeah?

former player

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #35 on: February 21, 2018, 01:10:39 PM »
I think it's basically the same idea, but broadened to include stuff like plane fare to see my family once per year, groceries for a special birthday dinner for someone special, my half of the car registration, stuff like that, yeah?
Yes, except that with your hair on fire you need to think to what extent those things are luxuries you (temporarily) can't afford and to what extent you can reduce the cost of the remaining items which are necessities.

englishteacheralex

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #36 on: February 21, 2018, 01:15:46 PM »
Fostering/adopting is complicated. People toss off this advice as though it's no big deal--"just foster/adopt!"--but it can be very challenging and expensive. Not to mention that it is not always possible for single women to adopt (laws/circumstances change about this depending on the year and the location).

I have friends who had children in their forties. It can be done. Personally, I met, married and had a kid with my husband within a two-year time span starting when I was 33. Had a second kid 2 years later at 37. Still recovering from such a fast tectonic shift in lifestyle, but all that to say--it's not required that from meeting the guy to having the first kid you need a time frame of around 5 years (five years sort of seems to be the conventional wisdom on the topic).

I will say that I can't really imagine trying to parent two toddlers without my husband. I have a theory that we tend to rise to whatever challenge is put before us, so I'm sure it's possible. Just...seems like single motherhood would be pretty intense.

Good luck! Sounds like you're keeping a pretty great attitude about the circumstances you find yourself in at the moment.

Dianalou

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #37 on: February 21, 2018, 01:26:46 PM »
Quote
I will say that I can't really imagine trying to parent two toddlers without my husband. I have a theory that we tend to rise to whatever challenge is put before us, so I'm sure it's possible. Just...seems like single motherhood would be pretty intense.

x1000 I'm hoping it's the toddler phase. Please?

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #38 on: February 21, 2018, 02:40:23 PM »
I think it's basically the same idea, but broadened to include stuff like plane fare to see my family once per year, groceries for a special birthday dinner for someone special, my half of the car registration, stuff like that, yeah?
Yes, except that with your hair on fire you need to think to what extent those things are luxuries you (temporarily) can't afford and to what extent you can reduce the cost of the remaining items which are necessities.

Yeah, the car stuff is about to go away for me and I can scrimp elsewhere in my budget for the groceries, I'm sure. The family thing is non-optional at this stage in my nephews' lives. I was mostly looking for stuff to fill out a list, haha.

Mesmoiselle

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #39 on: February 21, 2018, 02:52:38 PM »
yeah, you idea about CCs was about right and I agree with what the other person said.

 As a strategy that is kinda risky, but potentially worth it to avoid CC interest, you could get to the point where you charge everything to a card and pay for it by the time it's due. Even though you'd be carrying the same amount of debt (let's say 5k) you don't pay interest. At this point, you will be perpetually a month (or 5k) behind until you get true savings to get caught up. The real goal is to be a few months ahead very soon, because charging everything to a card is, of course, risky as you assess and learn what are True Expenses (tm/joke) and just Wants. A lot of things can't even be paid for with a CC, like Rent for the most part and a lot of utilities. But then the minimal rewards back (if you have any) can also be a good little snowball to get started, if you always turned around and apply that to the balance and never as an actual "yay! reward!"

I've heard confusing reports of people who think being a month behind (we always pay our CC balance with our next four paychecks!) is being fiscally smart but that's shaky ground. This is purely for a card you can't seem to transfer the balances of to an 18 month 0% CC (I've only ever done one transfer in my entire life, like 4 years ago. Chase Slate had this deal so I'm not sure what's available now.)

Anyway, it's a credit card "game" through and through, but it can shave off some interest and help if done carefully.

eliza

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #40 on: February 21, 2018, 03:08:45 PM »
I'm sorry for your breakup --- that's a huge life change and kudos to you on having such a positive attitude and being willing to make some changes.

That said, you have a HUGE income problem.  Living in LA on your salary is going to be terribly difficult.  I'd be job hunting beginning immediately and/or taking whatever additional work I could find.

If you can't raise your income, you are really going to need to go scorched earth on the budget (and you should probably be going barebones budget regardless until you pay off you hair-on-fire debt situation.  Based on the budget you proposed in your first post, here are my thoughts in red

My life is basically a dumpster fire right now.

My dependable take-home per month is about $2822, with two months having an "extra" paycheck.

Current expenses, monthly: I'll put after the slash what I expect them to be when I move back out on my own...
My half rent/water/trash - $808 (one-bedroom apt) / $800 (room for rent, if findable) – $1200 (tiny studio apartment) A studio apartment is not in the cards for you right now - $800 for a room to rent is about the upper limit of what you can spend - I would concentrate on finding the cheapest option that coudl possibly work for you (this isn't your forever home, this is your interim lodging while you get your shit together)
My portion of car payment (2015 Ford Fiesta hatchback) - $50 / $0*
Car insurance (non-owner policy) - $54 - seriously consider dropping this
Gasoline - $20 - Drop - I wouldn't plan on being able to use the car.
Lyft (due to shared car) - $30 / ?? - $50 for transportation (bus/lyft/uber/whatever)
Utilities (gas/electric, my half) - $59 / I expect this to actually go down because I use way less energy than he does - This is going to depend on living situation - I pay ~$100 a month for electric, gas, internet,
 water/sewer/trash in my DC share house.  Keep util costs in mind when selecting housing.

Cell - $50 (pre-paid 5GB-before slowdown unlimited talk/text/data plan through Straight Talk on an iPhone 6)
Band Costs - $24 (my portion of the hourly practice space rental, website costs, and data storage)
Personal Data - $2 (Google Drive) - Is this necessary
Food & Dining** - $145–200 - I'd drop this to $125
Therapy - $110 / $0 (this was marriage counseling that will be no longer a factor)
Yoga (via Groupons and coupons) - $15–33 (willing to consider free internet yoga, but I do it with a friend and it's motivating for both of us to do it that way) - Nope. Online or other free yoga classes for now
Renter's Insurance (my half, required by current lease) - $9 / $0
Personal Care*** (vitamins, toiletries) - $6–40 - Keep as low as possible
Pet Costs**** (2 house rabbits, 2 cats) - $70 / $50
Music (Pandora & Family Spotify) - $20 (I pay the whole Spotify in exchange for access to their Netflix) - This is a pretty huge extravagance given your situation.  If you are paying for Pandora - DROP.  And seriously consider dropping Spotify/Netflix
Gifts - $0–$300 historically, trying to trim that down but I'm more generous to others than I am to myself - Nope - no more than $25/month sinking fund for gifts.
Other - I put $20 on a public transit card every few months - covered in transport


Liabilities:
- Back Taxes (2013/2014) - Balance was $4,589 in March of 2017. I've been paying $100/mo on it since and need to re-check the balance now. I expect any refund I might be due to be gobbled up by that like it was previously. You are not getting a tax refund until this is finished.
- Student Loan #1 - $10,000 / 3.25% /$10,597.16 / 10 yrs / $110 (this loan is not federal and my mom co-signed in 2003)
- Student Loans #2 & #3 - I actually don't know what they started at, as I consolidated / 5.62% / $66,401 / IBR payments / $271 (the non IBR amount would be $722, but I didn't think that was possible until reading MMM; IBR is scheduled to go up to $358 in July due to a raise last year)
- Bank Line of Credit - $454 / 21.90% / min is $25 but I'm paying this off completely with my next couple paychecks due to MMM principles
- CC #1 - $10,596 / 14.24% / $244 min
- CC #2 - $6,921 / 12.99% / $152 min
- CC #3 - $2,275 / 12.74% / $47 min
- CC #4 - $2,473 / 11.15% / $50 min



HappierAtHome

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #41 on: February 21, 2018, 03:32:23 PM »
People suggesting adoption - adoption can take years, break your heart, and is often more expensive than IVF. Worth researching this if you are interested in it yourself or if you make a habit of suggesting it as an alternative to childbearing :-) it is not an easy fix.

You're already getting great responses here, and I'm not going to offer maths / expense cutting advice as I'm on a different continent. My advice is: start a journal here. Heaps of lovely people will comment with support and encouragement. They'll help you stay accountable for making the necessary changes. They'll come up with inventive solutions to your problems. It's pretty much the greatest.

Hey, thanks! I actually already did that yesterday. :)

Anyone interested can peep it here: https://forum.mrmoneymustache.com/journals/process-progress/msg1907105/#msg1907105

Awesome! I'll see you there ;-)

couponvan

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #42 on: February 21, 2018, 04:11:58 PM »
I'm going to ask about the non-information that may be relevant or not.

CA division of property and any debts during the marriage. Are you entitled to or obligated for assets or debt of your spouse? Can you negotiate any spousal support? Yes you are amicable, but don't forget to be fair with each other. My sister paid her first husband support for 3 years after their divorce. She wanted kids, he didn't. She was around your age and now has a 2nd hub and 2 kids. Granted they will be able to get SS before the 2nd kid turns 18...

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #43 on: February 21, 2018, 04:24:28 PM »
I'm going to ask about the non-information that may be relevant or not.

CA division of property and any debts during the marriage. Are you entitled to or obligated for assets or debt of your spouse? Can you negotiate any spousal support? Yes you are amicable, but don't forget to be fair with each other. My sister paid her first husband support for 3 years after their divorce. She wanted kids, he didn't. She was around your age and now has a 2nd hub and 2 kids. Granted they will be able to get SS before the 2nd kid turns 18...

We've been married less than a year, so we get to do the simple divorce. We've always had all separate accounts, only rented, the car is in only his name, and he makes only $2,500 more than me per year, so there's no kind of income discrepancy that would justify support. All of our furniture is IKEA or thrift junk that we can evenly divide. We each already had a TV (my smaller one was in the bedroom) and our own computer and musical equipment. I'm going to get out of this thing pretty easy, since only he will have the car payment, and I'm going to try to get him to take two of our (currently expensive) pets.

Cpa Cat

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #44 on: February 21, 2018, 04:50:12 PM »
In the following thread, starting at post 369, a forum poster (Kris) discusses her side gig of writing erotica E-books for sale on Amazon. Some people ask Kris some questions, so there's also some follow up from her with some details.

https://forum.mrmoneymustache.com/entrepreneurship/who-has-a-side-gigjob-that-brings-in-extra-cash-share-with-us!/369/

You could potentially cut the yoga costs by doing yoga at home with a Youtube instructor. You can google "best youtube yoga" for some suggestions. Maybe invite your friend over for it?

couponvan

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #45 on: February 21, 2018, 05:05:24 PM »
I'm going to ask about the non-information that may be relevant or not.

CA division of property and any debts during the marriage. Are you entitled to or obligated for assets or debt of your spouse? Can you negotiate any spousal support? Yes you are amicable, but don't forget to be fair with each other. My sister paid her first husband support for 3 years after their divorce. She wanted kids, he didn't. She was around your age and now has a 2nd hub and 2 kids. Granted they will be able to get SS before the 2nd kid turns 18...

We've been married less than a year, so we get to do the simple divorce. We've always had all separate accounts, only rented, the car is in only his name, and he makes only $2,500 more than me per year, so there's no kind of income discrepancy that would justify support. All of our furniture is IKEA or thrift junk that we can evenly divide. We each already had a TV (my smaller one was in the bedroom) and our own computer and musical equipment. I'm going to get out of this thing pretty easy, since only he will have the car payment, and I'm going to try to get him to take two of our (currently expensive) pets.
Well that does make it more simple. Sorry to be nosy in that area. If you do the move home route you can Craigslist your 1/2 and do a u pack/they move shared semi and fly the cat/rabbit home versus a one way rental. Www.broadwayexpress.net will price per foot in their trucks so you can compare. It's the company we used years ago. I have no affiliation with them, but several friends and family have used them since. Who knows, it may be cheaper to just rent a car.

It's good you found MMM and are putting a solid plan in place.

wooljaguar

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #46 on: February 21, 2018, 06:05:38 PM »
In the following thread, starting at post 369, a forum poster (Kris) discusses her side gig of writing erotica E-books for sale on Amazon. Some people ask Kris some questions, so there's also some follow up from her with some details.

https://forum.mrmoneymustache.com/entrepreneurship/who-has-a-side-gigjob-that-brings-in-extra-cash-share-with-us!/369/

You could potentially cut the yoga costs by doing yoga at home with a Youtube instructor. You can google "best youtube yoga" for some suggestions. Maybe invite your friend over for it?

I guess I could look into the doing further erotica thing, for sure! As for yoga, I've totally done YouTube yoga before! And I could maybe invite my friend over for it, though the ritual of attending the class is the main draw there, I think. At least I still have 30 classes left in my pack . . .

westtoeast

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Case Study - Debt Emergency + Biological Clock
« Reply #47 on: February 21, 2018, 06:55:10 PM »
People suggesting adoption - adoption can take years, break your heart, and is often more expensive than IVF. Worth researching this if you are interested in it yourself or if you make a habit of suggesting it as an alternative to childbearing :-) it is not an easy fix.


msg1907105/#msg1907105

Awesome! I'll see you there ;-)

I want to apologize if my question made it sound like I view adoption as a quick fix! I know that it’s not (but it’s on my personal radar too, which is one reason it came to mind). I thought that it might be relevant whether it was on the table or not for OP. It was also a question, not a suggestion. Again, no intention to minimize the challenges!!



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« Last Edit: February 21, 2018, 06:59:07 PM by westtoeast »

Villanelle

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #48 on: February 21, 2018, 08:56:39 PM »
To me, it seems like you can absolutely do this, but you need to evaulate every single decision in terms of what is costs.  And I referring both to every penny you spend, but also to the more braod definition of "cost".

That plane ticket to visit family may cost you another month or two before you can have a kid, for example, and with your age as a concern, that's not a meaningless amount of time.  Is it worth it, or could you skip a year?  Or maybe travel at a cheaper time, at the very least?

You find certain types of writing to be boring and painful.  Okay, but if it buys you 4 months in your baby timeline, is it worth it?

Even those concerts that you are willing to give up unless they are free--are you buying a beer or a shirt or paying for transportation or giving a token thank you gift for a free ticket?  Then they aren't free.

Is being in your band a net financial positive?  Even if it is, does it take time away from possible money-earning activities like more writing or a part time bartending job? 

Every.  Single.  Option on the table.  Give up meat in most of your cooking and save $x00 a year.  Write stuff you don't like.  Wait tables.  Babysit on Friday and Saturday night.  Give up alcohol.  Everything.  Because every decision you make shaves off or adds days to that timeline and to that ticking biological clock. 

I guess the broader question is just how badly do you really want this kid thing to happen, and given that you are leaving a marriage over it, it seems like the answer is "pretty damn bad".  So it may be time to strip everything else down, and put every semi-viable option on the table in order to make that happen.  Some of these things may seem extreme, and perhaps they are.  Whether they are too extreme for you just depends on how badly you want that main priority (which I'm assuming is having the debt gone and being able to afford a kid, and possibly even the sperm donor and/or IVF process).  Maybe the band means more to you than that because your soul will shrivel and die without that creative outlet.  Maybe those "free" concerts that cost you $25 plus another $40 in lost income are worth it.  Maybe not working 80 hours a week at your primary job plus two side gigs isn't worth it, even if it means that you don't get to the point where you can responsibly--whatever that means to you--afford a child before you lose your ability to do so.  There are no right answers, but these are the questions you need to be asking yourself, and I'd be asking them about nearly every expense and decision in my life right now.

Dicey

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Re: Case Study - Debt Emergency + Biological Clock
« Reply #49 on: February 21, 2018, 11:20:04 PM »
^^Great post, Villanelle.^^