I’m a little embarrassed to be writing this, but here goes. I am a part-time barber, 36, and my second husband is a tattoo artist, 30. I got out of a total mess when I met him about five years ago and escaped with nothing. He had nothing to begin with. We just found Dave Ramsey an this blog a few month ago. I have three kids, ages 8, 10, and 16. When we met, we were both apprenticing in our trades so we are both just this year really getting to where we both know money will come in. Now here’s an embarrassing tidbit: up until three months ago I really didn’t know how much we made or spent. My husband gets all cash from his commissions and gets a 1099, and at the end of the year gives his boss an arbitrary number because of his terrible record keeping (although this year he says he has all income and expenses tracked and categorized... we shall see when we file taxes!) Horrible, i know! I get regular paychecks with taxes taken out, that’s my commission and credit card tips, plus cash tips which i previously didn’t keep track of. I started using the every dollar app three months ago to keep better track and here’s what a month looks like on average:
Me: $2600
Cash tips: $300
Husband: $4300
Child support: $400
Total monthly average income: $7600
Which is crazy, before we started tracking in my head according to my earnings in previous years and just my best guess on hubby, i figured we made maybe $45000. So that’s good and bad news. Looks like without counting the child support that’s around $86,000.
So here’s another embarrassment: we have about $9,000 in credit card debt, mostly from some unexpected medical/dental things and some expenses incurred when we moved a year ago. I also have about 30k in student loans and 10 months left on a car lease. I tried to get out of it, but at this point i really cant. Never again, though. Hubby has a 09 Mazda 3, paid cash.
And still, ANOTHER embarrassment. We were previously renting a two bedroom flat with three kids, it wasn’t really working but we didn’t feel like we really had options. My family was really pushing us to buy a house in an expensive suburb of our city with a good school district. We knew that wasnt happening. I had a client/old friend offer their empty house to the first person who would pay what they owed on it, which was 72,000. It is in the city but its a beautiful Victorian on a tree lined boulevard. I got preapproved for a conventional loan with a high interest rate by a local bank that keeps mortgages in house. We had discussed us moving in in December but waiting until we got our tax return in February to buy it. When the time came, the bank denied us. Every bank denied us due to the commission based pay and uncertain nature of our income. I applied by myself but because of my student loans which are currently 0$ a month and my auto lease my dti ratio is too high. So here we are, just paying rent, hoping the owners will be patient with us while we try to figure out buying this house we’ve already put so much work in to.
This year we have paid off 12,000 in credit card debt. So there’s that. This is in a relatively short time and I’m quite proud of it. I have been biking to work all the days i can, but i have to drive a few days a month when i leave for an hour to get kids off the bus and situated at home before returning to work for the evening. And good news: the salon i work at is moving even closer in February! Ill only be 1/2 mile from work.
So that’s what”s running in the background. Here’s what the monthly expenses look like.
Rent: $825
Gas: $130 and probably going up for the next few months. Summer is $30 a month
Electric: $100 (two boys who are really into gaming)
Water/trash/sewage: $30
Auto lease: $250 (gone in October)
Insurance: $180 (will go down in October, includes renters insurance)
Gas: $120
Groceries: $800- not too bad for five vegans but trying to improve
Phone: $240, this includes my phone and phone and iPad hubs uses for work and mifi hotspot service the kids use for internet. He writes off most of this plus depreciation of devices as a business expense
Netflix: $12
Two Apple Music streaming services: $22
Family YMCA membership: $36
Pets: $45
Credit card minimum payments: $235
Extra debt payments we automatically transfer to a special savings: $600 (we also add all leftover money to this pool)
Life insurance: $30
Currently the kids are on chip and hubs and i have no insurance due to the clown in office messing up our access to the affordable care act. Maybe next year.
Usually some of that gas price and maybe 50$ or more a month in equipment/ entrance fees goes to traveling to nearby cities for our family pastime of skateboarding. Being in the Great Lakes region, we have to do it at indoor parks for half the year.
The only savings i have at the moment is a small Dave ramseian emergency fund of $1000 and $3400 from a whole life policy I’ll be cashing in to put towards my down payment.
We plan to pay the cc debt off within 6 months. Does anyone have any idea what we can do about the lease, or should we just ride it out? Also with my current student loan payments at zero should i start saving for retirement once my cards are paid or pay the loans first? Is it possible for people like us to retire early? Ive only been barbering for a few years and already I’ve got a bad back and hands and feet riddled with tendinitis and arthritis, i need an exit strategy!
What do we do about this house situation? Any insight would be appreciated!