Author Topic: Reader Case Study – Debt management advice while we wait for second income (in 4  (Read 2380 times)

skenney5678

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Life Situation: Young couple (26 & 27), MFJ, living in MO, 2 children (7yo and 1yo), currently living on one income while husband goes to school. Several things may be changing since I am almost out of the probationary period in my new job. We are currently aided by family and government assistance but I’m trying to work us into financial security so we don’t have to rely on these things. I AM NOT WILLING TO TAKE ON A SECOND JOB. I already work 40 hours a week, and I do not want to sacrifice my time with my family. My nights and weekends are sacred to me. That being said, if you know of any (non-MLM) ways of making extra money that are legit, please feel free to suggest. Husband takes classes all day until 3 pm when he gets our son off the bus, in order to save on after-school care. I get home around 5:30 pm.

Gross Salary/Wages:  Monthly: $2,716

Individual amounts of each Pre-tax deductions:
Health/Vision Insurance: $415
Dental Insurance: $42
FSA: $40
403(b): $109 (Employer matches at 4%)
MOST 529 college account (total for both kids, separate accounts): $60
TOTAL PRE-TAX: $666

Other Ordinary Income: My husband gets leftover money from his Pell Grant, but we aren’t guaranteed this amount. He wants to also take out student loans for our living expenses but I said no.

Taxes: $174 (totaled and rounded up to the nearest dollar amount)
 
Adjusted Gross Income: $1,876
 
Current expenses:
Rent: $700
Internet: $51
Electricity: $122 (budget billing plan, our bill changes too much to pay monthly usage)
Water/Trash/Sewer: $70
Daycare: $410 (will be reduced in November, starting with new provider)
Cell Phone Bill: $90
Groceries: $100 (currently in SNAP also)
Haircuts: $30
Discover Card: $65
Chase Card: $30
JCPenney Card: $30 (Almost paid off!)
Hospital Bill: $50 (still trying to pay off having a baby)
College: $50 (leftover balance from when my youngest was going to daycare on campus)
Loan Payment: $93
Netflix: $13 (for the kids, shared account with my parents-in-law as “payment” for them taking care of our renter’s insurance and husband’s car insurance)
Car Maintenance: $30
TOTAL EXPENSES: $1,851

**Two of my three cards are maxxed out from when my husband lost his job and we had to use them to pay bills until he could find something else. I’m unable to cut down on gas costs due to lots of city driving for my job and I drop our daughter off at daycare in the morning. We live too far from campus for husband to walk but his car gets good city mileage (and he doesn’t drive it otherwise) so we only have to fill it up once every month and a half.

Assets: My bank accounts are embarrassingly low so I won’t share. My parents own my car. My only assets are my charming smile and empathetic nature.

Liabilities:
Personal Loan (used for moving to where my job/husband’s school is to cut down on commuting costs and to cover first two weeks of daycare costs while waiting for paycheck)
Original Principal: $2,000
Interest: 5.750%
Minimum Payment: $93
Months until Paid Off: 21
Current Principal: $1,842
 
**I also have $15,500 in student loans that are currently in forbearance on an Income-Based Repayment Plan. My goal is to get rid of my credit card debt, then tackle the student loan monster. Since I work for a non-profit, I intend to apply for loan forgiveness after 10 years in the field.

Specific Question(s): I need a few things answered, just because I’m still not good at this adulting thing, and I’m being confused by Internet searches.
 
1.  How can I insert emergency fund savings into my expenses (like how much should I look to save based on my current expenses)?

2.  Would consolidating my credit card payments help my monthly expense situation? All my cards are frozen so no additional expenses can be accrued. Currently, we are working on a hybrid snowball/avalanche method of pay off where we’re focusing on the smallest debts first, then once those are paid off, doing giant payments for the highest interest card and ending with the lowest interest rate card, if that makes sense. I also have no idea what debt consolidation would do to my (low-ish) credit score.

3.  Should I reduce my 403(b) withholding to less than 4% until I start making more/am more financially secure? I’m not looking to RE at all.

4. We also want to start saving up a down payment for a home, since renting has not been great, but this will be in about 5 years or so, once my husband gets placed at a school (he’s studying for a teaching degree). In addition to saving our tax returns, how much should we look at setting aside while he’s in school, based on our current financial situation?

Comments: I just need advice from people who actually know what they’re talking about instead of random Internet searches and family members who haven’t been in this sort of situation before. I’m lost and trying to figure this out because I feel like a bum having to rely on family and not being able to take care of everything myself. I appreciate you taking the time to read this!

skenney5678

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Reader Case Study - Young family trying to get somewhere
« Reply #1 on: October 17, 2017, 11:00:01 AM »
Life Situation:
Young couple (26 & 27), MFJ, living in MO, 2 children (7yo and 1yo), currently living on one income while husband goes to school.

Several things may be changing since I am almost out of the probationary period in my new job. We are currently aided by family and government assistance but I’m trying to work us into financial security so we don’t have to rely on these things. I AM NOT WILLING TO TAKE ON A SECOND JOB. I already work 40 hours a week, and I do not want to sacrifice my time with my family. My nights and weekends are sacred to me. That being said, if you know of any (non-MLM) ways of making extra money that are legit, please feel free to suggest. Husband takes classes all day until 3 pm when he gets our son off the bus, in order to save on after-school care. I get home around 5:30 pm.

Gross Salary/Wages: 
Monthly: $2,716

Individual amounts of each Pre-tax deductions:
Health/Vision Insurance: $415
Dental Insurance: $42
FSA: $40
403(b): $109 (Employer matches at 4%)
MOST 529 college account (total for both kids, separate accounts): $60
TOTAL PRE-TAX: $666

Other Ordinary Income:
My husband gets leftover money from his Pell Grant, but we aren’t guaranteed this amount. He wants to also take out student loans for our living expenses but I said no.

Taxes: $174 (totaled and rounded up to the nearest dollar amount)
 
Adjusted Gross Income: $1,876
 
Current expenses:
Rent: $700
Internet: $51
Electricity: $122 (budget billing plan, our bill changes too much to pay monthly usage)
Water/Trash/Sewer: $70
Daycare: $410 (will be reduced in November, starting with new provider)
Cell Phone Bill: $90
Groceries: $100 (currently in SNAP also)
Haircuts: $30
Discover Card: $65
Chase Card: $30
JCPenney Card: $30 (Almost paid off!)
Hospital Bill: $50 (still trying to pay off having a baby)
College: $50 (leftover balance from when my youngest was going to daycare on campus)
Loan Payment: $93
Netflix: $13 (for the kids, shared account with my parents-in-law as “payment” for them taking care of our renter’s insurance and husband’s car insurance)
Car Maintenance: $30
TOTAL EXPENSES: $1,851

**Two of my three cards are maxxed out from when my husband lost his job and we had to use them to pay bills until he could find something else. I’m unable to cut down on gas costs due to lots of city driving for my job and I drop our daughter off at daycare in the morning. We live too far from campus for husband to walk but his car gets good city mileage (and he doesn’t drive it otherwise) so we only have to fill it up once every month and a half.

Assets:
My bank accounts are embarrassingly low so I won’t share. My parents own my car. My only assets are my charming smile and empathetic nature.

Liabilities:
Personal Loan (used for moving to where my job/husband’s school is to cut down on commuting costs and to cover first two weeks of daycare costs while waiting for paycheck)
Original Principal: $2,000
Interest: 5.750%
Minimum Payment: $93
Months until Paid Off: 21
Current Principal: $1,842
 
**I also have $15,500 in student loans that are currently in forbearance on an Income-Based Repayment Plan. My goal is to get rid of my credit card debt, then tackle the student loan monster. Since I work for a non-profit, I intend to apply for loan forgiveness after 10 years in the field.

Specific Question(s):
 
1.  How can I insert emergency fund savings into my expenses (like how much should I look to save based on my current expenses)?

2.  Would consolidating my credit card payments help my monthly expense situation? All my cards are frozen so no additional expenses can be accrued. Currently, we are working on a hybrid snowball/avalanche method of pay off where we’re focusing on the smallest debts first, then once those are paid off, doing giant payments for the highest interest card and ending with the lowest interest rate card, if that makes sense. I also have no idea what debt consolidation would do to my (low-ish) credit score.

3.  Should I reduce my 403(b) withholding to less than 4% until I start making more/am more financially secure? I’m not looking to RE at all.

4. We also want to start saving up a down payment for a home, since renting has not been great, but this will be in about 5 years or so, once my husband gets placed at a school (he’s studying for a teaching degree). In addition to saving our tax returns, how much should we look at setting aside while he’s in school, based on our current financial situation?

Comments:
I just need advice from people who actually know what they’re talking about instead of random Internet searches and family members who haven’t been in this sort of situation before. I’m lost and trying to figure this out because I feel like a bum having to rely on family and not being able to take care of everything myself. I appreciate you taking the time to read this!

plog

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I'll answer your specific questions, but honestly, your husband needs a job.  Even $100 a week would go a long way in your situation.  Why is he not bringing home anything?

1. You can't beat math.  You have $25 left over after your expenses.  Where's the emergency fund money going to come from? Either expenses go down or income comes up.   

2. Possibly, but not signficantly.  Do the math--you know what your monthly payments are now, find out what they will be after the consolidation.

3. Yes, I'd kill the 529 as well.  You need every dollar you can scratch together.  You are a broken alternator/refrigerator/arm away from disaster. 

4. $0.  Again, you have $25 left over each month. Just thinking about a house is a ways away.

You may have been living this close to disaster for so long that you have become numb to the peril you are in, but honestly you are in a hair on fire emergency.  Your husband needs a job.   

« Last Edit: October 17, 2017, 11:34:24 AM by plog »

Raenia

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The good news is, other than the debt repayment, your expenses are very frugal.  The bad news is, your debt is killing you (as I'm sure you're already aware).  Could you give us the details on the credit card debts - current principal, interest rate, and minimum - as well as the hospital bill and college daycare bill so we can help prioritize the debt repayments?

You mentioned that things may change when you are out of the probationary period at work, will that include a raise?  You desperately need some more income to direct to debt repayment and emergency fund.  If your husband is able to pick up a part time job, that would help immensely as well.

In the meantime, what I would do is:
 - Drop the 529 for now until all the loans are paid off
 - Learn to cut your own hair, or have your husband do it and you do his.  If that's a no-go, at least go for cuts that don't require much maintenance, and get that monthly amount down.
 - How much will the daycare bill drop in November?
That should give you ~100/month extra.  Build up your emergency fund first.  Given the amount of debt you're in right now, I'd go for a pretty lean emergency fund and then redirect that money toward debt repayment, highest interest first.

Now is not the time to be saving for a downpayment.  You need to get out of debt first, get a healthy emergency fund together, and then you can start saving for a house.  I know renting can suck, but buying just isn't in the cards right now.  There are too many things you need to do first.

Cwadda

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #4 on: October 17, 2017, 12:18:52 PM »
Would you consider working for a for-profit company, interim, until your husband is through school and there is another income?  This is a tough question to ask, because I know how much non-profit work means to folks (speaking from experience). However, you mentioned you live in a city area and there might be much higher earning potential for a few years to give you a safety net. Then you could go back to working in non-profit.

Another option: Would you be vehemently opposed to taking out a student loan in your husband's name to help get you through living expenses?  You are currently living paycheck to paycheck, and I'd argue that securing a government loan is less stressful than living with no emergency fund and a very tight budget.  Another angle: consider it an investment into your well-being and your husband's earning potential.

Quote
Cell Phone Bill: $90
This seems high. Have you looked into alternate plans?

Quote
Discover Card: $65
Chase Card: $30
JCPenney Card: $30 (Almost paid off!)
Are these minimum payments or regular balances paid in full?  Do you have credit card debt?  If so, how much and at what rates?

« Last Edit: October 17, 2017, 12:20:37 PM by Cwadda »

Laura33

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #5 on: October 17, 2017, 12:26:43 PM »
Can you post the CC balances and interest rates?  You have them listed as part of the monthly budget, but not as liabilities.

For right now, I'd say simplify your expectations.  You are in a temporary phase: you have a single income that is reasonable but not large, and two small children.  Your job right now is to stay afloat until your DH graduates and gets a job of his own.  How long is that?  You can figure out longer-term stuff once you know what he's earning (although if you may need to move again for his job, you will want to save enough cash to cover the costs of that move, new security deposits, etc. by that time).

You feel tight because over 20% of your take-home pay is going to paying down a multitude of past debts and putting away money for your kids' college!  The good news is those debts are going to continue to go down, as long as you keep your spending under control.  I strongly encourage the snowball approach -- if you have JC Penney almost paid off, then finish that with every bit you can save, and then throw everything at the highest-interest debt (unless the rates are similar and you can knock off the lesser one right away).

Otherwise, see what you can cut back on.  Cellphone bill seems high. Can you drop the haircuts and DIY, or do them less frequently?  Tht electric bill also seems high -- can you keep the house a little cooler in winter and warmer in summer?  And for the lowest-hanging fruit:  stop saving toward the kids' college.  You can't invest for your kids' future when you are still paying off your past.

The one thing I wouldn't cut, unless the CC rates are usurious, is the 401(k) -- the match is free money, which is basically a 100% return on your investment.

So in short, I think your priorities for however long your DH is in school are:

1.  Saving a small emergency fund, maybe $500-1000, so you don't have to go back to the CCs.
2.  Get your loans paid off -- entirely if you can manage it, or as much as possible.
3.  When he is approaching graduation, save what you need to cover the cost of any moving/interviewing expenses in cash.
4.  Continue your 401(k) unless the shit really hits the fan.

Everything else can wait until you are back in the black, so don't even waste one brain cell worrying about that for now.  Good luck!
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economista

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #6 on: October 17, 2017, 12:59:19 PM »
First of all, don't feel like a bum!  You are working and supporting your family; that is nothing to be ashamed of.


**I also have $15,500 in student loans that are currently in forbearance on an Income-Based Repayment Plan. My goal is to get rid of my credit card debt, then tackle the student loan monster. Since I work for a non-profit, I intend to apply for loan forgiveness after 10 years in the field.


I would be very careful with this.  I am part of the PSLF program and I know much more about the program than the average person.  Any time that passes while your loans are in forbearance does not count toward your 10 year time frame for forgiveness.  You have to make 120 on-time payments while working for a qualifying agency or non-profit group.  I started working for a federal government agency while I was still in grad school and during that time I made payments on my loans even though I wasn't in the official repayment period yet.  None of those payment count toward my 120 qualifying payments, even though I was working for a qualifying agency and making payments, because they weren't "official" payments on a payment plan.  You should also probably apply for the loan forgiveness program immediately.  They try and convince you to apply under the guise of validating that you work for a qualifying agency.  I knew that my agency would count so I was going to wait and just submit the paperwork when I hit the 10 year mark, but I got tired of their emails bugging me about it.  I went ahead and submitted the paperwork and got a response saying that I was now part of the program, along with a break-out of how many qualifying payments I had made to date.  (The slightly irritating part is that once you are part of the program they switch your lender to FedLoanServicing.  I had previously been with Nelnet.  A slight headache but essentially just a different website to use when making payments).

Here is the important part of applying asap - Betsy DeVos has made it clear that she doesn't like PSLF and wants to get rid of it.  I pay really close attention to anything that comes out about this and quite a few lawyers have stated that if she ends the program, she cannot legally end it for anyone currently in it.  She can make it so no new people can apply, but everyone already in the program will stay in the program.  Whether they are correct, and it actually plays out that way is another story, but for now I wouldn't take your chance on hoping it is still around and new people can apply in the future.  I would apply now, and see if you can get a monthly payment of even $5 or $10 so it is a small payment but not no payment at all.
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LifeHappens

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #7 on: October 17, 2017, 01:14:34 PM »
First of all, good on both you and your DH for getting by on an incredibly tight budget. That being said...

You have an income problem. You have $25 per month left over right now and I don't see anything in your budget about clothes and shoes for your kids, gas (unless that's your $30 car expense line), or renters/car insurance. You need more money coming in.

I understand not wanting to get a job that requires you to be out of the house, but could you or your husband work some online sidegigs like Leapforce or mTurk? Even Swagbucks is pretty good this time of year if you have an old phone you can run videos on and don't mind filling out surveys. Like others have said, even $100 a week would make a difference in your life.

You're at a place where the first thing I would suggest is trying to save up a $1000 emergency fund, then do the debt snowball Dave Ramsey style until you get rid of that credit card debt. After that you can start thinking about 529s and house down payments.

marty998

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #8 on: October 17, 2017, 02:19:06 PM »
Agree with Laura here - you're in a temporary phase where it is going to be a grind but that will pass.

Can your husband act as a tutor, either for school kids or for the lower year college classes? Even $200 a week would help in the interim.

MDM

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1.  How can I insert emergency fund savings into my expenses (like how much should I look to save based on my current expenses)?

2.  Would consolidating my credit card payments help my monthly expense situation? All my cards are frozen so no additional expenses can be accrued. Currently, we are working on a hybrid snowball/avalanche method of pay off where we’re focusing on the smallest debts first, then once those are paid off, doing giant payments for the highest interest card and ending with the lowest interest rate card, if that makes sense. I also have no idea what debt consolidation would do to my (low-ish) credit score.

3.  Should I reduce my 403(b) withholding to less than 4% until I start making more/am more financially secure? I’m not looking to RE at all.

4. We also want to start saving up a down payment for a home, since renting has not been great, but this will be in about 5 years or so, once my husband gets placed at a school (he’s studying for a teaching degree). In addition to saving our tax returns, how much should we look at setting aside while he’s in school, based on our current financial situation?
1.  One possibility: keep a minimum of $1000 (i.e., one month rent plus a little) in your checking account, just for peace of mind on not bouncing checks.  If the checking account goes above $2700 (aka $2K plus 1 month's rent), move $1000 into one of The 5 Best Online Savings Accounts.  Do that until you have ~$5K in the online account, at which time you can aim to keep ~$1K in checking while investing/paying debt with any excess.

2. You won't know until you determine what the consolidation terms would be.  Your current approach, however, seems reasonable.  See this Debt Reduction Calculator to determine if paying the highest interest rate first would be worthwhile to you.

3. No.  You are getting a 100% return on that money, better than paying off any of your debts.

4. $0, at least until you have your e-fund established and can see the end of the tunnel on debt repayment.  Also $0 for the 529. See Investment Order for general suggestions.

The $174/mo in tax - is that SS + Medicare + state tax?  You shouldn't be withholding anything for federal income tax, due to the ~$7K check you should expect from the IRS for EIC and CTC - correct?

TravelingCheddar

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1) Your very first priority in my opinion needs to be a $1000 emergency fund. I'm with Dave Ramsey on this. You need a higher income but you say you can't get another job...can your husband get a part time job? Or maybe you could join Wag or Rover (it's like uber but for dogs) and walk some dogs as a family together to make some extra cash? You can sell some extra stuff, maybe old baby clothes as your child grows out of them? You can post a service on Fiverr.com, people pay for all sorts of things like song writing, love advice, voodoo spells, coding, etc. My favorite category that ANYONE can earn money for is "Fun and Lifestyle"  Look around on the site and see if anyone is offering anything that you think you can do, and then you can try and copy what they're doing! I believe it is free to post a service.

2)No idea...sorry.

3) I think yes, stop contributing. You are only 26/27. You are right now in EMERGENCY debt mode. However I would not touch the money that is already invested because your taxes on it will be insane. Also I would only stop contributing if you will put 100% of that previous contribution money toward debt. If you use that money to buy a pizza, you have just stopped funding retirement to buy a pizza. That would be dumb. Have a calendar alert for this exact date 1 or 2 years from now when you will turn your retirement back on and stick to it! That way you know that the pause is not forever.   

4) You cannot afford a house. I would not even save for a down payment until I was debt free. After all, where would you save that money, a bank?? So you would get 1% interest on it in the best account. Meanwhile your credit card interest is eating you alive.

Also I see that your husband lives too far from campus to walk...how about biking? or electric biking? You could sell his car and go with an e-bike.
« Last Edit: October 17, 2017, 07:51:29 PM by amt9cs »

Playing with Fire UK

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What interest rate would the student loan for your husband be compared to the rate you are paying on your highest interest rate card?

I agree that he shouldn't take out more debt to spend more on household expenses, but if you used the loan to pay off your cards you could save a lot in interest payments.

Would you or your husband consider taking on temporary work in the run up to Christmas/New Year? Where I live there is a lot of seasonal work that is relatively well paid. Does your husband have time off school when he doesn't need to care for the children? You could save a $1000 e-fund by nailing extra work for a short period - it would be hard, but not the same as committing to a second job permanently.

Could your husband watch other child(ren) after school to make some more money? Or provide a childcare service during the school holidays (there are restrictions that vary by location you'd need to check before doing this)? Is he in a position to provide tutoring (you said he is training to be an educator)?

Finally, what are your husband's employment prospects after he finishes studying, compared to if he worked now? What would your lives and finances look like if he worked for a couple of years while studying part-time before completing the course (five years seems like a long time to me)?

Best of luck.

Freedomin5

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #12 on: October 18, 2017, 04:33:45 AM »
+1 on the tutoring. If your hubby doesn't want to leave the house, he could also consider online tutoring - teach oral English to kids in China. There a few threads on this forum with links to trustworthy tutoring sites. I think the pay is around $20- $30 per hour.

That's how I covered my living expenses in grad school.

boarder42

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #13 on: October 18, 2017, 04:48:29 AM »
whats the age and limit of the discover card and has it been paid on time for the last 2 years. if so once you get the balance under 10% of the credit limit you could start selling tradelines on it
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Dicey

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Please fix your subject line. Four days/weeks/months/years?

Also, the cell phones are low-hanging fruit. You should be able to cut that bill in half with minimal effort.
« Last Edit: October 18, 2017, 07:11:43 AM by Dicey »
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boarder42

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for 30 dollars you could buy a pair of clippers and cut your own heads.  not sure why you need to spend 30 a month on haircuts.  i spend 10 every 3 months to pay to have mine done and my wife gets hers cut once every 18 months.  the kids could have theirs cut by you. and with your hair on fire debt everyone should be cut at home.
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SimpleCycle

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Do you live in a Medicaid expansion state?  (Blue states here: https://www.kff.org/health-reform/slide/current-status-of-the-medicaid-expansion-decision/) You may be eligible for Medicaid, and if not, you are eligible for Obamacare subsidies that would bring your total cost of health insurance to under $100/month for a silver plan.

I'm not going to jump on the "you must earn more income" bandwagon because you are right on the edge of benefits eligibility and another $100-$200 in income could lose you your SNAP benefits (by my calcs you are already over the income limit, but it depends how you are calculating monthly income) and affect your husband's Pell Grant.  Are you also getting WIC?  If not, you should be.

More information about the debt balances, interest rates, and minimum payments would help us give you better advice on managing it.

SimpleCycle

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Do you get a large tax refund because of EITC?  If so, you might want to look at advance EITC payments.  Your HR should be able to help with that.

SimpleCycle

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Also, things are very tight for you right now, but you can do this!  This is a temporary income problem, and your H is going to school to increase that eventually, so you just need to keep afloat until he is employed.  If you can make progress on paying off the debts, even better!

People have mentioned the cell phones.  I would look into Mint SIM if it works with your existing phones - it's really cheap.  If not, moving to Cricket or Boost Mobile could make a big difference in the cell phone bill.

Cutting your own hair is suggested on here a lot, and I thought it was CRAZY until I tried it.  I watched a bunch of YouTube tutorials and I don't think mine looks half bad doing it myself.  The kids hair is also something you can cut yourself.

I would also suspend the college savings but keep the 403b contribution.

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I'm not going to jump on the "you must earn more income" bandwagon because you are right on the edge of benefits eligibility and another $100-$200 in income could lose you your SNAP benefits (by my calcs you are already over the income limit, but it depends how you are calculating monthly income) and affect your husband's Pell Grant.  Are you also getting WIC?  If not, you should be.

I don't know the details of these programmes. Can you swap babysitting for food or gas or haircuts without it being considered income? How about buying and selling on eBay/Craigslist? Is this an individual limit or a household limit?

Great catch SimpleCycle!

SimpleCycle

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I'm not going to jump on the "you must earn more income" bandwagon because you are right on the edge of benefits eligibility and another $100-$200 in income could lose you your SNAP benefits (by my calcs you are already over the income limit, but it depends how you are calculating monthly income) and affect your husband's Pell Grant.  Are you also getting WIC?  If not, you should be.

I don't know the details of these programmes. Can you swap babysitting for food or gas or haircuts without it being considered income? How about buying and selling on eBay/Craigslist? Is this an individual limit or a household limit?

Great catch SimpleCycle!

Non-monetary income is not countable.  eBay/Craigslist depends, but selling your own stuff for less than you bought it for is non-countable.

cchrissyy

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Quote
What interest rate would the student loan for your husband be compared to the rate you are paying on your highest interest rate card?

I agree that he shouldn't take out more debt to spend more on household expenses, but if you used the loan to pay off your cards you could save a lot in interest payments.

THIS!

Pipboy

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If you were serious about getting rid of your debt, nothing would be off the table--that means getting a second job for yourself, and getting your husband back to work. Everyone's nights and weekends are sacred to them. Too bad. Your expenses are too high, your income is too low, and it sounds like you're pretty much broke. It's going to take some sacrifice to get out of your hole.

Goldielocks

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I am with your husband.   
He should be contributing more $'s from a guaranteed work/study (more than the maybe? money from Pell Grant) or (he) takes on a part time job at /near his university, or take out student loans.

Keep the 403b contributions.   It is very important that YOU keep adding to your retirement as much as you would otherwise (see below).
Stop the kid college savings -- you money is worth a lot more to you right now in your monthly income.  Start saving again when the kids are 10, and you will still have 12 years to save up quite a bit (through their age 21), especially if you have a solid retirement nest egg  by then.

Re- student loans,   I was hesitant for DH to take out loans when he went back to school for 4 years.  We could JUST afford everything without them, on my income.  In hindsight, by doing so, I freed up more money for better investments (my retirement funds in particular, but also housing and minor family activities -- for you it may be cc debt pay off instead), we had a slightly better, less stressful lifestyle, my kids were older so this meant after school activities weren't cut, and now, we have 10 years to pay off that $20,000 at very very low interest rates.   $2k per year is nothing compared to the value of adding the $20k SL money to our finances in those years.

SimpleCycle

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Also, if he’s eligible for work-study, those earnings don’t count toward the SNAP income limits.  I’d definitely see if he could get a work-study job for 8-10 hours a week.

Playing with Fire UK

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Also, if he’s eligible for work-study, those earnings don’t count toward the SNAP income limits.  I’d definitely see if he could get a work-study job for 8-10 hours a week.

This sounds promising, and would improve the CV too.

Nick_Miller

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I just don't understand why one of you doesn't get a job/another job?

Yes, we all enjoy our nights and weekends with family, but life balance ebbs and flows. Your husband is a FT student. Okay, I get that. I was a FT student to. Many of us were. And I'd guess most of us worked at least PT hours during school. I did. And we all probably still had a good amount of free time.

Yes I know having kids changes the college experience, but there's no reason he couldn't work at least 2/3 shifts per week somewhere...anywhere! Hell, it could be working at a grocery store. Even that, assuming 15 hours per week @ $8/hour probably nets you $400 more per month. That's money your family desperately needs! And that's pretty much the worst/lowest earning scenario!

And it would only take him away maybe 2 weeknights and one weekend day, or something like that. You can't afford to wait 4 years for him to many any income. The income is needed now.


FrugalToque

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #27 on: October 19, 2017, 11:43:19 AM »
Merged, hopefully.
« Last Edit: October 19, 2017, 08:44:36 PM by FrugalToque »

TravelingCheddar

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Quote
What interest rate would the student loan for your husband be compared to the rate you are paying on your highest interest rate card?

I agree that he shouldn't take out more debt to spend more on household expenses, but if you used the loan to pay off your cards you could save a lot in interest payments.

THIS!

BUT! If there is any chance at all that bankruptcy is in the future, student loans can't be discharged. Of course I am not *recommending* bankruptcy. But at least you usually settle your credit card debt for a lower amount once it goes to collections. Student loans are yours forever and ever.

MDM

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Re: Reader Case Study - Young family trying to get somewhere
« Reply #29 on: October 19, 2017, 09:15:38 PM »

Dicey

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Kinda strange. OP creates an account on October 16th. Opens the same case study twice on October 17th, and then doesn't return. Has a total of three posts.

OP, it you're not gonna participate, how can we help you?
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

Goldielocks

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OP, would you like to participate in our MMM based MLM?


wink.

SimpleCycle

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I get really overinvested in case studies like this.