Not sure what to do at this point. I really need help. This will be a long post.

[nikki]

Anyone else got the feeling that we lost the OP?

Yup.
LOL too much good advice?

Atourlimit - we'd love to hear back from you.

Yes, please! I hope we didn't scare you away D:   Posters here can get a little excited sometimes when there's a pretty clear-cut path to better financial efficiency (and that's one of the reasons I adore this community).

[scrubbyfish]

Anyone else got the feeling that we lost the OP?

Maybe he awesomely cut his internet access and is excitedly drafting his progress report on paper while he waits for the library to open!

[DanishMM]

Haha,

It's like the movie "what about Bob?'. Us in the community being Bill Murray and the OP being Dreyfuss :-)

[atourlimit111]

I'm back!!!!

Nope still have Internet access at my house. I love "What about Bob"!. It's a great movie.

My wife and I buckled down with us going out to eat. We paid off a credit card!! Woohoo!! It was the Capital One at $192 dollars. We are also finally caught up with our bills.

I got rear ended twice at drive through at Dairy Queen. By the way it was a gift card that we completely forgot about. We found that Dairy Queen gift card and I went to get the food while my wife stayed home with our son.

Anyways, long story short. We exchanged information, police came, found the other driver at fault. I talked to her insurance, went to a body shop, mostly scratches on my bumper and for some reason I think it might be loose but not sure. I never have tried to wiggle it before this happened.

The good news is I will be getting a check for $740 from the other's driver insurance company!! WOOHOO!!! It will be in my name too. The estimator told me I can do what I want with it.

But I'm not sure how I should use it. I'm looking for some good ideas.

As you know my wife and I have two vehicles. 2008 Mazda Tribute and a 1996 Ford Taurus, The Ford needs a new windshield. The cheapest I found was for $130 before  taxes. I  already have been pulled over for it. But the police officer just gave me a warning. Also the Mazda needs an oil change and I will be buying a $30 part for the heat in the car. The heat only works at the highest fan speed.

Since all of our bills are caught up. We plan on using my next paycheck to pay off our Best Buy credit card. We owe $300 dollars. My wife wants to pay off the smallest Paypal balance.

Just looking for some good solid advice on what to do with the $740 we will be getting. I wanted to ask everyone here before I get the check.

[happy]

The $740 should be viewed as an unexpected windfall. I would use it to pay down the debts with the highest interest.
If the heat only works on the highest fan speed, so be it....if its freezing well you have heat. If it gets too hot, then turn it on and off. Doesn't need to be fixed with your debt emergency.

The oil change and the windscreen I would consider part of routine expenses...try to pay for them out of your regular budget. Just put the $740 against the debt and pretend you never got it. If you start thinking about how you could spend it, you'll come up with plenty of "essential" ideas and it'll be gone before you know it.

[marblejane]

You mentioned that your wife's mother manages your emergency fund, and that you have $120 left in it, but that you had $2,000 in there at one point. I would put the $740 windfall back in to that emergency fund, so that you can build up a $1,000 mini-emergency fund, like Dave Ramsey recommends.

You have a lot of good advice here. Keep us posted on your progress!

[impaire]

First of all, my congratulations on your healthy baby, and my deepest condolences for the hardships you've gone through. What a heartbreak.

Now, allow me to be direct: I'm very curious about how you are taking advice here. Did you call your lender to get your student loans put in forbearance or on an income-based payment plan? Did you cancel your and your wife's school enrollment for next year? I cannot encourage you enough to do at least this, of all of the great and indispensable advice that has been given here.

I also hope you're cutting/cancelling your cards as you're paying them off, since it sounds like you do have way too many of them, with ridiculous rates. Start with the scammy First Premier, that rate is bloody murder! Glad to hear you paid one off since last time, though--well done.

Now, with this $740, if I were you I would:
- pay off both Paypal credit cards (your highest rates): that should take about $600, depending on how much you've paid on them since last time. Then I would cancel both cards.
I would put the remaining money towards the windshield if and only if you cannot find it in your regular budget. You can find the $$ for an oil change, however, no excuses on that. Look for coupons, these are around all the time.

If, as happy suggested, you CAN find the money in your normal budget, then I would put that money towards the BestBuy card, NOT towards your emergency fund. If you run into trouble, you can use the card again, and you're in no worse a position than if you had never tried to pay down your debt.

But please, also be so nice as to answer all the people who have made such an effort to advise with your overall situation rather than just the immediate little windfall...

[Argyle]

I agree: the $740 goes to the Paypal credit cards.  Their interest rate is 26.99%!  If you fix your heater with that money, you are in effect paying 26.99% on that heater cost.  That's not just a hair-on-fire interest rate, it's a whole-body-on-fire-about-to-be-reduced-to-ashes interest rate.  Until you've paid off all those high-interest credit cards, everything else comes second -- heaters, windshields, emergency fund.  Otherwise those interest rates are eating you alive.  Those debts will go on and on and on unless you throw everything you have at them.  Sell unneeded stuff around the house, do everything you can, kill those debts. 

[Empire Business]

First of all, my congratulations on your healthy baby, and my deepest condolences for the hardships you've gone through. What a heartbreak.

Now, allow me to be direct: I'm very curious about how you are taking advice here. Did you call your lender to get your student loans put in forbearance or on an income-based payment plan? Did you cancel your and your wife's school enrollment for next year? I cannot encourage you enough to do at least this, of all of the great and indispensable advice that has been given here.

I also hope you're cutting/cancelling your cards as you're paying them off, since it sounds like you do have way too many of them, with ridiculous rates. Start with the scammy First Premier, that rate is bloody murder! Glad to hear you paid one off since last time, though--well done.

I really agree with this whole post, including the condolences and congrats.

But especially the First Premier card.  Even if never used, the fees to keep it open are robbery.  Please pay any fees owed and close this card.  (Once closed, definitely keep checking to make sure they didn't somehow "keep charging" fees.  This company sucks.)

[Simple Abundant Living]

Hello fellow Utahn!  Just thought I'd pop in with my .02.  Lots of good advice, and I'm glad you are considering it.  Once upon a time we were broke college students.  DH and I met and married in college.  I had my first child right after graduation and the second 20 months later (side note advice-contraception!-Just because you've had trouble conceiving doesn't mean it will always be so).  I understand a lot of the worry about things.  Lucky for us, smart phones and internet hadn't been invented yet- so our needs were just the basics.  We got through it and so can you, if you don't let your past decide your future.  As I look back, I can see we had a couple things in our favor.  Supportive family (not financially, but we knew we could move in the basement if times were hard.  And though we weren't completely financially savvy, I guarded our credit like it was our most valuable possession. 

Some things that stood out to me:
-Internet.  I have Centurylink 12mbps (their fastest) and home basic phone and pay $50/mo.  I would call and see if you can negotiate a lower rate, or get a slower speed.  (Or as others have stated, quit it all together.  If you're not in school right now, it can't be looked at as a need.)
-Housing.  I agree it would be great to move in with family temporarily.  If that's not possible, look into other options.  For example, see if you could trade housing for caring for an elderly person in their home and driving them to doctor appointments.  There is a huge need for this kind of help.
-School.  I am a huge believer in education.  But these days, you have to be smart about it.  Online colleges (even Western Governors) are expensive and are often seen as lower quality.  If you do want to finish your education, check out SLCC.  They have extremely cheap tuition rates and offer evening/weekend/and yes, online courses.  Talk to a counselor and find out exactly what you need so that you don't waste time and money.  Apply for Federal Grants.  We qualified our last year of school for these and they paid for tuition +.  Don't take on new debt.  Only take the classes you can afford.
-Cell phones- agree with previous posters.  Pay the penalty and remove yourself from bondage. 
-Job- Have you considered summer sales?  If you are not shy and clean cut, get a summer job selling pest control or security systems in the southern states.  (I'd go for pest control-easy sell).  You could make more than you do in a year.  Yes, separations are not ideal.  But it is temporary to take care of your family. 
Be open to moving away from your town or state.  When we had a young family, my DH applied for a job in the midwest.  It doubled our income and moved us to a lower COL area.  We missed family, but we grew closer as a couple and a little family unit.  Most Utahns wouldn't leave Utah for anything.  Be open to opportunity.
-Have a master plan.  What kind of career do you eventually want?  How will you get there?  Is there an "optimized" way?  The ability to see the big picture is something that I believe separates the perpetually poor from the temporarily poor.   
-Become thrift store shoppers and (weather permitting) yard sale shoppers.  Check KSL.com, facebook yard sale sites, and freecycle for used baby items.  It's insane how much people spend on their baby's clothing and furniture.  Buy things you and your wife need there too.  I have shopped at Goodwill (my personal favorite) for new IKEA dishes, clothing, books, etc.
-If you're an inactive mormon, consider getting active.  The Bishop can help you get on your feet.  If you're of another faith, seek help from your leader.  It often takes a village...

Good luck!

[needmyfi]

i'm getting the feeling that you somehow no longer feel the heat of the fire with your sudden windfall but that your longterm attitudes really haven't changed.  No talk of selling cars-only fixing cars, and fixing problems that really don't exist like heaters that don't work perfectly. "Since our bills are all caught up"? If I had credit cards with crazy high interest rates I would never think"my bills are all caught up"  You have the money for the required minimums, but you still haven't paid your bills from months ago which is why your ccard balances are maxed. I'm sure we define caught up very differently.

After our 20 k savings a year dh and I have close what you and your wife bring home and we don't think we can "afford" a  13,000 car note in our budget, (even though we woul pay only about 240 a month because we have a great credit score) and would never consider any cell phone other than a single burner we share for 7 bucks a month etc etc etc
You can either try to provide a stable secure home for your family-free of evictions, repos, bankruptcies and chaos in the future, or you can focus your worry on how to pay for Christmas next week.  Your choice

[pirate_wench]

I'm sorry if I'm committing a faux pas, but another resource to check out is Michelle Singletary who writes the Color of Money column for the Washington Post. She has a weekly live chat where she answers lots of various questions about personal finances, and may even answer your question if you write in. She specializes in low-income families with high debt, and for decades has helped people in similar situations as yours. She was my financial advice guru before I graduated to ERE and Mr Money Mustache, and may be a good place for you to start.

Just a note, a lot of people on this website seem to be adamantly opposed to the "payoff your smallest balance credit card first" technique, and instead insist on the more mathematically sound advice of paying off the highest interest rate cards/loans first. But as you've seen already, you get a huge psychological boost by getting rid of a balance. You might want to continue with that path, getting rid of the small balances first to give yourself a sense of accomplishment, then use your confidence to tackle the larger problems.

[electriceagle]

Everyone here says the same thing: pay off your debts from highest interest rate to lowest. They're right, but you need some techniques to show you how to do it.

1) Seek charity. Put aside any feelings of shame and go get food stamps. Get charity from your church. Go to food pantries. You are the people who all of these programs are intended for.

2) Get rid of the car. Visit creditboards.com and see if they can find a way to help you ditch the car without paying the difference between the value and what you owe.

3) Visit creditboards and see if they can find a way to reduce your CC debt.

4) Put an ad up on prosper; see if you can borrow at 10% to immediately pay off your 15%+ debt.

5) As you pay off the credit cards, cut them up. Once you have paid off a few, go to your local credit union and explain tour situation; show your track record of paying off your high interest cards and tell them that you need a low interest card to hold for emergencies. Show them your dedication and you may find someone more able to help.

6) Put off going back to school. I suspect that part of the reason for wanting to go to school now might be the pain of working all day and then coming back to sleepless nights and projectile pooping. Unfortunately, you both need to keep working - even pick up a side shift manning registers for the holidays.

7) Grandma and great-grandma represent free day care. Use them. Never pay for daycare, you cant afford it.

[sleepyguy]

Any possibility you can move in with your parents or the inlaws for a few months?  That is $650/mth and you can really start to stabilize some of that debt.

Either than repeating what others have said here... you need to find work with higher pay.  See MMM post about 50k jobs.  I'm not a huge believer expensive degrees for jobs beyond HS diploma/community college unless you are going for something professional (Engineer, Dr, Lawyer, Teacher, etc), or for just personal knowledge gain that is a different matter.   I'm not speaking out of my ass as well... I think I've done fairly well for just graduating HS only.

For your current living expenses... a good start would be around 45k salary, or about $21/hr.  That would allow some wiggle room and some savings.  Again look at MMM post of 50k jobs (2 parts).

Take care a good luck!

[atourlimit111]

Wow really good advice. I just want to say big thank you to each and everyone that has responded to my post.  I have read each one sometimes more than once and took notes on a lot of them.

I will give more details on our current financial situation. The $650 we pay every month for this house. It's the house my mother in law owns. So she has been very flexible in the past when we had to split rent or even skip a month of rent. But she told us she wants to move back in two years. So we plan on getting better financially before those two years are up.  We still owe a lot of money on car loan too.

We can't have the car repo'd.  When we move into a new apartment they will run our credit. Having a bankruptcy and a repo of your vehicle. Pretty much guarantees we won't be living in those apartments. I'm still researching on what to do with the car loan though. My wife and I both agreed that our next car will NOT have a loan attached to it.  If I could go back in time. I would slap my younger self from not getting the car loan. But I'm not sure if we had a choice or not. The engine in the car was not fixable even from a master mechanic. We only had $200 in our bank account at that time. We were surprised we got approved for a car loan too from Capital One Auto Finance.

I turn 33 years old next April. I'm not getting any younger and I really want to go to school. My end goal is to be a computer programmer making $60,000 and above. Most help wanted ads I have seen requires both a degree and experience.  Sadly I have nobody I can network with.  Plus I don't have any experience doing any computer programming at the moment. I will be checking out MMM section on getting jobs that others have mentioned.

Thank you all again for the heartfelt messages regarding our first born son Andre. He would have turned two years old on November the 4th this year.  Since losing Andre we have both become very paranoid parents plus the awful stories you hear on the news regarding child care workers. Yeah we don't plan on taking our son there until he's at least able to talk.
 
We have hardly any relatives that can watch our son for us. They live too far away from us and the ones that live close are too busy and my wife's grandparents are getting a bit old to watch our son.
But we do have a really good neighbor that we can trust. She is a stay at home mom and has five kids. She doesn't need to work. Her husband is a Actuary. 

Plus both my wife and I don't want to miss our son's first words or his first walk. We missed that with Andre and we don't want to miss this a second time.

As I write this we have $100 in our bank account. We will be getting the car insurance check either tomorrow or Tuesday. My wife and I were discussing what to do with the check. My wife will be getting paid $200 on Friday the 20th. Yesterday I got pulled over and got a fix it ticket for my windshield. Later that day I paid the $130 out of paycheck to pay for it.

Our two cars need some work though. I have a slow air leak in my front right tire. I am hoping either Costco or Discount Tires will repair my tire for free or for a very low fee. The Mazda Tribute needs a new oil change and a new fuel filter. I can replace the fuel filter myself to save money. My Ford Taurus needs a new oil pan gasket. The gasket costs $20. But I will have to pay for new oil too. The cheapest rate from a mechanic is $125 to replace it on my Ford Taurus that includes the oil change. I can do this myself though but it will take me a longer time to do it.

Whew! With that said should I still pay off the highest interest credit cards first or do something else with the $740 my wife and I will be getting.

[needmyfi]

About getting experience for a job-my younger brother got in trouble with the law for some "international wholesale agricultural trade"-  In his late 30's  did 2 year community college -got his experience by doing all computer work for free for a non profit (the rehab he ended up in) and worked nights as a nightwatchmen.  He got turned down from a few jobs after the background check turned up a felony, Glowing recommendation from his teachers, the  non profit, plus a guy who was a year ahead of him helped with first job.  started low 40k and two years later is already low 50's.  If you have any transferable credits this could be you in 18 months.  If you don't have any credits that transfer to a brick and mortar community college you  are probably wasting you time with the online degree.

BTW he is in Colorado-he would be an entrepenuer instead of a criminal today!

It is troubling that you see the best/only way out of the car loan as a repo!.  Also troubling that you are still making excuses about the loan in the first place.  If you got a car loan for the Mazda Tribute I am sure you could have also gotten a loan on a much cheaper car as well.  How much could you get if you sell it? If you and your wife never overlap work schedules why do you insist on two cars?

[swick]

My end goal is to be a computer programmer making $60,000 and above. Most help wanted ads I have seen requires both a degree and experience.  Sadly I have nobody I can network with.  Plus I don't have any experience doing any computer programming at the moment.

Computer programing is a field where employers care less about degrees then proven skills - however it is also a field with stiff competition and you have to be that much better or have a piece of paper behind you - it is also all about networking.

There are TONS of websites and online communities that offer free or very cheap programming training that comes with built in network opportunities. Have you looked into any of these? There is also a lot of grunt work in programming. Have you looked into it enough to be sure that is what you want to do?

Your cars are quite literally eating you alive, I would not spend another cent on them until you figure out how to get down to one car. Having any car is a luxury, and you aren't in a position where you can afford to be a two car family. You mention your living situation is temporary - In two years you will have to have money for a deposit, moving expenses and so on. You NEED to build a secure future for your son NOW.

[_JT]

Why in the fuck are you (a) driving both cars still, when you've never answered any of the questions about why you can't do what thousands of people in your area do and take public transit when one car isn't enough, and (b) driving the one that has the busted windshield? Do you not understand that your laziness (that's the only way I can think to describe someone who refuses to take public transit when they drastically need to and it's easily accessible) cost you money that you need and don't have?

You aren't even showing lip service to making any useful changes. You haven't answered any of the people who suggested you move in with relatives until your debt is under control, you claim you 'need' school, and you 'can't get rid of the car note'. You don't need to worry about a repo on your credit, because you're headed for another bankruptcy. I can only assume that you still do not grasp the severity of your situation.

[radcrast]

On the Dave Ramsey TMM forums in the "Money Talks" section, there is a very lengthy thread started by a policeman. He was making $43k a year with two children (one with special needs) and well into six figures of debt. Like you, he started out with many excuses why he "couldn't possibly" do this or that or make serious changes to his lifestyle. Eventually, though, he woke up and took radical action to begin pulling his family out of the mess they were in. I would suggest reading that thread for inspiration to just how much is possible when you really, truly want to start making changes to your life.

[Bethersonton]

I had to delurk for this one. My condolences on the loss of your son.

Face-punching commences: I agree with nearly everything that has been said here, so I won't repeat any of what has been said already. Besides, it seems like it would fall on deaf ears. What really stuck in my craw about your last post is your sentence about your neighbor and how the wife "doesn't have to work. Her husband is an actuary." That statement makes it seem like the only reason she doesn't have to work is that her husband is an actuary. You understand that her husband could be head programmer at Apple making millions a year but only with a budget and living below their means would she be able to stay home with her kids, right? The salary largely does not matter. Certainly you have been dealt a bad hand, but you are three years out from a bankruptcy and headed there again with very little awareness, or so it would seem from your posts.

There seems to be a ton of magical thinking (you consider it a windfall that someone rear-ended you, if only you had a degree then you would be making 60k and all of your money issues would go away) but no recognition of the central theme of this site: it doesn't matter what you make, it is how you manage your money that makes you rich.

[atourlimit111]

Good news everyone. Through selling stuff around the house and my wife and I going to work early. We paid off four credit cards.

The elephant in the room is the car loan. I just called up the local credit union to know the value of our vehicle. We are worse off than I imagined. The blue book value of our vehicle is $5,000 at the low end and $8,000 at the high end. We still owe a bit less than $12,000.

Our car loan is through Capital One Auto Finance and it's not possible to refinance through them. They won't allow it. I called up a week ago.

Both my wife and I want to get rid of it. But we are not sure what to do at this point.

Oh by the way. I am in the process of looking for a second job on the weekends.

What should I do with this stupid car loan?

I will NEVER get a car loan again.

[_JT]

Hey, congrats on paying off the cards. You're heading in the right direction. :)

[crumbcatcher]

Congrats on paying off those credit cards.  Now cut them up.  Seriously. Truly.  If you still have them, you will use them.  Don't stick them in the freezer, don't give them to a relative for safe-keeping, cut them up.  Call the credit card companies and close those accounts.

I say this as someone who has been in your situation. There is always going to be some urgent need for extra cash, and having them available not only prevents you from finding other, healthier ways of resolving your money needs, it lands you in hot water yet again.  The short term win is not worth the long-term danger.

P.S. - Have I mentioned yet that you should cut up those cards?

;-)

[scrubbyfish]

Through selling stuff around the house and my wife and I going to work early. We paid off four credit cards.

Way to go, atourlimit111! Great progress, and great openness too!

Can't help with car loan advice - I know nothing about such things. Just wanted to say "welcome back", great progress, and great reporting! The car loan thing is definitely crappy, but one day you'll be in great financial shape and simply posting the car loan on the "dumbest thing" thread alongside the dumb things all the rest of us have done :)   One way or another, you'll get that piece sorted out. Making this mistake early is going to reap you lots of gains in future, because of the whole range of mistakes you *won't* make in future as a direct result. That's the good thing about something like this hurting. Onward and upward!

[ChicagoGirl]

Is it possible for you and your wife to go completely without cars and just use public transportation? Sell both cars and take the money made from the Ford and pay down the remaining balance left on the Mazda. It's not the best choice and it will be painful and at times inconvenient, but deal with it as a lesson learned. This would eliminate car payments, insurance, repairs and gas from your budget. The vehicles seem to be causing the most stress to your budget.   

You and your wife need a serious game plan for the next two years, because according to your posts you will need new housing in two years which will mean deposits and other moving costs.  It's time for drastic measures.

You can do this! 



 

[Miamoo]

Well, thank god for your guardian angel and so sorry to hear of your losses and tribulations.

Not a whole lot to contribute here.

I agree with all that said to postpone your on-line education.  Get rid of one of the vehicles.  Talk to T-Mobile and see if they won't waive the cancellation fee based on your circumstances, on to something else.  Sprint totally waived my cancellation charges several years ago and turned me on to Boost - their subsidiary then -when I called and said I was laid off and couldn't afford their charges any longer.  (Have since cancelled and live without a cell phone as I'm now retired and don't need one). 

If you truly don't want to cancel internet . . . get rid of the cell phones and sign up for VoipO as a home phone @ $8/month.  Keep one cell phone for when one of you is on the road.   Read IP's posts, go shopping.  You'll save at least $100/month.  (Yeah IP!  Totally appreciate you!)

I didn't notice cable tv in the list of expenses but if you're keeping the internet . . . cancel that cable NOW as well.

For whomever posted the idea of you listing 2 things per day that you've done to improve your circumstances - hell yeah! Keeps you accountable as to the seriousness of your intentions and you will get encouragement.

I have the Dave Ramsey books I could send as well if you wanted.