Author Topic: Case study - where to go from here?  (Read 2184 times)

up2eleven

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Case study - where to go from here?
« on: August 04, 2015, 11:48:49 AM »
Life Situation:
IRS filing status: Single, no dependents.
Residence: Phoenix, AZ
Age: 45
Medical: Diabetes, neuropathy in feet which rules out any work on my feet.
Was out of work for about 1.5 years, had to stop paying bills, racked up CC debt, credit rating now in low 400's.

Gross Salary/Wages: $32,000/yr

Pre-tax deductions: none

Other Ordinary Income: none

Qualified Dividends & Long Term Capital Gains: none

Adjusted Gross Income: $32,000/yr

Taxes: All deductions come to about 21% from my paychecks

Current expenses:
Rent and utilities - $800
Phone - $75
Car insurance - $80
Internet - $60
Friend loan agreement - $100
Meds - $95
Food - $200
Gas - $90

Total - $1400

Remainder per month after expenses - $450

Assets: none

Liabilities: Have not made arrangements with CC companies yet.  CC debt is $6000. Debt to a phone carrier is about $1000 total. Personal debt is $6500. Total debt about $13,500.

Notes - Phoenix has an abysmal transportation system, so a car is basically a requirement. The difference between rooming with someone or renting a studio is not much. Rooms rent for maybe $100 less/month at most when utilities are taken into account.
My skills are basically all in customer service/low end tech support. Looking to find different work that's off the phones, but can't really be on my feet due to medial issues.  No idea where to go on that front. But, I'm  good employee with great stats.
No college degree. High school diploma.

Specific Question(s):
What would be good options for starting to pay off debt and start saving money?
Should I go with a debt consolidation company?
What options are out there to pay it off ASAP?
Also, any ideas on jobs that are not on the phone, pay at least $15/hr and don't require a degree would be amazing, as the sales and support phone work is highly stressful and makes me miserable. Just can't be on my feet much or do heavy lifting. Doing a decent job of breathing it out and trying to stay positive, but it's proving to be a constant struggle.

Thanks for any advice anyone might have!
« Last Edit: August 04, 2015, 11:51:31 AM by up2eleven »

slschierer

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Re: Case study - where to go from here?
« Reply #1 on: August 04, 2015, 12:39:46 PM »
Welcome to MMM again!

Is there any reason that you have to stay in Phoenix?  It seems as though it's costing you quite a bit to live there (high rent and lack of public transportation being two of the most easily identifiable issues).

I think you could save quite a bit on your cell phone by switching to Ting or Republic Wireless.  Your food bill also seems high for one person.  I have a family of 4 on a very do-able $250/month grocery bill and that includes household items like diapers for my little one.  I realize that your food bill also likely includes eating out, but I think you may be able to cut it down a little bit more.

Please do not contact a debt consolidation company.  You simply need to reach out to your debt holders and find out what they are willing to take in order to write off your debt.  Then, negotiate down a little bit more!  Do you have any savings with which you can pay that debt?  Where is that extra $450/month going right now?

Can you look into obtaining your Commercial Drivers License and becoming a truck driver?  It's a booming field right now, and I think the pay is pretty good.  Many of the jobs would require loading and unloading your own truck, but I think you could find jobs where you wouldn't have to do that.  Just something to look into.

Check out my blog at lifewiththekellers.com for posts regarding family, freezer meal cooking, financial independence, and more!

up2eleven

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Re: Case study - where to go from here?
« Reply #2 on: August 04, 2015, 02:05:28 PM »
I'd love to live elsewhere, actually, however I'd still have to save up to move and I'd have to find another job, and I've never seen the job market this scarce. Perhaps there are places I don't know about that have a lot of jobs. Very much open to suggestions! I'm actually in the process of apartment hunting, so I'm not locked into a lease yet. The rent I posted is average for what I've seen in my research.

I'm just got into the phone contract about 2 months ago, so stuck there for about 2 years.
I'd love some tips on cutting down on the food costs. I'm diabetic, so a lot of the cheap grains and pasta are out for me.  I don't eat out much, I think it's meat that costs a lot.

I reached out to all my debtors when I became unable to work. Only one of them was even willing to negotiate. So, trying to figure out that one. No savings at all, unfortunately. Open to more ideas there!

I actually did drive as truck for about 6 months a few years ago and had a terrible experience with it, however, I may be able to make a better situation out of it if I go for it again. I'd have to learn everything all over again and don't have money for driving school and can't get a loan with my credit, but if you know of places that'll pay for training, I'd actually consider it again.

Valetta

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Re: Case study - where to go from here?
« Reply #3 on: August 04, 2015, 02:54:32 PM »
Good for you on getting started paying off that credit card debt!

Couple of things:

1. You say that you would "only" save $100 more per month by moving to a studio or renting a room. On your income, $100 is a huge percentage. You have $450 left each month after expenses, if you saved an additional $100 per month, you'd have $550. That's an increase of over 20% by just changing one thing!

2. I also think your food expenses are high for 1 person. Much earlier in my money saving journey when we had a lot lower income, I managed to cook 3 meals per day for 2 people on $25 per week (unemployment 2007 - 2009). And we managed to eat pretty healthy too with fresh vegetables, grains and beans. It means absolutely no eating out though - we went out once a month for a date night for cheap ethnic food.

3. For your taxes, do you get a refund every year? Because on your income, I'm a little surprised that so much comes out of your checks. If you are getting a refund, you're just giving the government an interest free loan. You may want to make some adjustments here.

4. Finally, there are lots of places with much better job prospects. At least where I live, it is one of the worst hiring environments for employers and one of the best for job seekers. There is only 1 vacancy for every 1 unemployed person right now. I live in Minnesota but I can't imagine we're the only place where this is the case.

slschierer

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Re: Case study - where to go from here?
« Reply #4 on: August 04, 2015, 02:57:34 PM »
Great! You have a lot of options, then!  Offhand, I'm not sure which companies are offering to train CDL drivers.  It would largely be based upon where you want to be based, I think!  You just need to go to a job search website (monster.com, indeed.com, etc.) and search for truck driver jobs.  You should find a lot of options, and I'm sure that there would be several willing to train!

I understand the diabetes issue!  It runs in my family (types 1 and 2, aren't we lucky?), and I had gestational diabetes.  In order to keep that food budget low, you need to plan carefully, and look at it as a challenge.  Buy fruits and vegetables that are in season, and buy less meat!  Because you're right; it is expensive!  Eat smaller portions of meat or get protein from other sources.  We often have meals without meat and have eggs, instead.  If you google the term "meatless Monday recipes," you will find a ton of meatless recipes.  I'm not sure what grocery stores are available in Phoenix, but be sure to shop at the lower cost providers and know what your best prices are.  Also, be careful not to purchase any prepared meals.  You can make the same things for less money and probably better tasting!  The only type of prepared meal that I buy is a rotisserie chicken.  The rotisserie chickens at Costco are an amazing deal and could feed a single person for a week easily!

Look at that cell phone contract carefully, and find out what the early termination fee is.  Compare that to your monthly savings and determine your break even point.  You may find that you can afford to get out of that contract before the 2 years is up.

If you haven't paid on those debts for several months or a year, odds are that the companies will be much more willing to make a deal.
Check out my blog at lifewiththekellers.com for posts regarding family, freezer meal cooking, financial independence, and more!

up2eleven

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Re: Case study - where to go from here?
« Reply #5 on: August 05, 2015, 02:41:28 AM »
Well, it turns out federal regulations prohibit diabetics who require insulin from driving commercial vehicles. So, that's out. And I really have to get off the phones. Racking my brain here.

RobinAZ

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Re: Case study - where to go from here?
« Reply #6 on: August 07, 2015, 10:17:07 PM »
I have Type 1, so I know what you mean about grocery bills. I eat eggs or a high protein (14g) yogurt with no more than 12 carbs for breakfast. Snack on nuts, peanut butter, cheese, small hummus, carrots, celery.  Salad and meat for lunch, meat and 2-3 veggies for dinner. Very very limited fruit (I space berries out throughout the day so my blood sugar doesnt rise) and dairy.  I eat almost NO beans, rice, potatoes, pasta, grains, corn, peas, etc.  Nothing that is a pure carb, and no more than 50 carbs/ day.

My A1c is under 6.5 and I have had no complications for 26 years!  But it is time consuming and expensive, especially if you can't shop around. I eat whatever veggies and meat are on sale.  :-). Even if it isn't purely MMM, stick to the low carb - moderate protein diet with the highest quality food you can afford.  I think he would understand that preserving your health is critical to financial security. 

I am also in Phoenix- the job market is tough and you can barely rent a studio for $800 plus utilities.  If you can save up the money, you might be better off buying a $5000 mobile home in a nice park, then you just have a few hundred dollars in lot rent.  OR- get the heck out of here. 

Do you have a good endorsed here??