After years of financial screw ups, the light finally went on earlier this year, and I'm eager to be debt-free once and for all. Since finding this site, posting a few questions, and reading many recommended resources, my husband and I have made many changes and have made some progress -- dh got a new job with a higher salary, we're selling whatever we can on craigslist/donating lots of other things, got rid of an suv and replaced it with a car (more on that in a minute), paid off an $8000 credit card and have agreed to only pay cash for everything (more on that, too) and have set up a great budget on ynab.
We replaced the suv that we sold with a $2k car that seemed to be a great deal -- low mileage, and only a few hundred $ in minor reconditioning, but, after 3 months, it died, and instead of paying cash for another replacement, dh took out a $9k loan for a more reliable relacement. So that completely negated the progress that we made in paying off the credit card, went against our intention to pay cash for everything, and put us back to square 1 essentially. This new job is an hour commute each way by car, and there is no nearby public transportation. Dh works from home 1 day a week consistently, and occasionally 2 days are from home.
We have 3 kids under the age of 8, and we own our home. We live in a rural area with no sidewalks and have to drive everywhere. We paid $165k, owe around $114k, and it's worth around $185k. Our monthly payment, including taxes & insurance is $980. Dh makes $72k, and health ins will be deducted each month beginning Jan.1, so that will leave us around $4400 per month, net. We have another credit card with an $8k balance, the car loan of $9k, and student loans totaling $67k. We also own a minivan that is paid for. Here's what our budget currently looks like:
- mortgage/taxes/ins 980
-food/groceries/toiletries 500 - 600 per month
-Electricity 186 per month (we have no a/c, no microwave, no tv, no dishwasher, but we live in NH where electricity is among the most expensive in the country; we have a 3 br, 1 ba home that is approx 1100 sq feet.)
-car ins 152 per month
-term life ins $77 per month
-prescriptions $100 per month
-gas $450 per month
- kids activities/supplies $200 per month
- car payment 177 per month
- heating oil per month approx $75 per month
- cord wood per month approx $50 per month
-student loans $250
-car maintenance/repair/registration approx $100 per month
- home maintenance/repair approx $50 per month
- $125 per month in misc medical/dental
I'm sure that I'm leaving something out, but whatever is left over at the end of the month goes toward the debt. We have $1000 in savings for an emergency.
At the rate we are going, it will take us a long time to pay off the debt (not including the house), and I'm thinking that there must be something that we can do to help move things along faster. We have no retirement savings and are in our early 40s. I am wiling to sell the house and move, but dh refuses to move close to work b/c he works in the city. He would consider moving close to public transportation, but I don't think he's open to renting for awhile.
This is not an excuse, but I was raised by parents who encouraged getting into debt for education, cars, homes, and buying stuff on credit. Needless to say, my mother is in her 70s and still needs to work. I don't want that to happen to us. Better late than never, I guess, and at least our kids won't be such financial illiterates/idiots and make the same mistakes we have made.
So, what recommendations, advice, suggestions do you have for us? I need all the encouragement I can get right now. Thank you very much.