Author Topic: So I'm new to the forum  (Read 4753 times)

hondo7

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So I'm new to the forum
« on: February 14, 2016, 06:13:04 PM »
And have now realized how many mistakes I have made over the past few years.  A lot of it is certainly my fault  and some of it isnt, but I can't dwell on the past. At this point I am simply looking to move forward and need a place to talk strategy. So here goes the cliff notes version.

As a result of a combination of health problems and just pure bad luck I was put in a major bind for the last two years and had to take on a big amount of debt. Well maybe not big by everyone's standards but enough to cause me daily stress since 2013. As a result I now am weighed down by the following debts:

10k credit card debt
3k personal loan
3k in payday loan debt which is the absolute worse.

I know these were bad decisions but we can't live backwards. I had to make some decisions at the time that resulted in these debts thay I can't change now. So I'm looking for ideas on how I can fix my problems and get back on track. On top of these debts I already had the following.

Mortgage 114k
Car  loan which is now down under 1000
Installment loan which is now down to 2500

The bad news is the problems I just mentioned in the previous paragraph?  They wrecked my credit score, and it feels like I'm on a constant treadmill that is impossible to get off.

There are some positives. My bills are paid current for the moment. I have no student loans. These debts collectively are  not ideal but the total amount isnt completely crushing.

My base salary is 50k with approximately 5k in bonuses which I'm set to receive in April.

 I'm just looking for a strategy to attack specifically the payday loans first. Because those are the ones killing me and the credit score doesn't give me any options to refi for some breathing room. I'm out of ideas at this time so it's time to defer to the best.

DebtFreeBy25

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Re: So I'm new to the forum
« Reply #1 on: February 14, 2016, 06:27:12 PM »
10k credit card debt
3k personal loan
3k in payday loan debt which is the absolute worse.

Mortgage 114k
Car  loan which is now down under 1000
Installment loan which is now down to 2500

My base salary is 50k with approximately 5k in bonuses which I'm set to receive in April.

Hi, welcome to the forum! In order for us to help figure out a budget, we're going to need some additional information. Specifically:

What is your take-home pay? (Meaning the amount you actually deposit or cash from each check)
What are your expenses? Rent, food, utilities, debt service, car payment, etc.
What's your living situation?
What's the interest rate on the debts listed above?
Do you have any side hustles or the ability to earn extra cash?

hondo7

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Re: So I'm new to the forum
« Reply #2 on: February 14, 2016, 06:53:53 PM »
I thought this would be a good jdea after I posted the first post but didn't want to make it too long to start out with. So let me detail it a little for you guys

Take home pay is 1375 a check or 2750 monthly
Mortgage is 994
Car payment is 176
Utilities total about 200
Crédit cards min payment is 235 monthly with interest rates around 24% I believe.
Payday loans are the big prob. 588 a check is what those cost me.
Installment loans 1 is 125 monthly
Installment loan 2  is 244 monthly but will be paid off in july.

On to the monthly expenses..
Utilities total around 200.
Food is approximately 120 a week for the entire family
Insurance is 60 a month for both cars.
Daycare is 350 a month give or take a little.

I have no side hustles other than the ability to work OT on the weekends. I would like to get into side hustles but feel like I'm lacking the resources and time  right now.I am married with an 8 month old baby.  I have a lot of skills to offer people and am willing to work but would need more guidance in thus dept.

Some side notes. My wife and I are completely separate financially. She does have a full time job that pays $48k a year. I don't feel comfortable asking her for assistance unless it's an absolute emergency.

JAYSLOL

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Re: So I'm new to the forum
« Reply #3 on: February 14, 2016, 07:27:50 PM »
I thought this would be a good jdea after I posted the first post but didn't want to make it too long to start out with. So let me detail it a little for you guys

Take home pay is 1375 a check or 2750 monthly
Mortgage is 994
Car payment is 176
Utilities total about 200
Crédit cards min payment is 235 monthly with interest rates around 24% I believe.
Payday loans are the big prob. 588 a check is what those cost me.
Installment loans 1 is 125 monthly
Installment loan 2  is 244 monthly but will be paid off in july.

On to the monthly expenses..
Utilities total around 200.
Food is approximately 120 a week for the entire family
Insurance is 60 a month for both cars.
Daycare is 350 a month give or take a little.

I have no side hustles other than the ability to work OT on the weekends. I would like to get into side hustles but feel like I'm lacking the resources and time  right now.I am married with an 8 month old baby.  I have a lot of skills to offer people and am willing to work but would need more guidance in thus dept.

Some side notes. My wife and I are completely separate financially. She does have a full time job that pays $48k a year. I don't feel comfortable asking her for assistance unless it's an absolute emergency.


Um, 24% credit card debt and min. payday loan repayment that costs more than your mortgage IS an emergency.  Can you ask her to help you out paying off the debts and you will pay her back at a lower interest rate?  Does she even know you are in debt?
« Last Edit: February 14, 2016, 07:30:33 PM by JAYSLOL »

Bracken_Joy

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Re: So I'm new to the forum
« Reply #4 on: February 14, 2016, 07:45:57 PM »
Important first question: is your debt really "your" debt? http://www.nolo.com/legal-encyclopedia/debt-marriage-owe-spouse-debts-29572.html

Even if you guys think you have separate finances, the legal system may disagree. Be sure you know the laws before you assume that your debts are only your spouse's worry if it you decide you need to ask for help.

Mmm_Donuts

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Re: So I'm new to the forum
« Reply #5 on: February 15, 2016, 07:06:26 AM »
Why would you go to a payday loan store before asking your wife for help? You're paying almost $1200 a month on a $3000 loan, and I'm guessing a lot of that is interest? Surely if your wife knew you needed the money she would have helped. Maybe you two need to open up this line of communication. My husband and I have separate finances, but we talk about money a lot and we each know what we have, and share common financial goals. Perhaps you two need to get on the same page with your goals. It doesn't make sense for one partner to be going into this kind of bad debt while the other partner is saving money or sailing merrily along. You have to talk about this. And pay off that payday loan right now, today!

webguy

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Re: So I'm new to the forum
« Reply #6 on: February 15, 2016, 07:36:27 AM »
So you're comfortable with your wife giving birth to your child and helping to raise it but you're not comfortable asking her to help pay for your medical expenses as a couple? Come on man, this is a marriage!!! You're supposed to be a team and lean on each other when times get tough.

MDM

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Re: So I'm new to the forum
« Reply #7 on: February 15, 2016, 07:37:56 AM »
+1 to all the comments about you and your wife working together.  There could be a good reason for the two of you to keep things so separate, but it would be unusual.  With a joint income of ~$100K/yr you should be able to pay all these debts within a year.

You might download the spreadsheet from http://www.vertex42.com/Calculators/debt-reduction-calculator.html and look at how much interest you will pay, depending on how fast and in what order you repay the debts.


Midcenturymater

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Re: So I'm new to the forum
« Reply #8 on: February 15, 2016, 08:07:03 AM »
Yes. I agree....on 100 k a year these debts should be gone when your mortgage payment us so low.....I assume you are paying the entire mortgage with that figure. When I met my husband....boyfriend at the time...when I discovered he owed 20 k on credit cards I took the money from my savings and paid them off. I had faith in him and already knew we were in it for the long term.

Not mAny partners would wish to see stress on their partner over something you can help with...unless you have form for this and she is making a point.

It sounds like you are paying all the bills and house payment....and your wife not? That seems a,strange set up for a clue with separate finances.

With This Herring

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Re: So I'm new to the forum
« Reply #9 on: February 15, 2016, 08:23:19 AM »
I thought this would be a good jdea after I posted the first post but didn't want to make it too long to start out with. So let me detail it a little for you guys

Take home pay is 1375 a check or 2750 monthly
Mortgage is 994
Car payment is 176
Utilities total about 200
Crédit cards min payment is 235 monthly with interest rates around 24% I believe.
Payday loans are the big prob. 588 a check is what those cost me.
Installment loans 1 is 125 monthly
Installment loan 2  is 244 monthly but will be paid off in july.

On to the monthly expenses..
Utilities total around 200.
Food is approximately 120 a week for the entire family
Insurance is 60 a month for both cars.
Daycare is 350 a month give or take a little.

I have no side hustles other than the ability to work OT on the weekends. I would like to get into side hustles but feel like I'm lacking the resources and time  right now.I am married with an 8 month old baby.  I have a lot of skills to offer people and am willing to work but would need more guidance in thus dept.

Some side notes. My wife and I are completely separate financially. She does have a full time job that pays $48k a year. I don't feel comfortable asking her for assistance unless it's an absolute emergency.

If I'm reading this right, you are coming up short every month by a grand.  What am I missing?  If you two are really keeping things separate, we need to know what YOUR portions of these expenses are.

Take-home$2,750
Mortgage (all your portion?)-$994
Car loan-$176
Credit cards-$235
Payday loan check 1-$588
Payday loan check 2-$588
Install loan #1-$125
Install loan #2-$244
Utilities-$200
Food - $120/wk, split with wife?-$240
Auto insurance – half wife?-$30
Daycare – just your half?-$350
_______
hondo7 in the hole-$1,020

The only couple I've seen in real life where separate finances were perfectly tracked was one where spouse 1 was frugal and inherited riches before the marriage, while spouse 2 gambled (read as: lost) INSANE amounts and ran a successful business to fund it.

I agree with everyone else: Talk to your wife.

Do you have anything expensive that you can sell to clear the payday loan?

MDM

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Re: So I'm new to the forum
« Reply #10 on: February 15, 2016, 08:57:58 AM »
If I'm reading this right, you are coming up short every month by a grand.  What am I missing?  If you two are really keeping things separate, we need to know what YOUR portions of these expenses are.
Good question.

Also, it is better (or at least no worse) to start with gross income and spell out any pre-tax deductions and the taxes themselves that result in take home pay.  Starting with "take home" pay can be misleading.

The tax withheld from the paycheck could be, but usually is not, the same as actual tax owed on that pay.  E.g., the actual take home on 2015 pay of $55K/yr, assuming no pre-tax deductions, standard deduction, single status and a 5% state tax on (federal AGI minus a $4000 exemption) is ~$3,440/mo.  Add $48K/yr and switch to MFJ and one gets ~$5,930/mo.

AlwaysLearningToSave

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Re: So I'm new to the forum
« Reply #11 on: February 15, 2016, 09:44:20 AM »
Hondo7-- I worry that the immediate "talk to your wife" feedback you received from the group will weaken your resolve to improve your financial situation. 

We don't know the details of how you got to be in your current financial situation, but the fact that you went to a payday loan store and came to this forum before talking to your wife suggests to me that there is a bigger issue than "separate finances" in play.  Perhaps you are afraid to admit to your wife that you made poor decisions, don't want to ask her for help, or are worried about your wife's reaction if you were to reveal the true state of your finances, or perhaps it is something else entirely.  Whatever the reason, it seems like it is very important to you for you to have taken those steps before speaking to your wife.

This forum is a source of tough love.  We will not give secret tricks for how to shirk your debts.  What we will do is help you examine your finances in more detail than you likely have ever done before.  We will also bluntly tell you the difficult things you must do to improve your finances.  The people on this forum will help you make the hard choices you need to make and will support you during the difficult process of making those changes.  But there is no way around the fact that it will require you to make difficult and uncomfortable decisions. 

I think humbling yourself by speaking to your wife about your finances is something you must do soon.  You could choose to do it now and have her help you work through a solution or your could choose to do it in a few days after you get a clearer picture of the state of your finances with the help of this forum.  But your financial situation is an emergency and you need to enlist her help soon.  It is important for her to know so that she can support you, even if she never gives you a dime of direct financial assistance. 

If you tell her that you are in bad financial shape, show her that you have a plan to improve your finances, and ask for her support (whether financial assistance or merely emotional support), I have a hard time seeing it going poorly.  She may initially be surprised, upset, confused and angry.  But if she sees you confront this problem, humble yourself to her, and then conquer the problem, I would wager it will make your relationship stronger in the long run.  Asking for her help may be hard for you to do-- perhaps one of the hardest conversations you have ever had-- but working through this with her and with the help of this forum could be one of the best things you ever do.  Please don't lose your resolve.

Rosy

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Re: So I'm new to the forum
« Reply #12 on: February 15, 2016, 10:17:38 PM »
So you are here, because you are in trouble and you know it, it is eating you alive and that payday loan is killing you.
Welcome to the forum:)
Some of us have been in your shoes, too:)

There are no easy answers and no easy way out - fess up, have that talk with your wife and move forward together. That payday loan has to go, then set up a plan together and stick to it. You can do it - you have a good income and all in all, the totals are not that high.
Work it out, set a goal and make it happen within a year - this is entirely doable.

Tjat

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Re: So I'm new to the forum
« Reply #13 on: February 29, 2016, 02:45:18 PM »
Take all your debt (at least the payday loan and CC debt) and immediately refinance with lendingclub. Your interest rate will drop and you can actually start making headway on the principle without even affecting your payments.