Case Study - rapid debt payoff - what first?

[Ohregano]

Edit: So many responses and so much advice is very overwhelming. I don't get a lot of social interaction with other adults. So I'm stepping away from this post for a bit. I'll be back to update as things progress.
Thanks everyone for your advice and guidance.

Life Situation: Married filing joint, 3 kiddos all under 10, living in Portland, OR.  +my brother who is on SSI = 6 people

Gross Salary:  $125,000

Pre-tax deductions: $5,000 annually to 401k to meet employer match, $600 monthly for health, dental, vision.

Other income: $20k VA disability pension

Adjusted Gross Income:  $132,000

Taxes on W2: federal $12,749,  FICA $9,563, state $9,220,  local arts tax $35

Total income after taxes: $109,996

Expenses Monthly:
Mortgage Principle $559.66 Interest $921.18, Taxes/Ins $361.16 = $1,842
Utilities (nat gas, trash, water/sewer,electric, internet, cell phones $42 - no land line) $489
Credit Cards: $936
Personal loans: $862
Car loan: $563
Car ins: $50
Car Reg: $0 - veteran's get free registration in OR.
Student loan: $398
Spotify $15
Food for 3 adults, 3 children/toiletries/animal care: $2,500
Total: $7,655


Total annual expenses w/debt: $91,860


Assets: home valued at $370k (owe $303k, we had $0 down), we don't consider our car an asset as we were upside down on our F-150 and got that $20k rolled into our loan for our smaller/more fuel efficient car. So we owe $34k on a $12k car. 
EDIT: We also have $7k in cash.

Liabilities (which were listed above in expenses but have more detail here): I am not sure what the interest rate will be on the 0% cards when the promotional period is up. I will look into that.

US Bank CC balance $17,538, payment $176, currently at 0% interest for first year, ends in June, we had other credit cards that we consolidated to this one and have no put a new balance on. 3 of our cards are at a $0 balance.

Paypal Credit: balance $4,071, payment $36, interest currently 0%, ends in July

Citi Costco Anywhere Visa:  balance $9,005, payment $196, interest 16.74%

Chase Amazon Rewards Card: balance $5,762.18, payment $169, interest 23.74

Chase Sapphire Card:  balance $8,933, payment $89, interest 0% until Oct

Cap 1 Platinum card: balance, $2,914, Payment $12, interest 4% (yes 4%)

Cap 1 Journey card: balance $2,347, payment $67, interest 21.3%

Home Depot card: balance $11,999 , payment $230, interest varies per purchase, anything more than $200 is interest free for 6 months. we have only had the card for about 3 months. & are pretty much done using it as our project is complete.

US Bank Loan 1 balance (originally $15k)$8,072 , payment $388, interest 10.57%

US Bank Loan 2 balance (originally $20k)$18,069, payment $473, interest 14.49%

Car loan (originally $36,465) $34,683, payment $563, interest 6.89%

Student Loan (originally around $45k spread over 3 loans, paid only minimum for about 8 years, still had around 25 years left, consolidated to 1 loan and are currently paying amount to payoff in 10 years. Interest was also much higher on original loans) current balance $33,688, payment $398, interest 5.11%

Credit card totals:  $62,569



Edit: I trimmed this post a bit so it wasn't so long to read. The spotify stays. My husband listens to it literally all day while he is working. My children listen to it a lot during the day. I listen to it at least a few hours a day. My husband is not disabled in any way that requires extra care from me. He get's VA disability for bad knees & sleep apnea from having his nose broken in the service.  The pets are staying as well. We made a commitment to take care of them and you don't just discard another living thing because it is inconvenient. My brother feeds and deals with the dog poo. My husband plays frisbee with the dogs at least once per day for exercise. The cats are indoor outdoor and are the least expensive of the 3. I only need about 3 bags of food a year for them. Litter maybe once every 2 months as they rarely go in the box.

As far as the spending on the credit cards. It was trips, food, booze, various home-school related activities, entertainment, & remodeling our basement. Oh and I fronted the cost of my step-dad's funeral for my broke mother. She unfortunately cut contact with me after that and I haven't seen a dime of that money paid back.
 Last month we did NONE of that. We do desperately wan't to change and HAVE changed a lot of our habits. We found a wonderful website that has all things needed for school work for FREE. So we got rid of about $100 worth of subscription based learning programs. We also  cancelled $135 in streaming TV services.  I just called my internet provider yesterday and had our bill brought down by $20.  We are trying. The 2 things we won't budge on are the $15 spotify and our animals. We are willing to do the work anywhere else.

The $7k unfortunately is going to be paying to have our faulty electrical panel replaced in a few days.  It is dangerous and cannot be put off. I am expecting it to cost closer to $5k. So we will see how much is left. That can go towards debt.

I just logged into my mortgage and changed the amount so that we aren't paying the extra $158 and changed the calculations above to reflect that.

As far as my husband working two jobs... If anyone can do it, it's him. He has a very interesting personality. He gets shit done, for lack of a better way of putting it. I have removed that extra income from the calculations as it will not be coming in until March. We are pretty confident it will be coming in as DH signed the contract yesterday. Also he is not the only person we know that is working on more than one software project. It's not like this is unheard of. If/when the job starts, we can expect about $8,000 extra per month. We were paying about $2k on debt until Nov. When we had issues with our electrical panel. We have since then been putting any extra in savings. So we will be putting that $2k on debt again in Feb. Assuming job #2 works out for my husband, we will have $10,000 per month to throw at debt. Our tax return should also be around $12k. So that will be put straight towards debt as well. I fully anticipate having the CC debt paid off in 6 months or less.

I'll re-address the buying of a new property. That is a GOAL. A huge motivating factor in our lives. We absolutely HATE living in the city. It is a great source of stress & depression for all of us. We have no plans for moving until all of our debt is paid off. & until we have at least 20% down for a new place.

My spending habits are something I have been working on for YEARS. I won't go into specifics about how or why I have had such a huge change mentally. I do slip up from time to time and spend where I don't need to and then I feel like dog crap. I don't want to even slip up anymore. However there was a point in my life, not that long ago that I thought I was entitled to spend money and buy whatever I wanted because I took care of everyone and everything in my house. Also I have tried getting a job as well as my husband working. It did not work. The small amount of money I was able to bring in (about $1,500 working full time) was not enough to offset the cooking and cleaning that was not getting done at home.

I'll be posting and/or updating as things are paid off. I'm going to go with highest interest & credit cards first. Thank you all very much for your advice. I really do appreciate it.

[Monerexia]

Holy my goodness this is depressing haha. Ramsey would tell you to start with the lowest balance. Do that if you have a hard time motivating yourself bc you'll get a psych bump moving it to zero quicker. Better to start with highest interest rate if you can stay motivated. You can no doubt decrease the $2500 food budget and move to cheaper cell phone plans over time, e.g., Republic Wireless for $250/year.

[MDM]

Also I would love to hear thoughts on what order we should be paying things off.

You "should" pay off the highest interest first.

See http://forum.mrmoneymustache.com/ask-a-mustachian/which-loan-to-pay-extra-first/msg1307278/#msg1307278 for a good calculator - assuming your Chromebook can run it ;) - that will indicate how much interest cost difference there is among various payoff strategies.

[Ohregano]

Better to start with highest interest rate if you can stay motivated. You can no doubt decrease the $2500 food budget and move to cheaper cell phone plans over time, e.g., Republic Wireless for $250/year.

Just want to point out that $2,500 is not just food. It includes food, toiletries, cleaning supplies, animal food, flea, tick, dewormer. I agree that it could be lower. I'm aiming for a $1000 reduction. Which would leave us about $200/week to feed 6 people.  Animal expenses are for 2 cats & 3 dogs. We buy their food at costco. Generic flea/tick. Broad spectrum worm preventative is only by prescription. We did try a few times to not purchase this specifically as it is expensive. Every single time, all of our animals got worms. Unfortunately our neighborhood is teaming with vermin and birds. There is no escaping it.

Currently my husband refuses to change cell service. All of his work logins are authenticated with phone apps. We did replace our phones about a year ago and it really messed that all up for him. So he is pretty hard core against that. Cell phones are $42/month. Really don't feel like that is crazy. Unlimited talk/text/data for $42 total seems pretty cheap to me.
 
Highest interest first makes sense. I initially thought about paying off what was charging us the largest payment first... thinking that would then free up that money to "snowball" into other debt...

Also currently we make about $105k after all is said and done, before expenses. Most of my above calculations rely on DHs new job for that much higher income. This seems like a gold mine of an opportunity to throw every cent of that extra pay at debt. Plus a few thousand from current pay.

I agree. It is depressing. That is why I'm here.

[Ohregano]

You "should" pay off the highest interest first.

See http://forum.mrmoneymustache.com/ask-a-mustachian/which-loan-to-pay-extra-first/msg1307278/#msg1307278 for a good calculator - assuming your Chromebook can run it ;) - that will indicate how much interest cost difference there is among various payoff strategies.

Thanks for the link.

[Playing with Fire UK]

Do you have the interest rates that the 0% debt will move to when the offer expires? Can you move higher interest debt to lower interest cards?

[marty998]

* US Bank CC balance $17,538, payment $176, currently at 0% interest for first year, ends in June, we had other credit cards that we consolidated to this one and have no put a new balance on. what does the rate jump to after June? Can you clear $17k before it goes up to the higher rate? 3 of our cards are at a $0 balance ok - cut up those old cards, no more spending on them!
* Paypal Credit: balance $4,071, payment $36, interest currently 0%, ends in July
*Citi Costco Anywhere Visa:  balance $9,005, payment $196, interest 16.74%
* Chase Amazon Rewards Card: balance $5,762.18, payment $169, interest 23.74 Pay this one off second
* Chase Sapphire Card:  balance $8,933, payment $89, interest 0% until Oct
* Cap 1 Platinum card: balance, $2,914, Payment $12, interest 4% (yes 4%)
* Cap 1 Journey card: balance $2,347, payment $67, interest 21.3%Knock this one off first - with your next paycheck
* Home Depot card: balance $11,999 , payment $230, interest varies per purchase, anything more than $200 is interest free for 6 months. we have only had the card for about 3 months. & are pretty much done using it as our project is complete.
* US Bank Loan 1 balance (originally $15k)$8,072 , payment $388, interest 10.57%
* US Bank Loan 2 balance (originally $20k)$18,069, payment $473, interest 14.49%
*Car loan (originally $36,465) $34,683, payment $563, interest 6.89% Given your car is worth so much less, paying this is going to feel like dead money but psychologically it may be good to get it over and done with as soon as possible
*Student Loan (originally around $45k spread over 3 loans, paid only minimum for about 8 years, still had around 25 years left, consolidated to 1 loan and are currently paying amount to payoff in 10 years. Interest was also much higher on original loans) current balance $33,688, payment $398, interest 5.11%

Credit card totals:  $62,569

Oh my god this makes me want to cry. I presume you are the one going back to work soon? You need to pretend that you are still living off the one income earner, and all the net pay from your new job needs to go against the debts listed above.

Theres about $170,000 of non-mortgage debts listed there. It must be exhausting just pressing the button to pay each debt every month in your banking portal / app.

Freeze the cards until you pay it all off. Literally, put them at the bottom of the freezer, underneath the Christmas ham from 2016 that you can't bear to throw out but no one will ever eat. Putting any more on any card is just digging bigger hole.

Good luck, it's going to be tough but you guys need to crack onto it now!

[ReadyOrNot]

I'm unclear on a few things:

Life Situation: Married filing joint, 3 kiddos all under 10, living in Portland, OR.

Gross Salary:  $232K though that will not be forever, as this is income from two jobs. 2nd job doesn't start until EOM and won't pay first paycheck until March. So take away $107k for that and that is our current income until March 1.

You mention 3 kids, but then you mention $200/week to feed 6 people.  Where is the extra person?

Also you're figuring $232k for the future, but you are making $125k now?   I'm not sure what you mean $232k though that will not be forever?  Is first job going away?  If you are indeed making $232k, that's a lot better than $125k or $107k, but please help clarify what the situation is.  I wouldn't also count future income until you've started the gig and receiving paycheck, just in case things unexpecedly change, for this case study.

What was the reason you have so much credit card debt?  Was it to do a home improvement?  Is there any reason you couldn't have waited until you had more cash to take on the project?

You also have a lot of responsibilities, with 3 (4?) kids plus a disabled husband to take care of?  And then add 2 cats + 3 dogs on top of that?  That's a lot of expenses.   I hate to say it, but I think you should consider finding other homes for the pets for now.  A house full of 5 or 6 people is a lot to take care of for now.  The 5 pets is a significant burden on top of everything else.  At least until you're in the black and have gotten rid of all of the credit cards that are extremely risky.

I think Dave Ramsey would have a serious conversation with you about your spending habits, and urge you and your husband to find ways to make extra income, and cut expenses to the bone to pay down this debt.

Paying 23% interest rate on consumer spending is trying to swim uphill while the flood is pushing you down.  On the other hand, people who have stocks invested in 2019 had gains of around 24% and it was a significant impact to their financial portfolio.  This is the total opposite of that and it will hurt financially more than anything else.  You have $7k cash on hand. I would use that to wipe out the highest credit cards ASAP.  That's 24% cost of money by hanging on to that $7k. 

Good luck, you've got some tough choices ahead but focus on it and you'll come out ahead.

PS - I wouldn't even think of buying another property until you have significantly improved your finances and have a very healthy cash flow.  Washington may not have income taxes but property taxes could be very high, along with sales tax which Portland does not have.  You don't want to be a landlord when the rental property is empty between tenants, or need repairs, etc.  Put that off for a while until you're on solid financial footing.

[habanero]

Holy crap reading this almost made my eyes bleed. If I calculate correctly the "yield" on your "investments" (aka various consumer spending) is -9353 dollars per year, or -780 dollar per month. That is excluding the student loans and the mortgage. And before the 0% plans stop being 0% plans. Current "yield" is -9.65% which will get A Lot Worse when the 0% grace period is over.

Given that you send 936 dollars towards consumer debt with a notional of the debt is gonna be paid off, well, most likely never. Regardless of what you do this will haunt you for a long time and it's important to attack this full force at the moment. That means every single expense not required to have a roof over your head and feeding people and protecting them from the cold and getting to some income-generating activity the cheapest way possible has to go. Now. That includes the pets, unfortunately.

You also have to exploit every opportunity to increase income.

And forget about buying a new place. You will incur lots of costs and charges you probably never thought about in the process. The only valid reasons to move is if you can 1) get out a lot of equity from your current home (not very likely as there is only about 60k equity in it and selling a place costs a fair bit) or 2) moving somewhere else will sigificantly improve your income and/or cost situation.

[Freedomin5]

I just read your posts in the other thread. It sounds like DH will be holding down two full time jobs and earning both incomes, and who knows how long that will last before he burns out. That means your job is to find ways to cut expenses to the bone. No more spending on any credit card (even the 0% interest cards) until all debt (except mortgage) is completely paid off.

As other posters have mentioned, throw all extra income at the highest interest rate card first. Then freeze the card. I’d actually just cut up the card. There is no need to have so many credit cards. Then throw all extra income at the next highest interest rate card. And so on and so forth. This is especially critical because you have several 0% interest cards that will start charging interest within the next few months.

The more you can lower your monthly expenses, the faster you can get out of debt.

Also, I don’t what all you bought on credit, but you can also start thinking about decluttering/simplifying/selling stuff. And throwing all that money towards your debt.

Give yourself the reward of looking at land on the day that you pay off all your consumer debt.

Good luck.

[GoCubsGo]

I'm curious as to why your were paying down the mortgage every month (at what 4%?) and not using that money to pay off a 23% interest CC.  I'd definitely stop pre-paying the mortgage.  I'd also take that $7k cash and knock out the Chase Amazon card.  Your husband working two jobs is awesome but I wouldn't plan on that for the long term.  I'd bang out all that debt, get a solid working budget for at least a year or two, THEN maybe consider the new house idea.

My biggest concern is that you will be able to keep up a frugal lifestyle long term.  It's tough given how you've been raised and your past use of credit is a bit alarming.  You might want to think about why you used those credit cards and if you are "cured".   It's almost like trying to lose a bunch of weight, it's fun and exciting at first but when you realize you have to change your mindset for the rest of your life it can be daunting.   Life will only get more expensive as the kids get older so definitely budget for that. 

Best of luck. It's brave to post a case study with those type of numbers and take the face punches.  You are definitely on the right path now.

[ATR]

In line with the points raised above, where did all of this consumer debt come from? It might be worth seeking professional help in that regard as it may happen again, especially as your household income grows and you feel you can "afford" it.

[Ohregano]

In line with the points raised above, where did all of this consumer debt come from? It might be worth seeking professional help in that regard as it may happen again, especially as your household income grows and you feel you can "afford" it.

I just edited the OP to answer the questions raised. My husband doesn't believe in "professional help". So that has never been an option. He thinks only idiots talk to other people about their problems. I've tried a few times over the years to seek counseling and he says I'm wasting money. I know... Irony.
I have definitely adjusted our spending in the past to reflect raises. I totally get that. I feel like I'm in a good place. We just really started giving a shit a few months ago. We started spending less and less on the cards and spent $0 on the cards last month.

[therethere]

So your husband is the one that is disabled. But he's the one planning to work 2 FT jobs? That sounds unrealistic long term so you better take advantage of it while it lasts. How old are your kids? Are you staying home for childcare?

The food is the cheap part of having a pet. What will you do if one of them needs vet care? Surgery? What if two of them need vet care in the same year?

[SailingOnASmallSailboat]

Who is the 3rd adult? You mention 3 adults and 3 kids.

[J.R. Ewing]

If you're deliberate about grocery shopping and meal planning you should be able to easily feed a family of six for $600 a month.  Through in another $100 for the pets and $100 for toiletries and cleaning supplies and you get to $800 a month.  I struggle to see how that $2500/month number is even possible unless you're eating out a lot. 

[Villanelle]

Is your brother contributing to the household?  You guys are in a really, horribly terrible place financially.  He's making $20k per year which should give him something to contribute toward groceries, utilities, and rent.  If he's not, you need to tell him he needs to start, ASAP.  I'd ask for at least $400 per month, which still leaves him PLENTY to live on.  Actually, I'd ask charge more, but that seems place a bare minimum.

He also needs to start pitching in around the house to help you save money.  Batch cooking scouring sales and making a meal plan based on those, comparing prices across stores so you know who has the cheapest price on the basics you buy most, etc. 

Can you call all those cards and ask them to lower your interest?  Or see about transferring balances from the high interest cards onto the lower interest?  Like, don't just think about this.  Go make phone calls, right now.  Start with the highest interest and negotiate.  Call each place.  When you are finished, look at the lowest rate cards and call back to ask them about transferring a balance (from the highest cards) and see if you can do that with no fees, or with modest enough fees that make it worthwhile.  Do this RIGHT NOW.

Find a parttime job.  Anything to bring in money.  Your are in a very tenuous situation.  It will take drastic measure to fix it and it doesn't seem like you are quite getting that.  You are insisting on keeping spotity because you listen to it.  If you had a yacht that you used every weekend, would you keep that?  You lost the right to have frivilous expenses when you spent near $200k that you don't actually have. I say this knowing you are going to keep Spotify anyway.  But you are applying that logic to other things, and will probably apply it to convince yourself not to get a job.  But you need to.  You have two mentally capable adults home all day.  Babysitting and/or childcare seems like a place you could start and make decent money. Watch someone kids after school for a couple hours. Be back up childcare on snow days. Watch a couple kids on days school gets out early or school holidays where parents have to work.  Provide date night Friday and Saturday sitting.  Whatever you can come up with.  Yes, it will be hard work.  But that's what's required to overcome ~$200,000 in debt. 

Don't get more pets!  As you lose them through attrition, you get no more pets.  You can't afford them.  If that's a bitter pill to swallow since you clearly love your animals, look at it this way--you can't afford medical care for them if something goes wrong, so it's cruel to bring them into your home.  So NO MORE!!!  Until literally every last penny of your consumer debt is gone. 

[Ohregano]

So your husband is the one that is disabled. But he's the one planning to work 2 FT jobs? That sounds unrealistic long term so you better take advantage of it while it lasts. How old are your kids? Are you staying home for childcare?

The food is the cheap part of having a pet. What will you do if one of them needs vet care? Surgery? What if two of them need vet care in the same year?

I already addressed this in my post edit. My husband has bad knees and sleep apnea. It's not like he can't wipe is own ass. 2 "full-time" jobs that are remote, salaried, flexible in hours, and have unlimited PTO. He has already been learning the software language for job #2 for about 6 months like it was a 2nd job and not getting paid for it. And it is unrealistic forever. We don't expect it to last long term. But we will absolutely take advantage and put all of the extra income into paying off our flaming debt emergency.

Kids are 5, 8, 9 and are home-schooled. I also addressed that I have tried working. However I only have a HS diploma and only brought home about $1,500/month. & had to go to and from work 2x a day at the cost of over $100 in gas a week. That job paid $18/hour as a school bus driver. I might be able to find a job for $13/hour at a fast food place or walmart. However, then my husband would be home with the kids all day while trying to work and be responsible for cooking and cleaning. THAT seems unrealistic.

As far as vet care... It wasn't an issue last year as I guess we were making bad choices and had a small amount of cash set aside for that. One of our dogs did need care twice last year and we paid cash for it.  In my opinion that is the point of having a few thousand in cash in savings.... If it was something life threatening, they would be put down. That has always been our mindset on that, even before we had pets. We won't spend thousands on keeping them alive if they are dying.

[Ohregano]

If you're deliberate about grocery shopping and meal planning you should be able to easily feed a family of six for $600 a month.  Through in another $100 for the pets and $100 for toiletries and cleaning supplies and you get to $800 a month.  I struggle to see how that $2500/month number is even possible unless you're eating out a lot.

Well Portland is a high COL area. However you are correct. We were eating out and buying lots of snack type foods. We have cut back on that. But I'm not sure what the total will be yet until it has been a month of eating better.

[ReadyOrNot]

Having the few thousand of cash in savings is costing you effectively 24% in interest.  After you pay for the electrical panel, I would use vast majority of the cash to pay down the credit card debt.  The credit card can be an emergency tool for emergency expenses than the cash sitting in your savings account.

I sympathize with your situation a lot.  My SO and I make $225k per year, and just with one child and a couple of pets, we have annual expense of $60k - $78k.  This is true expenses, not just credit card payments. You'd think we'd be living in the lap of luxury but we really are not.  We appear to be materially worse off than our neighbors who have huge nice new trucks, luxury vehicles, and a lot more shiny new toys like latest iPhones / iPad Pros, etc., which is sobering but the reality of most people being heavily in debt and living paycheck to paycheck.

In comparison to us, your situation is a lot more dire with the additional people in the household and animals as well to support.  I think it's very brave of you to ask for feedback because sometimes you just don't know how bad a situation is, or how to take baby steps to move in a better situation.   

Aside from the credit cards which is a hair on fire situation, I am concerned about your husband's attitude about not seeking help, even anonymously with other people to give help on the situation.   The Spotify subscription is a minor cost and won't make or break the situation, but it is another feather on the camel's back which is already breaking.  I listen to Youtube music which can be free with ads, couldn't that work for a while in lieu of Spotify?  I used to have Spotify premium but I found Youtube music to be just as good, if not better, and ultimately I canceled Spotify and now pay for Youtube Red, but find even in free mode it works well.

I get that the pets are not negotiable, but take a look at it this way - would you sacrifice your kids for your pets?  Pets have a lot of costs throughout their lifetime, and it can be significant.  At the end of the day would only having 1 or 2 dogs not be sufficient?  Ultimately it's your decision and a cost for you to bear.

Does your husband have any sort of life insurance?  I have a $1m policy to protect my family because all it takes is one major accident to wipe away my income and leave the family destitute.  This is an item to budget for once you are clear of the credit card debt.

One more thing - you mention hating the city and wanting to move to a rural place.  Fact is there are more job opportunities in a more populated area, than a rural place.  If your husband's job prospects should change and lose the current gigs, it's a lot easier to find something else in a big city than out remote somewhere.

I telecommute several days working at home, but I stay near a bigger city / major airport because if my job situation should change, I have more options than not, in terms of alternatives.  If you move to a rural area and your husband's jobs are eliminated, you guys are hosed with few alternatives.  Just some reality check vs potential fantasy of living in a rural location with the negative of few local job options.

PS - I would urge you take a look at my case study, and see how I have listed actual expenses to see how much it can costs to live, rather than listing expenses in the form of credit card monthly payments, which is not representative of expenses but rather minimal cash flow obligations to stay afloat.

[Ohregano]

Having the few thousand of cash in savings is costing you effectively 24% in interest.  After you pay for the electrical panel, I would use vast majority of the cash to pay down the credit card debt.  The credit card can be an emergency tool for emergency expenses than the cash sitting in your savings account.

I sympathize with your situation a lot.  My SO and I make $225k per year, and just with one child and a couple of pets, we have annual expense of $60k - $78k.  This is true expenses, not just credit card payments. You'd think we'd be living in the lap of luxury but we really are not.  We appear to be materially worse off than our neighbors who have huge nice new trucks, luxury vehicles, and a lot more shiny new toys like latest iPhones / iPad Pros, etc., which is sobering but the reality of most people being heavily in debt and living paycheck to paycheck.

In comparison to us, your situation is a lot more dire with the additional people in the household and animals as well to support.  I think it's very brave of you to ask for feedback because sometimes you just don't know how bad a situation is, or how to take baby steps to move in a better situation.   

Aside from the credit cards which is a hair on fire situation, I am concerned about your husband's attitude about not seeking help, even anonymously with other people to give help on the situation.   The Spotify subscription is a minor cost and won't make or break the situation, but it is another feather on the camel's back which is already breaking.  I listen to Youtube music which can be free with ads, couldn't that work for a while in lieu of Spotify?  I used to have Spotify premium but I found Youtube music to be just as good, if not better, and ultimately I canceled Spotify and now pay for Youtube Red, but find even in free mode it works well.

I get that the pets are not negotiable, but take a look at it this way - would you sacrifice your kids for your pets?  Pets have a lot of costs throughout their lifetime, and it can be significant.  At the end of the day would only having 1 or 2 dogs not be sufficient?  Ultimately it's your decision and a cost for you to bear.

Does your husband have any sort of life insurance?  I have a $1m policy to protect my family because all it takes is one major accident to wipe away my income and leave the family destitute.  This is an item to budget for once you are clear of the credit card debt.

I totally understand the math of keeping a few thousand in cash when there is debt to be paid. However, what if there is an emergency? If I have no cash to pay for it, then it would be going on a credit card.

My husband does not know I am on here posting this. I don't see any issue with it. But I know he would freak out and say I was sharing private info with a bunch of strangers and I shouldn't be doing that. I disagree and want advice. I have and will definitely take some of the advice. Other things I think won't work for us. I'm going to do what I can.

I would continue to receive his VA disability in the event of his death. I was under the impression that he still had $400k in life ins from his time in the service. However some quick googling shows that is not true. So we will definitely look into that. I hadn't even thought about it until you asked because I thought we were covered. DH does understand the value of life ins. So that won't be hard to get him on board with.

Now I've got to get back to my daily grind. I've spent far too much time this morning on the forum.

I'm not too worried about living rurally. DH grew up rurally and I spent a number of years in my teens on a horse ranch. Best years of my life.
As far as work prospects, it is not uncommon at all to work remotely in the software industry. He has had to look for work a few times over the years and has worked remotely for all but 1 job. The 1 job was the reason we moved to Portland and it was a huge mistake.  It was his first job straight out of the service and we too assumed we would need to live in a big city. We do not. Most of his buddies and colleagues all work remotely now and have in past jobs. 

[ReadyOrNot]

I have been working remotely for 20+ years in some shape / form, so I am familiar.  However, all it takes is one recession / downturn for those remote jobs to be severely curtailed.  Employers prefer local employees they can see & manage than remote.  When times are good and there are limited pool of resources, having remote employees is not a choice for most employers.  But when there is a downturn and jobs shrink, there will be more people competing for the limited pool of jobs, and employers will favor local employees than taking a chance on remote employees. 

I have seen downturns in the past and have seen people in remote places get put in a really bad position because they're competing against local resources for a limited number of jobs.

In addition, if an employee can be 100% remote, companies consider off-shore resources who are far cheaper than an on-shore remote employee.  If your husband is doing DoD / US government related work, that will not be a concern since it requires US citizenship status.  But if it's just commercial work, that doesn't apply and can be a risk.

To sum it up, I personally feel working remotely in a rural area is a luxury that I could only afford when I was very close to FIRE, or FIREd.  Reason being if everything goes to hell, I can survive by living on low level minimum wage jobs in a rural setting without incurring major financial losses of selling the rural house to move back to a major city to find work in a down economy.

[MDM]

I totally understand the math of keeping a few thousand in cash when there is debt to be paid. However, what if there is an emergency? If I have no cash to pay for it, then it would be going on a credit card.

The definition of "emergency" can be in the eye of the beholder.

There is an opportunity now to pay off existing high interest debt.  If the need arises to use credit, you will be no worse off than if you keep the cash now and use it later.  But if an "emergency" doesn't occur, then you will be ahead by the amount of interest you didn't need to pay.

[habanero]

So what is basically happening here is the following:

0) You have, at least partly, understood the graveness of the situation and dealt with the root causes (great)
1) You have mostly stopped doing stupid shit (good)
2) You have found ways to do stuff you did earlier, just for less money spent (good)
3) When it comes to actually sacrificing anything meaningful, it's full stop (bad).

You're husband soon working 2 jobs is entitled to Spotify, I doubt anyone would have a big issue with that. Then there is the question of the 5(?) pets, the 3rd adult (your brother) who seems to pay nothing for living while still having some cash coming his way (SSI). These are examples of hard choices and frankly you aren't really in a situation to pick the comfy route on this.

Your financial situation is truly and utterly horrible, the only thing saving you is you husband's ability to earn a lot of money and work 2 jobs, if even only for a shorter period. Without that, all 6 humans and 5 pets of you would be completely screwed.

Your husband cannot work from home and school / look after the kids, his full attention is required for the sole purpose of bringing cash in to the best of satisfaction for whichever entity is sending him money in your family's general direction. As much as possible as soon as possible. How about your brother? Can he do some of the schooling, cooking or cleaning? Anything to allow you to earn some money to throw at the debt emergency.

And do anything you can to consolidate, refinance or anything possible to bring the interest costs of the debt down. Is some of the principal negotiable (unlikely as long as you have paid the loans so far). If you can increase your mortgage just a little to pay off some consumer debt, do it. Do you have stuff in the house you can sell off at Craigslist? Do it. And throw the proceeds at the debt.

If you want to look at it from the positive side, which admittingly is hard, you have several risk-free investment opportunities paying over 20% renturn. Your focus should be to "invest" (paying down) as much as this as soon as possible in any remotely possible way.

Best of luck.

[brooklynmoney]

From a strictly financial perspective, you should send all of your children to school and every adult in the household who does not have an income should find a way to earn as much as possible.

[Ohregano]

I totally understand the math of keeping a few thousand in cash when there is debt to be paid. However, what if there is an emergency? If I have no cash to pay for it, then it would be going on a credit card.

The definition of "emergency" can be in the eye of the beholder.

There is an opportunity now to pay off existing high interest debt.  If the need arises to use credit, you will be no worse off than if you keep the cash now and use it later.  But if an "emergency" doesn't occur, then you will be ahead by the amount of interest you didn't need to pay.

That makes sense. Thanks for explaining.

[ReadyOrNot]

So what is basically happening here is the following:

0) You have, at least partly, understood the graveness of the situation and dealt with the root causes (great)
1) You have mostly stopped doing stupid shit (good)
2) You have found ways to do stuff you did earlier, just for less money spent (good)
3) When it comes to actually sacrificing anything meaningful, it's full stop (bad).
...
If you want to look at it from the positive side, which admittingly is hard, you have several risk-free investment opportunities paying over 20% return. Your focus should be to "invest" (paying down) as much as this as soon as possible in any remotely possible way.

Best of luck.

Really good summary, and accurate.  Just a side conversation (stream of consciousness in my own head), regarding the credit debt, I put it into the context of eliminating additional 20% + cost, rather than a positive return.   I have money in the stock market earning 20% plus returns on my capital, which is vastly different than saving 20% in additional expenses in the form of debt interest.  I know you know that, I'm just chiming in and clarifying for other people who may not think of it this way.

Also want to stress the importance of looking at actual expenses rather than cash flow payments to service debt, which will help with analyzing true expenses that can be cut or otherwise properly managed.   This is why I have always negotiated purchases on the overall cost, rather than looking at monthly payments.

[frugalfoothills]

Paging @Laura33, this poster needs your sage advice if anyone ever has.

OP, I do appreciate that you are unwilling to get rid of the pets. That's also something that is non-negotiable for me, so I totally understand. I agree with other posters -- no more pets any time soon, and no replacing any that pass away. There is plenty of fat in the budget and opportunity for increased revenue where you don't need to unfairly disrupt the lives of your animals.

What is the deal with your brother? Others have asked but I haven't seen an answer. Is he working? Is he contributing to the finances in some way? What is the plan there?

[ReadyOrNot]

From a strictly financial perspective, you should send all of your children to school and every adult in the household who does not have an income should find a way to earn as much as possible.

This is a really good point.  OP mentions she only has a HS diploma, which is not a knock at all but I'd be concerned about the level of home schooling the kids are receiving.

I have graduate degrees and sometimes I feel unable to tutor my children on some of the topics they are learning.

[frugalfoothills]

From a strictly financial perspective, you should send all of your children to school and every adult in the household who does not have an income should find a way to earn as much as possible.

This is a really good point.  OP mentions she only has a HS diploma, which is not a knock at all but I'd be concerned about the level of home schooling the kids are receiving.

I have graduate degrees and sometimes I feel unable to tutor my children on some of the topics they are learning.

Also agree that they don't really have the luxury of choosing to homeschool if she is able to contribute financially in some way. $1,500/month is $18,000 a year, which is 2 or more of those credit cards gone. Household expenses at $2,500 per month tells me not much thought is going into grocery shopping or product usage.

Get the kids in school, pick up whatever job will pay you the most, start collecting something from brother OR ask him to contribute in non-financial ways, and optimize that category in your budget.

[mqtxc]

I believe you mentioned earlier this new income coming is going to be 1099/ self employment income. Make sure you are prepared for the tax implications of all the extra income with no withholding. A tax surprise a year from now could be devastating. I don't see where your age is listed but obviously the younger you are, the more time you'll have to recover from this. You can do this but it's going to take time, patience, and persistence.

[habanero]

It might also help that whenever you are considering a purchase of anything, you take the actual price and add about 25% to the cost. That is the actual cost of any expense not going towards getting rid of the debt (assuming you can pay off the debt in 3 years if rally hitting it). If the purchase is something you could do without, add the item price to the actual  cost.

[JGS1980]

PTF, I look forward to following your progress!

[Villanelle]

So your husband is the one that is disabled. But he's the one planning to work 2 FT jobs? That sounds unrealistic long term so you better take advantage of it while it lasts. How old are your kids? Are you staying home for childcare?

The food is the cheap part of having a pet. What will you do if one of them needs vet care? Surgery? What if two of them need vet care in the same year?

I already addressed this in my post edit. My husband has bad knees and sleep apnea. It's not like he can't wipe is own ass. 2 "full-time" jobs that are remote, salaried, flexible in hours, and have unlimited PTO. He has already been learning the software language for job #2 for about 6 months like it was a 2nd job and not getting paid for it. And it is unrealistic forever. We don't expect it to last long term. But we will absolutely take advantage and put all of the extra income into paying off our flaming debt emergency.

Kids are 5, 8, 9 and are home-schooled. I also addressed that I have tried working. However I only have a HS diploma and only brought home about $1,500/month. & had to go to and from work 2x a day at the cost of over $100 in gas a week. That job paid $18/hour as a school bus driver. I might be able to find a job for $13/hour at a fast food place or walmart. However, then my husband would be home with the kids all day while trying to work and be responsible for cooking and cleaning. THAT seems unrealistic.

As far as vet care... It wasn't an issue last year as I guess we were making bad choices and had a small amount of cash set aside for that. One of our dogs did need care twice last year and we paid cash for it.  In my opinion that is the point of having a few thousand in cash in savings.... If it was something life threatening, they would be put down. That has always been our mindset on that, even before we had pets. We won't spend thousands on keeping them alive if they are dying.

You have a third adult in your house, and one who doesn't seem to be contributing to the finances in any way.  So why would your husband be watching the kids while trying to work.

And perhaps you could find a weekend job.  Sure, it would suck because you wouldn't get to see your husband much.  But an extreme situation (which, to be very, very clear, yours is) requires some significant sacrifices.  Find a job in addition to your husband's two jobs.

Or even consider enrolling your kids in public school.  You'll likely say no because it feels like a sacrifice, like working, and asking that third person to contribute, and giving up Spotify, and rehoming a couple of the cats, and....  But if you do that, you could easily have the time for a full-time job. 

You can have once sacred cow (though with $170k+ in debt, even that's a stretch, frankly), but you have 5 sacred pets, and a sacred music service, and sacred cell phone service, and sacred homeschooling in lieu of working, and sacred providing housing and paying utilities for a third adult, and...

Seems to me like you have evaluated your situation and realize it sucks and you don't want it to continue.  But you feel like a few moderate changes is enough to earn you the right to a better situation.  But it isn't enough.  You need to get EXTREME for a while.  Set goals and use those as motivation--if you have paid off $x debt by September, then next year the kids can be homeschooled again and you can quit your job.  Once you have $Y debt paid off, you get spotify back.  At $z milestone, you go from three meatless meals a week to 1.  At $A, you get to start buying an occasional item for the kiddos' closets, rather than en entire wardrobe sourced from friends and a Buy Nothing project. 

Your debt is so big it has gravity.  Even if you never add an additional penny to it, it can still quite easily drown you.  One bad thing happens, and you are pretty screwed.  Your husband gets hurt and can't work for a few weeks, he losses a job, your car dies or needs major repairs.  This things can push you from barely afloat to head-under-water.

It's dire.  It's recoverable, but it's dire.  And that means taking dire steps.

[habanero]

^ agree on everything. But if the husband is working 2 gigs to keep the family + pets afloat he is entitled to his Spotify. You can demand a lot from a man, but there is a limit. And Spotify is well within it if it's what helps him keep churning.

But the pets (+ brother given current (lack of) details) and grocery++ spending is the real worry. I can somehow, if I really try, understand why someone with lots of folks around need a single pet. But 5 of them? Beyond me. And when justified by "excersise" as the husband throws frisbee with them (presumably a dog) as "excrsise" is high-level dilusionalism. It might be excercise for the dog in question but not for the frisbee-thrower.

This is an extreme emergency and should be treated as such. The OP does not seem to be willing to do so despite making some very important changes in lifestyle. But now it's time for the tough calls. They are called tough calls for a reason, and that's because they cannot be tackled just by a lack of doing stupid things and staying on course for a lower cost. Those are easy and obvious things.

The tough calls will hopefully be temporary and result in a clean sheet from which something can be built. View it as gratification later vs now and a LOT later and when you say your prayers, if you do, mention your husband twice. Or three times. He's the only thing between some relief at the end of the road and complete and utter disaster for everyone involved. Let him make as much money as possible regardless of what it takes. It's your only reasonable chance at avoiding disaster.

[Villanelle]

^ agree on everything. But if the husband is working 2 gigs to keep the family + pets afloat he is entitled to his Spotify. You can demand a lot from a man, but there is a limit. And Spotify is well within it if it's what helps him keep churning.

But the pets (+ brother given current (lack of) details) and grocery++ spending is the real worry. I can somehow, if I really try, understand why someone with lots of folks around need a single pet. But 5 of them? Beyond me. And when justified by "excersise" as the husband throws frisbee with them (presumably a dog) as "excrsise" is high-level dilusionalism. It might be excercise for the dog in question but not for the frisbee-thrower.

This is an extreme emergency and should be treated as such. The OP does not seem to be willing to do so despite making some very important changes in lifestyle. But now it's time for the tough calls. They are called tough calls for a reason, and that's because they cannot be tackled just by a lack of doing stupid things and staying on course for a lower cost. Those are easy and obvious things.

The tough calls will hopefully be temporary and result in a clean sheet from which something can be built. View it as gratification later vs now and a LOT later and when you say your prayers, if you do, mention your husband twice. Or three times. He's the only thing between some relief at the end of the road and complete and utter disaster for everyone involved. Let him make as much money as possible regardless of what it takes. It's your only reasonable chance at avoiding disaster.

Free Spotify works fine, you just have to listen to some commercials. The man would not be without music. 

[habanero]

Yeah, but when you keep 6 persons and 5 pets alive you have earned the right to a want. If that is music with no ads for a few dollars per month then so be it.

[Villanelle]

Yeah, but when you keep 6 persons and 5 pets alive you have earned the right to a want. If that is music with no ads for a few dollars per month then so be it.

I don't actually disagree.  I just think it's a symptom of a much bigger problem, which is the seeming unwillingness to make hard choices to get this turned around.  Spotify is a small enough expense that in and of itself, it makes so little difference.  It's like a cup of coffee at Starbuck's once a week.  But it shows a mindset (and one that is proven by all the other things they won't change), and that mindset is what got them to be $170k in consumer debt.  They've "earned' an indulgence.  They are "entitled" to a few luxuries.  They "can't possible sacrifice" whatever. 

If it's just Spotify, it's fine.  But it's never just Spotify.   

[ReadyOrNot]

Yeah, but when you keep 6 persons and 5 pets alive you have earned the right to a want. If that is music with no ads for a few dollars per month then so be it.

I don't actually disagree.  I just think it's a symptom of a much bigger problem, which is the seeming unwillingness to make hard choices to get this turned around.  Spotify is a small enough expense that in and of itself, it makes so little difference.  It's like a cup of coffee at Starbuck's once a week.  But it shows a mindset (and one that is proven by all the other things they won't change), and that mindset is what got them to be $170k in consumer debt.  They've "earned' an indulgence.  They are "entitled" to a few luxuries.  They "can't possible sacrifice" whatever. 

If it's just Spotify, it's fine.  But it's never just Spotify.

Agree wholeheartedly, this is the underlying issue.

Regarding 5 pets, another two concerns I have are - who is really taking care of them?  And two - what liability protection is there in case one of the animals attacks the family or another person?

We all love our sweet pets and think they would never hurt a fly, but truth is they are animals and they can be too over-protective or react aggressively to little kids playing too hard with them.  I have personal umbrella protection in case our dogs are too protective and attacks another dog or a person, god forbid. 

I am also constantly cleaning up after the dogs, while my teenage child's full time job is to take care of the dogs.  That means sweeping the floors daily for hair, feeding them properly, giving them baths once every other week, picking up poop every day.  It's a LOT of work just with one pet or two!  I can't imagine the amount of work it takes to care properly for 5 pets.  The amount of excess hair, occasional destruction of furniture / clothing / household items, and cleaning of poop itself is a huge burden.  I wouldn't count on small kids who are being home schooled to do this.  There is so much demand by the OP to do on this, on top of homeschooling 3 kids and caring and feeding for them.

I imagine the house must be a constant disaster, and every minute is a demand for attention for something with the kids or with the pets.  It would make more sense to have parents / in-laws who come and help out, but that doesn't seem to be the case either.

So the layers of bad decisions pile on top of each other to make this mess of a situation.  Once the OP is in it, it's really really hard to get out of.  I'm hoping there is some real progress on this, especially with the suggestion of having kids attend public school, going to work part time, and reducing the pet responsibility.  But most people don't make drastic changes like this...so it's likely we'll see further descent into debt and emergency financial situations. I hope I'm wrong.

[ReadyOrNot]

But the pets (+ brother given current (lack of) details) and grocery++ spending is the real worry. I can somehow, if I really try, understand why someone with lots of folks around need a single pet. But 5 of them? Beyond me. And when justified by "excersise" as the husband throws frisbee with them (presumably a dog) as "excrsise" is high-level dilusionalism. It might be excercise for the dog in question but not for the frisbee-thrower.

I fully agree with you.  Another thought I have is - the pets can be a huge distraction when working from home.  Add another 3 kids + brother & wife it's a full house bursting at the seams.  How is the husband able to do 2 full time jobs working from home that is so busy, loud, and distracting?   How does he have the work space and privacy to do 2 jobs effectively?  He must be a heck of a lot more focused than anyone I know to shut everything out and focus on the work at hand while the house is so busy and crowded.

I work from home part of the week, and it's distracting with 2 pets, 1 child who is mostly at school, and 1 spouse who is away at work.  And I have the entire house to myself, except for the pets, who are older pets from my SO and pretty quiet so they don't bark on my calls.  I couldn't imagine holding down a full time telecommuting job with 5 pets around the house.  And if the dogs barked moderately, they would have be given away because I cannot have barking dogs when I'm on my conference calls.

I most likely have a much bigger house than the OP, as I live in a low to MCOL place with a house that's more expensive than the OP's house in a HCOL place with a smaller price / mortgage.  I can't imagine how this can physically work for so many people and pets in such a small place.

[Freedomin5]

OP, I read your original post and your updated post. I am impressed you stuck with us even though we were doling out some really tough love.  It sounds like you’re already taking steps to cut the low hanging fruit. Good work!

Regarding you working, if your DH is capable of earning two incomes, then I don’t think you should go get a $13/hr job. You’re more valuable at home optimizing expenses and making sure your DH has the best environment possible to earn that money since your DH works from home. We were in a similar situation a few years ago where I was the high earner. DH was a stay at home dad because financially it made more sense for him to care for our daughter and cook and clean and grocery shop and meal plan, rather than having two exhausted parents and outsourcing all of that. He made sure I was eating well and resting well so that I was mentally able to earn the big bucks.

Please keep us updated. I, for one, would love to follow your progress as you kick your debt’s  ass.

[mistymoney]

So your husband is the one that is disabled. But he's the one planning to work 2 FT jobs? That sounds unrealistic long term so you better take advantage of it while it lasts. How old are your kids? Are you staying home for childcare?

The food is the cheap part of having a pet. What will you do if one of them needs vet care? Surgery? What if two of them need vet care in the same year?

I already addressed this in my post edit. My husband has bad knees and sleep apnea. It's not like he can't wipe is own ass. 2 "full-time" jobs that are remote, salaried, flexible in hours, and have unlimited PTO. He has already been learning the software language for job #2 for about 6 months like it was a 2nd job and not getting paid for it. And it is unrealistic forever. We don't expect it to last long term. But we will absolutely take advantage and put all of the extra income into paying off our flaming debt emergency.

Kids are 5, 8, 9 and are home-schooled. I also addressed that I have tried working. However I only have a HS diploma and only brought home about $1,500/month. & had to go to and from work 2x a day at the cost of over $100 in gas a week. That job paid $18/hour as a school bus driver. I might be able to find a job for $13/hour at a fast food place or walmart. However, then my husband would be home with the kids all day while trying to work and be responsible for cooking and cleaning. THAT seems unrealistic.

As far as vet care... It wasn't an issue last year as I guess we were making bad choices and had a small amount of cash set aside for that. One of our dogs did need care twice last year and we paid cash for it.  In my opinion that is the point of having a few thousand in cash in savings.... If it was something life threatening, they would be put down. That has always been our mindset on that, even before we had pets. We won't spend thousands on keeping them alive if they are dying.

rehoming a couple of the cats,

wow - your bias is really showing here! Why the cats? Dogs are generally more expensive.....

?

[Villanelle]

So your husband is the one that is disabled. But he's the one planning to work 2 FT jobs? That sounds unrealistic long term so you better take advantage of it while it lasts. How old are your kids? Are you staying home for childcare?

The food is the cheap part of having a pet. What will you do if one of them needs vet care? Surgery? What if two of them need vet care in the same year?

LOL.  My bias? 

Maybe I was just being casual about the whole thing.  "Pick a couple pets."  I don't care if they are cats or dogs.

I already addressed this in my post edit. My husband has bad knees and sleep apnea. It's not like he can't wipe is own ass. 2 "full-time" jobs that are remote, salaried, flexible in hours, and have unlimited PTO. He has already been learning the software language for job #2 for about 6 months like it was a 2nd job and not getting paid for it. And it is unrealistic forever. We don't expect it to last long term. But we will absolutely take advantage and put all of the extra income into paying off our flaming debt emergency.

Kids are 5, 8, 9 and are home-schooled. I also addressed that I have tried working. However I only have a HS diploma and only brought home about $1,500/month. & had to go to and from work 2x a day at the cost of over $100 in gas a week. That job paid $18/hour as a school bus driver. I might be able to find a job for $13/hour at a fast food place or walmart. However, then my husband would be home with the kids all day while trying to work and be responsible for cooking and cleaning. THAT seems unrealistic.

As far as vet care... It wasn't an issue last year as I guess we were making bad choices and had a small amount of cash set aside for that. One of our dogs did need care twice last year and we paid cash for it.  In my opinion that is the point of having a few thousand in cash in savings.... If it was something life threatening, they would be put down. That has always been our mindset on that, even before we had pets. We won't spend thousands on keeping them alive if they are dying.

rehoming a couple of the cats,

wow - your bias is really showing here! Why the cats? Dogs are generally more expensive.....

?

[DaMa]

She's a high school grad homeschooling 3 kids, and he's ex-military who doesn't believe in mental healthcare.
All my warning bells are going off even without the debt.

@Ohregano, you can do this.  I was in a similar situation at your age, and turned it around in a relatively short time.

You might like reading the Frugalwoods' blog.
Have you read The Tightwad Gazette by Amy Dacyczyn? 

[Morning Glory]

Hello,

I'm glad you are here and you are trying.

The $2500 for food and toiletries is the biggest red flag for me. I understand that you have six people but I have had eight people before and this category was about 1/3 of what you spend. Is there no Aldi where you live? Can you break this down into categories? Are there sacred cows here like organics, wine, fancy brand name pet food?

I think you could turn this into a learning opportunity for your kids. Grow a garden, get some backyard chickens (if the dogs won't kill them), learn how to extreme coupon, etc. Have them go through the flyers and find the best sales. Above all track everything!!!!

I am not going to tell you to get rid of your pets, but they can eat store brand food or Purina dog/cat Chow.  50 cents per pound or less.

You and your family don't need organics or brand name foods either!!! Try to average less than $1/lb for people food.
If you want organic then grow it yourself.

I really really don't understand homeschooling either, but that is your choice. If you would just try the public schools then maybe you could get a part time job during school hours, or take some training yourself (only do this if it's free).

[NonprofitER]

Kudos to you for reaching out and asking for help. This forum can be quite blunt, so we hope you hang in there, despite the feedback.

My biggest recommendation would be to start listening to Dave Ramsey's 3 hr daily podcast.  Everyday. All day. (It's free).
When you listen to other people who are in a similar boat and who have turned it around and become debt free, its incredibly motivating. It gives you hope. It makes your "why" stronger.  When you're "Why" is strong enough, you'll be willing to do anything it takes to get out of the hole. 

Dave gets a lot of knocks from people who disagree with his investing advice - and I can't personally listen to his political rants without enormous eye-rolling - but one thing he does better than anyone is get people motivated to get out of debt.  This needs to become a part of your daily routine. Turn it on in the background when you're cooking, cleaning, tending to the kids, etc.  It will put the necessary fire under your feet to make progress. 

[Laura33]

Thanks, @frugalfoothills -- though I see I've missed most of the initial fun.

So, seems to me you don't have an income problem; even with your DH's single job, you make over $100K/yr, and then you have your brother's disability available to boot.  You have a thinking problem.  And it's a pretty common one -- the most common, honestly:  it's the feeling that because you work hard, because you make six figures, you deserve XYZ.  A nice house.  A SAHM.  Homeschooling.  Supporting your brother.  Tons of pets.  Tons of groceries/staples.  Etc. etc. etc.

You need a mindset shift.  No one deserves material things, period.  Owning a home is a luxury.  Having a SAHM is a luxury.  Homeschooling is a luxury.  Supporting your brother, without using his disability to help you do so, is a luxury.  Listening to Spotify without commercials is a luxury.

So go back and look again at your list of "must-haves" and "won't dos":  every single one of them is a luxury.  Every one.  That is why you have such massive debt.  And that isn't going to change until you change your mindset.  It's not that luxury is bad; we all have things that matter a lot to us, and that we're willing to work extra to have.  It's that you expect them, that you have the right to them, that you can't possibly do without them, rather than seeing these as fantastic, wonderful extras that you are so lucky and blessed to have in your life.  Because the weight of all that debt strips away that feeling of thankfulness. 

The reality is that life is an "or," not an "and":  you can have some things, but you can't have everything.  You have operated for so long under the philosophy that you were going to live the kind of life you wanted and get what you deserved regardless of how to pay for it.  And unfortunately, now that means that not only can't you afford your current lifestyle, but you have a whole bunch of those past lifestyle choices to pay off.  So now you have two choices:  either give up the luxury of being a SAHM and homeschooling the kids; or go all-in on being the best frugalista homemaker you can be.  If you are not going to bring in an income, your most important job is to minimize the outflow.  Look at how hard your husband is working:  he is taking on an entire second full-time job to bring in the exta money you need to pay that off.  It is your job to work just as hard to minimize expenses. 

Yes, he can keep his Spotify -- that's not the low-hanging fruit and will probably create more marital disharmony than it's worth.  But your grocery and household budget needs to drop precipitously.  See if you have a friend who can keep your dogs for a while.    See if you have anything you can sell.  Charge your brother rent, or at least grocery money.  See if he can help watch the kids so you can menu plan.  Etc.  Behave as if this second job of his is never going to happen. 

[SuperNintendo Chalmers]

My husband does not know I am on here posting this. I don't see any issue with it. But I know he would freak out and say I was sharing private info with a bunch of strangers and I shouldn't be doing that. I disagree and want advice. I have and will definitely take some of the advice. Other things I think won't work for us. I'm going to do what I can.

I don't want to presume anything about you or your family, so if I am off-base with this I apologize.  But with all the big changes being recommended here, it seems like a threshold question is:  Are you comfortable raising and talking about these issues with your husband?

From your earlier post, you mentioned trying to go to therapy but your husband saying it's a waste of money.  Did you stop going because of him, or because you weren't getting what you need from it?  As you point out, it probably would have been a positive from a financial perspective if it addressed the issues that led to the overspending.  So curious why you stopped going. 

I am similar to your husband in that it's hard for me to imagine going to a therapist.  But I would never impose that view on anyone, much less my spouse. 

Again, I'm not trying to presume anything, and you and your family seem clearly full of love for your animals and relatives.  But if you are not telling your husband that you are posting here for fear of what he might say or do, is it realistic to tell him that you think the kids should go to school, you're getting a job, and the pets need to go?  (FWIW, I think you should keep your pets, although it will require dramatic changes elsewhere.)  Are there communication issues with your husband that, if addressed, might make the journey easier?

Good luck - I agree with others that it is brave to face these challenges and do the hard work to make your financial situation better.  You have a lot going for you and I think you can definitely do it. 

[ericrugiero]

You have taken the important first steps of recognizing the problem and deciding to do something about it.  That is huge and admirable.  Here are a few thoughts on your next steps. 

First, fix the spending issues that put you in this situation in the first place.  If you don't fix the spending, then anything you change won't last and some things you might do could put in a worse situation in the future.  Look at doing a budget so you can track where your money is going and spend it much more effectively.  The $2,500 category should give lots of opportunity for improvement.  Keeping Spotify is an OK decision but it does seem like you have a lot of sacred cows that you won't budge on.  You ARE going to have make some tough decisions to clean this mess up.  Also, your husbands job (in your current situation) is to make the money for your family.  Your job is to spend the money as wisely as possible.  That is just as important.  Oh, I almost forgot, CUT UP THE CREDIT CARDS!  Someone (or more) in your family has shown that they can't manage credit cards.  If you don't pay them off every month they will kill your financial future as you are seeing now. 

Second, the high interest debt is killing you.  Like others mentioned above, the interest is almost as much as you have been paying.  Continuing like that will be a never ending cycle that will end up with your family frustrated and bankrupt.  The good news is you have recognized the problem and are attacking it.  There are options for reducing the interest rates.  Call the companies and tell them you are struggling and trying to avoid bankruptcy.  See if they will do anything to help you with interest rates.  Look into credit consolidation loans.  You may be able to find something in the 10-12% range to put your high interest loans into.  Also, you have some home equity.  You could refinance or get a home equity loan which would both be much lower interest rate loans than your credit cards.  (IMPORTANT note: If you don't fix your spending, this is a terrible idea.  You will take your credit card debt and put it on your house which means you must either pay it off or lose the house.  Going bankrupt with "just" the credit cards would be much better than losing the house.) 

Right now you have a big mess.  Dave Ramsey would call it a "big hole".  The good news is you have what he would call a "big shovel" in your husbands very nice income.  You can do this.  The key is to not do it half way.  Get your husband and brother on board and attack this debt hard core.  If you go hard core for two years you could have this mess cleaned up.  Think about how it would feel to have no debt other than the house.  You would have much less stress and your husband could go back to one job.  Lots of people here don't like Dave Ramsey for his less than optimal investing advice.  But, he is a great motivator in situations like this.  If your husband agrees there is a problem you could listen to Dave together and get motivated. 

People are giving you tough love in this thread.  Don't take it personally.  We are all on your side and want you to succeed.  You can do this but it's not going to be easy.  Focus on the goal and get your family on board so you can do it together. 

[Malum Prohibitum]

Better to start with highest interest rate if you can stay motivated. You can no doubt decrease the $2500 food budget and move to cheaper cell phone plans over time, e.g., Republic Wireless for $250/year.

Just want to point out that $2,500 is not just food. It includes food, toiletries, cleaning supplies, animal food, flea, tick, dewormer. I agree that it could be lower. I'm aiming for a $1000 reduction. Which would leave us about $200/week to feed 6 people.  Animal expenses are for 2 cats & 3 dogs. We buy their food at costco. Generic flea/tick. Broad spectrum worm preventative is only by prescription. We did try a few times to not purchase this specifically as it is expensive. Every single time, all of our animals got worms. Unfortunately our neighborhood is teaming with vermin and birds. There is no escaping it.

I am just curious on how you are doing with that food budget.  I have three kids at home and two adults.  I guarantee I eat more than your husband and brother put together (bodybuilding lifestyle), but my food budget is less than $1000 total, and, like you, it includes all the extras we buy at the grocery store/Walmart.  I live in the south, so ticks and fleas, yeah.  Nevertheless, I think you need to do some work to get that budget down.  I have to hand the credit here to my wife who comparison shops online and organizes a menu and shops once every ten days - AND she feeds us very healthy meals.She cooks, and she has made herself so good at it that my kids often complain about restaurant food, LOL!

So what changes have you made and how is the food budget now doing?