Looks scary on paper

[Newsnerd68]

So, as backwards as this might seem, my fiance and I have lived together for more than a year and are getting married next year, but we've never had a serious discussion about money until today.

I know, I know, it's important and the cause of a lot of marital strife, but somehow we avoided it. So a couple of days ago, I said we need to talk about this.

I had no idea how much the house payment was, how much bills were, what bills we were paying or how much he made. I knew nothing. He never acted like money was a problem, so I guess I assumed it wasn't.
BIG MISTAKE!

What brought it on was this: I might not have a job after this month. I work at a newspaper and that business is sinking fast. In fact, I have been an unofficial employee for a while now and make much less than I did before. And I am a full-time student, so my earning capacity is limited right now. The paper I work for is reorganizing, and although I have no official word, there might not be a budget for 'stringers' after July. So I decided we needed to take a look at things and see what would happen if the worst is true.

YIKES

I was stunned. On his income only, after bills are paid and money is allotted for gas, groceries and necessities, there's only $34 left per month.
GULP

So now, we are plotting strategies to free up some money. We're looking at cutting back on Directv, cutting back phone service (after the contract is fulfilled), and we have already cleared out a storage unit, so that cost is gone.

Here is the question I have for y'all:

There is a small loan that we pay $80 per month on that has a balance of a little more than $400. We can likely scrap together the funds to pay it off sooner than the scheduled 5 months that are left, but after that, should we roll that $80 into the CC payment ($40 per mo. w/ $2100 balance) or use the $80 in an emergency fund?

Also, I could use any money saving or money raising tips you have. Seeing this on paper scared the hell outta me and I can't see anyway out of this. Help!!

[Debbie-cat]

I would pay off the small loan immediately. Then I would split the $80 and put half on the credit card and half into an emergency fund. Glad you had that talk!

[Shelli_wnj]

Do you have the $1000 baby emergency fund? If so, I would roll over the $80 totally to the CC. If not, what Debbie said makes sense, half and half. Congrats on the upcoming wedding!

[Newsnerd68]

Thanks guys... I appreciate the feedback.

We don't really have and emergency fund. I know...... but like I said, he never talks about money and ha always just provided whatever, whenever. He does have $70 taken from each check that is automatically invest in Wal-MArt stock (he works for them) so that has been the emergency fund. He can cash that in whenever he wants or when we need. It adds up fairly quickly.

I think half and half is a really good idea for a while. How much should an emergency fund be?

[Debbie-cat]

A good solid emergency fund is 3 months wages. That is a good start.

[frugalwarrior]

Start reading Dave Ramsey immediately. You can't be married w/o out financial discussions and a plan. You should get a part time job and knock out that debt. A baby E-fund for emergencies is $1000. The minimum three months expenses. I hope you aren't going into debt for the wedding you can't afford it. Read through old entries and go to the library to find books. Get a binder and start writing down what you pay out,anticipate expenses. Hopefully you will get wedding money to payoff that CC and put togther an E-fund. Once you get married you have 1 credit rating and all the other guys bills become yours. Get a copy of your credit report and his before you are married.

[Newsnerd68]

I am on the waiting list at the library for a Dave Ramsey book. Also, I would LOVE to find a part-time job if I lose this one, but so far I haven't had any luck. There is nothing to be had and believe me, I've tried. I apply for at least 2 jobs a day, have a page on careerbuilder.com, monster.com and the college job Web site. I'm also in the ESC system with a resume on file there too. But, I'll keep looking.

And there is NO WAY we're going into debt for a wedding. It's going to come in at about $1200 which will include park rental fees, food, our rings and clothing, flowers, decorations, etc. It's going to be a potluck reception and we're getting married under a tree by the lake at a park.

Thanks for all the advice everyone!

[FrugalMomof3]

Congrats on the upcoming wedding and I would knock out that $400 loan as soon as possible and move that $80 you were paying as the half and half as mentioned above. Most would do just the opposite and get the CC debt knocked out, but in today's economy, having at least a little cushion in savings helps.

[frugalwarrior]

Sounds good so far Do you have any talents you can do on the side like print cards and sell or make jewelry,etc. Etsy or freecycle or ebay can net some money. Resell from garage sales,paper delivery(well its money),sell coupons on the internet from the recycle bin?? Walk pets,house sit,sell designer labels on line?? Bake or cook,run errands,be a gift shopper? My friends are always trying to pay me to look for items at G sales. Designer kids clothes sell good on the internet. Some people buy unpaid storage units and sell the cntents in an auction. When we were first married we sold scrap computers for $100. One show we made enough for a washer and dryer cash. You look artsy. Just step outside the box and go underground w/ money for awhile.
Afriend of mine make art out of scrap metal. Money is all around if you think differently but fiance needs to step it up too. You can do just about anything for a couple of months to be more relaxed later right.

[frugalwarrior]

Congrats on your wedding by the way. It's late. i don't know your buget but heres some

Progressive has proved to be a cheap ins. for us
-save $100. by paying 6 mo. at a time
-they now have homeowners for add'l. discounts
-could you skip direct tv.
-would working at home save you money-we save gas,co. pays part of internet and phone,less wear and tear on car
-How long until you finish school-could you make it on your unemployment until you finish. Would this net you financial aid.
-cook cook for the week incl. lunches take to school/work incl. coffee
-coupon clip while you watch tv. Keep the file in your car.
-exchange those wedding gifts. Don't keep stuff you can't use
-G.sale,estatesales.net,rummage sales just before they close have deals!!
-Salvation Army 5/5.00 clothing on Fri.

[kita]

"So, as backwards as this might seem, we've never had a serious discussion about money until today."

I've believed that many people who are married have never had a serious money discussion involving goals and budgets. You aren't as backwards as some.

[strezzed]

You've gotten some great advice so far from everyone . so I'm just going to say congrats on the upcoming wedding. It sounds like you've thought and planned that through!

[a.nonymous]

So, as backwards as this might seem, my fiance and I have lived together for more than a year and are getting married next year, but we've never had a serious discussion about money until today.

Not at all as backwards as you think. Before my wife and I got married, we didn't talk much about money, either. Once we got engaged, we took stock of what we're bringing into the marriage (part of setting up our pre-nuptial), though.

Here is the question I have for y'all:

There is a small loan that we pay $80 per month on that has a balance of a little more than $400. We can likely scrap together the funds to pay it off sooner than the scheduled 5 months that are left, but after that, should we roll that $80 into the CC payment ($40 per mo. w/ $2100 balance) or use the $80 in an emergency fund?

I would go against the others here by advising to get the baby emergency fund set up first and foremost. Scrap the money together as planned, put it towards a $1k BEF, and if something is left over, get going on the smallest debt.
You can't afford to not have a BEF in place. If anything goes wrong (car needs repair, etc), you'll be hard pressed to resist the temptation of getting debt to sort it out.

We don't really have and emergency fund. I know...... but like I said, he never talks about money and ha always just provided whatever, whenever. He does have $70 taken from each check that is automatically invest in Wal-MArt stock (he works for them) so that has been the emergency fund. He can cash that in whenever he wants or when we need. It adds up fairly quickly.

An investment in stock is not a good emergency fund. I understand that there is emotional attachment if it's the company he works for, but face the facts, if Wal-Mart happens to release bad results, their stock as well as your "emergency fund" tanks, it doesn't do the job of bringing the bit of stability that an emergency fund should provide.

Before I started my DR style makeover, I had a modest amount of money invested in stocks and funds. I also always did well with those, but even I can't claim that my best investments would be immue to bad markets. If the market tanks as a whole, my stocks would have taken a hit as well. My loan payments won't go down simultaneously, though. So I liquidated all investments that had my name to it (I only have long-term positions that I've saved for my god child and my wife's nephew left - so technically it's not my money) and used it to set up my baby emergency fund and used the rest to pay off debt.

Yeah, that did hurt but ultimately it is the wise thing to do if I want to become debt free.

So, to get back on topic, here's my advice:
- Cash out Wal-Mart stock
- Scrap together as much cash as you would to pay off the small loan.
- Scrap together some more cash. If there's anything you can sell that you don't really need, do it.
- Set up BEF at $1k. Do not touch it for anything else but a true emergency.
- Throw the rest of your cash towards debt. Smallest balance to lowest. If balances are fairly similar, give the higher interest balance higher priority.

By the time your debt has taken a good hit, you should have had the chance to read DR's Total Money Makeover. From there on, it's pretty straight forward to simply apply his philosophy.

[Greebo]

I was going to say pretty much what a.nonymous said. But now I don't have to.

[forHISglory]

Also consider the tax advantages of being married. Anyway you can move up the date? It's not one of the bigger sources of money, but it can save you some in taxes.