Starting out...need help!

[Irishmama9]

Well, Christopher and I sat down and decided we need a reality check. We are expecting our first child October 26th, and would like to start straightening things out now.

We have the following debts:

Omni Loan: $1639.00 (Almost 33%!)
Star Card: $648.00
Qwest: $187.00
Baja Cable: $400.00
Truck Pmt: $8688.00

We are going to start September 1st and we will up the Omni payment of $182 up to $350, while paying the minimums on everything else, and snowballing from there.

With that plan:

Omni Projected Payoff: January 2010, 3 months early.
Star Card Projected Payoff: February 2010
Qwest Projected Payoff: January 2010
Baja Projected Payoff: March 2010
Truck Projected Payoff: November 2010

I also have a few things I'd like to start saving for. I currently drive a '89 Jeep Cherokee. It has a 6" lift kit in it, 35" tires, etc. The truck payment mentioned above is a 2003 F150, single cab. 6" Lift kit, 35" tires. Now that we've sat down and taken a look at things, I am not willing to finance another car. (We aren't really in a position too anyways. Being denied repeatedly is what forced us to sit down. Nobody will give us a second loan on one income, and I'm glad for it now.)

We need another car, but as I told him, I'd like to pay cash for it. So, that's going to require probably $6,000 in a savings account. We're also going to have quite a few baby related expenses coming up very soon, although we don't know what they are yet because the baby shower isn't until August 9th. So that needs to be taken into consideration. My mother already bought us a new crib, so that's out of the way. I'm not really sure what to do here, because we really can't wait that long to buy a new car. We drive to New York at least twice a year, and have to rent a car in order to do so because his truck only fits 3 people, and the Jeep wouldn't even make it to Denver from here. So that alone is a huge waste of money, and a big part of the reason we need a new vehicle. Any advice here?

Our monthly income is $3600.00. Our monthly expenses include the following:

Rent $600.00.
Child Support $350.00
Star Card $43.00
USAA $95.00 (Car and Renters Ins)
Baja $50.00
Omni Loan $182.00
Direct TV $125.00
Citi Financial Auto $278.00
AT+T $176.00
Qwest $40.00
Gas: $200.00
Food: $350.00
Total: $2489.00


The AT+T is really at the minimum that it can be. It's 3 lines, one for his mother.
The Direct TV is being cut tomorrow.
Baja isn't even our bill. His ex wife ran it up and never paid it when he was in Iraq, and he "won" it in the divorce.
USAA is at the minimums already.
Qwest is an old bill that was also "won" in the divorce.
Rent is cheap because we don't pay any utilities, and it includes use of the washer/dryer. It may go up to $700 if we can convince our landlord to give us the room they keep. We rent their basement, and their TV room is down here. If they wont give that up for $100 a month, we'll have to move. There's no way we can fit a baby in here without it.
Food is the next thing I'll be tackling. I would like to keep it below $350 if possible. I haven't figured out what diapers will cost us yet. We're planning on using disposables at first. Pretty much until we run out of what we get at the baby shower. During that time we'll be stocking up on cloth diapers. Prefolds and covers.


I know this was long, and if you made it through it I appreciate it. I'd love any advice you can give me, I'm rather lost!

[homemaker66]

First of all Welcome to the FV family. Go to the libaray and get David Ramsey "Total money make over" book and start following his advice. I would still cut down on the AT&T bill regardless who is on it. He needs to explain to his mom that she needs to go get her own plan. Direct TV take out and use the old method of watching tv. With Direct TV it is always re runs anyways. If you want to watch something special watch it on hulu.com through your computer. I would start with the smallest bill and pay that off first then snow ball to the larger one. It will not take to long to get a good snowball rolling so then you can pay off the larger one then finish it off with your income tax money (if you get one). Most important is read,read and more. This place is a great start for you. Good luck.

[Greebo]

First - Congratulations!

We have the following debts:

Omni Loan: $1639.00 (Almost 33%!)
Star Card: $648.00
Qwest: $187.00
Baja Cable: $400.00
Truck Pmt: $8688.00

We are going to start September 1st and we will up the Omni payment of $182 up to $350, while paying the minimums on everything else, and snowballing from there.

If you pay off your debts in the smallest to largest balance order, you will knock a number of them out more quickly, which is a HUGE Morale Boost. You could have Qwest gone this month, Baja next month, Star about 2 after that, and then focus on Omni. Yes, Omni charges more interest, but you'll be keeping a nice chunk more per month, and will be inspired by the early successes.

Just a possible alternative approach.

We need another car, but as I told him, I'd like to pay cash for it. So, that's going to require probably $6,000 in a savings account.

First - why do you need another car? Is the truck dying?

Second, go to www.kbb.com and get an estimate on the value of your current truck in a direct sale (not trade in). Then start a bit smaller - maybe $2,000, and add the value of truck to that. Look for an old Honda Odyssey - for around $2k you can get one if you shop around - and they're awesome "clunker" family cars (minivans).

I'm not really sure what to do here, because we really can't wait that long to buy a new car. We drive to New York at least twice a year, and have to rent a car in order to do so because his truck only fits 3 people, and the Jeep wouldn't even make it to Denver from here. So that alone is a huge waste of money, and a big part of the reason we need a new vehicle. Any advice here?

"Mom I'm sorry but we can't come to New York this year - we are fixing our finances and a trip isn't in it this year. Can you come visit us?"

Our monthly income is $3600.00. Our monthly expenses include the following:

Direct TV $125.00
AT+T $176.00

Get rid of the premium channels, get rid of the HD, get rid of the expensive phone plan.

Yes, you heard me. Those are luxuries that, with your debt, are hurting the future financial security of your child.

If AT&T is for cells, is your contract up? If its for land line, call Vonage and cut your land bill down to about $30/month.

It may even be worth it to break your contract, pay the fee, and get monthly cell phone plans that are dirt cheap. You don't need FANCY - you need functional. You should be able to cut at least $100/month off those two items alone.

The AT+T is really at the minimum that it can be. It's 3 lines, one for his mother.

So it is land lines? Vonage. We have a vonage device w/ 2 lines on it (business and home) for $50/month - 1 line, $25 and THAT is the fancy plan.

The Direct TV is being cut tomorrow.

oh good

Baja isn't even our bill. His ex wife ran it up and never paid it when he was in Iraq, and he "won" it in the divorce.
USAA is at the minimums already.
Qwest is an old bill that was also "won" in the divorce.

Oh - I almost forgot. What kind of work does Hubby do? And how soon can he start at his new part time job working for Fed Ex or UPS flinging boxes or Domino's deliering pizza? How quickly would an extra $1,000 a month get rid of this debt problem? C'mon Dad - step it up a notch for mom and baby. Time to get SERIOUS here.

Rent is cheap because we don't pay any utilities, and it includes use of the washer/dryer. It may go up to $700 if we can convince our landlord to give us the room they keep. We rent their basement, and their TV room is down here. If they wont give that up for $100 a month, we'll have to move. There's no way we can fit a baby in here without it.

You would be surprised how little space people actually *need*, especially when they can't crawl. Think "pioneer days" and the 1 room 10x10 cabins that families of 7 fit in. Remember, this isn't PERMANENT - this is until you're out of debt. How long is that going to take if Hubby works 2 jobs and you guys really live beans and rice?

From looking over your situation, honestly I think if you REALLY get into intense mode you're 6-8 months from debt freedom. I mean right now your budget indicates almost 1k a month - hubby working a 2nd job for an extra 1k means your 10k debt load is attacked by a 2k a month surplus. 6-8 months is actually me letting you have SOME kind of life in the process.

[Monner 1]

I think Greebo said it all and it is a good plan to follow. Also, welcome to the Village.

Monner

[ladykemma2]

let everyone you know you are expecting and tons of baby stuff will come to you.

vacations and cable tv while on baby step 2 are out of the question.

you can do this!

[ilovechocolate]

You don't need nearly as much baby stuff as you think you do. Believe me, that baby won't care if he/she is wearing yard sale clothes or brand-new items from the mall. And ask around----people love to give things to an expectant mom/new baby. Have you checked Freecycle or Craigslist? You may find lots of baby items there.

[Judi Dial]

and there's a lot of good advice here. Also, you might want to look at Amy D's Frugal Zealot discussion about diapers and making her own plastic pants, if I remember correctly. I've never had kids so I only vaguely remember the article.

Good luck!

Judi

[kita]

Since you have access to a washer and dryer use cloth from the beginning. Tell the person who is running the shower so you get cloth diapers as gifts.
I really think that if you have a crib, can breastfeed, and get cloth diapers at the baby shower you will be practically set up for the baby. I would sit down and write what you need for clothes etc. for the baby and stick to that ...making sure you have enough clothes for a one-year-old before buying or keeping gifts (with tags on them) for newborns. I am sure that there are lists on the internet about what a bare bones wardrobe is for a child. Onesies, six or seven everyday outfits, two dressy outfits, six or seven pj's And yes it is yard-sale season....
Amy Z had a great system of buying clothes cheaply, storing them by size so that she could see what she had to have and had to get.
Other furniture is optonal. If you can get a regular dresser free from Freecycle or Craigslist, you are set. Oh, maybe a baby bathtub, although I know my mom bathed all of us kids in the kitchen sink so it can be done. I really have never seen many people use changing tables. The floor with a blanket, the bed with a blanket, your lap, and okay yes, sometimes a changing table.
Just remember that you have things you NEED and things that would be nice. Make sure the NEED is taken care of before you hit nice.

[kita]

And oh, travel to NY? I think you are far enough along to excuse yourself from the trip until after the baby is born. Or look at the cost of flying compared to driving. If you are going to see your mother as some have suggested, then fly her out.

[FrugalMomof3]

I think Greebo hit the nail right on the head.

Your expecting a baby so things need to be cut especially that renting a car to visit your mom, have her come to you this time.

You dont need a new room for the baby, the baby can stay in your room thus saving you $100 more per month to put towards debt.

Why do you need a new car? Wait till the old one dies and in the meantime save up for another one to pay with cash.

While you have the income you need to cut those cell phones and other luxuries as Greebo mentioned, these are luxuries NOT necessities.

Once your finances are back in order then you can consider adding a luxury here and there but to get focused on the debt at hand and getting it down, things need to be cut down.

[Irishmama9]

Greebo:
No, the Jeep is not dying. It’s simply not safe for a child. It’s essentially a rock crawler.
What the truck is worth is irrelevant since it is not and will never be, going anywhere.
Going to NY is not an option. I never said I was going to see my mother. I said we went to NY twice a year. I’m not flying my entire family and his entire family to NY. Seeing our families is far more important than getting out of debt one month sooner. We want to cut out having to pay for a rental car, that’s it.
We already got rid of the premium channels, the HD is staying.
The AT+T is 3 cell phones, not land lines. We couldn’t have a land line if we wanted one. And no we will not be telling his mother that she needs to go get her own line. She had her own line. She was paying a fortune for it. They are already at the minimum that we will put them at. And no we will not be breaking our contract.
He’s in the Army so no I don’t think he needs to “step it up” since he’s already defending his entire country.
It’s not about “crawling space.” It’s about having someplace to put the crib.
LadyKemma2:
Nobody said anything about going on vacation. If we were going on vacation we wouldn’t be going to New York, that’s for sure.
And we’ll be keeping the cable TV since it’s the only entertainment we pay for.
Kita:
People will not buy us cloth diapers. My mother says, “You bet I won’t be buying that crap for my Grandson, I won’t be responsible for doing that to him.” So no.
And since we have to drive everything back to Colorado after the baby shower, chances are we’ll be getting clothes and not much else. So no, we won’t be all set up.
And no, I won’t be excusing myself from the trip to NY. I think people would be pretty miffed if I didn’t show up for my own baby shower.
I don’t see how flying 3 people would be cheaper than driving…
FrugalMomof3:
Again, I don’t know where this renting a car to visit my mom thing came from. All I said about my Mom is that she bought us a crib. We’re not renting a car to see my mom. Both of our entire families live in a ten mile radius. I can’t fly them all here.
No, the baby can not stay in our room without co-sleeping and I won’t be doing that.
We need a new car because we can’t put an infant seat in a 3 seater truck because it’s a manual, and the Jeep isn’t safe.
No, we aren’t cutting the cell phones. When we live 2000 miles from our families, none of which own computers, we won’t do that.

Thanks for the replies.

[ladykemma2]

boy, i guess she told us!

[ladykemma2]

Greebo:
No, the Jeep is not dying. It’s simply not safe for a child. It’s essentially a rock crawler.
What the truck is worth is irrelevant since it is not and will never be, going anywhere.
Going to NY is not an option. I never said I was going to see my mother. I said we went to NY twice a year. I’m not flying my entire family and his entire family to NY. Seeing our families is far more important than getting out of debt one month sooner. We want to cut out having to pay for a rental car, that’s it.
We already got rid of the premium channels, the HD is staying.
The AT+T is 3 cell phones, not land lines. We couldn’t have a land line if we wanted one. And no we will not be telling his mother that she needs to go get her own line. She had her own line. She was paying a fortune for it. They are already at the minimum that we will put them at. And no we will not be breaking our contract.
He’s in the Army so no I don’t think he needs to “step it up” since he’s already defending his entire country.
It’s not about “crawling space.” It’s about having someplace to put the crib.
LadyKemma2:
Nobody said anything about going on vacation. If we were going on vacation we wouldn’t be going to New York, that’s for sure.
And we’ll be keeping the cable TV since it’s the only entertainment we pay for.
Kita:
People will not buy us cloth diapers. My mother says, “You bet I won’t be buying that crap for my Grandson, I won’t be responsible for doing that to him.” So no.
And since we have to drive everything back to Colorado after the baby shower, chances are we’ll be getting clothes and not much else. So no, we won’t be all set up.
And no, I won’t be excusing myself from the trip to NY. I think people would be pretty miffed if I didn’t show up for my own baby shower.
I don’t see how flying 3 people would be cheaper than driving…
FrugalMomof3:
Again, I don’t know where this renting a car to visit my mom thing came from. All I said about my Mom is that she bought us a crib. We’re not renting a car to see my mom. Both of our entire families live in a ten mile radius. I can’t fly them all here.
No, the baby can not stay in our room without co-sleeping and I won’t be doing that.
We need a new car because we can’t put an infant seat in a 3 seater truck because it’s a manual, and the Jeep isn’t safe.
No, we aren’t cutting the cell phones. When we live 2000 miles from our families, none of which own computers, we won’t do that.

Thanks for the replies.

wandered away, wandered back. Ok, I'll bite: look, (gives stinging dope slap on back of your head) (standing with my finger in your face) i earn LESS than you do. in 2 years i paid back about 8000 in credit card debt, and saved 11,500 in my emergency fund.

do you think that some of us know what we are talking about? every dime counts. you are THOUSANDS of dollars in debt and you should not be paying for your 42 year old (guessing? she's not 80) mother's cell phone. you cannot afford a trip to new york, doesn't matter how you try to justify it. you are in debt, cable tv is a luxury you simply cannot afford.

you can turn the cable back on after you have paid all your debts and paid cash for a replacement car. then you can have a trip to new york after you have a 6 month emergency fund saved up.

if you truly need a new car, buy a used 4 door sedan beater car.

[Domestic Gal]

Guess she is not wanting/willing to get out of debt!!
Getting out of debt is actually changing your mindset about money.
Which means lifestyle changes and sacrifices.

[MaryCarney]

WOW, I hardly know what to say.