Newbie with a couple debt reduction ?s

[mndtrp]

To me it's about stepping up and taking responsibility....it is very kind of the parents to allow them to live rent free, but let's face it, it's not helping them......that's a good point about disposable income, too, but as an adult it's 'fake', it's just there because responsibilities are being overlooked and people are enabling. OP, please don't think I'm coming down on or criticizing you, I worry it may come off that way- I'm simply making suggestion to help get you on the track you say you wish to go down, getting things right with your finances.

I've seen where parents will charge their children rent, but save the money unbeknownst to the child in a separate account. Once the child moves out, the money is returned for some sort of positive payment. Down payment on a house, finish car loan, college payment, whatever the parents think is a good idea. I'm not entirely opposed to this idea.

[bmd1011]

This is not so much a 'getting out of debt' suggestion as a 'do what's right' suggestion, but any reason you pay NO rent, not even a minimal amount, say $200 a month? Seems counter-intuitive to becoming debt free, but ti's the responsible thing to do, getting on board with facing up to that reality may help you go further in other areas. You are 26....grown-ups who live at home and have a job should pay rent, IMO. Doesn't have to be huge, but would be taking a step towards being more responsible for your own situation, and I'm sure your parents wouldn't mind the help, even if it's just covering your food and electric usage each month! While it may seem like one more expense in the month, to me it seems like one more way to grab control of your situation.

I have discussed all of this with my mother already. During the school year, while my younger sister is in school I pay the cost of her after case (close to $200), as well as always buy my own food.... Also 2 of the credit cards in my debt snowball are in my parents names- some is my debt, but not all. I am incurring about $4000 debt to my snowball as a sort of "payback" for over the years...

[bmd1011]

And with the tanning, too. Literally. No offense but I can't think of anything that is a bigger waste of money besides cigarettes, but maybe tanning more actually because at least you can do that for free (if you so desire to do something so unhealthy that is)...

As far as where all the money "goes"- it sounds like it goes right down the toilet. I'm going to make a generalization, if you are someone that tans, then you are probably someone who also "splurges" on lots of other useless beauty items (getting nails and hair done, hair products, makeup products, skin products) and not to mention clothes and shoes. Maybe that isn't the case but they seem to go hand in hand.

I agree to let go of the car. Let go of the entertainment (eating out with friends, etc). Let go of the tanning (and all of the other "wants"). If you can do this, you will QUICKLY reach your goal, especially since you live at home!

Good luck!

You make a good point, and I used to be the nails/makeup/clothes/shoes person, but over the past year or so I have eliminated all of that. With my part time job being at a tanning salon, I have a bit of a requirement to have some sort of tan to my skin, which is why I do tan.

I honestly believe my money used to "go right down the toilet" b/c I would spend so much on dining out/fast food, going out with friends doing nothing (but wasting alot of money), as well as splurges. I have cut back on that lately, but obviously not completely enough.

Right now I have my cell phone (data plan should be cheaper, but I use it constantly....), weight watchers, and the gym. They are the things I can cut back on to eliminate a little cost, but the gym & phone are both under contracts.

[bmd1011]

Hmm, one thing that stands out to me:

1. You're paying for Weight Watchers and a gym. This would seem to indicate you struggle with controlling your weight.
2. You go out to eat with friends a lot.

If you didn't do #2, you might be able to cut Weight Watchers. I'd recommend educating yourself on Nutrition and become familiar with the term "macronutrients" and start doing some calorie counting and figuring out just how bad you're eating when you go out. Can really get some of that spending under control.

And, yeah, not to beat a dead horse, but that car payment is brutal.

You are correct, and yes #2 very much impacts #1. I have thought of switching to a free online program (Spark People) but am not sure if I can do it alone...So far in the past month I have SIGNIFICANTLY cut back on going out to eat, which is also allowing me success on WW. I need to weigh the pros & cons of switching to another program and if it will be beneficial (Cost and weight wise)

[bmd1011]

Again, I really do appreciate all of the advice/suggestion/tough love everyone. I feel like I really have a good idea on what needs to be done in order to get my situation in order.

2 close friends are getting married out of state next weekend, so I am going to that (staying 30 minutes away for $35 a night thanks to priceline compared to the $300 a night hotel the wedding/ reception is being held at!). So I have already set out my budget for that for food/gas, and for once feel in control and know what my priorities are. This time around it's to pay the bills first, not have fun then scramble around with whats left to see what bills I can pay, and which I need to wiggle and wait on.

Hugs to you all.

[Frugal Sooner]

I like your attitude and willingness to take constructive criticism!
It does sound like tough love, and can be hard to hear.
But believe me, it's coming from people (like me) who have gone down this road and learned hard lessons.
So the advice is coming from a heart that wants to help others and keep them from making the same mistakes.

[mndtrp]

You are correct, and yes #2 very much impacts #1. I have thought of switching to a free online program (Spark People) but am not sure if I can do it alone...So far in the past month I have SIGNIFICANTLY cut back on going out to eat, which is also allowing me success on WW. I need to weigh the pros & cons of switching to another program and if it will be beneficial (Cost and weight wise)

For what it's worth, the only people I've found that have been able to lose weight, and maintain that weight, have stayed with Weight Watchers. I've seen many people go through countless diets, as well as other programs, but WW seems to be the only thing that truly works. I imagine it's because it changes a person's lifestyle, and requires you to pay attention to your food. It's a budget, essentially.

If you are looking to cut things, I implore you to look in other areas first.

[khaski]

No rent... still living at home with the rents until I can afford to live on my own. Around here it'd be close to $1000 for a one bedroom apartment.

You also don't include rent/payment for housing or whatever in your breakdown....you don't want to overlook in your calculations if it's a regular expense, or even most-of-the year one. Is there a reason you feel you need the credit monitoring service? Unless you have reason to suspect someone stole your identity, you might consider cutting that expense at $8 a month- that's almost $100 a year. You can get a free report from each of the credit bureaus 1x a year, check one every 4 months, you're covered. If you have a reason to suspect someone has stolen/is trying to steal your identity, it might make sense to keep it. It would be a 'small' savings should you cancel, but a few small savings added together over time make for BIG savings!

[shoiji]

You can still get together with your friends. Just change up what you do with them for free or really low cost activities. Such as going to the park, finding free events in your area, volunteering at events like fundraisers, going to museum and gallery openings. Most likely your friends will appreciate not having to constantly spend money also.

[mndtrp]

You also don't include rent/payment for housing or whatever in your breakdown....you don't want to overlook in your calculations if it's a regular expense, or even most-of-the year one. Is there a reason you feel you need the credit monitoring service? Unless you have reason to suspect someone stole your identity, you might consider cutting that expense at $8 a month- that's almost $100 a year. You can get a free report from each of the credit bureaus 1x a year, check one every 4 months, you're covered. If you have a reason to suspect someone has stolen/is trying to steal your identity, it might make sense to keep it. It would be a 'small' savings should you cancel, but a few small savings added together over time make for BIG savings!

The credit companies also, by law, have to notify you whenever you have a negative account. They also have to notify you if there has been 8 hard pulls within a year (maybe 6 months, not too sure). Getting an account at a credit union will allow you to monitor your credit score. That would likely be enough, unless there's something she is doing that is atypical of other people.

[Anna43]

If you are keeping the vehicle, I suggest you get gap insurance. Maybe you already have it, but if you don't and total the vehicle you'll still owe the balance between what the insurance pays and the balance of the loan.

I would suggest that you pay your mother $200 a month to repay the loan. When the loan is repaid, you continue that amount as rent. Its the responsible thing to do.

You probably need to allow yourself small amount for entertainment. Maybe enough for you to go out once a month. One reason people fail at budgeting is they begin to feel deprived and trapped. It doesn't matter that you built the trap yourself!!

Due to my dh becoming disabled (and broke) we quit eating out except twice a year for our anniversary and our birthdays (our birthdays are the 11th & 13th of same month so one dinner for both). We found that (1) we appreciate the meal out more, (2) we eat better and MUCH cheaper at home. I think you'll find you appreciate going out more when you do it less. You might even decide you've outgrown the activities your friends enjoy.

As far as school is concerned, I agree 100% keep working. Jobs are too scarce these days to give up one to go to school especially when you have such huge debt. A lot of graduates are looking for work or working at McD's. When you've knocked your debt back and can afford to pay cash for classes, start picking up a semister here and there at night.

Close those credit card accounts. No matter the example set by the President and Congress you cannot solve your debt problems by accumulating more debt -- it does not work. Get your emergency fund in place. Credit cards are not emergency funds they are crippling debt.

[bmd1011]

I like your attitude and willingness to take constructive criticism!
It does sound like tough love, and can be hard to hear.
But believe me, it's coming from people (like me) who have gone down this road and learned hard lessons.
So the advice is coming from a heart that wants to help others and keep them from making the same mistakes.

Thank you. I know you all are very wise and know what you're talking about, mainly from experience. I can't say I would have been so willing to take the criticism a month ago though lol

For what it's worth, the only people I've found that have been able to lose weight, and maintain that weight, have stayed with Weight Watchers. I've seen many people go through countless diets, as well as other programs, but WW seems to be the only thing that truly works. I imagine it's because it changes a person's lifestyle, and requires you to pay attention to your food. It's a budget, essentially.

If you are looking to cut things, I implore you to look in other areas first.

Thank you for the input. I will look into other areas before cutting that out. I have thought of a free program, but not sure of the success rate on that.

Is there a reason you feel you need the credit monitoring service? Unless you have reason to suspect someone stole your identity, you might consider cutting that expense at $8 a month- that's almost $100 a year. You can get a free report from each of the credit bureaus 1x a year, check one every 4 months, you're covered. If you have a reason to suspect someone has stolen/is trying to steal your identity, it might make sense to keep it. It would be a 'small' savings should you cancel, but a few small savings added together over time make for BIG savings!

It is on my list of cut backs to make. I am going to be calling them this afternoon to cancel. Right now I know my credit isn't good, so no need to really watch it monthly.

You can still get together with your friends. Just change up what you do with them for free or really low cost activities. Such as going to the park, finding free events in your area, volunteering at events like fundraisers, going to museum and gallery openings. Most likely your friends will appreciate not having to constantly spend money also.

Thank you for the tips. I will remember those for the future.

[bmd1011]

If you are keeping the vehicle, I suggest you get gap insurance. Maybe you already have it, but if you don't and total the vehicle you'll still owe the balance between what the insurance pays and the balance of the loan.

I do have GAP. Thank you though.

I would suggest that you pay your mother $200 a month to repay the loan. When the loan is repaid, you continue that amount as rent. Its the responsible thing to do.

That is a good idea. I will work that into my final budget (if there is such a thing) this weekend.

As far as school is concerned, I agree 100% keep working. Jobs are too scarce these days to give up one to go to school especially when you have such huge debt. A lot of graduates are looking for work or working at McD's. When you've knocked your debt back and can afford to pay cash for classes, start picking up a semister here and there at night.

I would not quit working full time to continue my schooling. I am actually going back to school this semester (part time), and will continue to work full time, as well as my part time job. No further debt incurred for classes, thanks to my current employer since the classes/degree will further my knowledge in the position. Guess it's true that when you put out positive thoughts, positive things happen.

[krbshappy71]

Right now I have my cell phone (data plan should be cheaper, but I use it constantly....), .

Pssst...You may use it constantly but that doesn't mean you need it. I used to watch cable tv constantly too but now it's been 2 years without it. Not even basic. I am not saying drop the cell, just drop the data plan.

Hugs you can do this! It is great you are taking charge of your life like this.

[chadillac3]

For what it's worth, the only people I've found that have been able to lose weight, and maintain that weight, have stayed with Weight Watchers. I've seen many people go through countless diets, as well as other programs, but WW seems to be the only thing that truly works. I imagine it's because it changes a person's lifestyle, and requires you to pay attention to your food. It's a budget, essentially.

If you are looking to cut things, I implore you to look in other areas first.

Weight Watchers does seem to be the most recommended program. A much cheaper version of it (i.e. free) is to spend a little time learning about nutrition and understand what you're eating.

I'm not just talking about my ass here...I'm down 58 lbs in about 2 years of steady, consistent diet while improving my overall strength and endurance levels significantly. Went from a measured 44 inch hips down to 36 (not talking pant size here, actual tape measured).