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Facing The Facts - The long road ahead

7K views 32 replies 22 participants last post by  josantoro 
#1 ·
I can't say that I've lurked on your forums very long. As a matter of fact, I just found them on Friday. Thank God. I finally came to a point of saying, "Enough is enough. We have to stop bleeding." DH agrees.

We are NOT good budget makers. I can't count how many times we've started and then fudged and then given up. But there is a line in the sand now and past that, a cliff. So, we are not in a position to ignore.

I completely owe up to our overwhelming debt: $122,645.58, plus one bill that we are missing. This includes our mortgage. I wrote everything out and used a free debt snowball calculator and disgusted myself with the amount that we pay in debt every month!!! So I decided (after reading so many of your threads) that I'm writing it down on a forum. I may check in once a week or once a month, but I'll keep it in writing to urge myself on, to show the DH that we're plowing ahead. So here it all goes:

LS 273.55
Gas Card 1 421.08
Store Card 602.48
Gas Card 2 779.91
CC #1 890.00
Gas Card 3 1,967.12
Store Card 2,111.72
CC #2 3,740.00
CC #3 4,850.00
CC #4 5,731.39
CC #5 6,372.23
CC #6 6,670.00
CC #7 16,629.53
Mortgage 71,606.57
Total: $122,645.58

What a pit we are in!!! Nearly a year without work for the DH supplied some of that debt, but most of it was us not being wise. Now that everything is written out, I will be working on a budget. I really am horrible at budgets, so I'll just do the best I can for the first month and adjust for the next two until it works. Pray for me!
 
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#2 ·
ok so start arranging them in order
Things that are overdue but are not discharged go first
then pay smallest to largest to see the fastest progress
If may not be the cheapest according to interest but the momentum spurs you on so that is invaluable
Come hang at 11/12/13 debt reduction w/ us. We all post at paycheck and spur ea. other on. I was once at $250,000ish because of medical from as accident Dh had. Now we are at $24,800.00 eight years and 4 years of tuition for kids later.
It takes a change in mindset not just saving/paying balances.
 
#3 ·
Write down all of your bills and all of your income. Also, check the interest rates on all of these cards and write that down. I would gather as much information as I could about transferring balances to save interest. Inventory items in your home and start listing things for sale to earn extra money. Do you both work full time, if not, can you pick up a side hustle?

Knowledge is power. Good luck
 
#5 ·
I was able to download a free snowball calculator and arranged it smallest to largest. Then going by interest, we would save $1000, but I know that I'd just lose momentum. I also downloaded a free budget Excel worksheet. My DH sat right next to me while I filled it out so that we were literally on the same page. We already identified one huge leak in the finances and brought it to a stop. It's going to be tight for a bit. I asked that he give up his debit card for an allowance and he's okay with that. I'm going to call and see if I can get my cell phone bill reduced because I've been with them for over 10 years. I've started gathering "stuff" that's been sitting around for a garage sale to tuck some emergency funds away into our safe. I know it's the beginning and I know that usually everyone is excited in the beginning. I'm praying that I'll stay steady in the race.
 
#10 ·
You are doing a great job of lining up where you are and how you are going to deal with it. Great Job! One of the things I do to help me stay the course is to join the challenges. There is one for setting up your Emergency fund, 11.12.13 challenge is for tracking the debt you pay off and the one that helps keep to keep me on course day-to-day is the Frugal challenge where you keep track of what you did frugal that day. That one also helps me get ideas from what others post.

I'm glad you found The Village and that your DH is on board. This is a great place with lots of helpful information and friendly support.
 
#6 ·
Good for you for "facing the facts" and doing something about it!
If you want help with your budget, you can post your expenses. Everyone on FV is always a huge help.
I write down what i'm doing that is helping our situation. Spurs me onward, and helps prevent the "boo hooo to me" feelings. I know I'm doing what I can!
Good luck to you and your DH!
 
#7 ·
That's certainly a hefty sum but it is not the worst we've heard of :). I think you've done one of the hardest things and that is pulling all the numbers together in front of you and deciding to tackle it.

There is a lot of information tucked away in the Village Forums that can save you pennies and can save you hundreds (home made laundry soap to refinancing to cutting away some "I can't live without it luxuries"). It takes time and work and lots of communication between you and your spouse but it is so worth doing.

We're happy to help with budgeting so if you wish to post expenses we can help. Keep in mind you may be reading some suggestions you may not wish to hear but it is all well intended.

hugs
 
#12 ·
You can do this:) I wont even tell you what my mortgages are:( Very sad.......but will tackle them after CC and Minivan:)
 
#14 ·
Welcome...glad you decided to face the debts...lots of good and VERY helpful people here...also lots of people who will give support. Stick around...and just keep plugging at the debt.
 
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#15 ·
Well, a week in I've had both highs and lows financially. First, the low: Found out that there was a dr's bill that has a balance. Boo.

But, I made the budget! I set up the entire month worth of payments for the debt online and made a spreadsheet to track the spending, down to the penny, for the next 3 months. We are on our way. I'm sure the glitter and glow will wear thin sometimes, but even from a distance, I can see the light at the end of the tunnel!
 
#16 ·
Congratulations! It took me a few months for my budget to work correctly and now my life is so much more comfortable (it has been about 8 months living with a budget). Give yourself time. It almost becomes fun after a while (counting all those pennies).
 
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#18 ·
The first month is always the hardest. Write down everything you spend this next month, from a cup of coffee to gas in the car to food. When we did this we were amazed at what we were spending each month.

Phone companies and see if they will lower your interest rates. We did this and only one cc company said no, however they let us miss 3 months payments w/o any penalties which gave us a bit of a breather.

See where you can cut expenses ever more. Most times it's in the groceries. One thing you really have to do is make sacrifices and be consistent. You can do it. We will all be here cheering you on.
 
#19 ·
Dave Ramsey - 'Total Money Makeover' is an inspirational read and a good plan. He sells a lot of other unnecessary products but even purchasing this book is a good buy used if not available at local library.
He has nice free podcast available on daveramsey.com too.

Next step, - Joe Dominguez - "Your money or your life".

This will totally turn around your life.

Another neat browse is -The compact group - thecompact : The Compact -- People in this group pledge to refrain from consumption as much as possible and live a fulfilling and enjoyable existence.
 
#21 ·
You are in VERY good company here at the FV! Hang in there, and trust me....it WILL get better!

Theresa :)

btw- i don't know if this is a possibility, but would a re-fi on your mortgage be something that could lower your payment? we did our 1st re-fi back in 2005 and we were able to not only lower our interest rate on the house, but also borrow up to 80% of our equity. with taking that loan, we lump summed ALL our debts, and we were in a much better financial situation. It just might be worth a little research, especially in light of all the new programs out there!
 
#22 ·
Please don't consolidate your debts! This is one of the worst things you can do. You can refinance them individually for lower interest rates, but when they are all united into one debt you will not pay them off as quickly. Read Dave Ramsey's books (or just his website) and understand why you shouldn't consolidate. Previously I mentioned that lots of debts are almost fun to pay off. This is because you can cross them off your list and while you are concentrating on the smallest one the others are also getting smaller.

Have a read though some of FV's old threads and you will see how the members have succeeded in paying off their debts.
 
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#23 ·
I've never considered consolidating, so that isn't a factor at all.

My mortgage payment is so small that it's less than most people's rent, so I don't need to refi.

My problem? Mismanagement. Pure and simple. I just don't like keeping track of it. And now I'm on day 15 of the new chapter. I force myself to look at the bank account every evening, to check it against the spreadsheet I have. It's okay, it's what works for me. I don't look at the snowball often; I've only looked at it once this month to schedule all of the payments. I've been foolish with my money and now, I am paying on consequences. There is no "Woe is me!" Actually, it's more like, "I'm an idiot."

And I have to be different than most here. If I don't allow myself some freedom, if I don't buy pizza like I did tonight (well within the budget)? I KNOW for a fact that I will just go right back to where I was. I am not a cold turkey addict kind of gal and I don't want to set myself up to fail. I'm happy to be halfway through the first month. The first 2 weeks sucked because of what days the bills are due and how our paydays worked out. But, at the end of this month, I'll have a buffer for that. And I know that as I schedule my payments and click off my snowball chart, that more and more columns are going to have less boxes each time and that is something to look forward to.

If you are reading this and are at the place I was last month...do this. It isn't going to be all sunshine and puppy dogs. There are sometimes you'll just thing, 'Nah. Too much work." But you need to do this. I did. Only a month ago. Just need to go one foot in front of the other.
 
#24 ·
You are really not talking "budget" you are talking major lifestyle change. As you are already aware it will not be fast or easy, but it will work. With your dh on the same page you will succeed.

If you and your dh see reducing expenses and becoming debt free as a challenge and each small step worthy of celebration, you will be happy.

Do you have long term goals beyond becoming debt free? I think it helps so you don't get debt free and then turn around and fall back into debt.
 
#26 ·
Do you have long term goals beyond becoming debt free? I think it helps so you don't get debt free and then turn around and fall back into debt.
That is my fear and I think I'm so fearful of it and now aware of it, along with the DH having the same fear, that we are committed to going forward and not backwards. We work on the numbers once a month, side by side, so that we both have our heads firmly planted on our shoulders. We both know it was our own fault and not having any savings before DH was off work and spending wildly caused us much heart ache now. Long term goals: replace my car, fix my 1963 bug (sounds silly to most, but it's my baby), cash savings more than the small amount we have, pay off mortgage early, assist with our church's building fund and youth group outings.
 
#25 ·
And I'm back!!! I never really left, but I haven't had anything new to report. UNTIL NOW! DH and I cut back hard. There were times when we went backwards. However, yesterday we were given amazing news. The year that the DH was out of work was due to a horrible car collision in which he nearly lost his foot. We thought we'd never see any money from it, but the insurance company called and offered a settlement yesterday! :yoyo:

Up at the crack of dawn today, I sat on my computer and the DH on his work laptop, going back and forth with the actual numbers for the credit cards. Next month...we will pay off 70% of our credit card debt! We continued a new spreadsheet of then rolling the numbers and having a more realistic budget (you know, where groceries aren't bought with the leftover money). We are so excited!!! If the Lord holds our budget true, we will be debt free by May 2015!!! Let me say that we could get out from it quicker, and may choose to do that, but my car is failing (we bought it new in 1997 and it has 225k on it!) and so we are leaving a buffer to save for a down payment and possible payments to be made.

I understand my case isn't the norm. But I wanted to encourage anyone reading, who is new, that it is a battle worth fighting. Any sudden windfall of money and you know exactly what to do with it! You commit to paying off and suddenly, any extra $100 looks mighty good on the spreadsheet!
 
#30 ·
You can't finish if you don't start. You are off to a great start. Good luck.
 
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