NEED ADVICE

[Start-Living]

HI,
I'm new here.
I need advices/tips/secrets/etc.... to help reduce my debts.
Below is my finance info. If any of you see an area that I can work on, please let me know. I have been reading these forums, and very excited to find this website, and get started. Wish I know of this website years ago.

This finance is for both me and my boyfriend (we live together and put our money together, below are both of our debts) Below is Monthly Expense, he's the only one working full-time, and making most of the money to pay for he bills. I was a college student for the past 5 years, and now pregnant, so I'm staying home selling on ebay. Not planning to work, planning to stay home for the next 7 years.

FINANCE:

Mortgage/insurance: Owe $76,500 ($800 monthly including an extra $100 a month towards principal)
2nd Mortgage: Owe $29,400( $328 monthly including an extra $20 a month towards principal)
Car : Owe $21,400($466 monthly including an extra $20 a month towards principal)
Car Insurance: $215 monthly for 3 cars
Student Loans: Owe $20,000($350 monthly including an extra $10 a month towards principal)
Home Phone/DSL internet: ($85 monthly)
Cell Phone: (90 monthly)
Grocery: $200 to $400 monthly
Eating Out: $120 to $200 monthly
Gas: $180-$200
Utilities bills (Electric,gas,water) : $150 to $180 monthly
Credit Card: (Owe $1400 on it, paying $50 monthly)

I'm not sure which debt to tackle first, therefore, I pay a little extra towards each debt, so they will be paid off faster. As for Grocery, there is only 2 of us right now, so we are always throwing away food that we didn't get a chance to eat. I just made a plan for us to cut down on grocery $$$, so we will be spending $150 to $200 monthly on grocery, and we will only eat out once a week. This should saves us some money. We have always use our bank card for everything, sometimes we have extra in our bank, sometimes we are in the negatives. We don't carry cash at all, I have just read some of the forum, and will start using cash instead of the card. As for the credit card, I have just called them to cancel the account, so I can't use it anymore. I'm trying to pay it off, and we are staying away from credit cards for good. We got our 2nd mortagage about 6 months ago to pay off some student loans, personal loans, and car loans. But he got a new car after we paid off these loans, and now that we're pregnant, something need to change or we will be bankrupt very soon. Please post any advices & tips you have. It doesn't matter how silly it sounds, I need to know them all. I know everyone have their own ways of doing things to saves $$$ here and there. We both are very young 23 & 25 years, and still very clueless about savings, etc.

[couponchic]

First, I would quit paying extra on all loans and use the extra to knock out the CC debt very quickly. That will give you a sense of accomplishment with one less debt to worry about. Once that's paid off, I would either apply the extra to the car loan or the 2nd mortgage, whichever has the higher interest rate. The 2nd mortgage may be the one you want to tackle before the car loan if the 2nd mortgage has a floating interest rate.
Can't wait to hear other's suggestions/advice for you.

[joyb]

First of all, welcome to the village. Second, read all of the old posts you can find on here. There is a lot of information to be had.

I would check othere insurance companies for your car. I am assuming you and bf are very young and maybe your insurance is going to be much higher b/c of age, but to me your insurance sounds pretty high. Some on this board have had good luck with Geico. I would shop around and get estimates.

I was once young and ate out a lot. You don't realize how that eats up money. You could save by eating at home and put the savings towards cc bills. It sounds like you are working on that already.

I am sure you could get your grocery bill down quite a bit if you put your mind to it. Experiment with cooking more from scratch. You can find a lot of recipes here and elsewhere on the internet.

I also think your could save a lot on cell phone bills. Check around and find what other service providers are charging. Your bills sounds high to me.

There are some ladies here who will no doubt jump in and give your some great suggestions. I am an amateur compared to some of these women. I'm sure you'll get a lot more advice. Good luck. It is a learning process to become frugal.

[homesteadmamma]

Welcome to the village.

I agree, I would stop paying the little amounts to each debt and instead put it towards your credit card. Once it is paid off, then snowball that amount to your next debt.

You could cut your eating out to half of what you are spending now. Seeing has you are home, you can cook at home. Once you start cooking from scratch along with starting a well stocked pantry, you could probably cut your grocery bill a bit as well. A well stocked pantry saves you huge amounts in your grocery bill. Also watch for loss leaders.

You mentioned insurance for 3 cars. Can you sell one car, thus saving you car expenses such as insurance, gas, etc. You could put that money towards debt along with putting some in an emergency fund account.

Have you looked around for better cell phone rates. Do you need one?

You are on the right track in asking questions and wanting help. Read posts here. You can also see some neat ideas that members do to save money in the "frugal challenge" that members post to everyday.

[Valerie in WA]

Could you please check on and post what the interest rates are on the mortgage, 2nd mortgage, car loan and credit card? Once you've done so, I'll post my suggestions.

Also are you currently having trouble making these payments? I'm guessing not, since you pay extra on some, but I just wanted to be sure.

Your car insurance doesn't sound too high to me. It varies a lot regionally. If you are in a metro area, theft is generally higher and therefor your rates. FWIW, we pay $150 a month for 2 vehicles (3yo minivan and 1yo truck).

Your plan for reducing groceries and eating out sounds good!

These forums are a great place to find information on reducing your gasoline, as well as your utilities and groceries. As Joy suggested, read old posts for ideas.

I'll check back for your reply.

[dwallyfam]

I agree with everyone about focusing on one debt and getting it paid off. Also, right down every penny that you spend. that way you can see where the $$ is going and eliminate some more waste

Kellie

[Start-Living]

HI,
Thanks for all your replies.
I am so excited.

ANSWERS TO SOME OF THE QUESTIONS:

1. The interest rates for 1st mortgage is: 6.75%, the 2nd mortgage is 9.65%
2. The interest rates for the car is 7.65%
3. Interest rates on the credit card is now 29% (I miss 1 payment a few months ago)
4. We have spend our money poorly, and I can't keep track of how much we spend monthly, we paid all our bills each month, sometimes comes out negative at the end of the month, sometimes extra $$$ (depending on how much spending money we spend that month) (We used to spend and buy whatever we want, whenever we want) That's why I put extra towards all of our debt, so if we have less in the bank, then we will spend less. As you can see, we are in a big mess here.

I have been reading this forum all day today, and have gotten lots of tips/advices. Starting today, I'm in the process of writing my financial goals, start the April challenges (can't wait until May to start). Wrote down some ways to reduce my monthly spending. I will discuss all these information with him when he gets home from work.

THANK YOU SO MUCH EVERYONE. Please post any comments,suggestion,tips, you have. I appreciate them all

[FrugalMomof3]

Hi there and welcome to the village.

Ok now I am no expert but I do have one question for you? Why do you have 3 cars if there is only 2 of you? Second, with you now being a SAHM or soon to be SAHM, would you really need 3 cars or could you cut it down to 2 or even 1?

I ask the above because my hubby and I only have 1 car for the both of us, he works night and I am a SAHM, if I really need the car OR he is going to be at work all day 10am-9pm then he lets me drive him and pick him up if I really need the car for grocery shopping, dr's appts, etc... So my first suggestion is try to get rid of atleast 1 car, try selling it, once sold put that money towards the CC debt, get that one out the way first.

I agree, stop paying extra towards the other items and get the CC debt out first since it has the highest interest rate. THEN snowball what you were paying on that CC to the next highest interest rate loan which I see is your
2nd mortgage and so on and so forth.

If you have a HELOC that is adjustable be prepared for your monthly payments to go up and down at times but dont be discouraged, we just refinanced our 1st and 2nd mortgage into one payment saving us approx. $85 a month, it isn't much but every little bit counts.

Now... as for cutting down on regular bills...
Electric:
1. Turn off items not in use/un plug them
2. Use Candles
3. Some of us have turned off our heating system and turn it on 15 min. before hot water is needed
4. Line dry your clothing, dont use the electric dryer (if you have one)
5. Wash clothes in COLD water

Heating/Gas:
1. I dont have Gas but we have oil heat, we didn't turn on our heat at all this winter, we used Econo Heaters (do a search for my recent posts on this), we saved $200-$250 a month by using these heaters

Water:
1. Dont have the water running when brushing teeth, etc.
2. If you have a dishwasher make sure it is FULL before running
3. Repair leaks, etc...

I hope this information is helpful as it has helped me as well as the other posts you can find throughout the forums, I wish you the best of luck!

You can PM me if you ever wanna talk! I personally have paid off over $10,000 in debt since Jan 2006 (last payments were just last week).

[freedeal]

Welcome. You have gotten some great advice here.

My one suggestion is to

WRITE A BUDGET

Then, it will be much easier to see where the money is going and how much you can really afford to pay extra on the bills.

I second the advice of putting all extra to the credit card and work one debt at a time. Keep us posted.

I was talking to a friend of mine a couple of months ago and she said they never have any extra money. I told her to do a budget. She didn't know how so I helped her. She found out that her DH (not really so dear) was spending $200 a WEEK and could not account for it. That didn't include his gas and cigs. She works part-time and only makes $800 a month.

[AmyBoz]

I can't imagine any better advice than what you've received here, so I'll just say welcome and best of luck!

[banana]

Everyone gave you really great tips and advise!

I would suggest to write everything down and try to keep track of your money. I agree on trying to eliminate a car or 2. Good luck, you can do it!!!

[Valerie in WA]

Thank you for posting your interest rates.

1) I think you should STOP paying extra on the mortgage, 2nd mortgage, car and student loans. Those extra payments total $150. Add that to the $50 you already and pay on the credit card and pay the CC $200 a month. With a $1400 balance, you should pay that off pretty quickly.

2) Call the credit card, apologize for the late payment and ask them to reinstate your previous, lower, interest rate. Many companies will do this ONCE just for the asking.

3) Once the CC is paid off, add that $200 to the $466 you pay on the car loan. After that is paid off, add that $666 to the $350 you pay on the student loan. After it is paid off, roll that $1016 onto the $328 you already pay on the 2nd mortgage. When that is paid off you can send THAT extra $1344 as principle reduction on your first mortgage. This is what we mean by snowballing. It is a POWERFUL way to reduce debt. - Oh and I suggest paying off the car before the student loan, because student loan interest can be tax deductible (as well as mortgage interest).

4) In the mean time, try to reduce your spending and funnel that extra money toward which ever debt you are working on.

5) To keep track of what you're spending....if it's hard for you to remember and write it down at the end of the day, ask for receipts EVERYWHERE you go. Say you buy a coffee on the way to work, get a receipt. When you buy a snack from the vending machine on your first break, write that down on the coffee receipt. If you go out to lunch get a receipt. Etc. Every night, sit down with your receipts and write them down in a plain notebook. I write the date, what I bought, the cost (rounded up to the next dollar) and the category. Your categories will not be the same as mine, but mine are usually: groceries, eating out, gasoline, my pocket money, and family recreation.

Lastly, you are NOT 'in a big mess'. You're doing a lot better than many other people. You are just in a position now that you wish to do better. And you can!

[Sari]

I didn't see anything about savings (sorry if I missed it) so I definitely think you need to build an emergency fund. Dave Ramsey recommends at least $1000.00. You might want to do more, considering your boyfriend is the only one working and you are pregnant. You want to be able to get by for a few months if he loses his job, gets sick or hurt, the house burns down (God forbid), etc.

You also might want to consider putting some money away in an account just for you, just in case. It might sound selfish, but if you 2 break up, what's to keep him from taking all the money out of the accounts? I'm not judging you on your living situation, because my husband and I lived together before we were married. I would just worry that if he did leave, and you guys weren't married, he might not be obligated to support you like he would have to do for his child. Not to mention that even when men are supposed to provide child/spouse support sometimes they don't. So I'd personally try to put a few thousand dollars in an account that's just yours. That way if you are suddenly alone, you won't have to worry quite so much. Besides, assuming nothing like that happens (which I'm sure won't) it's just another emergency fund.

Best of luck to you both!

[MessyKat]

Welcome to FrugalVillage! This is one awesome place! I have only been here a short time and have learned so much.

I agree with what others have said, as far as snowballing etc. Specifically stop paying extra on mortgage and 2nd mortgage and car payment. You certainly should start an emergency fund. (I just recently started mine, and every little bit counts). If you start by snowballing your payments you can have that credit card paid off in a very little time. Make sure you have consolidated your student loans into one loan and you can probably get a great rate.

The biggest thing I have done is to start cooking (FROM SCRATCH!) then you know exactly what is in your food. I highly recommend watching 30 minute meals on FoodNetwork (Rachal Ray is the host). She makes a lot of great food and uses things you probably have in the kitchen.

If possible, cut your cable down by cancelling some services. I recently cut out all of my movie channels which helps me save some. I also agree with getting rid of at least one of the cars.

Good luck! and remember we are here cheering you on!

[Darlene]

Welcome to FV Start-Living! Kudos to all the ladies for giving you such great advice. Good Luck, you can do it!