Trying to Dig Us Out of the Hole Before It Caves

[Talula31]

Hello, I've just joined. I've been reading for about a week now and thought maybe I'd get more help/support if I actually joined and posted. I'm going to just lay it all out there, no reason to sugar coat it. It's bad, I've been beyond stupid with our finances and the credit cards. My husband and I sat down together last weekend. We got out all the CC and I cut them all up, except 1. I only kept the 1 in case of emergency with 1 of the vehicles, but I had DH hide it downstairs and told him he's not to give it to me unless 1 of the vehicles breaks down and we have to use it to for that.

My husband and I live in MO. with our 3 children (ages 14, 8 and 6). My husband works full time, gets paid every Friday. His take home pay is $487. I just started working part time. I get payed every 2 weeks. Take home pay anywhere from $250 to $350 depending on how many hours they give me.

Bills:

House payment - $490
Water - $35 ( $5 more or less depending on our usage)
Electric- $208 (this is the extreme high end + late payment - once we stop using the A/C it will drop down to a little under $100. But then of course we'll need propane for the winter. We have about 30% in the propane tank now Holds 500 gallons.)
Car insurance - $30
Van insurance- $60
Phone - $75 (didn't pay this last month -$147 due on the 25th)
Internet - $14
Beneficial- $134 every other Friday ( this is a loan- guess you'd call it like a 2nd mortgage? Not sure, think balance is around 15,000)
CC1: balance - 712.15- min. payment - $21.
cc2: balance- 939.89- min.payment - $80. (didn't pay last month)
cc3: balance - 4,087.57 - min.payment - $186. (this one is due in 5 days, it's $87 over the limit)
cc4: balance- 986 - min. payment - $30
cc5: balance - 3,023.33- min.payment - $100.85
cc6: balance 3,501.10 - min.payment- 86.00
Revolving Bank loan - balance - 250 - min.payment 28.00
Monthly Meds: $40

Of course- there's always an unplanned Dr. visit thrown in etc. I also didn't put in the bills that aren't due monthly, though I probably should- example- garbage bill - $64 every 3months.

This month we also have the car and van registration due. We haven't paid the property taxes on the vehicles yet,so have to do that 1st. We have had them inspected. Car had to have new tires, DH still has to replace the front brakes.

Property Tax = $185
Van registration = $68.82
Car reg. = $52.82

We have $320 in the bank now. DH will have a pay check this Friday. We still need to pay the prop.taxes, brakes for the car ($20), vehicle registrations, the Electric, cc#3, cc#1, and the Internet. I also have a Dr's appointment this Friday,my co-pay will be $30, I REALLY need to go,otherwise I'd wait awhile.

I do have a bad habit of paying most of the bills late. I'm really trying to NOT do that starting in October, because I sat down and started looking at how much the late fees are all together and realize I could save quite a bit just by paying on time.

Then of course gas and groceries. I honestly haven't been paying attention to how much we spend in these areas. I got out an envelope last week and have been making sure receipts for EVERYTHING go in there so we can go through them, see what we're spending and what we can work on cutting out.

I have made a few changes recently- started making the kids ride the bus to school in the mornings instead of driving them. I do still pick them up after school, but the 14 yr.old goes to the barn every day and the schools are on the way to the barn. She takes riding lessons and instead of us paying for them, she cleans stalls in exchange.She also feeds1x a week and saves that money to pay for the shows she wants to ride in.

I also canceled our Callwave subscription- bill was $7.95 a month-added to the phone bill. Also planning on calling the phone company and canceling our protection plan. It's $7.99 a month and is supposed to cover us in the event we need them to come and do repair work on the phone lines from inside of the house. We've lived here 10 years, they've had to come out 1x - and that was probably 8 years ago. I've basically paid them almost $1000 for that.

I canceled our cable a few years ago.

We do have cellphones - they;re the prepaid kind- we pay $20 every 90 days. We have 3 -mine, DH's and the 14 yr.old. She pays $10 of her fees every 90 days.

We have several pets. I know we would probably save A LOT of money if we down sized our pet population. But, it's just something I am not willing to do. I have promised myself and my husband that I will close our door to any more animals, no matter what the circumstances are. The Inn is officially over-crowded and full.

I've been reading through some of the threads to get ideas. Have finally started using the power strips we have to turnoff the computer, t.v.'s etc.

Trying to get back into the habit of making a menu for food and not going grocery shopping till I know EXACTLY what we'll need to make it through a week. We've stopped eating out 1-2x a week and now do it maybe 1x a month.

Have read Dave Ramsey book.Need to get it out and read it again.Would really like to start paying off debt and get a good snowball going!

Okay, hopefully that is enough information to give you an idea of where we're at currently. I'm ready for advice, criticism, support, and encouragement.

[jamie79]

First off, welcome to the site. Good for you and your hubby for sitting down and writing everything out. Facing it is the first step. Good for you for cutting up the c.cards.
Now the first thing I think you need to do is NOT make any more late payments. You need to pay the bills on time.
Start paying anything extra to your smallest bill first. That way you can get it paid off quickly and have a little victory. Once that one is paid snowball that amount into the one with the highest interest rate and keep paying that one, while sending the others minimums, until that one is gone and then so on.
This will not happen over night. You must have patience.
Also even if its $20 a pay day, start a baby emergency fund so that if something unexpected happens you wont touch the c.cards.
Also if you post what you generally spend on food we can help you cut your budget in that area. Keep reading the boards for ideas

[cmdarlin]

Welcome to the group from a fellow Missourian. I can't offer much on getting out of the hole as I'm sinking in a big one myself but I know that the people here are a huge source of information and support.

Debbie

[Lady_V]

Nice to have you out of Lurkdome.

You admitted there is a problem. You are already taking steps to help pinch that penny.

Thank you for posting your budget, I didn't see a line for food/hba/pet though. Do you think when you find a moment you can repost a more complete budget?

[Mochashello]

Hello!

I did a quick crunch of the numbers and the good news is that your take home pay is enough to cover your minimum expenses listed and leave you with about $675 for groceries, pet supplies, etc. and that isn't too bad. It at least means you have something to work with. But you didn't list how much gasoline you use and that could make things more difficult.

I think if you've been reading the threads then you know the basics. Slash and burn everywhere you can in your budget- which you've already begun to do and that is great!- trim your grocery bill by meal planning, using left overs, using coupons, avoiding name brands, etc., reduce how much you use the heater and a/c. When it gets cold try using a space heater to offset how often you have to turn on the heater for the whole house, etc. etc. Be EXTREMELY frugal for the next couple of months, as much as you can. The holidays are going to be a big temptation for you and you should know that ahead of time and plan ways to stave off the inclination to charge it.

Like others have said, we could help more specifically if you could post what your average spending at the grocery store is, and gas, and pets if they are a separate deal (I take my pet supplies from grocery money personally). But for a general plan of attack I'd say:

1. Bring everything current ASAP- how about Top Ramen night? Do WHATEVER you can to get current.
   
2. Get that emergency fund
   
3. Start a snowball
   
4. I'd add start a small savings for the holidays too if you can. It would be horrible to make good progress through October and November and have it undone in December because you just can't stand to not be able to buy something for the kids, or whatever. With three of them, I know how tempting that can be!

Good luck and

[Greebo]

While I agree with jamie on principal, I disagree with the order.

First, you need to get current on everything, and get any cards that are over limit down UNDER limit, or you'll get eaten alive by fees.

NEXT, I strongly suggest that before you start reducing debt, you first put as much money you can per month into saving up a $1,000 baby emergency fund.

This is very important - without a BEF, as soon as something goes wrong, you'll be going back into debt to pay for it. You kept one card for "emergencies", as you said. Cash is better all around for handling emergencies.

So get current, then emergency fund FIRST.

THEN turn attention to the debt.

Now, the good news - totalling up your income and expenses I have your monthly minimum income as $3,193.67 and your expenses (not including things like FOOD, which is a bit important) at $1,617.85. Now that leaves you with $1,575.82 per month that isn't allocated.

So what the heck is happening to $1,600 a month? Even if you eat $600 of it, where's the grand going?

The biggest problem you have right now is you don't know. You have no control of your money, and so your money is leaving you in search of a strong master. You listed bills, but its clearly incomplete - cause you threw in this thing and that thing as you went. You need a FULL accounting of where your money is going.

You must absolutely get your budget in place. Since you are paid weekly, you need, weekly, to be putting down ON PAPER, ON PURPOSE, where money is coming in and where it is going out. You need to ONLY spend money (both of you!) when the budget says you can. Not one penny should leave your hands without both you and DH in agreement on its spending and a plan in place to pay for it.

You should, based on the numbers you've given, be able to get on a strong written game plan and improve your situation significantly JUST by getting your money managed.

The good news is, you CAN do this!

[Greebo]

Hello!

I did a quick crunch of the numbers and the good news is that your take home pay is enough to cover your minimum expenses listed and leave you with about $675 for groceries, pet supplies, etc. and that isn't too bad. It at least means you have something to work with. But you didn't list how much gasoline you use and that could make things more difficult.

How'd we end up with such different numbers?

[McD]

Welcome to the Village!!! There's tons to learn here and since you've already done the hardest thing ever (i.e. posting your money woes for all to see) you are on your way to fixing the problem ! Anyhoo..here's what I am lokoing at:

Your hubby's net income for the month is 1948. I estimated yours low at 500.

Total Income: 2448
Expenses:
House -490 1958
Water -35 1923
Electric -208 1715
Insurance -90 1625
Phone -75 1550
Internet -14 1536
CC1 -21 1515
CC2 - 80 1435
CC 3 -186 1249
CC4 -30 1219
CC5 -100.00 1119
CC6 -86 1033
Revolving?: -28 1005
Meds -80 925

So you should have roughly 925$ a month leftover for things such as food, groceries, gas, etc. How much are you spending on those each month roughly? This also isn't including things like the garbage bill that's due quarterly. Ideally, you should be setting aside 21.34 every month for that so the bill doesn't sneak up on you.

Couple of things I noticed-

The phone you mentioned at 75$. Is tha the cells that you mentioned later? Or is that a landline? If it's a landline could you cut it entirely?

You need to start planning for the irregular expenses--like car registrations, etc. if you can.

Also--you mentioned paying a lot of bills late. Does your bank offer free online bill-pay?

[Greebo]

Apparently I can't do math today!

[Cricketlegs]

If the Op has 925.00 left over she could---

Take the number and divide by 4 for gas, grocery,savings, and misc catch all until she gets the EF in place.

That gives her $231.25 per each category. (Or 3 is $308.33 and do without the misc or what I call the slush fund)

Then she could get CAUGHT up and current, have enough to keep her bills paid on time,be really frugal with her car driving as she is gassing 2 cars,put money into savings =231.25x5=$1030.00, (308.33 x 4=1233.32) grocery shop like a frugal nut,

(and then she would have an additional 231.00 to catch things and or make additional savings deposits so she can start her snowball sooner or chose to go the $308.33 route and not do this option at all and get the EF built up sooner)
.

Just an idea for those who like to cover every base and not really hit one thing at a time.

[forHISglory]

Welcome from another Show-Me person! You have come to the right place for encouragement, ideas and gentle scolding.
Already you have received great advice.

In no particular order:
1. Get caught up and vow to never pay any late fees again. That's money wasted.
2. Put a little aside each pay time for your emergency fund.
3. Even tho Missouri has some of the lowest gas prices in the nation, it will still eat a huge part of the budget. Determine where you absolutely must drive.
4. You may have to bite the bullet and give away some of the pets. Not trying to be cruel, but your family is more important.
5. Keep that credit card hidden!
6. Food is a big chunk of any budget. Try to cut it in half. If that is not possible, look for cuts. Can you feed your family for about a dollar a day per person?
7. Start the snowball, even a little snowball.
8. Make a list of all the odd-time obligations: taxes, insurance, garbage pick-up, etc. Try to monthly set aside money to meet these obligations.
9. Be ruthless about discretionary spending. Gifts do not have to be elaborate. Entertaining can be potluck-cheap. Holidays do not have to have decoration, etc. Clothes can come from yard sales and thrift shops. Fun can be home-made.
10. Which phone do you want to keep: landline or cell?

I know there's much more, but this is a start. If you wish, post your menus and grocery list, and we can help with that.

Best to you!

[Mochashello]

I estimated the hubby's pay based on a 4 week month to be 1948 and hers on the low end of 500 for a total of=

$2448

Adding up the monthly expenses I got
$1773

Leaving a total of $675

She has one bill listed that is paid every 2 weeks so you gotta add that one twice, and I included $21 for the garbage bill that she pays every 3 months. Anyhoo...

I would also strongly suggest you call your credit card companies, starting with the ones you are behind on, and see what they will do to work with you. Very often you will get some help from them if you talk to the right people (i.e. not the people hired to answer the phones). You can often get your late fees forgiven and your interest rate lowered/minimum payments reduced on your own without using a Consumer Credit Counseling service (those services can be valuable and have their place but I recommend doing it on your own first). It's worth a try at least. The main thing is to use whatever cash flow that frees up toward your list, and not let it disappear into the wind, absorbed into the mystery grocery bill or something.

Also, after you get through the steps of bringing everything current and building your small emergency fund, you need to add your annual expenses of vehicle registrations and property taxes and divide by 12 and start putting that aside monthly so you aren't hit with it all at once next year too. It's only about $26 per month but it is an important $26/month (I'm learning that myself right now!) edit: you should start putting that $26/month aside before the emergency fund is completed, not after. But I still think getting current is top priority.

Then of course do what everyone has suggested and start the snowball on the lowest balance debt you have.

I'm still anxious to read your next post and get a sense of how much gasoline you use because that makes a big difference. The groceries, in my mind, are easier to trim back on than the gas- unless you do a ton of needless driving, but in my experience most of the driving is to and from work and there are only a few ways to cut back and save in that area whereas there are a lot of ways to save on the groceries. At least that has been my personal experience, but I too am a newbie!

[Talula31]

1st - Thanks for all the warm welcomes, good advice etc. I'm going to go over all the posts 1 by 1 and take time to absorb the info. Reading them all at once caused a bit of head spinning.

Okay - gas for the vehicles- I'd say we probably spend about $120 a week (that's both vehicles combined). Dh's work is 35 miles one way from our house. His work set up a list for car pooling. He's been on it for awhile now, but no one else in our direction has signed up for it. This is an area where we've just started to keep all receipts for gas we buy in an envelope so after a month, I can look and see exactly how much we're using. (it could be less than what I've posted.) Have also been very bad about buying snacks and or drinks while getting gas. I'm cutting that out!

Groceries - for the last 2 - 3 months, I honestly have not been keeping track,making a list or anything. Just going in and buying. Doing it that way,I was probably easily spending $150-$200 a week. When I make a menu and go with a list on hand and STICK to the list, I know I can get away with spending about $65 - $70 a week. Obviously,my goal is to get back to the menu planning and not going to the store unless I have list and coupons in hand.

Pet food/supplies-I would guess we spend around $60 - $70 a month? Honestly, another thing I've just never really kept track on.But am doing so now. Have also just started buying food in bulk, costs a little more but it also lasts quite awhile longer. So in the end, pretty sure it will make it cheaper.

For Christmas- we participate in the X-mas saving program through DH's work. They take out 2% of every paycheck and the GIVE him 3%. They save it all year and give him the check the 1st Friday in December. So I don't have to worry about where X-mas money is coming from. But I know I could do A LOT better in how we spend that X-mas money when we get it.

[Cricketlegs]

Pet food/supplies-I would guess we spend around $60 - $70 a month? Honestly, another thing I've just never really kept track on.But am doing so now. Have also just started buying food in bulk, costs a little more but it also lasts quite awhile longer. So in the end, pretty sure it will make it cheaper.


I spend on average $70 too for 3 dogs, 2 cats, 2 birds, 2 fish and 2 hermit crabs!

It does add up but with a plan you can make it work.

I buy holistic dog food(lab with allergies--4 bags)
cat food--one huge purina one--cat with allergies lol
huge cat litter
fish food(very seldom)
bird food(1 large bag)
puppy pee pads for my indoor rat terrier at night and when we are away.

[xtena]

You're on the right track and so much excellent advice is given I don't have a lot to add, except you should track EVERY PENNY that you spend for the next couple of months. Only by understanding where your money has been going, can you successfully build a plan to manage your money in the future.

If you spend cash, carry a notebook and write it down plus keep every receipt to balance to. If you have online banking, balance your account every day or two online. You can track your spending on paper, but I find it easier to use a spreadsheet or financial software. If you don't have QUICKEN, MONEY, EXCEL or something similar, sign up for a free online program like google apps which includes a free online spreadsheet. It is tedious, but very eye opening to find where your money leaks are and it is very satisfying and empowering when you take active steps to plug them up.