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Personal Finances / Credit Cards and Consumer Debt
|Subject: Such a Mess I've Made...||Date: 12/6/2007 1:03 AM|
|Author: nomoreplastic||Number: 264808 of 310986|
After a couple of months of lurking, I’m finally getting serious about my situation and I’ve taken the time and energy to look at the reality of the mess that I’ve created.
To begin, we probably make enough money to live very conservatively, but comfortably.
My DH takes home $2444 biweekly, I make $1000 per month. We have teen daughters, 14 and 16, and we homeschool, which in our case means that the oldest takes classes at the local community college, the younger one works independently on her work at home or we go to various activities that we’re involved with. I also have an art-related business website and a studio in my basement, where I create. I have been selling mass-produced work for the last 3 years, and now, I’m just about at the point where my personal work is ready to sell and I’m starting to do so, with the goal of selling my own work exclusively. (I’m purposely avoiding talking about exactly what I create on purpose to preserve my anonymity). The business has never really done great, and unless my own work can sell as it should, I’ve resolved to put it to bed and continue my work as a hobbiest rather than as a business. I have more than adequate amounts of supplies, and my website is paid for the next year, so there should be minimal costs to going this route, and most recently, I’ve been paying for those costs by liquidating my mass produced stock. We’re talking less than $100 per month.
My $1000 per month is from a job I have as an event planner for a small non-profit organization. As the event is annual, the work goes in cycles, and for the most part, it is more of a labor of love; I’m sure I could make more working for a different type of organization, however, this situation allows me to be with my girls for a couple more years, and also to pursue my art so that it might be more profitable later on. The biggest problem I'm having with this job is that they are miserably inconsistant with paying me on time.
I realize that some of you will look at my situation and think that I should just go get a job and throw the kids in high school. I AM planning on getting a full time grown up job (unless the art takes off) as soon as the 14 year old is just a bit older. If things get truly dire, I’m not above taking a shortterm seasonal job but it’s not my first option at this time.
Okay, so now for the part, my debt and cash flow situation.
My total credit card debt is $21,431.03. I have 2 cars, one with $3073 owed, and the other a little under $12K. Both are modest cars, no SUVs or fancy stuff. I have a mortgage, that is around $262K, house value even with the crazy market is around $400K. We live pretty simply, no RVs, boats, and we even have a second hand tv that we got for free after the old one died. We do have our computers, which the girls need for schoolwork, and I need for my work. Our other assets are my studio equipment, not super high end, valued around $2000, and my husband’s musical equipment (he is in a band and is just starting to gig regularly), value is about $3000, again, nothing really high end, but good for performing. The only other thing of value is a motorcycle, worth about $3000, which he uses to commute to work in good weather and parting with it is non-negotiable (I’d happily dump it!)
In the last year, we seemed to fall apart financially. I’m still trying to figure out exactly why, but what I’ve pretty much figured out from looking at all of our statements, is that I tend to overspend because I keep figures in my head and that leads to Peter and Paul syndrome, and if it’s really out of control, add in overdraft, overlimit and late fees, and well, do that for a year or so, and it becomes a mess. Spending on miscellaneous things also got out of control due to my need to please everyone in my house. You see, despite 20 years of marriage, my DH wants absolutely nothing to due with managing the money month to month. We’ve been through rougher roads (including BK, never again!) when the girls were much younger, then we did very well for awhile. It’s almost like all of the bad habits that we beat came back with a vengeance. The biggest one being my lack of planning and everyone else’s expectations to have exactly what they want instantly.
So I’ve talked to the bunch, and the 16 year old just got a job for her own spending money, the 14 year old now understands a bit better and is onboard with helping. DH is onboard with cutting back and doing a debt snowball so long as he can have his stuff (bike, instruments). I really do think that I am responsible for much of the mess due to my screwups, since I alone handle the money. I’m the one who needs to get a backbone and say no when necessary, as well as keep really tight track of what I’m doing.
Okay, so now that you have more background than you’d ever want to know, here’s what’s going on.
I am behind on the mortgage 45 days; I have spoken to the bank and they have approved an informal repayment plan. I have to make a $2800 payment this week, and then they're adding about $400 to the next 6 payments (till June) to get caught up. This will be tight, and if I can find anything to sell or another way to generate cash, it is the first thing I'm planning on paying. They say I can pay up the difference and get back to normal at any time.
I’m barely current on everything ; the electric and car insurance is pushing overdue, and soon the CC bills will be due again. The biggest problem with the CCs is that a) I screwed up enough to have a punitive interest rate, and b) I’m at the limit on everything from juggling to make things work. I have made the tiny progress of getting everything else up to date, making it unnecessary to keep using them. One account is closed.
I’m still working on a budget, and haven’t quite figured that part out yet. I can see that it’s going to be really tight, but we’re ready to get it together. The cash flow situation is the one that concerns me most; I feel like we could manage paying down the debt if I could just get caught up and on a plan.
I’m serious about getting out of debt and getting my finances under control, whatever it takes. I’ve read Soccer Dad’s posts, actually I've read this board till I dropped to help get motivated and glean some info about how to get out of this mess both short and long term. I have found this board incredibly inspirational, I’m actually excited about challenging myself to make things work!
Looking forward to your feedback, suggestions and comments.
Will put the numbers in next post in a moment.
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