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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308691  
Subject: Balancing debt with personal relationships[LONG] Date: 5/19/2009 10:10 AM
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Hey everyone, it's been a while since i've posted an update, and it will probably be just a little bit longer as I gather some more information to provide the most detailed [and unembarrassing] report I can. I apologize in advance for the length of my post, but short of finding a therapist to talk to, I felt like this was a good place to find some tough love.

INHALE

I am a bit ashamed to say my progress hasn't been as great as I would have liked. I have given in to my old habits on many occasions and I find myself in more CC debt than in the past.

I've also got some family financial issues [parents] and I now live with my wonderful fiancee. Until recently it did not occur to me just how bad I have been. I think it has gotten much worse in recent months, as i've just started to realize that I have been hiding some spending from her. She doesn't deserve that in a partner, and I know I don't deserve to live like this. So it has to stop. But enough of the pity party, on to my question[s]...

First off, let's start with my family, which shockingly tends to be where my financial failure was bred. Now I realize that my choices are my own and I have free will and my own lack of responsibility to blame for my [not so] little fox hole. But please hear me out before passing judgment.

My father worked his way up through a few companies from engineer to mid level manager to executive. Of course with his personal success came some financial rewards, and these rewards often trickled down to the kids and their families. It was quite a shock when my father lost his six figure salary, out of the blue, to an old partner that decided to come back to work out of retirement.

I don't think he ever quite recovered from that. He has been working his way toward social security [Feb 2010] at a retail job for the past couple of years. My mother was lucky enough to land a solid office job with health benefits, so they are getting by...but they have been through unemployment, food stamps, bankruptcy, moving from a beautiful 4 bedroom home to a modest 2 bedroom apartment, and turning to their 3 kids for financial advice and assistance.

Now as you might have guessed, I am in no position to be financially supporting anyone beyond myself. That isn't to say I didn't try. On a few occasions I have offered up what little money I have been able to scrape together to help them out. Most recently I co-signed for an $1800 balance [payment plan] so my father could have some critical dental work done. I would do that again in a heartbeat, but that doesn't address my underlying problem.

My fiancee and I have been talking more openly about money lately...specifically about my debt and my family financial issues. My parents are not in debt as they filed BK last year. But they have 2 junker cars that are money pits, honestly...and it seems like something is always coming up. I have ~35K in CC debt, about 7K in student loan debt and just under 20K owed to a vehicle loan at my CU.

We live in NC, my family lives in Upstate NY. So visiting is always an ordeal, whether during holidays or in the middle of the summer [which will be July this time] -- she thinks it is irresponsible to travel to see them, because they haven't been able to afford traveling to NC amidst their financial hardship over the last several years. I can't really convey how they feel about that either, because she isn't close to my family members at all. So she assumes they don't come because they don't care enough to visit me. It really hurts to hear things like "they never visit YOU, but you will whip out a credit card to go visit them whenever it's convenient." I plan to pay for my flight and expenses for the trip in July with cash savings i've been stashing away for months now.

I feel like I don't know how to live without having that card in my pocket to back me up if i'm a little short on cash at the moment. More awkwardly, I feel [and have been diagnosed by the fiancee] as an "addict" even. She feels quite strongly about my spending addiction. While I admit to having a problem with it, I feel quite badly when I am labeled as such. Maybe I need to get over it? I want to address my family with my spending issue and current debt load, but I feel ashamed and don't know what the best course of action is.

While I do have a large amount of debt, I have also switched jobs and make about 15% more cash than I did this time last year. So that helps a bit.

I really would like to hear your thoughts on how best to address family and fiancee with regard to my financial situation. I want to maintain a healthy, open line of communication...because I feel like this has the potential to destroy relationships if I don't rope things in now.

Part of me wants to find a way to keep my engagement while managing my debt, and part of me hears her arguments for why she shouldn't be forced to deal with my irresponsibility. I see where she is coming from, I just wish I could wave my magic wand and make it go away.

I won't blame her for the spending, but she was part of our enjoyment throughout much of it. She protests and swears she would never go along with that if given a choice. I don't know what to say or do at this point...

I will be tightening the screws now, i've been paying off chunks each month...at least $1300 a month in snowball, but I fear that is just going to make things worse as she sees just how boring life can be when the money all goes straight to debt.

I apologize for the absurd length of this post, and thank those of you who made it this far. I also promise to get a legit balance sheet up here this week so you can see my "new" starting point. My utilization still hovers around 45% and my FICO score is currently 765, so things could be worse. More on that soon.

So how do you do it? How do you make the shift in lifestyle without damaging the important relationships in your life? Maybe it isn't possible and you take the damage on the chin?

EXHALE

Thanks again for letting me vent. Be gentle ;)

Mike
wonders where to go from here
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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288132 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 10:27 AM
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You sound overwhelmed - step back and get some perspective.
I won't blame her for the spending, but she was part of our enjoyment throughout much of it. She protests and swears she would never go along with that if given a choice...I will be tightening the screws now...at least $1300 a month in snowball, but I fear that is just going to make things worse as she sees just how boring life can be when the money all goes straight to debt.

Don't be all passive-aggressive about this. She isn't the problem, and she has in fact told you she wants you to be responsible. If that's too "boring" for her, you aren't with the right person. But I would give her the benefit of the doubt and assume she means what she says. You have a budget, and now you need to live with it, and she needs to understand that.

because they haven't been able to afford traveling to NC amidst their financial hardship over the last several years.
And you are in the same situation. You cannot afford to visit them either. You may not recognize it, but you are in the same situation. they may be above their head, and you only in water to your eyebrows, but neither of you can afford travel right now. I'll cut you the slack on paying for your Dad's dentist (that's a one-time thing and a medical emergency), but travel doesn't fall into the same category.

I can't really convey how they feel about that either, because she isn't close to my family members at all. So she assumes they don't come because they don't care enough to visit me. It really hurts to hear things like "they never visit YOU, but you will whip out a credit card to go visit them whenever it's convenient."
I would not necessarily assume this. She is just pointing out that in fact, neither of you can afford this. Which is true. Really, unless there is a family health emergency and it is dire, you cannot afford this. Certainly not on credit.

I feel like I don't know how to live without having that card in my pocket to back me up if i'm a little short on cash at the moment. More awkwardly, I feel [and have been diagnosed by the fiancee] as an "addict" even. She feels quite strongly about my spending addiction.
She is right. A credit card is not intended to back you up "if you are short on cash at that moment" and you need to stop thinking of it that way. Take it OUT of the wallet and just pay cash. Period. I am more disturbed my the fact that she seems to be belittling you in what she calls you (?). Perhaps sit down with her and say, "I am really struggling with this and I need your help. Can you support me by taking the following actions, X, Y, Z (and here really think about what you need from her)..." and please don't put me down, because I'm trying really hard.

Oh - and last note? Sell that car and buy a beater. In your situation you don't need a $20K car note.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288133 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 10:50 AM
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Oh, and one more thing...
My utilization still hovers around 45% and my FICO score is currently 765
It' not my intent to discourage you, but I would avoid thinking of success in these terms. Utilization is a factor in credit score, but it has NO relation to your budget. The fact that you could be even more in debt is irrelevant to where you are now.

I would stop thinking of credit score or utilization, and start thinking about total debt, monthly budget and progress in reducing debt, and improving net worth. It's possible to be hemmoraghing money, be in debt beyond one's comfort level, and still have an OK credit score. What matters is YOUR plan, YOUR budget, YOUR relationships, and not an abstract number.

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288135 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:14 AM
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Does your fiancee know how much you owe, or is she simply aware that there's a lot of debt? Have the two of you talked, at all, about your parents and their financial problems? I'm not always in favor of discussing the problems of other family members with outsiders, but in this case you want to marry her, and she'll no longer be an outsider. If she is making judgments regarding your parents and their attitude toward her based on their unwillingness to visit, then she (and your parents) deserve to have the situation clarified.

Life doesn't have to be boring while paying off debt or even just living on a small income. There are plenty of things that can be done on a small amount. My sister and her husband spent many, many weekends hiking, picnicking, visiting historical sites, and so on. They were living on one salary and banking the other. (They are currently retired and on a motorcycle heading toward Boston, while stopping regularly for hikes, picnics, historical sites and unusual museums).

I think you need to be honest with your fiancee and ask for her help in terms of support or ideas for cheap dates. But I think she needs more information than it appears you've been giving her.

Nancy

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288137 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:19 AM
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I totally agree with Nancy - there's TONS of low-cost or free stuff that can be done for fun. I once dated a guy who was mostly unemployed, or marginally employed during the time when I knew him. I still remember that as being one of the most fun times of my life. We did so many wonderful things that didn't cost anything. He cooked for me (and I him - we LOVED to cook), we went to state beaches and parks, watched the sun set from the roof of tall office buildings, went to flea markets for people watching (not buying), went to parades and street fairs, museums, gallery openings, drove up & down the coast of CA camping, meteor-watching. It was great. Neither of us had much money, but boy did we have a lot of fun.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288140 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:35 AM
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Don't be all passive-aggressive about this. She isn't the problem, and she has in fact told you she wants you to be responsible. If that's too "boring" for her, you aren't with the right person. But I would give her the benefit of the doubt and assume she means what she says. You have a budget, and now you need to live with it, and she needs to understand that.

I know. You're right, she is not the problem. I am really just trying to find a way to get everything out in the open to her without losing her. Maybe that isn't possible, but the financial stuff will be my problem regardless. I didn't mean for it to sound like i'm blaming her for it. Just that i'm concerned she will not find life with me as enjoyable if I become a penny-pincher.

And you are in the same situation. You cannot afford to visit them either. You may not recognize it, but you are in the same situation. they may be above their head, and you only in water to your eyebrows, but neither of you can afford travel right now. I'll cut you the slack on paying for your Dad's dentist (that's a one-time thing and a medical emergency), but travel doesn't fall into the same category.

I agree with this, but I am lucky to see my family once each year. I also have a newborn nephew [Parker] that I really want to meet. I'm sure this is probably irrelevant to what I can afford though, huh? :/

I would not necessarily assume this. She is just pointing out that in fact, neither of you can afford this. Which is true. Really, unless there is a family health emergency and it is dire, you cannot afford this. Certainly not on credit.

I guess that makes sense. I have some cash in savings that I was planning to use to pay for this trip. It isn't a frivolous trip by any means. I would be buying a round trip flight to NY [200-300 dollars] and paying for a meal or two while in NY. I have a free place to stay and might not even need to buy meals as i'll be with family all weekend.

She is right. A credit card is not intended to back you up "if you are short on cash at that moment" and you need to stop thinking of it that way. Take it OUT of the wallet and just pay cash. Period. I am more disturbed my the fact that she seems to be belittling you in what she calls you (?). Perhaps sit down with her and say, "I am really struggling with this and I need your help. Can you support me by taking the following actions, X, Y, Z (and here really think about what you need from her)..." and please don't put me down, because I'm trying really hard.

I need to do this. It was to that point this morning [which is what sparked this post, honestly] -- I just can't do that while i'm on my way to work. It sets a bad tone for the day. I will talk with her this evening and try to explain it in better terms. My main idea is that I need her to realize that I am serious about repaying my debts and shifting to a cash lifestyle. She has never had a credit card and has no urge to get one. Perhaps she is a blessing in disguise.

Oh - and last note? Sell that car and buy a beater. In your situation you don't need a $20K car note.

Well, i'm not quite there yet, but this is certainly a possibility. I had an option to buy something more reasonable, or get something that will last me for 10 years. I chose longevity as i've been through a few vehicles in the last 7 years and I am sick of having a car payment AND repair bills. As I said before, I make a substantial amount more so I was able to justify it that way. Looking at the balance sheet...doesn't really help to back that up now, huh? Sigh, food for thought.

Thanks for your post. I appreciate it very much.
Mike
anyone wanna buy a 2008 camry with low miles?

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288141 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:37 AM
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Good comments on this thread. MJW sounds like he has a second generation spending problem, and he should learn to deal with it before he encounters problems like his parents.

It sounds like he's been spending money to attract the interest of his girl friend. Spending money you have on such things might be justifiable, but going into debt for such things is bound to lead to problems sooner or later.

Since she inviting him to cut his spending, take her up on that and see what happens. If she leaves ---- you couldn't afford that kind of arm candy anyway. If she stays --- you may have a keeper.

And consider this ---- if you DON'T deal with the spending and debt problems --- she may leave anyway. If she's smart --- and she sounds smart.



Seattle Pioneer

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288142 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:38 AM
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I'm really rooting for you, Mike. It sounds like you know what you need to do - just are having a hard time making yourself do it.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288143 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:40 AM
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It' not my intent to discourage you, but I would avoid thinking of success in these terms. Utilization is a factor in credit score, but it has NO relation to your budget. The fact that you could be even more in debt is irrelevant to where you are now.

I would stop thinking of credit score or utilization, and start thinking about total debt, monthly budget and progress in reducing debt, and improving net worth. It's possible to be hemmoraghing money, be in debt beyond one's comfort level, and still have an OK credit score. What matters is YOUR plan, YOUR budget, YOUR relationships, and not an abstract number.


I didn't mean to use that as a sign of success. Just a preface to my post in which I will detail my entire situation. It's coming, I promise. It's not as bad as it could be, but it's still pretty bad.

I am fortunate to have over 50% of my debt at 6% fixed for life thanks to my credit union. I am also thankful that I was able to shift a large chunk of it OFF of BofA before they jacked up the APR to 16%. But I digress.

Plugging numbers in to the snowball calculator puts me at about 30 months to pay off all the cc debt. My student loan will also be paid in full by then, assuming I don't mess up again.

Again, thanks for the input. I will address the family with my situation soon and I plan to talk with DF after work, over dinner perhaps.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288144 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:49 AM
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Does your fiancee know how much you owe, or is she simply aware that there's a lot of debt? Have the two of you talked, at all, about your parents and their financial problems? I'm not always in favor of discussing the problems of other family members with outsiders, but in this case you want to marry her, and she'll no longer be an outsider. If she is making judgments regarding your parents and their attitude toward her based on their unwillingness to visit, then she (and your parents) deserve to have the situation clarified.

Hi Nancy. She probably does not know the exact amount of debt. I do plan to share more information with her, as she is not used to dealing with stuff like "weighted averages" and "snowball calculators." I fear this may cause her to RUN frantically, if she doesn't do something more drastic. Honestly though, she is a kind person. I do not think she would appreciate being lied to or even having such information being kept from her. I plan to share it all with her very soon in my attempt to clear the air. I hope that goes OK.

Life doesn't have to be boring while paying off debt or even just living on a small income. There are plenty of things that can be done on a small amount. My sister and her husband spent many, many weekends hiking, picnicking, visiting historical sites, and so on. They were living on one salary and banking the other. (They are currently retired and on a motorcycle heading toward Boston, while stopping regularly for hikes, picnics, historical sites and unusual museums).

I think you need to be honest with your fiancee and ask for her help in terms of support or ideas for cheap dates. But I think she needs more information than it appears you've been giving her.


This may be a personal thing. I think [as SP so wisely guessed] my life has been filled with a lot of material entertainment. I am a computer geek by profession [and hobby] so gadgets and technology dominate my daily life. My parents raised us in a household where free spending was common and financial education was absent. They often carried debt but my father [the responsible one] always made enough to pay it off and manage it properly. Until his high salary/income disappeared. So we are both in to the outdoors and hiking, etc...so I think we can manage to entertain ourselves without the spending. I just hope it doesn't begin to wear on her and create any extra tension.

I suppose it would be better tension than having this debt load hanging over my head.

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288146 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:54 AM
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Does it hurt that she calls you a credit addict because she might be right?

I know several people in RL who seem to be always digging themselves out of debt. They never actually succeed because there is always a "one time" purchase they think they need or deserve. They never think "but this purchase is one more thing delaying my payoff date" or "this is one more bill that I will have to meet even if unemployed".

You can't afford to travel for anything. Period. Doesn't matter if it's mom & dad's 40th wedding anniversary, an aunt's funeral, or a cousin's wedding. Your butt needs to stay home.

Damaging the relationship? Let's be honest here, you're about to be married. If your relationship can't handle a tightened budget one of you two needs to grow up or move on. In 40 years of marriage you can expect at least one stretch on unemployment, arguments over how to raise the kids, where to live, a few deaths/hospitalizations of family & close friends, possible temptation towards infidelity, and a midlife crisis. Heck you might have a natural disaster thrown in (you think Katrina didn't put stress on marriages?). If you guys can't handle something as minor as living on a budget, you're screwed. Face it, once you're married, dates are infrequent events and pretty low-key. My husband and I eat most of our meals in, watch most of our movies at home, and an exciting weekend for us may be meeting friends at their house for dinner. Here is the big secret, what you do doesn't matter. The fact that you enjoy being with that person as much or even more then you enjoy being alone is key. When we read together in bed we aren't even talking to each other, but it's some of the best bonding time we have.

Lara Amber

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288147 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 11:54 AM
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Good comments on this thread. MJW sounds like he has a second generation spending problem, and he should learn to deal with it before he encounters problems like his parents.

Those who fail to learn from history, right? Sigh.

It sounds like he's been spending money to attract the interest of his girl friend. Spending money you have on such things might be justifiable, but going into debt for such things is bound to lead to problems sooner or later.

The thing is, I don't think she cares about the spending. Let me clarify, I mean she could care less if I spent a bunch of money on stuff and trips, etc...she would be happier with some personal attention and quality time. I guess that is what makes this MY problem. I need to get past it.

Since she inviting him to cut his spending, take her up on that and see what happens. If she leaves ---- you couldn't afford that kind of arm candy anyway. If she stays --- you may have a keeper.

And consider this ---- if you DON'T deal with the spending and debt problems --- she may leave anyway. If she's smart --- and she sounds smart.


This is where i'm at now. Ready to stop the bleeding. I just hope she will stick around to offer a band-aid from time to time instead of pouring the salt on her way out.

Great advice in here though folks. Thank you all. I will report back soon.

Mike
deep breaths

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288148 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:01 PM
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I just hope it doesn't begin to wear on her and create any extra tension.
It may very well do this - but here's the thing - if she loves you, she will want you to succeed at paying off debt and will support you in this effort. It sounds like you are afraid she loves you for your "stuff" and not you. This is almost surely not the case, from what you have said above about her. And if it is - wouldn't you want to know now, before you are married?

It will no doubt be scary to put the cards on the table for her, but it's essential if you are to be married. You cannot marry her hiding your financial situation. If it were me, I would view that as a betrayal, and waaaaaaaaaay more of an issue than being asked to give up eating out or a few toys.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288149 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:02 PM
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Does it hurt that she calls you a credit addict because she might be right?

I know several people in RL who seem to be always digging themselves out of debt. They never actually succeed because there is always a "one time" purchase they think they need or deserve. They never think "but this purchase is one more thing delaying my payoff date" or "this is one more bill that I will have to meet even if unemployed".

You can't afford to travel for anything. Period. Doesn't matter if it's mom & dad's 40th wedding anniversary, an aunt's funeral, or a cousin's wedding. Your butt needs to stay home.


It absolutely hurts because I know she's right. It hurts more because even after i've told her that I get it, I agree, I know I have a problem and need to address it, I *still* get that thrown at me. Kind as she is, the woman knows how to push my buttons. So I guess while I know it is my cross to bear...I wish she would cut me a bit of slack on the name-calling. I'll address that this evening. I need to know if she plans to support me [emotionally] or not. I imagine it will be vital to my recovery. I'm far less worried about the debt than I am about my ongoing cyclical spending.

Damaging the relationship? Let's be honest here, you're about to be married. If your relationship can't handle a tightened budget one of you two needs to grow up or move on. In 40 years of marriage you can expect at least one stretch on unemployment, arguments over how to raise the kids, where to live, a few deaths/hospitalizations of family & close friends, possible temptation towards infidelity, and a midlife crisis. Heck you might have a natural disaster thrown in (you think Katrina didn't put stress on marriages?). If you guys can't handle something as minor as living on a budget, you're screwed. Face it, once you're married, dates are infrequent events and pretty low-key. My husband and I eat most of our meals in, watch most of our movies at home, and an exciting weekend for us may be meeting friends at their house for dinner. Here is the big secret, what you do doesn't matter. The fact that you enjoy being with that person as much or even more then you enjoy being alone is key. When we read together in bed we aren't even talking to each other, but it's some of the best bonding time we have.

Point taken. Perhaps I made this in to something more than it actually is? A little stress from the morning commute [on TOP of the morning commute] does not a good start to my day make.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288150 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:13 PM
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I'm far less worried about the debt than I am about my ongoing cyclical spending.
If you are more worried about cyclical spending - do you have a monthly budget and track everything to the penny? It's critical to addressing this.

I was always diligent about having one, and then I got to a point where my income was well above outgo for a few years and I stopped keeping it, but now I have no income (hopefully will pick up work later this year!), and my budget is super critical. You say you are a geek - you can build a kick-butt spreadsheet with charts & graphs, like I did (I am so much a spreadsheet geek), or use one of the software options. The thing is, if you are a numbers person or at all technical, it gets kind of addictive keeping a budget. I had forgotten how much fun it is. And it's unforgiving. You can't spend frivolously and just sweep it under the carpet. It sits there in black & white and points at you. You can't wish it away. And it gets you to CHANGE your behavior. At least it did for me. I am much better at keeping spending in check when I keep a budget. And I do mean every penny. The parking meter quarters. A cup of coffee at work. Fertilizer for the lawn. Everything.

So, that's step one. If you haven't done it yet, make it the project for this week. the good news is that monthly spending is totally controllable, and way easier to deal with than debt.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288151 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:20 PM
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If you are more worried about cyclical spending - do you have a monthly budget and track everything to the penny? It's critical to addressing this.

I've been to this site a couple of times now looking for advice and support in my quest to escape debt. So <ducks> yes, I already have a budget. I've actually had one for 5 or 6 years now. Maybe longer.

My problem isn't budgeting, it's sticking to the budget. I will post up the numbers again real soon. Maybe i'll do it this afternoon.

My spreadsheet doesn't have any charts or graphs, but it does exactly what I need it to. Tracks incoming and outgoing "fixed" amounts. With overages for cash, etc. I have been using quicken for 7 years now too. It's getting tougher to back up my files to gmail...zipped, it's ~16MB now!

I think I might be a candidate for withdrawing cash for certain things [spending, groceries] and just cutting myself off when the money is gone. It might have to be that way.

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288152 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:43 PM
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I think I might be a candidate for withdrawing cash for certain things [spending, groceries] and just cutting myself off when the money is gone. It might have to be that way.

Everyone has their own style. Some people like budgets, some use envelopes, some are a bit more casual. Some people like YNAB (You Need A Budget) others prefer to create their own with a spreadsheet, others use Quicken or other programs.

What is important is that you find a system that works for you, that will help you keep the spending under control and get the debts paid off.

My mother, at the age of 92, uses a simple spreadsheet on her computer. It works for her.

Hang in there.

Nancy

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288153 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 12:51 PM
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<<My problem isn't budgeting, it's sticking to the budget. I will post up the numbers again real soon. Maybe i'll do it this afternoon.

>>


Well, there's a weekly date with the GF. Reviewing how closely you stuck to your budget during the earlier week.



Seattle Pioneer

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288156 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 1:05 PM
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SP and others have a good point about reviewing money with her in detail and not concealing anything.

Dating = can know where you work, but not really entitled to anything else

Living with You = should have a general idea of your finances and bills

Engaged = should be sitting down and discussing debts, assets, plans for the future (buy a home within X number of years, get pregnant, move to Germany after getting degree), and the proposed family budget in detail down to the penny before any marriage takes place.

Remember a marriage is a legal joining of two parties. Do you think companies merge without exchanging financial statements and going over everything in detail in advance? So where will be our new company headquarters? Are we going to continue to use your accountant or mine? Anything concealed is considered FRAUD.

Yet people are supposed to just concentrate on centerpieces and where they are going on their honeymoon, then wonder why the first year of marriage was so hard. Want a sure recipe for divorce? Conceal from her your debts until after you're married. Then once married hide purchases and maybe have a secret credit card.

You need to be completely honest with the person you're marrying. Even when it's hard because you're embarrassed or ashamed. The two of you will be hitched to one wagon pretty soon, you better be real honest with her about how much that wagon is going to weigh.

Lara Amber

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288157 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 1:24 PM
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My problem isn't budgeting, it's sticking to the budget. I will post up the numbers again real soon. Maybe i'll do it this afternoon.

My spreadsheet doesn't have any charts or graphs, but it does exactly what I need it to. Tracks incoming and outgoing "fixed" amounts. With overages for cash, etc. I have been using quicken for 7 years now too.


In my experience, Quicken is a poor budgeting tool. By the time you see what's going on, it's too late to do anything to change the answer. I like my 16 years of history in Quicken, but I've found the budget feature unusable.

There are actually two major parts to budgeting. Making the plan is the part that gets most of the attention and commentary. But a plan is worthless if you don't follow it.

The other part, which is absolutely critical, is being aware of the plan at the time you make spending decisions and changing those decisions to keep the budget balanced. You have to be able to decide, "No, I won't eat out today because I've already spent the dining budget. All the money I have left is needed for other budgeted stuff, and eating out now means I have to give up something I want more."

I think I might be a candidate for withdrawing cash for certain things [spending, groceries] and just cutting myself off when the money is gone. It might have to be that way.

That is certainly one strategy to hold problem areas within a budget. Another way is to use an envelope budgeting system. I use YNAB; if I'm diligent about keeping the records up to date, it shows me in near real time where I stand versus budget. So I learn to look at what's left in the Dining category before taking my daughter to Burger King. I learn to see that I've used over half the grocery budget by the 15th, so it's time to eat cheap for a couple weeks. I learn that if I have a $750 car repair when I only have $300 in the budget for that, I need to find $450 from other budget lines to cut . . . and then actually spend less than I had planned on the categories I had to cut.

There are two key concepts to staying within a budget. First, don't spend more than you planned in any category. Second, if Murphy forces you to spend more than was planned for some category, make it up somewhere else.

Budget software can help, but it's largely a mindset. Instead of thinking, "This is a one time thing, and I can live with the additional spending," you learn to think, "This is a one time thing, now where am I going to make it up by cutting other spending or getting extra income?"

Patzer

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288158 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 1:27 PM
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I agree - I've never liked Quicken for actual budgeting. It was always too high level for me, and didn't force me to be honest about that $1.50 for a cookie I was buying while out on a walk. I'm an Excel gal...

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Author: slakk Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288159 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 1:44 PM
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Mike, you've come to the right place.
Now instead of looking for the right answers, maybe you should ask the right questions.

You gave yourself all the answers you need.
You admit that you have a spending problem.
Perhaps you can ask yourself what you can do to overcome this addiction?

The fact that you visit the Fool and ask for advise means that you are willing to do what it takes to fix the situation for yourself.
Your fiance'/GF, parents, relatives are all external issues that you bundle in against your primary concern.

There are a lot of great suggestions on how to get out of debt, save money and have fun for free on the Fool boards.

I believe you have the answer you are looking for within yourself. All you need to do now is ask the right questions, meditate on the right answers, and act properly upon it.

slakk

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288161 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 2:21 PM
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I've been to this site a couple of times now looking for advice and support in my quest to escape debt. So <ducks> yes, I already have a budget. I've actually had one for 5 or 6 years now. Maybe longer.

My problem isn't budgeting, it's sticking to the budget. I will post up the numbers again real soon. Maybe i'll do it this afternoon.


Not meaning to sound harsh, mjw, but if you've had a budget for 5-6 years and your debt has been growing in that time, you don't have a budget; you have a pretty spreadsheet that's not working. Like dieting, sticking to the budget IS budgeting -- it only works if you do it.

I feel like I can say that because I was a failed budgeter for so long. For over ten years (maybe closer to 20!) I had pretty documents I didn't stick to. And my debt kept growing, or rather receding and then coming back even worse.

One of my ongoing mistakes was that whenever I screwed up a month and overspent, I would wipe the slate clean and start again the next month. It's all very well to say that the past is past, but the truth is, if you start the month with X debt and overspend by $200, the next month, your debt is X+$200. And if that happens every other month, well, we can all do the math.

One of ways YNAB truly revolutionized my spending was to teach me that if I overspend by $200 this month, I have $200 less to spend next month. Period. Otherwise, I have new debt. That one feature has made a huge difference to my ability to roll with my occasionally spending binges (or unexpected needs) and adjust the budget to accommodate them, instead of sticking the excess on a credit card and worrying about it later, like I used to.

Best of luck to you!! Your fiancee sounds like the right stuff. Hang onto her. Her tough love is really a blessing, and not just in disguise.

PS. I've had YNAB and have been actually living by a budget for almost two years. I'm hoping to do my debt free dance late this summer. Wish me luck, too.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288162 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 2:30 PM
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Not meaning to sound harsh, mjw, but if you've had a budget for 5-6 years and your debt has been growing in that time, you don't have a budget; you have a pretty spreadsheet that's not working. Like dieting, sticking to the budget IS budgeting -- it only works if you do it.

I agree completely. I know i've failed at sticking to my budget and perhaps that calls for a readjustment in my plan of attack. Is YNAB free? Is it a website?

I think I will look in to that now.

Congrats on your awesome progress and good luck finishing off that nasty debt!

Mike

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288164 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 2:35 PM
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Hi Mike,

YNAB is PC-based software. It costs a one time fee of $40 -- unquestionably the best $40 I've ever spent. (At least, I think it's still $40 -- or is it $50 now? Anyway, not inconsequential, but in my eyes well worth it.)

However, it isn't magic, you can apply the same principles to your own spreadsheet if you're diligent. (I happen to like it when software does the tedious part for me; others like doing it themselves.) All the principles used by the software are spelled out on the website (youneedabudget.com) -- check it out and see if it gives you any good ideas.

Hang in there, we're all rooting for you!

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288166 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 2:49 PM
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I glazed over their site, but I must be missing something. It uses a planned vs actual approach to calculate shortage/overage for each category?

Curious, how do you find this is more useful than say Quicken and a Spreadsheet? I don't use quicken for budgeting, I have a spreadsheet [the failing one] -- and I simply use quicken to balance accounts and download CC/Bank account transactions.

If there is a magic benefit from this program I am missing, please let me know. I'm pretty good in excel [programmer] so i'm sure I can make it happen if it's a feature I can't live without.

Mike
wonders if a change to his spreadsheet will kick off a change in attitude and behavior

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288169 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 2:56 PM
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Hello, Mike!

I haven't read more than the first few responses yet, so please forgive me if I'm repeating anything.

1) Your fiance is concerned that you spend too much. I assure you that if you show her how serious you are by being a penny-pincher that will impress her more than bore her. SHE doesn't have the perception that spending money is what creates fun, YOU do. Using her as an excuse for spending money is going to make you sound like even more of an addict (whether you are or not). Quit that. Not only quit saying it to her, but quit thinking it.

2) On that note, you need to get to the root of your relationship with money. It is possible to have a lot of fun without spending. Being frugal is not boring. Until you change your view that it is a punishment to be frugal, you're not going to succeed. Yes, you're going to have to be ridiculously frugal for a while and some of that is punishment for overspending in the past - but frugality itself isn't a punishment; it's a special skill to be honed, respected, admired, and emulated. Change your mindset - that will help change your problem.

3) Put a set amount of your money aside each month into two places: an eFund and a Freedom Fund. Do this even though you're still in debt. The eFund will help with things like dad's emergency medical care and other things you feel are truly unavoidable. The Freedom Fund gives you a set budget to blow on fun things - because without that set budget you'll seesaw wildly between not spending anything at all, and overspending because you haven't had any fun in so long. Use that Freedom Fund (if there's enough in it) to visit your parents if you want to. It's your money and you can do anything you want with it without guilt. But you'll have to budget it and prioritize your wants, or you won't have any when you want it.

4) Where do you go from here? You work out a plan, figure out how long it's going to take. Don't get discouraged - you didn't get in this mess in one year, and you're not going to get out in one year. Deal with it. Then do something fun, interactive, and visual to help you along. Make one of those paper chains, with one link for every $1,000 dollars of debt. String it across your wall by the computer. Invite your fiance to help you tear each link off as the debt disappears. Celebrate with a fling of $2.00 worth of sparkling apple juice to toast the event. Make it part of your life to enjoy the pay-down instead of hating it.

Good luck. You CAN do this.


Frydaze1

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Author: sturne012 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288173 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 3:08 PM
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Mike:

This might seem a little harsh, but in reading through your message, what struck me was your worry that "she" could/would not live with you if you didn't continue your past spending. If that is the case your are better off without her. Stick with your snowball each month, putting all of your increased finances toward the debt and add to this to pay off your CC cards and other debt.

There is no reason you can't pull this off, even with the problems your parents are having.

The biggest step is admitting you and your spending are the problem; not your parents; not your girl friend; not the world.

You can do this stuff...seems like I heard this some where.

Now back under my rock,

Spence, who has to do some work...I owe, I owe, it's off to work I go.

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Author: whoarob One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288175 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 3:10 PM
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Mike,

I was in a similar situation only had MUCH more debt than you. I had NEVER managed my money wisely.

I met and fell in love with a wonderful woman who manages her finances as well as anyone I can imagine. She has a PhD in finance. How ironic that we ended up together.

I spent many sleepless nights dreading having the money talk with her (this was way before we became engaged, we were living separately). I was sooo ashamed and figured she would dump me on the spot after my full financial disclosure.

I can't remember how the topic came up but we were sitting in the car in a parking lot. Ended up sitting there for a couple hours. I could tell she was amazed at how much debt I had amassed with not much to show for it.

We laughed, cried, worked out a plan, I made promises. I have not went another penny into debt since then.

We were married a few months later. I am STILL working on the debt. She has offered to help. She could write a check and pay off the remainder but I am stubborn about paying it off myself. Thankfully it is all at low interest rates.

Along the way, I have built up a fund....I won't call it an efund because I use it for other things. I keep the balance in the 4-5K range so I have have cash for things I used to "whip out" the credit card for.

I could not seem to break my bad habits for my sake. It took making promises and not wanting to let her down.

-R

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Author: slakk Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288176 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 3:12 PM
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Fry--

"It is possible to have a lot of fun without spending. Being frugal is not boring. "

I have a lot of fun trying to see how much I can get for as little as possible.

Its like a game to me.

Like those free tickets for Eminem tonight!
This is going to be a lot of FREE fun-- for me.

Mike--
If you have not bought your tiks to travel to see family yet, and have that trip saved up in cash, its time to bite the bullet.
You admitted you have a debt problem, and you also admit you spend too much. You also are concerned that this is causing problems for you and your love-life (love of your life?).
Time to start stopping what you normally start.
Cancel the trip, explain to people that you cannot afford such things until you climb out of debt. Make the plan and stick to it.
We are here to help. Ultimately the success will be up to you to achieve.

These Fools can only give advise and coach. You are the one that has to exercise and practice control, tactics, strategy, and implementation.

slakk

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Author: llambe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288182 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 3:27 PM
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The difference between YNAB and Quicken/Spreadsheet is: Quicken is good for tracking/reporting on PAST spending, spreadsheets are good for planning FUTURE spending, YNAB is good for keeping me on track TODAY.

YNAB is envelope style budgeting - if you don't have it you don't spend it. Instead, as Patzer said, if something unexpected comes up or you overspend in a category then you look into the other categories to see where you can pull the money from (or else YNAB will force you to account for it with less money to budget next month).

I'm a satisfied YNAB user who used Quicken and spreadsheets for 15+ years previous to YNAB and will never go back! If you don't want to spend the money on YNAB, you could try using envelopes and cash instead, Dave Ramsey style. Also there's a cheaper version of YNAB that is Excel based (with less bells and whistles).

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288186 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 3:57 PM
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I glazed over their site, but I must be missing something. It uses a planned vs actual approach to calculate shortage/overage for each category?

It's an envelope system. The site documentation won't clearly say this, but it's based on giving a job to every dollar you have. You don't get to budget dollars you expect to receive in the future, only dollars you have right now. The not so hidden implication is, don't spend money you don't already have. The are a lot of fine points, but the key is a very conservative attitude: Don't budget before you have the cash, and don't spend before it's budgeted.

Curious, how do you find this is more useful than say Quicken and a Spreadsheet? I don't use quicken for budgeting, I have a spreadsheet [the failing one] -- and I simply use quicken to balance accounts and download CC/Bank account transactions.

Even without using any budget software at all, one simple change will help you control spending: Stop downloading transactions. Instead, manually enter each and every spending transaction you make. This has multiple advantages for controlling spending:

1. Every time you enter a transaction, you are reminded that you spent money. It's harder to forget or overlook things. Entering lots of transactions will remind you that you're making lots of spending transactions, which ought to motivate you to make fewer of them. Don't forget to enter cash expenditures in a cash account, and regularly count your cash to balance it. That helps make cash spending real to you, which helps to stop spending leaks.

2. Entering your own transactions is faster than downloading. It normally takes 2 or 3 days for a credit card charge to post. Debit charges are about the same, and checks are worse. You need to know that the money is gone as soon as you spend it, not when the bank posts the transaction.

3. Downloading as the sole source of data implicity assumes that the bank is right. Manual entry plus reconciliation lets you find errors. Errors aren't common, and they're easy to fix when found; but if you don't find them, they're impossible to fix. Downloading as a reconciliation tool has more to recommend it; but if you're on top of your data entry, you should know pretty much which transactions haven't posted to the bank any time you look at your online account information.

4. It is a theoretical impossibility for a downloaded transaction to correctly categorize stuff you buy from a merchant that sells diverse stuff. In my life, that mostly means Walmart and Sam's Club. If I'm going to have to look at the receipt anyway to find out how much of the Walmart purchase is groceries versus toiletries versus pet supplies, I may as well do it immediately after shopping when things are fresh in my mind.

5. Intuit expects you to pay for an "upgrade" that will break things to keep downloading after more than 3 years. If you don't download, you don't have to pay for more bloat and nagware, and you don't risk having more stuff break in the next version of Quicken.

If there is a magic benefit from this program I am missing, please let me know. I'm pretty good in excel [programmer] so i'm sure I can make it happen if it's a feature I can't live without.

There is no magic. It's not so much the YNAB program as the YNAB system that works well, and you just about have to use it for a few months to understand the fine points. But most importantly, it's the change in how you look at things that makes a difference. There's a pretty active YNAB forum of users to help you understand the fine points of the program and see how other budgeters look at things. That helps some people with changing their mindset.

YNAB doesn't create money out of nothing. What it does is make your spending decisions explicit. For example, last year my daughter ran my $1000 deductible car into my $1000 deductible garage. I had a few hundred dollars budgeted for Auto:Service, but not $1000. I didn't have enough budgeted for home repair, either.

So what to do? I had to rob other budget categories. One of the categories that got robbed was "Vacation". I had $600 budgeted for a driving vacation, and that got spent on the $2000 visit from Murphy. As a result, I did not take a vacation in 2008. Another category that got robbed was Home Improvement. I paid that category back, but it took me eight months to do so.

And that's the key change in mindset. Instead of saying, a bad thing happened and I'm starting fresh, I say, a bad thing happened and I need to make it up. The easily identifiable part of making it up was not taking a vacation and delaying the new windows or repaved driveway by 8 months. The less obvious part was that my Auto:Replacement category stopped getting funded while I was making it up. The really subtle part was squeezing the grocery and dining budgets so I could make it up to Home Improvement faster.

That's the important part of budgeting. It gets you to make choices about spending, so that you spend on the things that are most important, subject to the constraint that the amount you have to spend is limited. If you make a budget plan and go spend whatever you feel like without reference to the plan, it's worthless. If Murphy comes knocking and you borrow to pay him off without changing other spending, your budget isn't doing as much as it should.

A good budget is a plan that lives, that reminds you of what you decided was most important, and that shows you the consequences of overspending in terms of what else you need to give up to fund the overspending.

wonders if a change to his spreadsheet will kick off a change in attitude and behavior

The other way around might work. A change to your attitude and behavior might get you to program a really kick-ass budget spreadsheet.

Patzer

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Author: GreatVintage1965 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288188 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:03 PM
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(I am seriously lusting after Patzer.)

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288189 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:13 PM
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Every time you enter a transaction, you are reminded that you spent money. It's harder to forget or overlook things.
I cannot emphasize enough how useful this is. I use Excel, and it's painful to se the numbers adding up and making me honest when I feel I really haven't spent "that much." Oh, yes I have - in aggregate. And I think "cash" accounts are kind of the devil spawn. I don't know how it works in YNAB, but for me, I do not differentiate between cash expenditures and others. All are tallied the same way. If it's groceries, it is groceries, whether it's $2 in loose change for a 1/4 lb of coffee at Peets, or $40 on my CC for weekly supermarket run.

It's behavioral training. I never liked Quicken because it just said after the fact - in some undifferentiated large buckets here are some but not all of the things you spend money on. I did it for two months and went, "mehhhhhh...not for me."

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288190 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:14 PM
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<<It is possible to have a lot of fun without spending. Being frugal is not boring. Until you change your view that it is a punishment to be frugal, you're not going to succeed. >>


Ummm--- this is a good comment worth discussing in more detail.


If you are in the habit of paying other people to entertain you, that can get VERY expensive depending on your tastes.

Developing other free or low cost means to entertain yourself may be something that takes some thought. Rather than paying money to a gym --- walking and bicycling might be alternatives to consider.

If book buying drains your cash, a rgular visit or two to the library might be a habit to cultivate.

If eating out costs you, perhaps you need to start practicing how to cook the meals you like the most when you go out.


So I'll invite you to post the usual means you spend to have others entertain you, and if you have ideas on free or low cost alternatives. Others might contribute their own methods of frugal entertainment of that kind.



Seattle Pioneer

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288195 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:27 PM
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Thanks, Patzer! I was just about to try and organize my thoughts to explain what I find especially valuable about YNAB, but as usual, you said it all better than I could.

FWIW, I do download transactions, a lot, especially when things get busy. I download to a qfx file and then import it into both Quicken and YNAB (so I get to avoid Quicken's nagware, at least for now). But certainly updating by hand has benefits, if you can make yourself devote the time.

The things that I have found especially helpful about YNAB, for what it's worth (many of which could be duplicated with a spreadsheet):

-- It works best if you choose to live off of last month's income. To most people in debt and living paycheck to paycheck, this is a radical idea, but it has paid off for me over and over since I reached that point (took a few months and some windfalls to get there). You don't have to start doing it right away, but working toward that goal helps to build up a buffer against Murphy and at the same time reinforces the idea that you can't spend a dollar you don't have in the bank.

-- It automatically holds money budgeted into a category in that category from month to month unless you spend it. This helps me to steadily put aside money for irregular expenses small and large. I'm still surprised at how often I think "Argh, how am I going to pay for X?" and then look at YNAB and realize the money is sitting right there waiting in the proper budget line. I forget it's even there.

-- If you overspend in a category, it doesn't budget less to that category next month (this is what many people instictively do with their own spreadsheets). It deducts that amount off the top of what you have to live on next month, and then leaves you to figure out how to redistribute what's left. This was a completely new way of thinking for me, and I've found it to be extremely helpful.

-- If there is a negative (overspending) anywhere in the budget, it forces you to deal with it immediately (i.e. take some money out somewhere else), or the numbers won't balance. YMMV, but I found it far to easy when I did my own spreadsheets to ignore red numbers, especially if they were small. (This undoubtedly says more about my combined lack of math skills and money savvy than it says about Excel.)

-- With the help of bank downloads, as I long as I keep up with entering transactions and categorizing, it tells me exactly where I stand in each category without me having to do any mental math. Again, YMMV, but I had a really hard time with my old spreadsheet determining in a matter of minutes or seconds whether I was actually on target with my spending during the month. In order to live according to a budget, if the budget is tight and you're not used to, you really need to be looking at it and adjusting your behavior accordingly, every single day.

I hope you can apply some of this to your own spreadsheet with success!

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288197 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:29 PM
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There have been a lot of good responses and I have been out of town over the weekend, so I may be a bit late to the party but here it goes anyway.

First, if you have $1300 to throw at your debt each month, then things are not as bad as you fear. Still, you could have more cash lurking around, and letting this forum pick apart your budget may help you to better understand your spending habits and change them for the bettr.

Second, if GF runs away when she learns the true nature of your debt, then she loves money more than you and good riddance. A bigger caution might be how she reacts if she sticks around. Does she seize control and start telling you how to handle your money, or does she work with you to help you develop improved spending and saving habits? Does she act superior and condescending for your missteps or supportive and understanding as you work your way out of your fiscal hole?

Fuskie
Who believes that calling you a credit addict may be an attempt at tough love, or it may be a sign that she looks down on you which is never a good way to start a marriage...

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288198 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:36 PM
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And I think "cash" accounts are kind of the devil spawn. I don't know how it works in YNAB, but for me, I do not differentiate between cash expenditures and others. All are tallied the same way. If it's groceries, it is groceries, whether it's $2 in loose change for a 1/4 lb of coffee at Peets, or $40 on my CC for weekly supermarket run.

[technical digression]

In a software tracking sense, there is no difference between a cash account and a checking account. Money goes in, money comes out, and it flows to other information according to how the software is designed. Poor recordkeeping leads to poor information and money leaks, not the account type.

Some people have a behavioral issue with tracking cash accurately. They will seldom have an accurate cash account, and may be better off regarding cash as spent when withdrawn from a bank account.

Other people will choose not to track certain types of cash transactions, or cash transctions below a certain size. I did this for several years, periodically counting my cash and making and adjusting entry for untracked spending. If the adjusting entry was bigger than expected, that told me I needed to control spending better or track more transactions.

These days, I track every cash transaction. The $0.75 put in the vending machine for candy gets categorized as dining. The quarter put in a parking meter gets categorized as auto:parking and tolls. The five bucks put into the envelope for an office collection gets categorized as gifts. I still do adjusting entries, and anything untracked gets categorized as Fun Money. That gives me such a good incentive to track accurately that my typical adjusting entry is an inflow, representing loose change that I found.

The cash account rolls up with other accounts in Quicken or YNAB to feed the total Net Worth (Quicken) or budget (YNAB) picture. No big deal, and not really any harder than dealing with a checking account or a credit card account.

[/technical digression]

I never liked Quicken because it just said after the fact - in some undifferentiated large buckets here are some but not all of the things you spend money on.

It's true that Quicken tells you after the fact what you spent on. How granular the buckets are, and how complete the report is, depends on how well you keep records in Quicken.

Certainly Quicken is not for everyone, and I'm not a fan of Quicken for budgeting. I do like it for pulling selected historical information out of my data; but that depends on my having put the historical data in with enough granularity to be useful.

Patzer

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Author: GreatVintage1965 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288199 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:45 PM
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"Some people have a behavioral issue with tracking cash accurately. They will seldom have an accurate cash account, and may be better off regarding cash as spent when withdrawn from a bank account."

This is how I account for cash. It alleviates the tracking of the minutiae that I spend the cash on. When I look at my checking account, I had better see only four withdrawals per month for $Y amount of money each. If I run out of cash, I look at the calendar and tell myself I have to wait until seven days have past since the last withdrawal (the virtual envelope is empty until then). Only urgent withdrawals can be made before then.

My gaming of the cash budget line item is to see if I can come in under budget, only splurge by using the coin change container I keep in the car, or by depositing the coin change into the bank for use elsewhere. It is a Crystal Lite container, fits in a cupholder and holds about $38.00.

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288200 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:45 PM
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A small point that I haven't seen anyone else address re: the trips home. It may be true that you just can't afford even yearly trips home right now (living by a budget will tell you if that's the case). But let's grant that visits home are a major priority for you and that you're determined to make them happen --

If you're going from NC to upstate NY, why can't you drive? Yes, it's a godawful long drive, but I used to live in upstate NY (way at the top), visit my parents in DC, and go with them to visit the beach in NC. Now I live in CT (a bit closer) but still do the same thing. I always drive. You could do the whole trip in one very, very long drive, or if you have friends along the way, maybe you could crash overnight partway there. Even with gas for the car and a motel if you can't find friends to crash with, it would still be cheaper than flying. This would be especially true if your fiancee goes along (two people drive and sleep for the price of one, not true with plane tickets).

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288202 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:55 PM
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<<5. Intuit expects you to pay for an "upgrade" that will break things to keep downloading after more than 3 years. If you don't download, you don't have to pay for more bloat and nagware, and you don't risk having more stuff break in the next version of Quicken.
>>



I bought a copy of Quicken in 1993. My bank gave me a free copy when they integrated their accounts to work with it.

That was fun for a brief period of time, but I prefer entering transaction manually, as described in your post.

As an additional benefit, I'm still using that 1999 version of Quicken, which has mifrated on to a couple of replacement computers over the years. I may take a backup copy with me to the grave, just to avoid any possible need to buy upgrades.



Seattle Pioneer

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288203 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 4:59 PM
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Patzer - you are 100% correct. For my business I do indeed have a "Petty Cash" account that Quickbooks treats no differently from my checking account. So I get what you are saying.

Some people have a behavioral issue with tracking cash accurately. They will seldom have an accurate cash account, and may be better off regarding cash as spent when withdrawn from a bank account.
I guess this is kind of what I was getting at. I think (personal bias showing) that if one does the latter - just budgets at the level of withdrawals at ATM, you don't really learn where the $ is going, so it's harder to control.

But as many here have said, there is no one perfect budgeting system - what matters is what works for the individual. I don't care if one collects a pinecone for every withdrawal from the bank to track accounts, and tallies it with an abacus, as long as the results are positive as far as spending control.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288204 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 5:02 PM
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<<Second, if GF runs away when she learns the true nature of your debt, then she loves money more than you and good riddance. >>


In my opinion, a reasonable and wise person might decide to write off people who are devoted to overspending or have accumulated large amounts of debt, especially if they don't have plans to change those behaviors.

But perhaps that would be "good riddance" at least for the person who has no interest in changing that behavior. For both parties.



Seattle Pioneer

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Author: yeilBagheera Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288206 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 5:58 PM
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I think this can be a great discussion:
you write
i'm concerned she will not find life with me as enjoyable if I become a penny-pincher.


Are you ready to say

Will you love me if I live like Scrooge?

or

I wish I could spend hundreds of dollars to pamper you, but you're right, I can't spend money I don't have. Is there a special treat I can give you as a symbol of my devotion?

(my idea is a pralines-and-cream cone in the park)

YeilB
female and married for decades

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Author: yeilBagheera Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288207 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:08 PM
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Can you make some charts showing what you owed in January and what you owe now?
or one that shows how much you paid in interest in February and how much you paid in April?
Would you be willing to post a BIG CHART of what you plan to spend before June 1 and your daily actions that will achieve that goal
I think she would like to hear how you are repaying the debt. Don't try to present the horrible big amounts and say they are not so bad. Do talk about the good habits you are developing.

Maybe the topic of how to entertain ourselves without spending dollars is less dangerous than how to pay off debt. Can you guys have a full and honest discussion --
when it's been nice to have been treated as a princess
when the costs haven't match the pleasure (I'm married to a man who doesn't enjoy beef, so we don't spend money on steaks and grilling -- he just wouldn't appreciate it)
is there some service work you might do together (picking up litter at the shore, eradicating ivy, serving at a soup kitchen, walking dogs for the Animal Shelter)?
walk to the public library and find a good book to read aloud to each other?
make music - play or sing together, with kids, at church?

YeilB
who admires you for putting your fears into words

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Author: yeilBagheera Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288208 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:16 PM
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well, mjw, I agree that you have listed amounts to spend over time (a budget), but you are not using the money you have coming in to provide for yourself and your Lady while saving for intermediate goals (travel, big gifts, housing in the future, emergency funds) or longterm goals (retirement, endowments) - so I don't think you are budgeting for what you need and want.

The spreadsheet doesn't exactly help you live a financially responsible life.
Maybe Quicken needs a bigger category for paying down debt or eliminating interest payments or sailing to Tahiti someday.

YeilB
as you lay on the couch, I suspect you are right that her concern about the weekend to your family and home may be a way of saying, can we have a great weekend together?

YMMV - I live in Alaska, so don't see family routinely. My kid brother lives a block from Mom and his wife has Mom in town and three siblings living there too.

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288212 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:24 PM
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DF and I live across the country from each other, so we spend a lot of time together that isn't actually together. We've gotten pretty creative about ways to be together and share things and, as you can imagine, very little money is spent on it. And yet we enjoy our time very much.

We cook together. (In separate kitchens, but the same meals.)
We watch TV together. And pause the show to discuss it.
We read aloud to each other.
We go on walks (and take pictures to share).
And we spend a lot of time every day just talking.

Since our relationship is almost all by phone, we've really honed our communication skills. And our friendship. And our knowledge or each other. And in the long run, that's what a strong relationship is built on, isn't it?

I was with xDH for 20 years, and when the money was gone it was pretty clear we didn't actually have anything in common or anything to talk about any more. Don't base your relationship on where you can go or what you can buy or how often you can have great sex. Build the friendship and trust and companionship that is much more valuable. If you can't stand to be alone together for a few days without some distraction to occupy you, I question the depth of the friendship. Learn to be good company for each other. That is something you'll always have, whether rich enough to travel the world or too old to get out of your wheelchair.


Frydaze1

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Author: yeilBagheera Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288213 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:29 PM
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what beautiful descriptions of lasting love
Thank you for #288212

YeilB

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288214 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:41 PM
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I think I might be a candidate for withdrawing cash for certain things [spending, groceries] and just cutting myself off when the money is gone. It might have to be that way.

EEEK!!!

This is exactly the kind of thought process that I think you're unaware of having.

"It might have to be that way" sounds like some kind of admission of failure or self-flagellation. It also sounds like a temporary fix until you're out of debt or something. It's not. I have a beautiful home, a nice car, and a healthy income. I also have debt from an xDH who equated success with an ability to buy anything he wanted the moment he laid eyes on it. But with or without the debt, no matter how high my income or how low my bills, I'd still have to stop spending when I ran out of money!

We ALL have to stop when we run out of money. Whether we use cash directly or a mental envelope. Using cash directly is not a flunky's method. It doesn't make you a bad person. It's not even a method designed for people who can't handle a credit card. In fact, it's the way most of the world operated until very recently even in this country.

Please stop seeing these solutions as temporary, horrible, embarrassing solutions. They are lifestyles that all of the successful people and successful companies follow. When your debt goes away, you'll have a TON of extra money to spend on things you want - and by then you'll have the skills and habits to keep yourself out of debt.

What you're doing now is about success, not failure. Please please please learn to recognize that. Resentment of your circumstances will derail you every time.


Frydaze1

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288215 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:43 PM
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Thank you, YeilB. I have high hopes for this one!


Frydaze1

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Author: 492dea Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288216 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 6:55 PM
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I think I might be a candidate for withdrawing cash for certain things [spending, groceries] and just cutting myself off when the money is gone. It might have to be that way.


You are not alone in this. I find I have to return to this method from time to time, in order to get back on track. I am currently a cash-only person.

492dea

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288217 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 7:18 PM
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<<We cook together. (In separate kitchens, but the same meals.)
We watch TV together. And pause the show to discuss it.
We read aloud to each other.
We go on walks (and take pictures to share).
And we spend a lot of time every day just talking.
>>


Hmmm. Interesting idea.


Reminds me of the movie "The Lake House" where a guy and a girl living in different years go on a walk set up by the guy to see Chicago architecture.


Seattle Pioneer

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Author: dianakalt Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288219 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/19/2009 7:49 PM
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Hi Mike,

My DH and I got married 2 years ago. At the time we got engaged, I had no debt other than a house payment. He had some significant CC debt as well as a car payment. I wasn't happy about this, but what we did is talk through financial things quite a bit before we tied the knot. Some random bits of advice.

*Tell her everything about the financial situation, in a way that you think will make the most sense to her. Don't beat yourself up over being in the situation - you can't change the past so your focus should be on the future.
*Let her know what thoughts you have about your plan to become financial secure.
*Ask her for her ideas on how to make your plans better.
*Discuss how you want to manage our household finances. My DH and I have discussed it a lot - before and since the marriage. I take care of the day to day bill paying and things, but we decide together where the money goes, especially for bigger things.
*Make sure you each have some money that you can blow on personal items without having to answer for it. You can do this a number of ways. DH and I each get a set allowance 2x per month, and the rule is that as long as we aren't breaking marriage vows or getting thrown in the slammer we can spend it as we like. It's a pretty good system for us.

Good luck! I think you know what you need to do - you just need support to do it and your family and DF is the best place to start!

d

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Author: GardenStateFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288252 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 9:12 AM
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I fear that is just going to make things worse as she sees just how boring life can be when the money all goes straight to debt.

Between boring stability and exciting collections calls, potential bankruptcy, and sleepness nights over debt...

...I'll take boring anytime.

There are lots and lots and lots and LOTS of things you can do that are fun and interesting and enjoyable in NC that don't involve a lot of money.

If everything you guys enjoy doing together takes a lot of money, then I might rethink the basis of the relationship. That's just me.

Also, allow her to speak for herself. You might be surprised at her answers. You've said that she considers you an "addict" and wants you to stop, I'm fairly sure she can figure out what the implications of not spending money are, and is willing to accept them.

GSF

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Author: GardenStateFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288253 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 9:13 AM
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I guess that makes sense. I have some cash in savings that I was planning to use to pay for this trip. It isn't a frivolous trip by any means. I would be buying a round trip flight to NY [200-300 dollars] and paying for a meal or two while in NY. I have a free place to stay and might not even need to buy meals as i'll be with family all weekend.

How about a bus or the train? Are those less expensive alternatives?

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288256 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 9:51 AM
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Wow, what an amazing group this is. It never takes long to remember why
 I signed up for a membership here back when it wasn't free. 

Thanks to all of you who have offered your tough love, suggestions, and
 life experiences.

Before I try to address everything individually, let me start with
 this...

I spoke to DF yesterday about things and she admits to being stressed 
about my financial situation. We are not in dire straits by any means. We live quite comfortably and have the ability to do so within 
[and soon to be below] our means. This will cut in to our entertainment budget a bit, but we are good at finding low cost options
 when we have to so i'm not too worried about that. 

To clarify my use of quicken for "downloading" transactions...I am not
 just buying stuff and hoping there is money left over when I download the week's transactions. I actually keep all my receipts for 
EVERYTHING, enter them all in to quicken the evening I make the purchase(s) [or when we get home if we are out of town] and THEN 
download to "balance" against what the bank thinks we spent. I reconcile against my online balances.

I feel pretty silly considering i've been doing this stuff for YEARS
 and I still can't get a handle on it. I locked up the "daily" spending CC in the vault last night. No more. I am thinking about 
deleting card information from some of our most frequent online retailers too [Amazon.com, Ticketmaster.com - yes, SP, we do pay others
 quite often to entertain us]

Before I address more of your posts, I want to post up my exact debt
 numbers to start, and before posting the budget I want to neaten it up a bit. But it is there and ready to be thrashed :)

Here goes...


Debt          Balance Limit  Min     APR
---------------------------------------------
Chase Visa    3862.69 11500  100.00 [10.24%]
Discover      9564.86 13500  190.00 [7988.09 @ 10.24%; 1375.50 @ 5.99% through Mar-2010]
LFCU Visa    19499.74 20000  500.00 [12499.74 @ 6.99%; 7000.00 @ 10.49%]
BofA Visa     4169.34 10500  100.00 [9.99%]
---------------------------------------------
Total CC:    $37,406.63


LFCU Car     18650.99 -----  449.09 [5.99%]
Nelnet        5295.06 -----  195.45 [2.75%]
---------------------------------------------
Total Loan:  $23,946.05

Total:       $61,352.68

That is all my current outstanding debt. I will get the budget together this evening, tidy it up, and let it fly.


Also worth mentioning, I spoke to my parents last night as well. I just
 wanted to let them know that while i'm not in any sort of major financial trouble, I do have a LOT of debt that I haven't been
 able to put much of a dent in...and they know I will probably NOT be going to NY now. They were very supportive and were glad to hear that I am coming to terms with my issues. They know the road i'm heading down all too well and want nothing more than for me to succeed here. I do feel better this morning, but I know it will be a long uphill battle. Perhaps I will save money to take a drive up 
north around the holidays in december. I will have TWO newborns to visit then! My second sister is having her first :)


Mike
feels like, starting over


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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288261 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 10:00 AM
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How about a bus or the train? Are those less expensive alternatives?

Well, DF was actually shocked I told my folks I wasn't coming up in July. I have a 3 day weekend from work and I could drive up for about half of what a flight would cost, but that's also wear and tear on the vehicle, an earlier scheduled maintenance date as a result, and a bit of wear n tear on ME from the 11 hour drive each way in 72 hours...

I've done the drive many times, it's just exhausting. I like driving though, gives me time to think and listen to lots of music I have missed.

I still think my best plan is to skip the summer trip. We will see how that pans out in the weeks to come.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288267 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 10:38 AM
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Good start!

You may want to start a new thread for the budget info and link to this one for reference. History is those threads can get looooooooong, and this on is already kind of big.

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288268 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 10:39 AM
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I feel pretty silly considering i've been doing this stuff for YEARS
and I still can't get a handle on it.


Don't feel too bad -- I too religiously entered stuff into Quicken for 15+ years before finding a working budget and shaping up. Entering stuff into Quicken didn't work for me as a spending regulator, because it was too easy to see all the remaining balances as "available" money. Now I never think of any money as available unless my budget says it's available in the correct category. (I still cheat once in a while, but at least I know I'm cheating and have to pay the piper...)

I was absolutely astonished just yesterday when I was in ING doing some housekeeping and noticed that the total of my savings accounts there is now over 7K. I know exactly what is in each of those accounts and what it's for, and in my mind, none of it is spendable except for its designated purpose. But I just hadn't mentally added it up and had no idea it was so much. I sweat if my checking account drops below a month's income... I, who used to think I was rolling in money as long as the balance was over $200, and routinely paid overdraft transfer fees when I got too busy to pay attention. I can have over 4K in the bank, but if my budget tells me I'm out of grocery money for the month, I'll go digging in the freezer for leftovers.

You know, this might be inconceivable to people who have lived by a working budget all their lives, but it used to be that I honestly didn't know how much money I had to last me to the next check. I had a vague ballpark idea that I needed $300 to last me after all my monthly bills were paid (I now set aside over 1K/mo for regular and irregular expenses, AFTER charity, savings, debt repayment and bills... that tells you how much I was routinely running short.) Even when I honestly tried to live by a budget, I kept tripping over the numbers. Somehow I couldn't figure out how to carry over the correct balance from month to month, or why my budget said I had money when my bank account was plainly telling me I was broke. (Yes, I really am that stupid.)

I cannot tell you the RELIEF when I finally found a tool that would tell me exactly what I had, what I needed to live on, what was left over, and that refused to let me cheat or screw up the math. For me that tool was YNAB, and that's why I sing its praises night and day, but other people have found their own way. I wish you luck finding yours!

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288273 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 10:55 AM
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I can have over 4K in the bank, but if my budget tells me I'm out of grocery money for the month, I'll go digging in the freezer for leftovers.
Hee hee hee, I totally get this.

I had a splurge this month and went to wine country with friends (it had been planned months ago). So, my grocery spending for this month - and several other budget categories - has been slashed. I've been very creative at cooking from the pantry. I have not bought any groceries in 3 weeks...and I'm still eating OK (although at this point I am kind of down to root vegies and kale/chard/herbs from the garden). Last night I made an awesome red curry over rice.

The budget is a stern task master! I can't wait to go shopping next week. Sigh.

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Author: llambe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288274 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 10:59 AM
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Don't feel too bad -- I too religiously entered stuff into Quicken for 15+ years before finding a working budget and shaping up. <...>

I cannot tell you the RELIEF when I finally found a tool that would tell me exactly what I had, what I needed to live on, what was left over, and that refused to let me cheat or screw up the math. For me that tool was YNAB, and that's why I sing its praises night and day, but other people have found their own way. I wish you luck finding yours!


I couldn't agree with this post more because this describes my experience too!

Lael

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288284 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 11:46 AM
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What I would really love is an application for my iPhone [nerd alert] that will allow me to track expenses in the wild and sync back to quicken somehow.

I don't know if such an application exists [yet] but it should.

I will put some more thought in to checking out YNAB this weekend and see what I come up with. For now I will stick with my spreadsheet and quicken and see if that is going to work for me.

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288285 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 11:50 AM
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What I would really love is an application for my iPhone [nerd alert] that will allow me to track expenses in the wild and sync back to quicken somehow.

I totally agree! I have an iPhone and haven't found a good application for this. I just keep every receipt, download frequently, and try to remember to check my budget as often as I can on my laptop to keep the numbers fresh in my memory.

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288286 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 11:52 AM
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What I would really love is an application for my iPhone [nerd alert]

Nerd alert? Shouldn't that be spending alert?

Nancy

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288300 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 12:55 PM
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Nerd alert? Shouldn't that be spending alert?

Hmm, i'm not sure I follow. Are you referring to the cost of this non-existent application, or the cost of the iPhone itself?

I've had my iPhone for almost 2 years now, and since then they have released a faster version. I'm quite happy with my device. I get more use out of it than any other item in my possession [except my brain and mouth, perhaps] and it is the center of my universe. I use it to keep in touch with business contacts, friends and family. I use it to remember appointments, take notes, make shopping lists, and to send cute pictures of monkeys at the zoo to my niece. I use it to check my BofA checking balance and to transfer money between DF's and my accounts, when necessary. I use it to facebook in waiting rooms and airports [guilty pleasure] I use it to find an awesome coffee house or museum in a strange city, should I ever find myself in one. The list is truly endless. It's a life changing little device.

Is it a luxury? Perhaps. Do I pay a slight premium each month for the service? Yes, I do. Could I live without it? Perhaps, but that is not something i'm willing to attempt to do right now, or any time in the near [or distant] future.

Mike
robo-boogying in to the future

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288308 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 1:15 PM
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Hmm, i'm not sure I follow. Are you referring to the cost of this non-existent application, or the cost of the iPhone itself?

The cost of the phone at the outset.

It's really, really, really easy to fool yourself about a need. You should see me in yarn stores and book shops: it's not a pretty sight. (Nancy: But I NEED the handmade ebony needles from Germany!
Nancy's Money Minder, sometimes called her conscience: Have you been knitting for years without them?
Nancy: Well, yeah.
Nancy's Money Minder: Then you don't need them. This is a want, not a need. Put the needles down and no one will get hurt.)

I have lots of conversations with myself.

And you're going to have to have lots of conversations with yourself. Until this debt is gone, when you see a new "toy" you need to back off. I understand how tempting these things are, and I realize that you can justify almost any expense. But you need to have a warning bell in your brain that will stop you from the spending habit.

Needs are things like a roof over your head, food on the table. medical expenses, transportation so you can get to work and afford the needs, and so on.

It will take a lot of discipline and hard work to retrain yourself. But it has to be done. Nerd toys are fun. But they are a want. If you truly want someone, and feel you can justify it, then you need to find the money within your regular budget. You can't "invent" the money. You can't spend the "invisible" money you have on your credit card. From now on, if you want a toy, pay cash.

This is the part that trips a lot of people. They've been accustomed to buying the latest iPod, or iPhone, or Playstation or whatever. But if you don't have the money for it, you can't afford it.

Hang in there. It gets easier after a while.

Nancy

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Author: Lea77 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288322 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 2:29 PM
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I was absolutely astonished just yesterday when I was in ING doing some housekeeping and noticed that the total of my savings accounts there is now over 7K.

I have been working really hard on the savings part of the equation this year, and I looked the other day and my total of various spending accounts is over 3k and I was very happy. I have a spreadsheet that I enter all of my savings amounts into on a monthly basis and that helps me see where I’m at.

My biggest problem is that I have some float going on the credit card. It is logged in my checking account as “-200 dollars”, so I know where I’m at, but it’s still in the negative. My actual checking account might have 1000 bucks in it. This is something I’ve been kind of bad about doing this year, and I’m hoping that if I’m frugal on a work trip last month I can get back in the positive without dipping into savings.

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288332 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 3:04 PM
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I understand now. Yeah that is my weakness for sure. In my uglier days, I would often take the credit card out on a date to best buy or circuit city, or wherever the credit card wanted to go that day. Just because I was bored and needed something to do.

I'm more conscious of this now, and part of what tripped an alarm in my head is that I caught myself doing some of the exact things I did when I was acting despicably back then. Factor in the hiding of balances and purchases and it is time to stop and reassess.

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Author: regattagirl Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288338 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 3:39 PM
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Hmmm….

1. Sounds to me like you are using spending to define yourself and create self-worth you believe is necessary (to be cool, keep the girl, be the man, number one son, whatever).

After YOU pay off all your debt, your self-worth will be inherent and unstoppable. Inherent and unstoppable.

2. Sounds to me like carrying your debt is not quite as painful as stopping spending.

After YOU pay off all your debt, new things look “different” somehow and not buying them will be joyful in your heart. Using your credit cards, even for wise purchases, will put you into convulsions.

3. Sounds to me like you might have just enough cash flow to function after your payments have been made.

After YOU pay off all your debt, you will always have more than enough and that will continually grow. You will not ever have to speculate whether or not you can afford it. You will either know you can or immediately dismiss it.

4. Sounds to me like you are concerned life takes the big things and only money can buy them.

After YOU pay off all your debt, the process will have taught you that life IS the little things.

5. Sounds to me like you don’t quite know what being without debt feels like and you don’t quite want it bad enough to really go after it.

After YOU pay off all your debt, you will feel so good. You will vow to never go back. Ever.

6. Sounds to me like you don’t yet know that you are living only half a life and even if you suspect that’s true, you don’t really believe you can conquer this.

After YOU pay off all your debt, you’ll marvel why you ever waited to get started. It will be gone faster than you think.

7. Sounds to me like in your relationships, you use your credit cards to prove you are the caretaker, the giver, the provider. And that if you admit you have a problem, you can no longer be any of those things.

After YOU pay off all your debt, you ARE easily able to be the caretaker, the giver, the provider. You ARE inherently all those things. Inherently. Without any extra effort.

8. Sounds to me like you are concerned about what others think about who you are and how you might change or they might have to change.

After YOU pay off all your debt, you WILL change. You will be BETTER. WAY BETTER. You will never be concerned again about how others think about you.

The relationships you maintain will improve because the real you will be in them, without the weight of debt on your shoulders. Right now YOU have no idea who that really is…and neither does anyone else. Don’t you want to be THAT guy?

~Regatta (been there, done that)
p.s. If you don't believe me, I challenge you to prove me wrong.

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Author: regattagirl Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288342 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/20/2009 3:54 PM
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Yes, you're going to have to be ridiculously frugal for a while and some of that is punishment for overspending in the past - but frugality itself isn't a punishment; it's a special skill to be honed, respected, admired, and emulated. Change your mindset - that will help change your problem.

Rec. Rec. Rec.

But you forgot, being frugal is FUN. Crazy fun. I mean freecyle, budget reducing, non-spending gaming (seeing who caves to spend the first unnecessary dollar) dumpster diving fun!

AND DATING can be FRUGAL FUN too.

Think about it...at the movies = no interaction. Fancy dinner or drinks = been there, done that. Boring. Boring. Boring. You already know who each other IS in those situations.

But, volunteering at a soup kitchen, hiking somewhere you've never been, changing your own oil, painting a room, cleaning the garage, shoveling snow for the elderly sweet couple down the block, babysitting your bosses kids? Now THAT is how you get to know each other.

~R

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Author: SoccerDad9998 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288367 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/21/2009 10:56 AM
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In my uglier days, I would often take the credit card out on a date to best buy or circuit city, or wherever the credit card wanted to go that day.

Funny. I am a fan of subtle humor.

Good luck to you mjw3786. Looks like you are off to a good re-start.

SD

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288385 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/21/2009 3:25 PM
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REGATTAGIRL! I love that post so much that I would marry it, were that legal in California. :-)

Holy cow. Y'all are blowing me away.


--Booa

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Author: lockmama One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288414 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/22/2009 10:52 AM
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Let me try that again without clicking enter prematurely.

Mike,
Have you considered getting a second job or selling some items on eBay or Craigslist? Maybe you could divert half of the money you make to your trip and half of it to debt pay down or an e fund. Since you would actually be getting out of debt faster by doing so, your finace may be more supportive.

Lockmama

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Author: lajawilk Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288446 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/22/2009 3:51 PM
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How do you make the shift in lifestyle without damaging the important relationships in your life? Maybe it isn't possible and you take the damage on the chin?

I would fall on my knees and thank G*d if my husband were to take getting out of debt seriously.

You talking with her about your plan to get out of debt, and your dedication to your financial future together might just be telling her what she has been longing to hear. Courage!

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Author: PipneyJane Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288517 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/26/2009 8:56 AM
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What I would really love is an application for my iPhone [nerd alert] that will allow me to track expenses in the wild and sync back to quicken somehow.

I don't know if such an application exists [yet] but it should.

< select de-lurk button >

The iPhone advertisements in the UK feature quite a useful budgetting app. Enter your spending, select the category and it immediately tells you what your remaining budget is. (This is one of the things that keeps tempting me to buy an iPhone when my 7-year-old cellphone dies.)

To respond to the second sentence: you're a programmer, how about you write one and sell it? There are thousands of people out there who write apps for iPhones and sell them through the iStore. There must be forums supporting them with information on coding, etc. You've identified that there is a need for this type of application, others here have affirmed that they also have that need, and you have the tools/mindset to fulfil that need.

It may earn you some extra money but (and this is a big plus) it should also satisfy your inner geek without involving a large outlay on your part.

Good luck.

- Pam

< select lurk button >

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288558 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/27/2009 12:19 PM
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To respond to the second sentence: you're a programmer, how about you write one and sell it? There are thousands of people out there who write apps for iPhones and sell them through the iStore. There must be forums supporting them with information on coding, etc. You've identified that there is a need for this type of application, others here have affirmed that they also have that need, and you have the tools/mindset to fulfill that need.

It may earn you some extra money but (and this is a big plus) it should also satisfy your inner geek without involving a large outlay on your part.


Hi Pam! thanks for your response. I AM a developer, however I work exclusively in Windows...to develop an app for the iPhone I would have some initial expenses not limited to to but including:

iPhone dev kit [$100]
Apple computer [$too much]

so for right now I have to pass on that thought, though I have pondered writing an app to do just that. perhaps I can tackle that when I have tackled my debt :)

Thanks again,
Mike

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Author: AlisonWonderland Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288571 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/27/2009 2:19 PM
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FRUGAL FUN too.

Little Johnny had a spelling assignment where he had to use some vocabulary words in a story.

Johhny: "Mom, what does frugal mean?"
Mom: "To save."

Johnny's story: "Once upon a time, there was a princess in a tree. She saw a handsome prince on a horse nearby. The princess cried, "Frugal me! Frugal me!" So he frugalled her and they lived happily ever after."

~~ Alison

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Author: vickifool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288597 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/28/2009 10:13 AM
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Hi Pam! thanks for your response. I AM a developer, however I work exclusively in Windows...

There are Windows-based phone/computers.
Mine's called a pocket PC, but there are others.

Vickifool

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Author: Jubii Two stars, 250 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288613 of 308691
Subject: Re: Balancing debt with personal relationships[L Date: 5/28/2009 12:10 PM
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Saw your starting post just now, and immediately thought of these:

Part I: I owe HOW much?! : http://boards.fool.com/Message.asp?mid=19584890
Part II: Budgeting in real life: http://boards.fool.com/Message.asp?mid=19592536
Part III: LBYMs as a friend: http://boards.fool.com/Message.asp?mid=19608553
Part IV: Getting those rates lowered: http://boards.fool.com/Message.asp?mid=19624712
Part V: Getting back in the kitchen again: http://boards.fool.com/Message.asp?mid=19644252
Part VI: Don't mourn, organize!: http://boards.fool.com/Message.asp?mid=19672026


Scanned the replies and looks as if TamarianG's famous series on getting out of debt hadn't been referenced yet. They've turned into part of my household's culture, kind of like YNAB has. Best part was, they gave me & DH a way to talk about how we had racked up debt together, and what we could do to get out of it. It worked!

Your situation is a little different, but a lot of the attitude-shift that Tamarian describes could be helpful. Good luck!

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