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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Such a Mess I've Made... Date: 12/6/2007 1:03 AM
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After a couple of months of lurking, I’m finally getting serious about my situation and I’ve taken the time and energy to look at the reality of the mess that I’ve created.

To begin, we probably make enough money to live very conservatively, but comfortably.
My DH takes home $2444 biweekly, I make $1000 per month. We have teen daughters, 14 and 16, and we homeschool, which in our case means that the oldest takes classes at the local community college, the younger one works independently on her work at home or we go to various activities that we’re involved with. I also have an art-related business website and a studio in my basement, where I create. I have been selling mass-produced work for the last 3 years, and now, I’m just about at the point where my personal work is ready to sell and I’m starting to do so, with the goal of selling my own work exclusively. (I’m purposely avoiding talking about exactly what I create on purpose to preserve my anonymity). The business has never really done great, and unless my own work can sell as it should, I’ve resolved to put it to bed and continue my work as a hobbiest rather than as a business. I have more than adequate amounts of supplies, and my website is paid for the next year, so there should be minimal costs to going this route, and most recently, I’ve been paying for those costs by liquidating my mass produced stock. We’re talking less than $100 per month.

My $1000 per month is from a job I have as an event planner for a small non-profit organization. As the event is annual, the work goes in cycles, and for the most part, it is more of a labor of love; I’m sure I could make more working for a different type of organization, however, this situation allows me to be with my girls for a couple more years, and also to pursue my art so that it might be more profitable later on. The biggest problem I'm having with this job is that they are miserably inconsistant with paying me on time.

I realize that some of you will look at my situation and think that I should just go get a job and throw the kids in high school. I AM planning on getting a full time grown up job (unless the art takes off) as soon as the 14 year old is just a bit older. If things get truly dire, I’m not above taking a shortterm seasonal job but it’s not my first option at this time.

Okay, so now for the part, my debt and cash flow situation.

My total credit card debt is $21,431.03. I have 2 cars, one with $3073 owed, and the other a little under $12K. Both are modest cars, no SUVs or fancy stuff. I have a mortgage, that is around $262K, house value even with the crazy market is around $400K. We live pretty simply, no RVs, boats, and we even have a second hand tv that we got for free after the old one died. We do have our computers, which the girls need for schoolwork, and I need for my work. Our other assets are my studio equipment, not super high end, valued around $2000, and my husband’s musical equipment (he is in a band and is just starting to gig regularly), value is about $3000, again, nothing really high end, but good for performing. The only other thing of value is a motorcycle, worth about $3000, which he uses to commute to work in good weather and parting with it is non-negotiable (I’d happily dump it!)

In the last year, we seemed to fall apart financially. I’m still trying to figure out exactly why, but what I’ve pretty much figured out from looking at all of our statements, is that I tend to overspend because I keep figures in my head and that leads to Peter and Paul syndrome, and if it’s really out of control, add in overdraft, overlimit and late fees, and well, do that for a year or so, and it becomes a mess. Spending on miscellaneous things also got out of control due to my need to please everyone in my house. You see, despite 20 years of marriage, my DH wants absolutely nothing to due with managing the money month to month. We’ve been through rougher roads (including BK, never again!) when the girls were much younger, then we did very well for awhile. It’s almost like all of the bad habits that we beat came back with a vengeance. The biggest one being my lack of planning and everyone else’s expectations to have exactly what they want instantly.

So I’ve talked to the bunch, and the 16 year old just got a job for her own spending money, the 14 year old now understands a bit better and is onboard with helping. DH is onboard with cutting back and doing a debt snowball so long as he can have his stuff (bike, instruments). I really do think that I am responsible for much of the mess due to my screwups, since I alone handle the money. I’m the one who needs to get a backbone and say no when necessary, as well as keep really tight track of what I’m doing.

Okay, so now that you have more background than you’d ever want to know, here’s what’s going on.

I am behind on the mortgage 45 days; I have spoken to the bank and they have approved an informal repayment plan. I have to make a $2800 payment this week, and then they're adding about $400 to the next 6 payments (till June) to get caught up. This will be tight, and if I can find anything to sell or another way to generate cash, it is the first thing I'm planning on paying. They say I can pay up the difference and get back to normal at any time.

I’m barely current on everything ; the electric and car insurance is pushing overdue, and soon the CC bills will be due again. The biggest problem with the CCs is that a) I screwed up enough to have a punitive interest rate, and b) I’m at the limit on everything from juggling to make things work. I have made the tiny progress of getting everything else up to date, making it unnecessary to keep using them. One account is closed.

I’m still working on a budget, and haven’t quite figured that part out yet. I can see that it’s going to be really tight, but we’re ready to get it together. The cash flow situation is the one that concerns me most; I feel like we could manage paying down the debt if I could just get caught up and on a plan.

I’m serious about getting out of debt and getting my finances under control, whatever it takes. I’ve read Soccer Dad’s posts, actually I've read this board till I dropped to help get motivated and glean some info about how to get out of this mess both short and long term. I have found this board incredibly inspirational, I’m actually excited about challenging myself to make things work!

Looking forward to your feedback, suggestions and comments.

Will put the numbers in next post in a moment.

Regards,

NMP
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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: 264809 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 1:09 AM
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Will put the numbers in next post in a moment.

It sounds like you and your family have a pretty good grasp of the situation and a basic understanding of what you need to do. I look forward to seeing your numbers.

Fuskie
Who expects you will get plenty of support from the board...

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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264810 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 1:18 AM
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Having a bit of trouble getting the formatting right, maybe someone can help? 
Here's what I've got:


Payee	Type	Int.Rate	Balance	         Min		Due
Wamu 	CC	31.99%	$12,304.78	$493.00	21st	        Limit-11910
PayPal	CC	31.99%	$4,138.09	        $166.00	6th	        Limit 4000
Juniper	CC	29.99%	$4,004.09   	$236.00	11th	        Limit 3800, closed
Kohls	CC	21.90%	$984.07	        $50.00	24th  	Limit 1000
		
Payee		 Freq.	        Rate          Balance                  Payment       Due
Mortgage	         Monthly	6.38%	$262,000.00	     $1,937.13    15th
Cap One Auto	 Monthly	6.00%	$3,404.00         	$333.34    23rd
Chrysler            Monthly	4.90%	$12,000.00	        $329.34     4th
Family Loan	Biweekly	0%	                                        $100.00             Done in March
						
Expenses  Due Date	   Overdue	     Usual Amt (per Month)
						
Sewer	Monthly	7th		                          $80.00		
Car Ins	Monthly	21st	            $137.18	$137.18		
Verizon	Monthly	30th	            $0.00	        $180.00		
Water	Bimonthly	25th	                          	$100.00		
Garbage	Quarterly	?		                          $70.00		
PGE	        Monthly	29th            $209.85	        $175.00		
Phone, 
Satellite, 
Internet	Monthly	20th	            $169.86	$170.00		
Toll Pass	Intermittent			                  $80.00		
Studio	Monthly	1st	                                  $49.95		
Music 	Monthly	16th	                                  $12.99		
						
Haven't tackled the everyday expenses such as food, gas, 
spending money (haha), clothes, household, etc.  
This is also a bit rough, as I expect to make several 
payments in the next few days; but this is a good start.


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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264811 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 1:29 AM
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Thanks Fuskie!

(...I realize that some of you will look at my situation and think that I should just go get a job and throw the kids in high school. I AM planning on getting a full time grown up job (unless the art takes off) as soon as the 14 year old is just a bit older. If things get truly dire, I’m not above taking a shortterm seasonal job but it’s not my first option at this time. )

Thought I'd clarify that a bit further. I am primary caregiver for my mom, who has been having heart problems for the last year (doctor appts, tests, surgical procedures, and basic care when her problems get bad). She lives one town over and only drives very locally, I drive everywhere else. So adding another job into the mix is going to be tough; I was working 3 PT jobs as thru Mar 06, just couldn't do it anymore and take care of everyone. So the one job, kids and mom are alot on my plate already. She just had a surgery last week and expects to have 1-2 more in the next 4 months. Mom is quite generous with providing gas money when I drive her alot and will pick up bills on groceries when I drive her to her health food stores, so I don't consider her care as any sort of expense to me.

NMP

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Author: yddeyma Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264814 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 7:34 AM
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Hi there, welcome to the board.

I've just added up the numbers you posted and the total is $4584 per month (based on what you paid this month and the expected amounts you provided).

That's before your non-fixed expenses like food, gas, clothing, toiletries, etc.

The good news is that your income is 5888 combined. That means you have about 1300 to pay for all your non-fixed expenses.

What you really need to do is post your budget for these items. The board is great at figuring out where you need to cut back.

The second thing you need to do is post your credit score if you know it (and find out what it is if you don't). Your interest rates are really very high. You can negotiate to lower them. The folks here on this board can help you with that but they need to know where you stand in terms of credit health.

Good luck.

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264815 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 8:27 AM
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Welcome to the board! :-) As Fuskie noted, it sounds like you are getting a good grasp on your situation.

May I suggest tracking your pennies? What you do is write down every single cent for one month so that you can clearly see where your money is going. You seem a bit bewildered as to where your money is being spent and this will help with that. You have plenty of income for the bills you've stated so tracking your pennies is critical to find out why you are running short each month.

Another suggestion is to contact your CC companies and request they lower your interest rates. It may take several phone calls spread over 4-6 months but eventually they will concede. Just keep calling!

Minxie

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264816 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 8:32 AM
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Welcome. I have changed things around a bit, but this should give you a better picture.....

Debt
CC        Int.Rate    Balance       Min     Limit   Utilization
Wamu 31.99% $12,304.78 $493.00 $11,910 103.3%
PayPal 31.99% $ 4,138.09 $166.00 $ 4,000 103.5%
Juniper 29.99% $ 4,004.09 $236.00 $ 3,800 105.4% (closed)
Kohls 21.90% $ 984.07 $ 50.00 $ 1,000 98.4%
Non-CC		
Mortgage 6.38% $262,000.00 $1,937.13 (+$400 through June, and $2800 payment due this week)
Cap One Auto 6.00% $ 3,404.00 $ 333.34
Chrysler 4.90% $ 12,000.00 $ 329.34
Family Loan 0% $ 900.00 $ 216.67
Monthly Expenses
Sewer	                          $ 80.00         none
Car Ins $137.18 $137.18
Verizon $180.00 none
Water $100.00 none
Garbage $ 70.00 ?
PGE $175.00 $209.85
Phone, Satellite, Internet $170.00 $169.86
Toll Pass $ 80.00 none
Studio $ 49.95 none
Music $ 12.99 none


One question on the expenses - why is there a $180 Verizon bill and another $170 Phone, Satellite, Internet bill? That's $350 a month - which is certainly more than you can afford in your current situation.

As far as your current situation, I see an immediate need for:
$1,436.18     (current overlimit on credit cards, plus $400 cushion on WAMU and $150 cushion on
each of the other 2 so you won't go overlimit due to monthly interest)
$2,800.00 (house payment this week)
$ 516.89 (overdue monthly expenses)
$4,753.07 TOTAL
just to stop the bleeding. That's $4,753.07 that you need right now! Do you have that? If not, would DH rather have a motorcycle or a house to live in? Because that's the level of choice you are at. Unless you can find some other way to come up with this money IMMEDIATELY, you need to sell something to raise cash.

Then, for the next several months, your minimum monthly expenses will be $5137, without counting little things like food and gas.

DH's takehome pay is an average of $5295/month and you bring home $1000 per month, so if you can keep food, gas and other expenses to less than what you bring home, you can squeak by, but you sure won't make any progress on the CC debt until at least July when you get the shortage on the house paid. Then you will have $400 to start snowballing the credit cards.

And with a 30 day late mortgage payment, the hope of getting additional credit, like a HELOC, getting decent rate BTs or lowering your current credit card rates is probably minimal for at least 2 years.

If you and/or DH are not willing to get additional jobs, and you are not willing/able to sell the items that you have accumulated, you might have the consumer debt paid off by the time you wanted to retire, but you will have little/no retirement savings and you will still have a mortgage to pay.

So you have some hard choices to make. And only you and DH can make them.

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264817 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 8:39 AM
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My $1000 per month is from a job I have as an event planner for a small non-profit organization. As the event is annual, the work goes in cycles, and for the most part, it is more of a labor of love; I’m sure I could make more working for a different type of organization, however, this situation allows me to be with my girls for a couple more years, and also to pursue my art so that it might be more profitable later on. The biggest problem I'm having with this job is that they are miserably inconsistant with paying me on time.

Is this a monthly average, or the most you would get paid during the times when you are working on this event? In other words, is this money that will be there every month, or just occasionally?

If it's just an occasional addition, could you get one part-time job to help supplement the amount? I can understand that with your mother and the girls and all you don't always have a fixed schedule, but if you look around you might be able to find something that will help add to the funds.

Since you don't seem to be sure on a lot of your expenses, I'd suggest that you and your husband track costs very closely for the next couple of months. Every time you spend money, whether it's on a credit card, check, debit card, cash, EFT, whatever, write down the amount and what it's for. You may find some steady trickles of money that you weren't aware of. And you have to write it down immediately, or at least collect the receipt and keep it in a safe place. This includes change given to homeless persons and newspapers bought from a machine.

I don't have a lot of other advice except to say take heart. Other people have been in a similar desperate situation, and have paid their debts and become financially stronger. And I'm glad you're including your daughters in the adjustment process; not only will they be more understanding when you say that you can't afford something, but they also can learn from your experience. I don't see why the younger daughter can't find something to do to earn money, by the way. Baby-sitting, newspaper delivery, dog-walking and pet-sitting are all things that a 14 year old can do, particularly if she doesn't have to be at school at set hours.

Oh. And you and your husband might want to start work on your priorities in terms of money. Paying the mortgage and the utilities would come first, for example. Then the car payments, since the cars could be seized if you fail to pay. Then the minimums on the credit cards, then the next necessities (food, transportation to work, communication devices such as phones) and so on.

Here's link to a section on budgeting from Findlaw:

http://bankruptcy.findlaw.com/bankruptcy/debt-relief-options/budget-top.html

and here's a section on Repaying Debts that will help keep things in perspective.

http://bankruptcy.findlaw.com/bankruptcy/debt-relief-options/repayment-top.html

Hang in there. You can do this, and we will help.

Nancy

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Author: dcoop46 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264818 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 8:55 AM
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"Another suggestion is to contact your CC companies and request they lower your interest rates. It may take several phone calls spread over 4-6 months but eventually they will concede. Just keep calling!"


I second this!, your current interest rates are killing you. If there is a way to reduce the hight rates or transfer to a lower rate it would free up a little more cah to put toward the actual debt. I would also recommend you look for additional work, based on the numbers it doesn't look like you have the time to see if your art business will be a go or not.

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Author: mastiffmama Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264826 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 10:10 AM
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You have already gotten some good suggestions, most importantly to track all of your expenses. Think about irregular things, too - car maintenance, gifts (which should be minimal and cheap or free at this point), professional dues, etc.

Don't put all the blame on yourself. You all have been spending, and it sounds like you all are ready to work as a team to get back on track. That's so important.

I'll point out some things that seem high to me -
internet/phone/TV/cell phones were already mentioned. We cut our cable plan and borrow DVD's from the library. You can watch so many shows online now for free. Plus it gave me time to get other things done at home.

Water - does that include lawn? $100 seems awfully high, plus $80 for sewer. Look into ways to conserve and you can probably save here.
PGE - lower the thermostat a few degrees if you haven't already. Turn off lights when you leave the room. Just be concious of what you're using.

Do you have any savings or investments (not in retirement accounts) that you can cash out? If you have an emergency fund, don't touch it!

Do you get a big tax refund every year? If you change your W4 you can start getting more of that each month.

What's most frightening to me is that you have no emergency fund (that you mentioned) and no room on credit cards if something were to happen. You're one big bad thing from disaster.

Would you consider moving to a less expensive house for a few years until things get under control? If you could cut that mortgage payment down, you could make some big progress.

Think about what's right for your family. You may be able to make some cuts now, and others may need to wait a while. This is an excellent time of year for you to pick up some part time/ seasonal work. It's not forever, it's just until you get things caught up and on time.

Good luck!
mm

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Author: sandyw54 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264828 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 10:19 AM
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I really do think that I am responsible for much of the mess due to my screwups, since I alone handle the money.


I also have a spouse who wants to spend money but doesn't want anything to do with MANAGING money. There is a big difference. Stop beating yourself up because you can't change the past. Just look forward. I am very new to this board myself and won't presume to offer you advice as far as specific steps to take as I am still learning myself. There are many knowledgeable folks on here who can help you through this. Read and consider all the suggestions seriously and decide for yourself what you think will work best for you. As bad as your finances seem remember that there are others who have been worse off and worked their way out of it. There are no quick and painless fixes. I have learned that by reading posts going back a year. I wish you well.

Sandy

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Author: FBCinvestor Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264832 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 11:51 AM
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I know how it feels to have the minimum payments so tight that there seems to be nothing else left. This is not the end of the world. You can do this, you just have to develop a plan that works and stick to it.

First priority is to get current. I doubt the cards will budge on the interest rate until you get the balances below the limit. Even then, they may want 6 months or so for you to show that you have turned the ship around.

Your priorities are:
1. Shelter. Absolutely stay current on the house payments. Your mortgage is a little higher relative to your take-home than I would personally be comfortable with, but still within reason. Living indoors is important.
2. Food. Be careful here, you may have to set aside steaks in favor of hamburger helper in order to trim as much as you can without going hungry.
3. Utilities. Definitely do everything you can to keep the lights on. However, you can conserve here too. Could you reduce to a more basic TV package? Turn down thermostats?
4. Debt. Your credit score is already damaged based on your current record. Don't give Visa a higher place than providing for the needs (not wants!) of your family. Short term you may miss a payment here, but this is unsecured debt so they can't take your stuff.
5. Everything else. Know where the money goes. Every dollar of income has an exact purpose.

Based on your current situation, I would say you should be in crisis mode. That means no dining out, no extras for a while. Clothing only as necessary to replace an item, and shop discount. Absolutely no new charges on any credit cards. It would be a good idea to bring cash to the grocery store so you limit yourself to exactly what is on your list.

You said car #2 has a balance of 12,000. Do you know what the car is worth? It is possible that you could sell the car and buy a $2000 junker. Sure, that is not elegant, but this is just short term. Think about how one year of car payments applied instead to your other debts would wipe them out so much faster. I have personally vowed to never have a car payment again. I save up and only buy as much car as I have saved.

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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264834 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 12:06 PM
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Your priorities are:
1. Shelter. Absolutely stay current on the house payments. Your mortgage is a little higher relative to your take-home than I would personally be comfortable with, but still within reason. Living indoors is important.
2. Food. Be careful here, you may have to set aside steaks in favor of hamburger helper in order to trim as much as you can without going hungry.
3. Utilities. Definitely do everything you can to keep the lights on. However, you can conserve here too. Could you reduce to a more basic TV package? Turn down thermostats?
4. Debt. Your credit score is already damaged based on your current record. Don't give Visa a higher place than providing for the needs (not wants!) of your family. Short term you may miss a payment here, but this is unsecured debt so they can't take your stuff.
5. Everything else. Know where the money goes. Every dollar of income has an exact purpose.


Fantastic advise. FBCinvestor saved me from typing the message. Being current on anything discretionary (CCs, cable, cellular, etc.) makes no sense if you're behind on mortgage or utilities! Shelter, food, water, heat, clothing. You need to focus on priorities.

The advice above is very Dave Ramsey-esque (OP may want to tune into his show for a day or two for context), and very valid in this case. The motorcycle and the $12K car should be sold today. You may be able to keep the lesser car payment.

OP, I'm glad you've joined the board, but you need to have a heart-to-heart with your spouse. He can no longer perceive finances as "your problem." It's immature and has probably been a big contributing factor into your current crisis.

ETR

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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: 264835 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 12:12 PM
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I chime in with others - first priority mortgage, utilities and getting those CCs below the limit.

Cancel cable.
Make sure you have a grocery budget each week that you stick to. Pay with cash, so you don't add anything more to CCs.
No eating out.
No entertainment for a while. Decide on 1 or 2 low-cost fun things and keep to those (hiking? netflix? rental movie night with friends?)
Consider second jobs.

Good luck!

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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: 264836 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 12:40 PM
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Hello NMP,

It is a mess. On top of the $4k you need right now (AJ post), are the holidays going to put you over the edge and back on the road to BK #2? What are your holiday spending plans?

DD #1 takes courses at community college - don't you / she have to pay for tuition, books and supplies in January if not this month? ($500 - $1,500 ?)

Something has got to give (job, motorcycle, instruments, business/hobby) to get you "caught up and back on a plan".

Until you and DH figure-out exactly what that is going to be... every penny counts and you should start today cutting expenses and walking through the house to find things to sell.

This is doable. But, you have a very small 1 to 2 month window to get everything turned around. The small things have got to start changing today and the big decisions have to be made before Christmas. It is not going to be a fun or quick process. But, you can do it and this time next year you can be very happy, relaxed and in control of your family's financial future if you will take action and make some big changes now.

Best of Luck
SoccerDad

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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: 264837 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 12:43 PM
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<<Cancel cable. >>

<<No eating out.>>

<<No entertainment for a while. Decide on 1 or 2 low-cost fun things and keep to those (hiking? netflix? rental movie night with friends?)>>





Besides saving some money, these economies might be clear statements to your family that money issues are critical and need their attention and support.




Seattle Pioneer

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Author: suburbancaroline Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264846 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 2:26 PM
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I noticed two statements in your different postings....

In the last year, things just seemed to fall apart financially
I was working 3 PT jobs as thru Mar 06, just couldn't do it anymore and take care of everyone.

And I think the second is definitely a contributing factor to the first - since I assume that you were bringing in more money with those PT jobs than you are now. That extra work gave you the cushion that you were living on, and you didn't adjust to the revised circumstances in time.

I'd suggest that you think creatively about what "taking care of people" means. Your two daughters are old enough now to do a lot of taking care of themselves and the household - cooking, cleaning, lawn work are all within the capability of 14 and 16 year olds. Do they help you now with your mother's care? The 16 year old could conceivably help with some of the driving tasks, even. Shuffling around these tasks could help free up enough time for you to pick up another part time job again, at least for long enough to get you over your immediate cash flow hump with the mortgage.

And I do think your mortgage payment is high. For your monthly takehome, I would rather see it not be above $2000/month. It's hard to do anything fast about the cost of housing, but you should take a serious look at whether you can really afford this house, long-term.

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Author: dswing Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264852 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 2:43 PM
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Hi,

All good advice given so far, I have to second what everyone else has said.

Being behind on mortgage payments, and utilities, and with no emergency fund (!), means that you all are in a crisis. Being in a crisis means:

1) If it isn't a tool that you use to make money, you sell it. I sold my shiny Suzuki many years ago to pay debt, and I didn't keel over dead.

2) If it is a necessity item that costs too much to maintain (say, a car) and you can get a cheaper one, you exchange it for a cheaper one.

3) If you have a job/hobby/activity that isn't paying the bills, you dump it for one that pays the bills. Yes that can mean quitting in the midst of financial crisis, but only as soon as you find something that pays. Yes, temp agencies and any number of private employers offer flex-time positions, so I don't buy the argument that this screwy non-profit organization is the only place in the world you could work and spend time with your kids.

4) You sell everything that isn't nailed down, for as much as you can get for it, and send the money to your creditors. You can advertise items on craigslist.org for free, even.

Working for non-profit agencies has been the road to poverty for many people. Funny how they never seem to mention that ... your available time needs to be spent earning for someone who will actually PAY YOU.
I have to say, the first time an employer was late with my paycheck would be the last day they ever saw me. If you don't value your own time and effort first, nobody else ever will.

Best of luck,

~dswing

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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: 264857 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 2:56 PM
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As the event is annual, the work goes in cycles, and for the most part, it is more of a labor of love; I’m sure I could make more working for a different type of organization, however, this situation allows me to be with my girls for a couple more years, and also to pursue my art so that it might be more profitable later on. The biggest problem I'm having with this job is that they are miserably inconsistant with paying me on time.
I went back again to your post and this jumped out at me.

In your situation, you cannot afford a job like this. You need a steady income you can plan on. I am sure there are other PT or flex jobs you could find that would pay you on time. What if they are a month late paying you? How will you/do you pay your bills? This might be fine if you had a nice cash cushion and cash flow was not an issue, but the fact that almost every card is maxed out says this is not the case.

You ned to think hard about what this "labor of love" is costing you. I could cost you dearly.

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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264865 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 3:31 PM
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Being behind on mortgage payments, and utilities, and with no emergency fund (!), means that you all are in a crisis.

I hesitate to mention it, but if OP really has $140K in home equity ($400K value vs. $260K mortgage), then a HELOC to get everything current might be possible.

Two caveats:
1. In OP's situation, the interest rate may be less-than-optimal (but still less than 30%), and that's if they qualify.
2. Doesn't do you a darn bit of good unless you take much of the rest of the advice already mentioned.

ETR

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264867 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 3:58 PM
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1. Shelter. Absolutely stay current on the house payments. Your mortgage is a little higher relative to your take-home than I would personally be comfortable with, but still within reason. Living indoors is important.

If her mortgage includes property taxes, it's possible that those have increased a lot in the past few years. I know that when we moved into our house in 1999 the monthly payment was between two and three hundred a month less than it is now. The increased payment is due to property taxes going up.

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Author: TMFeatnbybears 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: 264873 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 5:25 PM
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This may seem harsh, but you are in panic mode ....

I would plan a tag sale for next weekend, drag everything not tied down into the driveway and sell it. Motorcycle included ( may be a heart break to lose, but worse if you lose everything to keep the bike.

What is the value of the motorcycle ?

Seeing the Wamu interest rate of 31.99%, I guess your credit is way in the dumper. Those cards must go ... cut them pups up now.

(1) You got a relative that can spot you $5000?

(2) Tag sale and sell the bike. Scrounge up $10,000 no matter what you must do ... Bike, bike parts, any possessions of value from TVs to jewelry to computers, shoes, cloths, knickknacks, books, CDs ... if it will bring $1.00 ... sell it NOW.

(3) Take what you make, beg borrow or steal and pay off Pay Pal,Juniper and Kohl's. That will free $450.00 per month long term.

(4)Sorry, you must get a job .... fast. ...... Does being a "event planner for a small non-profit organization" require 40 hrs per week? If not, keep doing it and book 40 hrs in a outside job.

(5) Consider selling the house even in today's market .... you are in trouble and that freight train aint gonna slow down.

(6) Of course, no eating out, no unnecessary driving, cancel cable, turn out lights, eat macaroni and cheese, kids get sandwiches, no allowances, cloths from my favorite apparel shop ... Good Will stores, increase deductibles on insurance, sell stuff, sell stuff, sell stuff ...... $1.00 cash is better than putting it in storage after the house is gone.


Bears

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264874 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 5:46 PM
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I hesitate to mention it, but if OP really has $140K in home equity ($400K value vs. $260K mortgage), then a HELOC to get everything current might be possible.

The OP indicated that they are currently '45' days late on their mortgage payment. However, they also indicated that they consider their mortgage due date to be the 15th. In reality, the due date is generally the 1st, with a grace period until the 15th. If the OP did not make the October payment (due October 1st) until this week, they have been reported as 60 days late on that payment, plus 30 days late on the November payment.

With a major derogatory (60 days late) on a primary mortgage within the last 2 years, it is highly unlikely that they will qualify for any type of a HELOC or HEL, even at a high rate.

If the OP was going to try to apply for an equity loan, it should have been in September, before they missed any payments. Now, it's probably too late.

AJ

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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264879 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/6/2007 7:34 PM
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Thank you everyone for your responses! Although it is painful for me to hear, I'm really thankful to hear all of the advice and I really do need to hear it all. As some of you know, when you're in this much of a mess, you can't really 'talk' to anyone about it, so I am grateful to be able to get the feedback from all of you.

I'm going through things again as well as your posts to get a more thorough accounting of things. It will take me a day to digest all of this, but I'm more motivated than ever. Keep those comments/suggestions coming, PLEASE!!

I have a few things that I think can be sold asap for up to $1000. Will get on that today.

I'll also look into the car situation and see what can be done with selling my car (the one with $12K left). The other one has 8 payments left; and it's a Honda, so I'd like to try to hold on to it if possible.

I will think seriously on the job situation and try to find a better solution or a second job. I will also get rid of the massed produced end of my business asap.

Will also see about a family loan for helping in getting current. We are expecting a bit of overtime/holiday pay in the next couple of checks as well that may help out.

My FICO score is in the dumper, 580. I would think a HELOC would be out of the question. I did look into it several months ago, but decided against it as I really want to get a handle on this without a total bailout. I want to pay my debts and learn to budget and live properly. I was afraid if I got a HELOC I'd ultimately make things worse. Probably not the smartest move.

Will get the numbrs together and post again shortly.

Thank you so very much again!
NMP

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Author: justpatrick Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264896 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 11:19 AM
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I think that you have a win-win-win situation that you may not have considered. There are two additional sources of cash that you are not maximizing. Have you considered discussing a loan FROM your daughters? Both of them have the potential to bring in cash.

The reason I suggest this is that there is a large difference between the interest rate that you are paying on your debt(22-32%) and the interest rate that they can get on money that they earn(5%?). You could offer them 10%! You might note that even if they manage to get $6k of payments/interest to you, this is LESS than you are currently paying in interest on your credit cards each year.

Win #1: You get low cost access to capital.
Win #2: Your daughters get access to a great rate of return.
Win #3: Your daughters learn (saving, investing, earning, working, compound interest) and they get to actively contribute to the financial success of the family.

Note: This is a loan that does not have the option of not being paid back. You can be living on the streets eating trash and you still MUST pay this back.

At the age of 14, I was babysitting, cutting grass, and delivering papers. I would have JUMPED at the chance to give my parents a high interest (10%) loan.

I have a few things that I think can be sold asap for up to $1000. Will get on that today.

I will think seriously on the job situation and try to find a better solution or a second job. I will also get rid of the massed produced end of my business asap.

Considering the power of the Internet, these sound like things that a 14 year old might be able to do (or at least help with). You could do something like offer 10% of the sale price (in the first case) or profit sharing (25% of profit or even 50% of profit, in the second case).

- Gives her a chance to contribute
- Gives her a great learning opportunity
- Frees up more of your time
- Potentially increases your total family income potential

I'll also look into the car situation and see what can be done with selling my car (the one with $12K left). The other one has 8 payments left; and it's a Honda, so I'd like to try to hold on to it if possible.

A couple things to consider in this evaluation. 1. What are the payments (cash flow) that you have to make for each car. 2. What is the equity you have built up in the car.

So, if the $12k car doesn't have much equity in it you can sell it and get something cheaper in order to reduce your monthly payment (maybe brings it from $300 down to $150 or $200?). This certainly helps.

On the other hand, if the Honda has significant equity in it you might be able to sell it for something very cheap. This could potentially not only reduce (or eliminate) this payment, but it could provide cash that you could use to pay down debt.

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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: 264897 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 11:25 AM
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A loan FROM the daughters, even if feasible, will undermine the authority of the parents, throw household dynamics into chaos, and create tension between lender and loan-repayer. What if parents are late on paying back...can you imagine that discussion? Can you imagine the guilt it would generate on both sides.

This is a bad (if very creative) idea.

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264898 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 11:38 AM
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A loan FROM the daughters, even if feasible, will undermine the authority of the parents, throw household dynamics into chaos, and create tension between lender and loan-repayer. What if parents are late on paying back...can you imagine that discussion? Can you imagine the guilt it would generate on both sides.

This is a bad (if very creative) idea.


I agree. Speaking as someone who started working a full-time job at age 14 to support the family, it's a bad idea all the way round. That's not a burden that should be placed on the children. The parents made the mess, to use the OP's term, and they are the ones who need to fix it.

Minxie

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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: 264899 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 12:05 PM
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<<I think that you have a win-win-win situation that you may not have considered. There are two additional sources of cash that you are not maximizing. Have you considered discussing a loan FROM your daughters? Both of them have the potential to bring in cash.
>>


Interesting idea.


Personally, I would avoid structuring such a thing as a loan. I'd seriously consider cutting the DD who is in college loose from parental support, leaving her with the expectation that she will fund college expenses from loans and work, rather than parents. And perhaps pay room and board for living at home as well, if that were still needed.

I'd expect the younger daughter to be responsible for some income to support the family before I'd structure that as a loan.


<<At the age of 14, I was babysitting, cutting grass, and delivering papers. I would have JUMPED at the chance to give my parents a high interest (10%) loan.
>>


Heh, heh! I suppose 14 year olds probably would not jump quite so high if some of their income was skimmed off to support the family. But it would be entirely reasonable to expect that to happen when the family is in need, in my opinion.



Seattle Pioneer

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264900 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 12:11 PM
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I'd seriously consider cutting the DD who is in college loose from parental support, leaving her with the expectation that she will fund college expenses from loans and work, rather than parents. And perhaps pay room and board for living at home as well, if that were still needed.

The thing is, she's still only 16. I'm not sure what would happen if a 16 year old was told to support herself. If she were 18 or 19 I'd agree. And it seems that she hasn't had a job before, so I don't know how much she can earn at this point.

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: 264901 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 12:19 PM
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<<The thing is, she's still only 16. I'm not sure what would happen if a 16 year old was told to support herself. If she were 18 or 19 I'd agree. And it seems that she hasn't had a job before, so I don't know how much she can earn at this point.

Nancy
>>


Oops, you're right. I thought I'd read that the older daughter was in college.


That does change things ---- sorry.



Seattle Pioneer

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Author: electrasmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264902 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 12:27 PM
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Oops, you're right. I thought I'd read that the older daughter was in college.

She is taking courses at the college.

The younger one is home-schooled.

In dealing with my DSD (darling step daughter), she was doing the homeschooling thing thru some internet site. Not cheap. We always felt (but do to circumstances had no input into the matter) that she should have been in the local school. My question to the OP would be: is there a problem with the local school? gangs? If safe, the younger daughter should be back in the public school to save money. Unless, of course, that the homeschooling is free or nearly free.

JMHO, of course.

electrasmom

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264904 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 12:58 PM
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My question to the OP would be: is there a problem with the local school? gangs? If safe, the younger daughter should be back in the public school to save money. Unless, of course, that the homeschooling is free or nearly free.

Unfortunately, even if there is no cash outlay to pay for something like an on-line course, there is the fact that doing homeschooling is one factor preventing the OP from getting a solid dependable job that could help pay for their debt. So even if the materials/curriculum for the homeschooling are nearly free, there is still a significant cost.

AJ

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Author: electrasmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264905 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 1:10 PM
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Unfortunately, even if there is no cash outlay to pay for something like an on-line course, there is the fact that doing homeschooling is one factor preventing the OP from getting a solid dependable job that could help pay for their debt. So even if the materials/curriculum for the homeschooling are nearly free, there is still a significant cost.


aj,

True. However, she could still do homeschooling and take an EVENING job. When DSD was doing homeschooling (ages 16 and 17 I think) she was totally on her own. Her aunt (who she lives with), didn't give her any help.

I totally agree that a full-time day job would be easier to come by.

electrasmom

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Author: TMFeatnbybears 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: 264910 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 2:28 PM
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A loan FROM the daughters, even if feasible

On any loan ..... it must be only from someone who can afford to lose it or wait years for repayment. You never want to burdon someone elses life with your problems.

Before any loan, personal or commercial, you must go through the canceling of all extras (cable, subscriptions, cell phones (yes we did live without them once) eating out, extra driving ..... everything)

Then the selling of anything you can and use whatever you make to clip those high interest payments on the CCs.

Whatever you gain from getting the CC debt down must go to the other card and paying off the 8 months on the Honda.

The hardest part to stick to is that when you pay off a card (from what you sell), that now eliminated payment must go towards debt. If you pay off cars that save you $400.00 a month, as much of that $400.00 as can be used is put on say the Honda (reg Honda Payment plus the extra from the CC savings goes on Honda ... pay off ASAP. Then CC savings plus Honda payment (when paid off) all goes to the WaMu card balance .... You progress by doubling and tripling debt payments as you close out others. You do not stop untill all debt is paid and home is current ... got holes in your shoes ... plan on your feet getting wet.

Bears

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264912 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 2:44 PM
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I am struck by how much your posts talk about your credit card debt as if the financial obligations were yours alone. First, is that true? Are they solely your obligations or are they also the obligations of you and your husband?

Regardless, did your husband and family benefit from the overspending? If so, then morally at least I see this as a family matter not just you. In particular, your DH can't abdicate responsibility.

If his bike is sacrosanct then the burden on him is to come up with some other alternative that will raise at least as much money AND for you to then have enough to get the mortgage current, overlimits paid and so on. That is, just how does he propose raising $5000 immediately and getting the mortgage current over the next 6 months.

And I have to say that if it was DH and he couldn't/wouldn't work to do that then he would likely end up as an ex-DH. It is self indulgent to insist on keeping a luxury item when you are in a dire situation without coming up with some alternative.

And, let me tell you, I tend to be a spender and I love little luxuries. Prying my Alienware computer out of my hands would be difficult...but I also realize that choices have to be made.

There is a point where you have to decide what choices to make. In your case, the obvious source of case to truly pay off (not move around) debt and to lower your overall expenses is to sell your house. I urge you to consider it (not necessarily do it, but consider it). That doesn't change the dire need for $5000 but longer term could be a real solution.

99% of people that come here won't consider selling a house. I never quite understand it. I am not suggesting that you live in your car or even that you never buy another house. And, yes, I know whereof I speak. When we had $165,000 in credit card debt plus car loans, etc. we did sell our house. It didn't pay off all the debt but got it into manageable range. Two years after deciding to sell the house we now own a different house but our consumer debt is vastly smaller and what is left is at very low rates.

That solution may not work for you, but please consider it.

I am a believer in homeschooling and homeschooled two of my children for awhile. With a 14 year old and 16 year old you do not necessarily have to be present in the home all day. There is a lot of school work that can be done while you are at work. It is not a matter of job or homeschooling. Both are possible.

The reality is you have to make choices. You may not like any of them. This where you have to consider the Least Worst Alternative. That is, when no alternatives are great...which is the least worst?

Selling cycle
You getting a full time job
Daughter attending high school
Selling your house
Cutting expenses to the bone and selling everything except the house

None of those sound wonderful. But which combination is the least worst?

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Author: justpatrick Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264914 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 3:40 PM
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A loan FROM the daughters, even if feasible, will undermine the authority of the parents, throw household dynamics into chaos, and create tension between lender and loan-repayer. What if parents are late on paying back...can you imagine that discussion? Can you imagine the guilt it would generate on both sides.

This is a bad (if very creative) idea.


Let's take a look at your suggestion that the OP quit the job that they love. Some people can give up their dreams of selling their own art, quit a job that they love, cut out the quality time with the kids and at the same time go work somewhere for more consistent income. For other people, this is a recipe for disaster. Take away everything that they enjoy in life (work, hobbies & family)and that could lead to some situations that would result in some pretty horrible discussions (far worse than not paying your kids some money). This doesn't make your suggestion a bad idea or any worse than mine. I took it just as something that the OP might want to consider.

I appreciate the points that you make about some things that would need to be considered around the idea I presented (although I would change "will" to "might" or "could"). Those issues really depend on the family and don't apply to everyone.

I don't appreciate the "bad idea" label. In my opinion, it is clearly not a "bad idea" for everyone. It is clearly not a "good idea" for everyone. It is just a thought that I presented for the OP to consider.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264915 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 3:49 PM
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I don't appreciate the "bad idea" label. In my opinion, it is clearly not a "bad idea" for everyone. It is clearly not a "good idea" for everyone. It is just a thought that I presented for the OP to consider.

The kids aren't even working yet. The older one agreed to get a job to earn her own spending money. Considering that the OP needs about $5,000 over the next few months just to keep the house from foreclosure, and the cards are almost maxed out, I doubt that the girls would be able to earn enough money to help. (For some reason, I have this vision of two sad-faced children breaking open their piggy bank to help Mommy and Daddy, but that's just my over-active imagination).

It could work, under the right circumstances. And it might be something to be considered later on, when the girls are accumulating savings and are beginning to take an interest in growing their money. And, although you didn't say this specifically, I'm sure you meant that this should be a signed contract, and no force should be placed on the girls to hand over their earnings.

But at this point, when the mortgage situation is desperate and they're behind on their cards, I don't think it would answer.

Nancy

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Author: reallyalldone 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: 264916 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 4:17 PM
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Let's take a look at your suggestion that the OP quit the job that they love. Some people can give up their dreams of selling their own art, quit a job that they love, cut out the quality time with the kids and at the same time go work somewhere for more consistent income. For other people, this is a recipe for disaster. Take away everything that they enjoy in life (work, hobbies & family)and that could lead to some situations that would result in some pretty horrible discussions (far worse than not paying your kids some money).

When we had kids, it was our responsibility to support them, doing whatever we needed to do. It's what grown up people do. Disaster is ending up living on the street which is a pretty horrible fate.

rad

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264917 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 4:22 PM
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Let's take a look at your suggestion that the OP quit the job that they love. Some people can give up their dreams of selling their own art, quit a job that they love, cut out the quality time with the kids and at the same time go work somewhere for more consistent income. For other people, this is a recipe for disaster. Take away everything that they enjoy in life (work, hobbies & family)and that could lead to some situations that would result in some pretty horrible discussions (far worse than not paying your kids some money).

First of all, no one is taking away everything that they enjoy in life; they're just suggesting she get a decent job. If your boss is late and it's more of a labor of love than a paycheck, then you need to wake up and smell the CocoPuffs.

The OP and her DH are adults with responsibilities to their creditors and, more importantly, to their children. When you are an adult, you don't always have the luxury of following your bliss, especially if that is what is destroying your family and threatening your future.

You don't depend on your teenage children to pick up your slack if you are able to get a job, but just don't wanna. *I* don't want to work but my kid needs to eat; ergo, I work.

Again, I'm going with:

That's not a burden that should be placed on the children. The parents made the mess, to use the OP's term, and they are the ones who need to fix it.


Minxie
former teenager who did financially support her family

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Author: electrasmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264918 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 4:41 PM
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You don't depend on your teenage children to pick up your slack if you are able to get a job, but just don't wanna. *I* don't want to work but my kid needs to eat; ergo, I work.

That's not a burden that should be placed on the children. The parents made the mess, to use the OP's term, and they are the ones who need to fix it.



I have to go with Minxie on this. When I was a kid, my father and then evil stepmother borrowed money from me. Couldn't have been more than a few hundred dollars. Never saw that again. At age 45 it still makes me angry.

electrasmom

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264919 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 4:49 PM
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I have to go with Minxie on this. When I was a kid, my father and then evil stepmother borrowed money from me. Couldn't have been more than a few hundred dollars. Never saw that again. At age 45 it still makes me angry.

When my mother was sixteen and had inherited a small amount of money (and was working full-time in the summer at the family business) her father borrowed the money. She never saw it again either.

She's 91. She's still annoyed.

Nancy

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Author: paca24 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264921 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 5:31 PM
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It could work, under the right circumstances. And it might be something to be considered later on, when the girls are accumulating savings and are beginning to take an interest in growing their money.


I can understand kids helping out with household expenses; however, if I were looking at it from a business perspective, it's not a loan I would make.

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264926 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 9:18 PM
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I have to go with Minxie on this. When I was a kid, my father and then evil stepmother borrowed money from me. Couldn't have been more than a few hundred dollars. Never saw that again. At age 45 it still makes me angry.

Yeah, it's not something you really get over.

Minxie

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Author: SkyeQ Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264928 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/7/2007 9:47 PM
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True. However, she could still do homeschooling and take an EVENING job. When DSD was doing homeschooling (ages 16 and 17 I think) she was totally on her own. Her aunt (who she lives with), didn't give her any help.

I am constantly flabbergasted when I read things like this. How can a 16 year old homeschool totally on their OWN?? (unless they are some baby geniouses or something). I mean, I was a pretty smart cookie in high school, and motivated to boot, but there was no way I could have learned physics, calculus, foreign language, and so on and so forth through an online course. Perhaps I could have slid by and graduated, but I wouldn't have attained the academic heights I was capable of. And there was no way my parents would have been capable of teaching me some of the advanced subject matter typical of my junior and senior years.

Skye

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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264937 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 2:43 AM
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Wow! I've just finished reading and wow! Such an interesting discussion! (I never considered myself this interesting - but again, wow!)

Okay, first off, yes, this is mine and DH's problem, not the kids. We neither want nor expect them to lend us their money, although we will ask DD14 (who is quite capable) to help with some of the ebay stuff and give her a percentage of the sales.

For the record, what we have asked of DD16 is to get a part time job for spending money (She DID get a job yesterday, and starts next week - yea for her!) This particular kid is a very busy one. She takes college classes (many online, right now just one), now works, teaches piano (a small bit of income), and travels (in the US). She just got back from a 6 week trip with a family acting company. She had a few problems staying within in her budget, some things her fault, some not, perhaps we did not budget realistically, part was clothing related (we're in CA, she was in New England). She was badly injured early in the summer in a bike accident and could not work for quite a while. She works on the teen end of the event I work for, which took the latter half of the summer. So she did not have a chance to make any money to prepare for this trip. She got an opportunity to work with the acting company on a special project (she did make a small amount of money) and I made the (probably) irresponsible decision to put opportunity over sanity and tried to fund it, on top of everything else. Anyhow, the trip went well and she is invited to do it again in March. We have told her that she can do it, but she has to earn her own money this time, 100% (not all that impossible, as this trip will be shorter and closer to home). I really don't want OUR problems to keep her from living her dreams (within reason), but indeed, she does need to generate her own spending money (which by the way, she IS very good with under normal circumstances) for these special endeavors. Also, she has her permit (for 8 months now) and needs one more formal lesson before she can take her driving test . (another $89!). She is using her earnings from the trip to help pay for that (she's already paid for one of the 2 lessons she needed).

DD14 is pretty independent but I would not think it fair or reasonable to leave her 40 hours a week on her own. The local HS, although close to home, is neither safe nor good. Some of the things that my driving (and to an extent attendance) is required for is coop classes in science, book discussion groups, game days (math), museum field trips; also she volunteers at the library once a week. She does occasional pet care for several neighbors, and again hangs on to her money pretty well, though she is the one who loves shopping. We've introduced her to thrift stores, which she gladly peruses for things she needs. (She is also teaching herself to sew and frequently alters her thrift store finds to make them the way she wants them). So we're making progress there.

I spent today surveying the situation more (dollar by dollar, bill by bill) and should have a budget soon (or at least the numbers to offer up). I am still negotiating with DH about the motorcycle. I have a good vintage guitar that I am trying to come up with a fair price on, and that will be the best thing I can sell this week (it should go for $1500-1700, got it a couple of years ago at a garage sale for $40). I am looking for an appropriate job.

Regarding the holidays, (someone asked), we've all agreed that we have everything we need. I'm planning on making any gifts for relatives and friends (I have everything I need on hand to do so, and what I do is not tacky, quite nice in fact). DD16 is crocheting scarves for all her friends (she already had a good stash of yarn), DD14 is sewing soft sculptures for her friends (again, we have the supplies on hand, so no cost). I will sell several of my studio supplies (I have a group that buys very quickly) for about $50-100 for some stocking stuffers for the girls, but that's about it though with actual cash spending, and I haven't even decided for sure if I'll do it. My extended family had made the decision on Thanksgiving that we would not do much with gifts this year except for things homemade and creative, and we're all happy with that idea. We are good on food for a couple of weeks, the pantry is in good shape and we are mostly vegetarian anyway.

Sorry this is so long. As dire as the situation is, I do feel better and am gaining clarity just having talked to all of you and that I'm trying to finally fix it. I can do this!

Thanks,
NMP

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264940 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 8:13 AM
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Let's take a look at your suggestion that the OP quit the job that they love. Some people can give up their dreams of selling their own art, quit a job that they love, cut out the quality time with the kids and at the same time go work somewhere for more consistent income. For other people, this is a recipe for disaster.

The OP's finances are already a disaster. They're in arrears on the mortgage. I put keeping a roof over the kids' head as a much higher priority than doing something she loves. So you're saying that the OP's happiness at work is more important than a place for her children to live? Sorry, but being a grown up means that you have to take care of your family even if it means going to work at a job you don't like in order to provide for the ones you love.

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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264950 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 4:52 PM
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I spent today surveying the situation more (dollar by dollar, bill by bill) and should have a budget soon (or at least the numbers to offer up). I am still negotiating with DH about the motorcycle.

First of all, I'm very pleased just to see the change in your tone from your first post. You're much more positive and action-oriented. This is a good thing.

I won't comment on the motorcycle, other than I am not sure his side of the "negotiation"; clearly, he does not yet see it as a choice between a material possession and the livelihood of his family.

Finally, I will share some of the best marital financial advice I have: it's not a budget until both spouses sit at the same table and pledge two things: 1) I agree that this is exactly how we should spend every dollar this month, and 2) I will not deviate from this budget without both of us agreeing. Without such an agreement, it's just numbers on a sheet of paper that one party jotted down.

Best wishes,
ETR

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Author: Bweaver Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264951 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 5:57 PM
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I won't comment on the motorcycle, other than I am not sure his side of the "negotiation"; clearly, he does not yet see it as a choice between a material possession and the livelihood of his family.

As a motorcyclist, I'll happily comment on the motorcycle.

One, we don't and can't know the whole story.

Two, it's possible the motorcycle is efficient, low-cost transportation owned outright. Mine is, and the higher gas prices go, the more often colleagues enviously ask about mileage when we meet in the parking lot as the workday begins.

Third, with $355 monthly ($4260 a year!) going to verizon, satellite, phone, & internet, and a $1700 guitar hanging around, it's possible that there's a lot of unexpressed fundraising and cost-cutting opportunity a motorcyclist might see before "we must sell your motorcycle for $3000" makes sense.

For what it's worth, I've just returned from a brisk and damp motorcycle ride. It was much more fun than paying thousands in tcom bills.

Good luck,

Bruce

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264953 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 6:21 PM
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Third, with $355 monthly ($4260 a year!) going to verizon, satellite, phone, & internet, and a $1700 guitar hanging around, it's possible that there's a lot of unexpressed fundraising and cost-cutting opportunity a motorcyclist might see before "we must sell your motorcycle for $3000" makes sense.

If so, then I hope he'll stop saying, "you're in charge of the money, you deal with it," and start actively offering ideas. Perhaps that would work as a bargaining chip? "We'll have to sell the motorcycle unless you can help come up with ideas to save or earn X amount of money."

Would that provide a needed spur, do you think?

Nancy
I didn't check where you live, but it's not near me. Still some snow on the roads from yesterday.

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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: 264958 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/8/2007 11:58 PM
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When I was eight, my folks were strapped and Mom helped me keep a ledger as she borrowed back my allowance (to buy groceries). I remember maybe three months of entries - she'd catch up on payday. Then we didn't have to do that any more.

It worked for me, kept my busy little mind contented. My just younger sister, though, fretted a lot during this time.

YeilB
posting the story of how some folks got through the stretch of disastrously losing a job, living on savings for eight months, then moving to a new state and new job and having the car destroyed (all of which makes my adult life look like a cake walk.

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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264969 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/9/2007 12:03 PM
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As a motorcyclist, I'll happily comment on the motorcycle.

One, we don't and can't know the whole story.

Two, it's possible the motorcycle is efficient, low-cost transportation owned outright...


Fair points...to a point.

OP has stated that they have 2 current car loans, including 1 with a $12K balance. I have already recommended that car be liquidated.

In my opinion, driving a motorcycle to work daily is too risky an activity for a father of 2 who is providing the vast majority of the income for his family. Even if it saves some gas. If he chooses to do so, he had better have a quality disability policy and appropriate life insurance.

ETR (who loves to ride a motorcycle, but notes that other drivers on the road are idiots)

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Author: Bweaver Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264970 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/9/2007 12:42 PM
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Fair points...to a point.

ETR, you don't have to convince me. Motorcycling is without question significantly riskier than automobile travel.

Motorcycling risk and financial risk are different issues. I was simply responding to the suggestion that selling the motorcycle was a necessary and obvious financial step. The financial argument was weak, so I posted.

The personal safety/family security/relationship/parenting argument is strong.


Good luck,

Bruce

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Author: scientista One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264987 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/10/2007 12:14 PM
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"A loan FROM the daughters, even if feasible, will undermine the authority of the parents, throw household dynamics into chaos, and create tension between lender and loan-repayer. What if parents are late on paying back...can you imagine that discussion? Can you imagine the guilt it would generate on both sides.

This is a bad (if very creative) idea.

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Author: scientista One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264988 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/10/2007 12:18 PM
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"A loan FROM the daughters, even if feasible, will undermine the authority of the parents, throw household dynamics into chaos, and create tension between lender and loan-repayer. What if parents are late on paying back...can you imagine that discussion? Can you imagine the guilt it would generate on both sides.

This is a bad (if very creative) idea. "


When I was 15 I got a job and worked up to 20 hours a week (nights and weekends) while in high school full-time. Using this money I put gas in the $500 beater (that I bought with savings bonds from my grandparents) that I drove to work and school. I also bought groceries and helped my mom pay bills.

Is this an ideal situation? Heck, no.
Is this how children should grow up? Of course not.
Could it possibly help avert a crisis that would seriously affect their lives? You bet.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 264992 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/10/2007 12:49 PM
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When I was 15 I got a job and worked up to 20 hours a week (nights and weekends) while in high school full-time. Using this money I put gas in the $500 beater (that I bought with savings bonds from my grandparents) that I drove to work and school. I also bought groceries and helped my mom pay bills.

Is this an ideal situation? Heck, no.
Is this how children should grow up? Of course not.
Could it possibly help avert a crisis that would seriously affect their lives? You bet.


I think the reason that this suggestion was received with a certain amount of hostility is that A) the OP needs $5,000 very soon in order to rescue the mortgage, and I doubt that the girls can earn that much, and B) Justpatrick said that the money should be borrowed from the daughters so that nomoreplastic doesn't have to find a different or additional job. We're having difficulty in comprehending why the daughters are expected to sacrifice when the parents aren't.

Being willing to help pay for the groceries, or something of a similar nature isn't quite on the same basis as "empty your savings and hand them over." I prefer that the parents work out a plan for paying down the debt, which could include extra time at work, selling some items, doing without other things, and if the daughters want to contribute, that's fine. But it should be voluntary, and everyone should be making sacrifices, not just the daughters.

Hope that helps clarify some of the problem.

Nancy

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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265212 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/15/2007 3:42 PM
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Thank you for your kind reply, Kahuna. Very helpful.
NMP

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Author: nomoreplastic Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265213 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/15/2007 4:10 PM
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Again, thank you all who are providing feedback. I'm still working on my budget numbers, and I have raised a bit of cash to help get caught up.
The good news is that I've managed to secure a family loan for $6000 at !0% to act as both a partial balance transfer for some of the debt and to catch up with the mortgage. We also are expecting a bit of OT on the next two checks which should also help. I'm probably not going to post my current stats until the 12/21 though, so that they are accurate. Then I'd like to ask for help in how to allocate the loan and get started on doing a snowball, as well as get the budget squared away.
I'm also working on reducing the telecom expenses as I know they are way too high.
DD16 has started working. Christmas is under control. We are tracking every penny spent.
Thank you again for your support! I know I can fix this now!
NMP

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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: 265217 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/15/2007 7:28 PM
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Great steps you and your family have taken:

16 year old at work
sensible holiday spending
writing down every penny spent
asking for and being granted a family loan


Good work. Taking these steps does build your confidence in the idea that you can use your money for what you need. That being in chrage of your finances is a great feeling.

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Author: catcurve Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265470 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/21/2007 1:00 AM
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hi was noting the advice of determined mom about selling the house. this is one of the moves i considered but will clearly take a loss since have only been in the house 2 years. yet the 2500 morgage payments are more than i can manage right now. this does include property taxes. would prob have to leave the community we live in but the school is not adequately serving my son's special needs. problem is most communities that do are similarly priced in my state. still we could downsize further, our home is about 1100 sq ft now but in a very pricey district. would prob get about 30 k less on this home that purchase price if i can sell at all in this market. not sure how to weigh that kind of loss versus the pressure cooker i am in right now. jeanne

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265475 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/21/2007 2:17 AM
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One thing to consider is to imagine your cash flow if you sold the house. If you rented for a time what would it be? After we sold our house last year we rented for several months until buying our current house. Our expenses were very low since we were in a smaller house and without the maintenance responsibilities of a homeowner.

Then consider what you might spend to buy somewhere else. Could you get something adequate for less?

Obviously the optimal situation is to have equity when you sell...but even if you don't it can make sense to sell if you save money in what you end up with.

Just have to look at the specifics of your situation.

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Author: aamw Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265492 of 308881
Subject: Re: Such a Mess I've Made... Date: 12/21/2007 9:28 AM
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Jeane,

From your post it doesn't sound like you know exactly how much the home is worth. One option would be to find a reputable real estate agent in your area and have them come out to give you an idea of your market and your comps. Or if you prefer, there are many online tools that will give you the comps in your area. Based upon the comps you may be better informed on whether to consider selling or not.

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Author: CSDunford Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 265876 of 308881
Subject: Re: Such a Mess I've Made... Date: 1/1/2008 11:00 PM
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Hey, NMP, my CC debt is inching up toward the same amount, so we can pay off together. You haven't made a mess. You've given yourself a challenge, and you certainly weren't the only one involved, so cut yourself a little slack.

Others will probably have better advice than mine, but do take some time to sit down and outline what you spend your money on. Go back through the last couple months' bank statements or receipts to see. Is there a lot of eating out? Movies? The thing that helped me, at least for a little while, was the Motley Fool Personal Finance Workbook. At least it gave me a place to write things down--but you can do the exact same thing with a piece of paper and a pencil.

So start by figuring out where you stand right now. And you know where you want to get--zero cc debt. Then you just have to figure out the little steps to get from here to there. Make them little steps, too, so they're attainable.

CarolD.

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