No. of Recommendations: 2
Good Afternoon Kind People,
I am hoping that you may have some advice for my unconscionable situation.  Here is some background information.  
For the 2nd time in 5 years my DH has been unexpectedly ill and unable to work.  This time since Aug. 2007.  
Unfortunately, we still owed on some of the older debt when the new round of unemployment began.  However, we 
had some savings and that allowed us to make regular payments for 3 months.  

Now we have taken out loans to keep our bills & payments current, hoping that DH would find new employment soon.  
At this point, DH insists that is doing everything possible to find work.  We have 3 children: 22 yr old DD in 
college in our city (not giving her any money at this point) she will graduate in Dec 2008, 18 yr old DS senior 
in HS, and 16 yr old DD in HS.  Also, my brother in law is an over the road trucker & rents a spare room 
for $200  a month, for his use every other month or so when he comes home for a couple of days. I have an 
additional spare room which I have been trying to rent via craigslist since August.  We are 1 mile from the 
nearest bus stop, should I pay for an ad in the paper?

This is what we are actually spending.
Bill	 Amount 	Total Due	Rate
Mortgage	 $     1,227 		5.88%
Equity line	 $       185 	24000	8.49%
phone & Internet $       121 		
Cellphone	 $        58 		
Water	         $        24 		
Electric	 $       146 		
natural Gas	 $       100 		
security system	 $        32 		
cable TV	 $       114 		
Granny's Cable	 $        57 		
Car Insurance	 $       298 		
Car Payment	 $       520 	12480	11.90%
			
D-Visa  	 $        90 	3921	16.46%
A-Visa 	         $        75 	2766	18.99%
Macys	         $        45 	204	21%
Sears	         $        20 	1094	23.15%
Penneys 	 $        50 	797	20%
Home Depot	 $        25 	469	21%
Student loan	 $            	38000	about 4%
Tax bill	 $       270 	?	?
Loan1	         $       117 	8000	24.50%
Loan2	         $       135 	5000	27%
Gym	         $        81 		
Monthly game fee $        20 		
Trumpet	         $        42 		
			
Groceries	 $       400 		
Gasoline	 $       400 		
household	 $       100 		
fast food	 $       150 		
medical	         $        50 	dr. appts	
kids/school	 $       100 		
Total	 $     5,052 	

My income is 3000 a month including overtime at 44 hrs per week.  BIL pays 200 for his room, I am borrowing 2k per 
month(!!) to cover lost wages & bills from the last 6 months of lost wages.  Nothing is being repaired. 

I will now address line items in my current budget regarding which you might need more info.  
Mortgage includes insurance & taxes.
Telephone and internet are bundled, but about 45 is internet & the rest is local & LD phone
Cellphone is used by DH for business
Granny Cable- we pay for DH’s 90-yr old grandmother’s TV service.  Without this, she would get no channels 
because she lives in a senior citizen high-rise in the city.  I am thankful that her social security allows 
her to be (mostly) independent. 
Car insurance: 2 parents plus 22 & 18 yr olds.  16 yr old doesn’t have her license yet.  Maybe I can take 22 yr 
old off, since the car she was using is broken, but then she won’t be covered if she drives any of our cars, 
which occurs monthly.
Car:  75000 miles on car with payment.  Also own an ’89 & a ’92 (needs clutch-not running this was the car DD-22 
was using when it was running)
Visas- Both are Bank of America.  I have not called to ask them to lower my rate:  How do you do that??
Student loan- belongs to DH - yes, it’s been our albatross for years, currently not making payments due to unemployment
Tax bill- I think there is less than 5000 on this, DH will tell me by Monday and the rate
Loans- as mentioned, these are new
Game fee- need to cancel this.
Trumpet- my kid is in the marching band, I’m not sure how many years are left on this.

Groceries- I have worked very hard to get this to this point for our family of four, including meal planning 
& cooking from scratch.  I shop monthly and only serve meat 4 days a week (much to the disappointment of 
DH & kids) but I know it could be less.  I started digging up the back yard in Jan & will harvest nearly free 
veggies in a couple of months.

Household: This includes pet food (3 each dogs & cats, one turtle) and household cleaners/personal hygiene items.  

Regarding our Cable TV and the amount spent on Fast food, I have been fighting with spouse on this for years.  I 
was hoping that the cable would help me rent the spare room.  Since I am the only one working, at this point 
I guess I can turn everything off regardless of what anyone else wants.  

I have one friend who kept her home by living without electricity for about 6 months while under-employed.  
I am seriously open to any options, I know that borrowing is just creating more debt.  I’d like to keep 
my home, but don’t see how I can keep supporting everyone.  I do have a 401k, but haven’t checked how 
much – probably less than 5000 & it seems like your advice is not to touch that.

I know that I have made some extremely poor choices.  DH has handled our money for years & although I was 
raised to pinch every penny, I allowed myself to be swept into this LBYM lifestyle.  We had some savings; 
not enough.  Obviously, we are living well beyond the means that I have to support us at this time and I need 
to create a long range plan for my family which may include turning off basic utilities or not paying on the 
loans.  I look forward to your input.
Kind Regards,  Amy
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No. of Recommendations: 2
Gosh, good luck. I'm probably going to list the obvious things...

1. If you are taking out loans to pay bills, you can't afford cable and fast food. Period. These are luxuries. If DD/DS squawk, they can get a job to pay for it.

2. Cars: Kids should help pay for their insurance costs. I am not sure what the upcharge is, but have them contribute to this. It's nice they get to use your cars, but they should understand that cars have costs, and do something to help defray expenses. I'm sure you have had the conversation with them about DH's health and the fact you are on a limited income. Given that they should understand that you all need to pull together to help pay for things.

3.. Household cleaners: Cancel it and have everyone chip in to do it yourselves. I clean my own house and yet earn what most people would consider a good income. I do it because I'd rather have that $ in my savings account for emergencies or fun stuff.

4. Good job on groceries!

5. Can you defer student loan due to hardship? Whose is it? If DD's, then she should be paying for it, not you. If yours or DH then I'm sure deferral would be possible. It won't make it go away, but will help buy some space.

6. Gym: cancel it and take walks in the neighborhood.
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No. of Recommendations: 3
My income is 3000 a month including overtime at 44 hrs per week. BIL pays 200 for his room, I am borrowing 2k per
month(!!) to cover lost wages & bills from the last 6 months of lost wages. Nothing is being repaired.


You need more income. Have your high school age children start working to cover some of their own expenses. Can you look for a second job? What about selling stuff to bring in some cash (garage sale, ebay, selling books on half.com, etc.)? Has DH applied for any type of disability program? Even if he's not eligible for SSI, your state might have something he qualifies for.

Cut back on your phone and internet costs. If you have any super duper unlimited calling options, get rid of them. You don't need voicemail if you have a phone with an answering machine. If you need to make long distance calls, find a cheaper calling plan and don't talk to people as much and see about using up the cellphone minutes instead or rediscover the almost lost art of letter writing.

Drop the gym. That's $81 a month flying out the door. If you need exercise, see about doing some yardwork/gardening for people for profit.

Cable, drop it down to the cheapest plan you can get. If your phone company offers TV and they have any special new subscriber deals, tell your cable company you've been thinking of switching and see if they can match that price or offer you any deals. If you have cablevision, they have a deal for people that switch over their phone and internet.

Tell your DH that he may have to settle for something else temporarily if he can't find a job in his career/profession to bring in some cash. If he's well enough, he can go work at McDonald's or do something to bring in some money.
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No. of Recommendations: 5
Visas- Both are Bank of America. I have not called to ask them to lower my rate: How do you do that??

Hi Amy... welcome to the Fool!

I'll let others tackle most of this, but wanted to answer this question. Simply call the number on the back of the card, and when you get a real person, just say, "I'd like to speak to someone about lowering the interest rate on this card." You'll likely get transferred to someone else - just tell them the same thing, and with any luck, they'll say, "Let's see what I can do." You don't have insanely high balances, so as long as you're not over or close to your credit limit, they may do something for you.

They may be willing to decrease it to 10% or 14%, something like that. Maybe lower? Who knows!

If they can't offer you a lower rate, ask if there is anything you can do that will get them to lower it in the future - they may say something along the lines of after 6 or 12 on time payments they'd think about it, or when you get the balance below 50% of the limit, something like that.

Good luck! Just be pleasant and friendly, and I think you'll have success. (I was scared the first time I called to ask, but it was worth it. I think I'd been somewhere around 28%, and they knocked it down to 16%.)

~Mary Anna
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Granny's Cable

Who is Granny? She wasn't listed on your household members.

Debra
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Granny, i.e., Grandmother, Grandmom, Grandma, Grandparent, Mema, Nanna

: )
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Don't borrow money to pay other debt. That is don't borrow money so that you can pay existing credit card or loan debt. That will just get you more and more in the hole.

1. Live on $3000 a month. Don't go into more debt. You will say that your expenses are more than that. They are, but I would prioritize to the following:

mortgage 1227
Equity line 185
water 24
Elec 146
Gas 100
Car ins 298
Taxes 270
Groc 400
gasoline 400
Household 100
medical 50
Kids/school 100


Total 3300



You need to cut that a little to get to 3200. See if you can get a lower tax payment, maybe lower some of the utility expenses a bit, and cut gasoline a little. See if you can cut the car insurance through higher deductibles, etc.

2. For now, get rid of phone, internet, security system, cable, gym, fast food, etc. You don't have the money for them. Keep the most basic cheapest phone service available.

3. Get rid of the car with a $520 payment at an obscene interest rate.

4. Yes, I know that I am saying not to pay credit cards or other debts. The bottom line is that your survival needs -- food, shelter, utilities, clothing, medical care -- come first. Then, whatever you have left goes to debt. You are in a vicious cycle if you borrow money to pay debt and go more and more in the hole each month. Yes, it will hurt your credit, but it will stop the bleeding.

5. If the income situation is going to continue for a protracted period you may start to think about bankruptcy but your debts are not that high since the student loan debt is not dischargeable. So you can look into it but.... Your fundamental problem now is not so much a debt problem as an income problem.
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You've gotten some good advice already, but regarding the cable: my company (Comcast) has a limited basic plan that costs me $12.50 a month. They do not advertise it. You have to know it exists to ask for it. No, it's not as exciting as having 100 channels (I've got about 30, and none of the "cool" channels. But I learned to live with it. If something like that is available, you could cut your own cable bill by $100 a month, and cut Granny's cable bill by $40 or so.

As for the gym membership, if you feel that you really need the gym and are not willing to cut it out, is there somewhere like the Y near you to look into? They usually can work out lower payments for lower income people if you ask.

I also wanted to let you know that I sympathize - my husband was out of work for 18 months at one point, which cut our annual income by 50%. It was amazing what we found we could cut when we truly tried. I never would've imagined that two of us could live off our salary. It was hard, but we did it.
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No. of Recommendations: 1
Hi Amy,

There's been some great advice thus far, and of course you know by now expenses must be reduced. My suggestions:

Ax - either home phone, or mobile. If DH isn't working right now, then he's not really using the second phone. Shop for the very least expensive ISP you can find.

At least $100/month off the fast food total. If DH is the only one enjoying this luxury, I'm sure he'll survive on $12.00/week. If some of the fast food category is coffee stops, make a habit of brewing at home. Beverages while out and about, bring a bottle or thermos of water from home. We use a Pure faucet filter and sports bottles at our house. If your tap water doesn't require filtering for taste purposes, then simply refill an empty water bottle or two and keep them in the fridge.

Cable... gone. It's a luxury. TV is not a necessity.

Sell one of the cars, (the one with the payments, if you're not too far upside-down) or whichever of the other 2 the requires the most repairs. Fix the other vehicle. Better yet, sell 2 cars. This will also save taxes and maintenance.

Security system.... gone.

Gym membership.... gone.



Just the items I've listed (excluding vehicles) is around $350.00/month.


Definitely call the CC companies to ask for lower rates.

Have a garage sale and get rid of absolutely anything you do not need and can fetch a dollar.

Can DS mow lawns or something for cash? Can DD babysit or help your neighbors with tasks around the house? It shouldn't be beyond the realm of possibility to ask the kids to help out where possible. He may be happy to help out, if presented in the right way. This will also help teach the kids the meaning of family, teamwork, and responsibility.


Good luck, and keep posting.

MadamHusker 1
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Macys	         $        45 	204	21%
Sears $ 20 1094 23.15%
Penneys $ 50 797 20%
Home Depot $ 25 469 21%


Can you consolidate the above cards to a new card with a lower APR? Maybe a 0% BT offer with a low/no BT fee and easy to follow rules?

Fewer cards = fewer chances to miss payments.

Can the trumpet player pay for his/her trumpet?
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This has been mentioned by previous posters, but it might help to repeat it -- if you need an additional income line, talk to your kids. They are certainly old enough to get jobs and pay their own expenses. I started working at 15 and that was pretty "old" in my neighborhood!

Good luck!
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No. of Recommendations: 2
Now we have taken out loans to keep our bills & payments current, hoping that DH would find new employment soon.
At this point, DH insists that is doing everything possible to find work.


You have to have a "come to Jesus" meeting with your family. They might not know just how bad it is.

I will tell you that no matter what you do, nothing will work until you and your DH are on the same page. Planning is useless, and will be doomed to fail, if you are the ONLY ONE doing it.

What does "unexpectedly ill" mean? And "insists that he is doing everything possible" mean? Do you have reason to doubt that he is sick, or that he is trying to work?

Houses and cars and bankruptcy and all these things are simple paperwork and sideshows compared to a marriage that is disintegrating, or not founded on trust. You say "I know I" have made extremely poor choices, but why didn't you say *WE*? It sounds like it is your DH who caused much of this, and is not taking responsibility.

~dswing
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No. of Recommendations: 20
I see some people have advised cutting back to a smaller cable package, loosing one of the phones, shopping for a lower priced ISP, etc.

You want to come out of this mess? Forget all that.

Cancel your cable service. Granny's too. Completely. Call them right now and shut them off. Cancel your internet services. Completely. Call after you read this post and shut it off. Shut off your home telephone. Completely. Call them right now and shut it off. Save only one cell phone with the smallest package you can get on it. Carry it only yourself. Let nobody go over the minutes allowed. You might need to keep it for shutting off other stuff, and for dealing with emergencies.

Next call and cancel your security service. If you're husband is home all day you don't need no dang security service. Cancel the gym membership. Stop the monthly game fee.

Within an outdoor temp range of 60F to 80F you just live with a little discomfort. Don't use the heat or AC unless the house goes outside that range. Turn off your computer, the lights, the radio, the televisions, etc. You aren't going to have cable or internet service anyway. Got to get those utility bills down.

Get rid of the expensive car and full coverage insurance on it. Get liability and medical on the cheap car. It would cost you less to put in a new clutch than one single month's payment on the other car. You have two days to sell it. If you can't then you trot it down to the lender and work out a way for them to take it back. Whatever it takes to eliminate that payment; NOW!


Bill Amount Total Due Rate
Mortgage $ 1,227 5.88%
Equity line $ 185 24000 8.49%
Cellphone $ 58
Water $ 24
Electric $ 75
natural Gas $ 75
Car Insurance $ 150

D-Visa $ 90 3921 16.46%
A-Visa $ 75 2766 18.99%
Macys $ 45 204 21%
Sears $ 20 1094 23.15%
Penneys $ 50 797 20%
Home Depot $ 25 469 21%
Student loan $ 38000 about 4%
Tax bill $ 270 ? ?
Loan1 $ 117 8000 24.50%
Loan2 $ 135 5000 27%
Trumpet $ 42

Groceries $ 400
Gasoline $ 400
household $ 100
medical $ 50 dr. appts
kids/school $ 100
total = $3713


That's what your budget should look like. Now that still doesn't get your spending below your income. You need more income. You need a second job. Your kids need to contribute. Your husband must contribute. I don't care if he has to go panhandle on a street corner; he needs to start doing it today.

If you don't start taking drastic measures now, you're only going to be worse off, and it's barreling down on your faster/sooner than you can imagine.

You've got to start being a soldier. You've got to fight hard and long if you want to keep your house and family together. A good soldier does whatever it takes to get the job done. Whatever it takes. You can do it. Cable television and internet service are really trivial things in the big picture of your life. Don't procrastinate you and your family into further trouble. Take action now. You've already waited too long. If your husband gives you any grief you whup his butt into shape like you're the General and he's the new recruit.

Nobody can pull you up out of the ditch. You're going to have to claw your way up. Start now. Start this minute. You can win the war. Nobody else's opinion matters in the long run; only the survival of your family matters. You're the leader. Lead.

xtn
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No. of Recommendations: 7
Good Morning Folks,
I sincerely appreciate all your advice and want to update you on my tasks thus far. Determinedmom, your plan is what I was thinking I should do, but DH resists this and feels we should keep borrowing until we are no longer able & then look at returning the car, not paying on cards, etc. Xtn, I really appreciate the 'Soldier' attitude, but am having difficulty communicating the urgency of the situation to my family. You are exactly right, I am being called to lead at this point. I am trying to do so without creating a permanent rift in our relationship.
dswing, I said *I* made the poor choices because I allowed DH's values & choices regarding *our* money. Our relationship is strong but we disagree on this point, which will either tear us apart or make us stronger in the end. The main argument is why bother to reduce expenses by nickels & dimes when we are so far behind and that we should maintain good credit as long as possible, although we are borrowing to do so. I keep saying that we have got to make some difficult decisions to dig out of this.

After several discussions, this is where I am:
Phone & Internet reduced by 40
car insurance reduced by 60
security system off- save 32
gym off- save 81
fast food none-save 150
game fee off-save 20

I know this is only 383$ lower, but the victory here is that we have begun. We have discussed getting rid of the car with payment. I'm not sure what the outcome will be. Student loan is already deferred, we are not paying on it; it belongs to DH.
Mary Anna, I will call the Visa companies this afternoon, thanks for outlining how you did that!
Thanks again to everyone who responded & I will post again soon to let you know what my final budget for April looks like. Oh, and I am working more OT. IF they let me work enough hours, I can actually make more than an extra job.
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I know this is only 383$ lower, but the victory here is that we have begun.

We were not in as dire a situation as you, but we did make some sacrifices to speed up debt payment. I can tell you that DH resisted some things at first that I was willing to give up. As time went on he suggested other cuts or agreed to things that he wouldn't do in the beginning. Start with things within your control, set the example, and hopefully you will see the family coming up with other ideas soon.

Good luck.
mm
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I recognize that it is hard to devise a plan and implement it at times when there is a spouse who is no onboard with the same sense of urgency.

Having said that, and recognizing you may have difficulty with doing anything else, I have to say that the cuts you list will not make any real difference in your situation. You said you were going in the hole $2000 a month. This will cut that only slightly.

Your DH's plan to keep on borrowing is going to make it more and more difficult for you to dig out of this even if he is able to ultimately find work.

If you and your DH can't come up with a realistic plan in this situation (I think the most realistic ones posted here were xtn's and mine) then the problem is not just a financial problem and financial help alone won't solve it.
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No. of Recommendations: 9
Determinedmom is correct in saying that this isn't enough to solve the problem, but a step in the right direction is a step forward, so I'm glad that you are making decisions.

DH resists this and feels we should keep borrowing until we are no longer able & then look at returning the car, not paying on cards, etc

So essentially, DH feels that having bills go to collections, being harassed by collectors, having credit shut off, the possibility of a judgment against you, and eventual bankruptcy is better than making some cut-backs now?

<Nancy mutters into the corner of her cubible for a while>

Does he perceive any good coming from this scenario? Does he understand how overused credit reports are now? That a credit problem could impact your ability to get good insurance rates, or could prevent you from getting certain jobs? Does he want to fill out every job application from now on having to say "yes" when he's asked about whether he's ever had a bankruptcy?

Yes, I know, I do get upset over things like this.

Cutting back in some areas now will help you keep that good credit he was talking about.

What sort of jobs is he applying for?

Nancy
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Just like to say that I think you should keep paying the CC with money borrowed from others until they can't do so any more BUT ONLY THE CC's. My reason being that otherwise you're going to be racking up all sorts of late payments etc, well over the amount of debt increase paying one from another will get you.

BUT this only applies if you do whatEVER it takes to get the rest of your spending down below your income (not including overtime) especially getting rid of that darn car payment but including eating rice & beans (all 7 days), wearing 10 sweaters, no cable etc. IMO even overtime should go toward CC payments (or emergency fund) only since you apparently can't count on it. Then once DH gets a job you can raise the standards a bit while you pay down the CC's.

Really, it's one thing to say lets wait and see if he's just been out of work a short time but after 6 months its time to make drastic changes!

I definitely sympathize with you though - if my DH was out of work (or myself) I'd be for cutting back big time and DH would be saying it won't be for long :(

Lael
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