No. of Recommendations: 50
Hello Again Fools

Man, this turned out to be a long post. Sorry. I cut it back a little but it seems from my last post that there was just not enough info upfront and I kept adding posts. So, grab a cup of coffee and enjoy a good laugh or cry.

I first posted about my personal debt hell here:

Toward the very bottom of the thread is a summary of the options suggested, actions I have taken and goals made.

A very short summary is that I am not making some of the more drastic changes suggested right now. I have decided to take an aggressive approach to cut expenses, focus on the details of a debt plan, get the family prepared for more extreme changes in '07, work with DW to get her 100% on-board and really focus on making sure our habits and attitudes are turned around. SoccerDad is 37, DW is 35, DS is 9, DD is 7. DW is SAHM.

My goal is to review the progress at the end of January '07 to determine if more drastic steps are needed or if continuing to approach it aggressively will work. Another milestone is a big review at the end of April '07 to make decisions along the same lines.

I would like to post a monthly update and have you guys hold me accountable. Just posting and knowing that you guys will torch and encourage me is a huge motivation for me. What would really help me the most in the monthly updates is feedback along the lines of pointing out patterns, pointing out excuses instead of results, pointing out lack of follow-through and continuing to challenge me to trim the budget, be creative, look into things that could help short term and so on. I will post a “January '07 review” and that is when all the more drastic options will be put back on the table and you guys can give some input into next steps based on 4 months of supporting data and information.

These are the numbers as of the end of October with every account and penny accounted for. This is much more accurate than my first post with new accounts discovered and going off a full month of data. I do not change the credit balances until the next statement and you will see several notes where expense cuts are not yet reflected in the bills.

Creditor Min Pay Paid Difference Balance Limit Rate
MBNA $1,588.00 $1,588.00 $0.00 $46,364.58 $49,000.00 29.99%
Chase MC $441.00 $441.00 $0.00 $17,790.27 $18,100.00 29.99%
CitiBank $553.93 $554.00 $0.07 $15,435.19 $15,700.00 32.24%
Discover $304.00 $1,587.00 $1,283.00 $10,510.10 $10,000.00 28.24%
Chase OD $198.00 $198.00 $0.00 $9,980.52 $10,000.00 18.00%
Beneficial $55.65 $100.00 $44.35 $1,753.40 $2,000.00 29.00%
Cap One $0.00 $0.00 $0.00 $1,200.00 $1,500.00 17.00%
Texaco $36.18 $37.00 $0.82 $574.60 $1,500.00 21.00%
Sams $17.00 $17.00 $0.00 $458.60 $1,600.00 23.15%
Target $0.00 $0.00 $0.00 $157.23 $500.00 28.00%
Kohls $10.00 $123.58 $113.58 $123.58 $500.00 21.90%
$3,203.76 $4,645.58 $1,441.82 $104,348.07
401K $68.00 $68.00 $0.00 $2,100.00 $2,100.00 10.25%
Chase 20 $144.45 $145.00 $0.55 $19,637.00 $21,979.00 16.88%
Chase 80 $1,711.00 $1,711.00 $0.00 $168,638.57 $175,839.00 6.13%
AMX $1,272.26 $1,272.26 $0.00 $0.00
$6,399.47 $7,841.84 $1,442.37 $194,723.64

Expenses Nov Budget Actual Difference
Credit $5,300.00 $7,841.84 $2,541.84
Cash $720.00 $800.00 $80.00
Cash $360.00 $400.00 $40.00
Electric $250.00 $354.00 $104.00
State Farm $135.00 $135.00 $0.00
City $100.00 $0.00 -$100.00
Med $100.00 $63.92 -$36.08
Med Dect $100.00 $135.00 $35.00
Sprint $90.00 $118.18 $28.18
Internet $57.42 $57.42 $0.00
DirecTV $50.00 $24.00 -$26.00
Other $50.00 $2,560.34 $2,510.34
HOA $47.00 $470.00 $423.00
Cr Mon $29.90 $29.90 $0.00
Phone $22.00 $31.53 $9.53
Toll $20.00 $40.00 $20.00
LifeTime $0.00 $108.14 $108.14
Lawn $0.00 $143.19 $143.19
Auto Maint $100.00 $100.00 $0.00
e-Fund $100.00 $100.00 $0.00
Snowball $100.00 $250.93 $150.93
$7,731.32 $13,763.39 $6,032.07

Income Budget Actual Difference
Salary $7,622.00 $7,622.00 $0.00
401K $0.00 $2,065.00 $2,065.00 10.25% for 3 years
Sell $76.00 $76.00 $0.00
State Farm $211.00 $211.00 $0.00
MBNA $2,000.00 $2,000.00 $0.00
Cap One $1,200.00 $1,200.00 $0.00 14% for 12 months
$7,622.00 $13,174.00 $5,552.00

Totals Budget Actual Difference
Income $7,622.00 $13,174.00 $5,552.00
Credit $5,300.00 $7,841.84 $2,541.84
Expenses $2,431.32 $5,921.55 $3,490.23
Left Over -$589.39

Fund Budget Actual Difference Fully Funded at
HOA $470.00 $470.00 $0.00 $550.00
State Farm $145.00 $145.00 $0.00 $870.00
Auto Maint $100.00 $100.00 $0.00 $1,200.00
e-Fund $100.00 $100.00 $0.00 $1,200.00

Asset Value
401K $2,000.00
Honda Pilot 06 $24,000.00
Ford Explorer 97 $1,500.00
House $240,000.00
Home Equity $9,000.00 + Appraised Value

Other Updates:

DW – There is slow but good progress here. We did have the whole “I refuse to live like this and something has to change or else conversation”. We are reviewing progress weekly and talking about things daily right now. We have joined the Grocery Game, we are breaking down her expenses and looking to categorize then and cut them back. They are being cut back to $180 per week in November. She has been proactive in helping at times. However, this is a slippery slope. She is moving at a much slower pace than me. She is really struggling with tracking money and is very emotional in some areas (auto and home mostly). I think it is too high of a risk for me to force the issue on so many topics at once and risk sabotage and/or loosing her cooperation. So, we will continue to make changes with her budget, get her more and more involved and so on. She has also become an id theft victim and her credit is being monitored so she is very unlikely to open any new credit. My strategy here has changed from counting on her to be on-board 100% and moving at the same speed as me to something more along the lines that it will be an on-going process of mostly positive steps with some setbacks and at this point I need to manage the risk of any setbacks so it does not derail the entire effort. This topic might warrant its own post at another time.

'97 Ford SUV repairs – I was doing well collecting quotes and thought I had found a guy to do the work for much cheaper. But, one of my tires did not hold up and after hearing for the second time that I really should not be driving the SUV with the brakes in their current condition… I opted for lowest quote. This is the problem when time and debt is working against you (you loose leverage, loose time to make the best decisions and look into creative options). DW did offer for me to drive Honda but I did not want her and kids in Ford and it would cause too much chaos until we got the scheduled re-arranged. Everything is repaired except for seat belt and transmission service. I plan to get the transmission evaluated by a couple of different places. I hope that the Ford is reliable with only maintenance for '07 and when it makes it past '07 and gets close to 200k then I will just plan on driving it into the ground and I might get lucky and have it last till '08.

'06 Honda – Caught it up on most maintenance. The rest will be done in Dec / Jan. DW was “ok” with down-grading or refinancing her Honda. But, when we started to talk about actual replacements – she had more of a '02 Honda CRV for $12k in mind and was very concerned and upset about the possibility of driving anything “un-safe, un-reliable” with the kids for closer to $5k. Please remember this is an extremely sensitive issue for her and it is not about status but her perception of how new an auto has to be in order to be as safe and reliable as possible. This is not an issue she things logically on – it is almost driven entirely my emotion and memories of her auto wreck. So, this is something we will need to work on and maybe just the $10k net cash for her down-grading to an '01 or '02 Honda will free up enough cash to give us some momentum.

Home sell – short conversation with our realtor and stopping by to see what prices the close-out homes in our division were going for more than confirmed that April to June would be a far, far better time to sell. Talked to DW about where we would have to move to (new city, new school district and so on) and we are both more inclined to take an approach of keeping the exterior up to HOA standards while we live inside like we were in an apartment (close off parts of house, no a/c for most of the year and so on). We will see in April.

DW job – see is applying for part-time work for the holidays. She is not moving very fast on this. But, she is thinking and looking seriously into to. This is good progress for her and even if she does not get a job – it will be a much easier conversation and decision in January if it has to be done.

Cash Flow – I moved some money around and borrowed the max from my 401k to give some more breathing room and some cash flow. At this point there are no over-limit accounts, there should be no problems with late fees, all annually and quarterly paid expenses are on-schedule to be fully funded on-time, I am transferring money to another account for months when the actual is lower than the budget and so on. So, there are no excuses as long as there are no major un-expected expenses. The e-fund and auto maintenance fund is slowly being built up. I realize this could be seen as a red flag in terms of finding some more wiggle room to delay dealing with the source of the problem. But, in this case it was decisions made after a couple weeks of looking into options and every move was agonized over – it is only a lesser of evils to get a little breathing room and to get us to a point where we have a solid enough starting point with the budget that we can not use excuses that budgeted categorizes were already borrowed from, planned expenses already had cash used for something else and generally we have enough breathing room to be out of the month to month and week to week juggling game of who gets paid, when things get paid and where can money be “borrowed” from another budget area that can not be paid back. This will allow us to make a true evaluation about whether we are capable of living within a strict budget.

Lower Rates – I expect the penalty rates to start going down as the ID theft is clearing from my report and I keep calling my creditors. They are slowly starting to budge on due dates and rates. Discover was going to go up, charge an over-limit fee and generally not put me on their favorite customer list. So, I transferred part of the balance to Capital One. I upgraded Chase accounts (no fees) to quadruple platinum or something like that so that I become eligible for better rates and improve that relationship as it is a package deal of accounts. This is the place that has offered to work with us if we pursue a HELOC in Jan.

Better News Coming - There should be more changes that should start to kick in around the November to January time-frame as canceled expenses are no longer billed, expenses that have been cut will start to produce lower bills and medical expenses should go down with the start of '07.

Goals for Nov
1) Stay under budget - no matter what
2) Create a more detailed budget
3) Track money much better
4) Pay-off Target
5) Use extra snowball money to apply towards SAMS
6) Stay on top of id theft and credit monitoring
7) Work with DW & family
8) Post a Nov update - for better or worse

Thanks in advance for your support and tough love.

SoccerDad – living on the edge of debt hell – slowly backing away

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