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Hi all,

I appreciate all the comments the last few days. I'm so dismayed that I let it get this bad and didn't seek out guidance sooner. Fear is an odd feeling. The only thing we have to fear is fear itself, so... time to be courageous.

My mentality of liking nice things and not dealing well with simply doing without has gotten me into perpetual trouble. I've been on and off the boards long enough to know lots of random tips about being frugal. Many seemed absolutely crazy to me. Too much work and not worth the effort in savings. Clearly my way of operating isn't working however. And I noticed myself recently starting to do these things I previously thought of as silly. Specific example: I started washing my ziplock bags to reuse them. Not the ones with raw meat or marinades... but if they just had bread or snacks... reusable! And then after I did it I had to stare at them on the counter drying because it was the sudden clear message about values and priorities. And a few days later it occurred to me to surf the boards again...

And this morning it occurred to me that just my nickname on this board is ridiculous. Sassy. Yes, with my cute clothes and cute car and nice house, I am very sassy... and in debt up to my eyeballs.

VS
...who is going to go change her nickname again to SlowLearner....
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I'm following your story.
I post hardly at all, but I read everything here, and your story is why this board is here.

Best of luck.
Mosquito
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This is VerySassy with my new more appropriate nickname!

Thanks Mosquito, much appreciated.
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...liking nice things and not dealing well with simply doing without...

Some observations (as with everything else here, take what applies, ignore the rest):
- Maybe it's not just liking nice things. Maybe it's liking nice NEW things. You already have "cute clothes and cute car and nice house," so when you get a hankering for something new, you could remind yourself of what you already have. It's human nature to take for granted what already exists. It's also human nature to always find fault and try to improve (wardrobe, home, experiences, etc), so it takes a conscious effort to force oneself to slow down and appreciate the present.
- Another trick, when you see something you'd like, is not to think simply "Nope, can't afford it," which makes you feel deprived; but rather, "Nope, not in the budget right now. Maybe later." The result is the same (money saved), but morale is also saved.

...in debt up to my eyeballs...going to go change her nickname again to SlowLearner

But the debt is only temporary, yes?
"SlowLearner" as a name sounds defeatist, a defining of yourself by past mistakes. "Learning" or "New Leaf" or "Frugal Sassy" would be more appropriate. Or, just leave the user name as is, and focus on your numbers.
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No. of Recommendations: 29
My mentality of liking nice things and not dealing well with simply doing without has gotten me into perpetual trouble. I've been on and off the boards long enough to know lots of random tips about being frugal. Many seemed absolutely crazy to me. Too much work and not worth the effort in savings. Clearly my way of operating isn't working however.

This will be the key to you getting out of debt. I've been following your threads, accountant this, payroll that, but what I am not hearing which has me worried is how you plan to spend less than what you are making. Managing your expenses is far far more important than your income at this point. Look, you can outspend any salary - ask lottery winners, professional athletes and entertainers. Reducing your expenses is the key, the ONLY key to you getting out of debt. Every time you post, I hope to hear about what you have cut out, rather than which accountant you've chosen. You can get the most aggressive accountant out there; one that will call you on a daily basis, and generate daily spreadsheets, but if you don't stop spending, you won't get anywhere. You will be back on the boards in another 10 years, bankrupt, with no savings asking, "what went wrong?"

I'm not trying to make you feel bad. I'm telling you this because I have been where you are. My husband and I both have six figure incomes -
enviable, right? - we still had >100k in debt. Every time the cc bills came through, I would spent an hour looking at the calendar figuring out when I could work to generate extra income to pay it off. My first plan of attack to kill the debt was to work more and sell whatever I could to generate more income. It was really only when my credit cards were maxed out and AMEX my charge card told me "whoaaa nelly" that it dawned on me to actually cut the expenses. And no, it's not always fun and it is time consuming. I used to have a cleaning service and we have a 5000sq foot house. I do a little cleaning every day, but I still spend a few hrs weekly on the weekends cleaning. (And I really hate cleaning). At the end of a long day at work when all I want to do is go home, put my feet up, and hug my kids, I stop at Aldi's to get cheap food. It's 2 minutes from work but 25 minutes from home which means if I am going to shop there, it's going to be after work. But the rewards far outway any inconvenience, I am finally gaining peace of mind. And that to me, means the world. I used to actually have nightmares about the debt, real nightmares, can you imagine? I sleep well now. Don't get me wrong, I still want things. I actually keep a list. I would love to redo the master bath, replace the sliding doors to the deck with fabulous french doors, get elegant carriage door style garage doors and put hardwood floors in all throughout the house and I will do them some day. Or maybe not. I'm starting to think that my kid's college education fund is probably more important to me than any of those things. But in any case, it won't be until after the debt is paid off and I will do things at a much more measured pace when I am assured that I can afford it.

Just some food for thought. I wish you the very best. I really do.
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...example: I started washing my ziplock bags to reuse them.

No harm in that, and might be useful for the "message about values and priorities," but for real progress it's most effective to target the biggest budget categories. Others have tackled your current budget and posted questions and suggestions.

What is your proposed new budget?
Or, as rad asked, what have you given up? (besides new ziplock bags)
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"SlowLearner" as a name sounds defeatist, a defining of yourself by past mistakes.

I think I need the reminder. Besides, it's somewhat tongue in cheek. I'm more slow at application than I am at learning. I can't tell you how much my nickname bugged me this morning when I was thinking about it. Maybe Frugal Sassy when the debt is paid off and it's reality... Until then I can live with humble pie.

-SL
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...I would love to redo the master bath, replace the sliding doors to the deck with fabulous french doors, get elegant carriage door style garage doors and put hardwood floors throughout the house and I will some day. Or maybe not. I'm starting to think that my kid's college education fund is probably more important...

LOL! My kids are SO lucky I didn't start watching HGTV until after they'd graduated college.
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What is the new budget?

In fact, I do have a few ideas I'd like to run past everyone. I started to post about them but then thought taking action was more important. While I was in the shower thinking about the ridiculousness of my nickname, I was also thinking of the ways I could adjust. If I sincerely need to cut everywhere, then so be it. Perhaps some drastic measures are in order. I need to make getting out of debt my project and my main focus.


Reduce Rent Expense
I work from home and I have one roommate. We split the $3600 rent 3 ways--I pay 1/3 myself and 1/3 as the business, and she pays the remaining 1/3. $1200 rent is reasonable for this area. It's a new lease, and it's in a walkable area. There are cheaper neighborhoods in Baltimore for sure, however then I'd probably need a car (see next item). What I could do is try to find cheaper office space near my gym, and then add a roommate.

The space I'd be renting to the new roommate is very nice, and includes a living area and private bath. There's even room for a small fridge/microwave. It should rent for $1200 easily, maybe $1500.

Cons: I'll have to get good about packing my lunch which I'm not used to doing, commuting, and two roommates instead of just one. We won't have a guest room or extra storage closet.

ACTION TAKEN
I called Regus and Business Suites this morning and have appointments to look at office space this afternoon. From conversations on the phone, I'm not totally optimistic it will be a huge savings. Maybe only $200/mo. When you consider I'll probably lose an hour or two a month easily in commuting, is that worth it?



Sell Car
I live in a walkable neighborhood. I could walk to the gym, the grocery store, and the hypothetical new office. While I have parking, many other neighborhoods do not, so I end up taking Uber/Lyft (taxi services) instead. Zipcar is also available in my neighborhood, which I could use for local onsite meetings.

Current Car Expense ~$850-900 (payment, insurance, gas, maintenance, tags)
Zipcar cost: $528 (8x/mo * $66/day)
Savings: ~$350/mo

Cons: Time lost coordinating/reserving cars, walking to/from, getting stuck in the rain, general inconveniences.

ACTION TAKEN
I applied for Zipcar this morning also.



Cancel Luxuries
I have a cleaning service ($300/mo), a bookkeeper ($300/mo), spa membership ($80), reduce Netflix ($5)... I can let go of. I think the gym membership should stay for now.

Savings: ~$685

Cons: Time lost!!! Probably 5 hours a month cleaning and it will still be sorta dirty because I hate cleaning. 16 hours a month bookkeeping.

ACTION TAKEN
Not yet... does this make sense given my hourly rate?


Off to appointments, looking forward to some feedback.

Thanks
SL
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On the car, I meant to also say that I owe $14k. It will only sell for $8-9k. Yes, I know that's horrible. My ex-DH is an idiot. Anyhow, payment is $500, I have 30 months less. Interest is 4.25%.

If I do sell it, and something changes, I'd have to pay cash for whatever I buy. I don't have the credit to get a car loan.

Thanks
SL
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I work from home and I have one roommate. We split the $3600 rent 3 ways--I pay 1/3 myself and 1/3 as the business, and she pays the remaining 1/3. $1200 rent is reasonable for this area. It's a new lease, and it's in a walkable area. There are cheaper neighborhoods in Baltimore for sure, however then I'd probably need a car (see next item). What I could do is try to find cheaper office space near my gym, and then add a roommate.

The space I'd be renting to the new roommate is very nice, and includes a living area and private bath. There's even room for a small fridge/microwave. It should rent for $1200 easily, maybe $1500.

Cons: I'll have to get good about packing my lunch which I'm not used to doing, commuting, and two roommates instead of just one. We won't have a guest room or extra storage closet.


If you are the only employee, why do you need separate office space at all? Is there a way that you can just find a corner in the apartment from which to work? Then you could still get the extra roommate, reduce the rent for the business, and have more money in your own pocket.

I have a cleaning service ($300/mo), a bookkeeper ($300/mo), spa membership ($80), reduce Netflix ($5)... I can let go of. I think the gym membership should stay for now.

Savings: ~$685

Cons: Time lost!!! Probably 5 hours a month cleaning and it will still be sorta dirty because I hate cleaning. 16 hours a month bookkeeping.

ACTION TAKEN
Not yet... does this make sense given my hourly rate?


I don't see what your hourly rate has to do with any of this. It's not like you will be working any and every hour that is available, so you are not losing income by doing some of these things yourself. Instead, you are saving on expenses. So yes, it makes sense to do this and do the cleaning yourself, even if it won't e as clean as you have now, and the bookkeeping yourself. I'd also cancel the gym membership or look around for something less expensive. I have a Planet Fitness membership that I buy when they run their sale at the end of December, but they tend to do the same sale in August where you pay $99 for an entire year. That's almost what you seem to be paying for a month. At the very least, I think you can find a much less expensive gym.

What about other areas? Any low hanging fruit like cutting your grocery expenses by shopping at the cheapest grocery store? I can save a solid 30% by shopping at Market Basket instead of Shaw's or Stop & Shop, and that's for buying exactly the same items. I save even more if I can buy generics, which I mostly do, but not for everything.

Can you drive your housing costs down such as your utilities? If you raise your A/C a degree or two, you won't really notice much of a difference, but you would save on electricity. See how high you can push the temp before it is uncomfortable. I'd bet you have some utility savings there. Same thing in reverse for heat during the winter.

Is it possible to refinance your car to bring the payments and interest rate down? I'm paying 1.49% on DH's truck that we bought back in October through the credit union. It is his work truck, so I can actually write off the pittance of interest, but that is very cheap money and about a quarter of your rate. If you could get the rate down and leave the term as is, you might save some total dollars as well as help with cash flow.
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It seems like whatever you mention saving money on, you have a justification for not doing it.

What did you actually spend yesterday ? How about today ?

Here's the real tough love. My number one rule of personal finance is don't screw with the IRS. They can take whatever you have. And that's YOU, not some accountant. Accountants work from the information you give them. They are good at organizing numbers. They are not miracle workers.

Stop spending. You are justifying yourself into living on the street.
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Variable Food $893.88
Variable Home Life $1,491.89
Variable Self Care $184.76
Variable Wardrobe $458.51
Variable Sports/Fitness $454.41
Variable Fun $319.38
Variable Travel $253.03


I would focus on these categories first. They total over $4000/month --savings of $2000 just by cutting these in half.

I would break these apart more in YNAB too (and list like together as suggested elsewhere) -- I assume the cleaning service falls under home life since I don't see it listed elsewhere? Does the food include eating out? Sports/fitness of 450/month + spa/gym fees? What clothing costs are necessary for work and what are just because you like to buy clothes?

Also the big strength of YNAB is to set the budget in advance -- based on what's most needed/important to you. Figure out how much you have left after your obligations (AJ's posts are great for that) -- then make your choices when you budget the rest into the appropriate categories.

Then once you get some snowball going you can look at selling the car or moving. Go for the easier/high amount wins first. Two months of cutting these expenses in half and you'd have the money to cover the car loss -upping your savings to 3k/month.

And yes, I would spend time cleaning instead of washing ziplock bags for $300/month savings.
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Variable Wardrobe $458.51

Hey Very Sassy/Slow Learner (Sassy Learner?),

Wanted to delurk long enough to make a suggestion. Do you have a group of relatively local friends? One of the things I'm seeing frequently in my friends and my extended circles are Clothing Swaps. Basically, you and your friends all "clean out" your closets? Doesn't fit? Doesn't suit you? Bored with it? And then you all get together, bring your "discarded" items, and "shop" each other's piles. Voila! New wardrobe items! Free! and you've gotten some social time! You can decide on the rules -- does the host take all the leftovers to be donated somewhere? Do people keep their unclaimed items?

Just an idea for reducing a category and still allowing yourself to enjoy "new" "nice things".

back to lurking,

Hilary
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- Another trick, when you see something you'd like, is not to think simply "Nope, can't afford it," which makes you feel deprived; but rather, "Nope, not in the budget right now. Maybe later." The result is the same (money saved), but morale is also saved.

I go one better. I think, "HAHA slick marketing guy, you aren't smart enough to pry my money away from me this time!"

I wrote a whole piece on learning to be happier with cash in the bank than with purchasable stuff. Got POD if I remember right.

xtn
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...a corner in the apartment from which to work?

I like this. Or, conversely, a corner in the office in which to sleep. So, savings of $1200/mo (if it's not thrown away on a new office elsewhere plus commuting expenses).

I have one roommate....cleaning service ($300/mo)

Doesn't look like the roommate is sharing the cost. She should. And, with 2 roommates sharing the cost, and cutting it from every or every other week to once per month, VS can keep the cleaning service, for $250/mo less. (My 1x/month cleaning service is $120/mo for a house in a higher COLA than Baltimore.)

Of course, if VS cleans house instead of going to the gym, she spends no more hours, and saves on both housekeepers and gym membership.

I don't see what your hourly rate has to do with any of this.

Ding, ding, ding! I had a friend who refused to clean house because his hourly income was X, and he could hire maids for X/5. All well and good if he could add to his work hours at will. If instead of coming home at the end of the day, he could just stay an extra hour while the maids spent that hour cleaning, that would've worked. But actually the amount of work to be done at the office was finite.
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ACTION TAKEN
Not yet... does this make sense given my hourly rate?


Ah... good question. Does the answer really matter? You've got to squeeze the turnip.

xtn
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I'm so discouraged by your collective comments right now I'm actually in tears. I spent all morning trying to find ways to turn my life upside down to save money and all afternoon running around trying to put some of it into place, and apparently none of it is remotely good enough. I'm really at wits end and I was hoping to come home to a few encouraging words, and instead I just feel beat up.

Is anything I suggest going to be good enough? Or are you going to criticize everything I propose? It seems the consensus is that I should move into my closet with my laptop until my debt is paid for. And even then, I shouldn't increase my lifestyle, I should just save it all. Isn't there some middle ground somewhere where I can have some semblance of a frugal life while making progress on debt? I'm willing to make changes, drastic ones, provided they make sense in the long run.

Yes, I could put my desk in the corner of my room and work from there around the clock. You think I haven't considered it?! I thought about it, seriously thought about it, and I think it's a bad idea. I need to sustain this for THREE TO FIVE YEARS. I think I'll end up depressed if I do that. Like seriously depressed. How am I supposed to find any balance? I know I'm in debt up to my eyeballs, and I'm sure you're going to tell me balance can come later, right? What about avoiding depression? Oh, I know, I can be happy when my debt is paid? I don't even want to be happy, I just want to not hate myself for making mistakes.

I do not mean to make excuses to keep my luxuries by asking if is still worth it based my hourly rate. I meant it as a real question. The quantity of work I have available to me has seemed pretty endless for the last year. I don't know if it will continue, but I could pretty much work every weekend all weekend. So at a certain point, yes it starts to seem silly to do my own bookkeeping when I can barely keep up with billable work much less stuff that isn't billable.

I only mentioned cons of giving things up because I'm trying to think of all the angles. I don't want to be so drastic and neglect to think about the big picture and make more mistakes. I feel like I've turned into a punching bag instead of someone you actually wish to help. I don't mind tough love, I really don't, but some of you seem to have forgotten there a person on the other end of these messages.

Someone asked me what I spent yesterday and today. Here's it is, so you can criticize that too:

I told my significant other I couldn't go on a trip with him and his mom--that required buying a plane ticket home, since they're driving. It means I'll get three extra days of work this month. (Plane ticket $200, Increase revenue ~$3200)

I had my one meal out on Sunday ($20), and I have no plans to eat out for the rest of the week. I walked past countless coffee shops today without going in (I'm an addict, this is impressive restraint for me). Savings ($5).

I applied for zipcar $25.

I think that's it, other than fixed cost of existing... which apparently are supposed to be completely eliminated.

Losing hope,
SL
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In an earlier thread, you noted that a previous accountant had advised paying for your phone expense from personal budget rather than business. Doesn't make much sense to me, since you need the phone and mobile Wi-Fi for business use.

Check with your new CPA. Your phone expenses should be a total tax write-off, IMO.


Sass
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Its okay to feel discouraged. Its also necessary to be realistic.
You CAN have everything you want, just not all at once.

Everyone hates cleaning, but maybe still get a sense of satisfaction from having a clean place to live?

I believe you said earlier you worked an average of 160 hours a month. Thats pretty typical full time work. If you did work an extra day every weekend to compensate for paying for cleaning/book-keeping that would be one thing, but it doesn't appear that you have consistently done that.

Working from home can help a lot with being frugal.
No commuting to work, no need work office clothes, no need to go out for lunch. However, looking at your budget categories it doesn't seem like you are taking full advantage of these opportunities to save.

In regards to not taking the trip. That is a good step which needs to continue.
I didn't buy any plane tickets today either. Or yesterday, or the day before.
There is always an infinite amount of things we don't spend money on in a day. Any particular trip not taken is only a real savings if you can actually cut you average spending in that category.

Really, I think you still have lots of low hanging fruit that could be cut with little hardship. Keep working at it. You've only just started on the path, it will be hard, but worth it in the end.

If you could break out your categories more you might get more specific advice. Food category still seems pretty high for one person.

Best of luck
Mosquito
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FWIW, VerySassy, I agree with your thinking on the billable hours, especially given what you just wrote with regard to your current quantity of work ("pretty endless").

If you are paying someone say, $300-350 for accounting per month, and it would take you 16 hours to do the same work, 16 hours in which you could earn $2400 (minus $960 for taxes, so $1440, it is kind of a no-brainer to me. Keep the bookkeeper, especially since it seems rather important that AR stay on track.

As for the expense for maid service, I agree with the others that the cost should be shared with roommate or roommates, and if this service is cleaning your designated office area, that portion is a taxable expense. Seriously, if your CPA isn't advising you to claim your business expenses like this, they really suck.


Sass
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I'm so discouraged by your collective comments right now I'm actually in tears.

Please don't be discouraged. I know it can seem pretty overwhelming when everyone is throwing suggestions here and there and it feels like criticism.

You have the right attitude coming into this, and you have an income that can help you get out of it, given time and good decisions.

I'll back you up on at least two issues. I can understand now wanting to work and sleep in the same room, even if it saves a few bucks. I see significant value in having the work space separate from the living/sleeping space. Even if you really love what you do, it's important to be able to walk away from it and relax/decompress at the end of the day.

On the topic of cleaning, I happily pay $120 twice a month to have my house cleaned. And another $150/month for lawn care. Yes, I realize that's a lot of money over time. No, I'm not debt free either. DW and I both work long hours, and we prefer to spend the free time we have on other things. It's about priorities and balance. It's fine to have a "want" or a "luxury", so long as you understand and can accept the tradeoff. It may mean less money to spend somewhere else. It may mean a little longer to pay off the debt. It may mean a little less saved each month. You have to decide for yourself how much that affects the big picture, and if that tradeoff is something you're okay with.

To me, it's not about maximizing every dollar in the bank account. It's about finding a balance that works for you, and gets you to where you want to be in the end. I'm sure plenty of people here would scoff at some of my spending decisions, but I am happy with my lifestyle and on track for my long term goals, and that's all that matters in my book.
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Personally, SL, I think you're off to a great start!

This board has historically been pretty tough. I suggest you spread your personal finance reading among several blogs and find some favorites. There's a whole bunch of really good ones out there for you to read and be encouraged. Do a Google search and find them.

Also, someone commented earlier that you apply what works and reject the rest. Personal finance is mostly personal. Only you live in your shoes and only you are in the BEST position to ultimately decide what will work given your personality and emotional strengths and weaknesses.

I haven't applied every suggestion here. I also don't give 100% of all details (though I share a lot). What you start today and the decisions you make this week, month, year will likely adapt as you move forward.

The "Purpose" (getting out of debt) won't and shouldn't change.
The "Plan" on how you achieve that will evolve and change until you reach your goal. That's life. That's reality. You've already made the biggest advance, namely, mindset. Many never get that far. They just resign themselves to dying broke. You're already way ahead. But by all means, pick and choose what you wish to apply.

Once, when I was insulted by a mentor whose favor I desired I was rescued (emotionally speaking) by another mentor who overheard his criticism of one of my projects. He asked me how I felt about what the first man said. I replied, "It seemed a bit harsh" to which he stated: "Everyone's entitled to his own STUPID OPINION!" That felt great to hear and helped put things back in perspective for me.

That's not to undermine the help being offered. But it is to say that not all of the opinions are worthy of practicing in your case.

Please hang in there and carry on!

Ticohombre
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I'm so discouraged by your collective comments right now I'm actually in tears. I spent all morning trying to find ways to turn my life upside down to save money and all afternoon running around trying to put some of it into place, and apparently none of it is remotely good enough. I'm really at wits end and I was hoping to come home to a few encouraging words, and instead I just feel beat up.

Well, I like either of your new nicknames better than Smurfette. :-)

Seriously, I think you need to look at this like the stages of grief. You were in Denial for a long time, and you've probably beat yourself up some, as well as wanting to yell at other posters. I think the justification you are doing is probably akin to the Bargaining stage. And now you have reached the Depression stage. You will probably cycle back and forth a few times, until you finally get a plan together and start executing, which will be Acceptance.

Is anything I suggest going to be good enough? Or are you going to criticize everything I propose? It seems the consensus is that I should move into my closet with my laptop until my debt is paid for. And even then, I shouldn't increase my lifestyle, I should just save it all. Isn't there some middle ground somewhere where I can have some semblance of a frugal life while making progress on debt? I'm willing to make changes, drastic ones, provided they make sense in the long run.

It's good that you are willing to make drastic changes, because I commented to Joel last night about how you were going to have to make significant changes to your spending, and he looked at me and said "I'd call it drastic changes."

I'm so discouraged by your collective comments right now I'm actually in tears. I spent all morning trying to find ways to turn my life upside down to save money and all afternoon running around trying to put some of it into place, and apparently none of it is remotely good enough. I'm really at wits end and I was hoping to come home to a few encouraging words, and instead I just feel beat up.

You do need to figure out a way to actually LIVE your life - just at a lower expense than you have been. So, take what you are seeing here, and figure out how you might be able to make it work - realizing that you won't be able to (nor should you) implement EVERYTHING that is suggested. But you do need to figure out what will work for you, to get down to the level of spending that you need to get to.


Yes, I could put my desk in the corner of my room and work from there around the clock. You think I haven't considered it?! I thought about it, seriously thought about it, and I think it's a bad idea. I need to sustain this for THREE TO FIVE YEARS. I think I'll end up depressed if I do that. Like seriously depressed.

I was very impressed by the fact that you were thinking about how to cut your rent costs - that usually doesn't come up until much later in someone's decision-making. You don't have to commit to it for the full 3 - 5 years, though. Can you do the office in the corner of your room for 6 months or a year? Then you can re-evaluate. You might have found some other way to cut your costs by then, or found another revenue stream, or found a cheaper office space than going with the brand names for office suites.

How am I supposed to find any balance? I know I'm in debt up to my eyeballs, and I'm sure you're going to tell me balance can come later, right? What about avoiding depression? Oh, I know, I can be happy when my debt is paid? I don't even want to be happy, I just want to not hate myself for making mistakes.

There is some truth to the theory that you've spent x years not worrying, so now you need to make up for that. And right now, you are probably very stressed because you are finally realizing how big of a hole you've dug for yourself. On the other hand, when you are actually executing on your plan, you should find that, as others have said, it really becomes kind of a game to see how little you can spend, and how much you can put toward your debt, and eventually, toward your savings and investments. For me, one of the things that gives me a boost each month is when I see my mortgage payment being paid entirely by income from my investments. (It used to be even more fun when a lot of the income was coming from bank debt that I bought during the financial crisis at pretty low prices, so I felt like I was beating the banks at their own game. Alas, a lot of those investments have now been called, and I have replaced them with investments in non-bank companies.) You will find a balance, even while paying off the debt.

I told my significant other I couldn't go on a trip with him and his mom--that required buying a plane ticket home, since they're driving. It means I'll get three extra days of work this month. (Plane ticket $200, Increase revenue ~$3200)

I had my one meal out on Sunday ($20), and I have no plans to eat out for the rest of the week. I walked past countless coffee shops today without going in (I'm an addict, this is impressive restraint for me). Savings ($5).

I applied for zipcar $25.


That's a lot less spending than you would have done if you had been faced with the same situations a month ago, right? That's great! You are making progress!

And when you make mistakes, because you will, don't beat yourself up - just figure out how not to make that same mistake again - and go make a different one instead. ;-)

AJ
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Is anything I suggest going to be good enough? Or are you going to criticize everything I propose? It seems the consensus is that I should move into my closet with my laptop until my debt is paid for. And even then, I shouldn't increase my lifestyle, I should just save it all. Isn't there some middle ground somewhere where I can have some semblance of a frugal life while making progress on debt? I'm willing to make changes, drastic ones, provided they make sense in the long run.

Everyone here is going to have their opinion on what you need to do, but that doesn't mean you have to do it all now or even do it all.

But on these threads you are bouncing around from washing ziplock bags to looking into options that have you spending more money hoping to save money (new office space/selling car) and at the same time rejecting ideas that would seem to be low hanging fruit as taking too much time (cleaning).

Take a deep breath and then sit down and budget from what you have, not what you are spending each month. That means you can't look at all those numbers you posted and say "I'll try to spend less here" -- you have to start with the real numbers -- $7500 a month? then subtract debt payments, subtract not easily changed bills (car/rent/insurance) -- what do you have left?

Now prioritize and budget what's left to the categories that are most important to you. This is where the hard work is. Maybe it's worth it to eat beans and rice every day so that you can afford the cleaning lady -- only you can decide this.

The nice thing about YNAB is you redo this every month -- maybe one month you splurge on cleaning instead of traveling or maybe you start by getting rid of the spa but later decide you love it too much or maybe you decide that it would be worth it to get a roommate and make an office out of the closet so that you can afford to travel like you want .... but you are the one who decides not us.

And if you blow it or an unexpected bill comes up, you just go back are re-prioritize -- where is that money going to come from.
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SL

Just take it easy...deep breath.
The process of paying down debt is a fluid one of finding what works and what doesn't. I had a housecleaning service weekly, I brought it down to every other before I eventually stopped it. Some decisions you make will be easy, as in why didnt I think of this before easy, and other cuts will be harder. Some you have to make using baby steps.

As an aside I was once a member of COSE (council of small enterprises ). For $100/yr, I got access to office space for a nominal price. Also there are some small business think-tanks that you can go to for business mentoring that will provide cheap office space. I think a second roommate would give you a huge bang for your buck, if you can stomach it. Just be creative.
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Thanks for the additional replies. It's been an overwhelming couple of days.

I spoke to my roommate/friend this evening who is well aware of my tax situation because she also happens to be my bookkeeper for the last 3 months. Prior to that, I did my own books as best I could, but I was drowning in work. She has a FT gig doing project accounting; this isn't someone with no knowledge. And, I know that's a lot of eggs in one basket, but we're careful with boundaries and it works for us. Anyhow, she knows I've been wanting to make a dent in things for a while. Divorce is expensive. Anyway #2, her opinion was that I should rent the spare room and keep my office space right where it is, at least for a few months. If the distraction of a third roommate on the same floor proved to be too much, we could put a partition up. She thinks I'll be happier with the money saved, especially if we're selective about who we take as a roomie. Her opinion was that it was my 2/3 of the rent, so any savings is mine.

Current Business Expense for Rent $1400/mo
Rent received from future roommate $1000/mo
Savings $1000/mo

We discussed the pro/cons of keeping the house cleaner and splitting the cost. She likes to clean and I don't. We didn't come to a conclusion, but it is on the table at least. My plan is to cancel it at least until the payment plans are worked out and I'm on my new budget for a few months. If I really miss it I can re-evaluate.

Additionally, I'm much more comfortable with my new tax pro. He was very patient in explaining to me the pieces. He's going to prepare the personal property tax forms for the business first. Second he's going to contact the IRS and state of MD to see what the big picture is. We will be filing 2014 returns in the next month as well (corporate and individual) so I'll have a clear picture of what I owe probably by mid August if not sooner. It turns out that Maryland has an amnesty program starting Sept 1, where they forgive the penalties and 1/2 the interest if you agree to a 24 month payment plan. The other goal is going to be to pay the IRS below $50k, so I can enter their Fresh Start program, which I believe is a 72 month plan. As long as it is below $50k they do not ask for financial information and they can't/won't put a lien against me. So it seems like the taxes will be on payment plans by the end of the quarter.

I also got some clarity on how pass through business income works on my tax return. Neither of my previous tax preparers explained it very well. I was not doing anything wrong by cutting an extra payroll check so that more federal withholding was taken out, however I also could have just increased the withholding, because the owner draw doesn't increase my tax liability--I thought it did.

Lastly, my zipcar application was approved. So... I can get rid of my car. Eek.

I had a hair appointment scheduled for tomorrow. I cancelled it. It can wait.

That's all for now.
SL
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Hi SlowLearner/Sassy/Smurfette!

You're doing a great job. I realize it feels like you've made no progress at all. Trust me, you have. Just keep doing baby steps. If one day you feel like tackling the car issue and the next day the best you can do is rinse out a ziploc bag, that's really okay. As long as your choices average out in the right direction, you'll get there.

I've been posting to this board for 9 years (yoiks). I started with $350k+ in debt and now have $330k in debt. You'd think I was a failure just looking at those numbers. But at the same time, my net worth has increased by more than 50% (probably could have been more, but I'm happy with that progress), my savings rate has increased enormously, and my life is vastly more stable and secure than it was when I started.

The most important part is having life stable and secure. You'll get there. Just breathe and keep taking steps.

ThyPeace, cried about debt too. And also learned to decline people's suggestions. I wanted a pretty wedding dress and so I bought one. With cash. Same for the engagement ring. And deciding not to do major construction myself. The important thing was making those decisions consciously and knowing the financial consequences of each of them.
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As people have noted, there's usually a rush of advice, and people often repeat what other people have said, and yes, we know it can be overwhelming. Go through the posts slowly, ignoring what might be regarded as personal comments, and just weigh the good advice and decide what fits and what doesn't. Some suggestions might be wrong for now, but would work later on.

I have some reading for you. The first is a very short paperback called "The Richest Man in Babylon" by George S. Clason. It's about how people regard money.

https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(bo...

Well worthwhile. I still go back and reread it from time to time.

The rest of the reading is from the Fool, and was written by TamarianG, who was a former, much loved poster here. This is a series of posts by her about how she hauled herself out of overwhelming debt.

I. I Owe How Much?:

http://boards.fool.com/long-getting-here-from-there-19584890...

II. Budgeting in Real Life:

http://boards.fool.com/long-part-ii-finding-my-inner-budget-...

III. LBYMs as a Friend:

http://boards.fool.com/long-vat-eess-thees-froo-gahl-ee-tea-...

IV. Getting Those Rates Lowered:

http://boards.fool.com/long-ill-see-your-20-and-lower-you-2-...

V. Getting Back in the kitchen Again:

http://boards.fool.com/long-im-cookin-with-gas-now-19644252....

VI. Don't Mourn, Organize:

http://boards.fool.com/long-dont-mourn-organize-19672026.asp...

VII. Stop Think Plan Do:

http://boards.fool.com/long-stop-think-plan-do-19721194.aspx...

If nothing else you should get some laughs out it, and I think you need a laugh around now.

Hang in there. Ask questions if need be, but remember that you don't have to take all the advice at the same time. It sounds as though you'll survive the turmoil. There were be slips from time to time; you didn't get into debt in a week, and it will take time to dig out from under.

But it can be done. People have hauled their way through enormous piles of debt, and you can do it too.

Nancy
it takes a lot of courage to stand up under the withering fire of the Credit Card snipers. Give yourself a very tiny pat on the back. Just one.
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I have some reading for you. The first is a very short paperback called "The Richest Man in Babylon" by George S. Clason. It's about how people regard money.

Good book, but don't pay for it. Borrow it from the library.

AJ
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Sassy/SlowLearner,

Like ThyPeace said, you'll find many of us have had our own debt issues of varying degrees.

Here's my story: Our highest consumer debt peak was around 2005. We had at least $60k in consumer debt, plus another $70-75k in student loans. Plus a $175k mortgage. When I added up our total cash acounts minus debts (net debt), I found we were $250k+ in the hole.

Over the next few years, we paid down and paid off various consumer debts, consolidated the student loans, and made steady progress on the mortgage. We also started to shift money into savings and retirement plans. Last year's calculation showed that our net debt was actually a "net cash" position of +$400k. That's a $600k difference over a decade.

Why do I tell you this? To show you that it can be done. Many of us have been where you are and succeeded in getting things turned around. You can do it too.
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I'm so discouraged by your collective comments right now I'm actually in tears. I spent all morning trying to find ways to turn my life upside down to save money and all afternoon running around trying to put some of it into place, and apparently none of it is remotely good enough. I'm really at wits end and I was hoping to come home to a few encouraging words, and instead I just feel beat up.

Is anything I suggest going to be good enough? Or are you going to criticize everything I propose? It seems the consensus is that I should move into my closet with my laptop until my debt is paid for. And even then, I shouldn't increase my lifestyle, I should just save it all. Isn't there some middle ground somewhere where I can have some semblance of a frugal life while making progress on debt? I'm willing to make changes, drastic ones, provided they make sense in the long run.

Yes, I could put my desk in the corner of my room and work from there around the clock. You think I haven't considered it?! I thought about it, seriously thought about it, and I think it's a bad idea. I need to sustain this for THREE TO FIVE YEARS. I think I'll end up depressed if I do that. Like seriously depressed. How am I supposed to find any balance? I know I'm in debt up to my eyeballs, and I'm sure you're going to tell me balance can come later, right? What about avoiding depression? Oh, I know, I can be happy when my debt is paid? I don't even want to be happy, I just want to not hate myself for making mistakes.

I do not mean to make excuses to keep my luxuries by asking if is still worth it based my hourly rate. I meant it as a real question. The quantity of work I have available to me has seemed pretty endless for the last year. I don't know if it will continue, but I could pretty much work every weekend all weekend. So at a certain point, yes it starts to seem silly to do my own bookkeeping when I can barely keep up with billable work much less stuff that isn't billable.

I only mentioned cons of giving things up because I'm trying to think of all the angles. I don't want to be so drastic and neglect to think about the big picture and make more mistakes. I feel like I've turned into a punching bag instead of someone you actually wish to help. I don't mind tough love, I really don't, but some of you seem to have forgotten there a person on the other end of these messages.


I'm sorry I contributed to making you feel this way.

Of course there is some middle ground that will be good enough. I'm fond of preaching that one should set extreme goals on the basis that you can get halfway there and turn around to find that you have come farther than you thought possible.

We actually do wish to help. Yes, even me, the ass of the message board. We have various methods. Different methods work on different people. We don't know whats going to work for you when you come on here, so we throw everything at the wall and see what sticks, so to speak.

Please don't be discouraged. You can do this. You've already started down the path. Be a soldier, grit your teeth, and keep going. You can beat your debt while still maintaining some level of lifestyle that is in the middle. I just want you to push yourself.

Mistakes are okay. We all make them. A lot of us are on this board because we made so many. Every one is a learning experience. Every one is an opportunity to see how not to make them again. We want you to succeed. We want you to become another success story. We want you to be part of our little family of internet strangers who throw ideas at walls for newcomers trying to help them through a tight spot.

xtn
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I've found when I was an over-spender it came down to:

You're spending money you don't have to impress people you don't like or even know.

Now when I buy something I think about it carefully, make sure it's within my budget or priorities, and I don't care about trying to impress others. (and believe me, I know that can be hard in major cities like NYC or DC where so many people put on airs).

So when I re-use ziplock bags, it's a little bit because I remember my 20's and spending a lot on them because I'd toss them after one use, but it's also about not being wasteful to the environment knowing plastics aren't biodegradable.
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- Another trick, when you see something you'd like, is not to think simply "Nope, can't afford it," which makes you feel deprived; but rather, "Nope, not in the budget right now. Maybe later." The result is the same (money saved), but morale is also saved.

The question I asked myself when I was working my way out of debt and momentarily thought of buying something was "Do I want this more than I want to get myself out of debt, will buying this feel better than getting out of debt". Usually the answer is "no". And it didn't feel like depriving myself, it felt like focusing my mind on my priorities. It also helps now that I'm out of debt because I can still ask myself that with a savings/investment twist knowing money I spend on things is money that can't go towards savings/investing.
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Current Business Expense for Rent $1400/mo
Rent received from future roommate $1000/mo
Savings $1000/mo


Okay, so on the $4700/month target for cuts, this is a good step. You are now down to looking for an additional $3700. A couple of questions:

- Are you renting this space furnished? If so, you want to be sure you are pricing a bit more for this. If you're not renting it furnished, and you will have to move furnishings out - can you sell those furnishings, and apply the money to debt? (Please do not make the mistake of renting a space to store used furnishings. With a little shopping on Craigslist, you can find used furnishings of the same quality as the ones you currently have for about the same price you can sell.)

- Will there also be a decrease in the cost for things like utilities, internet, some of the expenses in "Home Life", etc. by taking on a new roommate? If so, that will help.

We discussed the pro/cons of keeping the house cleaner and splitting the cost. She likes to clean and I don't. We didn't come to a conclusion, but it is on the table at least. My plan is to cancel it at least until the payment plans are worked out and I'm on my new budget for a few months. If I really miss it I can re-evaluate.

Glad you are making the decision to cut this expense for now. This brings the spending cuts you still need down to $3400.

If you choose to re-evaluate, will the cost be split 3 ways, not just 2?

Lastly, my zipcar application was approved. So... I can get rid of my car. Eek.

Okay, this is another $350/month saved - you are now down to looking for $3050 in saves - assuming you are diligent about keeping the zipcar use down to 8 days a month. (If you can cut zipcar use to 5 days a month by, say, combining days you book meetings, etc., that's another $200 or so saved.)

Are there other cuts you have committed to? You are over 1/3 of the way there.

AJ
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I wrote a whole piece on learning to be happier with cash in the bank than with purchasable stuff. Got POD if I remember right.

Oooh ooh! As resident xtn stalker, this is my cue:

http://www.fool.com/community/pod/2005/051025.htm
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Hey Nugget, why can't FA track Air Force One? They afraid civilians might swarm it with their privately owned squadrons of fighter jets or something?

xtn
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We're not allowed to publish any military operations. But you can accomplish pretty much the same thing by paying attention to the FAA TFR announcements. :)
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Good to hear that you made a plan to skip eating out for a week. You exercised will power every time you passed a coffee shop door (and I have three favorites myself, so I can empathize with your diligence)

Maybe make a plan for a two year project of cutting expenses...I agree that 3-5 years can seem like forever.

Yes, you can get square with the revenuers and start using your money to get what you really want.

YeilBagheera
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Windowseat,

Thank you for posting those links to TamarianG's posts. Great stuff!

- Matt
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We're not allowed to publish any military operations. But you can accomplish pretty much the same thing by paying attention to the FAA TFR announcements. :)

Usually. There were FAR 91.141 (VIP) NOTAMs for KGYI today detailing no-fly-zone, because the President was coming in, but I found no associated TFR announcement.
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Metrochick,

Thanks for chiming in with the city perspective again. I swear growing up in northern VA, or what I like to call "brat country", warps your brain. It's not normal. Or sane. Affluence has spread to Baltimore and I have found my gravitating toward what I know. But it's a choice.

SL
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been on vacation.

Keep the bookkeeper, as long as they did not contribute advice that got you into this mess. I assume they help with billing, keeping contract straight, etc, as well as getting data together for the accountant. They are probably worth it.

Fire the cleaning service, at least for a few months. Make a plan to hire them again as a reward when you get the IRS paid off.

Haven't seen it mentioned - with medical issues and the fact that you are a single earner household - you need an emergency fund, even a modest one, just in case. If you don't have some liquid savings right now, I'd try to develop at least $1000.

Student loans - do what you need to do to get them out of default. then look at the interest rates and whether they are private or federally backed. Particularly if its federal, and at a decent rate, pay this off last.

Look into selling something or returning things. With your spending, there is a decent chance of making a few bucks like this - the best outlet will depend on what you have too much of and the time commitment - nice clothes you don't wear might be a good fit for consignment. Maybe certain things go on e-bay. The goal here is to generate extra revenue to either pay down debt or build up your emergency fund.

Work with your accountant and bookkeeper to identify potential business deductions for tax year 2014 that may have been missed.
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"I'm so discouraged by your collective comments right now I'm actually in tears."

I'm coming into this late, but please don't get discouraged. It seems so overwhelming at first, but once you get into the swing, it isn't as hard or as bad as you think it will be.

I managed to pay down a small mountain of debt much quicker than I thought I could, simply because frugality became second nature to me. That first month was the worst, and now I keep on living the frugal life and am quite happy. I'm also no longer afraid of what would happen if there was an emergency, or if my income was cut (God forbid).

Have you considered, rather than having a cleaning service come weekly, just cut it down to the deep-cleaning once a month? They can get the floors, dust, clean blinds and light fixtures, and then you and the roomie just do the daily dishes/bathroom/laundry stuff yourself?
I know you live in a more expensive area than I do, but cleaning services here offer things like 2 hours for $100. That would keep it from getting too bad. (I've considered it more than once myself)
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Windowseat,
Thanks for sharing the TamarianG posts -- I just read through them all!
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You're very welcome. I often reread them, just to watch her change from careless to careful, and move from resentful to appreciative. That section about her co-worker suddenly talking about how much she admired Tamarian is wonderful.

Nancy
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