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I have been coming off and on for several years reading this board, never applying any of the common sense actions/advice to my own messy life of overspending. All the while continuing to pile on mountains of debt. I am 51, recently divorced and a single mother to a 9 year old son, also a daughter 22yr old at home. Lately I have been growing spiritually and making some major changes to my life. I have been living my life foolishly being irresponsible, ungrateful and always looking for immediate gratification. I am ready to clean up my life and be a better person. I have grown comfortable living in a state of fog. I feel scared and a little nervous but I am excited at the same time. Finally I am ready to do what it takes to get out of debt. I would appreciate any advice along the way.
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No. of Recommendations: 29
I have been coming off and on for several years reading this board, never applying any of the common sense actions/advice to my own messy life of overspending. All the while continuing to pile on mountains of debt. I am 51, recently divorced and a single mother to a 9 year old son, also a daughter 22yr old at home. Lately I have been growing spiritually and making some major changes to my life. I have been living my life foolishly being irresponsible, ungrateful and always looking for immediate gratification. I am ready to clean up my life and be a better person. I have grown comfortable living in a state of fog. I feel scared and a little nervous but I am excited at the same time. Finally I am ready to do what it takes to get out of debt. I would appreciate any advice along the way.

Welcome!

One of the first things to do is to stop using all credit cards for anything, if you haven't done so already. You can't make progress on paying down debt if you're still digging the hole by adding more expenses onto the cards.

Then, you probably want to take stock of where you currently are, because if you don't know where you're starting from, it's hard to know if you're progressing.....

Even though it's scary - tally up the debt that you have, including interest rates, balances, minimum payments, etc. After you tally everything up, you need to figure out your paydown order - from a mathematical perspective, in order to pay the least interest, you should pay down the highest interest rate items first. However, if you are struggling from a cash flow perspective in order to even make all the minimum payments, you probably want to choose some of the smaller debts, and pay them off more quickly, so you can decrease your minimum payments owed each month. You also may have some debts that you want to get rid of because you don't like dealing with the company, or you just 'hate' a particular debt. Whatever you decide, you need to put a plan together, so you have a path to follow.

Speaking of cash flow - you need to look at your income vs. your expenses, probably month by month, for several months - and you need to look at actual information for both - not just things like "Child support - $100/month" that you are *supposed* to get or "Electric bill - $100 per month". If you don't get the child support regularly don't count on it as income every month. If your electric bill was $122.47 2 months ago and is $84.38 this month - that's what you need to track. If you can reconstruct the last few months, that will be a good start. But even if you can't - starting today, you need to write down every penny that is spent, so you can see where the money is going. And don't forget that there are probably some expenses that don't happen every month - like once a year car registration or every other month billing for some utilities.

Once you understand your income and expenses, you can see if you are living above, at or below your means - if your monthly income is less than your monthly expenses, you are living above your means and need to start making some immediate expense cuts, or find immediate ways to increase your income. Even if you are at or below your means (expenses equal or less than your income) if you want to make better progress, you should look to increase income and/or decrease expenses.

Ways to increase income:
- Another job
- A better job
- rent a room out/get a roommate
- Sell stuff

Ways to cut expenses:
- track expenses regularly - write everything down
- focus on your needs - food, shelter & clothing for you/your family - everything else is pretty much a want, and should be looked at to be cut
- within the needs - can you substitute less expensive things for some of the big ticket items?
- are you paying expenses for your 22 year old, like a car (including insurance, gas, maintenance, etc.) schooling, room and/or board? She's old enough that she should be paying her own way for those things, or at least contributing

If you post your information here, you will get lots of feedback. You probably won't like some (a lot) of it, but if it helps you to think about things differently and adjust your life to get out of debt more quickly, it will be helpful in the long run.

AJ
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Thanks AJ

Here is what I have been working on today;

- removed all of the credit cards from my wallet

- added up my total debt,including interest rates, balances, and minimum payments.

- highest interest rate will be my order of repayment

- put my info into the snowball calculator and that will be my plan

-starting today I plan on writing down every penny I spend ( small notebook for this added to my wallet)

I can already tell you that I am definitely living above my means

- I am getting to work extra Friday and have been thinking of ways to increase my income including looking for part-time jobs

-I have made of list of things I can cut back on and cancel. (just haven't cancelled anything as yet.)

My daughter is paying a lot of her expenses . I still pay for her cell phone and groceries.


Here is what I owe. Thanks.
Sep 17, 2014
Snowballing each month
$2,682.00
Name Interest Opening Current Difference
BOA 22.99% $4,815.00 $4,815.00 $0.00
Barclay 22.99% $1,862.00 $1,862.00 $0.00
chase 1 18.24% $5,584.00 $5,584.00 $0.00
chase2 22.99% $2,974.00 $2,974.00 $0.00
citi 15.99% $4,619.00 $4,619.00 $0.00
great lakes 7.21% $16,593.00 $16,593.00 $0.00
us bank 3.75% $82,338.00 $82,338.00 $0.00
valic 4.25% $10,395.00 $10,395.00 $0.00
walmart 21.90% $1,090.00 $1,090.00 $0.00
$130,270.00 $130,270.00 $0.00
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No. of Recommendations: 8
This is just to help others read your (ready2bedebtfree) chart in the previous post. Good luck!

Name Interest Opening Current Difference
BOA 22.99% $4,815.00 $4,815.00 $0.00
Barclay 22.99% $1,862.00 $1,862.00 $0.00
chase 1 18.24% $5,584.00 $5,584.00 $0.00
chase2 22.99% $2,974.00 $2,974.00 $0.00
citi 15.99% $4,619.00 $4,619.00 $0.00
great lakes 7.21% $16,593.00 $16,593.00 $0.00
us bank 3.75% $82,338.00 $82,338.00 $0.00
valic 4.25% $10,395.00 $10,395.00 $0.00
walmart 21.90% $1,090.00 $1,090.00 $0.00
$130,270.00 $130,270.00 $0.00
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Is US Bank a mortgage?
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Is US Bank a mortgage?

Sounds like it. I'm wondering if Great Lakes is a car loan, home equity, or what.

Nancy
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Sounds like it. I'm wondering if Great Lakes is a car loan, home equity, or what.


My money's on car loan, based on the amount and the size of what we presume is a mortgage.

Minxie
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thanks so much
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yes it is
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it is a direct plus loan (student)
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yes it is

A couple of suggestions. Including part of the question will help with following to which post you are responding. Italics can be added with < i > and ended with < /i > (Remove the spaces. To show the format, it is necessary to add spaces to make it non-executable.)

When you reply to a specific post, it will show up under Boards --> Favorites and Replies --> Replies.
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Is the $82K from US Bank a mortgage or a direct plus student loan?
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Is the $82K from US Bank a mortgage or a direct plus student loan?

From the replies s/he has made, it appears that the $82k is the mortgage and the $16k @7% is a student loan.

OP, what is your income?

Minxie
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OP

Are any of the accounts already past due or over their credit limits?

Do you and your daughter have anything you don't need and can sell, return, or otherwise get some value out of?

Returning, if you can get cash or credited back to the account is best. Specifics -
unused clothing/shoes?
household/office supplies?
home improvement supplies?
electronics?

A garage sale can also be a friend.
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No. of Recommendations: 3
I find that adding a column for "minimum payment" can be useful when prioritizing paydown order. As stated above, the cheapest route is to pay down in order or highest rate. But there are circumstances where you may want to pay off one that has in unusually high monthly payment requirement. Helps the cashflow, helps the snowball...
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Okay, from what I have gathered from the thread, here is a slightly updated list, with guesses at your minimum payments, re-ordered in a suggested payoff order, based on interest rate (largest to smallest) and for items at the same rate, smallest balance first:

Name        Interest    Opening       Current     Min Pay    Difference 
Barclay 22.99% $1,862.00 $1,862.00 $55.00 $0.00
chase2 22.99% $2,974.00 $2,974.00 $87.00 $0.00
BOA 22.99% $4,815.00 $4,815.00 $141.00 $0.00
walmart 21.90% $1,090.00 $1,090.00 $31.00 $0.00
chase 1 18.24% $5,584.00 $5,584.00 $150.00 $0.00
citi 15.99% $4,619.00 $4,619.00 $108.00 $0.00
great lakes 7.21% $16,593.00 $16,593.00 $222.00 $0.00
valic 4.25% $10,395.00 $10,395.00 $236.00 $0.00
us bank 3.75% $82,338.00 $82,338.00 $600.00 $0.00

Total $130,270.00 $130,270.00 $1,621.00 $0.00

Debt Payments (Snowball) $2,682.00

Excess over minimum payments $1,061.00

Please note - I added an estimate for escrow payments (taxes, insurance, etc.) to the us bank (mortgage) principal & interest, and assumed a 30 year mortgage that you have had for a little while. I assumed the student loan debt (great lakes) was on a 10 year repayment, and you had been paying on that for a little while. I also assumed that VALIC was a retirement plan loan with a 5 year term that you were about 1 year into.

If my guesses are close to right, and your budget actually allows for a debt payment of $2,682 each month (i.e. that's not just a goal), I would actually say you are in pretty good shape. You should have Barclay paid off in a couple of months, and Chase 2 about 3 months after that. You could actually have all of your high rate (double digit) debt paid off in about 18 or 19 months.

So, the question is - does your budget really allow you to put $2,682 toward your debt payments each month? Or is that your goal, and you haven't figured out how to pay that amount each month? And, are my guesses at your minimum payments somewhat close?

AJ
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Is the $82K from US Bank a mortgage or a direct plus student loan?

Its a mortgage

OP, what is your income?

Income around 98,000-102,000


Are any of the accounts already past due or over their credit limits?

None of my accounts are past due or over the limit (but are very close to the limit)

Do you and your daughter have anything you don't need and can sell, return, or otherwise get some value out of?

I don't think we have anything we could return. We did have a big yard sale few months ago. I donated my share of the money to my niece which she used for a mission trip.
My sister and I rent a small booth at a local antique/used shop. I have several things in my home I am thinking about selling. I don't plan on buying anything else for resell at this time. I have a few things in my garage and home I can use to restock my booth. I have a few items that require some work before I place them in the booth. I try to stay out of shopping areas because I don't trust myself.

I have added my exact minimal payments

Name Interest Opening Current Min Pay Difference
Barclay 22.99% $1,862.00 $1,862.00 $21.76 $0.00
chase2 22.99% $2,974.00 $2,974.00 $29.00 $0.00
BOA 22.99% $4,815.00 $4,815.00 $48.00 $0.00
walmart 21.90% $1,090.00 $1,090.00 $31.00 $0.00
chase 1 18.24% $5,584.00 $5,584.00 $106.32 $0.00
citi 15.99% $4,619.00 $4,619.00 $108.00 $0.00
great lakes 7.21% $16,593.00 $16,593.00 $100.00 $0.00
valic 4.25% $10,395.00 $10,395.00 $355.91 $0.00
us bank 3.75% $82,338.00 $82,338.00 $872.31 $0.00

Total $130,270.00 $130,270.00 $1,621.00 $0.00

Debt Payments (Snowball) $2,682.00

Excess over minimum payments $1,061.00



- BOA 0 interest expires 12/2014

- Barclay 0 interest expires 3/16/2015

- Chase2 0 interest expires 6/2015

- Great Lakes not sure what min pay will be. I will start getting statements in Jan 2015- I have been

paying 100/mo.


I added an estimate for escrow payments (taxes, insurance, etc.) to the us bank (mortgage) principal & interest, and assumed a 30 year


Mortgage is for 15 years. I pay 459.86 every 2 wks. I have refinanced my mortgage a couple of times I should have already paid it off. I bought the house in 1994.


I also assumed that VALIC was a retirement plan loan with a 5 year term that you were about 1 year into.


Valic is a loan I took against my 401B It will be completed 11/2015. It was a 5 yr term.


So, the question is - does your budget really allow you to put $2,682 toward your debt payments each month?

Yes I can pay 2682 a month and I want to pay more than that. I think

the biggest problem has been that I don't use or have a budget

and after paying my bills I use my credit cards to

live off of. I was raised by extremely frugal parents and I

am the complete opposite. I am trying to deal with those issues by

working the steps of debtors anonymous.

Thanks!
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My sister and I rent a small booth at a local antique/used shop.

I know someone who did this when she was experiencing financial difficulties. If her friends & relations hadn't paid for around half the months of her booth rental, she would've lost money on the deal--a lot of money. As it is, she barely broke even. Some months she sold less than 10% of the rental cost--and she had a well stocked booth of beautiful things (for which she asked too much--another problem).

This may be the first discretionary item I'd drop from your budget. Unless you're making money (are you?). Do you have many items that are in demand, things like antique toys & housewares, christmas ornaments & decorations in excellent condition? Otherwise, this is not a way to raise income, but an expensive hobby. Since it sounds like you have a full-time job (income $100k), is it your sister who's at the booth all day? If so, and she needs help paying booth rental, then you may be funding her expensive hobby. You sound like a very generous person, but I don't think you can afford to do this right now.

We did have a big yard sale few months ago. I donated my share of the money to my niece which she used for a mission trip.

Again, you are most generous, but I'm beginning to wonder if that may be one cause of your debt. Are you able to say, "sorry, but no," to family money requests/coercion that aren't life & death emergencies (such as helping a family member in dire circumstances meet an unaffordable medical deductible)? At least until you're out of consumer debt yourself. If these generous offers are your own ideas, you might remind yourself that just because you have a nice income doesn't mean you can afford to fund other peoples' hobbies and missions.
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Great Lakes not sure what min pay will be. I will start getting statements in Jan 2015- I have been paying 100/mo.

Since this is for your daughter's education, she should be paying this loan.
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I have added my exact minimal payments

Okay, here's an update:

Name        Interest    Opening       Current     Min Pay    Difference 
Barclay 22.99% $1,862.00 $1,862.00 $21.76 $0.00
chase2 22.99% $2,974.00 $2,974.00 $29.00 $0.00
BOA 22.99% $4,815.00 $4,815.00 $48.00 $0.00
walmart 21.90% $1,090.00 $1,090.00 $31.00 $0.00
chase 1 18.24% $5,584.00 $5,584.00 $106.32 $0.00
citi 15.99% $4,619.00 $4,619.00 $108.00 $0.00
great lakes 7.21% $16,593.00 $16,593.00 $100.00 $0.00
valic 4.25% $10,395.00 $10,395.00 $355.91 $0.00
us bank 3.75% $82,338.00 $82,338.00 $996.36 $0.00

Total $130,270.00 $130,270.00 $1,796.35 $0.00

Debt Payments (Snowball) $2,682.00

Excess over minimum payments $885.65


You will see that the excess over the minimum payment has decreased some, which means that the time for you to pay off your high rate debt has been extended some - probably to about 24 months, although that's a pretty rough estimate.

- BOA 0 interest expires 12/2014

- Barclay 0 interest expires 3/16/2015

- Chase2 0 interest expires 6/2015


So, after the 0% expires, your payments on these would increase. Because of the expiration dates, I would probably change the order of these a bit......

BOA expires first, so I would put that at the top of the list. With $885.65 extra each month, plus the $48 minimum payment, it would take 5.5 months to pay BOA off. So you could pay BOA off in Feb, which would mean that you would probably have 3 months that you would pay interest on it. I would suggest seeing if you can scrape up some additional money to pay BOA off in November (before the rate expires). Then I would put Barclay next on the list, and finally Chase2. If you can manage to pay off BOA in Nov, you should be able to pay off the others before they expire.

Mortgage is for 15 years. I pay 459.86 every 2 wks. I have refinanced my mortgage a couple of times I should have already paid it off. I bought the house in 1994.

Okay, I adjusted your monthly payment to the average, because by making a payment every 2 weeks, you are actually making 26 payments a year, which means that during 2 months of the year, you will make 3 payments of $459.86 for a total of 1379.58; the other 10 months, you will make 2 payments for a total of $919.72 Here's the calculation I did to get the average monthly payment: $459.56 x 26/12 = $996.36 To get you started in your budgeting, you need to account for making the extra payments in the 2 months that you make 3 payments, so in the months that you make only 2 payments, you should somehow be allocating $77.64 towards the months that you need to make 3 payments. There are a few different ways that you can do this - a lot depends on how you decide to do your budget.

I think the biggest problem has been that I don't use or have a budget and after paying my bills I use my credit cards to live off of. I was raised by extremely frugal parents and I am the complete opposite. I am trying to deal with those issues by working the steps of debtors anonymous.

Another suggestion: there have been a lot of people who like using a program called "You Need a Budget" (YNAB) to help implement budgeting. You might want to try that.

AJ
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Ready2BeDebtFree, you are getting good financial advice from others, and I hope you are able to follow it.

The discipline necessary to be able to change your patterns of behavior is also important here, and will help you follow the very good advice. The fact that you have been reading here for some time tells me that you have been in "get ready" mode. That's good -- it gives you familiarity and starts building pathways in your brain. The doing part builds even more paths. Key here is two things: repetition and frequency.

So -- check your balances frequently even if you already know what they are. Update your spreadsheet even if you just did it yesterday. If you're me, practice walking a route that takes you past the library instead of a bookstore (I have a love of books, for you it may be something else). Think through how you want to change the behavior, then practice it in an environment where there's little risk of failure. So -- practicing walking into the kitchen and choosing a glass of water instead of a snack is safer to your wallet (maybe not your waistline) than practicing walking through a mall and not going into a tempting store.

All these things build your discipline muscles. It's a literal workout for your brain, and similar to exercise and muscle building, it makes real changes in your brain's pathways.

It's also worth knowing that it takes about 144 repetitions to build a neural pathway equivalent to a pretty good habit (so you can ride the bike, but probably will still have trouble on wet pavement). Give yourself lots of opportunities to practice where you want to go.

You mentioned, too, having had a messy, somewhat self-focused life. If that trails over into other areas, you might want to check out FlyLady.net if you haven't already. Here on TMF, there is the "Get Organized!" board that focuses on that aspect of life.

ThyPeace, always working on improving in these areas, with varying results.
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I think

the biggest problem has been that I don't use or have a budget

and after paying my bills I use my credit cards to

live off of.


Before doing anything else, you need to create a budget - just write all your expenses down. Focus just on writing it down. Don't even worry about what you can or should cut out. Just get the numbers down to get a sense of what is coming in and what is going out. You can modify the numbers later.

I am in the midst of paying off debt which like you, started in the six figure range - unlike you that was above and beyond mortgage, car, and student loan. :( I am happy to say I now owe less than half of that. You post resonated with me because like you, I was terrified to stop using the cards because I always seemed to be short before the end of the month. In 2013, in fact, I paid something like $1700 in overdraft fees. One month I was charged $35 SEVEN times. Part of the problem was that I would see my checking account flush with money each paycheck and then spend it on "life" or a big credit card payment only to remember that I forgot to take into account the groceries, or the school tuition or worse yet that I had to pay the annual life insurance premium that month or renew my license, or pay the car registration and so on and so on.

So this is what I did. I had one card with a $500 limit. I paid it off and it became essentially my efund. On the day I got paid, I would calculate all the bills that I had to pay in those two weeks until the next one came in. This would include the weekly salary of the nanny, cc payments that fell in that time interval, weekly groceries, gas, phone bill, etc etc. I totaled the amount and knew that I only had $200 or so left over for extra cc payments, the odd coffee run, or grocery overflow. Many times I had more than that. But knowing that I had really only $700 of discretionary money that 2 week period instead of the $3300 that was in my account at that time was essential to my not overspending. The $2600 that was in my account already belonged to someone else and I was not allowed to touch it. I would not have known this if I didn't take the time to calculate what my expenses would be. The cc was in the event that I just noticed a gaping hole in my kids' sneakers and I had to run out and buy each a pair and I did not have enough in the checking acct. I chose the card with a small limit so that I did not get into too big a hole and would be able to pay it off in full monthly. Two months into debt paydown, I was able to confidently not only stop using the backup card but also STOP CARRYING IT WITH ME because I had faith in my budget and my numbers.

You mentioned being nervous and scared in your first post and I am here to tell you from firsthand experience YOU CAN DO THIS! Conquering your fear will make you that much more successful and that much more powerful. I BELIEVE IN YOU AND YOUR POWER TO BELIEVE IN YOURSELF.
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Since this is for your daughter's education, she should be paying this loan.

Since this is a 'PLUS' (was originally 'Parents Loan for Undergraduate Students' - has been expanded to graduate students) loan, the OP is probably the one who is legally responsible to make the payments on the loan, and the daughter probably has no legal responsibility. The loan will be reported on the OP's credit report, but likely not on the daughter's credit report.

Having the daughter make the payments could be arranged between the OP and her daughter, but the OP would need to ensure payments were made every month in any case, if she did not want her credit report impacted.

AJ
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Neveragain, it's wonderful to see you helping another withe the kind of advice that only a BTDT person has, while you're still in pay-down mode yourself. Kudos!
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My 2 cents:

I've never taken my mortgage as a factor in my consumer debt (nor do I take estimated property value or equity into calculation of assets). This is because my mortgage payment is about equivalent to renting similar type of housing (I'm only 2 1/2 years in) and I figure I have to live somewhere. I hope to be mortgage free in 20+ years before I retire, but it's just so far out it would be de-motivating to count that as debt. So I say "except for my mortgage, I'm debt free" - and that feels good enough for me right now.

As others have said, start tracking your spending so you can see what areas you could be more economical in.

Then prioritize the credit cards, because not only are those interest rates higher, but they're usually from living above ones means and/or not having emergency funds. Decide how much emergency funds you want while paying down this debt.

After those are paid off, work on the student loans. If they were for your daughter, I would discuss with her her helping to pay them off as she starts working and her income increases.

With the morgage interest rate you have, I wouldn't worry about paying it off faster. Once you're out of credit card debt, saving more for retirement, emergencies, and large necessary costs (replacing vehicles when necessary, necessary home maintenance, etc) are more important.

Really, you're not in terrible shape. You have @$20,000 in credit card debt, about $26,000 in student loans, and your mortage debt is fairly low considering your income.
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Having the daughter make the payments could be arranged between the OP and her daughter, but the OP would need to ensure payments were made every month in any case, if she did not want her credit report impacted.

AJ


Everything you said is true.

Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan. I agree with your statement that the daughter should make payments to her mother who pays the loan.
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Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan. I agree with your statement that the daughter should make payments to her mother who pays the loan.

I disagree. If the OP promised to help her daughter with college, that is her obligation to follow through with their agreement.

Minxie
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Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan. I agree with your statement that the daughter should make payments to her mother who pays the loan.
====================
I disagree. If the OP promised to help her daughter with college, that is her obligation to follow through with their agreement.

Minxie

---------------------------

Me, too. AJ didn't say the daughter should be responsible either. She said "Having the daughter make the payments could be arranged between the OP and her daughter" To me that's a lot different than saying she should.

One of the reasons I like AJ's posts so much is that she doesn't tell people what they should do. She offers options and suggestions. It's up to the OP to determine what they should do.

Jean
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Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan.

Depends on what the agreement between parent and child was at the time the loan was taken out.

I agree with your statement that the daughter could make payments to her mother who pays the loan.

There, fixed that for you.

Parents who want to pay for their child's school, but haven't saved the money to do so, often use PLUS loans. I've also heard of parents who haven't saved, so they tell their kids to take out their own student loans, and promise that the parents will make the payments. The rub comes when those same parents also haven't saved for their own retirement. At that point, by obligating themselves to pay for their kid's schooling, they can be setting themselves up for a financially difficult retirement, if they get to retire at all.

That said, if there wasn't an agreement between the OP and her daughter at the time that the loan was taken out that the daughter would make the payments on the loan, I don't think that the daughter has an obligation to do so. That's especially true if Mom told the daughter that Mom would pay, and the way Mom chose to pay was to take out a PLUS loan. Those were Mom's financial decisions, not daughter's.

I will say, especially since daughter is getting room, board and cell phone from Mom, it would be a nice gesture for daughter to make the payments, especially if daughter is working. But a nice gesture isn't an obligation.

AJ
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Thanks everyone for all the advice and support!!!

I know someone who did this when she was experiencing financial difficulties. If her friends & relations hadn't paid for around half the months of her booth rental, she would've lost money on the deal--a lot of money. As it is, she barely broke even. Some months she sold less than 10% of the rental cost--and she had a well stocked booth of beautiful things (for which she asked too much--another problem).

My sister and I have been renting our 12x12 booth for 3.5 yrs it just cost us $42.50 per month each. The owners have never increased our rent. We have only had to pay rent 1 time (the first month) the rest of the months they removed our rent from our profits plus they took 10% .


This may be the first discretionary item I'd drop from your budget. Unless you're making money (are you?). Do you have many items that are in demand, things like antique toys & housewares, christmas ornaments & decorations in excellent condition? Otherwise, this is not a way to raise income, but an expensive hobby. Since it sounds like you have a full-time job (income $100k), is it your sister who's at the booth all day? If so, and she needs help paying booth rental, then you may be funding her expensive hobby. You sound like a very generous person, but I don't think you can afford to do this right now.

We have thought about dropping the booth. My sister has several items she hasn't even placed in the booth. We decided if we ever did not sell enough to pay for rent we would get ride of the booth. My sister lives 2 hours away from the booth and she only gets to restock when she is up for a visit. I think I have made some money but its hard to say for certain since we never keep good records. We have had months when we made $1500 as low as $220 (after rent). My sister nor I have to work the booth. We just have to keep it stocked. I work 3 days a week and I do have extra time I could be going to auctions, yard sales, etc. but I think its best if I avoid that temptation. I plan on selling the stuff I have in my garage and some items in my home.

BOA expires first, so I would put that at the top of the list. With $885.65 extra each month, plus the $48 minimum payment, it would take 5.5 months to pay BOA off. So you could pay BOA off in Feb, which would mean that you would probably have 3 months that you would pay interest on it. I would suggest seeing if you can scrape up some additional money to pay BOA off in November (before the rate expires). Then I would put Barclay next on the list, and finally Chase2. If you can manage to pay off BOA in Nov, you should be able to pay off the others before they expire.

I am going to try and hurry to pay off BOA. I have some pal time I can cash in Nov..I was going to use this money for Christmas but that would be insane.

Another suggestion: there have been a lot of people who like using a program called "You Need a Budget" (YNAB) to help implement budgeting. You might want to try that

I have been reading about YNAB even been to their site. I will check more into it, thanks.


The discipline necessary to be able to change your patterns of behavior is also important here, and will help you follow the very good advice. The fact that you have been reading here for some time tells me that you have been in "get ready" mode. That's good -- it gives you familiarity and starts building pathways in your brain. The doing part builds even more paths. Key here is two things: repetition and frequency.

Thypeace, thanks so much for all the advice I definitely need to build discipline muscles. I used to try to follow the flylady's a few years ago. I polish my sink a few times thats about as far as I got. I will give it another try.

Before doing anything else, you need to create a budget - just write all your expenses down. Focus just on writing it down. Don't even worry about what you can or should cut out. Just get the numbers down to get a sense of what is coming in and what is going out. You can modify the numbers later.

Neveragain, Thanks I started writing the numbers yesterday and I am determined to do it daily I have read so much and I am convinced this will make me more aware of where my money goes.

I am in the midst of paying off debt which like you, started in the six figure range - unlike you that was above and beyond mortgage, car, and student loan. :( I am happy to say I now owe less than half of that. You post resonated with me because like you, I was terrified to stop using the cards because I always seemed to be short before the end of the month. In 2013, in fact, I paid something like $1700 in overdraft fees. One month I was charged $35 SEVEN times. Part of the problem was that I would see my checking account flush with money each paycheck and then spend it on "life" or a big credit card payment only to remember that I forgot to take into account the groceries, or the school tuition or worse yet that I had to pay the annual life insurance premium that month or renew my license, or pay the car registration and so on and so on.

Its amazing and encouraging that you have paid that much of your debt down. Today was my second day without credit cards



I know someone who did this when she was experiencing financial difficulties. If her friends & relations hadn't paid for around half the months of her booth rental, she would've lost money on the deal--a lot of money. As it is, she barely broke even. Some months she sold less than 10% of the rental cost--and she had a well stocked booth of beautiful things (for which she asked too much--another problem).

My sister and I have been renting our 12x12 booth for 3.5 yrs it just cost us $42.50 per month each. The owners have never increased our rent. We have only had to pay rent 1 time (the first month) the rest of the months they removed our rent from our profits plus they took 10% .


This may be the first discretionary item I'd drop from your budget. Unless you're making money (are you?). Do you have many items that are in demand, things like antique toys & housewares, christmas ornaments & decorations in excellent condition? Otherwise, this is not a way to raise income, but an expensive hobby. Since it sounds like you have a full-time job (income $100k), is it your sister who's at the booth all day? If so, and she needs help paying booth rental, then you may be funding her expensive hobby. You sound like a very generous person, but I don't think you can afford to do this right now.

We have thought about dropping it my sister has several items she hasn't even placed in the booth. We decided if we ever didn't sell enough to pay for rent we would. My sister lives 2 hours away from the booth and she only gets to restock when she is up for a visit. I think I have made some money but its hard to say for certain since we never keep good records. We have had months when we made $1500 as low as $220 (after rent). My sister nor I have to work the booth. We just have to keep it stocked. I work 3 days a week and I do have extra time I could be going to auctions, yard sales, etc. but I think its best if I avoid that temptation. I plan on selling the stuff I have in my garage and some items in my home.

BOA expires first, so I would put that at the top of the list. With $885.65 extra each month, plus the $48 minimum payment, it would take 5.5 months to pay BOA off. So you could pay BOA off in Feb, which would mean that you would probably have 3 months that you would pay interest on it. I would suggest seeing if you can scrape up some additional money to pay BOA off in November (before the rate expires). Then I would put Barclay next on the list, and finally Chase2. If you can manage to pay off BOA in Nov, you should be able to pay off the others before they expire.

I am going to try and hurry to pay off BOA. I have some pal time I can cash in Nov..I was going to use this money for Christmas but that would be insane.

Another suggestion: there have been a lot of people who like using a program called "You Need a Budget" (YNAB) to help implement budgeting. You might want to try that

I have been reading about YNAB even been to their site. I will check more into it, thanks.


The discipline necessary to be able to change your patterns of behavior is also important here, and will help you follow the very good advice. The fact that you have been reading here for some time tells me that you have been in "get ready" mode. That's good -- it gives you familiarity and starts building pathways in your brain. The doing part builds even more paths. Key here is two things: repetition and frequency.

Thypeace, thanks so much for all the advice I definitely need to build discipline muscles. I used to try to follow the flylady's a few years ago. I polish my sink a few times thats about as far as I got. I will give it another try.

Before doing anything else, you need to create a budget - just write all your expenses down. Focus just on writing it down. Don't even worry about what you can or should cut out. Just get the numbers down to get a sense of what is coming in and what is going out. You can modify the numbers later.

Neveragain, Thanks I started writing the numbers yesterday and I am determined to do it daily I have read so much and I am convinced this will make me more aware of where my money goes.

Its amazing and encouraging that you have paid so much of your debt down. I have overdraft fees also and I haven't even balanced my checking account in over 25 yrs.
Thank you for all of your encouraging words I look forward to being where you are.

Then prioritize the credit cards, because not only are those interest rates higher, but they're usually from living above ones means and/or not having emergency funds. Decide how much emergency funds you want while paying down this debt.

Metrochick I have been living above my means for years, I decided I am going to aim for $1000 in my Efund.
After those are paid off, work on the student loans. If they were for your daughter, I would discuss with her her helping to pay them off as she starts working and her income increases.

When I took the loan I told her I would pay it..she already has $10,000 student loan she is paying. I now regret telling her that. Its a lesson I have learned from.

Really, you're not in terrible shape. You have @$20,000 in credit card debt, about $26,000 in student loans, and your mortage debt is fairly low considering your income.

The student loan is around $16,500 I borrowed around $1400.00 and it has already increased so much. The valid money
I borrowed was $40,000 (now down to $10,000) and I borrowed that to pay off credit card debt. I didn't make any other changes
and thats why I ended up right back in credit card debit. I have borrowed money 2 times, took a 2nd mortgage and refinanced my home 2 times all just to pay off CC debit. I am done with credit cards.
and sick of being so wasteful and buying "stuff".

Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan. I agree with your statement that the daughter should make payments to her mother who pays the loan.

AJ there is no way I can get out of paying the loan. I know my daughter would pay it if I ask her but I can't do that since I did tell her I would pay it. It will never happen with my son.
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I definitely need to build discipline muscles. I used to try to follow the flylady's a few years ago. I polish my sink a few times thats about as far as I got. I will give it another try.

I think that's called crashing and burning. I bet you beat yourself up and felt all kinds of guilty about it. Don't! Instead, feel a little guilty (phrase it this way: "I did not take care of myself when I chose to..."). And then DO SOMETHING. Doing something can be easy. Takes about five minutes to polish your sink -- and about ten minutes to look at how much money you spent yesterday. There, 15 minutes of muscle building!

Baby steps are really important to any such process. Do not beat yourself up when you make a mistake. Babies don't do that when they fall over -- they just try again. You can too. Made a mistake? Go back and practice that part again, slowly, to see if you can make a better way through.

ThyPeace, like DD learning to play the violin. Practice, practice, practice! (Squeak!) Practice again!
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antique/used booth

You have a very good deal at your booth! My friend paid $300/month, not $42.50, and I believe 15% of profits to the owners, not 10%. She spent a lot of time there, but was unemployed with no child still at home. Eventually she got rid of the booth and got a paying job.

PLUS college loans--It will never happen with my son.

Good news! Since your son is only 9 (right?), you have 8-9 years to pay off debts and save something, if not $26,000, towards his education.
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It may be a good idea for you to post your budget here. Your money is going somewhere; your income and debt load aren't quite matching with what we would normally see without some horrendous spending elsewhere. The board here is very good at critiquing budgets and challenging "necessary" spending. Posters can be harsh sometimes but it should cause you to think; maybe you take the suggestions, maybe they act as a catalyst to spark your imagination.

With an income of about $100k, you should have no trouble paying any of that debt including the loan for your daughter and helping your son when he's ready to go to college (if you all have that agreement.)

Minxie
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The valid money
I borrowed was $40,000 (now down to $10,000) and I borrowed that to pay off credit card debt. I didn't make any other changes
and thats why I ended up right back in credit card debit. I have borrowed money 2 times, took a 2nd mortgage and refinanced my home 2 times all just to pay off CC debit. I am done with credit cards.
and sick of being so wasteful and buying "stuff".


I've been there - not with refinancing a house, but $10,000 of my student loan money went to pay off cc when I first started as a graduate student.

Some folks don't like her, but when I was just trying to change my ways I started watching the Suze Orman show (you can get it free from iTunes if you don't have cable). And from watching other callers one sees the emotional reasons why people get themselves in debt or make bad financial decisions. One of her sayings that stuck with me is "you're spending money you don't have to impress people you don't like or even know". And (unless to pay for necessary healthcare costs) that's usually where a lot of living-above-ones-means comes from if someone is making an income that's comfortably above the poverty line.
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AJ there is no way I can get out of paying the loan. I know my daughter would pay it if I ask her but I can't do that since I did tell her I would pay it. It will never happen with my son.

Does your daughter understand your financial situation?

Does your divorce agreement cover college expenses for your son?
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I think I have made some money but its hard to say for certain since we never keep good records. We have had months when we made $1500 as low as $220 (after rent).

This is a little worrisome, since you should have been declaring both your income and your expenses to the IRS.

I am going to try and hurry to pay off BOA. I have some pal time I can cash in Nov..I was going to use this money for Christmas but that would be insane.

Good for you for planning on using the money to pay off BOA instead of spending it like you would have in the past. Yeah, Christmas needs to be a lot leaner this year than it probably has been in the past. You and your kids should sit down and talk about it now, and figure out how to still enjoy Christmas on the cheap.

Today was my second day without credit cards

Good for you!

Regardless of who is legally responsible for the loan, I still believe that the daughter should be "paying" the loan. I agree with your statement that the daughter should make payments to her mother who pays the loan.

AJ there is no way I can get out of paying the loan. I know my daughter would pay it if I ask her but I can't do that since I did tell her I would pay it. It will never happen with my son.

Sorry, that was vkg, not me. I agree that if you told your daughter you would pay, and you paid using a PLUS loan, that's your decision and you need to live with the consequences. If your daughter understands your circumstances (and at 22, she's definitely old enough for you to be telling her the details - hopefully she can learn from your mistakes) and can afford to help you pay off this loan, it would be a nice gesture for her to do so. But I certainly don't think you should be laying your bad decision on her by telling her "You need to pay this." With $100k in income, you certainly should have the means to pay all of this debt off yourself.

And, about talking to your kids - if you haven't sat down and talked to both of them about the changes that will need to be made in your spending - you need to do so.

AJ
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I have been reading about YNAB even been to their site. I will check more into it, thanks.

It's against Fool rules for me to post the direct link here, but if you purchase YNAB through a link available from anyone who currently owns it, you can get a 10% discount (and the affiliate you purchase through gets $6 as well).

On the YNAB forums, many people have the link in their profile, so go hang out there, too, and get to know a couple of people.

There's a 34 day free trial and if you attend one of the live webinars, they always give away a copy.

Ishtar
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For most people the hardest part is this:

Focus just on writing it down.
Don't even worry about what you can or should cut out.
Just get the numbers down
,

and that is because connecting with reality is scary if you have drifted out of touch with it. And that is what makes connecting with reality so so powerful -- it is about overcoming your fear.

You Can DO This and once you do your life will fundamentally change for the better.

neveragain: I BELIEVE IN YOU AND YOUR POWER TO BELIEVE IN YOURSELF.
flyerboys: Me too.


david fb
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I don't think we have anything we could return. We did have a big yard sale few months ago. I donated my share of the money to my niece which she used for a mission trip.

You are broke. I think you know this based on what you have posted so far. Worse yet, you are a broke person that hasn't really figured out their budget yet. Right now, you think you have a lot of extra money to put towards credit card payments, but I don't think you have truly figured out all of the "outgo" yet, and which parts are wants and which parts are needs.

The point of which is, broke people shouldn't be giving away money they don't have. It's easy to think of yard sale money as "found money" that you can be generous with. But you just posted your debts: that "found money" really is money that is owed to creditors.

I don't say this to be mean. But one of the most powerful tools you have right now is that your own realization that you are broke. A lot of people find "being broke" makes it easier to say no to buying things (or donating money), or doing without, or getting an extra job, or cutting back. A lot of time, coming to a realization about debt allows people to give themselves permission to not "keep up with Joneses", to give themselves permission to live a LBYM lifestyle. Sometimes you have to say no to things that you really want to spend money on (like a niece) when you are broke, even things that are "worth the money".

I know that some people, even on this board, will disagree with me on this, and will assert that charity is a need not a want, even for someone who is broke. But charity is one of those things that you introduce once you have a solid budget. If you go three months, documenting all of your expenses, and you find that you really can be putting $2600 towards cards every months, then good for you. Because at that point you will also know the impact of what you give on your snowball and will be able to make an educated decision about whether a $100 you get from a yard sale (or whatever you received) is best spent on your niece or on paying your debts.

--CH
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<<I have been coming off and on for several years reading this board, never applying any of the common sense actions/advice to my own messy life of overspending. All the while continuing to pile on mountains of debt.>>



All too easy to do.


Good luck on revising your values and behavior to produce better long term results!




Seattle Pioneer
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A few comments -
again, get the budget together, and I would suggest including the 22 year old in that discussion, then involving the younger child after you have a fairly concrete plan - you don't want to scare him (Mom is worried about payments) but give him enough information he understands why you are cooking pizza at home rather than calling Domino's. Feel free to scare the 22 year old.

On the sales stall -

#1 - were any of the credit cards used exclusively to purchase stock/supplies?

#2 - you'll want to develop a budget for this effort if you keep it going. You need some idea of the cost of goods sold etc.

#3 - I would be tempted to segregate stock into unique items that will command a high price online, with other dealers or in the stall, and more commodity type items that sell well, but don't require a specific buyer.

#4 - Particularly for your commodity type items, I would look at stocking and pricing aggressively for the upcoming Christmas/Holiday shopping season. I'd try to maximize my cash flow so I can avoid paying 20% interest compounding. This may mean having some "sales" or markdowns you might not normally have.

#5 if there are any big ticket unique items, that may not sell well at your stall, I'd look at finding a different way to sell it and try to move it.

#6 You might talk to your stall partner about buying out the merchandise you have accumulated.
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I think that's called crashing and burning. I bet you beat yourself up and felt all kinds of guilty about it. Don't! Instead, feel a little guilty (phrase it this way: "I did not take care of myself when I chose to..."). And then DO SOMETHING. Doing something can be easy. Takes about five minutes to polish your sink -- and about ten minutes to look at how much money you spent yesterday. There, 15 minutes of muscle building!

Thypeace, thanks for the advice, I wrote down "DO SOMETHING" with a black marker on paper and post it on mirror. Hoping it will help remind me to take baby steps.

Good news! Since your son is only 9 (right?), you have 8-9 years to pay off debts and save something, if not $26,000, towards his education.

alstroemeria, yes he is 9


It may be a good idea for you to post your budget here. Your money is going somewhere; your income and debt load aren't quite matching with what we would normally see without some horrendous spending elsewhere. The board here is very good at critiquing budgets and challenging "necessary" spending. Posters can be harsh sometimes but it should cause you to think; maybe you take the suggestions, maybe they act as a catalyst to spark your imagination.
Minxie, I will post my budget on here when I make it. (try too in few days or estimated one)

Some folks don't like her, but when I was just trying to change my ways I started watching the Suze Orman show (you can get it free from iTunes if you don't have cable). And from watching other callers one sees the emotional reasons why people get themselves in debt or make bad financial decisions. One of her sayings that stuck with me is "you're spending money you don't have to impress people you don't like or even know". And (unless to pay for necessary healthcare costs) that's usually where a lot of living-above-ones-means comes from if someone is making an income that's comfortably above the poverty line.

Metrochick, I like Suze. I have read one of her books and have watch a few shows a while back. Working the steps in D.A. have helped me see that I am trying to impress people. I raised my daughter alone and now I will be raising my son alone. I don't want to feel like a failure or that my kids can't have the things a 2 parent family can provide. Spending money is more about my ego and its not the best way I can serve my children.


Does your daughter understand your financial situation?

Yes she does, she is happy I am trying to get my spending under control.


Does your divorce agreement cover college expenses for your son?

vkg, no it does not.


This is a little worrisome, since you should have been declaring both your income and your expenses to the IRS.

The people I rent the booth from told me I didn't need a business ID they remove the taxes from what I sale. They said unless I made a profit of more than $5000/yr I didn't need to file it on my taxes.

I haven't been keeping records so its hard to know if I made over $5000. Thanks AJ

It's against Fool rules for me to post the direct link here, but if you purchase YNAB through a link available from anyone who currently owns it, you can get a 10% discount (and the affiliate you purchase through gets $6 as well).

Ishtar, I went to web site and watched the video about YNAB, signed up for educational daily emails, and read a lot of reviews, I will sign up for free trail this week.




Focus just on writing it down.
Don't even worry about what you can or should cut out.
Just get the numbers down,


I have been doing this for 5 days now and its helping me see where the money is going. Thanks for advice and believing in me Flyerboys.


You are broke. I think you know this based on what you have posted so far. Worse yet, you are a broke person that hasn't really figured out their budget yet. Right now, you think you have a lot of extra money to put towards credit card payments, but I don't think you have truly figured out all of the "outgo" yet, and which parts are wants and which parts are needs.

The point of which is, broke people shouldn't be giving away money they don't have. It's easy to think of yard sale money as "found money" that you can be generous with. But you just posted your debts: that "found money" really is money that is owed to creditors.


Conehead, You are right I am soooo broke and I need to keep telling myself that. I understand what you mean when you said "broke people shouldn't be giving money away money they don't

have". I have heard my father say plenty of times; "if you can't pay cash it means you can't afford it". I am working the steps in Debtors Anonymous and I am getting a really good understanding

of how my thinking has gotten me in this much debt. Thanks for the advice and making your point.


Good luck on revising your values and behavior to produce better long term results!

Thank you Seattle Pioneer.

A few comments -
again, get the budget together, and I would suggest including the 22 year old in that discussion, then involving the younger child after you have a fairly concrete plan - you don't want to scare him (Mom is worried
about payments) but give him enough information he understands why you are cooking pizza at home rather than calling Domino's. Feel free to scare the 22 year old.



danbotx, I told them both that we are cutting out a lot of unnecessary spending, I also talked to them about cutting out cable. My son hates to shop. I tried buying him a pair of new shoes before
school started and he said "mom are you crazy? there is nothing wrong with the shoes I already have, when I get a hole in them I will get some new ones"




On the sales stall -

#1 - were any of the credit cards used exclusively to purchase stock/supplies?

No

#2 - you'll want to develop a budget for this effort if you keep it going. You need some idea of the cost of goods sold etc.

I am logging everything I buy to resale with price I paid and what I made after tax and 10% commission.

#3 - I would be tempted to segregate stock into unique items that will command a high price online, with other dealers or in the stall, and more commodity type items that sell well, but don't require a specific buyer.

I don't have any high priced items in the booth right now.

#4 - Particularly for your commodity type items, I would look at stocking and pricing aggressively for the upcoming Christmas/Holiday shopping season. I'd try to maximize my cash flow so I can avoid paying 20% interest compounding. This may mean having some "sales" or markdowns you might not normally have.


I have thought about marking everything down in hopes that it would sale faster and I could use the money to pay down on BOA.



#5 if there are any big ticket unique items, that may not sell well at your stall, I'd look at finding a different way to sell it and try to move it.

my sister has some big ticket items in the booth right now but I don't.

#6 You might talk to your stall partner about buying out the merchandise you have accumulated.

I ask her and she does not want to.
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The people I rent the booth from told me I didn't need a business ID they remove the taxes from what I sale.

That would likely be sales tax. It is very unlikely to be income tax.

They said unless I made a profit of more than $5000/yr I didn't need to file it on my taxes.

I haven't been keeping records so its hard to know if I made over $5000.


Sorry, it was probably a bad decision to take income tax advice from your landlord, as it is highly unlikely to are actually qualified to give such advice. Unless they are income tax professionals, I would strongly suggest that you get yourself to a tax attorney, and sooner, rather than later. (And if they are income tax professionals, I would actually be looking into reporting them to the IRS, as the advice that they gave you is flat out wrong.)

ALL income is subject to income tax. Here's a good resource for you as a small business owner: http://www.irs.gov/pub/irs-pdf/p583.pdf From page 6 of that publication:

Income Tax

All businesses except partnerships must file an annual income tax return. Partnerships file an information return. Which form you use depends on how your business is organized. See Table 2 to find out which return you have to file.

The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. An employee usually has income tax withheld from his or her pay. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. If you are not required to make estimated tax payments, you may pay any tax due when you file your return.


AJ
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Working the steps in D.A. have helped me see that I am trying to impress people. I raised my daughter alone and now I will be raising my son alone. I don't want to feel like a failure or that my kids can't have the things a 2 parent family can provide. Spending money is more about my ego and its not the best way I can serve my children.

1) Are you receiving child support for these children you are raising alone?

2) Being a single parent does not mean you are a failure; it just means you might have to prioritize more than a two-income family might.

With the income you are making, the low mortgage you have, and the relatively low debt load you have, your money is going elsewhere. You are would have to be spending a ton on fancy toys, camps, clothes for the children. I make much less than you, also am a single parent, my rent is pretty comparable, and my son is horribly spoiled.

Are your children in private school? Are you paying for before and after care so you can work? Do you have a huge cable bill? Cell phones?

Don't put this on the backs of your children by saying you are just trying to provide for them. YOU are the one making the choices of how to spend your money. You are making a great living and are better able to provide for your children than most families in the USA. Since you don't live in a high cost area, your money is going somewhere and even private school wouldn't take that much of a bite.

Minxie
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Sorry, it was probably a bad decision to take income tax advice from your landlord, as it is highly unlikely to are actually qualified to give such advice. Unless they are income tax professionals, I would strongly suggest that you get yourself to a tax attorney, and sooner, rather than later. (And if they are income tax professionals, I would actually be looking into reporting them to the IRS, as the advice that they gave you is flat out wrong.)

It isn't clear that the landlord was giving income tax advice. A tax professional would be helpful with the tax issue, but why a tax attorney? A tax attorney will be more expensive than an enrolled agent. There wasn't any intent to commit tax fraud. It isn't likely that the IRS would pursue criminal charges.
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This is a little worrisome, since you should have been declaring both your income and your expenses to the IRS.

The people I rent the booth from told me I didn't need a business ID they remove the taxes from what I sale. They said unless I made a profit of more than $5000/yr I didn't need to file it on my taxes.

It isn't clear that the landlord was giving income tax advice.

Even if the landlord wasn't giving actually giving advice on income taxes, from the way that the OP responded to the question, it appears that she took it as advice on her income taxes.

A tax professional would be helpful with the tax issue, but why a tax attorney? A tax attorney will be more expensive than an enrolled agent. There wasn't any intent to commit tax fraud. It isn't likely that the IRS would pursue criminal charges.

The OP has apparently missed reporting income on a small business that has documentable income (from the sales tax information filed with the state) for over 3 years. It seemed to me that making a call to a tax attorney might be a good idea. YMMV

AJ
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a daughter 22yr old at home

It's not clear if your daughter is still in school or out (may have missed it). If she is out of school and working and you are determined to pay the plus loan (which I get), she might be able to help you financially by paying a little bit of rent, or for groceries or if she is not yet paying insurance/cell phone/etc she could start paying those. She is going to have to do that as an adult anyway, and it might help you financially. Just a thought.
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Sorry, it was probably a bad decision to take income tax advice from your landlord, as it is highly unlikely to are actually qualified to give such advice. Unless they are income tax professionals, I would strongly suggest that you get yourself to a tax attorney, and sooner, rather than later. (And if they are income tax professionals, I would actually be looking into reporting them to the IRS, as the advice that they gave you is flat out wrong.)


Aj, thanks for the advice and link, I will check into it.




1) Are you receiving child support for these children you are raising alone?

Minxie, I have never received child support for my daughter, I get $400/month for my son.

2) Being a single parent does not mean you are a failure; it just means you might have to prioritize more than a two-income family might.

I realize being a single parent does not make anyone a failure. I think I felt guilty and tried to make it up by buying them some happiness and trying to make them feel secure. I worried so much about money when I was a child I never wanted them to feel that stress. I'm working on being a better person and I'm growing spiritually. I realize there is nothing spiritual about debt. I see my actions of overspending now as being a failure (or broken person) and I willing to change.



With the income you are making, the low mortgage you have, and the relatively low debt load you have, your money is going elsewhere. You are would have to be spending a ton on fancy toys, camps, clothes for the children. I make much less than you, also am a single parent, my rent is pretty comparable, and my son is horribly spoiled.


Are your children in private school? Are you paying for before and after care so you can work? Do you have a huge cable bill? Cell phones?

My children are not in private school and I don't pay for before and after care. My cable bill/phone/internet is $150/month.

My cell phone bill is usually around $220.


Don't put this on the backs of your children by saying you are just trying to provide for them. YOU are the one making the choices of how to spend your money. You are making a great living and are better able to provide for your children than most families in the USA. Since you don't live in a high cost area, your money is going somewhere and even private school wouldn't take that much of a bite.

Minxie, I'm not putting my debt on my children's back. I am taking responsibility for my poor money decisions and

unhealthy view of money. I think their view of money is a lot more logical than my view. Thank you for the input.

It isn't clear that the landlord was giving income tax advice. A tax professional would be helpful with the tax issue, but why a tax attorney? A tax attorney will be more expensive than an enrolled agent. There wasn't any intent to commit tax fraud. It isn't likely that the IRS would pursue criminal charges.

VKG, thanks for your advice. I haven't gotten around to looking at the link AJ sent, but I will do some research.




It's not clear if your daughter is still in school or out (may have missed it). If she is out of school and working and you are determined to pay the plus loan (which I get), she might be able to help you financially by paying a little bit of rent, or for groceries or if she is not yet paying insurance/cell phone/etc she could start paying those. She is going to have to do that as an adult anyway, and it might help you financially. Just a thought.

Lea, my daughter has completed 3 years of college and she applied to get in nursing program and she didn't get in. She does not have any more classes she can take until she gets in the nursing program. ( She will apply again to several programs next year). She is working full-time and she also helps me out a lot around the home and helps with her brother. She works full time as a CNA. She pays for her car insurance and most of her living expense. She has a dog she pays his expense. She is trying to pay about $8000 of her student loan, plus save for the nursing program because I told her she is responsibly 100% now. She is saving for the program because she does not want anymore student loans. I told her I hope she can have all of her loans paid, plus save for a home before she moves out. I would love for her to be debt free when she leaves home.

I am getting the free YNAB program as of yesterday, seen 2 of the web simanars and I am loving it so far. Thanks everyone for the support and advice.
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I see my actions of overspending now as being a failure (or broken person) and I willing to change.

Girl, you need yourself some Brene Brown and her research on "shame resilience". I highly recommend checking out her book "The Gifts of Imperfection" at the library.

There's a difference between doing something "bad" and "being a bad person". Getting into debt from consumer over-spending - that's doing something bad. A lot of us have been there. It doesn't make you a bad person.

"Being broke" in financial terms of having no money, doesn't make someone a "broken person". It's REALLY important to change you mindset of your past mistakes.

think their view of money is a lot more logical than my view.

If your son's at least 12, why not get your son and daughter involved with seeing the household budget and deciding what areas you all can save on (such as maybe pair down cable and cellphone coverage)? If you've got a good job and in-demand skills, there's no reason to feel insecure about income. And seeing the budget and helping make decisions about paying down debt I think helps build security in people since it's usually a lack of knowing what's going on that causes insecurity. You can still have money for some splurges, but this way family members get to decide what is really worth it to them to splurge on and understand every household has a budget to live in if they're not going further into debt.
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Girl, you need yourself some Brene Brown and her research on "shame resilience". I highly recommend checking out her book "The Gifts of Imperfection" at the library.

Metrochick, thanks I reserved the book at my local library this morning. I seen Brene Brown: The power of vulnerability ted talk last year and I loved it.



If your son's at least 12, why not get your son and daughter involved with seeing the household budget and deciding what areas you all can save on (such as maybe pair down cable and cellphone coverage)? If you've got a good job and in-demand skills, there's no reason to feel insecure about income. And seeing the budget and helping make decisions about paying down debt I think helps build security in people since it's usually a lack of knowing what's going on that causes insecurity. You can still have money for some splurges, but this way family members get to decide what is really worth it to them to splurge on and understand every household has a budget to live in if they're not going further into debt.

My son is 9 and I will get my children more involved in the budget. I started the nurtured heart approach with point system with my son about 3 wks ago and its going well. You make a good point about changing my mindset and building security. Thank you.
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