Okay guys, here goes (budget)

[Deleted]

Income:

• DH: 2,000 (waits tables, so this varies some)
• Me: 1,800
• I carry all Life, STD, LTD, Med, Dental, Vision, and FSA

Savings:

• About 500 in savings    
• 10% of my income is going into a 401k with a 6% match
  

Spending:

• Auto Ins: $130
• Gas: $500 (we have to commute a ton)
• Electric: $100
• Internet (must have for DH's education): $56
• Cell: $160, about to be $50 starting in March if we like the new service WiFi based service we're testing
• Gas (home): $85
• Water: $50
  
• Food: $550 - includes groceries, eating out, dog food, toiletries, alcohol, and the random necessity
  
• Child Care: $500

Debt:

• Mortgage: $140k remaining, low interest, monthly payment $1425 (15 yr)
  
• School loans (me only right now):  about $8k remaining, super low interest, monthly payment $200
  
• CC: $8k remaining, highest interest, monthly payment $200
• Medical: $3k remaining, no interest, paying whatever we can each month
• Care Credit: $2k remaining, no interest, due here and there until about July

I know this comes up to a few hundred more than we make.  So far somehow we've made it.  Feb will be the first month we have to pay a full month of child care though.  DH is in school full time and working full time.  I work full time and there is no way for me to pick up another job.  No family in the area at all to help with child care.  We're expecting to get a couple $k back from taxes that will all go to CC. 

We're hoping to knock out all but the school loans and mortgage in the next year or so.  Anything like birthday or Christmas money goes to CC.  Any suggestions?

[Deleted]

Oh, and all medical debt and about $4k of the cc debt is thanks to the little stinker under the Christmas tree. He cost us $8k just to be born. The rest of the cc debt is from when I was unemployed and we were caring for underage family in need and had a few medical emergencies while uninsured. Dental is emergency root canals. We never ever have medical issues and then BAM!

[awick14]

I agree with sue sue. Student loans can not be paid right now you can't afford it.

[Deleted]

Can you refi back to a 30 year? You need the breathing room, and that payment is really high for your income.

[nathansmommy]

I dont see a line for baby expenses? what about diapers?

[Deleted]

Also, if you can put less in 401k and still get 6% match, I'd scale that back until the credit card and medical debt are paid off.

[Deleted]

I agree with tosa concerning a 30 year mortgage, then after everything is paid off you can pay extra on the mortgage principal. I admire the mission to pay a home off in 15 years, but not at the expense of your other finances.

[mollybrown]

Yup, I'd refinance to a 30 year mortgage. I think a 30 year mortgage can be a great thing, but not if you have credit card debt to make it work.

[Roc A Bee]

I agree with refinancing to 30 yr loan. Your mortgage payment is very high for your income.

I'd also put your SLs in forbearance and put that $200 towards cc. Is your DH taking out student loans? When will he be done?

[Deleted]

DH's school: he should be done in Dec or next May, so loan repayment will start sometime next year. Hopefully by then he'll have a real job. If he doesn't, at least we'll be able to eliminate child care expenses since we only need them while he's in class. Fortunately we were able to pay for the first few years of school oop so he won't owe a ton upon graduation. He'll have a bachelors in CIS.

Ins. is actually really low (3rd gen State Farm, no accidents). It's the Camero that's jacking it way up there. As soon as we can afford it, we'd like a family car instead, but the Camero was free and we can't sell it since it's sort of not ours.

My loans: do you really thing I could get forbearance for 6 months? I assumed we made too much for that. I'd gladly do that, as it would help a lot.

401k: I think since we're starting to be really proactive, I might scale back to 6%, but put an end date to that, so we mentally commit ourselves to getting back to the 10% and don't slack. I'm just afraid we'll get used to the only 6% and leave it there. I'll discuss with DH tonight.

Baby: 100% breast fed and cloth diapered. Only expenses are wipes and doc, but the doc is covered by FSA. We live in the baby making capital, so pretty much anything else we need (clothes, etc) we get handed down whether we want it or not.

Mortgage: I'm afraid to touch this one. It'll be our last resort. Our credit tanked by about 100pts over the past year due to a couple of past due medical bills and maxing out our cc so I'm not even sure we could get a decent rate. I'd rather keep things really tight and remortgage only if we really have to.

[Deleted]

Ooh, I'm going to start packing lunches for DH while he's in school! A lot of our eating out expense is him grabbing a quick bite at Sonic or something while he's at school. I bet if I tried, I could pack some great things that he'd actually eat. (Not a responsibility I can leave to him. Food is my strength and his weakness.)

[darthnbjenni]

Ask your daycare for a discount for paying upfront (possibly with your tax returns).

[Deleted]

The reason on the mortgage is that we were originally on a 30 year and refinanced to a 15 about 3 years ago. It only brought our payment up $110/month. Now that our credit score is so much worse, I'm afraid we'd save under $100/month and still be out all of the closing costs. That really isn't worth it. Upside, we're really close to being able to drop PITI. Also, gas for the home goes down to about $30 in the summer, electric goes way down, and water has a few months that are close to $0 due to the misestimating.

[zacksbride]

is the student loan payment the minimum due?  are you at least on income based repayment if forbearance isnt an option?

[bostonmichelle]

I would look into at least doing an online calculator to figure out what your new mortgage payment would be if you went back to 30 year, could you try for a 20 year instead so its shorter than 30 years but not as high of a payment as 15 year? I agree that you should look into lower payments on your student loans. I would use any savings in cash flow to get rid of the high interest credit cards. Also if you think your house went up in value during this time you might be able to refinance and get rid of PMI at the same time.

Also if you haven't done so, figure out when the 0% promo's end and make sure to pay those off before hand, either by making payments every month to reach that goal or throwing a portion of the tax refund so you can do so. Also even though its not the best idea always, but anyway you can shift the interest credit cards to one of the 0% promotional cards to save some interest?

[momof2boys]

We just closed on a refinance that took us from a 20 year mortgage back up to a 25 year. It was rough adding another five years on (a compromise, my DH really didn't want to go back to a 30 year so we went with 25 year). However, the extra $300.00 wiggle room has freed up a lot of stress each month.

I think you need to do something about your cell phone bill as well. Most of your expenses are "must have", the cell is not and its too high for someone who is barely breaking even each month.

[Deleted]

It's our number one priority to pay off care credit before interest kicks in. I was burned once by that many years ago and that isn't going to happen again. We've applied for a couple of 0% credit cards with a balance transfer, but didn't qualify. For cell phones, our contract ends with Verizon in March. We just got our first Republic Wireless phone today and the other should be here Monday. They are each $25/ month for unlimited talk/ text/ data. I don't know of any place lower than that.

[Deleted]

Jan 26, 2013 18:10:06 GMT -5 @chronoptomist said:

The reason on the mortgage is that we were originally on a 30 year and refinanced to a 15 about 3 years ago. It only brought our payment up $110/month. Now that our credit score is so much worse, I'm afraid we'd save under $100/month and still be out all of the closing costs. That really isn't worth it. Upside, we're really close to being able to drop PITI. Also, gas for the home goes down to about $30 in the summer, electric goes way down, and water has a few months that are close to $0 due to the misestimating.

There would be no harm in calling around and getting some numbers and then you would know the answer instead of guessing.

[Roc A Bee]

What was your old mortgage interest rate? You can't afford your payment. It's 38% of your income.

[jennistarr1]

agree with others...in the immediate sense, scaled back retirement to 6% and scale back student loan...Take that money and apply it to the care credit and until it's gone. Then work on your regular credit card.  If you're able to rid yourself of those two debts, then keeping your 15 year loan should be doable...slowly build up your retirement (7% then 8%). What you would have paid to your credit cards start putting in a savings

[sillygoosegirl]

I would lower your retirement to whatever the minimum is to get the match. When DH graduates and gets a better job, immediately increase your contribution to around 15%. And of course DH should start saving for retirement too at that point.

Now that you have the baby, your taxes should go down a bit. Look into filing a new W4 with your employer so you can take home more of your income now, rather than waiting until spring of 2014 to see that money.

I fear that you do make too much to put your student loans on hold, but you should look into it. Trouble is, it's not the student loans that are the problem, it's the mortgage. Your student loans would be no big deal if your housing wasn't so expensive. However, you might be able to switch to one of the payment plans that has lower payments initially that increase over time. Also, make sure you are signed up for the longest payback period available. You'll have to plan for the bigger payments later, of course, but in a year or two your husband will be earning more. In 5 years your baby will be in school, and in 12 years your home will be paid off. You are the sort of person those repayment schedules were designed for.

Don't forget to deduct your student loan interest on your taxes. If you haven't been doing this, you may be able to file an amended return for past years.

Can either of you carpool, take the bus, or bike to save on gas?

[LoveTrains]

The mortgage is much too expensive for your income. I would refi to a 30 year.