The budget truth.

[asoctoberfalls]

How much equity do you have in your house?

Also, I know mortgages are different in Canada, but I don't know all the details. If you did roll the debt in, would you be able to pay extra on principal to get rid of it?

[gretchenindisguise]

Why do you need a nanny? Can your kiddo go to daycare/preschool instead?

Not sure about costs in Canada but here nanny is most expensive especially for one kid.

[krystee]

I feel like it is only a good idea to roll debt into other debt if you are truly committed to changing your lifestyle because you aren't fixing the problem--you are just moving it. Especially if you plan to extend your mortgage and not pay the rolled in Visa bill off quickly by making extra payments.

You are both pretty high earners if I remember right. Where is the money going? If your H's job is unstable and you don't have savings to cover a job loss, should you downsize your home?

[gt7301b]

I don't know how things work in Canada, but I wouldn't want to take the unsecured credit card debt and put it on the house. I know the interest is 17%, but if you are paying off $800 a month you will have that paid off in 10 months. I'd buckle down and pay that loan off this year rather than stretching it out over 20 years.

[mrshandy]

Do you have an e-fund? I would cut back seriously (no dance/swimming classes until you have a solid e-fund, so you don't end up in this same situation a few years down the road)

There are ways to cut, you just have to bite the bullet.

[M]

Is that LOC secured or unsecured? At what rate?

I agree with krystee, I would only roll in that CC debt into your mortgage if and only if you have changed the way you handle CCs. In other words, pay it off every month or don't use it at all except in case of emergencies.

[changedname]

Hanna, can you refinance into a 30 year mortgage to give you a little more wiggle room?

Also, if you cc is with your main bank you should be able to renegotiate the interest rate.

Same with other bills like cable, try negotiating to lower your costs.

Can you get a tenant in the basement? Or is your nanny live in?

Is a nanny share an option?

Sorry you are going through a tough time.

[lys]

Not a wise move on any level.

[AmyRI]

You want to fix it, but you're still unwilling to make cutbacks necessary to do so. A nanny is not a requirement, it's a want. A big one.

I would not be rolling credit card debt into my mortgage just so I can keep the most expensive childcare option available to me.

[mswax]

Oct 29, 2014 4:56:03 GMT -5 @hannymaren said:

Since the visa is 17% (Canada, we don't really have negotiation of interest rates as far as I know) I want to roll it in to our mortgage. Interest 2.8% (maybe lower with negotiation) we are coming up on refinance.
Any drawbacks? It would basically put us back 2 years on our 20yr mortgage but I think it's better than the cc debt looming over our heads.

The drawback is that even though the interest is lower, you'd be paying it for 20 years, vs. about 1 if you continued to pay $800/month toward the balance.  I know it sounds like a tempting option, but I think in the end it's a net loss.

[Deleted]

Why might your H lose his job?

I'm sure you can find a way to save another $100-$200 per month and knock the debt out even quicker.

Is 17% interest rate typical in Canada? In the U.S. People get offers for 0% balance transfers pretty regularly. Can you look in to that option?

It doesn't make sense to roll this debt in to your mortgage.

[tripleshot]

That's not a good idea. Change your spending habits instead. It's never recommended to make your unsecured debt into secured debt.

[Deleted]

Oct 29, 2014 7:25:23 GMT -5 AmyRI said:

You want to fix it, but you're still unwilling to make cutbacks necessary to do so. A nanny is not a requirement, it's a want. A big one.

I would not be rolling credit card debt into my mortgage just so I can keep the most expensive childcare option available to me.

Hanna works odd hours so I believe that nanny is her only option. Hanna can you get a live in nanny instead, they are much less $$.

I would have no issue putting your cc debt in the mortgage given its a relatively small amount given your incomes, and was a result of unemployment, not chronic overspending. Ie. You aren't going to build up cc debt all over again.
And you said you have a plan in place for future unemployment.

ETA- if you can put it ion a home line of credit I would do that-- ithat way, t's not amortized over 20 years, and you have visibility of when and how much it's paid off. You don't forget about it.

[lillaguma]

Would it be possible to do a nanny share with someone in your area? That might help cut back on that cost, if daycare isn't an option.

[Deleted]

If you are paying $800 a month on your cc, you'll have it paid by the end of next summer. Why not just stay with that? Especially if you can buckle down a couple of months in there and come up with a little extra money.

[L]

Oct 29, 2014 7:25:23 GMT -5 AmyRI said:

You want to fix it, but you're still unwilling to make cutbacks necessary to do so. A nanny is not a requirement, it's a want. A big one.

I would not be rolling credit card debt into my mortgage just so I can keep the most expensive childcare option available to me.

She works retail pharmacy hours and her H works lawyer hours. A nanny is not a luxury for the OP.

[h]

Oct 29, 2014 9:07:40 GMT -5 L said:

Oct 29, 2014 7:25:23 GMT -5 AmyRI said:

You want to fix it, but you're still unwilling to make cutbacks necessary to do so. A nanny is not a requirement, it's a want. A big one.

I would not be rolling credit card debt into my mortgage just so I can keep the most expensive childcare option available to me.

She works retail pharmacy hours and her H works lawyer hours. A nanny is not a luxury for the OP.

Plenty of people work long or non-traditional hours without full-time nannies. I knows tons of big law attorneys who use day care and hire someone to do picks ups, which is still often much cheaper than a nanny. Or there are nanny shares, au pairs, and likely other options that are generally cheaper than paying $2200 a month for childcare for one toddler. (I don't doubt for a minute that a full-time nanny is the most convenient solution and worth the cost, but when you are living in the red and paying off credit card debt, sometimes you don't get to do the most convenient thing.)

[Ashley&Scott]

Don't roll it into the mortgage. I would stop the education savings temporarily & throw that money at the CC debt. Also post your full budget, there have to be other areas you can cut.

[barefootcontessa]

I would look into alternative child care plans. $2200 is a lot for one child. Like hens said above, you could use daycare with a pick-up person. You will probably need this kind of arrangement once your child starts school so you might just try it now and see how it works. Would you consider posting your budget. You might get some good ideas for freeing up some additional cash to kill that visa. Then you could start to rebuild your savings.

[illgetthere]

Do you have any day cares there that are open non traditional hours? We have one every that is open 6a- 10p sun-thur and until midnight weekends. They have a limit on the total number of hours a kid can stay each week. It costs a little more than a traditional daycare, but only by maybe 200/month

[Deleted]

Oct 29, 2014 7:32:33 GMT -5 mswax said:

Oct 29, 2014 4:56:03 GMT -5 @hannymaren said:

Since the visa is 17% (Canada, we don't really have negotiation of interest rates as far as I know) I want to roll it in to our mortgage. Interest 2.8% (maybe lower with negotiation) we are coming up on refinance.
Any drawbacks? It would basically put us back 2 years on our 20yr mortgage but I think it's better than the cc debt looming over our heads.

The drawback is that even though the interest is lower, you'd be paying it for 20 years, vs. about 1 if you continued to pay $800/month toward the balance.  I know it sounds like a tempting option, but I think in the end it's a net loss.

This is what I was going to say as well.  I think you should keep them separate, if you can keep up with $800/month you will have it paid off in less then a year!

[UnderProtest]

Hanny, I say this with only love and concern. I think you need to start budgeting/living without your husband's paycheck. Given all his recent employment struggles, it doesn't seem like his income can be counted on for an extended period of time. His paycheck should go into extra savings/retirement/education funds, but not necessarily counted on monthly.

[UnderProtest]

Oct 29, 2014 17:57:13 GMT -5 @hannymaren said:

Oct 29, 2014 17:39:58 GMT -5 UnderProtest said:

Hanny, I say this with only love and concern. I think you need to start budgeting/living without your husband's paycheck. Given all his recent employment struggles, it doesn't seem like his income can be counted on for an extended period of time. His paycheck should go into extra savings/retirement/education funds, but not necessarily counted on monthly.

You know when we have those posts where people ask how much of your income is your housing? And people who live in HCOL get a free pass on the percentage? Well I live in HCOL.
We would be in a 1 bedroom apt for life if we budgeted solely by me
I would love to budget that way but it just seems impossible.
My take home is about $4500. My mortgage is $2500 and my nanny is $2200. His student loans are $1200.
Then we eat, pay hydro, gas, etc.
If he lost his job, we would skip the nanny and live barebones and we could make it. But barebones is Mac and cheese for dinner every night. Not an ideal situation.

Hanny, I remember where you live and I know its not what you want to do, but your husband's income hasn't proven to be reliable.  I don't want to see your debt get worse or for it to cause other issues in your life or marriage.  Hugs.

[changedname]

Oct 29, 2014 16:28:38 GMT -5 @hannymaren said:

Oct 29, 2014 6:51:09 GMT -5 changedname said:

Hanna, can you refinance into a 30 year mortgage to give you a little more wiggle room?

e.

How does this end up better?
Would this be to reduce my monthly payment? Likely it would mean a higher interest rate , right?

It would probably substantially reduce your monthly payment. The good thing is, if you want to and can you still pay it off as a 20 year but this gives you the flexibility.

It wont affect the interest rate as that is affected by the fixed term eg. 4 or 5 years.

[changedname]

Hanna, honestly maybe you do need to consider moving out of the city.

If your commute is really 2 hours to downtown, if you lived where I live it would be 1 hour. The train to downtown is 35 mins in rush hour. Housing is a lot cheaper here as are taxes and basically everything.

The reason people live in the 905 is because it is much cheaper to live than in the city. Otherwise we would all live there.

Just a thought. My dh also commutes to the city everyday and we probably take home the same as you. We thought about moving to the city but it just didn't make sense financially for us.

[Deleted]

Oct 29, 2014 18:03:35 GMT -5 @hannymaren said:

And I may sound like I am making up excuses but I am listening.
I just don't think selling my house is the best plan. Or losing the nanny.
I will try to cut more fat from our spending but it's hard. I feel like there is always something. We are budgeting as best we can.
I am hoping in a few weeks to change my hours to work about 4 hours more per week. A small increase.

But I'm still confused, why do you want to put the debt in to your mortgage? Why not just keep paying off the cc as planned and over the next few months pay a little extra. If you post your budget, I'm sure people could help you with cuts. 

If you were really in over your head then yes selling the house would be a good idea, but 8k in debt for 2 people with good paying jobs isn't the end of the world, so why not just buckle down and pay it off?