Anyone interested in critiquing my debt again?

[hopenotlost]

Can you sell your time share? Or are you not wanting to?

[Deleted]

I'll admit I'm not a DR follower. But I agee with your DH

CC 2, then timeshare, then CC1, then student loan.


Personally I would put the extra $ once you've paid off car 1 onto debt (except student loan) assuming the interest rate of future car loan would be lower than existing debt. And if pay off the 6% car loan before student loan

[Deleted]

Dec 8, 2014 9:01:06 GMT -5 hopenotlost said:

Can you sell your time share? Or are you not wanting to?

TS are notoriously hard to sell. If she uses it it makes no sense to sell it as she will get very little for it. It only makes sense to sell it if it's not being used or she can't afford the maintenance fees.

[badgergrl]

I'm no DR follower. There is no way in hell I would pay a 3% loan over an 18% loan.

Also 6% is very high for a car loan. If you got your credit better by the time you get your next car (hopefully choosing ones that are more within you financial abilities rather than ones you can't afford) you can qualify for a better rate. I would not save for a new car over debt repayment. How old will your car be? I would be shooting for keeping cars for 15 years or 200k miles.

[hopenotlost]

Dec 8, 2014 9:09:03 GMT -5 @gingerbb said:

Dec 8, 2014 9:01:06 GMT -5 hopenotlost said:

Can you sell your time share? Or are you not wanting to?

TS are notoriously hard to sell. If she uses it it makes no sense to sell it as she will get very little for it. It only makes sense to sell it if it's not being used or she can't afford the maintenance fees.

Oh ok I didn't know that.  I've never had a TS and don't know much about it.

[kadams767]

You are paying car #1 off in Sept. 2015 but expect to need to replace it within 2 years of that? What are the details on that car? IMO, you need to keep that car a lot longer once it is paid off.

[kadams767]

Also, what does your Christmas savings cover? Do you need to include travel or is that only gifts, food, etc.?

[SJ]

I would absolutely go in order of interest rate, from high to low.

[LoveTrains]

I would focus my debt snowball on:
Credit Card #2 $ 4,015 $100/mth 18%

It has a high interest rate and a relatively low balance. If you can jack up the payments on that to $400/month, you can pay it off in a less than a year.

then I would move to the time share. Again, a VERY high interest rate and a high balance. Then I would move to Credit Card #1.

I would ignore the student loan and then head to the car payments. 6% is a high interest rate for a car, too.

[SJ]

Also do you have any retirement savings at all? Are you currently contributing to retirement?

While I realize that you don't want to stop your monthly savings to focus on debt, I would advise looking into at least saving it in Roth IRA's instead. If you have to use it for emergencies, so be it, but hopefully it can remain untouched and start building for retirement.

[joenali]

$1800 for Christmas? Are you buying gifts for everyone on your block?

[joenali]

Dec 8, 2014 9:37:55 GMT -5 superduper said:

Dec 8, 2014 9:34:52 GMT -5 joenali said:

$1800 for Christmas? Are you buying gifts for everyone on your block?

I have 5 kids. We spend $225-$250 per kid. And then $25 per niece/nephew and there are 7 of them. Add in parents, a few polyannas, it adds up quick.

So? You don't need to spend that much per kid. And you don't need to buy gifts for everyone. I'm sure they would understand, and if they don't, too bad.

[lys]

Well first off - you are no where close to being ready to buy a house, but you are definitely wise to deal with this debt now. There is sooooo much more to home ownership than a mortgage payment. I recommend reading Home Buying for Dummies and Mortgages for Dummies before you get serious about buying. For now - you can find some place cheaper to rent to cut back on costs and free up more money to pay down debt.

I know you said you do not want to sell a car - but I would reconsider and sell the car#2 and buy something less costly - a low mileage, fuel efficient, used reliable vehicle and finance NO LONGER THAN THREE YEARS!
Pay off order:
First cc #2
Then timeshare
followed by cc #1

Congratulations on facing this debt monster - learn from your experience so you do not fall into this trap again (sorry if this sounds harsh, but that is one ton of debt and it sounds a bit like a lifestyle problem rather than a difficult life situation - but I do not know your story). I am not sure you are quite there yet in seeing the big picture. (I WANT a great x-mas for my kids, I WANT a vacation and I WANT a nice car)
You do not need $150 a month to provide a nice x-mas, nor $150 a month so kids can have fun with a get away vacation but you do need reliable, inexpensive transportation to get you from point A-point B while you dig yourself out of this hole.

[tripleshot]

Dec 8, 2014 9:37:55 GMT -5 superduper said:

Dec 8, 2014 9:34:52 GMT -5 joenali said:

$1800 for Christmas? Are you buying gifts for everyone on your block?

I have 5 kids. We spend $225-$250 per kid. And then $25 per niece/nephew and there are 7 of them. Add in parents, a few polyannas, it adds up quick.

That's ridiculous. You can't afford to spend that much on christmas. $100 per kid and $10-15 per niece and nothing for adults. That will save you $1200 you can put towards debt. Now is the time to cut back so you can pay off debt.

[LoveTrains]

I do think its time for some MM tough love. I personally don't think you can afford an expensive christmas like that.

And I'm also confused why you need to save $150/month for summer vacation when you also have the timeshare.

[joenali]

Dec 8, 2014 9:57:59 GMT -5 superduper said:

Dec 8, 2014 9:56:45 GMT -5 LoveTrains said:

I do think its time for some MM tough love. I personally don't think you can afford an expensive christmas like that.

And I'm also confused why you need to save $150/month for summer vacation when you also have the timeshare.

This covers our maintenance fee and spending money/air fare if need be.

I'm assuming here, but it sounds like you want to keep up with the Jones'.

[sweetiesparkles]

Wow, I feel bad for you. I am sorry if that sounds snarky. You even preface your post by apologizing for "lame questions, lol." Debt is serious stuff and look, you even admit your credit sucks. Buying a house is the last thing you should be entertaining.

YOU HAVE 85K IN DEBT. 85K.

You need to stop the vacation club and consider selling at a loss. Yes it's $475 approx per month with the time share/vacation club account but with $85K you cannot afford vacations.

Why is your 24K "Family Loan" no big deal? That's a lot of bank to owe someone, family or not.

You need to sell car #2. That will free up about $18K depending on its depreciation. Buy a beater.

What is your combined monthly income?

[sweetiesparkles]

Dec 8, 2014 9:55:01 GMT -5 superduper said:

Look, I appreciate that you all are so passionate about debt, this is why I ask questions on this page. But there are certain things that we are just unwilling to cut. Yes, we could probably pay off our debt quicker than 3 years if I sold my car, if we cut back on Christmas and if we didn't go on vacation, but we have made the decision that we don't want to have to give up those things. If push came to shove and our survival was hinged on that money, then yeah, we would have to make that decision, but right now, we have chosen to keep those things as is.

Superduper, you feel entitled to all of this "stuff" i.e. JUNK.

It makes me angry that you feel like you deserve all of this stuff.

You cannot afford your lifestyle. Period.

Tough love for sure--you cannot afford the stuff you want.  You need to learn a lesson on what's really important, not cars you cannot afford, vacations you cannot afford to take.

Remove the emotions of "I deserve this", on paper you cannot afford it.

[sweetnsour]

I would throw the extra money at the 18% debt.

[sweetiesparkles]

Dec 8, 2014 10:07:38 GMT -5 superduper said:

Dec 8, 2014 10:02:17 GMT -5 joenali said:

I'm assuming here, but it sounds like you want to keep up with the Jones'.

Yeah, I mean, a spade is a spade. And I'm a spade. I never claim to be the most MM person and I fully admit to making mistakes and prioritizing things that shouldn't even be on the priority list. But in order to keep the peace in my marriage, there are certain things that I promised MH would remain status quo while paying down debt. We made that decision together. The wisest decision? No. But it's a decision that we made together and that we can both live with.

If you need to continue "status quo" to remain peaceful with your marriage, your husband and you need to sit down with a counselor, financial counselor or marriage.

You have 5 children.  

[sweetiesparkles]

So your minimums are about 3000 and you make 8500.
What are your other monthly expenses?

[sporky]

More tough love: If you have no interest in changing your current spending habits and making cuts to help pay down your debt, then it doesn't really matter. You will continue to accrue and accrue even more debt and you will not pay your cards and other bills off.

Look, you have a good start with plans to pay down some of the loans that you have. And that's commendable. But to be so resistant to the advice of people who have been there/done that isn't going to help you in the long run.

And to echo some others, I don't care how much cheaper a mortgage may seem when compared to your local rents, there are so many other factors that make homeowning expensive. Just the tip of that iceberg includes property taxes, insurance, and maintenance costs. And with no money down? That's exactly how so many people ended up upside down on their mortgages and is part of the reason for the massive number of foreclosures over the last decade. I know it may be something that you want. And perhaps someday you will get there, but right now- you aren't even close to being ready.

[LoveTrains]

superduper, I really appreciate you taking the time to come back and respond and not just tune everyone out. And I hope you don't take this as a pile on.

How do you propose to buy a house? Do you have a downpayment? What is your credit like with the foreclosure on it?

[HoneySpider]

You've received some good advice so far and I hope you're willing to reconsider some of your spending habits to implement some of it. Good luck!

[SJ]

Renting is not killing you. AT ALL. Rent of $1550 for a family of 7 on a $8565 income sounds ideal.

I would under no circumstances try to upgrade or buy a house.

[shopgirl07]

Do you really only spend $540 a month on groceries for 7 people?

What about toiletries, haircuts, etc? Car registrations and maintenance?

I'm worried that your budget isn't accurate/realistic.

[aurora]

So you have a total of $1000 in savings, $85,000 in debt, and want to buy a house. How are you going to save up for the home maintenance? With 5 children and a house, I wouldn't be comfortable owning a house without at least $30k in my cash e-fund for near term repairs and health issues that might arise, and that's on top of my retirement accounts and general investments. Even if you're less conservative financially than I am, how do you plan to save for a down payment plus this e-fund? You can see how saving a couple hundred a month looks pretty puny compared to these numbers.

[scout8]

Although I think it would be better to try to reduce some of your expenses, I still think you have a good plan in place to start paying down your debt.

Please do not buy a house. It makes no sense in your situation. And I am a real estate agent! I normally want people to buy houses.

[mrsfarmer]

We have a number of nieces and nephews in DH's family as well. The kids trade names and we put a $10-$15 cap on those gifts. Then, as far as gifts from adults, the godparents get their niece/nephew who is their godchild a gift. This helps with the budget and the accumulation of stuff.

[LoveTrains]

Dec 8, 2014 10:29:29 GMT -5 superduper said:

Dec 8, 2014 10:23:49 GMT -5 LoveTrains said:

superduper, I really appreciate you taking the time to come back and respond and not just tune everyone out. And I hope you don't take this as a pile on.

How do you propose to buy a house? Do you have a downpayment? What is your credit like with the foreclosure on it?

We don't have the answer which is why I said that it will likely not come to fruition. MH has good credit, so we were going to look into an 80/20 loan that my bank offers. We have something that we can sell that would cover closing costs, but don't want to sell unless absolutely necessary as it has a lot of sentimenal value. It probably won't happen, but I just wanted to be completely honest when posting.

I promise you that I am truly coming from a place where I am trying to help you and not be mean, but I would stay far away from an 80/20. I personally did an 80/20 on my condo and it was the WORST financial decision I have ever made. The biggest issue is that you are often instantly underwater on the home and if anything happens, you will not be able to sell it because you will need to bring money to the table to close.

I think $1550 is very reasonable rent on your income.