Crawling over from ML -- Credit Card help needed

[panicked]

Check out your state's consumer credit counseling office. They are non-profit (stay FAR FAR away from any for=profit company. They will destroy your credit and still charge you interest) and will help consolidate your payment into one, while lowering your interest rate. It should not affect your credit. I had 8000 in CC debt 5+ years ago. I sat down with a lady in the office with all of my statements and such. She helped me create a budget. I made one payment to them each month and had my debt paid off within 3 years. They were able to negotiate my interest rates down to 0 on all of my cards, so the money I was putting towards them went straight to the principle.
Now, you will not be able to use the cards or take out any new revolving credit while you are in the program, so be aware of that.

[Susie]

A detailed budget will be the first, most helpful step. Then you can figure out where your money is going, and how much you have to throw at your debts. I use mint.com as an easy way to keep track of where we are with our budget throughout the month. It also helps identify how you're getting yourself into this mess. Little crap at Target adds up.

Take your credit cards out of your wallet, and freeze them in a block of ice. DO. NOT. USE.

Definitely prioritize paying off the credit cards before the SLs. Let those ride with just minimum payments for now - I'd even see if there are any extended payment plans you can avail yourself of, at least while you're paying off the consumer debt.

[Deleted]

Start using Mint to track where your money is going and put together a budget. How much are you spending on food, gas, car payments, etc. With your student loans and other expenses you list you still have $3000 a month that is unaccounted for. What is this being spent on?

[ijack]

Can you transfer any of your balances to the 0% interest card?
Ditto the others, set up a strict budget and stop using the cards. Concentrate on the highest interest rate first. Pay the minimums on everything, and as much as you can on the high rate until it's gone. Rinse, repeat.

[dexteroni]

Jul 15, 2013 14:40:37 GMT -5 Susie said:

A detailed budget will be the first, most helpful step. Then you can figure out where your money is going, and how much you have to throw at your debts.

I agree with Susie. Getting an idea of your spending is the first step, and a really important one. Then once you know how much you can dedicate to debt repayment, check out the snowball calculator at whatsthecost.com. It will tell you how much to pay to what cards in what order to get them paid off fastest and for the least amount of money. You'll need to find that one card's missing rate first, but you should be able to get that via a quick phone call.

[BAMFMrsB]

Jul 15, 2013 14:35:21 GMT -5 bricco said:

....so basically, we're in a world of hurt because of consumer and school debt and a series of bad choices.  I'm not sure what my most critical issue is, exactly.  I imagine it's the credit card debt. 

When I do the math, it sounds like we should be fine to cover all of this, but somehow we're not. 

Can you ladies help me?

Yes, of course!

Step 1: Stop living in the land of "abouts". What is your monthly takehome, in total, for reals? Figure this out. You're also going to need to know ALL of your monthly minimum payemnts. I know on things like your power bill, that will fluctuate, but your CCs, mortgage/rent, car payments, etc will remain fairly solid.
Step 2: go to What's the Cost - www.whatsthecost.com/snowball.aspx and utilize their snowball debt calcualtor. Life changing.
Step 3: go to Mint and create an account, add all of your debts/accounts. www.mint.com/ If you don't like this method, you CAN do all of this in a simple program like Excel.... but there's mint. It'll do it for you! It's a little time consuming to start out, but once you have it setup, it will help you see how/where you are overspending.
Step 4: STOP USING THE CCs. You think you need them. You don't. Trust the $$MM method. It is very freeing to stop using the cards.
Step 5: Figure out if you really need/use that gym membership, your cell phone plan, etc. Anything that is a monthly suck just for the sake of having it can stop FOR NOW, while you get out of debt, and you can go back to these things once you are debt free. Its all choices. "Do I NEED a smartphone, or just want it? I want it, so I'm going to pay $___/month for it." Same with cable, same with the gym. Same with starbucks. WHATEVER. Figure out what is a budget suck and decide if you need it to keep living, or are you willing to sacrifice XYZ now to get out of debt?

FWIW, I got out of a looooooooooooot of debt this way. Way more than you. WAY. MORE.

[bostonmichelle]

I would say use mint.com and look at your spending for the last 3 months and make a realistic budget for going forward. I think this would be the best way to figure out what is going on and get a handle of your finances.

I would put your credit cards in a drawer/locked up somewhere that you are not tempted to use them for anything. I would definitely prioritize paying the credit cards over anything else. I know some people suggest calling to see if you can get the interest rates dropped. I would not pay for a credit consolidation unless you can honestly not make payments and eat.

[HoneySpider]

Hi bricco!

I would make a very detailed budget so that you can accurately account for all of your expenses. Seems like you should have a decent chunk every month to put toward the cc. You just need to make it a priority - be choosy about what you spend your other money on and know that paying off cc debt is something you have to do in the short term- it's not an expense you'll have forever. I would tackle the highest % cc debt first and go from there.

FWIW, we had over $20k in cc debt at one point. By the time we buckled down we had maybe $18k and we paid that off in less than 2 years while also buying a house, paying for my school OOP, and paying down other loans (SL and car). Our take home is less than yours and our housing expenses slightly more. So, you can do it!

(If you want I probably still have our old budget I could email it to you if it would help)

ETA: Oops, I meant we paid it off in under 3 years, not 2. 

ETA: No, I was right when I said 2, lol  

[Susie]

Oh, also, if you are an online shopper, delete your credit card numbers from amazon.com and other retail accounts where it's saved and you do easy one click shopping. Make yourself stop and think before purchases, do I really need this? Have I budgeted for this?

[dexteroni]

Jul 15, 2013 14:48:39 GMT -5 bricco said:

Jul 15, 2013 14:45:13 GMT -5 dexteroni said:

I agree with Susie. Getting an idea of your spending is the first step, and a really important one. Then once you know how much you can dedicate to debt repayment, check out the snowball calculator at whatsthecost.com. It will tell you how much to pay to what cards in what order to get them paid off fastest and for the least amount of money. You'll need to find that one card's missing rate first, but you should be able to get that via a quick phone call.

I found that one.. it's split in half.  Part of it ($4183.87) is at 14.65%.  The rest of it ($2738.48) is at 11.65%.

I don't know if the website I linked has the ability to accommodate split rate cards. Although I don't know if it matters that much since it's still your lowest rate card. If you have to choose one rate, I would go with the higher one.

[SJ]

Wanting change is the first step- good job! It's good that you and your husband talked about this. What is his general attitude about finance? Which of you pays the bills? Is one of you more of a spender than the other? Do you have anything in a savings account? Do you have car loans or are those paid off?

I agree with the others. I would start by making a budget. There are lots of samples available on the Internet, but it can be done easily in Excel.

For example, here is a rough start:

Income                    $5,000
Home & Utilities         ($1,250)
Fixed bills (gym etc)   ($300)
H SL #1                   ($230)
W SL #1                  ($50)
W SL #2                  ($65)
Food                       ($600)
Misc                       ($200)

Leftover                  $2,305

Obviously, I am missing things (clothes, gifts, other shopping), but I guessed high on the food and added misc. as a buffer.  Even so, it seems like you should have approximately $2,000 to throw at your debt.

How much are the minimums on your credit cards each month? Pay the minimums and then throw all of the rest of the extra at the card with the highest interest rate. This should be a line item in your budget. Once you have a budget, try to track every penny you spend. You can sign up for mint.com. It will help you track and see where your "problem areas" are.

If you haven't already done so, STOP using your credit cards. Put them in a drawer at home, or freeze them in a block of ice, or cut them up. Use cash or debit cards only.

[hbomdiggity]

Sit down and create a more detailed budget. Buckle down on soending so you can throw any extra $ to snowballing the cc's. esp the 22% one. Ouch.

Be proactive on the student loans- call the lenders for est monthly payments and repayment schedule as well as incentive programs (rate reduction for x payments on time etc.)

[Deleted]

How are you guys doing in terms of cash/savings/e-fund? The cc debt can be managed if you have a budget and a plan to pay them off and stop charging.

[gt7301b]

1) like pp's said come up with a more detailed budget
2) stop paying extra on the student loans and put that extra $$ towards the highest interest credit cards
3) even though you are under contract call cable, Internet, cell companies and see if you can go to more basic plans
4) can you get a second job over the summer? Mr. GT tutors and is on a few committees over the summer.

[pedanticwench]

Creating a budget is the first step because it tells you where your money is going.

It looks like you have almost $3,000 left over after your bills and student loan payments are made. So, how much are your CC payments?

[bostonmichelle]

Also, I know on my student loans if I signed up for auto-payment online I got an interest rate reduction of 0.25%, which isn't much but is something.

[Deleted]

Jul 15, 2013 15:00:42 GMT -5 bricco said:

Jul 15, 2013 14:57:18 GMT -5 @missy1 said:

How are you guys doing in terms of cash/savings/e-fund? The cc debt can be managed if you have a budget and a plan to pay them off and stop charging.

We've got about $2000 in our savings account for emergencies.  Our checking accounts tend to run dry, and we're looking to see why.  I think it's pretty simple, though, we go out to eat way too much and choose costly forms of entertainment.

That's a decent e-fund. I wouldn't use that for debt pay-off. Time to make a budget. Also, can you and your H find some ways to make a little extra money this summer? tutoring?

[Deleted]

Jul 15, 2013 14:59:21 GMT -5 bricco said:

Jul 15, 2013 14:49:25 GMT -5 @barefootbarista said:

We are on the 12 month schedule, and did not get jobs this summer.  We are realizing now that we should have.  So much free time is a major drain on our check books!  We don't contribute to the 403b at this point.

Does this mean you do not have retirement savings at all or you are saving another way? Either way, you need to prioritize retirement and make it a part of your budget. I don't know if you should do that while in debt repayment mode but, if not, it really needs to become a very high priority when your consumer debt is paid off.

[awkwardpenguin]

Jul 15, 2013 14:45:26 GMT -5 BAMFMrsB said:

Jul 15, 2013 14:35:21 GMT -5 bricco said:

....so basically, we're in a world of hurt because of consumer and school debt and a series of bad choices.  I'm not sure what my most critical issue is, exactly.  I imagine it's the credit card debt. 

When I do the math, it sounds like we should be fine to cover all of this, but somehow we're not. 

Can you ladies help me?

Yes, of course!

Step 1: Stop living in the land of "abouts". What is your monthly takehome, in total, for reals? Figure this out. You're also going to need to know ALL of your monthly minimum payemnts. I know on things like your power bill, that will fluctuate, but your CCs, mortgage/rent, car payments, etc will remain fairly solid.
Step 2: go to What's the Cost - www.whatsthecost.com/snowball.aspx and utilize their snowball debt calcualtor. Life changing.
Step 3: go to Mint and create an account, add all of your debts/accounts. www.mint.com/ If you don't like this method, you CAN do all of this in a simple program like Excel.... but there's mint. It'll do it for you! It's a little time consuming to start out, but once you have it setup, it will help you see how/where you are overspending.
Step 4: STOP USING THE CCs. You think you need them. You don't. Trust the $$MM method. It is very freeing to stop using the cards.
Step 5: Figure out if you really need/use that gym membership, your cell phone plan, etc. Anything that is a monthly suck just for the sake of having it can stop FOR NOW, while you get out of debt, and you can go back to these things once you are debt free. Its all choices. "Do I NEED a smartphone, or just want it? I want it, so I'm going to pay $___/month for it." Same with cable, same with the gym. Same with starbucks. WHATEVER. Figure out what is a budget suck and decide if you need it to keep living, or are you willing to sacrifice XYZ now to get out of debt?

FWIW, I got out of a looooooooooooot of debt this way. Way more than you. WAY. MORE.

I paid off $18k in credit card debt this way.

Mint should be able to pull your last several months of transactions in and you should go through and categorize thing. It will be hard to do because you will not like what you see. When I did this I found out we were spending $600/month on eating out! But to solve the problem, first you have to know what the problem is.

[Deleted]

I don't think its too late to check into a temp agency to see if you can't work for the next month.

[lys]

Track ALL spending - even a pack of gum.  Eliminate or reduce NON essential spending (eating out, new clothes, entertainment, vacations,)  Find a cheaper place to live if you rent. Can you sell a car and replace it with something cheaper to own and operate without borrowing any money? (ex:  If your car is worth 12K - sell it and buy something for 8K and apply 4K to debt??)
IF you NEED something - borrow it, rent it, buy it used or on deep discount sale.  Do not pay full price for anything.
Live as if you are broke college students. 
Read Total Money Makeover by Dave Ramsey and Smart Couples Finish RIch by David Bach.

When you have a budget - post it here for more input.

ETA:  All gift money, bonuses, tax refunds go to debt - they are NOT for spending!

[morgie44]

I would probably go to a cash system for all variable expenses (besides utilities). Sit down together and set a budget for groceries, entertainment and eating out, household items, gas, etc. I got a coupon organizer to keep the different line items seperate and organized. When the money is gone, the money is gone, until your next pay period. Everything that is leftover, throw at the credit cards, but if you put the plastic away, it is like taking away the security blanket, IME. It makes you think a lot more about if you really need that extra whatever, or if you really need to go out to dinner when you don't feel like cooking or if you would rather just throw together some sandwiches.

[Deleted]

1. Get your H involved in paying bills.
2. Track all of your spending. We use You Need A Budget, but Mint or a simple Excel sheet would work, too. Basically, anything! Just get started
3. Even if those things are on contracts, consider taking the cancellation fee hit and cut them to improve monthly cash flow. While getting out of debt, we used rabbit ears for TV and had pre paid cell phones. Cut out the gym, use DVDs instead.
4. Make sure you are setting aside money for the bills that come up once or twice a year. This is a key concept of YNAB. Otherwise, you will be back to charging things in no time.
5. Meal plan, learn to cook, eat at home. Do not go out every day. Set a dining out budget, pay cash. Pack your lunches.
6. Read Dave Ramsey's TMMO as a starting point. I loved listening to his daily radio show for motivation when we were getting out of debt.
7. Key items missing from your budget - gas/maintenance, vacation, gifts, house stuff, medical, insurance, etc. break it all out and track it.
8. You have decent income so you can definitely tackle this. Consider picking up extra side gigs and definitely plan on working jobs next summer.

[pierogigirl]

I would also go to a cash system. After DS2 was born, we got too comfortable with our budget and stopped saving as much as we liked. We went to cash for groceries, gas, fun, kids, Target (yes, it's a line in our budget), misc. (car inspections, haircuts, birthday presents, water bill, etc). and we've started saving like we used to. It made a big difference.

I tutor a couple of kids (during the year and summer) for extra spending/college savings money.

You can do it. After a while it's almost fun to save and make progress (that could just be the nerdy mm in me, though).

[kme]

You know you need to wait for kids. You have no money to raise them, literally.

Anyway, how are the teacher student loans being forgiven? Is it through the fed?

[Deleted]

Good luck as you get your spending on track. You've come to the right board, the ladies on here give great advice.

I do agree that you need to stop spending willy-nilly, as that seems to be chewing up a lot of extra money. If you do a detailed budget post, you'll get a lot of great ideas here. Rarely is a good budget post regretted around here, myself included!! I learned a lot.

If you aren't willing to stop TTC, then you really need to go bare-bones on the spending. You said in the past it hasn't worked for you - look at all the $$ you have racked up in debt...you can stop now or keep feeding the beast. Stop now!

DITTO other PPs that mentioned (1) Getting H involved in paying the bills (2) Reading Smart Couples Finish Rich.

What motivates you? Are you a goal-oriented person? If so, use a piece of paper to record your progress against your debt. Having that number in front of you regularly, and seeing it shrink, can be a powerful motivator to stop growing debt and start paying it off.

Spend time on MM! AW your progress and vent when you feel frustrated. This group is great at keeping us all honest and on track.

And good luck, again, it seems like you're ready to face the music and knock this debt out. You can do it!!!!

[heygrey]

you've got good financial advice, but the next thing you need to work on is changing your core habits. write down any purchase over $25 that you're tempted to make and wait two weeks... 9/10 you won't want the thing anymore. shop with a list so you avoid purchasing on a whim. find hobbies to fill the time when you would normally shop.

when i'm feeling spendy for no reason, i go through the house and box up stuff for charity. it really eliminates the desire to buy more shit when i have so much already that isn't used or appreciated.

since you've spent so much lately on "shopping" is there anything around that house that you can return? anything that you can sell on craigslist? have a yard sale? get your snowball rolling with some extra cash as soon as possible.

i think you would benefit from reading some of the extreme get out of debt stories dave ramsey features. his advice isn't the most financially savvy (he suggests paying off the smallest debt first instead of the highest interest rate), but it's really motivating for people in situations like yours. your debt is not insurmountable, there are thousands of people who have fought back from worse situations. you can totally do this :-)

[msmerymac]

Jul 15, 2013 17:06:54 GMT -5 bricco said:

Mint question: Is there a way to do two people's accounts on Mint or do H and I need to have separate mint accounts (since we have person and joint accounts)?

I would do one account, but put all of your accounts on there. 

By separate accounts do you mean that you use your personal accounts for personal expenses? My husband and I do that too and we each get a certain amount of money to spend every month on lunches out, coffee, clothing, gifts, etc. If that's the case, you don't have to add those accounts, necessarily, if you're comfortable with the amount you put there. 

If you just put enough in the joint account to cover bills and keep ALL the rest of the money separate, I would recommend either going to the system above, or then putting those accounts in Mint as well. 

Is this all joint debt? Do you have those accounts you can enter into Mint?

[Deleted]

Jul 15, 2013 17:06:54 GMT -5 bricco said:

Mint question: Is there a way to do two people's accounts on Mint or do H and I need to have separate mint accounts (since we have person and joint accounts)?

Given your spending situation I would say all accounts need to be tracked in Mint. 

[Deleted]

Jul 15, 2013 16:32:38 GMT -5 bricco said:

We are TTC, and I understand why it would be a wise move financially to wait, but honestly, I'm not willing to do it.  I know it will be harder to pay off the debt once their are kids in the picture, but I'm just not willing to wait.  I get that this might be flameworthy, but I just won't do it.  I'm terrified there might be something wrong with me which makes me really hesitate to even consider putting it off at all.  I get where you're coming from, it would be wise financially, but no.

 Come on, now... this is not smart. You don't have the money to have a kid. Have you even thought about how you would pay for daycare, etc? I would most definitely halt all TTC until you have made significant progress on your debt. I'd use it as motivation to go as bare bones as you can. You are just going to keep digging yourself (and your future kid) in a deeper mess if you don't start taking responsibility for yourself and your finances. How old are you? Is it really necessary to start TTC now?