desperate help needed-suggestions appreciated

[JeRmS]

I'll say it again ...

BEFORE you make any drastic changes like selling your house .... please contact a professional debt counselor of some sorts in your area!!

Start by making those small changes though, cut the cable, cut the sports, cut the grocery bill down etc .... but selling your house in my opinion is a drastic measure that shouldn't happen unless absolutely necessary and recommended by a professional Debt lawyer/counselor.

I'm not sure about Canada but my lawyer here in the US charged me absolutely nothing to sit down and go over my situation and determine what needed to be done but in the end even if it had cost me .... it may have been worth it because it saved my sanity!

 

[BeachLove]

I wish you luck and I'm glad you came out with your issues. Most people here will be glad to help you and advise you on what to look to next. Doing little things no matter how little will save you at least some money.

Maybe you can cut these little things out?
1. Do you eat out or drink soda? Sports drinks?
2. Can you save on pet food? Less expensive vet?
3. Are you buying frozen meals? Those tend to be pricey.
4. If you buy fresh fruits and veggies you may want to consider going frozen.
5. Cut the cable-Just cut it because it is not a need.
6. Childrens sports- Can it be done cheaper? Less often? If you have zero money you have zero money.

 

[SHOREDAD]

We are in a similar boat. We live in the US and have approx. 30,000 in credit card debt along with two car payments, student loans, mortgage. We realized last year that we needed to do something. Our finances were spiraling out of control. I read Dave Ramsey's Total Money Makeover and it changed my way of thinking about money, credit, and spending. You have to read this book. It makes you fell pretty stupid at times, which is exactly what I needed. Sort of like a kick in the pants. In the past year we have committed to smarting budgeting and establishment of an emergency fund. We also have paid down credit card debt $5,000 since last year, that is down from approx $35,000. We have a plan in place. Once cars are paid off we will not replace at least one, and plan on not having car payments as soon as we can. We will use these to pay down the credit card debt. Coming on here was a huge step for you, I know. My wife and I were not talking about it and it became a big stressor for me. When we finally talked about it she never realized how bad it was. Once we were honest with each other and set goals together, it made it easier to start the plan. Part of it involved getting a second job for me, and this meant less time with the kids, but we make time whenever we can. Hopefully it will soon get better. I know this may not help, but please know you are not alone. Make no excuses and don't give up even when it seems like it won't get any better.

 

[Lolsmum]

I know what a consumer proposal is from watching Gail Vaz-Oxlaid.

Transportation should be no more than 15% of your $5400. Yours is 20.5 %

Housing should 35%. Yours is 43.2%

Life should be 25%. Yours is 35.3%


You are living way above your means.

Gail would have you sell the house, pull the kids sports, have you work 40 hours. You are home when you work and now you will not need totals the kids to all their stuff. This will also bring down your gas needs. Sell a car and reduce your food budget.

Is that in the US?

I would expect different percentages here in the UK because we pay higher taxes but have extremely low medical costs. Rather than the high insurance costs and co-pays my family in the US have, all we pay is about £8 per prescription for the adults and nothing for the kids.

I would think that Canada would also have drastically lower health costs than the US, leading to different expectations of expenditure.

 

[Mrs Eeyore]

No judgement here as our situation is uncannily similar. We have been able to give ourselves some breathing room by consolidating our debts. Speak to someone at the bank that holds your mortgage before you decide to sell. We refinanced the house and added our line of credit and car loan to the mortgage, with a lower interest rate, reducing our total monthly payments by hundreds of dollars. Of course it is not ideal as we will still be paying off our car from beyond the grave, but our goal is to get caught up once our kids' ridiculously expensive sport is finished. I would also speak to your kids' coaches, team owners or whoever to see if there's any way to get a break there. Sometimes you can do volunteer work to cover some of the cost. Best of luck! I know exactly how you feel.

 

[DisneyMomma81]

Is that in the US?

I would expect different percentages here in the UK because we pay higher taxes but have extremely low medical costs. Rather than the high insurance costs and co-pays my family in the US have, all we pay is about £8 per prescription for the adults and nothing for the kids.

I would think that Canada would also have drastically lower health costs than the US, leading to different expectations of expenditure.

And that's why your country is messed up *was briefly married to a Brit, spent time there* Your taxes are outrageous, my health insurance isn't that high, my taxes are low.

 

[Aladora]

I'm also in Canada in one of the higher priced cities to live so I know how high taxes, COL and all the other stuff can be.

I'll reiterate what many others here have said.

Drop cable, maybe look into video streaming like Netflix. We dropped cable years ago and between Netflix, downloads and online streaming, I don't miss it at all.

Drop the home phone if you have cells. Talk to your cell phone provider about family plans, DH and I get free calling between our cells.

Are you claiming your child's sports on your taxes? It's not a lot but you can claim up to $500/child on your taxes on line 365, Children's fitness amount. You claim the same amount for children's arts amounts.

You gas seems high. DH and I each have a car, my car uses 91 octane fuel, his uses 93 and we don't spend that much per month. Can you reduce this by taking public transit?

For long distance calls, look at using Skype.

We rolled out property taxes into our mortgage payments. Yes it extends the mortgage but it reduces your monthly expenditures. Call your mortgage broker or bank and get that set up.

$800/month for groceries for 4 seems high, you should be able to shave that down a bit by shopping wisely and planning meals. Check out weekly flyers and see what is on sale.

I would really look at how much you are spending on sports. If you are 80k in debt, $520/month is a big touch. Can you talk to the sports club and see if maybe your family can volunteer to reduce the monthly costs? Maybe your children can help coaching junior teams in exchange for their dues?

If you can roll your property taxes into your mortgage, get rid of cable and home phone. drop your grocery bill by 10%, drop your gas by 25% and either drop the kids sports or get them covered by volunteering you would reduce your monthly expenses by $1245.00 and you would save $14,940.00 over one year.

Regardless of what you end up cutting or keeping, I would absolutely go and talk to a credit counselor.

Good luck!

 

[MSSANDRA]

I think one of the biggest problem is that when the debt is sooo big, it seems that nothing you can do will lower it and you feel totally overwhelmed so it is hard to do anything!!

Anything is better than nothing.

I agree that on your current income, you can not afford to continue to live in the home you own. YOU have to decide if if would be better for your family to move somewhere less expensive to live and have you and DH home more OR stay where you are and both of you increase your work hours and denote all that money to debt.

I would REDUCE the kids sports but would not take them away. We have a child that is good at sports.....very good. He is also VERY smart, a risk taker and NEEDS to be kept busy. He needs to be involved and we are committed to that within reason. We decline to allow travel ball or tournament karate. Very expensive and time consuming. We also seek out used equipment and limit sports to two at a time but with two kids it may be ONE for them.

Write down EVERY dollar you spend. We did this once and DH just about flipped at out eating out cost!!! EVERY dollar helps.
Food-
Do not eat out. Period.
Do not buy drink. Water is GREAT for you. Fill bottles for the kids.
Eat the sales.
Use Coupons
Give up name brand EVERYTHING.....food....laundry detergent, shampoos etc.
Cut the cable.
Try to reduce the power bill.....raise or lower house temps.....turn out lights etc.
Bag lunch it for everyone.
Eat the pantry for a week and put that money toward debt.
Little things DO help....you just have to do a lot of them.
Good luck!

 

[ilovemk76]

Is that in the US?

I would expect different percentages here in the UK because we pay higher taxes but have extremely low medical costs. Rather than the high insurance costs and co-pays my family in the US have, all we pay is about £8 per prescription for the adults and nothing for the kids.

I would think that Canada would also have drastically lower health costs than the US, leading to different expectations of expenditure.

These are for Canada. GVO is in Canada.

 

[danetter]

Like others have said:
cut your cable, we have netflix stream only but honestly as of here lately my kids are finding more on youtube to watch than netflix.
You said that your house phone was needed to call family as you don't have long distance to call family members, Is there a way for them to call you and cut the home line if your home line is more expensive than your cell or if your cell is more than your home line cut your cell. If your kids have cells I would cut those too.
Check around for cheaper insurance.
Refinance if possible
Have yard sales, sell on ebay or do fundraisers if you are against cutting your kids sports. (here, where I live I know a lot of the schools do fundraisers to help with cost of sports, does the schools in Canada not do fundraisers at all to keep cost down for the students) If it's recreational sports cut those completly and keep the school sports . Get the kids involved in holding a fundraiser to help with their sports cost. (this can be done as a family and not have to take away any family time doing it.)
Take advantage of as many grocery sales as possible and start using coupons. I have just recently started couponing and where I was spending 150.00+ a week for a family of 4 and not hardly having anything in the cart to see that much and still didn't have enough food through the week sometimes. I have started buying nothing but bogo items and using coupons and now spending around 80.00 and now my cabinet, freezer, deep freeze and fridge is full of food. If you have a store to match prices stick to that store only and don't use the extra gas going from store to store.
Can you save your drink cans and cash in? Not a lot but a little does help.
Are you taking the kids to school or do they ride a bus. If taking to school have them ride the bus to cut gas.
For you and husband, is there anyway y'all can car pool together instead of using 2 vehicles to save on gas?

These are just a few suggestions that may or may not be what you won't but here is some to help you along the way.

 

[ceecee]

Anything is better than nothing.

I agree that on your current income, you can not afford to continue to live in the home you own. YOU have to decide if if would be better for your family to move somewhere less expensive to live and have you and DH home more OR stay where you are and both of you increase your work hours and denote all that money to debt.


Write down EVERY dollar you spend. We did this once and DH just about flipped at out eating out cost!!! EVERY dollar helps.
Food-
Do not eat out. Period.
Do not buy drink. Water is GREAT for you. Fill bottles for the kids.
Eat the sales.
Use Coupons
Give up name brand EVERYTHING.....food....laundry detergent, shampoos etc.
Cut the cable.
Try to reduce the power bill.....raise or lower house temps.....turn out lights etc.
Bag lunch it for everyone.
Eat the pantry for a week and put that money toward debt.
Little things DO help....you just have to do a lot of them.
Good luck!

Good advice. Those are the things I saw that seemed high as well. Take it on as a family challenge and write down everything you SAVE as well as spend to see the progress.

 

[TLuvsD]

On one of the coupon/bargain boards I follow the blogger saved over $500 in two weeks by simply not spending any money. They ate from the pantry/freezer, did without, did not spend a dime for those two weeks (they did pay the bills that arrived during that period). She was really shocked.

So, eat from the pantry, learn to coupon (I am shocked how much I am saving just for our family of 3). It takes some time, but it can add up.

I would definately talk to a credit counselor before selling the house. A refinance might be a better option for you--especially if you can combine some of the debt. You need to talk to someone who knows how these things might work in your area--especially since a big chunk of this is business debt.

 

[OklahomaTourist]

One other item...

If, for whatever reason, you must keep your landline, I would investigate dropping your current landline provider and see if you could leverage your Internet to do a VOIP-based phone service, using something like Google Voice as your "carrier." They offer free US/Canada calling for at least this year, and I was able to drop my $35/month landline expense by picking up a $35 Internet telephony box and hooking it to my network and porting my phone number to Google Voice. The only thing I pay is US$0.80/month for emergency 911 service.

There are some details in there, and perhaps caveats in Canada, but I made up the initial expense in two months. Be glad to post more details if you like...and I encourage ANYONE to investigate this if they'd like to keep their landline AND ditch the (ridiculous) monthly expense...

 

[eeyoresmom]

Thank you doodlebug for the hug. You don't know how stupid we feel. It is an awful cycle and honestly for anyone starting to think oh, I will just put the small business on credit, and pay for a new fridge with this credit, DON"t do it. You can NOT catch up. Something always comes up. Pay cash for everything. We have learned but now we can't fix the mistake:-( We figured if we qualified for the credit, it must mean they think we can pay it but it does not work like that and don't believe it.

Unfortunately here in Canada we do not have cell phone deals like you all do. Those cell phones only have about 150 minutes on them locally. So if I added long distance (which I would have to to talk to all family) and more local minutes they would cost close to 150-200 per month so might as well keep the landline. Husband needs cell for work but could dump mine and save about 30.00 a month there.


I may have to see what our house would appraise at. Then ask to refinance BUT with all this debt would they even refinance? When we got the mortgage we did not have all this debt. We still have three years before it comes up again for renewal.

So dumping cable and phone would save about 80.00 a month. Not a lot, but certainly a consideration. Dump kids sports and we are at about 600 total a month. That still does not get us where we need to be to even make a dent but I guess it is a small start. This is why we keep going in circles. I know none of you can help. Just wondered if we were missing something...........and if anyone had done a proposal before. JenRmS what you did sounds like what I mean. Basically 5 years of our life to get rid of it by doing settling but after 5 years we should be clear...............the 5 years will be awful but nothing worse then what we live every day now. Then in those 5 years we should have more equity in house and could move and downsize...........and them maybe we might have extra but I doubt it as oldest would be close to going to school and we would have those bills. Just feeling very pessimistic right now.

So sad, and so sick of all this. Please everyone, do not get yourself in this situation. It affects every part of your life.

So sorry for what your family is going through. Debt is slavery, robs you of your freedom, but you CAN get out of it. What most has me worried is your saying that $600 a month is just making a dent. That is a substantial amount of money for debt repayment. I'm wondering if that is how the debt got so large in the first place (ie. soccer is only $80 per month) A few years ago I got my dream job in a VERY secure field. I needed a car and ended up buying a new economy model after searching for months for a used one. About a year later I bought a DVC contract since we have a large family and vacation there often. This was with no other debt, IRA's fully funded etc. Then I heard that the program I work for would be cut from the state operating budget. Not at all an uncommon story, but boy did it motivate me to get that car and DVC contract paid. I did not want my husband's income to stretch to cover them while I got another job. At the time, I took home $36,000 a year. It took me 15 months to pay off $32,000 in dvc and car debt. I still had car insurance, gas, cell phone plan for family, electric bill, all Christmas/birthday spending (DH and I divide household bills because his income fluctuates). My mindset was that every PENNY counted to get my peace of mind back. I sold part of the DVC ( it was 2 seperate contracts), made my own laundry detergent, relearned how to drive my car in a way that was most gas efficient. And I kept close track of what I was saving with all these changes and paid it directly to debt. I would go so far as to figure..."I am saving $7 a week on gas now and every time I filled my gas tank, would make a $7 payment to the debt. I know it sounds extreme but it worked for me and now I have the freedom I didn't have with that debt on my back. I will never again have that much debt. I know have automatic deductions taken from my paycheck for EVERYTHING, Christmas, a new car fund, vet bills, travel, household emergencies, etc. I still make my own laundry detergent, drive with a minimal of acceleration/braking, hang my laundry out to dry. When they ask, I tell my kids I do these things so we can afford to go to Disney often and pay for their college with no loans. I'm still hanging out on the budget board looking for tips, even with no Disney trips coming up. OP you can do this, but don't disregard the small steps." How do you eat an elephant?........one bite at a time."

 

[ceemys]

I had trouble about 5 years ago to. Between having my 2nd baby, daycare costs, having to quit my part time job and my mortgage going up due to an adjustable rate, I lost about $1100 a month. I was very quickly getting behind. When my yougest daughter was 2, I had to sell my house and I moved into an apartment. We cut the cable, cut the landline, cut out movies, eating out...basically anything that was fun. It took 4 years but I did pay everything off. I did go on Disney trips, but I used my tax check to pay that and after cutting everything else out, it was something that I wanted to do. I did stay on track to paying my other bills. I paid over double what the minimum was. I agree with another PP that talked about the debt dumpers post. It really is inspiring. Now I am 100% debt free and I am saving for another house I am building to close this November.

It is hard, but your kids will get over not having sports and you will be fine without cable. My kids were upset at first, but we quickly filled that TV time with other things.

 

[mckelvey72]

One thing I want to add....get your kids involved in this effort. And I say this because they will learn so they don't fall into the same trap later in life. I watched my parents pull out the charge cards and didn't think anything of it when I got older. And while I made upwards of 6 figures myself....I spent all that much more and got in a terrible amount of debt. I couldn't sleep, couldn't eat...it was affecting my health.

I will admit that I tried all the counseling companies and because I wasn't behind on any bills most of them could not help me. I ended up filing bankruptcy and while I am ashamed of that fact, it has also lifted a burden so great and i was able to get my health back and be happy again. However I filed the Chapter that made you pay some of it back. For me I had to pay back 50%. I make my final payment July of this year.

Here is what I will say about bankruptcy....if you get to that point, then make sure you have learned your lesson. I filed 5 years ago and have never charged a dime since then. I only but what I can afford and spending money has become hard...cause I dont' want to go back there. We are doing to Disney this year and it is paid in full, the spending money is budgeted and I will be able to enjoy it knowing it is all cash and no credit.

I do not advocate bankruptcy....and I don't typically talk about it cause people have such drastic opinions and views but it isn't the end of the world. Talk to credit counseling and they will guide you to the correct solution....they are the ones that guided/convinced me to file the way I did. I pay back half. I tried everything else first...I called all the CC companies and none of them would help me. I asked for reduction in interest rates and they said No. I couldn't believe they would rather someone file bankruptcy then pay back what they owe at that point. It was weird to me.

But the other people have given you great advice on what you can cut. I am a family of 5 and dont' spend anywhere near 800 a month on food. We drink a ton of water and found that a water delievery company was 35.00 a month and we ended up saving money over buying bottled water. My kids LOVE oodles and noodles and they are only .18 a pack HAHA!!! but hey, you can add veggies to it and make a meal. I also do the "living out the pantry"..I don't go grocery shopping til everything in my freezer is gone. We have even had cereal for dinner cause we had eaten everything else. If you have local farms you can get eggs for about a dollar a dozen.

So keep your head up....asking for help is the first move. You can get there, it will just take a lot of time and effort. And as I started out with saying....get the kids involved...you would be amazed at how resourceful they can be. Collect all your change at the end of the day....it adds up faster than you think.

Good luck and feel free to message me privately if you need to talk.

 

[linmc1129]

I did not get to read all the replies, so I'm sorry if this has already been posted. Some (competitive) sports offer financial assistance based on need. You could look into that to help reduce the costs of the kid's sports.

 

[clarkshel]

Thank you doodlebug for the hug. You don't know how stupid we feel. It is an awful cycle and honestly for anyone starting to think oh, I will just put the small business on credit, and pay for a new fridge with this credit, DON"t do it. You can NOT catch up. Something always comes up. Pay cash for everything. We have learned but now we can't fix the mistake:-( We figured if we qualified for the credit, it must mean they think we can pay it but it does not work like that and don't believe it.

Unfortunately here in Canada we do not have cell phone deals like you all do. Those cell phones only have about 150 minutes on them locally. So if I added long distance (which I would have to to talk to all family) and more local minutes they would cost close to 150-200 per month so might as well keep the landline. Husband needs cell for work but could dump mine and save about 30.00 a month there.

I may have to see what our house would appraise at. Then ask to refinance BUT with all this debt would they even refinance? When we got the mortgage we did not have all this debt. We still have three years before it comes up again for renewal.

So dumping cable and phone would save about 80.00 a month. Not a lot, but certainly a consideration. Dump kids sports and we are at about 600 total a month. That still does not get us where we need to be to even make a dent but I guess it is a small start. This is why we keep going in circles. I know none of you can help. Just wondered if we were missing something...........and if anyone had done a proposal before. JenRmS what you did sounds like what I mean. Basically 5 years of our life to get rid of it by doing settling but after 5 years we should be clear...............the 5 years will be awful but nothing worse then what we live every day now. Then in those 5 years we should have more equity in house and could move and downsize...........and them maybe we might have extra but I doubt it as oldest would be close to going to school and we would have those bills. Just feeling very pessimistic right now.

So sad, and so sick of all this. Please everyone, do not get yourself in this situation. It affects every part of your life.

I haven't read all of the posts yet, so not sure if anyone has suggested this. Have you considered getting a HELOC? Them using his money to pay off all your credit cards and other debt. You can usually get one for prime plus 0.5% to 1.0%. With a HELOC, when you are short one month. You can pay as little as the interest only. Maybe check with our bank if you can redo your mortgage for a lower payment. When you get caught up, you can pay more on your mortgage and pay often HELOC.

If you can help it, I would try to keep the house. Unless you bought it when the prices where high during this past boom a few years ago. You have to see if it will be worth selling it. I would leave this as your last resort though.

 

[mom4graceandlogan]

you deserve kudos for tackling it and not looking the other way any longer. Beating yourself up over it will only make it worse. Be positive and move forward. Now you asked for advice, so hear is mine, no judgement just my thoughts.

Kids sports should no longer be paid by you until the situation has turned around. You have been treating them as a necessity and afraid to "punish" the kids because of your decisions. Sports is a luxury. You said yourself you have no way to pay for a car repair. What if your furnace broke.? My AC broke last week and it is $5100. to replace. Now you could maybe live without AC but I bet in Canada no working car or no heat whould be a necessity. That does not mean they have to quit all together but you can't pay for it.

RE: Sports I get the scholarship thing if it is a real possibility. If it is very likely that the child will get a scholarship, not just a maybe, and that kid is a junior or senior I would look for alternative ways to fund that sport only. Not necessarily the sport they love the most but the one most likely to get a scholarship. If they are not within two years of graduation, then I would have them skip at least a year. THey can stay conditioned for the sport and maybe be able to do it another year. Approach their coaches, teams and see if any grants, discounts etc. may be an option. Our good friends daughter is in gymnastics and the mom cleans the gym once a week to offset the cost. Do you have a skill/service you can offer any of the teams to offset the cost? I know you don't want to ask relatives for money, but if grandparents love the sports they may be able to chip in offer to pay for sports in lieu of christmas/birthday gifts etc. If they are only do one or no sports they can take babysitting and other jobs to help pay for their interests.

The bottom line is that their college and their sports interests are not a family priority right now. Surviving and getting out from under water is.
It does not help them learn how to be financially responsible to see the family allow what is an extravagent expense to many others. Many families are having to tell their kids no in this economy. So sit them down, be honest and tell things have to change. Maybe they will come up with a way to still do it. Moving to save the sports does not change the fact that you will still have so much debt you should not be paying for sports.

Additionally, if I were considering bankruptcy or restructuring debt, I could not in good faith say I cannot pay my debts and still pay over $500 a month for children's activities. Good luck on some hard choices. You will figure it out!

 

[Bob NC]

I really do not know how I would work more hours and be able to see my kids is what I meant. I did not intend when I had kids to not spend any time with them and that is one thing I will not change.

pigletto, you have hit the nail on the head. We are in one of those cities:-(

Part of the reason we will not rent. I do not want to subject my children to living in that sort of area and I will live like this month to month if that was my only alternative.

This may sound harsh, but you are in a harsh predicament.

The reason you are in this situation is because you have purchased things and lived at a level you can't afford.

Wanting to make changes isn't really part of this deal, you need to make changes.

Everyone would rather own their own house and property rather than live in a rental. If you can't afford it, you simply can't afford it. If you didn't own the house you own now, nobody would currently, in your financial situation, loan you the money to purchase that house.

You want to spend your free time with your kids instead of working? This is why you are living on credit cards.

You want to live where you live? This is why you are living on credit cards.

If you don't want to make changes then you are going to keep getting what you have been getting.

Even if you sell the house, stop the sports, and make drastic cuts in your spending, it's still a years long rough row to hoe for you to get out of this situation.

If you don't make drastic changes the outlook is even more bleak.

I know everyone is cheerleading here and we all hope the best for you, but, this requires a life change, cutting the land line and eating out less isn't the answer.