Feeling Horrible: Just found out how much in Debt we REALLY are...

[NotUrsula]

I disagree. I budget monthly. I know before I walk into the grocery store that I have only x amount to spend. I put it on the credit card to reap the points and pay the grocery amount off the minute I get home (and put away the groceries). Or sometimes even before I go for the groceries I make the payment. It's really all about self discipline as you say.

I guess I should have qualified that as "people who are in trouble with consumer debt".

Yes, if you are a very disciplined spender, working the points options is an excellent strategy, but for someone in the OP's position, using a CC for groceries is unwise, because it will pile on more interest, AND they are likely to overspend at the supermarket that way, because, after all, "groceries are a necessity!"

As I said, the supermarket is a danger zone for folks who are on austerity budgets, because it is a place where they will tend to give themselves permission to splurge because they have given up eating out. Those little supermarket splurges can add up to a lot of money over time.

Restricting yourself to cash-only at the supermarket (gift cards are good if you don't want to carry cash; buy them at the beginning of the month), forces you to watch the impulse buying if you don't want to be eating nothing but rice, pasta, and freezer leftovers for the last few days of the month.

 

[ilovemk76]

OP here again...

You guys are totally right, my Hubby and I need to do this together! I meant that I trusted him in regards to him not misusing our money. He's not gambling or anything like that.

What do you all think about transferring some of the high interest rates to zero percents?

It might be a good solution but not until you know where you are overspending, why you are overspending and show ther restraint to not overspend in that area or those areas.

If you jsut do a transfer you are just doing what you did when you refied and look where that got you. You never dealt with the problem but found a temporary bandaid. Eventually those zero cards will want the interest and by then you will have racked up more debt on the cards that you transferred.

 

[usnuzuloose]

All you do in trying to move your debt from one card to a zero balance one, you just move the debt around and not get anywhere. I have a friend who keeps doing this and is getting no where. It has been at least 6 yrs doing that. Harboring a secret is not a good thing. I know my husband did it. And he finally had to come clean. It hurts the whole family. You and your husband need to be on the same page. If not nothing will work. It will go right back to the same pattern as before. Dave Ramsey is an excellent work book and the method works if both of you apply it.

Money is all one in the marriage. You need to pull together and have talks all the time. You know if you cant be honest with the rest of the family, what happens when holidays come and you cant afford it? I hope it works out for you.

 

[punkin]

All you do in trying to move your debt from one card to a zero balance one, you just move the debt around and not get anywhere. I have a friend who keeps doing this and is getting no where. It has been at least 6 yrs doing that. Harboring a secret is not a good thing. I know my husband did it. And he finally had to come clean. It hurts the whole family. You and your husband need to be on the same page. If not nothing will work. It will go right back to the same pattern as before. Dave Ramsey is an excellent work book and the method works if both of you apply it.

Money is all one in the marriage. You need to pull together and have talks all the time. You know if you cant be honest with the rest of the family, what happens when holidays come and you cant afford it? I hope it works out for you.

I did that for years, but not because I couldn't pay it off. The incentives were just too good at the time to pay off. However, that gravy train ended over two years ago. At this point almost every single card will charge you a transfer fee. It may still be a good idea for OP (depending on the rates they are paying) but you are right that it is not a long term solution. For that the OP needs a budget and knowledge of the family's expenses. She also needs to stop using credit cards that are charged up. At this point the first step is to stop digging that hole deeper.

 

[bumbershoot]

What do you all think about transferring some of the high interest rates to zero percents?

It's only a good idea if you HAVE the discipline to get rid of them before the interest shows back up. If YOU have this discipline, and can get hubby to go along with it 100%, then it could work. But if you've both been a bit too lax in the CC department, it probably isn't the best idea.


When I first started the Ramsey stuff, and I'll state that we're on a break for it for right now (but that doesn't mean we're spending spending spending again), I was very tempted to see if I could charge our car payment, and beyond that put a HUGE payment on the car, with the CC. We had a disgusting interest rate on the car, and the CC interest was less than half of that interest rate. I figured that it would save us money. I ran it by some people on LLNOE, and since I was so new to the whole Ramsey thing, it was shot down, BIG time.

I chose to go along with what they said (and some of them are probably on this thread, LOL), and because I was so annoyed by the interest rate on the car loan, I/we (hubby said I did it, while I try to include him in it) destroyed the loan inside a year from starting Ramsey's stuff. I wouldn't have worked that hard, I know I wouldn't have, if I'd been playing my intended CC games.

 

[indimom]

OP here again...

You guys are totally right, my Hubby and I need to do this together! I meant that I trusted him in regards to him not misusing our money. He's not gambling or anything like that.

What do you all think about transferring some of the high interest rates to zero percents?

We did this to pay off our credit card debt interest free, but that was back when the offers were for 12-18 months. We would pay, pay, pay and when the deadline came up, we transfered to another card with a 0% offer. But, if if the offers are only for six months now, it may not be worth the transfer fee. You need to crunch the numbers and the timetable involved.

 

[Tiger926]

Have you tried not having separate money? I know it works for some people but for us it's better to attack things as a team. DH makes way more than I do, too, but all our expenses and income are ours.

My advice is to always share the bills. You should always know what is going out and coming in and not leave it all to the husband. If anything happened to him you want to know be able to take it over.
Its easy not to eat out. I work full time with 2 young kids and we only eat out once a month. And that is usually take out pizza. Just plan the meal the night before so you're not wondering what to make on a empty stomach at 5 p.m.

Totally agree! Hubby is a bank manager/financial advisor, and 2 relatives who are marriage therapists, and they both talk about how many more problems couples with separate accounts have. When you have separate accounts, couples start to take on the mindset of being one, instead of working as a team, and that means serious financial issues.

OP here...

Thank you so much for all your words of advice and encouragement. As I'm sure you all know relationships between husbands and wives are quite complicated. Luckily I trust him implicitly, he was just trying to maintain a happy face for me and reduce my stress by not letting me in on "our" debt secret. I get stressed pretty easily.

This is pretty much how this happened: After paying bills, random shopping and eating out about 2x a week (sometimes more), we'd be out of $. So he would buy our groceries and pay for gas on CC's, among other things. We live in an isolated area near a small town and his commute is about 40 minutes each way, so gas adds up. I don't work in that town, I work in an even smaller town closer to our house, so for the most part I don't do the grocery shopping, except on weekends. I can't quit my job, my health insurance is paid for by my company and we only have one more year of paying for 2 kids in daycare- my older daughter will be in kindergarten in one more year.

We are going to write a budget tonight, and have weekly budget meetings. I found out about this debt after looking at my recent credit rating update - luckily I still have excellent credit, but it's going down.

I know we can fix this problem, but boy do I still feel like crap. Once again thanks for the advice!

I am concerned that he was trying to protect you from the stress - so, is this stress less than that stress? No! Now, you have worse issues as there are things you had no idea about. You need to be 100% on board with your finances from here on in, or, you may encounter more problems in the future. Is there anyway to pool your accounts together, so that you have more of a united front against your debt?

Best of luck to you!

First of all, both of you need to do this together. Write down every cent you spend for a few months and see where it's going.
"Trust but verify" excellent saying!

Don't feel like crap, you are away of this problem and CAN fix it, it's gonna take some hard work and frugal spending for a while! i hear the impulse out to eat (we've been bad latley) but it has to STOP!! eating out is sooo expensive....you'be be better off spending the $5 you spend on fast food for yourself on a box of granola bars or crackers or snack you enjoy and keeping it in your car.....that way on that long commute you can crab a snack and it won't set you back i always keep a granola bar in my purse....i <3 fiber one chocolate bars, one really fills me up!

as far as your husband keeping you in the dark about the debt....NOT COOL!!!
This is a HUGE pet peeve of mine....ladies if you're married you need to be an EQUAL part of the finances....i don't care if you don't make a penny of income, you believe the man is the head of the household and the women should just cook, clean and make babies or whatever other reason is out there you need to know!!!!! PERIOD END OF TOPIC!!!

He's not doing you any favors because you're gonna find out eventully, so from now on keep a handle on it too....even if it's a once a week chat about how bills are going, what's in the account what could use a little extra, if anything needs to be cut back.

i actually did this when we got married, hubby had a pile of credit card debt (thank you MIL for NOT teaching him how to manage money ) and we were paying a TON a month in payments and most of it was going towards interest....then we got an offer for zero interest for a year on all balance transfers....was the begining of a wonderful relationship with discover card and really helped us get out of debt!

also.....and i have to say it, i see you have TWO disney vacations planned for the next year....any way you could cut one out?? or do them both on the cheap so 2 is the same price as one? would be an easy way to free up some funds and you would enjoy yourself alot more knowing you're free and clear of debt!

I agree about the vacations as well, but I don't see any evidence of that, unless OP deleted them from her signature? If she does have vacations planned, we don't know if they are gifts or totally paid for vacations, this might be a big issue as well. Vacations cannot be a priority with huge debt hanging over their heads.

I also agree with all of the other posters about stopping eating out, making a budget, and if credit cards are an issue due to impulsivity, they need to go as well.

Tiger

 

[Pirate Mamma]

lso.....and i have to say it, i see you have TWO disney vacations planned for the next year....any way you could cut one out?? or do them both on the cheap so 2 is the same price as one? would be an easy way to free up some funds and you would enjoy yourself alot more knowing you're free and clear of debt!

Actually, there is nothing about Disney trips in my signature... the only one on the horizon is not being paid by us...

 

[lovemylife]

I am in a similar situation and it is because we just bought an older house that needed a lot of work. Not an excuse, but I just got a Citi bank card with 0% interest for 21 months. It does have a 3% transfer rate, but that is only 2 months interest with my other card. That way all I put on it goes directly to principal. We will pay more than the minimum and go to cash for everything else. Good luck to all of us.

 

[undertheradar]

No, another poster who stated she has over $50,000. in credit card debt has 2 trips in her signature. Not the OP.

 

[ilovemk76]

No, another poster who stated she has over $50,000. in credit card debt has 2 trips in her signature. Not the OP.

I saw that. I wonder how that CC debt came about!

 

[ICF]

You could always just call the cc companies, negotiate a reduced payment amount and then do it again next year.....and then come here and brag about it and actually think it's a valid financial plan.

Or you could do what you have actually talked about doing....be responsible and work with your spouse to figure a budget and live with in your means....you know, live like a responsible person that doesnt want to pawn off their debts on everyone else. Congrats for choosing this method!

 

[bpesch]

You have to stop using your credit cards. Plenty of people get along just fine without them and you need to learn how to do it. It doesn't do any good to pay down the debt and keep using the cards. You'll never get ahead that way.

Sit down and make a list of your expenses every month. Then decide what you can do without. I suspect if you write them down, you're going to see you spend a lot of money on things you do not need. Start cutting them out one at a time.

Good luck!

 

[piperdown]

Just want to add some encouragement that it can be done. We were in a similar situation that came to a head about 4 years ago.

The one thing that helped the most was getting rid of the credit cards. We cut them up and went cash/debit card only. It forces you to live within your means. Also, we scheduled automatic payments to the credit cards that were large enough to start knocking down the debt. We treated them like another car payment, and reduced the our budget/spending to allow for those payments.

It can be done and we are living proof. I will be paying off the last of our credit card debt next month. We have just recently started using a new credit card for the 1% cash back, but I am making weekly payments to pay off the balance.

It takes commitment, but it will feel so good when stress of that debt starts to go away as the balances go down.

 

[tinkarooni]

Just want to add some encouragement that it can be done. We were in a similar situation that came to a head about 4 years ago.


It can be done and we are living proof. I will be paying off the last of our credit card debt next month. We have just recently started using a new credit card for the 1% cash back, but I am making weekly payments to pay off the balance.

It takes commitment, but it will feel so good when stress of that debt starts to go away as the balances go down.

Be really careful about using the cc just to earn the rewards, I have read a lot of financial advisors who talk about this being such a bad idea if you don't really keep on top of it. Good luck.

 

[ValpoCory]

Figure out what you spend in each category and then figure out what % of your take home pay it is. Then compare to the Gail Vaz-Oxlade % to see where you are overspending.

Categories:

Housing - mortgage, taxes, homwowners insurance, electric, heat, repairs etc.
Transportation - car payments, gas, auto insurance, repairs etc.
Life - Life and health insurance, eating out, food, fun, basically everything else.


Housing - 35%
Transportation - 15%
Life - 25%
Savings - 10%
Debt repayment - 15%

We Tithe 10% of my gross salary off the top. I've heard Dave Ramsey say that too. So for those category percentage numbers you list, "take home pay" would be Gross Salary - Tithe - Taxes, right?

 

[mrsklamc]

We Tithe 10% of my gross salary off the top. I've heard Dave Ramsey say that too. So for those category percentage numbers you list, "take home pay" would be Gross Salary - Tithe - Taxes, right?

Not sure for Gail's but Dave Ramsey has numbers that include tithing. I don't have them here with me but can post them later.

 

[MusiqChic99]

My first suggestion is to open up and have regular/often occuring conversations with your DH about your finances. If you're just now finding out about the issues with your credit cards you haven't been talking enough. Even though he's paying most of the bills you still need to know what's going on; it's your debt too.

Agreed.

Become a team in this even if he's paying most of the bills. Maybe you both need to sit down together when it's time to pay the bills. Also sit down together and look at what you spend during the month and figure out what has to stay and what you can easily let go.

 

[SDSorority]

to you OP!

To save money, we cut the cable (only do basic and netflix through the wii), cut the home phone, make a LOT of food from scratch, and don't spend on things that aren't really necessities (like dry cleaning unless we have to, maid service, etc.)

I work 1 full time job and 2 part time jobs, and DH works 1 full time job and is working on starting a part time job with his brother. The part time stuff is home-based: music lessons and social media management. The 3 jobs brings me up to where I 'should' be with someone with a bachelor's degree... but that's another story. DH has his Master's, which has helped him get a nice job with a nice salary. We try to live off of DH's salary, and put all of my salary and part of his in savings each paycheck. We go on vacations, but don't go out to movies, don't go out to eat much, don't do things entertainment-wise that cost a lot of $$. We like to go to state parks, community parks to kick around the soccer ball, do cookouts for friends and family, etc. We have a lot of fun, without spending $$$$$$$$$$$$

Check out the Painless $$ stretching thread- great ideas over there.

You can do it. I paid off $$,$$$ worth of student loans and $$,$$$ for a car in under 2 years. I had to be diligent and DH just had to TRUST me that it would get done. Cut out what you don't need, take care of what you have, and pay it down little by little.

 

[ilovemk76]

We Tithe 10% of my gross salary off the top. I've heard Dave Ramsey say that too. So for those category percentage numbers you list, "take home pay" would be Gross Salary - Tithe - Taxes, right?

You could included the Tithe in before you calulate your "net" or you could just use the net (gross-taxes) and then include the 10% in your life category.

BTW there is 15% in her numbers for debt repayment. Once you are debt free (less the mortgage and car(s), which are in other categories) you can distribute that 15% into other catagories. The most likely would be to add to your savings and live. Maybe savings 15-20% and life 35-30%.