~help I am broke! ~ ! BIG $$ mess here

[ajksmom]

We have a dump truck that isn't used frequently. Our insurance agent had us drop all but comp(? can't think what it's called). We just call when we will be using it for hauling loads, give them the time frame(usually a weekend) and they put all coverage back on it. Saved us $1400 last year to do this. If one or some of your vehicles aren't used too frequently try looking into this.
Maybe you can look into offering a service (babysitting, housecleaning, tutoring,etc) and take all the pay it brings in and feed it into your cushion. Its great that you can afford your bills, but what would happen if one of you lost your income, even for a short while?
It took us 5 years to get 6 months of cash tucked away to be used in emergencies!!! Even though my DH has short and long term disability it really doesn't begin to cover our expenses so we worked really hard to get here!
Don' t give up, half your "battle" is won already because you realize you need to save some for emergencies.

 

[ceecee]

I agree with the others....track your spending for a few months. If you cut your 10% down to %6, make sure you don't just spend the other 4% as well. By seeing where all the $ goes you'll be able to see what you can cut out.

You should have an available savings up tp six months of your salary to fall back on, so I would start saving that up ASAP.

 

[minnie1928]

1. Look at your phone/cable bills, do they include something along the lines of "wire maintenance"? Get rid of it, odds are you will never use it.
2. Open an ING account, if you open 3 (you, DH, DD) you could earn $95 in account opening cash bonus. They pay 2.20% which is GREAT and the fact that you can't withdraw from your account quite as quickly makes it a great savings vehicle. It removes the temptation to go make an ATM withdrawal . The $95 can't be touched for 30 days, but it would be a good start for your emergency fund! Better yet, they pay you $10 per referral, so if you can refer some family/friends then you get more free $. If you need more info or a referral, send me a PM.
3. Scale back the 401k to 6%, you definately don't want to give away free money, so I wouldn't take it any lower than that.
4. You mention that you make extra principal payments on your one vehicle. STOP! You need to get your cash situation figured out before you start making extra payments.
5. I agree with the other posters that recommend tracking your money, every cent. You'll be surprised what you spend money on!
6. If you do alot of your christmas shopping at Target , JCPenny, or ToysRUs, checkout Hotwire Savings Club. You can buy gift cards there with a 20% discount, then use them to purchase gifts or whatever. The first 30 days are free, so just do the trial period. As of 2 weeks ago they were offering $10 rebates off your first purchase.
7. Change as many light bulbs in your house to flourescent bulbs, they cost more up front, but they save you lots in the end.
8. Start drying more laundy using a drying rack or line. Saves on the electric bill! If nothing else, dry some things on the line and combine loads in the dryer. I used to dry 5 loads/week with the dryer and now I'm down to 3.
9. Start making payments via your bank's web banking service, if they don't charge for the service. Saves you alot in postage and checks!
10. Keep watching these boards!!!!!I check almost daily and am constantly amazed with what people come up with!

You are surrounded by some truly wonderful people and I'm sure you will make it through! Good luck and let us know how it's going.....

 

[rockin_rep]

I've often wondered - is there any type of financial planner or company that will analyze a family's finances (for a fee) to see where the holes are? Similar to what Jean Chatsky and others have done on Oprah, The Today Show etc? Where they go thru a couple's budget and find places they can save?

 

[pjlla]

Run to your nearest library and check out the "Tightwad Gazette" series of books (3) by Amy Dacyczyn (prounounced 'decision') and read them thoroughly!!! You will find some things that you will probably feel don't apply to your situation, but I think that you will be surprised at how much you will learn!! And she shows you how to break down the numbers to make sure that every cost cutting measure is INDEED a money saver for you. The books talk about ways to save on groceries (and no, coupons are not the only or best way), save $$ on insurance, both health and automobile, clothes, gadgets, LOTS OF STUFF!! PLEASE DO THIS!! I'm not kidding! I know how you feel... I was in some financial trouble when I was single after college and I know the stress it causes! Wish I had these books then (and a bit more self control with the credit cards!). As you read these you need to be open to changing a lifetime of habits....... I really hope this helps...................Pamela

 

[peacefulgirl]

We saved a ton on insurance with USAA- call 1-800-531-8111 to see if you qualify. it is for military and family, but the connection can be remote- it was our grandparents who served. But.. be careful about a high deductible- if something happens a huge deductibe could really hurt if you have a fragile situation. Good luck and best to your friend.

My brother serves in the guards right now ! I also work for a union, so I found 2 ins co's that have group plans that I need to research.

Your hubby sounds like a great guy, but don't discount the stress that financial problems can put on your marriage. If you need another motivator, keep that one in mind.

You hit it right on, even though we are struggling, just having a plan has made him sooooo much nicer!!!! Poor guy was wacked out with this!

I just heard the Today show, and Jean Chatzky is out with a new book, entitled "Pay down Debt," or something similar, with suggestions on how to save $10/day.

getting it !

I tell ya- the post about tracking what you spend is CRUCIAL!!

I thought, oh we dont spend that much in cash/debit/atm YA SURE!!

The debit cards are killing us... so they are outta here ! You are so right!

quote:
--------------------------------------------------------------------------------
Originally posted by peacefulgirl
3. We don't eat out,go to movies- NEVER, rent videos -hardly ever, hubby spends no $$ really, unless it is for the house and he uses his own saving for that, poor guy
--------------------------------------------------------------------------------



Can you clarify this? Are you saying your husband has his own savings? If so, is that not some degree of an emergency fund (assuming it is more than a couple of dollars)?

Yes he has 600/month going into a saving. 200 of that goes to his ROTH. He has savings on there (he is a great saver!) But we just did a home repair and he used it for that. He thought I was going to give him $$ for it, but I couldn't, obviously) so he had to pay the contractor with it. That is kinda what started this, this is when we went "WHAT THE ..."

I didn't read all the posts closely enough to see if this had already been suggested but you may want to call the CC company, if you've been timely about payments, and ask for a lower rate. Also, if you have student loans and haven't yet consolidated them, check now about doing so since the loan rate is at an historical low. If you've been timely about paying that, you might be able to negotiate a lower rate on those, even if you've already consolidated them. It never hurts to ask.

We have a rate of 9.50 with our credit union ... we have never been late on ANY payments of any of our credit!

What about consolidating the CC, 2 loans, and car payment into one bigger loan? That will usually reduce the total payment required, and then you could save the extra money in an emergency fund. I am a mortgage broker, and I often recommend this to clients who are trying to save for a downpayment. If you are afraid you won't save the extra money, borrow a little extra and put it into a savings certificate if some sort. It sounds like you pay your bills every month, but aren't real savers. That's ok, as long as you recognize that and are willing to "borrow to save". It may not make sense to some, but we are not savers either, but we always pay our bill. We would not be where we are financially had we not borrowed for our savings initially.

This may work. I would only do it if I was able to pay more than the minumum. It is kinda like we did with the equity, but we then didn't do anything differently and we got trapped. I have a friend that works at a mortgage co and she gets all our fees waived when we do this stuff. Our rates are great for mortgage and equity ... but I think she does consolidation too... hmmmmm But I would have to look at all my rates. My credit union where my loans are, I think are pretty low already.

I know others have discussed the cell phone bill, but have you scrutinized your land line phone bill? Do you have any services that can be dropped, like call waiting, call forwarding, etc.?

How about long distance service? I dropped this entirely from my phone coverage a couple years, saving me a monthly fee right away. Now I only use phone cards for any long distance calls, and I only buy them when they come up on sale for $.03 per minute or less (usually at Target).

We both work for the tel co, so I get discounts on cell and land line. those bills arent high.

And I entirely missed the fact that you have 4 vehicles. I would definitely cut back to 2. You'll save on insurance and you'll save on maintenance. Chances are the newer vehicles are probably more fuel efficient so you'll likely save on gas as well

this is true, but one truck is so old he needs to get a new one, he drove it to the ground ! The dump could come off the road for a while maybe??? The 3rd is the old car, I use this a lot to save on the wear and tear of my van. The van I need because I work 3rd shift and drive into the city alone, need reliabilty there. But I also have to consider, I only have 1 more payment of ins for this year,till April, so taking anything off the road won't help in INS $


So far

-I am looking at looking at:

- new INS rates.
- consolidation ??
- cosco shopping
- put my tax back to "1"
- put both our 401K to the 6% matched -temporarliy
- we both cut down to gas only for spending cash(no coffee/lunch out)
- call cable Co check services
- working OT when we can


I still have to map out a plan, but I cant do that until we know what amount we are working with. We need to both sit and do our own goals the come to an agreement on a plan.

I also may be able to take a temp job with a girlfriend who takes care of an elderly man !


Keep the ideas coming please ! And keep me on track !

Thanks guys !! Your the BESTEST people in the WORLD !

PG

p.s. no student loans here ..

 

[imsayin]

put both our 401K to the 6% matched -temporarliy

You'd be better off eliminating (temporarily) the Roth contribution of $200. 401K contributions are made before taxes and Roth IRA contributions are made with after tax dollars. So if you reduce the Roth deduction by $100, you will get $100. If you reduce the 401k contribution by $100, you might only get $80 (depends on your tax bracket).

 

[Lisa loves Pooh]

I might get smacked here for suggesting this but here goes....

We got in over our heads with our equity loan--it was fine by it self, but them home improvement expenses a little bit there, a little bit there proved mildly hairy and enough to give me a panic attack.

We ended up with a new credit card debt as a result and a few things scattered elsewhere. Tapping equity was not available b/c we used our present loan up on home improvements.

My husband is able to take a 401K loan out and payments are removed from his paycheck. And he earns the interest paid on the loan is actually credited to the account. Now this is from a man who refuses to give up a 100% company match for the first 6% of his contribution. The temporary small loan makes much more sense than losing out on an investment with real time 100% (more or less overall depending on the growth or decline in value of the 401K).

I'm not sure what your company match is--but if it is too favorable to pass up, consolidating some items onto a 401K loan can yield a more favorable payment and overall interest paid. My hubby is way into paying as little interest as possible and likes it better if he gets to pocket it in the end--in our case it was the best option.

But beware of course--if you are unable to pay--I believe it turns into an early withdraw and their are income tax penalties associated with that that could dig your hole deeper. Use this only as a last resort.

 

[peacefulgirl]

ok now you can all slap me ....... done that already ! we can have 2 loans on our 401K's and I used them all. 3 are small ones, but one is pretty BIG. I took them for short time, 6 months on the 3 lil ones, so they will be gone soon.

My problem was I knew where to get $$ when I wanted to ... I am just full of resourses for borrowing !! Well the OLD me was LOL !

 

[jipsy]

Cancel your vacation and get a refund.

 

[peacefulgirl]

I would but I am going with MIL and DD, we are going to visit SIL and driving to and from there. I already paid hotel and air fare. We are only going 3 nights, getting a fridge and eating from supermarket mostly. We are not doing a big deal with it. Just bare bones. Got SIL's van to get around in. Can't cancel on MIL mostly. That $$ is spent ... plus MIL is getting old and walking will be harder as the years go on and this is HER dream, she has never been.

Now I feel like a DORK for going

 

[Ozymoe]

If I were you...

I would bite the proverbial bullet, big time...and save absolutely every cent for one year...no vacation, no frills, no...anything.

It will be much easier to do this until October 1 of next year at this stage of the game...than it will be at any other time of your married life.

You will be making memories...and stories to tell for the rest of your lives...while you have youth, spunk and drive to succeed going strong for you.

Your daughter will not suffer from privation...she will be a part of the economization which will create bonds you can share in "meatier" times! One day she may very well say to you...and I was there when we accomplished all that!

LOL...I still love to hear our older kids telling our younger ones how it was when they were children...they swear they had to walk miles in the snow to school...uphill...carrying tons of books...

(ahem...for the most part they took the bus or were driven...plus we had an abnormal dearth of snow when they were kids...but I wouldn't dream of reminding them...they love having been "pioneers" too much!)

 

[Ozymoe]

Oh for Pete's sake...don't feel like a dork. Since you're committed to it, (sacrifice, "bite the bullet"...and go to Disney! lol)...do it with a good sense of humor and have fun...THEN start your "Year of Memories". LOL...if you implement even half of the good suggestions you've been given...when you review your situation a year from now, you will be in a much better place!

You just have to be strict with yourselves over Christmas this year. Maybe make it the year you do not spend...but still give to each other in non-monetary ways...?

 

[Gillian]

If your DH is saving $400 a month but you don't have enough money to pay the bills, that's kind of a problem. I know he does side work, and might feel that money is his, but it could cause problems later.

A friend of mine had a issue with something like this. Her DH saved overtime money and used it to buy something expensive and not very useful. Something with ongoing costs. She really resented it, especially after they had children and she had to stick to a very strict budget. I'm not saying your DH would do this, but that money could be considered part of your household money, especially if you have high interest debt.

DH & I always each had our own small checking accounts for fun things that we didn't want in the household budget. When I stopped working to stay home with our son, my checking account went poof! And then his did too. Having children and having to watch our spending really helped us get over the need to have separate money.

Another thing to look into is coupon clipping. It's amazing how much money you can save! Some people even make money by selling their deals at yardsales. These people buy multiples of coupons or get them from dumpsters or other sources. Fatwallet.com has a forum that might help you out. Just stay away from the Hot deals section!

Best of luck!

 

[Ozymoe]

...and I have to say, if this is your MIL's dream...and she's never been...weeeeeeeelllll...you just might have to trade off a little money for magic that sometimes only comes once.

...man, this is a hard one to call!

 

[MK Familystone]

Hi!
Are you and your spouse in agreement with a CHANGE in life style?
If a couple on New Years Eve makes a resolution together to exercise at a health club and a few months later only one holds to the resolution their relationship will become stressful.
May I suggest that you set up a Dinner Date with your spouse at home on a Sat night asap.
If you have children send them to a relative or friends house OUT OF THE HOUSE. from 6pm til 11pm.
At 6pm lock the doors on the house , shut off all the electronics, ALL!!!! that means no bells , whistles, tv, radio, cell phones!
In MHO you are in hurricane disaster mode.
At 615pm the two of you work together preparing your dinner until serving time, right before serving time light two 12in white candles that you placed on the dinner table, next shut off all the lights, open the back window or slider and pop the cork off the champagne that was chilling in the frig, set the the meal on the table, be seated facing each other and toast to your NEW ADVENTURE your relationship.
WHY? WHY? WHY?
After the 5 hour Dinner Date, I will bet your relationship will be clearified, defined, and plans for objectives will be achieved.
Money is not everthing, A couple's relationship with each other is more valuable that any money.
This works in becoming debt free, I suggest that every month on that calander day of the first dinner repeat the same setting and every month from there on.

"THE MAGIC HAPPPENS!!!

 

[jgates]

I apologize as you have I believe responded to some of these, but I was typing in another window trying to grab my thoughts....

1. Your 401K should be the LAST thing that you decrease or stop doing, especially if you are younger. Why? Rules of compounding. You would not BELIEVE the difference in how much less you will have at retirement if you cut your contributions when you are young. Realistically you should be maxing your contributions at the youngest ages. Here is one website: http://www.asec.org/ American Savings Education Council. Or go to our Calculator page, http://www.jacksoncountybank.com/calculat.htm and click on 'Retirement Planner'. It can be a big shock as to just how much more you will get from that additional contribution. Now that my lecture is done, please note, I have not followed my own advice in the past!

2. Cell Phone - Yes - contact the company. USCellular will let you normally switch contracts after you have been on the plan at least 6 months. Maybe your company will do the same. If you have a huge plan with tons of talk time, maybe you could drop your landline (if it doesn't affect the DSL)

3. Our local cable company offers cable and interest as both separate and packaged services. Make sure you are not taking HBO, Showtime, etc - the pricey extras.

4. I believe you mentioned something about paying extra on the car. I would suggest maybe paying the standard payment and taking the extra you are paying and stashing it off to the side for a downpayment for the next vehicle (for the beater truck).

5. When it is time for the next vehicle - don't buy new. Your money takes a dump as soon as you drive off the lot.

6. Check your holiday budget. Are you buying for everyone in the family? Trade names at Xmas & eliminate birthdays for all but kids, or just the closest relatives.

7. Insurance evaluation is a great place to look. Yes on the older vehicle have liability only - depending on where you live add what we call in Wisconsin, Deer Bird & Glass (can't think of the technical name). But basically if a rock hits your window you are covered, even though you don't have full coverage. If you hit the deer you are covered - if you swerve to miss the deer and dump it in the ditch you aren't.

8. Is your child nickel and diming you to death? I look back at when DS was little and every Saturday he got a new Hot Wheels car from the dime store. OK - only $1 but you get the picture - $52 a year and he could have sure lived with less of those things.

9. School supply clearances are going on now - try to pick up that stuff for next year. They always need pencils & notebooks.

10. Do you subscribe to any magazines - don't renew. Buy books? Go to the library.

11. I always disagree on the tax refund item. I claim single zero for both DH & myself. Yes, we get a big tax refund, but in the past it has purchased furniture, vacations, tuition etc. Things that would have never been had if I had that little bit more in my check - it would have just disappeared.

12. Ever thought of waitressing? Sounds silly but if you are good and can get in at a good restaurant, you can make $$$. Don't necessarily save that like DH is doing - tuck it aside until you can take a big chunk out of one of those bills.

 

[robsmom]

There have been some great suggestions on this thread. MK Familysone asked "are you serious"? I think this was the best question at all. There will always be reasons why you can't change your habits, MIL really wants to go on vacation, we need 4 cars, have to have the internet so can't look at cable, DH is entitled to his own savings, etc. etc.

the nickel and dime stuff is great if you really just need to find a little bit of cash flow, but you may need more than that. You have taken home equity out, used your DH's savings and tapped into 4 loans for the 401K. You say that you are not going to lose your house and I don't want to scare you, but eventually you could. The savings rates changes and income tax change are good ideas, but all they do is change you cash flow, they are not making any real change to your financial situtation except making your future situation worse. You may have to accept that you need real changes.

My guess is that your monthly income is greater than you routine monthly stuff (mortgage, phone, utilities, food etc.) but your total annual income is less than you spend in a year because of the unexpected and one time stuff like holidays, gifts, home improvements, vacations, car repairs etc. So my my sugggestion is to calculate your net worth at June 30, 2004 and your net worth at June 30, 2003. Did your total go up or down and by how much, this will tell you the extent of your problem. If your net worth went up substantially in the year but you have no cash, then this is just a cash flow issue and/or you are "over saving". Changing small things may help. If you find, however, that you have lowered your net worth for the year or not substantially increased it, you may have to accept that you are living above your means and major changes are in order. Good Luck.

 

[tink2dw]

What I want to know is; if you have pared down, to only paying
1. Mortgage
2. Natural Gas-heat
3. Electricity
4. Water
5. Trash
6. Insurance
7. Telephone with dsl/$3.00 more than dail-up/no long distance

Plus
Basic Direct TV $39./ instead of movie rentals and movie nights

Shop at Grocery Outlet and Winco[2 cheapest food stores]

Don't have any Credit Cards. Not even one for emergencies.

Have 1 beater car that was $600. paid with a tax refund 4 years ago, runs and runs, just a couple of quirks.

Have NO savings[whats that?] and whats a retirement?

Husbands working 40 hrs and job doesn't allow Any overtime.

And I'm still shuffling bills to see who gets paid this month or next.

Then what should you do?

 

[Lisa loves Pooh]

Originally posted by tink2dw
What I want to know is; if you are down to paying
1. Mortgage
2. Natural Gas-heat
3. Electricity
4. Water
5. Trash
6. Telephone with dsl/$3.00 more than dail-up/no long distance

Plus
Basic Direct TV $39./ instead of movie rentals and movie nights

Shop at Grocery Outlet and Winco[2 cheapest food stores]

Have 1 beater car that was $600. paid with a tax refund 4 years ago, runs and runs, just a couple of quirks.

Husbands working 40 hrs and job doesn't allow Any overtime.

Then what do you do?

We started raising our thermostat on our AC by a degree--it is a programmable thermastat--so all temp changes, i.e. 78 at 10am, 79 at 5pm, etc--we raised by one degree. In theory, the same idea can work in reverse in the winter--by lowering a degree. You will utilize less energy--and lower your energy costs. Basically you can do this every week or so until you get to your minimum comfort level where another adjustment would be too hot or too cold.

Our cable bil is $13--we just have channels 2 through 20. I couldn't see spending the extra just to have a zillion channels with only 2 channels I watch regularly.

We have cable internet--I do not recall the cost.

Trash--is it feasible for you to haul your own trash? Also, can you recycle and haul that in and exchange it for cash?

Water--shut the shower off when you are washing, turn it back on to rinse (I do this sometimes, otherwise I just take a quick shower). We used to let the girls take their bath with the water running and drain open. We put a stop to that, they bathe/play in only 1-2 inches of water--I think it lowered our water bill by at least $5-$10 (not sure if it had cycled the whole month or not).

2nd job--it is difficult for me to get one as the yield is so little for me to result in a significant budget dent. But--perhaps either you getting a job if you do not have one or either one or both of you getting a 2nd job (depending on your kid situation). Since your situation sounds kind of permanent (regular expenses, versus no listed debt expenses)--It might be important in looking at career options for yourself or career changes for your husband if that is feasible.

Also--I am not sure if you would classify your income as getting by or just that you are in a high cost of living area--but another extreme could be selling your house--only if without compromising quality and safety that you could move into a less expensive home. I.e. in our area--the beachside community where I live exploded in terms of land value--so my home that we bought for less than 6 figures is now 2-3 times in marketable value since we bought it. If we had to we could move to another nice area in town, get a house that is just as good if not better for a lot less than what we could sell our current home for. If you have that type of opportunity--then that could be your best bet. Sometimes it is hard to let go and do that, but for some people it can be the best decision ever made. Results in a lower mortgage, and possibly even the development of a savings account if the net reduction in housing price is large enough.

Good luck!