HELP!I'm pouring my heart out here, need advice!*Updated 6/12/07*

[MAGICX2]

We were pre-approved for the loan up to 59K for the land. That is where it was coming from. The problem that I had was where were we going to get the money for the payment each month. I am realistic about getting out of debt and I am committed. I wasn't using the cc's on a daily basis. Four of the six cards have not been used in the last 4 months. I was only using one card and it was typically for purchases exceeding $200. We always seem to make ends meet, but just barely. I get to the point every month where it looks like we are doing really well and then the next week we have $.02 in the bank. I have tried to do the budgets in the TMM workbook but they are a little confusing for me. On paper our budget looks outrageous, but why does it not always feel that tight?!
As far as the trips, the best friends one is the one that is paid for with the exception of souvies which, yes, I can restrict my self to a certain budget. I plan to take no cc's with me. The trip in May is a large family trip and we are renting points for a DVC stay with others in our family. They are aware of our situation and are helping with our part of the rental. I have an AP, so we just need tickets for DH in May and food/souvies. I will be getting my annual bonus in April which will cover this. (i know i should use it towrds cc's, but I am obligated with my family) We have no other trips scheduled and will net schedule any until the debt is GONE!
Please don't get discouraged with me. I am trying really hard to implement what I can. Our goal is to have cc #1,2, and 3 gone by Christmas. I really am comitted to this. I really want this for DH and me but mostly for my kids. Please do not think that I am all talk and no show. If I wasn't serious about this I would never have opened up so much personal info to get help. Please don't fail me now!

 

[jeancbpugh]

And I personally would get rid of cable, internet, and landline phone.

For those of you who get rid of their landline phones, what do you have at home for emergencies? How about if you have a babysitter?

 

[VSL]

As far as the trips, the best friends one is the one that is paid for with the exception of souvies which, yes, I can restrict my self to a certain budget. I plan to take no cc's with me. The trip in May is a large family trip and we are renting points for a DVC stay with others in our family. They are aware of our situation and are helping with our part of the rental. I have an AP, so we just need tickets for DH in May and food/souvies. I will be getting my annual bonus in April which will cover this. (i know i should use it towrds cc's, but I am obligated with my family)

That's the thing. There shouldn't even be a budget for any souveniours or tickets or extra expenses (which is clearly what ANY vacation amounts to), given the situation that you have gotten yourself into.

People really are dishing out some great advice here, but it really seems like you're only taking in what suits you.
I'm sending pixie dust, but YOU have to do this. Doesn't matter how much advice you read, it's only worth something when it's implemented.

 

[CarolA]

We were pre-approved for the loan up to 59K for the land. That is where it was coming from. The problem that I had was where were we going to get the money for the payment each month.

OK. you need to go back and read this statement again and again. Becuase that's the problem. You were preapproved, but the truth is you had no idea where the money was coming from. The bank was not GIVING it to you.

I am honestly concerned that since you were "pre-approved" it seems to have been OK to bid even though you had NO idea how you were going to make any payments...

I hope you can do this, but have you considered professional help. In reading your posts there is a disconnect here. You have credit avaialble so you spend... I am not sure that just wanting to will be enough. I think you can do it, but it might help to have someone to be accountable to besides DH. The whole buying the land, continuing to go on vacation etc. bother me. If I were you I would at least cancel the "best friends" trip ESPECIALLY if you have NOT told them the truth about your spending. I have never seen a Disney vacation where EVERYTHING (food) etc was paid for in advance. If someone is giving it to you, then you need to be really sure you understand EVERYTHING. ...

 

[crisi]

There is a rule for accountants, when in doubt, understate your assets and overstate your liabilities. In household finance terms this means "you make less than you make, you spend more than you spend." You've been doing the opposite - believing you have 10% more income than you have, while understating (probably) the expenses.

If you can't be honest with yourself, lie to yourself the other way. The biggest kick in the pants I got was when my husband was almost laid off from his six figure a year job. I make darn good money, but there was no way we were going to live off my income. It was the wakeup call I needed. We can now live off either one of our incomes. We don't, but if either one of us is unemployed, we cut back on the discretionary stuff - the dining out, the vacations, the hobbies, and we can still pay every single bill, put gas in the car, buy groceries. After that I spent years telling myself we only had my income. Its been amazingly freeing for both of us as well - imagine walking into work every day knowing you can just quit. (I'd never do that without talking to my husband, but its nice to know only one of us has to "put up" with the job.)

Instead of saying "w000t! We make (almost) six figures a year!" start telling yourself you make $80,000 - and half of that goes to taxes, and with the $40,000 that's left you don't know where college is coming from for the kids. Every time you spend money - EVERY TIME YOU SPEND MONEY - if its spending money at the salon to color your hair (a complete luxury I indulge in again after box coloring it for cheap for years) or buying name brand pasta at the grocery store (I buy the cheapest, unless I'm buying whole wheat noodles - more expensive, but healthier) think about what you could do with that money to secure your family's future. It may be six cents worth of noodles, but at the end of the year all those six cents make a difference.

 

[jeancbpugh]

We were pre-approved for the loan up to 59K for the land. That is where it was coming from. The problem that I had was where were we going to get the money for the payment each month.

Ouch.

 

[disneysteve]

We were pre-approved for the loan up to 59K for the land. That is where it was coming from. The problem that I had was where were we going to get the money for the payment each month. I am realistic about getting out of debt and I am committed.

What the heck were you thinking???

You say you are realistic about getting out of debt but you were one bid away from taking on an additional debt of $42,000! How realistic is that? From everything you've shared, you couldn't possibly have made those payments.

Just because credit is available to you, doesn't mean you can afford to take it. Look at all the college kids who sign up for credit cards and proceed to max out their credit lines even though they have zero income. I've got a combined credit line on my credit cards of close to $100,000. I could go on one heck of a spending spree but what would I do when the bills started arriving?

You need professional help to see past your denial of your situation and get on a truly realistic plan to control your spending and start building a foundation for the future. Good luck. Old habits are hard to break but you've got to break them if you want to stay out of bankruptcy.

 

[jeancbpugh]

Just because credit is available to you, doesn't mean you can afford to take it.

True. My first grader gets frequent preapproved credit card applications in the mail. His allowance is $2/week.

 

[tlbwriter]

True. My first grader gets frequent preapproved credit card applications in the mail. His allowance is $2/week.

LOL! My first grader recently got her first one. I should have kept it for her baby book.

 

[tinaluis]

I get to the point every month where it looks like we are doing really well and then the next week we have $.02 in the bank. I have tried to do the budgets in the TMM workbook but they are a little confusing for me. On paper our budget looks outrageous, but why does it not always feel that tight?!

Your budget doesn't "feel" that tight because you're putting the excess/overage on a credit card and don't "feel" it until you get your statement and can't pay it in full. You need to stop using ALL of your credit cards -- not just 4 of them. Believe me, I know how hard it is to do that, but it must be done. DH and I got into the credit card mess before we were married but, thankfully, were able to pay down our balances, stop using the cards and get our first apartment. Back then, I had to walk to work (no money for public transportation) and we had exactly $24.00 a month left over for "entertainment" after rent, utilities, student loans, and car payments were made. We had a little $$ in savings but never touched it. We lived on $24 a month for a little over a year and then DH graduated and got a job. You know what, we continued to live on $24 a month until we'd accumulated enough $$ for a down payment on our first place, a loft/condo. To this day, we live very frugally and manage to raise a family of 5 on just over $40K. Our mortgage is $1447 a month (including $100 extra a month toward principal) and our utilities average out to $265 a month. Our "luxuries" are a basic DISH network package, a cellular phone, a $10.95/month package at Hollywood Video that lets us rent unlimited MVP movies and yearly visits to WDW that are fully paid for before we go. It can be done -- you just have to be honest with yourself about where your money is going. Good luck.

 

[tlbwriter]

I get to the point every month where it looks like we are doing really well and then the next week we have $.02 in the bank. I have tried to do the budgets in the TMM workbook but they are a little confusing for me. On paper our budget looks outrageous, but why does it not always feel that tight?!

I apologize if this is too basic - please don't be insulted - but are you accounting for all of your expenses at the beginning of the month? Or are you spending everything in your account, thinking you have plenty of money, and then all of a sudden you realize there's a big bill due on the 21st and you didn't set aside money to pay for it? We have all of our fixed payments automatically deducted from our Quicken balance at the beginning of each month, even if the bill isn't paid until weeks later, because I want all of the money I can't spend to be invisible!

 

[MAGICX2]

That's the thing. There shouldn't even be a budget for any souveniours or tickets or extra expenses (which is clearly what ANY vacation amounts to), given the situation that you have gotten yourself into.

People really are dishing out some great advice here, but it really seems like you're only taking in what suits you.
I'm sending pixie dust, but YOU have to do this. Doesn't matter how much advice you read, it's only worth something when it's implemented.

I am not and will not defend my vacation expenditures. However, are you suggesting that I not have ANYTHING outside of the necesseties to live? And I am not saying that a trip to Disney is a necesseity to live. I have been given the entire amount of my trip by my mother because she knows just how very little I get to do for myself. The only thing I will be responsible for is souvies, which I don't ever buy a lot of any way. BUT, if anyone, not just me, were to be told to put every last living cent they have available (which I am just about doing now that I have started this) into paying off their debt, without any type of leeway(not just a Disney trip), I can almost garauntee that they will fail big time. I will tell you right now that one of the major things that has gotten me so head strong about this is that I have two upcoming trips that I know I have paid for without using cc's. I know that money could be used to pay some of this debt, but I am putting everything I have into this now. The other major factor is my and my children's future and what I am doing right now will determine that future. I have up until this point taken everyone's comments in stride. I know that with the situation I am in I should not be taking these trips. It is my concious decision to go ahead with it anyway. It does not mean that I am not serious about getting debt free, it does not mean that I am picking and choosing what advice to follow, it simply means I have made a decision and I have to live with it. If it means it will take 6 months longer than it would have to pay off the debt then so be it. I do not think that these trips are detremental to my getting debt free. Could the money be used else where, definitely. Will the money spent keep me from getting debt free, no way. It may slow it down for a month or two but it will not stop me.
My best friend is aware of the situation and when we were going to cancel that is when my mom stepped in. My mom never does things like this, but she also knows how much of my life I give up so that my DH can pursue his career. I do not hold this against DH, but my mother also thinks I deserve a break.
For all of you whom have suggested we seek "professional help", just exactly what type of help do you recommend? I have looked into debt consolidation services such as InCharge Debt Solutions, but it seemed I was only going to be paying about $50 less a month than I am already and I have heard this type of service hurts your credit. So, what type of "help" should we get. Does anyone know what "debt negotiation" is?

 

[solgent]

The trip in May is a large family trip and we are renting points for a DVC stay with others in our family. They are aware of our situation and are helping with our part of the rental. I have an AP, so we just need tickets for DH in May and food/souvies. I will be getting my annual bonus in April which will cover this. (i know i should use it towrds cc's, but I am obligated with my family)

People have said what had to be said about the bid on the land.

What about this statement, though? If your family were fully aware of your situation, would they really want you to make the trip? You're obligated to spend money on something that you can't afford when you have pressing debts?

Just like it's important to be able to say NO to yourself when you want something that doesn't fit the budget, it is important to be able to say NO to other people who might want or expect you to spend.

Try saying "I'm sorry, we'd really like to, but we just can't." People miss out on things all the time, sometimes for medical reasons, sometimes because of work obligations, sometimes because of a prior engagement, sometimes because of budget constraints. All of you will live through your not going.

 

[ElizaB39]

That's the thing. There shouldn't even be a budget for any souveniours or tickets or extra expenses (which is clearly what ANY vacation amounts to), given the situation that you have gotten yourself into.

People really are dishing out some great advice here, but it really seems like you're only taking in what suits you.
I'm sending pixie dust, but YOU have to do this. Doesn't matter how much advice you read, it's only worth something when it's implemented.

This extra expenses would be her blow money for the month, no? Even DR says to have some, no?

 

[d-man's mom]

On paper our budget looks outrageous, but why does it not always feel that tight?!

This is probably because of when the money flows in & out of your checking account each month. It doesn't "feel" tight because at the time that you are spending the money, there's money in the account and whatever bill came in is paid.

But what would happen if your paycheck direct deposit came in three or four days late because of a computer glitch? I bet you would probably notice just how tight things are- there's no wiggle room then and you'd be pulling out those cc's.

Even if you clear up these CC's you still need to take a hard look at WHY you are spending and what you are spending money on. Carry an index card around with you and write down everything you spent for the day- you'll be surprised after a month just where all of the money is going.

I used to be a spender- then I became a single mom. Years ago, I had create my budget to submit for child support purposes and used my "everday single mom" budget (as opposed to my "dream" budget).

Know what I put in the column for vacations?? Zero. There were a few other columns that were zero also. Back then I didn't take vacations- with what money? There was NOTHING extra.

My attorney (who is a very smart man) told me that I had better find a way to put vacations in my budget or that I'd eventually lose my mind! Needless to say, we changed my amount from zero for that column. As I became better with my finances, ds and I were able to take some long weekend trips. Disney is our first BIG vacation- and it's still not a whole week long because I can't afford any more than 3 days in the park.

When you get used to living with nothing extra, it really changes your thoughts on spending. I still plan ahead- I've bought Christmas gifts in August knowing that I wouldn't have as much extra money each month in the fall. And I haven't had cable in 10 years- I can't justify the expense.

You, as much as you have a lot of "stuff", have no money. Stuff is nothing. Having money in the bank is security and financial stability for your family- a new car, toys for the kids, or a dinner out, can't give you that.

Figure out exactly what "living within your means" for you and your family. It's ok to tell people you can't go to ________ because you are trying to become debt free.

My personal $.02- don't spend your bonus on Disney. Even if it means telling your family NO- they will get over it- you aren't obligated to them to go on this trip- you are obligated to the financial stability of your immediate family.

You have no idea now what expenses may come up next year. Take part of the bonus, put it in savings, put part towards the cc's, and put part of it towards doing something to improve the value of your home. As of now it sounds like you will be losing value if you were to sell anytime soon- putting in some upgrades might be a wise investment in the long run. This is exactly what I'm doing this winter with my bonus- part to savings, part to cc's, and part to have the hardwood in my home repaired/refinished. In the long run this is the smartest way for me to budget my bonus.

 

[dvcgirl]

We were pre-approved for the loan up to 59K for the land. That is where it was coming from. The problem that I had was where were we going to get the money for the payment each month. I am realistic about getting out of debt and I am committed. I wasn't using the cc's on a daily basis. Four of the six cards have not been used in the last 4 months. I was only using one card and it was typically for purchases exceeding $200. We always seem to make ends meet, but just barely. I get to the point every month where it looks like we are doing really well and then the next week we have $.02 in the bank. I have tried to do the budgets in the TMM workbook but they are a little confusing for me. On paper our budget looks outrageous, but why does it not always feel that tight?!
As far as the trips, the best friends one is the one that is paid for with the exception of souvies which, yes, I can restrict my self to a certain budget. I plan to take no cc's with me. The trip in May is a large family trip and we are renting points for a DVC stay with others in our family. They are aware of our situation and are helping with our part of the rental. I have an AP, so we just need tickets for DH in May and food/souvies. I will be getting my annual bonus in April which will cover this. (i know i should use it towrds cc's, but I am obligated with my family) We have no other trips scheduled and will net schedule any until the debt is GONE!
Please don't get discouraged with me. I am trying really hard to implement what I can. Our goal is to have cc #1,2, and 3 gone by Christmas. I really am comitted to this. I really want this for DH and me but mostly for my kids. Please do not think that I am all talk and no show. If I wasn't serious about this I would never have opened up so much personal info to get help. Please don't fail me now!

Magic....

Banks are in the business of loaning people money. They'll loan nearly *anyone* money these days. Just because you were pre-approved for a loan for 59K doesn't mean you should listen to them. Seriously, how on earth would you have made that payment if you won the bid? You simply don't have the money.

Your budget on paper looks awful, because there's no room for error. And again, there's $100 left at the end of the month, with nothing budgeted for car repairs/maintenance, clothing for you and and your family, and about nine million other "little things" that can (and do) come up. Why doesn't it feel so tight all of the time? Well, look to your credit card statments and I'm sure they will tell the tale.

At this point you should be paying cash for *everything*. No exceptions to that rule. Not for Christmas, for Disney...for anything. Paying "Cash" for a Disney trip because you have sent some DVC member a check to rent their points doesn't mean that you actually paid cash. You don't have any cash, and so that's impossible (based on your numbers). You just put some other essentials on a CC that month (or months) so that you could send them a check. And the same thing will hold true when you spend any additional money at Disney.

Unless there is a huge jump in your income level, I don't see how it's possible for you to pull out of this hole and take vacations. Your budget showed that you had an extra $100 or so left after paying all of your bills each month. That's it...$100. I think that number went up ever so slightly if you were able to pull your one child out of daycare. So, let's say $300 left after everything is paid. You said that only a couple of your CC minimums have gone up, and so that may eat into that $300. You said that you feed your family on $300 a month. Does that include toiletries and all of that good stuff as well? And that would mean that you're cooking every meal, never eating out...not once....every single day of the month. Anything you buy other than food and gas for your car comes out of what is left of that $300. Clothing, co-pays for meds and physician visits, haircuts, oil changes, maintenance issues with the house, birthday parties, birthday gifts, christmas gifts....on and on.

And out of what is left of that $300 (which is probably nothing...because you've been averaging an additional $1,200 in monthly spending on top of that for over four years) you are able to eek out enough to go to Walt Disney World? I'm sorry, but I don't think that you understand the seriousness of your own situation. Your home is leveraged to the hilt, you are 30K in debt above that, and your monthly budget leaves you no room to breathe, let alone spend.

I'm just telling you the facts, based on the numbers you've presented. You are a sinking ship right now. You need to absolutely stop spending, and like yesterday. You need to cut back anything and everything you can around the house. And you need to sell all non-essentials. And you need to apply all of that extra money toward paying down your CC debt, not taking vacations.

If you were in my family, I'd want to perform some sort of a financial intervention on you. You guys need serious help. If you don't seek this very soon, you are positively headed for bankruptcy. Based on your numbers, you are $100-$300 a month away from having to make a decision of who gets paid this month. Stop now, reverse in your tracks and get help...before it's too late.

 

[Lyn5]

I am not and will not defend my vacation expenditures. However, are you suggesting that I not have ANYTHING outside of the necesseties to live? And I am not saying that a trip to Disney is a necesseity to live. I have been given the entire amount of my trip by my mother because she knows just how very little I get to do for myself. The only thing I will be responsible for is souvies, which I don't ever buy a lot of any way. BUT, if anyone, not just me, were to be told to put every last living cent they have available (which I am just about doing now that I have started this) into paying off their debt, without any type of leeway(not just a Disney trip), I can almost garauntee that they will fail big time. I will tell you right now that one of the major things that has gotten me so head strong about this is that I have two upcoming trips that I know I have paid for without using cc's. I know that money could be used to pay some of this debt, but I am putting everything I have into this now. The other major factor is my and my children's future and what I am doing right now will determine that future. I have up until this point taken everyone's comments in stride. I know that with the situation I am in I should not be taking these trips. It is my concious decision to go ahead with it anyway. It does not mean that I am not serious about getting debt free, it does not mean that I am picking and choosing what advice to follow, it simply means I have made a decision and I have to live with it. If it means it will take 6 months longer than it would have to pay off the debt then so be it. I do not think that these trips are detremental to my getting debt free. Could the money be used else where, definitely. Will the money spent keep me from getting debt free, no way. It may slow it down for a month or two but it will not stop me.
My best friend is aware of the situation and when we were going to cancel that is when my mom stepped in. My mom never does things like this, but she also knows how much of my life I give up so that my DH can pursue his career. I do not hold this against DH, but my mother also thinks I deserve a break.
For all of you whom have suggested we seek "professional help", just exactly what type of help do you recommend? I have looked into debt consolidation services such as InCharge Debt Solutions, but it seemed I was only going to be paying about $50 less a month than I am already and I have heard this type of service hurts your credit. So, what type of "help" should we get. Does anyone know what "debt negotiation" is?

I started cheering you on because I thought you had a revelation at the auction...but now I don't think you really have come to terms with the magnitude of the situation. DH and I are in way better financial shape now, but it wasn't always like this. I had a new mortage, a new baby, van payment and pregnant. So, for my entire pregnancy and two months after I sacrificed so much, so that I could pay off my van before I went back to work and had to pay a sitter. We sold stuff, didn't eat out and didn't spend much, if anything on ourselves....no vacations (but to be honest, that would have been hard anyway with a baby and pregnant) but we cut back all we could and sold some stuff. And I missed my goal by one month, but I did it! Its not a matter of what you deserve or sacrifice, at this point it is a matter of survival. I am still cheering you on, I think you have begun the realization, you just haven't hit bottom yet.

 

[MAGICX2]

Magic....
If you were in my family, I'd want to perform some sort of a financial intervention on you. You guys need serious help. If you don't seek this very soon, you are positively headed for bankruptcy. Based on your numbers, you are $100-$300 a month away from having to make a decision of who gets paid this month. Stop now, reverse in your tracks and get help...before it's too late.

Where do I get this "help"? What is this magical help line that will get me all cleared up? Everyone says "get help!" Where, who, and how?

 

[elan]

I agree with others, eating out several times a day, theme park tickets and souvies are not even close to a "little" something just for me because I work hard and I deserve it. It's hard to believe that your family could know about your financial situation and still think you should accompany them. Why would they want to put you further into financial insecurity?


What was bought with the 40,000? clothes, furniture, toys... I know ebay was mentioned but I'd start selling, selling, selling. Sell as much as you can.

I wish you luck.

 

[DisFlan]

Magicx2 - about help...call your bank or credit card company and get the name of a reputable, non-profit credit counselling service. Or go to www.nfcc.org for names and good info. The good ones are FREE, and your creditors would MUCH rather have you counselled than see you further eroding your credit standing. They will work WITH you to help set up a budget and get your debt down to a managable level.

The fact that you can't say No to things like trips and tickets for trips and other things (like using your bonus for a trip rather than paying down debt) says that you DO need help. Please get it. It won't be easy or quick, and you'll have to give up a good number of things for a while. To be honest, yes, it WILL hurt - but it's something you HAVE to get done. Sooner rather than later.

Another point - is your husband fully aware of how tenuous your financial situation is? He needs to be a full partner in curing the problem as well.

As for dumping out of your trips - your family and friends will still be there when you're out of debt. Then you can really enjoy a trip with them. If they care about you (and I'm sure they do), they'll help, not hinder, you in getting out of debt. Good luck!

DisFlan