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

We are in a similar situation- I know I'll get flamed too_ :firefight My husband is a new doctor making @ 100K however we pay 3000 :earseek: a month between our school loans ($1700 a month for 4 years of med school from a state school!!) and house. We don't have expensive cars but we do make payments and we have @ 7000 in CC debt that we are paying off. Once we factor in preschool for our 4 yr old, and other payments (insc, utilities) we also have a hard time having anything left over. I used to teach at a catholic school in town but my salary would have been less than paying for daycare for 2 kids so now I stay home! :goodvibes But we are trying we do not have any new CC (debt is from college and med school) and we have opened a savings acc that I do not have access to because I probably would spend it too! We don't go out to eat unless we have a gift card or something or unless kids eat free(O'Charleys) and I go to Walmart and Aldi instead of the more expensive stores or Mall. I wonder how in the world we will be able to save anything for college for our 2 girls and retirement(yeah right). I think we'll still be paying off our loans! :p One day at a time I guess! I know there are millions of people out there who make far less than we do and they make it and save I guess its all relative? IF DH was not an MD then no big loans to pay off, making less $,= same problems with smaller $ amounts. ?
FLAME ON :love2:
 
We were in a similar situation too. What we did:

1) Gave up cable, eating out except for special occasions, shopping, etc.
2) We listed every cent that went out the door so we could see where it was going. That way we knew where we were blowing money, and we could stop it. We also set a budget that guides us on our expenditures during the year.

Really I would kill to have a mortgage that low! If I were you I would not sell your house yet.
 
PlaneJoy1 said:
If you can't control the urge to use a credit card and go shopping, take it out of your purse, put it in a plastic bag with water, and put it in the freezer. When you have the urge to spend, you'll have to wait for it to unthaw.


I heard this before. Very cute.

But I always wondered how this would deter internet shoppers. DH and I shop a lot through the internet and have our numbers, expiration date and even the security code memorized! Freezing would do nothing! Lol!

That being said, we always pay off any interest bearing balances in full every month.
 
Well, the first step to recovery of any kind is admitting that you have a problem. What's your net take home pay? What kind of payments are you making on the CC and the personal loan....and what are the interest rates. Are you paying the minimum on that CC? If so, did you know that your minimum payment is about to double? So, in essence, the federal government is going to help you to pay down your debt a little more quickly.

If you do attempt to consolidate your loans, don't go the home equity route. You've admitted that you have a serious spending problem, and until you get that into check, lumping unsecured debt in with secured debt is a no no.

Skip the trips to Disney. You say that they're already paid for...in cash. But they are not. You paid for them in cash perhaps, but then other items on a credit card...it's six of a half dozen. Same thing. And, while the room, tickets and even flights may be purchased, there's lots more spending to be done once you get down here....and it will all be done with money that you can't afford to spend. Almost all of what you've laid out is refundable. Take that money and put it towards your highest interest loan.

If your house has been on the market for a year, with lots of lookers and no takers....you're overpriced. You're going to have to drop your price. And rural Ohio isn't exactly a hot market right now. But in all honesty, I would pull the house off the market for now until you get your financial house in order. Learn to live beneath your means for a few years and pay off the credit card debt and the loan. When you pay off the car....keep that car. Don't get a new one. Take the credit cards, put them in tupperware and fill that tuperware with water....and then put it in the freezer.
 

solgent said:
The phrase that struck me in your message is "We have outgrown our house." I would guess that you have not really outgrown your house. In 1950 the average new house was 963 square feet. People in New York City live in very small apartments. You can do it! Besides, a smaller dwelling is easier to clean, cheaper to heat.

I think you should not move or do anything else to increase your debt until you get your financial house in order.

I totally agree with this. Bigger house=Bigger bills. More decorating, more maintenance. And the OP is talking about buying the land and then building. And so there's the possibility of lots of upgrades......it can snowball out of control. I'm betting that the original house is just fine.....two very small children. I'd stay put and forget about the land.
 
Something else I thought about -- Sometimes spending can get to be a recreational outlet. Look for ways to get out of the house and have fun that doesn't cost you anything.

Trips to the library.
Go to the park.
Visit friends & family.
Go for nature walks.

Things like that might give you that "outing" feel without spending.

A low cost alternative to "treats" while out and about is McDonalds. Sliced apples (comes with carmel for dipping, but we haven't used that) for a buck. We tried their parfait today. It was pretty good. Yogurt layered with strawberries & blueberries and topped off with granola, for a buck!
 
crisi said:
I'd have to do a lot more analysis, but my gut is different.

Buy the land. You've had your eye on it for years. Don't build on it now, but it isn't likely to depreciate. You'll regret not buying it.
.
Even if she can hardly stay afloat now? How would yet another loan be a good thing? By her own admission, they just seem to make ends meet now.

mudnuri said:
Yes, your 100% right, because after all we certainly know what her cost of living is, and what her mortgage is, after all, we're the Dis board, the place where people come for advice, and we give them a "theres no excuse for you"...blah blah blah

That's the trouble with asking for opinions on a public board like this..you get them.

I personally think this is way beyond what anyone on this board could help with. If she hasn't already cancelled her two vacations (or at least the second one..even though she said she paid cash for them in her first post..you would think some of it would be refundable..but where else but a Disney vacation board could you get people to agree that even if you are in over your head, you should still go on vacation (unless the other person is actually paying for absolutely everything, and wouldn't just give you the money instead)..go ahead an flame me for that..I can take it!), and has this kind of debt but wants to buy property before selling her 3 year old house, because they have outgrown it, and which has been on the market for a year already..well, I just don't see where this board could be helpful. I think she recogonizes the problems, but wants help without anything changing. It just doesn't work that way. To get solvent again takes work and doing without..even something we have wanted for 5 years. I still think you should let your husband start doing the bills, and holding onto the money until you get this under control.
 
Originally Posted by imsayin
Sorry, with income like yours, their is no excuse for you to be in that much debt or to not be able to make ends meet! Make a budget & stick to it. Do not go to Disney twice a year until you can pay for it up front. Seriously, get a hold of your situation now - pay off your debt then start saving. Quit shopping!

Yes, your 100% right, because after all we certainly know what her cost of living is, and what her mortgage is, after all, we're the Dis board, the place where people come for advice, and we give them a "theres no excuse for you"...blah blah blah

Yes, sorry that sounded harsh. Money mismanagement is one of my pet peeves.

Can't afford to work, can't afford to quit either

You'd be surprised if you ran some calculations with your daycare expenses, taxes, etc. at what you are really taking home.
 
pooh4evr said:
We are in a similar situation- I know I'll get flamed

I don't think anyone is flaming. At least I don't mean too. However, when there are posts like this on the budget board and people ask what they should do (they post it here..and ask us to respond), and advice is given..many times, it seems that no matter what is suggested, the person can't make that work. So if you (not you per se) aren't willing to make some changes that may hurt..what's the point of asking? We all know on this board that there is no such thing as a "free" Disney trip. Oh the room and air and tix may get paid for..but there is a lot more to a cost of a trip that that. I read so many times on this board where someone is broke, but "don't pay attention to the trips on my sig..those were paid by a friend, a relative, our income tax". Well, it's hard not to look at those trips. Back when we were starting off and couldn't afford Disney, we stayed home and used the money elsewhere. And even if a relative or friend is offering to pay for a trip..perhaps it would be better to admit that there is a problem, and could the gift be used to help out with the mortgage instead. A friend or relative that would be willing to pay for Disney, would, I'm sure be willing to help out.
Just my opinion.
 
You say that shopping makes you "feel better". You're an emotional shopper, and that's a tough habit to break. Here's the thing: You know that you must cut out the unnecessary shopping -- otherwise you'll never get over this situation -- but if you do, you're left with a hole in your life. A bit shopping-shaped hole. You need to replace it with something, or you'll feel empty. So seek out a FREE activity that can fit into that hole.

I think you're also making excuses for yourself. Disney trips while you're in serious financial trouble?

I'd suggest that you get rid of the credit cards right away. What do you do in case of emergencies? Well, what did people do years ago? They made do. You can too! Right now the cards are too much of a temptation for you. I didn't have a credit card AT ALL until about five years ago, and I only use them now because I can get rewards at the end of the month. You CAN live without them.

I really understand your plight with the house! We were in the same boat a few years ago! We were in a 1300 square foot house, no garage, little storage, and two children. We had stuff in all the corners, and I blamed the problem on the small house. But when we got ready to sell the house, and I got serious about cleaning out bunches of stuff (baby clothes, going-to-use-this-someday gifts, craft items I bought and never used, etc.) suddenly the house wasn't so tiny any more! It wasn't the size of the house: it was the size of my clutter.

In our case, we still needed to sell the house, however, because it was way out in the country and we were spending too much time on the roads every day. For reasons that sound a great deal like yours, it took us over a year to sell the house. Why? A new housing development had sprung up nearby, and people could buy a NEW house for the same price only a few miles away. Honestly, given those circumstances, I wouldn't have bought ours either. Eventually, we had to decrease the price. To sell a house in a difficult market like this, it must be in TOP NOTCH condition, and that often takes cash up front. Still, since you're looking at a HUGE mortgage, you may need to bite the bulllet and do it.

As for the land . . . I don't see it happening. You can't manage what you have now -- how can you pay more? It might be exactly what you want, and it might be a great investment, but if you're barely scraping by now, HOW can you consider it?

Ideas:
Declutter and ebay your junk.
As you declutter your house, "shop" for Christmas presents -- make your goal to spend ZERO on the holidays. Kids as young as yours will be just as happy with inexpensive gifts, so use "found" things from the closets, etc.
Do not buy new adult clothes for the next year -- you can probably do this painlessly.
Buy only used children's clothing for the next year -- it's very simple.
Start writing down everything you buy; since you're an emotional shopper, write down when you buy, how you feel, etc. as well. Once you discover the patterns, find ways to stop them. As for myself, I have a rule: If I see an impluse buy item, I tell myself that I have to wait two weeks before I can buy it. Often I no longer want it. Or, if it's on sale, I buy it and tell myself that it cannot leave the bag for two weeks; if I don't really want it two weeks later, I can return it. I am very rarely disappointed by waiting; I often save money.
 
DMRick said:
Even if she can hardly stay afloat now? How would yet another loan be a good thing? By her own admission, they just seem to make ends meet now.



That's the trouble with asking for opinions on a public board like this..you get them.

I personally think this is way beyond what anyone on this board could help with. If she hasn't already cancelled her two vacations (or at least the second one..even though she said she paid cash for them in her first post..you would think some of it would be refundable..but where else but a Disney vacation board could you get people to agree that even if you are in over your head, you should still go on vacation (unless the other person is actually paying for absolutely everything, and wouldn't just give you the money instead)..go ahead an flame me for that..I can take it!), and has this kind of debt but wants to buy property before selling her 3 year old house, because they have outgrown it, and which has been on the market for a year already..well, I just don't see where this board could be helpful. I think she recogonizes the problems, but wants help without anything changing. It just doesn't work that way. To get solvent again takes work and doing without..even something we have wanted for 5 years. I still think you should let your husband start doing the bills, and holding onto the money until you get this under control.


LOL...ask and you shall receive. Well, it's always interesting to me when these posts come along, because 99% of the time there's one or two Disney trips in the works. And so I always have to question the poster's willingness to change. And I question it again here. And it will take some *big* changes here for them to get out of the debt that they're in. There would seem to be a good deal of spending going on. While they have some 30K silly debt, the student loan and mortgage amounts are relatively low by today's standards. I think the mentality here, and with other posters is "hey, I know we're sinking here....and right after this *last* Disney trip...well, that's when we'll really buckle down." And I'd be willing to be my bottom dollar that this rarely happens. I think some financial counseling is in order....
 
You say your house was built in 2002 but that you've outgrown it. In fact, since it's been on the market for a year, you must have "outgrown" the house in only 2 years! Wow! I'm guessing that you haven't truly outgrown the house so much as (1) filled up the house (with toys, furniture, clothes, and other "stuff") and/or (2) got a nasty case of the "I wannas", as in "I wanna bigger, fancier house".

I think you should start getting rid of your clutter in order to find the space you already have in your house. Check out http://www.flylady.com for some great advice about decluttering.

Sit down and make out a budget. Make it realistic, but leave some spending money available. Leave your credit cards at home. If you don't have the money, you don't buy it.

If the student loans are more than one loan, you may be able to consolidate all of the loans into one loan with a longer repayment term. You may pay a bit more over time, but near term you could ease your budget pains. My DH consolidated over $50k in student loans directly with the U.S. Department of Education and went to a 20 year repayment term -- his payments went from over $900 a month to around $300 a month. As we've had extra money, we've made extra payments towards this loan and will pay it off only 8 years after DH consolidated. http://www.dlservicer.ed.gov/

Once you've gotten your budget under control, then you should start using whatever extra money, even if it's only $50 a month, to make extra payments on your loans using the debt snowball method.

Good Luck!
 
Cindy B said:
$880 a month in daycare is actually cheap. Around here it would be almost $1000 per month for ONE CHILD! I know some places do discounts, but daycare cost more than my mortgage!

I'll consider myself really lucky! I pay $135 for FT daycare/wk, 1 child (2.5 yr old) and that includes diapers!

Back to the subject....my mom is an emotional shopper and the only thing that has helped her is I yanked all her credit cards. Her credit rating is bad, so it's not easy for her to get new cards anyway. I also took over her checkbook, so now she "answers" to me :rolleyes: . I think the realization that shopping is her "fix" when she's down has also helped. WalMart was her drug of choice, several times a week. She's down to about once a week, for groceries primarily.

They often say admitting your problem is the first step, and you've taken care of that. Keep reading the great advice you'll find here. Remember many of us at the Dis are behind you and are willing to cheer you on whenever you need a "fix". So, come to the boards instead of shopping! It's free and lots of fun! :cheer2:
 
dvcgirl said:
While they have some 30K silly debt, the student loan and mortgage amounts are relatively low by today's standards.....
I disagree -- I think this debt amount is staggering. I am almost 40, and my lifetime total debt (house + all the cars I've owned, but then I've always chosen to live well below my means) has has never equalled the original poster's mortgage.

dvcgirl said:
I think the mentality here, and with other posters is "hey, I know we're sinking here....and right after this *last* Disney trip...well, that's when we'll really buckle down." And I'd be willing to be my bottom dollar that this rarely happens. I think some financial counseling is in order....
You know, that IS the typical story!
 
MrsPete said:
I disagree -- I think this debt amount is staggering. I am almost 40, and my lifetime total debt (house + all the cars I've owned, but then I've always chosen to live well below my means) has has never equalled the original poster's mortgage.

You know, that IS the typical story!

I think that the CC debt is high, but not the mortgage. You are clearly someone who lives well beneath your means. The OP definitely does not. But as relatively new home owners, the OP and her family still have the means to get out of debt and handle that mortgage. Yes, they should probably look to drop the price, sell, and find something more reasonable....definitely not look to buy land, build a newer *bigger* house.

Are you saying that your life is the typical story? Or that the OP's life is the typical story? I think there are a whole lot of people out there like the OP....not nearly as many people like you and me who live beneath our means.

Oh well, I wish the OP well, but a serious wake-up call is in order...
 
dvcgirl said:
Are you saying that your life is the typical story? Or that the OP's life is the typical story?
Neither, I'm agreeing with the other poster who said that many people here post "I'm in XXX financial trouble, please tell me how to get it straightened out -- after I take this one last Disney trip, that is." Actions speak louder than words.
 
MrsPete said:
I disagree -- I think this debt amount is staggering. I am almost 40, and my lifetime total debt (house + all the cars I've owned, but then I've always chosen to live well below my means) has has never equalled the original poster's mortgage.

Actually, the OPs debt load isn't terribly staggering in and of it's own. DH and I have more debt on a similar income. (We live frugally and have no problems making payments, though.)

However, the fact that the OP and her DH have so much unsecured debt that was used to purchase depreciating assets is disconcerting. Also, when you combine the OPs debts with other expenses, it's obvious that some severe measures are needed to improve her financial situation.
 
MrsPete said:
Neither, I'm agreeing with the other poster who said that many people here post "I'm in XXX financial trouble, please tell me how to get it straightened out -- after this one last Disney trip." Actions speak louder than words.

Oh okay, I gotcha. And I agree with ya. And I think that this is probably the only board on the DIS where these types of posts are answered honestly.

We had the poster who came in recently who said that they made 52 K, which she thought was great money, and they were in debt with a trip to Disney planned (and again..."paid in full, so we have to go!"). Here we have 102K a year, in much, much deeper debt with two Disney trips planned (and paid in full so we have to go!".

Still though, I think that the OP can help to pull her family out of debt. For one, cancel those trips. Disney will still be there when you pull yourself out of the hole. I can't emphasize what a huge step that would be for you. You are an emotional shopper, and Disney is an emotional vacation destination. People get *hooked* on Disney...it's really something.
 
DMRick said:
Even if she can hardly stay afloat now? How would yet another loan be a good thing? By her own admission, they just seem to make ends meet now.

I think they should consider it.

They are in a low cost of living part of the country. They are young. The student loan debt isn't unusual at their age. The daycare expenses are temporary, in a year the oldest will be in kindergarten - diaper expenses will go shortly (hopefully) too....if they don't have more kids, the end is in sight. The consumer debt is troubling, but we've seen people with half the income and twice the debt. For a complusive spender, they aren't doing bad at all - my ex-sister in law dug my BIL $100,000+ in debt in about two years.

Land doesn't tend to depreciate. Every piece of land is unique. If they've been watching this piece for five years, that is a indication of their desire. If they drive past that piece of land for the next 30 years with someone else's house on it, they'll kick themselves. If they buy in and are in over their head, they sell it.

Now, it may not be possible. The land may auction for a lot more than they can afford (which honestly isn't much). They may be in a part of the country where selling that land is harder than I'd want it to be. And the land will take major sacrifices. But with their income, if they get realistic about their income (and its tempting to say "hey, we make six figures, we are rich, we can do whatever we want!") they may (as I said, I don't have enough information) be able to pull it off and not regret it for the next 30 years.

But, sacrifices need to be made. Disney trips need to be cancelled (on the plus side, her kids are too young to really notice the change in plans this far out). Credit cards need to be frozen, cut up, or at least gift wrapped in twelve layers of paper and some duct tape. Expenses need to be slashed. Cable tv traded for broadcast. Kids clothes e-bayed. Broadband severed. Food budgets watched. And like DVCgirl, I sometimes have my doubts that people are going to make the sacrifices.

I'm more worried about someone making $50k a year and is going another $600 in debt every month than this case. Make $100k a year in Ohio - there is plenty of room to cut. $50,000 on the East or West Coast, not much room to cut.
 
MagicX2 - call your bank and get the name of a good credit counselor. Tomorrow. Early. Accept the fact that you aren't handling money well - and get help. You DO need help.

Get rid of your CCs! Your kids won't starve. And you won't be charging anything.

Dump the trips. You don't need to explain anything to anyone. If you can't get a refund on the one you paid for, chalk it up to bad decision making.

Forget the land. You can't afford it.

Have a yard sale and sell your junk. LOTS of it. Be brutal. Start to love "Less is More". Use the money you make for cc payments.

Keep your house. You can't afford a new one.

What you make is immaterial if you're out-spending it. And you are. This is not a Good Thing for your family's future. Buck up and do what you know you need to do. It isn't an option, it's an imperative.

DisFlan
 





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