I need serious financial advice...

[EsmeraldaX]

I know, I know, everyone has money woes.

Mine are severe. And I'm not really coming here to whine. I'm coming here for advice. So I apologize in advance if this sounds whiny. I don't mean for it too.

I live paycheck to paycheck. Literally.

I make under $30K a year and honestly don't hold out much hope for making more than that in my life, aside from minor cost of living wage increases. I live in a cramped apartment with my boyfriend and our dog. They are the light of my life. He makes about the same amount as I do, although as I stated in another thread he is about to get about a 5K a year raise due to promotion. However, we always have and always will split the household bills 50/50. That will not change. Neither of us want that.

My half of the rent is about $400 a month. We have an awesome landlord and since we're the only family in the building who actually pays on time, he doesn't mind if we need to hold off payment until the next payday or something, which we often do.

I do not use credit cards anymore, however I have about $7500 worth of debt from a divorce a few years ago that I am still paying off. (My ex left me stuck with a $1400 a month rent on a lease where the landlord threatened legal action if I left. He was my only landlord reference so I struggled it out and stayed, although virtually my entire months salary went to the rent check).

No matter how hard I try, making payments of more than minimums etc. I can not get this debt wiped out. I have one card that usually has a $120 minimum payment every month (this is where the bulk of my cc debt is; I haven't used the card for purchases in over a year). I almost always pay $200 to $250 a month on it. I can't afford to pay more and still be able to eat.

Up until now, my boyfriends car was our mode of transportation. It was old, paid off and the insurance on it was $50 a month.

Well, the car died. So rather than buy a new clunker and hope it didn't die, I financed a car (2002 PT Cruiser) for about 12K. The monthly payment is $230. The insurance on this one is $100 a month I make the car payment, as it is technically MY car. He does drive it though, so he pays 1/2 the insurance each month.

It's been two months with the car and I am now realizing that it was a mistake. I don't know what to do. I got paid today, and after paying the rent, the car, the insurance and my credit card bills (there are two other small "store" credit cards with small balances I got to try and fix my credit), I am left with barely enough to buy food.

DBF does not mind paying for me to be able to get by for two weeks, but I don't feel right about leeching off someone else.

I got a very good deal on the car. The finance rate was like, 3% (actually I think it was even less...like 2.9%) because my father co-signed with me. My credit is listed as "fair" on most reports. The car has less than 11,000 miles on it and is fully covered for 8 years. The only car problem payments I need to worry about are oil changes and other routine care.

DBF thinks it would be stupid to get rid of the car. In order to get something as reliable, I'd have to spend nearly as much, and not be fully covered.

I think he's right, but I don't know how I can continue living like this. My parents have told me I'm more than welcome to come home and live with them (I'm 27 so that would be kind of akward), which would cut out my rent and have me living over an hour away from DBF and our dog. And I know if I brought up that idea DBF would be very sad.

He also really does not want to have to cancel our Dec. Disney trip. I don't really either, but I'm seriously considering that as well.

I really do not want to pay a debt consolidator , because although I have a lot of debt, it's not really spread out over multiple credit cards/loans etc. And paying someone else is just another bill I'll have to pay.

I guess it just hit me really hard this month how bad my financial situation really is. Everyone I know is buying houses, having kids, going on really expensive trips etc. (These are people who make as much as I do). I'm sad that there are pretty good chances I'll never own a home or be able to just up and go on a $3000 trip (My Dec. Disney trip, if we still go, will be about $600 each).

I am very happy with DBF and this is not some sort of subconcious attempt to get away from him. But I can't live my life as a leech. I don't want to move back in with my parents either. But it's also very hard to imagine a life with no fun.

So , after what is probably giving you all way TMI, does anyone have any advice? I'm at the end of my rope here.

Thank you for listening.

 

[DoeWDW]

Check in your phone book for Consumer Credit Counseling. They are a non-profit organization and they do not charge for their services. They can often negotiate with the credit card companies on your behalf and get partial forgiveness and a lower payment.

Other than that, I say keep the car - it was a good deal and you probably won't find anything as reliable for cheaper.

Hang in there!

 

[snoopy]

I'd pay off the credit card bills, particularly the store credit cards with notoriously high interest rates before going on vacation. I'd take that $600 and use it on paying off that debt first and foremost.

Then I'd think about finding a new job. If you don't want to depend on your boyfriend's income, then you'll need to make more than 30k a year to avoid living paycheck to paycheck. You mentioned in your other post that your job doesn't have any room for advancement, time to cut ties there. You mentioned you were college educated. At 27, now is the time to start over. You don't want to be 37 and realize that you are stuck in a dead end job, the older you are, the harder it is to make changes. I would not get rid of the car. You have a good interest rate, and you need reliable transportation. I doubt you'll find a car for less than $230 a month. That sounds very reasonable to me.

I know its easier said than done, but I think you are going to have to be willing to make some changes in your life in order to get ahead.

 

[Kimberle]

I don't think a debt consolidator is a good idea. It may help you in the short term, but not in the long term.

First, you need to take control of your finances and lifestyle. And yes, you will probably need to make some hard choices about giving up things you do not *need*.

In Excel, make a simple spreadsheet. At the top, put your income, then add lines for any necessary bills (inc. food, gas, etc) for each month. Make columns for one month at a time.

You can make several versions for different sanario's (moving back home, cheaper apt, etc.)

Don't forget to add in all your debt which must be paid off. Go out into the future as long as you need until your debt is paid off.

Then you'll need to make some hard decisions, move home, stay where you are, get a 2nd job, etc.

Good luck, and you can crawl out of this hole! It's going to take time. But *you* are the one who must run with the ball!!

Good luck!!!

PS: Go to the library and BORROW Susy Ormand's books and tapes. She is a wonderful financial advisor, especially for young adults in your situation.

 

[EsmeraldaX]

Thank you for responding.

I have not had any late payments on anything in over 3 years. So that helps a lot.

As for getting a new job, it's a tough trade off because I have great benefits here, and relative security that my job isn't going to get rid of me. I am college educated, but my degrees are in useless things (I wish I'd thought more when I was 19 ) that don't help without grad school/doctorate degrees. I've tried and the only places that will take me are places with the same pay/no benefits or lower pay.

I told DBF I wanted to cancel the trip and he said he'd pay for it. I told him that I honestly didn't think I could do that. (We work together and for obvious reasons decided to not discuss it any further until lunch).

I really agree, I think cancelling the trip is the best thing to do right now. Now i just have to convince him that I'm not trying to be a pain and not take his $ to go. He is way more laid back about money than me. This has gotten him into financial trouble before and I don't want to encourage it in him now.

 

[EsmeraldaX]

Originally posted by Kimberle
I don't think a debt consolidator is a good idea. It may help you in the short term, but not in the long term.

First, you need to take control of your finances and lifestyle. And yes, you will probably need to make some hard choices about giving up things you do not *need*.

In Excel, make a simple spreadsheet. At the top, put your income, then add lines for any necessary bills (inc. food, gas, etc) for each month. Make columns for one month at a time.

You can make several versions for different sanario's (moving back home, cheaper apt, etc.)

Don't forget to add in all your debt which must be paid off. Go out into the future as long as you need until your debt is paid off.

Then you'll need to make some hard decisions, move home, stay where you are, get a 2nd job, etc.

Good luck, and you can crawl out of this hole! It's going to take time. But *you* are the one who must run with the ball!!

Good luck!!!

PS: Go to the library and BORROW Susy Ormand's books and tapes. She is a wonderful financial advisor, especially for young adults in your situation.

Thank you, I will look into those books.

 

[C.Ann]

How about a consolidation loan to pay EVERYTHING - but only if you have the fortitude necessary to NOT run up new bills and each month you will pay MORE than the minimum payment?

Sometimes only making one monthly payment makes it easier.. But again - you MUST pay more than the monthly minimum AND not create new bills..

Just a thought - and the best of luck to you!

 

[sue1013]

You stated you make less than 30K and don't think you will ever make more in your life. Why?? You are only 27 if you are not satisfied financially you can make a change. Change careers, go back to school. Don't just concentrate on the short term. I know I would be depressed if I had thought at 27 that I would never advance in my career, make a better salary.

 

[crazyforgoofy]

Um, not my business .... but there's such a thing as being too independent. Paying half the bills is right but why isn't your bf paying half the auto expenses. He benefits from it too, right. Half the insurance doesn't seem like enough. Half the payment too would ease your burden a mite, wouldn't it.

Cut up the credit cards first. You won't be tempted to use what you don't have. Pay off the smaller debts first, then add that amount to the larger debt each month. You'll make it and then won't you be proud!?

You can do this!

 

[The Mystery Machine]

Your only solution is to begin the journey of finding another job. Your finances are reasonable debt imho, nothing outrageous. Since your BF uses the car and you guys share expenses 50/50 he should pay for "rent" for it. I think that is fair when you consider your arrangement. Perhaps you pay less rent to cover the cost of his car use. That way it is "fixed" and makes it simpler to budget.

As Suzy Orman says, you MUST increase your income and since you loathe your job/workplace changing that is the best route to go. Keep at it, all the time. In the meantime focus on paying off the credit & stores cards. Pay off the debt that has the higher rate first.

My sister took out a signature loans from her bank, applied them to her credit cards and paid off the the bank loans at a lower rate. It took her 5+ yrs but she is credit card free now.

Good Luck! It isn't easy but it is doable. Check out Clark Howard as well. He has terrific tips.

 

[EsmeraldaX]

Originally posted by crazyforgoofy
Um, not my business .... but there's such a thing as being too independent. Paying half the bills is right but why isn't your bf paying half the auto expenses. He benefits from it too, right. Half the insurance doesn't seem like enough. Half the payment too would ease your burden a mite, wouldn't it.

Cut up the credit cards first. You won't be tempted to use what you don't have. Pay off the smaller debts first, then add that amount to the larger debt each month. You'll make it and then won't you be proud!?

You can do this!

I have locked the cc's away in a safe (they are not being used at all, but are there in case , god forbid , there is an emergency and I need them).

One bit of happy news was that I wiped out two store credit cards and cancelled them earlier this year. As I stated before, I got some store cards to pay off right away to improve my credit and it did work. Although my credit score is only so-so now, it was terrible during the divorce.

The only problem I see with having him pay 1/2 the car payment is that we are keeping any large assets (cars, furniture etc.) seperate. I lost thousands of dollars worth of my belongings including my old car during the divorce, and I'm not comfortable sharing the financial costs of something like a car with anyone, not matter how much I love DBF, we are not legally bound to each other and never intend to be (a mutual choice that a lot of people think is sad but we are both happy with. :shrug, and if we were to split up in 10 years or so, having him pay 1/2 the car now means, when we split 1/2 the car would technically be his and I can not go through that kind of stress and pain again (as I did when my exH and I split).

Maybe I am too independent. I've been told that and I guess I don't disagree with it. Fixing it is not as easy it souns though .

 

[Tinkerbelle739]

Could you do what my sister just did?

She is also 27 and living on her own for the first time with a room mate. She has a car payment, insurance, and rent. She had 3 credit cards and 1 with a VERY high interest rate.

My parents paid off that one credit card and she now makes payments to them, no interest. She is still paying the same amount but she is actually paying the debt off. It is ok to ask for help.

Good Luck!

Wishing everyone a "magical" day!

 

[phorsenuf]

Up until now, my boyfriends car was our mode of transportation. It was old, paid off and the insurance on it was $50 a month. Well, the car died. So rather than buy a new clunker and hope it didn't die, I financed a car (2002 PT Cruiser) for about 12K. The monthly payment is $230. The insurance on this one is $100 a month I make the car payment, as it is technically MY car. He does drive it though, so he pays 1/2 the insurance each month.

If he drives the car too (at least half of the time) then he should be paying more than $50 a month in my opinion. If you hadn't bought the car, what would he be doing for transportation? That's another $280 a month out of your pocket! I think that needs to be reworked.
Don't worry about him having claim to the car if you should break up. If its only in your name he has no legal right to it whether he paid 1/2 or not.
Watch Jude Judy sometime and see what she has to say about those type of car situations! LOL
Seriously, he would have no claim to it!

Also, pay off the small store credit cards. That will help too.

The $7500 debt you are paying, is that a loan or is it on your credit card? How much a month do you pay on that or is that included in your credit card payment?

Depending on how that is set up, there may be some options there.

Also, what are your interest rates on your credit cards? It may be prudent to consolidate the $7500 debt and large credit card balance to a loan with a lower interest rate. That will help for now on a monthly level and you can always apply more to the priciple to pay it off quicker.

Personally, I would hold off on cancelling your Dec. trip. You have plenty of time to cancel at a later date if you need to. Anything can happen between now and then and you could actually use it as an incentive to get regrouped. You know, a little reward for a job well done in getting your finances together.

I know for me that if I have nothing to save for and plan for or look forward too, then I feel bummed (like you are) about not being able to afford anything, to go anywhere, to do anything. All that does is bring us further down and makes us care less of getting things in order because now we have the mentality of "oh well, I can't afford to go to Disney anyway, so what's the big deal if I spend this $20. on XXXXXX.
Everybody needs incentives...consider that yours!!!

 

[EsmeraldaX]

Originally posted by The Mystery Machine
Your only solution is to begin the journey of finding another job. Your finances are reasonable debt imho, nothing outrageous. Since your BF uses the car and you guys share expenses 50/50 he should pay for "rent" for it. I think that is fair when you consider your arrangement. Perhaps you pay less rent to cover the cost of his car use. That way it is "fixed" and makes it simpler to budget.

As Suzy Orman says, you MUST increase your income and since you loathe your job/workplace changing that is the best route to go. Keep at it, all the time. In the meantime focus on paying off the credit & stores cards. Pay off the debt that has the higher rate first.

My sister took out a signature loans from her bank, applied them to her credit cards and paid off the the bank loans at a lower rate. It took her 5+ yrs but she is credit card free now.

Good Luck! It isn't easy but it is doable. Check out Clark Howard as well. He has terrific tips.

Thank you, I will check those books as well (planning a trip to the library tomorrow).

 

[EsmeraldaX]

Originally posted by Tinkerbelle739
Could you do what my sister just did?

She is also 27 and living on her own for the first time with a room mate. She has a car payment, insurance, and rent. She had 3 credit cards and 1 with a VERY high interest rate.

My parents paid off that one credit card and she now makes payments to them, no interest. She is still paying the same amount but she is actually paying the debt off. It is ok to ask for help.

Good Luck!

Wishing everyone a "magical" day!

Thanks. I could but I'd prefer to leave this for a very, very last resort. As bad as things are now, having to admit to my parents how screwed up my life has become and dealing with their dissapointment and anger at me would be worse.

Your parents sound a lot more understanding than mine.

 

[EsmeraldaX]

Originally posted by phorsenuf
If he drives the car too (at least half of the time) then he should be paying more than $50 a month in my opinion. If you hadn't bought the car, what would he be doing for transportation? That's another $280 a month out of your pocket! I think that needs to be reworked.

Also, pay off the small store credit cards. That will help too.

The $7500 debt you are paying, is that a loan or is it on your credit card? How much a month do you pay on that or is that included in your credit card payment?

Depending on how that is set up, there may be some options there.

Also, what are your interest rates on your credit cards? It may be prudent to consolidate the $7500 debt and large credit card balance to a loan with a lower interest rate. That will help for now on a monthly level and you can always apply more to the priciple to pay it off quicker.

Personally, I would hold off on cancelling your Dec. trip. You have plenty of time to cancel at a later date if you need to. Anything can happen between now and then and you could actually use it as an incentive to get regrouped. You know, a little reward for a job well done in getting your finances together.

I know for me that if I have nothing to save for and plan for or look forward too, then I feel bummed (like you are) about not being able to afford anything, to go anywhere, to do anything. All that does is bring us further down and makes us care less of getting things in order because now we have the mentality of "oh well, I can't afford to go to Disney anyway, so what's the big deal if I spend this $20. on XXXXXX.
Everybody needs incentives...consider that yours!!!

I feel like that too about the Dec. trip. Like there's still a lot of time. I hate not having anything good to look forward too. But I may have to. DBF and I are going to discuss it at legnth during our lunch hour today.

I don't know that with only so-so credit I would be able to get a loan with a lower interest rate.

I have an MBNA card which is where $6500 of the debt is. I have a Target card that has about $180 balance (I could easily pay that off with my next paycheck and probably will) and a Best Buy card with around $800 on it (DBF is willing to pitch in to pay on that, as the $800 was used to buy furniture we needed & a vaccum after our old vaccum died - I don't use it for "fun" Best buy stuff like cds. I don't buy cds or anything like that. Maybe once every 3 months I'll buy something fun/cheap like a cd.)

I'd have to check my statements for the actual finance charges but I know they are all pretty high. Finance charges on the MBNA card are usually $105 a month.

Without a co-signer (like my dad) I don't think I could get a better rate though on a loan. And I'd rather not have to bring my parents into this.

 

[my3kids]

Your car insurance sounds VERY expensive. I don't pay anywhere near $1200 a year for 2 new cars. Checking into other insuranceoptions would be a good first step, although perhaps rates are substantially higher in your area than mine.

You should be able to live on $30,000 a year, especially with a parner making about the same. For many here, I suspect, they would love to make $60,000 a year. Look into where your money is going each money. Keep track of every penny. Are you eating out a lot? Buting things for the apartment? Are there any places you could live in your area for less than $800 a month? That sounds more like a morgage payment than rent, and I live in an area where real estate values are high.

How are you getting to work if your boyfriend is driving your car? Is he on the insurance policy if he were to wreck it? It isn't like a married couple sharing a car.

What is the interest rate on the card you are paying off? If it is high, what about transferring the balance to a super low rate card and closing the other account. At least that will allow you get it paid off more quickly.


edited to add I just saw you live in Boston. Guess you can't find car insurance for less, or a cheaper apartment. Do you absolutely have to have a car? Would public transportation get you both to work until the debt is paid off. Is your boyfriend paying on the debt as well?

 

[KristaTX]

It sounds like you want all costs to be split evenly between the 2 of you. If that is how you both want it, then I agree with the other posters that your BF should be paying something for use of the car. And I also agree that Consumer Credit Counseling is at least worth checking into for help with your debt.

If you are in a committed relationship and really love each other, maybe he doesn't see helping each other as "leeching" off of each other. In most marriages, one person makes more money than the other. It doesn't mean that the one who makes less is a leech. It sounds like you are trying your best and doing what you can to deal with your financial situation, and he probably understands that. If he wants to do something for you simply because he loves you (like take you to WDW), then let him.

Krista

 

[aprilgail2]

Originally posted by my3kids
Your car insurance sounds VERY expensive. I don't pay anywhere near $1200 a year for 2 new cars. Checking into other insuranceoptions would be a good first step, although perhaps rates are substantially higher in your area than mine.

I pay over that for ONE new car and I have a perfect driving record....someday I hope to retire and move someplace with cheaper car insurance LOL....
I used a debt service called debt free america, www.debtfreeamerica.com it worked out great for me. I got all my credit cards and numerous medical bills paid off, interest was lowered significantly and I was able to keep my car (at the time it was 6 months old) and just keep paying that off. When I went for a new mini van this year I was hesisitant because I thought my credit scroe would be low and the interest would be high but it was a 750 which is great. My credit report looks great and my credit is good. I got rid of all credit cards that i had which had high rates on them and within 6 months of entering into credit counceling I was able to get a new VIsa with a 3.9 interest on it that I keep for emergancies.

 

[EsmeraldaX]

Originally posted by my3kids
Your car insurance sounds VERY expensive. I don't pay anywhere near $1200 a year for 2 new cars. Checking into other insuranceoptions would be a good first step, although perhaps rates are substantially higher in your area than mine.

You should be able to live on $30,000 a year, especially with a parner making about the same. For many here, I suspect, they would love to make $60,000 a year. Look into where your money is going each money. Keep track of every penny. Are you eating out a lot? Buting things for the apartment? Are there any places you could live in your area for less than $800 a month? That sounds more like a morgage payment than rent, and I live in an area where real estate values are high.

How are you getting to work if your boyfriend is driving your car? Is he on the insurance policy if he were to wreck it? It isn't like a married couple sharing a car.

What is the interest rate on the card you are paying off? If it is high, what about transferring the balance to a super low rate card and closing the other account. At least that will allow you get it paid off more quickly.

Hi , We live in the north of Boston area. Our rent is actually 700 a month, I pay $100 more than him because that $100 is my 1/2 of the household bills (electric/phone). That is extremely low for this area. My last two apartments were $1400 and $1250 a month. Rent in this area is ridiculous.

We don't eat out, we eat very cheap actually, which helps. We haven't really bought anything big for the apartment since last year since we picked up a desk and some bookshelves (hence the Best Buy debt ) and a vaccum we had to get recently when our old one (and I mean OLD) died (it would have cost almost as much to fix as to buy a new one).

Virtually every penny we make goes to bills, groceries, gas.

DBF and I work at the same place. We commute and leave together. He is on the insurance so he pays 1/2 of it each month.

My credit is only so -so and his is terrible. Mine will improve probably within a year though, as the only blips on my credit report now are quite old. I don't really know about his, but without going into detail, his will take a lot longer to improve.

I'll look into transferring to a super low rate card but I don't think I'd get aprroved for one, to be totally honest. And I know the more cards you apply for, the worse your credit report looks.