Money management poll

[Microcell]

I am very embarrassed about this, as I took money responsibility away from DH because he can't add, and now I can see the road ahead at our current rate, and it ain't pretty so advise away!

I work around DH and will continue to do so until DS 2 is in school. I have done the math and I am quite sure that is not only financially not possible to work full time and pay for daycare, but I would rather live in an apartment and have only one car than do that. I do not believe I am at this point yet anyway.

We are living beyond our means, though and have racked up quite a bit of credit card debt. I am able to pay every month, so our credit is not ruined yet. I am only paying the minimum of everything so we cannot make a dent in the debt that way.

We have decided no more credit usage but we don't know if we should use a reputable credit counseling company or get a consolidation loan? We cannot continue to pay everything and live so our payments for bills each month must decrease.

I am going to cancel cable and internet so that will be a hundred saved a month anyway. Tell me your experiences or advice.

 

[janette]

Do you own your home and have equity there? Sometimes you can refinance your debt into your mortgage and save $$ or use a 2nd mortgage / home equity loan.

Have you shopped around for better interest rates? If your credit is good there are excellent rates on many credit cards. I have some at 2.9 & 3.9 which I'm not too worried about since the interest doesnt' add up very fast and making the even the miniumum payments does make a difference. Those are fixed rates not promotional, you also have to be very careful and not use those cards, make the payments and keep your good credit intact.

There are other sources for consolidation loans other than a credit counseling company. Unless you are having problems making the payments I wouldn't use one of those. Try your bank or other lending institutions, maybe even consolidate to a card if you can find one with a really good rate.

 

[Microcell]

I guess I should have mentioned that I do not have any non payments or even late payments, but that is where the good part of my credit ends. I have high revolving debt so no good offers. I have thought about juggling around so most of the money is on the 2.99 % fixed card. I have one at 0% that is looking better and better each time. The third one with 11% is killing us and has the highest minimum due.

I would guess we have about $6000.00 in equity on our house.


I am talking about 18,000 here so I feel very overwhelmed!

 

[ibouncetoo]

Go to the library, right now, and get Suze Orman's "9 Steps to Financial Freedom". Notice, I didn't say 'buy' it......that's the kind of thing you'll learn in one of the 'steps'. It's full of informations/ideas/suggestions on getting out from under credit card debt as well as guidance on getting your entire financial picture worked out. It's been a lifesaver for me and quite a few of my friends too.

 

[Lynn CC]

I wouldn't consolidate or get counceling...have you watched Suze Orman? She has a show that is on on Saturdays. She also has a great website with all the advice that you need. www.suzeorman.com
She says to pay off your highest interest rate credit card first while paying the min. on the lower cards until the highest on is paid off entirely,,, then go right down the line until they are all paid off.
Not paying for cable and internet is a great start. That is an extra $100 you can put towards those cc bills.
Do you or DH treat yourself to coffee, or lunch out or dinners out, movies etc. All that can be put towards your bills too. She even suggests getting a second job or job that you can work from home until they are paid.
Good Luck and know there are many people in the same situation. Atleast you are correcting it before you have late payments etc...

 

[Jenn Lynn]

David Bach also has some great books out including Automatic Millionaire.

 

[Microcell]

I will check out Susie Orman. Unfortunately, we have been using credit for things like food, so the extra $100 will probably need to go toward that and not credit card bills! I welcome all other advice!

I feel so far from Millionaire! I will look for that book too!

 

[N.Bailey]

The 1st thing I would try is to get a consolidation loan. $18,000 unsecured though? I can't say that I'd expect it, but that's where I'd suggest you start. Keep in mind however that the payment might not be lower than the minimum amounts on the credit cards. Those cards are set up to NEVER be paid off. A loan isn't like that. You'd pay less interested with a loan, but they will require more money each month to be paid on the principle. I would definitely suggest you start there anyway. If you've got a loan calculator on your puter, run some figures and see how it works out for you.

You could also get into selling some on eBay to make a little more $ each month, which may help get you through this tough time too. Go to yard sales or auctions in your town and see if you can't make a little money that way.

Good luck whatever you decide.

 

[robsmom]

Do you have any credit left on either of the lower interest rate cards. Can you transfer some of the higher balance to these? As others have said, getting rid of the 11% debt s/b your first priority.

You said that you work around your DH's schedule and that you don't think full time employment would make financial sense. You also said, "i don't think i am at that point yet". I am not trying to start a work/don't work debate. I do think, however, that if you are buying food with your credit cards - you have reached that point.

Is there some that you trust who could watch you child even one day or so a week for a reasonable rate. If you could even bring in $100 more per month that would help.

Finallly, have you considered bankruptcy. If you owe $18,000 and have $6,000 in equity in your home, you currently have a negative net worth and this might make sense. I would talk to a debt counselor.

 

[AlexandNessa]

I had an ex-boyfriend who did credit card counseling. I made him. He procrastinated a bit, but when he finally did it, he regretted not doing it sooner.

Some credit card companies will want you to show good faith and remain in counseling for a few months before that will lower or forgive your interest rate.

What was nice is that he filled out a few forms, and the counseling service considered all his monthly expenses and figured out what a reasonable monthly payment for him would be. He made one payment to the counseling service (and as long as that was on time, all his payments were on time), and then they divvied it out to his debtors.

What was also nice was say that $50 of his payment was targeted toward his Macy's Card. Once his Macy's card was paid off, he had the option of continuing to pay the $50 to accelerate his debt payments, or save the $50, thereby lowering his payments to the counseling service.

They did charge a monthly fee (pretty reasonable), but he had about $12-15K in debt and was paid off in about 4 years.

There is an indication on your credit report that you are in credit (or debt) counseling, but that didn't stop him from getting a new car loan, if that's any consolation.

Good luck!

 

[Microcell]

Thanks for all your advice! I need to sleep on it and talk to some people on a weekday to see what my best options are. I understand your view that I work more, but maybe through ebay or something like that. I admit I have gotten to this point because I don't work as much, but I would do it again for the time with my kids!