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Old 06-26-2013, 03:17 PM
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So I sat down with some of DR's forms and my bills and his book and worked thru the pile this AM...


So I worked thru adding up our debt $61,100 (not including our home).

I did the monthly cash flow plan:

charity - 0% - we do donate goods when I can get them free but no $$$
saving - 2.5% - working this into the budget beginning in July
*housing - 41%...or 35% - we pay weekly so July has 5 Mondays - 5% interest, 15 year loan - 11 years left...this does make it tight but we chose to refinance to a 15 from our original 30 and went from 8% to 5% interest.
*utilities - 18% - working on reducing this
food - 6% - very tight - would like this to be at 10% someday
clothing - 5% - again tight for a family of 4, but we are working it
transportation - 13% - probably closer to 20% as my DH drives for a living
medical - 2.5% - probably less as we do not take meds, have many bills
insurance - 8% - only have car, home and business so needs to increase
personal - 4% - seems low when broken down but we shall see - more like 10%
recreation - 2% - also seems low and would like it at 10%.

So all in all we are within DR's guidelines EXCEPT for the debt category. Reasons are reasons and we are where we are....the question is now what?...

Debt - minimum monthly on top of basics above...

car payments - 715 (paid in one year)
back tax - 100 (2500 total)
college loan - 200 (2500 total)
personal/business debt - 100 (2500 total)
CC - 1500 (crazy I know - reasons blah blah blah, but still crazy)

To top it off, we both have irregular income, so I did the budget based on what we made last year (should be similar, hopefully a bit more as DH is on year 2 of being self-employed)...but he is in a field where he makes more 6 months of the year and drops considerably thru the winter.

I have looked at his pro rata plan, done the debt snowball worksheet etc.

I am just at a loss as to where to begin and where to go from here. We find ourselves being short every month (6-7 months a year) making the minimums. I know to make sure the basics are covered, but what do we do with the rest when we come up short a month, or consecutive months?

What does DR say about CC debt? We owe and intend to pay, but are having trouble with the payments so now what?

We have our baby step 1 down - $1000 saved.

Thanks!

Kelly married tomother of

Last edited by kloving70; 06-26-2013 at 04:50 PM..
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Old 06-26-2013, 03:23 PM
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I should clarify -

Do I continue to make the minimums and muddle thru with late fees etc when needed...stop paying and work on one at a time???? For example if we took the $1500 we pay on CC each month and not pay one month, we could have 2 debts paid off in July...but that would only free up about $100 of minimums a month.

I know to contact the companies in writing , I realize they will work with me on some issues. I also know that we cannot always work within their guidelines of timely repayment. I also know eventually fi we get ahead, we could settle on payments, but that is not possible now as we do not have an extra 1000-5000 to settle anything at this time.

Again, Thanks! and any questions, fire away!

.....also - if you could correct my math....$61,000 debt, paid at $1000 per month would take 61 MONTHS to pay off (not including interest etc) .....correct?

Kelly married tomother of
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Old 06-26-2013, 03:47 PM
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First he would say get rid of the cars! Sell them and get something that will get you around and stuff. That was a HUGE stress reliever for us years ago not to have car payments. An it feels great to own your vehicle. Also try sell some stuff at a yard sale. Put that little extra towards one bill to pay it off. That will start the snowball effect. But the cars will free up $715? a month and you can release alot of extra money. 2 months of saving that will pay for a vehicle. Just an idea that has helped me and my husband along with my mom and dad. Hth
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Old 06-26-2013, 04:49 PM
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Although we would love to be car payment free we cannot...

555 is for a work truck - my husband is self employed and bought this truck a year ago to replace one that the engine went out of...only 1 year left on the loan and it is paid off and he runs them until they die LOL

160 is for our personal vehicle - another non-negotiable as I am self employed and we live in a very rural area, 8 miles from children's school, 15 miles from store other than local convenience/gas station.

Thanks for the idea - I cannot wait for this time next year to be car payment free - and this will also reduce our insurance costs as we can reduce the coverage.

Kelly married tomother of
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Old 06-27-2013, 03:25 AM
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I think that you are on the right way, just need to focus and do baby steps for now. I totally understand the stress of irregular income. I have a really good paying job but I only make most of my money in summer; I go to university 8-10 months per year so income is at his lowest but depenses stay the same :-/. In december I had a pay of 450$, that's 25% of my expenses !!

I've cut a lot of expenses, moved out of my appartment to live with boyfriend and he's is one of a support: only have to pay for the groceries right now till the end of my degree in 2015. I'm planning to be dept free when I graduate and hopefully will have savings to put on a house cashdown. I found a way when I've spend so much in the past, having sooo much bad habits. If I did change (for the better), you can !
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Old 06-27-2013, 09:32 AM
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i think you are doing great, stick to your plan, in a year things will loosen up tremendously without the truck note !
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Old 06-29-2013, 09:18 AM
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Quote:
Originally Posted by kloving70 View Post
Although we would love to be car payment free we cannot...

555 is for a work truck - my husband is self employed and bought this truck a year ago to replace one that the engine went out of...only 1 year left on the loan and it is paid off and he runs them until they die LOL

160 is for our personal vehicle - another non-negotiable as I am self employed and we live in a very rural area, 8 miles from children's school, 15 miles from store other than local convenience/gas station.

Thanks for the idea - I cannot wait for this time next year to be car payment free - and this will also reduce our insurance costs as we can reduce the coverage.
The insurance agent here has to chime in. I would highly recommend not loosening up on the insurance coverage unless your cars won't be worth much next year. I would keep collision and comp unless your cars are worth less than maybe $3000. Because other wise, if something happens you will be out a lot. Instead, think of increasing your deductibles. But that doesn't always make it a lot lower in premium so have your agent run it both ways.

It sounds like you are on the right path if in a year from now you will have $715 freed up, then you can use that to pay on the other items. But keep in mind that what would really help is that during the lean months if you don't rely on adding more debt. If you can get your budget to include all of your expenses and all of the minimums without you adding more debt that would be ideal.

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Old 06-29-2013, 09:48 AM
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Quote:
Originally Posted by mtnmamamj View Post

The insurance agent here has to chime in. I would highly recommend not loosening up on the insurance coverage unless your cars won't be worth much next year. I would keep collision and comp unless your cars are worth less than maybe $3000. Because other wise, if something happens you will be out a lot. Instead, think of increasing your deductibles. But that doesn't always make it a lot lower in premium so have your agent run it both ways.

It sounds like you are on the right path if in a year from now you will have $715 freed up, then you can use that to pay on the other items. But keep in mind that what would really help is that during the lean months if you don't rely on adding more debt. If you can get your budget to include all of your expenses and all of the minimums without you adding more debt that would be ideal.
This is a great post! You must figure out a way to stop adding the debt...sell unused items to help cover when you're short, get an extra job, are you crafty? Etsy is a great way to sell things and make extra money.
If I had to...I'd sell stockpile items if I needed money, items I have a lot of. Could you have a yard sale? This could bring in a quick amount of money to put towards a bill or help you expand your budget where its tight.

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Old 06-29-2013, 01:15 PM
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Thanks for the thoughts and suggestions everyone!

Kelly married tomother of
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Old 07-01-2013, 10:22 AM
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The first thing Dave would tell you to do is cut up the credit cards. Call them and tell them to put a stop on your account so you can't charge anymore to it. This will make it more challenging in the winter months but not adding more debt will help your cause tremendously.

Second, I think nicnic was right about the cars. But you don't have to be without one. With a $715(555) car payment I would assume his truck is worth a lot. Can you sell it and get a cheaper truck that way you clear the debt and still have a car. Or maybe sell your car and get a beater car.

You said 61000-100 = 61 months. But all your payments from debt come to 2615. With the equity in his truck you can probably clear the 3 small debts. Leaving only your cc if I remember correctly.

I also have a few questions/tips. Does DHs business money come out of your family budget?
Dave would say you have an income problem for the 6-7 months in winter that truck work drops off so there needs to be a way to get that up.
I think you should call him and ask him what he says. He does 3 hour long shows. I would be interested in his response.

Hope this is helpful!
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