Need financial advice
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Anonymous
First, you need to learn some basic financial planning which includes taking a sheet of paper and making a monthly budget for the $5200. Post it somewhere prominant so that you both see it frequently and update it once/week to show where the money is going. I know one family who put it on a white board on the refrigerator so that they saw it every morning when they got breakfast ready. It should look something like this (this is a simplistic example): Second, you definitely need to get that credit card away from your husband. Impulse spending is going to kill you. For emergencies, he should put a $20 bill in his wallet and have a time limit (I would suggest once/month) before he can replace it. If he absolutely cannot, positively bear the thought of not having an emergency card, then buy a $50 Visa card (note that it will have a $3.95 activation fee or something like that) and put it in his wallet. It should truly be an emergency card and should not be replaced more frequently than once/year. If he needs it more than that, then he needs to start justifying why (although when he sees the "Misc-his" line going over budget every month, maybe he'll get the clue). For trips to the Target, grocery store, etc, make out a budget, estimate the amount you need and only take enough cash (plus a buffer of maybe $10) to pay for your shopping list. You should bring extra cash into the Target and then you won't spend it. Document everything. Seriously, when you have this type of spending problem where you have debt, a reasonable income and you still spend more than your earn, then you need to have constant reminders of where that is going because neither of you can visualize what your budget and spending issues are. So you need to lay it out clearly and visibly and update it regularly so that you can see the effects of "I spent $12 on snacks this week" have. Once you have it all documented and updated regularly (updates don't have to be exact, but close, say within $5) only then can you really figure out what is within your budget. Also, make sure that when you add in some big expense that is "non-negotiable" (frankly, I would skip my best friend's out-of-town wedding if I were in your financial straits) then you need to make sure that both of you are on-board with cutting back on other expenses over the next X months to pay it off. So if he spends $1000 for this wedding, that means that you want to cut $200/month for the next 5 months and make that a line item. With your tax return, you should open a new bank account that has some amount (let's say that $2000 which you cited in your OP) which is your emergency/life happens fund. Do NOT put it in your savings because you two have no willpower to stop spending and transfer this money. You want to put it in a bank account that will not allow you to electronically transfer this. You should have to go to a bank during regular business hours and have them make out a cashier's check for you to withdraw the money; anything to make it more difficult to access. This is for when something horrible like the A/C dies in the middle of summer, or your car needs major work or one of you loses your income. The rest should go to pay off the CC debt and get you that much closer to living within your means. You two are just one personal emergency away from true financial problems. What would you do now if one of you or your child has an emergency and required $1000 worth of medical care beyond what your insurance will pay? How will you pay it when you are already over limit on your credit card and you've already spent your savings? What would you do if the car completely dies and needs expensive work to even run? What would you do if your fridge/freezer died and you lost all of the food there. Where would you get the money to replace the fridge and the lost food? You need to start planning for emergencies NOW while you have the income and ability to do so and before you end up in dire straits. |
For both of us, we are mindless spenders on the little things. Trips to Target are the worst. For DH he is always buying food while at work. The little things add up.
Anonymous
| WTF - You have credit card debt, no savings, and spend more than you bring in, and your DH says a pleasure trip is "non-negotiable?" Tell him that his family comes first now, and the trip is off. |
Anonymous
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Op, in most cases I would say, if you're in this together then you don't need a personal financial advisor. But if your DH is not on board with making some major changes, it might be good to have a neutral party help you set up some systems that will work for you to get back on track.
I have to say, the thing that concerns me the most is that I don't think you or especially your husband realize how dire the situation is. He won't give up the credit card? Going to California is "non-negotiable"? Also for both of you, the little trips to Target and eating out are obviously having a BIG impact. You don't talk about your retirement savings or college savings here either but i would bet that situation isn't that good either? Also, no one should be getting an 8k tax refund.... |
Anonymous
| also can you consider taking long walks as your exercise and cut out the gym until you are in a better financial place? if you are negative net balance each month that's just a disaster. you need savings more than your sanity at this point! watch the suze orman show on tv or podcasts! |
Anonymous
| I wish I got 8k tax refund |
Anonymous
I agree with this unless you have a contract that is very hard to get out of. I'd ask your gym about canceling. I'd also look for other informal ways to make money, like babysit? |
Anonymous
| I liked the book "All your worth" by Elizabeth Warren. |
Anonymous
you probably could if you changed your number of withholdings - but then your paycheck would be significantly less. |
Anonymous
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If you really want to turn things around:
-No trip to CA, can't afford it -apply tax refund to credit card debt -adjust your withholdings asap, apply additional monthly income to debt -cut gym and ALL extras, switching to cash or prepaid debit cards can help with this, apply to debt. Really watch your food budget, no eating out. -find ways to increase income (sell items on craigslist or ebay, watch a neighbor's children 1/x in addition to your own), apply to debt -if you do all of this, you can have all your credit card paid debt paid off and the start of an emergency fund in less than a year -consider major lifestyle changes down the road if you are unable to manage on your budget (moving to a less expensive home, going back to work, downsizing to one car, etc) Good luck, OP! Consider that the temporary inconvenience of stringent budgeting pales in comparison with the joy of being able to offer your children financial stability in your home. Get your kids on board with saving. |
Anonymous
And you'd be putting all your trips to Target on the credit card. |
Anonymous
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Here is my advice - divorce him before he drags you down with him. He sounds like an incipient disaster.
"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." |
Anonymous
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I think the tax refund is a huge red flag unless you had very unexpected changes in your income this year. If you adjust your withholdings, you'd be getting an extra $600 a month! If your current take home pay is $5200, that's a really significant difference! Think how much you could have avoided in interest if you'd paid cash for that amount and not put it on credit.
Ultimately though--while you're making some excuses for your own poor monetary choices, it seems like your husband is a huge stumbling block. If he won't play, you will never get out of debt. |
Anonymous
| Oh--and there are good budget tracker apps to enter in spending as you do it that might help you assess how much you're spending and where you could easily cut back. |
Anonymous
+1000 seriously. Family financial security trumps all. If you really need to compromise, then he goes solo and surfs a couch at a friends house or shares a hotel with someone. |
Anonymous
I wish I could meet you and just walk you through the logic (or lack thereof) of all this in person, show you the graphs of what this spending will do to you and show you how much you are really giving up when you choose a trip to CA over something else. The gym membership is nice, I get it - but when you are spending more than you make - its not a necessity. You need to take a hard look at your expenses and really figure out what is critical and what isn't. Thats the only way you will dig out of the mess. I promise you if you posted all of your expenses, I'd find a way to shave off at least a thousand dollars....The trip to CA is important to your DH - fine - but whats more important, the trip to CA or your children's college fund, or your own retirement? You need to look at things differently. This is the difference between being 50 years old and having $20,000 in savings and being 50 years old and having $2,000,000. |