Another "need advice" subject - your input, please.

[Anonymous]

1 family loan because it's the right thing to do
2 consumer loans, start with the highest interest one first, when that is paid off, apply what you were paying to that one to the next, and so on
3 student loans last

Also:
Get rid of the cars, absolutely no reason why 3 years ago you went out and spent 50k on vehicles in your situation. It's the only debt you can get rid of
Find out if you can use money from your IRA or 401 to pay down some debt. Some, not all. There is a clause where you can claim hardship, once in a lifetime, and get $ out tax free. You need to look into it. Not sure if it's 401k or IRA but you need to look into it, not just "oh I think that's the case, not sure"
Sell the house and rent. You have 3 kids to support with college coming up. You need to be debt free or darn close to it when they go if you want to provide any help at all. You can't afford to be a homeowner.
Can you expand on why you need summer camps if you have a nanny?

[Anonymous]

I think, oddly, that you are saving too much and going in debt too far for it. You should not be spending on a college fund when you are a step away from losing your home. I personally would not have purchased a new car for $30K x2 if I was so far underwater. Are you anywhere near paying them off? If not, sell on of them and get a cheaper car. Perhaps instead of nanny you could use the school camps -- much cheaper.

[Anonymous]

The cars have to go.

I'm a huge Dave Ramsey fan (and I'm an atheist, for what it's worth - so I'm not drawn to his religious shtick). I've been following his teachings for years and they are absolutely life changing. I really just recommend you start following them. If you're in a more volatile job situation, you could up your beginner emergency fund a little bit, but it needs to be low enough that you're scared. I know that's a scary step to drain down savings, but that's actually the whole point - to make you feel like a "cheetah" is chasing you so you want to get "gazelle" intense.

Following Dave Ramsey's financial teachings have been one of the best decisions I've ever made. I recommend you take Financial Peace University and dive into his plan, even if you don't agree 100% with it and are hesitant. The proof is in the results.

[Anonymous]

Anonymous wrote:I think, oddly, that you are saving too much and going in debt too far for it. You should not be spending on a college fund when you are a step away from losing your home. I personally would not have purchased a new car for $30K x2 if I was so far underwater. Are you anywhere near paying them off? If not, sell on of them and get a cheaper car. Perhaps instead of nanny you could use the school camps -- much cheaper.

I agree. I think they need to sell at least one car. Guarantee you the family members all have iPhones.

[Anonymous]

You cant afford a 15 year mortgage. You might think about selling your house the moment you are out from underwater unless it is in a very good area. Still I would -- 37 year old home usually has quite a few repairs.

[Anonymous]

Anonymous wrote:I think, oddly, that you are saving too much and going in debt too far for it. You should not be spending on a college fund when you are a step away from losing your home. I personally would not have purchased a new car for $30K x2 if I was so far underwater. Are you anywhere near paying them off? If not, sell on of them and get a cheaper car. Perhaps instead of nanny you could use the school camps -- much cheaper.

If you rent you can have a smaller emergency fund because home repairs and appliances are not your problem.

[Anonymous]

I would put paying off the family loan last unless they are asking you for the money. Maybe you should refinance for an interest only loan with the idea of selling a couple of years. tightening your belt so hard squeezes all the joy out of your life. You will probably never pay that house off, so you are "renting" anyway.

[Anonymous]

OP, any feedback on the responses you have gotten so far?

[Anonymous]

Here's what I wouldn do:

1. Stop worrying about your savings. Maintain your $10K and just focus on paying off the store and CC debt.

2. Get rid of the Jeep. Can you drop to a single car family? No? Then get a cheap sedan for so commuting and whatnot.

3. Get your summer childcare in order. Don't worry about Xmas.

4. Get the second mortgage paid, then your loan, then family loan paid.

5. Once the second mortgage loan is paid then start funding your 401k, but only min to get company benefit. Do this until your loans (except studrnt) is paid off.

6. Once you are down to just SL, car and mortgage then you start really thinking about savings.

[Anonymous]

Anonymous wrote:Here's what I wouldn do:

1. Stop worrying about your savings. Maintain your $10K and just focus on paying off the store and CC debt.

2. Get rid of the Jeep. Can you drop to a single car family? No? Then get a cheap sedan for so commuting and whatnot.

3. Get your summer childcare in order. Don't worry about Xmas.

4. Get the second mortgage paid, then your loan, then family loan paid.

5. Once the second mortgage loan is paid then start funding your 401k, but only min to get company benefit. Do this until your loans (except studrnt) is paid off.

6. Once you are down to just SL, car and mortgage then you start really thinking about savings.

This.

[Anonymous]

I'm a fan of paying off highest interest rate debt first - so your credit card debt is first. Also pay off the family debt asap to keep good relations.

On the jeep - can you get what you owe from selling it used? Look at that differential. And use these cars into the ground - don't use debt to buy a car (or other depreciating asset).

Try not to take from your retirement or college savings accounts. But you may lower current contributions - keep contributing to the 401k up to the max, but maybe that's it for the time being.

Also, given your description of how you spend, I think it's likely that there are other ways for you to save money. Such as giving up cable, cell phones, eating out, groceries, starbucks, gym memberships, etc. Use Mint to track your current spending and see what can be cut back.

Find joy in things that don't require consumption. And stop paying attention to advertising that says you need x y and z NOW and they have to be new. It's used once you've brought it home, so may as well buy it used.

Good luck. It will take time - like losing weight - so be prepared for a long battle.

[Anonymous]

Don't sell your house. That is stupid advice. You have a 2000 sf house in the suburbs worth $550k for a family of five. It is a reasonable house and renting would not be cheaper. First, you cannot sell without paying off the 2nd mtg. Second, the costs to sell and move could be $50k to $60k.

You are doing fine. Pay off the 2nd as soon as you can then refinance. Maybe your house will be worth $600k by then.

Key thing is controlling the spending going forward.

[Anonymous]

Clearly only you know the terms of the family loan, but I have to agree about the cars. If I had lent money to a family member and they spent $50k on cars, I would be annoyed.

[Anonymous]

Thanks for the feedback, everyone. We talked last night about selling the Jeep, will be taking the next steps forward towards doing that now. Makes total sense.

[Anonymous]

Check out the lifetime tax free option for taking money out of a retirement fund.
Take 50k and pay off consumer debt, you will still have 400k which is good for your circumstances