How do I catch up? Is it even possible?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, wish I had answers for you, because I too have my own financial house to clean. I just wanted to offer you encouragement - there IS light at the end of the tunnel. You are not alone.

DCUM will have you believing that you are dumb, fiscally irresponsible, etc. because everyone who posts here has millions of dollars in their 401k by the time their 30, and fully funded 529s for their 4 kids, but there are millions of others who aren't there yet, and that doesn't mean that you can't improve your lot and catch up.

Keep doing what you're doing re: living frugally and thinking of ways to improve your income, etc.

OP here, and thank you. People love to pile on on this site.

I suffered extreme trauma as a child and young adult and had no family support or guidance. Life was very hard for me until I got married. My DH grew up poor. Certainly all of our choices haven't been perfect but there's been some chance bullshit we've had to deal with. We are doing our best.

OP, I am not the PP but share his/her sentiments.

Just keep doing what you're doing. See if you can dedicate your entire salary - part time, tiny, whatever - to paying down debt. Minimize expenses to the extent possible. Pay down higher interest credit cards first. You are not going to do it overnight. It's a lot easier to spend money than it is to repay it, but with time, you will get there. There are no magic bullets. Just a lot of hard work. Don't let these harpies make you feel bad for your choices.

[Anonymous]

Anonymous wrote:If you're a fed and abroad in a high COL area, consider bidding on a next assignment someplace less lovely and more cost effective. Places with high differential make it easy to pay off debt at home. I paid off $50K in debt in my first three years of foreign service (all at differential posts), as I was not paying housing costs and was careful to manage my other expenditures. While it's a bummer not to be in Europe or someplace fancy, my family is so much better off without ugly debt hanging over our heads.

Would you suggest this over a grade increase? DH has an opportunity for this but in an even higher COL area of Europe. Otherwise I think what you suggest is wise.

[Anonymous]

If the rental is paying for itself, that means it's also paying enough to handle maintenance. You had a huge outlay, are you sure the rental is paying for itself? Don't just pretend, sit down with what it's making, what the average maintenance has been and what you can expect it to be going forward, and include big occasional items. Are you banking enough to replace the water heater in a couple years? The heating and AC in 10?

Track your own budget. It sounds like you were living way beyond your means. That might have been temporary, or you may have developed habits which you really can't afford. You may not want to give up your toddler's part time preschool or whatever you're spending money on, but you may need to cut things back significantly for a bit. Both to pay down debt and to reset your idea of what you can afford.

You're limited in your job opportunities but what about something like tutoring, handy-man services, or babysitting? Are those things you can do?

If you don't have a budget, make one. If you do have one, seriously look it over and make sure you're sticking to it and it reflects the debt payments you're wanting to make.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you're a fed and abroad in a high COL area, consider bidding on a next assignment someplace less lovely and more cost effective. Places with high differential make it easy to pay off debt at home. I paid off $50K in debt in my first three years of foreign service (all at differential posts), as I was not paying housing costs and was careful to manage my other expenditures. While it's a bummer not to be in Europe or someplace fancy, my family is so much better off without ugly debt hanging over our heads.

Would you suggest this over a grade increase? DH has an opportunity for this but in an even higher COL area of Europe. Otherwise I think what you suggest is wise.

Maybe. You need to run the numbers. You get hardship pay in some countries that are actually quite nice to live in. The benefit is that in addition to hardship pay domestic help can also be quite cheap so you can often afford support that would let you work more for a fraction of what you'd pay in Europe. In addition to the extra $ with grade increase, make sure you factor in the extra $$ you will spend in high COL area in Europe. You may very well be off somewhere off the beaten path, but it will depend on your particulars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you're a fed and abroad in a high COL area, consider bidding on a next assignment someplace less lovely and more cost effective. Places with high differential make it easy to pay off debt at home. I paid off $50K in debt in my first three years of foreign service (all at differential posts), as I was not paying housing costs and was careful to manage my other expenditures. While it's a bummer not to be in Europe or someplace fancy, my family is so much better off without ugly debt hanging over our heads.

Would you suggest this over a grade increase? DH has an opportunity for this but in an even higher COL area of Europe. Otherwise I think what you suggest is wise.

Maybe. You need to run the numbers. You get hardship pay in some countries that are actually quite nice to live in. The benefit is that in addition to hardship pay domestic help can also be quite cheap so you can often afford support that would let you work more for a fraction of what you'd pay in Europe. In addition to the extra $ with grade increase, make sure you factor in the extra $$ you will spend in high COL area in Europe. You may very well be off somewhere off the beaten path, but it will depend on your particulars.

A grade increase might net me about $10K extra a year, which would disappear pretty quickly in a high COL area. Moving to a high differential post could easily bring in two or three times that, while also lowering your COL. There are fine reasons to take assignments in Europe - but if you're looking to pay off debt, someplace with a low COL and high differential can't be beat. W

We are currently saving for college for three kids, and putting aside almost $30k/yr off of my government salary by serving in an interesting but challenging part of Asia (25% differential). We live off the salary, which is easy because we don't have housing costs and child care is way less than home. And the entire differential goes into college savings. You guys could do a three year tour and almost pay off the full load of your debt.

[Anonymous]

Ignore the ones on here who just want to criticize you and point out you don't have millions in savings like them.

Do you have a budget? As it stands what's coming in with DH's European salary -- are there things you aren't paying for like housing or school? I think you need to sit down and write down inflow vs. outflow to see what is left over after the big fixed expenses -- housing; cars; mortgage on the other house; school/daycare; utilities/cell. Then see what is going to variable costs like food, entertainment, clothing and see if there's a way to cut some out of there. Once you have that you'll have a plan for what extra you can throw at your debt and that'll help you decide whether it's better to come back to the US or not.

[Anonymous]

OP, I sympathize. I have credit card debt that is not increasing but is not going down too quickly either. As you do, I acknowledge having made many dumb decisions. A few things that made a huge difference for me were downgrading my car--I would not buy anything with over a $200 car payment. I was able to pay mine off with an insurance settlement but I know that may not be an option. I had an opportunity to move to a cheaper apartment and I took it, even though it's not as brand new and fancy as my old one. This saved me $175 per month. I had a loan I got stuck with when I got divorced and it was pretty substantial, but I have steadily been paying on it and the end is finally in sight. A lot of it is just patience. I almost feel like I'm serving a jail sentence because I count the months until this big loan is paid off and it's finally down to 18 more months. Once that is paid off, dedicating that money to the rest of my debt is going to make a huge impact. It sucks being patient but just consistently paying and watching the numbers go down is very helpful. My fiancé and I have timelines for when we want to start to look at houses and stuff and it helps me to have a goal to work for and adhere more strictly to a budget. My credit score also went up a few points which was a nice boost and kinda gave me incentive to just keep plugging away. Just cut everything extra that's a money-suck and work hard at it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You people are harsh.

OP, I work for an agency where lots of people work abroad. With all of the allowances they receive, they seriously bank the dollars when they're overseas.

This is a problem solved by hacking away over time.

They have a housing allowance and they got themselves 50k in credit card debt. That takes a lot of effort.

I agree, people are being harsh!

My husband and I started out on tough financial footing, and clearly it's gotten worse. We charged our wedding (first mistake, shouldn't have had a wedding) - this cost 7000 all told. For our first year of marriage my husband paid his mortgage on top of our rent, because his ex didn't want to rent out the house. I was in school full-time and worked part-time, then we had our first child. Then I was in school full-time and SAH. Childcare where we lived averaged ~2000 a month and without a degree I was unable to find work that would justify that cost, especially while studying full time. I thought getting my degree was the smart decision.

We saw Europe as an opportunity to pay down debt, given where we were living before and with the benefits we get here. It's been slow going.

I'm sure it's easy to judge, but I posted looking for encouragement. We live extremely frugally - we don't eat out, we don't spend on anything other than necessities - and I just want some reassurance that there's a light at the end of the tunnel. I'm not making excuses, just saying we have a lot of debt that we're working to pay off.

Why did it matter what your husband's ex wanted to do with the property? The property should have been addressed in the divorce settlement, which would have had to be finalized before you got married.

Because OP and her DH were dating before he was divorced, it fits the pattern here of rash choices, I would suspect.

OP, is your DH much older than you or did you just go to college late? I'm not sure why you bothered with a college degree since it will be years before you could put it to use, but that's water under the bridge. Make sure that *both* of you are on the same page for saving money and paying off debt; DH maybe somewhat recklessly trying to impress his young pretty new wife and not making the hard choices.

That rental sounds like a pit. You are likely paying 20% or more or credit card interest; no rental income is going to make up for that. Sell the condo, clear the $20k equity you have hopefully, and pay off as much high interest debt as possible.

Finally, Dave Ramsey is great. But really it comes down to: your fixed expenses are *tiny*. When money comes in, immediately pay off a huge % to debt, then live off the rest. If you run out of money it isn't like you won't make rent!

[Anonymous]

I can't believe people are criticizing OP for getting a college degree and for having kids! Good job OP. Well done! Two kids is not an unreasonable number. If my parents waited to be able to afford kids I would not be here. OP sounds intelligent, and it bringing kids up (with a different cultural view perhaps) and is digging her way out of debt. Just like DCUM supported that poor woman whose husband was deployed and she was a lawyer working crazy hours, that to keep on keeping on and it will get better. OP, it will get better!

Now, for advice, we have a rental too and sometimes it feels like a liability but we crunched the numbers (HOAs to pay too, and property management) and it is constantly going up in value, and the taxes work out for it to be a "keep" for now. Just make some smart decisions based on real numbers.

[Anonymous]

How old are you, OP? Not sure why you decided to have a second kid when you are in so much debt and just graduated from college.

I had my first kid at age 30, after working for several years and finished grad school. Most of my friends did the same. None of my friends had kids during college. Many met their spouses in college though.

[Anonymous]

If you get housing allowance and you are not working, you should be able to tackle your credit card debt. I can't believe you racked up 50k of credit card debt. Were you living off your credit card??

[Anonymous]

We were able to save a ton of money while living overseas. Do you get free housing or money towards housing? If it is free housing, you should send all housing expenses (if you were paying them) to a savings account automatically. If it is money towards housing you should be sure to live within the allotment. I agree with taking a position in an area with more potential for saving money. We saved more in an Asian country than while in Europe.

[Anonymous]

Anonymous wrote:How old are you, OP? Not sure why you decided to have a second kid when you are in so much debt and just graduated from college.

I had my first kid at age 30, after working for several years and finished grad school. Most of my friends did the same. None of my friends had kids during college. Many met their spouses in college though.

Pin a rose on your nose.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How old are you, OP? Not sure why you decided to have a second kid when you are in so much debt and just graduated from college.

I had my first kid at age 30, after working for several years and finished grad school. Most of my friends did the same. None of my friends had kids during college. Many met their spouses in college though.

Pin a rose on your nose.

Life is about making good decisions.

[Anonymous]

Is your husband paying child and spousal support?