Reply to Earning Well but Drowning in Debt...how to dig out?

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[quote=Anonymous]You need to control your spending. I'll bet you can cut back on lots of things and still maintain a decent lifestyle. We live quite well on half your HHI, but we have no debt.

Can you take out a HELOC and pay off the credit card debt? That's the first place to start. The interest rate on credit card debt is outrageous, but the interest on a HELOC is a fraction of that. You might also be able to pay off part of your student loans with a HELOC if it's at a much lower rate.

That will cut your payments at least, and you would not be taking on any more debt.

Trade in your newish cars and get used minivans (they are spacious and cheap). Plenty of space to haul around three kids. Use the cash you raise to pay off more debt. Do not spend it or put it into savings.

Take cheap vacations or none at all. Don't throw away cash on big trips to Europe or renting a nice beach house when you can stay in a moderately priced hotel in a pleasant place for a week for the same price. Take day trips if you need to get out of town.

Look at your monthly expenses: What do you pay for heat? Do you really need to keep your thermostat at 72 degrees all winter? We keep ours at 65 degrees. Yes, it feels cold in the fall, but we wear sweaters and get used to it. As an added bonus, we get fewer colds when the temperature is lower in the house.

What are you paying for TV each month? Can you cut back on some of the premium channels? Can you live without cable? We don't have a TV, but we watch TV shows on our computers.

What are you paying for cell phones? There is lots of competition, so you can surely get a lower priced plan.

How much do you spend each week on lattes? Just cut that out right now. Bring your coffee from home in a thermos.

Go out to eat once or twice a month, period. And go to family-type places. You're over date night at fancy restaurants if you've got three kids.

How much do you spend on convenience foods? Takeout? Cook more, and you'll save money.

Have your housekeeper come every other week instead of every week.

Mow your own grass.

Shop at TJMaxx. They carry last-year's Nordstrom merchandise at a fraction of the price. I keep my clothes for more than a year, so it makes no difference to me.

That should get you started. as a pp said, it's not rocket science. You have to take a cold hard look at your "necessities" and cut back ruthlessly. Consider "needs" and not "wants". Get rid of the "wants."

Best of luck to you OP.

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