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

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[quote=Anonymous][quote=Anonymous]^pp I feel like your advice is good but would be better for someone who is unable to save vs someone who is in massive debt.

It seems like the op is spending too much because of certain choices she's made around her number of children, house, commute and childrens' activities.  Until she makes some big changes she's going to have a hard time not ordering convenient food.

Her biggest outflows are related to her home, childcare and two cars.  Something has to give because she needs to almost free up an entire salary to go towards the debt.  She needs at least 50k a year going to the debt.  That's not going to happen by quitting some activities and cooking at home.  It's going to happen by moving to an inexpensive apartment, selling a car, changing the childcare situation, etc.

Regardless op needs to do the math.  It all comes down to inflow vs outflow.  The numbers don't lie.  Do the math op.  Figure out how you can dedicate 5-6k a month towards the debt and to savings.  [/quote]

I disagree with you, for several reasons. First, while $50k a year toward debt would be great, it is not actually necessary for OP to tackle this situation. Will it take longer with smaller repayments? Of course. But that doesn't mean it's impossible. Lots of people carry a mortgage, students loans and a car loan or two, and still manage to be very financially secure.

Second, in a couple of years when the youngest is in elementary school, one of those three major expenses you've cited will naturally drop dramatically, as long as OP doesn't put that money toward something else (like nicer vacations or more kids activities). A lot people with young kids go through periods where they don't save much while their young children are in childcare, and then make up for it later. On the mortgage thing, didn't OP say her mortgage was $2,500 a month? She's not going to find an apartment for 5 for much less than that unless they move so far out they're looking at 90+ minute commutes for both of them each way, which just isn't good for the kids. I do agree that she can cut kid activities, I addressed that in my advice above. Cars may not be so easy as you say to get out of, if getting rid of a car means having to pay a bunch out of their savings because they're underwater and then they start incurring a bunch of other expenses related to commuting adjustments. If they move far away from their jobs to get the cheaper apartment you mention, getting rid of a car is probably even less feasible and they drive up their fuel costs.

Third, if OP starts with small changes, it may turn into big changes. After a few cuts they may not really notice the small cuts anymore, and seeing that extra $500 a month going toward their debt might motivate them to make bigger changes and pay it off faster. Whether you agree with it or not, OP isn't willing to make big changes right now, and isn't it better to make small changes (with an eye toward bigger changes, like putting former child care money toward debt repayment in a couple of years) than to make no changes at all?[/quote]

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