Anonymous wrote:in addition to selling the car and buying a cheap used car, the cleaning lady needs to go.

I say this in all seriousness, YOU should consider doing something like cleaning houses on the weekend for pay until you clean this mess up. Or...pick up a shift at a restaurant, or Starbucks.

Do you have any retirement savings?

I'm looking into getting a few teacher gigs on the side to help pay down the debt. DH can drive for Uber.

Anonymous wrote:Those expenses aren't bad at all, OP. However, they are only $7K/month--and you should be netting $12K-$14K[b] if you aren't saving much for retirement, depending on healthcare costs. I assume you are likely contributing to a Dependent Care FSA, so that child care cost may be reimbursable. Where is the rest of that money? That's what you need to figure out.

Agree that you should get rid of cable till the debt is under control (bonus: if you want to go back to it later, then you can get a nice intro package at that point--and you might find you don't miss it with some good streaming options!) Yes, fuel seems like a lot if you're not commuting for work. Are those actual numbers (what you spent), or what you budgeted?

I just started contributing to DFSA. I max it. I commute to work. DH just drives to Metro station and takes the train into work. We are on completely different schedules with him needing to leave the house by 5:30am and I go into work later so I can do school drop offs. Having one car isn't an option with this schedule. However, I am willing to let go of the cars for cheaper options without a negative impact on credit. We also visit family in MD and he goes to the barbershop in MD (refuses to change to someone in VA). So this is why our fuel is higher, NOT because of commuting to work.

Student Loans $125
Rent $3000
DH’s CC Consolidation Loan $305 - how soon until this paid off?
Cleaning $150 - cut this
Child Care $400
Car $821 - you have to bring this down. Sell the car, pay off the difference
Car $492 -(one car payment like this would be high on your income - you have almost 3 times this going to a depreciating asset)
Car Insurance $192
Internet $90 - reduce this
Tv $156 - cut to zero
Cell $158 - do prepaid get this down to $40/mo for both of you
Hair $80 - can you reduce this?
Mass Transit $100
Fuel $200
Groceries $400
Music $29
Child Activity $105
Child Math Tutor $200

Those expenses aren't bad at all, OP. However, they are only $7K/month--and you should be netting $12K-$14K if you aren't saving much for retirement, depending on healthcare costs. I assume you are likely contributing to a Dependent Care FSA, so that child care cost may be reimbursable. Where is the rest of that money? That's what you need to figure out.

Agree that you should get rid of cable till the debt is under control (bonus: if you want to go back to it later, then you can get a nice intro package at that point--and you might find you don't miss it with some good streaming options!) Yes, fuel seems like a lot if you're not commuting for work. Are those actual numbers (what you spent), or what you budgeted?

in addition to selling the car and buying a cheap used car, the cleaning lady needs to go.

I say this in all seriousness, YOU should consider doing something like cleaning houses on the weekend for pay until you clean this mess up. Or...pick up a shift at a restaurant, or Starbucks.

Do you have any retirement savings?

1. Switch phones to Cricket wireless. Save about 100.00 month. 2. Let go of cable. 3. Math tutor for a first grader??? Get rid of that. 4. 200.00 in fuel when you use mass transit for work? 5. Let go of the child activity and music class for a while until you get this under control.

Anonymous wrote:Can I get a strategy for getting rid of the expensive car that is underwater WITHOUT it ending up as a repossession on my credit report?

You'll have to sell it and write a check for the difference and come up with money for a new car (or find a way to be a 1 car family).
If you're going to a place like CarMax and buying a reliable slightly used car that is considerably cheaper than this one you could roll it into the next payment and still come out ahead. You've really got to do the math on this--look up the value of your car on edmunds.com (appraisal of used cars) for both trade-in and private seller. Calculate the difference between that and your loan balance. Look up the impact of changing interest rates on loan terms etc and also differences on insurance, maintenance, taxes etc.
See how much you come out ahead and if it's worth it. If it's NOT worth it, cut some other luxuries in your life, keep the car and still start a funding plan for emergency fund, 529 plans.

Anonymous wrote:

Anonymous wrote:Can I get a strategy for getting rid of the expensive car that is underwater WITHOUT it ending up as a repossession on my credit report?

How “underwater” are you and how is your credit? You trade it in for a much cheaper car. Then, you either roll the existing loan amount into the new loan (not a great idea but if you don’t have a choice you don’t have a choice) or, preferably, pay off the balance with cash. But even rolling 5k remaining after trade-in nto a much cheaper loan at a lower rate will save you so much money. You can cut that payment at least in half.

I owe 30 and the car is maybe worth 24K and that's assuming I trade it into a dealership and not sell it via private party.

Anonymous wrote:OP here. I have made a few small changes in the last few months such as no more visits to TJ Maxx, Target, or the Mall. Those are huge changes for me because I would always spend more in those places than I intended when I walked in. Also, we hardly eat out so that's not an issue. We live as close in as possible, so our commutes are not long at all and DH drives to the metro and takes that into work.

Can you talk us through the thinking when you bought the cars?

OP here. I have made a few small changes in the last few months such as no more visits to TJ Maxx, Target, or the Mall. Those are huge changes for me because I would always spend more in those places than I intended when I walked in. Also, we hardly eat out so that's not an issue. We live as close in as possible, so our commutes are not long at all and DH drives to the metro and takes that into work.

OP's montly expenses:

Student Loans $125
Rent $3000
DH’s CC Consolidation Loan $305
Cleaning $150
Child Care $400
Car $821
Car $492
Car Insurance $192
Internet $90
Tv $156
Cell $158
Hair $80
Mass Transit $100
Fuel $200
Groceries $400
Music $29
Child Activity $105
Child Math Tutor $200

Anonymous wrote:Can I get a strategy for getting rid of the expensive car that is underwater WITHOUT it ending up as a repossession on my credit report?

How “underwater” are you and how is your credit? You trade it in for a much cheaper car. Then, you either roll the existing loan amount into the new loan (not a great idea but if you don’t have a choice you don’t have a choice) or, preferably, pay off the balance with cash. But even rolling 5k remaining after trade-in nto a much cheaper loan at a lower rate will save you so much money. You can cut that payment at least in half.

Anonymous wrote:Can I get a strategy for getting rid of the expensive car that is underwater WITHOUT it ending up as a repossession on my credit report?

Yes. After you have paid off the credit card, save enough to pay off the difference between value and debt on the car and get it refinanced to a lower interest rate if you plan to keep the car. If you absolutely can't do that, then throw as much as you can at that payment until you've paid it off. Whether it makes sense to sell it is a hard call since it depends hugely on what you'd replace it with--is that just a luxury sedan, for instance, or is it a truck or minivan or something where you need a specific type of car? Ideally you'd sell it and buy something used but less costly, but that may or may not make sense. Either way you need to knock that debt down, though.

And I agree with others that in addition to having a plan to pay these off (which should include your DH's credit card consolidation debt too) you really, really need to look at where this debt is coming from. Unemployment can take a big bite out of your finances, for sure, but where is your money going to now? Go through your credit card statements (I use Mint for this and like that) to really understand this. Some of it will probably surprise you.

Can I get a strategy for getting rid of the expensive car that is underwater WITHOUT it ending up as a repossession on my credit report?

Anonymous wrote:OP here, I have a bonus and am willing to pay off the CC's now. So that takes away $600 from my monthly expenses.

Ok, but make sure you examine where that CC debt came from. If it's just from unemployment, then you have $600 month. If you're living above your means, you need to examine.


1. Pay off credit card debt with bonus.
2. Use remainder if you haven't matched employer 401k.
3. Sell the expensive car even though underwater and use extra bonus to pay difference and get a reliable cheap car. You can't afford this car. If you decide to keep it you have to sacrifice elsewhere.
4. Sounds like you are someone who would benefit from automatic deductions to key things: 401k, 529 college plans, emergency savings fund. You'll see you have less money to play with once your basic responsibilities are covered and will be less likely to make mistakes like your fancy cars. Cars are depreciating assets and you bought them with money you didn't have.
5. Use a budgeting software like Mint (free) or YNAB (small fee) to help you think through things.