Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.[i] 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.

I wish. Child was recently found to have a LD and is struggling. She needs the tutor.

Developmental psychologist here. Is she in public school? They should be meeting her needs--work out an IEP. Talk to the special education resources in your county about ways you can support her learning. First grade is really young to need a tutor. You could learn strategies to support her--it will help you all in the long run too.

Parent of child with LDs- yes you need an IEP to get the school to help. But the probability is that you will have substantial expenses associated with getting the right supports yourself too. Use that as motivation to get your financial house in order. You don’t want to be the parent that can’t afford the special school your child needs because of cc debt or a car payment. Early intervention/ support is most effective.

OP, I assembled all of your information into one place here. I was having a hard time getting the complete picture because your details were posted but by bit.

DEBTS:
Credit cards: $7K / $?? monthly @  @24%
Car: $30K / $820 monthly @11% underwater worth $24K
Car: $17K / $492 monthly  @7%
Consolidation loan: $Total ?? / $305 monthly at ?? %
Student Loans: $Total ?? / $125 monthly at ?? %

HHI is 230K
Expected cash bonus ranging $15K
Monthly Take home… $10,000?

Monthly Expenses:

Debt Repayment: 1743
Student loans 125
Consolidation 305
Car 821
Car 492

Housing: 3150
Rent 3000
Cleaning 150
Furnishings: ??

Costs of Kid: 705
Care: $400
Activity: 105
Education: 200
Clothing?
Birthday/Gifts/Toys?

Transportation (besides car debt): 492
Insurance 192
Gas: 200
Metro 100

Internet TV Cell Music: 433
90
156
158
29

Grooming/Clothing: 80
Hair 80
Clothing
Makeup? Toiletries?

Food: 400
Groceries 400
Household (aluminum foil etc) ??
Meals Out ???


That all adds up to $7000 so you are definitely missing something or else that would be another $3000 you could apply towards your debt!


I think you should use your bonus to get out from underwater with your car #1 and then sell that car for as much as you can get for it. Replace it with a reliable but cheaper car. Sell your other car as well, and replace it with a much cheaper one. You only need one super reliable car. Your husband could Uber to metro, or maybe even ride a bike.

Selling both cars and buying with cash will get rid of those monster car payments, and should bring your insurance payments down as well.

As soon as those are sold, start paying down your $7000 credit card. Take the money you had been sending to the car payments ($1300) and add any savings from insurance to it, and add it to what you were paying as your minimum payment on the credit cards. By cutting back in the rest of your budget, you should be able to make payments of $2000/monthly on your income. So the CCs should be paid off in less than 4 months.

Now take that $2000 and add it to the $300 you are paying on your husband's consolidation loan, which is how much? Can't tell how long it'll take to pay that off at $2300 a month. But keep paying, and if possible cut back elsewhere in your budget and send any little thing you can off to that debt, and then finally to pay off your student loans.

If you moved somewhere cheaper you could pay everything off faster, but I can understand not wanting to move with a 1st grader in school.

Once all your debt is paid off you will be in a great position to save for retirement. You will have reduced your living expenses and be used to sending $3000 a month off to debt repayment: just maintain your standard of living and send that money to retirement instead!

Anonymous wrote:Ugly picture...

1. Pay off CC
2. Save remains bonus as emergency fund
3. Re-examine your spending
4. Pay off other debts/save

How can a late 30/early 40 couple be this irresponsible?

Ugly post by you.

Anonymous wrote:

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.

Advertise it on Craigslist and take a little time to sell it, and get more than $24K for it. Maybe aim for $26 or $27K. Get it as high as you can. Use your bonus to make up the difference, and to pay cash for a reliable used car for under $5000.

Use the rest of your bonus to pay down the highest interest credit card debt.

How much do you guys own in student loans?

I think $3,000 a month in rent is fine at your income level, but right now you guys are broke. I'd consider moving to a place that is only $2000 a month which would give you a lot more wiggle room.

Anonymous wrote:

Anonymous wrote: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.[i] 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.

I wish. Child was recently found to have a LD and is struggling. She needs the tutor.

Developmental psychologist here. Is she in public school? They should be meeting her needs--work out an IEP. Talk to the special education resources in your county about ways you can support her learning. First grade is really young to need a tutor. You could learn strategies to support her--it will help you all in the long run too.

How much is left on the student loan? How much is on the consolidation loan?

Anonymous wrote: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

What expenses are you not reporting here? This list adds up to about $7,000 a month. At your HH income I'm guessing you are netting about $10,000 a month. Since you don't appear to be saving anything, where is this extra $3,000 a month going?

OP, would you and your husband consider reading together Dave Ramsey's book "Total Money Makeover"? It would be great for you. Even better would be if you were willing to go to his classes (usually at a church, and you don't have to be members or religious).

**here's where I don't like Dave's advice, as I said before. 1) I don't think you should turn down employer matches while getting out of debt

2) I don't think you necessarily need to pay for actively managed funds. But you're a ways away from that, anyway.

You should both really consider it. It will be more thorough, give you more motivation, and overall change your mindset about money more effectively than any advice you can get on here.

Anonymous wrote:

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.

By DFSA, do you mean DCFSA? If so remember that it is use it or lose it, so if you are on a calendar year plan, you need to use it by December (and thus might not want to max it). If you're in education you might be on an academic year plan so that's fine if so. But it's still not the missing money--that's only $400/month.

Check your respective paystubs to see what else you may be paying pre-tax (and also how much tax is being withheld--you could be overwithholding). You need a full budget to begin to understand where and what to cut. I suspect most of what's on this list is not the issue.

This budget is not yet complete. I think if you do look at dave ramsey with your husband you guys can get on the same page and support each other in this. It will be easier to make cuts if you are both on the same page. Right now you have a high income but you are bleeding money to debt instead of investing money and letting it work for you.
Your budget is not complete in that it has no gifts, no birthday parties, no pet expenses, no medical copays, no clothing, no shoes, no car maintenance expenses.
You need to budget every dollar of your income so you are directing it instead of being led by your expenses. You have what is known in Dave Ramsey world as a big shovel - you have a high income and can dig yourself out. You have very low student loans - the cars and credit cards are from living beyond your means. Those past choices are hindering your ability to invest in your future.

Good luck!

Anonymous wrote: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

NP here.

OP, you need some basic financial education. Both you and your husband are very naive and undereducated about finances for those in your late 30's and early 40's. You need to make the effort to get yourself some basic finances 101 and get yourself on track to fix the issues that you've created with 15-20 years of bad financial decisions.

Just like you are prioritizing your child's activity and math instruction, you need to prioritize your own financial education or you will continue to make bad choices and struggle financially when you should be much more comfortably off.

So, here are some tips: The biggest expense you have when you borrow money is paying interest. You have borrowed money in many ways:
- buying cars with car loans
- charging money on CCs
- consolidating your husband's CC debts into one loan

You need to get out of paying for all of that interest, overhead and finance charges that go to the banks and financial institutions every time you borrow money.

That said, I would aim to get rid of the bold expenses and minimize the underlined expenses:
- Stop paying housecleaners to clean for you until you get your financial house in order. You cannot afford housecleaners with this much debt
- First you should pay off your CC debt which you are paying 24% interest annually to hold
- Second, you should sell the expensive car at a loss and use some of the bonus to pay the difference between the value of the loan and the sale price. Yes, you will lose money, but you will lose less money than if you pay off the loan fully since the interest at 11% if costing you a ton. Purchase a small sensible used car with good gas mileage for a lot less and get a loan for lower interest. You should be able to save a lot here
- You did not list the interest rate on your husband's CL. After you pay off the expensive car, you need to focus on either paying off the second car (even 7% is not a good rate for a car loan) or your husband's CL, whichever has the higher interest rate.

Then you need to replan your optional expenses:
While it doesn't seem like a lot, $80 a month for hair care is a luxury that you really shouldn't give yourself now. I know that some types of hair need professional help, but even if you cut that back to every other month and apply that $80 towards debt relief, it will still help.

$90 for Internet, $156 for TV and $158 for cell phones are also luxuries that you can't afford. Look for cheaper cell phone plans. We currently pay $100 for up to 4 lines. We use one for each of our phones and one for one tablet that has a line so that it doesn't need to have WiFi or have to set up one of our phones as a hotspot so the kids can use it. You can switch to a combined package for TV and Internet for a lot less. We currently pay $80 for a triple play of landline, FIOS-TV and FIOS at home.

Anonymous wrote: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.[i] 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.

I wish. Child was recently found to have a LD and is struggling. She needs the tutor.