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Old 06-04-2019, 01:55 PM
 
1,933 posts, read 826,716 times
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Yes, refinance your house and/or get a lower interest rate loan to pay off your credit card debt and cut up your credit cards. Use a VISA debit card tied to your checking account instead. If you don't cut up the cards you will just run up the balances again. (Been there, done that several times until I just cut them up.) Spend less. Should be easier to do with a debit card as you can only spend what's in the checking account already. Don't get any kind of overdraft coverage etc. Other than a car payment and a mortgage don't use credit for anything. Forget about cash back, discounts, and all that crap. Just go cold turkey. If you can't pay for something, don't buy it. To make this work you will have to save up and keep a cash surplus of a few thousand dollars in your checking account to cover emergencies.

Stay in your house unless you really want to move / relocate / downsize. If you want to move / relocate / downsize, buy a cheaper house. Renting may be cheaper in the short run but will cost more in the long run as rental prices rise. And if you sell your house and rent you may not be able to afford a similar house in the future as house prices rise.

Live slightly below your means and save something for the future. I might be wrong but I have a feeling you are spending every penny that comes in. Only problem is when less pennies come in, you are not prepared for the lean times.

Quote:
Originally Posted by veuvegirl View Post
My husband and I are debating how to best move forward. He has had a tumultuous few years of employment causing us to go into a tailspin of debt. We now (knock wood) seem to be stable.

We currently own our home, absolutely love it. We put it on the market and stand to make approximately $70k if we sell. We had a couple of offers who pulled out at inspection so we took off the market temporarily to fix a few things we didn't realize were in need.

If we sell, we'll be completely out of debt with the exception of our car payments.

Now we are having sellers remorse. We are currently looking to refinance to see how low we can get our mortgage. With insurance, mortgage and taxes we are at $3900 a month. Our credit card debt is $1100 per month.

If we move, we'll rent, houses around here are $3000 a month average.

We gross $13,750 monthly.

Thoughts? Advice? Need further info?

Last edited by bobspez; 06-04-2019 at 02:18 PM..
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Old 06-04-2019, 01:58 PM
 
1,897 posts, read 453,884 times
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Quote:
Originally Posted by veuvegirl View Post
We have 2 cars for four people. It’s a challenge. We’re going to buy a third car deciding what now. Either an all cash car for $5000 or a car with payments under $200.
No, no, no! Don't do it. Yeah, it's a challenge to make do with 2 cars for four people. It probably sux. You may say to yourself "it just isn't doable." But don't do it. Countless families make do with 2 cars for four people. Countless more make do with 1 car for four people. It sux. But you can't afford it right now.

And I know -- its easy for me on the internet to say "don't do it."
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Old 06-04-2019, 02:16 PM
 
1,933 posts, read 826,716 times
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If you have to have another car, lease one. No repairs, no maintenance costs.

Quote:
Originally Posted by RationalExpectations View Post
No, no, no! Don't do it. Yeah, it's a challenge to make do with 2 cars for four people. It probably sux. You may say to yourself "it just isn't doable." But don't do it. Countless families make do with 2 cars for four people. Countless more make do with 1 car for four people. It sux. But you can't afford it right now.

And I know -- its easy for me on the internet to say "don't do it."
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Old 06-04-2019, 03:20 PM
 
4,414 posts, read 2,571,615 times
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OP,

I agree with not selling. Keep the house until the kids are gone and you really know what you want in another home. It looks easy on paper, but not easy in real life.

I also agree dont buy a 3rd car unless the kids really need a car for college or to get jobs. Buy a used Honda civic for $5,k CASH, DON'T finance it.

Moving to save $900/m will in total cost you more than that. YES to refi. That will ease you housing burden.
Renting in this case is like throwing good money after bad.

Get a copy of Dave Ramseys "The total money makeover ", and the companion workbook. Watch his youtube videos, youll likely see many people in your same/similar circumstances.


Write down EVERY PENNY you spend for a month, see what you can cut out, there has to be fat in ypur spending if you have no money.

Have a giant yard sale. Sell off the stuff you have not used in the last 6 mos.

Build yourself a budget. Dave Ramsey has the 'Every dollar' app, you can try it on for size. Costs nothing to use. If you dont want to use the app, google "budget templates" or go to Pinterest and print a couple out. Use pencil and work out a budget.

Try the cash envelopes system.put cash in the envelope for categories for the month. When the money runs out, its gone. It will help you budget fir, say, food, so if theres only $100 in the envelope youll add up your food purchases as you shop so as to evaluate each food item you buy. Itll teach you to cut back, shop wiser, and select food for NEEDS not wants, or just because its " convenient "(costs more).

After you track EVERY PENNY for at least a month, see what to cut out and develop a new budget knowing what you spend where.

If you really cant make 2 cars work for 4 people, check out bus routes near you the kids maybe can use. A $40/m bus pass is a whole lot cheaper per month than a $200/m car payment. If not available or too far to walk to the nearest stop, buy the used Honda for cash for $5k, no payments.

Once you know where your money is going, sell off a lot of stuff, pay down some debt, and develop a workable budget, you be on more stable ground to move forward.

Dont pay for college, make them work hard and save every cent towards college bills. You simply cant help much right now until you get yourselves squared away. You can always step in later and make a lump sum payments to help reduce their student loan debt.

Best of luck to you, and DO come back and let us know how you are faring with these ideas implemented for change!!

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Old 06-04-2019, 06:25 PM
 
Location: Dallas TX
14,992 posts, read 21,635,335 times
Reputation: 22099
Thanks all for the advice. We’ll get a cheap car. There are times where my husband is at work, son is at school/work and daughter has school/work. I work from home and will usually just wait for an opening. It’s not always doable.

We’ve been dealing with it for six months and it finally came to a head when I was out and son called me frantic he needed to go to work (my fault).

There are just too many balls in the air to not have another car.
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Old 06-05-2019, 08:07 AM
 
Location: Loudon, TN
5,632 posts, read 4,754,707 times
Reputation: 18854
So you're spending $3900 a month on housing, and $200 a month on a car payment, and $1100 per month on CC debt...where the heck is the other $8550 per month going? You really need to start tracking your spending and get this under control. First of all cut up those credit cards. You are paying interest on them that is outrageous. You didn't get into this mess overnight, and you won't get out quickly either, and definitely not without a bit of discomfort.

I agree with GalaxyHi, you need to find out where your money is going, and tighten your belts. If you will be moving after your kids graduate in a year or two, then don't move now. Multiple moves cost a bunch of money (RE commisions, moving expenses, additional furniture, remodeling or decorating at the new house, utility deposits, etc), and you need to be paying things down, not spending more. You have to realize that you can't keep doing what you're doing and expect a different outcome. You need to make big changes to your spending and throw every available dollar at your debts. Dave Ramsey does have a good plan to help those who've gotten themselves into this spending jam. Refinancing will help if you can significantly lower your interest rate, then put the savings towards the debts. If you have any extraneous things around that can bring a price (boat, travel trailer, expensive art or jewelry, etc) consider selling those to help pay down the debt. Before you make any purchase...ask yourself is this a NEED or a WANT. You can't afford to indulge "wants" right now. Pare down your lifestyle until you've dug your way out.

It's going to take a whole family effort to do this. Everyone has to understand that you're in a crisis, and you need to all pull together to get this straightened out.
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