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Old 01-10-2015, 09:25 PM
 
16 posts, read 17,171 times
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I have lived through many failed budgets. But, have been listening to the Dave Ramsey show and feel that my wif and I need to try again.

My job might be over in June....

I am a teacher at a private school. I make about $44,000 a year. My wife does odd jobs while she homeschools our youngest and makes $6,000 a year.. So we are looking at $50,000/year income.

We have about $12,000 in Credit Card debt and $2,000 in student loans.

I applied for Income Based Repayment for my student loans and have a $15/month payment

We live in the boonies and spend about $250/mo for commuting.

We own both our vehicles and pay $100/mo for insurance.

My wife cooks great and can do wonders with $350/mo for a family of 5 for food.

Our cells run us $98/mo

Internet is expensive because we can only get DSL and they require phone service to get it - $70/mo

Our rent is really low at $400/mo

Electric and wood averages out to around $250/mo

We pay $260/mo for our kids' schooling

But the latest thing that hurt us is that all 3 of our kids have bad teeth. The company I am working for has great insurance @ $150/mo.. They just changed premiums and plan structures and we opted for the new plan at $150/mo. Before the new plan was implemented we started ortho for all our kids. The bill is $19,000 and the old plan covered 50% which leaves us with $8,500. They want it paid off in 24 months which means we have to pay $350 a month.

My main question is...

We have around $5,000 we are going to get from taxes. What should I do with it?

And any other advice?

Thans,
Russ
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Old 01-10-2015, 09:59 PM
 
28,430 posts, read 70,757,953 times
Reputation: 18363
Your expenses seem pretty modest, all things considered. How'd you ring up $12k on cc debt?

What are you prospects if you need to find a new job?

What options do you have for renegotiating the dental costs? That is over $6k per child, seem quite high...

I would keep as much of the tax refund as possible until work situation stabilizes, live with the debt.

Pay no attention to lying, preachy types that make it sound like debt is like murder. Gordon's Garbage: Fact Checking Dave Ramsey

Make payments, sure, but don't flush all your safety cushion away. Idiots that stick too closely to the hare-brained ravings of anyone just have no credability!

For goodness sake, don't beat yourself for not living up to some impossible ideal. Times are tough, can you find extra work tutoring or some kind of summer gig? Spouse? Even kids if they are old enough... More income can whittle down debt fast!

Have you applied for better paying schools?

Last edited by chet everett; 01-10-2015 at 10:29 PM..
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Old 01-10-2015, 10:11 PM
 
6,432 posts, read 3,046,413 times
Reputation: 5823
Re the 8500 ortho for your kids, if you don't pay and they turn it over to a collection agency, they will likely only get about 50% of what you owe them. Tell them you know that and try to negotiate 4,000 full payment or a lesser monthly payment.

Once you secure your job situation I would pay down the credit cards first.
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Old 01-10-2015, 10:16 PM
 
Location: Somewhere in northern Alabama
17,739 posts, read 53,869,694 times
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"My main question is...

We have around $5,000 we are going to get from taxes. What should I do with it?"

Do NOT pay down credit card debt. You did not mention an emergency fund, and that $5000 looks like it is elected. That means keeping it available to keep minimum payments going if you go out of work.

What the dentist WANTS and what he GETS might be two different things. Ask the dentist if he is willing to have you put the equal payments (to pay it off over 24 months) plus $100 to him in escrow from now until June, and if you still have a job after June he gets all of that. If you DON'T have a job, he gets that amount minus the extra $100/mo and agrees to extend your payments over three years.
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Old 01-10-2015, 11:09 PM
 
Location: Portal to the Pacific
5,043 posts, read 5,040,659 times
Reputation: 6206
I don't know why you live so far from work ($250 for commuting is a lot!), especially if your wife is homeschooling. Also, why not public ed for the other two? At least until you get yourself out of the hole you've put yourself in? You could find another $5,000 or so a year just addressing those two issues.

If you look on the frugal forum, you might find some other tips regarding the cell phone....

also google Mr. Money Moustache.....

otherwise, not much more to be done unless you consider relocating or a new position...
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Old 01-11-2015, 06:16 AM
 
3,558 posts, read 4,343,568 times
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Quote:
Originally Posted by flyingsaucermom View Post
I don't know why you live so far from work ($250 for commuting is a lot!), especially if your wife is homeschooling. Also, why not public ed for the other two? At least until you get yourself out of the hole you've put yourself in? You could find another $5,000 or so a year just addressing those two issues.

If you look on the frugal forum, you might find some other tips regarding the cell phone....

also google Mr. Money Moustache.....

otherwise, not much more to be done unless you consider relocating or a new position...
He also only pus $400 for rent which may make up the commuting cost by a long shot.
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Old 01-11-2015, 08:38 AM
 
3,999 posts, read 2,892,081 times
Reputation: 6839
First thing is to reduce the withholdings on your taxes. If you make only $50K/year and are getting a $5K tax refund, you are withholding WAY too much. You want that number to be as close to $0 as possible, else you're giving Uncle Sam an interest free loan for the entire year. That will put much more into your pocket to help pay down the loans.

Stick with the Ramsey plan and pay the smallest balances first, then snowball those payments towards the larger balances. Can you wife work? Seems she could get a real job and make a minimum of $25K/year even at a retailer, which would help pay everything down much faster.
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Old 01-11-2015, 09:52 AM
 
12,664 posts, read 9,904,693 times
Reputation: 9424
Quote:
Originally Posted by flyingsaucermom View Post
I don't know why you live so far from work ($250 for commuting is a lot!), especially if your wife is homeschooling. Also, why not public ed for the other two? At least until you get yourself out of the hole you've put yourself in? You could find another $5,000 or so a year just addressing those two issues.

If you look on the frugal forum, you might find some other tips regarding the cell phone....

also google Mr. Money Moustache.....

otherwise, not much more to be done unless you consider relocating or a new position...
I'm assuming that poster made the classic mistake of not including added car depreciation and servicing in commuting costs. It might be $550/month once you factor these in!
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Old 01-11-2015, 10:27 AM
 
28,430 posts, read 70,757,953 times
Reputation: 18363
Default Very unlikely...

Quote:
Originally Posted by ncole1 View Post
I'm assuming that poster made the classic mistake of not including added car depreciation and servicing in commuting costs. It might be $550/month once you factor these in!
Many very foolish people assume that higher taxes to support elaborate transit schemes better serve folks of moderate income than an affordable personal vehicle. Numerous studies have shown this to false, especially for folks that purchase highly reliable Pre-owned vehicles that have nearly non-existent depreciation and low maintencance costs. A nice boring Honda will also deliver excellent fuel efficiency. Not everyone commutes in a giant fuel sucking nightmare vehicle, but even those who do at least can be thanking for paying a disproportionate share of fuel taxes for the maintenance of not just roads but also bike lanes and sidewalks which are also funded through these revenues in many states...
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Old 01-11-2015, 10:29 AM
 
Location: Portal to the Pacific
5,043 posts, read 5,040,659 times
Reputation: 6206
Quote:
Originally Posted by Florida2014 View Post

Stick with the Ramsey plan and pay the smallest balances first, then snowball those payments towards the larger balances. Can you wife work? Seems she could get a real job and make a minimum of $25K/year even at a retailer, which would help pay everything down much faster.
I can assure you that his wife already has a "real job" if she is homeschooling, taking after 2 other kids and does ALL the cooking and domestic duties around the house. All this "stuff" takes a great amount of time (if you're not using short cuts).

It's not quite a trade off, but almost...

He also mentioned she does bring in $6k doing odd jobs.
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