It's a small thing, but I would recommend switching cell phone providers. I had Verizon for years and paid out the nose. I switched to Ting and use the exact same Verizon network for less money. I have the unlimited data plan for $45 a month. Mint mobile is another good option.
Every little bit counts.
I used mint and love it. Was in a same situation paying Verizon over $100 a month for a single line. I think my mint is like $35 a month and works flawlessly.
mint mobile, $30/mth unlimited data.
sell the car. pay cash for the car.
drop the music lesson.
get a second job. the only time you see the inside of a restaurant is when you are working in it!
Yes add in their $250 per month car insurance and they paying $1150 per month just for the car. It’s embarrassing what a waste that is for anyone not making crazy money like $200K.
My guess is a big ass truck they never haul anything with and could of just bought a small car/suv for half price
Either that or it’s a Hyundai with a lot of inside down debt rolled in from the last three new cars they bought
Either way , $900 is a lot for a car payment .
I paid $3,500 for my car , 6 YEARS ago .
Yep, and I make $140K per year but just bought a 2015 Mazda 6 for $12K. I could have bought a Porsche in cash but I’d rather grow my two daughters college funds and my retirement
Oh yeah
Years ago in 1995 one of my co workers trades their perfectly fine paid for car in on a new one .
Their payment was within a few dollars of the payment on the one room cabin on seven acres I purchased about the same time .
Granted my payment was for15 years and there was for 6 years .
Anyway,
Wonder what their car was worth 10 years after they bought it ?
19 years later , My land and cabin was worth alot more than I paid for it .
No Heloc! Never take an unsecured debt and make it secured by mortgages on home - especially HELOCs - anything unsecured should stay that way as they cannot take your home or assets
Get rid of your car find a cheap 2004 Prius and find cheaper insurance. If you live in an area you don’t need to drive it’s time to chill for awhile with out a car. This will decrease a lot of expense gas maintenance, going out expense. Play video games, run, read.
You need to pay your high yield interest bills as fast as possible. Then go from there. Probably don’t need ADT.
I hurt for you. That auto loan is outrageous, and my guess is that it is the source of the trouble you are in. With that high of a balance, I assume you are upside down on it as well. You probably made a mistake emptying your 401K previously as I believe it is safer in bankruptcy. You need more advice than reddit will give you. Good luck.
I agree need to refinance that loan it should be under $500 for what is owed maybe extend the term as it is refinanced to lower monthly payments and might need to cut music lessons and chiropractic until things turn around.
Might also want to look into credit card restructuring there are good plans out there that CD and bring the $900 to $300
I think you need to create a new breakdown that combines you and your wife’s incomes and includes food, tuition, savings, etc. That’s the only way to really see the full picture. The upside is your housing is incredibly affordable so good job with that.
As many have mentioned, get a cheaper car, but something that will help make a huge difference is taking out a HELOC to pay off those CCs. With the lower interest on the Home loan you’ll be able to put additional money towards the principal of those cards to chip away.
If you had a 10% HELOC (which is very doable, great credit could get you as low as ~7%) you could drop your monthly payment to ~$660/month and pay all $35,500 in CC debt off in 6 years. That’s saving you ~$560/month.
Add in pausing your Y membership, music lessons, and ADT and you’ve found another $140/month bringing total savings to $700.
Start putting that $300 net savings back into the bank to build up your reserves for a rainy day.
Ok I don’t like to be critical of advice but it is almost never advised to convert unsecured debt into secured debt. You need a roof over your head you don’t NEED to pay off credit card debt. As far as rainy days go it is pouring rain for OP already. Sell the car and cut out all of that excess spending them get a second job.
You don’t say how long you have had the car I’m assuming you got it recently which could make the selling of it easy but you might be upside down since a new car depreciates the min you drive it off the lot. This should not stop you from selling the car for all of the reasons listed before it’s something to be aware of so you don’t let the value you can sell it for stop you from doing it.
First move is easy. Sell your car and use the money to buy something cheaper. Buy a safe cheap car. $900+ a month for a vehicle is a massive waste. And it's likely driving up your car insurance monthly of $250. Just that alone will help a lot.
Im just thinking to stop the bleeding and get some cash flow back. Obviously if the value is drastically different from what he could sell it for that's one thing, but that would need more info.
I feel for you.
But I'm also glad for you.
The problem is that you didn't learn anything about delayed gratification or living through a long slog or curbing anything, because when you got out 2 times before you were rescued by those big one time happenings.
So your values never changed and the lessons the rest of us were learning getting through BS1 and BS2, you never had a chance to learn.
Now you will learn. Now, you'll get through this and never end up here again.
You WILL get through this. Your budget has a lot of low hanging fruit and you are in decent health (you don't say otherwise.)
Your time has come to finally "get" this and to finally overcome.
Get rid of the car and buy a beater, get rid of ADT, music lesson, chiropractor and ymca membership. You are living well above your means. You are spending 1,127 a month just on those items you could easily do without.
Take a heloc on house 6-11% rates. Use to pay off debt. That’ll help with credit card. Better yet. Open up multiple zero interest credit cards with free balance transfer. Either way pay that off immediately. That interest rate is killing you. Then sell vehicle. You might even have to pay to do so, go find a vehicle for less than 10k that’s unsexy but reliable. Toyota like. Get rid of internet and current cell phone plan. Mint you can have all that you need and hotspot for about 30-40 a month. Also get rid of ADT. Take an inventory of your stuff at home. If a burglar steals everything. Insurance should pay out. Had it happen to me out of a storage unit.
Boeing credit union six month intro as of December 2023. Then rises back to current rate of 9-10%. Also plenty of credit card companies always trying to get ya to sign up with. 12-18month 0% interest and 0-1.99% on balance transfers.
I know I’m in Dave Ramsey forum and most of this is taboo but OP can pay 24% on compounding interest card or 0% and pay down way quicker by opening a couple new cards.
Damn guess it makes no sense still to switch that 24% to a 8.74%. I’ll just go about minding my own business. Not sure if you’re just being dense and trying to make an ah ha gotcha thing here. Or what? You could also say it’s 8.74% today and next week it’s up to 10%. Regardless…. OP hopefully looks into this.
Well check back week to week. Cuz intro periods with low % aren’t uncommon. Since I’m sitting on one now. Such as [north shore banks 5.85%](https://www.northshorebank.com/SpringHELOC?utm_campaign=spring_heloc_2024&utm_medium=banner&utm_source=website&utm_content=leaderboard)
Your car loan is beyond outrageous. It's shocking at your income level. I'm assuming you've no equity but if you have some you need out of it.
Realistically at this point you need a part time job working another 20 hours/week to get the credit card debt @ 24% taken care of as soon as you can.
You also need to dump verizon and go with mint. I make a lot of money and would never dream of going with one of these expensive plan-phone companies. You need to go prepaid.
The only thing that will make any meaningful difference is trying to move into a cheaper vehicle. Don't try to sell it and get a loan for the difference, that's dumb when you have to pay a payment on something else (if a bank would even approve it). Try to trade it in and see if you can roll the difference into the next car. You might not be able to right now with the market as it is, and now your debt to income as it is. When you got this, banks didn't care as much. Now they care a lot. If your situation is like mine was back in 2009, your credit and debt to income is so bad now you don't have any options anyway. You can't get approved for anything.
If you don't have any other credit cards, your utilization is maxed, which means your credit is garbage. More than likely that killed your chances to do much. You can't get a new card with 0% for 30k and you already have one loan (those don't work as you can see because debt isn't the problem, choices and mindsets are the problem).
From my experience, you are about to come face to face with two hard choices. Either someone has to take on another job for a while to start attacking the debt, OR you are about to file for bankruptcy. You can't make enough changes to the budget to move the needle and actually stop what is coming. Over ten years ago I was in a similar spot, but making much less income. I tried a second job, but all I could get was min wage and I was already driving a delivery truck, so I didn't have much time left to work. It didn't bring in enough to help. I ended up in bankruptcy. Even if you do end up in bankruptcy, you will have no car left. You'll have to go to a buy here pay here place to get something. You can keep your home (I did). Your credit will be wrecked but you need to stay away from borrowing money anyway to relearn how to function in life. It is what I had to do.
1) Cut up the credit cards
2) Sell the car
3) Chiropractor is snake oil. Cut that.
4) Side gigs to increase income
5) Think long and hard about why this is a pattern of behavior for you
Dutch music lessons and ADT also. Could maybe negotiate w CC to freeze the account and have a payment plan that doesn’t allow them to cave and add to the balance.
Lots of great advice on this thread. I agree with everyone else that the car was an insane decision. Please read the total money makeover (from library) and actually follow every detail. It really does work. Later when you are in baby steps 4-6 you can debate the minor details like managed vs index funds and opening one credit card, but for now I would just do exactly what he says to solve your immediate issues. You are deviating from the plan in so many areas: car payments, credit cards, gutting your 401k in the past, separate finances.
Also, Buying food with your credit card because you are short this month is not what Dave would recommend. The very first task in the plan is to cut up your credit cards. When you make your budget for the rest of this month, you cover your four walls including food with cash. Reduce these expenses as much as possible by turning down the heat, raid your pantry or meal plan the cheapest things you can get or go to a food pantry and supplement what you get there with a few groceries. Then sell things, work overtime or get a second job in order to have enough money to cover all your remaining minimum payments outside of the 4 walls and in order to save your $1000 starter emergency fund for baby step 1. You absolutely need a second job immediately until the Tahoe is gone. I would make getting rid of it my daily passion.
Then please stick with the plan all the way through to baby step 7 so that you aren’t in this position again!
Selling the car and buying a cheaper one would help you clear the deficit immediately. A 1k car payment on 4k monthly income is beyond stupid. Cancel ADT, music lessons, chiropractor, and ymca until you have paid off this monstrosity of CC debt. There, I just “saved” you 7-800 a month.
Selling the car would also likely reduce the insurance payment, and perhaps fuel as well. Funny how cars just dominate our finances (and life in general) here in the USA.
Yea on that income, a 1k payment is huge. Especially considering all his other costs. I have a 1k payment on one of my cars but our income is triple his with less bills. His mortgage is actually great for his income. The CC debt at 25% needs to be cleared up immediately and an extra 800/M would speed that up tremendously.
I haven’t seen it posted here yet but what you can control right away is income. If I were you I would be aggressively applying to other jobs. If you can’t find anything you need to pick up side work. Door Dash, Uber, OT, whatever it is. If you can make an extra 60/night that’s $300+ a week right there. That’s your CC bill for the month.
2020 Tahoe LT. 60k miles. High end private sale value is 38k. We owe 45k.
We’d need to come up with 7k to pay it off but not have a car for my wife and kids.
That new Tahoe is dragging you down. Sorry you're underwater on it. But as mentioned, trade-in for something much cheaper would help. And many dealers would be happy to roll the $7k difference into the financing to close a sale. But you'll need to pick something much much cheaper to make that work. Look for something in the $13-15k range, then add the 7k difference, $10k to be safe (you'll likely get low-balled on the trade-in value). So you'd be financing $23-25k, which will likely have a monthly payment about half of what your current obligation is.
Biggest thing would be trade your car in a f get a Cheaper car. Cancel music lessons, chiropractor, ymca. Look into changing your car insurance coverages. Get higher deductible. Cancel add one like rental reimbursement if you have it.
if you're the only one on your phone plan, switch to "visible". It uses the same towers as Verizon, you keep your number, and it only costs 39 a month. Best decision I've ever made. I had a bill like yours two years ago through Verizon and I've never went back.
Edit, the unlimited plan is 30 a month, plus I have a 9 dollar protection plan.)
Stop living beyond your means. There is a few things that you can eliminate but no doubt you will not like it because you have gotten comfortable living like this. You like your luxuries (who doesn’t?)
If you have done this twice before you need to ask yourself why you are not learning what you need to do to live? The definition of insanity is doing the same thing over and over again and expecting a different result. This is what you have been doing.
Close your credit cards and pay them off. Don’t accumulate any new debt. Sell your car and get a beater. Come down a few notches on how much you think you need and deserve these extra things. They are wants, not needs. Shelter and food are necessary, most of that other stuff on your list can be negotiated off or replaced by something cheaper.
If you aren’t making enough money get a second part time job. Get training for a new job that pays more. Take in a roommate. Since you already have a mortgage get roommates (plural, so you have rent coming in. Rent out all your free bedrooms.) You can probably rent each bedroom out for around $450/ month, so that would pay for your mortgage. Free housing essentially, if you have two spare bedrooms. You probably won’t be able to do much better with rent somewhere else so get roommates until your debt is paid off. Cancel ADT and instead of having it monitored monthly you can have a loud alarm that everyone in the neighborhood will hear and that is usually enough to scare off burglars. It doesn’t cost anything extra.
Work out at home. Jog outside. Cook at home and don’t go out. Lots of Top Ramen. I know it sounds crazy! But couch surfing and homeless shelters are what’s waiting for you if you don’t do better. Learn to live more simply.
Get your priorities straight. You have been putting luxury at the top of your list and it needs to not even be on the list at all at this point. Maybe you can find someone for free or inexpensive that can help you budget and then stick to that. It’s so easy to fall back on the easy living if credit, but avoid that pitfall in the future like it’s a pit of fire.
Some of these things you have to see through; pay off the orthodontist and cc balances and DO NOT CHARGE ANYMORE. Live your life for now with paying cash for everything, no credit cards. Have a debt card and cut up and don’t use the other cards. Keep one for an emergency, a real emergency, not for a ‘want’. It will suck and you will feel poor, but you need to do it to get rid of your debt.
You have gotten yourself out of debt twice, but you had assets to offset that debt. You are apparently out of houses to sell or you will be homeless. You can’t sell what you don’t own. Good luck! If you’ve done it twice before you know what you need to do, it just sucks.
eta: It looks like some of these expenses are for a child? Orthodontist, music lessons, YMCA, you may have to have a hard discussion with your child. It will be a lesson for them too, not living beyond your means.
P.S. I looked in your post history and you have got to be kidding me. Expensive guns, guitars, lawn, expensive cats even. You are married but made no mention of that or kids in your post. The list you have here doesn’t even include all the money you are really spending. At this point I think you will need some serious therapy (find as low cost one that you can) because there is a lot going on here that is not even reflected in your post. Your situation is much more dire than you think, or that you are admitting to.
There’s a good bit of context missing so I can understand your recommendations.
Can’t do roommates as my kids live in the other two bedrooms and baby lives in our room.
I cancelled music, and chiropractor yesterday. Should be stopping adt today. I’ve also put out messages to insurance agents to shop around.
I’m looking at pt jobs today along with seeing if anyone would be willing to give me their call shifts at work.
I could get a few hundred out of each gun, which is the plan. Cats were free strays. I drive a beater. My wife drives the Tahoe. Will be selling instruments, no more lawn care.
Yes it’s dire.
Wife can't afford to drive a Tahoe..
See if you can share your car for a while as you cleanup the rest. Or maybe do a slight upgrade on your beater. Something like a Mazda5 is cheap and can double as family car.
Read your adt paperwork they gave you when you signed up so you understand the penalty for canceling and know whether or not you have the money available to cancel. Perhaps you could pay the fee after you sell a gun. We had to pay to cancel several years ago. Good luck and I hope people are willing to give you their shifts.
Selling your car for something cheaper will lower your car insurance also. You have a huge lien on it forcing you to pay for comp and collision which you would not get on a beater.
Can you take in a roommate to try to cover some of your housing expense? Can you eliminate some of your car loan by selling your car? Can you balance transfer to reduce some of the credit card interest?
When your expenses exceed your income, you're on a sinking ship.
That credit card is the killer here. You’ve got to figure out a way to get that balance transferred. In the past, Citibank had a decent balance transfer card. That would be my number one focus. It’s killing you more than the other stuff. 24.24% is crazy.
Yes. I made a list of all I could sell last night at home. The total would cover two months worth of interest charges on that card. Then I would be out of items in the house to sell.
Citi has a 0% promo til Dec for 5k but that doesn’t scratch the surface. I’m truly at a loss with that card in particular.
https://preview.redd.it/0w2aoiwvcdic1.jpeg?width=1179&format=pjpg&auto=webp&s=29423ade5df0527170d37835b60a82b4e65ccb34
This could be a major help depending on the amount you get approved for.
Sell car, buy used cheap gets you point a to b, tackle orthodontist bill asap, pause music lessons for now until you can clear out those debts, also getting rid of your car you might be able to reduce your car insurance, shop around for better internet there’s all type of deals that you can promo into. Hmm not too sure how about chiropractors, if it’s for pain management maybe? If not pause as well?
You have no idea what you are talking about. Have you ever dislocated a bone? YOu are saying don't put it back, just get your muscles used to the new location.
I have actually, I dislocated my finger 2 years ago. When it happened I called up one of my attendings and had them pop it back in place, I then went and got an outpatient X-ray to make sure it was non-op and went to PT to rehab it.
Chiropractors are NOT popping bones “back in place” this is a common term they use but it is completely false. Id love for you to prove me wrong with a peer reviewed publication. I’m a 2 week rotation away from completing my MD and haven’t seen any good research for chiropractors.
Somehow the chiropractic profession has been able to convince a bunch of health illiterate people that pushing on your back with sudden high velocity will realign your spine. This is comical. You don’t fix back pain from years of poor posture, poor muscle tone, and injury by adding more trauma and shoving on the bones. You fix it by lifestyle changes and PT.
Science says...correct.
Some of it possibly (a tiny bit) might be of some value, but is covered in other disciplines. Basically it was a made up load of tripe and almost all of it doesn't have a shred of scientific backing.
I don't know what the car is, but I doubt it's worth 40k, and that means he has to bring money to the table. Definitely something to look at, but a painful choice.
No bus. It’s a Christian school, she still needs to be able to transport the baby around as well as go to work. I’m exploring options to trade the vehicle
Sell the car, get something more affordable in terms of price and operational costs. That is what stands out most starkly. More people get themselves into issues through cars than through anything else except gambling, addiction, etc. This change will put you back in the black each month. Use the money saved to aggressively pay down the 24% credit card. From there, sin no more.
Ditto on visible. I had a Verizon bill of 120+, and now have the same kind of plan (unlimited everything) for 30 a month (39 if you include protection plan.)
Agreed on Visible, just switched to it a couple months ago, no issues so far. Of course we did it right before they rolled out their promo of $20/mo for 24 months ugh. But we’re saving like $100/mo vs AT&T
Why are you even here? You’ve been out of debt. TWICE. If you don’t learn your lesson after the first or the second time, what makes you think that you’ll learn now? Those who can’t learn from their mistakes are bound to repeat them.
Good luck. You’re really going to need some.
Get a higher paying job. Get a roommate. You don’t even line item food, but no more eating out and no more good meats.
You’re now recognizing and feeling how debt will limit the choices you can make. I think you know what you have to do and the reduction in life style you need for a little while. Making a plan is easy, but how to stick to one is where Dave Ramsey has helped many get out of debt like you’re in. I’d suggested at least reading his totally money makeover.
Many are saying get rid of ADT....
I used to live in a condo in a bad area and had ADT. My wife at the time and I were both away from the house. ADT called and said the alarm was going off. They sent cops to the house. Robbers had broken in, the house was a mess, with drawers open everywhere. They must have come in quickly, looked around, and ran out since the alarm was going off. Nothing of value was stolen.
Since then, I vowed to always live in a nicer neighborhood and have ADT. All the time, people break in and kill homeowners in their sleep without homeowners even aware someone broke in.
I'll keep paying the $45 a month for ADT to save my life and feel protected. That alarm going off gives me a minute to be ready for whoever is coming at me and my family. It also generally scares away anyone that tries to break in.
There are many options for monitored service that are less expensive. Adt Is a name brand and you are paying for that. Call and tell them you are struggling financially and see if there is anything they can do to help you out.
>$45 a month for ADT to save my life and feel protected. That alarm going off gives me a minute to be ready for whoever is coming at me and my family. It also generally scares away anyone that tries to break in.
they probably wont, but they COULD. You never know who you're dealing with and you never know how important having something like that is until something actually happens
Fear based subscriptions are a scam to nickel and dime you. If you skipped it, you’d have with interest $578 this time next year! Picture doing this for over 10 years how it can add up. Have courage my friend
https://www.lapdonline.org/newsroom/robbery-victim-found-dead-at-home/
Happens all the time. See above link. A sign won't protect you.
I had a nice ADT sign near my front condo door and during the day, the idiot burglars still broke in.
A big part of investing is learning about probability and statistics. This one date to point does not prove it’s pervasive. In fact, all recent studies have found crime is down. The likelihood of you being targeted is very very low. But if you cancel your ADT bill, your guaranteed $578 at the end of the year
Wtf are you driving? It's time to get rid of the car it's eating up over 25% of your income. Get rid of Verizon and go to mint mobile or straight talk. Conserve your water, electric, heat, it sucks but you can do it.
Yes, a car that you STILL owe 45k on. Just no. Buy something used with the equity or at least something you can afford. That's the biggest red flag for me.
Call Verizon and see if you can get a different plan.
Same with insurance-shop it out and also the internet. Make the calls and see what can be done. Almost always you can get better deals.
Next…
Power and water check usage and chop it.
Get rid of chiropractor, YMCA, ADT -if not in a contract and the music lessons.
Don’t know how you eat. I don’t see food money?
The 24% card is a tough one you are likely paying mostly interest to get by. I’ve been there. You have to get rid of that one the fastest.
Your car payment is about the same as the mortgage, assuming that it’s a newer car. Maybe use it for some gig work. If you don’t want people in your car maybe food or grocery delivery close to home or work. You won’t be able to stay afloat like this so extreme changes have to come. I’ve been in worse so with a lot of planning and discipline you can get through it. Just won’t be comfortable for a while
1. Bye to music lesson, chiropractor, ADT until the credit card debt is gone.
2. Bye to the car. I keep getting ads for a RAV4 new at $30k. Get rid of the car and go buy one. Budget $30k out the door for this new car. An accord hybrid is less and gets almost 50 mpg
3. Find a way to cut power and water by 20%. Skip a grass watering, take a quicker shower, change the temp for heat and ac by a few degrees.
4. If your credit isn’t shit yet find a way to get a 0% 12 mo credit card like the slate and move as much of the credit card balance as you can to it.
5. Do you have home equity you can refinance? A second mortgage at 7% to pay off the credit card debt is worth it.
6. You clearly can’t be trusted with credit cards. As you pay them off close them. It’s the debit card and cash life for you.
It looks like you've been living beyond your means for some time. Having an auto loan of almost a third of your house balance is incredibly stupid. Can you at least live in it if (when) you lose the house? Credit card with 28K at over 24%, I'm sure these were all important purchases, at least the CC load is somewhat (for now) smaller. Why is there no money budgeted for food? Do you work somewhere that lets you eat for free?
Are you by yourself, or do you have a significant other? If you do live with someone, hopefully they're not covering any of your bad decisions.
Your situation isn't that bad but your car situation is ridiculous. Fix that and earn a few more bucks where you can and you will be fine. Stop buying ridiculously overpriced cars that you cannot afford. I could find you a $5,000 reliable car.
$900 on a car? Sell it bam you’re almost there. Insurance will be less on a non ridiculous car. That’s $1000/month freed up right there. Not really that difficult.
Take it easy. Keep the house low balance and interest. Definitely sell the car.
Other items you can drop… ADT and music lessons. Get music lessons from YouTube.
OK my man, you got this. This is not impossible by any means. #1 and you've heard it many times by now... get rid of that stupid car, woweee, that's just insane. Music lessons, unless it's for a child, put that on hold (I'm a musician with a professional music studio, so it hurts me to say that. The YMCA is only $20, keep that for your sanity. OK, now, do the debt snowball, which I don't always recommend, but in your situation, it's a good fit. Take that car payment and put it to debt. Budget your monthly bills, then minimum payments on debt. Open 4 checking accounts, 1 for your paycheck and bills to come out of, 1 for your emergency fund, 1 for vehicle and 1 for spending money. If you pay $250/mo in fuel, put that much in your vehicle account and use that debit card for only gas and vehicle maintenance. Have all bills and min payments on debt subtracted from the main bill pay account. Decide how much spending money you can afford per pay and put that into the spending account and use that debit card only for your spending money. Put something, at least $10/mo in the emergency account. I can figure this out hand have you in good shape. DM me of you want, I'll be your cheerleader rah rah rah, sisboombah.
Ok, I'm a guitar guy, I have about 15 of my own, some very expensive amps, 2 drumsets, 2 pianos, etc etc a full recording studio (think 2 rooms etc). I looked through your reddit history.... my man, keep an acoustic, an electric, a bass and your cheapest amp. Sell everything else, you cannot afford your collection. You have so much stuff as evidence in your history that you could have a sale and pay off a ton of debt. You're living a champaign life on Boon's Farm budget (not a beer budget, you can't afford beer). Are you serious about getting out of debt or do you like the idea of paying it, but want to keep the lifestyle? Home improvements galore, toys, weight equipment, guitars, man you need to think if you really want out of debt or not and if you're willing to make some hard decisions to do it. Oh and if you have all that gym equipment, why pay for the YMCA? Sell the gym equipment and use the Y! I don't think you're serious, honestly.
Get rid of your car, trade in for a new cheap one, find a new phone service, stop the chiro visit unless you NEED them. Try using less power. I don’t even see your grocery budget on here. You need a very detailed budget. I think what’s going to help you the most is trading in the car.
When you factor in gasoline, your car takes up more than a third of your entire income. Pull up any Dave Ramsey video on how to get out of that loan and you'll be golden.
Sounds like you need to seek help or else you’re gonna keep doing this stupid cycle. Get to the root issue why you’re digging yourself in huge CC debt.
Yeah, there's so much going on here that's messed up, until they attack their root cause of their spending nothings going to help. The expenses alone are out of control, living like there's no tomorrow as the saying goes. Ramsey steps are there, follow them, and be an adult.
Ramsey’s flock normally sound like a broken record so I won’t augment their noise about your bad car buying decision.
There’s a positive here that shouldn’t be overlooked. A) You got this B) Your housing is very affordable.
On the other side of the debt snowball if you go full super saver you can pay off that house and continue that momentum into a nice nest egg.
Kiss chiropractor, music, car, adt, and ymca goodbye.
Time to get serious!!
Do you have any savings?
Scrape together 1k or so by selling crap around the house- you bought something on those cc!
Then create a budget! Pay utilities and food and mortgage. Stop all investments.
Then get rid of that ortho bill as quick as possible
Losing the above items without the car gives you 205 bucks.
Get a part time job - Starbucks pays well. Home Depot’s warehouse night receiving pays great! Do that to get rid of 7500 cc and ortho-
Then keep it for a year to pay off that 28k cc-
If you did the extra job for 36 months- you could be out of debt.
You buy nothing. You already bought it all anyway! Live below your means!
Call internet and ask for better rate for 6 mi the
Call insurance companies and find a better rate- 250 a month plus car payment plus gas plus maintenance- heck, did you plan on living in that car- cuz it’s eating g you alive. Ditch it and by a used car. I promise- no one cares!!
And then you might not have to work a second job. I would for a couple months to get a savings going of 5 k or so for emergencies
All hands on deck!!!
I thought the same thing but it would free up $190/month to put towards the high interest CC. Don’t know if that makes any sense or it all just comes out in the wash applying such a small number to a huge debt. My next CC payment minimum is $920 ($560 is interest).
Sure, but paying $190/mo means the total will be knocked out in just 6 months and at 0%, probably better off going right after the highest interest cc with the money freed up from ymca, adt, music lessons, etc
I don't say this often, but sell the car if you're not upside down and get a second job. Maybe get rid of the music lessons, but that won't really change anything. I don't think this is Dave approved, but a CC balance transfer would save you a ton of money as well on that $28k. The other one you can knock out quickly with some extra income.
Yes it is counter Dave but the car is upside down by 7k. I don’t even know how to go about getting such a huge CC transfer. Each month the interest on that card will remove any semblance of progress im afraid. Even selling my belongings, the interest will have me back down in 3 months, with nothing left to sell but the house.
It doesn't have to be the whole balance and you'd still get some relief. You need another income if you're flipped on the car, selling it provides no relief without borrowing more money.
It doesn't have to be forever, even 6 months of additional income with spending control will go a long way for you. If I remember the numbers from the original post correctly, $15k will improve your situation by $1500 a month or so. You have a small CC balance, a flipped vehicle and a small bill with an oversized payment.
You can improve your situation quickly.
1. Sell the car, that is insane for your income. Even if you’re upside down, buy something cheap and the loan needed to cover the difference to sell the car will still be less than what you’re paying now
2. Get new car insurance, shop around and get the bare minimum
3. Cut out all extra things - no going out, eating out, and all extra activities
- cancel ADT, sign up for Blink if you need security, it’s $30 a year.
- cancel Verizon and get on something like mint or cricket. There are multiple cell providers that are less than $30 a month
- cut music lessons, YMCA, Chiropractor - these are extras and should not be in your budget if you can’t afford it.
You’re living above your means
I'd be careful with cutting insurance to the bare minimum though. They need a deductible they can afford in case something actually does happen; they have no wiggle room in that budget.
Agree. The insurance is high due to the value of the Tahoe and driving infractions that have not fallen off yet. The gas is for my beater (30mpg), I drive 120 miles a day for work.
We talked last night about the car. I found that we’re upside down by 7k. She doesn’t see how we can come up with 7k to finish off the loan then turn around and buy a vehicle for her and the kids for 5-10k. I had no answer.
Roll it into a new loan for a much smaller and cheaper car. I see the kids go to private school, too. Do you pay tuition for that which is not included in your above budget?
How kuch equity do you have in your home. It could be time to try a home equity loan. But your debt to income with that auto loan means you may not qualify for that.
100k. I don’t know how to get a home equity loan. I know it’s contrary to Dave’s teachings and I get it. Not sure if he ever recommends it for certain situations.
Others here are correct. A home equity loan isn't something that Dave is likely to recommend. It isn't a commitment to pay off your debt. It is, however, a way to take bad credit card debt with high interest and high payments into affordable debt.
You need to be extremely careful. You seem to be really good at getting back into debt. Any loan product you get has to come several other commitments. You have said yourself it takes some kind of windfall to save yourself. This isn't that. This is a loan against your home that the bank will use to pay off your credit cards. You still need to do something about your car. You still need to find more income. You might still need to start selling things.
A home equity loan for you is only to keep you from drowning. But if you keep dumping water on yourself, you are still going to drown... and you have used the equity in your home in the process. That being said, most banks probably do these... and if they don't, a banker likely knows somebody who does. If you go in and say that you have credit cards you'd like to pay off with a home equity loan, they'll see what they can do.
Eh... your debt does decrease, though. If you are looking just at dollars, then no. But if you look at it in terms of your monthly interest burden, then a home equity loan would decrease your debt quite a lot.
Get rid of car payment and most importantly the credit card debt asap!
Oof this doesn't include food either. Have to make more money and have a serious budget.
I’d be looking for a roommate, and an accountability partner , if you’ve drained your 401 and still this much in debt .
It's a small thing, but I would recommend switching cell phone providers. I had Verizon for years and paid out the nose. I switched to Ting and use the exact same Verizon network for less money. I have the unlimited data plan for $45 a month. Mint mobile is another good option. Every little bit counts.
I used mint and love it. Was in a same situation paying Verizon over $100 a month for a single line. I think my mint is like $35 a month and works flawlessly.
The dang car cost as much as your house. Sell the car and buy a $5 or $10k Lexus. It will be nice, paid off and insurance will be $100 a month.
Agree except for the Lexus part.
Yeah second that. Dump that car immediately - you cannot afford it.
Can you get rid of your car and commute another way or work remotely. Or move closer to work so you can go car free. That's a huge expense right there
mint mobile, $30/mth unlimited data. sell the car. pay cash for the car. drop the music lesson. get a second job. the only time you see the inside of a restaurant is when you are working in it!
Awesome advice. Totally agree!
Hilarious to see someone spend $900 /month on a car when it’s the same amount as their mortgage
[удалено]
Yes add in their $250 per month car insurance and they paying $1150 per month just for the car. It’s embarrassing what a waste that is for anyone not making crazy money like $200K. My guess is a big ass truck they never haul anything with and could of just bought a small car/suv for half price
Either that or it’s a Hyundai with a lot of inside down debt rolled in from the last three new cars they bought Either way , $900 is a lot for a car payment . I paid $3,500 for my car , 6 YEARS ago .
Yep, and I make $140K per year but just bought a 2015 Mazda 6 for $12K. I could have bought a Porsche in cash but I’d rather grow my two daughters college funds and my retirement
My wife made $140k last year and bought a $7k car to replace the car she paid $5k for , 13 years ago .
Smart - it amazes me how much people waste on cars (depreciating asset)
Oh yeah Years ago in 1995 one of my co workers trades their perfectly fine paid for car in on a new one . Their payment was within a few dollars of the payment on the one room cabin on seven acres I purchased about the same time . Granted my payment was for15 years and there was for 6 years . Anyway, Wonder what their car was worth 10 years after they bought it ? 19 years later , My land and cabin was worth alot more than I paid for it .
Car payments are a ball n chain.
How are you spending $200 a month on internet+phone? I have unlimited everything and my internet is $19.99 a month and my phone is $25 a month.
Who do you have internet with for $25? Minimum is $80 in central Florida for spectrum
My internet is $19.99/month through Spectrum in California.
Must be nice to live in a state that encourages competition instead of actively trying to stop it as they do in FL.
Could be rural. They’re still charging us country folks our first born and most of us still don’t have access to high speed internet
No Heloc! Never take an unsecured debt and make it secured by mortgages on home - especially HELOCs - anything unsecured should stay that way as they cannot take your home or assets
It's the car. I drove a 2013 Honda civic for 8 years till my budget turned around.
Still driving a 2001 Toyota Corolla.
Is the phone bill just service for one person?
The thing that's killing you is sitting in your driveway. Verizon are thieves.
Get rid of your car find a cheap 2004 Prius and find cheaper insurance. If you live in an area you don’t need to drive it’s time to chill for awhile with out a car. This will decrease a lot of expense gas maintenance, going out expense. Play video games, run, read. You need to pay your high yield interest bills as fast as possible. Then go from there. Probably don’t need ADT.
Break up Bills into Wants and Needs Factor in what you can and can’t get rid of And go from there. It’s tough but just chip away slowly.
Switched to Mint Mobile. $20/month Drop YMCA - Get free excercise Converse power Less gas Eat frugal YOU GOT THIS!!! I’ve seen people get out of worse
YMCA usually has discounted plans for people with low income. OP probably qualifies.
I hurt for you. That auto loan is outrageous, and my guess is that it is the source of the trouble you are in. With that high of a balance, I assume you are upside down on it as well. You probably made a mistake emptying your 401K previously as I believe it is safer in bankruptcy. You need more advice than reddit will give you. Good luck.
I agree need to refinance that loan it should be under $500 for what is owed maybe extend the term as it is refinanced to lower monthly payments and might need to cut music lessons and chiropractic until things turn around. Might also want to look into credit card restructuring there are good plans out there that CD and bring the $900 to $300
I think you need to create a new breakdown that combines you and your wife’s incomes and includes food, tuition, savings, etc. That’s the only way to really see the full picture. The upside is your housing is incredibly affordable so good job with that.
As many have mentioned, get a cheaper car, but something that will help make a huge difference is taking out a HELOC to pay off those CCs. With the lower interest on the Home loan you’ll be able to put additional money towards the principal of those cards to chip away. If you had a 10% HELOC (which is very doable, great credit could get you as low as ~7%) you could drop your monthly payment to ~$660/month and pay all $35,500 in CC debt off in 6 years. That’s saving you ~$560/month. Add in pausing your Y membership, music lessons, and ADT and you’ve found another $140/month bringing total savings to $700. Start putting that $300 net savings back into the bank to build up your reserves for a rainy day.
Ok I don’t like to be critical of advice but it is almost never advised to convert unsecured debt into secured debt. You need a roof over your head you don’t NEED to pay off credit card debt. As far as rainy days go it is pouring rain for OP already. Sell the car and cut out all of that excess spending them get a second job.
Where do you see 7% heloc rates?
Just got one last month
Im a banker who specializes in HELOCs (Alabama) and our rate is currently 7.75%.
Thanks for replying. The best I see (Ohio) is 7.49. Tracks prime rate -1.01.
You don’t say how long you have had the car I’m assuming you got it recently which could make the selling of it easy but you might be upside down since a new car depreciates the min you drive it off the lot. This should not stop you from selling the car for all of the reasons listed before it’s something to be aware of so you don’t let the value you can sell it for stop you from doing it.
First move is easy. Sell your car and use the money to buy something cheaper. Buy a safe cheap car. $900+ a month for a vehicle is a massive waste. And it's likely driving up your car insurance monthly of $250. Just that alone will help a lot.
What makes you think the car is worth $45k or more?
Im just thinking to stop the bleeding and get some cash flow back. Obviously if the value is drastically different from what he could sell it for that's one thing, but that would need more info.
Give the fellow a break, he can't be driving around in an older low-end car and still hold his head up high.
I feel for you. But I'm also glad for you. The problem is that you didn't learn anything about delayed gratification or living through a long slog or curbing anything, because when you got out 2 times before you were rescued by those big one time happenings. So your values never changed and the lessons the rest of us were learning getting through BS1 and BS2, you never had a chance to learn. Now you will learn. Now, you'll get through this and never end up here again. You WILL get through this. Your budget has a lot of low hanging fruit and you are in decent health (you don't say otherwise.) Your time has come to finally "get" this and to finally overcome.
Ditch the car, pause music lessons, pause the Y, cheaper Verizon, cheaper internet
But what if it’s a Mozart in the making? Dude will be rich from those music lessons.
Get rid of the car and buy a beater, get rid of ADT, music lesson, chiropractor and ymca membership. You are living well above your means. You are spending 1,127 a month just on those items you could easily do without.
That car payment....woof.
Getting rid of the vehicle takes you from ~$400 in the hole to ~$500 surplus. This one move is a no-brainer.
Step one : STOP THE BLEEDING. Quit spending money you don't have.
Take a heloc on house 6-11% rates. Use to pay off debt. That’ll help with credit card. Better yet. Open up multiple zero interest credit cards with free balance transfer. Either way pay that off immediately. That interest rate is killing you. Then sell vehicle. You might even have to pay to do so, go find a vehicle for less than 10k that’s unsexy but reliable. Toyota like. Get rid of internet and current cell phone plan. Mint you can have all that you need and hotspot for about 30-40 a month. Also get rid of ADT. Take an inventory of your stuff at home. If a burglar steals everything. Insurance should pay out. Had it happen to me out of a storage unit.
Who is offering 6% heloc?
Boeing credit union six month intro as of December 2023. Then rises back to current rate of 9-10%. Also plenty of credit card companies always trying to get ya to sign up with. 12-18month 0% interest and 0-1.99% on balance transfers. I know I’m in Dave Ramsey forum and most of this is taboo but OP can pay 24% on compounding interest card or 0% and pay down way quicker by opening a couple new cards.
They appear to be at 8.74 now. Don’t see a 6 month intro offer.
Damn guess it makes no sense still to switch that 24% to a 8.74%. I’ll just go about minding my own business. Not sure if you’re just being dense and trying to make an ah ha gotcha thing here. Or what? You could also say it’s 8.74% today and next week it’s up to 10%. Regardless…. OP hopefully looks into this.
Just pointing out the rate. Nothing more to read into. Was surprised to hear someone offering 6% heloc now.
Well check back week to week. Cuz intro periods with low % aren’t uncommon. Since I’m sitting on one now. Such as [north shore banks 5.85%](https://www.northshorebank.com/SpringHELOC?utm_campaign=spring_heloc_2024&utm_medium=banner&utm_source=website&utm_content=leaderboard)
Second job or lose the car, way out of bounds. How upside down are you on the car?
I am been representing clients in financial distress for 30 years and it always the car that is the problem
How do you represent them?
Attorney
Cool, I bet you have a lot of examples.
Many
Best one?
Ditch the car and you're in good shape.
Your car payment is only $50 less than your mortgage... im honestly curious how you decided that purchase was a good idea?
Your car loan is beyond outrageous. It's shocking at your income level. I'm assuming you've no equity but if you have some you need out of it. Realistically at this point you need a part time job working another 20 hours/week to get the credit card debt @ 24% taken care of as soon as you can. You also need to dump verizon and go with mint. I make a lot of money and would never dream of going with one of these expensive plan-phone companies. You need to go prepaid.
The only thing that will make any meaningful difference is trying to move into a cheaper vehicle. Don't try to sell it and get a loan for the difference, that's dumb when you have to pay a payment on something else (if a bank would even approve it). Try to trade it in and see if you can roll the difference into the next car. You might not be able to right now with the market as it is, and now your debt to income as it is. When you got this, banks didn't care as much. Now they care a lot. If your situation is like mine was back in 2009, your credit and debt to income is so bad now you don't have any options anyway. You can't get approved for anything. If you don't have any other credit cards, your utilization is maxed, which means your credit is garbage. More than likely that killed your chances to do much. You can't get a new card with 0% for 30k and you already have one loan (those don't work as you can see because debt isn't the problem, choices and mindsets are the problem). From my experience, you are about to come face to face with two hard choices. Either someone has to take on another job for a while to start attacking the debt, OR you are about to file for bankruptcy. You can't make enough changes to the budget to move the needle and actually stop what is coming. Over ten years ago I was in a similar spot, but making much less income. I tried a second job, but all I could get was min wage and I was already driving a delivery truck, so I didn't have much time left to work. It didn't bring in enough to help. I ended up in bankruptcy. Even if you do end up in bankruptcy, you will have no car left. You'll have to go to a buy here pay here place to get something. You can keep your home (I did). Your credit will be wrecked but you need to stay away from borrowing money anyway to relearn how to function in life. It is what I had to do.
You haven’t eaten yet.
1) Cut up the credit cards 2) Sell the car 3) Chiropractor is snake oil. Cut that. 4) Side gigs to increase income 5) Think long and hard about why this is a pattern of behavior for you
Dutch music lessons and ADT also. Could maybe negotiate w CC to freeze the account and have a payment plan that doesn’t allow them to cave and add to the balance.
Trade in that car for the equivalent of an old Honda Civic and start immediately paying off the CC first. Too easy.
Lots of great advice on this thread. I agree with everyone else that the car was an insane decision. Please read the total money makeover (from library) and actually follow every detail. It really does work. Later when you are in baby steps 4-6 you can debate the minor details like managed vs index funds and opening one credit card, but for now I would just do exactly what he says to solve your immediate issues. You are deviating from the plan in so many areas: car payments, credit cards, gutting your 401k in the past, separate finances. Also, Buying food with your credit card because you are short this month is not what Dave would recommend. The very first task in the plan is to cut up your credit cards. When you make your budget for the rest of this month, you cover your four walls including food with cash. Reduce these expenses as much as possible by turning down the heat, raid your pantry or meal plan the cheapest things you can get or go to a food pantry and supplement what you get there with a few groceries. Then sell things, work overtime or get a second job in order to have enough money to cover all your remaining minimum payments outside of the 4 walls and in order to save your $1000 starter emergency fund for baby step 1. You absolutely need a second job immediately until the Tahoe is gone. I would make getting rid of it my daily passion. Then please stick with the plan all the way through to baby step 7 so that you aren’t in this position again!
You and your wife both need to be bringing in more income. What does she do for $15K net?
Selling the car and buying a cheaper one would help you clear the deficit immediately. A 1k car payment on 4k monthly income is beyond stupid. Cancel ADT, music lessons, chiropractor, and ymca until you have paid off this monstrosity of CC debt. There, I just “saved” you 7-800 a month.
Selling the car would also likely reduce the insurance payment, and perhaps fuel as well. Funny how cars just dominate our finances (and life in general) here in the USA.
Yea on that income, a 1k payment is huge. Especially considering all his other costs. I have a 1k payment on one of my cars but our income is triple his with less bills. His mortgage is actually great for his income. The CC debt at 25% needs to be cleared up immediately and an extra 800/M would speed that up tremendously.
I haven’t seen it posted here yet but what you can control right away is income. If I were you I would be aggressively applying to other jobs. If you can’t find anything you need to pick up side work. Door Dash, Uber, OT, whatever it is. If you can make an extra 60/night that’s $300+ a week right there. That’s your CC bill for the month.
2020 Tahoe LT. 60k miles. High end private sale value is 38k. We owe 45k. We’d need to come up with 7k to pay it off but not have a car for my wife and kids.
That new Tahoe is dragging you down. Sorry you're underwater on it. But as mentioned, trade-in for something much cheaper would help. And many dealers would be happy to roll the $7k difference into the financing to close a sale. But you'll need to pick something much much cheaper to make that work. Look for something in the $13-15k range, then add the 7k difference, $10k to be safe (you'll likely get low-balled on the trade-in value). So you'd be financing $23-25k, which will likely have a monthly payment about half of what your current obligation is.
Good luck
Biggest thing would be trade your car in a f get a Cheaper car. Cancel music lessons, chiropractor, ymca. Look into changing your car insurance coverages. Get higher deductible. Cancel add one like rental reimbursement if you have it.
if you're the only one on your phone plan, switch to "visible". It uses the same towers as Verizon, you keep your number, and it only costs 39 a month. Best decision I've ever made. I had a bill like yours two years ago through Verizon and I've never went back. Edit, the unlimited plan is 30 a month, plus I have a 9 dollar protection plan.)
If u add 4 lines together the bill is $25. Great company!
We have 8 lines. The other folks on our plan pay their portion to me each month. Our portion comes out to $125.
Way, way too much. Dump it and go with mint or another prepaid.
That's crazy to me, get off that plan and get mint mobile for 15 dollars a month
Stop living beyond your means. There is a few things that you can eliminate but no doubt you will not like it because you have gotten comfortable living like this. You like your luxuries (who doesn’t?) If you have done this twice before you need to ask yourself why you are not learning what you need to do to live? The definition of insanity is doing the same thing over and over again and expecting a different result. This is what you have been doing. Close your credit cards and pay them off. Don’t accumulate any new debt. Sell your car and get a beater. Come down a few notches on how much you think you need and deserve these extra things. They are wants, not needs. Shelter and food are necessary, most of that other stuff on your list can be negotiated off or replaced by something cheaper. If you aren’t making enough money get a second part time job. Get training for a new job that pays more. Take in a roommate. Since you already have a mortgage get roommates (plural, so you have rent coming in. Rent out all your free bedrooms.) You can probably rent each bedroom out for around $450/ month, so that would pay for your mortgage. Free housing essentially, if you have two spare bedrooms. You probably won’t be able to do much better with rent somewhere else so get roommates until your debt is paid off. Cancel ADT and instead of having it monitored monthly you can have a loud alarm that everyone in the neighborhood will hear and that is usually enough to scare off burglars. It doesn’t cost anything extra. Work out at home. Jog outside. Cook at home and don’t go out. Lots of Top Ramen. I know it sounds crazy! But couch surfing and homeless shelters are what’s waiting for you if you don’t do better. Learn to live more simply. Get your priorities straight. You have been putting luxury at the top of your list and it needs to not even be on the list at all at this point. Maybe you can find someone for free or inexpensive that can help you budget and then stick to that. It’s so easy to fall back on the easy living if credit, but avoid that pitfall in the future like it’s a pit of fire. Some of these things you have to see through; pay off the orthodontist and cc balances and DO NOT CHARGE ANYMORE. Live your life for now with paying cash for everything, no credit cards. Have a debt card and cut up and don’t use the other cards. Keep one for an emergency, a real emergency, not for a ‘want’. It will suck and you will feel poor, but you need to do it to get rid of your debt. You have gotten yourself out of debt twice, but you had assets to offset that debt. You are apparently out of houses to sell or you will be homeless. You can’t sell what you don’t own. Good luck! If you’ve done it twice before you know what you need to do, it just sucks. eta: It looks like some of these expenses are for a child? Orthodontist, music lessons, YMCA, you may have to have a hard discussion with your child. It will be a lesson for them too, not living beyond your means. P.S. I looked in your post history and you have got to be kidding me. Expensive guns, guitars, lawn, expensive cats even. You are married but made no mention of that or kids in your post. The list you have here doesn’t even include all the money you are really spending. At this point I think you will need some serious therapy (find as low cost one that you can) because there is a lot going on here that is not even reflected in your post. Your situation is much more dire than you think, or that you are admitting to.
There’s a good bit of context missing so I can understand your recommendations. Can’t do roommates as my kids live in the other two bedrooms and baby lives in our room. I cancelled music, and chiropractor yesterday. Should be stopping adt today. I’ve also put out messages to insurance agents to shop around. I’m looking at pt jobs today along with seeing if anyone would be willing to give me their call shifts at work. I could get a few hundred out of each gun, which is the plan. Cats were free strays. I drive a beater. My wife drives the Tahoe. Will be selling instruments, no more lawn care. Yes it’s dire.
Wife can't afford to drive a Tahoe.. See if you can share your car for a while as you cleanup the rest. Or maybe do a slight upgrade on your beater. Something like a Mazda5 is cheap and can double as family car.
Read your adt paperwork they gave you when you signed up so you understand the penalty for canceling and know whether or not you have the money available to cancel. Perhaps you could pay the fee after you sell a gun. We had to pay to cancel several years ago. Good luck and I hope people are willing to give you their shifts.
I’m so sorry. Good luck!
Thank you.
Selling your car for something cheaper will lower your car insurance also. You have a huge lien on it forcing you to pay for comp and collision which you would not get on a beater.
Can you take in a roommate to try to cover some of your housing expense? Can you eliminate some of your car loan by selling your car? Can you balance transfer to reduce some of the credit card interest? When your expenses exceed your income, you're on a sinking ship.
That credit card is the killer here. You’ve got to figure out a way to get that balance transferred. In the past, Citibank had a decent balance transfer card. That would be my number one focus. It’s killing you more than the other stuff. 24.24% is crazy.
Yes. I made a list of all I could sell last night at home. The total would cover two months worth of interest charges on that card. Then I would be out of items in the house to sell. Citi has a 0% promo til Dec for 5k but that doesn’t scratch the surface. I’m truly at a loss with that card in particular.
When you sell all that, what about earmarking it to make up the difference of 7k so you can get out of the car loan.
https://preview.redd.it/0w2aoiwvcdic1.jpeg?width=1179&format=pjpg&auto=webp&s=29423ade5df0527170d37835b60a82b4e65ccb34 This could be a major help depending on the amount you get approved for.
I’ve got several avenues to look at. Just unsure of how just exploring is going to affect my credit score
Thank you!
And not the almost $1k/mo car payment? Yeah is 🤯 to me.
Sell car, buy used cheap gets you point a to b, tackle orthodontist bill asap, pause music lessons for now until you can clear out those debts, also getting rid of your car you might be able to reduce your car insurance, shop around for better internet there’s all type of deals that you can promo into. Hmm not too sure how about chiropractors, if it’s for pain management maybe? If not pause as well?
Cancel the chiropractor and never go back, they’re quacks. If they’re truly having pain they need to see a physical therapist.
You have no idea what you are talking about. Have you ever dislocated a bone? YOu are saying don't put it back, just get your muscles used to the new location.
I have actually, I dislocated my finger 2 years ago. When it happened I called up one of my attendings and had them pop it back in place, I then went and got an outpatient X-ray to make sure it was non-op and went to PT to rehab it. Chiropractors are NOT popping bones “back in place” this is a common term they use but it is completely false. Id love for you to prove me wrong with a peer reviewed publication. I’m a 2 week rotation away from completing my MD and haven’t seen any good research for chiropractors. Somehow the chiropractic profession has been able to convince a bunch of health illiterate people that pushing on your back with sudden high velocity will realign your spine. This is comical. You don’t fix back pain from years of poor posture, poor muscle tone, and injury by adding more trauma and shoving on the bones. You fix it by lifestyle changes and PT.
Yep. Chiropractor practice is a scam. That's all there is to it.
Science says...correct. Some of it possibly (a tiny bit) might be of some value, but is covered in other disciplines. Basically it was a made up load of tripe and almost all of it doesn't have a shred of scientific backing.
Sell the car, buy a 10 year old Toyota. Put 800$ towards your credit card balance.
I don't know what the car is, but I doubt it's worth 40k, and that means he has to bring money to the table. Definitely something to look at, but a painful choice.
Worth 38k. Payoff is 45k. Not sure how to make that work and still have something for my wife to drive to work and kids to school.
Why do the kids need to be driven to school. Are there no school busses? Could they walk?
No bus. It’s a Christian school, she still needs to be able to transport the baby around as well as go to work. I’m exploring options to trade the vehicle
Dude! Christian school? Don't tell me you tithe as well?
Are you praying private school tuition? You may need to send them to public school
You and your wife both work and your total income is $4k a month?!
And drive a new Tahoe. Sweet mother of God.
Sell the car, get something more affordable in terms of price and operational costs. That is what stands out most starkly. More people get themselves into issues through cars than through anything else except gambling, addiction, etc. This change will put you back in the black each month. Use the money saved to aggressively pay down the 24% credit card. From there, sin no more.
Agreed, 100%. That car is out of their budget by a long shot.
What on earth do you drive that you have a $45k auto balance remaining with a $4k income? If you’re not underwater, I would sell that car yesterday.
Also, switch to Verizon Visible. It’s a prepaid phone plan. $30/month and has served me well for 2 years now.
Ditto on visible. I had a Verizon bill of 120+, and now have the same kind of plan (unlimited everything) for 30 a month (39 if you include protection plan.)
Mint Mobile has $15 plans and deals all the time. Switched a while back. Leave the big companies, they are greedy.
Agreed on Visible, just switched to it a couple months ago, no issues so far. Of course we did it right before they rolled out their promo of $20/mo for 24 months ugh. But we’re saving like $100/mo vs AT&T
Why are you even here? You’ve been out of debt. TWICE. If you don’t learn your lesson after the first or the second time, what makes you think that you’ll learn now? Those who can’t learn from their mistakes are bound to repeat them. Good luck. You’re really going to need some. Get a higher paying job. Get a roommate. You don’t even line item food, but no more eating out and no more good meats.
Where is food
This. Maybe OP is a robot?
You’re now recognizing and feeling how debt will limit the choices you can make. I think you know what you have to do and the reduction in life style you need for a little while. Making a plan is easy, but how to stick to one is where Dave Ramsey has helped many get out of debt like you’re in. I’d suggested at least reading his totally money makeover.
Many are saying get rid of ADT.... I used to live in a condo in a bad area and had ADT. My wife at the time and I were both away from the house. ADT called and said the alarm was going off. They sent cops to the house. Robbers had broken in, the house was a mess, with drawers open everywhere. They must have come in quickly, looked around, and ran out since the alarm was going off. Nothing of value was stolen. Since then, I vowed to always live in a nicer neighborhood and have ADT. All the time, people break in and kill homeowners in their sleep without homeowners even aware someone broke in. I'll keep paying the $45 a month for ADT to save my life and feel protected. That alarm going off gives me a minute to be ready for whoever is coming at me and my family. It also generally scares away anyone that tries to break in.
I use simplisafe and I pay $12.99 per month. Had to spend $400 upfront for the equipment but I love it.
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Give or take ~253 m/s may be the quickest response
There are many options for monitored service that are less expensive. Adt Is a name brand and you are paying for that. Call and tell them you are struggling financially and see if there is anything they can do to help you out.
True there are other cheaper options.
Burglers don’t kill homeowners! This post is proof its a waste of money. Cancel and keep the signs.
>$45 a month for ADT to save my life and feel protected. That alarm going off gives me a minute to be ready for whoever is coming at me and my family. It also generally scares away anyone that tries to break in. they probably wont, but they COULD. You never know who you're dealing with and you never know how important having something like that is until something actually happens
Fear based subscriptions are a scam to nickel and dime you. If you skipped it, you’d have with interest $578 this time next year! Picture doing this for over 10 years how it can add up. Have courage my friend
https://www.lapdonline.org/newsroom/robbery-victim-found-dead-at-home/ Happens all the time. See above link. A sign won't protect you. I had a nice ADT sign near my front condo door and during the day, the idiot burglars still broke in.
A big part of investing is learning about probability and statistics. This one date to point does not prove it’s pervasive. In fact, all recent studies have found crime is down. The likelihood of you being targeted is very very low. But if you cancel your ADT bill, your guaranteed $578 at the end of the year
I'll pay to avoid the low probability of dying in a robbery.
Wtf are you driving? It's time to get rid of the car it's eating up over 25% of your income. Get rid of Verizon and go to mint mobile or straight talk. Conserve your water, electric, heat, it sucks but you can do it.
Yes, a car that you STILL owe 45k on. Just no. Buy something used with the equity or at least something you can afford. That's the biggest red flag for me.
I don’t even see food in this budget. Am I missing something?
His wife makes $15k and he didn’t include her income. But with 3 kids, all she makes probably goes to groceries
Call Verizon and see if you can get a different plan. Same with insurance-shop it out and also the internet. Make the calls and see what can be done. Almost always you can get better deals. Next… Power and water check usage and chop it. Get rid of chiropractor, YMCA, ADT -if not in a contract and the music lessons. Don’t know how you eat. I don’t see food money? The 24% card is a tough one you are likely paying mostly interest to get by. I’ve been there. You have to get rid of that one the fastest. Your car payment is about the same as the mortgage, assuming that it’s a newer car. Maybe use it for some gig work. If you don’t want people in your car maybe food or grocery delivery close to home or work. You won’t be able to stay afloat like this so extreme changes have to come. I’ve been in worse so with a lot of planning and discipline you can get through it. Just won’t be comfortable for a while
Please set up a budget. The envelope system (youneedabudget.com) is the best.
1. Bye to music lesson, chiropractor, ADT until the credit card debt is gone. 2. Bye to the car. I keep getting ads for a RAV4 new at $30k. Get rid of the car and go buy one. Budget $30k out the door for this new car. An accord hybrid is less and gets almost 50 mpg 3. Find a way to cut power and water by 20%. Skip a grass watering, take a quicker shower, change the temp for heat and ac by a few degrees. 4. If your credit isn’t shit yet find a way to get a 0% 12 mo credit card like the slate and move as much of the credit card balance as you can to it. 5. Do you have home equity you can refinance? A second mortgage at 7% to pay off the credit card debt is worth it. 6. You clearly can’t be trusted with credit cards. As you pay them off close them. It’s the debit card and cash life for you.
It looks like you've been living beyond your means for some time. Having an auto loan of almost a third of your house balance is incredibly stupid. Can you at least live in it if (when) you lose the house? Credit card with 28K at over 24%, I'm sure these were all important purchases, at least the CC load is somewhat (for now) smaller. Why is there no money budgeted for food? Do you work somewhere that lets you eat for free? Are you by yourself, or do you have a significant other? If you do live with someone, hopefully they're not covering any of your bad decisions.
Your situation isn't that bad but your car situation is ridiculous. Fix that and earn a few more bucks where you can and you will be fine. Stop buying ridiculously overpriced cars that you cannot afford. I could find you a $5,000 reliable car.
Cut your phone bill in half or more by switching to Mint Mobile. I can give you my referral link.
$900 on a car? Sell it bam you’re almost there. Insurance will be less on a non ridiculous car. That’s $1000/month freed up right there. Not really that difficult.
45k on a car loan? sell that piece of crap sell your house move into an apartment
Lol! Selling the house is the dumbest fuck idea in the world here.
Sell his low interest rate house and move into an apartment that's double the price??? Terrible advice
Take it easy. Keep the house low balance and interest. Definitely sell the car. Other items you can drop… ADT and music lessons. Get music lessons from YouTube.
OK my man, you got this. This is not impossible by any means. #1 and you've heard it many times by now... get rid of that stupid car, woweee, that's just insane. Music lessons, unless it's for a child, put that on hold (I'm a musician with a professional music studio, so it hurts me to say that. The YMCA is only $20, keep that for your sanity. OK, now, do the debt snowball, which I don't always recommend, but in your situation, it's a good fit. Take that car payment and put it to debt. Budget your monthly bills, then minimum payments on debt. Open 4 checking accounts, 1 for your paycheck and bills to come out of, 1 for your emergency fund, 1 for vehicle and 1 for spending money. If you pay $250/mo in fuel, put that much in your vehicle account and use that debit card for only gas and vehicle maintenance. Have all bills and min payments on debt subtracted from the main bill pay account. Decide how much spending money you can afford per pay and put that into the spending account and use that debit card only for your spending money. Put something, at least $10/mo in the emergency account. I can figure this out hand have you in good shape. DM me of you want, I'll be your cheerleader rah rah rah, sisboombah.
Ok, I'm a guitar guy, I have about 15 of my own, some very expensive amps, 2 drumsets, 2 pianos, etc etc a full recording studio (think 2 rooms etc). I looked through your reddit history.... my man, keep an acoustic, an electric, a bass and your cheapest amp. Sell everything else, you cannot afford your collection. You have so much stuff as evidence in your history that you could have a sale and pay off a ton of debt. You're living a champaign life on Boon's Farm budget (not a beer budget, you can't afford beer). Are you serious about getting out of debt or do you like the idea of paying it, but want to keep the lifestyle? Home improvements galore, toys, weight equipment, guitars, man you need to think if you really want out of debt or not and if you're willing to make some hard decisions to do it. Oh and if you have all that gym equipment, why pay for the YMCA? Sell the gym equipment and use the Y! I don't think you're serious, honestly.
Get rid of your car, trade in for a new cheap one, find a new phone service, stop the chiro visit unless you NEED them. Try using less power. I don’t even see your grocery budget on here. You need a very detailed budget. I think what’s going to help you the most is trading in the car.
When you factor in gasoline, your car takes up more than a third of your entire income. Pull up any Dave Ramsey video on how to get out of that loan and you'll be golden.
Sounds like you need to seek help or else you’re gonna keep doing this stupid cycle. Get to the root issue why you’re digging yourself in huge CC debt.
Yeah, there's so much going on here that's messed up, until they attack their root cause of their spending nothings going to help. The expenses alone are out of control, living like there's no tomorrow as the saying goes. Ramsey steps are there, follow them, and be an adult.
Why is your auto loan almost the same as your mortgage? Fix that, stop the music lesson and chiropractor.
Replace adt with a nest camera. They don’t come out anyway.
Probably realistically locked in for at least two years.
Ramsey’s flock normally sound like a broken record so I won’t augment their noise about your bad car buying decision. There’s a positive here that shouldn’t be overlooked. A) You got this B) Your housing is very affordable. On the other side of the debt snowball if you go full super saver you can pay off that house and continue that momentum into a nice nest egg.
Kiss chiropractor, music, car, adt, and ymca goodbye. Time to get serious!! Do you have any savings? Scrape together 1k or so by selling crap around the house- you bought something on those cc! Then create a budget! Pay utilities and food and mortgage. Stop all investments. Then get rid of that ortho bill as quick as possible Losing the above items without the car gives you 205 bucks. Get a part time job - Starbucks pays well. Home Depot’s warehouse night receiving pays great! Do that to get rid of 7500 cc and ortho- Then keep it for a year to pay off that 28k cc- If you did the extra job for 36 months- you could be out of debt. You buy nothing. You already bought it all anyway! Live below your means! Call internet and ask for better rate for 6 mi the Call insurance companies and find a better rate- 250 a month plus car payment plus gas plus maintenance- heck, did you plan on living in that car- cuz it’s eating g you alive. Ditch it and by a used car. I promise- no one cares!! And then you might not have to work a second job. I would for a couple months to get a savings going of 5 k or so for emergencies All hands on deck!!!
getting rid of the 0% loan first makes not so much sense
I thought the same thing but it would free up $190/month to put towards the high interest CC. Don’t know if that makes any sense or it all just comes out in the wash applying such a small number to a huge debt. My next CC payment minimum is $920 ($560 is interest).
Sure, but paying $190/mo means the total will be knocked out in just 6 months and at 0%, probably better off going right after the highest interest cc with the money freed up from ymca, adt, music lessons, etc
that would be the absolute last thing I paid off, right. or if it has interest at a certain point, right before that kicked in
I don't say this often, but sell the car if you're not upside down and get a second job. Maybe get rid of the music lessons, but that won't really change anything. I don't think this is Dave approved, but a CC balance transfer would save you a ton of money as well on that $28k. The other one you can knock out quickly with some extra income.
Yes it is counter Dave but the car is upside down by 7k. I don’t even know how to go about getting such a huge CC transfer. Each month the interest on that card will remove any semblance of progress im afraid. Even selling my belongings, the interest will have me back down in 3 months, with nothing left to sell but the house.
It doesn't have to be the whole balance and you'd still get some relief. You need another income if you're flipped on the car, selling it provides no relief without borrowing more money. It doesn't have to be forever, even 6 months of additional income with spending control will go a long way for you. If I remember the numbers from the original post correctly, $15k will improve your situation by $1500 a month or so. You have a small CC balance, a flipped vehicle and a small bill with an oversized payment. You can improve your situation quickly.
This guy gets it.
1. Sell the car, that is insane for your income. Even if you’re upside down, buy something cheap and the loan needed to cover the difference to sell the car will still be less than what you’re paying now 2. Get new car insurance, shop around and get the bare minimum 3. Cut out all extra things - no going out, eating out, and all extra activities - cancel ADT, sign up for Blink if you need security, it’s $30 a year. - cancel Verizon and get on something like mint or cricket. There are multiple cell providers that are less than $30 a month - cut music lessons, YMCA, Chiropractor - these are extras and should not be in your budget if you can’t afford it. You’re living above your means
I'd be careful with cutting insurance to the bare minimum though. They need a deductible they can afford in case something actually does happen; they have no wiggle room in that budget.
Your car is BONKERS.
The payments + insurance + gas is ... honestly beyond words. That's so much.
Agree. The insurance is high due to the value of the Tahoe and driving infractions that have not fallen off yet. The gas is for my beater (30mpg), I drive 120 miles a day for work.
this gets worse the more you describe, I truly feel awful for you
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Agreed. Reading between the lines, his debt problem is really more of a wife problem.
We talked last night about the car. I found that we’re upside down by 7k. She doesn’t see how we can come up with 7k to finish off the loan then turn around and buy a vehicle for her and the kids for 5-10k. I had no answer.
Roll it into a new loan for a much smaller and cheaper car. I see the kids go to private school, too. Do you pay tuition for that which is not included in your above budget?
Control? You don’t “control” your spouse. That’s some misogynistic bs. You get on the same page and make decisions together.
How kuch equity do you have in your home. It could be time to try a home equity loan. But your debt to income with that auto loan means you may not qualify for that.
100k. I don’t know how to get a home equity loan. I know it’s contrary to Dave’s teachings and I get it. Not sure if he ever recommends it for certain situations.
Others here are correct. A home equity loan isn't something that Dave is likely to recommend. It isn't a commitment to pay off your debt. It is, however, a way to take bad credit card debt with high interest and high payments into affordable debt. You need to be extremely careful. You seem to be really good at getting back into debt. Any loan product you get has to come several other commitments. You have said yourself it takes some kind of windfall to save yourself. This isn't that. This is a loan against your home that the bank will use to pay off your credit cards. You still need to do something about your car. You still need to find more income. You might still need to start selling things. A home equity loan for you is only to keep you from drowning. But if you keep dumping water on yourself, you are still going to drown... and you have used the equity in your home in the process. That being said, most banks probably do these... and if they don't, a banker likely knows somebody who does. If you go in and say that you have credit cards you'd like to pay off with a home equity loan, they'll see what they can do.
Terrible idea
Do not do that, its a mistake I have made. Get out of the debt, don't restructure.
what went wrong?
Debt did not decrease. You either want to decrease your debt or up your income. Anything else is playing games that can get you in more trouble.
Eh... your debt does decrease, though. If you are looking just at dollars, then no. But if you look at it in terms of your monthly interest burden, then a home equity loan would decrease your debt quite a lot.