Financial planning/budgeting?

Question

Okay this is going to sound a little pathetic, but here goes: I am 23, my fiance is 25, we have 2 kids, 6 and 3. We had to move into his parents house 6 months ago due to financial issues. We still have like $20,000 in debt. We only make like $22,000 a year. I can't take living here much longer, How can I get rid of some of this debt asap? I feel liek I am only paying interest and the balances aren't goign down. I wrote to the card companies and they say they can't reduce my interest rates. My credit report looks kinda crappy because I have some utility bills and medical bills on collection. But how do I get ahead?

we haven't used the cards in a long time, the reason there is so much debt on them is because I had to pay some old utilities with them and we also had to get a vehicle because the car was about to blow up. we spend as little as possible and i even started clipping coupons and watching for sales on stuff we need, but it hasn't helped much in the last 6 months

Answer 1

there are many options here. first of all you need to make sure that you and your fiance are both working full time and making as much money as possible. you also need to make sure you keep an eye on your common spending (ie food, ect) if you can some how find a way to reduce your common spending and only spend money on what you NEED to survive then you should be able to attack your credit bills in no time. it should be a little bit easier now that you are living with is parents. take that to your advantage because cost of living should be cheaper at the moment. if you are near the point to where you cant pay anything off you can file for bankruptcy, but that can cause a lot of problems when it comes to credit and purchasing stuff so i do not recommnend that...hope that helps

Answer 2

Heres what you'll want to do:

Start carrying a list of paper and writing down everytime you purchase something. Even if it's just a .50 or $1 item still write it down

Next, sit down with your paycheck, bills and that list. Do a budget with paying the minium on everything. Find out how much extra money you have left each month. Now, see which debt has the highest interest rate. You will want to pay all the extra money you have to that debt because it's costing you the most money each month.

Next, look at what bills you can get rid or downsize on. Moving in with your parents had to have helped abunch, don't feel bad i'm 23 and done the samething a bout 9 months ago and now i'm back on track and moving out in 2 weeks. Anyhow, things like taking a lunch to work, make your morning coffee, take drinks to work with you, cut the cell phone down or get rid of it, eat alot of soups, vegatables and pastas, cook 2-3 days worth of meals at once, cut coupons. If you have a car payment sell it and get something for cash or 1-2grand. You should both be working full time which if you only bring in 22k a year I dont think your both working. Both start working and maybe one of you should look at getting a second job and work on the other persons day off. I know it doesn't sound fun but if you really want to get out of debt you will do it. Just think you work 10 extra hours a week at $8 a hour thats a extra 3840 a year to go straight towards the debt.

I would recommend you get a book by Dave Ramsey called "The complete money makeover". This will help you stay focused and give you some help you need. You can get it at the library no need to spend the money and buy it. Maybe you can sign up for food assistance which will save you alot each month also. Best of luck but with some hard work and focus you can get out of this debt. Just don't let it happen again remember to always spend less then you make and save for retirement. Best of luck and happy holidays. If you'd like more help where you send me a list of all your bills and I can put togeahter a budget feel free to contact me on here.

Answer 3

Warning: personal opinions ahead. I have no connection to any of these products or companies. I have used Quicken forever and am hopelessly locked in to it. Quicken is the gold standard, but its quality has consistently declined over the years. Intuit seems less interested in fixing Quicken bugs than in branching out in other, less productive, directions. Moneydance is a very nice Quicken clone, and its creators seem to have more pride in their product's quality than Intuit does. I've looked at a little and it seems to have about 3/4 of Quicken's features and none of Quicken's annoying bugs. Microsoft Money is a total botch. Don't even bother going there. I've never heard of Financial GPS, but I'd be wary of any advertisement which read like this: DOWNLOAD INSTANTLY NOW FOR ONLY $89.99 no wait, $39.99!!! HURRY!!! This is a one time special and will expire on Sunday November 9, 108 at Midnite! (I think they may have a Y2K problem.) OBTW, the latest version of Quicken is 2009. I'm using 2007 and will stick with that until Intuit obsoletes it. Bottom line? I think if I were starting from scratch today, I'd go with Moneydance.

Answer 4

Can you sell anything ? Car, extra cloths , stuff the kids dont use anymore? Can you increase your income? Can you get a personal loan to pay off the credit card debt at a lower rate of interest? More tips here http://lissiearticles.com/how-to-get-out-of-debt-and-save-money/

Answer 5

Start by shredding your credit cards. You need to pay cash for everything so that you don't overspend. Get on a strict, written budget and sell some of the junk that you don't need. To get motivated and pay off your debt faster, pay the minimum balance on each debt except the smallest one. Throw all of your financial effort into paying off that small debt. When you pay it off, cross the debt off your list and go to the next smallest debt. You'll get some quick wins to stay motivated.

Answer 6

if you're Americans, I suggest that you both need to be working full time.

my neighbors used to do this. He worked days and she worked nights. Thus there was always someone home to look out for the kids and make meals. It was a rough go for a while and they needed the money until she got a better paying job and her youngest started into school.


GL

Answer 7

Cut spending and look into a second job at least one of you.