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3 years later.....worse off than when I started

March 20th, 2017 at 12:58 am

Hi everyone. I am 27 years old with a wife and 2, almost 3 kids. I have lived the last 7 years spending money and making sure I make all my payments, without saving a dime. I have a total of 117K in debt. I am finally ready to save money and pay my debt off. Please join me in my journey to pay off my debt and save money for my family's future.

Here is my current situation.

Current Savings: $0

Current 401K: $0

Current Debt:
46,359 - Student Loan (Mine)
41,978 - Car #1
14,040 - Car #2
5,256/6,000 - Walmart CC
3,724/3,800 - Capital One CC (Mine)
1,215/2,900 - Lowes CC
1,079/5,000 - GE Capital CC
973 - Old Court Fine
786 - Student Loan (Wife's)
578/600 - Wells Fargo CC
498/500 - Teamsters CC
192/300 - Bank of America CC
160/500 - Kohls CC
110/4,900 - Care Credit C
94/200 - Capital One CC (Wife's)

Upcoming Bills:
600 - Taxes
100 - Filing for taxes


Monthly Bills:

750 - Rent
560 - Car #1
330 - Car Insurance
320 - Car #2
300 - Gas
300 - Groceries
250 - Phones
150 - Walmart CC
120 - Electric
100 - Lowes CC
100 - GE Capital CC
87 - Life Insurance
80 - Capital One CC #2
80 - Water
50 - Student Loan #1
45 - Tanning
30 - Bank of America CC
30 - Care Credit CC
30 - Capital One CC #1
30 - Wells Fargo CC
30 - Kohls CC
30 - Teamsters CC
30 - Trash
20 - Gym
20 - Oil Changes
20 - Old Court Fine
12 - Netflix
11 - Ipsy Subscription


Current Month (March):

1,590 - Current money
1,500 - Forecasted income for rest of the month
3,090 - Total money for current month

2,010 - Total bills left for current month

1,080 - EXTRA Money this month.


I plan on spending the 1,084 on filing taxes (100) and the rest to an emergency fund (980). I will keep you updated!

22 Responses to “3 years later.....worse off than when I started”

  1. Shiela Says:

    Hi and welcome. Good luck paying off the debt. The $42K car is pretty expensive have you consider selling that off and getting a cheaper one?

  2. scottish girl Says:

    Hi! Welcome to SA. We will cheer you on!

  3. Dido Says:

    Welcome back to SA, and congrats on deciding to get serious about things. What's the sum of your monthly income and monthly expenses. Is having an extra thousand typical (I'm guessing not), or is that really money that will be spent on an annual, biannual, or quarterly expense like a car insurance payment (in which case, it's not really an emergency fund). If after laying out and planning for all the quarterly, biannual, and annual expenses you have more income than expenses, then lay out the debts by interest rate and start paying off the highest interest first. Or if there are some smaller debts like the old court debt, you might find it more motivating to pay some of those off first. Interest rates have started to increase, so you'll want to get a handle on that debt and consider which of your expenses are discretionary (e.g. tanning) and consider whether it might be worth it to put that money towards debt reduction until your debt is less and you can reward yourself by adding it back. Figure out how much interest you are paying each month on the CCs and add that in as an expense as well--because the credit card companies sure will. With that added in, your discretionary budget will be less. Good luck and welcome back!

  4. Petunia 100 Says:

    I remember you! Welcome back!

    Congrats on the new baby, and best of luck with your goals.

  5. greenleaf Says:

    Welcome back! It looks like you have a large number of relatively small CC balances- great potential for a quick debt snowball when you start knocking them out and recouping those monthly payments!

  6. LivingAlmostLarge Says:

    Welcome back HHM. Good luck. I wrote on your post it's the cars. What sort of cars do you drive? You need to really not look at cutting tiny things. But look big picture. Cell phones i assume you have to ride out the contract. But after that no more new cell phones and switch to some place you have to buy a cheap phone.

    But bigger picture what is the cars you are driving? They are too expensive car insurance and payment wise.

    Doesn't matter if it was $25k for new car, it should have been a gently used $10k minivan. To fit the 3 kids you mentioned. And if your wife drives locally then why couldn't it have been a used minivan?

  7. Kiki Says:

    I applaud your desire to get out of debt. You can do this!

    The cars and phones are really expensive. What kind of job do you have?
    Can you renegotiate the phone rates?
    How can you make some extra money to pay off debt fast?
    You are paid weekly? bi-weekly?

    Get on an all cash diet today and stop using the cards. If there is no cash for the purchase then do not buy it.

    I would pay that tax debt as soon as possible while you have the money.

    Then focus on those credit cards with little balances:

    94/200 - Capital One CC (Wife's)
    110/4,900 - Care Credit C
    160/500 - Kohls CC
    192/300 - Bank of America CC
    498/500 - Teamsters CC
    578/600 - Wells Fargo CC

    DO not close the accounts as that could affect your credit score but stop using them.

    Once a card is paid off roll that payment amount into the next debt to pay off.

    Get those little ones paid off with a specific goal: all 6 paid off by say end of May.

    You can do this!

  8. Butterscotch Says:

    You are making $880/mo in car payments, and $50 towards student loans? i would ditch those cars yesterday. I would also get rid of the phone plan at $250. Unless that is unlimited everything for 4-5 people then you are getting ripped off.
    Good luck!

  9. creditcardfree Says:

    Welcome to the SA blogs! Look forward to watching your financial life turn around.

  10. PatientSaver Says:

    Can you provide the interest rate on all those loans? That would provide very important info about prioritizing which should get paid first.

    I don't know what kind of vehicle you have that costs $42K but in your situation you cannot afford it.There is no way you can justify that. If you're serious about paying down the debt, you can find something much cheaper.

  11. crazyliblady Says:

    I would look at selling the car with the $42K loan and pay off the loan with the proceeds.

    I would also look at getting extra income, such as from overtime, surveys, mystery shopping, etc.

    If you are current on student loan payments, see if you can refinance. That could decrease your payment.

    Do you have any rewards you can cash in on any credit card? If so, cash them in and put that money towards a debt.

    Seriously, you are in this much debt and paying for tanning? That's a no brainer and something that you should cancel right away. Also, I looked up what Ipsy is and I would cancel that now also. And get one of the cheaper Netflix plans.

    Are you in a contract with the phones? That rate is way to high for a normal cell phone plan. I would look at something cheaper like a prepaid phone plan. I have had Tracfone for years and love it. Unless you are in a contract with the gym, cancel that too. Exercise at home to videos on Netflix, Youtube, DVD, etc. Or run, walk, etc. outside. Leave all your credit cards at home and only shop for necessities with cash.

  12. hehateme000 Says:

    Thank you everyone. The 42k car is because we rolled over our negative equity into a new car loan, and they would only do it if we spent enough on a car, So we had to spend 30k since they would finance 36k, with the extra 6k paying off the other car. Add taxes and fees, and it is 42k. The good thing is that my interest rate is 3.24%. I really don't think I can sell the car without being underwater still, so I would like to pay off the credit cards and then use that extra money to pay down the car.

    I am a Front Office Manager at a hotel in Sacramento. I make ok money, 47k a year salary. My wife brings home on average $400 every 2 weeks. She works from home and home schools our kids.

    So I put this months bills but within the last few days I have made some changes:

    1) Got rid of tanning. We still need to pay for April because they want a 30 day cancellation.
    2) Reduced phone bill from 280 to 250. In 4 months, one of our "payments" for the wives phone will stop and that will save an extra $30 a month. That will take it to $220. I am going to cancel our total coverage insurance for both phones, and that will take it to $200. Finally, in about a year, my phone will be paid off and that will take the total bill down to about $160. That is for unlimited data, so I could still take it down to about $120 at that point as well.
    3) I would cancel Ipsy and Netflix but those are mainly for the wife and kids. We homeschool and we do not pay for cable so I feel like the $12 we spend on Netflix is a good compromise, especially for the kids. My wife also has that Ipsy subscription but honestly she uses everything that comes in it. If she didn't get that bag every month, then she would be buying that stuff at the store. As someone else said, "she can't exactly use magic markers instead". lol
    4) The gym is really my only luxury I spend on myself, and I do work out 4-5x a week so it really is a good use for me. I am on a month to month contract though so I can cancel any time.
    5) My savings this month went from 1080 to 989 because I added some bills that are due in the beginning of next month and changed them to the end of this month. I first ran into this problem one month when I thought I had all the bills paid, then realized on the 1st that I had no money for rent. I started adding rent to my bills on the 31st so I knew I would have to have the money the month before. Now I am adding in bills that are due in the first week of the month to the month before. Sometimes we will not get a paycheck until the 7th and it always screws us when the next month comes and there are bills due on there 1st, 3rd, 5th, etc. Talk about living paycheck to paycheck

    Crazy lib lady - I do have some rewards on some cards, about $50 total. I will cash those in! Thanks!

    PatientSaver - Here are the interest rates:

    46,359 - Student Loan (Mine) - 5%
    41,978 - Car #1 - 3.24%
    14,040 - Car #2 - ?
    5,256/6,000 - Walmart CC - 23.15%
    3,724/3,800 - Capital One CC (Mine) - 12.4%
    1,215/2,900 - Lowes CC - 0% until 02/19/18
    1,079/5,000 - GE Capital CC - 0% until 02/14/18
    973 - Old Court Fine - 0%
    786 - Student Loan (Wife's) - 5.6%
    578/600 - Wells Fargo CC - 17.99%
    498/500 - Teamsters CC - 19.99%
    192/300 - Bank of America CC - 20.74%
    160/500 - Kohls CC - 24.49%
    110/4,900 - Care Credit CC - 26.99%
    94/200 - Capital One CC (Wife's) - 23.4%

  13. PatientSaver Says:

    Thanks for providing the interest rates. OK, so hopefully you already know what to do now that those rates are clearly spelled out. I would concentrate on paying down the 5 credit cards with interest rates over 20%. I'm sure you must be doing that, but just to reinforce...Clearly, these payments are a huge drag on your household finances.

    Beyond that, it's easy to see that the combined car payments and the phone bill are way too much given your income and other bills. ($300 a month for gas also seems extremely high.) IMHO, you are taking baby steps to deal with a massive debt problem. IMHO, you need to do more.

    I give you credit for putting yourself out there and laying it all on the line because I know it's not easy and all of us are telling you things you probably don't want to hear. Call it tough love, and please know we want to help you.

    You mentioned your wife home-schools the kids. Is that a non-negotiable for you? If they were in public schools, you wife could get at least a p/t job and that would help your debt pay-down enormously.

    Is your wife on board with you as to the absolute necessity to get a handle on this debt?

  14. crazyliblady Says:

    I would look at doing a snowball starting with these 3 credit cards. Make minimums on all other debts and start with the 1 you are concentrating on until it is dead.

    Well Fargo

    Also, do you need a second car?

  15. terri77 Says:

    Have you ever tried Dave Ramsay's course? I really think it could benefit you, as well as the invaluable advice you will get from SA bloggers.

  16. crazyliblady Says:

    Just another though. I love terri77's suggestion to do this Dave Ramsey course. Great idea. If you can't afford to do the course, though, borrow the book from the public library or snag a used copy at alibris.com. There are used copies of his books there for about 99 cents plus shipping.

  17. Tabs Says:


  18. hehateme000 Says:

    Hi everyone. I wanted to come here to update my situation and to stay on track!

    I just got a new job, and it is a life changer. I will be switching from management in the hotel industry to become a union pipe fitter in San Francisco as an apprentice. What is amazing about this opportunity is all of the benefits that come with the job. I will have a 401(a), pension, 401(k) with the employer and also extremely good medical/dental/vision for me, my wife and 3 children. I will finally be able to plan out my retirement the way I want and have options with my money. Right now we have a hard time saving because the little extra we do have we want to spend on making memories with our family, whether its spending gas money to travel to the beach, or bowling, etc. We don't blow our money on stupid things, but I will admit we have a hard time saving.

    My new starting salary will be 55k. Every 6 months I will get around a $3 raise. My wife currently works from home, and is going to start babysitting as well. She has a few kids lined up already. She will be bringing in around $1,200 a month cash, I will be bringing $3,300 every month. Our income will be about $4,500 a month, and our bills are around $4,000 a month.

    My future salaries will look like this:
    1st year: 55k
    2nd year: 67k
    3rd year: 80k
    4th year: 93k
    5th year: 106k
    6th year +: 128k
    Current Installment Debt:
    48,000 - Student Loan (Mine) - ~6%
    40,500 - Car #1 (Wife's)- 3.24%
    13,000 - Car #2 - ~6%
    873 - Old Court Fine - 0%
    590 - Student Loan (Wife's) - 5.6%
    Current CC Debt:
    0/500 - Victoria Secret (Wife's)
    0/1000 - Kay Jeweler's (Wife's)
    0/200 - Capital One (Wife's) - 23.4%
    70/300 - Bank of America (Wife's) - 20.74%
    251/2000 - Kohls (Wife's) - 24.49%
    0/7600 - Kay Jeweler's
    0/4,900 - Care Credit - 26.99%
    413/500 - Teamsters - 19.99%
    515/600 - Wells Fargo - 17.99%
    680/5,000 - GE Capital - 0% until 02/14/18
    800/4,000 - Lowes - 0% until 02/19/18
    3,750/3,800 - Capital One - 12.4%
    5,800/6,000 - Walmart - 23.15%
    My goal is to first establish an emergency fund of $1,000. After that, it will be the snowball effect for the credit cards. After paying off the smaller credit cards and installments, I will be focusing on paying off the 2 big credit card balances (Capital One and Walmart). Once the CC debt is completely eliminated, I will then focus on paying off Car #2 (my Honda). My student loans are currently deferred and I will keep it that way until I pay off everything besides Car #1 (Wife's). I will also hopefully get my EF to about 3 months of expenses by that time as well.

    I have a lot of questions about my retirement, but with my current credit card debt, I know I will have to focus on retirement in 2018, not this year. However I am confused on what to do about retirement. It looks like we have a 401(a), but also a normal pensions (defined benefit plan). The 401(a) looks like it is a defined contribution plan. But then should I also try to get a 401(k)? And what about a Roth IRA, would it be useful to do one of those as well? I just want to make sure I take full advantage of everything I am offered. I will find out next week more details about all of this. I want to see what they will match as well. Does anyone know how to read the paper I have that shows how much is going toward the 401(a) and the Defined Benefit Plan? Anyone else here work in a union?

    Anyway, thank you for reading! It is good to be back and I am so happy I am getting the opportunity to make enough for me and my family, and be able to set ourselves up for success down the road.

  19. patientsaver Says:

    Great news about the job. It seems like you're on the right track with your debt pay-down plans. I think the emergency fund is a good idea, and then focus on the big credit card balances at Walmart, Kohls, Care Credit and BOA. Those are crazy rates that suck the life blood out of you.

    Great work on reducing the phone bill.

    I'm not familiar with 401(a)s, but the conventional wisdom on 401(k)s is to contribute at least enough to receive the employer match, if any. Otherwise you're leaving money on the table. A Roth IRA is also great but again i would really focus on getting rid of the highest interest credit card debt asap, because that will go on forever and mushroom into bigger and bigger balances until you deal with it. If you did not have enough $$ to attack those credit card balances AND contribute to the Roth IRA, I would skip the Roth IRA.

  20. hehateme000 Says:

    Thanks patientsaver! I definitely like the idea of EF and then snowball the credit card balances. I love getting rid of a credit card balance, no matter how low. The peace of mind is better for me than the pennies I would save by going after the higher interest cards first.

    So I will have a 401(a) and a pension. It looks like I can even voluntarily contribute more to the 401(a). I will call the Trust Fund on Monday and get more info to see how much they match. Everything is contracted with the local union, but I still work for a company. So the company is required to pay all my non-taxable fringe benefits, like the 401(a), pension, health, and other trust funds. However, I believe I can still do a 401(k) directly with the company. But one of the ladies was a little confused when I asked about the 401k because she said most people do the 401a.

    Either way, I need to focus on this CC debt before I get too carried away with the retirement. It is just so exciting to know I could have millions when I retire! Never thought that would ever be a possibility for me.

  21. patientsaver Says:

    Well, it may well be that you can't do both the 401(a) and the 401k). It kind of sounds like double-dipping, but I guess you'll learn soon enough.

    I know I like to project out when I get a new job or when planning for long-term goals like retirement, but after clearly understanding what I need to do to get from point A to point B, i try not to dwell on it too much, becus a lot can happen in the intervening years to put your well-laid plans in jeopardy.

    That's why it's so important to carefully prioritize your goals and do the most important things first, because you never know what will happen to your job, etc. S*** happens.

  22. hehateme000 Says:

    Just wanted to post my retirement plan on here to lay it all out.

    There is no match on my 401a, and I also cannot start that for another 2.5 years. However, my pension looks pretty solid. Instead of a formula to determine my future pension amount, it is a flat amount. Every year of service gets me $275 a month. The amount continues to increase (it was $125 in 1998, $200 in 2013 and now $275). The retirement age is 60. If I want to retire before that, they take off 3% of my pension for every year before 60. So assuming I will work until I am 60, that will be 33 years. That will give me a pension of $9,075 a month.

    In 33 years with 3% inflation, that will only be worth $3,400. I would like to have about $8,000 a month in future dollars when I retire, so I would still need an extra $4,600 in today's dollars (extra $12,000 in future dollars). I will assume that I want my retirement to last 20 years (until I am 80 years old). In order to have 12,000 last me 20 years (with a 2% inflation rate and a 7% rate of return) I will need my 401a to be at 1.75 million.

    I then ran some final numbers and figured that over 30 years at a rate of 7%, I would need to save 17k a year ($320 a week). I only did 30 years because the next 2 years will be spent focusing on paying off my debt. It seems like I have to save so much considering I will have a pretty good pension, but my wife is a stay at home mom and babysits so there won't be any retirement in her name. I also am not really saving until 30 so I wish I would have started sooner obviously.

    Does wanting $8,000 a month seem excessive? That is $21,000 a month in the future. It sounds crazy to talk about wanting that much every month lol. I just figure it would be plenty to have for my bills and vacations and my kids.

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