Need CC advice - drowning...

[Anonymous]

5 kids! Wow! Just get rid of some of them and that will help. Some of them have to be teenagers and they eat cash for breakfast. 

So it seems you have closer to $3300 after taxes and payments. Your grocery bill is higher than average, no doubt. But I would guess there is a lot of discretionary spending that can be cut. 

You need to work out a budget with your spouse. Include every expense without fail and see what can be cut. Take all the extra and first make a $1k emergency fund and then use everything after to pay down. 

Either begin with the highest interest rate card and knock it our as soon as possible or with the lowest balance and knock it out and roll that payment into a "snowball" that builds after you pay each card off. One methods yields the best savings while the other gives a feeling of accomplishment. You choose.

You guys actually have this if the spending gets under control. If not, you are really headed for trouble.

ETA: You high interest cards mostly coincide with the smallest balances so the snowball method makes a lot of sense.

[Anonymous]

This is your plan of action. You are to cut all cc don't close them just cut them off except for one card for emergencies. You need to cut expenses ie. Eating out, entertainment, shopping, gym memberships, cable, etc. (And don't say you don't buy things you don't need or can afford, just look at your balances.) Then start paying your highest APR balance extra until its payed then continue with the next highest. Also you need to sit down and figure out, why you are allowing yourself to spend on credit living above your means. This will be hard to figure out but must be carefully looked at.

[DollyLama]

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@Anonymous wrote:

*edited total cc debt- I added wrong!*

I thought I posted, but I will try again as I do not see it.

First of - thanks so much, we are hard working people. This has been so hard and stressful for us. We have five kids and one going into college. Luckily - he has that covered with scholarships and savings and that he didn't fall into our footsteps of a poor example of managing finances and credit!

Here goes:

Honda Credit Union $4900 (9.90%) min payment is $150 but we revolve the credit often

Chase Amazon $12231 (16.49%) min payment $295 ($290 avail)
Chase Freedom $8240 (17.49%) min payment $206 ($60 avail)
Chase Disney $6349 (13.49%) min payment $136 (no avail)
Capital One $13261 (16.15) min payment $319 ($300 avail)
Citibank Diamond $3232 (20.24) min payment $85 ($50 avail)
Citibank ThankYou $15398 (12.24%) min payment $101 ($301 avail)
American Express Diamond $1391 (14.75%) min payment $35 ($42)
Kohls $2800 (22.15%) min payment $85

Total:  $1412

Mortgage and 4 other loans:  $3250

Total debt:  $4662

NET Income: $8000 (more exact than previous)

**I get commission that ranges between $200-$800 about 7-8 months of the year

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So your net disposable income minimum is $3338 to over $4k month 7 or 8 mos of the year. 

From that what is your personal expenses, utilities (all electric, water, natural gas), car insurance, phone bill (or is this multiple phones ie. iphones for you and your spouse and all children? gas expenses on automobiles, groceries (including the cleaning and hygiene supllies)? Do you have full out package on cable and internet or basic cable with no frills premium channels? Are the children involved in activities that cost money, dance lessons, etc. ?

Any private schools where there is tuition? 

Monthly prescriptions?

Vet bills?

Do you have frivolous expenses such as a cleaning maid, lawn care, newspapers, magazine subscriptions, netflix, ?

Security Alarm Services on your home that could be scaled back, or shop for a cheaper deal. 

You can list the absolute necessitites overall cost, and list the ones that would be considered frivilious for the time being until you can manage your spending better down the road. 

 ETA: Anytime you do receive $200-$800 commission act as if you did not receive it, and put this money strictly against the credit cards with no further charges.  I would work on the Citi Diamond and Kohls first as they are the highest interest accounts you have. 

[Anonymous]

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neaom wrote:

Honda Credit Union $4900 (9.90%) min payment is $150 but we revolve the credit often

Chase Amazon $12231 (16.49%) min payment $295 ($290 avail)
Chase Freedom $8240 (17.49%) min payment $206 ($60 avail)
Chase Disney $6349 (13.49%) min payment $136 (no avail)
Capital One $13261 (16.15) min payment $319 ($300 avail)
Citibank Diamond $3232 (20.24) min payment $85 ($50 avail)
Citibank ThankYou $15398 (12.24%) min payment $101 ($301 avail)
American Express Diamond $1391 (14.75%) min payment $35 ($42)
Kohls $2800 (22.15%) min payment $85

Your UTIs are killing your score (I only realized that recently with my own credit) and your budget

In the last 8/10 weeks I have done the following

I took every penny out of savings and paid them down to 50% or less (I still have 3 at 80%), when I realized that I was paying 12=24% interest on CCs and only earning less then 2% on savings it didn't take long for light bulb to hit me in the head.

I also take every extra cent after bills/food and put it to a CC

I also completely stopped spending money on anything extra (eating out, movies ect..) and applied that to a CC..in other words when I stopped "nickle & dime" my available income, I was able to add another couple of hundred to the pay down plan.

I also informed each CC insurers that I had a plan to pay down my UTIs so they wouldn't think something was going on and hopefully not CLD me (no one has with the exception of AMEX and they reinstated my CL with a payment of 50% of current bal)

but...

Be aware that your creditors can "balance chase" you (that's where they do a credit line decrease) as you pay off the CCs, one way to head them off the path is to do the "hardship payment plan" it's so much better for you in the long run then them closing for non-payment or racking up late pays

Not everyone's (mine included) plan will work for you, I am only sharing what worked in my particular situation...I am hoping that you find a way that works for you and your family..best of luck!

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[Anonymous]

I am also a firm beleiver in "child labor"

[medicgrrl]

Listing where the rest of your money is going would be very helpful.  You've got a large amount of disposable income that is going somewhere other than your bills.  There are probably large area's that can be cut.

My suggestions:

1)  Freeze your cards in ice!

2) Learn to coupon.  Don't coupon around your grocery list, make your grocery list around the coupons and sales.  This make a huge difference!

3) Put a cap on the children's cell phone data use.  Almost all providers allow you to do this on their website.   i know with my boys, this was a huge problem

4) Lower your utility bills.  Most people don't go by the suggested temps of the electric company and end up spending a great amount more than necessary on utilities.

5) Write a very detailed budget and figure out where your money is going and where you can save.  Stick with the written budget!

My estimate is that you have at least $1500 extra a month that you can put towards your credit card payments.  Based on that, here is my suggestion:

American Express Diamond $1391 (14.75%) min payment $35 ($42) Pay off in June

Kohls $2800 (22.15%) min payment $85 Pay off in July and August...this leaves you an extra $200 leftover plus the $35 from the Amex payment and now the $85 from the Kohl's payment

Citibank Diamond $3232 (20.24) min payment $85 ($50 avail)  Pay off in September and October...you should have sufficient funds to pay this based on above

Chase Disney $6349 (13.49%) min payment $136 (no avail)  Pay off in November, December, January& February.  You should have $1805 a month to put towards this based on the above being paid off.

Chase Freedom $8240 (17.49%) min payment $206 ($60 avail)  You now have $1805 going towards payoff, this should be able to be paid in full in March, April, May, June and final payment in July of $1020, leaving you $800 towards the next payoff plus a monthly amount of $2011

Chase Amazon $12231 (16.49%) min payment $295 ($290 avail)  Pay the $800 from above, then based on $2011 a month, this should be able to be paid off in 5.71 months, bringing you to payoff in January 2019 with a payment of $1400.  This will leave you $600 left towards the next card and a new payment of $2306 towards the next card

Capital One $13261 (16.15) min payment $319 ($300 avail)  Pay down with the $600 from above and then this card should be paid off in 5.5 months, bringing you to a final payoff in July 2019 of approximately $1100.  This will leave you $1200 towards your next payoff and a new amount of $2625 per month going towards pay down.

Citibank ThankYou $15398 (12.24%) min payment $101 ($301 avail)  Pay down with the $1200 from above.  This can be paid off in 5.5 months and will have all of your cards paid off in January 2020.  

This is based on you continuing to make minimum payments on all of the cards while paying down 1 card at a time.  You've got this!!  Luckily, you don't have an income problem, you have a spending problem.  Those are a little easier to correct when you have good disposable income.

ETA:  Realized I missed the Honda account...that would take you to a total payoff off all debts in March 2020

[UncleB]

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@Anonymous wrote:

I know - I don't know what happened... working on retyping it and will add info while doing so.

That income was net income. I'll post another - with better information. Thanks so much!

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The edit caused your post to get caught by the spam filter... I've restored it to the forum.  You shouldn't have any further issues, but if you do reach out to any moderator for assistance.

--UncleB

myFICO Moderator

[yfan]

Budget, budget, budget. Of that $3300 available after debt payments, how much are:

• Groceries?
• Utilities?
• Cable/Internet?
• Phones?
• Clothing?
• Other expenses?

Unfortunately, it's time to cut anything not absolutely necessary. If you are used to buying groceries at a more expensive place, switch to a cheaper store. More chicken, less steak. Shop weekly sales at grocery stores. Can you cut utility usage? Turn off the AC and use fans. Take shorter showers (incluing the kids). You do not need a cable package at all. See if you can get savings on home internet. Take the phones in your family and pick smaller data plans and put of buying new phones. Don't buy something at a brand name store when a cheaper alternative can be found at Target. Do your children have allowances? Cut those.

[Anonymous]

Yup. Everyone is going to have to tighten their belts a bit, like it or not. And there will be a lot of not.

[Anonymous]

First - let me say, "Thank You" to all - I can't thank you enough for your kind words, understanding, and encouragement. It is definitely appreciated and much needed as we are in a downward sprial and never seem to get enough traction to get ahead. I was afraid to post all of this information initially afraid that I would be scolded for our poor financial management... as I just stumbled upon this forum and wasn't sure of the audience but you are all such an amazing group of supportive people! Thank you so much!

A little background - years ago, my husband did the finances. I took over and everything went to downward from there. Although our income increased through the years, we were going further and further in debt. We know this is an area that he needs to manage, but it doesn't get the priority it needs. With five kiddos very active in school sports and other activities, we are running around a lot.

The crux of it is keeping and maintaining a budget. I have YNAB and we used it successfully for a month or two - but always fall back to old ways when life is crazy and living by the seat of our pants just putting out fires. It is actually quite exhausting! We are spending too much - even as I write this we are preparing for graduation and the costs associated with that, paying for things like drivers education class $300+, and other things that we don't plan properly for (car repairs).

This is all great advice - and if after reading the budget below anyone has more suggestions - please share. I loved seeing the breakdown of the speed at which we could potentially see the "snowball" go down... that was invigorating and I can't wait to show my husband.

We need to quit living like the Jones' and more simply - that I know. Eating at home would definitely be a good first start, just bringing the family out to even a fast food restaurant is $45 and a sit down restraunt is around $65-$100.  We do shop all groceries at discounted places like Aldi that are hard to beat on most costs. We are not big shoppers but have traveled 2-3 times a years as that is my side business (the one with commission) but typically cover this cost with that income/commission..

I need to add $150 a month for 18 months for some braces that my son recently got.

Here's some of the costs beyond what I have already mentioned that I copied from YNAB... some things I don't want to stop:

Cell (but could drop some data - we pay for my Mom and Dads phone, we have 6 ppones. We rarely go over data but occasionally do.

Piano (everyone plays sports - I want to support the arts)

Guitar

Cable (they may give up their cell phones first - I live with major sports fants... I could totally get rid of it though - lol)

Internet (need it for work)

Home landline (need ti for work - really can't eliminate)

Thansk to all!

LinkedIn Business LinkedIn $32.16 

Life Insurance $100 

Insurance $60.00 

Gas - cars Immediate Obligations Gas - cars $500.00 

Sacred Heart - donation for church - tithing) $60.00 

Landline phone - 23rd $37.00 

Cell phone - 10th $379.15 

Electric - 27th  $232.47 

Sewage - $60

Internet - 2nd $53.62 

Groceries $866.00 

Guitar $60.00 

Piano $88.00 

School lunch $200.00 

Dining Out $545.00 

Just for Fun Entertainment - Movies, Drinks, etc. $216.00