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Shifting Debt no longer working

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Re: Shifting Debt no longer working

OP,

You have fixed expenses like withholding, Mortgage payments, Auto-loan payments, real estate taxes, utilities, min payments on PL.

You may be able to lower your fixed expenses by

1) Refi the mortgage

2) Selling the home (Renting=No real estate taxes, lower utilities, lower maintenance, no HO insurance)

3) Selling the car (Public transport/Uber=No car payments/No car insurance/No gas/No mainteinance costs)

 

After the fixed expenses are calculated, what do you actually have left over for discretionary spending?

Only you can figure that out, then you can see what you have to budget with.

 

The discretionary spending is where you belt tighten til it hurts and sacrifice, sacrifice, sacrifice 

and it includes things like: Extra ppayments on PL, your food, internet, phone, pet care, travel

 

OP can't change jobs for a while otherwise the 401(K) loans become due immediately.

 

A Possible Action Plan

1) Look for additional income, (temp stop contributions to retirement plans, take in a renter, pet sit for others, sell the stuff in the garage...)

2) Cut discretionary spending to a bare bone (including rehoming some of the 5 other pets)

3) Payoff the 401(K) loans first because this is time sensitive and it is holding you back from a job change 

4) Once the 401(K) and interest are paid back, then you can change to a higher paying job

5) Tackle CC higher interest debt

6) Tackle the PL lower interest  debt

7) Start an emergency fund (min 2-month expenses, preferable 6-months) and NO-TOUCH

8) Rebuild your retirement fund

9) Rebuild your credit

 

This may take you 3-4+ years, but it works.

It's hard. But it works.

It's really hard. But it works.

 

You have a cheering squad here for moral support.

Get started TODAY!

 

Message 31 of 41
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Valued Contributor

Re: Shifting Debt no longer working

I wish float was an option, but I have to have health insurance. Definitely can cut my spending and have already cut up the cards a few months ago. 

Message 32 of 41
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Moderator Emeritus

Re: Shifting Debt no longer working


@Sbrooks1 wrote:

I wish float was an option, but I have to have health insurance. Definitely can cut my spending and have already cut up the cards a few months ago. 


Look to see what out of pocket health insurance costs; it probably isn't as good as what you have now but you may not need the usual level of hospital insurance that I've seen in the past.

 

I won't beat a dead horse but I'll simply state that you aren't lacking for hustle, you just need to apply yourself in a different role.  I did 80 hrs/wk for much of last year (and more in some cases, less in others) and am about to go back to that again... but I also get paid for virtually every hour I work.  

 

Being any sort of manager / director is bad mojo if you are salary without an alternate form of compensation... corporate America solves this with higher level bonus tiers but work hours that are pointless financially just isn't healthy financially or mentally.  I struggle with that and I just have to look at my brokerage account from last year to remind myself why it's worthwhile; on the flipside I wind up looking at my Personal Capital app way too much as a crutch so I can empathize with you on that.

 

Anyway you have a plan and I suspect you'll pull out of it in time, the question simply is how much time and pain do you go through to get to the other side.

 

Oh, if you have any equity from appreciation in the last 3 years and are under 80% LTV (some will go to 90%), open up a HELOC and use that to airstrike any high APR debt you have.  Easier and cheaper than refinancing.




        
Message 33 of 41
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Valued Member

Re: Shifting Debt no longer working

"OP can't change jobs for a while otherwise the 401(K) loans become due immediately."

 

Not true any longer.

 

Just had to chime in on this one,. as I see it repeated several times...  This changed with the Tax Cuts and Jobs Act ("Trump tax cuts").  You now have until taxes are due for the year in which you are separated from your job to repay any 401k loans without penalty.  So you if you changed jobs now (Feb 2020), you would have until April 15 2021 to repay.

 

Not making a statement as to whether changing jobs is a good idea, just want to correct the info given to help OP make the most. informed decision possible.

 

Good luck with whatever you decide

Message 34 of 41
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Senior Contributor

Re: Shifting Debt no longer working

OP:

I would recommend you start tracking all of your spending.  Whether it's a spreadsheet or software like YNAB (my personal fave), you need to drill down, log every penny, and see where all of your bleeding is.    I was shocked at some of the places I was spending money when I did that.   I didn't have debt (I got control over my spending before venturing to credit cards), so I could see where my bleed was and stop it.

You should cut up your cards, delete any entries of their numbers and start living on cash.  Pay yourself first (savings, debt), and then budget your vet bills, food, housing, transportation, etc.

I'm not going to tell you to never spend a single penny on something frivolous, but set a budget for it.  Let yourself spend $50 on fun things/month, but then put the rest towards debt.  

But really, start logging and tracking every penny.   You should be able to pinpoint your troubled areas, and also reduce those in others (I got my food spending from ~1000 to $300 by shopping 'better', and stopped with the hundreds of dollars of bleed).   You need to make every penny literally count.


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Message 35 of 41
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Valued Contributor

Re: Shifting Debt no longer working

Thanks for the advice. If I knew 10 years ago, I would be stuck with only a 2% at most raise I would nver have taken the job. I do not get any bonuses yet my job is to make this physician group and hospital lots of money. I am buckling down for the next few yearsand like I said earlier, I cut up all but one CC, and it is Pen Fed with a low limit. 

Message 36 of 41
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Valued Contributor

Re: Shifting Debt no longer working


@Sbrooks1 wrote:

My job doesnt really pay that well. I could make more as a staff RN than being a Department Head. I do not get any OT and my annual raise is only at the max 2% ( that is all the hospital allows). House was purchased for 174500 3 years ago and car is a Kia Optima, just purchased last March. When I look over my spending it is a whole lot of Wal Mart, Amazon and vet bills. Rarely eat out and lunch is always leftovers. 


It is odd that you said you would make more as a staff RN than as a manager. My ED department manager stepped down from her position 3 months ago for the exact reason you mentioned. She was salaried working 60+ hrs a week which included having to work as house supervisor and covering open shifts on the call schedule. I work as a staff RN 48 hrs, sometimes 60 hrs a week and I made considerably more than she did with overtime, shift differentials, incentive pay and call back pay. 

 

The hospital would not let her go back to a staff position full time so she left to work for another hospital. She just came back a couple of weeks ago as PRN and wants to work one or two shifts a month. She is much happier and in a better financial position than she was as a manager. 

 

I wish you the best of luck and happiness.

 

 

















Your FICO credit scores are not just numbers, it’s a skill.

Message 37 of 41
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Frequent Contributor

Re: Shifting Debt no longer working

I don't think its allowed to say the name but I use a computer program that lets me link most of my accounts so payments and all that. I can break down what I am spending to different time frames. Helps me keep track on what I am spending within a 30 day window (my pick). That way I can see what I am spending and intaking. It gives me a nice little pie graph with the amounts next to it. That way I can see if I can trim the fat. Love it. I have my bank accounts linked. My investment portfolio. 401K. Loans. Cards. Utilities. Some I have to manually enter. So worth it though. That may help you a bit on curbing spending and setting goals on debt payments and accruing savings.





Currently rebuilding. Cards aren't worth bragging about yet.

Message 38 of 41
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Valued Contributor

Re: Shifting Debt no longer working

I agree with your former manager decision, unfortunately my small hospital will not let me step down and be a patient care nurse, they will force me to leave, which again the 401 comes into play. 10 years I have given them on call 24/7 and I have never received any extra call or compensation. 

Message 39 of 41
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Valued Contributor

Re: Shifting Debt no longer working


@Sbrooks1 wrote:

I agree with your former manager decision, unfortunately my small hospital will not let me step down and be a patient care nurse, they will force me to leave, which again the 401 comes into play. 10 years I have given them on call 24/7 and I have never received any extra call or compensation. 


401k plans are set up very differently among different providers. Have you confirmed that you can't just continue making your loan payments directly should you leave your employer? I administer my work's plan and we allow that . . . . 

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Message 40 of 41
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