Debt Update #1

Glad you're making progress, but it sounds like you're employing some risky means to do so. Hope you're able to sell your trailer soon. Sounds like that would provide a nice bit of breathing room.

We wouldn't be able to afford double rent/house payments. No way. We can't afford more than 1 vehicle either, since I stay at home with the children (heh, probably couldn't afford it if I worked either). You guys are fortunate to have such a healthy income. I am sure you are both looking forward to the day you can fully enjoy that healthy income without having to mail it off to a bunch of different companies!

We'll probably die owing money, LOL. Our credit score is good, though.

Ziggy,

I am no export in money questions. I certainly spend too much and I am irresponsible with credit cards. Plus I always eat in restaurants and take-aways. I also spend thousands of euros when traveling.

But I have no idea how one can build such a huge amount of debt that even organising how to pay it off becomes a problem.

I also never use cheques to pay bills. I use direct-debit or a (good) credit card. I don't think I have so many regular bills to pay anyway (telephone, electricity, mobile phone, DSL, bunch of credit cards, health insurance).

If you send out cheques, just allocate the money as "spent" and forget about it. Don't allocate the same money twice.

Sell your bike. If you don't need it (and since you haven't used it in a fortnight and are still alive, it seems like you don't need it), spare yourself the money it costs to operate and sell it.

With a bit of luck that will cover your remaining bike payments.

I don't know how you live but I simply rented a furnished apartment, as is common on the British islands. I would never "buy a bed" after moving somewhere, unless it is into my own house. Furniture can also be gotten for cheap or free from lots of places. I know more people who are trying to get rid of surplus furniture than people trying to buy more furniture.

I cannot even understand why anybody who arrives somewhere with debt would buy a new bed on credit immediately! It's ridiculous.

If your trailer is in another state and you are not living in it, sell it. I'd personally rather pay off a trailer that isn't mine and that I don't have to worry about any more, than pay off a trailer that is mine and will remain a problem even if I manage to make the payments.

And stop buying trailers! What's the matter with you? I cannot even imagine being the kind of person who even considers any kind of "mobile home" when trying to decide between renting and buying. I just rent a small flat until I can buy something.

Apart from that, good on you for trying to set things right.

Easiest method: Stop buying things on credit; even if you "need" them. There are other people who cannot buy things on credit and still survive. If they can do it, you can too.

We haven't purchased anything on credit for over a year.  And we aren't planning on purchasing anything else on credit, other than a house SOMEDAY.  Vehicles will not be purchased new or on credit any longer.  They will be paid for with cash.

We know we've fucked up royally.  We get that.  So we don't really need to be chastized like children.  I think that Zig's done a really good job of saying "holy crap, Batman, this isn't working!" and has gotten our finances under control so that we're actually making headway and paying stuff off.  He's budgeting now, and we weren't doing that before.  We get so much each week for gas, groceries, etc.  If the grocery bill goes over a certain amount, things need to get put back on the shelf.

I generally spend hundreds of dollars each fall on school supplies for students, didn't do that this year.  I spent probably ten dollars this year.  Staples had some really good deals and stuff, so that was good.  And my school bought LOTS of stuff for me this year, and that was wonderful.

So...yeah...like I said, we've screwed up.  Chalk it up to being young and having too much money on our hands.  We've learned our lessons, and we're making good headway now.  I'm working extra during the school year, and when I'm finally done with my stupid master's degree, I'll get a pay raise, AND I may consider getting a weekend job, too. 

You can criticize and call us all the names in the book.  But what it comes down to is "we know."  And we're doing what we can to fix our screw-ups now.

Why Thank you!

Can you explain?  Not trying to argue (yet, lol)...just wondering what you mean. 

I agree that double payments is alot...its killing us for the most part.  We are able to make the payment for the trialer mortgage, unfortunately 2 weeks late.

We do have one car payment and my bike payment...which I know has been discussed before on here.  I could see the bike and break even on that...but we keep going back and forth on it.  So yeah, I should sell the bike...but if I was to do it all over again, Id save up the money and buy it with cash....and that would take quite a while at the rate we are going. The car we are upside down in, so we are just suffering at the moment. 

As far as income...Im not sure how healty it is per se.  I mean, Marcie is on a teachers salary and Im making roughly the same as I made last year...maybe a tad less.  However, she also got a decent pay raise when she moved over here so that has helped quite a bit.  I guess its just the fact that we budget for where our money will go so its easier to pay stuff off that way....you can look into the future somewhat and see where the money will go...etc.

Well if budgeting was easy, who would be in debt? 

Before I took the reigns, we just paid stuff off here and there and didn't keep a good track of what we were doing.  Since then, I have created a fairly detailed system where I try to keep as accurate records as possible when it comes to our spending.

We pay our bills in a few ways.  Most of them are online.  I give companies online direct access to my accounts to pay bills and that works out well.  Other bills, I pay via my banks Bill Pay where they cut and mail the check out.  With our issue with the lot rent for our trailer..we wrote them out 3 checks and each was supposed to be deposited on the seperate month they were dated for, not all 3 at once. 

Basically I dont mind using a check to pay a bill because I can just write it in our budget and take that out of our finances...but when post dated checks are cashed before they are supposed to be, that is where we get tripped up. 

Finding a place to live that is furnished here in the states is not nearly as common.  As a matter of fact, I think its 90+% of the time, a place is not furnished.  There is something to be said about sleeping in a bed that isnt even yours...just....creepy.  

When we moved to Vegas: apartment - unfurnished. We bought a table set as well as a sectional couch.  Paid off.

We moved to MN: unfurnished top of a house...used all of our vegas furniture

Rawlins: well we bought our house and everything just fit in there

Here: apartment, unfurnished. Actually we kept a TV stand the previous rentors left behind because it held up our TV. 

 

I just mean writing checks that might not clear. At least it sounds like you guys have overdraft protection.

I would say two adults living on a double salary, one of which is a professional salary is healthy. I know it probably doesn't feel that way, but trust me, you're doing great, LOL.

We are upside down on our vehicle too because we were trading a vehicle in every few years instead of paying one off. Sucks, but we have definitely learned to stick with a vehicle. It seems like nowadays no one has a vehicle less than a year or two old, but I think it will be worth it to not have a vehicle payment even if what we drive is older than what everyone else is driving.

Good luck with everything!

Right, I know what you are saying.  We just were just sending in three checks at a time so they wouldnt be late (mail takes forever out here). The gal we gave checks to, she never once had a problem. Unfortunately, they got some new staff in and someone took over and deposited all three checks, and then after doing so, told us they have a policy of not taking post dated checks for that reason.  Well, crap, lol.  I mean...it works if you and a person have an understanding of not depositing the other checks but when a new person is added to the chain of events...eek.

It could be worse.  Im frustrated Im not teaching this year, but I dont have much in terms of options for districts. I had one interview in June for a unique position.  But I figure Ill just do what i can to keep on keeping on.  I dont mind driving truck, but I just want some more responsibility and would like to make some extra $$ if I could.

 

That's import ant to know!   Could'nt resist! Besides I owe a one after you caught me on dictator ship!

People who needed expensive medical care or lost their jobs when trying to pay off a mortgage, that's who.

Budgeting is easy if you only buy what you can afford. There is no reason to go into debt for anything but cars or homes (that is property). Unsecured debt is just too expensive.

And the good news is that saving money is as easy as sitting on your sofa and doing nothing. You can even watch TV. I am not kidding. That really is the answer.




I don't own the bed I sleep in.

In fact, twice in my life I have shared a room with three other people in a hostel for several months in lieue of renting my own flat in order to save money.

Nothing wrong with living like poor people, especially if one is poor people.




True.




Reminds me of a cartoon about Ireland I always wanted to draw. Would show an old lady with a sign in her hands and another surrounded by lots of cats.

Get it?

Dave Ramsey has excellent advice...are you familiar with him?  This sounds lots like him...except he'd say, sell the bike (they're hot right now) and even if its at a loss....better to owe the difference than ALL OF IT...and chalk the difference up to a "stupid tax."  lol

Same with the trailer, or anything else you are not currently living in or using.  Sell it, suck up the loss (even if its several thousand dollars) and move on clean, instead of letting it suck you dry over and over.

 

I think I need some Dave Ramsey in my life, heh.

We could be a lot better off if we were not so impulsive.

Im a big fan of DR. Actually mentioned him in a blog I wrote last month (possessed by debt).  I know what he would do in our situation, lol.  Sell the bike and trailer.

We have been trying to sell the trailer. The problem is that we are trying to sell it in the current market.  There are over 100 homes for sale in the small town we live in.  If we sold it for less than we owe, we would be doing a short sale and while Im not a fan of that...it something that we COULD accept...better than a foreclosure.

However, we are working on some repairs and are thinking about renting the place out while selling.  At least then, the mortgage and lot rent would be paid on it. 

Not sure about what would be the best route though. 

Well banks are taking what they can get these days...and like you they don't want a foreclosure...they aren't in the house selling business.

It's not like you will ever really get equity in a trailer, it takes like 20 years or something....and then its crazy low.

I'd get out while its still decent enough to get it sold. And if you sell it for less than its worth, someone will want it.

It sounds like you guys are trying -- which is a positive. Sticking to a budget is hard. We're lucky that we don't have debt (other than our condos), but I could see getting in over our heads very quickly if we didn't have a safety net. My heating system died this past winter and cost just under $5K to replace -- if that weren't in savings, I think we'd be struggling to keep our heads above water for a long time to come -- as it is, we are having a very difficult time paying back the savings account.

Also, while it is technically not illegal to post-date checks, banks don't have to honor the date on the check and can always cash them immediately, therefore it's probably a better idea to not ever write a post-dated check. Too much of a gamble.

On the renting of the trailer thing -- from my experience, being a landlord is a lot harder than it looks. We are renting out my boyfriend's place (with the hopes of paying for our wedding with the rent money), and it's a struggle in the beginning. We spent (literally) weeks getting the place ready (fixing all the things that you can live with but you should really have repaired for a renter -- like cracks in the bathroom tile). We probably spent half the first month's rent in fixing it up and getting it ready. Screening a candidate was also really stressful -- but we think we lucked out. Then there is the cost of liability insurance, making sure you qualify for landlords insurance and having an umbrella policy that protects your ass in the unlikely (but traumatic) event that your darling tenant's dog bite some poor unsuspecting child. But the worst part is the Sunday morning phone calls because "the bathtub might be leaking" (which really meant your tenant didn't know how to pull the curtain closed when showering). All in all, unless you are right around the corner (we live less than 100 feet away from his place) I would counsel AGAINST renting your trailer. It's more of a headache than it's worth.

Hmm what do you think about having someone else manage it for a fee? 

I guess it depends on how much you are making from it. If you can get enough to pay the bills and the management fee, then I'd imagine it would be easier to let the management company do it- but there's still the stress of liability, but I'm one of those people who is totally over-insured cause I'm a big worrier. The management companies we looked at would have taken too big a chunk to make it worthwhile -- and since we literally live next door, it seemed a little silly to not just do it ourselves. We may, of course, live to regret that decision.

It's a trailer Zig. Dump it.

It will only DECREASE in value, its much like an automobile but worse. Would you rent a vehicle you couldn't afford? Or would you dump it and suck up the loss?

Seriously, a few years of a tenant who is a little ruff and you'll never get it sold. Trailers are a seriously bad investment unless you are living in it forever.

I don't understand why you are so attached to that particular problem.




Trailers are a seriously bad investment full stop.

As I said I would never ever consider a trailer myself and don't understand why some people do.

Because, Id much rather rent it out to some dependable people and then later sell it, than do a short sale or foreclosure which would drastically affect my credit rating for future large purchases (ie, a home). 

Yeah, well...if we all could look into the future and be as smart as others think they are. 

 

crap, Marcie forgot to sign out...that above reply and this one is Ziggystyles

I don't know why a short sale would affect your credit rating.

Either way, your credit rating should be bad. But the point is that if you sell the trailer and get rid of the problem you can improve it.




You think other people don't buy trailers because they can look into the future and you can't? That's bogus.

Zig, I grew up in and around trailers. They don't age well. Think of it this way. Your trailer looks as good now as it will EVER look again. Meaning, today has a better chance of selling it as compared to tomorrow or the day after. If selling it is your ultimate goal, then get rid of it while its still in good enough shape to make someone want to spend the money on it.

And you don't have to do a short sale or foreclosure. You can sell it for less than what's owed, and make payments on the difference until its paid off.

SO if you owe $45,000, sell it for $35,000, then all the sudden your debt is just $10,000. Much more manageable and easier to tackle.

Chalk it up to a $10,000 (or whatever the difference is) lesson. Or as DR says, "stupid tax."

You guys are just starting out, you're going to get hit with the stupid tax occasionally.

Plus he doesn't have the trailer to worry about and no rent payments for the trailer park.

I don't see how that option is not the completely obvious solution.

(Also, I would sell the bike. You can get a new bike in a few years when you have the money to enjoy it.)

The trailer *IS* for sale, and has been for a year.  We're not just keeping it for shits and giggles.  I think Zig talked to the realtor yesterday about lowering the price...we'd talked about that for a while.

The bike is also an area of contention.  He goes back and forth on selling it.  We both love to ride.  He just thinks that if we don't keep it, we'll never buy another one and we'll never ride again.  He thinks that the kids will come along, etc., etc...

I don't know.  It's his gig.  I have no opinion.

This sounds to me like you would never buy another one because you couldn't afford it.

Isn't that the point of the exercise? Not to buy stuff you cannot afford?

Seriously, who put a poker up your butt? 

Zig thinks we'll never buy another one because we'll get bogged down with "life."  You know, work, kids, etc., and we just won't make time to do that stuff together anymore.  And we purchased this bike five years ago, not yesterday.  Lots has happened since then.

It's HIS choice to get rid of it or not.  I'll keep working extra and he will, too, if it's something that is that important to him.