On what used to be at 0% and 2%. Soo, my choices at this point are:
1. Withdraw from savings, take a huge tax hit and likely some penalty.
2. Keep desperately trying to refinance somewhere below 12%.
3. HELOC.
4. Remortgage. I think I have about 6 years left at 5.75%. I have plenty of equity but it makes me sick to even think of doing this.
5. Pay big bucks to get a financial planner who specializes in disaster recovery!
6. Run away to Brazil.
And of course continue to squeeze the budget, but it takes time to squeeze out this kind of dough.
Ack!! I am now paying almost $20 per day in CC interest! I'm bleeding!
January 24th, 2009 at 12:25 am
January 24th, 2009 at 01:02 am 1232758932
January 24th, 2009 at 01:03 am 1232759018
Don't waste your time or money on a Financial Planner
If I had 6 years left on my mortgage with that fantastic % rate, I'd be jumping for joy.
Do you have enough to savings to cover a minimum of 6 or 8 months of expenses? If you do, I would tap into savings to pay off debt.
Running away to Brazil would be awesome!!! ;-)
Just my two cents! Good luck with whatever you decide to do. Don't despair there is light at the end of the tunnel.
January 24th, 2009 at 01:40 am 1232761249
NJDebbie, my savings are nebulously locked up in an old plan from an old employer, that was originally a savings plan but has seemed to get more 401k-like.
Brazil or anywhere without NJ's high cost of living sounds much better than staying here.
January 24th, 2009 at 01:41 am 1232761266
If you can tap into the savings, I too agree and get the debt down
good luck
January 24th, 2009 at 02:52 am 1232765531
1. Absolutely sit down and talk with your wife. Explain how much you are paying in interest now. Ask her which she prefers, having debt in her name (to get the 0-4% interest and do the transfer) or paying over $7K per year in interest on the CC companies? Hopefully she'll agree to do the transfer ... Then, look at the budget and come up with a plan to get the cards paid off. Plan a payoff date well before the 0% (or 4%) rate expires, because Murphy will come visiting and there will be setbacks along the way, so give yourself some wiggle room.
2. Do your taxes ASAP. If you will be getting a refund, send the return off ASAP to be first in line for a refund, and apply 100% of it to the CCs. (If you will owe, wait to mail until the last minute.)
3. What can you sell? A car? (It may not be a treat to get by with only 1, but it can be done, especially when only 1 spouse is working.) Can your wife sell on Ebay (or Craigslist) the things your girls have outgrown? Can you guys go through one room of your house each weekend sorting out things you no longer need, to get ready for a big garage sale in the spring? If 100% of sale proceeds went to the CCs, wouldn't that help? (And from personal experience, seeing how much things sell for second-hand is a great deterrent against buying any more unnecessary stuff.)
Good luck!!!
January 24th, 2009 at 04:05 am 1232769957
January 24th, 2009 at 04:37 am 1232771846
January 24th, 2009 at 05:48 am 1232776090
Seriously, $20 a day = $600 a month, a tidy sum. You must plug this black hole.
I agree that a HELOC should not be used to pay CC debt, but here's something to think about. If you already have a HELOC, it likely has a low interest rate, much lower than any CC. And, interest from a HELOC is tax-deductible, but interest from CCs is not. I MIGHT use your HELOC but only if there is a plan to systematically pay off extra every month, and ONLY IF you and your DW reform the way you use CCs (only spend that which you can pay off each month). If you do not already have a HELOC, you may not be able to get one with so much CC debt... but if your credit is good, then you might but there would be fees involved... not good. You need to think about the pros and cons. Using your HELOC could be disastrous if you turn around and rack up more CC debt. But if it helps you get out of this hole, then maybe it would be OK, but think it through. Only you understand your family dynamic about spending money.
I would not hire a financial planner... you can figure this out w/o having to spend extra $$ on a planner. Also, with only 6 years left on your mortgage and a rate of 5.75% (not bad, really), I would NOT remortgage... you're too close to paying it off. I also would not use 401K funds, because it sounds as if you'd have to pay penalties and/or taxes.
Time for a family pow-wow. Definitely have a meeting with your DW to discuss your options and give her a reality check. One option night be that DW helps by getting a part-time job (providing childcare at home, temp work, etc.) or at least helps you figure out how to rein in the family's CC spending once and for all. Good luck!
January 24th, 2009 at 02:26 pm 1232807182
January 24th, 2009 at 06:06 pm 1232820419
I don't really have any additional advice beyond what they others have suggested. Just wanted to offer my support. Good luck!
January 24th, 2009 at 10:15 pm 1232835332
January 25th, 2009 at 01:27 am 1232846842
Create a spread sheet of all your debt, show the family and ask what they are willing to do to help stop the bleed.
I would ask wife (who does not want the debt in her name). If she a wants to get a low interest rate credit card, get a job now that the children are older, or a plan C. Now by getting a job this could be a work at home thing such as putting household items on ebay. *She is the other partner in this relationship so she needs to help a little with getting the income up or the spending down. You are a team and need to get her on the same page.
I did not see a budget posted on your blog. I would suggest you track spending and bills and post your bills and income on your blog and others can point out to you easy ways to cut spending.
All those clothes for the Girls that you are so upset about, time to take anything they have outgrown and sell them on Ebay, or a consignment shop such as platos closet or once upon a child.
Good Luck!
January 25th, 2009 at 03:13 pm 1232896424
Housing including utilites: 28% of income
CC minimum payments, 14%
Ahh, I'll go to my quickenonline and make a new post. Suffice it to say that Christmas always kills us, a sore point between us for 20 years now, as well as clothes, auto expenses (mostly NJ's high insurance for 3 drivers, plus gas until recently, and some repairs and maintenance since all our cars are older, so we are saving there. Car # 3 payment due to end soon - yay! The rest are paid for, thank goodness.)
See my post on lawn care for another area to cut and save up to $1000 per year!
Yes, we have cable/Internet, but my wife did negotiate that down to $80 versus teh $100 is was. Still pay about $25 per momth each to AT&T and Verizon for a landline, guess I need to cut that. And food is probably the best area for saving. We have severely curtailed dining out, but my wife is still somewhat of a fast food junkie, and she likes the expensive stuff! But she has trimmed back a little thanks to DD2's insistence on eating healthy, and the daughter is starting to get assertive on that! Thank goodness for any help I can get!
January 25th, 2009 at 03:15 pm 1232896512
Housing including utilites: 28% of income
CC minimum payments, 14%
Ahh, I'll go to my quickenonline and make a new post. Suffice it to say that Christmas always kills us, a sore point between us for 20 years now, as well as clothes, auto expenses (mostly NJ's high insurance for 3 drivers, plus gas until recently, and some repairs and maintenance since all our cars are older, so we are saving there. Car # 3 payment due to end soon - yay! The rest are paid for, thank goodness.)
See my post on lawn care for another area to cut and save up to $1000 per year!
Yes, we have cable/Internet, but my wife did negotiate that down to $80 versus the $100 is was. Still pay about $25 per momth each to AT&T and Verizon for a landline, guess I need to cut that. And food is probably the best area for saving. We have severely curtailed dining out, but my wife is still somewhat of a fast food junkie, and she likes the expensive stuff! But she has trimmed back a little thanks to DD2's insistence on eating healthy, and the daughter is starting to get assertive on that! Thank goodness for any help I can get!
January 25th, 2009 at 03:16 pm 1232896571
Housing including utilites: 28% of income
CC minimum payments, 14%
Ahh, I'll go to my quickenonline and make a new post. Suffice it to say that Christmas always kills us, a sore point between us for 20 years now, as well as clothes, auto expenses (mostly NJ's high insurance for 3 drivers, plus gas until recently, and some repairs and maintenance since all our cars are older, so we are saving there. Car # 3 payment due to end soon - yay! The rest are paid for, thank goodness.)
See my post on lawn care for another area to cut and save up to $1000 per year!
Yes, we have cable/Internet, but my wife did negotiate that down to $80 versus the $100 is was. Still pay about $25 per month each to AT&T and Verizon for a landline, guess I need to cut that. And food is probably the best area for saving. We have severely curtailed dining out, but my wife is still somewhat of a fast food junkie, and she likes the expensive stuff! But she has trimmed back a little thanks to DD2's insistence on eating healthy, and the daughter is starting to get assertive on that! Thank goodness for any help I can get!