By Mogge from Norway
I'm not critizing Mogge because I don't know her situation but a lot of people got themselves in this situation by living in the moment. We have to plan for the worst and pray that it doesn't happen. Sometimes things happen beyond our control; such as in medical. Those are not the people I'm referring too. People need to change their views on what it means to be frugal. I have a friend who said she'd never buy used but new clothes have more often than not but tried on again and again. Another friend calls me lucky because I'm not in debt but what I can't get through to her is that I live a frugal lifestyle and luck has nothing to do with it. She's too proud to do the things I do and she lays awake at night worrying whereas I sleep like a baby. No new anything is as good as the peace of mind that debt free feels like.
My husband and I have five children. I am a stay-at-home mom. We barely survive on his income alone. I recently started actually paying attention to our loan statements and found that an extra small monthly or fairly large yearly payment can cut up to a whole year off the life of a loan. Better than blowing our income taxes! We are also paying off our mortgage in ten years instead of fifteen by making bi-weekly payments instead of monthly ones. The extra towards principal really helps.
You'll just have to tighten your belt. I retired and now am trying to live on Social inSecurity which is about $1100 per month. I have stopped taking trips into the country which is one thing I enjoyed. I'm trying to get by on filling my 2000 Chevy Malibu up twice a month. Don't go out for breakfast with my friends, that saves about $25 per week or $100 per month. I buy the cheapest TV dinners at the grocery
store. Make a list of every penny I spend on "things" that I really don't need.
Try doing this for a month and see how much you can save.
Everyone seems to be having difficulty stretching their dollars.
If you have a set amount of money coming in on a specific date be it weekly, monthly, etc. this is what I have done to help myself:
Make a chart showing every single payment you have showing who it's to, date due, minimum amount due, total balance, date last pay't, am't paid. If you desire to have some savings, set it up on the payment schedule too. If you have children you may also want to include emergency. Sort these payments by due date.
Your income less groceries and gasoline is what you have to pay bills with. Assuming the amount available is a little more than what has to be paid, look at the credit cards. If you are going to pay more than the minimum payments, concentrate on larger payments going to one card at a time. You save money in the long run by paying on the card charging the most interest.
However, if you are stressed because you have so many cards, then put the extra money on the card with the smallest balance and get it paid off. Then work on the next smallest balance. This way you will owe on fewer cards.
I also make a chart showing all of the credit cards with projected payouts so I can at least see when they will pay out if I make no further charges. In other words, I can see the light at the end of the tunnel.
You can also stretch your grocery money. Do all the grocery shopping possible at the Dollar General. I recommend their Clover Valley brand of canned goods which comes out of Tennessee. Even if you use brand names, they are 10 or 15 cents an item cheaper than the grocery store.
In addition, do a search online for depression recipes. There are a lot of them, and they are inexpensive to make.
Start looking at what you are actually spending money on. Nearly every bill is negotiable or an alternative can be found. Get out each one of your bills: rent/mortgage, electric, gas, phone, cell phone, internet, garbage, credit card, etc. Ask yourself if you can get a cheaper alternative? A better rate from the same company? For instance, if you have both a landline and cell phone, do you really need both? If you have internet, do you use it enough to justify the level of service you have or could you get by with a cheaper plan, or free service like netzero? Also, save a little bit of something from each paycheck, even if it is only $5.00. Make the savings automatic by having it automatically deducted from your pay. And if you have credit cards, stop using them. If you need to get something and can't afford to get it new, try thrift shops, freecycle (go to freecycle.org to locate a freecycle group near you), Craigslist.com (there is a free section on Craigslist), or ask someone if you can borrow theirs if you just need it once in awhile. If you have a large enough yard, you could start a vegetable and fruit garden to grow some of your own food and cut down on the amount you need to buy from a store. How about getting a second job? The situation is not hopeless. There are always options. I declared Chapter 13 bankruptcy in 2001 and would not recommend the experience, but it was definitely an eye-opening experience that taught me the difference between what I needed and what I wanted.
Forgot to add: we're working first on paying off the higher-interest cards. When I learned our Sears cards had 22% interest, I started campaigning hubby to stop using them and start paying them off. Barring unforeseen circumstances, we'll have the Sears Plus card paid off by mid-summer.
thanks to my little strategies, my credit score was nearly 700, as of a year ago. Who knows? it might be over that, by now... that's on my list of things to do soon!
I couldn't help but notice many of these posts seem more critical than encouraging. From your original post, your situation isn't *entirely* your fault, it's part your spouse's responsibility, too. I can sympathize; I'm in the same situation.
My New Year's resolution for 2009 was to get my finances really and truly under control, at last. Hubby and I are both on Social Security since a drunk driver left me nearly totally blind six years ago, so a second job is out of the question for me. I have, however, found little ways to accumulate an extra dollar here and there.
First, I collect pennies. When my little "penny bank" fills up, I wrap them and cash them in. I can think of a couple of occasions when those pennies hubby disdains kept us in gasoline and milk until payday. I've joined three "survey for pay" groups to date, and should receive my first small check for a survey project this month. If you "blog," there are also "blog for pay" sites, I hear. What you can make might not pay your mortgage, but you might earn enough for a gallon of milk or gas here and there.
Consolidating your accounts to a credit union can be wise. Starting this month, I transferred all my finances to my credit union. By doing that, I qualified for a better interest rate, by far, than I did at the bank I'd used for 15 years. When my SS check arrived, I immediately transferred most of it from my checking to my savings account. Since that money will collect interest in the week or two it sits there before I have to pay any bills with it, that can do one of two things. Either I'll have a tiny bit of extra bill money, or - my preference - the interest earned will stay in my savings account. I also qualify for a free box of checks each year - a great "perk" that potentially saved me $20 or so.
I flatly refuse to have a joint account, even though hubby has access to my debit card. He doesn't like it, but I closely track his spending so I don't go "into the red." (That's happened before, when I wasn't so vigilant.) Also, I never use my debit card as such for purchases. Instead, to save the fees, we use my check card as a credit card for purchases, whether at the grocery or gas station.
I, too, canceled the single credit card I owned when hubby maxed it out one too many times. When I received a letter saying my fees would nearly triple, I wrote right back, canceling the account. Now I'm slowly paying off the balance. I pay more than the minimum, even if it's only by a few dollars, in hopes I won't be paying on it forever.
I only have one bill automatically deducted from my account, because I have a kind of phobia about overdrafts. Anything else, I set MS Outlook Calendar reminders for myself, and plan bills around my tiny "work-at-home" paycheck. I make full use of free online bill pay options, and print a receipt each time I pay the bill. That way, the company can't say I didn't pay and get yet more money I can't afford.
As for asking help. I wouldn't recommend asking just so you can go to Olive Garden, but don't have "stubborn pride." If you need a little help to survive, the resources are out there. (They're not as plentiful in today's economy, but still there.) Even though hubby won't go to food banks (we're not that bad off, he reminds me,) we do ask for help from our local social service organizations when we have to get a little relief. Since hubby is a veteran (he spent a tour in the Korean war,) we can ask help from the Veterans' Affairs office once a year. I was embarrassed to do it the first time, but they were so compassionate and reminded us that's why they're around - to help vets in dire straits.
As for family contributions; we don't need more clothes, shoes or jewelry, so instead of these things, we let family know gift cards are always welcome. Instead of gifts this past Christmas, our younger daughter and her fiance took us grocery shopping. Instead of the concert we'd have loved to attend for Valentine's Day, we asked another daughter to do the same. One of the Christmas gifts we received was a gift card to my favorite sandwich shop, contributed by a friend of hubby's. My supervisor, instead of buying a knick-knack, gave us a box of the popcorn we love.
If you absolutely have to borrow from family or friends, make the loans small and short-term. Our oldest of the five kids hubby and I raised never minds finding an extra $20 for us, because he knows he'll get it back on payday. That's much better than the professional "payday loan" stores; interest-free, too.
My strategies might seem like small potatoes. Maybe they are. But hey - every little bit helps, right?
I live in Canada. I see you have a lot of good advice from other people, so I won't give you any more. I just want you to know that you are not the only one who lives like this. You are not alone. There are millions of us just struggling through life. Good luck. I'll keep a good thought for you.
I feel that part of you is saying, "I deserve to do more with my hard earned money than just pay bills". The thing is, if you used the services/kept the product, you are paying for things you already used. And those businesses deserve to be paid. But I know its hard. You want to ask for help, you want a bail out. Maybe you can tactfully let people know that are under stress, and cannot afford to relax. If you have very close friends and family, maybe you could let them know that you are in tight finances and ask them if they have any ideas. They probably won't offer a hand out, but they may point you toward ways of making extra money, getting odd jobs, or suggesting specific ways that you personally, can cut expenses that you have not seen, or realized.
I know people who moved from very nice apartments to not as nice apartments to save $150 of rent a month, as well as be closer to their jobs (saving gas money) they used most of that money to pay down debt, but used part of it to have a nice date out, once a month to treat themselves. Moving was hard for them, but after hearing about their financial problems, friends who knew the apartment manager helped them get out of their old lease, and get into the second apartment, many friends helped them move, loaning the use of their trucks, vans and cars and their own time. Maybe a radical short term situation like this would alleviate some of the stress. Maybe just keeping up with thriftyfun and changing your outlook would help as well.
Eliminate what you can. Life does go on without cable/dish and internet. Usually you can get free videos at the library for entertainment and use the internet for free at the library. Can you get rid of a house phone if you have a cell phone? Keep your thermostat down in winter, up in summer to help with your electric, limit your water usage. Don't eat out, pack your work lunches. Have a garage sale and start an emergency fund with the proceeds.
Visit savingadvice.com On that site, you can join (for free) and list all your bills and the group helps show you where you can save.
kasullivan has given good advice. Stop buying anything that is not a necessity and cancel/cut back on non-essential expenses. Look at your utilities and groceries, etc and search for cheaper alternatives..then actively DO IT. We searched around and saved hundreds on car/home insurance/phone. Be aware of what you're spending on, if you cannot afford something don't buy it. In the past I've even considered moving home to somewhere cheaper but that necessity didn't transpire. If your home is large enough perhaps you could consider renting a room to a lodger until you get your finances under control.
Good luck, you need to be active to make a change.
There was a couple on TV that paid off 45K in bills by:
Working 2-3 jobs each
Spent only $50 a week on food (if you have no kids)
Cut back on air conditioning/heat
There's many ways. You just have to want it to happen! It isn't gonna happen itself! You created it (as I did at one time) and YOU have to fix it!
Check out daveramsey.com he has many tips to help people pay off bills and start saving money.
You can save if you really wanted to. Even if it is only $10 a week. If all the money you make goes to bills then find a way to make some extra income that you can use to save. Recycle, have a sale, do lawn care for elderly people. Market your skills. Apply for at least one higher paying job a week. But most of all quit crying and start trying.
I joined a credit repair program in 2000 after the birth of my baby boy. It was a bit of a mistake as they were sued later and I got a settlement of some of the money I paid them. So I don't recommend that you go that route, unless you know they are all on the up and up. They did force me to pay off some bills, which was nice in the long run.
What I did discover is that most credit card companies have a special program set up for people in trouble. They will reduce the interest rate and close the account until you pay it in full. I would call your creditors and see if there is any way to get help directly. Most of them do NOT want to send you to collections as they don't get as much money that way.
We only use our joint accounts for household expenses. I have two different house accounts, both with credit unions. One is for my husband's paycheck: It takes care of the house payment, car payments, insurance and utilities. I have my bills set up to automatically pay, so no late fees or other mistakes. The second account is my paycheck for groceries, and ancillary or unexpected expenses.
I give myself and my husband an allowance as spending money every pay day, for coffees, lunches and impulse purchases. We have separate personal accounts with checking and savings. When that spending money is gone, it is gone!
I am currently trying to pay off a few of the smaller credit cards, and then add that payment to the next. I'm also trying to save up some money as a buffer for the next major emergency or expense.
Good luck, it is tricky to make meet. There are lots of systems and advice out there. Choose the tips that fit your situation best and stick with it!
I had to take on a second job to get my credit card under control - plus I left it hidden at home so I was not tempted to add more by purchasing a want. It took a year of working hard and giving up my "free" time plus I sold a few things at my friend's garage sale - but I am now free of credit card debt, had my cable taken out, reduced my other monthly bills to the minimum but I am now feeling better about my financial situation and my stress level has been lower!! Good luck to you - it is hard but you can do it.
There are lots of things you can do. Sell some stuff to catch up on your bills. In the long term see how you can eliminate some of your bills. See what is a necessity and what is a luxury. Be hyper-critical and then eliminate the luxuries. Things you CANNOT live without.
Then - get another job, part-time at nights and/or weekends. Do what you must. It won't be fun but it's the way it is for over-spending when you added the bills.
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