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OT: Upside-Down Finances and Need Suggestions

Old 07-12-2013, 09:07 AM
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OT: Upside-Down Finances and Need Suggestions

Things have been pretty good at home, except for the financial situation. This was one of the most difficult things about living with AH, would could suck up resources at an amazing rate but contributed next to nothing for the family. Because I was stupid, I paid off his umpteen small debts -- parking tickets and store credit cards that had gone to collections, which sucked up our disposable income -- to try to make sure nobody came after us. And in the meantime, the majority of my debt went unaddressed and he spent his paycheck on alcohol. Thanks to his deft excuses, I really didn't know it. In hindsight, I want to bang my head against a wall.

I finally sat down the other day and pounded out my bare bones budget vs. income vs. debt and it's not pretty. Making minimum payments with our only extravagance being cable TV and two family nights out for dinner per month, I end up with $0 to -$100 at the end of every month. (I can give up the cable, but not the family dinners. It's a thing.) My job is good, I have a decent salary and good benefits, but I need to maintain my second hobby, side-job to make ends meet.

I have very little credit card debt, under $1K.

My primary debt is student loans. I took out $40K to get myself through school as a single parent and despite paying for three years with a couple of deferments, I owe $48K today. With my payments today, nothing touches the principle. These are still held by Sallie Mae. My parents paid for my sibling's educations, including grad school, so I always assumed they would help me too. For some reason they did not, and it's a very sore subject and my feelings are very hurt over it even today.

The thought that I have no savings and am living hand to mouth with two children is near-debilitating. I just stick my head in the sand and pretend everything will always be fine. I have finally accepted that my parents won't help me with this student debt, and I may never know why -- it's certainly not the money. But that means I have to take responsibility for paying it back.

Does anyone have any suggestions? Resources? I have researched this endlessly and it feels like my only options are to continue to throw money down a black hole (i.e. work with Sallie Mae) or default knowing the consequences.

I just don't even know where to start, and all the family resentments and disappointment get me stuck in feeling sorry for myself and not moving on whatever options are out there.
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Old 07-12-2013, 09:14 AM
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I actually work in collections so I may be able to offer some advice but would need some more information from you. If you want send me a PM and we can discuss further.
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Old 07-12-2013, 10:28 AM
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So you have already looked at what you can cut back - packing lunches and that sort of thing? What is the daycare situation - can you look at trading care with another mom who has different hours, or volunteering some kind of service at daycare to cut the cost? If it doesn't creep you out, can you shop at thrift stores for clothing? That can really help especially with children's clothes. Do you have commuting costs that can be cut by drive-sharing or anything like that? I'm just randomly throwing out things that come to mind.

Are you eligible for any more deferments? That could give you a little time to build up some savings and get rid of the credit card debt.
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Old 07-12-2013, 10:36 AM
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I'm packing *more* lunches but I'm not perfect. I need to make it a top priority. Food is one way we just LEAK money.

Daycare is a serious situation. I pay $600 a month and can't find anywhere within city limits that is any less. My work is about 2 miles from my home, so driving isn't an issue. I could drive further for daycare, but then that becomes a time and gas money issue.

Girl, I am a THRIFT STORE QUEEN. Been thrifting and repurposing for so long it's a lifestyle. I actually don't like to buy new because I know what kind of deals and quality I can get when I'm patient.

We did the Hulu/Netflix thing for a long time and are probably going back to that soon.
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Old 07-12-2013, 11:59 AM
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I suspect even a raise at work may not help. How about finding a new job? Perhaps a better position or the market rate may have changed for what you do and is more dinero.
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Old 07-12-2013, 12:09 PM
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Have you looked into any of the student loan forgiveness programs for public service jobs? I don't know what you do for a living, but with those programs, after making ten years of payments WHILE you are working at a qualifying public service job, the remaining balance of the loan is forgiven.

I think you want to avoid default--that can make things even more of a mess for you than they are now.
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Old 07-12-2013, 12:29 PM
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I found myself in a similar budget situation in that there was not enough left to cut in order to not be teetering on the edge of disaster. Something significant needed to happen. I could not see how I could, as a single parent of four young children, reasonably take on a second job.

I sold the best house I had ever lived in and that my kids had ever known and moved 35 miles away to a town we had no connections in but the house is half the price. It is not as 'dream house' like but it is equally acceptable and in good shape etc. It has not been easy. Small towns are very nice and easy to live in, very difficult to make real friends in if you are an outsider (well a single woman with four kids kinda outsider anyway). My older kids were not very happy at first (younger one's are fine). They have more freedom in a small town.

However - the financial relief/security that was gained has been worth it. Summers are my most difficult time because of child care costs but I can save enough throughout the winter to make it work. It is still paycheck to paycheck but I don't have to hold my breath and pray every month either or wear snow suits in the house to stay warm.
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