trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 11:25:04 GMT -5
Hi all. I've been lurking ever since we made the switch from MSN, but have come to a point where I need to post for an outside opinion.
I am married with two kids (ages 2 and 4). My husband and I at one point had $45K in CC debt and we completely dug ourselves out back in 2009. But then I went back to work and we fell back in debt as we had full-time daycare costs for two kids of about $1200/month, plus some large family expenses.
We have a combined income of ~$115K which should be more than enough to cover our regular expenses, but we have gotten back up to $13K in CC debt. Luckily I have $11K sitting at 0% and $2K at 1.99%, but those rates will change in May 2012.
My problem is that my husband feels like we have done a lot of sacrificing over the past 8 years and he isn't in the mood to sacrifice any more. We used to be very extravagant and eliminated a lot of expenses, but we still spend quite a bit (in my opinion) on eating out and entertainment, especially with the children. He works very hard at a job he hates and doesn't see the problem with taking the kids out for dinner or to a movie, etc. Our grocery bill is extremely high, but this is one place he refuses to cut any further. I admit that I also spend more money than I need to on clothes, both for myself and the kids.
In the fall of 2012, both my kids will be in school and our daycare expenses will drop to $200/month. At that time we will also finish paying off our car loan and save an additional $450/month.
I would prefer to cut our budget to the bones and pay off the debt in the next 6-7 months, but my husband will not agree to eliminate further items from our budget. For the sake of my husband's sanity, and my own if it means I can stop arguing with him about this, our plan is to continue paying as we have been ($600/month) toward the debt until fall of 2012 when we can obviously excelerate and eliminate it quickly.
I'm YM will think this is a terrible idea - that we should suck it up and pay it off ASAP regardless of the cost to our standard of living and stable relationship - but I'm starting to wonder if living with debt is a compromise I just need to accept as part of my otherwise loving and happy marriage. Thoughts?
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 4, 2011 11:27:37 GMT -5
How about posting a budget? The posters are a fantastic with ideas on how to cut costs, maybe even some so that your DH doesn't even see it happening?
|
|
Apple
Junior Associate
Always travel with a sense of humor
Joined: Dec 17, 2010 15:51:04 GMT -5
Posts: 9,938
Mini-Profile Name Color: dc0e29
|
Post by Apple on Jul 4, 2011 11:33:58 GMT -5
As long as you are continuing to pay off the debt and NOT adding to it, it may be worth it to string it out over a year instead of 6-7 months, otherwise the backlash can be just too stressful. I don't think you should have to compromise and stay permanently in debt though.
And, jmho, for clothes for the kids--do you have anything against second hand stores for them? My son grew extremely fast (at 13 he's almost 6 feet tall) so I just resorted to almost exclusively second-hand. He got new stuff sometimes, but the majority was gently used--I could buy him five almost new shirts for $3 or $15 for one that he would grow out of just as quickly. My SIL refuses to buy second hand though (even if it is new with tags) and by 6-years-old my niece was very condescending toward it and announced to my sister "we don't buy clothes from those stores". To me it was just a painless way for me to reduce the budget but still get to buy cute cloths for the kiddo. ETA: I will never buy used shoes for him though--can easily cause foot problems since shoes form to the wearer's feet. Underwear either, but that's my ick factor for second hand.
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 4, 2011 11:36:50 GMT -5
Or find a Plato's closet. My DD and her friends were in and out of that place constantly turning in and changing what they wore. We got a prom dress with tags on it for $35!!!
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 4, 2011 11:37:42 GMT -5
Oh, kids are too young. 2 year old can wear 4 year olds old clothes.
|
|
trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 11:48:37 GMT -5
I can try to add a budget - let me work on it and see what I come up with.
I do buy second-hand clothing for my kids, or clearance priced new items when on super sale. I think that is part of my problem - I am an ingrained bargain shopper and I cannot pass up a great sale. It's not that their clothes are expensive, it's just that they have so many of them!
And my 4 year old is a boy and my 2 year old is a girl, so we stopped the hand-me-downs around the time she turned 1.
Thanks for the input so far - I'm glad to know the initial gut reaction wasn't that I am crazy.
|
|
Plain Old Petunia
Senior Member
bloom where you are planted
Joined: Dec 21, 2010 2:09:44 GMT -5
Posts: 4,840
|
Post by Plain Old Petunia on Jul 4, 2011 11:52:01 GMT -5
Your kids are 2 and 4 now, but will both be in school full-time by fall of 2012? How does that work?
It sounds as though hubby objects to cutting back on meals and movies out. Does he object to spending less money on clothes for you and the kids?
|
|
trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 12:07:12 GMT -5
Income -
His (net after pension, union dues, parking, taxes) $3250 Hers (net after charitable donation, taxes) $3250 Govt $200 (in Canada, parents get $100/month for each kid under the age of 6)
TOTAL $6700
Expenses -
Mortgage/Prop Taxes $1595 House Insurance $50 Utilities $350 Cleaning Service $175 (I know you will say to cut this - but I work full-time with two little kids and a dog. I will if I have to, but I really don't want to) Phone/TV/Internet $140 Cell phones $0 (paid for by our employers) Car Payment $455 Car Insurance $210 (for 2 vehicles, and insurance is very expensive in Ontario. This is a good price!) Gas $350 Child Care $735 (1 kid full-time, 1 kid before/after school - more in the summer is offset by our vacations) Life Insurance $75 Groceries $750 (includes household items and training pants for my daughter, but I realize this could come down) Restaurants $150 Clothing $100 Entertainment $150 Gym membership $45 Miscellaneous $75 (occasional things like swimming lesson fees, vehicle registration, etc) Bank fees $25 (I know there are no-fee accounts available, but we have looked at options and feel this is a reasonable expense for the accounts that we have) Emergency savings $220 Retirement savings $400 Debt repayment $650
TOTAL $6700
|
|
trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 12:08:44 GMT -5
Your kids are 2 and 4 now, but will both be in school full-time by fall of 2012? How does that work? It sounds as though hubby objects to cutting back on meals and movies out. Does he object to spending less money on clothes for you and the kids? We have full-day junior kindergarten. My daughter will enter school in September of 2012 at the age of 3 because she turns 4 by the end of the year. And I will definitely cut back on my spending on clothes! I was not making excuses, just giving the full picture that it's not all his fault. I realize I am also to blame for our situation.
|
|
daisylu
Junior Associate
Enter your message here...
Joined: Dec 27, 2010 6:04:42 GMT -5
Posts: 6,815
|
Post by daisylu on Jul 4, 2011 12:25:47 GMT -5
My tip on the clothes is to simply stay out of the stores. I used to have the same issue with passing up a bargain, then life just got crazy busy and I had no time to window shop. This will save you a TON.
|
|
phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,409
|
Post by phil5185 on Jul 4, 2011 12:27:50 GMT -5
Thanks for the input so far - I'm glad to know the initial gut reaction wasn't that I am crazy No, not crazy - just take a look at your top-down numbers. You earn $115,000 and your spend $122,000. Obviously, if you do this continually, you will crash. In 10 more years, you will be $140,000 in debt (if you pay 12% interest on the loans). What is the vehicle situation? That is normally more important than the grocery bill or the 'eating out' bill. (Unless dh is obese & harming his health?) Eg, in our case we go out to breakfast daily - we pick up our Paper & head out at 6:00. It costs about $3000. That's a choice - and $3000 is not a make or break part of $115,000. Look for the 'majors' - eg, if you spend $25,000/yr on cars, that IS a make/break part of $115,000.
|
|
trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 12:37:21 GMT -5
Sorry, Phil, I'm obviously not a numbers guru. How do you see us spending $122,000/year?
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 4, 2011 12:48:01 GMT -5
Girl can wear some boys clothing. DD wore DS's. Get a generic color like white, blues, yellow but the main thing is to stop shopping, period. They don't need clothes and you don't need clothes. Shoes are one thing. There's also birthdays and Christmas and they can get clothes from relatives for those as well. Geez, my DD used her brothers hand me down bikes until she was old enough for adult bike of her own. They don't care at all until age 6 or 7 if then. Jeans are jeans, jackets get in navy, you get the picture.
|
|
Deleted
Joined: Apr 29, 2024 7:15:15 GMT -5
Posts: 0
|
Post by Deleted on Jul 4, 2011 12:51:24 GMT -5
It seems like you have a plan. Maybe there are better plans, maybe there aren't, but what is important is a plan you can stick to and not create big marriage problems over. Put down your current plan in writing and make sure your husband is completely onboard. Let him know that if your spending goes above plan causing you take on more debt or lower debt reduction, he agrees now to cut out some of the extra things. Let him know you are compromising because you'd prefer to pay down debt faster and that it is important that he take this compromise seriously. Resist the urge to spend in response to him spending also.
It may not be fair that one spouse has to do the heavy lifting, but the alternative usually is debt builds and no one is happy in the end.
|
|
|
Post by robbase on Jul 4, 2011 12:57:54 GMT -5
I would just emphasize to him again how much he says he "hates" his work and he should either adjust his spending habits so he can eventually exit his work, or he should keep spending and be quiet about how much he hates his work, because both of these actions are in conflict
|
|
phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,409
|
Post by phil5185 on Jul 4, 2011 13:04:34 GMT -5
How do you see us spending $122,000/year? You say that you earn $115,000 and that you are currently back-sliding by about $7000/yr. So - $122,000 spent. You say the car payment is $5460/yr, ins is $2520/yr, gasoline is $4200. Add registration, oil changes, washes, 'wear' items - tires, brakes, batteries - maybe $1500/yr. So that is $14,000 net, that is about $20,000 of your $115,000 gross. But that doesn't consider depreciation - are these late-model cars? Your groceries & eating out is about $11,000 - that is $16,000 of your $115,000 gross - that is not over-the-top but it is an important one to keep under control. The house is about $28,000 of the $115,000, that's in the 'good' range, less than 25% of your 'gross'. And $1200/yr for clothing is certainly not causing your $13,000 problem (like I said, we spend more than that for breakfast). But I get the feeling that you blow thru that fairly often (you mentioned it more than once?) Mostly, you are in good shape. If that $650/m for debt ($7800/yr) were instead going into building wealth instead of paying for past expenses, that budget would balance nicely. Looks like a management issue - keep the budget carefully managed - then you can treat yourself to the house cleaner & the gym.
|
|
Mad Dawg Wiccan
Administrator
Rest in Peace
Only Bites Whiners
Joined: Jan 12, 2011 20:40:24 GMT -5
Posts: 9,693
|
Post by Mad Dawg Wiccan on Jul 4, 2011 13:40:18 GMT -5
Income - His (net after pension, union dues, parking, taxes) $3250Hers (net after charitable donation, taxes) $3250Govt $200 (in Canada, parents get $100/month for each kid under the age of 6) TOTAL $6700 Expenses - Mortgage/Prop Taxes $1595 House Insurance $50 Utilities $350 Cleaning Service $175 (I know you will say to cut this - but I work full-time with two little kids and a dog. I will if I have to, but I really don't want to) Phone/TV/Internet $140 Cell phones $0 (paid for by our employers) Car Payment $455 Car Insurance $210 (for 2 vehicles, and insurance is very expensive in Ontario. This is a good price!) Gas $350 Child Care $735 (1 kid full-time, 1 kid before/after school - more in the summer is offset by our vacations) Life Insurance $75 Groceries $750 (includes household items and training pants for my daughter, but I realize this could come down) Restaurants $150 Clothing $100 Entertainment $150 Gym membership $45 Miscellaneous $75 (occasional things like swimming lesson fees, vehicle registration, etc) Bank fees $25 (I know there are no-fee accounts available, but we have looked at options and feel this is a reasonable expense for the accounts that we have) Emergency savings $220 Retirement savings $400 Debt repayment $650 TOTAL $6700There's your problem. Your income is $6,500, and your expenses are $6,700. You need to cut $200 per month just to stay even.
|
|
bring in the new year
Well-Known Member
Happy Thanksgiving!
Joined: May 3, 2011 17:28:52 GMT -5
Posts: 1,966
|
Post by bring in the new year on Jul 4, 2011 14:08:44 GMT -5
Madawg, any reason you didn't count the 200 from the government for the kids?
Which would keep them in balance.
|
|
bring in the new year
Well-Known Member
Happy Thanksgiving!
Joined: May 3, 2011 17:28:52 GMT -5
Posts: 1,966
|
Post by bring in the new year on Jul 4, 2011 14:15:51 GMT -5
Silly question, how often do you use the gym? And what are your choices on phone/internet?
Also, I'm not familar with the Canadian tax system. Do you get refunds or is it more a UK style situation. If you're getting a refund, can you change your withholding?
I agree with the people who suggest staying out of stores. I swear I have more trouble in the grocery store than anywhere else, because I know (I JUST KNOW) I'm being virtuous. You might also think about looking at the clothes the kids have outgrown and trading them in for credit in consignment stores.
While I sympathize with what your husband feels, have you shown him this budget? And remember to add in what the cc repayments will come to once the 0% rate runs out. CC % can really start eating up the extras.
Good luck
|
|
Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,367
|
Post by Tiny on Jul 4, 2011 14:17:02 GMT -5
My tip would be to try to stop the Feast then Famine approach to personal finance you seem to have going - you feasted and ran up CC debt, you went into Famine while paying it all off, and then started feasting again and now you are contemplating a 6 to 7 month Famine to pay off the CC debt again. Sure - Feasting (spending more than you earn) seems all fine and wonderful and like you deserve it - especially after coming off a Famine. But that feast/famine cycle doesn't really lead to a whole of happiness. Why not try to break that cycle?
That's where figuring out a budget comes in - first try to get a handle on your money to STOP spending more money than is coming in, then start working on spending less - maybe make do, or put off some purchases (so what if you don't buy clothes for a 6 months or a year - you've got the REST of your LIFE ... you'll buy more clothes in the future - its not a clothes famine....). Give yourself a "Allowance" or "Fun Money" so you CAN go out to dinner or take the kids to a movie - Not every day/week (it's not a feast!) maybe one dinner out a week? one or two movies out a month? It's not a Famine. Try to look at your spending/buying in a different way.
|
|
trimommy
Junior Member
Joined: Jul 2, 2011 17:08:18 GMT -5
Posts: 107
|
Post by trimommy on Jul 4, 2011 14:58:50 GMT -5
Great advice. I agree completely about the feast vs. famine. That's part of why we are in debt - because we struggle with impulse. We needed a new dining set, and we decided to buy a beautiful one versus a generic one. We had to go to a family wedding, so we decided to turn it into a vacation because we hadn't ever taken a family vacation. We need balance!
And Phil, our cars are in decent shape. I drive a 2005 that is fully paid for and will last another 5-6 years with no problem. My husband drives a 2007 that I hope goes 10 more years. I don't ever want a car payment again!
|
|
Cass
Senior Member
Joined: Dec 24, 2010 0:43:29 GMT -5
Posts: 2,451
|
Post by Cass on Jul 4, 2011 16:19:09 GMT -5
Look into President's Choice chequing, you can use CIBC machines. I've been using them for a dozen years without paying a single fee and they have wonderful service. Won't make all the difference, but it's an easy $300 a year.
|
|
qofcc
Well-Known Member
Joined: Dec 20, 2010 13:30:58 GMT -5
Posts: 1,869
|
Post by qofcc on Jul 4, 2011 16:36:51 GMT -5
I wouldn't rush to pay off the low interest balance transfers. Pay the minimum and put the rest into building up your cash fund, then see if they are still offering balance transfers next May, if so, repeat and keep saving the cash, if not, use the cash to pay off as much as possible. If you don't have enough cash, when something comes up, you'll end up charging it at a higher rate.
As far as the clothing, too many clothes is just a waste even if you paid very little for them. Come up with a checklist of the items you want/need - especially for the kids - and as you find them, cross them off the list. When the list is done, you just don't need any more clothing in that size. I've found that it's sometimes easier to save up the money and shop for the kids stuff in a batch when everything is on sale and you can find a bunch of tops & bottoms that mix & match, rather than picking up items here and there that may not coordinate.
Is there any way you can keep going out, but stretch your entertainment dollars? Do they have those restaurant/entertainment coupon books in Canada? Do your local restaurants offer kids eat free nights? Do you have a bargain night at the movie theater? Can you split entrees or drink water instead of soda to cut back a little bit. A $20 dinner out with water & a coupon can be just as much fun as a $30 dinner.
|
|
cronewitch
Junior Associate
Joined: Dec 20, 2010 21:44:20 GMT -5
Posts: 5,974
|
Post by cronewitch on Jul 4, 2011 17:14:35 GMT -5
I would buy cheaper food without talking about it. Summer time so serve hot dogs once a week and burgers once a week and whatever veggies and fruit that are on sale and in season he might not even notice trimming $100 out of the food budget if you serve summer foods and avoid heavy meat meals. You might say how much you are enjoying all the light summer fare. Tacos are cheaper than roast beef and more fresh and colorful. Serve real popcorn instead of microwave corn or chips to save money. Tell him you are avoiding using as many prepared foods because they aren't as good for you and you prefer fresh food. Make iced tea instead of buying soda or lemonade.
|
|
Deleted
Joined: Apr 29, 2024 7:15:15 GMT -5
Posts: 0
|
Post by Deleted on Jul 4, 2011 17:24:04 GMT -5
I agree with Cronewitch about the food. You are also right that I would cut the cleaning service. That's pure luxury to me. Even parents of small children can clean up after themselves. Maybe the baseboards won't get dusted every two weeks, but you can schedule a 30-minute task a night, and it will get done. Thoroughly clean one bathroom one night, thoroughly clean the other the next, etc. Your house won't be spotless, but it will be presentable.
To be fair, though, we spend $75 every other week to have our lawn (1/2 acre) taken care of. It's the best money I spend each month, but some of that is because I don't know HOW to mow grass. I actually bought a lawnmower in my last house (fortunately, it broke after two weeks and I could return it). There was a small hill, and I tried pushing up it. My neighbor came over to try to teach me how dangerous that was.
Thank you, Karma, for breaking that mower.
|
|
daisylu
Junior Associate
Enter your message here...
Joined: Dec 27, 2010 6:04:42 GMT -5
Posts: 6,815
|
Post by daisylu on Jul 5, 2011 5:56:39 GMT -5
ATSiaRU made a good point about Feast and Famine.
You and DH need to have a very serious financial discussion. The two of you are the only people who can decide which compromises you can BOTH live with. If you try to figure this out on your own, you will end up being the martyr which will only lead to MUCH bigger problems down the road.
|
|
muttleynfelix
Junior Associate
Joined: Dec 20, 2010 15:32:52 GMT -5
Posts: 9,406
|
Post by muttleynfelix on Jul 5, 2011 6:38:45 GMT -5
Is that budget what you are actually spending or is it what you think you are spending? Do you track everything? If that budget is what you are actually spending, then I would keep on that path and just work to stay on budget.
|
|
daisylu
Junior Associate
Enter your message here...
Joined: Dec 27, 2010 6:04:42 GMT -5
Posts: 6,815
|
Post by daisylu on Jul 5, 2011 7:22:17 GMT -5
If that budget is what you are actually spending, then I would keep on that path and just work to stay on budget. I see two reasons to make adjustments: Both of these monthly contributions are too low, IMO. Unless the EF is already at a comfortable level - then I could see getting a break there. But if that is all of the retirement contributions for 2 people making ~$115,000/year, I would beef that up. Also, the $200/month from the govt is not going to last much longer for them.
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 5, 2011 7:26:37 GMT -5
How big is your house? How long does it take you to thoroughly clean it? Does she bring supplies or do you pay for them? My rule was to pay no more than $20 per hour for a housekeeper and for me to totally clean my house, 3 floors, 3 bedrooms, 3 bathrooms, took me 4 hours so I would not pay a PROFESSIONAL more than that because I felt they should be more organized and faster than I was. I was always quoted $65-$75 with them using their own supplies and I was totally happy with that. 2400 sq ft house but the 3 floors was a PITA. I'm sure there was a PITA charge thrown in!!!! My girlfriend cut hers to just doing floors and bathrooms and saved half the money so now is paying $50 every 2 weeks but she has a HUGE house on one level, though.
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,865
|
Post by zibazinski on Jul 5, 2011 7:28:57 GMT -5
Food and clothing are your easiest cuts, though. I get kosher hot dogs buy one get one free. Grill hot dogs once a week. Watch for the bun sales. Watch for the BOGO potato chip sales. Watch for soda to be 4 for $10. That is if you have to buy chips and soda for your husband. Stock up at a Costco or whatever for bulk stuff like TP/Paper towels.
|
|