Trying to Figure Out My Finances

[Deleted]

I'm in debt. There, I said it. Any help or ideas would be great if you have it.

Just so I can be held accountable, here is a breakdown of my bills:

Monthly General Life Expenses:
Rent: $575.00
Mortgage: $992.98
House Insurance: $65.00
Utilities: $85.00
Xcel Energy Approx.: $30.00
Comcast Internet: $28.83
Car Insurance $65.00
Medical Prescriptions: $25.00
Cell Phone: $95.00
Gas: $210.00
Groceries: $150.00

Student Loans:
Bank 1: Min Payment $149.01 Owe: $17,072.39 Interest Rate: 5.75%
Bank 2: Min Payment: $101.06 Total
Broken into these Increments that all get paid off by same min payment:
Owe: $4970.48 at 4.5% Interest
Owe: $3510.43 at 5.6% Interest
Owe: $3,685.33 at 6.8% Interest
Owe: $1,287.51 at 6.47% Interest
School: Min Payment $40.00 Owe: $1880.02

Other Loans:
Zales - Owe: $3,500.00 Min Payment: $390.00 at 0% Interest
Car - Owe: $7600.00 Min payment: $252.44 at 4.90% Interest
Credit Card: $2092.48 Min Payment: $125 at 0% Interest

I'm pretty sure that is all of my expenses, SO, here come's my income, which is all over the place (can that be a bad thing?)...

New Job Using My Degree: Approx. $2400/mo Before Taxes ($1800 after Taxes)
Rental Income: $1500/mo
Second Source Extra Income: Variable ranging from $1200- $2400/mo After Taxes

Total Income Expecting the Lowest Variable Income and 25% Taxes: $4500/mo.

Total Expenses: $3379.32

There seems to be about an $1100 gap, but I never pay the minimum on the bills, sometimes I'll pay them twice. I'm just trying to come up with a plan to get this over with as fast as I can. Any tips would be greatly appreciated.

Thanks!
L

[Wisconsin Beth]

Jul 5, 2012 15:33:35 GMT -5 @lonewolf said:

You pay rent AND a mortgage?

But there's incoming rental payment so something, presumably the house, is rented out.

[Deleted]

Why do have Rent AND a mortgage? If you own a rental, sell it.

And, gross income isn't something i bank on. Gross income doesn't mean a thing to me because that isn't money in my hand. I live based on NET.

[thyme4change]

The good news is you appear to have low interest rates on everything. The best thing to do is create a plan to pay off a single card. Instead of paying double on all cards - throw every extra dime at one single card, until it is gone. Frankly, I would start with that $1200 card. Eat rice and beans for a month and pay that sucker off in July. Done. Woo hoo.

August, September, October and November - I would work on that $3685 card. December, use all your free money to have a nice Christmas. The other two amounts will be paid off by next summer. I would get rid of the Zales and the "Other" card before next Christmas, and you will start 2014 with just a student loan and a car loan. Keep working on those, but make 2014 the year of stashing savings away.

[Deleted]

Dave Ramsey - Debt Snowball

[Deleted]

I agree with Thyme. Start knocking them out of the park one by one. I do think you should consider selling the rental and paying off all your debts. You could always buy a rental later on when you are in a better financial position.

[Sam_2.0]

I wouldn't necessarily get rid of the rental if you have a steady tenant. That's bringing in $500/mo more than the mortgage (which I am guessing includes taxes & insurance too?).

[thyme4change]

Given that you can get your debt way down in 24 months, I wouldn't get rid of the rental. By the time it is gone, you would just turn back around and buy another one.

[Sum Dum Gai]

Don't a profitable rental, that would be like voluntarily taking a pay cut in order to help pay off debt. Makes no damn sense.

[seriousthistime]

Hey lieblick,

Welcome!

I see that a lot of the people who've commented on your original post are usually over on the Your Money board. That's a more rough-and-tumble place. The advice they've given you is good though. Just saying it might not be delivered in the most gentle way.... by people who haven't necessarily "been there, done that".

The Women in Red Racers (WIRR) posters are the kinder, gentler version. What state do you live in? You probably need to repost your original message in whatever region is appropriate. We here at the WIR are pretty helpful about trying to figure out what's best for you, and if you post your message in your region you will get to "know" some of the people who post there.

You CAN do this ...

Start here: notmsnmoney.proboards.com/index.cgi?board=redracers&action=display&thread=11172

[Deleted]

Selling the rental is just my opinion. I HATE debt. I would do whatever it takes to get out of debt. As a result, i owe nothing to anyone. My home, cars , student loans, CC's everything are all paid off. Owning a single home is expensive. Owning a rental and being responsible for another property can also be expensive. If she sold it presumably she would eliminate the debt of the rental in addition to wiping out other debts. That is most likely what i would do personally. That may or may not be right for the OP, i don't know. But, it is one possible option to consider.

[Clever Username]

Things aren't desperate over there. So, no need for dramatic action.
But I bet you could establish some priorities in your life, things would feel more like firm ground.

Here are my opinions. But as I said, nothing is desperate, so you can re-prioritize.
1. Zales - Owe: $3,500.00 Min Payment: $390.00 at 0% Interest
Quit the impulse shopping. Doubly worse that you spent money you didn't have.
Yeah, yeah, they waived around 0% and acted like it was $0.
Congratulations, you're a grown up now, you now know it was a lie. Don't do that.

2. Rental. Hey, it's working for you. Keep working it.
But you know that it represents a risk. Risk of stuff breaking. Including your tennant breaking your lease. You know what you need to prepare for that risk? Cash. You need an emergency fund.
Some lowball at $1000 until they're out of debt. That's way low for a landlord, imho. $10k min.

3. Rental.
New Job Using My Degree: Approx. $2400/mo Before Taxes ($1800 after Taxes)
Either you're new at this or you are bad at doing taxes. That rental is a tax deduction gold mine. I doubt you pay any Federal Income Taxes. Change your deductions already. Funnell the takehome pay towards your priority list.

4. Debt payoff. Another PP brough up Dave Ramsey's snowball. I may disagree with the order he prioritizes things. But I wholeheartedly agree with minimum payments towards all + everything else at the target debt.
"but I never pay the minimum on the bills, sometimes I'll pay them twice."
Doing this without that type of focus probably yields little results.

Here's the order I like:
1. Credit Card: $2092.48 - good job negotiating down the interest. But, it is still a 30% risk. Break the cycle, no more credit card debt. Know thyself, you can go into credit card debt. Has that been resolved, or do you need to cut them up?
2. Zales - Owe: $3,500.00 - another 30% risk.
3. Car - Owe: $7600.00 - yeah, it's a big one and won't earn alot in minimum payments saved. But it's the next biggest risk on the board. Student loans have many built in mechanisms should income drop. Auto loans have unseemly men with towtrucks.
4. Student loans, pay off either low balance to high or high interest to low.

Two other priorities to fit in somewhere are fully funding an emergency fund and begining retirement savings. I'd probably place these before the car loan. But to each her own.

[Peace77]

Do you have an emergency fund? If not, start one by opening a savings or money market account at a credit union or bank.

Does the school debt charge interest?

When do the 0% interest rates expire? What will be the interest rate when the 0% expires?

It seems Thyme misread the $1287 loan as a credit card. It looks to me that eliminating that loan will not change or eliminate the $101 payment.

Your budget is missing several categories. The is nothing for clothing/shoes, gifts, misc such as haircuts and laundry.

Does your employer offer a 401(k) match? You need to add a budget line for savings even if just a small amount to start with.