Need financial advice and help-please!

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Dang bro, looks like y’all had a big time the few years! BTDT but not quite to the tune of 40k.

I agree Dave Ramsey is the guy. I only suggest NOT going to one of those 3rd party companies, that will negoitate the amounts down for ya. You credit score takes a serious hit when you pay off less than the amount owed.

Use the principals in the Money Makeover book, and clean this mess up on your own. It is not that hard once you have a plan.
 
Lots of good advice here, but I would caution against closing all of your accounts as soon as you pay them off. It will trash your FICO score because it will have a huge negative effect on the debt to credit ratio. Suze Orman gives a good explanation of how the FICO works. Cutting up the cards should prevent you from re-abusing the accounts without dealing the final death blow to your FICO.

Know that you can come back from this mess! I’m 10 years out from my crisis and my credit is now perfect with a high FICO. You must get to the root of how your family got into debt in the first place. Was it just mindless spending on little things here and there or reaching for a more expensive lifestyle than you could afford or is there a deeper issue or two that must be confronted to prevent a relapse down the road?

I personally had to confront that I was using “things” to fill an emptiness in my life that can only be filled by God. Luckily, I didn’t have the need to spend on expensive things or even ridiculous amounts of cheap things.

On another level, I was given the final push over the edge of the debt cliff when I lost a job shortly after spending my savings to move to the new city. I had not been out of law school for very long when I tried to jump to a better job and had a horrible experience. This is what made me finally sit down and take a hard look at how the debt creeped up and the savings stayed too low.

I was never extravagant about shopping or eating out, so I didn’t think that I had a problem until the crisis moment hit. However, with some hindsight and good counsel I could see a series of poorly planned decisions that led to my situation. More advanced planning could have kept me out of most of my difficulty.
 
jc-servant said:
Lots of good advice here, but I would caution against closing all of your accounts as soon as you pay them off. It will trash your FICO score because it will have a huge negative effect on the debt to credit ratio. Suze Orman gives a good explanation of how the FICO works. Cutting up the cards should prevent you from re-abusing the accounts without dealing the final death blow to your FICO.
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Some people don’t see any use for FICO scores after getting out of debt. There are plenty of institutions that use manual underwriting for determining the risk of a loan applicant.

I hope EVERYONE learns how the FICO score works. Cuz we’ve been fooled to believe that a FICO score determines wealth or financial success. The exact opposite is true. The only way to have a good FICO score is to borrow lots of money, very often and pay notes forever.

I tried that plan. It got me NOWHERE.

Example, you can have a 770 FICO score and have $40,000 in credit card debt, $60,000 in car loans, $240,000 first mortgage, $45,000 second mortgage, $60,000 in student loans and just lost your job and be staring straight down the barrel of BANKRUPTCY cause you can pay your bills anymore.

Or, you can have a 300 FICO score cause you are DONE WITH DEBT, lose your job and not sweat it, cause you have no bills.

So, FICO don’t mean much to me anymore.
 
This thread caught my eye, because I am a single mom struggling financially…and surprised at how debt piles up. I know the basics and I went years without a credit card but after my divorce I found that life without my credit card was impossible - mainly due to the fact that child support does not come in when it should (don’t even open the can of worms of taking daddy to court - a few years ago it took me more than 12 months to get him into court.)
I truly believe you will be blessed to find Dave Ramsey’s “Financial Peace University” near you. The average family going through “FPU” saves $2,500 and pays off $5,500 of debt in the 91 days during the course.
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And still pay for mortgage, utilitities and food? Thats more than $2500 month just to save the referenced $2500 and pay off the $5500 debt. Someone must have a much larger income than I do to accomplish this type of feat…now I’m depressed…maybe I am the lowest paid person in the USA. After all if I had $2500 extra a month I wouldn’t be stressing over the little bit of child support that daddy is supposed to be paying.

Did I misunderstand that??

Terri
 
homewardangel said:
This thread caught my eye, because I am a single mom struggling financially…and surprised at how debt piles up. I know the basics and I went years without a credit card but after my divorce I found that life without my credit card was impossible - mainly due to the fact that child support does not come in when it should (don’t even open the can of worms of taking daddy to court - a few years ago it took me more than 12 months to get him into court.)

And still pay for mortgage, utilitities and food? Thats more than $2500 month just to save the referenced $2500 and pay off the $5500 debt. Someone must have a much larger income than I do to accomplish this type of feat…now I’m depressed…maybe I am the lowest paid person in the USA. After all if I had $2500 extra a month I wouldn’t be stressing over the little bit of child support that daddy is supposed to be paying.

Did I misunderstand that??

Terri
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No you didn’t misunderstand. That’s just averages. Some did more, some did less. You, being a single mom with sporatic child support is the ULTIMATE exception.

So, don’t be depressed. Divorced/widowed mom’s are in the highest risk for financial turndowns for many reasons. Most of the time, the mom’s try to maintain pre divorce lifestyle for the sake of the child’s well being and mathmatically, it just won’t work. Its a very common and natural reaction for moms to protect their children in that way, so no condemnation from me about that.

As a Dave Ramsey Certified Counselor, during training, he encouraged us to take special care of single moms, divorced and widowed. They also taught us that the average advice simply will not work with this situation. Again, not your fault and not to demean you. You have alot on your shoulders and that added to the traumatic event of divorce mulitplies it.

So, my apologies for ommitting that circumstance. The last thing I wanted to do was to depress or diminish your hopes. There is certainly hope in your case. It will take longer and be more work than the average 2 income home. But, it’s certainly possible.

If you could get ahold to a Dave Ramsey Certified Counselor or a Crown Financial Certified counselor in your area and explain your situation, I’m sure the utmost charity and mercy will be extended to you due to your specific circumstances.

Just realize you have no reason to be ashamed or depressed. You are not alone and your brother’s and sisters in Christ doing the work of The Body of Christ are there for you. To empower you, equip you, to teach you and walk with you in order for you to have the life God intended for you.

In Christ
 
HomewardAngel,

I read those saving figures and thought “yeah. if we lived under a bridge and begged for our food.”

Most people make a lot more than our single factory income with seven kids (out of ten) still at home, too. If nothing else, at the end of the week, when it comes down to food on the table or gas in the car (in order to drive back and forth to work to earn his weekly pittance), we choose the food. and then gas the car with the card.

There are changes we have to make. I especially, got sloppy with stewardship and planning (menus, driving trips, etc.,) GoodHusband and I have been prayerfully wrangling the numbers (and having the numbers strangle us back) for several days. But those changes will only slow the bleeding. We need more income but have met dead ends all around. We are even licensed for daycare now (which was a carreer unto itslelf.) but the economy is so bad in our state the trusted daycares aren’t full and new ones are not getting clients. moving out of state isn’t an option unless we want to walk away and let the bank foreclose on a house that’s unsellable in this market.

This is the reality of the thing. God knows all of it.

Mother of God, pray for us NOW. Father in Heaven, give us THIS DAY our daily bread. GH and I realize that’s all we can ask for-- graces NOW. The future is God’s business. How HE will provide for us will not be revealed to us until we get there.
 
I wasn’t really depressed, I was mostly just being silly.👍 I would like to know what the secrets are to financial stability (note - I didn’t say success, just stability would be wonderful!)

I have been working hard and have been able to modestly increase my income - but to accomplish that litte bit I needed to get a degree. So with my modest salary increase I will also now have student loan payments in the spring…I suppose I am feeling that financial weight starting to weigh on me. I would love to find a plan that would ease my mind a wee -little bit. I continue to look for a better paying job - but nothing has worked out for me yet.

I will most likely look into the financial guidance that is suggested, but I am a little bit skeptical. Right now we are financially living very modestly…I don’t see how I can cut back $200 a month - let alone the thousands that others talk about! At some point I’m afraid that it just comes down to the fact that there is not enough money. I could cancel the Nickelodean - but then I lose my EWTN and that will only save $50 a month…I don’t know what that $50 would help me.

Terri
 
Well OH MY!!! :bigyikes: I looked at the Dave Ramsey website and I don’t think I will be going to any of his classes.

I found a class that will be held in a Catholic church starting on a Saturday morning - sounds good so far…but that is 85 miles from my house (170 miles round trip). How much gas $$$ would I need for that trip? Round trip most likely $27 - then of course there will be lunch to think about. Even if I suck it up for the gas cost and pack my lunch, I still have to purchase the book kit for the class - $140. That is my grocery money…

Those who have gone to these classes before - Who teaches the class?

Believe me, I realize that there is plenty that I don’t know and I don’t want to sound like a know it all - but how do I know that I will get my money’s worth out of this class?:confused: For me to give up $200 and a full day - that I could be doing laundry and cleaning house - to come back empy handed.

Any thoughts
Terri
 
I think the key to financial stability is tracking your spending and then doing a written spending plan for the month. With the spending tracking, you’ll be able to find out exactly where your money is going. Example, we discovered we were spending on average $400 per month at restraunts! Double income and no kids at the time. :o

Then, you need to do a “zero balance budget”. Which means making a spending plan by spending all your income on paper before the pay period. Take your income at the top of the paper, then start spending it on bills. Making the following a priority:
  1. Tithes/Offerings
  2. Saving- Omit if you’re focused on paying off debt!
  3. Food
  4. Housing/ Utilities / Clothing
  5. Transportation
Making these a priority will make sure you don’t get behind on car payments or house payments. No use paying off debt if you get foreclosed on with your house!

Next, you make priorities: Debt, vacation, savings for purchases, retirement, etc.

Here’s the tough part: You may have to reduce lifestyle if your outgo is more than your income. Here are some guidelines to consider:
  1. Mortage/Rent should be 25%-35% of your take home income.
  2. Cars - value of motorized things should be less than 50% of income.
Most of the time, car payments are what’s killing household’s finances. Its tough, but sometimes you gotta sell the $20,000 vehicle and get rid of the $400/month payment.

Very rarely is the house payment the problem.

As basic as it sounds, the key is getting the income as high above the spending as possible. Extra jobs are tough, but if you focus and you are intense, it should only be temporary.

Also realize that it took a long time to make the mess. So, don’t count on easy/quick fixes. Lastly, you just have to make your mind up to stop borrowing money. You can NEVER borrow your way to financial stability.

Even though our culture has excepted debt as the norm, the bible NEVER HAS ONE GOOD THING TO SAY ABOUT DEBT! Here’s some examples of what the Bible says about debt:
  • Slave
  • Unwise
  • Curse
  • Servant
  • Foolish
  • Stupid (contemporary english bible)
 
OutinChgoburbs said:
I highly recommend Veritas. They teach finance from a solidly Catholic perspective.
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I DO NOT ask this as bait for a dispute or debate, but to honestly understand the difference:

What would be different between Non Catholic stewardship principles (Crown Financial or Dave Ramsey) versus Catholic stewardship principles (Veritas Fin.)?
 
With the spending tracking, you’ll be able to find out exactly where your money is going. Example, we discovered we were spending on average $400 per month at restraunts! Double income and no kids at the time.
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Then, you need to do a “zero balance budget”. Which means making a spending plan by spending all your income on paper before the pay period. Take your income at the top of the paper, then start spending it on bills.
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I agree! And this is exactly what I have done and continue to do. Finding out that others are doing what I am already doing does help me to feel better - maybe I am on the right track after all.

Okay here’s my problem - I found out that I am lucky to spend $150 a month at restaruants - and thats me and 2 kids. I am not going to complain about that amount…but maybe I should???

My take home figure is an amount that has a 401k and medical flexpay already taken out.

My house (& property taxes) is about 29% of my take home pay.

My car payment is about 22% of my take home pay.

Those 2 items are 51% my take home pay. :bigyikes:

Utilities (13% of pay); home, car and life insurance (12% of pay), my satellite TV, internet and movie rentals (7% of my pay)

and of course we need to give at church, we need food and I need gas to get to work and I have 17% of my pay left

Are these figures out of line with other peoples?🤷

Terri
 
homewardangel said:
I agree! And this is exactly what I have done and continue to do. Finding out that others are doing what I am already doing does help me to feel better - maybe I am on the right track after all.

Okay here’s my problem - I found out that I am lucky to spend $150 a month at restaruants - and thats me and 2 kids. I am not going to complain about that amount…but maybe I should???

My take home figure is an amount that has a 401k and medical flexpay already taken out.

My house (& property taxes) is about 29% of my take home pay.

My car payment is about 22% of my take home pay.

Those 2 items are 51% my take home pay. :bigyikes:

Utilities (13% of pay); home, car and life insurance (12% of pay), my satellite TV, internet and movie rentals (7% of my pay)

and of course we need to give at church, we need food and I need gas to get to work and I have 17% of my pay left

Are these figures out of line with other peoples?🤷

Terri
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nope
My take home figure is an amount that has a 401k and medical flexpay already taken out. 👍

My house (& property taxes) is about 29% of my take home pay.
3.2% of take home pay

*My car payment is about 22% of my take home pay. *
0%, no car payments

Those 2 items are 51% my take home pay. :bigyikes:
Yeah they are.

Utilities (13% of pay); home, car and life insurance (12% of pay), my satellite TV, internet and movie rentals (7% of my pay)

Utilities (4.5%) home & car insurance (life taken care of via work) 6.9% cable & internent (4.5%) Church (10%) Other Charitable contributions (10%)

FOOD, GAS (6.5%)
 
Its recommended NOT to have motorized assets that are valued at more than half of your annual household income. If you make $44,000 (National Average Household Income), and you have $25,000 worth of vehicles, you have too much invested in assets that go down in value. Then, if you are borrowing the money for that $25,000, you are paying interest on too much that is invested in assets that go down in value: DOUBLE WHAMMY!

These recommendations come from examples and studies of DECADES of working through household budgets. In the above example, most families do not have enough after paying a car note to give, save for retirement, save for purchases, have fun, normal living costs.

Based on that, your house is in line, but your car is weighing you down.
 
COGHOBDOJ said:
Lastly, you just have to make your mind up to stop borrowing money. You can NEVER borrow your way to financial stability.

Even though our culture has excepted debt as the norm, the bible NEVER HAS ONE GOOD THING TO SAY ABOUT DEBT! Here’s some examples of what the Bible says about debt:
  • Slave
  • Unwise
  • Curse
  • Servant
  • Foolish
  • Stupid (contemporary english bible)
Click to expand...
I disagree that you can NEVER borrow your way to financial stability.

What about the young student who borrows (student loans) to get a college and/or graduate degree?

What about the person who borrows money to start up or purchase a business?

What about those of us who borrowed to purchase a house rather than rent for the rest of our lives?

I don’t want to be argumentative but like with most things ABSOLUTES should be used VERY CAREFULLY.
 
ODGarza said:
I disagree that you can NEVER borrow your way to financial stability.

What about the young student who borrows (student loans) to get a college and/or graduate degree?

What about the person who borrows money to start up or purchase a business?

What about those of us who borrowed to purchase a house rather than rent for the rest of our lives?

I don’t want to be argumentative but like with most things ABSOLUTES should be used VERY CAREFULLY.
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I agree. Bad choice of words on my part.

If you are deeply in debt due to spending more than you make, you cannot borrow your way out of debt. That’s a better way to say it.

The best way to get out of deep debt is to make a decision to change your behavior and live on less than you make.

Proverbs 22:7- The rich rules over the poor, And the borrower becomes the lender’s slave.

This is a Proverb of God’s wisdom. It says to me to be smart, we should avoid debt or borrowing money as a way of life. The more debt you have, the more risk you are of losing control if life happens and you lose your income for a period of time.

Good challenge. Thanks for the feedback. Tastefully done too, may I add.🙂
 
:extrahappy: WOW!!! I can’t believe how many others there are out there with current or past money issues. I guess I don’t feel so dumb now…anyway, just an update. I have come into contact with one of the national people from CrownCatholic and I am communicating with him via e-mail. CrownCatholic has no counselors in this area but regular Crown does. So DH and I will be meeting with a Crown person (a money coach) and sorting this whole thing out. What really stinks for us is that we are able to meet our bills each month and even pay a little bit more on most of them, but we don’t have a lot of excess to pay a lot ahead. so we’ll get it sorted out soon. i’ll keep you all posted. twk
 
COGHOBDOJ said:
I DO NOT ask this as bait for a dispute or debate, but to honestly understand the difference:

What would be different between Non Catholic stewardship principles (Crown Financial or Dave Ramsey) versus Catholic stewardship principles (Veritas Fin.)?
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Well, long story short, it is solidly Catholic. It is based on Scripture, but also on Tradition (with a capital T). Some of the writings used include Aquinas. Have you viewed the materials? Maybe you would like to get some. In your circumstances, they should be tax deductible.

One of the differences I’ve found is that non-Catholic finabnial seminars push 10% tithing, which the Catholic Church does not necessarily teach. While giving to God in an increased amount is encouraged, Veritas teaches that ALL we have is God’s.

As it is my opinion, I prefer solidly Catholic materials. My choice. Please read my disclosure in my signature.
 
OutinChgoburbs said:
Well, long story short, it is solidly Catholic. It is based on Scripture, but also on Tradition (with a capital T). Some of the writings used include Aquinas. Have you viewed the materials? Maybe you would like to get some. In your circumstances, they should be tax deductible.

One of the differences I’ve found is that non-Catholic finabnial seminars push 10% tithing, which the Catholic Church does not necessarily teach. While giving to God in an increased amount is encouraged, Veritas teaches that ALL we have is God’s.

The giving teachings I’ve been exposed to is similar. God is our sole provider and all of it does belong to Him. We are only steward’s of His resources.

Not to nitpick, but Tithe literally means “10%” It’s a tradition started in the OT, but nothing in the NT indicates an end to 10% tradition. We are instructed to be cheerful givers and we are instructed to give to a level we are comfortable with or at peace with.

Another note: Actual Jewish customs had 3 tithes. One for the local temple, one for the widows and another for the poor. It wasn’t 3 separate 10% tithe, it was 2 - 10% and another partial. It totaled 23%.

Also, giving is not a salvation issue. If we are to mirror the image of Christ, we should try to be givers, as Christ was the ultimate giver. We don’t give to earn God’s Love. We give cause God instructs us to give and He’s smarter than us.
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