Down in the Dumps

You are not a loser. You probably got into your situation honestly, especially since you don't overspend - or at least you are not aware of it. You have a lot of positive things going for you - like both of you have jobs. And, you are aware of the direness of your circumstances and are not just blowing it off.

I've been on a roller coaster myself, and have been both poor and very comfortable. Since I am self-employed, I've learned to adjust my spending habits according to what I am making or believe I will be making in the near future.

What I do, and have done several times since the downturn of the economy, is to take a hard look at what I'm spending money on. And then I look for things I can cut. I've done this several times, and from the same list, that has already been cut, I find new things to cut. It helps a lot. Here are a few things I've cut and really haven't missed:

1. Premium channels on Dish Network TV. Saved about $60 a month.
2. Changed my cell phone plan to one that worked better for us. Saved about $30 a month
3. Reviewed my phone bill and internet bills to consoldate (may cancel home phone service)

You probably already do this, but sit down with your husband and come up with a family budget, and a priority. Your family has to be your first priority, and that means putting aside a few dollars every paycheck no matter what. That's your emergency fund that you don't touch unless there is absolutely no choice.

Second priority has to be your mortgage. Lenders are having a rough time too. Talk to them and be honest about your situation and see if they will give you some slack. Ask if you can make up for past mortgage payments by paying a little extra each month with future payments. They don't want to foreclose, so in the spirit of creating a win win situation, see what you can work out.

Your cars - these are major expenses, but if you can sell one and live with just one, you'll be much better off. That may sound crazy, but I had to go for nearly a month with just one car, and did fine. Carpooling for work and kids' events worked out. I also got to know people I would not have otherwise. It ended up being very positive.

Gasoline - just say no to driving unless it's absolutely necessary. I just saved $200 in gas this month because I refused to take short little trips here and there (which eats more gas than highway driving.) If you plan things out just little - and group your errands into one trip, it's amazing how much you save. If you can walk or ride a bike to do some of your errands, you'll be buring calories instead of gas and feel great about it!

Food - Since you are both working, chances are you eat out or grab fast food more than you can really afford, just because you're a busy family. Everyone does. Bringing your lunch to work every day can save a few hundred bucks a month. Double that for both of you. That doesn't mean you have to be a killjoy at work, but limit the lunches out to one a week.

Groceries - I don't know if you plan meals or not, but this saves a lot of money. I write down what we're going to have for dinner every night, and buy food accordingly. The difference between planning and winging it is at least $50 - $75. When you wing it, you spend money on food you may or may not eat. When you plan, you buy what you eat and eat what you buy. Also - another cool tip I just learned was if you plan and buy for two weeks instead of one, you will spend less overall. I tried this and bought 1 1/2 weeks worth of groceries instead of one week's worth, and spent only about $50 more. (Usually a week is $130 for six of us.) Bonus - fewer trips to the grocery store = less gasoline!

Clothes - this is a biggie. For you and your husband, just say no to new clothes for a few months. Or, give yourselves a reasonable clothing budget and stick with it. For your daughters, there are mountains of adorable baby and toddler clothes that are hardly used at garage sales and second hand stores everywhere. There is no reason to spend $30 on a cute girly dress when you can get the same thing for $1 from a garage sale. Same with toys and other stuff. Don't feel bad about this - consider that you can buy your children far more "stuff" and spend less money doing this. Plus, you are helping the environment and your community.

Second job - one of you could consider getting a second job temporarily until you get caught up. Don't consider a minimum wage job demeaning - it's not. You or your husband I'm sure would gladly flip burgers a few nights a week to make sure your children keep a roof over their heads. If you can get a better second job with better pay - great. And when thinking about a second job, think about a business that you use a lot. If you shop at Target a lot, for example, try getting a job there and get the discounts.

Take a look at everything you spend money on, and if you can trim thing back just a little in every area, you may find that you can cut your spending by several hundred dollars a month - without a whole lot of sacrifice.

The good news for you two is that you haven't gone under and you have a lot of options in front of you. Instead of fretting, take this on as a challenge that you and your husband share in. When you come out of it, you'll be a closer family!

K., you are not a loser! You are a completely normal American - a lot of people are in your exact same situation, they just don't talk about it much. My husband and I used to be just like you - we had two kids the same ages as well and made good money - but we could not get ends to meet. One thing that I found that has totally helped me out of this is Dave Ramsey. He is a financial advisor, he has a daily radio show and nightly show on Fox Business Network. He is not like most other financial advisors - he has a system that you can follow, steps to take (he calls them Baby Steps) that will get you out of your situation all on your own. He does not believe in debt - any kind except mortgages. He is a good speaker and very motivational. Even though I am no longer struggling to make ends meet, I still listen to him every day because I love the way he treats his callers who are down in the dumps and need help out. He is very empathetic and understanding - he has been there himself. There aren't any local radio stations that carry his show here in St. Louis, but you can listen to him online - and he has a free podcast on iTunes. Also he has a propram called Financial Peace University - it's a 13 week program held at various churches around town. I attended and got a lot out of it. If you go to his website daveramsey.com you can find locations in St. Louis and listen to the show. Oh - one more thing - he has a few books that are must haves! I recommend (and he would too) The Total Money Makeover, it will give you all the baby steps and a system to get out. All the libraries carry his book but it's usually checked out with a waiting list. It runs about $24.95 at Borders and maybe a little less at Amazon.com. I wish you the best, if you need additional support feel free to contact me!

I have many girl clothes to get rid of if you are interested.

Also, go to www.angelfoodministries.com and contact a church for ordering a unit of food. The cost is $30 and it's really alot of food. You can also order specials to go along with the regular unit for $16-20 per special ordered. The food is wonderful and it saves alot on groceries and also on gas.

Pay the bills such as...housing, heat, electic. Things that you need to have. Let the credit cards be the last ones you pay. They are not necessities.

J.

Hi!
We've been in the same position, and trying to dig ourselves out for years. We actually came close to divorce twice b/c of the stress of money + child. Last summer we made a couple of decisions: 1. No more credit under any circumstances (barring medical, of course); 2. Keep a bar graph of our debts, updated every month so we can see where our money needs to go and how much we ARE doing; and 3. Keep a spreadsheet budget on our computer that we update every time we spend money, so we know what's going in and out. Even with me losing my job, we've paid off over $20,000 this year. We have a long way to go, but we aren't all over the place trying to scramble to survive. When we get tight, we see it coming at least. Are you St. Louis local? I'd be happy to give you a copy of our spreadsheet and debts graph, and talk to you about how to do this. I read a number of books, and they're helpful for ideas, but we had to find something that worked for us. (Also, have you heard of Angel Food Ministries? We're saving about $100 a month on food!) You probably also know the saving tips: Library instead of video and book stores, walk when you can, start a garden for fresh produce, cancel your credit cards every time you get one paid off (don't open any more), use freecycle.org and craigslist.com to get stuff used and free or cheap, cancel cable and cell phones, explore free community activities... Anyway, if you live out of area, I can burn a CD and mail it to you with the spreadsheets. Just let me know off board if you want that stuff, and also know that you are not alone!

I've been in the same position, also.  My husband started his own business a couple of years ago and there are months at a time that we have no pay check.  The others have given great suggestions about really looking at every expense line by line.  A couple extra things we did-look at your home owners and auto insurance-raising the deductibles can lower the monthly payment-also shopping around, there might be another company that is less expensive.  As for food-try shopping at Aldis-we save a lot each week there (even over shop n save)--I can feed a family of 5 for about $100 a week.  There is also a group called Angelministries-it's kind of like a food bank, but it's not just for people who can't afford groceries-they sell boxes of groceries for $25 a month (it usually fed my family for 1 1/2-2 weeks).  Just google it and find a church nearby.  We've stopped going places very much-we come up with lots of free activities at home.  I've also started doing a Target or Walmart run just once a month-no more running in for just one thing (and coming out with 10:)) Same for the grocery store.  If I forget something, we just do without that week.As for feeling bad for your kids, I do the same thing. All their friends have new clothes/toys/bikes/whatever, and all my kids clothes and toys come from friends hand-me-downs and garage sales. They really don't care. My 6 year olds "best day ever" was the day we found real baseball pants, a batting helmet and baseball shoes at a garage sale for 50 cents a piece. It doesn't take much to make kids happy. My kids would rather hang out at home in the sprinkler, have a lemonade stand, play hopscotch, have a watergun fight, etc. that go to all the fun activities around town that cost money.
Just hang in there and continue trying to do what is best for your family. Try to stop feeling guilty about all that your kids are missing and really focus on all the things they have (your love, attention, etc).

K., I really feel your pain. I'm actually in the same boat myself. I'm a single mom and my ex husband left me with alot of debt and on top of it all someone else I cared about took advantage of me and my money, so I'm really feeling like you right now. Have you ever heard of Arbonne? It's a home based business I started awile back and then stopped. I've seen lots of success with it and the friend that introduced me to it is now at the top of the company earning over 20,000 per month. I know it sounds too good to be true. But even making an extra ###-###-#### a month I'm sure would be helpful. I have been getting a check every month for over 2 years now and I haven't even been active in the business. I'm now relaunching myself and plan to move to the next level where I'll be making an exta $1500/ month. Please let me know if you'd like to get together over lunch or even just talk on the phone or email about what it has to offer. It's worth looking at it I'm telling you. I would love to let you know more. Keep your head up and pray, God will show you a way.
Thanks,
V.
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I'm so sorry you're having such stress and are feeling so bad. You and your husband are not losers though, things are just really tough financially and that's not your fault. Growing up, my parents had no money and I had a very happy childhood (and as a result, I don't over-value money), so I know your children will be fine as long as they have you and your love. I know it's easier said than done, but try to focus on the good things in your life and your children will be happier too. Good luck, you'll be in my thoughts and prayers.

I've been there, done that, very recently (as in 2008). The good news in this is that most mortgage companies are doing anything & everything in their power to help. Call them and ask them if they have a forebearance plan and have them send you the paperwork. My mortgage company helped by taking my 9.75% interest rate and reducing it to 3.95% for 3 years to help alleviate some of the burden. Some vehicle and student loan companies will also let you defer payments for a month or two - it never hurts to ask. This really does help get things caught up. I'm not one to ask for help, it nearly killed me when I had to, but good did come out of it. You and your husband are not losers, you are victims of the economy just like everyone else. Your girls are very lucky that you want to make things right for them. Don't give up but rather keep your chin up and don't be afraid to ask these companies for help. Best of luck!!!!

Hi, K.! I don't know about words of wisdom, but I can sympathize - we are there too. My husband and I borrowed money from his mom (that was supposed to be his inheritance) to buy a business which didn't make it and we have just had to shut it down. Our house is the collateral for the business loan, so we too are in danger of losing our house. We are working with a lawyer who seems optimistic that we will not lose it, but of course it's not his house! We have been struggling ever since we got engaged, and it's now over five years later. I have been depressed much of this time, and cry a lot - like you. I have been home with our daughter (who is almost three) but may have to leave to go back to work to make ends meet. My older daughter is 11, and I bought this house myself when it was just the two of us - I had perfect credit, no debt and a good job - it has all gone downhill since then. I know exactly how you feel about feeling guilty that this is not the life you want for your kids. It is hard to keep it all together when it seems like everyone else has a great life and is making it just fine. I don't know if credit counseling would help you, or if you or your husband are in a position to change jobs or get financing to go back to school. I know I am endlessly frustrated because it seems that my options are so limited! Anyway, I will keep you and your family in my thoughts - hopefully we will all make it through this! I hope that someday you come out the other side and are able to look back and laugh, and your kids have learned great lessons about perseverance and dedication, and of course LOVE! GOOD LUCK to you!!!