Money discussion ~ considering starting savings and retirement and slower debt reduction.......

[Joanne]

Please, Dave Ramsey fans, I am TOTALLY familiar with his plan and theory.

 

I don't wholeheartedly believe and, IMO, his theory is not applicable across the board.

 

I will have to work until I can't anymore. I have NO savings. I have major debt ~ legal, medical, vehicle, student loan. My legal debt payments are on hold ( I am not getting child support and the firm understands my situation). My student loan repayment is income based so I don't have payments now.

 

The level of our medical debt is absurd; I will never be able to pay it off.

 

It seems to me, at 46, that I can't wait for an emergency fund OR retirement. It seems to me I am better off diverting $50 to $100 for emergency and retirement per month than using all funds for debt.

 

I would also rather not rent forever, but buy a modest house in a few years (or lease to own sooner).

 

I am ok with vehicle debt ~ the junker idea does not work for me. I do not regret my student loans. The medical debt is what it is.

 

Discussion?

[homemomandnild]

You need the $1000 emergency fund first, and if you need to use it, then the first thing to do is replenish it. You may need to adjust the plan to work best for you, but it is much more freeing when you don't have the debt hanging over you. We don't have much in retirement either and struggle with whether to save for college or what next. Most of our income goes to daily needs anyways. When we get a gift, we hold onto it and put it where it will best be used for the long haul.

[Joanne]

You need the $1000 emergency fund first, and if you need to use it, then the first thing to do is replenish it. You may need to adjust the plan to work best for you, but it is much more freeing when you don't have the debt hanging over you. We don't have much in retirement either and struggle with whether to save for college or what next. Most of our income goes to daily needs anyways. When we get a gift, we hold onto it and put it where it will best be used for the long haul.

 

 

On the bold; I agree.

 

But my situation is such that I will never not have debt hanging over me. Even if I adopted a total money makeover completely, my situation is such that getting out of debt is more than 10 years out. That is debt - no real estate.

[Kathryn]

We are in the same sort of situation as far as not ever being able to be debt free. We've made the decision that we MUST start saving for retirement, so that begins January 1. We'll put what we can towards the debt that can be paid down, but the debt that will never go away is just going to be on maintenance payments.

[Just Kate]

Well, I am a huge Dave Ramsey fan, but we are not following his plan entirely. I have liked DR for close to 10 years, and still dh and I have made stupid money decisions and we still have debt. Because we don't seem to have the self-control needed to completely follow the plan, we need to modify it a bit to work for us.

 

We are working to get out of debt...BUT we are also saving for retirement. Dh is in his early 40s and I am in my later 30s and we know that if we don't start saving NOW, there is just no way to have enough.

 

I do think that DR is right on as far as having a 0 balance budget. When we budget monthly, we consistently have more money.

 

I also like using cash for most things. That seems to help me. When the cash is gone, no more spending!

 

The problem with Dave Ramsey is that he has a one-size-fits-all approach, but everyone is not the same. I DO like him though, because his plan has given me a base line to use when thinking about how dh and I should handle money.

[Anne]

Joanne, I think that in your situation, I would absolutely start an emergency fund and then retirement.

 

On a side note, is there any hope of getting your medical debt forgiven or at least reduced to a manageable number?

 

Anne

[Joanne]

Having seen friends dig out -- make a long term plan that includes living on less and generating more income. The savings from living in the smallest space you can, combined with working the second and third job pulls you out fast. The side work. my friends did included driving school busses (bus co trains drivers and has a varity of runs at oddball times and on wkends) and bookkeeping for small businesses, which was set your own hours. One also night babysat for nurse friends. No cable, minimal cell, no Internet, no expenses outside of needs. Took them two years, his main job has pension, and they will be in their own home ,not low income senior housing when they do retire. Another widowed friend did it by being the night/weekend handyman at an apt complex, apt w/utilities part of his pay, and using public transport or cabs. I would definitely price out cab fare or a van pool or public transport before taking a vehicle loan or accquiring one;inconvenient, yes, but the payoff may be worth it. I would not put away for retirement in your situation at this time other than anything you get matched at work, as you will be able to make catchup contributions to 401k when you turn 50 and are in a better financial position. Will you be eligible for spousal ss, or do you need to become eligible on your own record?

 

 

Please listen. I feel your kindness and heart. I do. I really, really, do. I don't expect you to be able to "know the history" of everyone you post to. :)

 

But I have been working 2-3 jobs for YEARS. Granted, they were low level jobs for the first 5 or so years. Now my jobs are higher level jobs. (One is a barter for no actual *income* so that my kids can finish school and not get put back in grade level in a public school who won't accept their transcripts. Texas may be "homeschooling friendly" but school districts are not.)

 

This is Houston (ish) Texas - van pools, public transport, and taxis do not "work" for the majority of workers, *particularly* with several jobs. (My husband uses public transport for most of his non acute medical needs since he does not drive and the drivers in the family are either at work or school.)

 

I am currently working 3 jobs. Indeed, I am accepting another class to teach in January. I am quite literally one of the hardest working people I have ever met. My 2 for pay jobs and 1 for barter job are all I can do.

 

 

The financial impact on my life is profound in ways that can't be communicated.

[Joanne]

Probably the best thing I ever did though was to cut up all of our credit cards. We currently do have one that we never use. We got it to buy a ticket to Germany when my FIL passed away. We had no choice. We haven't gotten rid of it because really you never know and it's at lest something.

 

 

You sound like you are doing great.

 

Fortunately, our debt total, which is massive, has less than $5000 on credit cards. Most of that is an old credit card, closed, and the payment is current. The other $1000 are current, small limit, credit cards that are not being used.

[NorthwestMom]

I AM a Dave Ramsey fan, and I agree with you that you should have an emergency fund and a reliable vehicle to get you where you need to go. You do have special circumstances (multiple jobs and chronically ill spouse) that make the usual approach unrealistic in your case. I think you should put your own stability and economic safety (fund, small retirement savings, and car) above debt payments at this time.

 

((Joanne)). Your hard work and persistence is an inspiration to me.

[Chris in VA]

Well, I for one don't expect you to live in a dirt-floor house or a place with busted out windows...My God.

Maybe you COULD move/downsize when the kids are gone, but I'd never expect you to live in squalor.

 

The only thing I can think of is, can you negotiate down the debt for the medical expenses? (You don't have to answer the following, of course--) Is it nursing home, private pay, or major hospital that might be more likely to write off some debt due to hardship?

 

Also, can you reduce the interest rate on your credit card thru applying for a hardship waiver? I was able to negotiate a 24K debt down to 6K thru several hardship waivers and settlements. I can't wait til that 6K is paid off!

 

Student loans are never written off, so I've heard. Those have to be paid. If you are current, just keep going.

 

If your credit ever gets sucky, you can kiss a house goodbye, unless you want a mortgage with out-of-this-world interest. You might, however, be able to one day get a mortgage (historically low rates now) and rent out part of it. That way you could cover most of the mortgage by the rental. It's something to think about.

 

But I agree with you that it's time to save for retirement.

[Scarlett]

Please, Dave Ramsey fans, I am TOTALLY familiar with his plan and theory.

 

I don't wholeheartedly believe and, IMO, his theory is not applicable across the board.

 

I will have to work until I can't anymore. I have NO savings. I have major debt ~ legal, medical, vehicle, student loan. My legal debt payments are on hold ( I am not getting child support and the firm understands my situation). My student loan repayment is income based so I don't have payments now.

 

The level of our medical debt is absurd; I will never be able to pay it off.

 

It seems to me, at 46, that I can't wait for an emergency fund OR retirement. It seems to me I am better off diverting $50 to $100 for emergency and retirement per month than using all funds for debt.

 

I would also rather not rent forever, but buy a modest house in a few years (or lease to own sooner).

 

I am ok with vehicle debt ~ the junker idea does not work for me. I do not regret my student loans. The medical debt is what it is.

 

Discussion?

 

 

Can you not file bankruptcy ? Your situation seems extreme to me and needs an extreme solution.

 

As for where to put your money now......I would ask what is your goal? You said you will work until you can't , so do you hope to have some income ( other than ss) once you can't work ? I forget how old you are...I am thinking 45? So a good 20 years of work left at least. would it benefit you just as much to aim for a paid for house by retirement ?

 

I know you have to consider the impact of your dh's issues......if he goes to a nursing home you

don't want your assets to be seized to pay for it if he should die. ( I am sorry to talk so blunt. :( ). If you invested your money in a home would half of it be your dh's?

 

Dh and I have zero saving (well we have a $1000 EF) , no vehicle debt and around $5k in cc debt. However, our house is paid for. He also has a decent job.....we too are ready to think about our future.....I like DR, but agree his plan can't be followed to the letter by everyone.

 

 

 

 

 

 

[whitestavern]

I have not read all the responses...

 

I have had 2x in my life where I've had pretty high debt. One was borrowing $$ from my boyfriend's mother (we were planning on a life together--didn't happen thank goodness) for a down payment on house. I was young. When we split, the house was worth much less...I owed her half of the down payment, which was a lot. I'm still paying $50 a month...have been for almost 20 years. I've also had a lot of medical debt. I owed about 5 different institutions (hospital, doctor, anesthesiologist, etc). They got $25 a month as well. Still paying some of those too. Are you in a situation where you could do this and still put $50 or so away every month towards retirement? I realize that the debt you speak of is very high...but if you're making a good faith effort to pay it off, I think they will accept almost any tiny monthly amount. If it takes 50 years to pay off, so be it, but you need that to be as little as possible so you can put something else aside each month for yourself.

 

Also, do any of your jobs have the opportunity for 401K or profit sharing? Are you continually looking at other, high paying jobs?

[Carrie12345]

I would suggest carefully crunching the numbers. If you pay off debt as scheduled in 10 years, what will the total interest paid be as compared to what you will have in retirement. If you pay off debt earlier than 10 years, then start retirement, what does the math say?

 

I'm not expecting you to answer that. :) Just posing food for thought.

[Joanne]

 

To get out of debt Costs have to be cut. Cars are mega expensive compared to the alternatives. You might try a combo of the alternatives. Around here the cab drivers are happy to have standing contracts - you have to ask around as many are solo operators working on word of mouth and look like day laborers, but they are the kindest people, just trying to get ahead. In a city the size of yours you should be able to set up an arrangement, as there are a lot of people that offer this service, and many younger ones trying to cut costs by ride sharing.

 

 

Is teaching worth it? Seriously, around here adjuncts are paid dirt and you'd be better off driving a bus or clerking at the post office or doing factory labor. Is there another job you can do or business that you can run instead that will generate more income? I've known people to take in laundry, which is great as the machine does most of the work and of course night babysitting.

 

 

 

 

 

I've known people who live in homes with dirt floors, and others in single wides with busted out windows. I have a neighbor who has her third bedroom, her garage, and her basement rented out. I have a friend that lived in a tent for a year so he could keep his payments going to his children and get in position to go to college. you have options. Part of your plan can be cutting living expenses. How long until children contribute to household? Dh for ex was twelve; at fourteen he was paying one bill per month.

 

 

 

 

 

 

 

 

 

Heidi Ho, I am posting trying to assume you are trying to be comprehensively helpful.

 

Houston is SPRAWLING. The cab driver solution is not workable. Not. Not with Houston, not with 3 jobs. Cost wise, it would cost at or more than a payment and insurance. Period. It might work in other situations, maybe even other metro situations, but not mine.

 

Regarding low level jobs for pay: BTDT for years. They are a drain in ways that can't be quantified. I did them for as long as I needed to. But, no, I am not going to forfeit working as an Adjunct Instructor to babysit or take in laundry. I make $37.50 per hour at that job working hours that work around a highly unique schedule. It would be dumb to give that up.

 

Your last paragraph in not at all workable, especially considering the legal vulnerability involved with my ex husband. I am already renting a home as far down as I can go and still be safe (ish) getting from my car to my house at 10:00 at night.

 

I realize this sounds defensive; but I feel frustrated by your responses. I feel like you want to make a theory and idea work without granting that theories are not wholly applicable. And that you don't know that the poster who made the OP has been working diligently and hard on every freaking level for years.

 

I don't need any kind of "work harder, be creative" ideas. I ran freaking Fireworks stands and cleaned freaking office buildings, ok?

 

I was simply pondering the wisdom of not starting to save now for emergencies and "retirement."

[Starr]

I say a definite yes to your emergency fund and retirement. You've downsized, work a million jobs and are quite careful with your money. I pray somehow your medical debt would be cut down. Your other debt would then be manageable. :grouphug:

[Joanne]

I have not read all the responses...

 

I have had 2x in my life where I've had pretty high debt. One was borrowing $$ from my boyfriend's mother (we were planning on a life together--didn't happen thank goodness) for a down payment on house. I was young. When we split, the house was worth much less...I owed her half of the down payment, which was a lot. I'm still paying $50 a month...have been for almost 20 years. I've also had a lot of medical debt. I owed about 5 different institutions (hospital, doctor, anesthesiologist, etc). They got $25 a month as well. Still paying some of those too. Are you in a situation where you could do this and still put $50 or so away every month towards retirement? I realize that the debt you speak of is very high...but if you're making a good faith effort to pay it off, I think they will accept almost any tiny monthly amount. If it takes 50 years to pay off, so be it, but you need that to be as little as possible so you can put something else aside each month for yourself.

 

Also, do any of your jobs have the opportunity for 401K or profit sharing? Are you continually looking at other, high paying jobs?

 

 

Actually, the $50 and $25 payments for debt and savings are exactly the kind of stuff I am looking at. I'm considering paying it simultaneously, instead of waiting for the debt to be gone.

 

My current company has a 401k, but does not match. I did recently go through a job search, and got a better offer, which my company matched. A week later, they also promoted me. I feel that I need to stay here and make it work because of their response to me, the opportunity provided career wise, how the structure of the job works with my other jobs in terms of time, and because while I still have a provisional license, I am limited income wise.

[Annie G]

Diverting money to an emergency fund will make you feel so much better- having some money set aside will give you peace of mind and even though it won't erase the debt, it can take some stress off you and that is worth a lot.

I like a concept I heard from You Need a Budget. You save until you have a month's worth of expenses as savings and then every month you live off the previous month's income. That way you're never juggling bills waiting for payday, and there is a buffer in the account. I know you're frugal and wouldn't be tempted to spend beyond your budgeted amounts, and it would be a way to gradually put some money aside for long term things like a home.

[justamouse]

Is bankruptcy possible at all? I know people get freaky about going there, but I've been there, and if you can...

 

I would, without hesitations, start saving for an emergency fund for yourself. The other debt is totally overwhelming, you don't have another 8 hours in your day. That's just the facts. But I think for the safety of you and your family, you need to save what you can despite the debt.

[Joanne]

Well, I for one don't expect you to live in a dirt-floor house or a place with busted out windows...My God.

Maybe you COULD move/downsize when the kids are gone, but I'd never expect you to live in squalor.

 

The only thing I can think of is, can you negotiate down the debt for the medical expenses? (You don't have to answer the following, of course--) Is it nursing home, private pay, or major hospital that might be more likely to write off some debt due to hardship?

 

Also, can you reduce the interest rate on your credit card thru applying for a hardship waiver? I was able to negotiate a 24K debt down to 6K thru several hardship waivers and settlements. I can't wait til that 6K is paid off!

 

Student loans are never written off, so I've heard. Those have to be paid. If you are current, just keep going.

 

If your credit ever gets sucky, you can kiss a house goodbye, unless you want a mortgage with out-of-this-world interest. You might, however, be able to one day get a mortgage (historically low rates now) and rent out part of it. That way you could cover most of the mortgage by the rental. It's something to think about.

 

But I agree with you that it's time to save for retirement.

 

 

The credit card has about a $3800 balance (down from $6500) and is zero interest because I've already negotiated. :)

 

Student loans can't be written off, but there can be "forgiveness" after 144 payments while working at a qualifying public service role. :) Since my current repayment plan is income based, I don't actually *have* a payment but I likely will after the review sometime next year.

 

I guess I do need to research how to negotiate down the medical demands. Adrian is currently at home, and not in the nursing home. I am fighting to get the months he was there paid, but it is a government program and it takes time.

[Starr]

No point in bankruptcy, if it's possible, while medical bills are still being incurred.

[justamouse]

Another thought I had. If you think it is at all possible the medical ppl would ever come after you in court, you might consider keeping your emergency cash in a safe deposit box. Yes, it doesn't earn interest, but the interest rates are so insanely low that you won't be missing out on anything.

 

 

 

True, there is no point in keeping the $ in a bank at this point.

 

 

The only time you would need that is if you needed to prove for a mortgage, and that can be worked around. Regardless, I may be wrong, but even if you put it in 5 years previous to purchasing a house, they're still going to want to know where it came from. They're *ahem* like that, especially after the crash.

[justamouse]

 

These are all his bills I assume?

 

I won't suggest out loud what I want to suggest. I know it will sound horrible, but sometimes you gotta do what you gotta do.

 

Please forgive me for that thought. :crying:

 

 

Dh and I agreed to that, too, if it ever came to it. He'd want me to protect the kids, and I would expect the same from him.

[Joanne]

 

These are all his bills I assume?

 

I won't suggest out loud what I want to suggest. I know it will sound horrible, but sometimes you gotta do what you gotta do.

 

Please forgive me for that thought. :crying:

 

 

The over $100k of medical debt is all his.

 

Divorce won't help; I would lose the modest family benefit 2 of the kids get for his social security disability. Right now, especially with no child support, I need that benefit.

 

FTR, "marriage" becomes a strange word in situations like this.

 

Bankruptcy on him is a possibility. I had to file bankruptcy shortly after being a single mom, when xh reduced child support, stopped paying, and then began the legal battle. I won't file again and the BK is now 5 years old, and having less credit impact.

[RoughCollie]

If you bankrupt due to medical debt, you need to find out whether your husband will need to bankrupt simultaneously. This is because in many states creditors can go after the spouse for the payment of necessaries, which includes medical expenses. If these continue to pile up, or there is any possibility that they will, then bankruptcy is not a permanent solution for getting rid of medical debt.

 

If you decide to file bankruptcy, you need to do it at the most financially advantageous time for you. That can be tricky, too.

 

When you save money, you need to make sure it is socked away in a place creditors cannot reach, just in case. I'm not talking about doing anything illegal or about fraudulently transferring your assets.

 

If you have life insurance, you need to consider the impact on the beneficiaries. I have a lot of medical debt, and if I die within the statute of limitations for collecting it, my creditors can still go after my husband. That is why he is not the beneficiary of my small life insurance policy. DH and I can no longer get life insurance, so we can't increase either of our policies to an amount that would cover my medical debt.

 

The caveat here is that there is a limit on how long creditors can pursue a debt, except for student loans which cease to exist upon death. Find out what the statutes of limitation are for collecting each type of debt, and which events temporarily stop the ticking clock and extend the length of time you are liable. Find out whether your husband's creditors can pursue you for his debts, which types of debts are included, and for how long and under which circumstances they can do this. Make sure you inform yourself of laws pertaining to reaffirming the debt. The statute of limitations could have passed and you no longer owe the debt, but when you agree to make payments, it starts all over again.

 

What it boils down to is I think you need to find out what the worst-case scenario is for each type of debt and for each solution you come up with for managing your debt and savings. Then make your plans with these scenarios in mind. Make sure you are not fraudulently transferring assets or will not be treated as having done so (such as during an unplanned for bankruptcy in the future) with each scenario.

 

There are both state and federal laws which pertain to bankruptcy. Generally, except for federal taxes and student loans, state laws cover debt collection. The laws are particular to state in which you reside, so every states laws are different. If you incurred debt in more than one state, more than one state's laws may apply - you would have to check both.

[elegantlion]

I say a definite yes to your emergency fund and retirement. You've downsized, work a million jobs and are quite careful with your money. I pray somehow your medical debt would be cut down. Your other debt would then be manageable. :grouphug:

 

Yes, I would start a cash fund and sock it away somewhere. My only concern with keeping cash is if it will change any aid, delays, forgiveness that you qualify for.

[Lady Florida.]

Joanne,

I think it's a good idea for you to put some money away for emergencies and retirement. As you said, the debt isn't going away. However, aging isn't going away either. You can start putting money aside to give you some security while slowing down the debt reduction. You'll still be paying your debts, just not aggressively.

[Alessandra]

RoughCollie had such a good post. I agree with all that.

 

From what you have said over the years, my guess would be that there is no way you can pay everything. Planning for various scenarios -- including bankruptcy -- sounds like a good idea. Texas has laws that protect more of your assets than some states, doesn't it? I think you should have emergency/retirement -- what if you became ill? Is there a way you can protect money from creditors, such as some kind of investment in a home or other protected asset, should you decide on the bankruptcy option?

 

And about paying off bills -- I have read many stories of companies that say they will not pursue legal action, or whatever, as long as you make a token payment. I can't remember the exact articles I've seen, but I think some creditors contracting out almost-ready-to-expire debts to specialists who try to start the clock again. Even a payment of $5 can make an almost expired debt current again.

[Alessandra]

You would think so. That didn't happen with my parents regarding medical bills. They incurred a large bill for my sister. They were paying $150 a month. And that was cutting into their food bill to do it. The hospital took them to court. But hah on them because the judge ruled they should pay $10 a month. Best outcome ever.

 

 

The expiring debt may apply only to credit card bills. I'm not sure -- I wish I had more expertise!

 

Oh, I was able to find the article I'd read.

 

http://www.nytimes.com/2010/07/31/business/31collect.html?pagewanted=all&_r=0

[Mrs Mungo]

Can you qualify for a home loan? It might be cheaper than renting, especially with interest rates so low. It may not be a retirement plan, but it would be money that would be going toward building your assets. It could eventually be sold to help you toward retirement. A home is also an asset that cannot usually be taken away, even in debt settlements. Just an idea. I don't know how feasible it is for you, but you might be surprised. Have you ever owned a home? There are some programs for first time home owners that might help.

 

Having a dirt floor and no windows and giving away your kids to your ex might be options, but I don't think they are options many of us would choose in order to live debt free. My kids take priority, as I know your kids do for you.

 

I definitely think that starting an emergency fund with $50/month is a good start. Even if you still have debt, an emergency fund can stop you from accruing more debt for minor emergencies.

[texasmama]

In your shoes, I would put away cold, hard cash in an envelope in my underwear drawer - $50-$100 a month or whatever I could reasonably afford to stick aside that no entity would be able to touch in case it came to that. (I have such a fund, BTW...it is not in my underwear drawer but close...it makes me feel better.) I would also put as much energy/time as I had into trying to figure out a way to get the medical debt reduced/forgiven, since that is your biggest debt. It sounds like your dh is on SSDI. Does he get Medicare? I would contact the facilities which you owe medical debt to and ask for the debt to be at least partially forgiven. I would explore any ways that his medical needs going forward can possibly be covered. I wish I knew more about this system and could help you with that piece of it. I think you are doing what you can to cut costs, earn money and barter for your kids' needs. I also think it is appropriate to prioritize your retirement or emergency savings over paying off debt.

[Leav97]

I your situation I would start by hiding what ever cash I could until I had a little cash saved and then start in on retirement. I would skip paying down the medical bills and the student loans. Depending on the cash flow, I might consider the credit cards in a year or 2.

[Miss Mousie]

I agree with the people who suggest a small payment to yourself off the top to build an emergency fund, but the underlying notion of "so your creditors can't get to it" leaves a bad taste in my mouth. Those services have been rendered in good faith and cannot be taken back. The debt is legitimate and should be repaid as best as you can, in the same sense of good faith.

 

Having said that - one poster noted the wisdom of an emergency fund if only so that small emergencies don't add to the debt pile. That's the mindset I'd adopt in this case. Keep going with the $50 a month or whatever until you have three months' expenses covered. I know it can take a long time to get there, but it is a responsible way to achieve balance, IMHO.

 

I have great respect for your attempts to juggle so many difficult situations. Hang in there, and keep stepping forward.

[texasmama]

I agree with the people who suggest a small payment to yourself off the top to build an emergency fund, but the underlying notion of "so your creditors can't get to it" leaves a bad taste in my mouth. Those services have been rendered in good faith and cannot be taken back. The debt is legitimate and should be repaid as best as you can, in the same sense of good faith.

 

Having a cash emergency fund and repaying creditors as one is able are not mutually exclusive.

[TravelingChris]

I agree with most others here who say start an emergency fund and even more importantly, read about the laws in Texas= what are the time limits for debts, what can and cannot be seized, etc. In some states, I think normal levels of retirement savings are safe. If that is the case in Texas, it may be worthwhile to start putting in a small amount into the 401K even if not matched. I know that those are usually not counted for financial aid purposes either at all or with some threshhold that you won't have to worry about.

 

I know how hard you have worked and I think some times it is unrealistic to think debts will be paid off. I am one who normally doesn't like bankruptcy but if there are ever situations that call for such things or debt forgiveness, it is for situations like what you have been through. :grouphug: :grouphug: :grouphug:

[swellmomma]

What a sticky situation. If your dh's medical bills had stopped climbing I would look at bankruptcy but since they continue to climb that isn't even an option. Out here if your last day of attending college was more than 10 years ago and you are filing for bankruptcy the student loans are wiped out with it. THat is what I am doing. I am waiting for the kids disability for finally kick in (it has been a long process with appeals etc) becuase if we get the back pay after I file I have to hand all that money over and still can't pay for their therapies. If I get it first prepay for the therapies, bills etc then it is not considered in the bankruptcy claim.

 

You situation is a tough one for sure. I would keep the things up to date that you are currently paying. The rest is on hold for a while so I would ignore that temporarily and save up for an emergency fund. I would hate to see you paying off the cc's for example, only to have the car blow a tire and you have to use the cc to pay for a replacement. So get that emergency fund up to $1000 as quickly as you can. After that start saving for retirement. Now having a reliable car is important, and if you have downsized that as much as you can (for example we switched to a sedan after our van broke down because the cost of keeping a sedan running is much cheaper, even if it means we are crammed in there.).

 

Housing wise, is this a regular rental you found? DO you qualify for low income housing at all? We lived in that for 8 years, now the house I had was a proper house in a regular neighborhood. Not great but not overly dangerous either. I know most low income housing is more ghetto/rowhousing developments and they may not be feasible. I liked that it was based on income, so we had periods of time where is was only $200 a month, and times when it was $800. Each year they re-evaluated our suitability, checking income, debts etc. The extra paper work was a pita each year but it determined our rent for another 12 months and really helped with cost of living. It included heat and water too which helped the overall cost too. If that is an option to lower the cost of rent so you can work on saving it may be worth it.

 

I would put the thought of buying out of your mind for now. It may very well mean you never get to buy. If my parents had not bought this house and turned it into a lease to buy situation with me I would never have ever likely bought a home. I would have rented forever unless my kids bought me an apartment or something when they were grown. It may be that you continue renting and when the kids are grown you switch to renting an apartment in a safer area, but still renting. There are bonuses to renting. The increased utility bills, the repairs, and upkeep, etc is much higher in an owned home. I own my home already in the sense that unlike landlords all maintainence etc is up to me. I need to repair the entire surround around the tub as it is falling apart, drylock the basement, replace the furnace, all cosmetic work to update the home, install insulation in the addition and bring the electrical up to 100 amp service. In otherwords many thousands of dollars worth of repairs and maintance that I would not have to worry about in a rental. So while owning is good, that does not mean renting even for another 10-15 years is necessarily bad.

 

I am sure you have already accessed any and all programs to help with cost of food etc. I would consider maybe teaching the older kids how to coupon, make a competition out of it, for them to track them down for you, clip and organize them. Once you get going you can drop your food budget to next to nothing, and put the money saved from that into your growing emergency fund. It may not seem like much at first but once you get through a few cycles of couponing (and yes by default stockpiling those things) you may start seeing an extre $100-200 or more a month to put into savings. You are far too busy with your schedule to worry about becoming an extreme couponer, but if the older kids did the leg work for you, you may be able to benefit from it.

 

I don't know what else to suggest. You work your arse off, you are already doing what most people would suggest. You are just in a sh*tty situation and unless you win the lotto don't see a huge change unfortunately. The only thing I can think of is once the medical bills have stopped piling up filing for bankruptcy to eliminate all of that debt and the little things, and the legal debt. Student loans will still be there but at least the rest will be gone. You are not going to have a credit score high enough to qualify for a mort for at least 10 years anyway with all the debt piling on, you may as well file, get out from under the bulk of it, and use the next 10 years to pay off student loans, rebuild the credit score and save up. But again that won't help until the medical bills stop piling up.

 

In the meantime I will pray for something to work out, a windfall of some sort, a generous person at the hospital wiping out the bill, Your dh to be healed by the hand of God so that you can stop working so hard, and he could return to working again. Something, anything. I don't know.

[Harriet Vane]

Joanne--No advice, but just wanted to send you :grouphug: . My heart hurts to see someone I respect so highly struggling so mightily with such unhappy, unfair circumstances. My prayers are with you and with Adrian.

 

:grouphug:

[Renee in NC]

(((Joanne))) I am so sorry for how things have gone for you. I don't have any advice (because I am sure you know every trick in the book) but I wanted to show you some support.

[chiguirre]

:grouphug: Joanne!

 

How much longer do you have until your dh qualifies for Medicaid? Will you still have to accumulate medical debt once he's covered or will it pay for all of his care? If Medicaid will cover everything, I'd personally consider bankruptcy. Save what you can in cash in case you have an emergency and keep on chugging along until the medical bill situation stabilizes. You could also look into continuing as your dh's guardian if you do divorce? Could you free yourself of his medical debt or would you have to assume half of it?

 

As pressing as retirement savings are, you have so many other issues to resolve first that I'd try to postpone that consideration for a year. Try not to beat yourself up over your finances. Given your dh's medical needs, you could have been a perfect DR follower, and you'd still be buried under a hopeless mountain of debt.

 

I sincerely hope 2013 treats you better.

[Heatherwith4]

I don't have any advice other than I agree with those who suggest saving a little each month in your underwear drawer. I also wanted to offer some :grouphug: especially in the face of such tackiness.

[acurtis75]

I agree with others about saving for an emergency fund first then retirement. I would pay the absolute minimum on all debts. I can't answer in great detail on a public forum becaus dh and I have a business in the financial arena and there are licensing restrictions about what can be posted in a place that can be seen outside of Texas where we are licensed. Feel free to pm me if you would like some additional ideas or specifics on what we would suggest to clients in your financial position. We are in the same general area and would not charge for anything.

[RoughCollie]

Whatever you do, don't hide cash in a drawer, under a mattress, in a toilet tank, or in the freezer -- those are the first places burglars look.

[annandatje]

Joanne, if the occasional minor amounts toward an emergency and/or retirement fund will give you any peace of mind, the psychological payoff may be well worth the small decrease in debt reduction.

 

Your fortitude throughout the years has amazed me. In spite of tremendous obstacles not of your own making, you've found clever creative ways to give your children a first class education, to earn a professional degree yourself, to extricate yourself from an unhealthy relationship, to provide parenting counseling, etc.

 

You owe no one any explanations or rationalizations to anyone.

[Melissa in Australia]

no advice, but Joanne I wish to give you a hug :grouphug: :grouphug: :grouphug: :grouphug:

[jujsky]

Oh, it is a jawm post.

 

For the record I am sharing ideas done by people I've known. Take what is useful. The bottom line is that tough decisions have to be made. If you want to stay in a nice neighborhood, send children to private school, live in better than trailer court or doubled up housing and own vehicles, and pay down debt, you can't work for peanuts no matter how hard a worker you are. Saving for retirement while debts mount for the lifestyle choices ime mean that borrowing will be done against the retirement fund when a rough spot is hit in the future. My friends that are adjuncts btw, are only there bc it feeds students into their real income source -- private lessons. With the cost of gas and keeping up certs, they can't afford to teach full time in an un tenured position.

 

Secondly, the options you are sneering at are done by many people to get ahead. I have several neighbors that arrived with the shirt on their back. Literally, doubled up on housing, rode bicycles thru the winter and made it to homeowner within five years. It can be done, and it is worth looking at the paths successful people take to get there.

 

But again, it is a jawm. Enjoy your life.

 

 

Wow....amidst all the nice Christmas threads and boardies helping boardies threads, we have a response like this. Nice.

 

Did someone pee in your eggnog today? It's extremely low, mean, and just plain cruel to kick someone when they're down like this :glare:

[nmoira]

Wow....amidst all the nice Christmas threads and boardies helping boardies threads, we have a response like this. Nice.

 

Did someone pee in your eggnog today? It's extremely low, mean, and just plain cruel to kick someone when they're down like this :glare:

 

 

Careful. Almost all the posts supporting Joanne in this matter/manner seem to have been deleted. :glare:

[jujsky]

Careful. Almost all the posts supporting Joanne in this matter/manner seem to have been deleted. :glare:

 

 

I don't care. I usually stay out of things like this, but if someone is unnecessarily cruel, they need to be called out on it. It's not cool and not okay to treat people like crap for no reason.

[nmoira]

 

 

I don't care. I usually stay out of things like this, but if someone is unnecessarily cruel, they need to be called out on it. It's not cool and not okay to treat people like crap for no reason.

 

 

I'm not disagreeing.

[Joanne]

Heigh Ho, on 08 December 2012 - 02:26 PM, said:

 

Oh, it is a jawm post.

 

For the record I am sharing ideas done by people I've known. Take what is useful. The bottom line is that tough decisions have to be made. If you want to stay in a nice neighborhood, send children to private school, live in better than trailer court or doubled up housing and own vehicles, and pay down debt, you can't work for peanuts no matter how hard a worker you are. Saving for retirement while debts mount for the lifestyle choices ime mean that borrowing will be done against the retirement fund when a rough spot is hit in the future. My friends that are adjuncts btw, are only there bc it feeds students into their real income source -- private lessons. With the cost of gas and keeping up certs, they can't afford to teach full time in an un tenured position.

 

Secondly, the options you are sneering at are done by many people to get ahead. I have several neighbors that arrived with the shirt on their back. Literally, doubled up on housing, rode bicycles thru the winter and made it to homeowner within five years. It can be done, and it is worth looking at the paths successful people take to get there.

 

But again, it is a jawm. Enjoy your life.

 

Apparently you don't know my situation, or you have made some erroneious and inaccurate assumptions.

 

Years ago, I divorced from my children's abusive father. He then plunged the family into a custody battle that lasteed years. This, in combination with a reduction in child support to $400 a month and an eventual total lapse, caused a foreclosure on my home. In the meantime, I worked many jobs, including teaching additional children, working for the YMCA, working for a local company that provided free poker entertainment in local bars, and cleaning buildings.

 

A local second generation homeschooling family had also been teaching additional students. Her mother had started a homeschooling store; she eventually started offering homeschool enrichment classes. This became a cottage school, which became a full school. I joined the team as the 7th through 12th grade Language Arts teacher. 2 of my children attended the school as part of my compensaton.. The other child was required by a mediated agreement with his Dad to enter public school. I live in Katy, Texas. They are known to have an excellent, award winning public school system. That system would not honor my son's homeschooled 9th grade year (Though he had outsourced math and biology, and I used Sonlight, and had excellent documentation). In spite of accepted standardized testing (Iowa and Stanford), they put him in 9th grade again.

 

This same school district won't honor the transcripts and credits of the private school (we are now in an accreditation year.) I work at the school so that my children get the needed education and so that they don't get penalized and have to spend more years in school than their academic history dictates.

 

It seems to me that finding a way to fund it without paying IS creative budgeting.

 

Eventually, I returned to school to earn my Master's degree. While a full time student, I worked several jobs, homeschooled my and other kids. I spent the last 2 years of my Master's degree working 3/4 time at the my kids' school and full time at my graduate school (which after 1 year allowed for free tuition for me and my husband).

 

As far as my neighborhood, I live in the lowest type of neighborhood I can and still be safe. It is 1100 square feet for 5 adult sized people. My boys share a room, and for a while, shared a bed. The house is deteriorating at an accelerated rate due to age and a landlord who does not invest in proactive care. I have identified at least one drug house. I moved here after my husband's health tanked and I needed to get him back into a county in which I could have access to cheaper healthcare. However, his health situation created many medical bills, and at times, continues to create bills because he can't get the specialized care he needs at the hospital associated with his "free" care. In addition, there are times that his acute episodes dictate I call 911; they won't take him to the hospital district hospital, they take him local which incurs bills.

 

The luxuries I have are smart phones; getting out of that contract costs a chunk of money I don't have. Not having cell phones is not an option.

 

I am not working to fund "lifestyle choices". Riding a bicycle for 3 professional level jobs in metro Houston is not feasible. Your friends' situation with being an Adjunct Instructor is not mine. I am accepting an additional class for Spring term, which will double my income from this source and fund one of the vehicles you are critical of.

 

Monday through Friday, I work from 7:00 am to 9:30 pm. Now that I've been promoted, I often go in on Saturdays and starting January, I will teach a course on Saturday.

 

Your ideas and attitude emerge from somewhere; but are not a match for my situation. It wasn't a JAWM post; but I don't need the spend less, earn more ideas. I've LIVED it. I was posting for feedback on personal finance theory. I'm not sure paying off debt and not funding a decent emergency fund and retirement are prudent in a case like mine.

 

"Enjoy your life" is a unique kind of jab. I am glad I work at my kids' school (the oldest is there now through a ironic twist of fate); I see them those mornings. My husband is dying a slow, tortuous death that heavily impacts all involved in many, many ways. My children have heard "no" many, many times and have taken the reality of our life with grace, maturity, and humor.

 

I have been steadfast and persevered; but I have also been plunged into depths of despair I don't post about.

 

Given your perspective, I don't expect you'll revisit your assumptions about me and my choices. I'd like to ask, then, that you consider no longer contributing to this thread.

[Miss Mousie]

Having a cash emergency fund and repaying creditors as one is able are not mutually exclusive.

 

 

Of course not. The second paragraph of my post says that. Pay less to the creditors while building the fund, and when the fund can cover three months' expenses those fund payments can revert to being used for higher payments to creditors.

[Giraffe]

(((Joanne)))

 

I don't post much on your situation but I have followed it and cannot believe how strong and faithful you have been to your family.

 

Honestly, I would sock away some cash in a drawer as an emergency fund, but I'd be careful not to advertise its existence just in case someone gets tempted, especially since you're already living in a "safe-ish" neighborhood. Alternatively, you could open a safety deposit box with cash savings in it. Both those options would be protected in case of a legal battle, I believe.

 

I would try to negotiate the medical bills down as well. Don't know how far you'll get, but it's the only place I see where you can try.

 

Again, :grouphug: