Balancing My Debt Question

Hey guys,

Wanted to know if anyone had some advice regarding some debt issues I currently possess.

I am behind on some payments, and have several lines of debt. With my income level I am unable to actually pay down the debts and have just been balancing them. I do not want to declare bankruptcy for obvious negative reasons, although I have looked into Consumer Debt Proposal. The bank would not qualify me for a debt consolidation loan as my debt to income ratio was over their limit.

Aside from a consumer proposal, would there be any other way of consolidating the moneys? My parents will not help. The total amount is in the ballpark of $25k.

Best,
eric

Call MBNA and see if they will consolidate all your debt to one of their credit cards. They were give you a special rate based on your credit score. My friend got 20,000 for .99 for two years. But he had to pay the cash advance fee of $180-$220 ish to get the money of the card to pay of the other lines.

Leo

Put a loan on your car?

Also see if you can "downsize" anything to save money...

I don't want to seem like a dick....but didn't u just make a post about a 500 valentines day gift?

Yes

http://www.torontomazda3.ca/forum/sh...t=#post1160479

...

seems more like a spending problem, rather than a debt problem.
change your lifestyle and you wont have such serious debt.

First off - Cancel credit or cut up your cards so you don't fall into a loop of paying the minimum - only to use the available balance to buy McD's.

Then Look deep into your spending habits and see where you can cut corners.


Avoid convenience stores - there's a premium charge for that convenience

Stop gambling - even Lotto 6/49.

Buy cheaper smokes

Buy cheaper booze

Go grocery shopping
- bring lunch (even once or twice a week)
- buy a case of water/soda instead of buying one at convenience stores
- brew your coffee
- bring your own snacks

Change / cheapen your cell phone plan by using landlines when available.
- cancel vMail, lower data package, lower daytime minutes.

Ease up on the latest trends. Hipsters are the new yuppies - kids with WAAAY too much expendable money buying up every new gadget to be one of the cool kids.

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No start saving your savings

Buy a piggy bank - I actually have a tin piggy bank that I throw all my change into at the end of the day. You can get these zodiac piggy banks at Dollarama - and you have to physically break it open to get money out. None of the kiddy ones with the trap door at the bottom or else you'll cheat.

The first one I did had $600 within a year

I even paid myself for coffee that I brew at home or work lol. $1 each time I brewed a cup I coffee went into the piggy bank.

You Need A Budget software has really helped me. It's $60 but if you watch steam I got it for $15!

Like someone said above, I believe MBNA may consolidate your debt, you should definitely call them.

Worst case scenario, they don't and you can't find a way to consolidate your debt, you're going to have to reduce your spending and make extra cash. Set a budget for all your expenses and make sure you stick to them... you may even want to look at getting a cheaper cell phone plan, bringing lunch to work everyday, etc. Find a PT job for extra cash, it will really help. And pay down the card with the highest interest rate first (while still maintaining at least the minimum payment for your other cards).

Tough situation to be in. Best of luck :)

Budget, Budget, Budget.

https://www.mint.com/how-it-works/anywhere/iphone/
Try this to help you become more aware of your spending.

Also, Default User said cheaper alcohol and smokes..... By cheaper he meant none, at all. I mean, I understand nicotine addiction and what not, but alcohol is definitely not needed.

Quote:

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Originally Posted by Hyperion

https://www.mint.com/how-it-works/anywhere/iphone/
Try this to help you become more aware of your spending.

Also, Default User said cheaper alcohol and smokes..... By cheaper he meant none, at all. I mean, I understand nicotine addiction and what not, but alcohol is definitely not needed.

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No - I meant cheaper.

I know how hard it is to quit - and even harder when you're stressed about money.

The best thing to do (if not quit) is to at least buy the cheap economy brands - natives if possible.

$10-$12/pack a day for "premium brands" vs $7-8/day for budget brands.

**** the Heinecken and drink ****ing Brava if you need a buzz.


Bein strapped for cash doesn't mean he has to drastically change his life habits (although it would be a good thing)

I'm gonna sound like a jerk for saying this but maybe it's time to sell your car, and get something that's not only cheaper to maintain, but also lighter on gas. All those upgrades that you put in your MS3 are putting a serious drain in your finances.

Default user has some really good tips. And Kiyomi is right as well. It may be a spending habit that got you into this. I'm on the same boat as you but not in that range.

A few months ago, I even looked up some methods on cutting down debt like the snowball effect and etc. If you have credit card debit, RIP THAT SHIT UP, hide it or take it out of your wallet so you don't get tempted to use it to buy small things or car parts... It all adds up eventually. Don't just pay the minimum.

It takes patience, effort and determination I would say. Unless you win the lottery! but don't go buying tix every week

Thanks for all of the replies guys! Let me clear some things up:

Yes I did buy my gf an iPad for valentine's day. It is coming out of the tax return money I will get next week. I am also doing brake repairs out of that money, and then the remainder will go towards bills. I bought her the gift because as of late I have not been able to really do anything extravagant, so I wanted to do something.

-I don't smoke
-drink maybe once per 2-3 weeks
-can't sell car as it's still being paid for
-already bring soup or pasta for lunch daily
-have not bought new clothing in over a year
-have no assets other than a 4 year old computer and some old radios
-only non-essential car mod currently is RMM, the rest were done because the stock parts were literally falling apart

I have carried the debt in one for or another for the past 7 years, I have just not been able to get it paid down completely ever. I will look into the MBNA credit card consolidation to see if they can offer any solutions.
best,
eric

my girlfriend was 35k at her peak (car loan, CC's) now she plenty down

you need to get another job… give up 3 weeknights for 4 hours a night and do dishes or something.. do some simple math.. 12 hours a week @ say $10 a hour = $120 a week… = approx $6200 a year… yeah i know how it is giving up life time.. time with the girlfriend time with friends etc. i do it. but sometimes its gotta be done.

i know lots of people who have worked 2 or 3 jobs. full time and part time on the side just to pay down school debt or afford things they want. I've done/do it.

Because it is coming out of your tac return does not mean its ok

Just wanted to point that out

If you're ok with carrying the debt then you can continue to justify your spending saying things like you haven't done anything extravagant

Anyway you should go talk to a financial advisor or a debt professional because it sounds like it might be a mind set that got you in this situation in the first place

Good on you for not smoking

Also I'm not judging you if anyone is wondering, I'm just saying what comes to my mind when I read what you posted that's all

If your gf was of any worth she would not need an ipad and would be helping encourage you to pay it all down. Tax return isn't free money, you spend just as much time earning it and since it's "out of the ordinary money" it should go 100% to paying down debts.

Looks like you just make some dumb choices (MS3 being one of them) and can always convince yourself it's ok if you spend money for various reasons. You would be shocked at how far even $30,000/year will go if you don't try to live beyond your means.


And FYI I AM judging you, or really anyone who accumulates a large debt for stupid reasons...a reasonable car loan is ok (don't buy a new bmw when you should have a used honda civic), house is ok and schooling to some extent is ok although so many people abuse osap. Debt is a bad habit/addiction like smoking or drugs.

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Originally Posted by SomeGuy

If your gf was of any worth she would not need an ipad and would be helping encourage you to pay it all down. Tax return isn't free money, you spend just as much time earning it and since it's "out of the ordinary money" it should go 100% to paying down debts.

Looks like you just make some dumb choices (MS3 being one of them) and can always convince yourself it's ok if you spend money for various reasons. You would be shocked at how far even $30,000/year will go if you don't try to live beyond your means.


And FYI I AM judging you, or really anyone who accumulates a large debt for stupid reasons...a reasonable car loan is ok (don't buy a new bmw when you should have a used honda civic), house is ok and schooling to some extent is ok although so many people abuse osap. Debt is a bad habit/addiction like smoking or drugs.

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Hey it's not a problem, if I didn't want personal opinions or to be judged, I would not post in an open forum!

Yes perhaps the ms3 wasn't the best financial choice, although I did get it for $10k which at the time was affordable for me (current job pays less). I live in a bad basement apartment, and the only thing I do beyond my means I would say is eat subway too often, although if you work out the cost of a daily deal there it's only slightly more than a much less nutritious meal prepared at home, oftentimes cheaper. I will have to cut back on that though I know.

I may be looking in the wrong places for part time work, but even a grocery store would not hire me for weekends when I applied, and I have over 3 years past experience in a grocery store.

I'm not sure of your other life parameters, but would it be possible to move back home with your parents? Rent, no matter how cruddy the basement is, is still money going into someone elses' pocket. I paid "rent" to my parents when I lived at home in the form of a contribution. It was less than renting a room, but enough to help them out with their bills. Win-win.

Not to beat a dead horse but admittedly the iPad was a bad move, but what's done is done.

Like everyone else has stated, cut your set expenses - things like the gym, remove all data from your cell phone plan, 407ETR use, see about porting to a second tier cell phone provider to get rock-bottom voice/text plans (wind/mobilicity/chatr), etc. It's painful, but you need to categorize things that are "luxury" and things that are "need-to-live".

A good example of luxury would be booze. Even Mexican-piss costs $5/beer x 26 times a year (1 every 2 weeks), that's $130 down the drain. Once you've got your luxuries and necessities listed out on paper in front of you, you'll have a better sense of where the little $10s and $20s are disappearing to.

What is your current job now? Are you actively looking for an upgrade? If you don't have specialty training, have you looked at doing manual labour jobs? I know this might be even more painful, but you might need to park your speed so you aren't paying $1.46+/L, and see if you can get a reduction in your insurance rates if it's stored, and bus it like a student.

Sometimes people need to be smacked in the face a bit.

1) Evaluate your bills each month (cell/tv/internet, gas/hydro/water, insurance/car, etc) and get rid of what you can or conserve where you can. Taking a shorter shower and turning your heat down and leaving lights off and only having basic cable could save you $100's a month.
2) Don't carry cash, it's easier to spend on little needless things where you otherwise wouldn't (the pack of gum and energy drink from the convenient places for instance).
3) Each time you go to spend money while shopping, ask yourself if you really need this to survive the day/week/month whatever. If the answer is no, then leave it behind.
4) Get side jobs, deliver papers, shovel snow...do you have anything you can do well (fix computers, take pictures, whatever) that could be a side job of your own. That's if you can't find part time employment (try EVERYWHERE, even places that you'd rather not work and don't give up).

All this money you save goes right into paying off your debt. Pay off the highest interest stuff first as it's costing you the most. Consolidate to lower rates wherever you can.

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Originally Posted by Stretch

although if you work out the cost of a daily deal there it's only slightly more than a much less nutritious meal prepared at home, oftentimes cheaper.

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Knowing the actual costs of the alternatives really helps when you're deciding on things like this. Believe me, I had to go through something like this when I was young and stupid - Even if you only eat the 6" raccoon fetus salad from Subway, it'll at least run you $4 taxes in for that one meal. If you eat that sub 3 times a week, you're at around $12.

Loaf of bread = $2 ($3 if you buy that fancy 12-grain stuff)
Cold cuts = $6 (cuz that sh*t is expensive)
Condiments = $3 (or take them from fast food joints to save the money)
Cheese = $4 (or more cold cuts if you're lactose intolerant)
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$12-16 to feed you like a king for the week vs. $12 for 3 so-so diarrhea-inducing subs

Also take a look at bank fees. if you pay any switch banks to pc. That saved me over $120/year.

Good advice everyone! Especially your advice about staying away from the raccoon-fetus subs SilenJay, they were never my favorite anyway.

Ill put to use the ideas/comments from you guys, and get back to car-related discussion rather than these soap box threads.

eric

I know someone mentioned tackling the debt with the highest interest rate first ... I was in a similar situation in the past, and as much as that makes sense, what really helped me get the ball rolling is getting rid of the smallest balance first, it gave me hope and a sense of accomplishment, and made me feel like I can keep chopping away at everything and get it all done!
But yes, looking back now, I agree with whomever said to hit the highest interest rate first.

Another thing that gave helped me focus was adding up all the interest you're paying for all your debts, sit down and add em up, that's money you're just giving away, especially if you're only able to meet the minimum payments, cause frankly the minimum payments don't hit deep enough against your principal to make a difference ...

As for doing something nice for your GF, I get it, I was there too ... sadly that habit started from when I was in highschool with my first part-time job ... but what I learnt over the years and girls is that its not the $$$ that matters, its how much thought and effort you put into the gift that goes further and leaves a lasting memory in her heart. Like what? quick thought in my head would be maybe a box of her favorite chocolates, and within that box you tuck in a Hand Written Letter of personal thoughts and what-not.

As for a part-time job, don't just focus on grocery stores, look at similar options, hardware stores, pet stores, etc ... keep trying and it won't be too long before you find one. You'll be surprised at how much a part time job helps, cause if you're not busy making money, chances are you're gonna be spending money. If you can't do 3 weeknights a week, then try something like Sundays and 1 weeknight a week, but you're weekend becomes a 1 day weekend ... who cares? Cause you'll also watch your debt go down that much quicker.
DO NOT find ways to spend that money you just earned at your part time job, cause it would defeat the whole purpose.

I understand your pain man, I have been in similar position. Had student loan, car, cc and had very bad habit of spending in times of recession. There was a time when at univ, when my cc were maxed out and my accounts were in overdraft and no job. I learned the hard way and nearly withdraw from univ. Just take it easy and think before you spend. I'm down to 5k debt now and should be debt free if my current job keeps going smoothly in next couple of months.

Advice I would give, learn to forget your wallet at home. My gf used to hide my wallet and after a month or so, I lost the urge to spend any money. Used to walk/bike to and from work and univ (around 7-8km one way) everyday. On the plus side, I lost nearly 20 pounds in 2 months.

And regarding the whole ipad thing, I gave my gf itouch when they first came out on v-day when I was nearly broke. We all do stupid things for people we love. Can't do anything about it now. But I was set for a year. She herself made it very clear about no more gift for a year except b-day but that to had a max spending limit of 50.

Quote:

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Originally Posted by Stretch

Thanks for all of the replies guys! Let me clear some things up:

Yes I did buy my gf an iPad for valentine's day. It is coming out of the tax return money I will get next week. I am also doing brake repairs out of that money, and then the remainder will go towards bills. I bought her the gift because as of late I have not been able to really do anything extravagant, so I wanted to do something.

-I don't smoke
-drink maybe once per 2-3 weeks
-can't sell car as it's still being paid for
-already bring soup or pasta for lunch daily
-have not bought new clothing in over a year
-have no assets other than a 4 year old computer and some old radios
-only non-essential car mod currently is RMM, the rest were done because the stock parts were literally falling apart

I have carried the debt in one for or another for the past 7 years, I have just not been able to get it paid down completely ever. I will look into the MBNA credit card consolidation to see if they can offer any solutions.
best,
eric

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Jumping on bandwagon regarding iPad. Baaaad move. A true GF will understand that you are having some tough times and will forego the occasional luxury to help you out. This is why my girlfriend is now my wife. Get out of debt, then celebrate by buying her a nice luxury she has been waiting for.

Can't sell car because it is being paid for? When you are paying off a car, it is called a liability. When you're trying to pay off a 25K debt, it is also called a liability. Your objective at this point is to increase your financial fluidity AND decreasing your liability. The mods you are putting into that car are being put in because of what you said: stock parts were literally falling apart. Again, A LIABILITY. Get rid of it. If you need a car, get a used vehicle that would require less maintenance, and one you can easily pay off (if possible, use whatever residual value minus loans from your car to pay for it). Otherwise, take the TTC.

I know I'm sounding harsh but if you have ever watched "Til Debt Do Us Part", "Princess", and "Money Moron", Gail Vaz-Oxlade will smack you upside the head. The FIRST THING she will tell you is to get rid of the car as she will see this as nothing more than a money pit. The ideas that the other guys are giving you are good, but I think they are not enough for you to climb out of that 25K hole you're in. Drastic action is needed, and getting rid of your car is one of them.

Quote:

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Originally Posted by Stretch

Hey it's not a problem, if I didn't want personal opinions or to be judged, I would not post in an open forum!

Yes perhaps the ms3 wasn't the best financial choice, although I did get it for $10k which at the time was affordable for me (current job pays less). I live in a bad basement apartment, and the only thing I do beyond my means I would say is eat subway too often, although if you work out the cost of a daily deal there it's only slightly more than a much less nutritious meal prepared at home, oftentimes cheaper. I will have to cut back on that though I know.

I may be looking in the wrong places for part time work, but even a grocery store would not hire me for weekends when I applied, and I have over 3 years past experience in a grocery store.

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I am/was in the same boat as you. I say was because I couldn't pay down my debts. However I got help and have been budgeting and sticking to it and cutting way back on extraneous purchasing habits.

The first step is admitting you have a problem and need help, the second step is asking/looking for help, the third step is admitting to yourself that you made mistakes (there may be reasons don't get me wrong) and that you can't justify certain expenses anymore. Stop making justifications for things. The person that helped me get my finances in order, beat into me that the money I make isn't my money...and money I have is not my money...it is the bank's or the credit card company's...not mine until I am debt free, or have enough to cover my debts and then some. So spending $500 on an ipad (regardless of the justification for it) was not technically your money to spend...it is a harsh reality to accept (I know I have been there) and I am getting on top of it with help, and basically figuring out what my total debts were, total expenses, and total income.

Also one thing I noticed that made a huge difference with me and after sorting out gave me more money per pay...is getting bills paid on time...those late charges add up without even really noticing...but you start getting bills paid on time and those late fees disappear suddenly you have $30-$40(or more) per pay extra you can put towards paying down credit or other bills!

Also I know you think getting Subway almost everyday is about the same breakdown as bringing something from home...but it isn't. The easiest thing to do is when making dinner make bigger portions, double the recipe and that should give you a day or two worth of leftovers...leftovers are a great way to cut down on food expenses...don't have a microwave at work then the next best option is make your own subs...I know Maple Leaf sells a Hero Sub pack of assorted meats and you can get that for about $6 after taxes, with about 12 slices of each type of meat, say you put 3 slices of each meat on one sub that is 4 subs worth of meat from $5, buy a pack of fresh sub buns for 3-4 dollars, and those usually come with 6-8 buns in them, and get a pack of cheese...lettuce and tomato cost next to nothing when divided into sandwiches per day...and at the end of the day instead of 5-8 dollars per visit to Subway(more if you are getting a combo), you are spending maybe 10-15 dollars per week if that.

Honestly I feel for you I am right there with you, if you need advice or want more ideas on what I am doing let me know. Asking for help is hard...You took a big first step, the rest is considerably easier after that.

Wow guys, some really excellent advice here. I am proud!

Im telling you, debt is the devil... dont spend money on shit you dont need to. Otherwise you will NEVERRRR get out of debt. And the older you get the harder it is to pay off because you aquire more financial responsibilites.

I dont miss debt at all. And my fiancee is trying to pay off a large-ish chunk of debt too. It's hard, because like I said, now we have a mortgage and stuff and bill and it's harder to come up with money. But I help too.

Btw, Ipad... fail.

That is WAY to extravagent a gift. $200 would have been plenty to spend. Valentines isnt even a good reason to get it for her. Save that shit for a bday or Christmas. Vday is for flowers and dinner or something.

Buckle down. You are going to have to make a LOT of sacfifices to pay this off at the rate you are going. All the small things really add up when you are spending and you dont realize that. Your tax return should have gone straight to the debt... that would have saved you on even more interest that you would have been paying.

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Originally Posted by peterm15

Also take a look at bank fees. if you pay any switch banks to pc. That saved me over $120/year.

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^^this...all my this!!

This is one of the BIG things I have been working on doing...I was with TD and that shit was costing me a ton on bank fees...I am down to basically one account with TD now and within the month will be completely closed off from them...PC offers no fee bank accounts and decent interest rates.


also on an unrelated note PC also seems to have really great insurance rates :/ in case anyone was looking (getting discontinued off my current provider so looking for alternatives PC is by far the best quote I have found so far)
anyways :bot

What does your budget look like?

If you can't answer that question, you are not ready to tackle your debt.

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Originally Posted by midnightfxgt

What does your budget look like?

If you can't answer that question, you are not ready to tackle your debt.

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I have not updated it for 2014 yet, however I know I basically have more total debt than income, which is one reason I was looking into consumer debt proposal. I was hoping to find a different way but so far it seems to be the best solution as it would significantly reduce my monthly expenditures, thus allow me to save money in a savings account on the side.

Quote:

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Originally Posted by Stretch

I have not updated it for 2014 yet, however I know I basically have more total debt than income, which is one reason I was looking into consumer debt proposal. I was hoping to find a different way but so far it seems to be the best solution as it would significantly reduce my monthly expenditures, thus allow me to save money in a savings account on the side.

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Budgets shouldn't be updated for each year. You need to sit down, figure out how much money you have coming in. Then find your fixed costs (rent/hydro etc) and variables (Subway dinners etc). See what you can cut out to save money. Small stuff adds up fast, and other things like cable are easy to knock out. Maybe a lil better of an internet plan, and stream/Dl stuff. See if you can negotiate your cell bills etc. If you can lower fixed costs, its an ongoing savings.

I understand the concept of what you're saying. My fixed costs, before food allowance, are within $25-$50 of my total income. I run rogers highspeed lite, have no cable, and the phone plan is $55 which is the lowest with data although I could remove data and save the $20/mo. One of the largest expenses, even more than my rent, is my gas as I drive around 150km/day.

Maybe a move closer to your final destination may be a good option.

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Originally Posted by midnightfxgt

Budgets shouldn't be updated for each year. You need to sit down, figure out how much money you have coming in. Then find your fixed costs (rent/hydro etc) and variables (Subway dinners etc). See what you can cut out to save money. Small stuff adds up fast, and other things like cable are easy to knock out. Maybe a lil better of an internet plan, and stream/Dl stuff. See if you can negotiate your cell bills etc. If you can lower fixed costs, its an ongoing savings.

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^^this. Also, if your interest rates are super high, you can call your credit card companies and ask them what they can do to help you. Once you start making regular on time payments they will be more likely/willing to help you out...tell them you are on the verge of bankruptcy (never threaten bankruptcy) Just mention it is something you don't want to do, and ask if they would be able to lower your interest, so that it is easier for you to pay it off. They may not or they may say sure. If they are still getting minimum payments they are still making money but it will give you more money to play around with and put toward things that need it more rather than money down the sink in interest.

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Originally Posted by peterm15

Maybe a move closer to your final destination may be a good option.

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problem with this is the potential rent increases/insurance premium increases...but is always a good option to explore

You do have to weigh all pros and cons of it but sometimes its better.

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Originally Posted by Stretch

I understand the concept of what you're saying. My fixed costs, before food allowance, are within $25-$50 of my total income. I run rogers highspeed lite, have no cable, and the phone plan is $55 which is the lowest with data although I could remove data and save the $20/mo. One of the largest expenses, even more than my rent, is my gas as I drive around 150km/day.

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I've been following this thread and didn't want to comment on getting rid of the car as I get it's amazing to have a speed3. But the reality is the speed3 eats gas, premium gas at that, like no tomorrow and if you're driving 150 km per day, you would be saving yourself a ton of gas if you got just a regular mazda3 or something else that have good fuel consumption, not to mention perhaps less insurance as well. As for internet, Rogers is known to have higher prices. You could check out Teksavvy they have pretty good prices. And as others have pointed out, perhaps moving closer to work is an option... less wear and tear on your car, less mileage and less fuel.