I’m sort of in a similar situation right now. I tried to keep the budget as a stay at home mom but it became impossible the last few years of my husband going to college. We took out student loans but it was too little, too late. Here’s what it looked liked last week – $18,000 on credit cards, $15,000 in student loans. Our student loan payment is fine – $125 a month. I only wish that we had taken out another $15,000 in student loans. It would’ve saved a lot of grief.
I went online to http://www.oprah.com to see what kind of worksheets Oprah had on reducing debt. Search for “debt diet” and you will find these worksheets. I’ve also read a couple of books about how to get out of debt. I checked them out of the library so I can’t remember what the titles were.
After using the worksheets and discussing things with my husband, we applied for a 0% card for the next year. We each got one and he is actually going to call today to see if his credit line can be raised since they only gave him $2500 and gave me $4500. We transferred half of a balance of one of the major cards to my card. We paid off the remainder of the balance of that major card with our tax return. Next he is going to balance transfer whatever amount he can to his 0% card (again, depending on what they can offer as far as a credit increase).
I had recieved one of those notices that my interest on my card with $6700 was going to skyrocket soon from 13% to 30% if I didn’t opt out of the changes. I called and asked how I could opt out. We aren’t using any of the cards anymore so when they told me all I had to do was close the account to freeze the interest rate – I said “Sure!” So now that account if closed and I just have to keep making payments on it until its paid off. We are hoping to transfer this one to his 0% card. We also have a couple of department store cards that were up to $1000 each. My husband recieved a pay increase that was issued in a single check and retroactive for a few months. Instead of spending that money on something we want we paid off half of one of the department store cards.
Now we are down to $13,500 in credit card debt. We won’t be paying interest on at least $6500 for the next year.
I wanted to help more with things so when my brother-in-law had a childcare crisis, I decided to step in and help. I didn’t really want to but seeing that we are having our 3rd child soon, I wanted to be able to make a bigger dent in the department store cards – especially since those were the cards that I didn’t have to use and caused the biggest contention in our family because they were items not needed as much. So now I’m paying off that card with the income from watching my nephew. By the time the baby is born, these cards will be paid off and the leftover money is going to buy a new carseat and stroller and whatever else we may need (I know that I don’t need a ton of junk – it is our 3rd kid and I will not get caught up in marketing!). So we will be down to $12,000 in debt in a few months.
I think some counseling and soul searching for your relatives would be good. What I finally realized is that our debt was so crushing that it was the root of all of our arguments! The minimum payments that would pay down only a few dollars a month on the highest cards were totally ridiculous! We want something better for our family and what I’ve learned is that you can’t buy before you have the money. I also don’t really want to watch my nephew because its time that I should be spending with my son while my daughter is at school. Pretty soon he’ll be having to share my time with a baby too and I deeply regret that I have to share my time with him and my nephew right now. That alone is enough for me to want to watch what we spend from now on.
You’ve got to tap into what is important to them! Do they really want to work for years and years when they could be retirees having some fun?
So My husband and I have this plan and we are sticking to it! We will have 3 kids in the backseat of the car until the baby is at least a year old. In 16 months I will have all of the credit cards and the car paid off! All that will be left is the student loan which is just fine. I even think that I don’t want to rush back into having a car payment again so I might not get that minivan until a few years from now. Its a luxury – not a necessity (until I have 4 kids – LOL!)
I hope this can help you. It is possible to pay off debt. My husband and I are doing that on his entry level (he graduated in May) professional salary while I stay home – with almost 3 children! He will also be heading back to school for his M.S. in the fall. Luckily he gets free tuition since he works for the university!
