Here is My situation, desperate for advice!

conquistadude · #1 (**permalink**) 08-10-2010, 08:33 PM

Hello, I over the past 6 months has had a lot of bad things happen, all cascading and overlapping things that made it to where to pay one I needed to not pay the other, and it just grew and grew. we have all been there

With 4 things that screwed me over.
1) my roomate had car trouble, making $400 behind on his rent, at the time I was good, and able to cover it. this was the first thing that stated a cascade, this did more damage then I thought it could ever do, because of this the power go turned off, then paying that power (in full) got my car behind, insurance. etc.
2) my GF of 4 years, mother of my child, chose to explore other relationship option, moving out and taking a way her small, but VERY helpful income
3) The plant where I work (and it pay well $17.25hour) shut down for 2 weeks for roof repair, then a month later another 2 weeks for boiler maintenance.
4) My car (which I still owe on) died, no way to pay to get it fixed.

So now I am very behind, in rent, electricity bill, car payment, phone, everyting. My rent is the biggest "BAD" in the whole thing. I managed to get behind 5 months...yes 5, this is the worst thing I have ever done financially ever. because my rent is......$1000 a month.....yeah, bad. I owe 3800 still on my car, and its going to take at least 1000 to get it fixed, power bill is not as bad as it was, it was 1200, but now its $600, Car is $200 a month, and is behind making it $400.

I just don't know what to do. I am Lucky in that my landlord is my grandmother, but considering its 5 behind, doesn't save me much anymore. My house is a good deal its a 5bed 2 bath 2story house ofr only a 1000 in California, and I dont want to loose it. but as behind as I am, I couldn't afford to move if I wanted to.

So that is the basic damage I am in. desperate desperate need for advice!

DavidBibby · #2 (**permalink**) 08-10-2010, 09:17 PM

As bad as things seem.. the situation could be much much worse. You ARE lucky that the landlord is your Grandma.

You still have your income correct? That is the NUMBER 1 thing you have going FOR YOU. What's your take home pay on average?

There still a lot I don't know about your situation, but for what it's worth.. here's my advise based on what I have so far.

The most important things you want to keep is:
1) Your relationship with grandma
2) Your child
3) Your place to live
4) Your car.

Right now.. your priority is to keep Grandma happy.

Does she depend on your rent to make the mortgage payment for the house you are staying in... or does she own the home outright?

In either case.. let her know that you ARE going to pay all the back rent you owe.. little by little... until you are no longer behind.

What is the arrangement you have with your roommate?
Does he pay half the rent.. 1/3... does he share in the utilities?

Now that your GF moved out.. can he move his contributions up to 1/2?

And if HE moved out.. could you survive on your own?

Can you get another roommate to share in the costs?

Can you downgrade your cell phone plan. Cut back on entertainment.. find ways to eat less expensively...? I ask this question in particular.. because if your Grandma knows that you are 5 months behind, yet she see's you walking around playing with your cell phone, and eating out all the time.. it's only going to build resentment towards you. Like I said.. you want to keep Grandma happy.

You car is behind, but you are also not too far off from owning it outright.. how much will it take to fix it?

I realize that I asked a lot of questions... the more we know about your situation.. the better we can help you.

So in short.. the plan I'd go through right now is
1) Ask roommate to contribute more (for both your sakes)
2) Write a letter to Grandma (handwritten and mailed) explaining that you are getting your act together and you start paying an additional amount above and beyond your normal rent. For example... if you and roommate(s) start paying $1400 total per month.. you'll have your backrent paid off in a year.
3) Get your car current.. and start saving the money to fix it.. UNLESS the repairs are going to cost more than $1500... it might be time to let it go.. but that's another issue.
4) Do your best at work.. (has it been a while since you got a raise?)
5) Spend time with your child
6) Don't worry about your GF for now.. get your finances in order first.. then you can work on getting her back (IF she's even worth it)

Let me know if this works for you.. obviously.. the more we know the better we can help.

Alex Richards · #3 (**permalink**) 08-11-2010, 10:11 AM

I'd say David's advice is in general very good. Take note! Consider using public transport and selling your car, if possible.

clearskycredit · #4 (**permalink**) 08-11-2010, 01:30 PM

You will get thru this...sometimes you just have to keep in mind, "This too will pass". Get your plan together to address all of the items mentioned with the great ideas provided by others and then execute. One of the keys will be to visualize where you want to be in six months or a year and keep your energy focused on getting to that place. You'll be there in no time...

lighthouse · #5 (**permalink**) 08-16-2010, 03:32 PM

Some great advice on how to get you out of debt...keep your head up!

However, I did not see advice that would really help you stay out of this situation. Start saving….As important as it is for you to get out of this it should be just as, or more important, that you do not get back in it. If you would have had 2000 saved before all this happened would you be in this situation? This is what we call an emergency fund.

Without an emergency fund you will be put you right back into this situation.

So adding to Mr. Bibby’s advice I would begin to set aside cash to fund an emergency fund to prevent such situations from happening again.

The greatest mistake you can make is not learning from the past. Next time you will be prepared to absorb the car and time off work. And those 4 weeks could be spent with your kid instead of worrying about finances.

Lighthouse

DavidBibby · #6 (**permalink**) 08-16-2010, 05:27 PM

You make an excellent point, lighthouse.

The emergency fund is THE way to make certain that you don't run into trouble and be FORCED to used a credit card because you were out of options.

$500 to $1500 is ideal..

Most emergencies can be covered with under $500.. but a larger car repair can be covered with $1000 or $1500.

Here's the thing about emergency funds... most people DON'T start them because the interest rates are so low. A savings account earns virtually nothing.

But if that's your objection to an emergency fund... I'm here to tell you that you're missing the point. The emergency fund is NOT an investment. It is a stash of cash to be used when trouble strikes.. and it WILL strike.

Forget about interest rates with your emergency fund.. the point is.. YOU NEED ONE. Having $1000 under your bed is better than NO emergency fund at all. But for safety's sake.. but it in a savings account at your bank so that you CAN get it relatively quickly. If you DO get interest... great! But don't neglect this essential step to financial freedom.

Emotionally and Physically.. you will FEEL better and SLEEP better just knowing that you have emergencies covered.

Surprisingly.. having available credit on a credit card does NOT give you the same Emotional and Physical peace.

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