User:Woozle/blog/2009-04-07 1003 The Money Situation/var/$text.below

Sandy's income is $2000 a month, plus $10k annually (birthday/Xmas gifts) in the Fall/Winter. Almost half the $10k goes to property tax (based on the most recent inflated "value" of the house -- which we never had any interest in selling and consequently we don't actually have $350k lying around from which we can draw off $4500 every year, but since the real estate industry sets the rules around here we still have to pay it), so realistically that's more like $5000/year, which makes her total income $29k/year or just over $2400/month.

Now, outgo (rough numbers):

Debt:

• mortgage: $750
• credit cards: $1253

Spending:

• utilities: $500
• purchases: $2000

Obviously the level of purchasing makes everything impossible. I've got to look at that more closely and see how much it can be trimmed... but just the minimum payments (750+1253+500 = $2503) now total more than Sandy's actual income, even without buying groceries.

We've been coasting along using the credit cards for groceries and such and paying just the minimums on the cards hoping the Josh situation would be resolved soon, because at that point two things happen: (1) expenses are reduced somewhat; (2) my time is significantly freed up, so I can spend more time working for clients (i.e. more income) or possibly get a "real" job (not easy even in the best economy and even less likely now, but still possible).

The Josh situation remains unresolved, and I don't see anything happening in the next two months, and we have used up the Christmas money and arrived (as expected) at the point where we don't quite have enough to pay the minimum charges on the credit cards.

2009-04-07 update (started typing on 04/06): I wasn't done typing this, but a new event has pushed the Date With Disaster off another month or so: Sandy's mutual fund sent a letter warning that they were going to close one of her two accounts because it fell below $1000, so we decided to cash the whole thing in (a little over $2000) and use that to finish off this month's bills. Next month, I think we need to lock up the credit cards, go to paying cash (Visa check card) for everything, and send hardship letters to all the credit card companies.

I was in the process of contacting a credit counseling agency, but the one I chose has made things difficult by not responding to my email and insisting on using the phone for everything. Maybe I won't bother with them, or maybe I'll look for someone else.

Also, we came up with the idea of setting up a computer for me in Mel's room so I could work uninterrupted during certain parts of the week and make more money. Right now, I don't have any allocated spans of time during which I can reasonably expect not to be interrupted, so it's very difficult to even start concentrating on a project.

• Down side: more expenses (~$500 for a completely new system, hard drive, and monitor); some time required to assemble and get it set up
• Up side: excuse to buy a new LCD monitor and a system board even faster than this one (woo-hoo!) if I can find one for cheap (awww...).

Also also, if we can get SSI for Josh, that's another income stream; we've been told it may include back-payments, though not all in a lump. We'll see what happens with that.

I knocked our telecomm expenses down by $50-$70 by reducing DirecTV to the basic plan ($60 -> $30), reducing the Vonage line from "unlimited" to "500 minutes" ($30->$20) and moving the Verizon wired phone line over to Vonage as well, under the same plan ($50 -> $20). We desperately need to get rid of the storage unit ($100/mo) but making room in the house is taking a lot of time (which takes away from money-making activities). I'm thinking I can get rid of vbz.net's Vonage line completely (~$20), at least until vbz has staff who would like to have a phone again.

A debt-consolidation loan of $160k at 5% (which seems to be the going rate at the moment) comes to about $1100/month, putting total non-discretionary expenses at about $1600, which leaves discretionary spending at about $800/month plus whatever I can bring in.

Maybe that's the way to go.

Does anyone have any thoughts on this?

2009-04-07 17:09 update: it looks like consolidating the credit cards into the mortgage and refinancing at "today's low rates" (5%) means that all the cards together would only add another $100-$150 on top of the mortgage monthly amount. This would leave us with something like $1200 in discretionary spending, which ought to be enough. The exact numbers will depend on how much they have to jack up the interest rate due to Sandy's jobless status. (~3 years of on-time payments ought to count for something, I should think, and perhaps they will.)

I submitted the application online (yay for online applications!) at CountryWide, and we'll just have to see what happens.