OK, I've been reading this site for a couple weeks now, and figure I'll go ahead and throw myself to the wolves, so to speak. I warn you, this is going to be the kind of graphic info that makes you cringe, frugality lovers and debt-free denizens of the forum. This will be long, too.

The basics:
I'm 30. Bought my first house at 22 and rode the wave of climbing prices. Am currently in my third house. I'm a cubicle jockey for a telecom company. To be honest, in 2004 I was living high on the hog - discretionary income, could do what I wanted when I wanted, plenty in the 401k (started contributing when I was 20, still work for same company), the whole nine. 2006 was really the killer for me. Sources of extra income dried up (stocks, bonuses, etc) and then the decline...

The bad news now:

- Housing decline means my house is only worth $360k or so, when I have $390k financed. 5.25% 1st mtg, 8.99% 2nd, can't refi because LTV is upside down and i *do* have pretty good rates already. I can't sell yet because of the severe short position, and a short sale would put wayyyy too much on a 1099 at the end of the year, for me to be able to tackle.

- some $32k in credit card debts. 4 cards, the largest balance of which is $17k at 13.49% and I have NO IDEA how! (this card was paid off less than 2 years ago.) And my total balance to limit ratio is 78%. Bad.

- I thought it would be a great move to trade in my flashy sports car, bought in '05. I had put 19k down on it and it was still $600/mo for 72 mo. I could afford it *then*, but in '07 realized it was getting harder to handle. Let it go and bought an SUV for $15k. The bad news? Yeah, I had realized it would cost more in gas every month, but not DOUBLE. ouch. Half the car payment, double the gas? Not saving nearly enough monthly.

- I have $25k in two outstanding 401k loans - that's $300 a paycheck gone. And I found that one cannot use the vested balance in a 401k to cover loans on the same account.

- The absolute kicker? Basically at this point my income is less than my outlay each month. Some of that big credit card debt I know came from having to refill the coffers every few months to get the bills paid. My significant other makes a very small amount of money, but still gives me several hundred dollars a month as "rent" because she doesn't expect to live with me for free.

- Oh, and while I used to have a credit score in the mid-700s, it's now down below 700 because I've been trying to find ways to get this shored up.

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The good news, and yes, there is good somewhere here:

- I am chipping away at every "set expense" I have.
*I switched car insurance companies 6 months ago, saving me $40 a month then, and just found an even better rate this week, switched again and am saving another $50/mo now.
*I rarely use my landline and it was $60/mo. I called to cancel and they dropped it to a 10.99/mo plan so I could have service when I needed to.
*I worked it out with my job to telecommute 1 day a week, thus saving me 20% of mandated driving. My commute is an hour each way in traffic, so this helps on gas.

- Since my girlfriend is in the Army, we can shop for groceries at the Commissary. We stacked one of our checkout receipts against a simulated Peapod order (giant food's online service) and we spent $130 less for the same items.

- I use a two-account system for ensuring the bills get paid; the bulk of my paycheck is DDed into savings, then on the 1st a set amount is moved from savings to ckg, and the bills go out via online autopay. I also recently moved both of my primary accounts (where this all happens) to ING Direct, as the interest rates at BoA are a joke. (the problem here is as stated above, though, the outlay is greater than the monthly income, so I have to keep adding oil to the leaky engine)

- As soon as I am able to get started in earnest, pretty much every single thing in my home that I don't need is getting sold.

- EDIT: Forgot to mention, I round all payments up to the next $100. So for instance my car payment should be some $270, I pay $300.

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The objective, obviously, is to get rid of all this crap. As soon as it's in tip top shape, I'm selling the SUV and getting something even more frugal for the bottom line, for example. This year is The Year I Clean Up My Own Mess. Hell, I decided to lose some weight, like everybody does each new year.... but unlike most, I'll bet, I've already lost 10 lbs in 2008. This year I am not accepting excuses for myself. I know the biggest culprits are usually runaway spending on frivolous items, but there's only one frivolous item in the lot and it was $2k. The rest, no real idea but I know it's just a result of my not paying attention.

My Questions:
- Is there a bank in the world that will take on my $32k on maybe a 0% balance transfer card? With all the finance charges I'll never get on top of this mess.
- Is there any way at all to have my 401k eat its own loans and leave me with whatever is left vested? In the fund, not in cash. (and I don't qualify for any of the hardships they count, and even then i could only get about 8k out)
- Anybody wanna buy a truck? =0)

Thanks for reading, I know it makes you want to pull your hair out. Me too.

Wow you went from the high life to the low life pretty quick. I kind of had a financial wake up call today as well. My wife and I make around $100k and i've been trying to find out where its been going so today i got a set of highlighters and printed out the last month of our debit card and highlighted the entries color coded by food, entertainment, monthly bills, etc.

It might help for you as well. I just about threw up in my mouth when i realized we spent $8000 in the last 40 days (that includes 2 mortgage payments but still). We eat out entirely too much as well.

Things you might want to try is applying for a couple 0% credit card offers, they are everywhere and even with a score a lil below 700 they shouldn't be hard to get. Then transfer your balance over to them.

I'm not sure that would even help you if you can't pay it off within the promotional period. I may be wrong, but I believe the terms of these cards usually state that back interest will be added if you don't pay off the balance before the 0% expires. You'd just be deferring the interest in that case.

It could be worse. You could be maxed out on your cards and thus incurring overlimit fees. As it is now, I would see what you can do about selling some of your household effects on Craigslist or eBay, or perhaps getting a part-time job or other source of additional income.



Definitely check with your plan administrator. I believe some plans will allow you to convert your loan to a withdrawal. Withdrawals incur taxes and a 10% penalty, of course.



Actually it seems like you're on the right track for cleaning this up, so your situation seems hopeful. Just keep trimming your expenses as much as possible. I know it's tough to sell an SUV these days, but give it a shot. See about earning more income, cutting your grocery expenditures down as much as possible, and don't buy anything frivolous (cut the cable, cut Netflix, cancel magazine subscriptions (they'll give you a pro rata refund for the rest of the subscription term), stop eating out, etc., etc.) until your income exceeds your expenditures.

Wow, I am not qualified to give advice for your situation.

But I can tell you that all the zero interest cards I have been using for the past several years do not count up the interest and hit you with it at the end. Retail Store cards may be the exception

I think the fact that your here "baring all" is a great sign that you are getting back on track.

Good luck!

i would agree that getting rid of the SUV is a good option, sell it and look into getting a used Honda Civic or its equivalent, very dependable cars with high gas mileage.

Can you list out your monthly income and monthly expenses down to the penny?

A simple thing like paying the $270 on the SUV and not $300 could really help you out in this scenario.

So let's really bare all here... income, rent, utilities, cell phone, car payment, eating out, food, everything...

Also, you may want to try a balance transfer onto an AMEX card with a fixed rate of 4.99% to ease your burdens for a while.

I will try to detail it out fully, sure. Some of these figures either vary or I can't remember exact bills right now.

I technically probably should make "enough" that I'd be covered, but my paychecks don't reflect it because of the 401k loans, so I'll just go on what I *do* get.

IN
Paycheck, biweekly: $1348. (1200 to savings, 148 to checking)
supplemental biweekly: $150 to checking (repayments from a loan I made to a family member in need, will be coming in for a couple years)
supplemental monthly: $500 from my other half.

OUT
Primary Mortgage: $1600
Second/HELOC: ~$830-850, I pay 900.
Car: ~$275, I pay 300
Car Insurance: $85
CC1: Minimum ~$400
CC2: Minimum ~$150
CC3: Minimum $30
CC4: Minimum $60
Cell Phone: $7 (yep, seven bucks - phone is free through work, I pay the 7 for replacement/repair protection)
Internet: $22
DirecTV: $82 (I know this is big, but I only watch maybe 5 channels and most of them aren't in the basic tier. No pay channels though.)
Power: $120-130
Water: $23 qtrly
HOA: $200 qtrly
Auto Fuel: $313 (1250 miles a month, 13mpg, 3.25 for gas)
Groceries: no idea, my SO and I alternate on buying groceries based on who's got more.
Eating out: no idea, but not nearly as often as we used to.
Netflix: $18. Forgot that one.
Home Phone: $20 after all the taxes and crap.

I'm afraid to total that all up, now that I think about it.

Go check out "Your Money or Your Life" from the library.

Thanks, I will likely do that, there's a library not terribly far from my house. (they are getting scarce these days in the burbs, tho)

FWIW, I did go ahead and tally that up, and excluding the unknown quantities of food and entertainment, I'm 446.33 in the red each month. If I could just get "back" the 401k loan deductions each paycheck, I'd actually be in the black again - here's hoping my plan admin will let me do SOMETHING about that.

My tax refund will go into the savings account that the set bills come from, thus extending its life by a few months so I don't totally drown, whilst I figure this out.

I will second the opinion to trade in your suv for a civic. I had one for 10 years, and i miss it every day. the gas mileage is incredible, and you will find that you go to the mechanic and rarely if ever is there an issue.

second, you have somethings in your budget that really have to go. I mean, you are in a big mess, and you really need to get militant.

Get rid of these things: Netflix, home phone, internet, direct tv. NO EATING OUT. At all. I would pick up a night job if you can too - i see your outlay as much higher than $440 in the red....

You seem to be focusing on the 401k loans as what your "problem" is - but I think that isn't your problem - you have to pay your penance for your previously extravagant lifestyle.

Best of luck.

Oh the 401k thing isn't my problem source - it would just help the most in the immediate. No matter what happens with that, I am still going to change up a bunch of things.

Some of the elimination things are indeed obvious. If we still "need" one or two of them, like Internet, for the family at large (not just me) I will see if my SO would be able to take those payments over until I get back on track.

I have been talking second job as well.

What kind of hours do you work? Could you add on 15 hours a week at $8 an hour at some place? Perhaps somewhere that will give you discounts on stuff you already buy? That would give you an extra $520/mo before taxes.

Do you really need a vehicle at all? Could you spend extra time commuting? You're spending almost $700 a month on your SUV. That means your commute is costing you $35 a day.

If you start commuting and get a part-time job, you won't have time for TV. You'd save $80 there.

You live in a house. Could you take on a boarder for a while? Alternatively, for how much can you rent out your house? Could you rent it out and live somewhere cheaper? Could you live in the basement and rent out the top? Could you suite the basement?

I'm going to break away from the pack here and tell you to pay down the HELOC as fast as you can. Why? Because it's keeping you upside-down on the mortgage. If you weren't upside-down, you could sell and move to an apartment or condo. Or perhaps you could use another HELOC to pay off some of the credit cards and then put the cards in the freezer in coffee cans full of ice.

Is there any way your SO can help you with this stuff? I mean, my wife and I view ourselves as a team, and we help each other when the other is down. I don't want to or mean to prod into your marriage, but it's just another thought. Maybe you could sit down with your SO and explain the situation you are in, and if you decide that something like internet or Netflix is something your family just can't do without, then maybe you can split the payment or your SO can pay it - like you said. Just another thought, best of luck to you. I know the head ache that money problems cause - I think a lot of us do - and it's not a pleasant feeling. But there is light at the end of the tunnel, and I think you did the right thing by starting here. Good luck!

E

Wait, I get a completely different number.

Here's how I broke it up monthly:

Income: $3,496 ($2,696 job, $300 loan repayment, $500 significant other)
Expenses (without food!): $4,118
--Mortgage $1,600
--HELOC $850
--Car $275
--Car Ins $85
--CC1 Min $400
--CC2 Min $150
--CC3 Min $30
--CC4 Min $60
--Cell $7
--Internet $22
--DirecTV $82
--Power $130
--Water $7.67 ($23/3)
--HOA $66.67 ($200/3)
--Gas $315
--Netflix $18
--Home Phone $20

Deficit (again, without food!): $622

So for starters, not good. Really, really not good. At least you have come to realize this.

The worst part is, most of your expenses above are fixed. That is, you can't really change the amount.

Things you are going to have to eliminate: DirecTV, NetFlix, Home Phone. This gets you to -$502 per month. I would vote for keeping the internet -- $22 is cheap for the amount of knowledge you can get from it. If you have to, cut it as well. Just be careful because you may get dinged with fees for ending your contract early with DirecTV. You can use the internet at the library.

Will your S.O. consider helping out more? Is she in this relationship for the long run? Can she pay for all the food while you straighten out your life?

You HAVE to get rid of the SUV. Put it on the market now. Get the cheapest car that is reliable. We're talking $2,000 car here. The gas and car payment are killing you.

Again, this is all without groceries or eating out. That could put you another $200-300 in the hole.

I would try:

• getting a second job
• transferring all of the debt (or as much as possible) to AMEX @ 4.99% fixed -- hopefully this would lower your minimums and free up some cash to pay it off
• cutting everything off
• selling the truck, getting the cheapest car you can find

It's Dave Ramsey time -- rice and beans, beans and rice. The good news is you can get through this.

Hopefully this post hasn't depressed you too much!

If you called to cancel your phone service, you shouldn't be paying 10.99/month. If you really don't need it, CANCEL it. Your work pays for your phone, use that. I use my phone line for internet access, so I have to keep it. If you're not in that situation, you don't need it.

I also think the $7/month replacement and repair for your phone is a waste. By the time your phone is broken, you will have probably been a customer for 2 years, and you're due for a free upgrade. Why spend 84 bucks over the year when you will spend another 80 on a new phone? I am cheap, so I was able to get a new phone for free. It's not the fanciest phone, but if I was going to get a free upgrade, I wanted a FREE upgrade.

I think you're on the right track though since you're thinking about where you can cut costs. I hope you learned your lesson about borrowing against your 401k. Since you owe, do you have to continue contributing? What percentage? I'm not sure how that works. It seems pretty defeatest, but maybe you can decrease your contributions and use your after tax money to pay down some of your other bills.

Maybe your family member can write out their $150 check to your credit card, so it will seem like you're not paying it, when you really are. Do you always put their money right towards the bills, or do you have a tendency to spend it on dining out (rewards for yourself)?

Lastly, I would probably take your tax refund and pay off at least one of the cards if you can (if you are getting a large refund). No sense putting it in the bank, when the interest on the card is higher than the interest in the bank.

If I think of something else, I'll reply again. Good luck..you have a long way to go, but you can do it!