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Question for the Money Doctors

Question submitted on Mar 21, 2019.

Question

I've really gotten myself into a mess. I bought a house through USDA-RD with a payment of 477.92. Additionally, I took a loan at a high-interest loan agency with a payment of 102.00. Also at a check writing place with a payment of 87.50 per month just to pay the principal. I have a loan using my only car as collateral with a payment of 245.00 per month for 18 months. Car insurance is 75.00 per month. My utilities are about 375.00 per month for all electric home and cable. The cell phone is 90.00 per month. I am on a limited income. I receive 983.00, a child currently gets 750.00 from SSI and another child who gets 181.00 per month. . The children are 13 and 14 and require being driven to school, and are in several activities - many of them are free to participate, however items needed to participate are needed. I do not receive any food stamp or other assistance. Groceries for this family are expensive and I spend about 125.00 a week. I am constantly overdrawn at the bank which cuts into the budget the following month. I don't want to consider bankruptcy. I am not able to work because of my own personal health and one of the children is a special needs child.

Answer

Hello, I am very sorry this is happening to you.   For what I can see is that your income is $1914 a month and your expenses you list are $1578 a month.  Which leaves you with $336 at the end of the month.  I just want to encourage you that YOU CAN DO THIS even though it seems hopeless.  You can.  With all that is in you, take that extra $336 a month and attack the smallest loan first ($87.50+336) will that will be paid off in no time.  Then take the $87.50 + $336 you were just paying on the small loan and attack the next loan ($102+87.50+336) and that will be paid off VERY soon.  If you keep doing this, you will be soon DEBT FREE!  And then you will have at least an extra $911 per month in your pocket!  

Also, look at ways to cut your expenses - get rid of cable in favor of Hulu/Netflix.  Your kids watch YouTube anyway...Eat rice and beans and tuna (cheap groceries).  and NO EATING OUT.  Drop your $90 a month cell phone and get something less expensive - you may be eligible for free mobile phone access through the FCC.  You can do this.  Do not give up.  You are a tortoise.  If you keep one step in front of the other, you will win this race!  Good luck! 


For additional information visit http://www.360financialliteracy.org/

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