Help me with my finances?

Question

monthly income: 4k

monthly payments:

2cars: 651

car insur: 220

loans: 91

cc debt from 9 credit cards between us total balance is 9900 with min payments of 50 each card/month.

cell: 120

gas 2 cars:100/week

groceries: 100/week

we live with parents and pay no utilities..

how can i make my finances work and still save money for a down on a home of 40k. I have no idea how we end up with no money at the end of the month..how can i make payments so that we can have a couple of free paychecks for saving?

Answer 1

You can't have $ for a downpayment until you pay off your debts. Pay off the debts first. Start with the smallest credit card balances and pay them off fully. Then, move on to the next largest one, etc. If you pay the minimum only, you will never get out from under. That is what the credit card companies want- for you to be indebted all of your life. Stop using your credit cards. If you don't have cash for a purchase, than do without. You want to own a home, but you are not ready yet. You need to have six months savings when you own a home, in case of emergencies. You have a long road ahead of you.

Best of luck to you.

Answer 2

well this is a lesson well learned. You officially spent more than what you make. Here is my advice start to pay off the cc with highest interest making monthly payments on the other credit cards. I don't know how far you work from your house but could you sell a car and use the money  to pay off the other car? And pay yourself first. Once you get your paycheck but atleast $75-$100 a week it's a start. Do you honestly need a phone, perhaps use a house phone. I don't know all your circumstances so i just randomly took out some things you are paying that your truely don't need. Perhaps since you live with your parents you could make a deal that you don't pay rent but move out in a year, this way the rent won't be holding you back and you could save that money too. Don't spend anymore money foolishly and don't go out to eat. Good luck.  

Answer 3

Do NOT "not pay anything for 2 months".  You will ruin your credit and rack up a ton of late fees and charges.  It will negatively impact your ability to get a mortgage.  If you can transfer all or some of your credit card debt to a no interest or low interest card that will help.

Please don't "consolidate" your debt. You will just end up owing more money and for a longer time. You probably can not get rid of all of your debts all at once, but you may be able to do it in a (relatively) short period of time. Of course that depends on the amount of debt and your income.You can jump start your payoff by having a garage sale and selling anything that you no longer use and you should consider getting a temporary part time job until you get everything paid off. Here is a plan that will help you. If you work the plan, the plan will work for you:

1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :

Debt #1 (highest interest): minimum payment+ extra payment

Debt #2 (middle interest): minimum payment

Debt #3(lowest interest): minimum payment

Debt #1: paid off

Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment

Debt #3: minimum payment

Debt #1: paid off

Debt #2: paid off

Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.