Question about Debt?

Question

Okay so my dad has been shaky with money for about 1.5 years. We used to be a very stable family financially wise. We currently live in a nice house in a very nice/safe town.

My dad re-financed our house because he bought a huge insurance policy and needed the extra money. So now we have to pay a 6,000 dollar mortgage every month, with a 22,000 dollar tax yearly just by living in our house. My dad makes 225,000 dollar a year, but with 2 kids in college, the mortgage, everyday living, and tax..he simply cant afford it anymore. Of course im furious, because i have to move to a new high school right before my junior year..because we cant live in this town..but my dad seems to be really motivated in getting us back to normal financially wise. I KNOW im writing alot, but i DO have many questions....How long does it take to get out of this crisis? I feel like even if my dads company shoots up...he will never get us back to normal because hes spending all the money on necessaties..and none is really left over for us to save up for a nice house again...because we will be renting a house ffor 3k a month. UGH please explain this to me! And please dont send me some random ad for websites on how to get out of debt...im 16...

Answer 1

Have your Dad write down all the expenses. Everything....rent/mortgage, taxes, food bill, general upkeep on house/apt, utilities, car payments, credit card payments, clothing, school, and any other expenses.

See where the money goes.

Is there room to budget lower on something? Cut down on eating out? Less money on new clothes? Etc.

Tackle all the credit card payments (if any) first.

Freeing up that money could be useful to go towards saving.

It really doesn't happen over night. It could take several months, even years to get finances back to normal after a money crisis.

Be patient. Help out where you can. Conserve on the utility bills by using less water, turning lights out when you leave a room, spending only enough to get the necessities.

Are you currently working?

Can you take on one of the bills? For example, maybe you could be in charge of buying the tooth paste, shampoo, etc.? Is there other family members that can help too?

Sorry that you have to move. It can be very stressful to move, let alone that the money situation has changed. Your Dad is doing the right thing, I'm sure. Stand by him, through thick and thin.

Take this as a learning experience. Look at the good side of things...you'll have new and exciting experiences at your new school. You'll have new neighbors that could be really cool.

Keep your head held high!  

Answer 2

Sorry to be the one to break this to you but it probably won't get better any time soon. The state of the nation is that were are in a recession that all the top financial annalists believe will become a depression. The only thing they don't agree on it how long it will be till the worst of the depression is here. Some say as little as a few months. Anyway, things will be getting much worse before they get better. I don't know what type of business your dad is in but recession proof jobs don't usually make that kind of money. Be thankful that right now you are still better off than most and you do have a responsible working father that will make sure your needs are met.