Thursday, May 30, 2013

Hitting Rock Bottom

Hello all my blogging friends. I know it's been quite a while since I've checked in here. Life has thrown us a few curve balls in the last couple of months, and I really haven't had much time to check in with all my friends. It's something I've sorely missed! (And need to get back into!)

Today I'm not going to go into the in-s and out-s of what's been going on, because I honestly don't want to come across as whining or being ungrateful. I'm counting my blessings daily and trying to keep on keeping on. Today's post is honestly me reaching out to you my friends for some advice. It's times like these that I appreciate and love even more the community of bloggers that we belong to. You have such a network of people to draw from in times of need!

First of all I want you all to know that any and all comments, advice are welcome. I'm honestly at a point where there can be no bad advice. So here's the question. How to recover when you've hit rock bottom financially?

Let me first give you some background on us so you know where we're coming from. When Eric and I first got married six and a half years ago, I had some debt that I was managing, but quickly it got out of control. We could blame this on several factors, but what it all boils down to is that we were irresponsible with our money. We were young and in love, and made some horrible choices. When we first got married, Eric was paying on some payday loans, that we let go on for about two years, living off of them so to speak. It finally got to a point that we decided to suck it up and pay them off, and I'm glad we did! The sense of relief was awesome!

Then two months later, Eric lost his job. We were totally blindsided and had nothing in reserve. We spent a year and a half living on unemployment and food stamps, looking for work. We ended up having to move back to Utah with my parents (a tad humiliating) and look for a job.

Fast forward to feb of this year. Our landlord told us he wasn't renewing our lease because he had family that needed our apartment. We once again had nothing in reserve, and we were barely scraping by as it was. We ended up having to live with friends for a couple of months, and now with my parents once again. (If it was humiliating before, it's completely embarassing now...)

So here it is. Eric has a job that pays about $11.75/hour with benefits and a 401K. He's been there a year and a half, and it's looking steady. We don't have a car payment because we bought a car outright. We do have car repairs come up every once in a while. Our insurance is paid through his work, so we do't have to worry about that. We have no credit cards, because everything is in collections. We've had two cars repossessed, and both he and I have student loans. Our credit is so bad we couldn't finance a can of peas if we tried.

We are completely horrible with our finances. We have hit rock bottom because of this. We get paid on a Friday, and by Sunday night it's gone. (I honestly think our biggest problem is that right there, we go for so long with literally no money that when we do have $$ again we just go crazy and spend it!)

I'm sick and tired of this. I think it could all be fixed with willpower, but I honestly don't know where to start to get things fixed. My question to you readers is this. How do you recover from rock bottom with your finances? How to apply willpower and budgeting? What has worked for you in your financial life? What hasn't worked? What luxuries do you allow yourself when creating a budget? How do you keep from overspending?

Please give me all comments and suggestions you can think of. I need a jumping off point so we can get some momentum to get things turned around.



Missy Shay said...

The easiest way that has worked for me is the envelope system. You take your bills and (we get pd twice a month) so I divide the bills up for which pay period comes first. I write on the outside of the envelope how much is due when and when you get pd you put that money in the envelope. You also make envelopes for everything, from gas, food, to allowances for you and your husband as well as the kids and when that money is, it's gone.You can not "borrow" from envelopes either. As far as loans and cc bills and stuff go, pay off the lowest bills first so you feel like you have accomplished something. I hope this helps!

Susan Dougill said...

I'm not fantastic witb money myself but I was given some brilliant advice from someone who was brilliant with money. Sit down work out what you need for what. As Missy said put this into envelopes. Then have 2 envelopes or accounts. One for emergencies and one for saving. Then if you have anything left that is yours for the week for treats.

Tiffany said...

Hey, kudos to you for acknowledging your situation, and making a resolve to improve it! There's no shame in that...
One fantastic option that is likely available to in your local area is the United Way. I know that one of their core programs involves helping low income, working families out of financial crisis. They have financial education programs where they work one on one with families to develop strategies for reducing debt and expense, increase income and savings, and provide access to lower cost goods and services. Overall the goal is to help families become independent, building savings and gaining assets.
I wish you luck!

More Than A Mom said...

I read a few books by experts. I found Suzy Ormand's "Women and Money" has a very coherent way to organize not just your money but also planning for the future (savings, loan repayment, will preparation, etc.). I like it that she sets out a plan and prioritizes it for you. I did this when I was very stressed about money and now we only have our mortgage and the car payment left after following her advice (we had 5 student loans and a large line of credit owing!).
You can get her book from the local library at no cost to you. Best of luck to you.

Adelina Priddis said...

I haven't been by in awhile, so just seeing this! How are you doing now?
I'll let you know we are right there too. Changing careers because of job loss, hoping we have one now, but it means moving and we just bought our house, and the market here is not moving!! We've talked if moving in with my parents, but have decided to try and rent and make house payments....
I've been reading and listening to a lot if Dave Ramsay stuff. I would suggest starting with him to get your finances in order