I feel totally hopeless here and hoping that I do not get ridiculed by telling my story.
I have student loans (law school and undergrad) totalling $180,000.
I live in California and it took me 4 times to pass the bar. I had a lot of trouble w/ living expenses (no one would hire me b/c overqualified blah blah blah). So, lived off of credit cards. Credit card debt is $20,000.
Car $19,500.00, so monthly payment is $400 or so. I would trade it in but I am upside down big time in negative equity.
I make $70,000.00 but after rent and all my expenses, I seriously have $200 left over (and that is for food and gas).
How in God's name can I ever get out of this hole??? I sure cannot claim bankruptcy with the new code.
I haven't had a good night sleep in about 2 years.
When I graduated from law school, I thought I would get a decent paying legal job and that didn't happen.
I have friends who make way less and live way better than I do. This is really depressing. I don't even own a home nor can I save any money. help!!!! You are not alone in struggling with finances and going too deeply into debt. Your life is not over. You didn't get into debt overnight, and you won't get out of it overnight, but life can still be good, and there is hope for someday being debt-free. I hope that you will find inspiration and help at these sites:
http://www.cheapskatemonthly.com/mary_my...
http://www.daveramsey.com/
http://www.debtorsanonymous.org/
There is a reality t.v. show about people learning to budget and pay off their debt. I think you will benefit from it even though it focuses on couples:
http://www.slice.ca/Shows/ShowsPage.aspx...
You might find further helpful info at these sites:
http://www.bankrate.com/
http://www.crown.org/
Managing finances is just a skill you are still learning to master. Keep trying. As someone once said, "Everything is difficult before it is easy." You'll get there! And then you will be an inspiration to others, as well as being able to show them compassion and true understanding. @$k somonelse but don't do suicide Take a look at prosper.com and think on what they have to offer. It's free to sign up and no obligation to use them. I used them once with success.... and later if you clear your debt you can start to loan to people and make money, Can you do a reorganizational (Chap 13) BK?? Just suck it up, and pay what you can.Sometimes you can get student loans forgiven if you work in impoverished areas, or if you work for legal aid.Just take it one step at a time, try to consolidate your debt.Since you are a lawyer, maybe you can go into the military.officers get yearly bonuses, and you can use those to pay down your debt.Good luck Try www.prosper.com.
maybe you'll get that high paying legal job you've been hoping for. Can you go into private practice, working out of your home? Move away from California. Go where the jobs are, post your resume on monster or some other job posting web site and look for jobs outside of California. The cost of living there is sky high, I don't see how anyone can afford to live there. You need to find ways of reducing your expenses. Can you move in with someone or take a roommate? How about carpooling or using public transportation to get to work? Do you eat out a lot? If so, stop and learn to cook. Do you have cable or satellite? If so, get rid of it. What about your cell phone plan? Can you get a cheaper one? All these little things add up!
When I got divorced, my ex-husband stuck me with a mountain of debts and being the chronically unemployed alcoholic loser that he was, they were all left to me to pay off. What I did first was tally my monthly expenses (minimum payments on everything) and then my income. I reduced expenditures wherever I could and then I came up with a monthly budget for myself, including everything. I choose the bill I owed the least on to zero in on first so whatever I had leftover each month went to that bill. I paid minimums on everything else. When that bill was paid off, I took that payment and applied it to the minimum I was already paying on my next lowest bill and I zeroed in on that bill. When that bill was paid up, I took that monthly payment and applied it to the next lowest bill and so on and so forth until they were all paid off. It took me three years and I had to forego a lot of luxuries, but I did it. You can do it too. PLEASE if you really think comitting suicide will end your problems..it wont..it will just shift them to your family and they will have to deal with closing out all your accounts..reminding them of you and really causing them more hurt on top of your death.
One thing to think about is moving..I used to live in the South.rent is really reasonable and Im sure freeing up some money every month from rent will help. Of course you have to get all your stuff together to move, just sell it all or give it away. Find new stuff on craigslist or freecycle. More expensive things mabey you can give to relatives to hold. I understand your debts, but they are not impossible to pay off. Call the lenders to see if you can work out a smaller payment, Do not trade in your car..the dealer wont give you squat for it. mabey you can refinance with the bank for what you owe on it, or get a better interest rate. My bank actually gave me 2 months of no payments..they just added it to the end of the loan, but it gave me a breather for a couple of months to pay off some other bills. It took a while to for you to get where you are and it will take a while to get out or close to being debt free.
Look for ways to stretch your 200.00 if you are single it should be easier. Get a CVS card, and look for the deals there. at least every month you can get free toothpaste and shampoo and other things with your card. Read about coupons and saving money on food. Really if you are committed you can save thousands a year by shopping sales and using coupons.
It sounds like you have to really sit down and be honest with yourself about your finances. Do not look to others to measure yourself..you never know mabey they have credit up to thier eyeballs and are just trying to show a good face to everyone else.
Read others stories about living debt free, or really really cheap and you will find ways to help. Squeezing out 50.00 a month into savings might not seem a lot but after one year it adds up to 600.00 plus interest.
Just keep plugging away..I was divorced and had over 60,000 in cc debt I moved to a cheaper area, keeping my car till it falls apart and started shopping using coupons and looking for deals on everything from clothing to dog food. And we live pretty well. I think defining pretty will for you will help you..does it mean going out and dropping 100.00 on dinner or just taking a book from the library to the park? Driving everyday to work or taking the bus and a bike and saving on gas. Eating Lunch everyday with Starbucks. or buying your own bread from the bread store and on sale lunch meat and making your own coffee? Start thinking long term instead of just now..if coffee is on sale 2/10 and its regular 9.99 for one then spend the 10.00 and buy two. you have saved 10.00 on coffe for the next few months!! Buy lunch meat on sale, it really freezes well. Check out your sale papers and try to buy only what is on sale. If chicken is on sale then we are eating chicken that week. You will learn that you wont have to pay "Retail" on everthing and realize how overpriced everthing really is.
I hope this helps....remember it takes TIME!! Dont be afraid to look at your finances and make a plan and stay with it..It really is a test of your self control. First of all, if you're really considering suicide get some kind of professional help. It sounds as though you have a job now. That's great. Do whatever you can to make more money. A raise, more hours another job. Now expenses. Need to cut those to the bare bones. The $19,500 car needs to go. Sell it, pay off the loan and if you need a car, get something cheap. Rent? You don't say how much. Can you find a cheaper place? Take in a roommate or move in with somebody else. Can you move back in with Mom and Dad or any other family member. Lifestyle? No idea where you are with that. Do you go out to eat and or drink? Stop both. Not only will you be better off financially but you'll be healthier too. There is an out here. Making $70,000 will help. Making more will help more. But don't throw in the towel. Nothings worth killing yourself over. Take a serious, serious look at what you spend your money on every day. Bet you, with a few minor lifestyle changes, you can start getting ahead.
If you are making $70K, you should be able to pay all your bills, and have something left over.
Here are a few suggestions, (I did most of these, and really got out from under my debt real fast.)
Drop the cell phone contract. Get a good pre-pay phone. Recommend Virgin Mobile, but AT&T is good as well. Do you really need 600 minutes of talktime every month? Talking about $59 a month, versus $100 a year.
Do you drink Starbucks? Bottled water? Stop doing both of them. You will save around $10 a day. That's $300 a month, or $3600 a year.
Buy lunch? Stop that as well. Savings around $10 a day when you are working. Talking around $200 a month here.
What about cable/satellite TV? Do you really need all those premium packages? Doubt it. Get a netflix subscription instead if you love movies. Savings around $20-50 a month.
Internet access? Do you need high speed? Is there a more economical way to get high speed? DSL versus cable of FiOS. Which one suits your wallet best?
Let's talk about food. Do you buy frozen meals? Very expensive for what you get. Try cooking the same thing, you will get more meals, for less money. Same thing with name brand versus store brand. If you find the supermarkets own brand of soup bland, add some garlic and onion powder and it will spark it right up.
Sales are your friends. Do you drink sodas? Some other type of soft drink? Get it in bulk, on sale, and bring it with you when you go out, rather then popping into the convenience store. For what you pay for 2-3 Cokes at 7-11, you can buy a 12 pack on sale.
I did everything above and saved almost $650 a month on expenses. Dedicate that extra $650 a month against the credit card or car debt, and get it paid off. Then use the additional money to pay off the other loans.
Start a savings account.
And, ask yourself why the people you know that make a lot less then you do, have more. Bet the answer is that they do not spend their money on stuff they do not need. First of all, you are going to be ok. If you have a roof over your head and food to eat, you will be ok. I've been pretty damn poor in the past and I've lived in some places that make a hopper bin look like Buckingham Palace. So take a deep breath and go make a coffee.
First of all, you need to look at ALL the debts. Your student debts are long term, so they're probably not a major priority. However, the credit card debt and the car loan are big problems. First of all, check the rates on these loans. Identify which one is the highest RATE, (not balance). The rate of the loan is what is eating your money. A high rate loan eats more money than a low rate one, so you have to clear that one first.
Pay minimums on all your debts, but extra on the debt with the highest rate. On average, credit card minimum repayments are only about 2.5% of the principle (at least in Australia, where I'm from) which means the company makes heaps of money out of you while you feebly try to pay off the principle on the minimum repayments. So pay minimums on the lowest rate debts first, and concentrate on the highest rate debt. Get rid of that one first. This is mathematically the fastest way to get out of your predicament. Dave Ramsay's theory might work for the unmotivated, but it costs more and takes longer. I'm pretty sure you're pretty motivated. When you've cleared that debt, move what you'd be paying onto the next highest rate debt. See if you can transfer some of the higher rate card debt onto a lower rate card, to save some money.
Now, is that $200 weekly or monthly? I don't know your pay rate. I'll go for worst case scenario and say that it's monthly, which means you've got about $40 a week. That's not a lot to work with. You need to cut some expenses from your life. The following is a list of things I suggest, which I'll include, but I'm sure you're probably doing some of these already.
First of all, I recommend that you ALWAYS make your own lunch and take it to work. ALWAYS. Cereal in a plastic container is good, as is sandwiches. I make all my sandwiches on Sunday night, wrap them in cling wrap, and freeze them. Then, I take one out before I go to bed and it's thawed by morning tea. This saves me thousands of dollars. Do not buy lunch, or coffee. If your work has a kettle or a microwave, either use the 'work' coffee and sugar, or take it from home. This will save you big dollars.
Always buy generic brands at the supermarket. Do the supermarket shop on the way home from work. Yeah, it might take longer, but it'll save you an extra trip and the petrol. Always buy bulk packs of everything. Buy basics. Bread, rice, pasta, tinned food, cheese, milk, and shop around for vegetables. They might be cheaper at a greengrocer. Don't buy any preprepared food, no matter how tempting. They will blow your budget. Don't buy any meat, because that's really expensive, and most people eat way too much meat anyway. Accept that some nights you might just have to have a toasted cheese sandwich or some pancakes for tea. No alcohol or cigarettes. They are unnecessary items. Don't buy toilet paper or washing powder at the supermarket. Check out discount stores and buy bulk packs. That saves me heaps.
Go online or to the phone book and look up wholesalers in your area, and factory sales outlets. These can be a good place to buy cheap food.
Cook extra serves of curries, pastas, and fried rice. These are pretty cheap meals, and you can freeze the leftovers either in plastic containers or in plastic bags. This will save you time when you get home because you can either defrost them in the fridge during the day, or in the microwave. You can also take them for lunch at work, if they have a microwave.
Cancel any newspaper or magazine subscriptions. Shop around for a cheaper rate on your utilities. If you don't need it at home for work, consider cutting the internet and landline phone, and just keep your mobile. Only use your mobile when you absolutely need to, because that will save you heaps. Let other people ring you. Cancel any cable television service. That's unnecessary. Do not, under any circumstances, use your credit cards. Leave them at home.
If you're renting a place, see if you can get a flatmate. Do background checks. Request that they provide 3 references and that they pay 4 weeks of their share of the rent up front as bond. Get them to pay a 'surcharge' of about $10 or $15 a week for bills, so if they leave in a big hurry, you can cover some of the bills. If they want the phone on, they can get it in their own name. I suggest looking at University websites and putting an ad in the paper for this. Having a flatmate will cut your utility bills and give you more disposable income to pump into the debts.
Can you grow a small pot of spinach on your porch? A lot of vegies grow well in pots, and this can save you a little money.
You sound as if you're already working pretty hard. Can you take another job? Even a job as a cleaner or in food retail on the weekend will bring in some extra money. Don't include your qualifications on the resume. If you want help writing a cover letter, email me and I'll see if I can help you out.
Now, go through your entire house and look at what you've got. Do you have any furniture like coffee tables, extra chairs, dining settings, bedside tables etc, that you can sell? Do you have any unused appliances or other things that you don't really need? If you've not used stuff in 12 months, you can sell it in the newspaper classifieds. Seriously, even sell your television and DVD player. Sell your bed base and sleep on the mattress on the floor. Sell the toaster and use the griller (that's Aussie speak for broiler) Sell your computer, and your CDs, and anything else you can find. This is far easier than Ebay, and you don't need to mail anything off. Just post one ad at a time (because it will cost you) and wait. When you sell something, use some of the money to set up another ad, and pay the rest off your highest rate loan.
In the meantime, don't buy any new clothes or any other consumer goods. All you need to spend on is food and petrol. Consider getting someone to car pool with. If someone is paying for public transport to get to work, and they live on your way to work, it might be feasible to car pool. You drive them, and they pay you petrol money. That will subsidise your fuel costs.
Don't worry about saving. If you're in debt, you can't save, because your priority is to clear the debt. So if you have any 'savings', use that to get rid of the highest rate debt.
You can get out of this, but it'll take a while and you'll have to be pretty frugal. Just focus on one step at a time. Make that highest rate debt the first step and just concentrate on that. Changing one thing in your life will effect everything else. Even just lowering the amount outstanding on the highest rate debt will make your 'minimum repayment' for that debt lower, so if you get a bad week, you'll be able to cope a little better. This is going to take a long time. I think you need some support. I'm not a Christian, but I suggest perhaps going to church or another community group to get some emotional support there. I know it's hard, but bankruptcy wouldn't fix anything. I work with an ex bankrupt and she's still making the same ridiculous mistakes that got her in her previous mess. You, on the other hand, are at a point where you can change your life for the better forever. It'll take time, and it won't be easy, but you can do it. If you're really down, send me an email. It really helps to talk about stuff.
Best wishes I attended Dave Ramsey's Financial Peace workshop a few years ago at my church, and it really works! Dave is the real deal - not a scam or anything misleading. His Debt Snoball is the best way to get out of debt and get control of you money. He also has a very encouraging Podcast in iTunes. See:
http://www.daveramsey.com/etc/cms/baby_s...
Get out of debt the same way you learned to walk, one step at a time. Dave has taught these principles to millions via radio, books, Financial Peace University, LIVE events, and online:
$1,000 to start an Emergency Fund
Pay off all debt using the Debt Snowball Sell everything. Use eBay and Craigslist to sell as much as you can - furniture, CDs, DVDs, TV. Maybe keep the computer if you don't have easy access to a library. Have a yard sale and even sell the cleaning chemicals under the sink (there's really not a lot of things that can't be cleaned with baking soda and vinegar, honestly, plus you won't have much to clean after you sell everything!). Most people have more clothes than they need - pick out the clothes that you have that mix and match the best, sell everything else to a consignment shop.
Once you're down to minimum furniture (really, you probably just need a bed, a kitchen table to eat at, and maybe a desk for the computer), shop around for a cheaper apartment. Since you've got a lot less stuff, you can afford to live someplace really small.
Take all the money you make from selling everything and put it toward your car loan. Put the money you're saving from living in a cheaper apartment toward your car loan as well. Search online for "frugal living" and learn how to spend less on food. Walk everywhere you can - if it's within five miles, walk, don't drive. Put as much money toward your car loan as possible. Live like that until you're not upside down in your car loan any longer. Once you've paid it down enough, sell it and buy a junker.
Keep going like this. I know, it sounds horrible. But please, please, please understand that suicide is a worse option. Living like a poor college student for about a year is not the end of the world. Take up some free or really cheap hobbies to occupy your time, and you'll feel better about it.
There's a great support system for people in your situation, called the "debt blogosphere." It's a collection of people who, just like you, faced overwhelming debt. They decided to handle it by writing about it on the internet, and have kept writing as they learned to handle their finances and get out of debt. A great example of this can be found at http://www.bloggingawaydebt.com
Another great blog to check out is http://www.thesimpledollar.com - not only did the writer (Trent) completely turn his life around after a financial meltdown, he really knows his stuff and writes a lot of great articles (sometimes up to five a day!).
Please, do not give up. It all sounds really hard, but it will be worth it when you start to see your debt eliminated and your financial life turned around. Remember - it's only money. But it's time to stop letting it control you, and learn to control it. |
