So I’ve written about the crises that lead to our realization that things need to change. There were a few additional things that urged us along to start to take more action and control of our finances and lives.
First, in the late spring/early summer, our church had a Sermon Series called Money Talks and there were some challenging sermons that really called us to task our our greed (living beyond our means with the constant use of credit cards). The church offered the opportunity to work with a Financial Counselor for a 4-6 month period and we decided that we really were entering full-on crisis, so we applied to the program. After filling out our paperwork, we found that we had a $1,534.84 DEFICIT every month. We had been making up the shortfall by using credit cards, but then our credit card payments would just get higher and higher. We were paying over $2,400/month to service the debt and with our high interest rates, it didn’t look like we were going to be able to get out of debt for over a decade.
So we determined that it was time for us to move and to try to cut $1,500 from our spending (or make more money). Here’s a list of what we did:
- We moved. We went from a wonderfully quiet 2-bd, 2-ba townhouse to a 1-bd, 1-ba bottom-floor apartment (with no door on the bedroom. This saved us $355/month. It’s really loud, and sometimes it takes my husband 10 min to find parking at night (and there is a stack of stuff in the middle of the front room that needs to find a home because we’re out of storage space). But we just couldn’t afford to live where we were anymore.
- I called my phone company. I was sure that we shouldn’t be paying $100/month for our phone and DSL. After calling and asking if there wasn’t a better bundle, I was told that we could be saving $50/month.
- We cancelled our Netflix and Blockbuster Online. We just couldn’t afford the monthly payments of $40/month anymore and we have DirecTV, so we’d just settle for using the movie channels.
- I changed health clubs. I LOVE Curves, but the location I was a member of was over 20 miles away from my house (I live in a very dense urban area, so this is pretty far away) and while I was getting a student discount (from grad school), $25/month is a lot more than the $9/month to go to the Bally’s Fitness that is 2 miles from my house. The hours a better, there is a better chance of me going because it is close and we could save $16/month.
That only brought us down $461, which still wouldn’t make us “balanced” each month.
So, after a tearful conversation with a parent, we were advised that we should file for Bankruptcy.
More on that to come…