Friday, April 9, 2010

Catch Up and Keep Up

When I worked for Neighboring City, my office had just had a Housing Needs Assessment done, particularly focusing on supply and demand of housing that was affordable to households earning 80% or less of the area median income.  One of the things the consultant who conducted the needs assessment created was a schedule to catch up the housing stock needed at certain price points (with which the city was to incent developers to create) as well as keep up with projected demands based on industries that were growing, etc.

It was scintillating reading.  Or maybe scintillating is in the eye of the beholder.

All of that to say I'm in need of a lot of catching up and keeping up myself.

Household chore wise - ha!  I've never gotten to where I feel "caught up" for very long, much less kept it up for any period of time.  Suffice to say with me being sick last week, and the kids having been out of school, that things are bit behind right now, and I'm slowly digging out.

Financially - this is the hard, gut-wrenching part for us. 

We've been in a constant struggle for just at a year now and it's wearing.  A year ago, I was just about to have Christopher and Seth's work had been through a slow spell which left us juggling a bit.  Then we had Chris, Seth took one week of unpaid leave, and two weeks later, I had my 12 day stint at the hospital.  Well, then we were REALLY strapped, and that was just with our regular bills. 

The medical debt hadn't started to hit yet.

Our church helped substantially, which helped us steady ourselves and gain some composure.  We submitted a claim to AFLAC for both the birth and my subsequent hospitalization.

But, as things trickled in, as it took several months for all of the medical bills to make themselves known, it became clear that it wasn't enough.  We called several of the first creditors we had and tried to make payment arrangements as best we could.  Some wanted their money in total by 4 months, others would spread it out a year, and so on.  But we didn't end up calling all of our creditors and making payment arrangements, because quite honestly, there was no more money in the month to give in the way of payment installments.

In October, we used Seth's annual bonus to catch things up, both domestic and medical.

By November, we needed help again, and we borrowed against Seth's 401k plan.  We paid my surgical bill off completely and once again caught up on the priority bills; mortgage, car, doctors, insurance.

We hadn't made a payment on our Home Depot account in quite some time, and those medical creditors with whom we'd never made payment arrangements sent us to collections.  But what could I tell them, "Gee, I know we owe you money, but we have to pay this stuff down before we can pay you because we just don't have it right now?"  Yeah, that's gonna go over well.  And, as soon as those things wound up in collections, we got a note from our auto insurance that basically said,
Since your credit now sucks balls, we're afraid you're not going to pay us 1.) in a timely fashion or 2.) ever again.  Therefore, your monthly payment is going UP $40/month because we believe in the tool known as the self-fulfilling prophecy.  Good day!

We attempted Christmas gifts for everyone - mostly on the cheap and homemade end - but perhaps we shouldn't have.

Because at this time, we got behind on our mortgage for the first time in all of this, and then everything has seemed to spiral out since. 

Our [sizable] tax refund came and went - going to tie up medical debts (paid off my OBGYN, paid off the hospital, paid off some other doctor's fees), a large payment to Home Depot (they'd made an offer to us of making a "matching payment" on our account if we could pay $x), two mortgage payments, utility catch up, etc.

I started talking to our mortgage lender about a modification and have been working on getting all of the documentation together for it. 

And putting numbers down on the paper, I now see why we haven't been able to stay afloat:  We have more expenses than income.  And by quite a lot.

It's hard, because now we're to the point of looking at another 401k loan, to catch up.  And the AFLAC claim hadn't paid out properly, so we're waiting on a copy of my surgical report to send to them, which will trigger an additional payment to us.

To keep up we're hoping the mortgage loan modification goes through and that we'll be able to allocate some of what was going to the mortgage amount to our medical debts and eventually pay them off. 

Our health insurance premium is going up another $100/month due to "increased costs in healthcare overall."

It just sucks. 

My husband works his tail off to provide for us, 50+ hours a week of physically and mentally demanding work - and he makes decent enough money.  I cut costs where ever possible, and we do not live an extravagant lifestyle.  I mean, I've taken to baking our breads (including hamburger buns) and making our own laundry detergent to pinch pennies!  And yet we struggle through.  We're not "poor" enough to be eligible for any kind of assistance (though I just discovered we may be eligible to get the kids on a state health care program, which could decrease our health premium - which is killing us, but you can't not have insurance these days) and yet we certainly aren't rich by any stretch of the word.

We have some toys, the motocross bikes and gear, that if worse came to worse, could probably be sold, though the "cost" of my kids and husband losing their main recreational outlet would be pretty large.  But really, there's not a lot to just liquidate of value around our house.  Our computer is old.  Our TV, though a flat screen and of decent size, is dated (it's 4 yrs old now I think) and not competitive with what is available at the big-box stores.

What do y'all do to cut costs?

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  1. First *HUGS* this year has been NUTS! I am so sorry you have had to go through all this... Hopefully the light is at the end of the tunnel.

    I cut costs substantially by doing ONCE A MONTH COOKING... believe it or not... it saves upwords of $100+ a month depending on the family size. You plan, you shop in bulk and you use and freeze. Its awesome.

    (ROTFL the word verification is xessiv LOL... trying not to be... thanks ;))

  2. This may sound crazy, but I have noticed significant savings on our electric bill. I run the dishwasher (totally full, of course,) and then when it gets to the 'dry' cycle i open the door and let them air dry. Honestly, my bill was NOTICEABLY LESS. Maybe $30/month? (Granted, I'm a hag about lights, chargers, etc. but still!)

  3. yuk yuk Heather! Downsizing cars? Selling a good one to get rid of a payment and then buying super cheap with the $$ from sold vehicle and using the extra? I noticed a HUGE difference for us once we got rid of our car payments. I can not and could not (then or now) afford another payment, so I drove old and cheap and used the "payment" for savings for a new (used)car after a few years.

  4. @Eisley - problem with getting started on once a month cooking is having the cash to buy that big bulk purchase right now - otherwise, yes, I have done it before.

    @Headless Mom - we have a button on our dw that tells it to air dry instead of heat dry. It gets pushed, lol.

    @Kristin - my car is 14 yrs old and is paid free and clear. Thankfully we know someone who maintains it in great shape, despite cosmetic appearances, for no cost ;) Our truck, however, has more loan than value at this time - we know as Seth looked into getting out of it already :(

    I tried to to sell him on getting rid of cable, but that is not a popular idea right now. we're also contemplating the whole magic jack phone thing too. but that's maybe gonna free up a total of $100/month, not 10x that amount.

  5. Has Seth changed his tax withholdings? This may be something that you have already done but since you did have a sizeable refund, it may be helpful to her that back in a paycheck instead of all at once. Of course your refund may have been because of your huge med bills too... You would also have to factor in the 10 percent penalty on401 k withdrawal Most plans also withhold a 20 percent on taxes but I believe you can request that they just withhold the penalty if your taxable income will be similar. I think you can search for withholding calculators on the Internet an run some different scenerios. I admire you guys for sticking with this. I know it has to be very stressful.

  6. @ Shellie, we DO need to update Seth's withholdings - so maybe that will help. Mostly the tax return was so big because of medical bills and my lia sophia business (more expense than income at this point).
    As for the 401k - it's not a withdrawal (we definitely couldn't afford the penalty!) but rather a loan against a portion of his 401k. It's a 3%interest loan and paid back via payroll deduction straight from the employer to the loan company for 5 years. It hasn't been too bad so far.

  7. I'm here from Soliloquy's place, and I feel your pain. Literally. My husband got a devestating medical diagnosis last year which is killing us. And this on top of dd #2's heart murmur, which already gave us tons of medical bills.

    I can tell you that Magic Jack works - we now have it. I get DSL from the phone company (even without a phone line) for $20/month.

    Do you have Angel Food Ministries in your area? Cheap groceries.

    Is one car an option? Or how about pizza delivery at night? Not ideal, I know, but drivers can make a lot more than you'd think. Dave Ramsey recommends it for a second job for people struggling.

    What can you sell on ebay? Yard sale? Craigslist?

    Any skills you could use - sewing, for example? Tutoring, piano lessons, cleaning houses...

    A few things off the top of my head. I hope things turn around for you!