How to rebuild?

[greggsewell]

I'm 54 -- actually, 55 in a few days -- and have had a rough few years. The summary: Divorce drained me, I lost my job, got really sick, and was out of work for almost exactly twelve months.

I have a new job now, since September of 2007, but no savings -- and I mean zero. Don't even have a savings account. My alimony payments to my ex are approximately 29% of my take-home pay. My debt (credit cards) is 20% of my take-home pay.

Any advice you can give to an oldster who never thought this is where he'd end up will be much appreciated.

This looks like a lively forum. I look forward to learning from you all.

peace,

gregg

[Will]

Welcome to the forum Gregg.

Your story reminds me of my favorite scene from City Slickers.

Phil (who is getting divorced due to committing adultery): I'm at a dead end. I'm almost 40 years old. I've wasted my life.

Mitch: Yeah, but now you got a chance to start over. You know? Phil, remember when we were kids? And we'd be playing ball and the ball would get stuck up in a tree? And we'd yell "Do over!" Huh?

Phil: Yeah?

Mitch: Your life is a "do over". You got a clean slate.

Some people I know who are in severe debt situations stop living their lives. They just literally give up. They stop hanging out with friends, they stop nurturing their hobbies, and they stop building relationships with people. I think those people put their lives in that static field partially because they feel like they need to punish themselves for getting into so much debt.

The people I know who successfully overcame tremendous personal debt problems usually take the opposite approach. They think of their lives as a "do over." They live a lot more frugally and they might pick up an additional job or two. But they don't stop living. They tackle the problem head on but they don't punish themselves. They still hang out with their friends, they still tend to their hobbies, they still fall in love and get married.

You seem to fit into the second group. To say you've gone through a lot is an understatement. But the fact that you are slowly getting back on track and reaching out to other people is a great sign. I hope our community can give you some useful advice and lots of moral support.

[windsurf18]

Calling it a do over is a positive way to look at it. Having another chance at excellence: "Doing the best you can, with what you have, in the time available". It really helps to write down goals, visualize your life the way you want it to be, and identify "why" you want the things you are working for. Knowing WHY helps move you past quitting points, and is the light at the end of the tunnel, when things get tough. Happy New Year and good luck!

[Julie Rains]

I'll throw out a few ideas in addition to paying off the cc debt, unless it is at a really low interest rate, in which case I would invest and pay off debt simultaneously. Right now, after everything that has gone on and a new job, you might not want to dive into a second job or side business. But in a year or so, it might be helpful to generate extra income for investments and debt reduction. You might also consider what you plan to do when you become of retirement age (65); perhaps keep working at your current job. Or perhaps you could find a fun, albeit lower paying, job that you could work in for a while that supplements whatever retirement income you might have (social security, pension?), and preferably in a place with a low cost of living and relatively inexpensive housing.

[greggsewell]

Wow. Thank you all for your positive encouragement. It means a lot to me. I'll certainly try to take your advice.

But if you could give me a bit more specific advice about how to go about eliminating my debt while beginning to save, I'd be grateful. I'm such a dummy when it comes to finances.

Thank you,

Gregg

[arcadian]

here's a thread where people shared successful strategies for battling consumer debt. that might be helpful.

in that thread linsey mentioned getting help from a church association. is that an option for you?

When I met my now hubby, he encouraged me to enroll in a debt consolidation program from our church association. He was also in the same program with $25,000 in debt from a failed business. Together we paid off over $55,000 in less than five years! With many of our cards at an original interest rate of over 24 percent, the program was able to reduce to 0 percent in some instances. Every time we got a large income tax refund, we would put it directly towards out debt, enabling us to repay the entire debt years earlier than anticipated.

[laura]

Hi Gregg,

I am being honest. I dont know how it would feel after experiencing what you have because I am 24 and still have a long way to go. What you can do in this case is try and find out ways to earn something extra. This extra can be saved.

For your target your savings should be six months of your monthly income. Now you guys can discuss what possibilities are there to get some extra money. So....... all the best.

[Julie Rains]

There has been much discussion on Wise Bread about asking for lower credit card rates; you can call your cc company and ask. You could also consider doing a balance transfer with teaser rates and before they expire, find new/low teaser rates; this could be dangerous though if you aren't able to continue with low rates. But the lower the rate, the quicker you can pay off those balances. Money saving ideas to free up cash are in the Frugal Living section and great grocery saving ideas are here in the forum.

[mulungu]

Hi,

saving Money could be easy. If you earn 100 save 20 If you earn 1000 save 200. Never spend more than you earn.
I think the main problem is the mess in the head (zenhabits.net helped me out of this and brought me right here) . I would even go to sombody else who can give me a different view point on my own situation. I think this would help me to follow the advices written before. And dont forget you social live, even seeing a lot of nice people here in the place A good friend or girlfriend is able to lend you the cool brain and the warm heart which use to be lost in this kind of a situations. A asking the questin here or somewhere else show the most important thing of all, you are willing to change the situation.
I´ve lost a business and a lot more in the last 4 years and and the most important thing was that my laywer told me he saw a lot of people giving up in this situation. So, please sorry for writing "nonspecific" but it helps me and i hope it help you.. a little bit.

[khorrell]

Hi Gregg,

I was just reading through some older posts and came across yours. I hope that you still feeling hopeful. It sounds like you've had a rough time lately.

I don't want to be too basic, but you did ask for specifics. Here's what I would suggest:

1. Write down every cent you spend
2. Make a list of everything you owe, including the amount and the interest rate. Hang it up somewhere obvious (bathroom mirror, next to the computer, ??)
3. If your health and other job allow it, consider a second job for a bit. This would allow you to get that savings started.
4. Yes, call your creditors. It doesn't cost anything to ask for lower rates. Do this with other bills as well - telephone, internet, cable television. Or consider if you can live without those other utilities for a while. It may sound hard but with the right attitude you can do it.
5. I don't know anything about your situation, and this is a touchy subject, but you might consider whether you want to/need to/can appeal the alimony situation. I hope I haven't offended you, but it is a huge expense and only you know whether it is right/appropriate/etc.

Best of luck to you!