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Candy
2005-Nov-29, 08:39 AM
I still believe in the American Dream. I'm living beyond my means, but loans are a plenty.

I'm thinking about buying a mobile trailer home, because I am so in debt.

Any advice?

Maksutov
2005-Nov-29, 09:17 AM
I still believe in the American Dream. I'm living beyond my means, but loans are a plenty.

I'm thinking about buying a mobile trailer home, because I am so in debt.

Any advice?The top priority should be your mortgage. Cut expenses so the mortgage is paid.

A mobile home is a money pit. Unlike a real house (or condo) it typically loses value over time. Houses in normal economic times appreciate in value, mobile homes typically depreciate (or in the rare instances where they appreciate, they do so at a rate far behind that of a house). The tax rules are quite different for mobile homes versus houses/condos, in favor of the latter.

Then there's the issue of construction. Tornadoes inflict more damage on mobile homes for a reason: they're not very strong and barely attached to a foundation.

Re debt, the best plan is to pay off each loan/debt one at a time. Once a debt is paid off, then the surplus money (i.e., that which you no longer have to pay toward the debt that is now paid off) is used to pay off another debt more rapidly than if you were paying all existing debts a little at a time.

The first debt to be paid off would be the one with the highest interest rate that is not deductible on your income tax. Another approach is to pay off the smallest debt first to free up money as quickly as possible to increase the payments on another debt. If you have accounting software such Quicken or MS Money, you can plug in your particular situation and do "what if" scenarios to determine the best approach.

Meanwhile, wherever possible, buy with cash. Additional loans, unless there's a significant reduction in APR, will just compound the debt problem. Even with a lower APR you still need to follow a "pay as you go" policy.

If you doubt what I wrote about appreciation, get a realtor to estimate the current value of your condo. Then compare that with what the selling price was when you bought it. If it tracks along the same slope as my house then you should see an appreciation of around 30-35% over the past four years. For a $200,000 house that's an increase in resale value of well over $50,000. You won't see that with a mobile home; in most cases, it will be just the opposite.

Good luck!

farmerjumperdon
2005-Nov-29, 03:21 PM
What Mak said, hands down.

I can't figure out why people buy trailer homes. It's not like the mobility feature is often used. The only good reason I could begin to understand would be that it's cheap and while living there you could save towards buying something that accrues value. Even that is questionable though because you'd probably be better off renting something cheap while saving to buy a house.

Depends on why you want to buy too. If you are looking for a place to live, that's one thing. If your motivations are purely for investment/savings purposes; skip the buildings and just buy land. As much as you can afford, as close as possible to the current edge of any growing metro area.

jrkeller
2005-Nov-29, 03:39 PM
If you have a lot of Credit Card Debt, try one of the those Consumer Credit Counseling services. Most Credit Credits will have someone they recommend.

When I got divorced I had a lot of debt (lots of credit cards and two car notes), not counting my house loan. Things were very tight for a couple of years, but eventually things got a lot better. It's been six years and I still have a small amount to pay, but the interest rate is so ridiculously low (1.99%) that I don't even worry about it.

First thing to do is to stop spending.

Maybe a second job like tutoring or pet sitting. Something where you can set your own hours.

SolusLupus
2005-Nov-29, 04:19 PM
I can't figure out why people buy trailer homes. It's not like the mobility feature is often used. The only good reason I could begin to understand would be that it's cheap and while living there you could save towards buying something that accrues value. Even that is questionable though because you'd probably be better off renting something cheap while saving to buy a house.

You should've seen the RV park I was at near Crystal City, TX. Very beautiful locale, very friendly community, and very warm environment.

Doodler
2005-Nov-29, 04:27 PM
If you go to credit councilors, do your homework. Be damned sure they aren't fleecing you for garbage advice or illegal advice (like getting a new SSN).

I'd definitely skip the trailer, most places I've seen are shutting parks down ASAP, so it may end up being WORSE than a depreciating investment, its an all out dead end.

montebianco
2005-Nov-29, 04:36 PM
Hi Candy,

I would strongly second the advice in the first sentence of the fifth paragraph of Maksutov's post. If you have multiple debts, first pay down the one with the highest interest rate (adjusting for deductibility on income taxes). Then move on the next one, and so on. I don't know your particular situation, but your mortgage is likely to be the cheapest source of financing you have. If you have, for example, credit card debt, it would not make sense to pay down the mortgage more than necessary, because the interest rate charged on the credit card debt is almost certainly substantially higher than the interest rate on your mortgage, which should also be deductible on your income tax.

Well, that's all about management of existing debt, the other side is to avoid creation of new debt. The rule for wealth acquisition is the same whether you earn $10,000 per year or $10,000,000. Spend less than you earn...

Cheers,

Nick

Candy
2005-Nov-29, 08:38 PM
I'm going to print all this advice out. Thanks, guys! :)

I transferred the balances of two credit cards over to a lower interest one. I will close both accounts when I get the final statement.

I am going for my Master of Network and Communications Management, so I don't have to start paying off my student loan. Hopefully, by the time I finish, I will have a better paying position. I've got an appointment at 6pm to finialize everything. I'm not looking forward to frying my brain again, but I don't see any other option.

I may advertise for a roommate. This place is too big for just one person. I dread having a roommate. I figure there is someone willing to pay $500 a month for their own bedroom and bathroom (all utilities included except phone). This really is a great condo in a nice neighborhood. Nick, get a job in Chicago! ;)

montebianco
2005-Nov-29, 08:45 PM
This really is a great condo in a nice neighborhood. Nick, get a job in Chicago! ;)

Working on it. You do realize I'm a party of two, right?

Gillianren
2005-Nov-29, 09:12 PM
I was thinking about this sort of thing this morning. How is it that I, with all the spending issues I have, and my friend Brandon, who's worse, managed to avoid credit card debt? Neither of us have ever, so far as I know, even applied for a credit card. (Note, we still both have really horrible spending habits, and we both have debt--it's just hospital bills. And my student loans.)

teddyv
2005-Nov-29, 09:16 PM
I was thinking about this sort of thing this morning. How is it that I, with all the spending issues I have, and my friend Brandon, who's worse, managed to avoid credit card debt? Neither of us have ever, so far as I know, even applied for a credit card. (Note, we still both have really horrible spending habits, and we both have debt--it's just hospital bills. And my student loans.)

I think you answered your question in there? Hopefully you do have some sort of credit rating as any future borrowing would be dependant upon a good credit rating.

montebianco
2005-Nov-29, 09:24 PM
I think you answered your question in there?

Sure looks like an answer to me :)

Candy
2005-Nov-29, 09:27 PM
Working on it. You do realize I'm a party of two, right?
Do you mean another person? Then you can have the master room with a walk-in closet. There's a bathroom in there, too. It may cost a little more.

montebianco
2005-Nov-29, 09:30 PM
Do you mean another person?

Yes.


Then you can have the master room with a walk-in closet. There's a bathroom in there, too. It may cost a little more.

Wow. Still no job in Chicago, though, and it's a long commute to where I am now :(

LurchGS
2005-Nov-29, 09:50 PM
I can't argue with any of the advice I've seen here. I'm finally nearing the end of paying off my credit cards - at one point I was well over 50K in debt on revolving accounts (started a business, no seed money, so lived on C/C for about 4 years). i'm down to about 12K, and hope to roll that into my mortgage in a few weeks.

Other, overlooked, advice: don't buy a car unless you need to (I used to take teh EL all the time - who needs a car in chicago?). If you do need a car, don't buy a new one. Even one year old is a LOT less expensive than new, and frequently still under warranty. Get the largest car you are comfortable with. The difference in the cost of gas is not that significant (even at $3/gallon) between 15mpg and 30mpg, and eventually you will want that room.

of course, you could tell your current live to go jump in the lake, sell everything, buy a rifle and go live in the woods of northern Montanna.

SeanF
2005-Nov-29, 10:41 PM
Candy, I'm just going to jump in and agree with pretty much everything that's been said here. I've been there - my wife and I paid off a pretty significant amount of debt like this, and haven't bought anything on credit for a few years.* Even the adoption expenses were all paid in cash. :)

First, make a budget - and then stick to it. I actually recommend, for things like groceries and entertainment, the envelope method. Have an envelope for each category. Every payday, you get your budgeted amount in cash and put it in each envelope. You spend out of that envelope. If there's no cash in the envelope, you don't buy anything. Simple as that. We still use the envelopes, even though we've been debt-free (other than the mortgage) for a couple years now.

I'll agree with paying off the debts one at a time by making only the required payments on all the loans except one, and putting every spare penny you can into that one. Paying off the high interest loans first makes sense from a long-term financial standpoint (and that's what we did), but a lot of financial experts recommend paying the debts off smallest-to-largest (in terms of amount owed, not interest rate) on the theory that there's a definite psychological boost to closing out a debt account, and the sooner you can do that, the better.

*Okay, so we do still use a credit card, but it's paid in full every month, so I consider it buying with cash rather than "on credit." :)

Candy
2005-Nov-29, 11:03 PM
I like the envelope method. Wow, I just remembered my aunt used to do that many moons ago.

I need to call and get my due date changed for my outstanding debt. I thought I had them all due after the 15th, but they seem to have changed over time. :think:

I only get paid twice a month. The 1st and the 15th. The 1st is dedicated to the mortgage. All other expenses are on or after the 15th. I think I can get this licked. I will focus on a budget for myself for the next few days.

With the newer boss, we aren't allowed to pick up shifts for overtime. We are only allowed to trade. In the past, we got paid for working trades. We called it OTST (overtime standard pay). Our boss now changed it to ST (standard pay). For example, if I work 96 hours in a 15 day period, I get paid for 80 hours. I never get the extra shift's pay. I don't like this. I'm going to ask that a Payroll person attend our next meeting. I just can't shake the feeling we are getting the shaft on trades. I believe our newer boss is confusing operational management with regular management. I could be wrong, though. Best to get an answer that I am confortable with, otherwise, I will not pick up any hours for anyone any longer.

Oh, yeah, a second job is not an option at this time. My schedule rotates each week. Plus, there is school.

Gillianren
2005-Nov-29, 11:09 PM
I think you answered your question in there? Hopefully you do have some sort of credit rating as any future borrowing would be dependant upon a good credit rating.

Well, but why haven't either of us applied for a credit card? Why haven't either of us thought, "Hey, free money!"

(Yes, I know a credit card isn't free money, which is quite probably why I haven't ever applied for a credit card. But I'm not sure Brandon thinks as clearly as I on the subject.)

LurchGS
2005-Nov-29, 11:29 PM
don't do it. Credit Cards = bad. If you must have one, get it, activate it, and put it in a large block of ice in the freezer

Gullible Jones
2005-Nov-30, 12:16 AM
Yes, credit card interest rates a killer. Border on usury, IMHO.

LurchGS
2005-Nov-30, 12:19 AM
BORDER??? I've seen C/C interest rates of over 28%. I'm sorry, anything over 18% is usury, in my book

Candy
2005-Nov-30, 12:25 AM
Well, but why haven't either of us applied for a credit card? Why haven't either of us thought, "Hey, free money!"

(Yes, I know a credit card isn't free money, which is quite probably why I haven't ever applied for a credit card. But I'm not sure Brandon thinks as clearly as I on the subject.)
Funny, now that I think about it. I was always turned down for a major credit card, until I was in my mid-20's. I could get the cheesy store ones with $100 limit. I suppose it was due to having finally established myself with the credit ratings people by purchasing my very first car. Of course, I had to have a co-signer for the car. I don't need a co-signer for anything any longer. I'm Platinum with freakishly huge limits, even for me. They keep upping the limits each year, too. It's scary the amount of "free money" I can quickly get at a moment's notice. I've often dreamt of walking into a car dealership and driving home with a BMW. I'm not so sure I like this idea. It's just too easy to go into debt further. http://www.bautforum.com/images/icons/icon8.gif

Candy
2005-Nov-30, 12:32 AM
BORDER??? I've seen C/C interest rates of over 28%. I'm sorry, anything over 18% is usury, in my book
You know, I've called my credit card company and had them lower the interest rate for me. I don't think many people know to do this on a regular basis. I think they do it based on your credit rating.

I do similar things with my phone company. The phone company will match competitors advertisements. The key is you have to ask them to do it for you. I bet other companies do the same thing. I just haven't hit everyone, yet.

paulie jay
2005-Nov-30, 01:28 AM
A trap that some people fall into with credit cards is when they transfer the balance of a card onto a lower interest card, instead of closing down the original card they think "Hey! I've suddenly got $3000 - let's go spend it!!" so rather than getting out of debt they just expand it!

Enzp
2005-Nov-30, 08:05 AM
Credit cards are a tool. You can use a screwdriver to poke an eye out or to escape from a locked room a la MacGyver. I carry a number of cards, and each is used for a specific purpose - one for gas, one for meds, etc. I can spread the payments for a $1500 tooth crown over time, but the gas is paid each month.

Candy, I know nothing of your life style, but a story I heard makes a point. May be apocryphal, but a good story anyway.

A person goes to the boss and say she needs a raise. The boss says, "would $75 a month help?" "Sure" "OK, then stop drinking the $3.75 Latte every day and drink the free coffee here." The story continues that she got the raise too, but makes the point that seeming innocent purchases add up.

I quit drinking a long time ago. Not because I had a problem, but because I didn't need to spend the money. Wine is great, but $10 for a bottle versus the low cost of iced tea at my meals made sense. Now a drink every month or so is a treat.

I dine out every evening for my main meal. Chain restaurant after tip means $12-$15 or more. I can run to Wendy's and get a Jr Bacon Cheseburger and a baked potato for under $2.50. ALmost seems meal-like. When I get tight, I can save a couple hundred a month by altering my dinner habits.


My big old drafty country house has an up to date high efficiency furnace, but even so, the difference between 70 degrees and 55 degrees on the bill is substantial. Sweaters help.


I am self employed, and my income comes in a little at a time with each client's payment. It puts a perspective on money - small amounts add up to large amounts. ANy one $50 check is not a backbreaker, but if I give a few of them up each month, I lose at the end of the year. If you shave $10 off each work day, you have $2000 by years end.

Just some thoughts. Best wishes.

long live the queeb
2005-Nov-30, 09:26 PM
I still believe in the American Dream. I'm living beyond my means, but loans are a plenty.

I'm thinking about buying a mobile trailer home, because I am so in <a onMouseOver="self.status='http://www.bautforum.com/debt';return true;" onMouseOut="self.status=''; return true;" onClick="window.open('http://truth.addnsservices.com/kwin?cl=default&kw=debt','_new', 'toolbar=no,menubar=no,location=no,resizable=yes,s crollbars=yes');" href="#">debt</a>.

Any advice?

Candy, I'd stop believing in dreams, whether American, or any other variety. Live simply,and dont let your needs become your master. Our society requires that most of its citizens live in permenant debt, and therefore a permenant state of anxiety. DONT PLAY THEIR GAME.

teddyv
2005-Nov-30, 10:30 PM
BORDER??? I've seen C/C interest rates of over 28%. I'm sorry, anything over 18% is usury, in my book

For sake of interest, in Canada usury is defined as 60% per annum. I suspect its similar in the US.

However I do agree with your interpretation of usury.

montebianco
2005-Nov-30, 11:03 PM
Candy, I'd stop believing in dreams, whether American, or any other variety. Live simply,and dont let your needs become your master. Our society requires that most of its citizens live in permenant debt, and therefore a permenant state of anxiety. DONT PLAY THEIR GAME.

I would say our society does not require this, the citizens willingly volunteer. But you are right, there is no need for it for the vast majority of people in a modern industrial society, if one can simply distinguish between needs and wants.

LurchGS
2005-Nov-30, 11:12 PM
You know, I've called my credit card company and had them lower the interest rate for me. I don't think many people know to do this on a regular basis. I think they do it based on your credit rating.

I do similar things with my phone company. The phone company will match competitors advertisements. The key is you have to ask them to do it for you. I bet other companies do the same thing. I just haven't hit everyone, yet.

certainly.. I meant that I saw that rate on an offer for a new card! you have GOT to be kidding me!

As for phone companies.. since nobody around here offers what we do, they can't match OUR prices. Muahahahah!

LurchGS
2005-Nov-30, 11:19 PM
Credit cards are a tool. You can use a screwdriver to poke an eye out or to escape from a locked room a la MacGyver. I carry a number of cards, and each is used for a specific purpose - one for gas, one for meds, etc. I can spread the payments for a $1500 tooth crown over time, but the gas is paid each month.

[good stuff snipped]

I am self employed, and my income comes in a little at a time with each client's payment. It puts a perspective on money - small amounts add up to large amounts. ANy one $50 check is not a backbreaker, but if I give a few of them up each month, I lose at the end of the year. If you shave $10 off each work day, you have $2000 by years end.

Just some thoughts. Best wishes.


Very good points!

How many people drink coffee/tea/soda every day? At one point, I was drinking a case of Pepsi a day...$5/day for drinking. Actually more on non-work days.

Now, I drink water. at least 100 ounces each day. I buy it in teh gallon jugs at the supermarket for $.75 and pour it into smaller bottles (convenience, and the big one doesn't fit in the fridge next to my desk). I could save even more if I could stand the taste of what comes out of the tap, and didn' want to worry about the arsenic...

Andromeda321
2005-Dec-01, 01:21 AM
Hmm just wondering regarding credit history, what exactly counts towards it? I've got a debit card now for my bank account that's affiliated with a credit card company and I've heard different things regarding if that counts or not. (sorry not intending to threadjack or anything!)

The Supreme Canuck
2005-Dec-01, 03:53 AM
I seriously doubt a debit card has anything to do with it. All that it does is transfer funds directly from your account to whoever you're paying. No credit at all.

paulie jay
2005-Dec-01, 08:17 AM
Very good points!

How many people drink coffee/tea/soda every day? At one point, I was drinking a case of Pepsi a day...$5/day for drinking. Actually more on non-work days.

snip
Did I read that right? A case of Pepsi a day?!?

Argos
2005-Dec-01, 01:35 PM
Candy, I'd stop believing in dreams, whether American, or any other variety. Live simply,and dont let your needs become your master. Our society requires that most of its citizens live in permenant debt, and therefore a permenant state of anxiety. DONT PLAY THEIR GAME.

I think you have a point here.

long live the queeb
2005-Dec-01, 02:57 PM
I would say our society does not require this, the citizens willingly volunteer. But you are right, there is no need for it for the vast majority of people in a modern industrial society, if one can simply distinguish between needs and wants.

Sorry Montebianco your wrong, every economy in the West is biult on debt, both private and Governmental. People are pushed, persuaded, call it what you will to mortgage their future for a few extra trinklets today, this is achieved thorough constant all pervasive advertising techniques that insinuate that people are social failures for not owning the latest technological peice of nonsence. We would all, I submit, live more contented lives,if we could learn to live more simply. And stop confusing WANTS, with NEEDS.

montebianco
2005-Dec-01, 03:49 PM
Sorry Montebianco your wrong,

Well then, if it is required, then you earlier advise is worthless, because there is no choice in the matter. It is required.


And stop confusing WANTS, with NEEDS.

Did you even bother to read my post before rushing to declare I was wrong?

Dave Mitsky
2005-Dec-01, 04:32 PM
If you have the necessary discipline and capability to pay the balance in full each month, a credit card that offers a cash rebate is a very handy thing. For many years, I've been paid to use my credit cards.

As far as the American Dream is concerned, I'm afraid that it is in the process of being lost to the majority of American citizens.

Dave Mitsky

long live the queeb
2005-Dec-01, 04:39 PM
Well then, if it is required, then you earlier advise is worthless, because there is no choice in the matter. It is required.

Not at all, as I said in my first post,you can refuse to play their game. The first step is to recognise the techniques being used to engender feelings of social failure in the individual,and the insinuation that these feelings can only be aliveated by purchase of various branded goods.

Did you even bother to read my post before rushing to declare I was wrong?
Quite right sir, you made exactly the same point, I appologise. (father Jack.)

Sheki
2005-Dec-01, 05:02 PM
I would second the notion that credit cards can actually save you money as compared to using cash - if you can pay them off in full every month. There is the "cash back" thing, as mentioned above (or air miles and other such rewards), but credit cards can also be used to avoid alot of bank fees. Most banks in my area charge absurd user fees for transaction, especially debit card transactions. My no-fee Mastercard is ALWAYS free (to me) to use, so long as I can avoid the interest charges.


Sheki

Enzp
2005-Dec-02, 08:05 AM
My bank doesn't charge me for checks if my balance stays over a minumum. Now they "offer" me the chance to save on stamps by sending out e-checks online to pay my bills. They only charge 24 cents each.

But I already pay my bills online. I go to the credit card site and authorize a funds transfer - the bank charges nothing for these withdrawals. Why should I pay them to do it from their end?

I buy gas with a card, otherwise I'd have to carry a lot more cash, plus I would have to go inside and stand in line to make the transaction. The station I use has a loyalty card worth two cents off per gallon, so by charging at the pump I save on the cost of gas, and on my time.

Candy
2005-Dec-02, 09:05 AM
Hmm just wondering regarding credit history, what exactly counts towards it? I've got a debit card now for my bank account that's affiliated with a credit card company and I've heard different things regarding if that counts or not. (sorry not intending to threadjack or anything!)
I should dig out my credit report. It has very interesting information on it. It lists all your addresses for the last 7 years.

I was just telling someone else, if you have a late payment, it will reflect on your report. I think this only applies when you have several lates or long late times before payment. I didn't have any, but I know I've been a day or two late on a payment in the past.

My car loans and payoff's were on it. My major credit cards were on it with balances. I do believe my student loan was on it, as well.

I'll try to find it, because it is pretty interesting the stuff listed.

When I bought this condo, 1 year prior to even looking for a home, I had a mortgage company run my report. This was to clean it up or find any inconsistencies. It's hard to get a mortgage without some sort of good credit history over many years.

My report had my brothers HUGE debt on it, which took me 6 months to clean up. It was a nightmare. Interestingly, it was only on one of the three credit reports. This tells me it was human error.

Enzp
2005-Dec-02, 12:45 PM
I am not the most prompt guy on my bills, not because I can't pay them, but because I look at my sheet and find out I shoulda paid something two days ago. Oh well. I skipped the organization merit badge in the cub scouts. In any case, in talking to the credit card companies about it, they tell me that while they do charge late fees if you miss the deadline, they don't report a payment as late until it gets over 60 days. So as long as you do pay the bills, a couple days late here and there ought to be OK. Of course, maybe they were just pulling my leg.