[Financial] Helping Others Out of Debt

If he's truly living on $1800 (including $200 debt payments), he should be OK. Simply using the 'spare' $200 to double his payments will repay his debt in a couple of years. I suspect his costs are slightly higher? What a tough situation. I'd have him track his expenses diligently and continue to track them to see if the $1800 is accurate.

It's hard not to get sensitive when told to cut cable, move, etc. The implication is he's living large, when, really, he isn't. But you have to consider it all.

Of his $2000, $750 is going to rent (incl utilities), $400 to kids, and a couple hundred (?) to student debt and $200 to min debt payments. He has to prioritize the rest. (which is down to about $100-$150/week). Cheaper digs? Get rid of the car? (a huge savings -- but possibly not practical). But he should check out all his costs. Ima's right -- substituting debt won't necessarily work since it seems his debt accumulated over time, rather then being the result of a one-time unexpected cost...

 

Well, once his wife finishes college, maybe her job will make things easier. We all were broke in college. Sometimes, you just have to deal with the debt for the time being if you are planning ahead and know you can handle it later?

 

Second job?

 

Like wekko368 said,

you can give plasma up to twice a week and make $25-$50 each.

for two adults, that's $200 - $400 a month.

you can get up to $200-$1000 each time if you are diagnosed with diseases like Lupus, Rheumatoid Arthritis, Hepatitis A, Toxoplasmosis, and many others. The Plasma is used to develop diagnostic tests.

Use less AC, no dish washer, set computer to hibernate when not using, turn off monitor, turn off tv. turn off all the lights.

I still say, no renter's insurance, unless he has something that is worth insuring.

his wife should consider getting student loans enough to pay everything off. Maybe 1 semester?

Once everything is paid off, then pay off the student loan.

 

Yeah definitely. Interest rate on her school loan will most likely be much lower than the CC interest rate.

 

Have him go to the Medical Center and volunteer to be injected with something or other. A few times doing that and he'll be out of debt. Or go donate sperm about 200 times.

 

BigSherv threw it out there earlier... and it's worth considering. If your friend has higher interest rate debt on some credit cards, it would be worth looking for a zero % interest card (for a set period before it changes to something else). You said he has decent credit already, so getting approved shouldn't be an issue. He can then just transfer those higher balances to the zero % interest card (and just destroy the old cards... but don't close the accounts). Keep paying down on the zero % interest until the promotional period ends... then transfer that balance to a new zero % interest card. Wash. Rinse. Repeat.

 

That sounds like an interesting plan, as long as you find enough zero % cards and will continually be able to get approved for them. I don't know enough about how credit scores work to know how it would hurt, but I'm pretty sure you take a hit when you pay off an entire balance at once. Sounds like a dangerous game though, if you get stuck with a card at a high % rate and a damaged credit score.

On the renters insurance- $40 a month sounds outrageous to me, but I don't live in a place with terrible crime. Maybe he should shop around for other rates.

 

You should definitely look into this. Get student loans at the amount of his current credit card debt. Use that money to pay off all the credit cards. The student loans should be deferred payment. So that basically just eliminates the debt (the wife keeps putting her money to paying for school). Start saving that extra money to build some cushion and then start paying off the student loans as soon as possible to clear out that debt.

 

I managed to rack up significant credit card debt in school (well, significant to me at the time). I was just a naive kid at the time... gee, a credit card company wanted to extend a nice line of credit to a sophomore in college? Awesome. Initially after graduating, I found myself in a position where I was paying roughly $150/month... just in interest. I quickly figured out that that wasn't going to cut it, so I started on the zero % interest balance transfer shuffle. Two years later - and after paying not a cent more in interest, I was completely debt free... and it's not like I was just banking it at the time.

Honestly, I don't know how much more difficult it is to find a zero % intro offer card right now (especially after the credit crunch). It's certainly worth investigating though. That extra $150/month not going to interest, but going to the debt itself makes a huge difference.

Edit: Oh, and yes... applying for credit cards does ding your credit, but the key is simple. Do not miss any payments. You wouldn't want to do that on your existing higher interest credit cards anyway. Making steady payments over time and knocking down that debt will do wonders for your credit score anyway.