Working Two Jobs But Still Drowning in Debt
Posted June 11, 2013
WRAL Reader Question
I'm currently working 2 jobs to keep my head above water with debt.
I got divorced a few years ago and took on all debt including the house. My mortgage is a 2 person mortgage and it's hard to make with just one job.
I have other CC debt that I'm trying to get out of but it's hard with high interest rates. I've tried to get a loan to consolidate the CC's with a lower interest rate and just 1 payment a month but my debt to income is not good.... so I'm getting turned down.
I haven't been over 30 days late on ANYTHING but it's been a struggle. Do you have any advice?
What do I do?
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I would suspect part of the growth of your credit card debt was due to making ends meet because you were stretched so thin. The negative amounts wind up being paid for with credit cards that are almost impossible to pay off, not from the interest rates but from your lack of available cash each month.
You can make all the payments you want on time and have a sterling credit score but those are not the only components to determine risk for the lender. There is also the debt to income ratio where lenders look at the amount you have going out each month in debt payments and the amount you have coming in each month in income. If higher the ratio is the more at risk you are of defaulting if one small thing gets in your way.
In this situation the answer seems obvious, you need to seriously consider selling the house or take in roommates to help with the expenses.
Ultimately your financial life is way out of balance if you are unable to save for emergencies, invest for retirement, and meet your expenses with some left over. It might be helpful for you to read my guide 8 Easy Steps to Eliminate Your Debt.
For me personally, I'm not a fan of roommates in my house. It's like the houseguest that will never go away. If I was in your shoes I'd sell the house, probably rent something much less expensive, and recapture a life of less financial stress to leave more room for savings and joy.
And once the expenses were downsized, you'll either have cash from the sale of your house to use to pay down the debt and start savings or at the very least, your debt to income ratio will be better and leave you more likely to get a debt consolidation loan.
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