Please help me out of this financial quicksand

March 19, 2007 12:02 PM

I need to find a free or very low cost service where I can sit down with a live person on a weekly or monthly basis and help make a budget we can stick to and sort out my family finances. I am not low income. Does such a service exist for me in Maine?

Let me tell you what I don't need first: I don't need Quicken, Excel, a "system", a book, a website, or a TV show. I have tried most of these things and yet I still continue to overdraw my checking account and fail to put anything away in savings simply because there doesn't seem to be any extra money anywhere. We've drained basically our entire savings paying our bills this winter (including our $500/month oil bill) and I've just learned that our property tax bill will go up in April - again.

What I need is some sort of counselor who will sit down with me on a weekly or monthly basis and help me review our family finances and tell me where we've gone wrong. We don't have significant credit card debt or student loans or a three latte a day habit, and we don't eat out more than (maybe) once a month (the baby sees to that) -- just a mortgage and a single car payment and a new baby whose medical, clothing, and daycare expenses seem to be sucking up every single extra cent we used to have. I have tried and tried to fix this myself, but I simply cannot figure out how to do it.

Is there, somewhere, a service that provide free or low cost financial counseling services to people like me who are not low income (we make almost 400x the Federal Poverty Guideline) but who are struggling to make ends meet? I can't really afford to pay someone $100 per hour to help me with this, which is what most services of this type that I've found charge -- if I had that much air in my budget I wouldn't need the help.

I'm getting desperate. Things cannot continue as they are; we've already had out electricity turned off unexpectedly once for late payment of our bill and we're starting to consider selling our beautiful house and that would be a tragedy.

posted by anastasiav to work & money (15 comments total)

Calculate your total monthly expenses and your total monthly income right now, baby expenses included. Does your income exceed your expenses? If not, you need to reduce expenses. I don't know of any counsellors in maine.

I feel for you , as I have a young son too, and daycare, etc. is expensive.

Do you have a programmable thermostat? If so, try to program it to a lower temp whe you're not in the house - we put ours to 60F during the day.

Can you refinance your mortgage?

Look at your expenses and see where the money is going. The counsellor would do the same. There is no magic fix - just account for all expenses, find out where it's going, then try to cut back where you can.

Is your house insulated well? Any drafts through windows and doors? Do you have an old water heater, is it insulated oin the outside, is the water temp turned down below 100F? There alot of $saving tips out there.
posted by cahlers at 12:13 PM on March 19, 2007

If not, you need to reduce expenses

Ah, yes, well ... that's the rub, isn't it? But I'm not able to reduce our electric bill or oil bill any more than it is without spending significant amounts of money (which we don't have) or keeping the house so bitterly cold that we're all miserable. The thermostat is set for 60 now 24 hours a day, it would be hard to go any lower than that (and I'm sure its colder than that on the second floor).

I can't reduce the daycare. I can't make the baby stop getting sick. Neither his father nor I have had any new clothes in almost a year. We pack lunches and rely on ourselves for entertainment. I work two jobs. In the past week we've incurred $290 of unexpected expenses (a new tire, doctor's copay, a $40 prescription and an ER visit) that ate up our grocery budget for the next month and then some.

I need someone to look at this with a new set of eyes, and help me figure out where we've gone so horribly off the tracks.
posted by anastasiav at 12:21 PM on March 19, 2007

anastasiav - I'm not sure you meant 400x the poverty guideline - cause that'd be impressive if you were still struggling on nearly $4m (or my maths are way off, which is always possible).

I don't know of a place that will help you with this, but I have helped several people really examine what they are doing. If you don't find an organization that will help you do this, might I suggest humbling yourself to a friend who has money-matters firmly in hand? Explain your situation and just sit down with them to go over everything.
posted by FlamingBore at 12:28 PM on March 19, 2007

I have seen a lot of commercials for CCCS in Maine. They purport to be free and i think they do just what you want: real people on the phone talking you through financial problems and solutions. I have never actually talked to them so I don't really know exactly what they will and will not do.
posted by unreasonable at 12:33 PM on March 19, 2007

(I'm going to assume there's a typo in your statement regarding your income, because if you make 400x the federal poverty level for a family of three ($16,600), you'd be making $6,640,000 a year. Do you mean that you make 4x the federal poverty level, or something else?)

There are financial counselors who work on commission from products you buy (IRAs, insurance, etc.) rather than on an hourly rate paid by you. They're going to give you a bit of a harder sell on those types of products, but if you find a good one, s/he will also be willing to work with you to find the money in your budget to pay for necessary expenses (and insurance and retirement savings should be considered necessary expenses).

I've heard good recommendations about counselors recommended by financial guru Dave Ramsey. His program is bible-based, but you don't have to be a Christian to benefit from it. You can look up financial counselors in his program on his website. I'm sure other gurus probably have similar services, but his is the one I'm most familiar with.

Finally, not to get you down, but it may be that your expenses simply outpace your income. With the new expenses of raising a child, you may need to find ways to drastically cut your expenses (think selling a car or moving to a smaller house) or raise your income (does your husband have a second job? Can either of you look for more lucrative work? Would you end up saving money on net if one of you quit working and pulled the baby out of daycare?) That will suck. But there's no magic cure for money woes, and it sounds like you're on a pretty lean budget already, so if there's no fat left to trim, you may have to start looking at some hard choices. I can't say based on the information you've given whether or not that's the case, but it's something to think about. I'm sorry you're in this situation, and I wish you all the best in getting out of it.
posted by decathecting at 12:34 PM on March 19, 2007

Seconding Dave Ramsey. One of the staff members at my church is a certified financial counselor through Ramsey's organization, and he does this sort of thing all the time.
posted by Pater Aletheias at 12:37 PM on March 19, 2007

This is an ugly snip, but these people might help if you are in the right part of Maine. If not, my search terms were "Maine welfar financial counseling".

CONSUMER CREDIT COUNSELING OF MAINE
http://www.cccsme.org/
Mailing Address: PO Box 2560, South Portland, ME 04116-2560
Street Address: 111 Wescott Rd., South Portland, ME 04106 (Satellite offices throughout Maine)
Telephone: [phone] or 800-539-2227
Contact Person: Whoever answers the phone
Population Served: Anyone with difficulties with credit or budgeting
Services: Financial counseling (in person, by phone or mail); budgeting assistance; debt management; housing education; credit report review; ; educational workshops for businesses and organizations; CCCS scholarships.
Fees: Most services are free. A small monthly fee is charged for debt management and bill paying services.
Hours of Service: Office hours are M-F 9:00 am to 5:00 pm. Satellite locations have evening hours by appointment.
Funding Sources: Fair Share contributions by creditors of up to 15% of debt amount; voluntary business contributions; service charges for some services
Other Information: Free workshops offered to public schools (K - 12) promoting sound money management skills.
posted by janell at 12:38 PM on March 19, 2007

My actual search terms were all spelled correctly.
posted by janell at 12:42 PM on March 19, 2007

Sorry - I did mean 400% of federal poverty (or 4x), not 400x (I wish).
posted by anastasiav at 12:55 PM on March 19, 2007

One of the biggest benefits of writing everything down is that you begin to see patterns: the doctor's copay isn't an unplanned expense because you know you went to the doctor five times last year, so you need to set aside at least that much this year.

Honestly, if I found myself in your situation, that's what I'd do (and my husband and I have done): I'd write down all of my monthly expenses - all of them, and I'd start tracking from this point forward, until I could answer the question: "By how much are my expenses exceeding my income?" Until you know that magic number, you can't know the scope of what lies ahead. You may not *have* to sell your house, but if it's your biggest asset, you may have to consider options that involve the house if the monthly deficit is big enough.

There are so many things I could ask, but here are just a few that occur to me. Obviously, these are pretty detailed, so don't feel you need to share all of the gory details if you don't want to:

- Was the electric bill unpaid because of insufficient funds or because the funds were there at one point but the bill sat unpaid? Do you have a billpaying time after the two of you get paid where you take care of finances each month, or do bills just kind of get taken care of when someone has time? I was in the latter camp, until I realized it freaked my husband out, so now we pay the bills at the same time every month.

- Have you had an energy audit done on your house? If you feel like the energy bills are larger than they should be, an energy audit might help identify areas where heat is being lost that are not obvious - of course, it might also reveal the need for home renovations which are beyond your means at this point. But knowledge is power; the more you have the easier decisions will be. Many municipalities offer them for free, but you can often get contractors to do heat loss analysis as well, as part of estimating potential work for you.

- Do you have debt? How much? Are you paying off more than the minimum each month, particularly on the highest-rate loans? What would it look like if you stopped using your credit cards? Could you plan a payoff schedule that would be reasonable for you at this point, or is that out of the question?

- Do you have retirement accounts or health flex plans through work? Are you contributing to either? The flex plan in particular would help enormously with sick baby expenses because you can pay for thing like co-pays with pre-tax dollars, which go further.

Planning ahead and writing things down can help control all kinds of expenses: we plan a week's worth of menus at a time and shop at the discount grocery store once, pretty much sticking to the list. I also haven't paid retail for a piece of clothing in a few years thanks to EBay and thrift stores (even for nicer stuff for work).

I'm not sure any of this is helpful (I hope so!), but I know exactly how it feels to be stretched, so I can sympathize.
posted by deliriouscool at 1:00 PM on March 19, 2007

Some credit unions (mine included) give its members free financial consultation and can probably help you find longer-term financial counseling if need be. (Members are anyone who has a savings account with them.)

Here are two articles on getting help with high heating costs. Heating bills are causing problems for lots of people. Even if you're not below the poverty line, you might still qualify as "low income" and get assistance to weatherize or pay heating bills. And some insulation tips are really cheap.

By the way, what % of your income are you spending on your mortgage payment? You're not on an adjustable rate mortgage, are you?
posted by salvia at 3:45 PM on March 19, 2007

So, you meant 400% of poverty level, I suspect.

A 500/mo heating bill is a lot, even for a house, and clearly one of your larger bills. Highly recommend a programmable thermostat. I keep my house at 55 when I'm asleep or away, and 65 in the evening when I'm watching tv or web-cruising or whatever. You might be able to get some fuel assistance, and maybe insulation assistance.

Any chance you'd find a roommate?

There is child care voucher money, but there's a waiting list. The sooner you're on it, the better. Several excellent centers have subsidized slots; all have separate waiting lists; sign up. Infant child care is (justifiably) very expensive; that will get better.

Maine has good health care programs.

I agree with DeliriousCool that an understanding of where the money went will help you plan.

PROP is a good resource for fuel assistance, and it looks like they have financial planning assistance, too. Maybe someone there would be a good financial adviser for you. Find out what kinds of help may be available. Don't feel bad about asking for help; we're a community.
posted by theora55 at 5:20 PM on March 19, 2007

If you have USAA, they offer free financial counseling.

Even though it isn't the advice you posted for, I think the answers above regarding looking at your finances yourself are well worth heeding. It sounds like you're living a very frugal lifestyle, and you already have a handle on where money is going. All a financial person can do is talk to you about where to spend less money, and most of them really only want to talk about how to manage existing money. And what will you do if you don't like his/her advice? What if they tell you that you're hemorrhaging money and you have to sell the beautiful house? Are you ready to follow through on something that unpleasant?

It sounds like instead of a financial person, you need some cash-saving lifehacks.
You already know where your money is going, so address how to decrease those expenses.
For example, you've already identified the $500/mo oil bill as one of the cash-flow problems; now the question is how to fix that. My sister in Montana duct-tapes thick, clear plastic sheeting over some of her windows in the winter; this works great as an insulator.
posted by Sprout the Vulgarian at 8:07 AM on March 20, 2007

Just a random suggestion -- a friend of mine is trying to hook up a child care cooperative. Her draft plan is to find ten families, have each family commit to one day/week (or two half days). Then at any time, there will be two adults with the ten kids.
posted by salvia at 9:34 AM on March 20, 2007

Infant care is extremely expensive, particularly if it's not subsidized by your employer, or the government. Take a hard look at the hourly wage equivalent for each job the two of you have, compared to the hourly rate you pay for childcare. Include any associated expenses (commuting, unreimbursed supplies, etc). It may be worth it for someone to work less.

A childcare cooperative can be a great idea, but I wouldn't do more than a 2:1 ratio until they're not babies anymore. It's a lot easier when they can walk with you. If you find one other family with a similar-aged baby and two contributing adults, each person puts in 10-15 hours of childcare a week depending on everyone's work hours. Then when the weather gets nicer, you can pop them into an inexpensive double stroller so you're not going nuts in the house with your part-time twins. I had this kind of arrangement from when my daughter was 5 months to 18 months old.
posted by expialidocious at 4:00 PM on March 20, 2007