Author Topic: new here and thanks  (Read 5402 times)

sowantere

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new here and thanks
« on: April 08, 2012, 11:31:30 AM »
So I am 32 and live on the south east coast of the US.  I own my own house and am debt free.  I felt like becoming debt free would be a great experience but after looking at my budget it seems I have a long way to retire.  I view retirement as having the ability to not work if i so choose to.  So now I am on to building assets.  I was wondering what you all thought of my current budget and if you had any advice. 

Income 75000 a year, budget set at take home 3100 a month.  This does not account for bonuses of 1k every 3 months and a once a year 1k bonus nor the two months of the year where there is an "extra" non budgeted paycheck. This is for a family of 3.

item                                  month   year           10 years   % of salary
gas                                        460   5520               55200   14.83870968
entertainment                        200   2400               24000   6.451612903
groceries                                400   4800               48000   12.90322581
Pharmacy                                  10   120                 1200   0.322580645
Pet                                          60   720                 7200   1.935483871
Restaurants                        100   1200               12000   3.225806452
Retail stores                        100   1200               12000   3.225806452
Utilities                                378   4543               45430   12.21258065
college                                500   6000               11000   16.12903226
car insurance                        103   1236               12360   3.322580645
home insur/tax                        120   1440               14400   3.870967742
savings                                668                         21.5616129
total outflow                       2431   29179          242790   
             
Utilities            
dish   tv             58         
verizon cell   82.98         
internet/tele   69.61         
trash                   18         
electricity           150         

Here are my current assets
house 107,000 paid for
401k     38,285
no debt cars are prius and corolla

savings 5000 (paid off house 2 months ago)   

So here is my plan to grow my stache.
I moved here in 2006 because the place i was staying at got robbed and the school systems in town suck.  I figured I could either pay for private school or gas.  My daughter is now 16 and I think she is at the point of being ok if we live back closer to where I work.  I currently drive 40 miles one way monday thru friday for 80 miles a day or 400 miles a week.  I currently drive a toyota corolla and my wife a prius.  I think this is the only way to save on gas.  There is an option to work from home for 57k a year compared to current 75k.  Living in the country has its bonuses.  Water is free and my current insurance and taxes come to 120 dollars a month.  So besides gas, utilities, and the occasional breakage I pay $120 a month for shelter.  If I move back to town ill have to dodge home owner accociations (such bs), higher taxes, and new utilities such as water.

I am going to save up the 11k for my wifes' college, this is the remainder to cash flow her school. This will raise my savings per month from 21% to 36 %.  My wife car pools her one a half hour drive to college one way 4 days a week.  This is in the gas above.  With her car pool she has to drive every third week.
When she starts working in two years it will raise our take home pay to somewhere around 6500 a month.  So this is definately worth it. 

I am cancelling my dish tv in august.  I am still on contract and they want something obscene like 400 bucks to cancel.  And yes it is true I can find everything I watch on tv for free on the internet.  I have already set up my old computer to connect to my tv.  I wish i would of known about this sooner and believe that cable providers should be very scared of their future.

I would love some advice on cell phones.  I have read some of the pay as you go forums and it seems complicated.  Me and my wife used 200 minutes between the both of us last month for a whooping .36 cents a minute.  I think this is robbery but with our long drive we have to have something for safety.  I currently receive a 22% discount with verizon thru my work. 

Internet/telephone- i am limited to a single dsl provider in the country and they require a telephone.  The plus is that they do not cap the amount of downloading you do in a month so this will be good for watching tv on the internet.  I have already called and downgraded the telephone last month to the minimum I can with absolutely no frills.  This lowered the bill from 89 to 69.  I didn't even know I had all that junk on the phone line.  Learned this at ERE.

Electricity- I have all the non essentials unplugged and plug them in to use them.  I keep the thermostat at 76 degrees which means it is usually not on and use natural light if I can.

Home and car insurance- I combined my home and car insurance at allstate 2 years ago moving my home insurance from farmers insurance.  This HALFED my yearly insurance bill.  Farmers was ripping me off and since the bank signed me up with them when i bought the house and paid in escrow I'm sure they didn't shop around for the best insurance.  I wouldn't be surprised if they got a cut or a kick back.

Transportation- eating me alive at $460 a month for gas not counting tires and wear and tear on the cars.  Also the lost time driving back and forth.

So my problem is my low savings rate of 21%.  Cutting back as above and moving closer to work will bump me up into the 40's and when my wife graduates hopefully ill reach the golden 70's in savings rates.  I would love any additional thoughts on increasing this. 
I really don't want to move as I love my big yard and inexpensive tax rates but I don't see any other way.  And no I'm not buying a 40k volt. 

Sorry about the book and thanks for reading.

SowantERE

Daley

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Re: new here and thanks
« Reply #1 on: April 08, 2012, 12:46:19 PM »
-snip-
item                                  month   year           10 years   % of salary
entertainment                        200   2400               24000   6.451612903
Utilities                                378   4543               45430   12.21258065
-snip-
Utilities            
dish   tv             58         
verizon cell   82.98         
internet/tele   69.61            
-snip-
I am cancelling my dish tv in august.  I am still on contract and they want something obscene like 400 bucks to cancel.  And yes it is true I can find everything I watch on tv for free on the internet.  I have already set up my old computer to connect to my tv.  I wish i would of known about this sooner and believe that cable providers should be very scared of their future.

I would love some advice on cell phones.  I have read some of the pay as you go forums and it seems complicated.  Me and my wife used 200 minutes between the both of us last month for a whooping .36 cents a minute.  I think this is robbery but with our long drive we have to have something for safety.  I currently receive a 22% discount with verizon thru my work. 

Internet/telephone- i am limited to a single dsl provider in the country and they require a telephone.  The plus is that they do not cap the amount of downloading you do in a month so this will be good for watching tv on the internet.  I have already called and downgraded the telephone last month to the minimum I can with absolutely no frills.  This lowered the bill from 89 to 69.  I didn't even know I had all that junk on the phone line.  Learned this at ERE.

There will be better folks who can help with other stuff, and some of it is going to be forest for the trees common sense for you (like: stop eating out, don't go to the theaters, buy less stuff, groom your own pets, try and hypermile, consider a moped, consider future cost of gas plus insurance and time and wear and tear vs. telecommuting income loss, set the thermostat far lower in the winter and much higher in the summer and open windows more often - and other appropriate things based on the reality of your situation and not inferred guessing based on budgets and brief comments), but let me tackle the highlighted stuff above. First thing I'm going to recommend is for you to read over the communications superguide as it'll help you quite a bit with these areas and covers quite a bit more than just what you're dealing with and how to bring it all together.

Second, let's deal with Dish first. Good news is, you can cut your monthly costs with Dish substantially before you get out of contract. How? A secret, barely advertised television package called the "Welcome Pack". So long as you've never had the package before and upgraded away from it, you're eligible to downgrade to it. $15/month for locals plus a few entertaining channels like Boomerang, RT, MTV2, MSNBC, Comedy Central, AMC, TBS, Hub and the Hitler Ghost & Alien Hitler Channel. Tack on the free Public Interest channels, and you've got a fair selection for that money. There's about $40 of savings per month just going into August. If you need local OTA stations and a directional antenna is out of the question due to your location, this is probably the best price you'll get.

Next up, cell phones. You mentioned you're in a Verizon area. Two questions: 1) How's Sprint CDMA reception in your area, and 2) if Verizon's the better provider, do you own your handsets outright and are out of contract? If Sprint is an acceptable provider, switch to PlatinumTel. Those sorts of minutes between two handsets will average to around $5 a month for a total cost of around $10 a month for both phones. Check for coupon codes on their front page and at RetailMeNot. Alternatively, if Sprint isn't an option due to coverage... your next best choice would be to port your Verizon handsets (if approved) and numbers into PagePlus and sign up for their "The 12" packages. Still overkill, and about 2.5x the cost of P'tel, but the only other alternative for rural users is usually AT&T's network, and H2O Wireless isn't going to be too much less per phone unless you buy their $100 account credits for year-at-a-wack airtime and you'll still have to find a couple used AT&T GSM handsets for use (which isn't hard, but still). Better details in the guide, and even if you go with P+, that's still close to a $60 a month savings.

With your internet service, it sounds like you can't do dry loop. Since they're offering unmetered DSL access, I'm guessing your local phone exchange isn't AT&T. Your only real option is to look around and see if any other DSL providers have access to provide to your CO. Normally I'd recommend DSLExtreme as 3Mbps service would be $15 a month with contract in AT&T regions, but not likely being in the Deathstar's territory from the way you describe things, I dunno. Better details would help, and there's good info posted in the guide on this stuff as well. Even not factoring that, the above changes (without cutting back on the miscellaneous frivolities) could shave off upwards of $100 a month or more right there and that's with still having Dish.
« Last Edit: April 08, 2012, 01:04:04 PM by I.P. Daley »

sowantere

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Re: new here and thanks
« Reply #2 on: April 08, 2012, 01:15:23 PM »
I called and switched to the welcome pack.  And you were right it was not advertised and I was not be able to switch to it online i had to call.  The total price is 26.99 . The welcome pack 14.99, 6 dollars for DVR (I hate commercials) , and 6 dollars for protection plan.  That halved my TV bill.  Thanks alot.

I do not get good sprint service in my area.  That is what I used when I moved here.  I was one of those works right up the street but my house is in a dead zone deals.  So I switched to verizon which gets great service but they have no pay as you go plans.  My contract is up with one out of my 2 phones.  The 2nd phone contract is up in december.

I am not in a ATT region as I called about ATT Uverse internet yesterday which starts at 3mbs 19.99 a month with no contract for 12 months then goes to 44 dollars a month after 12 ( at which time hopefully I would find another cheap provider).  Being in the country cable is not an option.  Only satillite at 50- 50 dollars a month or the single DSL provider which is a telephone company hence why a telephone number is required with them, something to do with licensing they say.  With the possiblility of moving in my future to save on my transport bill I am reluctant to sign any contracts.

SowantERE

sowantere

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Re: new here and thanks
« Reply #3 on: April 08, 2012, 01:17:03 PM »
yeah i just got your post about the hitler- ghost and alien channel.  What the hell happened to the History Channel lol.

SoWantERE

Daley

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Re: new here and thanks
« Reply #4 on: April 08, 2012, 03:10:48 PM »
I called and switched to the welcome pack.  And you were right it was not advertised and I was not be able to switch to it online i had to call.  The total price is 26.99 . The welcome pack 14.99, 6 dollars for DVR (I hate commercials) , and 6 dollars for protection plan.  That halved my TV bill.  Thanks alot.

I do not get good sprint service in my area.  That is what I used when I moved here.  I was one of those works right up the street but my house is in a dead zone deals.  So I switched to verizon which gets great service but they have no pay as you go plans.  My contract is up with one out of my 2 phones.  The 2nd phone contract is up in december.

I am not in a ATT region as I called about ATT Uverse internet yesterday which starts at 3mbs 19.99 a month with no contract for 12 months then goes to 44 dollars a month after 12 ( at which time hopefully I would find another cheap provider).  Being in the country cable is not an option.  Only satillite at 50- 50 dollars a month or the single DSL provider which is a telephone company hence why a telephone number is required with them, something to do with licensing they say.  With the possiblility of moving in my future to save on my transport bill I am reluctant to sign any contracts.

Glad to help on the Dish end. If you're thinking of turfing it in August anyway, why even pay for the protection plan? If it dies, it dies, and if it dies, you take off the DVR fee, too. That's easily another $30 in the pocket before August. If not, used/refurbished Dish equipment's pretty cheap.

I'm a little confused on how your Verizon contract be up on only one phone unless you're dealing with separate bills? Correct me if I'm wrong but from what I know/remember, you're either in contract with your plan or you aren't. A phone may be able to be taken out immediately, but your contract is what matters most. Anyway, look into the cost of buying out your contract. If you can get the ESN released for the phones or have Verizon phones with clear ESNs already, take those suckers over to PagePlus. I re-checked prepaid by the minute rates with them, and if each phone really is only averaging about 100 minutes a month and you're not really doing any texting and can do without data entirely, P+ has $25/400min for 120 day standard plan packages as well. That'd toss you into roughly the $7/month camp per phone. It'll cost you about $750 to stay until end of contract, and with the by minute rate with an average of around 100 minutes a phone a month averaging about $7 a phone a month with P+, you'll save about $625 switching, which still gives you a major cushion to eat any termination fees, number and handset porting costs, and still come out ahead.

Even if you were in an AT&T region, I'd highly advise against Uverse. Wild Blue and HughsNet (satellite) are both ripoffs as well. I need to know who your local phone carrier is and what speed package you've got though if I'm going to be able to help you find any alternative DSL ISPs or ways to save on the DSL in general, as well as phone versus internet cost breakdown. Unless you're in Covad/Qwest territory, even being in the country, the cost sounds a little high. You also may be getting fed a line of bull about dry loop services. Don't know until I know specifics.

sowantere

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Re: new here and thanks
« Reply #5 on: April 08, 2012, 06:19:54 PM »
I kept the protection plan because I will have to return the DVR at the end of my contract.  It currently is a dvr and box for receiving the satillite.  I remember when i was at directv before switching to dish it was like 400 dollars if the dvr was lost or broken.   

I do not get sprint in my area as that is what i had when i first moved here so i went with page plus dropping my phone bill from 82.89 to 25.44 for two cell phones.  I did have to break my contract with verizon for $215, but I'm ok with that because I turned out the contract for one phone was until dec 2012 and april 2013.   I had a family share plan that was originally a single plan that i added a line too.  Thats how I had 2 contracts for one plan.  It deals with getting a discount on the phone when you sign up.

So all in all
dish from 58 to 28 and then 0 in august
and cell from 89 to 25.
 
Thats 94 dollars a month in savings.  Thanks alot for your help.  I really appreciate it.

My current dsl provider is bulloch.net it is a local provider that has 3mbs download speeds and basic telephone for 69 a month after taxes.  I have called cable, satillites, ATT, and looked into earthling and no luck.  The competition is non existant.  I am not close enough to share with any neighbors.  If anyone out there has any advice on this it would be great.  I am not a fan of repetitive bills.

SowantERE

Nancy

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Re: new here and thanks
« Reply #6 on: April 08, 2012, 07:17:17 PM »
Does a Prius get better gas mileage than a Corolla? If so, you should be driving it to work instead of your wife. If not, then sorry, I know nothing about cars.
« Last Edit: April 08, 2012, 07:19:37 PM by Nancy »

Daley

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Re: new here and thanks
« Reply #7 on: April 08, 2012, 07:53:57 PM »
I kept the protection plan because I will have to return the DVR at the end of my contract.  It currently is a dvr and box for receiving the satillite.  I remember when i was at directv before switching to dish it was like 400 dollars if the dvr was lost or broken.   

I do not get sprint in my area as that is what i had when i first moved here so i went with page plus dropping my phone bill from 82.89 to 25.44 for two cell phones.  I did have to break my contract with verizon for $215, but I'm ok with that because I turned out the contract for one phone was until dec 2012 and april 2013.   I had a family share plan that was originally a single plan that i added a line too.  Thats how I had 2 contracts for one plan.  It deals with getting a discount on the phone when you sign up.

So all in all
dish from 58 to 28 and then 0 in august
and cell from 89 to 25.
 
Thats 94 dollars a month in savings.  Thanks alot for your help.  I really appreciate it.

My current dsl provider is bulloch.net it is a local provider that has 3mbs download speeds and basic telephone for 69 a month after taxes.  I have called cable, satillites, ATT, and looked into earthling and no luck.  The competition is non existant.  I am not close enough to share with any neighbors.  If anyone out there has any advice on this it would be great.  I am not a fan of repetitive bills.

SowantERE

I'm guessing Bulloch is the local telephone company, then? Yeah, I'm not finding anything either.

Keep an eye on your average monthly usage with PagePlus on those "The 12" plans. If you keep averaging about 100 minutes a month a phone and aren't texting much or using any data, you might be able to half that new lower cost by dropping to their by the minute Standard Plan package as I recommended in the last post.

Typically, after a 24 month contract, Dish won't want the equipment outside of the LNBF off the parabola as the receivers are usually too old. Call and talk with an agent. YMMV.

Does a Prius get better gas mileage than a Corolla? If so, you should be driving it to work instead of your wife.

Good point, Nancy. Highest MPG vehicle needs to always be used on the highest usage days. None of this his-car-her-car nonsense.

sowantere

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Re: new here and thanks
« Reply #8 on: April 08, 2012, 08:11:22 PM »
Ya it is a good point.  The reason she is in the prius is it is the more reliable car and her school is unforgiving with absenses.  I would rather it be me breaking down.  She drives the same distance as me monday thru thursday as her car pool starts at the half way point about 40- 50 minutes away.  I will start driving her car when able on fridays.  Every bit helps.  The corolla gets about 36 miles per gallon and the prius gets 40-46 depending on hills, temperature, etc. I really think i just need to move closer to work.  Will think about putting the house up for sale this summer.  I am just worried that between new utilities such as water, possible home owner association fees, and higher taxes/home insurance, it might not be worth it.  I would like the time that i loose driving every day just being able to do other things. A close proximity to work and food markets would be great as those are the two things i mostly go into town for. 

Thanks again for your advice

SowantERE

Daley

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Re: new here and thanks
« Reply #9 on: April 08, 2012, 08:22:42 PM »
You only have to deal with HOAs if you move into a neighborhood where they have them. Also, you own your current house. Don't sell it, rent that sucker out if you move back in closer! Buy a smaller, cheaper house that has monthly mortgage payments less than what you could clear on renting the current place... then you're building equity and making your investments work for you.

Edit:
Ya it is a good point.  The reason she is in the prius is it is the more reliable car and her school is unforgiving with absenses.  I would rather it be me breaking down.  She drives the same distance as me monday thru thursday as her car pool starts at the half way point about 40- 50 minutes away.  I will start driving her car when able on fridays.  Every bit helps.  The corolla gets about 36 miles per gallon and the prius gets 40-46 depending on hills, temperature, etc. I really think i just need to move closer to work.  Will think about putting the house up for sale this summer.  I am just worried that between new utilities such as water, possible home owner association fees, and higher taxes/home insurance, it might not be worth it.  I would like the time that i loose driving every day just being able to do other things. A close proximity to work and food markets would be great as those are the two things i mostly go into town for.

Wait a minute... are you telling me you both drive nearly the same distance almost daily? Are you going the same direction? If you are, make the concessions necessary to carpool together! Even if it means one of you having to leave earlier or staying a bit later... that should at least half your gas budget alone... never mind the savings in maintenance, insurance....
« Last Edit: April 08, 2012, 08:43:30 PM by I.P. Daley »

sowantere

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Re: new here and thanks
« Reply #10 on: April 09, 2012, 02:40:26 PM »
unfortunately I drive east and she goes south east.  There may be a little overlap but its generally around 4 hours difference as i leave at 530 am and get off work at 3pm and she gets out of school at 630 pm and hour south of my job and i have a kid to get home to.  I will have her possibly look at overlap with some of the other car poolers but at least 1/3 of her trip is down interstate that is completly out of the way.  She currently car pools from 40 miles out as that is where there definately is overlap with the others.  Ill think of the logistics of this.  Keep up with the ideas every bit helps.

The problem with the house is that its in the country with a great school district but not near many jobs.  I am not sure how easy it would be to get renters.  But it wont hurt to try.  I pay 120 a month for taxes and insurance and could probably rent for 850.  So there would be some cash flow of 700 ish.  The reason I want to sell is it is in an area little affected by the housing crash.  I will probably get 7k above what I paid for it if not 12k and since i have lived more than 2 years there as my primary residence i wouldn't have to pay any capital gains taxes.  This should the equal of one or 2 renting years.  I had two serious buyers last year as a self sale when I put the house up for sale.  unfortunatly my wife did not get accepted to the local college hence her long drive now.  The buyers were locals who wanted to buy for either their daughters/sons to live in or mothers/fathers etc.  I backed out of selling because I wasn't sure where we were going to end up or if she was going to get in a school at all.  I was about 6 months away from being debt free with no mortgage at the time so i stayed put.  Since i know where she will be going to school the next two years my thoughts now are to sell the house and buy in town where i work and it would be about 15 miles away from her car pool start.  It has foreclosures and shortsales everywhere so I could get a newer house then the one I currently own and probably pay cash.  Then I would save up money and buy a rental house and put money down decreasing the monthly payment well below what i would rent for.  I'm thinking of rentals as a business and I want to have a bit of a cushion to get it started.  I however do get your point that my primary residence under the right conditions would be a great potential money maker.  It has a 5 year old roof and looks great for being a house built around 1990.  Again I am still thinking it over.  I might just try to sell and if cant, rent.  I do want to build assets your suggestion would be the quickest way. 

Yeah HOA are rampant in the city but you are right there are still non HOA houses around they are generally just built around 2000 or older.   I will have to just be more picky.
 
Thanks again for your input.

SoWantERE



Daley

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Re: new here and thanks
« Reply #11 on: April 09, 2012, 03:06:16 PM »
Been ruminating. Have you tried crunching numbers for what cost of living might be if you took the telecommuting job, temporarily move to the town where your wife is going to college and rent a small place until she graduates, and rent out your current house?

Think of the reduced cost overhead of the car maintenance, wear, tear, not worrying about increasing gas prices as you could bike everywhere most of the time, the added time home for both of you, added income potential for both of you if you're not spending five plus hours a day between the lot sitting in a steel cage, yadda yadda... and it's great that you're socking away so much money into the savings, but that money needs to be working for you, and being more flexible on the amount you put away until the college situation is finished up to afford you more options might be worth considering as well.

AJ

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Re: new here and thanks
« Reply #12 on: April 09, 2012, 03:17:58 PM »
It has a 5 year old roof and looks great for being a house built around 1990.

Yeah HOA are rampant in the city but you are right there are still non HOA houses around they are generally just built around 2000 or older.   I will have to just be more picky.

Houses aren't like cars, newer doesn't necessarily equate to better. In fact, newer houses are often built with low quality materials that will need to be replaced after only a couple years of wear. A well maintained house from 1950 can be a better buy than a McMansion from 2005. Age does matter, because building practices and codes were different several decades ago, but I've never heard anyone refer to a pre-2000 house as older.