Author Topic: Tell me something I don't know!  (Read 4464 times)

lithy

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Tell me something I don't know!
« on: June 02, 2013, 06:42:01 AM »
Newly stumbled upon this site while searching for additional financial reading and the availability of a forum sealed the deal.  I suspect I will be spending a lot of time here catching up on the archives.

What I wanted to start with was a second (ad infinitum) set of eyes to give our money a once over and maybe see the things I am not seeing. 

For the faint of heart, there are a few budgetary items in here that I see very well, they may alarm you, have faith that I am trying or feel free to poke and tease me into action to improve them.

First a little about us, we are an old married couple of 28 and 29.  I work as a brewer, hourly with plenty of overtime (and beer!) always available, in the wonderfully low cost of living Pittsburgh, my wife works as a salaried HR director.  Although it varies depending on my hours worked, I count about 80k of household income per year with an expected raise for me coming shortly that could increase slightly. 

We purchased a house in May 2012, 2 bed/1 bath just under 1000 sq ft, basement, 2 car (barely!) garage, on a tiny tenth of an acre for 55,700.  I came into our marriage 4 years ago with about 20k in debt between 12k in student loans, 5k personal loan, and 3k credit card debt.  Everything is paid with 1200 left on the student loan scheduled to be paid on June 21.  At the same time we will make a payment to the mortgage to be able to drop PMI and have 44k left owed on the mortgage at 4.125% 

After taxes, insurance and retirement funding (16% for me to Simple IRA, 12% for wife to 401k), we count on at least 3700 in take home pay every 4 weeks.

All spending tracked through GNUCash, all costs listed are monthly unless otherwise noted.

PITI on house is 450
Water/Sewer: 75
Electricity: 50
Gas: 50
Trash: 25
No cable, netflix, etc or home internet
Two Cell Phones, one 70 T-Mobile fully unlimited pre-paid, used as home internet, one minutes only less than 15

Groceries: 300
Dining: ...200, eep
Alcohol: 150 (despite free work beer and wife's only desire for cheap box wine, this still seems way too high)
1 Dog: 200 (this includes food, vet, and boarding during travel)

2 Cars (things are going to get scary), 2003 Ford Taurus 190k, 2006 Suzuki Aerio SX 50k
Insurance: 30
Repairs and Maintenance: Irregular but figure an average of 75, I do all maintenance short of engine and transmission internals
Gas: 300 sad face
Registrations & Inspections: 200/year

Clothes: 100
Misc Entertainment and Travel: 100
Gifts: 100
Housewares/Home Repair/Toiletries: 100
Medical/Dental/Vision: 300

This totals 2700, the additional money is split between additional student loan payments (again this month only), additional mortgage principal, and automatic savings account transfers.

Almost all spending is put on a Discover card which never carries a month to month balance, and cashback is put toward the balance when it can be.

Current positive assets. 12k liquid emergency fund earning a sad 0.50%, 3k 401k, 3k Simple IRA.

I think that is enough to work with for a first post, if you have read to the end, I appreciate you very much and look forward to any comments you might have.  I will update another post later with some of our financial goals and targets.



grantmeaname

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Re: Tell me something I don't know!
« Reply #1 on: June 02, 2013, 07:01:15 AM »
No cable, netflix, etc or home internet
Two Cell Phones, one 70 T-Mobile fully unlimited pre-paid, used as home internet, one minutes only less than 15
You should head over to the communications superguide. You could be paying ~$20/month for internet and $30/month or less for your two phones, and you'd be getting faster home internet in the process. The nation's cellular data networks are just about the most expensive way to get a megabyte from place to place, so the more you can use dedicated wired internet, the cheaper it'll be.

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Dining: ...200, eep
If you think that's too expensive (and it is - that's $6/day and nearly half as much again as your mortgage!), then quit being a wimp and stop doing so much of it. Become a twice a month regular at a local burger place or pizza joint, and spend $30 a month while still really enjoying the experience. The great thing about luxury experience is the less you do them, the better they get!.

Quote
Alcohol: 150 (despite free work beer and wife's only desire for cheap box wine, this still seems way too high)
Do you brew at home, too? Or is that $150 worth of expensive craft beer, which isn't really very much beer for the money? Winemaking is effortless, too, though it'll be six months before you'll want to drink any of it.

Quote
Gas: 300 sad face
Ride bikes for short errands. Hypermile. Consider selling one or both cars for vehicles with city fuel economy ratings closer to the thirties than the high teens. Fueleconomy.gov can be a good resource for finding out the fuel economy of older vehicles you see on craigslist -- see this for example. You can also check out the top 10 cars for smart people, because you are after all a smart person.
« Last Edit: June 02, 2013, 07:04:26 AM by grantmeaname »

Zaga

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Re: Tell me something I don't know!
« Reply #2 on: June 02, 2013, 07:06:10 AM »
Welcome from another who lives near the Burgh!  It really is a great low COL area to live I think, glad the rest in those crowded cities on the coasts haven't figured out how nice it is around here :-)

I do a little bit of home brewing, that sounds like an interesting day job.  Also, I'm a food scientist with Heinz, so probably similar to my job in some ways.  (Mix things together, taste...)

How far is your commute?  You spend about what we do in gas, as we live 25 miles from work, but work in the same town so are able to carpool.  Any chance of decreasing that?  I'm guessing unlikely based on your very economical house.

Oh, and congrats on paying off your loans, that's just awesome!

lithy

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Re: Tell me something I don't know!
« Reply #3 on: June 02, 2013, 07:53:45 AM »
You should head over to the communications superguide. You could be paying ~$20/month for internet and $30/month or less for your two phones, and you'd be getting faster home internet in the process. The nation's cellular data networks are just about the most expensive way to get a megabyte from place to place, so the more you can use dedicated wired internet, the cheaper it'll be.

I will research again, but the last time I checked, I couldn't manage to get any home service for under 50 a month, that combined with an "I've had it" sort of moment with Comcast, led to me just axing all of the service.

Quote
Do you brew at home, too? Or is that $150 worth of expensive craft beer, which isn't really very much beer for the money? Winemaking is effortless, too, though it'll be six months before you'll want to drink any of it.

I used to homebrew, now that I probrew, I usually just grab beer from work if I'm in the mood.  The money is mostly coming from drinking and dining, which I know is an expensive waste of money. 

Quote
You can also check out the top 10 cars for smart people, because you are after all a smart person.

Hey, look at that, our Suzuki made the list.

Quote from: Zaga
How far is your commute?  You spend about what we do in gas, as we live 25 miles from work, but work in the same town so are able to carpool.  Any chance of decreasing that?  I'm guessing unlikely based on your very economical house.

Commuting is definitely a killer for us, we live on the South Side and I work in Lawrenceville, wife works further south in Bethel Park.  So while the drive is only 6 miles or so for me and 9 miles for her, it is decidedly Pittsburgh driving, up hills, across bridges, stop and go on slow 2 lanes,etc.  My city rated Taurus of 19 never sees commuting mpg better than 12.  Suzuki does about 20.

I have looked into finding an old small cc Honda CB or Suzuki GZ250 to use on nice days.  I also need to take some mustache advice and work some beer gut off on the bike.  Some days require a car though since we end up hauling kegs and equipment to events.

Thanks for the helpful replies!

Rebecca Stapler

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Re: Tell me something I don't know!
« Reply #4 on: June 03, 2013, 09:01:27 AM »

Commuting is definitely a killer for us, we live on the South Side and I work in Lawrenceville, wife works further south in Bethel Park.  So while the drive is only 6 miles or so for me and 9 miles for her, it is decidedly Pittsburgh driving, up hills, across bridges, stop and go on slow 2 lanes,etc.  My city rated Taurus of 19 never sees commuting mpg better than 12.  Suzuki does about 20.

I have looked into finding an old small cc Honda CB or Suzuki GZ250 to use on nice days.  I also need to take some mustache advice and work some beer gut off on the bike.  Some days require a car though since we end up hauling kegs and equipment to events.

Thanks for the helpful replies!

Ouch! That gas mileage is terrible, and it really adds up. A rough estimate based on $3.50/gal is that it's costing you $6/week to have 12MPGs and not the 19MPGs you expect. But if you compare that to a 30 or 40 MPG car, it's costing you $9-12/week ($624/year). I'm not too knowledge about cars, but if the Taurus is supposed to get higher MPGs, do you think there's something wrong with it? Or are you driving on snow tires in the summer, or do they need better inflation? (those are pretty much the only 2 things I know about cars that can decrease your gas mileage other than the car itself)

You might want to consider your options for replacing it with a higher MPG car. Our 2006 Prius has a lot of space in the back for hauling stuff (it's a hatchback) and averages 40 MPGs, with some of the best mileage in stop and go traffic. That said, if the Taurus is otherwise a low maintenance car and buying a used car to replace it would require you to borrow $, then you may as well use it until it needs a big repair -- or until you can buy a new-to-you car with cash.

SunshineGirl

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Re: Tell me something I don't know!
« Reply #5 on: June 03, 2013, 10:42:58 AM »
I would completely and totally focus on paying off your mortgage, including using 10K of your savings to do it and probably diverting money from your retirement accounts as well. The balance is just SO LOW and you could have it paid off very quickly. If you set a very aggressive goal on that, your spending in other areas might naturally take care of themselves.

Then, I might look to buy another small house and turn the one you've got into a rental. And so on.

homeymomma

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Re: Tell me something I don't know!
« Reply #6 on: June 03, 2013, 11:59:30 AM »
WOW! Writing from the DC area here, and my eyes are boggling at that home price. That's what we're having to save up just for a down payment! LOL!

Anyway, your spending is definitely super high in a couple places. #1 - alcohol. I'm all for having drinks with friends, but maybe invite people over to partake of your free stuff from work, or limit yourselves to 1 or 2 drinks ONLY when out with other people, not when you're just by yourselves. Plus, how much of that 200 dining out is actually alcohol as well?

Second, your shopping seems quite high. Neither of you have a super fancy job where you have to dress to impress every day, so why are you spending 100/mo on clothes? Try stopping the budget all together and see how long you can make it with what you have.

100/mo on gifts also seems very high. I myself am at the point in life when everybody and their brother is getting married and having babies, and we are able to skate along on only 50/mo for gifts, which even still seems high.

Huge congrats on paying off the loans! Things look so much better on the other side of the debt pile when you're watching numbers grow instead of shrink.

mahina

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Re: Tell me something I don't know!
« Reply #7 on: June 04, 2013, 12:13:34 AM »
aloha lithy
i read your post through to the end, and i just want to congratulate you for your good sense! you and your wife are in your twenties, and you're already figuring out how to make changes in your habits. lots of good advice from others here, on specifics. i'll just say, keep thinking of the future, talking together about your goals, and make a point of celebrating your successes. end of the month and you've socked away half your income? now you share a bottle of wine!
very best wishes to you!