Author Topic: 26 Year old, $30k debt roasting  (Read 6853 times)

ereamrod

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Re: 26 Year old, $30k debt roasting
« Reply #50 on: August 21, 2017, 09:16:01 AM »
Hey congrats on deciding to dive in!

I'm 26 too so I'm right there with you on navigating the waters of the different accounts.  The best thing I did was get JLCollins book, it's not overly wordy and he wrote it for his 19yo daughter so aimed for a novice who just wants to know what they need.

I had about 50k in student loan debt and recently destroyed it.  It was super gratifying.  I'd stick to what the others are saying as far as the order of operations but thought I'd offer some BoA advice. I have their cash rewards CC, I paid for EVERYTHING on this.  They give you actual cash back, not just money you can put back into your statement balance, and  if you redeem into a BoA account it's an extra 10%.  Pay it off every month and get a figurative discount on everything you buy.

BoA has a networth tracker and other tools you can use to track how much your spending if you are using their cards to pay for everything (see above).  I liked this but I was using other cards to hack away at my debt so now I use personal capitol to track my net worth.  It's really exciting to see it changing and it actually looks at the transaction of the other cards to see what your spending vs BoA seeing $150 to a citi card and lumping it into a financed group.

If you're in good standing with your CC they often offer you options for balance transfers or some do just for signing up, chace is great for this.  What I did was take these and put my student loans on credit.  The card would have zero money on it and I wouldn't touch it for anything. I'd get an offer for zero percent for 12 months, send 30% of my available credit limit to it to not mess up my credit score and just be sure to pay it off by the end of the year. You pay a small fee for the transfer but it was always less than what I'd be spending on the monthly interest for the loan. This way allowed me to build up a safety net/emergency but also save on the interest of my loans which were really stressing me out.  You're ahead of me because I wasn't really investing yet when I did all this.

If you decide to do this MMM And Mad fientist bth have CC pages that show the ones with the best offers. MMM just doesn't offer chace anymore, the banned him for his badassity.

Good luck and keep us all posted on how you're doing!

Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #51 on: August 21, 2017, 11:37:08 AM »
Roth might be a good idea for you because you can withdraw your contributions (not any earnings on them, though) without penalty if you need to. Sorry if I'm repeating anyone; I'm too fried right now to read back through the thread. Why does $61K income make things complicated? Pretty sure you can just open an IRA with Vanguard and plop your money in, as long as you don't exceed the $5,500 annual limit for people your age.

Only complicated in that he's in the phaseout for the traditional IRA potentially. So he can't just plop $5500 into a tIRA right now and get the full deduction- this means tax wise, ideally, he would do some in tIRA and some in a roth IRA. But that involves knowing your tax particulars. So the means waiting, or recharacterizing. Just a little more complicated than a clear cut, one way or the other type income number.

I'm curious if Wallace can contribute enough to his 401k this year though to get the full traditional deduction =) That would probably be best case scenario!

If I contribute to my 401k does that effectively 'lower' my income and therefore make 'more' eligible for the traditional IRA? I'm sitting at 61k if I take my gross income and multiply by the remaining months, not my take home income.

Paul der Krake

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Re: 26 Year old, $30k debt roasting
« Reply #52 on: August 21, 2017, 12:29:37 PM »
Yes.

Bracken_Joy

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Re: 26 Year old, $30k debt roasting
« Reply #53 on: August 21, 2017, 05:11:56 PM »
Roth might be a good idea for you because you can withdraw your contributions (not any earnings on them, though) without penalty if you need to. Sorry if I'm repeating anyone; I'm too fried right now to read back through the thread. Why does $61K income make things complicated? Pretty sure you can just open an IRA with Vanguard and plop your money in, as long as you don't exceed the $5,500 annual limit for people your age.

Only complicated in that he's in the phaseout for the traditional IRA potentially. So he can't just plop $5500 into a tIRA right now and get the full deduction- this means tax wise, ideally, he would do some in tIRA and some in a roth IRA. But that involves knowing your tax particulars. So the means waiting, or recharacterizing. Just a little more complicated than a clear cut, one way or the other type income number.

I'm curious if Wallace can contribute enough to his 401k this year though to get the full traditional deduction =) That would probably be best case scenario!

If I contribute to my 401k does that effectively 'lower' my income and therefore make 'more' eligible for the traditional IRA? I'm sitting at 61k if I take my gross income and multiply by the remaining months, not my take home income.

Precisely. Your 401k "hides" your money from the IRS, functionally. It just magically and wonderfully doesn't count then. So if you can get your mAGI down to below $61k, you can take the whole traditional deduction.

There are lots of tax projection calculators around that you can use, if you have access to your pay stubs =)
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Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #54 on: August 22, 2017, 12:10:25 PM »
Roth might be a good idea for you because you can withdraw your contributions (not any earnings on them, though) without penalty if you need to. Sorry if I'm repeating anyone; I'm too fried right now to read back through the thread. Why does $61K income make things complicated? Pretty sure you can just open an IRA with Vanguard and plop your money in, as long as you don't exceed the $5,500 annual limit for people your age.


Only complicated in that he's in the phaseout for the traditional IRA potentially. So he can't just plop $5500 into a tIRA right now and get the full deduction- this means tax wise, ideally, he would do some in tIRA and some in a roth IRA. But that involves knowing your tax particulars. So the means waiting, or recharacterizing. Just a little more complicated than a clear cut, one way or the other type income number.

I'm curious if Wallace can contribute enough to his 401k this year though to get the full traditional deduction =) That would probably be best case scenario!

If I contribute to my 401k does that effectively 'lower' my income and therefore make 'more' eligible for the traditional IRA? I'm sitting at 61k if I take my gross income and multiply by the remaining months, not my take home income.

Precisely. Your 401k "hides" your money from the IRS, functionally. It just magically and wonderfully doesn't count then. So if you can get your mAGI down to below $61k, you can take the whole traditional deduction.

There are lots of tax projection calculators around that you can use, if you have access to your pay stubs =)

In that case, I'm probably all set. If I subtract the amount I've put into my 401k (assuming that's all from this year) from my gross income, I'd be below 61k. Like you said, I'll probably have to check my last pay stub.

Bracken_Joy

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Re: 26 Year old, $30k debt roasting
« Reply #55 on: August 22, 2017, 12:13:54 PM »
Glad to hear it!

And how is your 'prospective budget' shaping up vs real spending? Still feeling satisfied stepping away from the 'unbearable lightness of being' mode of life (aka, party hard on the weekends?)
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Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #56 on: August 22, 2017, 01:01:10 PM »
Glad to hear it!

And how is your 'prospective budget' shaping up vs real spending? Still feeling satisfied stepping away from the 'unbearable lightness of being' mode of life (aka, party hard on the weekends?)

Nevermind I was wrong. About 1700 YTD. I'll answer that when I get home later. This month report is gunna be rugged. For the most part, I'm still trying to figure things out.

Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #57 on: August 22, 2017, 11:42:01 PM »
Glad to hear it!

And how is your 'prospective budget' shaping up vs real spending? Still feeling satisfied stepping away from the 'unbearable lightness of being' mode of life (aka, party hard on the weekends?)

I guess I started this journey on August 8th, so I guess I should be having a better month. That means I've been actively trying or aware of MMM for two weeks. Chalk it up to an adjustment curve.

Here is the prospective 'budget:'

Student loans:
Loan 1
--Outstanding balance: $7,744.64
---Interest: 6.550%
Loan 2
--Outstanding balance: $21,015.86
---Interest: 5.960%

Total Debt: $28,760.50
Minimum Payment: $400 split between the two loans

Revenue:
Job: ~$3,000/month

Expenses:
Rent/ Utilities: $600
Phone/ Car Insurance: $200
Groceries: $300
Gas: $150
Gym: $20
Xbox/ Netflix: $21
BoA Fee: $12
Misc: $75

Total: ~$1378

Apparent monthly payment able to put towards debt: $1622 (4x current payment)

Cash on hand: $8,033.41

So this wasn't actually a budget, it was just a list of expenses I'm 'okay' with paying (or was okay with paying). Hidden beneath this was more money I don't like spending, like 'bars and alcohol,' which has been pretty much out of control for months. 'Out of control' meaning I really didn't care I was spending it but now I don't want to spend it at all.

So, the BoA fee should be gone. I cancelled xbox live. And netflix is staying because my roommates use it, and one of my roommates pretty much pays for trash bags, dish soap, etc., and doesn't ask us for anything. The Misc. fee up there won't be returning either.

I can definitely see how groceries can be reduced. I had lentils and rice from a bygone era in my cabinet and have been eating them for lunch everyday. I went to the grocery store yesterday when I was still hungry and ended up buying snacks I didn't need. That was the first time I've been to the grocery store in August, spending $10.99. Realistically I could've got away with like $5. Still a far cry from $300 - but that was when I was 'bodybuilding' on mostly precooked chicken, lol. I honestly could see myself needing maybe four cartons of eggs a month, two bags of lentils, and a bag of rice as staples. Don't know the cost for sure, but this is under $25. I should probably get some vegetables in there too, but I'd need to cook them. I used to buy mass packs of steamfresh which could have been $2-3 a day on veggies. $60-70 a month on whey protein. If I changed that now, it could $50 for the month of September and that is high balling it. We will see. I don't want to get too excited, because I know who I am and how I am capable of getting off track, slipping back into not give a fuckery. I also know how you guys would chew me out. Something needs to be done, however, as I find myself still hungry after dinner.

All this being said, I have had some slip ups. I went out last weekend and had that sort of epiphany where I really didn't want to be out. And then I went out Saturday. It was pretty much last minute, and I fought tooth and nail the entire way, spending $22. Also, since starting, I think I have technically eaten out twice, both on Thrones Sunday. I'm starting to resent people who essentially ask me to do things that either: a) get me to get hammered, etc. or b) get me to spend money on shit I shouldn't spend it on (getting hammered, eating out, vacations).

I made the decision that I would keep all obligations I made previous to MMM so as to not lose my mind. Thus, I went to my brother's birthday party and took a $38 hit and in November I'm involved in a wedding where I'll be glad to take some more hits. Also, McGregor v Mayweather is a must buy but I'll have people to split the cost.

I want to start September clean so I'm trying to pay off any random bills: a $400 medical expense that I don't know how to pay and $90 I owe my friend from a while back.

Long post here. For anyone still interested, it's been an okay two weeks. If this community didn't exist, I don't think I could do this on my own. Also, it made me realize maybe I shouldn't 'stress' so much about my debt. I've also been questioning everything I own too meaning basically my vehicle, my phone and maybe even my body (nothing special, but it can take a lot of resources to bodybuild). I thought having a paid off vehicle was the way to go but it's not if you have shitty mileage. I'm considering getting the Moto X too and lowering my phone plan to $10 a month but not before I get some real numbers from my dad.

I can see myself getting along just fine. On the weekdays, I can just give in to the rat race, trying to enjoy the mediocre job I have and for what it is: a place of refuge from people trying to get you to spend your money. Wanna hang out Friday? Nah, man, I got work. 

I haven't been exercising because I really fucked up my back pretty much a month ago. I need to start again because I think I get very depressed or anxiety ridden if I don't exercise. My other post How To Be Bored (https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-be-bored/msg1655103/#msg1655103) should be renamed to How Does One Wage The Passive War To Financial Independence? You work hard all month, and then increase your net worth or decrease your debt at the end of the month. Then the cycle repeats. You see the needle move, and that is it, you gotta pass the time until the next deposit. And then eventually you realize you aren't fighting a war anymore, you've just altered your lifestyle to something realistically no different than before except for what you eat and how you spend your weekends.

Two weeks, not so bad. Lots of room for improvement.

Note: I have one pair of pants. I bought them like a year or two ago and they are falling apart, lol. Any advice on buying jeans? I'm thinking one pair for work, and one pair for everything else.

Bracken_Joy

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Re: 26 Year old, $30k debt roasting
« Reply #58 on: August 23, 2017, 08:49:03 AM »
So I might actually be the right person to be replying, haha. Husband and I are both fitness nuts. Large home gym, rogue equipment. He does more Oly than bodybuilding, and fights (currently loving BJJ, has done other stuff in the past). I've been out of sorts for a few months (long story) but used to do a lot more Oly and Crossfit/Metcon style stuff. Also, we're definitely watching the McGregor fight. (BJJ guy is ordering it though, and asking for donations or potluck style. I'll make a big pot of chili as my contribution, since none of those guys can cook haha. Maybe you could find a similar option to defray the cost? I know it's going to be the most expensive pay per view fee they've ever done on a fight, supposedly).

Anyway, a couple thoughts.

1) I think the other thread is covering it well, but don't cut yourself off from people just for frugality's sake. Find new friends, or redirect activities, or skip drinking while out (bodybuilding is a GREAT excuse for this, alcohol totally destroys your gains). But don't isolate yourself. That's like someone crash dieting, it'll never stick. Humans are social animals, and if you isolate yourself, you'll be totally miserable.

2) I count my health among my assets. Carefully weigh decisions for how it affects your health. You don't need precooked chicken and steam-in-pouch veggies and tubs of whey powder to be healthy, or even to lift. You need a healthy diet though, and to eat enough. Don't skip your veggies for money.
PS- any veggie can be a "steam in bag" if you put it with water in a covered container in the microwave: http://www.thekitchn.com/how-to-steam-broccoli-in-the-m-47176 After that just add some butter and some seasoning salt. Tada, it's already in the storage container even.
Eggs generally work out cheaper per gram protein than whey powder does, and they have other really good stuff as well (vitamin A and choline and all sort of wonderful things... don't throw out the yolks!). I buy 5doz eggs at a time from Costco, and have to do that every 7-10 days. I eat 2 eggs for breakfast, husband eats 4, and then we'll use eggs for other things as well, like tuna cakes (1 can tuna + 1 egg, add some salt and garlic powder, pat down flat in pan, fry in butter 4 min each side. Eat with hot sauce or soy sauce or feta cheese or pesto).
The website BudgetBytes is a great resource.

Point is, food can be delicious and fast and cheap and only require one dish to prep. You just need to get creative and plan ahead for your meals if you aren't going to be home. I work 12 hour shifts with NO lunch break (nurse) and I manage to eat whole real foods all the time. You can do it too!

3) Don't beat yourself up about your expenses not dropping to zero instantly. It can take some time to adjust and re-learn how you Do Life. And if you get too self-deprecating about your efforts, you will abandon them. I imagine you go through this cycle, since you mentioned wanting results immediately then giving up when that doesn't happen. So your curve would go like Discovery->Zealotry->Frustration->Self-deprecation->Self-punishment->Tiny slip ups->Completely give up. You need instead to cultivate an approach more like getting a college degree. You learn, you succeed, you fail in turns, and yet you always come back to something that progresses your ultimate goals.

A lot of times on the forums people have this view of TRY HARDER, RIGHT NOW, NEVER STOP, NEVER GIVE UP. But we know that doesn't actually line up with the psychology of change! As they say though, there's no zealot like a convert. These are usually people new to MMM, and they usually burn out after a while too. This is why it's so important to set goals, and have the long game in mind. Don't deprive yourself of friends and vegetables. Instead, build a life where friends and vegetables are both affordable and sustainable and build the life you want to lead.

Re the goals, I like this post and often come back to it: http://www.frugalwoods.com/2015/05/08/is-frugality-sustainable-without-a-goal/

4) Pants. Are you close to a thrift store? They tend to have larger selection than most anywhere, actually. What do you do? We buy husband's jeans at places like Cabellas, but then he works in industrial sites, so the fashion requirement is zero but the durability requirement is high. Either way, I recommend planning ahead and buying a gift card off cardpool to get additional % off.

Hope some of that helps!
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Peony

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Re: 26 Year old, $30k debt roasting
« Reply #59 on: August 23, 2017, 09:17:40 AM »
@Mustache_Wallace, it sounds like you're having some of the useful discomfort that leads to figuring things out. You're a young guy, you're figuring out how you want to live your life -- what's important to you. The MMM community has lots to offer in that regard, IMO. But change takes some time, especially when you're not exactly sure what you want things to change to. So, I'm sending you encouragement and good wishes. I think you're really smart to be questioning a life of debt and consumerism. I was a whole lot older than you are before I began to get my act together.

You pointed out that the "budget" you presented was actually just a list of expenses you were okay with (leaving out some other places where your money is actually going). Earlier, I recommended YNAB (stands for "You Need a Budget") but I'm not sure I made clear what it is. It's a budgeting software that many around here have found lifechanging. I strongly suggest you at least look into it. I, personally, use the desktop version rather than the subscription version. It has revolutionized my ability to make good plans for my money. Even if you don't take this advice, I wish you well and look forward to following your journey.

Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #60 on: August 23, 2017, 11:31:08 AM »
Quote
Discovery->Zealotry->Frustration->Self-deprecation->Self-punishment->Tiny slip ups->Completely give up

This is probably how most things in my life go. Sticking with things has always been hard. As for the college degree, I pretty much skated by without any real ambition. If I needed to get an A to keep the GPA afloat I would, and then go back to skating. Not the best way to approach things.

As for jeans, I don't need anything fancy but I probably wouldn't wear anything I didn't like, lol. I have to change into scrubs at work, I just want something without holes in them prior to changing.

You pointed out that the "budget" you presented was actually just a list of expenses you were okay with (leaving out some other places where your money is actually going). Earlier, I recommended YNAB (stands for "You Need a Budget") but I'm not sure I made clear what it is. It's a budgeting software that many around here have found lifechanging. I strongly suggest you at least look into it. I, personally, use the desktop version rather than the subscription version. It has revolutionized my ability to make good plans for my money. Even if you don't take this advice, I wish you well and look forward to following your journey.


I've been using Mint. Is YNAB that much different or better? My budget is spend the least amount possible that doesn't make me give up spending the least amount possible.

In other news, I paid off that medical bill today. I asked the lady why hasn't anything bad happened since I haven't paid it in months and she said it was about to go to debt collectors, lol. Crisis narrowly avoided.

Peony

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Re: 26 Year old, $30k debt roasting
« Reply #61 on: August 23, 2017, 08:01:00 PM »
I haven't used Mint but my understanding is that it's more for tracking spending rather than *planning* spending, which is what budgeting actually is.

Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #62 on: August 23, 2017, 10:59:00 PM »
I haven't used Mint but my understanding is that it's more for tracking spending rather than *planning* spending, which is what budgeting actually is.

It has a budget section. And if you go over on any budget it will send you a notification.

Mustache_Wallace

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Re: 26 Year old, $30k debt roasting
« Reply #63 on: August 23, 2017, 11:01:29 PM »
Does anyone know if the Moto X is actually good? Will switching from an iPhone to the Moto X and from Verizon down to RW be miserable? I know I could adapt, and would like to spend less time on my phone anyways but I am curious. It looks like I could be paying 80-100 for my phone right now which I never knew was the case. I thought the 200$ I gave my paps was mostly car insurance but it looks like it is half phone.

channtheman

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Re: 26 Year old, $30k debt roasting
« Reply #64 on: August 23, 2017, 11:44:48 PM »
Does anyone know if the Moto X is actually good? Will switching from an iPhone to the Moto X and from Verizon down to RW be miserable? I know I could adapt, and would like to spend less time on my phone anyways but I am curious. It looks like I could be paying 80-100 for my phone right now which I never knew was the case. I thought the 200$ I gave my paps was mostly car insurance but it looks like it is half phone.

It's gonna suck at first going from Verizon to RW and an iPhone to a Moto X.  I have a Moto E 2nd gen with RW and am on a grandfathered refund plan that no longer exists that costs about $12 and used to have a Droid Maxx on Verizon for $60 a month.  You'll notice the coverage is worse and the phone is worse.  But then you think about the money you pay for it and you just kind of deal with it.  I mean really, my wife and I could easily spend about 100 bucks for 2 lines/month or $1200 a year.  Instead we spend $12 a month each or about $25 a month (taxes affect price slightly) or just $300 per year.

You have to decide what is worth it to you, but unless you do business where you need to be reached at all times with the best coverage available, I know what would be worth it to me.  Also, my grandfathered RW plan will forever make it really hard for me to give it up. 

Bracken_Joy

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Re: 26 Year old, $30k debt roasting
« Reply #65 on: August 24, 2017, 08:34:22 AM »
I've definitely heard GoogleFi is much loved over republic wireless. Might be worth investigating.

Also, sounds like you need to shop around for car insurance. $200 for both those things is insane. We pay less than $60/month for TWO cars, one of which is a 2017.
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DarkandStormy

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Re: 26 Year old, $30k debt roasting
« Reply #66 on: August 24, 2017, 09:29:26 AM »
I've definitely heard GoogleFi is much loved over republic wireless. Might be worth investigating.

Love Project FI, especially so because of the FI pun on our FIRE journey.

That said, it's only compatible with 3 phones - the Pixel/Pixel XL, Nexus 6P, and Nexus 5X.  Google's site said they are out of stock on both Nexus models, though you can transfer over an existing phone if you own it.  I've heard other people have tried to rig their phone (which is not one of the 3 above) to be able to match up with Fi's service.

Pricing is very straight-forward.  $20 for unlimited talk & text.  $10/GB of data used - no overages or slowing of service.  Simple.  I'm consistently under $40/month and usually closer to $32-$35.  It's very easy to limit data - just don't watch videos or download anything if you're not connected to Wi-Fi.

You also get use of three cellular networks - T-Mobile, Sprint, and US Cellular.  So even if Sprint's coverage is horrible where you are, you have a chance to get good service from one of the other two.  The phone will automatically switch to the strongest network.

Another bonus is the ease of international use - can be used in 135 countries.  Data roaming is charged at the same $10/GB rate.  Texts are the same as well ("free") and calls are $0.20/minute.  So if you're an international traveler at all it comes in very handy.

Looks like the Pixels start at $649.  Google will let you pay it off over 2 years with 0% interest, so $27.04/month.  It essentially becomes a two-year "contract" I believe, though I'm not 100% sure.  Still, if you can manage around 1GB/month of data, that's ~$60/month for a Pixel + Project Fi service for the next two years.  If you have an existing Pixel or Nexus that you own, it's just over $30/month for the service.
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Peony

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Re: 26 Year old, $30k debt roasting
« Reply #67 on: August 24, 2017, 09:56:49 AM »
Mint may have a budgeting section that sends out notifications but it doesn't sound like it's doing you much good. I'm suggesting that there is at least one other system that many people here have found extremely useful, that may be worth taking a little time to consider. Good luck to you.

theotherelise

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Re: 26 Year old, $30k debt roasting
« Reply #68 on: August 24, 2017, 10:38:53 AM »
I have had a Moto X for 2.5 years and I am 100% satisfied. I did finally make some changes a couple months ago that enabled me to fall back in love with the phone. The husband and I are trying to avoid upgrade fever and so far it's working. I use the Nova Launcher instead of the android/motoX launcher. That lets me customize the home screen way more than I used to be able to and get rid of the permanently afixed google search at the top of each screen. I also downloaded a different texting app (Textra) because I do not love the way android messaging works. But it's a good phone with a long battery life and good sound quality. The camera isn't great, but that's not a big deal really.

I second or third the recommendation for budgeting and tracking. I use EveryDollar now because I prefer to do a zero-based budget. Before we used that, we budgeted and tracked expenses using google sheets. This is what we started with a couple years ago: https://docs.google.com/spreadsheets/d/1ryk0pNlChaq93yBDsMZq_D0bmrnXV7FU9nrt7Z01HEk/edit?usp=sharing

But still, every month I sit down with pen and paper and we list out all of our planned expenses for the month. That forces us to consider events like your fight night or big needs like new pants/shoes, and then we set an amount to spend for those items. Our big area for money leakage (spending without realizing it) was on lunch out at work. So we limited ourselves with cash-only on non-budgeted spending (miscellaneous stuff). All of a sudden we stopped spending so much on that! I'd recommend you give yourself a set amount for entertainment and eating out and get that amount out in cash each month. Once it's gone, it's gone.

At the end of the day, these kinds of lifestyle choices do cause you to have to say sometimes, "no, sorry I can't do that, it's not in the budget." And that is hard at first. But you can figure out better alternatives. Invite people over for board games or to watch sports. Meet up with people at the park for ultimate frisbee. Make friends through free hobbies like cycling or volunteering.

Oh! on the pants. You might be able to check out Plato's Closet if you've got one locally. A lot of men don't realize that they have a decent men's section with very affordable, gently-used clothes. But if you can't find something there, go get yourself a pair of pants from Ross's or JCPenny or Kohl's. Pants are a need, it's okay to buy a new pair of pants.

Goldielocks

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Re: 26 Year old, $30k debt roasting
« Reply #69 on: August 28, 2017, 12:48:51 AM »
Hey,  your case study isn't all that bad, you know.
Those debt rates to me are a bit "urgent", however  (the interest rates).   All over 5% and such...

I would:

1) Spend 2 months maximum to pay off the $7k debt in full, leaving a little over $1000 in the savings account for lifestyle cash flow surprises.  (they always come).

2)  Move the debt repayment from the smaller debt onto the second one to snowball it, maybe increase it by a couple of hundred more.

3)  Get all my employer matching funds starting in month 2...

4) Pay off debt #2 with any left over.
5)  keep maximizing my savings and expenses,  keep the pencil sharpened, in other words..

BUT ALSO -- look for ways to increase income!  You are 26, with  a degree or two (I presume)...  earning more money should be in your near future if you focus on it.  Start this now.

Good luck.

zoe2dot

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Re: 26 Year old, $30k debt roasting
« Reply #70 on: September 15, 2017, 11:23:20 AM »
How's it going, M_W?
I'm new to MMM and worry I won't be able to keep up my MMMing. 

What's on your mind/mustache after a month or two?


civil4life

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Re: 26 Year old, $30k debt roasting
« Reply #71 on: October 02, 2017, 06:16:09 PM »
I just read through your case study.

First awareness is the first step to change. You have done that and that is awesome.  I have 2 siblings 29 and 32 both living paycheck to paycheck and make enough money not too and have grown up with a parent that is very money conscious.  At 26 you are probably ahead of the majority of your peers or Americans in general.  I can tell you are very intelligent and I am sure you will be able to figure all of this stuff out.  It takes time and can definitely be confusing.  I am engineer and I find finance stuff confusing.

I think you are coming from this with the spend as little as possible without looking at the whole picture.  You make a decent income and your debt is not a huge debt emergency.  There is no need to go straight bare bones.  I think first you need to get a handle on how much and what you are spending your money on.  Then from there you are in a better place to set a budget.

I use mint as well.  It is really helpful in identifying how you spend your money.  You can look at the trends and see how much you are spending in various categories.  Also it lets you set a monthly budget so it can be used as well.  I have not used YNAB.  The mint will help you with the first step in identifying where is your money going.

I think it may be a good idea to think about what you really enjoy.  Are you an outdoors person or movie buff or sport fan. You can use meetup.com to find people that have similar interest as you to and that hopefully do not take you down a destructive path.

Also, with the phone there are various prepaid carriers that let you bring your iphone with you. 

Do you own a bike?  You said you were only 7 miles from the gym.  A great workout would be riding to the gym or even work if possible

Back pain and injuries are no joke.  Definitely do some research on exercises that will help strengthen your core so you can avoid future back problems.

It has been awhile since you updated, I look forward to hearing about your progress.

Suit

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Re: 26 Year old, $30k debt roasting
« Reply #72 on: October 02, 2017, 08:54:35 PM »
I just found this thread and wanted to see if you had considered refinancing your loans to get a lower interest rate? I used Earnest to refi my law school loans down to 3.5% (others use Sofi or other lenders).