Bye to loan; hi to home - what would you do?

[RollingGreen]

Hi, everyone.

This forum is a great resource, and I'm glad I've found it (first post here.) I'm not in the best of situations, but I guess that's why this forum exists. I'm currently not paying mortgage/rent, so that has been helpful. I like the idea of ER, but honestly that's not my immediate goal - My short-term aim is to pay off the student loans and purchase a home in the range of $180,000 to $200,000. A fixer-upper would be nice.

I'm looking to see what you would do in my situation. Also, going forward, I would like to know the best place to put my money in the future. Right now, I'm just using a Santander checking account. I like the idea of making your money work for you, so I'd like to optimize it.

The cash-flow spreadsheet, which I've filled out to the best of my ability, is attached. If I've forgotten anything or if you need further information, please let me know.

Thanks very much for the help you provide here. My details are below.



Life Situation: Single, no dependents

Gross Salary/Wages: $60,000

I'm contributing $46.16 bi-weekly to a 403(b) for now, as I am paying off a loan within the plan ($196.33 goes to this bi-weekly, and it should be paid off in six months.) I plan to bump up my contributions much higher soon.

Currently, the 403(b) balance is $15,072.06.

Other Ordinary Income: I am an adjunct instructor at the local university, though this is on an as-needed basis; I wish it were more frequent. The stipend is about $4,500 per course. Sometimes I have two courses in a semester; sometimes I'll go half a year without one. The extra income is helpful, though. This is not reflected in the spreadsheet.




Current monthly expenses:

Cell phone (AT&T) is around $315/mo. This is because I'm paying for three lines. I'd love to bring that way down, but I believe that could be approached in another thread.

I'm leasing a car (2015 Kia Optima) for $299/mo., and I'm looking into a buyout. The remainder is $11,400.

Credit Card: $1000. There is no monthly charge on this as it was a balance transfer. Hope to knock this off in a month.

Grocery purchases are about $250/mo.

Dining (umm... I like having a lot of beer with friends) is about $300. I get it - this could be cut out to get out of debt faster. I can feel the face punches already. Beer makes you fat and your wallet thin. :(

Student Loans: $11,672.70 remaining. I plan to attack this after the credit card and pay much higher than the minimum $112/mo. any longer.

[RWD]

You're spending 11% of your gross income on food and alcohol. That is ridiculous.
Your cell phone bill is also crazy. We're spending ~$50/month for two lines.
$167/month is a lot for insurance on a 2015 Kia. We spend significantly less than that on two cars.

Your spreadsheet seems to be missing a lot of expenses. You're not buying any clothes? No gas for the car? No gifts? I'm assuming since you aren't paying rent/mortgage someone else is covering utilities and such?

[RollingGreen]

Thanks for the quick response. Yes, rent and utilities are covered for now. I forgot about gas, which amounts to about $60/mo. I'm aware of the cell phone bill; I'm paying for three lines, and I'd like to get it down somehow. I realize that can be covered in another section of the forum, so I'm going to take a look to save from extraneous posts here.  The $300 is the extreme - it is often much less, but it fluctuates. I figured I would use the higher extent as a worst case. I agree about the insurance. Hoping to talk that down soon as I shop around.

[DoNorth]

switch to cricket wireless.  uses the AT&T network but for a fraction of a cost.  We got on a family plan with my folks.  4 lines for $100/month and 5GB of data each with free calling to Canada.

yeah, I like beer and wine too.  Pre-game before you go out, drink more at home with friends, home brew, alternate between domestic and pricier craft drafts, hit the happy hours.  Plenty of ways to still enjoy time out with friend while keeping the costs down. 

[Lady SA]

What is the reason you are paying for 3 lines? I see you are single, is there a reason the other 2 people can't have their own plan? Feel free to disregard/ignore if you are not comfortable responding, just thought I'd ask to see if a more radical solution to that line item was possible. If you only paid for your own line through Ting or Cricket, you would suddenly have $275 back every month, which would be really great when you are paying back your loan and saving for a house!

Do you track your expenses? Or use a service like Mint? I highly suggest tracking your spending (that means EVERY transaction) for a few months. This budget/expenses sheet seems full of holes (missing clothing, travel, medical, insurance, utilities, gifts, car maintenance, restaurants, personal items like shampoo and soap, entertainment, etc) so it isn't an accurate representation of your spending.
Once you know what you are working with, it will be much easier to see the fat to trim.

Agreed on the alcohol. Drinking less has really had a surprisingly big impact on our budget (I'm not proud of that fact...). When we do go out, we try to pre-game with alcohol at home (cheaper!) and then usually limit ourselves to 1-2 drinks at the bar. With dinner, I only have water and never get a drink. If I'm actually at a bar to drink, I usually get a flight and sip slowly so I can feel like I'm trying a lot of flavors but I essentially got the equivalent of a single beer, instead of getting a full glass of each flavor I want.

Grocery is actually pretty good for a single person!

[RollingGreen]

Thanks very much for the replies, DoNorth and Lady SA. I will be researching Cricket Wireless immediately after writing this. I read a few reviews earlier today, and it looks positive. No other caveats with Cricket that I should be aware of? I'm hoping the transition is smooth. The savings make this the most exciting prospect yet.

You're right - tracking expenses will have to be routine going forward, and I'll use Mint for the next few months to get a more precise picture. This will help fill in the gaps, and I'll update the spreadsheet then (I don't foresee clothes to be a significant cost, though - I buy them online very infrequently.) As far as groceries, I recently discovered Walmart (ugh.) I don't buy much to begin with, and it's priced at two or three dollars less. I actually had my first grocery shopping experience there yesterday, and it was ... good.

Thanks for the advice on the alcohol (This is starting to sound like a topic for a whole 'nother forum.) I realize this is a glaring expense, and it can simply be curbed. It just takes a mindset from reading a blog/forum like this to get focused. I just started reading the blog from the beginning a few weeks ago, and I've only skimmed the forum in the past couple of days.

Looking ahead, I'd like to see if it's better to put the max into the 403(b) plan or to save for that 20%. I know you should be "making your money work for you," so I'm trying to better understand where it should go to do so.

Appreciate your help. I owe you a beer ...

[RWD]

I.P. Daley is not a fan of Cricket. He's pretty much the authority on cheap cell phone plans. He had a really good guide but it doesn't seem to be up currently. Relevant forum post. Of course, he's not a fan of Google Fi either, which is what my wife uses.

Looking ahead, I'd like to see if it's better to put the max into the 403(b) plan or to save for that 20%. I know you should be "making your money work for you," so I'm trying to better understand where it should go to do so.

Investment order post.

Grocery is actually pretty good for a single person!

I disagree. It's only $2/month less than my wife and I spend combined (average over the last four years).

[RollingGreen]

My gosh - I was coincidentally reading I.P. Daley's thread-war from last year with a Cricket fan as you posted this reply. Haha. I don't want to re-ignite the firestorm of that thread, but Daley seems to be ideologically opposed to Cricket. I've read a few other reviews, and it looks - price-wise - to be a really good option. Plus, I could stay on the AT&T network, which is strong in my area. (I just read an article today that a new tower is going up soon, which will augment its strength.) Wow, Daley's authority and knowledge on the cellular communications industry is impressive.

Thank you for the investment order post link. This will be helpful.

Whether that grocery number was good or not, I am on the path of decreasing it (as per my Walmart visit yesterday.) Lower prices coupled with a mindset of more frugal purchases brought a typically $60+ bill to $36.

[RWD]

There are a few options to stay on the AT&T network without going to Cricket.

You seem to be on the right path. It's great that you're researching stuff yourself. We can throw tons of suggestions at you but ultimately it's up to you to decide what is best for your personal financial situation.

[RollingGreen]

True. For example, Airvoice looks like a viable option, as well.

And you're right - all the coaching is great, but I gotta be the player on the field.

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[CalBal]

I have Cricket. I pay $35 for 2GB (I think, or maybe 4GB, IDK), and I think I could go down to $30. I don't know anything about the drama or ideological opposition, but if you are in a location with a good AT&T network it is a good deal. You don't get cut off once you reach your cap, and you don't get charged extra. I've never noticed a significant slowdown, although I think I only went over the cap once or twice while traveling. If I were getting a cell now, I might go with Google Fi for the ease of international use, but Cricket is good. If you aren't in an area with a good AT&T network (like, I lived in NYC pre-9/11 and pretty much you had to have Verizon), then I don't know. I should say, I first signed on with Cricket before they were bought by AT&T. YMMV.

[RollingGreen]

Thanks, CalBal. Duly noted. I'm pretty sure the AT&T MVNO options are be the best deal because of the coverage in my area. Have you had any basic texting or MMS issues? Sounds as if you've had a positive experience overall, though.

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[RollingGreen]

Great suggestions, Finances_With_Purpose, and I appreciate the detailed response! The student loan rates are 3% each: one is $9227, and the other is $2396. I indicate this on the cash flow spreadsheet.

I'm curious about Santander's shortcomings now that you mention it. I've been with them (even back when they were Sovereign Bank) since 2001, and I have never had any problems with them. Customer service has been fine. There haven't been many fantastic perks either, but that's what's expected for a low-balance customer at a standard "large" bank, I'd think. I will look that up, though. With this in mind, what are some better banks, and what makes them so?

I also have investments with Mutual of America through my employer. I'm woefully (somewhat embarrassingly) uneducated on the stock market, so I might screen shot what funds I have and ask the experts in the other section of the Forum what I should do.

Agreed about the order of paying off debt (attacking that now), and - you're right - I may look into a roommate situation or find something cheaper.Who knows - this is down the line. I have seen friends who have purchased homes more than they could afford (like way more) and suffered for it. Silly.

I do enjoy a good side-hustle. As I mentioned above, I have additional income, albeit unreliable, through teaching online courses. I genuinely like doing it, as well, but I wish it were more consistent. I'm going to look into the "Entrepreneurship" section of this forum to see what other similar (or not-so-related) side jobs I could handle. I'm really not one to sit around, watch TV, and waste time.

Sneakin' a flask, huh? Haven't done that since ... college ... haha. Maybe that emergency fund should be built just for bail money.

Great encouragement, though - thank you.