Author Topic: Case Study: Finally admitting I am an adult  (Read 11362 times)

alltheccdebt

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Case Study: Finally admitting I am an adult
« on: December 11, 2017, 05:01:07 PM »
So, not going full bore retire as early as possible, but I do need to pull my head out of my ass. I've been slowly moving towards that this year but I recently re-discovered this site and it has renewed my resolve. This thread is mostly just something to keep me honest.

Status: 29, single and no kids, dog and a cat

Gross Salary: ~$80k, varies slightly with OT and vacation time

Deductions: 3% to hit the max 1/2 match from my employer, $135/mo health insurance

Taxes: 1% city, ~3.5% state

Expenses (monthly):
Mortgage: $750 principal and $400 insurance and taxes, first payment in January so lots of time left
Car: Insurance $114 during the race season, $85 or so in the off-season, $329 payment
Fuel: $150
Internet/phone: $150. Definitely not getting an expensive phone next time around
Utilities: $95 in the current apartment, expecting higher in the new house but not sure how much yet
Food: $250, includes mine and the pets. This probably still has room for improvement. Need ~2500 cal/day with current lifestyle
Other: $200/mo for bars, fast food, shopping, whatever
Credit card minimums: $650

Total: ~$2750

This is where it gets stupid

Assets
Race car: conservative worth of $8000
M3: $12,000
Speed Triple: $5000
Commuter crapcan: $6000
House: $145,000
401k: $11,000

Liabilities:
Student loans: $14,000 @5%
Car loan: $7900 @ 0% ($329 x 2 years)
Credit cards: $29,000

Additional: $5000/yr racing budget (consumables are basically paid for through contingency, just paying for entry costs and travel)

So the worst of it... Credit cards were at $2000 about a year and a half ago, but I've had two big nasty injuries playing hockey in the last year (lower back and torn PCL) and prior to that, bought things for the race car. Obvious smart money says sell all but the daily crapcan and I agree and fully expect to catch a lot of shit for that. Not going to happen. The reasons are purely emotional but they are what they are.

The commuter crapcan is on the expensive side but due to my field and not wanting to live in the middle of nowhere, I deal with commuting 85 miles a day. On the bright side it's basically a forever car and gets 40+mpg average, 50mpg on the highway in the summer. I do live within 5 miles of everything I could ever want to do in the city so I will be biking for most or all of my other normal miles.

My plan is to save $500 a month to rebuild an emergency fund after buying the house, and throw $1400/mo at the credit cards. Once I have $6000 or so cash I was planning on throwing all excess money until the credit debt is gone. I think I should look into a personal loan to consolidate all the cards into a much lower rate, but I'm thinking I should wait a month or two to let the house/move/credit rating settle out (could use some advice on this one). I also have a friend who is recently divorced and trying to sell his house. We have tossed around the idea of him moving in when that happens so that would help out a lot but I'm not counting on it.

Basically shooting for eliminating all of the credit debt and the car debt in 2 years even, then maxing 401k for a while and finishing off the student loans. All while traveling the country racing cars and having a blast. To be perfectly honest, working till 55 in a career I enjoy while still racing until I'm 80 sounds like a life well spent. If I do win the big show this year the plan would be to just drive other peoples cars, which would decrease costs significantly. Not a very good Mustachian, but sounds amazing to me.
« Last Edit: December 11, 2017, 05:02:38 PM by landstuhltaylor »

Bracken_Joy

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Re: Case Study: Finally admitting I am an adult
« Reply #1 on: December 11, 2017, 05:09:27 PM »
I.... will just start by leaving this here. https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

What rates are your CCs at?! $29k on credit cards is insane. INSANE. Deeply, deeply worrisome levels of insanity.

LifeHappens

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Re: Case Study: Finally admitting I am an adult
« Reply #2 on: December 11, 2017, 05:18:32 PM »
What is your net take home pay every month? Why are you aiming for $6000 in cash? And definitely do look at refinancing those CCs now before rates go up! See if you can get a 0% balance transfer for at least part of it.

ixtap

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Re: Case Study: Finally admitting I am an adult
« Reply #3 on: December 11, 2017, 05:24:39 PM »
One of us is missing the student loan payment on your monthly expenses.

You have 3 cars and a motorcycle? And none of them need any maintenance? I have an expensive hobby myself, but this seems a bit much.

All of that is to say: I am not convinced you have a handle on your monthly expenses, even before moving into the new house.

MDM

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Re: Case Study: Finally admitting I am an adult
« Reply #4 on: December 11, 2017, 05:31:01 PM »
The good news is the 50% match on the 401k is probably higher than the credit card interest, so keep getting the 401k match.

After that, why put any money beyond life essentials (however you define that) into anything other than getting rid of the CC debt (assuming that is ~18% or higher)?  As Warren Buffett said, "If you’re willing to pay 18% on a credit card, you will not come out well."

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #5 on: December 11, 2017, 05:35:40 PM »
Current monthly take home is about $4600, varies a bit and working on increasing that. Yes the credit card debt is insane you will get absolutely zero arguments from me. I haven't seen a mechanic in ~9 years so all of the vehicles is done by me. One oil change on the bike every year, two on the main car, two on the race car, and one on the M3. Tires for the race car are free and usually get sold for profit when I get new ones. Some of the contingency also gets redeemed for parts for the other vehicles or sold as they come in. All budgeted maintenance accounted for either in the Other category or rolled into the racing budget (which is a high estimate, I don't think it will be that).

Again, I know this is all stupid. My motivation for posting was to slap myself in the face once again. While I blame most of it on the injuries ($7k deductible and hit it both years) a lot of it was having everything else auto-paid and convincing myself that somehow the next months budget wouldn't include XYZ expense. Every time I think about buying something I don't need I will open this thing up first.

Up until recently I reffed hockey games on the side for $400/mo but I found I was always tired, ate like crap, and was always stressed out. Didn't seem worth it at the end of the day when all the other costs associated with getting to the games was factored in.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #6 on: December 11, 2017, 05:41:37 PM »
The good news is the 50% match on the 401k is probably higher than the credit card interest, so keep getting the 401k match.

After that, why put any money beyond life essentials (however you define that) into anything other than getting rid of the CC debt (assuming that is ~18% or higher)?  As Warren Buffett said, "If you’re willing to pay 18% on a credit card, you will not come out well."

While I'm well aware the net effect is well below zero, the racing is directly related to my career and has gotten me the leg up in all of my job opportunities. I really don't see earlier retirement to be worth giving it up. That may change in the future, but not now. I am at the very least making my schedule based on expected costs/winnings and passing on events that aren't worth it.

Basically I eat/sleep/live motorsports and want to fund that hobby while putting myself in a position to retire earlier than most people and enjoy a stress-free life.
« Last Edit: December 11, 2017, 05:43:14 PM by landstuhltaylor »

MDM

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Re: Case Study: Finally admitting I am an adult
« Reply #7 on: December 11, 2017, 06:02:15 PM »
The good news is the 50% match on the 401k is probably higher than the credit card interest, so keep getting the 401k match.

After that, why put any money beyond life essentials (however you define that) into anything other than getting rid of the CC debt (assuming that is ~18% or higher)?  As Warren Buffett said, "If you’re willing to pay 18% on a credit card, you will not come out well."

While I'm well aware the net effect is well below zero, the racing is directly related to my career and has gotten me the leg up in all of my job opportunities. I really don't see earlier retirement to be worth giving it up. That may change in the future, but not now. I am at the very least making my schedule based on expected costs/winnings and passing on events that aren't worth it.

Basically I eat/sleep/live motorsports and want to fund that hobby while putting myself in a position to retire earlier than most people and enjoy a stress-free life.
Note the phrase "however you define that". ;)

Not trying to suggest that you give up something that makes life worth living for you.

Am suggesting that you not rebuild an emergency fund because those dollars should go toward your current "emergency", the CC debt.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #8 on: December 11, 2017, 06:04:51 PM »
One of us is missing the student loan payment on your monthly expenses.

$250/mo

I'm still finalizing a lot of these numbers. I've cut~$100 out of the food budget in the last two months or so and trying to see if that can come down more. Cut out hockey ($2000/yr), cut car insurance down and got rid of one car payment (car is already at rock bottom depreciation, so won't lose more value at the least). Cut my phone bill by taking advantage of the company discount and dropping the data down. Netflix access from a friend so that's free, no cable. Used to blow way too much at the bar, trying to keep that to $10/week or 15 max and no more alcohol in the house.

Considering doing a partial bike commute of 15 miles or so once my knee heals both for exercise and saving some more money. Selling all the random crap I've held onto from spare car parts to just things I don't use. Very much in the beginning phase of living simpler.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #9 on: December 11, 2017, 06:07:08 PM »
The good news is the 50% match on the 401k is probably higher than the credit card interest, so keep getting the 401k match.

After that, why put any money beyond life essentials (however you define that) into anything other than getting rid of the CC debt (assuming that is ~18% or higher)?  As Warren Buffett said, "If you’re willing to pay 18% on a credit card, you will not come out well."

While I'm well aware the net effect is well below zero, the racing is directly related to my career and has gotten me the leg up in all of my job opportunities. I really don't see earlier retirement to be worth giving it up. That may change in the future, but not now. I am at the very least making my schedule based on expected costs/winnings and passing on events that aren't worth it.

Basically I eat/sleep/live motorsports and want to fund that hobby while putting myself in a position to retire earlier than most people and enjoy a stress-free life.
Note the phrase "however you define that". ;)

Not trying to suggest that you give up something that makes life worth living for you.

Am suggesting that you not rebuild an emergency fund because those dollars should go toward your current "emergency", the CC debt.

Oh I fully understand that. My main thinking for the emergency fund is that I can't pay a mortgage without cash. If for whatever reason I were to have some life change where I lost my job I don't want to have to hand my house back to the bank. Although I suppose that may be unnecessary as I should probably just sell the motorcycle if that were to happen.

Laura33

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Re: Case Study: Finally admitting I am an adult
« Reply #10 on: December 12, 2017, 06:54:32 AM »
Race car: conservative worth of $8000
M3: $12,000
Speed Triple: $5000
Commuter crapcan: $6000
. . . .

Student loans: $14,000 @5%
Car loan: $7900 @ 0% ($329 x 2 years)
Credit cards: $29,000

Dude.  Ok.

First:  car girl here.  I get it, and I'm not going to try to talk you out of racing.

Second:  Do you race the M3 and speed triple too?  Why do I think the answer is no?  Is it safe to assume those are the "I want to have fun while driving around" vehicles, a/k/a "please don't force me to drive the commuter crapcan all the time"?

You have the cart thoroughly in front of the horse -- and despite your "I'm a grownup" claims, you are continuing down that path.  Why do you have three toys instead of one when you have almost $50K in debt?  And for the love of Pete, why are you taking on more debt to buy a house that you don't need -- especially with that other debt outstanding??

You can have some things, but you can't have all the things.  Life is an "or," not an "and."  Pick your top priority -- presumably, the racecar.  Sell the other toys.  Pay off your debt* -- not in two years, this year, or six months even.  You make plenty of money to knock it out ASAP, especially if you bring in some cash selling the extra stuff.  Then start socking money away -- build an EF, max your 401(k) and IRA/Roth.  Once the debt is gone and you have the savings set up automatically, now you know what your "real" net income is and can figure out what other luxuries you can actually afford -- going out more with friends?  a house?  another fun car?  More savings to be FI sooner so you have more time to race?  Etc.  But you don't get those other things until you take care of business first.

*Except the 0% car loan, which is free money.

kendallf

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Re: Case Study: Finally admitting I am an adult
« Reply #11 on: December 12, 2017, 07:23:48 AM »
+1 to Laura's advice.  Keep a boring commuter and the race car, sell everything else.  Your racing passion will actually benefit as you won't be spending time and energy paying for and maintaining the middle of the road cars.

I'm a car guy and for many years I couldn't say no to a good deal.  Result: lots of unfinished project cars cluttering up my garage (and yard!).  Now I daily drive a Prius with 230k+ miles and my Grand National is actually painted and running nicely. 

Final thought: I don't think you have a real handle on your expenses, especially the non-regular (but recurring!) ones.  Go sign up for Mint, track everything for a couple of months.  Proceed to freak out at all of the stuff you didn't remember spending on.  Fix it.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #12 on: December 12, 2017, 09:27:52 AM »
Agree with all of your points.

I bought the house as even with renting a very cheap apartment and storing the tools and just one car (let alone two and a bike) it costs about the same as my mortgage. Factor in a place that is not a dump and I come out way ahead even on just the monthly cost by buying. This is a very expensive city to rent vs buy.

I don't race the M3 any more, but I used to. I actually still need to de-sticker it and put the stock parts on that I still have so I can sell the pricier items that also make it a crappier street car. At the very least I can at least promise to seriously think about selling it come spring time when it will be easier to move. Speed Triple, no racing and purely emotional reasons for keeping it. It's mostly used on weekends for any and all trips that can replace driving the commuter. The cost here is really $150/yr maintenance, $150/yr insurance, probably $150/yr more than I would otherwise spend on fuel for the car, and obviously the ~$5k I could sell it for and reduce my debt.

I have been on Mint for a few years but have really failed at paying attention to what it was telling me which changes now. Probably 95% of my expenses that did not make it on my list where things I look back on and honestly say I did not need them. Things like a TV, video games, car parts, extra clothes/shoes, furniture etc etc. I know there will be additional items like home maintenance which are not accounted for. Doing things myself should minimize this but I should be aware of it.

Seems step 1 should be consolidate the debt (did a soft inquiry at 3 years, 9.95%, pay extra as available). Part of me would love to close all the cards except one just for the mental aspect, but I assume it's best to just stuff them in the deepest depths of my sock drawer. Currently interviewing for a new position at work that could be $0-5k less salary, but infinitely better benefits (better healthcare, better 401k match, paid vacation and other perks), a signing bonus, and yearly bonus. Clean things up and get them ready to sell. And open this thread every day to keep on track.

MightyAl

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Re: Case Study: Finally admitting I am an adult
« Reply #13 on: December 12, 2017, 09:36:06 AM »
Agree with all of your points.

I bought the house as even with renting a very cheap apartment and storing the tools and just one car (let alone two and a bike) it costs about the same as my mortgage. Factor in a place that is not a dump and I come out way ahead even on just the monthly cost by buying. This is a very expensive city to rent vs buy.

I don't race the M3 any more, but I used to. I actually still need to de-sticker it and put the stock parts on that I still have so I can sell the pricier items that also make it a crappier street car. At the very least I can at least promise to seriously think about selling it come spring time when it will be easier to move. Speed Triple, no racing and purely emotional reasons for keeping it. It's mostly used on weekends for any and all trips that can replace driving the commuter. The cost here is really $150/yr maintenance, $150/yr insurance, probably $150/yr more than I would otherwise spend on fuel for the car, and obviously the ~$5k I could sell it for and reduce my debt.

I have been on Mint for a few years but have really failed at paying attention to what it was telling me which changes now. Probably 95% of my expenses that did not make it on my list where things I look back on and honestly say I did not need them. Things like a TV, video games, car parts, extra clothes/shoes, furniture etc etc. I know there will be additional items like home maintenance which are not accounted for. Doing things myself should minimize this but I should be aware of it.

Seems step 1 should be consolidate the debt (did a soft inquiry at 3 years, 9.95%, pay extra as available). Part of me would love to close all the cards except one just for the mental aspect, but I assume it's best to just stuff them in the deepest depths of my sock drawer. Currently interviewing for a new position at work that could be $0-5k less salary, but infinitely better benefits (better healthcare, better 401k match, paid vacation and other perks), a signing bonus, and yearly bonus. Clean things up and get them ready to sell. And open this thread every day to keep on track.

I am assuming that the M3 is an e36.  I have seen the prices on those going up here in the last year.  You might be able to do pretty well if you get rid of it. 

Bracken_Joy

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Re: Case Study: Finally admitting I am an adult
« Reply #14 on: December 12, 2017, 09:37:28 AM »
Stuff the cards away if: 1, you can trust yourself not to use them and 2, they have no annual fees. IF they do have annual fees, you can open a no fee one with the same company and generally preserve that age of credit. (Ex, this is how it works with american express for their blue cash preferred (fee) vs their blue cash every day (no fee). You'd have to double check though).

Is the emotional aspect of the speed triple worth the financial catastrophe you're in right now? =\

Smart on looking hard at the mint now. As I'm sure you realize, consolidating and paying off debt will ultimately achieve nothing if you just wind back up in debt. You've clearly been living well beyond your means, and now it's time to pay back on everything your Past Self screwed you on. It's also time to figure out how not to screw Future You. It seems like passive tracking like Mint might not work that well for you. Some people do far better having to manually enter their transactions, like with the original YNAB or a spreadsheet. (Or I think maybe current YNAB if you just don't set it up to sync to stuff? I'm not sure, I'm a Mint user).

Keep at it. You've got a long way to go, but you're making important progress. Keep up the motion.

Laura33

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Re: Case Study: Finally admitting I am an adult
« Reply #15 on: December 12, 2017, 10:50:16 AM »
The cost here is really $150/yr maintenance, $150/yr insurance, probably $150/yr more than I would otherwise spend on fuel for the car, and obviously the ~$5k I could sell it for and reduce my debt.

. . . .

Seems step 1 should be consolidate the debt (did a soft inquiry at 3 years, 9.95%, pay extra as available).

What are your CC rates?  If the Speed Triple is costing you $450/yr and is worth $5K, and your highest CC is at 20%, keeping it is costing you $6540+ for this first year alone.  How much is the M3 worth?  Add insurance + gas, and multiply the whole thing by 1.2 to see how much that is costing you to hang onto.

FWIW, I am not a fan of debt consolidation -- or, to be more blunt about it, consolidation is appropriate only when it is the last option after the budget has been cut back to the bone.  It is not an appropriate excuse/justification to hang on to luxuries that you can't afford but don't want to get rid of -- that's not fixing the underlying problem, it's just replacing one horrible debt with a slightly-less-bad one (a/k/a "rearranging the deck chairs on the Titanic").  Most people need the daily pain of cutting back and paying off the debt, a bit at a time, to really "get" why debt is an emergency and how it gets in the way of what you really want in life. 

Here, you're making progress on your lifestyle and mindset, and I don't want to belittle that in any way.  And yet at the same time, you're still looking for any excuse to keep not one, not even two, but three luxury vehicles ("racing is non-negotiable"; "oh, it's not THAT much money"; "what if I think about it in the spring?"), and thinking that 2 years is perfectly fine(!) to pay off a CC debt that is probably half a year's net pay*, while rejecting options that would help you expedite that ("my side hustle was just leaving me too tired for only $400/mo"). 

In short, you aren't there yet.  I think you're like most people and are going to need to feel the pinch for a while to really get exactly how much that debt is costing you (metaphorically as much as financially).  Do not consolidate until, at a minimum, the two extra toys are gone.

*And I'm assuming the interest rates must be horrendous, since you're not even publishing them here.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #16 on: December 12, 2017, 11:47:16 AM »
The worst of the cards is 20%. Currently the M3 is about -$15/mo insurance and $0 fuel since it isn't on the road and not being driven, nor has it been in about a year and a half. That probably just makes the math worse lol. And E46, so even worse than an E36 in MMM terms.

I appreciate the advice given so far and I will be looking into it. I don't ever intend to go full bore MMM, but I would like to incorporate much of it to find a nice blend (for me). Pretty certain at least one of the vehicles will disappear, possibly to a friend who has been looking for one lately.
« Last Edit: December 12, 2017, 11:51:18 AM by landstuhltaylor »

Novik

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Re: Case Study: Finally admitting I am an adult
« Reply #17 on: December 12, 2017, 11:54:53 AM »
I know nothing about cars, so this may be a ridiculous idea, but if the Triple and the commuter are so similar in value, and you are unwilling to sell the Triple, why not sell the current commuter and drive in the Triple? If having the car is that important to you, why not use it and still get down to two cars?

Also please kill your credit card debt with fire. And post a breakdown of cards/rates/balances for prioritization/accountability.

Laura33

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Re: Case Study: Finally admitting I am an adult
« Reply #18 on: December 12, 2017, 12:09:06 PM »
The worst of the cards is 20%.

Ok, so not usury.

Currently the M3 is about -$15/mo insurance and $0 fuel since it isn't on the road and not being driven.

What's the car worth?  With your 20% CC rate, if it's worth $10K, it's costing you @$2K in interest every year.  If it's worth $25K, well, there's almost an entire CC payoff right there.

Try this:  for so long as you have CC debt, multiply everything you buy -- food, clothes, gas, everything -- by your highest CC rate.  Because that's how much it's really costing you.  That @25K/yr lifestyle?  It's actually costing you $30K.  That's almost a full IRA contribution that you are giving away every year you still have that debt.

LifeHappens

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Re: Case Study: Finally admitting I am an adult
« Reply #19 on: December 12, 2017, 12:28:55 PM »
Look, I'm not going to facepunch you for racing because I own a boat and am not a hypocrite (but I don't have any debt except my mortgage). I AM going to facepunch you for holding on to two vehicles you don't need, including one which is useless right now. Don't wait until spring. Start selling cars, car parts and anything else you have laying around and get the CC debt paid down. 20% interest will eat you alive.

GetSmart

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Re: Case Study: Finally admitting I am an adult
« Reply #20 on: December 12, 2017, 01:15:23 PM »
So first the math is wrong on your monthly expenses:

It should be $3324 including the school loan payment - so you should fix that.

With a net income of ~4600 - 3324 = 1276/mo that you aren't accounting for.

Knock down the bars/eating out to zero added to the 1276 = 17712+7800 min. payments (! are you really only paying the minimum? - ouch!)  plus whatever OT pay / bonus, extra money from selling off stuff and your credit cards are gone within the year.  Those are the priority.

Anybody can 'suck it up' for one year -- you could probably even (gasp) give up racing (5k) for ONE year.

Also you might want to fill out a proper case study so you know exactly where your money is going and how much is coming in.

Moustachienne

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Re: Case Study: Finally admitting I am an adult
« Reply #21 on: December 12, 2017, 03:59:03 PM »
"Give me chastity and continence, but not yet." So many Case Studies remind me of this quotation from Saint Augustine.  :)

Further thoughts:

a) there are SO many kind and conscientious commenters on this Forum, willing to provide excellent detailed advice to the "but not yet" posters;

b) I have a few "but not yet" areas in my very own life, where my words say I want a different outcome but my actions say otherwise!

These "but not yet" posts are frustrating to read but useful for self reflection!

Meesh

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Re: Case Study: Finally admitting I am an adult
« Reply #22 on: December 12, 2017, 04:57:31 PM »
How did you buy a house when you are 50k in debt? How much did you put down? What you put down is the amount you have in assets not 145k, that's it's worth. Also a good rule of thumb is to account 1000/month per every 100k in house because of taxes and maintenance etc. So my guess is housing is will end up being more like 1500, maybe a bit less if you DIY a lot. Is that really cheaper than an apartment?

If you hit your 7k deductible every year then you need MORE than 7k in emergency savings, 6k won't cut it. At least 8k if not closer to 10k minimum that would be your deductible plus a months expenses. This is a big part of your cc problem. But you said you were at 2000 so... what did you spend 20,000 dollars on in 18 months? That's averaging 1100/ month over what you make (presumably since you have no savings out of your 401k and not including that 7k in deductibles). Even if it's 14k in deductibles that's still 720/month in random spending. You have a massive spending problem. You are likely to slip up. So... Check to make sure they don't have any annual fees then cut up all your ccs  but one (which will only be used until you have that 7k deductible money then cut that one up as well). Hide the last one or mail it to mom or something.

Because you hit your deductible every year I'd honestly consider just adding that amount to your budget. 583.33/month for living an extreme sports life or whatever. You need to be honest with yourself what things are costing you.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #23 on: December 12, 2017, 06:52:09 PM »
Those medical expenses were two years in a row, so 14k. Didn't budget for it and still don't plan on it because 1. Last medical issue I had was a broken hand and surgeries for it. That was back in high school, 0 out of pocket for anyone. 2. For the time being I don't play hockey and won't go back until the healthcare situation changes.

I think this will be my last post for a while. I've gotten some good advice I will look into. Not really interested in what someone else thinks of the car habit. I put a different number on that value and I don't expect or care if the people here agree with that number. Really this should have gone into the journal forum but I didn't notice it until after I posted.

Also, 900/mo is considered cheap for rent around here if it's not in a very high crime area which would also be on the complete opposite side of town from work. $700 is the lowest I have been able to find for a shoebox, plus the issue of it not having parking.

I plan on posting an update in May or so.
« Last Edit: December 12, 2017, 06:54:41 PM by alltheccdebt »

ixtap

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Re: Case Study: Finally admitting I am an adult
« Reply #24 on: December 12, 2017, 06:54:47 PM »
No one has ever gotten injured working on or racing motor vehicles.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #25 on: December 12, 2017, 07:33:43 PM »
No one has ever gotten injured working on or racing motor vehicles.

For the type I do, it's incredibly rare. Like really, really, really, really rare. More people have killed themselves on golfcarts at events...seriously.

And just wanted to post some proof of my numbers (not really comfortable yet going into a shit ton of detail). Last month was the last one with high rent and I still spend too much on food and needless trips to the tune of~$300 total. This was the first month I really took stock of things, but with saving for the house made no headway on the debt. Spent $3550 total of my $4600 take-home. The house will drop combined housing+insurance+storage cost by $475/mo (but again utilities will be higher and some maintenance). Buckle down on everything else which I am on track for and $3000/mo should be doable for required expenses/payments. Rest will all go towards CC debt.

Hope to pop back in a few months with real progress. :)

Meesh

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Re: Case Study: Finally admitting I am an adult
« Reply #26 on: December 12, 2017, 07:38:33 PM »
If hockey injuries are no longer an issue, then I revise my above posted recommendation and say save 1,000 in emergency money. This will get you through most major problems. It will take you less than 2 months. If that scares you go for 3100 which is enough for a full months essentials. Then throw all extra at credit cards until its gone. 29k in cc will take awhile. Then go back and do a real emergency fund of 3-6 months. After that go start retirement savings. Good luck

ixtap I was talking about hockey not cars if that was about me, I didn't realize he had stopped playing.

Ben Kurtz

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Re: Case Study: Finally admitting I am an adult
« Reply #27 on: December 14, 2017, 11:30:34 AM »
If this divorced friend does not end up moving in to your house, could you rent out spare rooms to other long term roommates, or on Air B&B (if you are in an area with tourist demand)? That could easily replace the $400 per month you got from refereeing hockey games, and then some, with probably a lot less effort.

The credit card debt is eating you alive. Sell the M3 an associated spare parts within the next three months, take a massive whack out of that debt, and refinance what remains at 10% interest or less. At that point things will look a lot better. Plan to pay down the remainder by the end of 2018.

You're grown up enough to realize that you are trading a chance at early financial independence for a hobby which you seem passionate about. And that's a fair trade for a grown-up to make, eyes wide open. I won't begrudge you that, and most folks here won't, either. But the $29,000 in high-interest credit card debt is a big, red, blinking warning light that you are not executing on your "trade independence for racing" plan in a sustainable fashion. You can drive a car hard; it's much riskier to do so when the low coolant light is on. Yes, the temperature gauge is holding steady for now, but it's kind of hard to say when that pinhole leak on radiator hose will burst wide open and leave all your coolant in a puddle on the interstate -- and you with 90 seconds to get that engine shut down before it catches fire. Yeah, you'll probably skate by, but you're vastly better off taking some corrective action in response to the warning light.

Take on a roommate, sell the M3, make a big pay-down on the credit card debt, and update us again in March 2018, not May 2018 like you threatened.

Bee21

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Re: Case Study: Finally admitting I am an adult
« Reply #28 on: December 16, 2017, 03:17:55 PM »
You sound a bit hurt. Hm. Some things needed to be said first, even though it was prob not the answer you expected.  There was a successful blog a few years ago, with a dude paying off 100k student loans. No more Harvard debt. He sold his extra cars and motorbike when he was halfway through. He needed a considerable amount of time to realise the obvious answer to some of his problems.

I live with a car and boat person. His non negotiable vehicle needs (NNVN) are costing us around 20k a year. Yup. He refused to believe it at first but spreadsheets don't lie. Was kidding himself, like you do, that the car did not cost us that much. Its a tax deduction. All the boat needed was an extra x. Yeah, sure. Apparently it is essential to his happiness so I accepted this. Will also go down next year after he pays off the dickmobile. He also cut back in other areas to compensate. No more gadgets and new fishing rods. We have a high income,  no debt, a good looking emergency fund, considerable retirement savings... we can afford it,  even though we would be so much better off without these NNVN.

 You are not there yet. If those vehicles are so important for you, create a life where you can afford them. That might happen after you pay off the cc debt. Keeping the extra vehicles might not cost you that much, but keeping the credit cards and not having an emergency fund definitely will. You might be one accident away from a major financial disaster. You never know. What is your worst case scenario? If shtf, you might need to sell the mororbike at a fire sale, it is better to do it when you are not that desperate.

 I would put the extra vehicles on the market tomorrow.  Don't wait till spring, you will prob pay more on the cc interest than the difference will be.  Sell the parts etc. Pay off the ccs with the highest interest first. Transfer whatever you can on a card with 0% interest. Keep going until you have no cc debt left. Build an emergency fund.  When you are at that point, you can reconsider your NNVN.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #29 on: August 16, 2018, 06:35:28 AM »
Update: Hit net zero recently and now I'm in the green ~$1500. Moving a little slower than I hoped but that was to be expected. I did get a new job making less money but it comes with way more vacation, GOOD health insurance, 8% match on the 401k, smallish yearly bonus as well as other perks. Yearly total cash compensation will fall somewhere in the 75-80k range. Also got a roommate last month who is contributing $500/mo as rent.

Still working away at the non-mortgage debt at an average rate of ~$2200/mo which should increase in the winter as my spending naturally decreases. Home has also appreciated about 10% since I bought it less than a year ago.

BrightFIRE

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Re: Case Study: Finally admitting I am an adult
« Reply #30 on: August 16, 2018, 12:03:15 PM »
Congratulations! That must feel great.

AMandM

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Re: Case Study: Finally admitting I am an adult
« Reply #31 on: August 21, 2018, 08:53:27 AM »
Congrats on the progress!
Have you been able to sell a lot of parts as you were planning to?  Did you sell a car?
Are you feeling deprived and grimly hanging on, or are you feeling energized and positive?

ToTheMoon

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Re: Case Study: Finally admitting I am an adult
« Reply #32 on: August 21, 2018, 10:48:30 AM »
Update: Hit net zero recently and now I'm in the green ~$1500. Moving a little slower than I hoped but that was to be expected. I did get a new job making less money but it comes with way more vacation, GOOD health insurance, 8% match on the 401k, smallish yearly bonus as well as other perks. Yearly total cash compensation will fall somewhere in the 75-80k range. Also got a roommate last month who is contributing $500/mo as rent.

Still working away at the non-mortgage debt at an average rate of ~$2200/mo which should increase in the winter as my spending naturally decreases. Home has also appreciated about 10% since I bought it less than a year ago.

That is a great update, and the new job sounds like it was a good move - are you enjoying it?

I know I found my motivation dipped a little bit once debt payoff happened and it took me another year or so to get back on track (I let a bit of lifestyle inflation set in.)  Set small goals for yourself and keep smashing them out so that you don't lose focus!

Looking forward to your next update, and hope you keep checking in frequently!

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #33 on: August 25, 2018, 08:55:13 AM »
Thanks all!

Congrats on the progress!
Have you been able to sell a lot of parts as you were planning to?  Did you sell a car?
Are you feeling deprived and grimly hanging on, or are you feeling energized and positive?

I actually bought another vehicle haha! Racecar got hit on the street early in the summer and the insurance payout covered purchase of a cheap old beater truck for towing and Home Depot runs for $2000. The car is still running as good as ever, just now with a salvage title and some battle scars. I've been going the Mustachian route of borrowing my roommates trailer most of the summer when I need it, but next summer there will be a purchase of a new relatively cheap trailer of my own. That will be entirely covered by the extra paycheck in May that never enters my budget calculations.

I did sell quite a few old tires and miscellaneous stuff and have a bit more that I still need to get rid of. Definitely does not feel deprived and instead feels great to clean up the clutter. I've also been doing a ton of volunteering in town for very cheap/free entertainment.

That is a great update, and the new job sounds like it was a good move - are you enjoying it?

I know I found my motivation dipped a little bit once debt payoff happened and it took me another year or so to get back on track (I let a bit of lifestyle inflation set in.)  Set small goals for yourself and keep smashing them out so that you don't lose focus!

Looking forward to your next update, and hope you keep checking in frequently!

New job is good. Same company and very similar work, just direct hire instead of contract and moved to a different department.

Motivation definitely did dip for a bit when cash flow improved as I felt like I was set and didn't need to think about it any more. I've found that listening to podcasts like ChooseFI just helps keep me in the right mindset even if an episode doesn't teach me anything new. Oddly enough working in the garage also helps as it keeps me busy and as long as nothing new breaks, prevents me from getting sucked in by advertisements or online shopping deals etc. It's close to free if it's just maintenance work and I'm listening to a podcast or music and also checking things off the to-do list.

Biggest small goal is this is the first month I will be making an advance payment one of my loans. I have $3971 on it today and it should be completely gone come November.
« Last Edit: August 25, 2018, 09:27:02 AM by alltheccdebt »

midwesterner1982

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Re: Case Study: Finally admitting I am an adult
« Reply #34 on: August 28, 2018, 12:05:30 AM »
Update: Hit net zero recently and now I'm in the green ~$1500. Moving a little slower than I hoped but that was to be expected. I did get a new job making less money but it comes with way more vacation, GOOD health insurance, 8% match on the 401k, smallish yearly bonus as well as other perks. Yearly total cash compensation will fall somewhere in the 75-80k range. Also got a roommate last month who is contributing $500/mo as rent.

Still working away at the non-mortgage debt at an average rate of ~$2200/mo which should increase in the winter as my spending naturally decreases. Home has also appreciated about 10% since I bought it less than a year ago.

Great to read about your progress!  It seems like you've made some good changes that will pay you handsomely (new job with 8% company match, bonus, roommate).  Great to see you have GOOD health insurance now.  If you continue to optimize your life and spending to give yourself the luxuries you really want while avoiding the unnecessary you can begin to amass serious riches.  Hope you continue to update as you go.

patchyfacialhair

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Re: Case Study: Finally admitting I am an adult
« Reply #35 on: August 29, 2018, 01:59:21 PM »
Interesting case study. So what is your overall goal? Save as much to retire early but not give up any vehicle activities or vehicles themselves?

Honestly just curious. I'm far from prime mustachian but the first thing I did when I realized that my dream car was a money suck was sell it (Jeep Wrangler), so keeping multiple vehicles in the face of thousands of credit card debt is interesting to me.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #36 on: September 13, 2018, 08:16:12 AM »
Interesting case study. So what is your overall goal? Save as much to retire early but not give up any vehicle activities or vehicles themselves?

Honestly just curious. I'm far from prime mustachian but the first thing I did when I realized that my dream car was a money suck was sell it (Jeep Wrangler), so keeping multiple vehicles in the face of thousands of credit card debt is interesting to me.

Play with cars, find a way to retire early-ish (50 or so most likely) despite the expenses. I believe I can optimize all the other parts of my life to extract the most value out of them while not hating my work/life balance and supporting the hobby.

Thinking I may go the rental real estate route eventually as it's something I've always had a fascination with. That's still a ways away though as I want to eliminate all non-mortgage debt and build a big cushion before seriously considering that.

alltheccdebt

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Re: Case Study: Finally admitting I am an adult
« Reply #37 on: February 13, 2020, 09:34:24 PM »
Not going into the details, but I revisited this post to remind myself of the numbers when I started.

Still have all the cars, although the last two I've bought have been as fix and flip projects. Allows me to scratch my buying crap itch while making money and spending less on other things. Back to playing hockey and loving it for my mental health. Also been doing quite a bit of traveling between work (Japan/California) and working travel rewards from those trips. Work compensation has been right at 80k each year plus their matches. Did fall off the wagon for a while but the basics are solid now so it still seemed to work out.

Current net worth is ~70k, so an increase of ~80k in just over two years. Savings rate can only go up from here.
« Last Edit: February 13, 2020, 09:57:19 PM by alltheccdebt »