Author Topic: Case Study: Living above means need to get out.  (Read 11142 times)

deific

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Case Study: Living above means need to get out.
« on: March 09, 2017, 12:50:04 PM »
Life Situation:
IRS filing: MFJ
Location: California
Household:
Dad 37, Wife 36, 3 Kids (7, 5, 2) 1 dog with health issues


Money:
Gross Salary/Wages
Monthly Salary                                        13,235 (this is annual / 12 in reality I'm paid almost 50% of this in December)
Pretax Health Ins.                                   $395
Pretax Vision/Dental Ins.                             $63
Healthcare Flex Savings Acct. (FSA)     $83
Daycare FSA                                           $208

FICA base salary/wages                      $12,485

Income subject to IRS tax              $12,485
 
ESPP/After-tax 401k (50% of 6.5%)   $860
 
Paycheck income before tax             $11,625

Schedule C net profit                           $392

Federal Total Income                        $12,877
 
Federal tax                                         $1,392
State/City tax                                            $559
Soc. Sec.                                                    $634
Medicare                                                    $181
Self-employment Tax                              $55
Total income taxes                                 $2,822
 
Add Health + Daycare reimb.                    $292
Add Commuter reimb.                                $0
Add Excluded Foreign Income                        $0
Income before other expenses            $9,486


Monthly Average Expenses:
Mortgage$1,614
Property Tax$808
Mortgage Insurance
Home/Rent Insurance$117
Car Insurance$161
Car Maintenance, Registration, etc.$85
Childcare$710
Clothing/Shoes$165
Dining (Lunch/Dinner/Etc.)$610
Electricity$160
Emergency Fund
Entertainment$442
Fuel/Public Transport$390
Gas/Oil for heating$165
Groceries$615
Household; Maintenance$110
Internet$88
Medical (Doctor, Hospital, etc.)$200
Miscellaneous$300
Pets$125
Phone (cell)$92
Sports/Recreation$265
Non-mortgage total$5,608

Loans:
Car Loan 1$386
Car Loan 2$592


Total Expense$8,199
 
Total to invest$1,287
Available for taxable investment:$1,287
 
Summary:
"Gross" income$13,627.00
Income taxes$2,822
After-tax income$10,805

ESPP+529/other$860
Living expenses$7,680
Non-mortgage loans$978

Net Worth
Assets:

Cash: 20,800
Roth 401k: 155,000
Employee Stock: 250,000
Traditional Rollover: 50,000
Home: $415,000

Liabilities:
Auto Loan 1: $22k, 10k remaining at ~2%
Auto Loan 2: $34k, 9k remaining at 1.72%
Mortgage: $328k, $319k (29y) remaining at 4.25%

The Bottom Line:
Because a large chunk of my pay is paid at YE I end up using some of that to cover next years expenses (ie. Mortgage). We spent quite a bit of the 4th quarter and now after paying off my CC statement balances I'm finding my cash reserves significantly drained making it very difficult to get through this year, on top of this, my wife works a limited amount of hours a week but I believe this actually costs us money. She is considering leaving work, preferably before school is out, or else I'll be paying for daycare. If this is to happen I need to scrub off some monthly expense. The one expense I'm focused on is my car payment which is $600 a month. I have a few options but 2 of them I'd like to explore.

1. Pay off the remaining $8k, then refinance at current bank over 36 months. Which would reduce this down to ~$200/m and I could pay off the remaining at year end. I have the savings from my previous years bonus but I need this to cover my mortgage for the remainder of the year.
2. Use $8k of my Roth 401k to pay this off.
3. Stop contributing to 401k to pay it off faster (I currently have about 12 months left)
4. Sell vehicle, which is an option but I'm not sure if I want to explore this right now.

I'm really only considering option 1, 2, 3 right now but I do have my eye out for a lower priced used vehicle that is reliable. Everyone has their own balance of Mustachianism and I'm working my way to get there.

Some might suggest selling my house, but selling my house does not make financial sense to me right now because I would lose so much to realtor fees, but it will be in the works eventually. Also note that this isn't the only step I'm taking, as far as cleaning up wasted expenditures. Monthly expenditures are based on my previous month, which was a pretty good month, but also consider that I won't see almost half of this income until December, cash of $20,800 is what's left over from last years bonus paid in December.

Thanks in advance.
« Last Edit: March 09, 2017, 06:55:37 PM by deific »

rpr

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Re: Case Study: Living above means need to get out.
« Reply #1 on: March 09, 2017, 01:08:12 PM »
Any chance you can sell  some of the employee stock and pay off your vehicles. It seems dangerous to own so much stock in a concentrated position.

How much are you contributing to the 401K?

deific

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Re: Case Study: Living above means need to get out.
« Reply #2 on: March 09, 2017, 01:11:30 PM »
Any chance you can sell  some of the employee stock and pay off your vehicles. It seems dangerous to own so much stock in a concentrated position.

How much are you contributing to the 401K?
No I couldn't but I wouldn't if I could last year it went up like 30%. I contribute 6.5% my employer matches 50% of this.


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RWD

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Re: Case Study: Living above means need to get out.
« Reply #3 on: March 09, 2017, 01:12:41 PM »
Monthly Average Expenses:
Mortgage$1,614
Property Tax$808
Mortgage Insurance
Home/Rent Insurance$117
Car Insurance$161
Car Maintenance, Registration, etc.$85
Childcare$710
Clothing/Shoes$165
Dining (Lunch/Dinner/Etc.)$610
Electricity$160
Emergency Fund
Entertainment$442
Fuel/Public Transport$390
Gas/Oil for heating$165
Groceries$615
Household; Maintenance$110
Internet$88
Medical (Doctor, Hospital, etc.)$200
Miscellaneous$300
Pets$125
Phone (cell)$92
Sports/Recreation$265
Non-mortgage total$5,608

You're spending $19k/year on strictly optional stuff (dining, entertainment, recreation, misc). That would be a good place to start cutting back.

Your transportation costs seem high as well. Your car insurance is more than double ours (we have two cars), you might want to shop around and/or consider raising your deductibles. Your fuel/public transportation is crazy! At average Connecticut fuel prices and a 30 mpg car $390/month works out to 58k miles per year... Are there some crazy tolls/parking/tram passes costs or something? How long are your commutes?

What are your vehicles? I still maintain that you shouldn't pay down those loans faster than necessary with your low interest rates, but it might make sense to change vehicles if they get terrible fuel economy.

Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #4 on: March 09, 2017, 01:13:55 PM »
Some things you could address right away are Dining Out, Entertainment, Groceries, Miscellaneous.

Adding those together, you're spending almost $2k.  Cut eating out to once per month as a treat, pack lunches, etc.  Keep your grocery spend around $600 for now (can get lower), Dining out cut down to $100, and no entertainment or miscellaneous until you get your budget sorted out.  This could add $1.3k to your savings/debt immediately.

This would put your budget closer to in-line with your salary, not counting the bonus.  Then you can use your bonus for big investments rather than holding it to pay your mortgage throughout the year.  Try to work out a budget that doesn't rely on the bonus at all.

I also agree that you should look into selling company stock.  It's risky to have that much in one place, regardless of if it's where you work.  Keep some, but withdraw most and throw it at Vangard like it's on fire.

deific

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Re: Case Study: Living above means need to get out.
« Reply #5 on: March 09, 2017, 01:19:03 PM »
Monthly Average Expenses:
Mortgage$1,614
Property Tax$808
Mortgage Insurance
Home/Rent Insurance$117
Car Insurance$161
Car Maintenance, Registration, etc.$85
Childcare$710
Clothing/Shoes$165
Dining (Lunch/Dinner/Etc.)$610
Electricity$160
Emergency Fund
Entertainment$442
Fuel/Public Transport$390
Gas/Oil for heating$165
Groceries$615
Household; Maintenance$110
Internet$88
Medical (Doctor, Hospital, etc.)$200
Miscellaneous$300
Pets$125
Phone (cell)$92
Sports/Recreation$265
Non-mortgage total$5,608

You're spending $19k/year on strictly optional stuff (dining, entertainment, recreation, misc). That would be a good place to start cutting back.

Your transportation costs seem high as well. Your car insurance is more than double ours (we have two cars), you might want to shop around and/or consider raising your deductibles. Your fuel/public transportation is crazy! At average Connecticut fuel prices and a 30 mpg car $390/month works out to 58k miles per year... Are there some crazy tolls/parking/tram passes costs or something? How long are your commutes?

What are your vehicles? I still maintain that you shouldn't pay down those loans faster than necessary with your low interest rates, but it might make sense to change vehicles if they get terrible fuel economy.

Truck 17mpg 40 miles day plus trips to job sites, which I may expense (I'm a consult and don't have the ability to work from home). There aren't many trucks that get good gas mileage...

Minivan 26mpg, mileage? Likely too many.

Also child care (preschool) breaks in the summer my 3rd will be thru 2019.


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rpr

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Re: Case Study: Living above means need to get out.
« Reply #6 on: March 09, 2017, 01:22:38 PM »
Any chance you can sell  some of the employee stock and pay off your vehicles. It seems dangerous to own so much stock in a concentrated position.

How much are you contributing to the 401K?
No I couldn't but I wouldn't if I could last year it went up like 30%. I contribute 6.5% my employer matches 50% of this.


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Do you think this stock will continue to keep growing at 30% every year? This is downright dangerous. Companies can crater rapidly (Exhibit A:  Enron). You can lose your employment and your savings, resulting in a potential double whammy.

Melissa

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Re: Case Study: Living above means need to get out.
« Reply #7 on: March 09, 2017, 01:28:59 PM »
$442 a month for entertainment? What do you do for entertainment? That would be the easiest category to reduce.

Board games, parks, DVDs, and popcorn are cheap my friend

deific

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Re: Case Study: Living above means need to get out.
« Reply #8 on: March 09, 2017, 01:29:08 PM »
Any chance you can sell  some of the employee stock and pay off your vehicles. It seems dangerous to own so much stock in a concentrated position.

How much are you contributing to the 401K?
No I couldn't but I wouldn't if I could last year it went up like 30%. I contribute 6.5% my employer matches 50% of this.


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Do you think this stock will continue to keep growing at 30% every year? This is downright dangerous. Companies can crater rapidly (Exhibit A:  Enron). You can lose your employment and your savings, resulting in a potential double whammy.
I don't have the ability to sell it until I leave.


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researcher1

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Re: Case Study: Living above means need to get out.
« Reply #9 on: March 09, 2017, 01:30:23 PM »
Total Expense$8,199

In your earlier post, you said you spent $45K in the past 3 months.

The expenses listed here only totals to $24,600 for the same time period.

How did you spend and ADDITIONAL $20K in the past 3 months.  Was this all expenses from previous months that you did not pay?

deific

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Re: Case Study: Living above means need to get out.
« Reply #10 on: March 09, 2017, 01:34:08 PM »
Total Expense$8,199

In your earlier post, you said you spent $45K in the past 3 months.

The expenses listed here only totals to $24,600 for the same time period.

How did you spend and ADDITIONAL $20K in the past 3 months.  Was this all expenses from previous months that you did not pay?
I delayed 3 months of CC statement, holiday spending, a vacation, and a golf membership. (Which is factored in monthly under entertainment, but I paid it all at once)


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deific

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Re: Case Study: Living above means need to get out.
« Reply #11 on: March 09, 2017, 01:43:12 PM »
Consider the following expenses:
Dining (Lunch/Dinner/Etc.)$610  - Aim to cut this in half or better.
Entertainment$442 - WOW - what is this?
Sports/Recreation$265 - This in addition to the entertainment budget is hard for me to understand.
Fuel/Public Transport$390 - This seems very high.  This is gas for commuting?  It would appear your commute is 100 miles roundtrip?
Groceries$615 - Also high for a family of 4.  Just being more conscious of spending at the store can reduce this significantly.
Car Loans - almost $1000 per month for 2 loans.  Pay them off or sell them.  Loans on depreciating assets are no good.  Consider more frugal choices in cars - non luxury brands, middle trim level, late model used.

I think it would be easy to cut $1500 a month out of your budget in these categories.  This would double the amount you invest after tax.
Dining is high, in part because I paid for a $230 family meal and have $150 cash in my pocket that needs to be deposited.
Entertainment golf membership...
It does look a little high, I believe we each fill up every 2 weeks.
I disagree on your assessment of groceries, my target is $550 for a family of 5, I always bring breakfast and lunch to work.
Cars, yes this was my question associated with this post, I had a couple options on how to do this.



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deific

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Re: Case Study: Living above means need to get out.
« Reply #12 on: March 09, 2017, 01:47:16 PM »
Total Expense$8,199

In your earlier post, you said you spent $45K in the past 3 months.

The expenses listed here only totals to $24,600 for the same time period.

How did you spend and ADDITIONAL $20K in the past 3 months.  Was this all expenses from previous months that you did not pay?
I delayed 3 months of CC statement, holiday spending, a vacation, and a golf membership. (Which is factored in monthly under entertainment, but I paid it all at once)


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I don't want to seem rude, but you've admitted to having to use non-guaranteed bonus income to pay your mortgage, yet you are paying for a golf membership?  You're living way above your income, to say nothing of living in a way that would allow you to spend time with your wife and kids and have some degree of future security.  Will your memory of rounds of expensive golf give you satisfaction while you're pulling your kids out of school and moving out of your foreclosed house?

With minor changes (reducing entertainment, dining, and vaction expenses) and a couple major ones (wife takes over for child care, you reduce your car expenses) you could be talking about retiring before your kids are all grown.  As it is, if your company went bankrupt you would lose the VAST majority of your net worth (stocks) and your income in a second, and your cushion is virtually non-existent.
Fair enough, it's a family membership but your point is still valid. But to clarify child care is preschool, it costs until kindergarten unless you qualify for some type of services.



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Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #13 on: March 09, 2017, 01:50:24 PM »
Dining is high, in part because I paid for a $230 family meal and have $150 cash in my pocket that needs to be deposited.
Entertainment golf membership...
It does look a little high, I believe we each fill up every 2 weeks.
I disagree on your assessment of groceries, my target is $550 for a family of 5, I always bring breakfast and lunch to work.
Cars, yes this was my question associated with this post, I had a couple options on how to do this.

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Please don't limit your focus to your cars.  There are so many other ways you can save!

If you're bringing breakfast and lunch to work, how is Dining Out so high?  This is just family dinners out?  You said you bought a $250 family meal, then you have $150 in cash... but there is still another $200 you spent other than that?

Also, how does $150 in cash get counted into your dining spending?

Note:  Asking for clarity, not in an incredulous way.  We all have things to work on.

rawr237

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Re: Case Study: Living above means need to get out.
« Reply #14 on: March 09, 2017, 01:58:54 PM »
deific,
I think you need to start by clarifying your goals. Your title says you want to spend less than you earn, and the immediate reason behind that seems to be the stress of spending above your means. One or two long-range goals (retire at ___, fund college for littles, perhaps), with more near-term goals (get monthly spend consistently below income, pay off cars, invest ___ in ___ account by a certain age). Having those goals (and writing them down!) will help you to make changes that are difficult or uncomfortable at first. Even one amorphous goal (feeling good about your financial situation) is not a bad place to start. Just ask yourself what it would take to for you to have that warm fuzzy feeling.

Personally, even 'knowing' that I had a big bonus coming at the end of the year, I would not be comfortable with a spend rate higher than my monthly expenses. It sounds like you have some of the same instinct, using your bonus to pay for the following year's mortgage...but for me the negative cash flow for 11 months of the year would be simply terrifying -- I would base my budget off of actual monthly income, and treat the bonus as just that - throw the money at debt, or invest it. If you are satisfied with your previous operating mode, then that's up to you.

Is your wife on board with cutting back your spending? That would be helpful, especially if she becomes a SAHM and does most of the shopping.

Since your Entertainment includes Travel, I actually don't think it's shockingly high, but it depends on your priorities. Getting out of debt, or going on vacation? I completely understand how easy it is to succumb to lifestyle inflation (and CT can be HCOL), but realize that is what you have done.

Try to figure out where that 'Miscellaneous' money is going.

So the Dining # is unusually high because you covered other people for a meal? Do you have your actual average spend for that category?

rpr

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Re: Case Study: Living above means need to get out.
« Reply #15 on: March 09, 2017, 02:10:06 PM »
Any chance you can sell  some of the employee stock and pay off your vehicles. It seems dangerous to own so much stock in a concentrated position.

How much are you contributing to the 401K?
No I couldn't but I wouldn't if I could last year it went up like 30%. I contribute 6.5% my employer matches 50% of this.


Sent from my iPhone using Tapatalk
Do you think this stock will continue to keep growing at 30% every year? This is downright dangerous. Companies can crater rapidly (Exhibit A:  Enron). You can lose your employment and your savings, resulting in a potential double whammy.
I don't have the ability to sell it until I leave.


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I'm surprised that your ESPP works this way by preventing you from selling until you leave. That sounds way too restrictive.

deific

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Re: Case Study: Living above means need to get out.
« Reply #16 on: March 09, 2017, 02:17:34 PM »
Dining is high, in part because I paid for a $230 family meal and have $150 cash in my pocket that needs to be deposited.
Entertainment golf membership...
It does look a little high, I believe we each fill up every 2 weeks.
I disagree on your assessment of groceries, my target is $550 for a family of 5, I always bring breakfast and lunch to work.
Cars, yes this was my question associated with this post, I had a couple options on how to do this.

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Please don't limit your focus to your cars.  There are so many other ways you can save!

If you're bringing breakfast and lunch to work, how is Dining Out so high?  This is just family dinners out?  You said you bought a $250 family meal, then you have $150 in cash... but there is still another $200 you spent other than that?

Also, how does $150 in cash get counted into your dining spending?

Note:  Asking for clarity, not in an incredulous way.  We all have things to work on.
Cars was just 1 of my starting points because I'm uncomfortable with my payment, at one point I was planning on using $10k for the vehicle but ended up financing at 100%, 10k was to be used for home improvements but then we decided to move and now its part of my down payment.
I'm sorry if I'm not clear with Dining out, I should have recorded the ($150) against the $250 bill I essentially spent $100 on my families food and received cash for extended family. Remaining restaurant spend is smaller $50-60 meals with the family which is a typical lunch or dinner with everyone.

deific

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Re: Case Study: Living above means need to get out.
« Reply #17 on: March 09, 2017, 02:18:23 PM »

I'm surprised that your ESPP works this way by preventing you from selling until you leave. That sounds way too restrictive.
It's an ESOP, not ESPP.

deific

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Re: Case Study: Living above means need to get out.
« Reply #18 on: March 09, 2017, 02:35:59 PM »
deific,
I think you need to start by clarifying your goals. Your title says you want to spend less than you earn, and the immediate reason behind that seems to be the stress of spending above your means. One or two long-range goals (retire at ___, fund college for littles, perhaps), with more near-term goals (get monthly spend consistently below income, pay off cars, invest ___ in ___ account by a certain age). Having those goals (and writing them down!) will help you to make changes that are difficult or uncomfortable at first. Even one amorphous goal (feeling good about your financial situation) is not a bad place to start. Just ask yourself what it would take to for you to have that warm fuzzy feeling.

Personally, even 'knowing' that I had a big bonus coming at the end of the year, I would not be comfortable with a spend rate higher than my monthly expenses. It sounds like you have some of the same instinct, using your bonus to pay for the following year's mortgage...but for me the negative cash flow for 11 months of the year would be simply terrifying -- I would base my budget off of actual monthly income, and treat the bonus as just that - throw the money at debt, or invest it. If you are satisfied with your previous operating mode, then that's up to you.

Is your wife on board with cutting back your spending? That would be helpful, especially if she becomes a SAHM and does most of the shopping.

Since your Entertainment includes Travel, I actually don't think it's shockingly high, but it depends on your priorities. Getting out of debt, or going on vacation? I completely understand how easy it is to succumb to lifestyle inflation (and CT can be HCOL), but realize that is what you have done.

Try to figure out where that 'Miscellaneous' money is going.

So the Dining # is unusually high because you covered other people for a meal? Do you have your actual average spend for that category?
Well my goals...
1: be able to sleep at night and not worry about if I'll run out of money at year end.
2. Become comfortable living below my means, without the need to buy something, its strange not seeing Amazon boxes at the house every day 3. Commit, in 10 years I would like to move downsize to a house that doesn't have the wasted space, a dining room I never use, a living room I never use, a bedroom/ bonus room the size of a large 2 car garage...

11 months of negative is awful, I would throw up every week seeing it going down. That's why I established a separate account for my mortgage and funded it for a year. That way I'm able to watch my primary account to see which way its trending. I like to think my wife is on board, she only went back to work in September of last year. But I need to put her in charge of some budgets and regularly check back in on those to see how we are doing, this is something we don't do. Thanks for your reply. So are you thinking I should sell the truck and get something else? Its difficult to think of this as I have 8k left and then I have no more payments.

Laura33

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Re: Case Study: Living above means need to get out.
« Reply #19 on: March 09, 2017, 02:56:57 PM »
Given your income level, why are you in post-tax savings vehicles instead of a traditional 401(k) and/or IRA?  You are currently significantly cash-flow-negative for 11 out of 12 months.  Putting the same amount of savings in pretax accounts will leave more cash in your pocket every month.

Cars:  $1K/mo. just on loans is, wow.  But it's not just the loans -- new, large vehicles are expensive to insure and expensive to fuel up, and every mile you drive is just sucking down the residual value even more.  I understand you need to be able to visit client sites; is there a reason it needs to be in a truck?  Unless you have large tools/trailer/etc. that you need to transport, you would be better off in a smaller, cheaper, and more fuel-efficient *used* vehicle.  Let someone else pay the depreciation for you.

FWIW, I have also been in a position where my income was variable, back when things were much tighter; and I am currently in a job where, like you, I get 40-50% of my annual pay on 12/31.  If you are looking to feel more under control and sane, then my very strong advice, based on my own experience, is hard but simple:  keep your basic living expenses to your monthly take-home.  Period.  First, sign up for your 401(k), flex accounts, dependent care, insurance, etc.  Your monthly budget is what is left.  Mortgage, groceries, reasonable amount of dining out, utilities, phones, gas/maintenance -- your daily lifestyle is all built around what you bring home *that day*. 

Then you can really focus that end-of-year $$ on additional savings, luxuries, and major capital expenses.  Again, I'd start this with additional savings:  what do you need to put aside to reach your targets?  That comes off the top.  Then you allocate the rest to the other big wants -- vacations for the upcoming year, a new car fund, your golf membership, etc..  Heck, go out to a big blow-out dinner on 1/1 to scratch the fine dining itch.  But write the checks on 1/1, put the money where it needs to go so that money goes away and you don't see it again (we had a separate account for a new car fund and vacation fund, for ex.).  And then on 1/2, you're back to your regular monthly budget.  That way there is no stress, because when it comes time for the vacation or the car or whatever, you have the money sitting there in an account waiting for it, and you don't need to borrow, or float credit cards, or any of that stressful stuff.  And if the money isn't there -- maybe your first vacation ran over and sucked down the cash for the weekend trip you planned -- then, well, you're done.  You don't have the money, so you don't go. 

The reason you are feeling stressed right now is because you are spending too much -- your gut is trying to tell you something.  If you are getting to October and November and relying on credit cards and such because you sucked down your end-of-year cash already, you are spending more than you are bringing home.  You are on the right track with setting aside the amount for the next year's mortgage, but the only thing that will make you feel secure is, quite simply, finding a way *not* to run in the red for the other 11 months of the year. 

ShoulderThingThatGoesUp

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Re: Case Study: Living above means need to get out.
« Reply #20 on: March 10, 2017, 04:31:38 AM »
I don't see your current credit card balances listed. Are they paid off right now?

Does your wife know that you guys have a problem?0

deific

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Re: Case Study: Living above means need to get out.
« Reply #21 on: March 10, 2017, 04:56:16 AM »
I don't see your current credit card balances listed. Are they paid off right now?

Does your wife know that you guys have a problem?0
I don't have any credit debt or any debt outside of mortgage and 2 car loans.

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Re: Case Study: Living above means need to get out.
« Reply #22 on: March 10, 2017, 06:29:20 AM »
You are paying exactly the same amount on your cars and public transport every month as you are on your mortgage.   And you don't even get a house at the end of it.  Crazy, my friend.

I agree you need to sort out your aims with your wife.  Does she know that you are sick with worry about living beyond your means?   That you are one crisis away from the road to bankruptcy?  That there isn't room in your current budget even to pay life insurance on you, so that if you die or are disabled she will be left in poverty? Will it be important for you both to be able to support your children through college?

You have a good income and are spending it all on having a nice life and keeping up appearances: overlarge house, new and expensive cars, golf club membership.  But you have no financial resilience, so that life is built on sand not a rock.  These are your good times, when you are young and healthy and well paid.   If you can cut down on your current spending (still with a house, and two cars, and even the golf club membership) and store up some of your current good fortune to launch your children into the world and weather the storms which come to us all in time, you will look back on this time in your life with fondness rather than with regret at mistakes made and opportunities lost.

Best of luck.

Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #23 on: March 10, 2017, 06:39:42 AM »
Cars was just 1 of my starting points because I'm uncomfortable with my payment, at one point I was planning on using $10k for the vehicle but ended up financing at 100%, 10k was to be used for home improvements but then we decided to move and now its part of my down payment.

In regards to vehicles, yes, you need to get rid of the truck.  It's tempting to keep it, because you're only $8k from paying it off, but if you sell it, and get something with better gas mileage, your monthly spend on fuel will be cut in half.  With how much you drive, that would be huge.

Get a used Toyota or Honda, and try to keep the "balance" at or below $8k.  Then you'll be at the same "pay-off" level, but you'll have a lower payment and better fuel cost.

rawr237

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Re: Case Study: Living above means need to get out.
« Reply #24 on: March 10, 2017, 09:09:49 AM »
Well my goals...
1: be able to sleep at night and not worry about if I'll run out of money at year end.
2. Become comfortable living below my means, without the need to buy something, its strange not seeing Amazon boxes at the house every day 3. Commit, in 10 years I would like to move downsize to a house that doesn't have the wasted space, a dining room I never use, a living room I never use, a bedroom/ bonus room the size of a large 2 car garage...

11 months of negative is awful, I would throw up every week seeing it going down. That's why I established a separate account for my mortgage and funded it for a year. That way I'm able to watch my primary account to see which way its trending. I like to think my wife is on board, she only went back to work in September of last year. But I need to put her in charge of some budgets and regularly check back in on those to see how we are doing, this is something we don't do. Thanks for your reply. So are you thinking I should sell the truck and get something else? Its difficult to think of this as I have 8k left and then I have no more payments.
Thank you for your thoughtful response, with goals!

I think you know this, but by separating the mortgage out to a separate account, you're not seeing your true rate of spend by just watching that primary account. It made you feel warm and fuzzy (and maybe kept you from spending that bonus on other stuff, which is good), but in the long run it sets you up to rely so heavily on that bonus because it pays for the roof over your head! How you account things depends on what works for you, but it doesn't look like this system is working. If it were me, I would  have my mortgage come out of the primary account, because that OMFG LOOK AT ALL THIS MONEY GOING OUT I'M GOING TO THROW UP feeling is a catalyst for change. The BEST way to know that you won't run out of money by the end of the year is that for every month of the year, you spend less than comes in, including your mortgage. Walk through the steps in Laura's post.

Another tip: account for an expenditure when you make the purchase, not when the money leaves your checking account. When you say you 'spent' $45k in three months, you're including paying the CC bill. That isn't 'spending' (unless it's interest I guess). If you use Mint (what are you using to track expenses?), then transactions show up at the point of purchase, and it's clear that this $__ is no longer yours - it has been spent on ___ . This may be a helpful mental shift, because if it doesn't feel like you spent the money until you pay the bill, there's a period of time where it seems like you just magically acquired these items without any impact to your wallet.

On feeling the need to buy something...I'm sure after posting, etc, you're hyperaware of your purchases. Try this exercise http://www.nwedible.com/mini-money-challenge-occupy-your-brainwhat-you-want-isnt-really-what-you-want/ to figure out why.

On the truck...how much could you get for it? I see the 34k figure but assume that was the cost new. If you do sell it, then the car you buy to replace it should be a vehicle you can afford outright - so there will be no more payments either way (yay).

deific

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Re: Case Study: Living above means need to get out.
« Reply #25 on: March 10, 2017, 09:51:24 AM »
Given your income level, why are you in post-tax savings vehicles instead of a traditional 401(k) and/or IRA?  You are currently significantly cash-flow-negative for 11 out of 12 months.  Putting the same amount of savings in pretax accounts will leave more cash in your pocket every month.

Cars:  $1K/mo. just on loans is, wow.  But it's not just the loans -- new, large vehicles are expensive to insure and expensive to fuel up, and every mile you drive is just sucking down the residual value even more.  I understand you need to be able to visit client sites; is there a reason it needs to be in a truck?  Unless you have large tools/trailer/etc. that you need to transport, you would be better off in a smaller, cheaper, and more fuel-efficient *used* vehicle.  Let someone else pay the depreciation for you.

FWIW, I have also been in a position where my income was variable, back when things were much tighter; and I am currently in a job where, like you, I get 40-50% of my annual pay on 12/31.  If you are looking to feel more under control and sane, then my very strong advice, based on my own experience, is hard but simple:  keep your basic living expenses to your monthly take-home.  Period.  First, sign up for your 401(k), flex accounts, dependent care, insurance, etc.  Your monthly budget is what is left.  Mortgage, groceries, reasonable amount of dining out, utilities, phones, gas/maintenance -- your daily lifestyle is all built around what you bring home *that day*. 

Then you can really focus that end-of-year $$ on additional savings, luxuries, and major capital expenses.  Again, I'd start this with additional savings:  what do you need to put aside to reach your targets?  That comes off the top.  Then you allocate the rest to the other big wants -- vacations for the upcoming year, a new car fund, your golf membership, etc..  Heck, go out to a big blow-out dinner on 1/1 to scratch the fine dining itch.  But write the checks on 1/1, put the money where it needs to go so that money goes away and you don't see it again (we had a separate account for a new car fund and vacation fund, for ex.).  And then on 1/2, you're back to your regular monthly budget.  That way there is no stress, because when it comes time for the vacation or the car or whatever, you have the money sitting there in an account waiting for it, and you don't need to borrow, or float credit cards, or any of that stressful stuff.  And if the money isn't there -- maybe your first vacation ran over and sucked down the cash for the weekend trip you planned -- then, well, you're done.  You don't have the money, so you don't go. 

The reason you are feeling stressed right now is because you are spending too much -- your gut is trying to tell you something.  If you are getting to October and November and relying on credit cards and such because you sucked down your end-of-year cash already, you are spending more than you are bringing home.  You are on the right track with setting aside the amount for the next year's mortgage, but the only thing that will make you feel secure is, quite simply, finding a way *not* to run in the red for the other 11 months of the year.
Laura, I appreciate your reply. I updated my 401k contributions accordingly. I used to not use bonus for anything, but one year shortly before deciding to move the amount jumped significantly. For whatever reason we looked at that and said hey we make $20k more, we could easily afford a house thats $1k more than we currently have, having the 3rd kid just pushed it over the edge.

I should clarify above some of my numbers, I've signed up for dependent care withdrawls out of my pay check right now is $208 / m or $2,500 a year. That will offset my "child care" of $600 / month which should be less than $7,100 per year (my wife said the youngest will not go so many days in the fall). I would have allocated more to this, but its a use it or lose it fund.

I certainly need to get back to just spending my base and using bonus for next years luxuries....

deific

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Re: Case Study: Living above means need to get out.
« Reply #26 on: March 10, 2017, 11:06:06 AM »
Thank you for your thoughtful response, with goals!

I think you know this, but by separating the mortgage out to a separate account, you're not seeing your true rate of spend by just watching that primary account. It made you feel warm and fuzzy (and maybe kept you from spending that bonus on other stuff, which is good), but in the long run it sets you up to rely so heavily on that bonus because it pays for the roof over your head! How you account things depends on what works for you, but it doesn't look like this system is working. If it were me, I would  have my mortgage come out of the primary account, because that OMFG LOOK AT ALL THIS MONEY GOING OUT I'M GOING TO THROW UP feeling is a catalyst for change. The BEST way to know that you won't run out of money by the end of the year is that for every month of the year, you spend less than comes in, including your mortgage. Walk through the steps in Laura's post.

Another tip: account for an expenditure when you make the purchase, not when the money leaves your checking account. When you say you 'spent' $45k in three months, you're including paying the CC bill. That isn't 'spending' (unless it's interest I guess). If you use Mint (what are you using to track expenses?), then transactions show up at the point of purchase, and it's clear that this $__ is no longer yours - it has been spent on ___ . This may be a helpful mental shift, because if it doesn't feel like you spent the money until you pay the bill, there's a period of time where it seems like you just magically acquired these items without any impact to your wallet.

On feeling the need to buy something...I'm sure after posting, etc, you're hyperaware of your purchases. Try this exercise http://www.nwedible.com/mini-money-challenge-occupy-your-brainwhat-you-want-isnt-really-what-you-want/ to figure out why.

On the truck...how much could you get for it? I see the 34k figure but assume that was the cost new. If you do sell it, then the car you buy to replace it should be a vehicle you can afford outright - so there will be no more payments either way (yay).
Rawr, I understand you're thought, and certainly agree with the use of bonus, however if I had my way I would create folders/buckets/accounts for each of my major bills. If you are truly accounting for each expenditure then this should work?
$45k, I saw this 3 month number while pulling together the numbers for my case study and I find it as amazing as you do. At the end of the year I moved into Fidelity, which they have a "Full View" which allows you to link all of your accounts together and allows you to analyze them in dashboards. I seem to like it a bit more than Mint, which I did use Mint, its less "annoying". But it truly is $37k (there is a 5k transfer not being reflected) from 12/1 - Today, credit card bills and payments net against each other.
I am hyper award now of expenditures!
The truck I can get about $21k for it.
« Last Edit: March 10, 2017, 11:26:32 AM by deific »

Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #27 on: March 10, 2017, 11:26:33 AM »
The truck I can get about $25k for it.

WOW!  Do this immediately.

Sell for $25k $21K, pay off $8k, put $10k $7k towards a used Civic or something similar, and $7k $6k immediately towards other items your wifes car!!

You'll have (almost) no car payment, and your fuel costs will be slashed!

I don't see how this is even an option to consider.  In my mind, it'd be silly not to make this move.

ETA:  Saw you changed the number.  That's fine.  Still do this...
« Last Edit: March 10, 2017, 11:32:05 AM by Vindicated »

Malum Prohibitum

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Re: Case Study: Living above means need to get out.
« Reply #28 on: March 10, 2017, 11:30:02 AM »
deific,

Two things:

(1) Is the wife on board or not?

(2) What is step one for you?  What I mean is, what is your first actual, concrete step going to be to cut spending, and when are you going to do it?  Just name one thing and tell us when it is going to happen.  Then we can discuss the next thing.  You have received a lot of good advice already.  Let's hear what you are going to do with the advice.

deific

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Re: Case Study: Living above means need to get out.
« Reply #29 on: March 10, 2017, 11:47:31 AM »
deific,

Two things:

(1) Is the wife on board or not?

(2) What is step one for you?  What I mean is, what is your first actual, concrete step going to be to cut spending, and when are you going to do it?  Just name one thing and tell us when it is going to happen.  Then we can discuss the next thing.  You have received a lot of good advice already.  Let's hear what you are going to do with the advice.
My wife is on board with in limits, for example she doesn't think it's a good idea to sell my truck. But she has put alot in my court as far as developing budgets which I'd like her to be responsible for.
Initial things I'm looking to do...
1. Change from Roth to T401k -done
2. Drop XFINITY Internet @~$90 recontract at $40
3. Leave AT&T, sell current phone purchase compatible phone with Republic or Sprint reduction of $90 to ~$50
4. Stop spending unnecessary money.


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Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #30 on: March 10, 2017, 11:49:54 AM »
Initial things I'm looking to do...
1. Change from Roth to T401k -done
2. Drop XFINITY Internet @~$90 recontract at $40
3. Leave AT&T, sell current phone purchase compatible phone with Republic or Sprint reduction of $90 to ~$50
4. Stop spending unnecessary money.
5. Sell truck?


deific

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Re: Case Study: Living above means need to get out.
« Reply #31 on: March 10, 2017, 11:52:43 AM »
The truck I can get about $25k for it.


ETA:  Saw you changed the number.  That's fine.  Still do this...
I've been looking into trading it in, I feel I've been getting almost wholesale trade numbers at 21.5 when I look up NADA it's more like $25k.
This is a difficult pill to swallow, though I realize I may get flamed for that comment.



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Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #32 on: March 10, 2017, 11:57:52 AM »
The truck I can get about $25k for it.


ETA:  Saw you changed the number.  That's fine.  Still do this...
I've been looking into trading it in, I feel I've been getting almost wholesale trade numbers at 21.5 when I look up NADA it's more like $25k.
This is a difficult pill to swallow, though I realize I may get flamed for that comment.



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Noooo, imagine the freedom of no car payment, and having that extra money EVERY MONTH! Plus driving a truck the number of miles you do is just downright wasteful.

If you really feel that you need a "nice" vehicle, do this:

Sell for $25k, pay off $8k loan, buy nearly new Acura for $15k.  You'll have your fancypants ride, better mileage, $2k wiggle room, and most importantly NO PAYMENT!

deific

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Re: Case Study: Living above means need to get out.
« Reply #33 on: March 10, 2017, 12:16:58 PM »

Noooo, imagine the freedom of no car payment, and having that extra money EVERY MONTH! Plus driving a truck the number of miles you do is just downright wasteful.

If you really feel that you need a "nice" vehicle, do this:

Sell for $25k, pay off $8k loan, buy nearly new Acura for $15k.  You'll have your fancypants ride, better mileage, $2k wiggle room, and most importantly NO PAYMENT!
I understand, part of my issue here is admitting that I made a mistake getting this vehicle. I had an Accord that ran perfectly, with no payments for 3 years when I sold it to buy the truck. It may be wrong, insecure, but buying a driving my truck made me feel great. I also don't have garbage pick up (I'd have to pay for it), do home improvement projects, and pick up a mulch in the spring last year was about 10 loads. So I'd have to figure out an alternative to that.

rawr237

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Re: Case Study: Living above means need to get out.
« Reply #34 on: March 10, 2017, 12:30:47 PM »
Rawr, I understand you're thought, and certainly agree with the use of bonus, however if I had my way I would create folders/buckets/accounts for each of my major bills. If you are truly accounting for each expenditure then this should work?
$45k, I saw this 3 month number while pulling together the numbers for my case study and I find it as amazing as you do. At the end of the year I moved into Fidelity, which they have a "Full View" which allows you to link all of your accounts together and allows you to analyze them in dashboards. I seem to like it a bit more than Mint, which I did use Mint, its less "annoying". But it truly is $37k (there is a 5k transfer not being reflected) from 12/1 - Today, credit card bills and payments net against each other.
I am hyper award now of expenditures!
The truck I can get about $25k for it.

Yes, mathematically it should work. Which is why I said 'how you account things depends on what works for you.' If you can stone-cold look at the numbers, and make your spending decisions based on those numbers, then do your buckets however you like. But if you're finding your feelings having a lot of impact on your spending (ex. buying toys when you feel bored, eating out when you feel tired, buying souvenirs because yay vacation) then you may need to change your system.

Still trying to understand how the $37k makes sense with your 8k average. Assuming the 8k is a year's average...
Yearly total = $98.4k
Months 10-12 total = $37k ($12.3k/mo)
Months 1-9 total = $61.4k
Months 1-9 avg = $6.8k

Which means for months 10-12 you were spending $5.5k/mo over your previous norm.
Let me know if I'm missing something.
Can you break down where the $16k went?
I know you said holidays, vacation, and golf membership...but it's just such a huge jump.
More importantly, do you expect these expenses to pop up again?

Regarding the truck...it's up to you. It's a good step, but if your wife is resisting then maybe start with other areas that she's fine with adjusting.

Steps 2 & 3 look good!

Vindicated

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Re: Case Study: Living above means need to get out.
« Reply #35 on: March 10, 2017, 12:44:16 PM »
I understand, part of my issue here is admitting that I made a mistake getting this vehicle. I had an Accord that ran perfectly, with no payments for 3 years when I sold it to buy the truck. It may be wrong, insecure, but buying a driving my truck made me feel great. I also don't have garbage pick up (I'd have to pay for it), do home improvement projects, and pick up a mulch in the spring last year was about 10 loads. So I'd have to figure out an alternative to that.

If I were to offer you $16K to drive an Accord instead of the truck, would you take it?

For the purpose of this example, I'm going to say you'll pay off your truck in 12 months.

Here is the math:

Sell Truck:
$25k sale, $8k loan payoff, $10k Accord paid in full.  This leaves $7k to invest, and no payment.
If you invest the $7k and the additional $8k you save by not making the ~$670/mo payment for the next 12 months, you have ~$16,000 (With 7% growth on your investment).

Keep Truck:
$8k to pay off in next year, ~$670/mo if you clear it in 12 months.  Then, you have Truck afterwards paid off.

So, one year from now, you can have $16,000 and an Accord paid off.

OR, you can have $0 and the Truck paid off.

deific

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Re: Case Study: Living above means need to get out.
« Reply #36 on: March 10, 2017, 12:56:51 PM »
Rawr, I understand you're thought, and certainly agree with the use of bonus, however if I had my way I would create folders/buckets/accounts for each of my major bills. If you are truly accounting for each expenditure then this should work?
$45k, I saw this 3 month number while pulling together the numbers for my case study and I find it as amazing as you do. At the end of the year I moved into Fidelity, which they have a "Full View" which allows you to link all of your accounts together and allows you to analyze them in dashboards. I seem to like it a bit more than Mint, which I did use Mint, its less "annoying". But it truly is $37k (there is a 5k transfer not being reflected) from 12/1 - Today, credit card bills and payments net against each other.
I am hyper award now of expenditures!
The truck I can get about $25k for it.

Yes, mathematically it should work. Which is why I said 'how you account things depends on what works for you.' If you can stone-cold look at the numbers, and make your spending decisions based on those numbers, then do your buckets however you like. But if you're finding your feelings having a lot of impact on your spending (ex. buying toys when you feel bored, eating out when you feel tired, buying souvenirs because yay vacation) then you may need to change your system.

Still trying to understand how the $37k makes sense with your 8k average. Assuming the 8k is a year's average...
Yearly total = $98.4k
Months 10-12 total = $37k ($12.3k/mo)
Months 1-9 total = $61.4k
Months 1-9 avg = $6.8k

Which means for months 10-12 you were spending $5.5k/mo over your previous norm.
Let me know if I'm missing something.
Can you break down where the $16k went?
I know you said holidays, vacation, and golf membership...but it's just such a huge jump.
More importantly, do you expect these expenses to pop up again?

Regarding the truck...it's up to you. It's a good step, but if your wife is resisting then maybe start with other areas that she's fine with adjusting.

Steps 2 & 3 look good!
I can't break down the 16k, it looks like everything is just higher. So stating that I wouldn't expect them to occur again, I tried to set a $250 holiday budget/ kid but I definitely do not believe this was adhered to, I only did 1 of the 3 kids. I also paid for ski lessons, 2 sets of used skis, a few local ski trips (still run $250).

researcher1

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Re: Case Study: Living above means need to get out.
« Reply #37 on: March 10, 2017, 02:36:08 PM »
It may be wrong, insecure, but buying a driving my truck made me feel great.

Do you think this was some sort of coping mechanism for a mid life crisis or depression?  What part of the country do you live in? 
In my area, lots of guys need jacked up trucks with Truck Nutz that can roll coal to feel good about themselves.

Quote
I also don't have garbage pick up (I'd have to pay for it), do home improvement projects, and pick up a mulch in the spring last year was about 10 loads. So I'd have to figure out an alternative to that.
How did you do all of these things prior to getting a truck?
You have a minivan.  All you need is a $5 tarp to put down and you can do all of the things you mention.
« Last Edit: March 10, 2017, 02:39:24 PM by researcher1 »

Dee18

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Re: Case Study: Living above means need to get out.
« Reply #38 on: March 10, 2017, 08:15:34 PM »
For home improvement projects Home Depot will rent you a truck for 75 minutes for $20. Just used it yesterday.  In the summer where i live I have to take the trash to the dump....I do it in my trunk, just make sure the bag is closed.  It's also an incentive to make less trash. (check out zerowastehome blog for inspiration)  As for the mulch, sounds like that's a once a year expense.  You know the truck is a crazy waste of money in many ways.  17 mpg? 

human

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Re: Case Study: Living above means need to get out.
« Reply #39 on: March 11, 2017, 05:42:07 AM »
Those car payments are crazy, sell and buy used.

deific

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Re: Case Study: Living above means need to get out.
« Reply #40 on: March 11, 2017, 07:37:40 AM »
Thank you for all your helpful comments, time to get to work, I'll try to update in a month with some substantial progress.

ToTheMoon

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Re: Case Study: Living above means need to get out.
« Reply #41 on: March 11, 2017, 08:10:36 AM »
Rawr, I understand you're thought, and certainly agree with the use of bonus, however if I had my way I would create folders/buckets/accounts for each of my major bills. If you are truly accounting for each expenditure then this should work?

I applaud you guys for wanting to get on top of this, and for the steps you have already taken.  For lots of us, this frugality mentality is something we have been practicing for months/years, and lots of us get invested in the success of new people to the forums.  We really do want you to succeed, and I hope that us pushing you does not cause you to run for cover.

That said, if you and your wife are just transitioning to this line of thinking, a great book to check out is "Your Money or Your Life - Vicki Robin."  Get it from the LIBRARY (request it if it is not on the shelf,) read it together, and discuss it together.  That alone will get the two of you talking about what you value, and what your family goals are.

Second, the bolded part above makes me think you two are ideal candidates to use YNAB (You Need A Budget.)  It works a little bit differently than Mint or other budget "trackers" and does take a few hours of time to do the learning, and sometimes a couple of months to really get the hang of it.  Once you "get it" though, you will likely see drastic changes in your spending.  Perhaps your wife would be interested in taking it on, and teaching you?

Best of luck this month, and we look forward to your update!

1967mama

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Re: Case Study: Living above means need to get out.
« Reply #42 on: March 13, 2017, 10:09:00 PM »
Posting to follow

tweezers

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Re: Case Study: Living above means need to get out.
« Reply #43 on: March 14, 2017, 02:31:56 PM »

Noooo, imagine the freedom of no car payment, and having that extra money EVERY MONTH! Plus driving a truck the number of miles you do is just downright wasteful.

If you really feel that you need a "nice" vehicle, do this:

Sell for $25k, pay off $8k loan, buy nearly new Acura for $15k.  You'll have your fancypants ride, better mileage, $2k wiggle room, and most importantly NO PAYMENT!
I understand, part of my issue here is admitting that I made a mistake getting this vehicle. I had an Accord that ran perfectly, with no payments for 3 years when I sold it to buy the truck. It may be wrong, insecure, but buying a driving my truck made me feel great. I also don't have garbage pick up (I'd have to pay for it), do home improvement projects, and pick up a mulch in the spring last year was about 10 loads. So I'd have to figure out an alternative to that.

We have a 1993 Honda Civic and and a 2008 Honda Fit, and my husband pines for a pickup truck because he likes riding higher on the road.  However, we get an amazing amount of material in both cars (e.g. 10 ft 2x4s, a dozen bales of insulation, and plywood half sheets for a garage project all went into the civic).  Everything that doesn't fit we borrow/rent a truck (very rare), or have it delivered.  For items we've had delivered (drywall and 10 yards of soil), the delivery was free because the amount we purchased reached the free delivery threshold.  I'm not suggesting that you buy a car approaching 25 years (I've had the civic since 2004....I paid $1800 for it), but driving smaller/cheaper cars has rarely been an issue, and not having a car payment gives us considerably more options for other goals.  Honestly, although I know he would still love a truck, I think my husband feels pretty badass walking out of Home Depot with a flat of building materials and loading everything into a little car while all the PRT* drivers look on in amazement.  :)

ETA: *PRT= penis-replacement truck
« Last Edit: March 14, 2017, 02:33:49 PM by tweezers »

ysette9

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Re: Case Study: Living above means need to get out.
« Reply #44 on: March 14, 2017, 03:12:58 PM »
Quote
ETA: *PRT= penis-replacement truck

We call them Little Penis Trucks in my group of friends. :)

deific

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Re: Case Study: Living above means need to get out.
« Reply #45 on: March 15, 2017, 07:17:26 AM »
Wow, the level of maturity here really took a dive.

better late

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Re: Case Study: Living above means need to get out.
« Reply #46 on: March 15, 2017, 08:30:41 AM »
I get the sense that you don't have a budget or any way to track where your money is going. If you have time to play a round of golf, you have time to set up a budget and track your spending. IMHO it is the biggest part of getting out of debt and building wealth, especially for people like me and you who tend to be "spendy"   
« Last Edit: March 15, 2017, 03:21:04 PM by Better Late »

ysette9

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Re: Case Study: Living above means need to get out.
« Reply #47 on: March 15, 2017, 09:30:20 AM »
Quote
Wow, the level of maturity here really took a dive.

Guilty! I think it is important to have a little fun along with the important stuff as well.

That said, it does appear with some people that the huge truck is some sort of coping mechanism for a perceived deficiency. In my home town it was usually the teenage boys who were trying so desperately to be manly and impress each other. It is along the lines of the midlife crisis sports car or spending on hair and nails and shopping st the mall to mask some other unhappiness. In the end we buy things because either they are useful tools (the majority of the time big trucks do not fit this bill), or we are trying to bring ourselves pleasure in some way. It is important to be thoughtful about our purchase to ensure they really are bringing genuine pleasure and not the fake kind brought by trying to impres others or achieve some temporary high. If I am feeling depressed I might eat to give myself a momentary boost, but long-term that is damaging and not addressing the underlying issue.

 

Wow, a phone plan for fifteen bucks!