Author Topic: Case study - Time to be analyzed by the experts!  (Read 8038 times)

bpolson2

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Case study - Time to be analyzed by the experts!
« on: July 05, 2018, 05:21:55 PM »
OK everyone! I have been around the site for about 6 months and trying to work our way to financial independence. I've been very hesitant to post our numbers on here because I know that there are things that I need to and am trying trying to fix.  Please look over what we have here and let me know what I can try and fix.

Background:

Me- 44
Wife - 39
2 kids – 15, 13

Income (monthly):

Me - $3,200 take-home paycheck (after $150 to 403B and $380 to State Teacher Pension. SEE BELOW)
Wife - $2,300 take-home (after $260 to 401k -7% of her salary this increases .5% each year, and $480 to health insurance)

Total $5,500 take-home

Expenses (monthly):

$600 mortgage P&I
$55 home insurance
$65 property tax
$600 groceries/household
$266 cell phone - This is a tough one living in a rural area. Verizon is our only reliable option.
$181 auto insurance - I am currently shopping around on this. Our cars are old so I feel this is way too high.
$75 gas
$180 electric
$87 cable
$96 landline/internet
$500 transportation (gasoline)
$40 pets (food, vet, annual cat shaving for summer)
$100 dining out
$150 medical
$100 clothes/shoes
$12 netflix
$1,200 credit cards (see below)
$75 golf - This expense happens mainly in the summer, but it averages about $75 month for the year.
$50 Wife misc
$50 Me misc
$100 kids misc
$89 student loan
$150 school lunch account - kids during the school year
$110 golf cart payment - Only 4 months left. This was the last big dumb decision before I found MMM.
$56 life insurance - 25 year term policy

Saving for car repairs $50
Saving for house repairs $200

Total $5,137

Assets:
Primary residence (3b/2ba, 2100 sqft) $156,000
2008 Toyota Corolla $2,500
2010 Dodge Avenger $2,800

403b (mine) $58,208
410k (hers) $109,771
HCSP (mine) $16,513
TD Ameritrade taxable $1,807

Emergency Fund $800 Very low
Cash (personal) $3,000

Total (excluding vehicles AND Home value) $190,099

Liabilities:

Primary mortgage $110,881 at 4.375%
Wells Fargo Credit Card $2,308 at 25% This was a "surprise" card the wife had maxxed at $3,000 two months ago. Hammering this one.
United Educators Mastercard $6,250 at 11.99%
Chase Visa $3,282 at 0% Did a balance transfer that is 0% for 15 more months.
Student Loan - 6,888 at 4.25%

Total $129,609

Net worth $60,291

As a note, the wife's employer kicks in 9% of her salary each year to her 401k as an end of year bonus. (They have never missed it. healthcare facility). My state teacher pension is a defined benefit plan. At current, I will receive a full pension at age 66 of approximately $4,800-5,200/month with 1.5% COLA. If I retire at 62, it would be $1,800-$2,100/month.

There are some big mistakes that have been made over the years before I found MMM. The wife and I both were always "minimum" payment people. Then I read Rich Dad, Poor Dad, and it completely changed my thinking and my life. I am working hard to pay off those credit cards as quickly as we can so that we can contribute more to our pre-tax investments. Wife is slowly coming around to this idea of not carrying a credit card and investing money beyond the bare minimum in our retirement accounts.

We are both picking up some bartending shifts at our small town golf course (where I'm also the president) to pick up a little extra money to pay our credit cards off more quickly. The reason I am so nervous is because we will need another vehicle next May for our oldest who will get her license. The biggest positive of all of this is that I have now opened a Roth for her since she just started her first job. I'm not going to let her fall into the same pattern that her mom and me and our parents have been in.

Sorry for the long post. I hope this explains everything clearly.

MrsWolfeRN

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Re: Case study - Time to be analyzed by the experts!
« Reply #1 on: July 05, 2018, 06:03:48 PM »
Hi, the first thing you can do is read the MMM article about why your debt is a hair on fire emergency.  Next sign up for Frugalwoods Uber frugal month challenge; it will help with motivation on your next steps. That's it for tonight.

Tomorrow morning, immediately get on the phone and cancel your cable and landline. Suspend your Netflix account, you can sign back up after the debt is gone if you really miss it.  Then call your car insurance company and drop everything except liability coverage.

After that, start researching cell phone options. I live in a rural area too, and in fact can't get a signal in the house without Verizon. We have Republic wireless for $15 per month each, no data. WiFi calling is your friend. We have a WiFi signal repeater out in the shed so we can get WiFi outside too. If you have to have a signal somewhere other than school/work/home, look int Straight Talk, they use the Verizon network. I think Sprint also let's you roam on Verizon's towers.

There, now you just freed up at least$300 per month to put towards debt, and then savings once the debt is gone. I also recommend putting a temporary hold on dining out, new clothes, golf, and misc. until the cc debt is gone. Remember that right now you are essentially paying an extra 25% on anything you purchase.

Once you have gotten the fire put out, look at your commute. $500 on gas every month is a lot, you must live very far from work. Can you move closer, carpool, or save up cash for a more efficient car? Are there commuter buses in your area?

One more thing, don't buy your daughter a car. She will learn more about money if she saved up income from her job

gpyros85

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Re: Case study - Time to be analyzed by the experts!
« Reply #2 on: July 05, 2018, 06:59:36 PM »


Total $5,500 take-home

Expenses (monthly):

$600 mortgage P&I                       This is okay no issue.
$55 home insurance                      This is okay no issue.
$65 property tax                           This is okay no issue.
$600 groceries/household              This is okay no issue.
$266 cell phone - This is a tough one living in a rural area. Verizon is our only reliable option.       This is out of control!! Try Verizon Prepaid!!
$181 auto insurance - I am currently shopping around on this. Our cars are old so I feel this is way too high.       This is also out of control should be paying $80-100, libality only your cars aren't worth much
$75 gas              This is a lot for gas, where do you live?
$180 electric       Is this every month? This is high, but its what you pay for having 2,100 sqf home also.
$87 cable            How much do you really use this?
$96 landline/internet              This is out of control! Is this due to being rural? What about a bundle TV/PHONE/Internet?
$500 transportation (gasoline)              Completely out of control, thought you were driving F-350 Trucks then seen Corolla!!
$40 pets (food, vet, annual cat shaving for summer)
$100 dining out                  Reasonable but debt payoff should come first.
$150 medical                     Is this pretax?
$100 clothes/shoes
$12 netflix                        Your $87 Cable isn't good enough?
$1,200 credit cards (see below)               We need to pay this off, I would exclude this from your monthly budget and consider this savings, because the mindset is when cards are paid off this is investment savings.
$75 golf - This expense happens mainly in the summer, but it averages about $75 month for the year.      Debt First!
$50 Wife misc            Debt First!
$50 Me misc              Debt First!
$100 kids misc          Debt First!
$89 student loan       
$150 school lunch account - kids during the school year         
$110 golf cart payment - Only 4 months left. This was the last big dumb decision before I found MMM.        Don't get me started... How much is this asset worth? Possible sell and send to debt
$56 life insurance - 25 year term policy           The Social Security has pretty good life insurance already in place.

Saving for car repairs $50
Saving for house repairs $200

Total $5,137



You net roughly the same as me $5412/month but I am able to save $1,800/month from that $5,412 and I have a stay home wife and 3 kids.


bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #3 on: July 05, 2018, 08:22:43 PM »
@MrsWolfeRN and @gpyros85

Thank you both for commenting on my post. I knew we had some big issues. I can expand on a few of these.

Auto Insurance - I am currently shopping around. I do believe that I will get a much better rate from another agent.
Auto Gas - My wife did just get a job much closer which will cut her commute in half. As I dug a little closer into our bill, we use a Kwik Trip card and I pay it off each month. It's probably more like $300 in gas and then a couple hundred on food and items in the store. I will definitely be cutting that down! I should have looked more closely at my monthly statements!
Cell Phone - I am working on shopping around for this as well!
Electric - That is what I pay each month. I'm not sure why it is so much. Would an energy audit help?
Golf Cart - Yeah, this is my one big non-Mustachian thing.
Medical - Yes, I do have a flex spending account, but we have exhausted that for the year. I have low back arthritis, yeah at 44 it sucks, but each year I have an RFA done on my low back to kill the pain for a year. It is wonderful, but expensive and not something I would ever go without.

I did sign up for the Frugalwoods Uber Frugal monthly challenge. I read their posts and am looking forward to trying to more to pay off my "hair on fire" credit cards. I'm also reading Rich Dad Poor Dad again. That was the book that got me started down this path.

My wife and I have to stop thinking like the "old us" and think like the "new us".

brooklynmoney

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Re: Case study - Time to be analyzed by the experts!
« Reply #4 on: July 05, 2018, 09:25:22 PM »
Can you roll all of the balances into a zero interest card?

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #5 on: July 05, 2018, 09:37:40 PM »
@brooklynmoney

I recently opened a Discover It card that I am using for a cash back card to pay my monthly bills on and we religiously pay that off each month, so I don't think I would qualify for another card even though my credit is very good. High 700s. It is possible. I was hoping that the Chase card would raise my credit line and then I would transfer some of that other balance over. The Wells Fargo card I want paid off by September.

SunnyDays

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Re: Case study - Time to be analyzed by the experts!
« Reply #6 on: July 05, 2018, 10:08:46 PM »
Call up you credit card companies and request a lower interest rate.  No, INSIST on it - 25% is ridiculous.  If they think you might default, they will agree.

CrispySub

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Re: Case study - Time to be analyzed by the experts!
« Reply #7 on: July 05, 2018, 10:10:46 PM »
$2300 @ 25% (Est int 50)
$6250 @ 12% (Est int 65)
$3300 @ 0%

$110 in CC interest a month

You lose ~$110 a month in interest on the two CCs. Fix this ASAP.

Fix it via:
Paying $8500 upfront
Aggresively paying it down over next 6 months
Balance transfer smartly

I recommend the balance transfer, nominally:
Amex EveryDay (currently $0 BT fee, 0% BT APR for 15 months) 
Chase Slate ($0 BT fee, 0% BT APR for 15 months). 
BankAmericard (same deal)
I am unsure if this was your "Chase  Visa", but it probably was.

If you can't get those cards, I think Aspire CU has a CC that is 0% BT for 6 months and $0 BT fee.

If you transfer the entire balance to one or all of those cards, you are literally saving ~$110 every month.

Total Savings: $110

Now, let us clear the rest of the $8500.

Use Ibotta, Checkout51, SavingStar, and a host of others for your groceries. Cut out as much alcohol as possible.  Use coupons. Send emails to your favorite brands for coupons. With some minor spending/shopping list modifications, you should easily be able to save $10 via Ibotta and $20 via coupons without going too drastic.

Total Savings: $140

Car insurance. You are definitely paying too much for both of those cars, essentially you are paying for a half of an equivalent car every year. Switch to liability only. If you don't total your car in 3 years with a your fault accident, you come out ahead.  I pay $37 a month for liability only insurance in one of the most expensive cities on a paid off car with a higher KBB than both those cars combined for me and my spouse. Surely there is a way to knock your payment down to at least $50/month.

Total Savings: $270

Utilities: Cut back on electricity. Unplug laptops after they are fully charged (or charge them in public/at work), turn off TV's/computers. Program your Air Conditioning, if possible.   If you have two fridges, see if you only really use one and unplug the 2nd. Buy energy efficient light bulbs, cheap door insulation, and close the curtains when the house is empty to prevent additional cooling loss.  You can knock consumption down at least $40, but lets just assume $20.

Total Savings: $290

Cell Phone: There are numerous approaches available to you.
1) Call and request a lower rate
2) Find another carrier that pays 'early termination fees' and ask your company if they could transfer your cell numbers. Chances are they will redirect you to a retention team and offer a discounted rate for x months.
3) Switch to discount carriers in your coverage area
4) Many companies have free, cheaper smart phones. Use one of those instead of the monthly payment phones.
 My household cell phone bill (with unlimited data) is $38/month. Once, I got it to $20/month for 8 months via the customer retention team and a new cell phone.  So lets assume you only save $30 a month.

Total Savings: $320

Cable/Internet/Phone: The prices and bundles are very specific to your area. If you have a landline, consider using that at home and focus on a cheaper cell phone company that has reception around your town (and not your house). Call, compare, reduce/rid yourself of cable/landline. Switch internet companies for the 12 month deals.  Watch your favorite shows online. I won't deduct anything from this lifestyle change, but there are plenty of deductions here.

Total Savings: $320

Transportation: Cut back. Walk/ride bikes, if possible. Combine multiple trips to town, potentially with trips to/from work.  Teenagers with a $100 bike should be capable of traveling at least 10 miles  in an hour while promoting a healthy life style. Also, properly inflate your tires and check monthly.  You can save at least $50 by smartly transporting.

Total Savings: $370

MISC: You have $200 Misc, $100 clothes, $100 dining out, $75 golf on top of the $350 unaccounted for in your budget. That is basically 15% of your income for things that probably don't offer longterm fulfillment. Buy clothes at a thrift store or order online with free returns. I have bought nice dress shirts at our thrift store for $1 and high quality 2-piece suits with no defects for $20. Online, I bought nice, new dress shoes for $16. You can knock out the Misc by not wasting it on things you don't really need nor actually enjoy 5 minutes later.  Ice cream, coffee, donuts, etc. offer no lasting value, but a lasting impact on your waist and your wallet.  Trim it.  Cut back to $300 or less for all misc and keep the rest to invest.

Total Savings: $600


With those steps above, we have $600 to apply to the CC principle (I am including the $110 in CC interest since it isn't being paid towards interest at 0%).

You will effectively be able to pay off $1,800 a month for CC's. In 7 months, you could be credit card debt free. 4 months after that, student loan free. In 12 months, you would have nearly $2,000 a month extra income than you do now.

I recommend investing that extra ~20k-25k/year and get your retirement/investments/emergency fund on track.
   
I recommend that your oldest find a job to work for her car. I came from a poor, no investments/real savings family. I saved for my first car since I was 8 years old from every quarter found on the street to every yard raked to working in a restaurant.  If you insist on getting her a car after her license in May, I recommend sharing your cars with her for a few months (every month starting next July is $2k extra) and using a portion of those new monthly savings to buy you a better used car and give her your older car.

Peachtea

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Re: Case study - Time to be analyzed by the experts!
« Reply #8 on: July 06, 2018, 05:40:13 AM »
Mmm KT! I miss their coffee. While your KT card might have a bunch of non-needed food on it (donuts, quick hot foods etc), they do have great prices on some grocery items that you should compare to your grocery store. Bananas, potatoes, onions, bread, and dairy are the ones to look for. Especially bread and dairy since they have their own brand/bakery/dairy. Every once in a while they have crazy sales on things like butter and my parents stock up (can freeze butter).

When you look into cell phones google “Verizon MVNO” and you should find a list of the MVNOs that run off Verizon’s network like Go Red Pocket, Straight Talk (avail Walmart), and Tracfone. I know people in rural Western WI (where only the Verizon network works) who successfully use Staight Talk and Tracfone. A coworker switched his mom to Red Pocket in rural Indiana and hasn’t had any complaints on service yet. (He did say poor customer service and unclear instructions made it take a few hours to initially set it up.)

This is the link @MrsWolfeRN referenced: https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/ Your comments about picking up bartending shifts to pay down over $12k in consumer debt reminds me of the wife working an extra part time job in that post. Your not working those shifts to pay down the debt. Your working them to pay for your current cable, clothing, golf cart, misc budget, and expensive cell plan. All those things need to go until your debt is gone. Hopefully it will inspire you to cut as much as possible to be out of debt ASAP, so you can add back in whatever luxuries are most important to you.

The great news is your kids are now old enough to take care of their wants and now is a good time to teach them the difference between a want and a need. When I was 12 I started asking for name brand clothes rather than rummage sale or Walmart. I got a $100-150 back to school clothes budget depending on the year and could use it on what I wanted where I wanted. (Usually got me a few pair of jeans and a pair of shoes at Kohls. And clothing prices have oddly gone down since I was a kid.) Any other clothes/shoes came from babysitting/Xmas/bday money saved and later part time wages. Implement something similar and cut your clothing budget. You and your wife should only need a few hundred a year max to replace worn out items. But while paying cc debt, the only new clothes are of the “all my shoes have holes and I need a cheap replacement” variety.

I felt very fortunate that my parents bought me a 16 year old $500 car with a gazillion miles. (My car and I shared the same birthday!) It got me to work and to my friends places that were 10-17 miles away (that rural). I didn’t feel the need to use my part time wages to get a better car. Even my well-to-do friend had to get a job to work for her car, although her parents agreed to match whatever she saved for hers. My point is a car for your daughter, no matter how rural you are, is a want not a need. Even if it’s much more convenient for all of you if she has one. And you have $12k of consumer debt! You can’t afford to buy her a car. Clear up your debt first (put on your oxygen mask first) and then consider whether you will pitch in on a beater car.

And finally the golf cart. Your going to sell this right? I thought to myself why would anyone need a golf cart, don’t courses have them available? But I don’t golf, so I tried googling reasons to buy a golf cart to make sure I wasn’t missing the obvious. Pages on electric vs gas, why to buy new vs old, and top 4-5 (non golf) reasons to buy a golf cart. Several different searches, going a few pages down in results and not one result on why a golfer should buy a golf cart. Seems suspiciously like there’s no good reason for a golfer to buy a golf cart, even if he could afford one (which see cc debt above).

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #9 on: July 06, 2018, 09:04:53 AM »
@CrispySub

Thanks for the very detailed post. I will work towards each of those areas that you mentioned. It is much harder to go cold turkey than I thought when I see all of these areas that need improvement. I knew this would happen, but I will force myself to work on each one. I am going to swing into the State Farm agency in the neighboring town to see if the quote I got from online is accurate. If so, I could save up to $100/month. I'm also going to look into Verizon prepaid. Is that something you can look at in one of their stores or do they just put you on plans there?

@Peachtea

Yes, KT is definitely a weakness for us with the Hot Spot right when you walk in. We do get our eggs, b Iutter, milk, etc there though. It's cheaper than anywhere else.

I see exactly what you are saying with the part-time shifts at the golf course.

My oldest does have a job now at a local restaurant. She's just started and she is earning a fair amount. She is very frugal herself. Biking for us in our location is actually pretty dangerous on these roads. No shoulders at all and people regularly speed by at 70. No amount of money saved would give me any piece of mind putting my kids on those roads on a bike, and my wife would never accept it, so that's a non-starter. I did just mail off an application to open a Roth for her at TD Ameritrade yesterday so I think that is a big win!

Ugh, the golf cart. I should have added that I purchased it with my mom, so I am unable to sell it. I know it's about as anti-mustachian as it gets, but it is almost paid off and off the books.

I will keep updating as we take each step so we can stay motivated. I'm sure we will never be full mustachian, but every step that we take towards it will be great!

Goldielocks

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Re: Case study - Time to be analyzed by the experts!
« Reply #10 on: July 06, 2018, 09:28:48 AM »
I have to chime in about the car!

I am suburban, so taking the (poor) bus service here is an option, as is the ability to ride a bike to get to places (2 miles to grocery store, up a hill, is a common trip).

I now have 4 driving adults, with our two teens, and as a cost saving measure, we went down to one car.  Yep.  It is a pain to coordinate car use.  I have to drive DH to work and pick him up sometimes and that is not convenient.  Teens need to take a bus (up to 2 hrs) to get to work, or I ride a bike to get groceries.  My son chose to work at a fast food place about 2 miles away just so he could bike (or walk).  But it is working.

I think that with 2 cars and only 3 drivers, you should be absolutely fine.  It only takes a bit of planning and extra time to coordinate drop-offs for work.  Teens want the cars in the evening / weekends, when you may not be working, can get rides with friends, etc.

One option --
-- is to buy a cheap car and allow your daughter to pay for all insurance and gas from her job.  You should be able to find a $1000 car that works just fine.   If you limit your cost to the upfront amount, it is a lot less for you.  I gave this option to my kids, who are both now working, and neither has taken me up on it yet... so maybe cars are not a "need" unless mom and dad are paying for them.

lemanfan

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Re: Case study - Time to be analyzed by the experts!
« Reply #11 on: July 06, 2018, 09:39:18 AM »
In your replies, I see confirmation that you agree that some expenses could be cut,  but no real commitment to make real changes.

What is you're real, concrete goal? What are you willing to sacrifice to reach that goal? What do you want to teach your kids about personal finances and personal responsability?

ysette9

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Re: Case study - Time to be analyzed by the experts!
« Reply #12 on: July 06, 2018, 10:20:48 AM »
This is minor but it stuck out to me that you’ve mentioned two situations where you have used an old-school methods for doing business that are more time consuming and expensive. Specifically, you mention dropping by an insurance office in person (versus a phone call) and mailing in a Roth (IRA I presume) application versus doing it online.

I may well be reading too much into this that doesn’t actually exist in real life, but I’d encourage you to think more strategically about tasks like this. Can you do it online instead of jumping in the car and paying to drive someplace? Can you bundle trips to be more efficient?

I say this because I have family members who take this to the extreme. Any tasks that can be done in person they do in person. Drive to the bank to talk to the teller to take out money. Drive to the X shop to pick up a something. Drive to Starbucks for a morning coffee and then an hour later get back in the car to drive to the hardware store for a screw or a bolt. Manually pay all of the bills each month by writing checks and mailing them off. All of that is completely wasted time and energy in my book. My bills are paid automatically online. I don’t use cash, but if I did, I would get cash at the grocery store while buying stuff anyway. Getting in the car and going anywhere is a big production now with two littles at home, so we do that as infrequently as possible and bundle trips as much as we can. Whenever possible we look to borrow from our neighborhood group, get on the Buy Nothing group, or buy locally on Craigslist. When that fails, Amazon prime for little things to save a trip to target.

Sorry for the long blathering post. My goal is to just poke at whether you can start thinking more efficiently with your resources, both time and money.

formerlydivorcedmom

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Re: Case study - Time to be analyzed by the experts!
« Reply #13 on: July 06, 2018, 11:05:58 AM »
If reading has been helpful to you...pick up a copy of Your Money or Your Life. It encourages mindful spending that matches your values.  It really, really helped me (and is the only reason I finally let go of cable).  Some of my friends found it a bit new agey for them, but you can overlook those parts.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #14 on: July 06, 2018, 02:02:01 PM »
@ysette9

I understand what you are saying. I did do an online quote for my insurance. The agent is in the town my oldest works in (actually right next door) so I stopped in to verify the online quote. It did show that I can actually increase my liability insurance and still pay $90/month less. He also recommended a $1,000,000 umbrella policy that would be $126/year. Do people recommend these umbrella policies? He explained to me that IF something were to happen that they could come after my teacher retirement pension, my 403b, and my wife's 401k. Is this accurate?

As for the Minor Roth, TD Ameritrade does not allow you to create this online. It has to be paper application. I did try to do it online. The reason I am using TD Ameritrade is that is where my 403b is and I know that SPTM is a good low index fund that is commission free.

@lemanfan

You are correct in your observation that I haven't made any super solid commitments yet. I am going in baby steps. Actually the biggest step already has been to not put anything at all on our credit cards for the last 5 months. That's a major step for my wife. There were actually thoughts of the d-word happening if that didn't change, but we have done a better job now of communicating and getting on a "closer" page when it comes to finances. I won't say it's the same page yet, but it's getting better.

As for my goals, I guess I don't think I'll ever be truly full-Mustachian. My goal is to eliminate as many expenses as I can at this point. I want to use those saved expenses to pay off our debt. Once that is accomplished, I want to invest those savings in a combination of pretax and taxable accounts to build my asset column (like Rich Dad encourages) so that it throws off passive income.

Thanks everyone for the comments! I am taking all of your advice and questions to heart. It is very eye opening to hear everyone's thoughts on our situation.

ZMonet

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Re: Case study - Time to be analyzed by the experts!
« Reply #15 on: July 06, 2018, 02:53:33 PM »
I don't have much to add but did want to give some encouragement.  I don't think you should be faulted for taking "baby steps" to fix what wasn't working.  Just admitting that there was an issue and moving in the right direction is huge!  If you were headed towards divorce, and it sounds like you were, and all this exercise does is get you to communicate better with your wife and, consequently, avoid that then it has already paid HUGE dividends, both financially and developmentally.  Keep at it and keep doing the tangential things, like teaching your daughter not to make the same mistakes and setting her up with an account to pour money into, and in no time you'll look back and be amazed.

And as time moves forward, do push yourself to do more.  I think that is what others on here are calling you on.  They want to make sure that you are making progress and not just talking a good game.

Good luck!

CrispySub

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Re: Case study - Time to be analyzed by the experts!
« Reply #16 on: July 06, 2018, 11:09:24 PM »
@ysette9

I understand what you are saying. I did do an online quote for my insurance. The agent is in the town my oldest works in (actually right next door) so I stopped in to verify the online quote. It did show that I can actually increase my liability insurance and still pay $90/month less. He also recommended a $1,000,000 umbrella policy that would be $126/year. Do people recommend these umbrella policies? He explained to me that IF something were to happen that they could come after my teacher retirement pension, my 403b, and my wife's 401k. Is this accurate?


This is a hard question to answer and honestly depends on your risk/fear tolerance. Insurance companies make money. They make a lot of money selling any product they can. Chances are high that you are probably throwing your $126 a year down the drain.  Let us assume that your liability insurance at $90 a month covers 25k personal injury 25k property.  Chances are that you won't cause a major at-fault car accident. If you do, then the 25k property will only partially pay for the other persons new car (since most cars are >25k). If you hit other property, then the out of pocket expenses could be even greater.  Also chances are that with health insurance that the 25k personal injury would be enough to cover the immediate medical expenses (ambulance, ER visit, etc).  At this point you have a high probability of coming out financially ok.

Now here comes the umbrella.  They typically go in 1 mil increments. The person you injured is a specialized doctor (400k/year) who can't work for 3 months due to your accident. The umbrella would pay him 100k work loss plus medical bills.  You are relieved.

Now lets say the person you injured is a seasonal athlete who can't work for 3 months. He gets paid 10mil a season.  Your insurance covers 1mil, and you are on the hook for 9mil. You are not relieved.

In a third scenario, you injure an average worker for 3 months at 40k/year. Your auto insurance covers the 10k from work loss.

In only one scenario above out of three highly unlikely scenarios does umbrella pay off.

Stats are all over the board, but in the US 37k people die and 2-3million are injured each year.  Most of those deaths are alcohol/speeding/traffic infraction (red light running, texting/driving, etc) related. Chances are you will not cause a car accident death or be held liable. If you are, the average cost to you averages over 1million (more than umbrella).  A disabling injury typically costs between 25k-100k (hardly worth umbrella), and a typical injury costs <20k (not covered by umbrella). 

Unless you are extraordinarily uncomfortable with improbably events (likely <1 in 10,000, but someone should check those numbers), then you are wasting your money. 

reeshau

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Re: Case study - Time to be analyzed by the experts!
« Reply #17 on: July 07, 2018, 01:05:16 AM »
Unless you are extraordinarily uncomfortable with improbably events (likely <1 in 10,000, but someone should check those numbers), then you are wasting your money.

I think of insurance, or managing insurance, in exactly the opposite way.  I am comfortable to have a high auto deductible because I have a decent 'stache and I can cover it.  You need insurance exactly for unlikely, large events that would change your life permanently if they occurred.  (Term) Life insurance, at least until you have reached FI, flood insurance, and a liability umbrella.  A high-deductible health insurance plan, at a minimum.  Possibly long-term care insurance, if you don't have enough to self-insure a low-six-figure nursing home stay.

The key to umbrella coverage is that it is not an asset.  You get sued, your assets are forfeit and your wages could be garnished.  Beyond that will be unrecoverable, and not worth going after for a contingency lawyer.  That is the "total coverage" level to have.

I think any mustachian, who has been careful and intentional about planning their life, would have the most to lose from some catastrophe; that is, the greatest potential life change, the most to lose.  Having the ability to deal with even that is just another level of sleeping soundly at night.

bassman2003

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Re: Case study - Time to be analyzed by the experts!
« Reply #18 on: July 07, 2018, 08:45:39 AM »
We have a 1 million umbrella policy.  I sleep a little better at night because of it.  Medical bills are expensive, a broken bone with surgery/PT will burn through minimum policies in a heartbeat.

Also, remember, if you're in an accident, State Farm is protecting their money to a certain extent.  1 million is on the line, State Farm wants to pay as little of that as possible.  You'll likely have a pretty competent lawyer hired from State Farm working your case, not just an adjuster.  I've heard it's very rare for individuals with an umbrella policy to ever pay out the full amount. If those policies paid out 1 million frequently, they'd be way more expensive than $126/year.

Finances_With_Purpose

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Re: Case study - Time to be analyzed by the experts!
« Reply #19 on: July 07, 2018, 09:20:54 PM »
You've gotten feedback on some specifics, and I'm going to stick to the few high-level things that stick out to me as great places to start.

1.  Most obvious: your wife had a "surprise" credit card with $2.3k in debt on it (i.e. half your monthly pay, and, per your numbers, almost 6 months of all the extra slack in your budget)!??!? 

You have a marriage/debt/spending issue, more than a budgeting/finances issue.  We're less helpful for those.  That's something that needs to be addressed (in a loving but firm way, not in a bash-on-your wife or push her way).  Maybe some counseling, now - address hard things now, with extra attention, before they become bigger/tougher problems. 

If you only do that/figure that out, you'll be doing far better.  As it stands, you might move forward while she's moving backwards, and all that will do is build resentment/bitterness in you - no good for you or for her. 

2.  Read Millionaire Next Door.  You may find it encouraging and motivational.  I know I did. 

3.  Take the Dave Ramsey course.  Why?  You're learning this stuff, but he covers the psychological parts as well as the nuts & bolts better than we can in one thread quickly.  It's worth it for the insurance savings alone.  Since you buy insurance in person, I'm guessing you'll find that part useful.  You'll more than make back your money's worth, and it'll answer a lot of the questions you pose here.  While a few of us have disagreements with some minor things in Dave's course (e.g., the way he treats investment returns/mutual funds), he's amazing for a beginner course and to hit all the basics well - everyone who listens to his advice (save, give, invest) will do well. 

That's all for now.  And that's a lot to do; I'm sure you're a busy person too.  Two of those will motivate you (Dave and the book), and the third should as well - it's an opportunity for progress.  Good luck with it all! 

Dee18

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Re: Case study - Time to be analyzed by the experts!
« Reply #20 on: July 08, 2018, 05:57:53 AM »
Just want to repeat the advice: do not buy your daughter a car.  Yes, it would be convenient. Yes, many of her friends will get cars when they get their licenses (and for many of those families it is a bad financial choice), and yes sharing a car will be inconvenient.  First, teens are more likely to have accidents (and deadly ones) when driving their own cars.  But more important is the fact that your teens need to learn about personal finance and need to understand that limiting one's wants to match one's budget is essential.  Sharing a car with my daughter for her teen years meant that one of us often went earlier to school or work or had to wait after school or work to be picked up.  But benefits included (1) many more hours of driving experience for her with me in the car, (2) her learning to think creatively about scheduling, (3) her learning to use "waiting" times for studying, (4) her learning to factor in location in job selection, and (5) our saving the cost of a second car, maintenance on that car, and the high insurance of a teen with her own car.  She also saw me dealing with the inconvenience of adapting my schedule when she needed the car.  Best of all we had a lot of great conversations in the car, especially on the way home from school, while many of my friends lamented that they never talked with their teens. 

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #21 on: July 08, 2018, 11:37:51 AM »
I understand the not buying a car part, but I should explain how rural we are. We live 10 miles from the nearest town which is straight south. I spend much of my time golfing there in the summer. My kids go to school and work in the town that is 12 miles straight east of us. I teach in a town that is 14 miles just north and slightly east of us, and my wife works in a town 15 miles northwest of us, so ride sharing actually would cause us to put more miles on than just having an old beater car for commuting.

I've tried to go through the different ways that we could get by with two vehicles but it just isn't about convenience, the extra miles between towns would cost as much as an older car, so I know it's not mustachian to add another vehicle, but the numbers just work that way.

And no, moving closer to one of them isn't an option. We live on our family farm and won't move into town. Kind of like others have posted on various posts. I am moving towards being more mustachian, but there are certain parts of life that we won't sacrifice.

But I am in process of switching auto insurance and will be saving almost $100/month, so that's a good second step. First step being the wife and me not putting ANYTHING on credit cards and actually communicating about finances.

@Finances_With_Purpose

I totally agree with your #1 statement. I think that has been the biggest win of them all for us. My wife and I BOTH come from families that spend every cent they have ever earned. I mean my dad owns his own helicopter. Actually it's his second one he's owned. He "upgraded" from his previous one....

Peachtea

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Re: Case study - Time to be analyzed by the experts!
« Reply #22 on: July 08, 2018, 04:01:33 PM »
If you’ve actually done the math, not just guess or assume, how much it would cost over 2 years to have your daughter take the school bus to school, walk or get a ride from friends from school to work, and then have you pick her up afterwards and drop off/pick up on weekends vs a beater car, then cool your daughter gets a beater car. BUT that still doesn’t mean you pay for it. She has a job and doesn’t get her license until next May. If she saves $100 a month from now until then she can buy her own $1000 beater car. You need to make sure she knows this so it’s not a surprise.

I wish I knew in HS that my parents were in debt. Because even though I had some kind of “job” since 12, bought a lot of my own “wants,” and only asked for things I thought my parents could afford, I had no idea their real financial situation until they filed for bankruptcy my freshman year of college. I still, 10 years later, feel like a spoiled brat anytime I open my jewelry box and see the expensive class ring I begged for as bday/Xmas gift senior year (and only ever wore that year) or see my dad using the then $300 iPod I begged for as my bday/Xmas gift junior year HS. I doubt your daughter would want you spending money you can’t afford due to your debt on her car, when she can save up for it herself.

Goldielocks

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Re: Case study - Time to be analyzed by the experts!
« Reply #23 on: July 08, 2018, 08:30:05 PM »
Is your daughter changing schools when she turns 16?  If not, how is she getting to school now without driving?  I mean to say, you are already sharing two cars in your family... her turning 16 and getting a drivers license should just make what you do today a bit easier, is all.
 
The big switch up may be the ability for her to get an after school job, compared to no job now, which would help pay for the insurance, gas, etc.    BUT - it is possible to get a job on weekends only, or maybe at the golf course that you play at and you two carpool sometimes.

There are tons of ways to do this, and I will repeat the idea that you get a $1000 running car, and she pays for everything else.

Finances_With_Purpose

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Re: Case study - Time to be analyzed by the experts!
« Reply #24 on: July 09, 2018, 09:00:32 PM »
As someone pointed out to my father, you don't want a teen having a valuable car.  I had my license a full year before a can rolled under the brake and I bumped a guy - ruining the front end.  But that old beater wasn't one to cry about anyway - as it should be. 

When it comes to kids and cars, go cheap. 

lemanfan

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Re: Case study - Time to be analyzed by the experts!
« Reply #25 on: July 10, 2018, 03:08:18 AM »
I don't have much to add but did want to give some encouragement.  I don't think you should be faulted for taking "baby steps" to fix what wasn't working. 

Since I was one of the people that was a bit hard, I want to agree with whatever level you take this to, it's a step in the right direction. :)

One of my questions was regarding goals.  Partly because it's important that you and your wife want to rouchly reach the same goal, and partly becuase some people are very goal-oriented.

You mentioned and unspecified "financial independence".  If you can put that into hard facts, it's easier to discuss with your wife, both what needs to be done, and what the effects could be for your life - during the process and after reaching the goal.  And you really REALLY need to understand her.  You share a life, and kids.  Kids who will be highly influenced by your attitude towards money.

All good discussions or negotiations start with listening.  In the famous book "7 habits of highly efficient people", one of the 7 principles are: "Seek first to understand, then to be understood". Pick up any book on sales and negoitation and you'll see basically the same advice: "Listen more, talk less". And when you listen, listen with the intent of understanding - not listening while trying to think of what you should say next.

Perhaps a look at this could inspire some discussion topics with your wife: https://www.youtube.com/watch?v=qCKZgBw0g2E

I'm firmly convinced that having concrete goals, and working towards them every day is a good way to go ahead.  Check our all the journals in the forum where people either work hard to kill debt or create positive net worth ... by tracking the progress, you see results, and get closer and closer to that goal.  One good example: https://forum.mrmoneymustache.com/journals/dirty-laundry/


zoe2dot

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Re: Case study - Time to be analyzed by the experts!
« Reply #26 on: July 10, 2018, 08:07:00 AM »
Don’t discount the balance transfer suggestion.
Let the banks tell you they won’t give you a card!
https://www.nerdwallet.com/best/credit-cards/balance-transfer

Sell your half of the golf cart, or rent it to someone in the summer months. 

Get started on the monthly savings—chipping away at those tasks will be how you get started on this debt.  People who post these case studies often wait for something.  DON’T WAIT!  Cancel the cable, Netflix, subscriptions etc ASAP.  ASAP!  Not “someday”.  Someday is today!  It is now!  Open up your Netflix account RIGHT NOW and cancel it.  www.netflix.com if you need it.

Please consider the advice given about the kid’s car.  Your situation is NOT different or unique.  We totally understand that you are rural.  At one point as a child I lived 11.9 miles from town and it meant a 45min school bus ride every day.  Get over it.  She’ll get her reading done.  Or, like someone else said, carpool.  She can ride in with you in the mornings and home w your wife (or vice versa).  She can kill time at the library if needed.  There is nothing about your situation that justifies a THIRD car that YOU are paying for.  NOTHING. 

You want to teach her to be financially savvy then start with this: save up for your first car, including insurance and gas. 
You’re not off the hook just because you opened a ROTH.  It’s “ROTH, and” not “ROTH, done”. 

Start. 

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #27 on: July 12, 2018, 04:02:17 PM »
First win - I was able to get rid of the $110/month payment for the golf cart. Won't be able to sell my half, but at least out from under the monthly payment.

Second win - Tomorrow I am going to meet with the State Farm agent and switch our insurance to them. I am going to be combining auto and home both with them and an umbrella policy. It will lower our monthly bill about $50 total. Once I get a good emergency fund set up, I am going to switch both cars to liability and then save another $60/month.

This gives us $160/month more to put it onto our credit card debt!

Good point on the responsibility for my oldest. She will also be paying us $50/month for her cell phone to help cover the costs. I am still looking into moving us into Verizon prepaid to try and lower our bill. I will also take this $50 and put it toward our credit card debt as well!

Small steps, but we are making progress. Once the auto and home insurance are set, I will look into lowering the Verizon bill.

lemanfan

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Re: Case study - Time to be analyzed by the experts!
« Reply #28 on: July 13, 2018, 12:08:46 AM »
Good job! 

inline five

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Re: Case study - Time to be analyzed by the experts!
« Reply #29 on: July 13, 2018, 03:40:33 PM »
Switch to Total Wireless it's a prepaid carrier on Verizon towers. Buy a cheapie phone at Walmart with on months service and activate to see if it will work in your area. Actually, what area are you in (zip code)?

For two lines it's $62/month total.

fuzzy math

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Re: Case study - Time to be analyzed by the experts!
« Reply #30 on: July 14, 2018, 08:06:27 AM »
We use Page Plus which is another Verizon MNVO. It's $30 a month per line (a bit less with autopay) for unlimited everything. Data is only fast for the first 2 gigs, then rated down to lower speeds.


inline five

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Re: Case study - Time to be analyzed by the experts!
« Reply #31 on: July 14, 2018, 11:52:54 AM »
We use Page Plus which is another Verizon MNVO. It's $30 a month per line (a bit less with autopay) for unlimited everything. Data is only fast for the first 2 gigs, then rated down to lower speeds.

If you use less than 5gb of data each month per line just switch to Total. IMO. Same price for more. Makes no sense. Pageplus was a good option when it was based in the US but now it's under the Tracfone umbrella and personally I see no advantage to it. Unlimited data is useless at low speed.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #32 on: July 15, 2018, 05:17:04 PM »
Just knocked $40 off of our monthly Verizon bill! I went through it line by line and realized they were charging us $40/month for "Total  Device Protection"! My phone is fully paid off, and one more has $58 left before it is paid off! The other two are over half paid off. When I researched it more, that protection barely covered anything... The deductible was still like $50 to fix anything. Ridiculous. The other thing is that from now on, when I get a different phone, I WILL pay up front in cash. They drain you with those "monthly" payments.

So adding to what we've saved before, we have $200/month extra in cash to plow into my credit card debt! Working away!

Chaplin

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Re: Case study - Time to be analyzed by the experts!
« Reply #33 on: July 15, 2018, 07:15:17 PM »
Minor point: I think you excluded your home equity from your assets, but included your mortgage in your liabilities when calculating your net worth, so that might bear revisiting.

I agree with other posters that you don't seem to be taking the emergency situation seriously enough, but I do commend you on the changes you have made.

Regardless of all your counter-points, don't buy the kid a car.

Regardless of your statement that you can't sell the golf cart, do it anyway - you may have to sell the whole thing and return your mother's money to her, but don't give up as easily as you seem to be.

lemanfan

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Re: Case study - Time to be analyzed by the experts!
« Reply #34 on: July 15, 2018, 11:31:22 PM »
How are discussions going in the family?  How much on board is the wife?  How do you involve the kids?

Can you talk to your mother in the lines of "I'm up over my ears in CC debt, I couldn't really afford the golf cart in the first place and now needs to free up that money"?


TassieFI

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Re: Case study - Time to be analyzed by the experts!
« Reply #35 on: July 16, 2018, 04:51:55 AM »
PTF

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #36 on: July 16, 2018, 09:36:09 AM »
@Chaplin No, I purposely included my mortgage since I have to pay it as a liability, but I do NOT include my house value as an asset as many do since I make no money off of it and would have to sell it to make any money off of it (which I doubt we will ever do).

@lemanfan The family part is still a work in progress. My 15-year-old gets it. She saves her money and pays for her cell phone now (which is nice). DW is understanding and listens, but she just does not want to learn about saving and budgeting. She understands about not charging, but she is so much like her mother (if you need something, you just go buy it). That's how she was raised, and I'm working to get her away from that. We have talked though about her not carrying any debit or credit cards at all, only cash. Her idea of budgeting right now is just telling me what she spent, not necessarily keeping it under a certain amount, and my youngest seems to be following in her footsteps unfortunately....

As far as the golf cart, I'm afraid I'm stuck with owning that. My mom is not good with money either so there is no way that she can buy half back from me. Where do you think I got my money-sense before I found this site?! I'm just putting that down as my LAST stupid money decision and will have to live with it.

Another little small step today was changing my own oil. Bought everything for about $26 and took me about 15 minutes. I would have paid $35 or so at my local auto shop, so saved $9+. It's nice because my dad has a huge shop for all his equipment, so I have everything I need available for me there to do all kinds of work on my vehicles, and with youtube, you can learn how to make all kinds of fixes. I will be changing my brakes on the car in the next couple of months also.

lemanfan

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Re: Case study - Time to be analyzed by the experts!
« Reply #37 on: July 16, 2018, 10:49:56 AM »

@lemanfan The family part is still a work in progress. My 15-year-old gets it. She saves her money and pays for her cell phone now (which is nice).

Good!

For the others, remember it takes time.  :)

Another little small step today was changing my own oil. Bought everything for about $26 and took me about 15 minutes. I would have paid $35 or so at my local auto shop, so saved $9+. It's nice because my dad has a huge shop for all his equipment, so I have everything I need available for me there to do all kinds of work on my vehicles, and with youtube, you can learn how to make all kinds of fixes. I will be changing my brakes on the car in the next couple of months also.

Really good.  DIY is one of those habits that saves money, but perhaps more importantly creates self-confidence and a sense of agency.  On top of that, you know your car better and know that the work is done well and that it's not a rush job by some uninspired person who just longs for the next cigarette break...

And it's a good role model for the kids as well.  To feel that you can fix things on your own is probably good for everyone growing up into maturity. There's nothing magical about handling a wrench or a screw driver - or thread and needle for that matter, but you got to learn it somewhere. 

From what I see around me, it might be a bit extra needed to expose girls to the mechanical workshop and buys to the textile care (both laundry and repairs), but it sure is good for them to have the experience and the confidence.

Goldielocks

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Re: Case study - Time to be analyzed by the experts!
« Reply #38 on: July 16, 2018, 03:53:22 PM »
Girls AND boys who need to be exposed to mechanical car care. now... It is a lost art.

   I don't know many people who can do any car care, and of the handful, there are some women.

Stachetastic

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Re: Case study - Time to be analyzed by the experts!
« Reply #39 on: July 17, 2018, 05:54:33 AM »
Excellent progress so far! Hopefully your wife and your youngest will get on board with time.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #40 on: July 17, 2018, 01:01:00 PM »
Yes, it's a slow process. Unfortunately, I am a little impatient. It's something I am working on myself.

I've always used Quicken to create budgets and track our money, but it's not the most user friendly thing for budgeting. It's great for bills, but the budgeting part is not very user friendly. I started a trial membership with YNAB. It seems very clear and user-friendly. I mentioned to the wife that I started and would like to show it to her and see if it gets her interested. I'm hoping it does. One thing I am having a difficult time with is that I pay much of our monthly bills on my Discover It card for the 1%/5% cash back. How do you do that on YNAB? I enter my monthly budget things on the bottom, but then when I enter the monthly cost of paying off the Discover each month, it blasts my total budget big time. Any suggestions on how to do that?

Thanks!

bluewater

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Re: Case study - Time to be analyzed by the experts!
« Reply #41 on: July 19, 2018, 01:22:30 PM »
Scanned through most of the comments and I didn't see anyone really bat an eye at the $150 school kids lunch account.  Understandably its not your biggest problem but if we are looking to find dollars to throw towards debt we might as well look at everything.  So you've got two kids and a typical month will give you 20 school days.  They are spending $3.75 per day or $18.75 week.  If you buy a couple loaves of bread, sandwich meat, peanut butter and jelly, chips, cookies, etc. I think there is savings to be had especially if you're able to buy in bulk at Costco/BJ's etc.  My little kids end up buying when we get lazy and I know from experience we're able to save money and give them a much higher quality lunch then what they are getting served at school.  Maybe let them choose to buy one day a week on pizza day or something to not feel like you are depriving them?  Back of the napkin math I'm thinking you could save $50/month which over the school year could get you an extra $500 to throw towards credit card debt.  Good luck, you're on the right track!

P.S. I would add my own spending is a cesspool of waste and I feel like groceries are one of the best bang for your buck places to eek out money.  I'm working towards my own case study :)
« Last Edit: July 19, 2018, 01:26:04 PM by bluewater »

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #42 on: July 19, 2018, 10:03:07 PM »
@bluewater

I agree that the $150 amount might be high. I always tend to overestimate my budget but then at the same time I use that as justification to “overspend” in other areas. I’m trying to be much more deliberate in my actions. Of course I’m still kind of mentally weak when I walk into a store. Just yesterday, I walked into Menards to buy a window AC u it for our church that I will be reimbursed for, and I walked out with $74 worth of stuff to make some repairs around my house. Those kinds of things drive me crazy! And I only have myself to blame....

Stachetastic

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Re: Case study - Time to be analyzed by the experts!
« Reply #43 on: July 20, 2018, 05:38:48 AM »
Scanned through most of the comments and I didn't see anyone really bat an eye at the $150 school kids lunch account.  Understandably its not your biggest problem but if we are looking to find dollars to throw towards debt we might as well look at everything.  So you've got two kids and a typical month will give you 20 school days.  They are spending $3.75 per day or $18.75 week.  If you buy a couple loaves of bread, sandwich meat, peanut butter and jelly, chips, cookies, etc. I think there is savings to be had especially if you're able to buy in bulk at Costco/BJ's etc.  My little kids end up buying when we get lazy and I know from experience we're able to save money and give them a much higher quality lunch then what they are getting served at school.  Maybe let them choose to buy one day a week on pizza day or something to not feel like you are depriving them?  Back of the napkin math I'm thinking you could save $50/month which over the school year could get you an extra $500 to throw towards credit card debt.  Good luck, you're on the right track!

P.S. I would add my own spending is a cesspool of waste and I feel like groceries are one of the best bang for your buck places to eek out money.  I'm working towards my own case study :)

My kid's school charges close to $3/day for lunch. I can pack a better lunch for less than $1. That was all the motivation I needed to get into the habit. Now I don't even really think about it, and someday soon he'll be able to do it himself.

Exhale

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Re: Case study - Time to be analyzed by the experts!
« Reply #44 on: July 23, 2018, 08:41:23 PM »
@bluewater

Just yesterday...I walked out with $74 worth of stuff to make some repairs around my house. Those kinds of things drive me crazy! And I only have myself to blame....

Did you save the rcpt? If so (and it's unused), just return it.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #45 on: July 28, 2018, 10:57:58 AM »
So, had a week of football camp this week. It helped take my mind off of focusing on money all the time.

So I just got our bill to Kwik Trip (gas station) yesterday. Very disappointed in myself.

The bill for the month was for $513. I went through the itemized transactions. We spent ~$235 on gasoline and ~$280 on in-store purchases!! We do get all of our butter, eggs, and milk there. We are big milk drinkers, BUT that is completely unacceptable. It's that dang hot station right when you walk in the door. The new goal is to limit that in-store spending to ~$100. That would give me another $180 in money that I can throw at our credit card debt.

Small steps....

reeshau

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Re: Case study - Time to be analyzed by the experts!
« Reply #46 on: July 28, 2018, 03:48:19 PM »
So, had a week of football camp this week. It helped take my mind off of focusing on money all the time.

So I just got our bill to Kwik Trip (gas station) yesterday. Very disappointed in myself.

The bill for the month was for $513. I went through the itemized transactions. We spent ~$235 on gasoline and ~$280 on in-store purchases!! We do get all of our butter, eggs, and milk there. We are big milk drinkers, BUT that is completely unacceptable. It's that dang hot station right when you walk in the door. The new goal is to limit that in-store spending to ~$100. That would give me another $180 in money that I can throw at our credit card debt.

Small steps....

Might I suggest that the potential savings on dairy is not worth the temptations inside?  Which is probably why the pricing and layout are just what they are?  Maybe the experiment to try is $0 in-store purchases at Kwik Trip, and see how that affects your food cost overall.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #47 on: July 30, 2018, 09:30:43 PM »
@reeshau That is a good point about the temptations inside. We have done a good job over the last week only purchasing exactly what is needed inside and nothing more. My oldest overheard me talking with my wife about it the other night and she is very "worried" about our current spending so she doesn't want to spend anything extra in there like she used to.

Another decision that I've come to is that I'm going to get sell off my investments in my TD Ameritrade account and use it to pay off our Wells Fargo credit card account. It'll end up costing me about $45 in taxes since I'll get hit with short term cap gains, but it'll save me $50/month on interest charges on that account. It's something that I believe needs to be done to get us moving more quickly in the right direction.

We have eliminated approximately $130/month in expenses. I'm thinking we can eliminate another $180-$200/month off of our Kwik Trip bill. That will go a long ways to help us climb out of our hole faster.

Dee18

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Re: Case study - Time to be analyzed by the experts!
« Reply #48 on: July 31, 2018, 01:03:47 PM »
It sounds like you would save a lot of money if you just decided you will not buy anything at Kwik Trip except gasoline.  Pay at the pump.  Do not go inside.  The few dollars you are saving on milk and eggs is far outweighed by the huge bill you are running up for other items.

Goldielocks

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Re: Case study - Time to be analyzed by the experts!
« Reply #49 on: July 31, 2018, 01:24:14 PM »
So, had a week of football camp this week. It helped take my mind off of focusing on money all the time.

So I just got our bill to Kwik Trip (gas station) yesterday. Very disappointed in myself.

The bill for the month was for $513. I went through the itemized transactions. We spent ~$235 on gasoline and ~$280 on in-store purchases!! We do get all of our butter, eggs, and milk there. We are big milk drinkers, BUT that is completely unacceptable. It's that dang hot station right when you walk in the door. The new goal is to limit that in-store spending to ~$100. That would give me another $180 in money that I can throw at our credit card debt.

Small steps....
To break the habit, start using cash.

Keep your CC for gas and milk / eggs / butter, but then bring CASH for everything else, and only take out a set amount each month of CASH, and once that is gone, it is gone.   I did this at the grocery store, paying CASH for anything other than basic core necessities, and it is amazing  how I will discover that I don't really need to buy jam on this trip, or I notice that the bag of cherries which look so fresh and healthy is actually $8 and choose to only buy a small amout instead, only buy one avocado at a time.. that sort of thing.

After only 2-3 months, the habit of buying good, healthy, not unreasonably priced items that I did not need right away was cut down.     It saved a lot, and most of the items I did not really need to buy at all.