Author Topic: Case study - Time to be analyzed by the experts!  (Read 10155 times)

formerlydivorcedmom

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Re: Case study - Time to be analyzed by the experts!
« Reply #50 on: August 01, 2018, 03:56:40 PM »
. 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.

I accidentally scared the crap out of my 12-year-old by talking about finances to my husband without realizing she was listening.  The language we were using made sense to us but was much more literal and thus frightening to her.

Once I figured out that she thought we were on the verge of poverty and homelessness, she and I had a long discussion where I laid out our finances pretty transparently.  We talked about financial goals and debt and how to prioritize spending.  I've had these kinds of conversations with the kids pretty much all their lives, but in small pieces and without specific numbers.  It was good to put it all together for her.

If you haven't already, you might want to have a detailed talk with your oldest and make sure that the "worried" is for the right reason. 

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #51 on: August 01, 2018, 06:11:03 PM »
@formerlydivorcedmom That's a very good idea. I have had small talks with her, but I should make sure that she understands everything. She's a worrier to begin with.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #52 on: August 27, 2018, 09:44:09 PM »
Had a big win this past week that wasnít about me and my financial situation. Iím the head football coach at our high school and we talk with our players their futures and what they would like to do. One of my assistants and I both are in the FI movement. We gave a 10 minute talk to our players about savings rates, retirement accounts and opportunity costs. It was all they could talk about during actual practice. Iím going to keep bringing it up weekly during the season. If we can get even 4-5 of our guys to start up their own retirement accounts, Iíll consider it a major win.

Trifele

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Re: Case study - Time to be analyzed by the experts!
« Reply #53 on: August 28, 2018, 04:22:19 AM »
Just chiming in to offer encouragement, @bpolson2 -- keep up the good work.  Love the work you are putting in to talk about finances with your students and your daughter.

I was struck by your early comment that both you and your wife grew up in families with poor financial habits.  You are changing the paradigm for your daughter.  She is growing up with a good example in you and your wife.  You should be proud of your progress so far.

We have two kids, 15 and 12 years old.  We are totally transparent with them about our finances, and talk about financial topics frequently -- three or four times a week.  They each have their own investment account which they feed -- small amounts at a time -- with their allowance and birthday money.  So far our 15 year old looks like a mustachian in the making, while our 12 year old still struggles a bit to control his spending impulses.  Time will tell how they turn out, but at least we will have done our best to educate them.


bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #54 on: September 15, 2018, 02:47:13 PM »
Been a while since I checked in.

I have been working to get my debts paid down and it is football coaching season, so I got half of my coaching check with my most recent teaching check. Here is where I am currently at.

Wells Fargo Credit Card $2,308 at 25%. NOW PAID IN FULL!
United Educators Mastercard $6,250 at 11.99% NOW DOWN TO $2,798
Chase Visa $3,282 at 0% NOW AT $3,788

I had transferred over a little more from my higher interest card to my chase Visa that is still at 0%. So I am making good progress on this and hopefully will have all my credit card debt paid in full by the New Year!

It will feel so good and be the first time in my life since college that I would be debt free other than our mortgage. And I'm 44 years old....

ToTheMoon

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Re: Case study - Time to be analyzed by the experts!
« Reply #55 on: September 15, 2018, 03:46:01 PM »
You are doing an excellent job - now is not the time be complacent. (I am not implying that you are - it is just a reminder.) 

You said that you both did bartending shifts at the golf course for extra cash.  Is this something that you are still doing?  I know you are getting paid for the coaching, but with the Christmas season not too far away, are there some extra retail shifts your wife or 15 YO could grab for the next few months as another temporary boost to your incomes?


bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #56 on: September 15, 2018, 06:56:55 PM »
I agree. I'm definitely not going to be complacent with this seeing as we are so close.

As for the side hustle, I am not able to now with coaching football and teaching. No time at all.  Wife is working at the golf course every Saturday in September and then the course will close in August, but she also is picking up some extra Sunday shifts at the clinic for coding in patient records with their new health IT system. So should be a good couple of months here going forward! I am really thinking we could be credit card free by Christmas!

Trifele

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Re: Case study - Time to be analyzed by the experts!
« Reply #57 on: September 16, 2018, 03:59:35 AM »
This is great @bpolson2

Do you think the Christmas season (with buying pressures) will be a danger zone for you and your wife?   With temptations to put purchases on credit cards?  If so, you may want to come up with a plan now for how to navigate that.  Again -- great job!

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #58 on: September 16, 2018, 12:35:55 PM »
@Trifele You are correct. I am already in planning stages for Christmas. My wife always been a big spender on "gifts" for other people. We are using YNAB to get money set aside for the gifts. We should be just fine with her picking up these extra shifts and using that money for gifts and using the second half of my coaching check to finish wiping out our 2nd credit card.

I am just trying to stay patient with the process and not get ahead of myself with this.

Finances_With_Purpose

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Re: Case study - Time to be analyzed by the experts!
« Reply #59 on: October 06, 2018, 02:35:11 PM »
Awesome @bpolson2 - great to hear your progress!

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #60 on: October 09, 2018, 01:17:31 PM »
I was just going back through my net worth spreadsheets from each month and I realized that we were at $14,300 in credit card debt last April!! After my payment today, we are down to $5,700 in credit card debt. It feels great to be so close to the finish line. It feels so exciting!

The YNAB app has really helped us focus on what we are spending on along with this community....

Peachtea

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Re: Case study - Time to be analyzed by the experts!
« Reply #61 on: October 09, 2018, 06:32:07 PM »
Congrats! Whatís your goal to wipe out the last of the cc debt?

Trifele

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Re: Case study - Time to be analyzed by the experts!
« Reply #62 on: October 10, 2018, 03:00:45 AM »
I was just going back through my net worth spreadsheets from each month and I realized that we were at $14,300 in credit card debt last April!! After my payment today, we are down to $5,700 in credit card debt. It feels great to be so close to the finish line. It feels so exciting!

The YNAB app has really helped us focus on what we are spending on along with this community....

Great job!  Keep going -- slay that beast!!

anonymouscow

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Re: Case study - Time to be analyzed by the experts!
« Reply #63 on: October 10, 2018, 11:47:56 AM »
@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.

In your calculations you might want to keep in mind there is a minimum amount of coverage required before you can get an umbrella policy.

"In most states, umbrella insurance applicants must have a homeowners policy with a minimum of $300,000 in personal liability coverage, plus an auto policy with limits of $250,000 or $500,000 for bodily injury coverage and $100,000 for property damage coverage and uninsured/underinsured motorist coverage (or a single limit of $300,000)."

I think I heard a rule that you want as much insurance as you have in assets.

You also might want to check and see what assets can be taken if you are ever sued. I thought a 401k has more protections against being sued as well as your primary residence.

It could be a choice to not have an umbrella policy even if you have assets as long as they are mostly in a 401k and primary residence, of course I'm not 100% sure on these and it might be good to have just in case, but they might be things to take into consideration.

TealBlue

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Re: Case study - Time to be analyzed by the experts!
« Reply #64 on: October 12, 2018, 11:34:11 AM »
I'm late to following, but I just wanted to say congratulations from breaking the credit card cycle.  I know first hand how difficult it is to just get out of the habit!  The real test will be making sure you don't get back into those bad habits once you get them paid off.  Keep it up!

Awesomeness

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Re: Case study - Time to be analyzed by the experts!
« Reply #65 on: October 15, 2018, 08:33:15 PM »
Impressive progress. Keep it up. 

Just wanted to chime in on the cell phones. I use Puppy Wireless, 28.60$ a month for a 2GB plan, I have a iPhone 8 Plus I bought in full at the Apple store. Previously I used an iPhone 6 Plus for three years, just swapped out my SIM card in the store and my new phone worked perfectly. They use Verizon towers. My service is excellent. 

You already have Verizon phones so this would be an easy switch. Assuming theyíre paid for or just pay off your contracts, all you need is a 10$ SIM card from puppy, pick a plan etc.   


If you donít mind me asking could you elaborate on your pension plan?  My son is considering being a teacher but I know he has some interest in Fire.  Can you quit after so many years, while being relatively younger, like forties or fifties, and still receive a pension later? Does it vary from state to state?

Thanks and congrats on your progress.

bpolson2

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Re: Case study - Time to be analyzed by the experts!
« Reply #66 on: October 15, 2018, 08:54:31 PM »
@Awesomeness

Thanks for the info on the cell phone service. I will have to look into it.

As for the pension, I believe it does vary from state to state. In MN, you could FIRE and then hold off on taking your pension until later in life, but it will be lower than if you kept teaching. We used to have Rule of 90 here where your age plus years of service added together once it reached 90 meant full retirement. That was eliminated in 1989. I don't have that. Now you have to go until full retirement age of 66. We do have a "62-30" rule that means if you have taught for 30 years and are 62, you get a"reduced penalty", but it's like $1,000 mo penalty, so it is still a significant penalty. This is my 21st year of teaching, and I'll only be HALF DONE if I go to full retirement age. And I found FIRE just about a year ago, so it's kind of depressing.