Author Topic: Case Study worthy of face punching (multitudes of face punches)  (Read 9532 times)

tduff311

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Case Study worthy of face punching (multitudes of face punches)
« on: September 01, 2017, 12:04:08 PM »
First off, let me just say I am humbled and embarrassed to post these stats before the eyes of so many successful, more disciplined, and well seasoned MMMers. However, this will also help to fuel my fire; pushing me to show results to you all. :)

Reader Case Study - What would you do.

Life Situation: Married Filing Jointly, 2 children (ages 7 and 8).  8 y/o turns 9 next month; 7 y/o has Cystic Fibrosis, so a good savings is a must for down the road.

Gross Salary/Wages: About $100k as follows: $77k this year from my employer, plus a nontaxable service compensation of $18k, and an expected $7.5k from wife's teaching Ballet and a side hustle (minimally, if any, taxes anticipated on this hustle for 2017: wife's new photography business out of home).

Pre-tax deductions: About $1050 per bi-weekly paycheck as follows:
5% (matched) into Thrift Savings Plan: about $100
Life Insurance: $21
Healthcare: $174
Social Security: $179
FERS Retirement: $19
Federal Taxes: $160
State Taxes: $87
Local Taxes: $72
Dental: $48
Vision: $21
Medicare: $42
Union: $20

Adjusted Gross Income: About $74k

Taxes: Federal, state/local, and FICA. 15% bracket.

Current expenses:
Mortgage: $1,700.00
Internet: $57.00
Cell Phones: $199.00
Gas: $76.00
Electricity: $129.00
Groceries: $1,300.00
Car Insurance: $92.00
Trash: $95.00
Gasoline: $150.00
Car (lease/maintain): $427.00

Assets:
Home: $269k
Small Efund: $1k
Toyota Prius '07: $4k (trade-in value)
TSP: $15k (100% in "C" Fund)

Liabilities:
Mortgage: $247k @ 3.75% (30 year fixed w/ no P&I) $1700/month
Chase Credit Card: $2,180 (22.99%) $80/month
Synchrony Credit Card: $2,954 (0% promo period ends in April 2018 and becomes 26.99% w/ deferred interest charges) $96/month
Chase Credit Card: $4,895 (0% promo period ends in December and becomes 18.74% w/ no deferred interest I'm told) $48/month
Private Student Loan: $13,985 (10.5%) $150/month
Auto Loan: $5,085 (8.24%) $250/month
Federal Student Loan Debt: $183.5k (5.6 to 6.5%) $221/month This debt is due to be completely forgive on 12/2023 under the PSLF program, as long as I continue to make my minimum monthly payments, which are currently $221/month under the income-based repayment plan. As such, this debt is not being counted into my debt avalanche. However, please note that by FI, these payments will disappear as the loan is forgiven 6 years before our FI goal date.

My initial plan is based upon JL Collins’ advice as follows:

1. Continue 5% paycheck contributions into my TSP retirement plan (100% "C" Fund within Traditional IRA) to get the full 5% matching from my employer.

2. Pay off my remaining debt (above 5% interest) via the avalanche method (7 credit cards paid off this year so far, 3 left and then the loans); then student loan @10% and auto loan @8%.

3. Build up Emergency Fund to $10k ($3k in checking, $7k within Vanguard VTSMX Fund)

*As soon as all debt (5% interest or higher) is paid off, and we have $10k in Emergency Funds, I will automate the below #4 and #5 to ensure full limits are reached annually.

4. Max out my TSP contributions at $18k annually. This will take full advantage of my 5% employer match as well as allow maximum growth within a low cost (.03%) portfolio growing tax-deferred and tax-free. This is all being contributed to the ‘C’ fund, which is a mirror of the S&P 500.

5. Max out a Traditional IRA in my name and one in my wife’s name for a total of $11k annually. I was thinking it would make more sense to do these IRA’s within Vanguard’s VTI through their free investor account as it is only a .04% cost ratio and it wouldn’t make sense to pay another .25% for portfolio management of IRA’s through Betterment; especially as these don’t require rebalancing, receive no TLH, and are meant to be left alone to grow ideally. We would aim to max out each Traditional IRA within Vanguard's VTI until balance grows for VTSMX and finally VTSAX.

*The combination of 1 & 2 will keep us on par for reaching our minimum goals for lean FI in 12+ years*

6. Contribute remaining money (if any) towards a taxable Betterment account with TLH in a 75/25 to 80/20 portfolio.

Our goal is a combined balance of all funds at $500-750k in 12+ years whereupon we can consider living in partial retirement, off dividends, plus my service related disability compensation of $18k annually. To accomplish this, the FI find would need to produce a $20-30k minimum in dividends annually @4% withdrawal rate with a 7-8% average growth. My service compensation of $20k annually plus this $20-30k annually would be sufficient as kids will then be out of the home as well as loans being paid off and cost of living decreases.

What do you think? Aside from the stupid debt that is...
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

4alpacas

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #1 on: September 01, 2017, 01:12:00 PM »
Cell Phones: $199.00
Gas: $76.00
Electricity: $129.00
Groceries: $1,300.00
Car Insurance: $92.00
Trash: $95.00
Gasoline: $150.00
Car (lease/maintain): $427.00 (Is this for your '07 Prius)

Right now, I would focus on cutting your spending drastically to get the credit cards off your back.  Can your wife put in a few more hours teaching ballet to bring in more money?  Could you get a side hustle?

On the spending,
You're spending $1300/month for 4 people for food.  That's insane.  You can EASILY cut this in half by bulk cooking and avoiding prepared foods (which are not great for you anyway).

You're spending $669/month on your car.  Figure out how you can cut this down.

You're spending $200/month on cellphones.  Figure out a way to cut this.  I spend less than $40/month (and I talk on my phone a LOT and probably use way more data than I should).

Good luck!

Laura33

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #2 on: September 01, 2017, 01:47:42 PM »
First question is have you fixed the issues that led you to take on that much CC debt at those rates?  Holy cow!  I am a little worried because it seems like your listed spending is missing a number of categories, like clothes, kid activities, out-of-pocket medical costs, home repairs, vacations, recreation, gifts, Amazon/Netflix/Hulu, etc. etc. etc.  Is this a "real" budget, or is this aspirational?  Your long-term plan seems fine, but it's only going to work if you stick with it.

Also, do you have disability insurance?  It sounds like your family relies on your current income to make ends meet; you need to protect them in case something happens to you and you can no longer work in a $100K/yr job.

Otherwise, make sure to approach those CCs strategically -- for the one that is going to charge you deferred interest if you don't have the balance paid off by the trigger date, you *must* get that one down to zero before then.  If your expenses are accurate, you should be able to do this within just a few months -- but that's why the expenses are so important, because if you actually had $1500-$2K free cash every month, you wouldn't have run up all that debt in the first place.

I also want to understand the car situation.  Are you really spending $427/mo. on the loan and maintenance for your Prius, AND $150/mo in gas?  That seems extremely high for a Prius.  Or do you have two cars, one with a loan and one with a lease?  In either case, you also need to work into your plan savings for your next car(s), because you are never going to lease a(nother) vehicle, and it makes no sense to pay off a bunch of debt just to turn around and take on another car loan.
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Raenia

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #3 on: September 01, 2017, 01:59:40 PM »
First, as Laura said, you look like you're missing a bunch of categories.  Make sure you actually know everything you spend money on in the last month.  If you don't, then start tracking NOW, whether by hand or through Mint or some other software.  I suspect your budget is leaking from a series of small holes you don't even notice.

Second, holy moly your grocery bill is insane.  I spend about $100/mo/adult.  You can easily get down to $500-600/mo without compromising on quality.  There are a bunch of threads around here on lowering grocery spend, take a look around and take it to heart.

While you're doing that, make absolutely sure that the deferred interest promo card is paid off before the promo period ends.

As far as it goes, your order of operations plan looks quite sensible.  Just make sure that you're going to be able to hold to it, by tracking all your spending.  You're not going to be able to pay off all that debt if you're leaking at the seams.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #4 on: September 01, 2017, 02:04:34 PM »
Cell Phones: $199.00
Gas: $76.00
Electricity: $129.00
Groceries: $1,300.00
Car Insurance: $92.00
Trash: $95.00
Gasoline: $150.00
Car (lease/maintain): $427.00 (Is this for your '07 Prius)

Right now, I would focus on cutting your spending drastically to get the credit cards off your back.  Can your wife put in a few more hours teaching ballet to bring in more money?  Could you get a side hustle?

On the spending,
You're spending $1300/month for 4 people for food.  That's insane.  You can EASILY cut this in half by bulk cooking and avoiding prepared foods (which are not great for you anyway).

You're spending $669/month on your car.  Figure out how you can cut this down.

You're spending $200/month on cellphones.  Figure out a way to cut this.  I spend less than $40/month (and I talk on my phone a LOT and probably use way more data than I should).

Good luck!

Thank you, Laura.

That is my wife's car lease...not my Prius (it's the 250/mo auto loan)

She is already forecasted to generate $400/mo pre-tax over the next 4 months teaching ballet. That is in addition to home schooling our children and her side hustle of photography, which is new for 2017 and doing well, but the money is basically self-funding her growth and the unnecessary luxuries, such as ice cream and snacks with the kids.

As for the groceries, I completely agree. I am a bulk food prep type and do so every weekend, creating a week's worth of food for myself and the family for a cost of about $150-180/week. However, I can't get them to stick to it. Try as I might, they can't help snacking on other, pre-packaged, more enticing things. She's a busy woman, and hasn't yet settled into a routine of doing much cooking, unfortunately.

As for me and side hustling, my side hustle is overtime....I work 8-10 hours of overtime a week, in addition to driving 2 hours daily commute for work. I am looking to transition to closer work, but I am limited on options and it's hard to say how long it will take.

I have talked to her about cutting these cell phones down, trust me....sore subject right now...I'm working the issue lol

Thanks for your input!
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #5 on: September 01, 2017, 02:11:50 PM »
First question is have you fixed the issues that led you to take on that much CC debt at those rates?  Holy cow!  I am a little worried because it seems like your listed spending is missing a number of categories, like clothes, kid activities, out-of-pocket medical costs, home repairs, vacations, recreation, gifts, Amazon/Netflix/Hulu, etc. etc. etc.  Is this a "real" budget, or is this aspirational?  Your long-term plan seems fine, but it's only going to work if you stick with it.

Also, do you have disability insurance?  It sounds like your family relies on your current income to make ends meet; you need to protect them in case something happens to you and you can no longer work in a $100K/yr job.

Otherwise, make sure to approach those CCs strategically -- for the one that is going to charge you deferred interest if you don't have the balance paid off by the trigger date, you *must* get that one down to zero before then.  If your expenses are accurate, you should be able to do this within just a few months -- but that's why the expenses are so important, because if you actually had $1500-$2K free cash every month, you wouldn't have run up all that debt in the first place.

I also want to understand the car situation.  Are you really spending $427/mo. on the loan and maintenance for your Prius, AND $150/mo in gas?  That seems extremely high for a Prius.  Or do you have two cars, one with a loan and one with a lease?  In either case, you also need to work into your plan savings for your next car(s), because you are never going to lease a(nother) vehicle, and it makes no sense to pay off a bunch of debt just to turn around and take on another car loan.

You are correct, 2 cars, 1 loan, 1 lease, and a ton of my own driving in that Prius for commutes.

I am employed federally, as a Police Lieutenant, and as such disability insurance is both impossible to find and, as I understand it, unnecessary. Federally, we simply are put into a position we can handle in a 'light limited duty status' until recovered. If the disability is permanent, we are simply transferred into a field we can handle.

Those expenses are accurate, the categories are accounted for correctly, however I did neglect the Netflix ($8 monthly) and Amazon ($125 annually) and her hair care ($60/mo). The remainder of nonessential expenses (clothing, etc.) are covered under my wife's side hustle cash flow in photography for now.

I am attacking these cards per your advice too :)

Thanks for the insight.
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #6 on: September 01, 2017, 02:17:58 PM »
First, as Laura said, you look like you're missing a bunch of categories.  Make sure you actually know everything you spend money on in the last month.  If you don't, then start tracking NOW, whether by hand or through Mint or some other software.  I suspect your budget is leaking from a series of small holes you don't even notice.

Second, holy moly your grocery bill is insane.  I spend about $100/mo/adult.  You can easily get down to $500-600/mo without compromising on quality.  There are a bunch of threads around here on lowering grocery spend, take a look around and take it to heart.

While you're doing that, make absolutely sure that the deferred interest promo card is paid off before the promo period ends.

As far as it goes, your order of operations plan looks quite sensible.  Just make sure that you're going to be able to hold to it, by tracking all your spending.  You're not going to be able to pay off all that debt if you're leaking at the seams.

Thank you.

Yes, I track everything scrupulously within YNAB, MINT, and Personal Capital.

I agree that the grocery bill is ludicrous, and aside from arguing with my wife over this, I feel somewhat hopeless on this front. We've gone down that road a number of times over the past several years, or longer.

I can cook food for our family, and they would love it, and keep our budget $8-900 tops, monthly. I already do this now at $720 tops, but I am gone most the time working and they chose not to eat what I make....it's very frustrating. :(
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

Raenia

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #7 on: September 01, 2017, 02:34:59 PM »
So it sounds like your main problem is not having buy-in from your spouse?  I would sit down with her and ask her about what her financial goals for the family are, and see if you can reach an agreement about your priorities.  I believe there's a sticky on how to convince a reluctant spouse, I'll go hunting for that in a minute.  If you're already doing most of the cooking, it's not like you're asking her to do extra work to stay within budget, just to eat what you made!  If you're also doing most of the shopping, perhaps you can stock stocking the prepared stuff they're eating instead?

Other than that, if you can't get agreement, there's not really a lot you can do, unfortunately.

Here's the link: https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/
« Last Edit: September 01, 2017, 02:38:39 PM by Raenia »

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #8 on: September 01, 2017, 02:41:28 PM »
So it sounds like your main problem is not having buy-in from your spouse?  I would sit down with her and ask her about what her financial goals for the family are, and see if you can reach an agreement about your priorities.  I believe there's a sticky on how to convince a reluctant spouse, I'll go hunting for that in a minute.  If you're already doing most of the cooking, it's not like you're asking her to do extra work to stay within budget, just to eat what you made!  If you're also doing most of the shopping, perhaps you can stock stocking the prepared stuff they're eating instead?

Other than that, if you can't get agreement, there's not really a lot you can do, unfortunately.

Thank you, I would appreciate that sticky...

Yes, we've had that talk....she's a stubborn and defensive woman and really is good financially, with the exception of food expenses...there are examples I won't go into....I make her pay for her dog's food out of her photo money since she insists it needs these $80 special bags of food because he's a Husky and they have sensitive stomachs....lol ugh

Unfortunately, she hits the grocery stores frequently aside from our weekly food prep shopping. This is where the extra $4-500 leaks out...
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

dougules

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #9 on: September 01, 2017, 02:53:25 PM »
What do you get house-wise for $269k in your area?  Would it be possible to move somewhere more modest near work?

4alpacas

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #10 on: September 01, 2017, 02:56:44 PM »
As for the groceries, I completely agree. I am a bulk food prep type and do so every weekend, creating a week's worth of food for myself and the family for a cost of about $150-180/week. However, I can't get them to stick to it. Try as I might, they can't help snacking on other, pre-packaged, more enticing things. She's a busy woman, and hasn't yet settled into a routine of doing much cooking, unfortunately.
Good news!  You can bulk cook for your entire family! Your wife sounds like a busy lady--two side hussles and homeschooling.  You can do all of the grocery shopping, meal planning and cooking.  If you really dedicate yourself to it, I'm sure you can get your budget below $500/month.

Optimiser

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #11 on: September 01, 2017, 03:19:25 PM »
The remainder of nonessential expenses (clothing, etc.) are covered under my wife's side hustle cash flow in photography for now.

I make her pay for her dog's food out of her photo money since she insists it needs these $80 special bags of food because he's a Husky and they have sensitive stomachs....lol ugh

Quote from: tduff311
That is in addition to home schooling our children and her side hustle of photography, which is new for 2017 and doing well, but the money is basically self-funding her growth and the unnecessary luxuries, such as ice cream and snacks with the kids.

How much profit is this photography side-hustle generating? All of these expenses really add up, and if you are paying over 20% interest on credit card debt you should really be tracking and budgeting this money, not just blowing it on "unnecessary luxuries."

(minimally, if any, taxes anticipated on this hustle for 2017: wife's new photography business out of home).

It sounds like there is decent amount of profit that she will owe SE tax on in addition to it being taxed at your marginal rate.

RedwoodDreams

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #12 on: September 01, 2017, 03:52:31 PM »
First question is have you fixed the issues that led you to take on that much CC debt at those rates?  Holy cow!  I am a little worried because it seems like your listed spending is missing a number of categories, like clothes, kid activities, out-of-pocket medical costs, home repairs, vacations, recreation, gifts, Amazon/Netflix/Hulu, etc. etc. etc.  Is this a "real" budget, or is this aspirational?  Your long-term plan seems fine, but it's only going to work if you stick with it.

Also, do you have disability insurance?  It sounds like your family relies on your current income to make ends meet; you need to protect them in case something happens to you and you can no longer work in a $100K/yr job.

Otherwise, make sure to approach those CCs strategically -- for the one that is going to charge you deferred interest if you don't have the balance paid off by the trigger date, you *must* get that one down to zero before then.  If your expenses are accurate, you should be able to do this within just a few months -- but that's why the expenses are so important, because if you actually had $1500-$2K free cash every month, you wouldn't have run up all that debt in the first place.

I also want to understand the car situation.  Are you really spending $427/mo. on the loan and maintenance for your Prius, AND $150/mo in gas?  That seems extremely high for a Prius.  Or do you have two cars, one with a loan and one with a lease?  In either case, you also need to work into your plan savings for your next car(s), because you are never going to lease a(nother) vehicle, and it makes no sense to pay off a bunch of debt just to turn around and take on another car loan.

You are correct, 2 cars, 1 loan, 1 lease, and a ton of my own driving in that Prius for commutes.

I am employed federally, as a Police Lieutenant, and as such disability insurance is both impossible to find and, as I understand it, unnecessary. Federally, we simply are put into a position we can handle in a 'light limited duty status' until recovered. If the disability is permanent, we are simply transferred into a field we can handle.

Those expenses are accurate, the categories are accounted for correctly, however I did neglect the Netflix ($8 monthly) and Amazon ($125 annually) and her hair care ($60/mo). The remainder of nonessential expenses (clothing, etc.) are covered under my wife's side hustle cash flow in photography for now.

I am attacking these cards per your advice too :)

Thanks for the insight.

Also, I think sometimes people forget about the existence of SSDI. If you have an account at ssa.gov, you can log in to see what your benefit, and your family's benefits, would be were you to become disabled. IMHO, it's great to know this for peace of mind, especially where children are concerned.

Capt j-rod

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #13 on: September 01, 2017, 05:35:41 PM »
Growing the stache is a whole family sport. If your spouse is spending and you are saving it will lead to a crash. My DW has been VERY difficult to convert. It was my idea to get out of the rat race early. She has fought a great fight, but she now finally gets it. She still tries to sneak an amazon spree in and have a relapse.  Now over to your budget.  I eat incredibly well and very healthy for $150 a week with a wife and 2 young kids. You sound like you are attacking the charge cards which is what I would do first. Sometimes we forget that any money we send as extra principle on a loan is considered savings. The cars are another sore topic on here. The lease needs to ultimately go away. Are there any colleagues that live near by that you could carpool with? Is there any equity in your home that you could use a HELOC to kill those cards and pay back at a fast pace? I can tell you from my personal experience that you will struggle to gain any wealth by carrying serious debt. 6 years ago we had $230k of student debt, a car payment, and a mortgage. We never had charge card debt. I now have $65k left on the student loans, no car payment and I own 50% of my home. It can be done but you need some serious discipline. Budget, budget, budget.... When there is no money for food left in the budget, change the groceries not the budget. I always classify a purchase before I make it. Want or need? Asset or liability? What level of product will accomplish the task? Status is for fake people that want to be seen. Function is for people that have net worth. Read some good guide books. The millionaire next door, rich dad poor dad... They all help to keep things in perspective. There are some amazing people in this forum.

Capt j-rod

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #14 on: September 01, 2017, 05:51:35 PM »
After crunching some quick numbers you only have about $1500 left at the end of the month based on the numbers you provide. I see nothing in there for clothes, car repairs, home repairs, entertainment, etc.... Medical bills aren't mentioned either. The $10k in charge cards has to continue to die. I am very familiar with Medina Oh, as I used to live near by. The great news is that you can have a very low cost of living if you travel in the right circles. Which area are you commuting to?

theotherelise

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #15 on: September 01, 2017, 06:16:18 PM »
How do you and your wife handle finances? I might seriously consider Financial Peace University from Dave Ramsey for you guys. Just substitute avalanche for snowball. But the bulk of the class is about communicating about money and taking honest stock of your financial situation then coming to an agreement about your spending plan.

Right now, it is costing you significant money for your wife to stay home with the kids. Usually when a parent stays home, part of their job is as a home economist, saving money on convenience foods because of the extra time for preparation, etc. With kids that age, she certainly should have that time.

My big question, is whether she is aware how much debt you have an how much the interest is costing you each month. I'd probably lump together all the unsecured, non-PSLF debt and show her the totals and the monthly interest serviced. I'd even give a couple amortization tables to compare your past payoff speed to an accelerated payoff.

Next, I'd like to know what cell phone plan you actually have? You say it's a sore spot, but I legitimately don't understand how you could be spending $200/month on phones. If you're at work all day and she is at home most of it, then you can't need that much data. Take a look at your actual usage and see if you're paying for more than you're using.

You know the food is a problem. Hopefully something like FPU would help your wife see the importance of limiting this amount. Even if you set an amount of $25/week extra in the budget that she could spend on these snacks, that would save a ton. But I'm curious if that cost is all groceries or if she is stopping by the golden arches while out doing activities with the kiddos.

Your problem is 70% marriage communication and 30% budgeting & expense tracking commitment.

lhamo

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #16 on: September 01, 2017, 07:59:12 PM »
I'm going to try to be generous and assume that your wife is trying to maximize enjoyable experiences with your kids before the CF starts really limiting what she can do with them.  Still, I must say that EVEN if that is the situation here, she sounds not just stubborn but spoiled.   I like getting treats for my kids, too, sometimes.  Our grocery bill is probably $50-100/month higher as a result.  But I don't go to the store multiple times a week and spend $400-500/month extra on that crap.  Maybe that is why I am FIREd and you guys are still up to your noses in high-interest debt.  I mean, seriously -- with that 22%+ rate on your chase balance, she isn't just spending $500/month, it is more like $625.   Because she is putting that crap on the credit cards, right? 

You guys need to get on the same page and she needs to develop some discipline.  It  must be really hard to have a kid with a CF diagnosis.  But come on -- she is putting your financial future at risk because she wants to buy treats 5 times a week, drive a car you can't afford, and have unlimited data on an expensive phone.  Meanwhile, you are literally putting your life on the line (thank you for your service, BTW) in order to provide for the family, while she pursues hobby "businesses" that don't really generate anything for your family.

You guys could EASILY cut several hundred dollars a month out of your spending with very little effort.   Try FPU.  Maybe having some in-person peer pressure will knock some sense into your wife.  She isnt just being stubborn -- she is being selfish and stupid.
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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #17 on: September 01, 2017, 09:34:24 PM »
I'm going to try to be generous and assume that your wife is trying to maximize enjoyable experiences with your kids before the CF starts really limiting what she can do with them.  Still, I must say that EVEN if that is the situation here, she sounds not just stubborn but spoiled.   I like getting treats for my kids, too, sometimes.  Our grocery bill is probably $50-100/month higher as a result.  But I don't go to the store multiple times a week and spend $400-500/month extra on that crap.  Maybe that is why I am FIREd and you guys are still up to your noses in high-interest debt.  I mean, seriously -- with that 22%+ rate on your chase balance, she isn't just spending $500/month, it is more like $625.   Because she is putting that crap on the credit cards, right? 

You guys need to get on the same page and she needs to develop some discipline.  It  must be really hard to have a kid with a CF diagnosis.  But come on -- she is putting your financial future at risk because she wants to buy treats 5 times a week, drive a car you can't afford, and have unlimited data on an expensive phone.  Meanwhile, you are literally putting your life on the line (thank you for your service, BTW) in order to provide for the family, while she pursues hobby "businesses" that don't really generate anything for your family.

You guys could EASILY cut several hundred dollars a month out of your spending with very little effort.   Try FPU.  Maybe having some in-person peer pressure will knock some sense into your wife.  She isnt just being stubborn -- she is being selfish and stupid.

Wow, this incredibly hard on the one member of the marriage who hasn't had the opportunity to weigh in with her side of things.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #18 on: September 01, 2017, 10:49:24 PM »
I think I mis-communicated somewhere here.

My wife is incredibly spend-thrift.

Our only challenge comes to the grocery budget and controlling where the money is leaking out.

Fortunately, after messaging here today, I went home and felt inspired to re-address this...

It went very well, and we made some plan and I will be getting ALL grocery receipts for the next month so we can get to the bottom of where it's jumping up so fast....

We both agreed, it doesn't make sense. Which is why I point to her frequent and small trips to the local store for kids snacks, cravings, and munchies....

We will see what the receipts reveal, but trust me she is about as spendthrift as I have ever seen within my own family.
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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #19 on: September 02, 2017, 01:18:18 AM »
She is already forecasted to generate $400/mo pre-tax over the next 4 months teaching ballet. That is in addition to home schooling our children and her side hustle of photography, which is new for 2017 and doing well, but the money is basically self-funding her growth and the unnecessary luxuries, such as ice cream and snacks with the kids.

As for the groceries, I completely agree. I am a bulk food prep type and do so every weekend, creating a week's worth of food for myself and the family for a cost of about $150-180/week. However, I can't get them to stick to it. Try as I might, they can't help snacking on other, pre-packaged, more enticing things. She's a busy woman, and hasn't yet settled into a routine of doing much cooking, unfortunately.

Sorry, people in debt don't get to make choices like this. You are effectively paying 22% interest on all of these snacks because you do not have the money to pay for them. It doesn't really matter whether you are spending on the actual cards or out of a different bank account, because your money is not your own until you have paid off your debts.

Look at how much the food costs are versus your overtime. Could you work fewer hours and do the food prep? Can you involve the kids in food prep (could make them more excited about eating it)?

It went very well, and we made some plan and I will be getting ALL grocery receipts for the next month so we can get to the bottom of where it's jumping up so fast....

We both agreed, it doesn't make sense. Which is why I point to her frequent and small trips to the local store for kids snacks, cravings, and munchies....

We will see what the receipts reveal, but trust me she is about as spendthrift as I have ever seen within my own family.

This isn't entirely on her, if you've only mentioned this recently it will take time for her to adjust. The credit card bills didn't appear overnight; it seems like you've had a 'light-bulb moment' and found this site, but she hasn't (yet). You've grown up in different households and have different attitudes and skills with money.

She might be naturally spendy, but you married her and have had the ability to talk about your preferred approach to finance before that. I think you need to be mindful of how you get the message across: your post above reads like someone scolding a naughty child, not solving a problem with their partner. A big part of getting a spouse on board is leading the way, find out what problem the snacks are solving and solve the problem more cheaply (NB, not by telling her to bake some cookies, but by baking them yourself).

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #20 on: September 02, 2017, 05:18:40 AM »
All told it take two to tango. Do you pack lunch? Do you buy coffee? Do you drink pop? If so this is a great way to start. Keurig coffee doesn't count btw. There are tons of farmers markets in that area just like mine in Ohio... I am freezing, canning, and dehydrating like a fool right now. Apple sauce and apple butter is next.... it is for my health as well as my wallet. Cook as many meals as you can. When I worked full time we cooked on Sunday and the leftovers made it through Wednesday. The crockpot is your best friend.

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #21 on: September 02, 2017, 07:11:13 AM »
I'm sorry if my response earlier was overly harsh.   Something inside me goes a bit whacky when I see that level of spending coming from people who are paying high interest on a considerably amount of debt.

Good job on discussing the food costs.  Hope you can find some areas to compromise there.  Suggest that you also consider discussing if there are other reasons your wife likes to make these constant trips to the store, and if there are other destinations/activities that she might be able to replace them with - say a trip to the library or the park, or even a garden or craft project at home.  Right now she may be conditioning your kids to think that when they are bored or unhappy a trip somewhere to spend money/eat treats is how to address it.  Not a good habit for them to fall into at such a young age. 

Now about those phones -- what is the story there?   I promise not to be so aggressive/negative in my response this time, but maybe laying it out there can help us help you come up with some alternatives to drop that bill down. You should easily be able to get that under $100/month.  We pay about $30/line for phones in our house, two on Tmobile with unlimited data and two on Google Fi.
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farfromfire

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #22 on: September 02, 2017, 07:29:35 AM »
OP:
Someone who spends 500$ a month on snacks and "extra" groceries, beyond the (quite fancy for this forum) 780$ on groceries that you prepare, is most definitely spendthrift:
Quote
a person who spends money in an extravagant, irresponsible way
but your response seems to indicate you think the word has an opposite meaning. Either way, she's an adult and can most certainly help herself especially when it comes to money you do not have.

ETA you are also a little generous to yourselves with your math. 150-180$ a week is 650-780$ a month, leaving 520-650$ a month on snacks. And that's not even counting the interest you're paying on it.
« Last Edit: September 02, 2017, 07:35:26 AM by farfromfire »

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #23 on: September 02, 2017, 10:04:03 AM »
I'm sorry if my response earlier was overly harsh.   Something inside me goes a bit whacky when I see that level of spending coming from people who are paying high interest on a considerably amount of debt.

Good job on discussing the food costs.  Hope you can find some areas to compromise there.  Suggest that you also consider discussing if there are other reasons your wife likes to make these constant trips to the store, and if there are other destinations/activities that she might be able to replace them with - say a trip to the library or the park, or even a garden or craft project at home.  Right now she may be conditioning your kids to think that when they are bored or unhappy a trip somewhere to spend money/eat treats is how to address it.  Not a good habit for them to fall into at such a young age. 

Now about those phones -- what is the story there?   I promise not to be so aggressive/negative in my response this time, but maybe laying it out there can help us help you come up with some alternatives to drop that bill down. You should easily be able to get that under $100/month.  We pay about $30/line for phones in our house, two on Tmobile with unlimited data and two on Google Fi.

Thank you and I totally understand.

We currently pay $199/mo for our combined cell plan, including a shared 8GB and payments on our iPhones.

There is a combined total of $618.64 owed on both phones and no contract otherwise; these payments account for $56.24 of the monthly bill. Another $9 Asurion protection plan and $3 roadside assistance is also part of each phone's monthly charges: that's another $24. So, taking that and the payments out of the equation, would save $80/mo from the bill. So, what plans are suggested at $120/month out there that offer what Verizon does at 8 GB/month with unlimited texts, etc.?

I am think we should payoff the balance and go to a carrier offering the same data/coverage for a much better price.

Thoughts and/or suggestions?
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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #24 on: September 02, 2017, 10:24:31 AM »
I'm sorry if my response earlier was overly harsh.   Something inside me goes a bit whacky when I see that level of spending coming from people who are paying high interest on a considerably amount of debt.

Good job on discussing the food costs.  Hope you can find some areas to compromise there.  Suggest that you also consider discussing if there are other reasons your wife likes to make these constant trips to the store, and if there are other destinations/activities that she might be able to replace them with - say a trip to the library or the park, or even a garden or craft project at home.  Right now she may be conditioning your kids to think that when they are bored or unhappy a trip somewhere to spend money/eat treats is how to address it.  Not a good habit for them to fall into at such a young age. 

Now about those phones -- what is the story there?   I promise not to be so aggressive/negative in my response this time, but maybe laying it out there can help us help you come up with some alternatives to drop that bill down. You should easily be able to get that under $100/month.  We pay about $30/line for phones in our house, two on Tmobile with unlimited data and two on Google Fi.

Thank you and I totally understand.

We currently pay $199/mo for our combined cell plan, including a shared 8GB and payments on our iPhones.

There is a combined total of $618.64 owed on both phones and no contract otherwise; these payments account for $56.24 of the monthly bill. Another $9 Asurion protection plan and $3 roadside assistance is also part of each phone's monthly charges: that's another $24. So, taking that and the payments out of the equation, would save $80/mo from the bill. So, what plans are suggested at $120/month out there that offer what Verizon does at 8 GB/month with unlimited texts, etc.?

I am think we should payoff the balance and go to a carrier offering the same data/coverage for a much better price.

Thoughts and/or suggestions?

For the time being, I just got off the phone with Verizon and removed the roadside from both phones ($6 off), removed the insurance from my phone ($9 off), dropped to a lower plan with safety mode engaged ($20.08 off). This should drop total bill, currently to $32.08 off.

We may remove my wife's coverage soon too, as well as paying off phones so we are open to other providers if a better option presents. However, the phone's ear speaker is acting up for her, so I want to hold off on removing that coverage for now, even though it's obviously a defect of the phone as it is her baby and not subject to any damage or accidents... hence my wanting to remove that coverage after that is addressed, to be safe.
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #25 on: September 02, 2017, 10:26:42 AM »
OP:
Someone who spends 500$ a month on snacks and "extra" groceries, beyond the (quite fancy for this forum) 780$ on groceries that you prepare, is most definitely spendthrift:
Quote
a person who spends money in an extravagant, irresponsible way
but your response seems to indicate you think the word has an opposite meaning. Either way, she's an adult and can most certainly help herself especially when it comes to money you do not have.

ETA you are also a little generous to yourselves with your math. 150-180$ a week is 650-780$ a month, leaving 520-650$ a month on snacks. And that's not even counting the interest you're paying on it.

You are correct, my mistake. I meant to imply she is thrifty, or not overly indulgent or impulsive in her spending. She is creative and shops, when needed, on the Facebook marketplace, ebay, etsy, etc.
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tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #26 on: September 02, 2017, 01:48:34 PM »
I'm sorry if my response earlier was overly harsh.   Something inside me goes a bit whacky when I see that level of spending coming from people who are paying high interest on a considerably amount of debt.

Good job on discussing the food costs.  Hope you can find some areas to compromise there.  Suggest that you also consider discussing if there are other reasons your wife likes to make these constant trips to the store, and if there are other destinations/activities that she might be able to replace them with - say a trip to the library or the park, or even a garden or craft project at home.  Right now she may be conditioning your kids to think that when they are bored or unhappy a trip somewhere to spend money/eat treats is how to address it.  Not a good habit for them to fall into at such a young age. 

Now about those phones -- what is the story there?   I promise not to be so aggressive/negative in my response this time, but maybe laying it out there can help us help you come up with some alternatives to drop that bill down. You should easily be able to get that under $100/month.  We pay about $30/line for phones in our house, two on Tmobile with unlimited data and two on Google Fi.

Thank you and I totally understand.

We currently pay $199/mo for our combined cell plan, including a shared 8GB and payments on our iPhones.

There is a combined total of $618.64 owed on both phones and no contract otherwise; these payments account for $56.24 of the monthly bill. Another $9 Asurion protection plan and $3 roadside assistance is also part of each phone's monthly charges: that's another $24. So, taking that and the payments out of the equation, would save $80/mo from the bill. So, what plans are suggested at $120/month out there that offer what Verizon does at 8 GB/month with unlimited texts, etc.?

I am think we should payoff the balance and go to a carrier offering the same data/coverage for a much better price.

Thoughts and/or suggestions?

For the time being, I just got off the phone with Verizon and removed the roadside from both phones ($6 off), removed the insurance from my phone ($9 off), dropped to a lower plan with safety mode engaged ($20.08 off). This should drop total bill, currently to $32.08 off.

We may remove my wife's coverage soon too, as well as paying off phones so we are open to other providers if a better option presents. However, the phone's ear speaker is acting up for her, so I want to hold off on removing that coverage for now, even though it's obviously a defect of the phone as it is her baby and not subject to any damage or accidents... hence my wanting to remove that coverage after that is addressed, to be safe.

Good news.

I looked around and Sprint is running a contract-free special for Verizon customers.

Porting our numbers over, bringing our current phones, and 1 year free service with unlimited data, calls, texts, etc.

Bam :)

The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #27 on: September 02, 2017, 04:40:02 PM »
Dude -- that's awesome!   
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tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #28 on: September 02, 2017, 06:17:17 PM »
Are payments towards repaying a TSP loan tax deductible?

I mean, since it counts towards our taxable income when we take a loan from our TSP, would the repayments then be tax deductible?

I have a 1.75% tsp $5k loan I could  payoff if this is the case. Otherwise the TSP interest generated in investments is likely better....but then this also represents money not getting interest in tsp since it's loaned out to me.

Tax deductible payments??
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MrsWolfeRN

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #29 on: September 02, 2017, 09:09:30 PM »
Good job on the phone situation. Why is your trash service so expensive? Is it really $95 every month?

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #30 on: September 02, 2017, 09:38:28 PM »
Good job on the phone situation. Why is your trash service so expensive? Is it really $95 every month?

Thank you!

That is a typo....trash bill is quarterly!! :)

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #31 on: September 02, 2017, 11:46:54 PM »
I think I mis-communicated somewhere here.

My wife is incredibly spend-thrift.


You do realize you just said your wife is an extravagant, irresponsible spender, right??
Her grocery spending on snacks/treats to the tune of several hundred dollars a month does kinda put her in the spendthrift category. ;)

But seriously, keeping your receipts and then seeing exactly how much is being spent  on treats versus real food might nudge your wife to pumps the brakes a little bit.


« Last Edit: September 03, 2017, 12:28:34 AM by a-scho »

Playing with Fire UK

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #32 on: September 03, 2017, 12:33:00 AM »
If I'm reading this right. You think your wife is generally frugal but is spending a lot on food?

Could it be that she associates many types of spending with being wasteful, but then all food purchases are considered necessary and therefore don't need the same level of scrutiny and consideration? This could be a little bit of a blind spot, or something that she learned growing up that isn't helpful any more.

To broach this, make absolutely sure that you stress first that you are committed to everyone being fed and healthy, (cutting down on food spend does not mean cutting down on nutrition). Then maybe review receipts and see what the distribution of food spend is (produce, meat, pre-prepared meals, snacks, soft drinks, alcohol, etc). See what you spend on, think about how much food gets thrown away, what pre-prepared meals you could make, consider eating meat fewer days per week. If relevant, consider any health goals you have (such as cutting down on salt and sugar), which you could support by eating less processed food.

If at all possible, do all of this after you have cooked a delicious and super cheap dinner. I like the website Cooking on a Bootstrap, and see Budget Bytes recommended as well.

Your progress is great.

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #33 on: September 03, 2017, 08:03:42 AM »
Here is the thing though, you don't actually have much of an idea how much your wife spends on anything since her side-gig money is essentially a slush fund for things she wants to do with the kids and whatever else. You don't even include this money in your income, so you don't include the purchases in your expenses either.

The other day I told my sister my current lack of home decor frustrates me, but I'm so cheap I never want to spend money on those kinds of things. For me, that means I haven't bough a picture frame, or centerpiece, or wall decor, or anything related in the three years since I got married and got on a budget. But my sister responded, "I know, I'm so cheap too!" The thing is, we had this conversation at an antique mall where she was looking for trinkets ($30) to put on this little teardrop wall shelf thing she'd recently purchased to update the look of her dining room after recently buying a new table and chairs. Now, my sister is debt free and doesn't spend her money on vacations or cars or going out to eat, so it's totally fine if she wants to buy bronze giraffes from the antique mall, but her perception that she is cheap is incorrect. (side note: I super benefit from this because I still get all her furniture hand-me downs including the chair I'm writing this on and the coffee table where my feet are currently propped)

Buying things on etsy and ebay is still spending money. And honestly, etsy is usually pretty expensive compared to big box stores because the goods are either antique or homemade by artisans.

Right now, your wife spends at least $400/month on extra food purchases beyond what you say is enough food and meal prep to feed the family all month. Then she also spends an unknown amount on children's activities and other purchases which are not tracked because they come out of her slush side-gig money.

The absolute first step of getting your financial life together is to be absolutely honest about your situation and your spending. You need to do that with the extra income and spending before you can really address your problems honestly.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #34 on: September 03, 2017, 01:54:42 PM »
I think I mis-communicated somewhere here.

My wife is incredibly spend-thrift.


You do realize you just said your wife is an extravagant, irresponsible spender, right??
Her grocery spending on snacks/treats to the tune of several hundred dollars a month does kinda put her in the spendthrift category. ;)

But seriously, keeping your receipts and then seeing exactly how much is being spent  on treats versus real food might nudge your wife to pumps the brakes a little bit.

Yes, I already commented on and corrected that misstatement....lol  I misused the word for sure.

As for the the snack and receipts, agreed! I'm actually anxious to see what they reveal or, if the mere act of keeping and reviewing them results in much lower numbers lol
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tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #35 on: September 03, 2017, 01:56:13 PM »
If I'm reading this right. You think your wife is generally frugal but is spending a lot on food?

Could it be that she associates many types of spending with being wasteful, but then all food purchases are considered necessary and therefore don't need the same level of scrutiny and consideration? This could be a little bit of a blind spot, or something that she learned growing up that isn't helpful any more.

To broach this, make absolutely sure that you stress first that you are committed to everyone being fed and healthy, (cutting down on food spend does not mean cutting down on nutrition). Then maybe review receipts and see what the distribution of food spend is (produce, meat, pre-prepared meals, snacks, soft drinks, alcohol, etc). See what you spend on, think about how much food gets thrown away, what pre-prepared meals you could make, consider eating meat fewer days per week. If relevant, consider any health goals you have (such as cutting down on salt and sugar), which you could support by eating less processed food.

If at all possible, do all of this after you have cooked a delicious and super cheap dinner. I like the website Cooking on a Bootstrap, and see Budget Bytes recommended as well.

Your progress is great.

Great insight and exactly what I have planned for this month :)
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #36 on: September 03, 2017, 02:01:14 PM »
Here is the thing though, you don't actually have much of an idea how much your wife spends on anything since her side-gig money is essentially a slush fund for things she wants to do with the kids and whatever else. You don't even include this money in your income, so you don't include the purchases in your expenses either.

The other day I told my sister my current lack of home decor frustrates me, but I'm so cheap I never want to spend money on those kinds of things. For me, that means I haven't bough a picture frame, or centerpiece, or wall decor, or anything related in the three years since I got married and got on a budget. But my sister responded, "I know, I'm so cheap too!" The thing is, we had this conversation at an antique mall where she was looking for trinkets ($30) to put on this little teardrop wall shelf thing she'd recently purchased to update the look of her dining room after recently buying a new table and chairs. Now, my sister is debt free and doesn't spend her money on vacations or cars or going out to eat, so it's totally fine if she wants to buy bronze giraffes from the antique mall, but her perception that she is cheap is incorrect. (side note: I super benefit from this because I still get all her furniture hand-me downs including the chair I'm writing this on and the coffee table where my feet are currently propped)

Buying things on etsy and ebay is still spending money. And honestly, etsy is usually pretty expensive compared to big box stores because the goods are either antique or homemade by artisans.

Right now, your wife spends at least $400/month on extra food purchases beyond what you say is enough food and meal prep to feed the family all month. Then she also spends an unknown amount on children's activities and other purchases which are not tracked because they come out of her slush side-gig money.

The absolute first step of getting your financial life together is to be absolutely honest about your situation and your spending. You need to do that with the extra income and spending before you can really address your problems honestly.

I couldn't agree more with what you're saying. However, I do see the majority of her cash flow as I help her balance it - she is new to budgeting and I am helping her to do so well. We do talk regularly about what she makes and, for the most part, I have a good pulse on her expenses....aside from a roughly $50/month in miscellaneous photo backdrops, seasonal decorations for photo sessions, to include etsy-type small purchases for photography session decorations and accessories. She really is frugal; in fact, I am likely overbearing in this regard.

That being said, the grocery budget is likely the area where the leaks occur, and that is getting addressed this month :)
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

former player

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #37 on: September 03, 2017, 02:14:01 PM »
Your children are 7 and 8 - are they old enough to have an allowance and for all their snacks and treats, such as ice cream, to come out of it?  If you can transition to that system it could take a lot of pressure off your wife to be the regulator of what gets bought and when.
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tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #38 on: September 03, 2017, 05:32:44 PM »
Your children are 7 and 8 - are they old enough to have an allowance and for all their snacks and treats, such as ice cream, to come out of it?  If you can transition to that system it could take a lot of pressure off your wife to be the regulator of what gets bought and when.

Good plan :)

Now to sell it to the wife....lol
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ejacobson

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #39 on: September 03, 2017, 07:56:14 PM »
Do you have the option to lower or drop the dental and vision coverage? If you do, check to see if you are getting your money's worth. Unless someone in your family has particular problems (braces?) spending over $500 on vision and over $1,200 on dental might not be worth it. If your numbers are monthly, even half the amount still seems high unless there are specific problems to address.

Goldielocks

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #40 on: September 03, 2017, 09:53:36 PM »
Once you and DW agree to a budget, the best way to get a habit of spending only that amount is a cash envelope system for that line item.  (in this case groceries / eating out / snacks).      I highly recommend it when you are trying to change your spend "thermostat" in a category.

------------------------
Photography side business.

My next post is more about baggage I have with a friend who ran a photography business for two years.  What I saw happening:

1)  Lots of justification for office equipment photography props and equipment,
2) lots of driving to the photography shoots (sometimes requiring doggy daycare,
3) free work for marketing purposes,or highly discounted,
4) lots of expensive out of town travel for rural weddings that  appeared profitable until she accounted for the travel costs... she then would offset by calling it a family vacation (netting zero dollars in the end) and bringing kids and DH with her so DH could watch kids while they wait for her work to be over (e.g., not a vacation).

She was very motivated but the end result was so much energy spent on the business, sales were immediately spent on more spend for the business, etc... that there was not enough time to do the home economy that her family needed.

So...  be prepared to take a strong look at the business and encourage yoru wife to limit it to a bit of side cash from her hobby, and her core business is helping to save over $800 per month on the household expenses.

I bet that the extra $600_+ spend on food more than outstrips what she is earning from the side hustle.

Finances_With_Purpose

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #41 on: September 03, 2017, 10:20:06 PM »
I'm sorry if my response earlier was overly harsh.   Something inside me goes a bit whacky when I see that level of spending coming from people who are paying high interest on a considerably amount of debt.

Good job on discussing the food costs.  Hope you can find some areas to compromise there.  Suggest that you also consider discussing if there are other reasons your wife likes to make these constant trips to the store, and if there are other destinations/activities that she might be able to replace them with - say a trip to the library or the park, or even a garden or craft project at home.  Right now she may be conditioning your kids to think that when they are bored or unhappy a trip somewhere to spend money/eat treats is how to address it.  Not a good habit for them to fall into at such a young age. 

Now about those phones -- what is the story there?   I promise not to be so aggressive/negative in my response this time, but maybe laying it out there can help us help you come up with some alternatives to drop that bill down. You should easily be able to get that under $100/month.  We pay about $30/line for phones in our house, two on Tmobile with unlimited data and two on Google Fi.

Thank you and I totally understand.

We currently pay $199/mo for our combined cell plan, including a shared 8GB and payments on our iPhones.

There is a combined total of $618.64 owed on both phones and no contract otherwise; these payments account for $56.24 of the monthly bill. Another $9 Asurion protection plan and $3 roadside assistance is also part of each phone's monthly charges: that's another $24. So, taking that and the payments out of the equation, would save $80/mo from the bill. So, what plans are suggested at $120/month out there that offer what Verizon does at 8 GB/month with unlimited texts, etc.?

I am think we should payoff the balance and go to a carrier offering the same data/coverage for a much better price.

Thoughts and/or suggestions?

Asurion is a scam. Google it if you doubt it. You're paying a bunch of sales commissions for a worthless agreement.  (Wife had it and went through the ringer with them.).

Also the roadside is cheaper through your insurance or AAA usually. I think I pay 12/year via USAA.

Finances_With_Purpose

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #42 on: September 03, 2017, 10:44:18 PM »
Answered about phones - you should be able to cut tremendously there.  We use Google Fi and it costs us under 40/mo easily, and under 80 usually even with the cost of buying two phones included.
(Link, which is a referral link that saves you $20 FYI: https://g.co/fi/r/HXK6HP)

But here's the key: sounds like you need to educate your wife or get on the same page with her. Being charitable here, I can't tell if she opposes the plan or is simply newer to these goals.

Either way, that's your biggest growth area. You have a spending problem and a marriage issue more than anything.

Like others, I highly recommend Ramsey's course or some discussions and maybe mentoring in these areas from someone very savvy.

You and your wife need to both share and own the goals. 

Also, as for food, be careful, as there may be other issues there. She and the kids may be impulse eaters, having eating issues, or the like.

Unlike others, I won't recommend you push your wife to abandon her side gigs because I don't know whether that's key to her well-being and her only outlet.

Also, you may get farther by taking away some pressures from your wife even as you have these hard convos with her about spending and so on. (E.g., she may be working so much because she feels it's the only way she gets her small spending amount, where you might save more if she kept only higher-paying gigs, did more to save at home, and you included some of her expense in the budget.)

Without knowing more, it's hard to judge or say. But you really need to get on the same page with her. And it will require delicacy. 

Explain your goals (as a family) and have a conversation with her about how you two get there ask for her input. Ask about her goals.  Compromise some.

You're currently living your means with the credit cards and no savings, which is a dangerous game. (Just met with a friend who did that but lost his job, and you don't want to be where he is with the options he now has.). I say that not to scare you but to motivate you, because you now have an opportunity to adjust and you're already here and doing it.

Shave where you can on long term things. Insure yourself where you can (dental, auto insurance, deductibles, so on), but ONLY after you save 10k or more as an emergency fund.

Your biggest impediment is your spending issues related to your wife. Figure out the mature way forward there where you lead well and help her move ahead. That's the key.  There are tons of threads here along those lines. 

Finally, huge props to you for doing this - it'll be a great thing for your family and your future!!! Glad you're here.

farfromfire

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #43 on: September 04, 2017, 02:37:34 AM »
OP:
Someone who spends 500$ a month on snacks and "extra" groceries, beyond the (quite fancy for this forum) 780$ on groceries that you prepare, is most definitely spendthrift:
Quote
a person who spends money in an extravagant, irresponsible way
but your response seems to indicate you think the word has an opposite meaning. Either way, she's an adult and can most certainly help herself especially when it comes to money you do not have.

ETA you are also a little generous to yourselves with your math. 150-180$ a week is 650-780$ a month, leaving 520-650$ a month on snacks. And that's not even counting the interest you're paying on it.

You are correct, my mistake. I meant to imply she is thrifty, or not overly indulgent or impulsive in her spending. She is creative and shops, when needed, on the Facebook marketplace, ebay, etsy, etc.
I only made that comment so that you're on the same page, not to poke fun at you. Please take the rest of my post into consideration, there is absolutely no justification for spending so much money on groceries. Being frugal frequently means shopping *less*, not shopping at more creative places. Hell, it doesn't take much creativity to spend money, not nearly as much as figuring out a free DIY solution.

This might sound shocking to your family, but snacks are not a necessity. I fucking love ice cream and could eat it every day, but neither of us have the income to justify it more than once a month.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #44 on: September 04, 2017, 09:00:06 AM »
Do you have the option to lower or drop the dental and vision coverage? If you do, check to see if you are getting your money's worth. Unless someone in your family has particular problems (braces?) spending over $500 on vision and over $1,200 on dental might not be worth it. If your numbers are monthly, even half the amount still seems high unless there are specific problems to address.

I was considering this as well...

Yes, we can drop the dental and the vision.

Considering the monthly costs, it really seems ludicrous I don't simply self-fund these, especially if I can get an HSA.

Those numbers are actually per paycheck....biweekly...so, even worse.
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #45 on: September 04, 2017, 10:26:11 AM »
Once you and DW agree to a budget, the best way to get a habit of spending only that amount is a cash envelope system for that line item.  (in this case groceries / eating out / snacks).      I highly recommend it when you are trying to change your spend "thermostat" in a category.

------------------------
Photography side business.

My next post is more about baggage I have with a friend who ran a photography business for two years.  What I saw happening:

1)  Lots of justification for office equipment photography props and equipment,
2) lots of driving to the photography shoots (sometimes requiring doggy daycare,
3) free work for marketing purposes,or highly discounted,
4) lots of expensive out of town travel for rural weddings that  appeared profitable until she accounted for the travel costs... she then would offset by calling it a family vacation (netting zero dollars in the end) and bringing kids and DH with her so DH could watch kids while they wait for her work to be over (e.g., not a vacation).

She was very motivated but the end result was so much energy spent on the business, sales were immediately spent on more spend for the business, etc... that there was not enough time to do the home economy that her family needed.

So...  be prepared to take a strong look at the business and encourage yoru wife to limit it to a bit of side cash from her hobby, and her core business is helping to save over $800 per month on the household expenses.

I bet that the extra $600_+ spend on food more than outstrips what she is earning from the side hustle.

Thank you for sharing, I couldn't agree more.

This year we agreed that aside from my Christmas gift to her for her first real camera, she would self-fund the growth of her business. She has kept to that promise as well as helped with bills, kids clothes, snacks, date nights, and to keep our efund topped off.

While that scenario you outlined does sound familiar, she has restrained from driving more than 40 minutes for a shoot, and rarely does this. Most shoots are done in our home, in a room converted into her infant/maternity studio. She really is doing phenomenally and it is growing so fast. I don't want her to burn out, which is why I'm not trying to be too oppressive lol
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #46 on: September 04, 2017, 10:28:02 AM »
Answered about phones - you should be able to cut tremendously there.  We use Google Fi and it costs us under 40/mo easily, and under 80 usually even with the cost of buying two phones included.
(Link, which is a referral link that saves you $20 FYI: https://g.co/fi/r/HXK6HP)

But here's the key: sounds like you need to educate your wife or get on the same page with her. Being charitable here, I can't tell if she opposes the plan or is simply newer to these goals.

Either way, that's your biggest growth area. You have a spending problem and a marriage issue more than anything.

Like others, I highly recommend Ramsey's course or some discussions and maybe mentoring in these areas from someone very savvy.

You and your wife need to both share and own the goals. 

Also, as for food, be careful, as there may be other issues there. She and the kids may be impulse eaters, having eating issues, or the like.

Unlike others, I won't recommend you push your wife to abandon her side gigs because I don't know whether that's key to her well-being and her only outlet.

Also, you may get farther by taking away some pressures from your wife even as you have these hard convos with her about spending and so on. (E.g., she may be working so much because she feels it's the only way she gets her small spending amount, where you might save more if she kept only higher-paying gigs, did more to save at home, and you included some of her expense in the budget.)

Without knowing more, it's hard to judge or say. But you really need to get on the same page with her. And it will require delicacy. 

Explain your goals (as a family) and have a conversation with her about how you two get there ask for her input. Ask about her goals.  Compromise some.

You're currently living your means with the credit cards and no savings, which is a dangerous game. (Just met with a friend who did that but lost his job, and you don't want to be where he is with the options he now has.). I say that not to scare you but to motivate you, because you now have an opportunity to adjust and you're already here and doing it.

Shave where you can on long term things. Insure yourself where you can (dental, auto insurance, deductibles, so on), but ONLY after you save 10k or more as an emergency fund.

Your biggest impediment is your spending issues related to your wife. Figure out the mature way forward there where you lead well and help her move ahead. That's the key.  There are tons of threads here along those lines. 

Finally, huge props to you for doing this - it'll be a great thing for your family and your future!!! Glad you're here.

Thank you!
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.

Laura33

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #47 on: September 05, 2017, 07:30:14 AM »
OK, so clearly the low-hanging fruit here is the "extra" food spending your wife does.  But I am going to recommend taking a step back and approaching this from a bigger-picture perspective.  Your wife currently is a SAHM and so presumably takes the lion's share of the kid duties and home chores.  And she does 4 other jobs to boot (primary caretaker for kid with CF; teacher (homeschooling); ballet teacher; photographer. 

Number one, this is in itself stressful and leads to decision fatigue.  I personally do much better on days I have one big project vs. 15 small ones, because I lose time and focus trying to shift between multiple things.  And it is those days -- the days I am pulled six ways from Sunday -- when I am most likely to cave and order Papa John's when I get home.

Number two, becoming a frugal homemaker is another job in and of itself.  It takes more time and energy to follow the frugal path.  Think about it:  you are running around with the kids all day, maybe you're out doing errands or going to the park or whatever [side note: getting out of the house is necessary for mental health as SAHM!].  Kids get hungry.  You have 4 options: (1) say no, and deal with reeeealllly cranky kids [from experience: not gonna happen if things need to get done]; (2) swing by for fast food; (3) plan ahead and pack some granola bars and juice boxes; or (4) really plan ahead, spend Sunday baking homemade muffins or granola bars the kids like, and pack homemade snacks and designated reusable water bottles for each kid.  (4) is obviously the best, from both a financial and health perspective -- but that takes a LOT more time and mental energy than (3).  So if you would like her to add that job, the time and energy has to come from somewhere else.  And -- critically -- and you want to make sure it is coming from the "right" thing, both in terms of finances and her own emotional health.  If she is making $250/wk from photography, and that is keeping her sane, you don't want her to feel like she needs to give that up to save $50/wk by taking over more efficient snack duty for the kids.

I would recommend that you approach this from the standpoint of optimizing her life in a way that makes her the happiest.  The photography business taking off seems to provide you a good opportunity to do that, because if it is growing rapidly, it is taking up more of her time, and so she likely already feels overwhelmed.  Are there some duties that perhaps she needs to/is ready to give up?  E.g., are the kids old enough that she can stop homeschooling and they can go to a regular school, which would give her a lot more hours in the day?  Or, if she really wants to keep going on everything, can you pick up some of the slack -- e.g., if you don't like her spending on prepackaged kid foods, since you already do the shopping and weekly cooking, can you re-interpret part of your job to also include making some weekly snacks that you "prepackage" yourself, and create a designated "snack zone" in the fridge where you leave the snacks and pre-filled water bottles for the kids, so when she is running out with the kids, she can grab a muffin just as easily as she can a granola bar out of a box? 

The point is not to rework your life to fit some ideal; it is trying to figure out ways to manage your time and money most efficiently to fit your life as you would like to live it. 

Laugh while you can, monkey-boy

lhamo

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #48 on: September 05, 2017, 10:50:29 AM »
THIS!!!! Laura 33 is brilliant -- listen to Laura 33!
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tduff311

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Re: Case Study worthy of face punching (multitudes of face punches)
« Reply #49 on: September 05, 2017, 12:37:58 PM »
OK, so clearly the low-hanging fruit here is the "extra" food spending your wife does.  But I am going to recommend taking a step back and approaching this from a bigger-picture perspective.  Your wife currently is a SAHM and so presumably takes the lion's share of the kid duties and home chores.  And she does 4 other jobs to boot (primary caretaker for kid with CF; teacher (homeschooling); ballet teacher; photographer. 

Number one, this is in itself stressful and leads to decision fatigue.  I personally do much better on days I have one big project vs. 15 small ones, because I lose time and focus trying to shift between multiple things.  And it is those days -- the days I am pulled six ways from Sunday -- when I am most likely to cave and order Papa John's when I get home.

Number two, becoming a frugal homemaker is another job in and of itself.  It takes more time and energy to follow the frugal path.  Think about it:  you are running around with the kids all day, maybe you're out doing errands or going to the park or whatever [side note: getting out of the house is necessary for mental health as SAHM!].  Kids get hungry.  You have 4 options: (1) say no, and deal with reeeealllly cranky kids [from experience: not gonna happen if things need to get done]; (2) swing by for fast food; (3) plan ahead and pack some granola bars and juice boxes; or (4) really plan ahead, spend Sunday baking homemade muffins or granola bars the kids like, and pack homemade snacks and designated reusable water bottles for each kid.  (4) is obviously the best, from both a financial and health perspective -- but that takes a LOT more time and mental energy than (3).  So if you would like her to add that job, the time and energy has to come from somewhere else.  And -- critically -- and you want to make sure it is coming from the "right" thing, both in terms of finances and her own emotional health.  If she is making $250/wk from photography, and that is keeping her sane, you don't want her to feel like she needs to give that up to save $50/wk by taking over more efficient snack duty for the kids.

I would recommend that you approach this from the standpoint of optimizing her life in a way that makes her the happiest.  The photography business taking off seems to provide you a good opportunity to do that, because if it is growing rapidly, it is taking up more of her time, and so she likely already feels overwhelmed.  Are there some duties that perhaps she needs to/is ready to give up?  E.g., are the kids old enough that she can stop homeschooling and they can go to a regular school, which would give her a lot more hours in the day?  Or, if she really wants to keep going on everything, can you pick up some of the slack -- e.g., if you don't like her spending on prepackaged kid foods, since you already do the shopping and weekly cooking, can you re-interpret part of your job to also include making some weekly snacks that you "prepackage" yourself, and create a designated "snack zone" in the fridge where you leave the snacks and pre-filled water bottles for the kids, so when she is running out with the kids, she can grab a muffin just as easily as she can a granola bar out of a box? 

The point is not to rework your life to fit some ideal; it is trying to figure out ways to manage your time and money most efficiently to fit your life as you would like to live it.

Very well said!

I like your recommendations in the conclusion and will give that a go :)

Thanks!
The future is not some place we are going to, but one we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination.