Author Topic: Family of 5, late 30's, low savings  (Read 2643 times)

JenYouWin

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Family of 5, late 30's, low savings
« on: October 09, 2018, 01:19:33 PM »

We have two teenagers, and a third grader. We have 55k in my husband's 401k (he puts in 3%, company matches), $1000 in savings, and 9k in credit card debt.

Husband decided he needed a 65k truck, and won't sell or downgrade. He also bought cell phones for everyone in our family plus his parents to the tune of $335 monthly. Also will not downgrade this.

Husband takes home about $7200 a month

mortgage - 1180.18 (owe 103k)
truck - 762.98
insurance- $102
electric- $275
water-   $120
natural gas - $40
cable and internet- $40
cell phones - $335
netflix - $15
braces- $198
vision therapy- $560-700 (one child has a vision impairment)
riding lessons- $160 ( same child for help with balance, hand eye coordination)
groceries and household- $800-1000
gasoline $200

Any tips or suggestions?

IsThisAGoodUsername

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Re: Family of 5, late 30's, low savings
« Reply #1 on: October 09, 2018, 01:55:45 PM »
Admittedly, I don't know the intimate details of your marriage/life/finances so I might be out of line here, but husband's adamant decision to spend $65k on a truck and $335 on cell phones without conversation and/or considerations of more frugal options are red flags to me. Maybe the first thing you should do is marriage counseling. If he's not on board with a financial overhaul and you're trying to do this alone, then you're destined to fail. You two should be a team.

After that, look at the checklist/order of operations at https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153

Also, do you or either of the teenagers work? Do either of you have other retirement accounts?
« Last Edit: October 09, 2018, 01:58:12 PM by IsThisAGoodUsername »

JenYouWin

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Re: Family of 5, late 30's, low savings
« Reply #2 on: October 09, 2018, 02:08:04 PM »
Thank you for that checklist, it's very helpful.

Yes, I agree, we need to be on the same page. I'm hoping he comes around so this isn't a lost cause.

My teenagers are 13 and 14 so not old enough to work yet, but will get a part-time job when they are 15 or 16 to pay for their wants.

No other retirement accounts, unfortunately.

wordnerd

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Re: Family of 5, late 30's, low savings
« Reply #3 on: October 09, 2018, 02:16:07 PM »
Are you tracking your spending? Your list seems to be missing a lot of incidentials like restaurants, gifts, travel, etc. If you aren't tracking, I'd start there. You Need A Budget and Mint are popular trackers, though a pen and paper or spreadsheet works fine. You'll likely find money drips.

You don't give the interest rate for the CC debt, but follow the investment order previously posted, and you should be fine there.

I'd also recommend both you and your husband read Your Money or Your Life. If he'd be open to reading it with you, he might get a better sense of what those purchases are costing him/he family without you being the messenger. There is also a sticky thread in the forum about how to convert your spouse that might be helpful.

BDWW

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Re: Family of 5, late 30's, low savings
« Reply #4 on: October 09, 2018, 02:18:14 PM »
Well, you mentioned the truck and cell phone.

One thing that jumps out at me is your electric bill. What does that cover? Seems very high, especially since you also have a natural gas bill (heating?).


former player

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Re: Family of 5, late 30's, low savings
« Reply #5 on: October 09, 2018, 02:24:20 PM »
Welcome.

This thread on converting your SO to mustachianism might be useful to you -

https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

Your healthcare costs are high: you might look into whether you have got the most useful healthcare plan for your particular circumstances and whether an HSA for paying out of pocket healthcare expenses free of tax is a possibility.


Good luck.

marty998

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Re: Family of 5, late 30's, low savings
« Reply #6 on: October 09, 2018, 02:34:54 PM »
What is the interest rate on the truck loan? Paying off a $65k loan at $762 a month will take at least 8 years even at a low interest rate... it's a long time to be locked into a vehicle that is going to need expensive maintenance along the way too.

$1000 emergency fund is not enough here - you are one work accident away from homelessness - if he loses his job what do you do? Can you work part time and have one of the older kids look after your youngest in the afternoons?


IsThisAGoodUsername

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Re: Family of 5, late 30's, low savings
« Reply #7 on: October 09, 2018, 03:03:21 PM »
Also regarding the truck: is this poor-gas-mpg vehicle used to commute to work, for recreation (towing a boat?), getting mileage reimbursement from work, necessary for hauling cargo, used in a side-hustle, or just demonstrating alpha masculinity? Can it even accommodate all 5 family members? Do you have a 2nd vehicle?

ShoulderThingThatGoesUp

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Re: Family of 5, late 30's, low savings
« Reply #8 on: October 09, 2018, 04:42:01 PM »
Would it be workable for you to get a job (if I am reading right you aren’t getting paid now)? It’s vullshit to have to get a job to pay for your husbands stupid truck, but (a) you have a debt emergency and (b) you may get more input then.

CNM

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Re: Family of 5, late 30's, low savings
« Reply #9 on: October 09, 2018, 04:46:58 PM »
I agree that spending tracking is key.  Based on your list in the first post, you all spend $5128/mo, and that's assuming the highest estimations for vision therapy and groceries.  Where is the remaining $2000 going?

JenYouWin

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Re: Family of 5, late 30's, low savings
« Reply #10 on: October 09, 2018, 08:39:43 PM »
Electric is high because we need to replace a 20 year old a/c that isn't efficient anymore. We are also in Texas, and I refuse to sweat in my house so it stays at 73 during our 10 month summer. We plan to replace the unit this spring.

Therapy is not covered by our insurance. It is to help her quality of life. We were paying $1200-1300 a month for it, but dropped down to once a week since she's almost done with the program. She'll finish this summer.

Interest rate on the truck is below 3%. He bought new at the end of last year, and with a trade in he owes around 40k now. It's for either a 5 or 6 year loan

Truck is probably for alpha status. It fits all 5 of us. My husband has a company vehicle that he uses and they pay for gas. He can't drive it for personal use or have anyone else in it though. The truck is mainly a grocery getter, kid hauler.

I agree, $1000 isn't enough for an emergency fund. Ideally, we would like to have around 3 months salary saved for this.

Yes, I can get a part time job. I plan on looking for one in the next week or so. I'm also in college full time.

The extra $2000 has been going to pay off debt. We are down to our last credit card to pay off.

I need to get better at tracking expenses into subcategories, but the $8-1000 a month for groceries includes all discretionary spending for now. We rarely eat out.
« Last Edit: October 09, 2018, 11:15:45 PM by JenYouWin »

Freedomin5

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Re: Family of 5, late 30's, low savings
« Reply #11 on: October 09, 2018, 09:05:59 PM »
$800-$1000 is still quite high for groceries even if it includes all discretionary expenses. Start tracking all the specific categories, as mentioned by previous posters, to help you get a better handle on where all the money is going. Then check out the “groceries for under $200/month” thread. Not saying you have to get to a sub-$200 grocery budget, but that thread may give you ideas to lower grocery expenses.

Here’s the link to the thread: https://forum.mrmoneymustache.com/share-your-badassity/have-a-sub-$200month-grocery-budget/?topicseen

Everyone here will “face punch” you guys for having the truck, and having a loan payment on it no less, but if your husband is unwilling to give in at this moment, there’s no point dwelling on it for now. Just focus on the areas that you can lower.

With regard to AC, see if you can slowly up the temperature. So for example, you’re at 73 right now so try upping it to 73.5 or 74. Give your body time to adjust until it doesn’t sweat at 73.5, then increase to 75. I was able to do this and get up to still feeling comfortable at 80F over time (started at 70F).

If you’re planning to replace AC soon, you’ll need to start setting amount a bit each month to start saving for that upcoming expense. Don’t put it on your CC (unless you have the funds to pay off the CC at the end of the month).

By the way, good job on throwing $2k at credit card debt. Get out of the CC debt ASAP, and try to never go back into that kind of debt again — the crazy interest rates will kill you.
« Last Edit: October 09, 2018, 09:18:27 PM by Freedomin5 »

Tuskalusa

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Re: Family of 5, late 30's, low savings
« Reply #12 on: October 09, 2018, 11:54:49 PM »
I see that you are in college full time. Are there loans associated with your education that will come due when you graduate?  This would be something you’d want to account for in your long term planning.

JenYouWin

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Re: Family of 5, late 30's, low savings
« Reply #13 on: October 11, 2018, 06:52:00 AM »
Yes, I'll graduate in a year with a little over 7k in student loans. I plan on paying them off within the first 3 months after graduation.

ysette9

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Re: Family of 5, late 30's, low savings
« Reply #14 on: October 11, 2018, 08:59:02 AM »
What at you studying and do you have a sense of what kind of job you can get after graduating, and what kind of money you could make? If you are finishing up something potentially lucrative (engineering, as an example) then it may make more sense to focus all of your extra energy on getting great grades now to get the best job you can in a year, rather than trying to find a part-time job now to bring in a little extra $. This does depend on how hard your school is and your own capacity to handle multiple obligations. School plus kids already seems like too much for me; you are a super hero.

Have you had conversations with your husband about your joint financial goals and really just life goals? Where you want to be in the future, what you would like to do with your time, and what things you value? Money is a tool to get you what you really want in life. If you can build that joint vision of what you really want long-term that will help him to slowly realize that a gargantuan LPT* with a massive payment is antithesis to the actual life goals you have together. Hopefully.

*LPT= little penis truck

My friend in high school long ago dubbed those big trucks thus, arguing that boys and men who drive them must have a deficiency they feel insecure about and need to compensate for. I found it hilarious and it has stuck in my mind ever since.

Bee21

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Re: Family of 5, late 30's, low savings
« Reply #15 on: October 12, 2018, 12:11:18 AM »
My husban is also a truck owner, so I can relate to your pain. I found it easier after I accepted the situation and stopped making snarky remarks about the car and the carpayment. Yes, it is stupid but I decided it is not worth arguing about. I call it his NNVN (non negotiable vehicle needs). 😊

The phone expenses are something I would fight for though. Why don't you get a few quotes and show him?

as for the rest, your situation will probably improve after you graduate and get a job. In the meanwhile, I would set simple monthly goals and work for them. Like adding to your emergency fund. Reducing the cc debt. Maybe try a 10% challenge: pay off 10% of cc, increase energency fund with 10%, decrease food expenses with 10% etc. That will be easy to persuade the husband to do.

thesis

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Re: Family of 5, late 30's, low savings
« Reply #16 on: October 15, 2018, 11:45:11 AM »
Whooo. My brain. That truck payment.

Well, I understand it isn't your fault, so no facepunches here :). You might suggest keeping 3-6 months worth of truck payments as a "truck emergency fund" so that, given a setback, he could keep the truck and not be getting calls from the lender or get it repo'd. If he needs to see emergency savings from that perspective, then do it. It may even trigger something in him to realize just how expensive that is, and he may see it as you being supportive of him in his...er...love of alpha status? Gosh, I can't believe I'm saying this, but I hear getting a spouse on board takes time and cunning. (as a single person, that truck payment is slightly higher than my rent, utilities, car insurance, and cell phone COMBINED)

The good news is that those lessons/therapy are scheduled to end soon, and that will free up a lot of money. But be talking to your husband now about what you two will do with that money when it's free, or he may make up his mind without you. Just sayin'. Start the conversation now so that when the time comes, that money will be going to a good place (savings, paying off debt, etc)

JenYouWin

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Re: Family of 5, late 30's, low savings
« Reply #17 on: October 15, 2018, 02:48:31 PM »
I'm in school for HR Management. Worst case scenario is 50k first year. I've been watching what we've been spending at the store this week, and I kept it @ $125 so that's a start. I also just paid 3k to the credit card leaving us with a balance of around 6k now. I'm thinking about getting a part or full time job at the cell phone store just for the free plan, and discounts on the others already on our account. He's not budging on the vehicle or cell phones. We are on contract with them and have to wait it out another 1.5 years.

Goals for the near future are to:
try to lower expenses as much as we can
pay off the credit card debt
save 3 months salary for emergency fund

« Last Edit: October 15, 2018, 02:51:10 PM by JenYouWin »