Author Topic: I think therefore I am what I am.  (Read 2003 times)

NotBadForADad

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I think therefore I am what I am.
« on: September 16, 2020, 02:21:09 PM »
Good Evening,

I am 33 years old living in sin with my gf (30) and we have a 1.5 year old boy. We are located in the great white north where the winters are long and cold and the summers are too short. (It's already freezing temperatures at night.)

GF is currently a Stay at home mom. She is collecting unemployment benefits due to covid, which is ending soon. Her employer offered her to come back to work seasonal but am not sure if they will let her go in January officially once the season is over. She has been there for ten years and though she has been planning to find new work she put this off since she was furloughed and collecting.

My house is roughly 1500sf w/ 3bd/2bth & a giant 3 story garage sitting on a 14,000sf of land. I owe $245k on a 30-year at 5% and is worth north of $300k at this point.
I have two vehicles: 2014 VW Jettawagen bought in cash. 2014 Audi Q& with $10k on the loan.


General Breakdown:
$70,500 Salary ($4,040 monthly take home)

Expenditures:
Amount Owed             Interest Rate               Category             Bill
$6,306.25                   6.00%                        Loan                    Student Loans (Deferred until end of year due to covid)
$612.40                      0% until Dec               Credit Card            (This will be ZERO next paycheck)
$1,798.37                   26.74%                       Credit Card           (This will be nearly ZERO next paycheck)
$248,303.17                5.00%                        Loan                     30-year Mortgage
$4,559.31                   11.50%                       Loan                     Personal (will start doubling up on this once aforementioned cc have been paid off )
$2,050.74                   0% to Nov 2021           Credit Card          Paying Monthly $29 mins atm until bigger debts are finished
$10,993.67                 4.49%                         Loan                     Audi (I like it, its $200 a month, It's Diesel and gets 30mpg, it hauls all my band gear/tools/home supplies/babies/dogs.It's not up to discussion)
$120/month                                                  Utility                    Electricity
$150/every 3 months                                     Utility                    Water
$164.15/month                                                        Insurance              Geico
$85                                                              Utility                    Cell (This was $75, but they automatically put me in a payment thing due to covid where they took one month payment and spread it over 6 months. I have one month left of $25 for the phone that is going to be paid off. No, I am not upgrading my phone.)
$100/month                                                                               Average gas consumption.
$300                                                                                         Groceries/Home Supplies (GF Covers a lot of this too with her checks)
~$90                                                            Utility                    Comcast (necessary evil, I've looked into all avenues to reduce this bill, this is as low as I can get it in our area. We only use internet. Sure, I can buy a modem, I could also get the new $39.99 plan as a new users if one off us canceled and the other starts a new account, gets the auto pay to save $10 a month and we buy a modem. We are still debating that option.)

I spend some money on supplies for wood working projects and other DIY stuff around the house. I don't track this money as it's a hobby and it is what it is. I also don't track drum parts and accessories because that too is a hobby, I also get paid to play out so it's a wash.


Once I hammer out those CC and Personal Loans, what's next? More importantly, what should GF do with her employment situation? Could we have her be a SAHM even if she isn't collecting unemployment? If she goes back to work now PT, she would get about $300 a month after taxes and insurance for her 12hr weekly shifts.

Any feedback is appreciated.

YYK

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Re: I think therefore I am what I am.
« Reply #1 on: September 16, 2020, 06:43:07 PM »
It would be useful to see your actual cash flow here; there's no itemization of what's being paid on each of the loans, and your un-tracked hobby expenses are a potential killer. As such I can't really comment on your cash flow situation.

I would avoid paying the off the 0% until December card and instead put that money towards the 26.74% card and the 11.5% loan. Pay off the 0% card once the interest rate increases.
Paying min on the other 0% card is reasonable.

Nothing is not up to discussion. I would be looking at other ways to meet your transportation needs than a car with a loan on it, especially when you already have significant other debts. In that same vein, I recommend tracking your hobby expenses as well. There's always room for improvement. You've gotten into CC debt before; have your attitudes towards spending since changed?

terran

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Re: I think therefore I am what I am.
« Reply #2 on: September 16, 2020, 10:58:34 PM »
Does great white north mean Canada or northern US? Mostly for retirement account differences.

Does your employer offer a retirement with a match? Other than contributing enough to get a match and establishing an emergency fund (I'd go with a small one of $1000 or so for now) tackling that debt mountain is a priority. MMM would call it a hair on fire debt emergency. According to the recommended investment order at least get rid of any debt over 5.66% before investing anything else.

Hobby spending is definitely not "it is what it is" spending. Some things (food and housing) you definitely need to buy (you should still try to optimize them. Hobby spending is totally discretionary and should be tightly controlled, especially when you're in as much debt as you are.

If you're in the US take a look at https://www.redpocket.com/ for cell phone service. Especially the annual plans can save some serious money. I use the $60/year plan by using wifi a lot and making most of my calls using google voice. Other plans for more usage will still save you compared to what you're paying now.

I assume one of the cars is your girlfriend's, or are both of the cars yours and she has her own?

Freedomin5

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Re: I think therefore I am what I am.
« Reply #3 on: September 17, 2020, 12:52:05 AM »
I would completely pay off the credit card with the 26+% interest rate before paying off the one with the 0% interest rate.

Quote
More importantly, what should GF do with her employment situation? Could we have her be a SAHM even if she isn't collecting unemployment? If she goes back to work now PT, she would get about $300 a month after taxes and insurance for her 12hr weekly shifts.

That depends on how much you would have to pay for childcare if she were to go back to work. If she's taking home than the cost of childcare, it might make sense for her to go back to work. If you're shelling out more for childcare than her take-home pay, it would make sense for her to be a SAHM.

Aunt Petunia

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Re: I think therefore I am what I am.
« Reply #4 on: September 17, 2020, 05:24:40 AM »
5% is high for a mortgage these days,. You could probably save a lot on interest if you refinance.

What retirement accounts are available to you?

I would not have her be a sahm unless you are married, so she can still get social security if something happens to you/the relationship. (Not clear if you are in the US or Canada).

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #5 on: September 17, 2020, 06:21:51 AM »
It would be useful to see your actual cash flow here; there's no itemization of what's being paid on each of the loans, and your un-tracked hobby expenses are a potential killer. As such I can't really comment on your cash flow situation.

I would avoid paying the off the 0% until December card and instead put that money towards the 26.74% card and the 11.5% loan. Pay off the 0% card once the interest rate increases.
Paying min on the other 0% card is reasonable.

Nothing is not up to discussion. I would be looking at other ways to meet your transportation needs than a car with a loan on it, especially when you already have significant other debts. In that same vein, I recommend tracking your hobby expenses as well. There's always room for improvement. You've gotten into CC debt before; have your attitudes towards spending since changed?

Personal Loan: $132/month
Car Loan: $200 Month
Student Loans: $0 since March
CC: these have been inflated as I've been throwing $500-$1000+ on each.

Hobbies: I spent about $250 in wood, stains, poly, and brushes since June to build a table, refurbish my mothers coffee table, and paint metal shelving I got for free on Craigslist. This isn't a monthly thing. The next project I plan to do is a TV stand with shelving. Again, less than $100 worth of wood. I already have all the tools since my days of being a flooring installer.

I've paid over $12k in CC Debt this year already.

I reached out to get Refi on my loan but when the C19 hit, I got a hit on my credit and had too much DTI then. I again reached out to my loan officer last month and she said in a few more months to go and refi.

GF is looking for a new job for nights now. Her boss needed an answer if she was going back to work and I believe she decided to move on. She doesn't have a lot of experience outside of merchandising and retail/warehouse work. She thinks she can get a job as one of those traveling merchandisers stocking grocery stores for big companies? Or maybe a nightly cleaning gig.

I do my company match at 3%, and nothing else at the moment.

We don't go out, we don't rent movies, we don't play video games. We lead a pretty boring life. I work all day then come home, spend time with my family, listen to these news, eat dinner, get the boy ready for bed and sleep. Rinse, repeat.

Laura33

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Re: I think therefore I am what I am.
« Reply #6 on: September 17, 2020, 06:28:35 AM »
Where did all the debt come from?  Until you have a handle on the thought process that led you into that hole, you have the classic case of rearranging the deck chairs on the Titanic. 

Example:  you are currently driving a vehicle worth somewhere around $20-25K.  You could sell that vehicle, spend a couple of grand on a beater, and pay off all your non-house debt except the student loans.  You have made the choice not to do that, because it is more important to you to keep your expensive luxury vehicle than it is to be out of debt.  OK.  But if that's where your head is -- if the luxuries in your life are the priority, even when you have to borrow from Future You to pay for it -- then what's the point in delving into the details of your current debt paydown strategy when like as not you'll just run it up again the next time you have an appealing lifestyle choice to make?  Like, say, the next time you need a vehicle, and that $80K Audi is looking might fine . . . .

I'm not trying to be harsh here, although I know it sounds that way.  Paying off $12K in a year is huge progress, and you deserve a ton of credit for achieving that.  It's just that when you post with a number of non-negotiables, while you've got hair-on-fire debt, it sounds like this is really just a crash diet because the debt got out of control, vs. a sustainable lifestyle.  That's the mindset to challenge if you want long-term success.

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #7 on: September 17, 2020, 06:39:04 AM »
Where did all the debt come from?  Until you have a handle on the thought process that led you into that hole, you have the classic case of rearranging the deck chairs on the Titanic. 

Example:  you are currently driving a vehicle worth somewhere around $20-25K.  You could sell that vehicle, spend a couple of grand on a beater, and pay off all your non-house debt except the student loans.  You have made the choice not to do that, because it is more important to you to keep your expensive luxury vehicle than it is to be out of debt.  OK.  But if that's where your head is -- if the luxuries in your life are the priority, even when you have to borrow from Future You to pay for it -- then what's the point in delving into the details of your current debt paydown strategy when like as not you'll just run it up again the next time you have an appealing lifestyle choice to make?  Like, say, the next time you need a vehicle, and that $80K Audi is looking might fine . . . .

I'm not trying to be harsh here, although I know it sounds that way.  Paying off $12K in a year is huge progress, and you deserve a ton of credit for achieving that.  It's just that when you post with a number of non-negotiables, while you've got hair-on-fire debt, it sounds like this is really just a crash diet because the debt got out of control, vs. a sustainable lifestyle.  That's the mindset to challenge if you want long-term success.

Appreciated. I've considered the thought of selling the SUV. It's been my main hauler for everything so it's utility has been good. I would never buy a car for $80k, I bought this car for less than $14k. I bought the other one in cash. I can re-look at this.

JestJes

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Re: I think therefore I am what I am.
« Reply #8 on: September 17, 2020, 11:45:05 AM »
I feel like we need a little more information.

What kind of assets do you have now? Anything in a 401k, 529 Account, Emergency Savings?

What kind of money do you make now? How stable is your employment? Do you make any money from this band gig or does it cost you?

Most importantly, what are your goals? If just want to live a nice financially secure life then the advice is going to be different then if you want to FIRE in 15 years.

Also I would highly recommend tracking all your spending for a couple months to see how much you are spending on hobbies, food, ext. 300 a month for a family for food and household needs is really low, which is awesome if its accurate.

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #9 on: September 17, 2020, 12:11:48 PM »
I feel like we need a little more information.

What kind of assets do you have now? Anything in a 401k, 529 Account, Emergency Savings?

What kind of money do you make now? How stable is your employment? Do you make any money from this band gig or does it cost you? ($70,500 salary USD)

Most importantly, what are your goals? If just want to live a nice financially secure life then the advice is going to be different then if you want to FIRE in 15 years.

Also I would highly recommend tracking all your spending for a couple months to see how much you are spending on hobbies, food, ext. 300 a month for a family for food and household needs is really low, which is awesome if its accurate.


What kind of assets do you have now? Anything in a 401k, 529 Account, Emergency Savings?
$1000 EF. ~$500 in 401k (just started this with company last month)

What kind of money do you make now? How stable is your employment? Do you make any money from this band gig or does it cost you? ($70,500 salary USD) We are an essential mfg. of wood products. I am their lead estimator. She works retail. When she goes back (3 nights a week) she'll make about $900/month before tax.

Most importantly, what are your goals? If just want to live a nice financially secure life then the advice is going to be different then if you want to FIRE in 15 years. TBH, I won't retire because I will get board. I'd like to get to the point where I can not NEED a job, but continue the one I do now. I like building, drumming, spending time with my boy and dog. More time with them is better time well spent.

Also I would highly recommend tracking all your spending for a couple months to see how much you are spending on hobbies, food, ext. 300 a month for a family for food and household needs is really low, which is awesome if its accurate. That's what I've tracked through mint and my spreadsheet. This year hasn't been as accurate as it could of been since GF was receiving both FED and Local Unemployment, we both received the stimulus check. Since she was taking in $700/wk from those benefits I used every extra buck I could find to knock down those CCs.


JestJes

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Re: I think therefore I am what I am.
« Reply #10 on: September 17, 2020, 01:35:40 PM »
If you are only saving 500 a month you are going to need to save a little more to retire on time at 67 and even more to retire earlier than that. I'm not sure if you could put more income into retirement accounts? Maybe all your partners earnings can go into a roth? Based on your spending you will need a little over a million dollars to retire.

You are not in a bad financial spot, you make good money and don't have out of control spending. You really just need to narrow down what you want. I would play around with some retirement calculators online to see how much you could save to contribute to this goal. Maybe you can trim a small amount spending or make more money by flipping some of those craigslist finds. The thing about this forum is that most people want to retire ASAP so they are going to recommend things that you may not be willing to do like sell your car. Anything else is just basic math. Save more spend less. Be happy.

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #11 on: September 17, 2020, 01:39:14 PM »
If you are only saving 500 a month you are going to need to save a little more to retire on time at 67 and even more to retire earlier than that. I'm not sure if you could put more income into retirement accounts? Maybe all your partners earnings can go into a roth? Based on your spending you will need a little over a million dollars to retire.

You are not in a bad financial spot, you make good money and don't have out of control spending. You really just need to narrow down what you want. I would play around with some retirement calculators online to see how much you could save to contribute to this goal. Maybe you can trim a small amount spending or make more money by flipping some of those craigslist finds. The thing about this forum is that most people want to retire ASAP so they are going to recommend things that you may not be willing to do like sell your car. Anything else is just basic math. Save more spend less. Be happy.

Thanks!!

I do want to invest more, but I think my best path before that is to just get rid of the loans (not mortgage) and build up my savings. Once I'm comfortable with tangible cash, I'll ask about investment moves.

Dicey

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Re: I think therefore I am what I am.
« Reply #12 on: September 17, 2020, 03:15:26 PM »
When you make a case study on this forum, there is no such thing as "It is what it is." Further, if you approach this group with that attitude, you're going to get less help. There are lots of great people here who coach the willing. They tend to focus their efforts where the motivation is greatest.

« Last Edit: October 06, 2020, 11:53:47 AM by Dicey »

slappy

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Re: I think therefore I am what I am.
« Reply #13 on: October 06, 2020, 09:49:52 AM »
This story seems very familiar. Did you used to be another poster?

bacchi

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Re: I think therefore I am what I am.
« Reply #14 on: October 06, 2020, 10:07:13 AM »
$164.15/month                                                        Insurance              Geico

This is really high. You have C&C insurance but damn. Have you tried shopping around?

Quote
$85                                                              Utility                    Cell (This was $75, but they automatically put me in a payment thing due to covid where they took one month payment and spread it over 6 months. I have one month left of $25 for the phone that is going to be paid off. No, I am not upgrading my phone.)

When your phone is paid off, start looking at MVNOs. It's $15/month at Mint, for example.

Quote
~$90                                                            Utility                    Comcast (necessary evil, I've looked into all avenues to reduce this bill, this is as low as I can get it in our area. We only use internet. Sure, I can buy a modem, I could also get the new $39.99 plan as a new users if one off us canceled and the other starts a new account, gets the auto pay to save $10 a month and we buy a modem. We are still debating that option.)

Why wouldn't you do this? Look up compatible modems for Comcast, order one, and then take 20 minutes to cancel and order new service. It would save $600/year.

« Last Edit: October 06, 2020, 10:09:18 AM by bacchi »

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #15 on: October 06, 2020, 02:37:04 PM »
$164.15/month                                                        Insurance              Geico

This is really high. You have C&C insurance but damn. Have you tried shopping around?

Quote
$85                                                              Utility                    Cell (This was $75, but they automatically put me in a payment thing due to covid where they took one month payment and spread it over 6 months. I have one month left of $25 for the phone that is going to be paid off. No, I am not upgrading my phone.)

When your phone is paid off, start looking at MVNOs. It's $15/month at Mint, for example.

Quote
~$90                                                            Utility                    Comcast (necessary evil, I've looked into all avenues to reduce this bill, this is as low as I can get it in our area. We only use internet. Sure, I can buy a modem, I could also get the new $39.99 plan as a new users if one off us canceled and the other starts a new account, gets the auto pay to save $10 a month and we buy a modem. We are still debating that option.)

Why wouldn't you do this? Look up compatible modems for Comcast, order one, and then take 20 minutes to cancel and order new service. It would save $600/year.

We already did the modem/router swap and we got an antenna for local channels.

I don't have the greatest driving record so this is actually through my GF and is the lowest of all the quotes I could get. My phone is paid off now, monthly payment now is $50. I'm not really concerned about saving another $15 bucks on this honestly.

Moonwaves

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Re: I think therefore I am what I am.
« Reply #16 on: October 07, 2020, 03:19:46 AM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #17 on: October 07, 2020, 06:23:49 AM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

That's all fine and dandy, but I do get employee discounts and perks from Best Buy where I have the phone service through.

GreenToTheCore

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Re: I think therefore I am what I am.
« Reply #18 on: October 07, 2020, 02:32:28 PM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

That's all fine and dandy, but I do get employee discounts and perks from Best Buy where I have the phone service through.

$50/mo --> $600/yr
$15/mo --> $180/yr

Are the perks and discounts (on more consumption) worth $420/yr?
It's a personal choice, but it is a choice.
« Last Edit: October 07, 2020, 02:35:40 PM by GreenToTheCore »

NotBadForADad

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Re: I think therefore I am what I am.
« Reply #19 on: October 07, 2020, 04:08:22 PM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

That's all fine and dandy, but I do get employee discounts and perks from Best Buy where I have the phone service through.

$50/mo --> $600/yr
$15/mo --> $180/yr

Are the perks and discounts (on more consumption) worth $420/yr?
It's a personal choice, but it is a choice.

Yea I get what you're saying. That's like a whole 'nother beer a day ! ;)

Freedomin5

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Re: I think therefore I am what I am.
« Reply #20 on: October 07, 2020, 04:22:47 PM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

That's all fine and dandy, but I do get employee discounts and perks from Best Buy where I have the phone service through.

$50/mo --> $600/yr
$15/mo --> $180/yr

Are the perks and discounts (on more consumption) worth $420/yr?
It's a personal choice, but it is a choice.

Yea I get what you're saying. That's like a whole 'nother beer a day ! ;)

I hesitate to comment, given that other posters are simply asking you to do the math, and youíre responding flippantly. At the same time, itís thinking like this that keeps people poor. Itís only $15 here, or $5 there, and before you know it, the money has been frittered away and you donít understand why your savings rate is so low or why youíre in debt. Your $35/month extra spending is costing you $6209 in ten years. Or say you want to retire in 17 years at age 50. That extra $35/month has now cost you $13859. Just because you couldnít be bothered to do a bit of work.

Now, if you do the math and figure out that your employee discounts save you more than $35/month, then it makes sense to stay with your current plan.
« Last Edit: October 07, 2020, 04:30:31 PM by Freedomin5 »

GreenToTheCore

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Re: I think therefore I am what I am.
« Reply #21 on: October 07, 2020, 05:29:38 PM »
I hesitate to comment, given that other posters are simply asking you to do the math, and youíre responding flippantly. At the same time, itís thinking like this that keeps people poor. Itís only $15 here, or $5 there, and before you know it, the money has been frittered away and you donít understand why your savings rate is so low or why youíre in debt. Your $35/month extra spending is costing you $6209 in ten years. Or say you want to retire in 17 years at age 50. That extra $35/month has now cost you $13859. Just because you couldnít be bothered to do a bit of work.

Now, if you do the math and figure out that your employee discounts save you more than $35/month, then it makes sense to stay with your current plan.

Thank you.

Feivel2000

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Re: I think therefore I am what I am.
« Reply #22 on: October 08, 2020, 01:33:24 AM »
I'm not really concerned about saving another $15 bucks on this honestly.

That reminds me of this blog post:
A Millionaire is Made Ten Bucks at a Time

That's all fine and dandy, but I do get employee discounts and perks from Best Buy where I have the phone service through.

You wouldn't save $15, you would save $35 per month. $420 per year. What kind of "perks" is Best Buy offering? Interesting choice for someone with ~$20k in consumer debt...