Author Topic: I wonder what you all will say to me?  (Read 7417 times)

mistymoney

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I wonder what you all will say to me?
« on: April 20, 2019, 11:03:15 AM »
I think it is a bit too late to RE but I still have FI ambitions, and not sure where to focus. I will give you a quick snapshot of where I am.

Assets
401k 675k
Roth   70k
HSA     6k
company stock 12k

Debts
Mortgage 260k (redfin value 500k)
student loans 115k
CC  16k
pers loan 2k

income/outgo
Income 128k
Monthly bills ~5k

I am 52. My job is demanding, but usually in a good way and for the most part I enjoy it. I was looking for a new job when I finally received a promotion and 30k raise so I may stay with current employer until retirement. I borrowed for my children's educations. My son finished his BA and daughter has 2 more years to go. Hopefully with this raise, I won't need anymore parent plus loans for those final two years. I know you all will tell me not to, but I paid for one child and must do the same for the other if I am able. Of course if I got laid off that would be a different story.

However, I am getting to a point where I would like to feel more secure. I had 25k in savings before the college years but that dwindled and is now gone. Now I hope to start building again. On my current plan, I will clear all the nonmortgage and nonSL debt by end of 2019, and I am planning on addressing FI in 2020.

Too late? I would like to focus on income generating assets outside of retirement accounts.

Rental real estate? commercial RE? I live in a HCOL area, and that seems to be a high entry fee possibility. Property taxes very high.
Dividend stocks? I feel that I already have a lot in the stock market and worry about what too much exposure there may mean if it takes a big and prolonged dip.

2019 I will focus on the repayments and trying to reduce monthly expenses.

Come 2020 and my bid to focus on FI, what do recommend as first steps?




nereo

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Re: I wonder what you all will say to me?
« Reply #1 on: April 20, 2019, 11:47:49 AM »
What jumps out at me is the large amount of debt.  What are the rates and terms for your student loans and credit card debt?
Are debt payments part of your ~$5k in monthly bills?

You have a lot of assets and a good income but a lot of debt and above-average monthly bills.  Certainly you have the potential to hit FI before age 60, but a lot depends on the particulars.

can you give a better accounting of your expenses and debts? Where do you fall on the 'investment order'?

MDM

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Re: I wonder what you all will say to me?
« Reply #2 on: April 20, 2019, 12:26:23 PM »
2019 I will focus on the repayments and trying to reduce monthly expenses.

Come 2020 and my bid to focus on FI, what do recommend as first steps?
Investment Order is applicable to many, at least for those looking to investments for FI.  Whether to pursue that or real estate or something else is up to you.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #3 on: April 20, 2019, 12:51:27 PM »
Thanks Nereo. Your balanced reply encourages me to dig a little deeper! Prior to the raise I was dogpaddling, but now I am trying to tackle things a little more head on. The raise came through in Feb, and I have started paying down the ccs since last month.

Based on last year averages and rounded to nearest $5 increment:

2290   mort
310   gas/heat
95   electric
150   cell
105   internet
550   healthcare
190   car ins
100   other transport
545   SLs
650   food
   
4985   

So the 5k includes the student loan payments (but not for all of the loans, only about 65k. the rest are deferred until other child graduates), but not the cc debt - which only started accruing in 2018

Mortgage is at 4.375%, student loan rates vary from 4.15% to 7.56%.

cc debt is across several cards from 12.24% to 20.99%. Most (10k) is on the 12.24% and I pay only the minimum. I have 4k at 17.99 and 2k at 20.99. That one will be paid off in May. Extra paycheck month!

personal loan is at 10%.

I stopped my 401k contributions in about July last year when the cc balance started climbing. I'm not sure if I should start that up again, or when I should. I have approximately 1500 month that I am putting towards the cc.

I had always prioritized my retirement savings, and feel a bit off to not be contributing, and for almost a year now.

On the other hand, my past diligence in that regard has served me well, and there is enough there that is can continue to grow without additional funds. And that is one reason I wonder if I should look elsewhere for investing in 2020? My market based funds will increase on their own, so perhaps I should diversify? so maybe only do the minimum for 401k match?


this is investment order?

WHAT           
0. Establish an emergency fund to your satisfaction
 - no, spent it all.         
1. Contribute to your 401k up to any company match
 - not currently         
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.     
 - that would include cc but not SL debt - maybe higher intest loans? I have 8!  so - yes in process of paying cc down
3. Max Health Savings Account (HSA) if eligible.
 - no, have ppo currently but may switch back
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level 
 - not currently         
5. Max 401k (if
    - 401k fees are lower than available in an IRA, or
    - you need the 401k deduction to be eligible for (and desire) a tIRA deduction, or
    - your earn too much for an IRA deduction and prefer traditional to Roth, then
    swap #4 and #5)   
 - no, and guess no need to answer 6-8!   
6. Fund a mega backdoor Roth if applicable.         
7. Pay off any debts with interest rates ~3% or more above the current 10-year Treasury note yield.           
8. Invest in a taxable account and/or fund a 529 with any extra.     

so - according to this, I am a long way from making non 401k investing?

I was hoping to have some non-work based income, that that would give me more security, diversify income streams. But - again, maybe I am too old to try for that kind of thing?     

mistymoney

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Re: I wonder what you all will say to me?
« Reply #4 on: April 20, 2019, 01:03:51 PM »
Oh - one thing I should note about the cc debt!

About 4k of that was work-related travel and I am waiting for reimbursement checks! I was just online checking current balances when putting this post together, and didn't take account of that.

It takes my company a while to pay these expenses, unfortunately, and I do end up eating a bit of interest on the travel sometimes.

so by end of May, I will have that 4k back, about 1500 left over from 2 checks - expenses, and my extra check of 3,250 which will all go to the ccs.

Then it will be quite a bit under 10k, and only on the lower interest rate card, and much more doable for paying off by year's end.


MDM

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Re: I wonder what you all will say to me?
« Reply #5 on: April 20, 2019, 01:50:52 PM »
WHAT           
0. Establish an emergency fund to your satisfaction
 - no, spent it all.         
1. Contribute to your 401k up to any company match
 - not currently         
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.     
 - that would include cc but not SL debt - maybe higher intest loans? I have 8!  so - yes in process of paying cc down
0. You might consider that your Roth IRA is an emergency fund.
1. If the company match percentage is >20.99% (your highest debt rate) then it is to your advantage to take the company match.
2. Yes, paying the high interest rate debt ASAP is likely going to be the best thing for you.

After #2 becomes "not applicable" you can consider 3-8.  One step at a time - good luck!

lhamo

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Re: I wonder what you all will say to me?
« Reply #6 on: April 20, 2019, 01:58:12 PM »
Your company should not be expecting you to put work-related expenses on a personal card. You should either get a company card or they should give you a cash advance.

You cell phone and internet bills are way too high.  Plenty of unlimited cell plans for $50-60/month, and internet shouldn't be more than $50ish.

Is food just for you?  $650 is way too much for one person.

Can you downsize your house once the kids launch?  Both your mortgage and your utilities seems very high for one person.  If you are determined to keep the house look into getting an energy audit to bring utilities down.  We have an old 2400 sq ft house without great insulation and in the coldest weather our gas bill was only $150ish.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #7 on: April 20, 2019, 02:26:03 PM »
Your company should not be expecting you to put work-related expenses on a personal card. You should either get a company card or they should give you a cash advance.

You cell phone and internet bills are way too high.  Plenty of unlimited cell plans for $50-60/month, and internet shouldn't be more than $50ish.

Is food just for you?  $650 is way too much for one person.

Can you downsize your house once the kids launch?  Both your mortgage and your utilities seems very high for one person.  If you are determined to keep the house look into getting an energy audit to bring utilities down.  We have an old 2400 sq ft house without great insulation and in the coldest weather our gas bill was only $150ish.

food and phone is for 3 people. I garden in summer and have rice and beans at least twice a week for dinner. And I do all my beans from dried, no canned. But always with a lot of veggies. I do try to have a lot of fruit and veggies and those can be pricey, especially in winter. I try to do salads mostly for lunch, and fruit and nuts for breakfast.  Eggs or meat are minimized and always bought with animal welfare in mind - those are more expensive. two of us are lactose intolerant so no dairy. We do a lot of cream sauces with cashews - more expensive than diary I think. I do try for organic when I can and the price difference is not so steep.


Selling the house is certainly an option once both are out, the mortgage and utilities are due to HCOL area, they aren't that out of line. Mortgage listed is PITI, property tax is about 8k/year, insurance 1500. HCOL is usually high all across the board - mortgage or rent - both includes the property tax and insurance one way or another, HCOL affects utilities, and food. My PITI is about 2300 but a 3 bedroom apartment in same area is 15-1600 - 1200 for an apt above a store front on a busy street.

Freedomin5

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Re: I wonder what you all will say to me?
« Reply #8 on: April 20, 2019, 04:04:46 PM »
Quote
2019 I will focus on the repayments and trying to reduce monthly expenses.

Come 2020 and my bid to focus on FI, what do recommend as first steps?

Are you saying that by the end of 2019, you will have paid off all the CC debt, personal loan, AND the 115k student loan? If not, then in 2020, you should focus on knocking out ALL loans except the mortgage. Once all loans are gone, if youíre interested in real estate, consider a REIT. In HCOL areas, getting into rentals usually does not make much financial sense, plus then you also have to deal with tenants and things breaking down, etc.

Buffalo Chip

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Re: I wonder what you all will say to me?
« Reply #9 on: April 20, 2019, 07:44:22 PM »
I see several things. Iím of the Dave Ramsey persuasion on debt, so I think you need to get super intense on getting this debt knocked out. I also believe in the debt snowball vice the debt avalanche. If youíre committed to getting this debt knocked out ASAP, and you should be, the relative interest rates arenít all that relevant. You need some victories. To me, the investments are secondary to getting rid of all non-mortgage debt.

On your budget, a few things leap out. The internet and cell look high to me. You can get visible cell phone, which is Verizon network, all you can eat data, phone, and text for $40 mo including tax. And if you arenít a data glutton like me, you can find significantly cheaper services. The internet is probably high speed.  Basic service is usually sufficient. The auto insurance looks steep as well, but that could be young drivers. I hope you have a cheap, older car that you can just get liability insurance on. Also, be sure to shop it.

I strongly suggest that you take the credit cards and toss them in the shredder and close the accounts. I realize that some mustachians like to play with travel miles and rewards. I think itís playing with vipers. Youíre carrying a balance and with all kindness and respect, you need to shake that habit. I respectfully suggest cold turkey. Once youíre out of the debt and are drinking lustily from the fountain of wealth and plenty, you might have them again but for now, theyíre going to be a temptation.

Nothing else jumped out, but most everything could use a trim. Be smart about and combine trips. Shop aldi and lidl. Ask your company for a credit card so you stop floating their cash flow. It all adds up.

SwordGuy

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Re: I wonder what you all will say to me?
« Reply #10 on: April 20, 2019, 08:08:04 PM »
Get rid of that credit card debt pronto.

You spoke of that debt going up as if you didn't really have anything to do with it.   You know, like bad weather or something.    That's not an attitude that keeps the CC debt from coming back!
Own it.  You spent it on something.  What?   Can you just sell it back?

You could sell your expensive house in a couple of years, clear out the student loan debt, and move into someplace cheaper. 

Villanelle

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Re: I wonder what you all will say to me?
« Reply #11 on: April 20, 2019, 09:14:07 PM »
Three people--besides you, are the others adults?  Or at least teens?

blingwrx

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Re: I wonder what you all will say to me?
« Reply #12 on: April 20, 2019, 11:39:52 PM »
I suggest signing up for a balance transfer credit card like the chase slate which has a 0% intro APR for 15 months and no balance transfer fees. Most other cards beware have a 3% fee to transfer balances. Hopefully your credit is still decent and you can get a decent line of credit enough to transfer all your CC debts or you may need to open more than one card, this will eliminate the high interest for the next 15 months and hopefully you managed to pay it all off by then. I think maybe if you opened a HELOC in the beginning you might have saved a bunch of money on interest. It's still an option now to be able to pay off some of your higher interest rate debts.

Kwill

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Re: I wonder what you all will say to me?
« Reply #13 on: April 21, 2019, 01:48:13 AM »
Are you sure about your spending? If you are spending under $60,000 a year and making $128,000, how do you have credit card and personal loan debt? Even if you get the current debt under control, if you aren't sure where the rest is going, then the debt might come back.

I use my personal credit card for work travel sometimes, but I pay it myself before the bill is due so that there isn't any interest to pay. Then when the reimbursement comes in, it goes to my savings.

As someone mentioned, the Roth IRA can double as an emergency fund. Contributions can be withdrawn at any time without a penalty, so that is the part that is safe to use. Do you know how much of it you contributed?

Assuming half of the Roth is contributions, then you would have $35,000 to use now. I would use $18,000 to knock out the credit card and personal loan debt right away. That still leaves you a $17,000 emergency fund, which should be more than 3 months expenses if your estimate is right.

Then I'd work on reducing expenses and paying off the student loans.

mspym

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Re: I wonder what you all will say to me?
« Reply #14 on: April 21, 2019, 04:00:58 AM »
I am with Kwill - there is money leaking out somewhere and you need to find out where. Are you tracking your spending at all? Are you taking out cash and not paying attention to where it's going?

And yes, stop floating your company money, especially if you are paying interest on it!

former player

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Re: I wonder what you all will say to me?
« Reply #15 on: April 21, 2019, 04:29:01 AM »
1500 a year on house insurance seems high - how long ago did you last shop around for this?  Add that to shopping around for cell, internet and car insurance.

I hope you are putting your company expense claims in as soon as possible, to get them paid as soon as possible.  Do the company rules allow you to add in an amount for interest paid by you in relation to those expenses?  If so, add it.  If not, you need to get to the point that you are paying the expenses off before interest is charged.

What do you have sitting around in your house/garage/storage that you can sell online for cash to help pay off the high interest debts sooner?  Maybe put your kids onto doing this for you?

If you can leave your retirement account alone for the next 10 years it should have reached $1m even without further contributions.  That's an income of $25k a year.  How is that retirement account invested - have you checked what funds it is in?  Should be mostly low cost index funds, plus some bonds given that you are getting close to retirement age, so this is something else to check up on and action if you haven't already.

Once you have paid off your high interest debts (credit cards, personal loan and perhaps the highest interest student loans) you should start contributions to this retirement fund again, especially if you get a match from your employer.

Where are you on a social security entitlement?   Any rights to an ex's social security?

You've got a more than decent basis to work from, both in assets and income.  Once you've gone through actioning the recommendations in this thread for reducing expenses and paying off debt you will find that your financial trajectory really takes off in a great direction.

happy

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Re: I wonder what you all will say to me?
« Reply #16 on: April 21, 2019, 05:50:28 AM »
Get rid of your high interest debt asap.
Have some easy of avoiding cc interest rates...if your work insists on you paying in advance, save up a fund in advance so you don't pay that ridiculous interest.
Track your expenses...there are lots of categories missing eg clothes, gifts etc

Goldy

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Re: I wonder what you all will say to me?
« Reply #17 on: April 21, 2019, 05:59:30 AM »
I know you want to provide college for your children but could the kids help repay some of that?  Paying for your kids school is an incredibly generous thing to do but it happens to be a really inconvenient time for you to make large debt payments being in the tail end of your career and having under saved for retirement.  Your kid would have their entire career ahead of themselves to earn and pay off the loans where you only have a handful of years left and other priorities.

I would also suggest you sign up for Mint.com or similar budget tracking software.  The budget outline you posted looks simplistic and while itís a good first step I bet there is a bit more spending going on.  Mint makes tracking actual spending easy and itís free.

You can do this!  With a high salary and some enhanced budget tracking you will be able to snowball some of this debt pretty quickly.

Alfa1234

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Re: I wonder what you all will say to me?
« Reply #18 on: April 21, 2019, 06:18:28 AM »
Before the raise you were making +/- 98k/year with what you say were about 60k expenses.  Yet your CC card debt was climbing.  The numbers don't add up.  I think your expenses are WAY higher than you think they are and you should start by getting them down into detail before you can do anything else.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #19 on: April 21, 2019, 07:02:49 AM »
Quote
2019 I will focus on the repayments and trying to reduce monthly expenses.

Come 2020 and my bid to focus on FI, what do recommend as first steps?

Are you saying that by the end of 2019, you will have paid off all the CC debt, personal loan, AND the 115k student loan? If not, then in 2020, you should focus on knocking out ALL loans except the mortgage. Once all loans are gone, if youíre interested in real estate, consider a REIT. In HCOL areas, getting into rentals usually does not make much financial sense, plus then you also have to deal with tenants and things breaking down, etc.

I had noted in the OP that that was not including the sl which will take a while to pay down.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #20 on: April 21, 2019, 07:10:03 AM »
Get rid of that credit card debt pronto.

You spoke of that debt going up as if you didn't really have anything to do with it.   You know, like bad weather or something.    That's not an attitude that keeps the CC debt from coming back!
Own it.  You spent it on something.  What?   Can you just sell it back?

You could sell your expensive house in a couple of years, clear out the student loan debt, and move into someplace cheaper.

LOL! IDK, it kind of felt that way!

I was just trying to emphasize that it was a new wrinkle, I have historically paid off the balance monthly, once or twice I needed to carry something over an extra month or two, and then a few things cropped up, the balance wasn't paid and of course it starts accruing interest.

More details as I work through the postings.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #21 on: April 21, 2019, 07:18:48 AM »
I see several things. Iím of the Dave Ramsey persuasion on debt, so I think you need to get super intense on getting this debt knocked out. I also believe in the debt snowball vice the debt avalanche. If youíre committed to getting this debt knocked out ASAP, and you should be, the relative interest rates arenít all that relevant. You need some victories. To me, the investments are secondary to getting rid of all non-mortgage debt.

On your budget, a few things leap out. The internet and cell look high to me. You can get visible cell phone, which is Verizon network, all you can eat data, phone, and text for $40 mo including tax. And if you arenít a data glutton like me, you can find significantly cheaper services. The internet is probably high speed.  Basic service is usually sufficient. The auto insurance looks steep as well, but that could be young drivers. I hope you have a cheap, older car that you can just get liability insurance on. Also, be sure to shop it.

I strongly suggest that you take the credit cards and toss them in the shredder and close the accounts. I realize that some mustachians like to play with travel miles and rewards. I think itís playing with vipers. Youíre carrying a balance and with all kindness and respect, you need to shake that habit. I respectfully suggest cold turkey. Once youíre out of the debt and are drinking lustily from the fountain of wealth and plenty, you might have them again but for now, theyíre going to be a temptation.

Nothing else jumped out, but most everything could use a trim. Be smart about and combine trips. Shop aldi and lidl. Ask your company for a credit card so you stop floating their cash flow. It all adds up.

Lots of good suggestions.

Car is older and paid off, insurance is higher due to young drivers on it. I haven't gone to liability only but I think it is time to do that.

Cell is 50/person but I can look into trimming that - we do have unlimited everything and really use it!

Internet is so we can have a lot streaming going on, am not happy with rate or provider, but it seems that is always out of the frying pan and into the fire when changing. But - I think time to shop around and see what is currently available. Have been with this company/plan several years. They are always upping it.

Getting rid of the cards isn't something I'm interested in doing. Things were going well for years on that account until last year.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #22 on: April 21, 2019, 07:19:45 AM »
Three people--besides you, are the others adults?  Or at least teens?

yes, 23 and 21.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #23 on: April 21, 2019, 07:25:58 AM »
Are you sure about your spending? If you are spending under $60,000 a year and making $128,000, how do you have credit card and personal loan debt? Even if you get the current debt under control, if you aren't sure where the rest is going, then the debt might come back.

I use my personal credit card for work travel sometimes, but I pay it myself before the bill is due so that there isn't any interest to pay. Then when the reimbursement comes in, it goes to my savings.

As someone mentioned, the Roth IRA can double as an emergency fund. Contributions can be withdrawn at any time without a penalty, so that is the part that is safe to use. Do you know how much of it you contributed?

Assuming half of the Roth is contributions, then you would have $35,000 to use now. I would use $18,000 to knock out the credit card and personal loan debt right away. That still leaves you a $17,000 emergency fund, which should be more than 3 months expenses if your estimate is right.

Then I'd work on reducing expenses and paying off the student loans.

The roth contributions are all from 10+ years ago so I think my contributions are only about 20k, and I do not want to touch those unless a real emergency such as job loss/losing the house or something like to give me time to sell.

But - yes - I have the option in case.


mistymoney

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Re: I wonder what you all will say to me?
« Reply #24 on: April 21, 2019, 07:38:19 AM »
1500 a year on house insurance seems high - how long ago did you last shop around for this?  Add that to shopping around for cell, internet and car insurance.

I hope you are putting your company expense claims in as soon as possible, to get them paid as soon as possible.  Do the company rules allow you to add in an amount for interest paid by you in relation to those expenses?  If so, add it.  If not, you need to get to the point that you are paying the expenses off before interest is charged.

What do you have sitting around in your house/garage/storage that you can sell online for cash to help pay off the high interest debts sooner?  Maybe put your kids onto doing this for you?

If you can leave your retirement account alone for the next 10 years it should have reached $1m even without further contributions.  That's an income of $25k a year.  How is that retirement account invested - have you checked what funds it is in?  Should be mostly low cost index funds, plus some bonds given that you are getting close to retirement age, so this is something else to check up on and action if you haven't already.

Once you have paid off your high interest debts (credit cards, personal loan and perhaps the highest interest student loans) you should start contributions to this retirement fund again, especially if you get a match from your employer.

Where are you on a social security entitlement?   Any rights to an ex's social security?

You've got a more than decent basis to work from, both in assets and income.  Once you've gone through actioning the recommendations in this thread for reducing expenses and paying off debt you will find that your financial trajectory really takes off in a great direction.

thanks - adding the home owners to shopping around list.

I have been trying to get those expenses in asap, and after this latest bunch (and the promotion) I can at least hand that off to someone else to submit, that should help a little bit time-wise.

I am going to ask about options here. I asked about a company cc before and that is a no, but there may be an option for advancement or something - I will at least ask. The promotion came with a lot more travel, and prior to last summer, I was always able to handle the expenses without interest.

There is really nothing salable. Nothing beyond pocket change, and I just donate and take a tax deduction, and I will try to that more for 2019 taxes.

I need to look into the match and maybe sign back up just the minimum, I can't recall what that is, but I think 6%. When I stopped the 401k, I thought it would just be a few months, I don't want to leave that money on the table. Especially this long.

X has no SS.

After finishing all the posts, will put together an action plan.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #25 on: April 21, 2019, 07:56:05 AM »
I know you want to provide college for your children but could the kids help repay some of that?  Paying for your kids school is an incredibly generous thing to do but it happens to be a really inconvenient time for you to make large debt payments being in the tail end of your career and having under saved for retirement.  Your kid would have their entire career ahead of themselves to earn and pay off the loans where you only have a handful of years left and other priorities.

I would also suggest you sign up for Mint.com or similar budget tracking software.  The budget outline you posted looks simplistic and while itís a good first step I bet there is a bit more spending going on.  Mint makes tracking actual spending easy and itís free.

You can do this!  With a high salary and some enhanced budget tracking you will be able to snowball some of this debt pretty quickly.

Both are taking out the max government loans in their own names and paying off that portion.

Quote
First-Year Undergraduate Annual Loan Limit
$5,500óNo more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit
$6,500óNo more than $4,500 of this amount may be in subsidized loans.
Third-Year and Beyond  Undergraduate Annual Loan Limit
$7,500óNo more than $5,500 of this amount may be in subsidized loans.

Son has about 37k (took 5 years to graduate), daughter has 12k so far and will have about 28k at end hopefully graduating in 4 years! Only part of loans are subsidized, so interest starts ticking.

They both went to state school, and I had 40k saved in 529s, but wow - it goes fast! 35k/year including room and board. For state school.

Aside from the fairness angle to do for the younger what I did for the older - This is the greatest joy of my life to do this and have them both educated and into the world. I would have paid it all if I could, but I think 30-40k of student loans is about the max an entry level person should and can handle while building their lives and to also give them that ownership of the process.

Unfortunately - at about 80-95k salary through these past 10 years, I didn't make enough money to save alot/pay alot for their tuitions but also made "too much" and got no need-based aid. so right in the middle of getting help and being able to handle it comfortably. Oh well!

I do certainly need more help conceptualizing and using a budget. Had tried mint previously and wasn't too good with it. Will try to get something going somewhere about better tracking.


Kitsy

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Re: I wonder what you all will say to me?
« Reply #26 on: April 21, 2019, 08:00:06 AM »
Have you considered sharing your financial situation with your kids? My parents took out Parent Plus Loans, and I assisted in paying them back. I am also still working on my own loans for graduate school. I would have been sick if my parents were being hurt by my college choices. Perhaps they can assist in paying those back, or at the very least pay their own cellphone bill.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #27 on: April 21, 2019, 09:13:10 AM »
Before the raise you were making +/- 98k/year with what you say were about 60k expenses.  Yet your CC card debt was climbing.  The numbers don't add up.  I think your expenses are WAY higher than you think they are and you should start by getting them down into detail before you can do anything else.

ok - so about numbers not adding up. Many comments on this. The 5k does not include irregular expenses such as home maintenance, car maintenance and repairs, gifts, healthcare deductible and copays, eye exams and glasses, clothing, haircuts and the like - so yes in that way it is missing something - not intentional but not unknown. I had previously counted on those 2 months of 3 paychecks for this area, didn't really account for it budget-wise. That had worked for many years until it didn't in 2018.

The promotion happened just this Feb. Prior to that I was making 95/year.  So - 10k to the 401k, Fica, fed and state income taxes and I would be able to pay all the bills and absorb a few incidentals most months. A haircut, a drs. appt and an Rx, an item of clothing. If I saved a few hundred one month, it'd get spent the next, polar vortex or other would crop up.

I made a big mistake because I was getting nervous about the student loan balances as they neared the 6 figure mark, I didn't take enough out for the 2017-18 academic year thinking I could force myself to pay more OOP and it blew up at me. Ended up putting some of those expenses on the CC. Then - had a significant plumbing issue, needing a lot of dry wall repair on the ceiling below, painting, that was nearly 3k. But the extra check had already been spent, and then you are in dept.

So - the 5k/month is pretty accurate I think - but it depended on having the 2 extra checks free to take on any irregular expenses.

So that bases the yearly budget on about 68k from a gross pay of 95, based on having about 150 extra/paycheck and the 2 extra checks. Minus FICA, state and fed taxes, 401k, that seems to be congruent to me. Is there something I'm not seeing?

lhamo

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Re: I wonder what you all will say to me?
« Reply #28 on: April 21, 2019, 10:04:14 AM »
This still isn't adding up -- if you are paying for room and board for the kids then why is your food cost $650/month?  Why are you carrying higher cost insurance so that they can have access to your car, especially if they are not living at home? 

I appreciate that you don't want your kids to be crushed by SL debt, but you are doing them a disservice by continuing to pay for most other stuff for them. They need to learn that these things cost money.  They should be paying for things like cell phone, clothes, streaming services, etc from money they earn. 


mistymoney

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Re: I wonder what you all will say to me?
« Reply #29 on: April 21, 2019, 10:13:37 AM »
Action plan

Immediately investigate lower rates for:
Car insurance Ė look into liability only
Homeowner insurance
Cell
Internet

Review options for:
Financing work travel
Offspring pay own phone/car insurance
Sonís health insurance (make sure part of job search)

Steps
Pay off CCs and personal loans/ Be judicious (strategic) about further student loans
Add 401k to get match
Determine new budget/cash flow for 2020 and consider options for FI

mistymoney

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Re: I wonder what you all will say to me?
« Reply #30 on: April 21, 2019, 10:26:15 AM »
Have you considered sharing your financial situation with your kids? My parents took out Parent Plus Loans, and I assisted in paying them back. I am also still working on my own loans for graduate school. I would have been sick if my parents were being hurt by my college choices. Perhaps they can assist in paying those back, or at the very least pay their own cellphone bill.

This is a good point that I will broach with each one as they settle into their career jobs post graduation. Son is looking but is currently working pt low wage job looking for entry level position. I have been standing back but will talk to him more about this.

I think I must keep this debt on me for now, but their financial situations will hopefully change rapidly over the next decade and they could take on more of this. So - maybe more of a temporary situation for me than I am envisioning now.

daughter is a fixer - I worry too much talk on this will make her think dropping out would be helping. So keeping it light is important.

But will broach the cell phone issue/car insurance with both of them.



mistymoney

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Re: I wonder what you all will say to me?
« Reply #31 on: April 21, 2019, 10:47:25 AM »
This still isn't adding up -- if you are paying for room and board for the kids then why is your food cost $650/month?  Why are you carrying higher cost insurance so that they can have access to your car, especially if they are not living at home? 

I appreciate that you don't want your kids to be crushed by SL debt, but you are doing them a disservice by continuing to pay for most other stuff for them. They need to learn that these things cost money.  They should be paying for things like cell phone, clothes, streaming services, etc from money they earn.

This question doesn't make any sense to me. I reported a number based of 2018 average expenditure. What is supposed to add with what for this?

son is living home - looking for career entry and is willing to move to a couple different states, daughter is home at least one weekend/month spring and winter break, thx, summer, and uses car. 

have the phone and car insurance on the plan to discuss with them.

Tuskalusa

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Re: I wonder what you all will say to me?
« Reply #32 on: April 21, 2019, 11:36:26 AM »
Just wanted to chime in and say I totally understand why you financed your kidsí college costs. It will be my joy in life to pay for my sonís college, as it was for my parents to do so (so they say).  And the fact that youíve done this on one income is pretty badass.

Of course, now itís time to think about your own future. Once the kids are done, it will be critical for you to pull the focus back on yourself. Your gift to them was a good start in their professional lives. Other things will come up for them (weddings, grad school, home purchases, etc.). You may feel the desire to help with those. At that point, youíll want to remind yourself and your kids that you focused on getting them where they are so that they could ďtake it from here.Ē  Starting the conversations now about them starting to assume responsibilities like auto insurance, etc. will set the stage nicely.

lhamo

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Re: I wonder what you all will say to me?
« Reply #33 on: April 21, 2019, 11:56:12 AM »
This still isn't adding up -- if you are paying for room and board for the kids then why is your food cost $650/month?  Why are you carrying higher cost insurance so that they can have access to your car, especially if they are not living at home? 

I appreciate that you don't want your kids to be crushed by SL debt, but you are doing them a disservice by continuing to pay for most other stuff for them. They need to learn that these things cost money.  They should be paying for things like cell phone, clothes, streaming services, etc from money they earn.

This question doesn't make any sense to me. I reported a number based of 2018 average expenditure. What is supposed to add with what for this?

son is living home - looking for career entry and is willing to move to a couple different states, daughter is home at least one weekend/month spring and winter break, thx, summer, and uses car. 

have the phone and car insurance on the plan to discuss with them.

I was confused because you mentioned the high cost of room and board as part of their college costs -- so I assumed they were both living away at school.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #34 on: April 21, 2019, 12:07:02 PM »
Just wanted to chime in and say I totally understand why you financed your kidsí college costs. It will be my joy in life to pay for my sonís college, as it was for my parents to do so (so they say).  And the fact that youíve done this on one income is pretty badass.

Of course, now itís time to think about your own future. Once the kids are done, it will be critical for you to pull the focus back on yourself. Your gift to them was a good start in their professional lives. Other things will come up for them (weddings, grad school, home purchases, etc.). You may feel the desire to help with those. At that point, youíll want to remind yourself and your kids that you focused on getting them where they are so that they could ďtake it from here.Ē  Starting the conversations now about them starting to assume responsibilities like auto insurance, etc. will set the stage nicely.

Thank you! Yes it is a source of pride and joy - pride for them for all their hard work, of course, and pride in myself that I am able to make it happen financially! The promotion reaffirmed my purpose and that I was on the right path. Providence gave me the means to complete this task I had assigned myself.

I know that on this message space paying for education of one's children is not really embraced, but it is a very important thing for me to do.

I am looking forward and planning for myself, even if I can't quite put much into action in the next year or two - I will be soon. I appreciate all the advise here on areas to try to trim and the emphasis on being more diligent. A small savings every month will eventually be a large amount at the end of a few years so I need to push myself on that front and make those changes.

My goal is to pay these credit cards and personal loan off as quick as I can and not get caught in that trap again.


mistymoney

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Re: I wonder what you all will say to me?
« Reply #35 on: April 21, 2019, 12:22:05 PM »
This still isn't adding up -- if you are paying for room and board for the kids then why is your food cost $650/month?  Why are you carrying higher cost insurance so that they can have access to your car, especially if they are not living at home? 

I appreciate that you don't want your kids to be crushed by SL debt, but you are doing them a disservice by continuing to pay for most other stuff for them. They need to learn that these things cost money.  They should be paying for things like cell phone, clothes, streaming services, etc from money they earn.

This question doesn't make any sense to me. I reported a number based of 2018 average expenditure. What is supposed to add with what for this?

son is living home - looking for career entry and is willing to move to a couple different states, daughter is home at least one weekend/month spring and winter break, thx, summer, and uses car. 

have the phone and car insurance on the plan to discuss with them.

I was confused because you mentioned the high cost of room and board as part of their college costs -- so I assumed they were both living away at school.


I was confused as to what was supposed to add up, but perhaps I am looking at it too literally.

It is what was spent at grocery stores and restaurants either on debit or credit card in 2018 and divided by 12.




mistymoney

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Re: I wonder what you all will say to me?
« Reply #36 on: April 21, 2019, 12:29:06 PM »
Action plan

Immediately investigate lower rates for:
Car insurance Ė look into liability only
Homeowner insurance
Cell
Internet

Review options for:
Financing work travel
Offspring pay own phone/car insurance
Sonís health insurance (make sure part of job search)

Steps 2019

Pay off CCs and personal loans/ Be judicious (strategic) about further student loans
Add 401k to get match
Reestablish EF (goal 25k, begin 100/month)

Steps 2020
Determine new budget/cash flow for 2020 and consider options for FI

Revising a bit to add some savings to prevent credit card debt from recurring

MDM

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Re: I wonder what you all will say to me?
« Reply #37 on: April 21, 2019, 12:51:07 PM »
Steps
Determine new budget/cash flow for 2020 and consider options for FI
The Case Study Spreadsheet can be helpful for this.  Its "Time to FI" calculations and chart are somewhat simplified, but can serve as a "gateway drug" to more sophisticated tools such as those mentioned in Best and/or Recommended Retirement Calculator - Bogleheads.org.

Kwill

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Re: I wonder what you all will say to me?
« Reply #38 on: April 21, 2019, 02:35:29 PM »
Thank you for taking the time to reply and think about advice.

I think Mint could be helpful if you put all your accounts into it and then look at it over time. After 3 months, you will be able to tell a lot from the charts of trends and spending.

Every month is going to have something from the expenses you mention: "irregular expenses such as home maintenance, car maintenance and repairs, gifts, healthcare deductible and copays, eye exams and glasses, clothing, haircuts." It shouldn't be a surprise that those things happen and cost money. It's worth tracking spending, at least in an automatic way with Mint or your credit card website, to see how much you average with those kinds of expenses.

Things like gifts, clothing, and haircuts can really vary a lot depending on your choices. Do you have low maintenance hair that you get trimmed twice a year at a no-frills unisex salon, or do you get your hair professionally coloured and permed on a regular basis? Are you the kind of person who averages $200 a month on clothes or $10 a month? Even eyeglasses can vary depending on where you go and what you choose--name brand frames or slightly less expensive ones, coupons or not, etc.

mistymoney

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Re: I wonder what you all will say to me?
« Reply #39 on: April 21, 2019, 03:18:01 PM »
Thank you for taking the time to reply and think about advice.

I think Mint could be helpful if you put all your accounts into it and then look at it over time. After 3 months, you will be able to tell a lot from the charts of trends and spending.

Every month is going to have something from the expenses you mention: "irregular expenses such as home maintenance, car maintenance and repairs, gifts, healthcare deductible and copays, eye exams and glasses, clothing, haircuts." It shouldn't be a surprise that those things happen and cost money. It's worth tracking spending, at least in an automatic way with Mint or your credit card website, to see how much you average with those kinds of expenses.

Things like gifts, clothing, and haircuts can really vary a lot depending on your choices. Do you have low maintenance hair that you get trimmed twice a year at a no-frills unisex salon, or do you get your hair professionally coloured and permed on a regular basis? Are you the kind of person who averages $200 a month on clothes or $10 a month? Even eyeglasses can vary depending on where you go and what you choose--name brand frames or slightly less expensive ones, coupons or not, etc.

I am pretty deficient in terms of clothing, but putting off those purchases until the credit is paid off. I get a hair cut and color for about $65-75 every 3 months/4 times per year, I don't think that is way out there but not sure how "extravagant" that is. Would prefer the color every 6-7 weeks, but have been stretching it the past 3 years.

I haven't gotten it done for about 8 months now due to the debt, and looking pretty rough! I think I need to take care of that at least before it gets too embarrassing!

It's grown out enough I could go quite short and cut out the colored hair altogether - but frankly that just really depresses me. A lot grey - I feel I'd be giving in to old age for sure.

 


lhamo

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Re: I wonder what you all will say to me?
« Reply #40 on: April 21, 2019, 03:43:04 PM »
I am 50 and my sister is 54 and we both have a lot of grey -- neither of us has ever colored our hair.  Neither did our mom or grandmothers.  The only comments I personally have ever gotten about it are compliments. 

Villanelle

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Re: I wonder what you all will say to me?
« Reply #41 on: April 21, 2019, 07:38:36 PM »
I'm still not quite understanding the financial impact of the kids on your current spending.  I'm not sure you do, either.

If you aren't going to ask the kids for much more money (beyond cell phones and insurance)  then frankly, your only other option is to cut your expense and live a pretty tight existence for a while.  You are paying some obscene interest rates.  In your shoes, I'd be walking dogs on weekends and banishing all restaurants from my life, and committing to do that for at least 6 months.  And of course the other cuts mentioned, as well as whatever else you can find.  Meatless Mondays, rice and been Tuesdays and Thursdays, etc. 

The great news is that your income is wonderful.  You can turn this around quickly.  But the best way to do that is to make deep cuts initially.  You can ease off somewhat over time if you must but progress at the very beginning counts for far more, since you are dealing with compounding interest. 

MrSpendy

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Re: I wonder what you all will say to me?
« Reply #42 on: April 21, 2019, 09:01:34 PM »
You just got promoted so I assume you're in good standing with your employer so you

 Take out a 401K loan and pay off the stupid high interest rate debt immediately. Then focus on paying that 401k loan  back as quickly as possible.

 I don't  get why you'd pay credit card and personal loan rates when you have substantial home equity and a 401k. does your 401k not offer this? Most offer something like 4% five year term where interest either goes to you or sometimes the administrator.

Likewise, shouldn't it be easy to set up a HELOC?

Obviously you need to get better idea of your inflows and outflows, but all high interest debt can be gone within a few business days of processing either of those options. There are many drawback to 401k loans, but credit card rates are far worse than those drawbacks.

Also, Can you sell your company stock without penalty?

« Last Edit: April 21, 2019, 09:10:47 PM by MrSpendy »

Laura33

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Re: I wonder what you all will say to me?
« Reply #43 on: April 23, 2019, 09:52:17 AM »
First, track everything.  Those "irregular" expenses actually account for a huge percentage of your discretionary spending.  If you have been running up CC debt, you are by definition living a lifestyle that you can't afford -- but you don't even see it, because when you look at your finances, you see $5K/mo. spending, and it looks like you are doing fine.  Every penny that leaves your pocket needs to get written down somewhere -- I guarantee you will be shocked by how much that all adds up to that you can't even recall now!  That is your low-hanging fruit.  You have to know where you actually are before you can find a path to where you need to be.

Second, I agree with you that if you have made a commitment to your kids, you need to follow through on that -- and certainly don't burden them with your problems while they are in school or looking for jobs.  Frankly, your choice to subsidize them was your choice, not theirs, so it would not be fair to ask them to assume your loans, which they never agreed to.  It's entirely possible that if they'd realized they needed to bear the entire burden, they'd have made different choices, like living at home and going to CC for a few years before transferring; you can't pull a bait-and-switch on them now, after they are already committed.  If things change in a few years and they can help you out, that's great -- but you need to make your plans assuming that you will be paying them all off.

But choices have consequences.  And when you choose to give your kids six figures in college funding, the consequence is that you need to make very hard lifestyle decisions if you want to be financially independent and retire at a reasonable age.  And that means whacking at your expenses mercilessly.  Get the kids off the parental dime -- if you are going to cover college, you cannot also provide them the cushy lifestyle they have become accustomed to.  That's the tradeoff that comes with your choice.  As soon as your oldest gets a job, he covers his own food/cellphone/car insurance -- and if he wants to continue living at home, he can pay rent.  In the meantime, he gets to live with the cheapest possible phone plan and internet; unlimited data is a luxury no one is entitled to while you're six figures in the hole.  And giving your employer a free loan of thousands of dollars a month, at the cost of 20% interest?  Oh hell no.  You need to hold yourself to a higher standard -- if there is no possible way to make them pay up front, then until you get the CCs paid off, your #1 job is to get your expense reports in the day you return from a trip.  And there is no eating out, no movies, no other extras.

I know this seems harsh, but your debt is more than you make in a full year -- and you're not even done borrowing yet.  If you add in the taxes and future loans, that means that you need to work for a minimum of two full years just to pay for what you've already spent (probably three).  If that's not an emergency, I don't know what is -- especially if you want to be able to retire within the next 20 years.  I mean, that's a sell-the-house level of emergency.  You need to re-examine all of your expectations and assumptions to decide what is most important to you.*  You can fund your kids' education or live a nice lifestyle or be FI in a few years -- heck, you can probably do two of those at your income level -- but you can't do all three.

In terms of a specific plan, the investment order listed already is the best approach.  But your success or failure is going to depend on how seriously you manage to cut back your expenses and work those "irregular" expenses into your plan, so you're not taken by surprise and have to rely on more debt to get you through.

*And by this I mean why are you focusing on 3Br apartments when you have one kid in college and one who's graduated?  One bedroom and a sleeper sofa is sufficient, at least until you are back on track.

Enigma

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Re: I wonder what you all will say to me?
« Reply #44 on: April 23, 2019, 02:53:07 PM »
EXTREMELY EASY Fix:
1)   Immediately I would take out a 401k loan from your account (16k credit cards + 2k personal loans).  The interest you pay goes back into your account.  Make it as short of a term as you can handle.  Be aware that your checks will be smaller.
2)   You need to do at least the company match for your 401k.  Max it out if you can because you need all the tax advantages.
3)   Pay off or remove any student loans above 5%.  In the future do not accept a loan from the bank above 5%.
4)   DO NOT USE THE CREDIT CARDS.  Put something small on them that occurs each month but pay them off in full.  That way you have better debt-to-credit ratio and can borrow for student loans in the future if needed at a lower rate.

ericrugiero

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Re: I wonder what you all will say to me?
« Reply #45 on: April 25, 2019, 01:31:55 PM »
First of all, you have options to get money loaned a better terms than your existing loans.  I'd be looking at that pretty hard.  But, if you use up those options and don't change your spending behavior you will just dig a bigger hole.  The good news is you have pretty decent chunk invested and a good income.

401K loans have some pretty nasty penalties if you don't pay them back and they are due in full if you leave your job, get fired, company shuts down, etc. 

A better option would be to look at a mortgage refinance to pay off any loans that are higher interest than you can get on a mortgage.  Looks like you have enough equity to cover all your loans.  Get down to one payment and cash flow the rest of kids college while letting your investments grow.  (invest as much as possible and definitely enough in 401K to get any match)

The best option might be to sell the house and rent.  Use the cash to pay off loans and help with college.  You could probably even keep investing a decent amount (at a minimum enough to get any match).  Seems like in MOST HCOL areas it's cheaper to rent than buy when you consider opportunity cost.  Also, with kids getting older and moving out you might be able to down size. 
« Last Edit: April 25, 2019, 02:00:28 PM by ericrugiero »

mistymoney

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Re: I wonder what you all will say to me?
« Reply #46 on: May 03, 2019, 05:40:53 AM »
Just a mini update on my status and planning.

Looking at this listing I made a few changes:

0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.     
3. Max Health Savings Account (HSA) if eligible.
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level 
5. Max 401k (if
    - 401k fees are lower than available in an IRA, or
    - you need the 401k deduction to be eligible for (and desire) a tIRA deduction, or
    - your earn too much for an IRA deduction and prefer traditional to Roth, then
    swap #4 and #5)   
 - no, and guess no need to answer 6-8!   
6. Fund a mega backdoor Roth if applicable.         
7. Pay off any debts with interest rates ~3% or more above the current 10-year Treasury note yield.           
8. Invest in a taxable account and/or fund a 529 with any extra.     

I've opened a vanguard account as an emergency fund with 100/month auto funding and started up my 401k again with 10% to address 0 and 1 and to put some positivity into my current circumstances. I can save a little for the EF and I must save something towards retirement. And it will work out.

Not investing anything at all was a real downer and I couldn't go any farther on that route. It made me feel very stagnant and hopeless, to be honest.

Finally got my work expenses reimbursed and tax refund and adding that to my usual payments the higher interest cc are paid off, still have the personal loan and the 12% credit card.  Total debt combined is 7500 that I will soon put my extra paycheck on that. After that, it will be slow going.

I think posting my balances as of the 20th in the OP were a little inflated as it included a lot of the usual bills that are autopayed and monthly food shopping etc. that is paid off.

So at least a little bit progress there.

I have been combing through my expenses and I think there are some things not being accounted for and I have a lot more work to do on that and trimming the bills. Pulling everything out of the pantry to try to work with the stockpile and try to buy as few groceries as possible in the near term.

freya

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Re: I wonder what you all will say to me?
« Reply #47 on: May 03, 2019, 06:53:07 AM »
Some suggestions...first:  where is the other parent, and why isn't that person contributing to college costs?  I expect the answer to this is "forget it" but it's worth at least considering.  If that person won't split the costs at least contribute SOMETHING.

An item to add to the action plan:  Review your health plan options at your next opportunity.  Switching to a high deductible plan and using an HSA to pay medical costs is almost certainly going to be much better than your current PPO once you count in the value of the tax deduction (which probably doesn't appear on the helpful calculator your employer may provide - so don't use that).

Also, I second suggestions to refinance all existing debt into lower interest rate options - including the student loans.  A mortgage refinance, HELOC, or 401K loan are all good options.  So is a new credit card with an introductory 0% interest rate for at least a year, as long as you repay what you put on it by the end of the 0% period.

I completely agree that your overall strategy for the next two years is to forget about retirement savings, tighten spending, and aim to pay that $35K/year college bill for your daughter in cash - no more loans for you.  With your salary and expenses it should be doable.  The only retirement savings you might consider in the next few years are fully funding an HSA, and contributing to the 401K up to the company match.

Last suggestion:  you may be someone who could greatly benefit from YNAB (budgeting software that forces you into a mindful spending mode).  I know they charge for it but it may be worth it if it helps you avoid credit card interest.  Mint gives you good info on past spending trends and it's free, but it doesn't help much with prospective spending.

Kwill

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Re: I wonder what you all will say to me?
« Reply #48 on: May 03, 2019, 12:08:23 PM »
Finally got my work expenses reimbursed and tax refund and adding that to my usual payments the higher interest cc are paid off, still have the personal loan and the 12% credit card.  Total debt combined is 7500 that I will soon put my extra paycheck on that. After that, it will be slow going.
. . .
Pulling everything out of the pantry to try to work with the stockpile and try to buy as few groceries as possible in the near term.

That is a great step. I hope you can put a little more toward the other credit card and personal loan from your usual paychecks now that the higher rate ones are gone. That will help the total go down faster, and the emergency fund should help it stay down.

Can you destroy or close the high rate credit cards now? You could ask for an increase in the limit on your lower rate card if you feel like that wouldn't give you enough wiggle room, but given that you can potentially use part of your Roth IRA or borrow from the 401k, you shouldn't be so desperate as to borrow with credit cards at such high rates.

Good luck with your stockpile cooking. I stocked up a bit for Brexit, and now I'm trying to use up the supplies a bit because of the delay in it. Now that I've gotten used to cooking from the pantry, I'm enjoying going to the store less and being able to throw something together quickly after work.

freya

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Re: I wonder what you all will say to me?
« Reply #49 on: May 05, 2019, 09:41:13 AM »
I agree about avoiding using credit cards, or at least set them on full balance autopay.   But don't close old accounts!!!  It will ding your credit rating.  Also if you're going to go the mortage refi route, do that before applying for any new credit lines.  More than 2 hard inquiries in the last two years on your record may increase your interest rate.

Also yes...congrats on paying off the high interest cards!