Author Topic: Reader Case Study - 32 yo trying to support 2 households for relocation  (Read 777 times)

catmustache

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Hi,
It's been a while since I've been actively Mustaching, so my budget's crept up quite a bit. I'm trying to work up the courage to relocate soon and I've been putting aside money for that, so my numbers are a little off. The idea is to go to Ohio and work in the food industry, if possible. I'm doing regulatory work right now.

Life Situation: 32yo; married filing jointly, no dependents, live in the west, want to go to the Midwest.

Gross Salary/Wages:This is where it gets a little dicey. I make about 56k a year and DH makes about 38k, but a big chunk of the money goes towards a relocation savings account.

Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc.: $500 total

Other Ordinary Income: I work 2 additional part-time jobs (one doing legal work on the side) and the other as a tech in a mental hospital. These vary quite a bit from year to year, so about 6k average

Qualified Dividends & Long Term Capital Gains: N/A


Rental Income, Actual Expenses, and Depreciation
: $1300, expenses are about $800 respectively, so net is $500. I know the houses will need repairs soon, so all the money sits in a rental account for the inevitable other shoe to drop.

Adjusted Gross Income: After all the savings and everything else is taken out, we take home about $3873 a month.


Current expenses:

Housing: $450 a month (we have a tenant, mortgage and HOA payments)
Phones: $90 a month for all the lines
Utilities: $250 (estimate - just moved and haven't gotten bills yet)
Cable for tenant: $81 (condition of tenant paying increased rent - from $400 - $500)
Technology (Hulu, Netflix, Cloud backup, phone security, journal app): $30
DH's credit card: $244
My student loans: $680
Cars (insurance + gas + random expenses): $180
Tithing: $525
Food: $500
Beauty: $200 (this one is pretty non-negotiable while I live here. My hair is completely unmanageable and there's only one salon that will deal with it. When I live in a more humid climate, that will be different)
Travel: $300
Gifts: $100
Licensing fees: $70 (comes out twice a year, but I set money aside for it)
Miscellaneous: $150

Expected relocation expenses: $1000 a month (other categories in my budget will correspondingly decrease)

Assets:

Car 1: $5000
Car 2: $800
House 1: $172.5k
House 2: $38k
House 3: $36K
Retirement: 33k (just me. DH has his own with more, but I'm not sure how much)
Relocation savings: $9k - Hoping to not touch this if I don't have to.


Liabilities:
House 1: $138k
House 2: 26k
House 3: 20k
Student Loans: 41k
DH's credit card: 7.5k
DH's 401(k) loan: 4k
Tax bill: anticipated 5k

Specific Question(s): I want help figuring out how to afford the move when a giant chunk of our income will be gone. I know I need to pay off my debts, but I don't know if it makes sense to put money into that when I know a change will be coming. Am I crazy?
« Last Edit: March 04, 2017, 11:26:16 AM by catmustache »



Hargrove

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It's not really clear to me what you're affording (or asking to afford).

9k will move you anywhere you want. You can do the truck yourself for something like 3k and a lot of driving (plus gas), or get a POD from UHaul or something for 2k then drive out yourself, or throw out everything that doesn't fit into your cars and drive them for just the cost of gas and depreciation. I'd be more concerned about what to do with the rentals when you're not nearby, if they're where you are now.

Debts are a huge problem, credit card, dunno your student loan rates... gift, travel, beauty, and tithing seem surprizing choices if you're worried you don't have enough to move.

You mentioned you just moved under "utilities." Are you... moving again?

How are you expecting multi-month relocation expenses?

It seems like the wrong time to get rid of income sources and ignore debt to spend a ton to move across the country, unless you get a corresponding raise. Not sure if you expect your income to dry up irrespective of moving, or when you move. You're basically in a debt emergency... your tax bill with erase most of your relocation savings, but you'd still have enough to physically move, you would only still need the down for an apartment.

Quote
Housing: $450 a month (we have a tenant, mortgage and HOA payments) Great
Phones: $90 a month for all the lines Could be better
Utilities: $250 (estimate - just moved and haven't gotten bills yet) Could be much better
Cable for tenant: $81 (condition of tenant paying increased rent - from $400 - $500) Huh? Then why Hulu and Netflix?
Technology (Hulu, Netflix, Cloud backup, phone security, journal app): $30 Journal... app? There must be a free journal app. Or an actual journal.
DH's credit card: $244 What rate?
My student loans: $680 What rate?
Cars (insurance + gas + random expenses): $180 Not bad. Can one of you walk or bike?
Food: $500 This could be a quarter the cost.
Beauty: $200 (this one is pretty non-negotiable while I live here. My hair is completely unmanageable and there's only one salon that will deal with it. When I live in a more humid climate, that will be different) I mean, the less room there is to negotiate, the harder this gets.
Travel: $300 This should be 0 right now.
Gifts: $100 You're trying to move across the country... why are you giving away so much money?
Licensing fees: $70 (comes out twice a year, but I set money aside for it) Licensing for what?
Miscellaneous: $150 There should not be any miscellaneous if you really want to cut a budget down. You either need to spend it or you don't.