Awe man! I've been screwing up for so long. where do I begin?

[missj]

Hi everyone. This is my first post here.  I've read through the first couple of dozen blog posts and I really like what I'm reading but I feel like such an idiot for all the dumb things I've done with my money and all the time I've wasted!  I want to take action immediately, but I don't know where to start.

I'll give a quick and dirty accounting of my sins:
I have a universal life policy that I don't even know where all the money goes, but the commissions are high I think.
I have a Vanguard account through my employer, but I've just gone with their "standard" recommended mutual funds
I have an Edward Jones brokerage account, Roth IRA, traditional IRA and money market account.  I think I'm paying high commissions?
I have 2 car loans.  but at least they're modest.  my car loan is $13,000 and my husband's is $7,000
I sometimes carry a credit card balance, but not usually for more than 1-2 months.
I have a mortgage 30 yr fixed at 4.85%

Here's a few positive things I've got going for me
I have a great job with great benefits and nice wages.
just wrote my last daycare check!  yeah!
I've been saving for retirement since I was 18 and I'm still only 33 so I've got time on my side
I paid off all my student loans years ago.
I have an emergency fund
We bought a cheaper house than we qualified for.
my credit score is 762

there I am in a nutshell.  What started me off on all this is I've always known I should save for retirement and avoid debt, so I (mostly) always have.  After writing my last daycare check a couple weeks ago I got excited about what to do with my "extra" money  and wanted to invest it.  I started researching where to invest it, and down the rabbit hole I went.

I think I'm a sucker when sale's people get ahold of me I am too trusting and I believe them.  I'm sick of asking advice from the "traditional" people and advisers because I feel like I am just a mark to them and they sell me the biggest commission they can get away with. (Hence I ended up with the universal life policy).  Then even when I realize I've been taken advantage of I kind of "freeze" because I don't know how to get out of these contracts without costing myself more money, and I don't know a better place to put my money and I get gunshy about asking another adviser for fear I'll just get duped again...

Just Last week I gave an order for my Edward Jones adviser to max out my Roth IRA ($458 per month) But I honestly don't even understand what kind of investment she will put it into, with my luck it will most likely be one with a high commission.  The transaction won't occur until the 15th of this month so I still have potentially 2 days to cancel it.

I'm just so confused.  I know I need to do better but I work 40+ hours a week and I'm a mom and I'm tired at the end of each day.

so...I guess that's enough for now.  Please guide me oh wise ones!

:-)

[G-dog]

You missed the other positives that you have been saving for 15 years, there are various stats on the percent of people in various age brackets who have 0 savings (retirement or other). So my view is that now you are just looking to 'optimize'.
My view - first steps are to get more data on the fees you are paying, costs or penalties to get out, and returns. I would cancel your order to EJ at this time while you collect that data. You still have time to max that out when you have a clearer vision of how you want to use that account.
Don't forget, you are already ahead of the game with your saving/investing habits - now you are just getting smarter and more in control.

[lauren_knows]

At first glance, you have a lot of good things going for you: No student loans, you've been saving since 18, good wages.

Refer to this post in the "Ask a Mustachian" forum, as to how to structure a "Case Study" post. http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

This will give you a good idea as to what details you need to scrounge up to give a good enough picture to the folks on these forums to provide good feedback.

Welcome to the forums.

[Gone Fishing]

No worries, we all start somewhere, we all make mistakes, and we are all here to get better (in my best motivational speaker voice).

1. Pledge to never carry a CC balance again!

2. Get all your Edward Jones stuff together and call Vanguard, you will probably be able to transfer most of it over the phone. Provide details on what you are currently invested in and we can offer suggestions.

3. Provide all the detail you can on you existing employer sponsored retirement account...everything!

For numbers 2&3-as far as what actual investments you need to be in, the members can propose many options, but ultimately this will be up to you.  Maybe provide a little detail on how well you handle market swings-do you get sick when the market goes down 20% or do you view it as a buying opportunity?

4. Provide all the information you can on the life insurance policy-this likely can be terminated-the cash value added to your current investments and the policy replaced with a MUCH cheaper term policy if it is needed at all.  Does you employer supply you with life insurance as one of those benefits?

5. How long do you expect to stay in your current home, you might be able to knock .50%+ off your mortgage rate, which would only be worth it if you plan on staying a while-we can help you through the math.

 Once you get through this stuff come back for more, as I am sure there is more opportunity for optimization!

[Thegoblinchief]

If you need further encouragement to RUN away from Edward a Jones after reading this, I can't help you:

http://www.joshuakennon.com/executives-edward-jones-feel-humiliated-mutual-fund-practices/

Saving money is great, but it amounts to a hill of beans if your "little green employees" aren't working for you in as efficient a manner as possible. I'd make a rollover to either Vanguard or Fidelity (their Spartan series only) your top priority.

[2ndTimer]

Sounds like you've already built the metaphorical boat.  Now you just have to spot the leaks.  Pat yourself on the back that you didn't arrive here with ginormous debt like many folks. 

[hybrid]

I'd start by saying quit kicking yourself. You are in a very good place now, and now you've decided you want to be in an even better place (this was also me when I found this blog). A whole heckuva lotta people would love love love to be in your position, so start by giving yourself the pat on the back you deserve for not being in a Hair On Fire situation like so many other poor souls.

From there I would suggest taking on one thing at a time and seeing how it sits with you. When we made our wholesale changes we did it over a period of months, not weeks. Months aren't that big a deal in the grand scheme, but pulling a 180 on a dime, the change being too quick and too radical, and then just going back to the more comfortable ways would be a pity.

Good luck, and welcome aboard!

[Basenji]

I know the "D'oh!" feeling very well. But once you get organized and really get your green babies in order you'll feel better. I read Bernstein's "The Four Pillars of Investing" and it really helped me stop kicking myself and correct our investments. As others said, you are in a good spot, welcome.

[JetBlast]

I'd start by saying quit kicking yourself. You are in a very good place now, and now you've decided you want to be in an even better place (this was also me when I found this blog).

I agree. The first step is to stop worrying about past mistakes. You can't change the past, so there's no reason to beat your self up over those mistakes. Just let it go.

Then start the changes you've ready identified.

[Cheddar Stacker]

Welcome to the forum missj.

I think you're in good shape. You just need to get a better handle on the insurance and investments, then optimize. +1 to looking into a mortgage refinance. If the cars have high interest rates pay them off or sell one. Keep posting questions here, you'll get a lot of good answers with more specific details.

Congrats on getting through the daycare stage. Hopefully you can replace that with investments instead of private school.

[missj]

Thanks everybody!

I have been quite a frugal number crunching nerd for many years,  so I catalog all my spendings on quicken.  I'll crunch some numbers and post a case study according to the directions.

I tried to call and cancel my Edward jones order today,  but it was already being processed.  :-/

I do plan on staying in my home for a long time.  We have 30+ fruit trees many of which I planted myself and I want to be around when my investments literally bear fruit.  may look into a refi  but one nice thing about my mortgage is I get 1% of my interest paid as cash  back deposited into my checking account  at the end of each year for being on auto payments and electronic  statements. 

Also,  this mortgage is partnered with my union (I am a member/affiliate of AFL-CIO) and I have strike and layoff protection through my mortgage/union partnership.  I get up to 6 months mortgage forgiveness if I am laid off or go on strike and up to 6 months more of mortgage postponement where the union loans me the money to pay the interest (but not the principle).  I don't know how much that all is worth in terms of actual dollars but the peace off mind is nice and also allows me to have a somewhat smaller emergency fund.  I am moderately expecting nasty contract negotiations  spring of 2015...  Thoughts?

[Cheddar Stacker]

My thoughts are this blog and forum are more about self reliance. Its great the union has your back so take advantage where it makes sense, but if you can find a better interest rate on your biggest debt it's likely worth straying from the union.

If you save $ overall, you will be able to afford 6 months interest without union support. Depend on yourself instead of others whenever possible.

[Calvawt]

I think you should treat this like you just woke up.  It was all a bad dream that you can now fix by making some changes.  Your situation is actually pretty good, you are just not use to the investment management part.  Keep reading and get those fees down and you will be fine. 

Keep your head up, many people would be envious of some of your great money saving habits!

[missj]

Thanks for the warm welcome and good ideas.

I've already taken a few positive steps since writing this post

1) canceled 2 "entertainment" type subscription accounts for $21 a month savings
2) paid off all of my credit cards down to $0 (came from my emergency fund which is probably too big)
3) vowed to never carry a credit card balance again
4) read the entire contract of my universal life policy, but I honestly still cannot tell you where the money goes.

I'm currently reading more MMM blog posts and trying to compile data for my case study.

:-) it's good to know I'm not alone and other people are going through the same exact things I am.

[NewStachian]

Thanks for the warm welcome and good ideas.

I've already taken a few positive steps since writing this post

1) canceled 2 "entertainment" type subscription accounts for $21 a month savings
2) paid off all of my credit cards down to $0 (came from my emergency fund which is probably too big)
3) vowed to never carry a credit card balance again
4) read the entire contract of my universal life policy, but I honestly still cannot tell you where the money goes.

I'm currently reading more MMM blog posts and trying to compile data for my case study.

:-) it's good to know I'm not alone and other people are going through the same exact things I am.

This is a great start, but the way to really get ahead is automation. Instead of vowing to never carry a credit card balance again, just log into your online bank and set it to automatically pay off in full each month. You have an emergency fund, so that should act as a float. This will force you to track your checking account to make sure you have funds available to pay off your credit card. It sounds like you setup the ROTH IRA to be automatic which is great. If you get to the point where you're maxing ROTH and 401(k), set up an automatic allotment for a taxable account as well.

The best thing, IMO, is to track every single dollar you spend for 2-3 months to see where it's all going. I plug all this into a spreadsheet and average it out over time to get my true average spending. I also use mint.com since the UI is very nice and it lets me see everything with very little work.

Lastly, take charge of your investing. Getting a really good portfolio is not difficult. I'm actually on my way to simplifying to about 4-5 ETF's/funds. My goal is a S&P500 ETF(large cap), small/mid cap ETF, international fund, bond fund. There are infinitely more ways to do this, but the basics are right there. I pick based on performance, but mainly based on exp ratios. The big thing is don't let the fear of not knowing enough to optimize your investing strategy stop you from putting a 'pretty good' strategy in place that reduces your fees. You can continue researching and expanding your strategy, but a well-diversified portfolio carrying large/mid/small cap, domestic/internation and stock/bonds should be all you need. Research asset allocations and go with what you're comfortable with (I'm heavy stock, but i'm about 5% bonds, 20% international stock, 25% small/mid cap and the rest large cap).

Good luck and keep asking questions!

[Calvawt]

Glad to see the immediate changes! Good luck implementing some of the other good advice mentioned above.


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[missj]

This is a great start, but the way to really get ahead is automation. Instead of vowing to never carry a credit card balance again, just log into your online bank and set it to automatically pay off in full each month. You have an emergency fund, so that should act as a float. This will force you to track your checking account to make sure you have funds available to pay off your credit card. It sounds like you setup the ROTH IRA to be automatic which is great. If you get to the point where you're maxing ROTH and 401(k), set up an automatic allotment for a taxable account as well.

This was really great advice about the automation and I took it!  I've really been meaning to do that for years, but then I'm always afraid I'll accidentally overdraw my checking account.  But enough excuses, it is done and set up and that will just make me pay closer attention to my CC  and checking acct. balances, which can't be a bad thing. (albeit more work, but keeps in line with MMM principles and hypothetically earns me a few bucks every year that I was paying in unintended finance charges).

[ampersand]

Okay, I'm going to sound like a shill here but bear with me. There's 2 websites out there that bring all your accounts together in one place. Mint.com and personalcapital.com . Mint is a bit stronger on budgeting and PC is more focused on investing (my favorite). If you spend 15 minutes on PC entering your account information, it will bring it all together in a couple very simple graphs. It will also analyze all your current fees for you and give you some easy suggestions. Best of all this advice is free. I found the consolidation of all my accounts really helpful to prevent feeling overwhelmed. When you get to the point you might check provident mortgage... They have super low interest rates on mortgages if you have at least 20% equity.


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