Author Topic: Budget Voyeurs? Down payment, student loans, retirement?  (Read 4426 times)

SpendyMcSpend

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Budget Voyeurs? Down payment, student loans, retirement?
« on: May 09, 2012, 06:11:07 PM »
-------Totals--------
|Budgeted| 2053
|Income|   3800
|Spent|    0
--------Incomes--------
Income                             3800
--------Charity--------
Charitable Gifts                   125
--------Saving--------
College Fund                       0
Emergency Fund                     0
Retirement Fund                    0
--------Housing--------
Replace Furniture                  0
Repairs/Maint.                     0
Renter's Insurance                 0
Rent                               600
--------Utilities--------
Cable                              55
Electricity                        40
Mobile Phone                       103
--------Food--------
Restaurants                        80
Grocery                            120
--------Transportation--------
Repairs & Tires                    25
Car Replacement                    0
Car Insurance                      75
License & Taxes                    20
Gas & Oil                          40
--------Clothing--------
Cleaning/Laundry                   30
Adults                             75
--------Medical/Health--------
Drugs                              0
Health Insurance                   0
Dentist                            25
Disability Insurance               0
Doctor Bills                       0
Optometrist                        30
--------Personal--------
Organization Dues                  0
Spending money                     80
Books                              0
Child Care                         0
School Supplies                    0
Alimony                            0
Toiletries                         10
Cosmetics                          0
Hair Care                          50
Education/Adult                    0
Miscellaneous                      0
Subscriptions                      0
Gifts (incl. Christmas)            25
--------Recreation--------
Entertainment                      30
Vacation                           25
--------Debts--------
Student Loan                       82
Car Payment                        0
Credit Card                        0
Student Loan                       253
Student Loan                       155

The rest:  Extra towards Paying Off Debt:  $1747

Total Debt: $93,500
Paid so far:  40,000

Student loans:  $13,500 (6.8%)
$16,000 (2.77%)
$24,000 (3.15% variable)


I have several competing priorities.  The first is to pay off my student loans.  The second is to save for a house down payment.  These are the types of homes I'm looking for:
http://www.trulia.com/property/3005909209-236-W-Pine-St-Long-Beach-NY-11561

The school district is not great.  I'm almost 30 and we are looking to start having kids in the next 3 years or so. 
Right now my SO and I share a studio, and there just isn't any room for children.  I'd really like to start trying to have kids by the time I'm 34 because fertility starts to go down and I have PCOS.

My other priority is saving for retirement.  I just don't know if there is enough money to spread around so I wonder what my best course of action is.  I have $57,000 in retirement right now and my boyfriend has a pension as well as about $40,000 in his own retirement account.

Should I focus on one at a time or put a little bit of money in each area?


« Last Edit: May 09, 2012, 06:13:32 PM by Meadow »

gooki

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #1 on: May 09, 2012, 06:59:10 PM »
All right here goes.

I'd really have to know your joint income and expenses to make a full recommendation. I'll assume your only current debt is the $53,000 of student loans.

Step 1.
Student loan  $13,500 (6.8%) - Pay this one down ASAP. Don't bother about extra repayments on the other loans until this one is cleared.

Step 2.
 Cut back on a few expenses - cable, mobile phone, restaurants, hair care, and spending money would be my targets. You should be able to free up $300 extra a month, without a drastic change in lifestyle.

Step 3.
You can't afford that house (this is assuming your partner has the same income and similar expenses).

A good place to start
http://www.nytimes.com/interactive/business/buy-rent-calculator.html

You'll be fine in your current studio with a baby. Could easily get away with it until they're 2 years old. Your rent seems low enough and local house prices high enough that I'd stay where you are, focus on repaying that high interest debt, then investing or continuing to pay down the other debt.

If either of you have retirement plans that allow for employer match then I'd make sure you are contributing enough to get maximum match.

I'd only focus on home ownership if you can find a much better priced property, or if I've severely underestimated your partners income.

PS with a  baby you won't have the time or energy to maintain a garden, or clean a whole house. So a studio really isn't a bad place to be,

James

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #2 on: May 09, 2012, 08:18:53 PM »
gooki has excellent points and covers the details perfectly.


Start with the 6.8% loan and attack with a vengeance.  After that determine a balance between the three goals.  I agree we are either missing something big or the home you linked to is out of reach for quite a while. 




SpendyMcSpend

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #3 on: May 09, 2012, 08:32:31 PM »
My boyfriend's base salary is around $90k but he makes a lot of overtime these days.   He's also starting a side enterprise as a real estate broker.  However, he puts a substantial amount aside in retirement, pension and savings.  He saves $300 in cash per paycheck, so his take-home without overtime is about $1300 after all the savings are taken out.  With overtime, he can make $1000-4000 extra per month. 

He has $75,000 in savings, and he actually owns the studio where we live with about a $100k mortgage (his mom put down $100k as did he but he lost his equity when the market tanked).  So he doesn't have much equity in the studio.  We each pay about half of rent and expenses.  The maintenance is $600 and the mortgage is $600ish.  If he sold, we'd want to buy something so we aren't buying high and selling low.

Anyway, the main problem with this studio is that it takes me 1.3 hours to get to work and him about 45-60 minutes.  It's really not convenient and with my hours it's not working out well.  The commute costs $254 (pre-tax) for me by train.  So we want to either move into the city and possibly buy something there and sell this place, or rent something in the city while we keep this place.  And no we can't rent it (co-op rules).

My hours are looking like 8am-midnight every day in 2013.  I just can't commute with those hours :(

gooki

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #4 on: May 09, 2012, 09:38:39 PM »
Ok cool, that makes a whole lot of sense. Long commute times, high salary for your partner.

The difficult part - how comfortable are you in the relationship going forward. Do you both have similar ideas on financing. If this is a long term relationship, and your both on the same page money wise I'd recommend combining finances.

He probably has enough cash to pay off that 6.8% student loan of yours. That's the high interest stuff out of the way.

Next onto the housing. Yes he's lost equity, it sucks, but so has everybody else. I wouldn't recommend renting and sitting on the current studio while you wait for the market to recover. So I'd say sell up and move closer to where you both work, but don't focus on trading up too much on the housing front. Just make sure the property you are buying/renting is the best place you can get (note best not most expensive).

Either way keep investing (note investing, not saving) for and have some of that investment accessible for use as a deposit on home when you choose to buy, keep an eye out on the housing and rental market, keep playing with the rent vs buy calculator and when you choose to buy don't over extend yourself.

Good luck.

twinge

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #5 on: May 10, 2012, 08:03:02 AM »
Quote
You'll be fine in your current studio with a baby. Could easily get away with it until they're 2 years old.

I second this: we lived in a 400 sq foot apt with our son until he was 2.5 and I always think of it as a very sweet and cozy time. It was also easier to keep an eye on him as there was nowhere he could go that wasn't in my sight.  When I contrast that with my daughter's toddler years now (living in a 1300 sq foot home) I feel like I'm always running around trying to find her.

menorman

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #6 on: May 11, 2012, 01:05:22 PM »
My boyfriend's base salary is around $90k but he makes a lot of overtime these days.   He's also starting a side enterprise as a real estate broker.  However, he puts a substantial amount aside in retirement, pension and savings.  He saves $300 in cash per paycheck, so his take-home without overtime is about $1300 after all the savings are taken out.  With overtime, he can make $1000-4000 extra per month. 

He has $75,000 in savings, and he actually owns the studio where we live with about a $100k mortgage (his mom put down $100k as did he but he lost his equity when the market tanked).  So he doesn't have much equity in the studio.  We each pay about half of rent and expenses.  The maintenance is $600 and the mortgage is $600ish.  If he sold, we'd want to buy something so we aren't buying high and selling low.

Anyway, the main problem with this studio is that it takes me 1.3 hours to get to work and him about 45-60 minutes.  It's really not convenient and with my hours it's not working out well.  The commute costs $254 (pre-tax) for me by train.  So we want to either move into the city and possibly buy something there and sell this place, or rent something in the city while we keep this place.  And no we can't rent it (co-op rules).

My hours are looking like 8am-midnight every day in 2013.  I just can't commute with those hours :(
I'm sorry, what do you do again that would require 16 hours of your day five days a week and why are they only paying your $44k/year for it? But I agree, those would be impossible hours to commute and if you had a kid, you might as well quit since you'd have to put her/him in perpetual daycare.

SpendyMcSpend

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Re: Budget Voyeurs? Down payment, student loans, retirement?
« Reply #7 on: May 11, 2012, 03:04:37 PM »
Accounting