Author Topic: Sadly, it's better than I thought...  (Read 7168 times)

hoodedfalcon

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Sadly, it's better than I thought...
« on: April 25, 2013, 05:50:03 PM »
So, I just plugged everything I have (and don't have) into Mint. My net worth is -98K. This is actually better than I thought it was. When I first finished school I was around -200K. The majority of the debt I have is student loans (over 100K right now). My mortgage is the rest of the debt (less than 60K @3.25). No credit card debt, no car payment, etc.

I am going to track this number every month. I already keep tabs on my monthly debts and investments, but for some reason I never put those numbers together to calculate my net worth.

I am (and I assume many people on this site) very goal-oriented. I like small, easily obtained goals. I like long term goals. I like mid-range goals. I have figured out my long and mid-range goals. I can't even think about the ultimate goal at this point.

My mid-range goal is to build up my emergency fund to cover 6 months of expenses (generously calculated as 2K/month). Once I hit that, I will find a new mid-range goal (likely maxing out my Roth). 

My short term goal for this month was to reduce my monthly expenses by $50. I did that by modifying my car insurance and cancelling a recurring "treat" that I was allowing myself.

So, here is my question. After a few months of trying to reduce my monthly expenses by $50, I will get to the point where that isn't feasible. I am already pretty lean when it comes to spending. I was wondering if anyone on this board had some suggestions for other short-term goals that would help me down this long, long road to being debt-free?

Reepekg

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Re: Sadly, it's better than I thought...
« Reply #1 on: April 25, 2013, 06:15:50 PM »
Pick up a side hustle instead of a hobby. I, for example, love playing soccer. Since I'm a few years past my physical prime, I gave up dreams of becoming a pro and started refereeing instead. Now on sunny afternoons spent in the park, I make money instead of spending it.

megash

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Re: Sadly, it's better than I thought...
« Reply #2 on: May 01, 2013, 12:10:18 PM »
This wouldn't be a recurring goal, probably, but might work for a couple months. What about going through a given room in your house and clearing it out? The spring cleaner in me is saying CLEAN and then clear out, but that's optional. Is there anything in (pick a room) that you don't need or use? List it on Craigslist or throw together a garage sale. Clear out some unneeded "stuff". Clothes, movies, etc. As a perk, if there is less clutter, you'll usually be able to be more efficient!

CrochetStache

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Re: Sadly, it's better than I thought...
« Reply #3 on: May 01, 2013, 03:07:46 PM »
Instead of only looking at how much you owe you can also remind yourself of how far you've come...over $100k in student loans paid off! And most of your home is paid off also!

Regularly checking, such as quarterly, that your spending is exactly in line with your long term goals. It isn't necessarily about continually finding ways to reduce expenses but to ensure your money & activities are focused on the mid and long term goals.

Done by Forty

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Re: Sadly, it's better than I thought...
« Reply #4 on: May 01, 2013, 04:23:01 PM »
So, here is my question. After a few months of trying to reduce my monthly expenses by $50, I will get to the point where that isn't feasible.

You might ignore this piece of logic and see how long you can continue to push towards a $50, month-over-month, reduction in expenses.  I see some posters here (e.g. - Bakari) who really focus on the spend side and it makes me realize how much room I still have in my budget to cut down. 

Put another way, maybe there's "always" another $50 to cut.

hoodedfalcon

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Re: Sadly, it's better than I thought...
« Reply #5 on: May 02, 2013, 09:09:28 PM »
This wouldn't be a recurring goal, probably, but might work for a couple months. What about going through a given room in your house and clearing it out? The spring cleaner in me is saying CLEAN and then clear out, but that's optional. Is there anything in (pick a room) that you don't need or use? List it on Craigslist or throw together a garage sale. Clear out some unneeded "stuff". Clothes, movies, etc. As a perk, if there is less clutter, you'll usually be able to be more efficient!

This is a great idea! I am sure I can find things laying around gathering dust. I think I read in another post about a challenge to get rid of 100 things. I think I will do that. Thank you!

hoodedfalcon

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Re: Sadly, it's better than I thought...
« Reply #6 on: May 02, 2013, 09:14:04 PM »
Instead of only looking at how much you owe you can also remind yourself of how far you've come...over $100k in student loans paid off! And most of your home is paid off also!

Regularly checking, such as quarterly, that your spending is exactly in line with your long term goals. It isn't necessarily about continually finding ways to reduce expenses but to ensure your money & activities are focused on the mid and long term goals.

Part of the difference stems from savings/401K, but I have paid off a huge chunk of student loans! I guess I am sort of impatient. This forum has been great though. I can't wait for a few months to go by and I can look back on Mint to see how much changes from month to month.

At the rate I am going, I am going to have my house paid off right around the same time as my student loans. I won't even know what to do with myself (yes I will).

hoodedfalcon

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Re: Sadly, it's better than I thought...
« Reply #7 on: May 02, 2013, 09:19:44 PM »
So, here is my question. After a few months of trying to reduce my monthly expenses by $50, I will get to the point where that isn't feasible.

You might ignore this piece of logic and see how long you can continue to push towards a $50, month-over-month, reduction in expenses.  I see some posters here (e.g. - Bakari) who really focus on the spend side and it makes me realize how much room I still have in my budget to cut down. 

Put another way, maybe there's "always" another $50 to cut.

You are probably right. I am certainly going to keep trying to cut my spending. This week, I am not grocery shopping, for instance. As the season warms up my yard garden will hopefully supply quite a bit of food (asparagus, squash, sweet potatoes, kale, potatoes, peaches, blueberries, herbs, etc). I expanded quite a bit this spring, so hopefully I will see some returns!

Mazzinator

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Re: Sadly, it's better than I thought...
« Reply #8 on: May 03, 2013, 02:43:30 PM »
This may be a bit tooo dave ramsey ish, but have you considered doing one goal at a time?? Pay off SL, pay off house, or build up emergency fund???

An example could be... You could lower your 401k contribution, say up to the match, then put that extra along with the other two goals you're trying to reach into one goal that you will reach quicker...

hoodedfalcon

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Re: Sadly, it's better than I thought...
« Reply #9 on: May 03, 2013, 04:01:37 PM »
MrMurphey- I am sort of doing that, but in an extended way. Once I get my efund built back up (about $500/month going in right now, plus any extra at the end of the month), I am going to reevaluate. The interest rate on my private loans is probably going to go up this summer, and if that happens, I am going to be focusing on that. In fact, within the private loan category there are three loans, and I am debt snowballing those with the extra I am currently putting in. It really is rewarding to see the little piddly loans go away quickly.

Also, Megash, you will be happy to know I have taken your advice and disposed of a pile of magazines that had been piling up since 2007! Throughout the years people have given me a bunch of magazines, and I was ashamed at how, uh, dusty they were. :) Gone now!

Mazzinator

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Re: Sadly, it's better than I thought...
« Reply #10 on: May 04, 2013, 01:48:36 PM »
Quote
In fact, within the private loan category there are three loans, and I am debt snowballing those with the extra I am currently putting in. It really is rewarding to see the little piddly loans go away quickly.

Sweet! We have the exact same thing going on. Private loan, consolidated into 3...except as of yesterday...wait for it...wait for it...now there are only 2!!! Small victory, i guess.. Sorry to highjack with my mini celebration...

Anyways, i was also sort of asking with myself (and dh) in mind.. We are swimming in SL and constantly going back and forth between paying them off, vs EF, vs retirement..sigh...

hoodedfalcon

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Re: Sadly, it's better than I thought...
« Reply #11 on: May 04, 2013, 11:03:54 PM »
MrMurphey- Congrats on the loan! That is such a great feeling. I've paid off 5 smaller student loans so far, and it's amazing. Every time I get the payoff statement in the mail I feel like I should frame it or something.

I totally identify with feeling torn about how to use any extra money. Like, really torn. I hope that I will figure it out by the time my efund is back where I need it to be. My thoughts are that I would take half that $500 and put it towards the private loans, take a small amount (maybe $100 a month?) and put it in my Roth, and the rest will go in my 403b. But then I think I should just put all that extra in my 403b to reduce my AGI (which will in turn reduce my federal loan payment and also my tax burden). Since I plan on taking advantage of the public service loan forgiveness, I have a strong desire to reduce that payment amount as much as possible. But then 5 minutes later I have a whole new plan.

Good luck! Let me know if you have any words of wisdom on this issue. And congratulations again on killing that loan!

Mazzinator

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Re: Sadly, it's better than I thought...
« Reply #12 on: May 06, 2013, 07:34:59 AM »
Thanks!! We need all the help we can get...

We are in a very similar position.. My dh can get the PSLF, he is in the army, but as of this year he didn't qualify for IBR. So, one idea we had was to max out his TSP, to lower our AGI, so that he can qualify for it. But then i get nervous that he will get promoted in the next 10 yrs and then he won't qualify for the IBR and we end up screwing ourselves..plus I hope to go back to work before then...if we ever stop moving so often...

We also thought about getting on the IBR as a strategy... Go on IBR, get the interest savings, for the first 3 years plus lower payment, save that on a taxable account gaining some interest, then towards the end of 3 yrs, just pay it off completely...

Anyways, i feel your pain..we also change our minds every 5 mins, hahaha... Or we come up with some great plan..then...

We don't even have an EF..well, long time ago, i contributed to a Roth ira, so i guess we could use those contributions, about $10k, if the shit ever hit the fan... But we only have about $3k "cash" sitting in the savings...

And congrats to you for paying off the 5 small loans...

megash

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Re: Sadly, it's better than I thought...
« Reply #13 on: May 07, 2013, 10:50:34 AM »

Also, Megash, you will be happy to know I have taken your advice and disposed of a pile of magazines that had been piling up since 2007! Throughout the years people have given me a bunch of magazines, and I was ashamed at how, uh, dusty they were. :) Gone now!

I'm so proud! :-) Now if only I'd make time to hold that yard sale to put all of MY cleared junk in!

Congrats on the progress you've made, recently! It feels good to know you're working in the right direction (even if there seems to be more than one direction to go-at least they are all forward progress!!)