Author Topic: CASE STUDY: 51 yrs old and scared!!!  (Read 22058 times)

silver fox

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CASE STUDY: 51 yrs old and scared!!!
« on: August 14, 2014, 12:09:53 PM »
I really feel like Iím falling off a cliff with no parachute. I hope someone will take the time to give me some advice. I have been reading MMM for aprox 2 months and I do believe Iíve read most of the posts. I was putting off doing a case study because I honestly donít have a handle on my monthly expenses. Aug. 1st I joined ďMintĒ and hope to have a handle on our monthly expenses soon!
A little background. Iím 51 and Hubby is 57. Married, kids all grown. 3 dogs and 7 chickens (for the eggs). Iím a nurse and H is disabled on SSI. We live aprox. 1 mile outside of a small AZ town. (pop 2000) . We moved from Phoenix  9 years ago to ďget away from it allĒ Can NOT bear the thought of moving back to a large city. I was commuting aprox 35 miles to the nearest hospital working as a respiratory therapist and decided to go to school to become an RN so I could get my dream job, here in town at the only medical facility (a dialysis clinic) which I did 2 years ago. Now my commute is 2.8 miles and I LOVE my job.
I now have aprox $12000. in credit card bills (SIGH)  and owe $19,472. in student loans. I think I made a HUGE mistake but as my H said ďwe made this bed now we lie in itĒ!!  We sat down the other day and I showed him what I really owe and I think he was a little shocked. I donít even pretend to think I can EVER retire early I just want to have a plan so I donít end up in bankruptcy. My goal is to pay off the house in 10 years and be debt free. We have 10.5 years left on mortgage, but sometimes I think we should refinance maybe?? To pay off some of these loans? We REALLY love where we live, on 2.5 acres with a beautiful view! Iím really not good with financial issues (as you can tell) and know I have some major ďface-punchingĒ coming. I can take it:)

INCOME  approx:  $3471/monthly (Iím only going to list my income because H gets $1300/monthly but we have separate accounts and pay some bills separately. He gives me $200 a month towards bills which I included)

SAVINGS: $83. (this is NOT a joke) I have no savings. I do have approx $17000 in my 401k. sometimes I wonder ďwhy bother?Ē I could free up approx $280 a month if I quit contributing the %6.


DEBTS:

MORTGAGE: $86,217. 4.25%  10.5yrs left on a 15 year mortgage
Payment $1026.96

VISA: $2849  9.99%  min. payment $60.  (this is my #2 priority)

VISA #2:  $7892  8.25%  min payment $202  (this is my #3 priority)

OVERDRAFT ACCT: $ 1664  12.75%  min. payment $35  (this is my #1 priority)

WELLS FARGO PRIVATE STUDENT LOAN:  $  13456  4.25% min payment $85
NELNET GOVíT LOAN: $6016  6.8%  min. payment $90

CAR LOAN: $11660.  3.19%  min payment $252  2012 Ford focus. Bought almost new. Got rid of the F-250 (paid for) to save on gas. In 2 years we have put 50,000 miles on it!! I thought about selling it, H says no, we need something reliable and good on gas due to where we live.  Nearest grocery store is 40 miles away.  Heís been trying to sell his 1990 Toyota 4 runner (POS) on Craigslist with no luck. We donít owe anything on it. Its not reliable and not good on gas.

TOTAL: $1750.96

MONTHLY EXPENSES: not really sure if this is accurate yet as I have not been keeping track until this month.

GROCERY/OTHER STUFF: $949. I stopped buying so much meat and alcohol this month as I realized from reading MMM thatís where I can save some. I hope with a budget now I can reduce this greatly.

INSURANCE: $109. this is for ford, quad and motor-home and term life insurance. I just dropped the term-life in attempt to save (yes H is OK with this!. This was a $250,000 policy on myself in case something happened I didnít want H to HAVE to sell the house if he didnít want to) only going to save about $25/month though. so should be $84 moving forward.

ELECTRIC: average $151. we have 2 meters, one for our well and one for the house. The well is always around $22-25/month. Iíve been hanging my clothes out to dry now and  turned the thermostat up, will continue to try and reduce our electric bill.

NETFLIX: $8.69

INTERNET/PHONE:  $ 87.85 only one carrier in our area. Century Link

CELL PHONE: was  $152 for 2 i-phones. (I just called ATT and asked how long I had on my contractÖtill March 2015Ö guess? what they reduced my plan to aprox $80!!)
GAS: $150. (this is a good guess as I donít really know yet how much Iím spending) this is just for the Ford.
TOTAL: $1607.54

TAKE HOME PAY: $3471 APPROX
BILLS: $3358 (thats assuming min. monthly payments, which I don't want to do)

As you can see itís not a pretty picture. I told my H that the credit cards are our only choice at this point if something major comes up like a water heater or god forbid new roof. We both agree this can NOT continue.
We have a 2007 side-by side ranger (paid for) that we use a LOT. Not just for pleasure but for hauling firewood in winter and sand and rocks and chicken food ectÖ
We have a 1965 classic Mustang which my H inherited from his Dad when he passed away several yrs ago. H has been restoring it and it is now drivable but terrible on gas. H gets teary eyed when he talks about selling it. I donít want him to sell it as I think he will regret it.
In Jan. we bought a 1994 34ft motor home from my Hubbyís brotherís father-in-law for $1500, because health was forcing him to sell it.  (hence the overdraft loan) this was a horrible mistake I believe, but I feel stuck because I agreed to it. At the time we both thought ďwell this is too good to pass up! We HAVE to go for itĒ we have always wanted a motor home to travel in when I retire. HAHAHA!! Doesnít look I will be retiring any time in my life time!! I would like to sell it but I know H will balk at the idea. Heís pretty handy and he believes he can keep it running for years to come. IF we could sell it?? Who knows?  The Toyota has been on craigslist for several weeks now and no luck.

I am contemplating riding my bike to work which is 2.8 miles from the house. Will not save much $$ but for health reasons it makes sense. Not in the best shape. The only thing is, ďIím scared to death!!Ē The road to work, is a highway with 55 MPH and dark. I leave for work around 4AM. There is NO shoulder until I reach town which isnít far, maybe 1 mile? Once I get to town there is a nice shoulder or sidewalk I can ride on. I feel safe there. I do NOT feel safe on the highway with the cars going approx 65MPH and not a real bike friendly area.  I also know that going to work is all downhill and coming home is uphill and I will have to get off and push my bike some (sort of embarrassed)  I have tried it twice now, riding part of the way and both times had to get off and walk. This will change I know as I get into shape. I just donít want to get hurt on the road.

THANKS FOR READING! I really enjoy this site and have learned SO SO much. I just hope its not too late!!
« Last Edit: August 14, 2014, 12:43:51 PM by silver fox »

trailrated

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #1 on: August 14, 2014, 12:31:54 PM »
I will let the other posters get down to the details but I just have to say... If you keep doing what you have been doing you are going to keep getting what you have been getting. I see a lot of hesitation to sell the cars, etc. But if you want to start getting better results you have to be willing to make the changes to get there.

I wish you the best of luck, and seeking out information is a huge first step.

Dicey

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #2 on: August 14, 2014, 12:33:18 PM »
Good for you for getting started. Your situation is probably not as dire as it feels at the moment. Others in far worse holes have dug their way out and I am confident that you will too. Why? Because you're here! There is still time to make a huge difference in your financial situation while you are making a difference in people's lives every day.

More details, please.
How much equity do you have in your home?
Is your WF Student Loan rate fixed? I'm assuming the others are, if not please give details.
Are your credit card rates fixed or limited time?
Does your employer have any kind of matching plan?

For better answers, this info will help.

A few fast suggestions until then.
- Refi the car loan. You should be able to get at or just under 2%, assuming your credit scores are good.
- Get rid of the 4 Runner. Lower the price until it sells. Ditch the insurance.
- Ditch the quad asap. Unless you have it because you live on many acres or some other, non-entertainment reason. I'm scratching my head as to why someone on disability owns one.
-Same on the RV, unless you plan to move into it and rent out your house while you are paying off debt, which may be something to consider.
- Do NOT stop contributing to your retirement accounts.

Once you get your spending under control, and assuming there is some equity in your house, I'd refinance to the cheapest 30 year loan you can find.
Do not prepay it until you have wiped out your debt, established an emergency fund and started funding your retirement accounts. You can always pay it off later, but a paid off house ain't worth much if you have student loan debt and no savings.

Okay, I'm sure others will have lots of great suggestions, but this is a start.


jadbgee

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #3 on: August 14, 2014, 12:35:33 PM »
Is your income gross income or take home pay?

DoubleDown

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #4 on: August 14, 2014, 12:39:54 PM »
Hi, and welcome!

Good on you for reading MMM and discovering that you can ditch some of those spendy habits and become financially independent. Yes, you can do it in due time if you stop spending and start saving.

Now that the niceties are out of the way, you are indeed falling off a cliff with no parachute. It sounds like you understand some of the things that need to be done, like paying off those credit cards. I hope you're committed to them and to making some other advisable cuts in order to get your financial life on track. You are in what MMM calls a "Hair On Fire Debt Emergency." This means you need to give up all frills and discretionary spending -- and you have a lot of it. On top of that, you are in a precarious financial position at middle age. Sorry for the bluntness, but I want you to understand that drastic change in attitude is needed or you may find yourselves in financial ruin in old age.

So:

1. Yes, pay off those credit cards and overdraft account ASAP.

2. Drastically cut that grocery/"other" bill. You should be spending about $200 for two people. My family of 5 eats like kings and queens on half of your spending, including steaks, seafood, and fresh fruits and vegetable, etc., and without hardly trying. I just buy stuff when it's on sale. And that includes all toiletries/cleaning products/etc. I frankly don't know how 2 people could spend $1000/month in a low cost of living place like AZ, but I guess you already recognize you need to cut this. Now do it!

3. Ditch the cell phones, or get a $10/month plan. Do you even both need cell phones?

4. Holy crap, I lost count of just how many vehicles you have. A quad??? Sell it! Motor home??? Sell it! Classic car??? Sell it! Anything else sitting around gathering dust or that is not a necessity??? Sell it! How could you and your disabled husband need anything more than one compact or medium-sized car?

5. Lower the price of the Toyota and sell it ASAP. It hasn't sold because you're asking too much for it.

6. Put all the money from selling these vehicles towards your credit cards and other debt, in order of highest interest first.

7. Go through everything else you are spending on, and if it is not absolutely necessary, get rid of it.

8. You should not start out biking on a 55 mph highway in the dark. In fact, you should likely never do it. Confine your biking to quiet, slow streets with limited traffic. Even if you were an experienced rider, that route is unsafe.

Good luck, we're on your side and rooting for you.

Frankies Girl

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #5 on: August 14, 2014, 01:17:54 PM »
Welcome, and good for you for trying to get your ducks in a row.

You are in a "hair on fire" emergency situation. Please understand there will be facepunches to follow, but I mean them in the nicest possible way.

Your husband needs to face facts that just because he has an emotional or familial attachment to a material object, if he's not out of debt, then he is saying that the things (motor home/cars) are more important than you and him being safe and stable and debt free. His attitude is hurting the both of you. If you lost your job or were unable to work, you both would lose EVERYTHING. That is a horrible burden on your shoulders, so he needs to make some hard decisions, but it is for the good our your shared future.

Sell the motor home and the classic car ASAP. You can't afford them at all. I know there is some emotional attachment and it will hurt, but you have no savings, large amount of debt and are bleeding money every month - you absolutely can't afford them. Dropping the motor home insurance once you get rid of it should get that insurance payment lower as well. And a driveable 65 mustang could help pay off a good chunk of debt depending on the style and condition! I get that he inherited it, and that is a very awesome car, but he's choosing a material thing over everything else that should be more important in his life... and that really sucks. (seriously, I love classic mustangs and that would be a huge emotional decision, but something has to give... so unless the other stuff is able to get y'all on track for a fast paydown and savings build-up, this should not be "off the table" )

Lower the price on the FourRunner in increments until someone bites. Price fixes most selling issues. Even if it's a "scrap for parts" type of situation.

Why do you need a home phone when you have cell phones? Drop that and should reduce your phone/internet expenses by half.

Your food bill is crazy high for two people. Definitely should be able to cut that in half. Check out recipe sites like budgetbytes.com for some good food recipes that are cheap and easy to make. It goes without saying that any eating out should be cut out completely (start packing your lunch for work if you don't already) or at least severely reduced if this is part of the food bill.

Electric does seem pretty high, but you're taking steps.

I personally would not advise you to sell your current commuter car or bike to work. But if you really want to pay down the debt ASAP and start building a stache, it would be advisable to consider selling (as long as you could get the loan amount) and buying a ~4K older car for commuting, since your insurance would also go down by getting rid of a financed car. You said your husband works on cars, so you technically could get him to fix anything that crops up.

http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/
Good recommendations on where to start if you want to research. We have a 2004 Scion Xa that keeps chugging along and has had almost nothing in terms of repairs - just standard maintenance.


I'm a little concerned that your husband only puts $200 towards your shared bills - where is the rest of his SSI going? I'm sure there's more to the story, but frankly just from what you've posted, it sounds like your husband is not involved in any way in helping out on the shared debt loads (and an outright a hindrance in the fact that you're buying stuff you can't afford or hanging onto stuff that could bail you out), and you're going to be responsible for everything... and that's not a good thing for you or your marriage. Might be a good idea to ask him (in a non confrontational way) what he thinks you both can do to dig your way out. Get the conversation going and make sure he's completely aware of the situation and tell him how worried and stressed you are. If he loves you, he should be trying to help as much as he can. If he is benefiting from the mortgage and credit cards... he should be putting "his" money in with yours and paying off stuff WITH you. (and I'm kind of worried that he's spending his money on "fun" stuff while you're paying the majority of the debts/expenses, but I hope that's not the case)

Finally, can you pick up extra hours or shifts at your work, or the hospital? What about working home care a few nights or weekends? Until you dig out of the debt (especially those cards!) you should be trying to get as much money coming in as possible.

And I do hope you leave the 401k alone - it technically can count as your super duper emergency fund, but it's all you have right now working FOR you, so let it work. And please put those credit cards away until you're out of debt. Serious money lockdown and only spending on essentials.

As you free up money, hit the highest interest debts first (think you already have them prioritized that way) and keep laser-focused on killing those debts and rolling into the next one.

You can do this - but it's going to take some time and work and making sure you and your husband are both focused on cutting costs to the bone and bringing in more money if at all possible.



so.mpls

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #6 on: August 14, 2014, 01:40:33 PM »
Hello and welcome, silver fox.

Other's have already given you some great advice, and it certainly seems that your situation is fixable.

You mentioned that you & your husband pay some bills separately, but didn't list any of those expenses that are coming out of your husband's disability check.  Where is the rest of that $1,300 going?  I think you need to have a full understanding of ALL of your income and expenses in order to develop a plan.  You can keep the finances 'separate' if you want, but you should still be looking at your income + husband income - your bills - husband bills to get a complete picture of how much you can realistically save every month.

And not to beat a dead horse, but for the love of god get rid of some vehicles! 5(?) vehicles for a couple with one working adult and no kids is just so absolutely unnecessary!


BaldingStoic

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #7 on: August 14, 2014, 01:45:09 PM »
You've got some challenges but you seem on the right track - reading MMM and starting to trim discretionary expenses.  Given the credit cards and overdraft interest rates of ~10%, I think you should seriously consider selling off all/part of your 401K.  Stocks have performed wonderfully the last couple years but the safe assumption is for the market on average to return 4-7%, so it doesn't make sense to lock up money in a 401K while paying 10% interest.  I believe there are even provisions in the tax code whereby you can avoid the penalties of early withdraw as long as you re-contribute back into the 401K properly.

Secondly, you've gotta find ways to further reduce discretionary spending.  For example, cancel Netflix and buy a $35 Chromecast, limiting what you watch to free online content.  Go through every spent category and figure out how to save 10%.  (Sell vehicles and buy cheaper gas-efficient models, car-pool, eat vast quantities of oats & nuts bought in bulk or at Costco, etc. 

Once the debt is retired, you'll be able to rebuilt your 401K and add back some of the luxuries, but perhaps by then you won't even need them.  There's plenty of joy to be had in a minimalist life-style.  Good luck.

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #8 on: August 14, 2014, 01:49:48 PM »
Are you getting matching on the 401k 6%?  Is it 100% matching?  If it's not matching I don't think the tax savings are worth the interest on a ~12% loan.

Also, not to be too personal, but does your husband's disability mean you're running most of the errands?  Feels like he should be kicking in on the car loan and gas if he's benefiting from them.

I don't think you should feel bad or nervous about walking part of your commute.  That seems like a good solution if parts of the route are hair-raising or strenuous. 

silver fox

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #9 on: August 14, 2014, 01:52:52 PM »
OK I'm having some technical issues with responding-editing- and so forth. Going to try again.
THANK YOU ALL FOR THE RESPONSES! My mind is reeling from all the advice and trying to sort-it-out!
some clarifications:
-credit card rates are fixed
-WF student loan rate fixed
-401K-is at 6% which is the minimum for employer matching.
-Equity in the house?? owe $87,000 and possibly worth $180,000. not sure, homes in this area seem to be on the market a LONG time. very little job opportunities out this way.
-my income was "take home pay"

1) Really refinance to a 30 year mortage? That seems so SAD when we only have 10.5 yrs left. I wonder if it would really lower my monthly payment so I can pay towards those horrible credit card debts? will most definitely talk to my bank about it though.
2) I totally agree with the vehicle issues. WE HAVE TOO MANY!!! the emotional issue is something I'm going to have to deal with. I feel the Quad (which has a dump bed) saves us $$ H is disabled but not an invalid and has used it to build chicken coop, garden, retaining walls ect...
3) Cell phones-worried about ending the contract early and paying a termination fee. was going to wait until contract was up and reconsider. H says he doesn't need one!
4) in our area the only reliable way to get internet service is thru Century link and a home phone.
5) I am seriously trying hard to cut waaayyyy back on food bill. NO MORE eating out. still have lots to learn in that area and am reading all I can on this forum.
6) YES we have separate banking accounts. H pays for his insurance, visa card (which I think is around $3000) medical bills (even though he goes to the VA they are quite a bit, RX especially), gas ect... maybe we do need to have a TALK and pool our money better? He doesn't go out and have fun without me though! He mostly stays home.
I am still reading all the great info given to me and I really appreciate it. I know we will get thru this. 

Jack

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #10 on: August 14, 2014, 02:06:13 PM »
You have 3 cars, some kind of off-road thing and a motorhome. That is ridiculous and insane. Sell all but one car (I don't care which you keep -- in fact, if it were me I'd keep the mustang, but that's not the best plan financially).

You may keep the motorhome only if you live in it and rent out your house (which you certainly should do).

If riding a bike is unsafe then walk to work, staying well away from the road. The fuel costs of even 6 miles a day add up.

Find a chest freezer on Craigslist, and only drive the 40 miles to the grocery store twice a month, maximum.

silver fox

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #11 on: August 14, 2014, 02:11:19 PM »
THANK YOU Frankies Girl for having a blunt talk with me. I hadn't looked at our financial situation as the "2 of us" since I feel REALLY guilty for having gone back to school and created such a huge debt while doing so. H has supported me all the way, but I guess since I'm the one working I figured I should be the one to get us out of this mess!! Looks like we need to sit down and have more "talks" about our debt. He is on board with "cutting costs" maybe just not to the extent I am right now.

Frankies Girl

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #12 on: August 14, 2014, 02:24:38 PM »
THANK YOU Frankies Girl for having a blunt talk with me. I hadn't looked at our financial situation as the "2 of us" since I feel REALLY guilty for having gone back to school and created such a huge debt while doing so. H has supported me all the way, but I guess since I'm the one working I figured I should be the one to get us out of this mess!! Looks like we need to sit down and have more "talks" about our debt. He is on board with "cutting costs" maybe just not to the extent I am right now.

Your going back to school was a direct benefit to both of you - so definitely don't feel guilty about it or that it was a waste - RNs can make better money and have more options (as I'm sure you already know). Great that your husband has been supportive, but you're a team, so don't feel like you have to carry all of this alone - if you need his help, ask for it and see how you can support each other. Definitely keep up the dialogue! :)


Dicey

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #13 on: August 14, 2014, 02:25:27 PM »
Yes, REALLY on the house! What's SAD is that you have no retirement savings, not how much you owe on the house!! Perhaps you see that you "only owe 10.5 more years" as a beacon that you're not doing so badly after all. It's understandable, but it won't get you to your goals in a reasonable time frame.

Assuming that none of your debt is on stupid stuff and that you have (or will quickly learn to have) the discipline to curtail your spending, refinancing your house is the fastest way out of the hole you're in and onto a path of financial freedom. (BTW - Length of time on market in your area is irrelevant. I am not suggesting you sell your house.)

Quick back-of-the-envelope math says if you re-fied your house for 144K (80% of 180 value) at 4.25%, your Principle + Interest would be $708/mo. You would net approximately 54K, enough to pay off all your debts, boost your 401k, start Roths for both of you and fill an emergency fund. You don't have to take out this much, but you could. Save like a fiend with the skills you'll learn here and pay the new mortgage off in ten years or less, once your retirement saving is up to snuff. Doesn't that sound a lot happier?

Now, before you do this, you must have a frank discussion with DH. He must be on board with this. His oar is not anywhere close to the water, based on your inputs. The mustang can stay for now, IMHO. Keep it garaged and insure accordingly. Also, keep your car. 40 miles to the grocery store is way too much. You're 51, ride a bike for exercise, but not for groceries. Finally, if you re-fi the house, neither of you may buy anything with this money, only pay off debt, invest and fund EF, got it?

Finally, whatever you do, DO NOT stop contributing to your 401k at work. You will be losing out in too many ways to enumerate in this post. Anyone who advises same is probably much younger. What might work for them is anathema to you at the age of 51.

You can do this! It is not too late.
« Last Edit: August 14, 2014, 02:58:34 PM by Diane C »

minimustache1985

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #14 on: August 14, 2014, 02:26:42 PM »
OK I'm having some technical issues with responding-editing- and so forth. Going to try again.
THANK YOU ALL FOR THE RESPONSES! My mind is reeling from all the advice and trying to sort-it-out!
some clarifications:
-credit card rates are fixed
-WF student loan rate fixed
-401K-is at 6% which is the minimum for employer matching.
-Equity in the house?? owe $87,000 and possibly worth $180,000. not sure, homes in this area seem to be on the market a LONG time. very little job opportunities out this way.
-my income was "take home pay"

1) Really refinance to a 30 year mortage? That seems so SAD when we only have 10.5 yrs left. I wonder if it would really lower my monthly payment so I can pay towards those horrible credit card debts? will most definitely talk to my bank about it though.
2) I totally agree with the vehicle issues. WE HAVE TOO MANY!!! the emotional issue is something I'm going to have to deal with. I feel the Quad (which has a dump bed) saves us $$ H is disabled but not an invalid and has used it to build chicken coop, garden, retaining walls ect...
3) Cell phones-worried about ending the contract early and paying a termination fee. was going to wait until contract was up and reconsider. H says he doesn't need one!
4) in our area the only reliable way to get internet service is thru Century link and a home phone.
5) I am seriously trying hard to cut waaayyyy back on food bill. NO MORE eating out. still have lots to learn in that area and am reading all I can on this forum.
6) YES we have separate banking accounts. H pays for his insurance, visa card (which I think is around $3000) medical bills (even though he goes to the VA they are quite a bit, RX especially), gas ect... maybe we do need to have a TALK and pool our money better? He doesn't go out and have fun without me though! He mostly stays home.
I am still reading all the great info given to me and I really appreciate it. I know we will get thru this.

1) Yes, just be sure the refinanced loan doesn't have any prepayment penalties so you can get aggressive with it once your other debt is gone.  You should be able to get as good of a rate as you have now with it anyways, and may be able to do a cash-out refi where you take out some of the equity you have in the house and use it to pay off the CCs and higher interest SL and then you can start overpaying the mortgage right away.  Just because you get a 30 year loan doesn't mean you have to take 30 years to pay it off, but it'll ease your monthly burden in the meantime while you attack your other debt.
2)Good, and the Toyota honest to goodness take it to a scrap yard and see what they'll give you.  If it's more than you think you can sell it for take it- my sister scrapped her old car and the yard paid her by the pound for it, I guarantee your truck weighs more than her small sedan did.  And the RV needs to go, unless you're going to live in it and rent the house like others have said.
3)Generally switching to a cheaper plan will still be cheaper overall than the ETF, crunch the numbers and see.  Worst case switch when your contract is up.  Your H should have either a cell phone or a home phone in case he has an emergency and needs to call you, the VA, etc, but either give up his cell phone or the house one.
4)They won't do internet without home phone?  I mean I hear you on the one provider monopoly, but if that's the case ditch your husbands cell phone.
5)Keep up the progress!
6)Sit down and go over his expenses with him looking at it from a household perspective.  Meds are costly but anything beyond the $200 he's putting towards debt/bills now will help both of you be more secure going forward.

I would not bike to work if there isn't a safer path, 55mph roads without shoulders are dangerous.  Heck we have one here with a shoulder and I shake my head at the road bikers that use it (bc here there IS a safe paved bike path they could use next to the road).  If there is a path you can use to walk/run further away from the road that might be worth trying, but it completely depends how safe you feel doing that.  I also see you gave up term insurance, I might reconsider that at a lower benefit amount like 50-100k instead of the 250k you had.

Do not stop contributing to your 401(k), honestly at 51 you need to look at upping those contributions once the CCs and 6.8% SL are gone.

MillenialMustache

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #15 on: August 14, 2014, 02:37:26 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Gone Fishing

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #16 on: August 14, 2014, 02:52:21 PM »
If you care about your husband YOU NEED LIFE INSURANCE, sure he gets $1300/mo, but you are providing most of his support.  If something happened to you, he would be in bad shape.

You could just go for another 15 year mortgage, lower your rate by about 1%, and only add 4.5 years.  While it may make $ sense to cash out, I would't do it, as it would just make the emergency go away for a while, until you ran the cards back up.  The debt needs to stay in your face until you get it paid off.  Perhaps you could find a lower rate and transfer the balances.

Can you consolidate electric meters?  My guess is that they charge you a lower rate on the one used for the well?  If there is a flat fee for service, it might not be worth it.

Do you have any type of pension other than SS?

It might be tough to hear, but I would go ahead and plan on working as long as you are physically able, at least to maximum SS benefit (70) and possibly beyond.  I don't think financial stability is out of the question but it is going to take quite a bit to get you to a place where you are secure.
 
« Last Edit: August 14, 2014, 02:55:24 PM by So Close »

Cassie

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #17 on: August 14, 2014, 03:01:51 PM »
I think that it is great that you went back to school to be a nurse. I am sure the income is higher then your previous job and also easier to find a job. At age 51 you are probably not up to working extra hours. The vehicle advice is good and while I might stop contributing to 401 K I would not withdraw any of the $.  As far as the house goes see how much lower your payment will to determine if it is worth it.  If it is you will have a low payment when you retire so might not be that much of an issue.   Good luck!

Eric

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #18 on: August 14, 2014, 03:54:52 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me.

I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?

4alpacas

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #19 on: August 14, 2014, 04:02:41 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me.

I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?
+1  No one is stripping you of memories.  I know my father would value my security more than a physical possession.  Would it be difficult for me to sell something my father left me?  Of course.  BUT they're 51/57.  There isn't much saved for retirement.  One person is already out of the work force. 

I would also refinance, but not cash out your equity.  A 15 year mortgage sounds like a way to give yourself a little breathing room and keeping the forward progress on the home pay-off. 

Good luck!

southern granny

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #20 on: August 14, 2014, 04:20:45 PM »
There are good ideas here.  I just want to echo what someone else said and got taken to task for.  I would sell the mustang only if all other efforts were insufficient.  People who are not "car people" have a hard time understanding that a car can be practically a member of the family.  We have a classic mustang that we bought right before we got married in 1975.  When I have to decide which child to leave the car to, it will go to the one who seems best prepared to take care of it.  If they sold it, I just might come back and haunt them. 

former player

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #21 on: August 14, 2014, 04:39:29 PM »
Congratulations on qualifying as an RN and getting your dream job.  Also, congratulations on raising a family who are all now out in the world and not relying on you to finance them.  You are making a success of your life, and I hope you know that.

On your finances, a quick win will be to reduce your groceries budget from $949.  If you can get it down to $349 (should be doable for two people with not much hardship), you have freed up $600 per month.  That's your overdraft gone in three months, right there.  You've just saved $70 on your phones: send that automatically to your priority credit card: hey presto and just by that you've already doubled the payment you are making on that card.   By the end of October, you will have paid off the overdraft and will be starting paying at least $830 a month on the priority credit card, which will have it sorted by February at the latest.  All that from one change you have already made (the phone bill) and another you've already started work on (groceries/eating out/drink).  Carry on the same, and your second credit card is gone before the end of next year, even with just those two changes.   But if once those changes have settled in you start looking for more savings on your expenses, your debt payments will snowball even more quickly. You can do this!

Looking at what you can sell, personally I'd keep the Ford Focus: where you live you need it.  Look after it well as you should be keeping it for a long time.  Plan your expeditions to reduce the amount of driving you do.  Hint: it's not the 2.8 mile commute which is killing you on gas costs, so look at the other driving you do before biking on a road that's not safe.  If you are getting good use out of the quad, keep it, although if you can sell it and buy a cheaper one that might be an option.  Store the Mustang safely away so it is not costing you anything.  Sell the Toyota for whatever you can get for it, try to sell the motorhome at a profit (if husband is handy, you can buy another one which he can keep going for you when you do retire).  What else do you have to sell?  You have a house, 2 1/2 acres and a lifetime of raising family, so I bet there's a fair bit of stuff you no longer use and could sell.  Put everything you get from selling stuff to your overdraft, credit cards and student loans in turn, and you are paying things off even quicker than with your savings on expenses.  Good luck.

MillenialMustache

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #22 on: August 14, 2014, 04:53:11 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me. I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?


Would you sell your parent's prized possession that was left to you? Whatever it is? I think that is a little sad too. I looked up the value on this Mustang - unless it is a convertible or GT, perfect condition it is worth $15,000. Since the OP said that her DH had been fixing it up and just now got it running, it is likely worth around $10,000. Not sure that amount would really put them on the fast track to financial freedom - especially since she doesn't know where $1,100 a month goes, and she has a $900 grocery bill. There are so many other problems - selling the car doesn't really fix it.
« Last Edit: August 14, 2014, 04:54:49 PM by Ashley57 »

Cpa Cat

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #23 on: August 14, 2014, 04:53:30 PM »
1. Lower the price on the Craigslist car. Maybe post a few fliers around town/at work.

2. IF you end up being able to bike to work year-round, then I'd be tempted to dump the Prius and drive the Mustang for groceries. But if biking isn't realistic, then keep the Prius and keep the Mustang. I'd rather sell my husband's old classic car, but  I know where you're coming from on this.

3. Sell the RV. You know you have to.

4. Sell anything else you can. You're on a razor's edge of financial disaster here. I think every buck counts until you clear off your debt. Sell used books, sell old furniture. Whatever you have in your house that's non-essential, clear it out.

5. Got any extra space? Can you rent out a room?

6. Account for the rest of the SSI. It's not like you're not going to pay for his medical bills if they go over his budget one month. There's no real reason for you guys to have separate finances. You're in this together.

7. Is there anything you can do to freelance? Like scheduled nursing visits to help people in their homes?

Just some brainstorming for you. Good luck! You'll get on top of this if you're aggressive about it. Once you're free of your student/consumer debt, you can work on paying off the house and get mortgage free. That'll give you a lot more security.
« Last Edit: August 14, 2014, 04:55:06 PM by Cpa Cat »

Frankies Girl

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #24 on: August 14, 2014, 05:10:13 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me. I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?


Would you sell your parent's prized possession that was left to you? Whatever it is? I think that is a little sad too. I looked up the value on this Mustang - unless it is a convertible or GT, perfect condition it is worth $15,000. Since the OP said that her DH had been fixing it up and just now got it running, it is likely worth around $10,000. Not sure that amount would really put them on the fast track to financial freedom - especially since she doesn't know where $1,100 a month goes, and she has a $900 grocery bill. There are so many other problems - selling the car doesn't really fix it.

I have unhealthy sentimental attachments to things, and I'm recovering from it, so I get that stuff sometimes means more to a person. But material objects are either physical representations of memories, or they're there to serve a purpose. One or the other. You don't lose the memories of the thing once the thing is gone, so it makes sense to sell if it helps bail them out even a little bit since this car is not serving any purpose other than as a happy memory of a person gone. It also makes sense to hang on to it if they can adjust their lifestyle enough to cut out all extras and get the debt paid down... but it's a time thing and a "how big of an emergency" situation. In fair condition, they could probably get 5K+ for it, and that is a huge amount of money for them to realize quickly.

Think of it like this: You are drowning in the middle of the ocean. Land is a very, very long way away, and you might just be able to swim for it. You struggle to hang on to the life preserver, but one hand is clutching your suitcase full of things that are important to you - jewelry, gifts from friends or family, that clock that belonged to your greatgrandmother... but it's pulling you under and you're going to have to make a choice. How fast can you swim to safety and how much energy do you have to both swim and still hang onto those things that right at this moment are nothing but a liability? If it's not fast enough, then you have to let go of the suitcase and save yourself.

Sucks to be in the situation, but sometimes you have to drop the stuff and swim for all you're worth. Things are cool and all, but in an emergency, keeping things for sentimental reasons isn't a priority until once you're out of danger.

« Last Edit: August 14, 2014, 05:14:38 PM by Frankies Girl »

MillenialMustache

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #25 on: August 14, 2014, 05:19:43 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me. I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?


Would you sell your parent's prized possession that was left to you? Whatever it is? I think that is a little sad too. I looked up the value on this Mustang - unless it is a convertible or GT, perfect condition it is worth $15,000. Since the OP said that her DH had been fixing it up and just now got it running, it is likely worth around $10,000. Not sure that amount would really put them on the fast track to financial freedom - especially since she doesn't know where $1,100 a month goes, and she has a $900 grocery bill. There are so many other problems - selling the car doesn't really fix it.

Think of it like this: You are drowning in the middle of the ocean. Land is a very, very long way away, and you might just be able to swim for it. You struggle to hang on to the life preserver, but one hand is clutching your suitcase full of things that are important to you - jewelry, gifts from friends or family, that clock that belonged to your greatgrandmother... but it's pulling you under and you're going to have to make a choice. How fast can you swim to safety and how much energy do you have to both swim and still hang onto those things that right at this moment are nothing but a liability? If it's not fast enough, then you have to let go of the suitcase and save yourself.

Sucks to be in the situation, but sometimes you have to drop the stuff and swim for all you're worth. Things are cool and all, but in an emergency, keeping things for sentimental reasons isn't a priority until once you're out of danger.

I agree with what you are saying, but I do not believe that is them. She has so many other things to cut and save. I believe people are unfairly attacking the car because it is easy, not because it really solves the problem. Besides, it does have function - it can be used as a car.

Jack

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #26 on: August 14, 2014, 05:26:08 PM »
I agree with what you are saying, but I do not believe that is them. She has so many other things to cut and save. I believe people are unfairly attacking the car because it is easy, not because it really solves the problem. Besides, it does have function - it can be used as a car.

Quoted for emphasis!

The Mustang has more sentimental value than the Focus, but probably less market value. If it's drivable (and the OP says it is), and the OP can cut down on some of the 40-mile grocery trips to save on gas, keeping the Mustang and selling all the other cars makes sense.

Eric

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #27 on: August 14, 2014, 05:32:13 PM »
I just want to share that I would not sell the Mustang. I am as frugal as frugal comes, but that can never be replaced and he will miss it for the rest of his life. Please keep it. I know that is going against Mustachianism, but it was his father's and that can never be replaced. Maybe consider taking the tags and insurance off of it for the time being, so that it is not costing you money. My dad has a 1968 Chevelle, and I could not imagine him selling it, and I would never let him, no matter what financial trouble my parents are in.

Yep, it definitely is.  Advising to keep a car for sentimental reasons when selling that same car would put them on the fast track to firm financial footing is kind of crazy to me. I get it that the car is a fond reminder of his dad.  But you have to ask, what do you think his dad would want more?  For his son and DIL to have a secure future or for them to keep the car at all costs?


Would you sell your parent's prized possession that was left to you? Whatever it is? I think that is a little sad too. I looked up the value on this Mustang - unless it is a convertible or GT, perfect condition it is worth $15,000. Since the OP said that her DH had been fixing it up and just now got it running, it is likely worth around $10,000. Not sure that amount would really put them on the fast track to financial freedom - especially since she doesn't know where $1,100 a month goes, and she has a $900 grocery bill. There are so many other problems - selling the car doesn't really fix it.

They have over $43K in non-mortgage debt.  $43K!!  So I think $10K is a huge deal and puts them directly on the path to fixing the problem.  It's my opinion that you should do whatever possible to get out from under the burden of an enormous pile of debt, because that will feel much better than having a car in the garage, no matter how much his parents or they love it.  They'll need to do that in addition to cutting their spending as mentioned above.  That's the thing about massive debt loads -- getting out of them takes sacrifice.  If it was easy, this forum wouldn't exist.

4alpacas

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #28 on: August 14, 2014, 05:40:01 PM »
If the OP was 21 or even 31, or if she wasn't the sole breadwinner by necessity, then I wouldn't harp on selling their possessions. 

The OP is getting very close to retirement age.  She has $17k in her retirement account and $83 in savings.  The OP and her DH need to cut expenses, pay off debt, and manage to save for retirement in a very short period of time. 

silver fox, I wish you the best of luck.  Nothing about this is going to be easy, but I hope you can turn things around. 

silver fox

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #29 on: August 14, 2014, 05:58:49 PM »
THANK YOU ALL FOR RESPONDING!
I did talk to my credit union (who also owns the mortgage) about refi. Brief numbers:
take out $100,000-put $13000 toward credit cards and loans. ( I could take out more, but this was just a first conversation with them)

20 yr loan 3.75% monthly payment $763
30 yr loan 4.125% monthly payment $655

this would not wipe out our debt but make a huge dent. plus lower monthly payment....send to debt.
NOT going to do anything drastic yet but starting to think. I feel I HAVE to get a handle on our monthly expenses FIRST. because I really have no clue. just went thru my July checkbook and came up with the $900/everything food bill, which I know is a ridiculous amount. I'm hoping to get a handle on this with Mint.
Also know I have to sit down with H and go over EVERYTHING. I don't know exactly what his bills/spending is.
I am NOT going to use the CC ever again. IF we have an emergency, especially for the house, I will sell something first.
I will start lowering the Toyota ad on Craigslist TONIGHT.
I will check to see if we can get internet without home phone/wifi??
I AM going to try to get H to agree to sell at least the RV. mustang I don't really know.
I do have a small pension from my RT job in Phoenix. Just went a looked at papers and it will be $428/month at age 65.
« Last Edit: August 14, 2014, 06:10:04 PM by silver fox »

MillenialMustache

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #30 on: August 14, 2014, 06:07:08 PM »
THANK YOU ALL FOR RESPONDING!
I did talk to my credit union (who also owns the mortgage) about refi. Brief numbers:
take out $100,000-put $13000 toward credit cards and loans. ( I could take out more, but this was just a first conversation with them)

20 yr loan 3.75% monthly payment $763
30 yr loan 4.125% monthly payment $655

this would not wipe out our debt but make a huge dent. plus lower monthly payment....send to debt.
NOT going to do anything drastic yet but starting to think. I feel I HAVE to get a handle on our monthly expenses FIRST. because I really have no clue. just went thru my July checkbook and came up with the $900/everything food bill, which I know is a ridiculous amount. I'm hoping to get a handle on this with Mint.
Also know I have to sit down with H and go over EVERYTHING. I don't know exactly what his bills/spending is.
I am NOT going to use the CC ever again. IF we have an emergency, especially for the house, I will sell something first.
I will start lowering the Toyota ad on Craigslist TONIGHT.
I will check to see if we can get internet without home phone/wifi??
I AM going to try to get H to agree to sell at least the RV. mustang I don't really know.

A long journey starts with a single step. I think you are taking some good steps and you will figure it out.

Cyanne

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #31 on: August 14, 2014, 06:12:46 PM »
I have Century Link for both home phone and internet. They gave me a promotional rate for the first year but now that it is up I will be dropping the phone and using my cell only. I imagine that you would be able to do the same.

One way to bring down your food bill is to cook from scratch. Convenience foods and prepared items are expensive. My family eats very well for around $400 and I have a teenage son who has expensive eating habits like mangos and avocados.

I wouldn't sell the Mustang either. We have a couple of classic cars and in my state there is a classic car registration/classic car plates which are a one time fee with no annual renewal. The insurance is also low since the insurance company assumes you don't put a bunch of miles on your collectible car. You should check and see if your state has something like this as well.

MrsPotts

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #32 on: August 14, 2014, 06:29:39 PM »
I would not sell the mustang or your commuter car.  Sell all those other vehicles, though.  If you need to haul shit you can get a used trailer for cheap.

Maybe you and DH could pool your monies and pay all the bills out of the pot?   You can't dig out until you know how deep the hole is.

I think that your food budget has a lot of low hanging fruit.    Truly...DH and I are lavish food spenders and we don't come close to half of that.   Is your DH interested in helping you dig out?  Maybe he could get behind frugal cooking?  Budgetbytes.com has awesome recipes.

Finally, I wouldn't refinance right now.  Try to cut all the other shit first. 

Good luck

hexdexorex

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #33 on: August 14, 2014, 09:25:51 PM »
RN is a great job. I would just keep working hard and cut back. You are starting really late but there are tons of people in situations worse than you. I would think of your cuts in spending as a game and not as a hardship...after a few months you will get really used to it and it will just feel natural.

I think tmobile pays for contract breakup. I use them and for 5 lines after taxes/corporate discount it is around $100 a month

waltworks

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #34 on: August 14, 2014, 10:03:24 PM »
I will just echo many other smart people here and say that you should cash-out refi the house (gah! I can't believe I just typed that...) and wipe out the high interest debt, establish an emergency fund, etc. You should also be doing all the other good things that have been mentioned (sell crap especially vehicles, buy less crap, etc) but leveraging the home equity is a no-brainer when you have double digit interest rates on other debt. You will be in *much* better financial shape immediately, AND you'll be in better shape in 10 years than you would be if you tried to continue the way you are now.

-W

Dicey

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #35 on: August 14, 2014, 11:08:11 PM »
Hi SF,
Okay, I've read everything twice and have a few more thoughts. First of all, don't punish yourself for going back to school. IMO, you surveyed the terrain and forged a path to freedom. It looks as if the value you will receive will more than outweigh your student debt. Kudos to you. I am sure that nursing school is not easy. Nor is dialysis. Unlike so many nursing jobs, you see the same people day after day and have a chance to build relationships with them. Sometimes they are there through no fault of their own and other times it's because they have made many, many poor choices in their life. In terms of your finances, resolve to be more of the former than the latter. I mean, learn from your mistakes and firmly resolve not to make them again.

Now I'm going to focus on DH for a while. If your food bill alone is $900, why he does he think $200 is anywhere close to equitable? You must discuss this with him, putting aside any guilt you may have about racking up student debt. You took on something really difficult to improve both of your lives. He needs to help.

Next, if he is "handy", why doesn't the Toyota run better? Get him cracking on that thing and lowering the price himself. Still think you should keep your car and the Mustang should go into storage until debt is resolved. That could be his carrot. I'm on the fence about the quad, but not the RV. You bought it because it symbolized something you didn't think you'll ever get. Truth is, you can get it, but you are putting the cart before the horse. If it's clean, you should be able to sell it to someone looking to live in it for quite a bit more than you paid for it. Blue Book/NADA doesn't matter as much if it's livable. Put the proceeds toward debt. If you put your mind to it, by the time you're ready to retire, you can buy (and afford) something more sensible than an old 34' gas guzzler. And you'll be able to pay cash for it. I think there's one more vehicle, but I can't keep them straight. If there is, get rid of it. If DH needs a car, he can drive you to work. You do not need two right now. Change your insurance and use this as an excuse to shop around for a lower rate on what's left.

Under normal circumstances, I would facepunch you for taking cash out of your home to pay off debt.  A smart friend/financial planner once warned me not to use my house as an ATM. While I strongly agree with this, I think your case is a little different. I would suggest you take out enough to resolve all of your school-related debt. This will give you some breathing room and more money to throw at the other debt. Then set yourself to the task of paying everything else off as fast as possible. BTW, taking out a 30 year loan does not mean that you have to take 30 years to pay it off. This late in the game, it's a higher priority to amass money for retirement before you pay off the house.

Finally, for this whole thing to work, you must boost your retirement savings. Your goal is to pay off debt so you can retire, so one without the other does not get you to your goals. Time is your friend when it comes to retirement savings. You don't have much left. You have a good start, so don't blow that now. I wish I could look you straight in the eye as I tell you this, as it is the key to your future. And then I'd give you a hug and assure you that you are closer than you think.
Also, congrats on speaking to your CU today and hooray for that small pension. That, plus SS will help you by reducing the amount you will need to save to realize the retirement of your dreams.

Silver Fox, you have made amazing progress in just one day! Please keep posting, so we can cheer your continued success.

Sdsailing

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #36 on: August 14, 2014, 11:35:04 PM »

With your RN, you need to focus on getting the higher paying job that you are "eligible" for. It sounds as though this may involve moving or a long commute, but it is your most effective way to financial health. IMO it is your only path to substantial savings for you in retirement.

Also, you need to contribute to 401k to the max that they will match.  It sounded as though your 6% is min not max.

Perhaps husband can be enlisted to do something small to raise money, such as ebay or craigslist selling.

fa

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #37 on: August 15, 2014, 06:30:02 AM »
Agreed with these previous posters.

I wonder about the abilities of DH.  He is on disability, but restores old cars, builds retaining walls...  He doesn't sound too disabled.  Is there any job he can do?  Telemarketing, customer service, tech support, etc.  It sounds that he is healthy enough to hold a job.  That would help a lot.

The Mustang is pure emotion.  I love those cars too but you have a serious emergency here.  Sell it!

You should read the book "Your Money Or Your Life".  Seriously.  It just sounds that there is such a habit of mindless spending in your household.  If you cannot control that, you will never get a handle on your emergency.

Food.  We spend less than $500/mo and I have 2 teenagers. We eat very well and very healthy.   How in the world can you spend $900 for 2 people?  There alone you could immediately save $700/mo.  No eating out.  No steak or shrimp.  Period.

Don't feel guilty about your degree.  RNs have great job opportunites and you like your job.  Well worth it.

Best of luck.

ltt

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #38 on: August 15, 2014, 06:49:08 AM »
Hi!!

I read your story with interest as we are the same age.

This is what I think you should consider:

I added up your remaining mortage, credit cards, overdraft account, student loans, car loans, etc. and came up with around $131,000.  Would you consider refinancing wrapping all of these into a new 15-year loan?  Your payment should be about the same as what you are currently paying--maybe even a little less--if you can get a loan around 3.5 percent.  It's only extending the loan by 5 years and that will put you at retirement age anyway.  You may still be able to pay it off early, once you start digging yourself out of this small hole.  And I do see this as a small hole.

Do not look at your education loans as a "bummer," because you really have taken the bull by the horns and used them to get a job you love.  What could be better than that??

Definitely keep contributing to your 401K.  Since your husband fixes up your vehicles, have him fix up the motor home and put it up for sale.  Keep the vehicle that your husband uses to haul materials in--you will definitely need it.

Don't sell your Ford car--keep it.  And don't bike to work--too dangerous!! 

My husband found it interesting that you live in a community with a dialysis center, but yet no grocery store.  This is a really far-flung idea, but since your husband fixes up vehicles, would he be able to fix up a small building with help to try and start a small grocery store in your town.  He could always hire someone else to run it.

As for the grocery situation, yes this is an area you could cut down on.  Since it's the two of you, I'd say maybe 50% to 66% of your current expenses.  Stock up on sale items when you shop.  More meal planning.  Less going out.  Booze can be really expensive.  The only difficulty is buying fresh vegetables and fruits when the nearest grocery store is 40 miles away.  On 2 plus acres, can you do any gardening, or is it too hot?? 

Sounds like you love your lifestyle and I'd stay put.  I admire that you went for a job you love in a place that you love.  With some adjustments, you will be back on the path to prosperity in no time. 

Bob W

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #39 on: August 15, 2014, 06:58:09 AM »
I haven't read all the responses but here is my pennies worth.

Take the 30 year refi and pay off ccs asap.

Your food budget is just unbelievable!  I mean I was shocked.  Shoot for 250-300. (monthly savings 600)

Motorhome -- You're kidding right?  Sell that puppy for whatever you can.  The ad reads "or best offer."

No biking on 55 dark roads!  You would save like 50 cents a day and probably be one of your own patients.

Take these and some other suggestions and work a little OT and in no time you will be saving 3,000 + a month!

On your student loan,  I don't recall the rate?  But if it is under 6% I would pay it off as slowly as possible while continuing to fill up the retirement tank.  You should also talk to HR or do some research.  Many times medical student loans can be entirely forgiven it you are serving in rural high need areas.

Don't despair you are in really great shape income wise.   You have so much opportunity that I almost wish I were you so that I could get to it with a vengeance.    In 6 months, if you follow many of our suggestions,  you will be so damn happy.  Debt free and saving $3,500 a month!


ltt

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #40 on: August 15, 2014, 07:14:59 AM »
Oh, and I wanted to add, once you do the refinance, take the additional money and put in an emergency fund.  Get it funded.  Then boost your 401k rate.  Then, also start looking at investing.

daverobev

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #41 on: August 15, 2014, 08:26:49 AM »
Taking money out of a house and so paying 4% on it to have it sit in an emergency fund at 1% or less seems silly.

OP - how about a HELOC? Take that money and pay off the credit cards. Cut up all bar one card, and use that one for all monthly expenses.

Refi if the rates are lower, if a 15 year is both cheaper and more flexible, it's a no brainer. Half a percent on $100k is $500 a year...

Can you grow some fruit and veg? 2.5 acres with chickens... sounds pretty idyllic,if you can get rid of the stress and love your job, why retire antway?!

Good luck!

PS keep the Mustang, especially rather than cause marital upset. Sell the class A, they get like 5mpg...

minimustache1985

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #42 on: August 15, 2014, 09:03:24 AM »
THANK YOU ALL FOR RESPONDING!
I did talk to my credit union (who also owns the mortgage) about refi. Brief numbers:
take out $100,000-put $13000 toward credit cards and loans. ( I could take out more, but this was just a first conversation with them)

20 yr loan 3.75% monthly payment $763
30 yr loan 4.125% monthly payment $655

this would not wipe out our debt but make a huge dent. plus lower monthly payment....send to debt.
NOT going to do anything drastic yet but starting to think. I feel I HAVE to get a handle on our monthly expenses FIRST. because I really have no clue. just went thru my July checkbook and came up with the $900/everything food bill, which I know is a ridiculous amount. I'm hoping to get a handle on this with Mint.
Also know I have to sit down with H and go over EVERYTHING. I don't know exactly what his bills/spending is.
I am NOT going to use the CC ever again. IF we have an emergency, especially for the house, I will sell something first.
I will start lowering the Toyota ad on Craigslist TONIGHT.
I will check to see if we can get internet without home phone/wifi??
I AM going to try to get H to agree to sell at least the RV. mustang I don't really know.
I do have a small pension from my RT job in Phoenix. Just went a looked at papers and it will be $428/month at age 65.
This is great news!  Honestly I would go with the 20 year cash-out (although like you said it was just a first discussion, so a 15 year may make sense too) and pay off all the credit cards in one swoop.  If that 763 also includes the same costs as your current 1027 payment (I'm assuming your current payment includes escrow payments for taxes and insurance) that frees up $264 a month in mortgage payments AND $297 in minimum CC payments.  Add in a modest $600 in savings on food and such and suddenly you're throwing $1161 a month at those SLs, the 6.8% will be wiped out in 5-6 months!  Honestly at that point all your debt will be under 5% interest and I'd work on trying to max retirement contributions at that point and see what your monthly take-home is with that, and start chipping away at your lower interest debts in conjunction with saving more aggressively for retirement.  Still sell that RV and Toyota and throw that cash at your debts- and parlay the insurance savings from not having those vehicles into a term insurance policy.

DocHolliday

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #43 on: August 15, 2014, 10:45:27 AM »
First,

I'm not sure this has been stressed enough but congratulations on realizing your hair is on fire and having the strength of character to ask for and actually apply the advice given. 

I think that the advice you've been given is solid.  My sole contribution would be to advise you to seek out a loan of 118,094 and use the money to pay off the entirety of your credit loans as well as your student loans.  On the 20 year loan that you described (and BTW you should shop for the best mortgage deal and not just accept what is offered by one branch) taking the extra 18,094 would cost approximately $108 more per month (making the payment $871).  The net benefit would be that this would be tax advantaged (not like the credit debt) as well as being at a lower rate than the student loans which will work to your benefit.  Take the extra each month and pay down the car loan each month as long as there is no penalty.

Cheers,

DocHolliday

Dicey

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #44 on: August 15, 2014, 12:40:41 PM »
Taking money out of a house and so paying 4% on it to have it sit in an emergency fund at 1% or less seems silly.
I completely agree, if that was the only reason for taking money out, but clearly an EF is only a tiny fraction of what needs to be done here. The EF is insurance against future emergencies. Not silly at all.

sheepstache

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #45 on: August 15, 2014, 04:37:19 PM »
It sounds from your replies that you're being really aggressive about solving the problem, well done!

I would compare the cash-out you could get from the home to a 401k loan.  with a 401k loan you can borrow half your balance.  The interest gets paid back into your account, so effectively it's 0 interest.  The initiation and processing fees are minimal, like 10 bucks a year.  Downside is that the balance of the loan is often held in cash, so you're gambling that the growth in the market wouldn't be greater than the interest you're paying off but at least with the ~12 and 10 percent debt seems like that would be a safe bet.  And you can still make contributions while paying back the loan.  Obviously check all these things with your HR department, it could vary a lot by institution.


Now I'm going to focus on DH for a while. If your food bill alone is $900, why he does he think $200 is anywhere close to equitable? You must discuss this with him, putting aside any guilt you may have about racking up student debt. You took on something really difficult to improve both of your lives. He needs to help.


+1  Plus it sounds like you're saying you make the entire mortgage payment of over $1k. Is he really paying other bills that are equivalent to that?  Perhaps the two of you could talk about budget and whether he could contribute proportionate to his income.  Even if you keep accounts separate and even if you want to pay off your personal debts separately, you're on the same team when it comes to basic living expenses.  Does he have retirement savings?  I think you'll be fine with the plans outlined above and I'm not espousing any particular way to handle family finances, but looking at your joint big picture could bring up even more options (or emergencies) that you hadn't thought of. 

2ndTimer

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #46 on: August 16, 2014, 09:06:32 AM »
I read your case with interest since we have some things in common both being older couples.  I can't add anything to the financial advice since you have gotten loads of it.  I can share two spouse tricks that worked for us.

 My husband really came on board when I showed him my estimate of what our retirement income would be and suggested a practice run living on it.  Suddenly he could see a reason for controlling our spending besides just me ruining his fun. 

Once he was in agreement, I provided him with a small notebook and pen to keep track of what he was spending.  The river of money that was running from his pocket straight to convenience stores for coffee and junk food has really slowed down now that he records it.   

I also have a notebook and pen which I use religiously.  That seems frightfully low tech in our world but it had zero learning curve and cost a grand total of $1.00 for all the equipment.  It has significantly cut my spending on impulse purchases of wine and potato chips. 

silver fox

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #47 on: August 16, 2014, 09:23:59 AM »
WOW I can't believe all the wonderful advice. I am so grateful for stumbling across MMM and posting to this forum. A few days ago I really felt hopeless about our situation. I DON'T anymore. I really feel like people out there are willing to take time out of their busy life and help me. I see that maybe there is light at the end of the tunnel, with some sacrifice and hard work. When "Diane" said "she wished she could look me in the eye and then give me a hug" I sort of teared up. I felt really alone with this problem. I have also started an honest dialogue with Hubby. It's really my fault for not being honest with him years ago about our financial situation. I told him we will sit down at least once or twice a month and I will show him our budget. I hope that when he sees how much is coming in and how much is going out, he will also realize that "OUR HAIR IS ON FIRE"!!! This will probably take some time.
I have received all kinds of financial advice that I am trying to make sense of. "Numbers" are not my strong point. I'd rather go clean out the chicken coop or turn compost than sit down and try to figure out the best insurance rate, or mortgage rate ect..... I have to say it's been hard to see my "lifestyle" picked apart so brutally honest. BUT this is good, I am starting to see how foolish we have been. Some of the suggestions such as HELOC loan, or taking out from 401K ect... I honestly don't know much about. I am trying to educate myself (quickly) about some financial ideas. I don't want to make MORE stupid mistakes. So I have decided to take a couple of months, while seeing where our money is actually going, before I make big decisions such as a refi of the house. I think I do need the "debt in my face" a little longer while we make some adjustments to our lifestyle.
Now for the GOOD NEWS and BAD NEWS!

GOOD NEWS:
-groceries as of Aug. 15th $256. IF we double that (which I really hope we don't) monthly food bill should be closer to $500 then $900. I am trying to change quickly in this area as I feel I have the most control over this.
-Toyota is back on craigslist with a lower amount and OBO. hopefully this will go quickly. and H has agreed to put this on overdraft loan FIRST!
-getting ready to have a yard sale as soon as it cools off. really looking around our place to see what we can sell. I think a lot!!

BAD NEWS:
-first talk about selling the RV or Mustang with Hubby. Not so good. my hope is that with some time, he will see the "HAIR ON FIRE" situation we are in!

Well at least we are sitting down and talking about this situation and that's a start right?
I really feel overwhelmed with all the help and support and great advice I'm getting here.


daverobev

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #48 on: August 16, 2014, 10:19:26 AM »
Taking money out of a house and so paying 4% on it to have it sit in an emergency fund at 1% or less seems silly.
I completely agree, if that was the only reason for taking money out, but clearly an EF is only a tiny fraction of what needs to be done here. The EF is insurance against future emergencies. Not silly at all.

And... the rest of my post where I suggest the HELOC etc? Again, no point having money costing 4% getting 1%. Better to have a HELOC at 5% but unused.

Take as much out of the house as is needed to kill the 6-20% debts, but no more; set up a method of getting more money if needed.Once monthly cashflow is significantly better then it's all good.

2ndTimer

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Re: CASE STUDY: 51 yrs old and scared!!!
« Reply #49 on: August 16, 2014, 10:57:59 AM »
Hi Silverfox:

All this information coming at you is like trying to drink from Niagara falls.  You are smart to seize on the thing that you understand  and are responsible for (grocery shopping) and get it under control. Seeing progress in one area will encourage you to step out into the next one. 

Also very smart to give the Hub a clear picture of what is going on.  Once he really understands the situation he may surprise you with his good ideas, hard work, willingness to sacrifice and abilities you didn't know he had.   I know mine did.  I was dazzled when he stepped up and repaired a fairly major plumbing issue recently.  Turns out he had worked as a plumber's assistant one summer when he was in going to school about 30 years ago.