Author Topic: Case Study: Please help, have no idea how to improve our finances  (Read 19304 times)

leopard print

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My husband is 35, I am 31.  We have two children, ages 2 and 4, and are due late Jan. of 2015 with our third child.

Income: We have no income right now, my husband is completing an Accelerated BSN in Nursing and will be searching for employment next month- but graduates in Feb. of 2015.  It is typical for an RN student to be offered a job even prior to passing the NCLEX here. We have been living off of savings for the past 8 months, and took out student loans to pay for his tuition. This in itself might deserve face punches. Starting salary for RN's in this area is around 45k a year- and he would hopefully have the opportunity to work extra shifts.

We have 29k left in the bank to pay for the next 3.5 months of living expenses, and are hoping not to spend more than 9k of that before he starts work again. If he can't find employment right away we will need to dip further into our savings.

Current expenses (with notes about future expected expenses):

Annual Expense Sinking Fund: $500.00/mo. This monthly amount covers all of the below ANNUAL expenses
(Prop Taxes: 3400
Car Registration: 120
HOA: 500
Flood Insurance (we live in a high risk flood zone): 575
Home Maintanence/ Car Repair Sinking Fund: 1200
Cell Phone Minutes: 200.00
Magic Jack: $36.00)

Mortgage Payment: 500.00/ mo

Utilities: $370.00/ mo
Includes: (these are all paid according to a budget billing plan which regulates the payment so that it is is the same year round)
Gas: $106.00
Electricity: $119.00
Water: $110.00
Internet: 35.00

Groceries: $400.00

Clothing/ Haircuts: $60.00

Gas/ Oil: $200.00/mo

Car Insurance for 2 cars: 88.00/ mo
Home Insurance:142.00/mo

Gifts/ Christmas: 20.00/ mo

Student loans (this is the expected amount we will need to pay upon graduation): 455/ mo

Health Insurance: 300/ mo ( is through Medicaid until we are employed again- but this is our estimated cost because dh will work in a hospital)

Life Insurance: 20/ mo

Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again)


Total Monthly Expenses: 3455
Total Monthly Expected Income: 2900-3000/ mo

We do not include blow money or gifts or recreation for our kids in our budget because we receive gifts from family that cover 'fun' costs.  We just save them and use them for the occasional night out or coffee drink or book or whatever.

Assets: Our home is valued around 275k and we owe 39k on it.
We have around 45k split between a Roth IRA and 401K
Our cars are in good repair and are paid for.
As mentioned above, we hope to have around 20k still in our savings account upon employment.
We have an HSA account with about 5k
I have a Whole Life Insurance Policy worth about 5k cash
We just received an early inheritance of 10k and are trying to decide how to allocate it.

Debts: Our total student loan debt is around 34k

Specific Questions: When we add up our total monthly expenses it totals more than our total monthly (expected) income.  Also, in this projected budget we have no savings, nothing going to retirement, nothing to put towards eventually replacing our cars, no vacations, no extras whatsoever.  DH is willing to work extra shifts to bring more income, but I will be unable to work for a while after the baby and do not have much earning potential- it is advantageous for me to stay home financially and for the sake of our family.
 
All this to ask- should we pay off the mortgage or our student loan debt? If we eliminate the mortgage payment we would eliminate a 500/ mo payment, or if we eliminate school debt then a payment of 455/ mo.  We could feasibly pay off either one if we use all but 5k of savings, a big chunk of our Roth money, cash in my whole life policy and use this gift we just received.  We would not do this until dh is employed, of course.

Also, one other detail that matters to me quite a bit, is that our mortgage is a private mortgage through family- we have a very low interest rate, but I do not want to continue to owe money to family members (this is the biggest and only factor that makes me want to pay off the mortgage instead of the student loans).

I'm sorry this is so very long and detailed. Can anyone offer opinions or advice?

skunkfunk

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #1 on: November 26, 2014, 01:45:35 PM »
Okay, there are things to do but you are not going to like it. You've cut your current lifestyle to the bone, and the only way out is to change that lifestyle or make more money. You say making more money is impossible, so I'll spell out below what I'd do in your situation.

Annual Expense Sinking Fund: $500.00/mo. This monthly amount covers all of the below ANNUAL expenses
(Prop Taxes: 3400
Car Registration: 120
HOA: 500
Flood Insurance (we live in a high risk flood zone): 575
Home Maintanence/ Car Repair Sinking Fund: 1200
Cell Phone Minutes: 200.00
Magic Jack: $36.00)
Holy cow, this is weird. That's quite a bit in property taxes and HOA + flood insurance, that's over 400 a month right there. Right. There. This is going to be a common theme in my reply - you need to move.
Mortgage Payment: 500.00/ mo
Good mortgage payment, but this doesn't cover all that other shit. Call it $1042 with taxes/insurance. Not bad, really.
Utilities: $370.00/ mo
Includes: (these are all paid according to a budget billing plan which regulates the payment so that it is is the same year round)
Gas: $106.00
Electricity: $119.00
Water: $110.00
Internet: 35.00


There's fat to cut here, but it's not the worst I've seen. Not too much to say here.
Groceries: $400.00
Reasonable.
Clothing/ Haircuts: $60.00
Shop more secondhand and learn to cut hair and you can save here, but it's just trimming around the margins really. You'll need bigger cuts than that.
Gas/ Oil: $200.00/mo

Car Insurance for 2 cars: 88.00/ mo
What cars do you drive? You realize that's $500 every 6 months right? Full coverage or bad accident history? You likely need to get rid of a car and replace with a bicycle, ebike, scooter, something that doesn't cost $100 a month in gas/insurance.
Health Insurance: 300/ mo ( is through Medicaid until we are employed again- but this is our estimated cost because dh will work in a hospital)

Life Insurance: 20/ mo

Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again)
That's pricey for insurance, will it not be subsidized by employer? Look into high deductible plan.

My opinion, you can't afford to tithe right now. If you hit FI you can tithe so much more as your stache makes more and more money. Save this for later.
Assets: Our home is valued around 275k and we owe 39k on it.
We have around 45k split between a Roth IRA and 401K
That's quite a lot of equity. I still think you need to move. I'd sell that house and go somewhere with no HOA or flood insurance, buy a cheaper house and use the difference to pay down those student loans. My brother, for instance, got a house for $80k last year and slapped some paint on it. Nice house, 3 bedrooms, plenty for 5 people. You may have to move to a cheaper city (hopefully stay near enough family) but you've got to cut expenses, and this is where you start. I mean, you could pay off your current house, and it is STILL $600 a month. That's not good in your position, not with a $500 student loan payment.
Our cars are in good repair and are paid for.

I have a Whole Life Insurance Policy worth about 5k cash
We just received an early inheritance of 10k and are trying to decide how to allocate it.

Debts: Our total student loan debt is around 34k
What cars, good mpg? Insurance costs are high as mentioned before. I suggest getting rid of any Whole Life policies, you can put that money to much better use. Term life is okay at this point, get a short term after FI it is not needed.

My suggestion stands - sell house, pay off student loans, buy one with cash where insurance and taxes are a bit cheaper. That should cut over $1k from your monthly expenses in one fell swoop. You can trim other fat if you want (the cars are the next thing to look at) but that one alone gets you in decent shape.
All this to ask- should we pay off the mortgage or our student loan debt? If we eliminate the mortgage payment we would eliminate a 500/ mo payment, or if we eliminate school debt then a payment of 455/ mo.  We could feasibly pay off either one if we use all but 5k of savings, a big chunk of our Roth money, cash in my whole life policy and use this gift we just received.  We would not do this until dh is employed, of course.

Also, one other detail that matters to me quite a bit, is that our mortgage is a private mortgage through family- we have a very low interest rate, but I do not want to continue to owe money to family members (this is the biggest and only factor that makes me want to pay off the mortgage instead of the student loans).

All the more reason to follow my advice. Fixes every one of these problems. Where do you live? I hate to make a blanket suggestion like that without knowing the real estate market at all.

seattlecyclone

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #2 on: November 26, 2014, 01:53:17 PM »
Expenses: your spending for natural gas, electricity, and homeowner's insurance are significantly higher than mine. Regional differences in prices and climate could be a big reason for this, but you should look at ways to economize on utility use and consider shopping around for a cheaper insurance policy.

As to the loans, you'll be better off mathematically prioritizing the student loan if the interest rate is higher. However I do understand the desire to not be indebted to family members, so I would understand if you want to prioritize paying off the mortgage instead. Either way, as you say your current expenses are higher than your projected income, so something has to give. Having your husband pick up a few extra shifts and directing some of your savings to knock out either one of those loans quickly would give you some breathing room. I probably wouldn't use the whole amount of savings for the loan, but spending all but a $10k emergency fund would be a good thing to do.

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #3 on: November 26, 2014, 02:00:27 PM »
Thank you so much for your replies- I was anxiously waiting for advice. 

skunkfunk- You're right- I really don't want to sell the house, and it's hard especially since the mortgage is so low, but it is expensive for other reasons.  We've been considering this because the same advice was recommended to us in another forum- it's just a really, really hard decision to make. Anybody else think we should sell the house to eliminate all debt?

seattlecyclone- I will call our insurance company next week to see about our home insurance- they recently raised it by 50.00 per month- and we don't have that kind of space in our budget. The student loan interest rates are higher- much higher- our mortgage loan is at 3% and student loans at 6.8 - 8.24%, but I am so, so motivated to wipe out what we owe to family. 

by_1008

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #4 on: November 26, 2014, 02:01:08 PM »
I agree about the high expenses for your utilities. Could you house stand to be weatherized? A small upfront cost in some energy efficiency improvements could help your cash flow issues.

skunkfunk

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #5 on: November 26, 2014, 02:04:07 PM »
Thank you so much for your replies- I was anxiously waiting for advice. 

skunkfunk- You're right- I really don't want to sell the house, and it's hard especially since the mortgage is so low, but it is expensive for other reasons.  We've been considering this because the same advice was recommended to us in another forum- it's just a really, really hard decision to make. Anybody else think we should sell the house to eliminate all debt?

seattlecyclone- I will call our insurance company next week to see about our home insurance- they recently raised it by 50.00 per month- and we don't have that kind of space in our budget. The student loan interest rates are higher- much higher- our mortgage loan is at 3% and student loans at 6.8 - 8.24%, but I am so, so motivated to wipe out what we owe to family.

I understand, houses can be really emotional. On yet another front, have you considered that your $1200 car/home repair allowance may be woefully inadequate?

I too owe money to family for my house, and it is only 3% but it is in major paydown mode because I don't want to owe that much to my mother. She's been great about it, doesn't say a word or let it change anything but still. Only $3100 left, though!

Gin1984

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #6 on: November 26, 2014, 02:09:27 PM »
If you have no income, why is your husband not getting subsidized student loans?  Can you apply for grants/scholarships to lower that debt?  The cost of the student loans is high, over 10% of your gross income. If you want to keep the house, that needs to go. 
So beside things he can do, what about you?  Can you get swagbucks and cut $60 from his book cost by getting amazon gift cards?  What about mypoints, and stretching your food budget?
Get rid of you whole life insurance.  Call around and get your car and home insurance lowered, they look high.

Simple Abundant Living

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #7 on: November 26, 2014, 03:08:38 PM »
My husband is 35, I am 31.  We have two children, ages 2 and 4, and are due late Jan. of 2015 with our third child.

Income: We have no income right now, my husband is completing an Accelerated BSN in Nursing and will be searching for employment next month- but graduates in Feb. of 2015.  It is typical for an RN student to be offered a job even prior to passing the NCLEX here. We have been living off of savings for the past 8 months, and took out student loans to pay for his tuition. This in itself might deserve face punches. Starting salary for RN's in this area is around 45k a year- and he would hopefully have the opportunity to work extra shifts.

We have 29k left in the bank to pay for the next 3.5 months of living expenses, and are hoping not to spend more than 9k of that before he starts work again. If he can't find employment right away we will need to dip further into our savings.

Current expenses (with notes about future expected expenses):

Annual Expense Sinking Fund: $500.00/mo. This monthly amount covers all of the below ANNUAL expenses
(Prop Taxes: 3400
Car Registration: 120
HOA: 500
Flood Insurance (we live in a high risk flood zone): 575
Home Maintanence/ Car Repair Sinking Fund: 1200
Cell Phone Minutes: 200.00 Look at the IP Daley's communication Superguide to save here. You shouldn't be more than $60, IMO
Magic Jack: $36.00) Is this cheaper than a land line? Do you need this?

Mortgage Payment: 500.00/ mo

Utilities: $370.00/ mo
Includes: (these are all paid according to a budget billing plan which regulates the payment so that it is is the same year round)
Gas: $106.00
Electricity: $119.00
Water: $110.00
Internet: 35.00

Groceries: $400.00

Clothing/ Haircuts: $60.00 This should be close to zero. Get a clipper set and some decent shears. Start doing your own hair cuts. Clothing should be limited to kid's shoes. The rest can be found at the thrift stores/classified/facebook yardsale sites.

Gas/ Oil: $200.00/mo Seems high for a student and SAHM- what's your gas mileage/how far are you driving?

Car Insurance for 2 cars: 88.00/ mo
Home Insurance:142.00/mo

Gifts/ Christmas: 20.00/ mo  Right now, this should be pretty much zero. A 4 and 2 year old don't need much. Everyone else surely understands that you have no income at the moment!

Student loans (this is the expected amount we will need to pay upon graduation): 455/ mo

Health Insurance: 300/ mo ( is through Medicaid until we are employed again- but this is our estimated cost because dh will work in a hospital)

Life Insurance: 20/ mo

Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again) I am of the opinion that tithing is important, even before FI. I would make the priority selling the house so that this is possible without jeopardizing a savings/retirement plan.


Total Monthly Expenses: 3455
Total Monthly Expected Income: 2900-3000/ mo

We do not include blow money or gifts or recreation for our kids in our budget because we receive gifts from family that cover 'fun' costs.  We just save them and use them for the occasional night out or coffee drink or book or whatever.

Assets: Our home is valued around 275k and we owe 39k on it. Sell, sell, sell. Pay off SL's and any other debt. When your DH gets a job offer, make sure your new home/rental is near for a shorter commute/possibility of biking or walking.
We have around 45k split between a Roth IRA and 401K
Our cars are in good repair and are paid for.
As mentioned above, we hope to have around 20k still in our savings account upon employment.
We have an HSA account with about 5k
I have a Whole Life Insurance Policy worth about 5k cash
We just received an early inheritance of 10k and are trying to decide how to allocate it.

Debts: Our total student loan debt is around 34k

Specific Questions: When we add up our total monthly expenses it totals more than our total monthly (expected) income.  Also, in this projected budget we have no savings, nothing going to retirement, nothing to put towards eventually replacing our cars, no vacations, no extras whatsoever.  DH is willing to work extra shifts to bring more income, but I will be unable to work for a while after the baby and do not have much earning potential- it is advantageous for me to stay home financially and for the sake of our family.
 
All this to ask- should we pay off the mortgage or our student loan debt? If we eliminate the mortgage payment we would eliminate a 500/ mo payment, or if we eliminate school debt then a payment of 455/ mo.  We could feasibly pay off either one if we use all but 5k of savings, a big chunk of our Roth money, cash in my whole life policy and use this gift we just received.  We would not do this until dh is employed, of course.

Also, one other detail that matters to me quite a bit, is that our mortgage is a private mortgage through family- we have a very low interest rate, but I do not want to continue to owe money to family members (this is the biggest and only factor that makes me want to pay off the mortgage instead of the student loans).

I'm sorry this is so very long and detailed. Can anyone offer opinions or advice?

index

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #8 on: November 26, 2014, 03:15:42 PM »
Your housing costs are the glaring issue in your budget.

All in: HOA + Flood Insurance +HO Insurance + Taxes + Mortgage + Utilities + Maintenance = ~$1292/month - 43% of your take home pay.

Cars are 10% of your take home pay

If you want to continue to live in the house. I would:

a. Cash out the insurance (saving you $20 per month) and put inheritance toward the student loan debt bringing it down to 19K

b. Get a HELOC on the house for 19K and pay off the student loan. This should cost you about ~3.5% per year. And you can pay off the HELOC in 5 years for ~$350/month.

$1700 per year is expensive for a 275k house. I have insurance through Amica for $280k for $920/year.

You cannot really afford to tithe right now unless you sell your house.

If you cut out tithing, life insurance, replace student loans with a 5yr HELOC, and shop around for insurance. You should shave $585 off of your monthly expenses leaving you with a budget of $2870 per month. 



rmendpara

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #9 on: November 26, 2014, 03:28:47 PM »
Way too much spending on your home and home-related expenses.

Mortgage + utilities + taxes + sinking = 20,555 / 12 = 1,712

Being generous, let's say you expect to have 50k household income next year, then you spend 41% of your gross income on housing. This is your biggest problem.
In financial terms, you need to decrease your bottom line (expenses), increase your top line (make more money) or both to keep a positive budget. Without the mortgage, you'll save 6k per year in payments, but even that only gets you to 29% spent on housing costs of gross income of 50k.

Conclusion: In no way can you afford your house.

A short term solution would be to sell your house, since you have a lot equity, but if your expenses don't decrease then you'll have spent all your previous savings in a few years.

I'm sure you two can get by for a few years, but unless your partner can make another 10k+ per year, you'll be in the same situation in 10 years (financially).

Some other areas can be cut, and others already discussed that, but this is the elephant that needs to be addressed somehow.

Given your home is a 280k value, I don't think 45k is enough for your family to get by. I'd be looking for ways to increase your household income.

I will, however, give you much applause for having been so responsible with the home loans to pay so much of it off already and to have saved up to pay living expenses while going back to school to minimize future debt. Well done! I think you have what it takes to be on a good path, but some uncomfortable decisions will need to be made in the next few years to help get there.

Good luck!
« Last Edit: November 26, 2014, 03:35:20 PM by rmendpara »

skunkfunk

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #10 on: November 26, 2014, 03:54:04 PM »
I will, however, give you much applause for having been so responsible with the home loans to pay so much of it off already and to have saved up to pay living expenses while going back to school to minimize future debt. Well done! I think you have what it takes to be on a good path, but some uncomfortable decisions will need to be made in the next few years to help get there.

Good luck!

Agree with everything you said. They are in a much better position than it could have been. The average consumer would not have the savings or equity and probably some flaming credit cards. 
« Last Edit: November 26, 2014, 04:07:06 PM by skunkfunk »

Thegoblinchief

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #11 on: November 26, 2014, 04:13:15 PM »
The home insurance seems ridiculously high - is that because of the high-risk flood zone? Is there somewhere you could move that would get you out of the flood zone but still within reasonable commuting distance (ideally bikeable) to DH's school and/or possible employers?

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #12 on: November 26, 2014, 05:25:58 PM »
Thanks all for the encouraging words- the truth is that while both dh and I are very prudent with money and avoid credit cards, we've also been blessed more than once with inheritance money, and so can't really take credit for the positive parts of our financial situation.

Since everybody agrees that our insurance costs are too high, I will definitely be contacting our insurance company next week to either lower our payments or shop around for another company.

For those of you who calculated the percentage we are spending on our home- thank you! I have never considered how much of our past/ future income will be spent on the house- I just assumed since we had so much equity we were doing okay.  This puts it into a completely different perspective.

Our cars; we have a 2003 pontiac vibe and a 2005 lexus suv- the vibe gets great gas mileage- the lexus is moderate.  I think we could cut down on gas expenses- we drive quite a bit to visit family about 45 miles away, and dh's school is 15 miles away.

As far as my ability to bring in income- I've done swagbucks a little and just can't seem to make it worthwhile.  I've thought about maybe doing some babysitting in our home after we get settled in with the new baby- perhaps that could work but I'm not going to be ready for another six months.

I was just talking to DH about your responses to my case study and all of the suggestions that we sell the house. He stated that he will definitely be working prn to increase our income, but neither of us is sure this will make staying here feasible.  His long term goal is to become a nurse anesthetist, which pays very well, but will be a HUGE expense and we are waiting to see how to make this happen without a bunch of student loans (3 years of school= 3 years loss of income plus tuition costs, plus living expenses >110k

Also- just to clarify, our phone costs are not 236/month, they are 236 per year- we have pre paid plans and a magic jack landline

Gin1984

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #13 on: November 26, 2014, 06:30:40 PM »
How much do you need to make, to make it worthwhile, when the only thing you are doing is changing search engines?  And given your debt, even $60/year is worth it.

Spondulix

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #14 on: November 26, 2014, 06:59:27 PM »
What are your SL and mortgage interest rates?

MKinVA

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #15 on: November 26, 2014, 07:16:00 PM »
Before you pay too much on his student loans, look into the government program where if he works for a government agency or a nonprofit for 10 years and I think pays ten percent to the loans for that ten years, the loans are then forgiven. Not sure of all the technicalities, but check it out. You don't want to pay for something that could be paid for in a different way. Most hospitals are non profits or government facilities like state hospitals or the VA.

DavidAnnArbor

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #16 on: November 26, 2014, 08:12:58 PM »
I don't know what the rules are for food stamps or SNAP but maybe you would qualify since you have no income.  You're children should be qualified for health care under federal programs for those below a certain income. You might want to find some kind of help from local non-profit organizations that could provide advice, assistance, food, clothing. You're about to have three children and you really need all the help you can get financially.  Your husband should absolutely become a nurse anesthetist, the income for those jobs is well above $100K a year.  I think your house is way too expensive, flood insurance is crazy. But since you're about to have a baby is now a good time to move?  I think you can wait to move a couple months after your baby is born. 

DollarBill

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #17 on: November 26, 2014, 09:02:12 PM »
Quote
Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again)
I don't understand when a church would expect this or how people think this is ok...sounds like a Jim Baker to me.

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #18 on: November 26, 2014, 10:02:27 PM »
Student loan debt interest rate varies between 6.8% and 8.24 %- Mathematically it would make more sense to pay this off, but as I mentioned, it is very uncomfortable owing money to family. 

DollarBill- Our church doesn't expect us to tithe, per say, it's just something we want to do- and I completely agree that tithing shouldn't be done on someone elses dollar- I definitely want to be more settled financially before we begin to tithe.

DavidAnnArbor- I do think we would qualify for more govt. assistance, but given that we only expect to be unemployed for 3 more months, I don't think we are going to apply for any additional assistance.  Right now we are on medicaid, and I really dislike depending on the government.
Also, yes I am encouraging DH to become an anesthetist- he is an excellent student and I think he would do well, but the cost of grad school is enormous- if I don't work, we would be looking at 110k minimum to cover tuition and living expenses during the 3 years of school required to become a crna- do you think we should take out that amount of student loans- most people seem to think it's a really bad idea...

MKinVa- thanks for the suggestion- We have looked into that govt. program as well as others- we hope to have the student loans paid off way before 10 years, but maybe that is idealistic.

Gin1984- I'm sorry- I'm not sure what you mean?

All- This is the second forum where we've gotten very strong advice to sell the house- dh and I have finally agreed that we will do it if we have too, but will probably wait until after the baby is born and dh has a job.

DavidAnnArbor

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #19 on: November 26, 2014, 10:31:39 PM »
Yes I do think you should get the loans because a nurse anesthetist is like the salary of a primary care doctor.

Allie

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #20 on: November 26, 2014, 11:30:42 PM »
I think you may benefit from selling the house, but it may be a good idea to take a moment to settle before you make any firm plans.  I'll probably get slammed for this, but I think you need to see how the birth, job hunt, testing goes before you make any changes.  If your area is anything like mine, nurses are in such high demand it's crazy.  Signing bonuses, tution repayment plans, time and a half or double time shifts are all common.  He may do much better than you expect.  If he gets a good job you may even get assistance for his grad school.  Wait to see what comes down the pike before jumping into some big changes.

MrsPete

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #21 on: November 28, 2014, 01:04:10 PM »
Income: We have no income right now, my husband is completing an Accelerated BSN in Nursing and will be searching for employment next month- but graduates in Feb. of 2015.  It is typical for an RN student to be offered a job even prior to passing the NCLEX here. We have been living off of savings for the past 8 months, and took out student loans to pay for his tuition. This in itself might deserve face punches. Starting salary for RN's in this area is around 45k a year- and he would hopefully have the opportunity to work extra shifts.
He needs to be very aggressive about searching for the highest paying job he can find:  Attend job fairs, apply to all the hospitals he's worked in as a student nurse, and basically get his name out there EVERYWHERE. 

In addition to working extra shifts, he can look into a pay differential for working unpopular shifts (night, holidays) and working in areas of high demand. 

Several people have suggested that he go the nurse ant. route.  Quite a few nursing specialties command high salaries, and this is one of them, but this isn't realistic at this point.  In the field of nursing you're expected to work at least four years before you enter a grad program -- you probably won't be accepted into a program without some experience as an RN, and you wouldn't be hired without some experience as an RN.  My daughter, who is also a nursing student, is considering going the Nurse Practioner route -- but she tells me that you just can't hurry this process.  Heart cath. is another high-paying specialty. 

I agree that you have "too much house" for your financial situation, but with the birth and his graduation so close, I wouldn't do anything RIGHT THIS MINUTE.  You have too many big changes coming up soon.  Instead, I'd wait and see WHERE he gets a job -- then base your decisions around that job. 

Nothing's been said about you going back to work.  I assume with two -- almost three -- small children, that's just not an option for a couple years.  I'd make two suggestions on this front:  First, between three kids, student loans, and only one income, you're going to be stretched thin for the foreseeable future.  Take measures not to make it four children -- at least not until you're financially stable.  Second, be sure you stay current in whatever job field you're in.  If at any point you need or want to return to work, you want it to be a choice. 

Your family's financial security revolves around one single thing:  Your husband's ability to earn.  I strongly suspect he will get a good-paying job quickly, but be sure you're keeping his life insurance and disability insurance up to date.  Same thing for YOU.  If you were to die or become disabled, he'd have a hard time working and raising three children on his own. 

I agree with beginning to tithe again once he's working.  You might begin with half a tithe and move up over the next few years.  For those who say this is foolish, you're not coming at this with a Christian mindset:  Everything you have is a gift from God.  Tithing is returning a portion of what we have to God.  It's showing respect for His gift.  If you disagree, that's fine -- but you don't have a right to question someone else's values. 


kib

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #22 on: November 28, 2014, 01:14:33 PM »
I'm a newbie here so I don't know if this is the Mustachian Way, but here's my advice.

Refinance your mortgage with a bank, and roll the student loan debt into it.  At 4.5% / 20 years you will have a payment of $461 per month vs. $955.  This will cover your overage and give you a solid simple place to throw extra money.  Although you'll be treading water you won't be under it, and if you can get a rate like that, raising your mortgage rate will be offset by lowering the student loan rate.  Ordinarily I wouldn't say that extending debt payoff is a good idea, but you have a huge amount of home equity and from your post it seems like you're being responsible about spending.  If you find you still can't swing it, then sell the house.
« Last Edit: November 28, 2014, 02:20:00 PM by frufrau »

GardenFun

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #23 on: November 28, 2014, 01:26:49 PM »
Also, yes I am encouraging DH to become an anesthetist- he is an excellent student and I think he would do well, but the cost of grad school is enormous- if I don't work, we would be looking at 110k minimum to cover tuition and living expenses during the 3 years of school required to become a crna- do you think we should take out that amount of student loans- most people seem to think it's a really bad idea...

You have the 110K for grad school, but it's tied up in the house.  An interesting twist on the definition of "house poor", more like "fixed asset poor".  You were fortunate to save inheritance money instead of wasting it.  Now its time to make it work for you.  After your husband gains some work experience, find an affordable program in a low COL area.  You can achieve your goal of more pay without taking out student loans. 

Or, save all your husband's expected OT money and pay for as much grad school as possible.  Being that it is 4-5 years away, many positive things can happen (such as the suggestion of work subsidizing part of the tuition expense). 

Gin1984

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #24 on: November 28, 2014, 01:29:37 PM »
Student loan debt interest rate varies between 6.8% and 8.24 %- Mathematically it would make more sense to pay this off, but as I mentioned, it is very uncomfortable owing money to family. 

DollarBill- Our church doesn't expect us to tithe, per say, it's just something we want to do- and I completely agree that tithing shouldn't be done on someone elses dollar- I definitely want to be more settled financially before we begin to tithe.

DavidAnnArbor- I do think we would qualify for more govt. assistance, but given that we only expect to be unemployed for 3 more months, I don't think we are going to apply for any additional assistance.  Right now we are on medicaid, and I really dislike depending on the government.
Also, yes I am encouraging DH to become an anesthetist- he is an excellent student and I think he would do well, but the cost of grad school is enormous- if I don't work, we would be looking at 110k minimum to cover tuition and living expenses during the 3 years of school required to become a crna- do you think we should take out that amount of student loans- most people seem to think it's a really bad idea...

MKinVa- thanks for the suggestion- We have looked into that govt. program as well as others- we hope to have the student loans paid off way before 10 years, but maybe that is idealistic.

Gin1984- I'm sorry- I'm not sure what you mean?


All- This is the second forum where we've gotten very strong advice to sell the house- dh and I have finally agreed that we will do it if we have too, but will probably wait until after the baby is born and dh has a job.
I mean that you have no income.  To complain and something is not worth it, when all you have to do is change the site you are search from and again, you have no money, makes no sense to me.  You need to stop losing money and at this point, every single penny counts. 

myrax

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #25 on: November 28, 2014, 03:19:28 PM »

MKinVa- thanks for the suggestion- We have looked into that govt. program as well as others- we hope to have the student loans paid off way before 10 years, but maybe that is idealistic.


Since your husband's expected annual income (45k) exceeds his debt (34k), the program probably won't work for you. Public Service Loan Forgiveness requires you to pay 10% of your pre-tax income for 10 years and then the rest is forgiven. But you won't have any left to forgive at that rate, especially if your husband gets a raise at any point in those ten years.

Focus on paying down the student loan fast, to save on interest.

lemonlime

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #26 on: November 28, 2014, 09:19:55 PM »
I would urge you to not do much right now - hold on to your cash and don't pay down debt or sell your house until your husband has a job assuming he gets one on the timeline you expect. I just wouldn't want you to have run out of cash to keep roof over head/food on table because you threw all of your cash at debt, then had to go right back into debt or be forced into a fire-sale of your house because you had no cash to live on if the job situation doesn't pan out as expected. That said, plan for the worst, but still keep up that optimism and expect the best (specifically in terms of the job hunt).

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #27 on: November 28, 2014, 10:05:05 PM »
Thanks everyone for your thoughtful replies. I definitely agree with those of you who have suggested that we wait before moving or paying down debt or really, spending money at all until dh has a job. We are sitting tight and pinching pennies right now and won't make any decisions until we reach that point.

A new development occurred  yesterday and I wanted to see if you still think we need to sell the house once employed. We were informed that a moderate transfer of wealth will take place in a few months that will allow us to eliminate all of our debt -both mortgage and student loans. This should give us an extra few hundred dollars after all of our expenses are taken care of if dh gets a low paying rn job. If this pans out, is it reasonable to remain in this home? At least until grad school at which point we could sell in order to avoid student loans?

midwifemustache

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #28 on: November 28, 2014, 10:07:13 PM »
Where do you live? 45 k for a nurse is really low. Some have said you cannot become an np without working as nurse first. This is not true. There are lots of programs that let you in without nursing experience. I went through one. However, except for a few specialties most RNs will make more hourly than the long salaried hours as an NP.

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #29 on: November 28, 2014, 10:14:41 PM »
We live in Kansas city- we are hoping to make more than 45k but it really seems like the starting wage around here.

Goldielocks

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #30 on: November 28, 2014, 10:30:44 PM »
Quote
Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again)
I don't understand when a church would expect this or how people think this is ok...sounds like a Jim Baker to me.

I will put this out there...  Right now YOU are the family the church should be helping to get through the next year.

Go to your pastor, explain the situation, explain what you are doing to get yourself out of it, then ask if anyone would provide you interest free student loan or a gift to help for 6 months of the new baby, until DH gets a job.

Allie

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #31 on: November 28, 2014, 11:01:19 PM »
With the loans knocked out your budget looks pretty good.  I'd still encourage you to save the tithe until after the bby is born and DH is employed.  You will have to weight the cost of selling the house vs the cost of the extra expense of this particular house.  Even if you do most of the work yourself, buying and selling property will cost you.  If you use a traditional realtor it will likely cost you thousands.  You will have to sit down and figure out how long it will take you to recoup the cost in annual savings.  It may not be worth it, especially if you like the house. 

45k is starting.  Regardless of whether he gets his grad degree, it should only go up from there.

goodlife

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #32 on: November 29, 2014, 12:34:27 AM »
Out of curiosity...seems you have already gotten a lot of inheritance...now there is another "wealth transfer" which I assume (hope) nobody actually died but they are just passing on some of their wealth for tax reasons or whatever. So....are you expecting to inherit more in the future? If yes, how much? If that's the case, your financial picture does look quite a bit different, so please elaborate if you feel comfortable.

GardenFun

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #33 on: November 29, 2014, 07:06:01 AM »
With the loans knocked out your budget looks pretty good.  I'd still encourage you to save the tithe until after the bby is born and DH is employed.  You will have to weight the cost of selling the house vs the cost of the extra expense of this particular house.  Even if you do most of the work yourself, buying and selling property will cost you.  If you use a traditional realtor it will likely cost you thousands.  You will have to sit down and figure out how long it will take you to recoup the cost in annual savings.  It may not be worth it, especially if you like the house. 

45k is starting.  Regardless of whether he gets his grad degree, it should only go up from there.

+1.  Removing roughly $1000/mo from your budget is a decision changer for the short term. 

Also, if your house is paid off, you may not be required to have the flood insurance.  My parents live in an area and everyone with a mortgage is required by the banks to have it, but since my parent's house was paid off, they didn't even know about it until it was discussed during a neighborhood gathering.  It's a personal choice, but wanted you to be aware of the choice. 


leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #34 on: November 29, 2014, 08:04:27 AM »
Gin1984-thanks you're right- I will look into swagbucks and perk TV again

Goldie locks- that's an interesting perspective. We currently do not tithe and don't plan to until we are employed and able to pay back our debts. As far as asking for help, I guess I just don't see our family as being in that desperate of a situation to ask for charity. Is our hair on fire and we don't know it?

Allie- thanks- that's kind of what I was thinking, but want sure if I m just rationalizing to stay here.

Goodlife- my husband comes from a wealthy family where wealth is often transferred to avoid taxes. His family frequently and randomly gifts large amounts of money (10k usually, once 50, once 40, once 70) all of this they have wanted to go towards our mortgage- that's why our house is nearly paid off. Anyway, I think this is going to slow down because they don't want things being too easy for us, they don't want us going on fancy vacations and buying expensive cars- they just want us to be "secure". There is no way of knowing or planning for these gifts.

Garden fun - we aren't required to have flood insurance even now because our mortgage is through a private family loan. Do you think we should drop it? We've had water in our basement twice in the two years we've lived here but no damage. 575$ a year gives us 50k structural damage. What do you think



bugbaby

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #35 on: November 29, 2014, 08:18:00 AM »
Unbelievable, guys are actually suggesting that OP stop tithing and go on food stamps??? Are we on the wrong forum, is this really 'anti-mustachian whiny entitled how-to'??  And telling her not to have a 4th child, really?

OP, even without your wealth transfers you'll be doing just ok on one nurse's income, by flexing your frugality muscles further ala MMM principles : optimize food, transport, utilities + phones, learn some DIY skills for the house, explore thrift stores and craig's...

Cash out the whole life insurance, and stash it till the paycheck comes.

Get term life /disability for hubby.... Prob will get this & health coverage via job

Congrats on new baby

GardenFun

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #36 on: November 29, 2014, 11:30:04 AM »
Garden fun - we aren't required to have flood insurance even now because our mortgage is through a private family loan. Do you think we should drop it? We've had water in our basement twice in the two years we've lived here but no damage. 575$ a year gives us 50k structural damage. What do you think

Good question.  Here's the questions I would ask:

1. Were the basement floods due to common events (mid-size rainstorms, spring snow thaw) or more catastrophic?
2. Is the yard graded properly - i.e. is the flooding truly from large weather events or incorrectly sloped yard?
3. Is there anything structurally we can do to reduce the risk of flooding - backup sump pump, wall sealant to stop seepage, redesign of potential water entry locations (i.e. basement windows), maybe build some mini-wall around them?
4. If the coverage is dropped, does the regular homeowners provide any basement coverage - maybe 10K to replace furnace and other basement items?
5. Do we know how to fix some of the problems ourselves, or have friends/family that could do the work at cost?

Overall, the insurance isn't a budget buster.  If it helps you sleep at night to pay the insurance and gives you time to focus on other areas, it is worth it.  But I would still do items 2 and 3 on any house.   

skunkfunk

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #37 on: November 29, 2014, 12:55:39 PM »
Unbelievable, guys are actually suggesting that OP stop tithing and go on food stamps??? Are we on the wrong forum, is this really 'anti-mustachian whiny entitled how-to'??  And telling her not to have a 4th child, really?

OP, even without your wealth transfers you'll be doing just ok on one nurse's income, by flexing your frugality muscles further ala MMM principles : optimize food, transport, utilities + phones, learn some DIY skills for the house, explore thrift stores and craig's...

Cash out the whole life insurance, and stash it till the paycheck comes.

Get term life /disability for hubby.... Prob will get this & health coverage via job

Congrats on new baby
It'd be pretty tough to cut under $3k a month even with plenty of penny pinching craziness. They've got too many fixed expenses on the house and I still think that $1200 is pretty short on maintenance for car and house.

That said, since OP is getting the mortgage and loans paid off, no, it is not imperative that they move. You can stay and trim around the margins if you like. It will delay FI date to stay in that house, but that's really not unreasonable.

You should be able to save $6k+ /yr if nothing else changes. I think you could even stay there and get a HELOC or something to pay for grad school, if so inclined.

Seņora Savings

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #38 on: November 30, 2014, 11:08:45 AM »
I would recommend reading this blog post:

http://www.iheartbudgets.net/2012/05/budgeting-basics-part-1-laying-your-financial-foundation/

He talks about listing your priorities before you make a budget and he puts God at #1.  It might give you some insight.  I find that by keeping my essentials low I can spend on what I care about, which makes me feel way richer than having a bigger house.

Thanks everyone for your thoughtful replies. I definitely agree with those of you who have suggested that we wait before moving or paying down debt or really, spending money at all until dh has a job. We are sitting tight and pinching pennies right now and won't make any decisions until we reach that point.

A new development occurred  yesterday and I wanted to see if you still think we need to sell the house once employed. We were informed that a moderate transfer of wealth will take place in a few months that will allow us to eliminate all of our debt -both mortgage and student loans. This should give us an extra few hundred dollars after all of our expenses are taken care of if dh gets a low paying rn job. If this pans out, is it reasonable to remain in this home? At least until grad school at which point we could sell in order to avoid student loans?

No.  You are living an inflated lifestyle.  You do not use windfalls to inflate your lifestyle.  You have more house than you can afford.  And when I say "more house than you can afford", I mean more house that you would be able to afford if you were making the money you think you will be making soon.  You are about to be entering a job search, you can move anywhere you want.  Move somewhere with highish pay and a low cost of living.  I would be getting ready to move now so that you don't stay trapped in your home after your husband graduates.  I know it's a bad time for you to move, but you'll be seriously limiting his job prospects if they have to be within a certain radius of the house that you shouldn't be in.

wwweb

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #39 on: November 30, 2014, 11:31:20 AM »
Even with your mortgage paid off, I would take a serious look at what your home is costing you.

Here is just using your numbers
Prop Taxes: 3400 / year
HOA: 500 / year
Flood Insurance (we live in a high risk flood zone): 575 / year
Home Maintenance/ Car Repair Sinking Fund: 1200 / year

Utilities: $370.00/ mo
Home Insurance:142.00/mo

This is a total of ~$1,000/month which is a third of your monthly income.  Moreover, your maintenance budget is almost certainly low.  Just based on the price of your house + the size of your family, I would guess $4,000 / year is more realistic.


With all that said, I would wait and see what kind of job your husband gets, then have a serious discussion about housing.  There is no need to rush into a complicated financial decision right now.

Gin1984

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #40 on: November 30, 2014, 11:37:21 AM »
I would recommend reading this blog post:

http://www.iheartbudgets.net/2012/05/budgeting-basics-part-1-laying-your-financial-foundation/

He talks about listing your priorities before you make a budget and he puts God at #1.  It might give you some insight.  I find that by keeping my essentials low I can spend on what I care about, which makes me feel way richer than having a bigger house.

Thanks everyone for your thoughtful replies. I definitely agree with those of you who have suggested that we wait before moving or paying down debt or really, spending money at all until dh has a job. We are sitting tight and pinching pennies right now and won't make any decisions until we reach that point.

A new development occurred  yesterday and I wanted to see if you still think we need to sell the house once employed. We were informed that a moderate transfer of wealth will take place in a few months that will allow us to eliminate all of our debt -both mortgage and student loans. This should give us an extra few hundred dollars after all of our expenses are taken care of if dh gets a low paying rn job. If this pans out, is it reasonable to remain in this home? At least until grad school at which point we could sell in order to avoid student loans?

No.  You are living an inflated lifestyle.  You do not use windfalls to inflate your lifestyle.  You have more house than you can afford.  And when I say "more house than you can afford", I mean more house that you would be able to afford if you were making the money you think you will be making soon.  You are about to be entering a job search, you can move anywhere you want.  Move somewhere with highish pay and a low cost of living.  I would be getting ready to move now so that you don't stay trapped in your home after your husband graduates.  I know it's a bad time for you to move, but you'll be seriously limiting his job prospects if they have to be within a certain radius of the house that you shouldn't be in.
Nursing is a state license, her husband may not be able to move anywhere, because some states don't count other state's license as equivalent, especially for a new grad. 

Cassie

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #41 on: November 30, 2014, 02:17:04 PM »
Having a new baby & 2 toddlers is stressful enough without moving.  35 years ago we were in a situation similar & had to move for a job.  My 3rd son arrived 2 weeks after we moved-ugh!  It was horrible.  I would stay put & see where hubby gets job.  Also is your house huge or is that the normal price for where you live?    As far as moving for a job the nursing license issue is something you would need to figure out.  Also do you value living where you do, does it put you close to family, possible babysitters when you need it, etc?   When you have 3 kids don't move lightly.  My SIL went from being a nurse to a NA & her income skyrocketed so it sounds like this would be a great path.  I would look at the experience that is expected upon entering grad school because this really varies by profession.   In your situation I would never apply for food stamps, help from church, etc.  This is for people that are really poor with no resources.  YOu guys certainly don't fall into that category.  I think it is awesome that your hubby's parents are passing down some of the $ when you really need it.  Good luck!

southern granny

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #42 on: November 30, 2014, 04:32:47 PM »
Quote
Tithe: 400/ mo (We do not tithe currently, but really want to make this a priority when we have an income again)
I don't understand when a church would expect this or how people think this is ok...sounds like a Jim Baker to me.

I am a firm believer in tithes, but you have no income right now, so you would not be expected to tithe.  I assume the money you have in savings, you have paid tithes on, so don't worry about it.  When you begin receiving income, you can resume your tithes.  I have paid tithes on the money in my 401k, when I begin to withdraw it I will pay some tithes because of the interest gained, but I will not pay full tithe.  We make gifts on top of our tithes, but the amounts vary from year to year.  And the church expects this, and I am happy to pay it,  because it is spelled out in scriptures to repay 1/10th to God.   

bdc

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #43 on: November 30, 2014, 08:35:15 PM »
Once your husband has a job, refinance your house with a bank. Your payments will be MUCH lower (about $160/mo.). You will not owe family. You can get a line of credit (or a larger loan) to pay off the student loan, which you should do ASAP.

Your low balance and high equity are huge assets for you. Just use them.

TerriM

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #44 on: November 30, 2014, 08:49:30 PM »
Garden fun - we aren't required to have flood insurance even now because our mortgage is through a private family loan. Do you think we should drop it? We've had water in our basement twice in the two years we've lived here but no damage. 575$ a year gives us 50k structural damage. What do you think

Good question.  Here's the questions I would ask:

1. Were the basement floods due to common events (mid-size rainstorms, spring snow thaw) or more catastrophic?
2. Is the yard graded properly - i.e. is the flooding truly from large weather events or incorrectly sloped yard?
3. Is there anything structurally we can do to reduce the risk of flooding - backup sump pump, wall sealant to stop seepage, redesign of potential water entry locations (i.e. basement windows), maybe build some mini-wall around them?
4. If the coverage is dropped, does the regular homeowners provide any basement coverage - maybe 10K to replace furnace and other basement items?
5. Do we know how to fix some of the problems ourselves, or have friends/family that could do the work at cost?

Overall, the insurance isn't a budget buster.  If it helps you sleep at night to pay the insurance and gives you time to focus on other areas, it is worth it.  But I would still do items 2 and 3 on any house.

Are you in a FEMA flood zone?  If so, which kind? (i.e., how often does or is it expected to flood?)

You can find the FEMA maps here:

https://msc.fema.gov/portal/search

TexasStash

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #45 on: December 01, 2014, 12:26:20 PM »
Haven't seen anyone mention it here, but have you considered renting out a room in your house? Seems ideal for a big house and cash flow problems. Obviously would depend on whether you move or not, and I can imagine it seems crazy with 2 young kids and a 3rd on the way soon, but it is an option.

boarder42

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #46 on: December 01, 2014, 01:25:15 PM »
where do you live in KC? i live in KC and we dont have flood insurance also 275k is a huge amount for a house. in the KC area you could greatly decrease this.  i mean i even live on a lake and i dont have flood insurance.  Your home owners insurance is also pretty high to me.  i pay 800 on a 250k house. 

Check out Nationwide insurance with Bob Hoog in Lees summit thats who we have and if you have no debt and few to no credit cards it somehow works in his system to see you as low risk and you can get a great rate. (I have insurance with him i dont work there he was the cheapest for me in town i called EVERYONE)

SunshineGirl

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #47 on: December 01, 2014, 02:38:13 PM »
I don't think you should move right away. Just use whatever money you're getting to pay off/down your mortgage and student loan, wait a year, and revisit the issue.

leopard print

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #48 on: December 01, 2014, 07:20:10 PM »
Thanks everyone! I'm getting some conflicting advice, but I also see some themes here from a lot of you.
One thing I can say is that we are definitely going to have the baby, find the best job we can, and pay off our debts if the windfall  comes through. In March we will examine our finances and determine if we need to move.

To answer a couple of questions- yes we absolutely could get decent, safe, cheaper housing. Our house is not extravagant but is nice and in a great neighborhood. It is 2500 sq. Ft. 4 bed 4 bath. We do live in a fema high risk flood zone, so if we stay we would probably keep at least some flood insurance coverage.

MrsPete

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Re: Case Study: Please help, have no idea how to improve our finances
« Reply #49 on: December 02, 2014, 06:05:00 AM »
. . . And telling her not to have a 4th child, really? . ..

. . . OP, even without your wealth transfers you'll be doing just ok on one nurse's income, by flexing your frugality muscles further ala MMM principles : optimize food, transport, utilities + phones, learn some DIY skills for the house, explore thrift stores and craig's...
Read more carefully. 

One of the numerous points I made was that they're stretched tightly now, and she should not have a 4th child while they're in this financial situation. 

No, I don't think they're going to be hunky-dory-fine on one nurse's income -- not as things are now; not when a potential job is still months away and the only breadwinner isn't yet qualified for that job, not when the debt exceeds the first year's expected income, not with three children.  Some changes are in order.