Author Topic: Reader Case Study--Will I EVER be able to retire? :(  (Read 4737 times)


  • 5 O'Clock Shadow
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Reader Case Study--Will I EVER be able to retire? :(
« on: June 23, 2014, 04:49:02 PM »
I’m 41, divorced, and a mother of four (ages 16, 12, 8, and 5).  My youngest has significant special needs and is unlikely (IMO) to ever be able to live independently as an adult.  Our home’s mortgage was paid off as part of the divorce settlement (2010), and our one and only car was purchased with cash (2005 Ford Freestyle with approx. 164,000 miles on it).  My parents moved to Michigan from Colorado after the divorce, and they have given sacrificially of their time and money to help us.  I use my car to commute to work (about 7 miles away, 3-4 days/week), get groceries (3.5 miles away, usually on the way to or from work), and take my kids to and from their father’s house, school (the older three go to public charter schools, no bus service), appointments, and church.  My kids each have a bike (except for the youngest), but only the oldest knows how to ride (gonna force the other two to learn this summer!).  I’m fine with them biking into town (about 1 mile away), but they do need to be careful since we live off a 45mph main road.  I have a bike as well, but don’t currently use it.  I don’t have a trailer for my youngest, either.  [Edited to add:  I live in a rural area with paved roads but no bike lanes or sidewalks on my normal routes (and sometimes no shoulder!)]

•   Child support – $2442.09/mo (will start to diminish as the kids each graduate from high school—oldest just finished 9th grade)
•   Part-time self-employment – approx. $650/mo (10-12 hrs/week at $15/hr, cleaning our church buildings)
•   Family Support Subsidy – $222.11/mo (state subsidy for low-income families of disabled children—I use this for my disabled daughter as needed, and don’t include it in my budget)
•   NOTE: my youngest has, in the past, received SSI funds from the feds and the state, but is currently ineligible because I have “too much money” in my account (the maximum allowed is $2000, and this number hasn’t changed since 1989!!!).  Also, I screwed up and didn’t report things like I should have, so I may have to pay back about $5500 to the SSA.  :P  Talk about a “stupid tax”….

Current budget (NOTE: I have been budgeting a slightly higher number than the actual expense, in most cases):
•   Giving to my church – 10% of my income each month (currently on hold because of my debt emergency)
•   Giving to Compassion International – $38/mo for sponsoring a child in Bolivia (I have $166 saved up in this category, so I could stop budgeting for this for a while if necessary)
•   Church cleaning supplies – $100/mo (usually spend between $50-100 during the month, reimbursed by the church)
•   Memberships -- $20/mo (saving up for annual $55 Costco fee)
•   Taxes/Fees -- $50/mo (trying to save up; I just started this job last November, so I don’t know how much income tax will be for this year)
•   Personal – varies, currently on hold because of debt emergency
•   Auto insurance --$140/mo (actual expense is $134.72/mo)
•   Electric/Gas -- $190/mo (actual expense is $186/mo on BudgetWise program, but I usually use more than that—I can dig up a statement and break things down better if anyone wants)
•   Healthcare -- $200/mo (actual expense is usually $150/mo; I am part of a Christian healthcare cost-sharing ministry at the highest level with the lowest deductible—if I change to the lowest level/highest deductible, it would be $50/mo) plus $42/qtr catastrophic care
•   Internet/cell -- $115/mo (one smartphone at $51/mo that I greatly depend on, two pay-as-you-go TracFones (talk/text only), internet at $30/mo until March 2015)
•   HELOC -- $350/mo (this is more than the minimum monthly payment)
•   Everyday expenses – varies, this is a catch-all for groceries, gas, storage unit ($76/mo, gotta get rid of this!), pet expenses, etc.  Whatever child support and income aren’t already spoken for goes here.
  • Edited to add: Home insurance -- $688.81 saved up, budgeting $100/mo (transitioning from annual September payment of about $900-1000 to monthly payments of ???)

Non-monthly expenses that I’m trying to save up for:
•   Property taxes -- $150/mo (taxes are a little less than $1800/yr)
•   Water/Sewer -- $30/mo (billed quarterly)
•   Driving expenses -- $15/mo (includes maintenance and license fees, but not gas)
•   Gifts -- $25/mo (birthdays and Christmas for four kids)

•   Bank credit card -- $43.60 current balance (% interest)
•   Care Credit card -- $0 current balance (ongoing 6-12 month 0% promotional period when used for kids)
•   Discover Card -- $4440.24 current balance (0% interest thru July 2015)
•   HELOC – approx. $12,000 current balance (3.99% interest, comes due in December 2022)
•   Potential SSA repayment -- $5500 (see last bullet point under Income above)

I’ve been able to save a little here and there by budgeting more than the expense actually is, but I’d like to do more.  I have no investments or retirement fund.  My youngest will probably be eligible for special education all the way through age 26, but after that I’m guessing that she’ll have to live with me (or one of her siblings) full time.  I’m glad that the house and car are paid off, but I have a feeling I’ll want to downsize after the older kids are grown up (1/3 acre property and 5-bedroom house are too much for me!).  I do wonder, though, if I’ll be able to keep that up as the kids graduate and the child support starts going bye-bye.

Some of the things I’ve changed in recent months:
•   Stopped buying fast food
•   Bumped my a/c up to 73 (I usually keep it at 68-70, so this is an improvement)
•   Started eating more simple, home-cooked meals (rice, chicken, veggies, fruit) so I depend less on “convenience” items
•   Stocked up on pantry basics
•   Continued to learn how to enjoy my small life!

I guess my question is, have any of you successful Mustachians been through something like this, going from serious poverty to FI?  How about with a disabled child?  How long did it take?  Will I be able to do it?  What should my first step/focus be (the debt, I assume)?  I always want to do more, and do better, but I have a hard time seeing how I will ever be able to take care of myself, much less my special needs baby girl too.  I don’t want to have to depend on the government for help.  :P

(P.S.  I use YNAB as my budgeting software—so thankful for it!)

(P.P.S.  If you need any more information, please ask.  I know that the pinned Case Study thread above says I should subtotal each category, so if I really do need to go back and edit this post, please let me know!)
« Last Edit: June 23, 2014, 05:10:55 PM by Peregrin »


  • Magnum Stache
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #1 on: June 23, 2014, 05:02:59 PM »
First of all, you don't have enough income, stop trying to give it away to a kid in Bolivia, your kid needs it.  Why are you paying so much in auto insurance?  You pay over three times what I pay and NY (my state)has high premiums.  Why don't you have alimony?  It is obvious you were not working during your marriage.


  • 5 O'Clock Shadow
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #2 on: June 23, 2014, 05:06:56 PM »
I haven't looked into alternative auto (or home) insurance since the divorce, just went with what State Farm offered.

No alimony was part of the divorce settlement (and yes, I kind of regret that).  And yes, I was a stay-at-home mother.


  • Magnum Stache
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #3 on: June 23, 2014, 05:30:45 PM »
Welcome to the board, Peregrin!

I'm sure there are many areas in the budget where you could optimize a save a little bit.  For example, I spend ~$60/month for phone and internet for myself and two teenagers.  Phone plans are $10/month, no home phone.  IPDaley has a long thread about optimizing phone costs, and MMM has a blog post about the $10/month phone plan.

Also, I agree with Gin1984:  you are a virtuous person but you have to get past the idea that virtue means giving the church (and other causes) money.  You need to focus on not just putting out the fire in your hair from the debt emergency but then after that you need to focus on getting an emergency fund for yourself and then getting a retirement account set up with regular contributions.  That is where that 10% needs to go for many years even after your debt is paid off.  Once you have the ability to give security to your future and the future for your own children, only then you can tithe to the church as well.  NO GUILT about this!  If I was the church (and I am not), then I would not be able to take your money at this time with good faith and conscience.

Can you afford the upkeep on your home now?  You probably don't want to hear this, but it might be in your best interest to find something smaller, downsize now, and use the money to pay off debt and get an emergency and retirement nest egg started.  There aren't really enough details to know for sure. 

Good luck!

Another Reader

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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #4 on: June 23, 2014, 05:40:23 PM »
You have a number of issues, all of which could be solved by more income.  Despite help from your parents, you already had to borrow against the house to support your expenses.  That's not a good plan.

I'm confused about your employment.  You say you commute 3-4 days a week, but only list the church cleaning job.  Is that your only job?  Does your school district offer a program for the 5 year-old?  As soon as she is in school, I would start looking for some type of employment, at least part time.  Did you work before the kids?  What skills do you have?  Can your folks help with the kids while you work?

Can you go back to court or negotiate with the ex for more support, especially for your youngest?

What about the house?  What is it worth?  Could you downsize to something smaller and less expensive?

You are going to need to replace the SUV soon at 164k miles.  What is your plan for that?

Again, you can save some money on your expenses, but the real solution to your problem is more income.


  • Stubble
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #5 on: June 23, 2014, 06:07:36 PM »
I agree on the auto insurance, State Farm is a good company but in my experience can be the priciest. Shop around for that and buy minimum limits. I would also consider the higher deductible health plan, depending on the health of your children and whether you all go to the doctors much.

Turn up your air, you'll find most people on this forum keep their AC on at least 80. It can make a HUGE difference on your bill.

On your income the small steps do matter. Good luck to you and welcome to the forum!


  • Pencil Stache
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #6 on: June 23, 2014, 06:35:42 PM »
State Farm will happily let you know they are not the cheapest nor are they in the price matching game. That being said, I've heard amazing stories from people when their vehicles were stolen/broken in too. You can find better options.

Please stop sending money to Boliva and worry  about your own kid. 

Why do you give money to the church and then collect a paycheck from them? Seems odd to me but maybe I don't church stuff?

pay off that $43 card and stop using it. You seem like you would benefit greatly from the money envelope system.

Good luck! And welcome to the forum.

Cheddar Stacker

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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #7 on: June 23, 2014, 06:56:39 PM »
Welcome to the forum. Agree with other posts. Just wanted to add you can't really afford to have a pet right now either. You have enough mouths to feed without it.

If you make some of the changes suggested you will be able to retire at some point. If you won't/can't make the changes I think you need to get comfortable with working for a long, long time.

Be strong. Consider the suggestions. Don't dismiss or disregard them. Some people here have very low income situations as well. You have to be willing to go to extremes sometimes.

Good luck!


  • Magnum Stache
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #8 on: June 23, 2014, 07:04:26 PM »
If you are going to tithe, at the very least, don't tithe on the child support.  That is not your income, it is 100% for supporting your kids.  Just tithe on what you earn at your job. 

I would love to see your grocery numbers, etc. 

I will echo the PP's questions regarding your plans for your youngest to go to school.  I assume he/she will be in Tull day kindergarten?  This is an opportunity for, at the very least, a high level of efficiency and frugality in the home- if u are only working 15 hours a week, you have 15 hours a week of kid free time.  Every meal should be from scratch, all the laundry hung to dry, etc.  Or, better yet, look for additional employment.

I have a special needs 6 year old kid myself, and it can be overwhelming (and my kid can often pass for typical to others- although special needs mothers can always pick him out!).  We deal with high medical costs for our son, which is hard.  We also probably "should" be paying for crazy stuff like private speech therapy at 100$ a week.  It is so hard to know how much is the right amount of therapy, isn't necessarily the sky is the limit if money is unlimited.  Having him in full day kindergarten has been great, though.  He loved it, and he thrived.  I anticipate he will be able to go to college, get a job, etc, but it may not happen at 18-22 years- he may need a few additional years if help from us to transition to adulthood. 

I would encourage you not to count on your other children taking care of their sibling.  That is a huge, get unfair burden.  If your child can't live independently. You need to come up with a plan for after you are no longer able to care for them.  This would most likely be a group home type situation.  I have a mentally handicapped uncle (didn't have enough oxygen during birth and his brain was compromised) and he lived at home with my grandma.  But when he was a big 6' tall, 200 lb. teenager, it was physically too much for her, and became unsafe for her to care for alone (my grandpa was dead by the ).  She had to put him in a group home.  He could spend as much time with her as she could handle (weeks at a time if she wanted) but the group home was there for him when they needed it.  And as she got older, he transitioned to spending all his time in the group home, and just getting picked up for a dinner out, etc.  then, once she passed, he was used to the home, loved it in fact.  And when she died, she willed her house to the group home, and he got to move back into his house to live for the rest if his life. 

Of course, maybe your older kids will be able to handle your youngest.  Maybe they will want to scare for their sibling!  But don't make that the only plan.  It isn't realistic and it isn't fair to expect that of them.


  • Magnum Stache
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #9 on: June 23, 2014, 07:36:24 PM »
Lots of good advice so far.

I want to chime again with some more positivity.  You have taken some positive steps with YNAB and finding MMM.  Your changes with the cooking and your focus on enjoying the "now" with the children are also really important.

I divorced a few years ago in my early 40's.  At that time had no house, lived in a 2 bedroom apt with two children, and had debt similar to yours including lawyer bills which continued to roll in.  I had a retirement account set up but was not contributing to it (there was a balance from my contributions when I was younger), but no house & almost no child support, so I'm going to guess you currently have more assets than I had initially.  I was working, but in a "Mommy track" job as I had been primarily raising children and supporting my ex-husband's career for more than a decade.  For some time there I just didn't have money, but I refused to charge more on cards.  Instead I started finding ways to earn more money (in 4 years have more than doubled my income by finding a new job), continuing to live frugally while I started to build a stash.  I have turned it around and now I'm on track to retire in my early 50's if I would like, although I really like my job, so I might just continue to pad the nest.  If you had told me 4 years ago where I would be today financially, I absolutely would not have believed it possible.  So, yes, you can retire someday. :-)

Here are some questions:
In July, 2015, what does the interest rate on the Discover card look like?  Can you transfer to the balance of that to the HELOC in June, right before the interest charges kick in?  Pay off the $43 first then focus on one of those other two depending upon which makes more sense now (probably the HELOC.)

What type of job skills do you have?  What kind of job would you like to have?

Can you ask for more child support?  Can you ask for another position at the church?  What other types of jobs could you do? Can you find a job that has some type of retirement benefits or retirement savings plan?  (Consider reading the book Ask for It by Linda Babcock and Sarah Laschever; my county library system had a copy.)

Do you really need such a big house?  What are the advantages of keeping the house?  What are the advantages of downsizing now?  Your kids might not mind downsizing as much as you think; mine enjoyed sharing a bedroom (and my brother has 6 kids who share 2 small bedrooms between them:  one for the boys and one for the girls.)  I have bought a house now and they routinely complain that they liked the apartment better, mostly because there was a higher density of children there. 

Another book I liked when I was just getting things turned around was America's Cheapest Family Gets You Right on the Money.  Lots of suggestions there for seeing progress on debt and finding free fun for the kids.

Please keep us posted as you make small changes, and welcome to the board!


  • Bristles
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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #10 on: June 23, 2014, 07:39:43 PM »
Kudos on what seems to be a good heart and a giving spirit. The world (and this forum) has its share of people who make 15x your income and don't contribute $500 a year to a worthy cause of any sort. Just the fact that your giving was the first item in your list tells a lot.

Immediate actions that I see:
1) Kill the bank credit card this week just to get a line item off your budget/debt. Start with a win.
2) Pay HELOC minimum and push any extra debt payments toward Discover. That 0% will balloon to 14+% in a year.
3) Get the church to forward the cash for its cleaning supplies or simply buy them and make them available to you. It's negligent on their part to expect you to float $100 in supplies given your situation, even if for no other reason than the hassle. (And yes, my wife and I have spent our whole married lives involved in some form of church ministry--full-time, part-time, or volunteer, so I know that a church that can reimburse you can rearrange its petty cash arrangements)
4) Giving to your church/charity is important to you and to me as well. I could never advise a person to give nothing, even in your situation. I would forego items still left on this budget (mostly in your General and phone categories) before I gave nothing. I volunteer my time and effort for certain activities, but I would still give of my income. How much you decide to give is a different matter. I personally follow the New Testament principle of "according to his ability/as God hath prospered" (Acts 11:28-30; I Corinthians 16:2). I have always given something, even in my early marriage when I had two young children and made $20K in grad school. Follow your charitable heart, tempering it with a dash of "charity begins at home."

Overall ideas that I would think about:
1) Include every source of income in your budget. Leaving income out of a budget does nothing to help you plan out the month, but it can keep you from seeing possibilities, or it can give you some "hidden" cash to let slip through the cracks (waste).
2) Include (a) regular and (b) significant expenditures in your budget. I didn't see Food here. Food is probably your most regular expenditure and is a likely place to lose money as you mentioned yourself. This will also help you find out if the Costco membership is worth the annual expense.
3) Don't worry about the SSA repayment unless you have other information/papers in hand indicating that you should be taking some action. I would either be proactive and go straight to the SSA office and work it out, or I would put it aside mentally until they contacted me. I wouldn't let it cloud my decisions but do nothing about it.
4) As others mentioned, evaluate your employment options. However, this takes time, so I put it further down the list. With a paid off house, a paid off car, and $40K in income, a family of five can make it work, although it will require diligence.
5) Make sure you have at least one or two trustworthy friends that are frugal themselves--people with whom you can discuss your personal life, ask to evaluate your budget, give feedback on your major decisions, vent frustrations. Sometimes the fatigue of managing a large household on a small budget alone over time will lead to a handful of bad choices that can undo six months' of planning and hard work.
6) Don't concern yourself with retirement right now. You need to stabilize yourself financially (income, expenses, and debts) and prepare for the near future (decreasing child support, car replacement, emergency fund). Then you can begin to think about retirement.

Good luck, and I wish you well. Feel free to hit the forum for help. The commonality that we share here besides somewhat frugal living is the willingness to give usually thoughtful advice. Take in all perspectives and choose wisely.

former player

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Re: Reader Case Study--Will I EVER be able to retire? :(
« Reply #11 on: June 24, 2014, 02:29:05 AM »
I think you need to find out where you stand on getting financial assistance from state and feds: look for free/charitable money advice organisations in your area which can help you with this.  The biggest immediate improvement you can make in your situation is sorting out what benefits you are eligible for, what if anything you can change to increase your entitlement (don't keep $2,000 in your checking account if this is stopping you from getting benefits, use it to pay off some debts) and what if anything you might need to pay back (if you get an entitlement to new benefits, any debt could be set off against this rather than you having to find the money).

You are earning under $8,000 dollars a year by working and have four children in the household.  I would hope that you will pay almost nothing in tax.  You need to work this out: the $50 a month you are putting aside for tax on your earnings could have a better use if you don't need it for taxes.  A money advice service could help you with this too.

Slightly longer term, you need to check what your own eligibility for social security will be when you reach retirement age, for instance whether you need a certain number of years paying into the system, or can claim on your ex's contributions during your years of marriage.  If your retirement is going to depend on having enough contributions during your working-age years, you need to know that now so you can plan to put in the right number of years.

Your house is your biggest financial asset, but I don't notice anything in your budget which relates to house maintenance and you say that a five bedroom house and 1/3 acre are too much for you.  That tells me that it is a depreciating asset (no maintenance budget) and that it is more trouble to you than it is worth to someone else.  You need to sell, asap, before lack of maintenance loses you more value.  Whether you then buy or rent depends on a number of factors, depending on what is available to you in your area.  Renting would enable you to downsize progressively as your children start to leave home, but if having capital invested stops you getting SSI benefits that may change the calculation.

Your children's father needs to put in some of the work in driving them around, in particular in picking them up and dropping them off after visiting him.  And if the 16 year old can start earning money and put it towards their own expenses or saving for college, that would be a help.

I agree with what others have said about charity beginning at home.  You already treat the Family Support Subsidy that you get for your youngest daughter as being hypothecated to her needs.  In exactly the same way, you need to treat the child support you get for your children as hypothecated to their needs (that includes what is needed to give them a home and what you need to be able to be their mother).  Your children's needs do not include giving their money away either to the church or to other children.  Then there are your earnings - but your church has given you a job so that it can give you money and it makes no sense for you to pay tax on it and then give it back!  (Also, have you costed travel time and expense into the hourly rate you are paid?  It will be little enough that your church is giving you, once you have done that.)  And Compassion International are a good cause, but one with audited assets of $274 million.  The child you are sponsoring will not lose sponsorship if you stop your contribution.