Author Topic: 1st Real job out of the military - Help me retire in 12 - 15 years  (Read 5803 times)

jbow808

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Overview:
I'm 38, wife is 35 with 3 kids - 15, 11, and 5 months. Up until I got my current job, we struggled.

Life made us her bitch the past 2 - 1/2 years. We had a daughter nearly die at school, almost lost our house to default - twice, gone on public assistance, and sold possession to make ends meet - including our wedding rings.

When I returned from a deployment as a reservist in 2011, I didn’t have a job waiting for me. I decided it was time to go back to school and utilize a retraining program, however, along the way I lost my unemployment benefits due to a SNAFU with the state employment office; it was eventually resolved but drained our savings ($15,000) in the process.

A few months later, my daughter got hurt at school and was in the ICU for 6 weeks, my wife was the only one working at the time - I was a full-time student, and we spend every waking moment at her side.

When my daughter eventually came home, with my wife's employers blessing, my wife took 6 months off to oversee her rehab. After months of looking I found a part-time job that would jive with my school schedule and cover most of the income lost. Eventually the company was bought out and my position was eliminated.

My wife went back to work, with a lighter schedule - 40 hours a week to about 16, mostly because her clients recognized her and she refused to discuss what happened to our daughter with them. Eventually she became a zero hour employee.

A month later I found another job, but quit after 3 months because 14 hours days (8 hours of work + 3 hours of school + 3 hour round-trip commute and no weekends) suck - I was burnt out and tired of not seeing my kids.

I wound up working as a contractor for the military, barely making ends meet at $20/hr, while my wife was on maternity leave from her job. I was laid off right before Christmas and lived on unemployment of $875/ month until I was offered my current position as a Field Engineer.

Over the past 2-1/2 years - we survived. Luckily we had health insurance so the hospital stay didn’t ruin us financially and a really supportive family helped us through.
 
Living on $875 a month was certainly an eye opener. Now that we've weathered that storm, I'm looking to trying to make a better financial future for my family. Our goals are to eliminate debt, buy about some land, build a comfortable house with a small hobby farm, and retire in about 12- 15 years.

Saving for college would be good, but not a priority, we believe our kids should learn the value of hard work to get a college education. Also they don’t know but when their grandpa passed away 7 years ago we put a sizable amount of his life insurance policy in a trust fund for the oldest kids. We also were debt free for 2 years aside for cars and a mortgage, but pissed that away.

Honestly I have no clue where to start. I just got caught up with some past due balances the last few paychecks and want to start making my earnings work for me, vice me working just to pay others. 

I’ve never been good with money to start with, I grew up in a very low income household and saw anything extra as “fun” money and buy status items, and my wife has a similar background. We’ve recognized our folly, learned frugality, and hope some kind mustachio’s would provide some advice on how to get us to where they are at today.

Additional Info: I maintain 2 separate residences; I live 1000 miles away from my family and it’s cheaper the rent an apartment than it is to pay for a flight home every weekend (on the road 4-5 nights a week/ company paid travel).

The family will be moving out with me once school is on summer break and we plan on renting out our home, providing a possible revenue stream.  We could live anywhere we want for my job, but prefer to be close to my company’s home base, so that on the days I’m not out in the field I can spend more time with the family.

My wife, plans on being a SAHM until the baby is pre-school age (3-4). She does have a small craft business, mostly hair bows and baby hats and brings home a small income of about $100 a month, which mostly goes back to materials. I don’t include this as income since all profits are reinvested to her business or donated to church.

Oldest daughter attends a private school, paid for by her own separate trust fund. We plan to send youngest to private school also, but that expense is 4 years in the future.

Undergoing some legal “stuff” with the military. If all works out, I will be officially retired for the service due to injuries and will receive retirement and healthcare benefits.   

Income: $9209.50
**My income is dependent on overtime and performance bonuses**

VA Disability Benefits - $258/month

Employment:    Base Salary - $43680/ annually
              Average Yearly Pay - $101010
Average weekly pay is $1942.50
Salary (40 hours) @ $21/ hour: $840/ week
Overtime (35 Hours) @ $31.50/ hour:  $1102.50/ week
Monthly reimbursement from company for meals while traveling: $534.00

Current Expenses/ Debts: 6225.26
Taxes and Deductions (Medical/ Dental/ Life Insurance): $1183.46
Mortgage: $1060 (Owe $205,000)
Student Loans: $395 (Owe $45,000)
Car Loan: $150 (Owe $5,500)
Visa: $50 (Owe $2,600)
VA Debt – Over paid benefits: $258 (Owe $2064)
Apartment Rental - Mine: $500
Internet - Mine: $40
Cable TV/ Internet - Family: $100 – once they move we will be cutting the cord forever.
Water - Family: $75
Electricity – Family: $125
Car Insurance: $141
Garbage - Family: $34
Cell: $150

Wife gets an allowance of $1680 per month. This allows her to pay for food, gas, and other miscellaneous items for her and the kids.

I budget $300 a month for food, gas for my personnel vehicle, and personnel expenses. 

Assets: ($3800)
Savings Account - $1000
1998 Chevy Suburban - $2800

Liabilities: ($260164)
Mortgage – 205,000 - 2.75% (30 year/ 28 left to pay)
Student Loans - $45,000 – 6.7%
Car (2001 Subaru Outback): 5500 - 12%, needed a second car so wife could take kids to appointments and school.
Visa: $2,600 – 29%
VA Debt – Over paid benefits: $2064 - 1%

Question(s):

What should my spending priorities be? Do I pay down debts, save for the house, look for ways to cut back on expenses? Like I said I was never good with money, but am learning that it is a valuable tool

In a few weeks I will be eligible for my employers 401K Plan, they match up to 5% of my base salary and was thinking about just contributing 5%. Is this wise or should I be contributing more? Should I be looking at other avenues of investment like a 401(K).

I also need to save about $10000 in the next 3 months, to pay for moving expenses (company reimbursed) and deposit for a rental unit in the new area, what would be the most effective way to do that?

We are looking to buy land / build a second home in the near future, is this feasible or should we continue renting until we pay off our debts and afford land and a home outright?

My AT&T contract is up. I’m trying to convince my wife to switch to a pre-paid carrier like Straight Talk, but she loves her iPhone too much. I’m switching to Straight Talk soon or should I  cancel service all together since I have a company paid  phone?
I’ll likely have a bunch more questions later.

Thanks!

msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #1 on: April 20, 2014, 07:24:46 PM »
Thank you for your service.  Glad you seem to have stabilized after a very rough patch, but unfortunately you've stabilized in an awkward spot, with your family split off from you. 

I think the best thing you can do right now, financially, is figure out what your cashflows look like after your family moves.  Do you work as many hours?  Do you rent out the old house, or sell it?  If selling it, does that free up enough cash to pay off your debts and fund the move?  Those sorts of things.  A lot depends on the housing markets where your family is versus where you are now.  Your mortgage is very, very cheap.  It's entirely plausible that renting it could be a great move.  Hop on Craigslist and Redfin and try to figure out what your post-move situation looks like.  If landlording looks promising, do some research to figure out if it is.  It would have to be very lucrative though, to be worth it.  There are extra expenses in being a remote landlord.

While you're figuring that out, I'd be trying to optimize expenses a bit.  I don't see why you have to wait to cut the cable.  If your employer is covering your cell, I say embrace that.  Can you tether and get them to cover your Internet as well? :)

Your wife's allowance seems largish, to my eye.  One effective way to tackle those, I understand, is to start moving things into it.  She wants the iPhone?  Okay.  Can she cut something to make room for it?  Ditto for cable.  Your family is spending about 5x what you are for one adult, a baby, and a child. 

You're fortunate that you have enough cash flow that you can set your own priorities in terms of bringing the family out versus paying down debts.  Once you decide to pay those debts down, get that Visa and car loan taken care of ASAP.  Those are some high interest rates.

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #2 on: April 20, 2014, 10:53:34 PM »
Thanks for the reply.

My hours at work are pretty much fixed at 75 hours a week ( I also get paid for drive time to and from sites I visit). I could take less hours, but that would tether me to a desk all day, pretty much performing a tech support role - something I dread. 

As for selling the house, we are upside/down based on recent sales in our neighborhood, several sites place the value of my home between $155,000 and $175,000, comparable homes on the market are priced between 155,000 and 195,000. I have considered a short-sale to just get out from under the mortgage.   

A 4 BD/ 1.5 BA unit just outside of Seattle shouldn't be too hard to rent. The property does have some appeal but only after some much needed repairs are done (floors, crawlspace , upgrades to HVAC).  We can charge $1350 and have no major issues finding tenants. But the the financial risk of renting, especially as a absentee landlord along, make me cringe. 

The thing that sucks is that I live in a pretty rural area, just east of Billings, MT, and property values are kind of inflated due to the influx of people working in the oil fields and rail road. Getting a true feel of what the real estate/ rental market looks like in my new area has been difficult because of inflation. A standard 3 bedroom house goes for around $1500, and demand far out weighs supply. One of the alternatives is to move to an area where more housing is more readily available, but it would make for a longer commute to work at the beginning and end of the week.

We've talked about making cuts to my wife's spending, but a lot of it is necessary in her eyes.  I haven't really gotten a handle on her expenses, but I know that she has at least $60 a week in medical co-pays, $50 a week on gas - our kids go to different schools on opposite sides of town with crap for public transit so driving is a must, groceries are about $100 and baby supplies (formula/ baby food/ diaper's) are about $50. That puts her spending at about $1127 a month, with $553 extra a month for doing things with the kids - swimming lessons, trips, meals out ( Dr. Appointment days) and Costco runs.  She's also been able to cover some emergency expenditures that have come up including new glasses for our son - $165, $180 in dental work for the oldest daughter and $750 for new tires and brakes on her car.

I plan on paying down the Visa and car loan, ASAP, once my VA debt is repaid that should free up another $258 to go towards paying down debt faster.

msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #3 on: April 21, 2014, 02:36:39 AM »
When it comes to paying down debts, the math works out best if your paying off the highest-interest ones first.  I mention that because it sounds like for you right now you're treating your lowest-interest debt (VA/1%) as your highest priority.  Much better to kill off that Visa balance at 29%.

I was hoping that when you looked at a post-move picture, it would look like the monthly expenses were much lower, which could make it worth trying hard to make the move work from a simple dollars-and-cents perspective.  One situation in which it can make sense to take on some debt is when you're using it to buy something that more than pays for its interest costs.  (Cars for work being the most common example.)  If you expected the interest on moving to cost far less than maintaining two households, then it could make sense to try to find a way to consolidate the housing situation before killing off, say, the car debt.  Housing for all of you together is similar to housing for all of you apart, which makes that a little less likely.  However, there might be some other efficiencies.  Transportation could be promising, for example, if you could land in a neighborhood that cuts back on driving around town.  There's also the TV thing. 

My gut and napkin suggest that paying 30% to finance the move is unlikely to be a good call at a $10k move price.  You could look for ways to bring that cost down.  At the end of the day, if you can free up $250/mo in spending, that's like paying 10k off your Visa bill, and vice versa.  ($10k * 30% = $250 * 12 months.)  If you could DIY the move, does that change things a lot?  Could you sell the awkward furniture on CL in Seattle, and buy used in Billings --maybe get things down to a trip that you and your wife could manage with just the car and a rented truck?  Looks like a U-Haul would run about $1k for that trip.  You'd have plenty of other expenses as well.

It doesn't sound like renting out in Seattle is a promising option.  Unfortunately, it looks like the tax relief for forgiven mortgage balances has recently expired, which might make a short sale less attractive.  I don't know what to say there.  Also, a short sale would hit your credit score, making it harder to buy that land you want.
http://www.chicagotribune.com/classified/realestate/ct-mre-0309-podmolik-homefront-20140307,0,2327020.column

So I guess another decision you have to worry about (sorry) is how far out buying in MT needs to be for you.  If your credit score took a hit from the short sale, could you buy?  If not, you might need to raise cash to bring to closing.  If you're happy renting for 7 years, it doesn't matter, OTOH.  Good news, of course, is you're on a trajectory to be free of your high interest debt real fast, so you start stashing away for something like that pretty quickly.  With a bit of luck, the market could strengthen in the interim and meet you part way.

BTW, taking on debt to solve a problem isn't the ideal Mustachian way of dealing with an issue.  Personally, I think it makes the most sense to do the math, and see where it takes you.  Using debt to solve a problem does leave you extra exposed to adverse life events, though. 

HairyUpperLip

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #4 on: April 21, 2014, 08:28:46 AM »
Good luck with everything man.

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #5 on: April 21, 2014, 10:41:40 AM »
Well the government has kind of made the VA debt a priority, so until it's paid off in 8 months, my hands are kind of tied.  The plan is to pay down the Visa debt and car note aggressively, once the move is complete. That would leave the student loans and the mortgage (?) as our next targets.

As for the move, we are pretty open to location. Billings is attractive because my daughter would have access to great health care and  I would have a 15 minute drive to/from the office, but since I'm on the road 5 days a week - it might make more sense to head to Butte, or even Sheridan, WY and Rapid City, SD to decrease housing cost - a lot of my colleagues do this. A quick glance at data shows that rental prices are on a the upswing in Billings and the other areas have steadied out in the last year. I don't mind driving a few hours to save a lot on housing cost.

As far as expenses for the move, 10K was a ball park figure my company gave based on them moving me.  After I ran some of the numbers on a DIY move,  $5000 (all reimbursable/ except housing) is a little more realistic. I'm looking at about $250 for a one-way flight to Seattle. Another $677 for the Uhaul rental. $ 800 for gas for both vehicles (cost me $350/ when I drove the Suburban out in February).  Add $3000 for deposit and first month rent. I figure the balance can be used for utility deposits and other moving cost. We also plan on staying a a friends house along the way, so we don't drive for 16 hours straight. 

As far as the house in Seattle goes, it's been a blessing and a curse. We do have some emotional attachment to it and that makes it difficult to sell. But because of our financial situation the past 2 years, we haven't been able to keep up on maintenance like we should have and that's what makes it tough to rent. I'd hate to pay a mortgage for something that is going to sit vacant until we fix it up and make it liveable. On the other hand, it would take 2 years to see any return on investment for any improvements we make... definitely a tough spot. (Repairs = $7200/ Profit from Rental = 300/mo).

Debt is something we are trying to avoid at all cost. We're prepared to rent for a few years while we look for a suitable plot of land to build on and invest for retirement.

Lastly, I had a long talk with the wife last night and we both agree that cutting the cord now make sense..straight talk will only happen if I get her a new Iphone, after being married for 15 years I've learned to pick and chose my battles.



 

msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #6 on: April 21, 2014, 11:09:50 AM »
Someone with landlording experience can chime in if I'm wrong, but I don't think that a $1300/mo in rental income on a $1050/mo mortgage sounds at all promising from a financial perspective.  If that's right, and you're moving the family out, then you'd need to get rid of the place.  Lots of people hold onto houses for too long for reasons that are more emotional than financial.  Before we bought a house for stability, they were my favorite people to rent from.  Don't be that guy.  :)  If you're going to take losses, it's almost always best to cut them early, avoid carrying costs, and allow your freed up cash flow to go into more profitable avenues, like debt repayment and later investments.

I just realized that I never weighed in on some of the basics.  You should be contributing at least up to the match for your 401(k), even before paying down the Visa.  Don't worry too much about it not being available to buy a house later.  This is another thing a lot of Mustachians will recommend against, but with most 401(k) plans you can take loans out of your account.  If you bring that money to closing, it will be counted as part of a downpayment.  (I don't think this depends on the state, but it's probably best to check.)  There are lots of good reasons not to do this, but if your choices are between not getting the match because you want liquidity, and planning on taking the loan at a certain point to simulate liquidity, then the free money starts making the latter very difficult to pass up.  Just be sure to pay it back super fast.  (Being debt free will help a lot at that point.)  Obviously, job stability would be an important prerequisite before taking out a 401(k) loan.  But since passing on the match is so bad, it's probably best to just take it and figure the rest out later.

You should also be trying to build an emergency fund.  Your Visa should come ahead of that, IMO, because you can use your paid-off Visa to simulate one.  Maybe after that's done, split your savings between the car and a savings buffer?  Just a thought.

plantingourpennies

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #7 on: April 21, 2014, 01:54:15 PM »
For your wife and the iPhone, tell her to check out Ting.  We were paying $161/month for 2 iPhones on Verizon, but now pay $43/month to have both iPhones on Ting.  It's a BYOD service, but if she's already got an iPhone, switching out to a Ting compatible (translate as Sprint network) iPhone shouldn't cost much.  We lost about ~$100/phone selling the Verizon phones and buying equivalent Sprint ones, but quickly recouped that spending in savings on the monthly bill. 

msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #8 on: April 21, 2014, 02:08:21 PM »
Okay, been thinking more about your situation.  I'm not sure if something super aggressive like this would work for you, either on a personal, financial, or legal level, but it might be worth considering, and some further research if it sounds like a decent fit:
* Stop paying the mortgage in Seattle, and go into a strategic default.  This [1] makes it sound like the impact to your credit score would be similar to a short sale.  This [2] makes it sound like you wouldn't be in too much trouble in Washington from walking.  (But you'd want to talk to someone qualified before making that call.)  Try to negotiate a short sale, but be prepared to take just a few months of free rent for the family if they don't let you out of the mortgage.
* Choose your next home with cost of living being a major consideration.  It sounds like you have cheaper options than Billings on the table.  If you can cut a big chunk out of your rent, that makes an accelerated move a lot more attractive.
* Aggressively pay down debt.  Keep cash balances light, and existing credit lines open to whatever extent you can until the situation in Washington is resolved.  Washington is technically a recourse state, but you don't have assets to go after, yet.  Normally 401(k) plans are protected from creditors via ERISA. [3]  I don't know if that would apply if you only started to contribute right around the time you stopped payments on a mortgage, though.  Definitely best to seek qualified advice there.  Or else, stick to paying down debt.  (Exception: I'd still get the 5% match.)
* Save aggressively.  It looks like debt-free in about a year is realistic given your cash flows, and some smart lifestyle changes.  (Currently you seem to have a surplus of $3k/mo = $3.6k/yr.  I'm SWAGging that through consolidating in an inexpensive area, and reducing interest costs fast, you can free up an extra ~$1k/mo, and get to $50k/yr+ savings rate including the 401k match.)  If your lender went with either a short sale or a "non-judicial foreclosure" [2], it sounds like you'd be in the clear from the lender before your net worth climbed above $0, which would be about a year out.  You say you're prepared to rent for a few years.  For every year after the first, you'd have about $50k in cash home/land-buying budget.  You'd be able to buy years before getting out of credit jail, possibly with a cash discount.  You might wind up on the hook to the IRS for some loan forgiveness, but probably not much more than a few months of savings.

Obviously, this is all super-aggressive, and you might not be comfortable with some or all of it, and should definitely seek some professional legal advice first if you think a strategic default might be the right move. 

[1] http://homebuying.about.com/od/4closureshortsales/qt/060907SScredit.htm
[2] http://www.seattleshortsales.com/homeowners/recourse.htm
[3] http://www.bankrate.com/finance/debt/401k-safe-bankruptcy.aspx
« Last Edit: April 21, 2014, 02:10:16 PM by msilenus »

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #9 on: April 25, 2014, 04:41:29 PM »
Thanks for the advice, I've been mulling my options for the last couple days and consulting a professional on this matter would hopefully uncomplicated this mess.
Also had a heart to heart with the spouse regarding finances and our future goals and she is willing to forego many luxuries - coffee, nails, and meals out to get us where we want to be in 12- 15 years.
I think once we get the mortgage situation settled we should be on the right path.  I just want to say it's good to find a community like this and all the positive responses and advice should get us started towards our journey to financial independence   

Mazzinator

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #10 on: April 25, 2014, 06:29:14 PM »
Quote
The thing that sucks is that I live in a pretty rural area, just east of Billings, MT, and property values are kind of inflated due to the influx of people working in the oil fields and rail road. Getting a true feel of what the real estate/ rental market looks like in my new area has been difficult because of inflation. A standard 3 bedroom house goes for around $1500, and demand far out weighs supply. One of the alternatives is to move to an area where more housing is more readily available, but it would make for a longer commute to work at the beginning and end of the week.

Quote
As for the move, we are pretty open to location. Billings is attractive because my daughter would have access to great health care and  I would have a 15 minute drive to/from the office, but since I'm on the road 5 days a week - it might make more sense to head to Butte, or even Sheridan, WY and Rapid City, SD to decrease housing cost - a lot of my colleagues do this. A quick glance at data shows that rental prices are on a the upswing in Billings and the other areas have steadied out in the last year. I don't mind driving a few hours to save a lot on housing cost.

Thank you for your service!!

I would focus some efforts here. My husband is AD army and we move a lot. The biggest way to get back on track would be to lower your housing cost. The "big 3" housing, cars and food can make or break yout budget. MMM standard advice would be small house, small commute and close to groceries or schoolings (or wherever you need to drive to often)

You could "sell" the idea of small house to your wife as temporary, less to clean, less to heat/cool, etc. As a stay at home mom myself, the biggest issue is outside yard space, then storage then bedrooms. Could any or all of your kids share a room? I did a super quick craigslist search and there seemed to be a ton of 2 beds rentals for around $700/month... Not sure if they are ghetto or what... But you get the idea... Even if you rented a small cheap place for a year or two it could make a huge difference. Or all live in your $500/month place for a few months...anything!!

The bigger and sooner/earlier the cuts (savings) the better. Better to save $5000 the first year than to save $1000 a year for the next five.

Good luck and keep us updated!!

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #11 on: April 25, 2014, 11:48:10 PM »
Mazzinator,
Awesome suggestion.  Actually the wife and I were discussing living in Billing vice. other locations this evening - smaller house, closer to schools/ hospitals, less commuting for me - more worried about me driving home in bad weather and at night for long distances, since I drive into work on Monday morning and return home Friday evening/ Saturday morning. We've both come to the conclusion that we can do a smaller place for a year, get a feel for the area, and learn which neighboorhoods offer the best value, all the while saving $$$$ .

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #12 on: April 27, 2014, 11:57:01 PM »
Just thought I'd update you all on the situation.

Spoke to a friend today and learned more about VA short-sales then I ever wanted to know. 

Of the options we have on the table a compromise sale by the VA, is the most appealing.  It gets us out of the house - legally and ethically. Though I would love to keep it, fix it up and rent it, but it would take years to see any returns on the cash outlay.  Although it bums me out for cheating the system,  the VA is on the hook for the remainder of the balance when the sale is approved. On the plus side, we would be eligible for another VA backed loan in about 18 months. We could also take advantage of some home buying programs in Montana after 3 years, if we decide to go that route.

Moving forward selling the house and renting in the new location seems like the best thing to do. The annual cost savings alone is awesome ~ $13K. assuming we don't have to pay utilities or heat, which is fairly common in this area. Buying can wait a few years.

The plan is to retire most of our outstanding debt, except for the student loans, as they have a pretty reasonable interest rate, in the next 16 months. Going to start putting an extra $250 a month towards the visa and pay the balance off by December 2014, and then role the payments to the second car.

I'm also looking at opening a separate bank account to force savings, if we can't see it, we can't touch it. And trim more expenses along the way, next up cell phones.   


msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #13 on: April 28, 2014, 11:55:56 AM »
jbow,

Thanks for the update.  I'm glad that benefit is available to you. 

I'm surprised that you're only throwing $250/mo at the Visa.  When I was reading your numbers earlier, it looked like you had about a $3k/mo surplus right now --roughly 10% of that.  Where is the rest going right now?  Or did I miss something?

My sense is that you're best off getting to zero on the Visa really fast.  I could see splitting payments between that, and saving for moving expenses that must be paid for in cash, but it seems like any surplus beyond cash-mandatory expenses should be going into the Visa.  Part of the reason why is that the Visa is somewhat liquid.  If you ever needed to "un-save" the money, you could just put expenses back on it.  (This isn't true of your other loans.)  Even if you were forced to do that eventually, you come out ahead because didn't pay as much interest in between.  And if you're *not* forced to do that, then you come out way ahead.

BTW, I don't think I said this earlier, but I later went back and cross-checked the family side of your discretionary budget against my own, and it wound up looking a lot more reasonable than I thought at first.  Your earlier assessment that she's handling a lot of one-offs probably means there are a lot of line items in there that aren't strictly monthly.  As time goes forward, you might benefit from firming up those things, and developing a more detailed model of your (soon to be unified) household spending.  Some people use YNAB to develop and track it.  I built one in Excel and use Mint to track it.  Whatever works for you.  I've found that it helps keep me focused and honest, especially about incidentals and one-offs and such.  Long story short (too late!), while trimming fat is always good, you might want to avoid putting too much pressure on your wife until you both have a firm understanding of how far she's really stretching that portion of the budget.  It might be farther than it seems.

Anyway, glad to see things are falling into place.

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #14 on: April 28, 2014, 04:58:05 PM »
Msilenus

Right now $250 is the maximum I feel comfortable putting towards the Visa.  Plus the interest rate was as high as I feared (17% vs 29%) as the bank lowered it as we started making regular payments again. 

I want to have a $10K cushion when we move for any incidentals that I didn't account for (housing the dog in case we can't find pet-friendly rental, vehicle repair) or in case movers break or lose something (haven't had a move where I gotten all my still in the condition I've sent it), so most of the money is going towards that looming expense.  I'm kind of paranoid and on't like being unprepared.

Cuts are still happening, just doing ones my wife isn't going to notice too much.

After making some adjustments to car insurance - mainly insuring my vehicle in Montana and raising deductibles to $500, going to $1K when we have 3 months of living expenses in the bank, has saved me about $23/ mo.

Also  my wife signed up with Bountiful Baskets http://www.bountifulbaskets.org/  for $15 a week. I think the savings is awesome and we can continue participating in the new location.  This should cut the grocery bill significantly, at least I'm hoping it will, and get the kids to eat more fruits and veggies. When the family gets here we hope to start buying beef/pork/ chicken directly from the local processing plant and planting some of our own herbs and veggies in containers. 
 
Right now, I use excel for tracking expenditures, I tried YNAB, but found it intimidating to get things set up and for some odd reason my bank data didn't transfer smoothly.  We expect to be switching to a local bank in the near future so hopefully their data migrates a little smoother.

Things are falling into place now that the wife and are on the same page and have similar goals.   


SnpKraklePhyz

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #15 on: May 31, 2014, 05:14:49 AM »
Just read this thread and I'm wondering how did it work out?

jbow808

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Just a quick update:
Still working a bunch of kinks in the budget and developing a savings plan. Taking 8 days off from work to move and take care of stuff back in Seattle really hurt the pocket! (No O/T, per diem, or bonuses for those days - just straight salary). A second trip last week where we had to fly and tie up loose ends didn't help too much either. 

Buying 2 AC units ($500) for the 100 degree days was an unexpected expense - the house got up to 90 degrees! I'm trying to recoup the cost by selling items that don't fit into the new house, which also prevents us from having to rent a storage unit. 

I'm also waiting to get reimbursed for my moving expenses ($3500) once I get paid back we will pay off the Visa and as much as the car note we can while purchasing a deep freezer (to cut down on Costco Trips), canning supplies (for the abundance of veggies we get each week) , and a dehydrator will go a long way to trimming one of our biggest expense - Food and food waste.

Things should start to get better as we've begun repairs on the house in Washington. We have a renter who also owns a handyman business and we've traded rent ( I pay the mortgage and building materials (mostly from the habitat for humanity store with the money he pays for rent)while he pays utilities and fixes the house over the next 6 months for reduced rent). To me it's a win/win - His family has a place to stay and I get the house fixed and the house doesn't sit vacant.  Though it was a few hundred dollars, I had lawyer look over the rental contract to protect myself in the event something in the deal went awry.

We've also managed to drop our auto insurance payment to $65 a month from $125 and utilities (electric/ water/ internet/ trash) have gone from $325 a month to about $175 . Our gas bill has also plummeted significantly, from about $600 pre-move to about $225.  We're still waiting to make the move to a prepaid cell plan, we're stuck with out old AT&T plan until I upgrade the wife to an iPhone 5, but once we get that done our cell cost go from $175 a month to $90.

Food cost are a bit higher ($1-2 more for a gallon of milk) than Washington, but thanks to bi-weekly trips to Costco, Bountiful Baskets, and joining Azure Standard where food items at about 10-15% less than our local market we should start seeming some headway in reducing food cost.

Once we have about a "normal" month of expense/ income under our belt I'll go back and reevaluate our financial situation and provide an update in a month or two.


SunshineGirl

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #17 on: August 09, 2014, 08:43:02 AM »
If at all possible, I think your wife should get a PT job during the week during the hours when your other kids can watch your little one. You can bill it as a "fun job" to get her out of the house for a few hours and socialize and meet some people. I say this because you're working killer hours - can you keep it up? What if you lose your job? Having even a few hundred extra dollars per month will allow you a little cushion and make it easier for your wife to get a FT job down the road if needed. 

jbow808

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #18 on: August 09, 2014, 10:54:03 AM »
We've discussed the possibility of her taking on a part-time job,I've even suggested that she sell  more crafts on Etsy (she makes headbands for babies and knits). Running a home based business appeals to her much more than working for someone else, because it allows her some degree in flexibility to make appointments of our oldest daughter, who still requires a lot of medical care.

Prior to our daughter's incident she worked in the health care field as a Medical Assistant, however I'm unsure if she wants to return to her previous line of work. Without going into too much detail, she was traumatized very much by our daughter's incident. 

Part of her fear of working outside the home is that someone other than family will raise the baby, our other 2 children were raised by our mothers; the idea of watching other people's kids for money has also been discussed, but she's concerned about liability.
 
As for my "long" hours, most of of my day is spent sitting in my work truck and waiting for something to break at the job site - many hours of boredom, reading and surfing the internet, followed by 15 seconds of panic and confusion when something breaks. I'm also working on my masters (100% paid for by the GI Bill) in a totally unrelated field in the event my body can no longer handle the semi-physical nature of my job. 

But yes, having her work would make getting to our goal that much quicker.
« Last Edit: August 09, 2014, 11:32:42 AM by jbow808 »

msilenus

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Re: 1st Real job out of the military - Help me retire in 12 - 15 years
« Reply #19 on: August 09, 2014, 05:07:21 PM »
Liability doesn't seem like a very good reason to me.  You don't seem to have a lot of assets to go after right now, and given how expensive childcare is, you could probably insure for quite a bit on what she'd be making doing it.

That doesn't mean there don't exist good reasons lurking behind that one.  I suspect there are.  But if you get the sense that she'd like that line of work if not for that one concern, it might be worth trying to work on addressing the concern.