The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Rekon on July 04, 2014, 06:19:52 PM
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Hello,
I'm a new member here... I would like some advise to increase my overall income and reduce my expenses.
Age = 26
Location = Canoga Park, CA (Los Angeles county)
Occupations = Finance Assistant Manager... Wife is a Legal Secretary
Income = $58k/yr... Wife makes $28k/yr
Rent = $1,500/month
Debt = 2011 Acura TSX ($480/month at 3% APR -- 3 years left on loan) - 2013 Acura ILX ($280/month 36 mo. Lease -- 2 years left on lease) I regret buying these cars
School = No student debt. However, I went back to a state university to obtain my B.S. Finance degree. I did this in hopes that having a degree would land me a higher paying job. I did not get a student loan and I am paying this cash as I go. $9k/yr + books.
Assets = 401k account with $24k - Company offers 3% match. Note: They also offer share match program. Where every company share you buy they give you one free. I am thinking about putting my money in this.
My wife and I live exactly 10 miles away in opposite directions from our jobs. I purchased a $600 used road bike a few months ago and I have been riding to work 3-5 days a week. I did this to get in shape but I also noticed how much I'm saving on gas! My goal is to ride my bike to work every day and be car-less once my wife's lease is up.
So, that's my financial story and here is my dilemma. My wife and I would like to have a kid soon. However, before we do so we would like to buy a house or condo. Problem is we could only save approx. $1k/month comfortably with our current expenses.
What can I do to increase income and lower expenses?
Should I look into trading in one of my cars? Should I get a second job or start a side biz? Is buying a property even worth it... should I just rent and invest?
^^ Obviously I'm a little confused about what to do.
Please help -- advise is appreciated!!
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Probably need to give a more detailed breakdown of your monthly expenses so we can see where your money is going and how/where you can reduce waste and expenditures.
You'll have to double check but I thought you could set up a 529 plan for yourself to pay for school. Not sure all of the tax implications of this (I read this here or on /r/personalfinanace I think, so likely someone here will better explain) but I'd think you should be able to save some money that way. Will work pay for/reimburse you for any schooling at all? If you aren't in your final or maybe even penultimate year of the baccalaureate degree, consider taking whatever classes you can at the community or junior college. CA is great for community colleges because they are so heavily subsidized you should be able to pay <$50/credit+books&fees.
No idea what the LA county housing market is like but if it's anything like Bay area, on your income, unless you have a very healthy down payment, it may be difficult to find much of anything to purchase. =\
Good job on riding your bike! Can wifey start riding or taking public transport to get to work? Does your work offer pretax commuter vouchers (commuter checks) or rideshare programs?
You didn't buy the ILX, you're renting it. If you're already comfortable riding, maybe see how much it would cost you to break the lease; with $6720 remaining in the lease term, I wouldn't be surprised if you can get away cheaper cutting your losses.
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You are in a very expensive area to buy. With only $86k of household income and cash flowing a degree, you are not in a position to buy a house or even a condo. You will have to rent until your income is much higher. Renting gives you the flexibility to move to take a better job anyway.
The cars are poor uses of what limited funds you have as you have discovered. You may be upside down on the purchase and it would be tough to get out of the lease unless someone wanted to assume it. In your shoes, I would get rid of the one with the $480 payment as soon as I could. The leased one can be replaced by a basic used car when the time comes.
An experienced legal secretary in the LA area should command a much higher salary. Yes, there is a lot of excess capacity in the legal field, but $28k is about what local government agencies pay entry level clerical staff. If I were her, I would be looking for a better paying job. Preferably one with a strong benefit package to help with the children.
Can you get a second job if you are a finance manager? Do you have a schedule that would allow that?
Are you settled in the LA area? If not, moving to a less expensive area opens up more options, provided you both can find similar jobs.
Those are the things I would look at in your shoes.
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I would lose both cars. Those are killing you. Forget the stock purchase. That's too many eggs in one basket. One or both of you should pick up second jobs and save enough cash for a 20% down payment on a 15 year mortgage. Kids don't really get expensive till later in their lives.
A Plan
Sacrifice
Discipline
Stick to it
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Forget the stock purchase. That's too many eggs in one basket.
This stock purchase plan literally yields 100% automatically. If the company is even somewhat solid and you think the odds of it going down before the stock is yours (I'm guessing you can't just turn around and sell) is low, I'd go for it.
I know I took my employer's.
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I would lose both cars. Those are killing you. Forget the stock purchase. That's too many eggs in one basket. One or both of you should pick up second jobs and save enough cash for a 20% down payment on a 15 year mortgage. Kids don't really get expensive till later in their lives.
A Plan
Sacrifice
Discipline
Stick to it
Unless sale is restricted, I'd go ahead with the plan. Buy shares, sell them immediately. Pocket it. A friend of mine has a company that offers shares at a 15% discount with no restriction on sale (there is a cap on how much you can buy each month, though.)
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Thank you everyone for the feedback so far!! So, what i'm hearing is get rid of my cars and make more money... I'm thinking of getting rid of the lease. Also, I will probably look for a second job and help my wife get a better job or raise. I agree that legal secretaries in LA should demand more.
Probably need to give a more detailed breakdown of your monthly expenses so we can see where your money is going and how/where you can reduce waste and expenditures.
Good job on riding your bike! Can wifey start riding or taking public transport to get to work? Does your work offer pretax commuter vouchers (commuter checks) or rideshare programs?
You didn't buy the ILX, you're renting it. If you're already comfortable riding, maybe see how much it would cost you to break the lease; with $6720 remaining in the lease term, I wouldn't be surprised if you can get away cheaper cutting your losses.
I'll provide a detailed breakdown of monthly expenses and provide details of breaking my lease shortly.
Unless sale is restricted, I'd go ahead with the plan. Buy shares, sell them immediately. Pocket it. A friend of mine has a company that offers shares at a 15% discount with no restriction on sale (there is a cap on how much you can buy each month, though.)
No ride share programs or commuter checks -- i wish!!
You are in a very expensive area to buy. With only $86k of household income and cash flowing a degree, you are not in a position to buy a house or even a condo. You will have to rent until your income is much higher. Renting gives you the flexibility to move to take a better job anyway.
The cars are poor uses of what limited funds you have as you have discovered. You may be upside down on the purchase and it would be tough to get out of the lease unless someone wanted to assume it. In your shoes, I would get rid of the one with the $480 payment as soon as I could. The leased one can be replaced by a basic used car when the time comes.
An experienced legal secretary in the LA area should command a much higher salary. Yes, there is a lot of excess capacity in the legal field, but $28k is about what local government agencies pay entry level clerical staff. If I were her, I would be looking for a better paying job. Preferably one with a strong benefit package to help with the children.
Can you get a second job if you are a finance manager? Do you have a schedule that would allow that?
Are you settled in the LA area? If not, moving to a less expensive area opens up more options, provided you both can find similar jobs.
Those are the things I would look at in your shoes.
I could get a second job and work on the weekends and a few nights a week. I would be trading my time for money at that point.
I'm not settled in the LA area I'm open to other areas such as Riverside. I've looked into jobs out there but for the work I do pay starts around 40k and I would have to start over as an analyst. I haven't looked into moving to another state.
I would lose both cars. Those are killing you. Forget the stock purchase. That's too many eggs in one basket. One or both of you should pick up second jobs and save enough cash for a 20% down payment on a 15 year mortgage. Kids don't really get expensive till later in their lives.
I cannot lose both cars. I like to travel sometimes (e.g., san diego) and public transit would be hell. I was thinking of losing one car - probably the lease since the financed car is almost paid off (15k left). I agree about the 20% down. I do NOT want to pay PMI. :)
Forget the stock purchase. That's too many eggs in one basket.
This stock purchase plan literally yields 100% automatically. If the company is even somewhat solid and you think the odds of it going down before the stock is yours (I'm guessing you can't just turn around and sell) is low, I'd go for it.
I know I took my employer's.
My company offers a 15% discount, however there is a 3 year restriction. So, If I sell the shares before 3 years... I only get back the the principle shares and I loose the shares the company bought for me.
You'll have to double check but I thought you could set up a 529 plan for yourself to pay for school. Not sure all of the tax implications of this (I read this here or on /r/personalfinanace I think, so likely someone here will better explain) but I'd think you should be able to save some money that way. Will work pay for/reimburse you for any schooling at all? If you aren't in your final or maybe even penultimate year of the baccalaureate degree, consider taking whatever classes you can at the community or junior college. CA is great for community colleges because they are so heavily subsidized you should be able to pay <$50/credit+books&fees.
I'll have to look into the 529 program. I already maxed out my community college units. I graduated last June and I have to transfer to get my bachelors degree. I have 2 years left.
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Here is a rough breakdown of my expenses (based on previous 3 months expenses using mint.com):
Total Monthly Income = $5,400
Total Monthly Expenses = $3,620
Balance = $1,780
Note: With the balance above I put $780 towards tuition and $1,000 towards savings.
MONTHLY EXPENSES
Rent/mortgage = $1,500.00
Electric = $50.00
Cell phone = $100.00 (this includes 2 cell phones)
Groceries = $400.00
Restaurants = $200.00 (this varies every month... $200 is on the higher side)
Car payment 2011 Acura TSX = $480.00
Car payment 2013 Acura ILX = $280.00
Auto Gas = $180.00
Student loans = $0.00
Credit cards = $0.00 (I refuse to carry CC debt)
Auto Insurance = $170.00
Personal care = $160.00 (this includes my hair cuts and wifes nails etc.)
Cable = $70.00
Internet = $30.00
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You need to sell both cars and get a used honda civic or something similar.
Your rent and just car payments are 31.5% of GROSS, not net, so those must be north of 40% of your take home pay, ouch. Could you write what your net take home pay is per month and all expenses?
Also you need to either get a higher paying job or move to a less expensive housing area. A $1500/mo 30yr PITI mortgage payment implies about a $300,000 house, and at 2.5x gross you'd only be able to afford a $215,000 house, so already you're overpaying, and with the kind of rent and car expenses you have currently, it will take like a decade or more for you to save up a 20% downpayment.
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You need to sell both cars and get a used honda civic or something similar.
Your rent and just car payments are 31.5% of GROSS, not net, so those must be north of 40% of your take home pay, ouch. Could you write what your net take home pay is per month and all expenses?
Also you need to either get a higher paying job or move to a less expensive housing area. A $1500/mo 30yr PITI mortgage payment implies about a $300,000 house, and at 2.5x gross you'd only be able to afford a $215,000 house, so already you're overpaying, and with the kind of rent and car expenses you have currently, it will take like a decade or more for you to save up a 20% downpayment.
I just listed my net income and expenses above...
Where do you suggest I move to? The main reason I haven't been actively looking for another job is because I don't have my B.S., degree yet and It's a little tough to market myself without one.
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Cut these two in half:
Restaurants = $200.00 (this varies every month... $200 is on the higher side)
Personal care = $160.00 (this includes my hair cuts and wifes nails etc.)
Get rid of this:
Cable = $70.00
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I would do the following in your shoes:
1. Get rid of one of the cars. Having 2 Acuras at your income level is not sustainable. It sounds like you can get by with 1 car since you bike to work (and presumably you could take the bus if you were unable to bike for some reason).
2. Get rid of cable. Netflix/Hulu over the internet should provide you with enough entertainment options.
3. Take the company stock deal. 3 years is not crazy long, and if you can hang onto it for that long, you'll get a 100% payback which is amazing. If you have to sell it early you'll still get back whatever you put into it, hopefully (obviously, not if the stock goes down, so it's a risk.. but if you think you'll be there for 3 years then I'd do it for sure). \
4. Keep contributing as much as needed to the 401k to get the full company match.
5. Stay where you are till you finish your BA. Once you have that, then you can start job hunting around in lower cost of living areas.
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I would do the following in your shoes:
1. Get rid of one of the cars. Having 2 Acuras at your income level is not sustainable. It sounds like you can get by with 1 car since you bike to work (and presumably you could take the bus if you were unable to bike for some reason).
2. Get rid of cable. Netflix/Hulu over the internet should provide you with enough entertainment options.
3. Take the company stock deal. 3 years is not crazy long, and if you can hang onto it for that long, you'll get a 100% payback which is amazing. If you have to sell it early you'll still get back whatever you put into it, hopefully (obviously, not if the stock goes down, so it's a risk.. but if you think you'll be there for 3 years then I'd do it for sure). \
4. Keep contributing as much as needed to the 401k to get the full company match.
5. Stay where you are till you finish your BA. Once you have that, then you can start job hunting around in lower cost of living areas.
Thanks!! Cable is easy enough to get rid of and my wife currently uses her sister's Netflix account. :)
I will take on the company stock deal. Stock has been historically increasing over the past 10 years. How much do you think I should put in each month?
Totally agree about the 401k! I'm currenly taking advantage of the match. I contribute 6% into a Fidelity lifecycle fund and my company matches 3%. That is the max match contribution...
Regarding the cars, which car do you suggest I get rid of? I was thinking of getting rid of the ILX and keeping the TSX since it's a purchase and I would ride it until the wheels fall off! Thoughts?
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You say the ILX is on a lease, so you are stuck with that for now. The TSX is not appropriate for your income, nor your goals, so sell it and buy a used civic or something like it.
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You say the ILX is on a lease, so you are stuck with that for now. The TSX is not appropriate for your income, nor your goals, so sell it and buy a used civic or something like it.
Hmm.. I was thinking about breaking the lease for the ILX.
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As far as the cars, get rid of the lease. Even if you break it you will not be spending that monthly payment anymore.
For the owned car, how much is it worth? It probably makes more sense to sell it and buy out the financing. Then with what's left over, get a used reliable car with the profit? Or even if you just break even, and save $480/mo for a reliable used car for a year.... With no car payment, you have 480 more a month in your pocket. (Edit: it's worth more than you still owe! Sell it and get a ten-year-old Civic instead or similar). Automatically you'll have that 480 a month!
Your job has a pretty decent salary. Till you finish your degree, staying on the same area and finding a better job for your wife seems smart.
For food, try combining groceries and restaurants into one category and reducing the total to $450 or so. It will force you to think about reducing your grocery bill in order to have any money left to go out to eat. And if you overspend on restaurants you eat less fancy groceries for example. Later you can reduce this number even more
Does your place have a 2nd bedroom you could rent to offset some of the housing cost? Or a storage area/shed/locker you could rent? If not, is moving to a 2-3 bedroom and getting housemates feasible?
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As far as the cars, get rid of the lease. Even if you break it you will not be spending that monthly payment anymore.
For the owned car, how much is it worth? It probably makes more sense to sell it and buy out the financing. Then with what's left over, get a used reliable car with the profit? Or even if you just break even, and save $480/mo for a reliable used car for a year.... With no car payment, you have 480 more a month in your pocket.
Your job has a pretty decent salary. Till you finish your degree, staying on the same area and finding a better job for your wife seems smart.
Does your place have a 2nd bedroom you could rent to offset some of the housing cost? Or a storage area/shed/locker you could rent? If not, is moving to a 2-3 bedroom and getting housemates feasible?
According to KBB the 2011 TSX is worth $20,400. I owe 16.8k left on my loan. So I can feasibly pocket the difference.
I tried calling Acura regarding the lease and inquire what the penalty is to break the contract. Unfortunately, their lease dept. is closed. So, I'll try again on Monday.
My place is a 2 bedroom (1,000 sq ft) condo that I'm renting. Currently the spare room acts as storage for the bikes, room for my dog (small maltipoo), and a study room for me. With that said, I'm not sure if we would feel comfortable having someone else living here. We enjoy our privacy. :)
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Enjoy your privacy more than not having money? I get it though, I don't care for roommates much either but maybe consider downsizing to a 1bedroom instead of getting a roomie? Or just suck it up and get a roommate until you finish your degree? This is probably the most reasonable compromise in that regard.
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How much longer until the degree? I wouldn't try to get a second job because you dont have any debt at this point, good work! I would double-down on the degree with your all your free time. You're doing good for 26, keep working hard.
Wife needs to find a better job, $13.50/hr in LA? Ouch. Could she babysit for a rich family during the day with like 2 kids? I bet that would clear $40k/yr.
Don't do the shared roommate thing, dangerous at worse, stressful at best. You don't have an income problem, you have a spending on cars problem.
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Enjoy your privacy more than not having money? I get it though, I don't care for roommates much either but maybe consider downsizing to a 1bedroom instead of getting a roomie? Or just suck it up and get a roommate until you finish your degree? This is probably the most reasonable compromise in that regard.
I don't want a roommate. I got a pretty good deal in my area... decent 1 bedrooms are $1500+.
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How much longer until the degree? I wouldn't try to get a second job because you dont have any debt at this point, good work! I would double-down on the degree with your all your free time. You're doing good for 26, keep working hard.
Wife needs to find a better job, $13.50/hr in LA? Ouch. Could she babysit for a rich family during the day with like 2 kids? I bet that would clear $40k/yr.
Don't do the shared roommate thing, dangerous at worse, stressful at best. You don't have an income problem, you have a spending on cars problem.
Thanks! I started my job at $30k when I was 21. 5 years later I was promoted to asst. manager. I know managers make upwards of $85k. My goal is to get there.
2 more years until I get the degree. So, it would cost me $18k'ish more to obtain.
I agree, I have a car spending problem - not a debt problem. I was tempted taking on debt for school but I refused! :) I will take your advise in knocking out my school work ASAP.
Regarding my wife's job... problem is my wife has experience with personal injury law and most PI attorney's don't pay their assistants them much. $15/hr at most with no benefits. She is studying for the NALA to get certified so she can market herself to other types of law firms (contracts, criminal etc.).
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So, to put it in perspective, you wrote "$15k left, it's almost paid off" for the expensive car.
$15k is not almost paid off. As a percentage of the purchase price, maybe. But dollar value, no. (For the record, the most I've ever spend on any car was $18k, for a new Honda Civic).
Break the lease, sell the car with the big payment, replace with a used smaller vehicle. Civic. Maybe a Matrix (the two cars we own). Matrix has more space and gets better gas mileage for us.
I'd stay where you are renting, especially if you've been there awhile. I'd suggest a 1BR, but often once you've been in a place, your rent hasn't gone up like market rents, and going to market is worse.
Otherwise, I'd aim for the following:
Cut out cable and replace with Netflix.
Cut down on personal care. $160 for two people? That's awfully high. We spend way less than that for four people.
Cut your eating out in half.
Do some research on salary.com on what your wife should be making, and have her go in armed with info on the next review. I did that for my husband on his first review, and after the boss grumbled and suggested he look elsewhere - he slept on it overnight - and doubled the raise. Sadly, it's never worked for me. My bosses are either the go-getter types who treat their people well and pay them, or misers who say FU. (Right now I'm looking for a new boss.)
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So, to put it in perspective, you wrote "$15k left, it's almost paid off" for the expensive car.
$15k is not almost paid off. As a percentage of the purchase price, maybe. But dollar value, no. (For the record, the most I've ever spend on any car was $18k, for a new Honda Civic).
Break the lease, sell the car with the big payment, replace with a used smaller vehicle. Civic. Maybe a Matrix (the two cars we own). Matrix has more space and gets better gas mileage for us.
I'd stay where you are renting, especially if you've been there awhile. I'd suggest a 1BR, but often once you've been in a place, your rent hasn't gone up like market rents, and going to market is worse.
Otherwise, I'd aim for the following:
Cut out cable and replace with Netflix.
Cut down on personal care. $160 for two people? That's awfully high. We spend way less than that for four people.
Cut your eating out in half.
Do some research on salary.com on what your wife should be making, and have her go in armed with info on the next review. I did that for my husband on his first review, and after the boss grumbled and suggested he look elsewhere - he slept on it overnight - and doubled the raise. Sadly, it's never worked for me. My bosses are either the go-getter types who treat their people well and pay them, or misers who say FU. (Right now I'm looking for a new boss.)
I'll look into breaking the lease and selling the expensive car. A 2006 civic is roughly 13k (I wonder if a dealer would buy back my two cars if I offered to buy a used one).
I tried the salary.com with my wife and her boss is a type who says FU. However, this has worked for me many times! I got 10% X 2 raises in the span of 6 months with this technique.
We've been here for a while and the owner has never raised the rent. The market is much higher now trust me I've looked. Unless it's a 1 bedroom with roaches, no AC and a bad neighborhood - there's nothing below $1,500 for a one bedroom. I like being able to walk my dog at night and not having to worry. :)
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What do you guys think about refinancing the TSX? 60 month term would be around $300 a month.
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It looks like your wife is very underpaid.
Based on http://www.bls.gov/ooh/legal/paralegals-and-legal-assistants.htm#tab-5 over 90% of legal assistants/paralegals make more than she does. If her boss wont give her a raise, she should look for another job.
Also, you spend over $1,000 each month on cars. Refinancing them wont solve this problem, it only delays the solution. Sell them now and buy something cheaper.
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It looks like your wife is very underpaid.
Based on http://www.bls.gov/ooh/legal/paralegals-and-legal-assistants.htm#tab-5 over 90% of legal assistants/paralegals make more than she does. If her boss wont give her a raise, she should look for another job.
Also, you spend over $1,000 each month on cars. Refinancing them wont solve this problem, it only delays the solution. Sell them now and buy something cheaper.
Thanks! I will job hunt with her ASAP!
Re: the cars what do you suggest I buy? I agree refinancing would delay the problem but what's the difference between buying a 15k civic vs. refinance my 15k balance? The payments would be about the same.
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It would cost me $1,602.77 in total to refinance the expensive car (TSX). But I would have more $ left over each month that I can save towards a down payment and/or invest. Thoughts?
Refinancing into a 60 month term:
New monthly payment: $
314.71
Monthly savings: $
165.29
Difference in interest: $
-1602.77
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I'm psyched that you're so willing to break that lease, sell your $20k car and buy something less expensive and more efficient. You will find that there are lots of great cars out there under $10k. For the best deal, buy off of craigslist and don't be afraid to make the deal contingent upon a mechanic's inspection. Dealerships are the most expensive places to buy cars.
As for what car to buy? Check out MMM's post on cars under $10k. I did a quick search but couldn't find it. I'm pretty sure he wrote it within the last year. The Civic that you saw listed for $13k at a dealership might be $10k or less from a private party seller.
After selling your Acura, how much cash could you put down on a new-to-you car?
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It would cost me $1,602.77 in total to refinance the expensive car (TSX). But I would have more $ left over each month that I can save towards a down payment and/or invest. Thoughts?
Refinancing into a 60 month term:
New monthly payment: $
314.71
Monthly savings: $
165.29
Difference in interest: $
-1602.77
How much time do you have left on your current loan term? Refinancing and starting the clock on 60 months of payments for a 2011 car doesn't seem so wise to me, even if it marginally lowers your payments.
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I'm psyched that you're so willing to break that lease, sell your $20k car and buy something less expensive and more efficient. You will find that there are lots of great cars out there under $10k. For the best deal, buy off of craigslist and don't be afraid to make the deal contingent upon a mechanic's inspection. Dealerships are the most expensive places to buy cars.
As for what car to buy? Check out MMM's post on cars under $10k. I did a quick search but couldn't find it. I'm pretty sure he wrote it within the last year. The Civic that you saw listed for $13k at a dealership might be $10k or less from a private party seller.
After selling your Acura, how much cash could you put down on a new-to-you car?
Thanks I should be able to profit 3-4k from the Acura.
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It would cost me $1,602.77 in total to refinance the expensive car (TSX). But I would have more $ left over each month that I can save towards a down payment and/or invest. Thoughts?
Refinancing into a 60 month term:
New monthly payment: $
314.71
Monthly savings: $
165.29
Difference in interest: $
-1602.77
How much time do you have left on your current loan term? Refinancing and starting the clock on 60 months of payments for a 2011 car doesn't seem so wise to me, even if it marginally lowers your payments.
35 months left on current loan term...
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As for your wife's salary -- just because she has experience in PI doesn't mean that it can't translate into other legal fields. PI is litigation-heavy, so I'm guessing she's familiar with a lot of the court documents and the court systems involved in PI. She could go into corporate litigation, which should have more financial stability for the lawyers involved, and therefore higher salaries.
Other stable areas are trusts and estates and corporate transactional law. They require similar skill sets -- attention to detail, using document templates and modifying them for special situations, etc. But they would require some new substantive knowledge because they don't involve litigation.
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It would cost me $1,602.77 in total to refinance the expensive car (TSX). But I would have more $ left over each month that I can save towards a down payment and/or invest. Thoughts?
Refinancing into a 60 month term:
New monthly payment: $
314.71
Monthly savings: $
165.29
Difference in interest: $
-1602.77
How much time do you have left on your current loan term? Refinancing and starting the clock on 60 months of payments for a 2011 car doesn't seem so wise to me, even if it marginally lowers your payments.
35 months left on current loan term...
Does your savings analysis take that into account? Or would you only be saving $165/mo for the 35 months left on your current loan?
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It would cost me $1,602.77 in total to refinance the expensive car (TSX). But I would have more $ left over each month that I can save towards a down payment and/or invest. Thoughts?
Refinancing into a 60 month term:
New monthly payment: $
314.71
Monthly savings: $
165.29
Difference in interest: $
-1602.77
How much time do you have left on your current loan term? Refinancing and starting the clock on 60 months of payments for a 2011 car doesn't seem so wise to me, even if it marginally lowers your payments.
35 months left on current loan term...
Does your savings analysis take that into account? Or would you only be saving $165/mo for the 35 months left on your current loan?
Yes, i'm taking remaining term into account.
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In summary, I am considering the following:
- Get rid of our leased car and cancel our cable service
- Cut down on restaurant and personal care expenses
- Get wife a higher paying job
Estimated Savings Breakdown:
Lease Payment ILX: $280
Gas for ILX: $100
Auto Insurance for ILX: $80
Cable: $70
Restaurants: $100
Personal Care $60
This sums up to approx. $690 in savings. Note: this excludes any savings from auto registration and auto maintenance.
So, by doing this I would be able to save a total of $1690. (this includes paying tuition expenses cash)
Now when my wife gets a higher paying job... I estimate she would make at least $16/hr. which translates into an extra $400 a month and would put us at $2080 in monthly savings.
With that said, once I finish college in 2 years we would be able to save $2,780 a month.
With that said, my goal is to reach $60,000 in savings (20% down payment for a $300,000 house) and I believe the following will help:
- Remedy 1 - getting rid of lease and expenses ($1690 monthly savings): achieve goal in 36 months
- Remedy 2 - apply remedy 1 + get wife a higher paying job ($2080 monthly savings): achieve goal in 29 months
I'm still not convinced on getting rid of the TSX... Can someone show me on how I would save money by getting rid of my TSX and still have a very reliable car? My car is a 2011 and has 23k miles. I'm paying a $480/month payment and I have 35 months left to go. If I buy a cheaper car I fear the risk of it breaking down and having problems. I understand buying a cheap used car could us save money but this shit has to be reliable since it's going to be our only car! ;)
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I'm still not convinced on getting rid of the TSX... Can someone show me on how I would save money by getting rid of my TSX and still have a very reliable car? My car is a 2011 and has 23k miles. I'm paying a $480/month payment and I have 35 months left to go. If I buy a cheaper car I fear the risk of it breaking down and having problems. I understand buying a cheap used car could us save money but this shit has to be reliable since it's going to be our only car! ;)
Like others posted, I'm glad you're so willing to change. I have seen many threads get to a few pages before the original poster gives in to the suggestion of getting rid of a lease. Getting rid of an expensive car that has payments is next-toughest nut to crack :)
Here's how it will save you money to downgrade to a used car under $10k:
- Save money on insurance -- because it's a less expensive car, your insurance goes done. If you pay cash for it, you will not need to have a hefty collision policy on it (as required by the loan company).
- Save money on the interest you're paying on the loan (here, I guesstimate that's around $800 over 2 years)
- You have the room in your expenses to pay $480/mo on your car loan, so that means instead of paying the loan, you can put that monthly payment into savings. If you put it into savings to replace what you paid for the car (presumably, $6k after you sell your current car), you will replace it after a year -- and sooner if you put your insurance savings into your account as well. So, that entire amount you would have spent on your car loan during the 13th - 25th month is completely banked.
I think it's pretty common to be wary of buying a cheaper used car, but you will find that there are a lot of reliable, used cars out there. We bought our Prius at 3 years old for $12k and have been driving it for almost 4 years with no problems that weren't regular maintenance or caused by my bad driving! ::knock on wood:: I bought our 1999 Corolla used in 2003 and it has over 150k miles on it now. We've spent no more than $2k over the life of the car on maintenance issues unrelated to the expected costs of new brakes and tires, etc. ::knock on wood::
So, if you think about how much you'll save during the second year ($6k+), I doubt that a reliable used car will cost you that much in maintenance. If you drive an Acura now, I'm going to guess that you'll be comfortable with the reliability of a Honda or maybe even a Toyota? In my experience, they are good investments.
Grab a free 14-day trial to Consumer Reports online and see what cars you can find for under $10k (or whatever your cash budget may be) and assess their reliability. You might be surprised with the results. And, unless you're comfortable with some serious negotiation, I would avoid buying used at a dealership and I would absolutely avoid trading in your car there as part of the sale.
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I'm sorry for monopolizing your thread, but I just want to add that we rent and we have a 4-year-old. We haven't been in a good enough financial position to buy, and until he goes to kindergarten next year, we don't feel a need to rent in a town that has good school districts. But, we plan to move to a better school district next year -- and that's when we may plunk the money down on a house if we can't find a rental we like.
Buying a house is a huge commitment, and you can never change the location, so try to avoid buying something just because you feel it's "the thing to do" before having a child. At this point (22 weeks pregnant), my mom is telling me that "the thing to do" is to let each kid have their own rooms. But really, I know plenty of well-adjusted people who shared rooms with their brother/sister; so that's what we're going to do for now. It's hard to buck expectations, but when you crunch the numbers sometimes it's what's best for your family.
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You already drive a used honda, just get a simpler version such as a civic. Sell your cars on craigslist, don't get scammed by dealers trading it in, they will not give you a deal.
You can trust the reliability of honda, Toyota, and nissan. I could go into the details and costs of auto repair what if scenarios, but you'll be just fine. Find a pre-purchase inspection mechanic to do a thorough examination and you'll be set. Civic, carolla, or sentra, take your pick.
As for my personal experience I have only owned nissans for the past 15 years, and we also have a CRV with 90k miles, running strong.
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What about the cell phones? What service do you have? Your bill isn't outrageous, but a lot of people on the forum are doing much better than $50 per phone. Have you looked into Republic Wireless, AirVoice, Page Plus, Ting?
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Thank you everyone for all of the feedback!! Re: selling the TSX, it's still a little hard to justify... I've found a few priuses for sale on craigslist under or about 10k. However, these cars have well over 100k miles! Keep in mind my acura may be 5k more expensive but it only has 24k miles!!! TBH selling the TSX doesn't make sense to me.
You are doing great, and I love your openness to change.
I just wanted to chime in, kids can be very expensive. I've got a 1 year old and we are going to be paying more than $10,000 this year between the kid's medical expenses and daycare (wife and I both work FT), and that's not unusual. We don't spend money on toys or fancy clothes (we get hand-me-downs), and we're still talking 10,000/yr. So please keep that in mind.
Also, don't rush on the house, particularly as you're still building your income streams and lowering your expenses. The flexibility you enjoy as a renter is one of the things you won't fully appreciate until you're locked into a home. I remember my wife wanted to purchase a home because she wanted more room for the kid. Keep in mind you don't really need room, kids are tiny people. If you REALLY want need more room, consider renting a house. Remember that when you purchase a house, a huge chunk of your money goes POOF and it can take a helluva long time to build that savings back up, particularly if your revenue streams haven't yet matured.
Thank you for your feedback! I kind of had a "WTF really!?" face when another person on here said kids are not expensive until they get older. We both work FT as well and we would also need to find a daycare. Plus all other misc. expenses. It adds up!!!
Re: the house, thank you for your advise. We would keep living in our apt as long as possible to continue saving money. Ideally we would love to find a house outside of LA (i.e. Riverside) that's pretty new and in decent districts. We don't see the value of houses in LA! They are generally old (built in the 70s or 80s) and small. In order to get something decent in LA it would cost upwards of half a million!
So, in order to do buy a house in Riverside, my wife and I would have to find jobs in Riverside (obviously). But I would need to stay put and get my degree before we move so I can maximize my options. From my experience employers take advantage and low-ball people without a degree.
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Do you have dedicated or underground parking at all? I used to get $100/mo for renting out my underground parking spot in a suburb. Once you get rid of the second car that could be a painless income boost. Much more painless than renting out a bedroom.
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Do you have dedicated or underground parking at all? I used to get $100/mo for renting out my underground parking spot in a suburb. Once you get rid of the second car that could be a painless income boost. Much more painless than renting out a bedroom.
Agreed! I'm going to call Acura's lease dept. first thing Monday morning. I wonder what the penalty fee is going to be...
Yes, I have dedicated underground parking. Not a bad idea. I'll look into renting it out.
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Thank you everyone for all of the feedback!! Re: selling the TSX, it's still a little hard to justify... I've found a few priuses for sale on craigslist under or about 10k. However, these cars have well over 100k miles! Keep in mind my acura may be 5k more expensive but it only has 24k miles!!! TBH selling the TSX doesn't make sense to me.
You're still PAYING for a $34,560 TSX even though it's currently worth $20,000. It's good you're not underwater on it but you really can't afford it.
Here:
2012 Honda Civic LX - $13,999 - 24,000 miles
Permalink: http://cargur.us/1hYk0
2012 Honda Civic LX - $13,900 - 30,440 miles
Permalink: http://cargur.us/1lXt4
You can do it man!! These are practically brand new! Newer than what you're driving, amazingly luxurious autos. (PS the TSX is an Accord, ILX is a Civic).
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I'm still not convinced on getting rid of the TSX... Can someone show me on how I would save money by getting rid of my TSX and still have a very reliable car? My car is a 2011 and has 23k miles. I'm paying a $480/month payment and I have 35 months left to go. If I buy a cheaper car I fear the risk of it breaking down and having problems. I understand buying a cheap used car could us save money but this shit has to be reliable since it's going to be our only car! ;)
I think it's possible to be a reliable car for $2000-3000. You just need to know how to buy a good used car. I bought an old miata a while back, and paid $1600. I replaced the top and the clutch for $500 and it ran like a new car.
There are some sites/blogs that describe how to buy a good used car and I'd suggest researching it.
I basically would scour Craiglist and had a few reliable brands in mind. I'd look for one owner cars with good maintenance records. I'd go test drive the car and always, always, always take it to a mechanic for a pre-purchase checkup. I might call up 100-200 owners over several weeks, test drive about 20-25 cars, before finding the "one."
Overall though, I think that you could focus on increasing you income, and that might mean looking for a new job or new career path.
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Thank you everyone for all of the feedback!! Re: selling the TSX, it's still a little hard to justify... I've found a few priuses for sale on craigslist under or about 10k. However, these cars have well over 100k miles! Keep in mind my acura may be 5k more expensive but it only has 24k miles!!! TBH selling the TSX doesn't make sense to me.
You're still PAYING for a $34,560 TSX even though it's currently worth $20,000. It's good you're not underwater on it but you really can't afford it.
Here:
2012 Honda Civic LX - $13,999 - 24,000 miles
Permalink: http://cargur.us/1hYk0
2012 Honda Civic LX - $13,900 - 30,440 miles
Permalink: http://cargur.us/1lXt4
You can do it man!! These are practically brand new! Newer than what you're driving, amazingly luxurious autos. (PS the TSX is an Accord, ILX is a Civic).
So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
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So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
The flaw in your analysis is that you are saying you're paying $15,000 over 35 payments. But that's just the principal that you owe. Your actual cost to pay over 35 months is higher -- depends on your interest rate. PLUS you are paying more for your insurance (you need to have collision if you have lien on your car).
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So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
The flaw in your analysis is that you are saying you're paying $15,000 over 35 payments. But that's just the principal that you owe. Your actual cost to pay over 35 months is higher -- depends on your interest rate. PLUS you are paying more for your insurance (you need to have collision if you have lien on your car).
You're incorrect, most consumer loans are fully amortized with interest included in the payment.
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So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
The flaw in your analysis is that you are saying you're paying $15,000 over 35 payments. But that's just the principal that you owe. Your actual cost to pay over 35 months is higher -- depends on your interest rate. PLUS you are paying more for your insurance (you need to have collision if you have lien on your car).
You're incorrect, most consumer loans are fully amortized with interest included in the payment.
yep! My loan is fully amortized. Whether I pay it now or in 3 years same P&I due.
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2012 civic isn't their best....really cheap interior...consumer reports didn't even recommend it
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2012 civic isn't their best....really cheap interior...consumer reports didn't even recommend it
Sent from my iPad using Tapatalk
that's the main reason why I went with Acura everything felt a lot better. Also resell value holds up well..
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Hi,
I'm new, and not that Mustachian, so I've been lurking, but I know a thing or two about used cars so I wanted to speak up. You seem nervous about buying a used car. I've been driving for 10 years and during that time I've driven approx 300,000 miles. I've owned three cars, and all were at least 15 years old when I got them and the average age of my car at any given time is about 20 years old.
Lots of people are nervous about buying a used car because they are worried it won't be reliable. They think it will either break down frequently, leaving them stranded, or will be a money pit, requiring frequent costly repairs.
Suppose you need to be at a certain place at a certain time and you decide to drive there. There are three basic categories that any delay will fall into: environmental (traffic, closures, weather), driver related (illness, drunk, forgot to get gas), or car related (breakdown, won't start). People spend many many hours each year being delayed by the first two things and think nothing of it. A good used car, well maintained, rarely breaks down. My cars were bought randomly, without much skill, and maintained when I felt like it. I've only been stranded twice in ten years. How many times has traffic delayed you in ten years? Or weather made you stay home? Or you lost a contact or accidently drank too much? Your car would have to break down ALL THE TIME to delay you more than the things you already don't think twice about. Environmental delays are way, way more common than any other delay, followed by driver error, and used cars are a pretty minor cause of delays.
As far as the money pit goes, as long as you don't buy a car that has been tortured by a sadistic driver, you're probably going to be ok. Buying and maintaining my cars has cost me about 20,000 over the course of ten years. I can almost guarentee you've spent more, probably twice or three times that. I also have been told by all my coworkers and many of my friends over the last decade how foolish I was to drive older cars. But I noticed that they took their two or three year old cars to the shop just as much as I did. And they had payments and super high insurance, and they all got more tickets than me.
Your dedication and skill as a driver, plus a little random chance, affect your driving costs far more than how old your car is.
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So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
The flaw in your analysis is that you are saying you're paying $15,000 over 35 payments. But that's just the principal that you owe. Your actual cost to pay over 35 months is higher -- depends on your interest rate. PLUS you are paying more for your insurance (you need to have collision if you have lien on your car).
You're incorrect, most consumer loans are fully amortized with interest included in the payment.
Wow! I didn't realize that (obviously). Sorry, that sucks!
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So, if I understand correctly, below is how much I would save by selling my tsx and buying a civic.
2011 acura tsx value = $20000
2011 acura tsx debt = $15000
Net profit of sale = $5000
2012 honda civic purchase = $13000
cost to keep acura = $15000 (across 35 payments)
cost to buy honda = $8000 (upfront cost)
Net Savings over 3 years to sell tsx and buy civic = $7000
With that said, buying the civic is an upfront cost and the acura would be spread across 35 months. I'm assuming 7k is enough evidence that I should do the transaction above. However, should I consider present and future value of paying it upfront vs. over a period time?
Edit: Nevermind if I take future value of 15k into account, selling the TSX would yield a greater savings! ;)
The flaw in your analysis is that you are saying you're paying $15,000 over 35 payments. But that's just the principal that you owe. Your actual cost to pay over 35 months is higher -- depends on your interest rate. PLUS you are paying more for your insurance (you need to have collision if you have lien on your car).
You're incorrect, most consumer loans are fully amortized with interest included in the payment.
Wow! I didn't realize that (obviously). Sorry, that sucks!
I don't think this is true at all......
My 2c on everything else:
Get rid of both cars and get used cars 2003-2008 year.
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Just an update: I ended up selling my 2011 Acura TSX! With that car sold, I am planning on saving an extra $700 monthly! That includes payment, gas and insurance. :)
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I'll look into breaking the lease and selling the expensive car. A 2006 civic is roughly 13k (I wonder if a dealer would buy back my two cars if I offered to buy a used one).
Wut? I got our 2004 Civic for $5k... 4 years ago. A 2006 is showing $5k to $8k on Autotrader here in Ontario... and cars here are, AFAIK, more expensive than most places in the US.
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BTW OP.....I live in Huntington Beach and have a 2007 Civic with 59,000 miles on it. I'm asking $11k if you're interested. I'm in the same position as you...I already have my truck so this car is a waste :)
Pm me if you're interested
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Thank you everyone for all of the feedback!! Re: selling the TSX, it's still a little hard to justify... I've found a few priuses for sale on craigslist under or about 10k. However, these cars have well over 100k miles! Keep in mind my acura may be 5k more expensive but it only has 24k miles!!! TBH selling the TSX doesn't make sense to me.
You're still PAYING for a $34,560 TSX even though it's currently worth $20,000. It's good you're not underwater on it but you really can't afford it.
Here:
2012 Honda Civic LX - $13,999 - 24,000 miles
Permalink: http://cargur.us/1hYk0
2012 Honda Civic LX - $13,900 - 30,440 miles
Permalink: http://cargur.us/1lXt4
You can do it man!! These are practically brand new! Newer than what you're driving, amazingly luxurious autos. (PS the TSX is an Accord, ILX is a Civic).
I'd be wiling to bet those are salvaged vehicles :)
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Just an update: I ended up selling my 2011 Acura TSX! With that car sold, I am planning on saving an extra $700 monthly! That includes payment, gas and insurance. :)
Great job!
Sorry that your wife's boss is the FU type.
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BTW OP.....I live in Huntington Beach and have a 2007 Civic with 59,000 miles on it. I'm asking $11k if you're interested. I'm in the same position as you...I already have my truck so this car is a waste :)
Pm me if you're interested
Thanks - I'm going to try to get by with only one car for a while - eventually my thoughts are to buy a truck cash.
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Just an update: I ended up selling my 2011 Acura TSX! With that car sold, I am planning on saving an extra $700 monthly! That includes payment, gas and insurance. :)
Great job!
Sorry that your wife's boss is the FU type.
Thanks! I can't stop looking at my $0 balance on mint! It feels good!
Yeah my wife went to an interview recently but the opportunity was limited and pay was about the same. So, not worth it in our opinion.
She is still looking/applying. Dilemma is she wants a job that is close to home (< 10 miles) and the better paying jobs are usually in downtown LA (approx 30 miles). We live about an hour from there (x2 - if there is an accident). I'm still helping her look...
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The reason I'm moving to Pasadena is to take the subway to work
Isn't there a line going in to Canoga Park(red line) directly downtown?
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The reason I'm moving to Pasadena is to take the subway to work
Isn't there a line going in to Canoga Park(red line) directly downtown?
Not directly, you have to take the orange line and then take the metro that goes downtown. I'd rather her work close to home - in case i need the car i will drop her off at work and take the car. Plus, she is not a big fan of LA's public transportation.
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Cut these two in half:
Restaurants = $200.00 (this varies every month... $200 is on the higher side)
Personal care = $160.00 (this includes my hair cuts and wifes nails etc.)
Get rid of this:
Cable = $70.00
I agree w this. Dump cable. Get Netflix. Learn to cut your own hair, wife can do her own nails, with occasional pro jobs as a treat.
Acuras are marvelous cars. Lose the lease and consider getting older cars that you can afford more easily.
Take care w house shopping.
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Don't get a civic. Get an older Acura that you. An afford.
We have a 2001 Tl that is rocking 230,000 miles and is still running very well. We are original owners and I am looking forward to more years out of it. The leather seat has taken some damage and it is worn, but the engine is awesome.
See if you can find something used that is a good value that you can afford. Get out of the lease.
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Thanks but I think I'm going to stick out the lease until I have to turn it in. Once I get closer I will look into buying something cash.
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BTW OP.....I live in Huntington Beach and have a 2007 Civic with 59,000 miles on it. I'm asking $11k if you're interested. I'm in the same position as you...I already have my truck so this car is a waste :)
Pm me if you're interested
Thanks - I'm going to try to get by with only one car for a while - eventually my thoughts are to buy a truck cash.
Why would you buy a truck in LA? The gas mileage on trucks is the pits, you're not a contractor in need of a vehicle to drive big pieces of drywall and whatnot around, and you live in a sprawling metropolis with terrible traffic. A small, high-MPG car seems like the right fit.... assuming you do NOT want to spend an extra $1000/year in unnecessary gas...
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For mountain biking/dirt bikes. I would hardly drive the truck as I ride my bike to work/school!
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Just an update: I ended up selling my 2011 Acura TSX! With that car sold, I am planning on saving an extra $700 monthly! That includes payment, gas and insurance. :)
Thanks - I'm going to try to get by with only one car for a while - eventually my thoughts are to buy a truck cash.
Impressive!!!
I disagree with pp, I would say Civics are GREAT cars. But take your time and think about if a truck is worth it to you or not... Either way, being a one car family is great progress!!!
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Thanks!! For now I'm just going to keep the Acura lease. When the lease is up we are buying a older civic cash. I do a lot of sports with my friends. Mountain/road biking, atv/dirt bikes, surfing etc. etc. I just think a small v4 truck would be practical on the weekends. Obviously I would still ride my bike to work instead of driving. The truck is not immediate but eventually I would like one.
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You need a trailer, not a truck!
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You need a trailer, not a truck!
Not a bad idea - but I don't have the space for a trailer.
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Ok just gonna be a devil advocate here BC that's what I do. How can you have space for a truck and not a trailer. Put a roof rack on the civic or trunk rack for your bikes. Both these make more sense than a truck. And if you have room r
For a f
Truck you ha e room for a trailer.
I own a 21' 3000 lb inboard boat and I don't have a truck. I think you should seriously reevaluate your truck needs.
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In he building I live in they are not allowed (violation of hoa). Some fire safety BS. So if I wanted a trailer I'd have to pay for storage. Although a bike rack might be OK.
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In he building I live in they are not allowed (violation of hoa). Some fire safety BS. So if I wanted a trailer I'd have to pay for storage.
What a completely stupid rule. I hate HOA's.
For mountain bikes you don't need a truck--you're right, a bike rack would work. Much cheaper too.
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You can get all kinds of bicycles onto either a roof rack or a tow-hitch mounted bicycle rack (you don't need to intend to actually *tow* anything with it). I drove a Mazda 323 for years and hauled around a crazy amount of stuff in or on it.
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I just bought a nice bike rack for the Acura. Bought it off nashbar for $120.
I'm thinking of getting rid of the lease and buying a used accord or CR-V cash. What do you guys think? I initially thought about a civic but we would like kids in the future and I'm not sure if a car seat fits in a civic. Thoughts?
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I just bought a nice bike rack for the Acura. Bought it off nashbar for $120.
I'm thinking of getting rid of the lease and buying a used accord or CR-V cash. What do you guys think? I initially thought about a civic but we would like kids in the future and I'm not sure if a car seat fits in a civic. Thoughts?
I LUV my 2007 Prius (128,000 miles). It's known in my family as the "Mighty Prius." Seriously. Plenty of room for people/ kids/ cargo. With the back seats flipped down, it is practically a truck. I've hauled kitchen cabinets and cinder blocks in mine. I've also camped in it. http://www.habitents.com/ (http://www.habitents.com/)
I very much suggest you expand your search to include a Prius. The 46 to 50 MPG means my gas cost is about $110/ mo.
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if you're thinking small SUV .. .go with a ford escape hybrid ... things are great... i get 45 MPGs in mine.. people slam it on here still... but guess what your tiny little car is getting worse mileage than my SUV so shove it....
oh and first question is always battery replacement. I called ford ... they said they have never had a battery fail before the engine. in NYC these were used as taxi's and some ran up over 500k miles and are still going. they sold 95% of the cars still running with over 350K miles on them
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I haven't been reading all of the posts, so I might be repeating...
Wait a couple years for the baby. You'll be 28, which is still a great young age to have a child. Not only will the baby take a lot of money, but they will suck up all of your concentration too (lack of sleep, constant needs). Finish school and completely clean up your debt and save some money. You will be so glad you did. Testing when you've been up all night with a crying baby will not be fun. I love being a parent, but I feel like my life is a series of constant interruptions. (My daughter has been chattering constantly in my ear the whole time I'm typing and she's 8!)
I feel like your car choices have a lot to do with the influences around you. CA is a car and vanity heavy culture. It takes a lot of effort to fight against that, but you can get your smug feeling from knowing that you aren't drowning in a ton of debt like most of the people around you. Sell the car you are purchasing and either break the lease, or use that car until the lease is up. Once you buy a car, sometimes buying something funky will make you feel like you're comparing to others less, ie: a Civic or Corolla can feel like a small sedan (and can be hard to fit a backward facing car seat in the back, whereas a Scion XB can feel more like something different and fun - just a thought.
Your feelings about a lot of your lifestyle choices will change a LOT after you have kids. I thought I would be happy going back to work with my Mom as the nanny after I had babies. That choice haunted me everyday for 6 years until I was able to stay home. I also found that my stress and unhappiness with working so much while having babies at home caused me to spend a lot more money. I didn't have time, so I threw money at all my problems and did too much retail therapy (it was for the baby, of course!).
My feeling about the city I'm in changed dramatically as I watched my kids grow. I Never wanted to live in the suburbs, but now I feel done with the city. So, my advice here would be, stay in your condo (that is a good price for where you live and you don't have to pay for homeowner upkeep) and keep renting. After your child is one to two years old, you might begin to feel differently about where you live. This way you won't be locked in. I also highly doubt that you could afford a turnkey home for the cost of your rent in CA. I have done nothing but sink money into my house since I purchased it (fixer). The house and the kids stopped our savings cold.
No matter how tight things are for us, we still contribute more than necessary to my husbands 401K. I suggest you do the stock purchases, as long as you have a good feeling about staying put until vested and the strength of your company.
Finally, when you do have kids, for gods sake buy your stuff used!! All those big clunky plastic pieces that you need, will not be needed for all that long in the scheme of things. Buy it used and sell it for the same price you bought it for - free rental of bouncy seats, pack and plays, and exersaucers. Also, what you think you might need and everyone else uses, might go unused by you and your kid. All those fancy clothes just end up covered in spit up and poopy blowouts (that's a pretty picture!).
Use this time to focus, get your education wrapped up, pay off debts and save save save. Once you have kids, your life changes forever so this is a great time to get yourselves set up for success.
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I haven't been reading all of the posts, so I might be repeating...
Wait a couple years for the baby. You'll be 28, which is still a great young age to have a child. Not only will the baby take a lot of money, but they will suck up all of your concentration too (lack of sleep, constant needs). Finish school and completely clean up your debt and save some money. You will be so glad you did. Testing when you've been up all night with a crying baby will not be fun. I love being a parent, but I feel like my life is a series of constant interruptions. (My daughter has been chattering constantly in my ear the whole time I'm typing and she's 8!)
I feel like your car choices have a lot to do with the influences around you. CA is a car and vanity heavy culture. It takes a lot of effort to fight against that, but you can get your smug feeling from knowing that you aren't drowning in a ton of debt like most of the people around you. Sell the car you are purchasing and either break the lease, or use that car until the lease is up. Once you buy a car, sometimes buying something funky will make you feel like you're comparing to others less, ie: a Civic or Corolla can feel like a small sedan (and can be hard to fit a backward facing car seat in the back, whereas a Scion XB can feel more like something different and fun - just a thought.
Your feelings about a lot of your lifestyle choices will change a LOT after you have kids. I thought I would be happy going back to work with my Mom as the nanny after I had babies. That choice haunted me everyday for 6 years until I was able to stay home. I also found that my stress and unhappiness with working so much while having babies at home caused me to spend a lot more money. I didn't have time, so I threw money at all my problems and did too much retail therapy (it was for the baby, of course!).
My feeling about the city I'm in changed dramatically as I watched my kids grow. I Never wanted to live in the suburbs, but now I feel done with the city. So, my advice here would be, stay in your condo (that is a good price for where you live and you don't have to pay for homeowner upkeep) and keep renting. After your child is one to two years old, you might begin to feel differently about where you live. This way you won't be locked in. I also highly doubt that you could afford a turnkey home for the cost of your rent in CA. I have done nothing but sink money into my house since I purchased it (fixer). The house and the kids stopped our savings cold.
No matter how tight things are for us, we still contribute more than necessary to my husbands 401K. I suggest you do the stock purchases, as long as you have a good feeling about staying put until vested and the strength of your company.
Finally, when you do have kids, for gods sake buy your stuff used!! All those big clunky plastic pieces that you need, will not be needed for all that long in the scheme of things. Buy it used and sell it for the same price you bought it for - free rental of bouncy seats, pack and plays, and exersaucers. Also, what you think you might need and everyone else uses, might go unused by you and your kid. All those fancy clothes just end up covered in spit up and poopy blowouts (that's a pretty picture!).
Use this time to focus, get your education wrapped up, pay off debts and save save save. Once you have kids, your life changes forever so this is a great time to get yourselves set up for success.
Thank you for your excellent advice! This is great. Our thoughts are to wait a few years to have a kid as well. Once school is done and debt is gone. We would be able to save money after that. We are re-thinking buying a house in LA. Not sure if makes sense as the property values are really expensive.
With that said, we also need to make more $! My wife has been looking/interviewing but hasn't had much luck. Either employers want to pay her the same or she doesn't have the experience required. Do you Mustachens' think we make a good enough income to succeed? I see a lot people on this forum with 100k salaries and it's a little discouraging that we are on the salary lower end (in a high end market).
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Yea it's pretty scary, I don't know how people average people make it. I think the only way they do is by not saving at all and living paycheck to paycheck. I live in a city with $50,000 household income and $1000 ave rent and $300,000 ave house- how that add up?? Especially with state income tax and high property taxes, insane.
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I just bought a nice bike rack for the Acura. Bought it off nashbar for $120.
I'm thinking of getting rid of the lease and buying a used accord or CR-V cash. What do you guys think? I initially thought about a civic but we would like kids in the future and I'm not sure if a car seat fits in a civic. Thoughts?
Wife just left for the day with our baby in her car seat in our Civic.
The previous owner had two car seats in it.
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Cool! -- thanks for sharing!
Sent from my RM-860_nam_usa_100 using Tapatalk
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I will take on the company stock deal. Stock has been historically increasing over the past 10 years. How much do you think I should put in each month?
Earlier on you said that your company was giving you a share for each share you buy. If this is the case and you are at a reasonably stable company I would be buying as many shares as they let you. I would put them on the Visa if I had to as your return is 100%. I would look into the details of this plan as it seems too good. Max it out if it is doubling your money.
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I will take on the company stock deal. Stock has been historically increasing over the past 10 years. How much do you think I should put in each month?
Earlier on you said that your company was giving you a share for each share you buy. If this is the case and you are at a reasonably stable company I would be buying as many shares as they let you. I would put them on the Visa if I had to as your return is 100%. I would look into the details of this plan as it seems too good. Max it out if it is doubling your money.
I agree with tomsang. It depends on the specific terms but, if there were no restrictions on selling, the right move is to BUY EVERY SHARE YOU CAN!!! To the point that you should absolutely be taking out credit card loans/borrowing money from friends, cutting every single expense you can to the absolute minimum so you can BUY MORE SHARES!!! That situation would literally be a "money making machine." Step 1, buy 1 share. Step 2, get second share from company. Step 3, sell 2 shares. Step 4, repeat as fast as you possibly can.
That being said, its likely that you have to hold onto the shares for 3 years or something similar. In that case, assuming the shares wont be worth 50% of their current value in 3 years (you know better than us), you should BUY EVERY SHARE YOU CAN AFFORD! You'll still need an emergency fund and living expenses, but if you aren't planning on buying the house for at least 3 years, then this is by far and away the best saving vehicle you have available to you.
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I will take on the company stock deal. Stock has been historically increasing over the past 10 years. How much do you think I should put in each month?
Earlier on you said that your company was giving you a share for each share you buy. If this is the case and you are at a reasonably stable company I would be buying as many shares as they let you. I would put them on the Visa if I had to as your return is 100%. I would look into the details of this plan as it seems too good. Max it out if it is doubling your money.
I agree with tomsang. It depends on the specific terms but, if there were no restrictions on selling, the right move is to BUY EVERY SHARE YOU CAN!!! To the point that you should absolutely be taking out credit card loans/borrowing money from friends, cutting every single expense you can to the absolute minimum so you can BUY MORE SHARES!!! That situation would literally be a "money making machine." Step 1, buy 1 share. Step 2, get second share from company. Step 3, sell 2 shares. Step 4, repeat as fast as you possibly can.
That being said, its likely that you have to hold onto the shares for 3 years or something similar. In that case, assuming the shares wont be worth 50% of their current value in 3 years (you know better than us), you should BUY EVERY SHARE YOU CAN AFFORD! You'll still need an emergency fund and living expenses, but if you aren't planning on buying the house for at least 3 years, then this is by far and away the best saving vehicle you have available to you.
Uh... do you remember Enron, by any chance?? There's a reason we have this proverb: "Don't put all your eggs in one basket."
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Sell the cars and buy a Fit/Yaris/Fiesta. Get the match in your 401k, then max out Roths.
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Thanks! I got the max 401k match already. Should I max IRA next or the sharematch at my company? I just got more information today regarding the sharematch. Basically, it's 1 free share for every 2 shares I buy (maximum $3,000/yr). Also, if I sell before 3 years I keep my principle shares but I loose the free shares.
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Should I max my IRA or Company Share Program?
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I'll look into breaking the lease and selling the expensive car. A 2006 civic is roughly 13k (I wonder if a dealer would buy back my two cars if I offered to buy a used one).
Wut? I got our 2004 Civic for $5k... 4 years ago. A 2006 is showing $5k to $8k on Autotrader here in Ontario... and cars here are, AFAIK, more expensive than most places in the US.
Yeah. I'm confused. I drive a 2006 Civic Hybrid and I've priced out my car. I bought it new and has about $50k miles. It's worth maybe $8,000. At the high end. If I could get 12k for it, I would probably dump it for a Prius. Mine only gets 36 mpg.
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The company share match has a better "baked-in" return than the tax advantage on the IRA. I vote for the share match next. Just commit to cash out once you've held onto them for the required time.
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Should I max my IRA or Company Share Program?
Always max 401k first (true for most W2 workers).
http://forum.mrmoneymustache.com/investor-alley/max-out-401k-or-open-roth-ira/
http://www.bogleheads.org/forum/viewtopic.php?t=109107&f=1
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Should I max my IRA or Company Share Program?
Always max 401k first (true for most W2 workers).
http://forum.mrmoneymustache.com/investor-alley/max-out-401k-or-open-roth-ira/
http://www.bogleheads.org/forum/viewtopic.php?t=109107&f=1
No, it depends on income tax today and expected income tax in retirement, and whether or not this share match program is worthwhile.
Thanks! I got the max 401k match already. Should I max IRA next or the sharematch at my company? I just got more information today regarding the sharematch. Basically, it's 1 free share for every 2 shares I buy (maximum $3,000/yr). Also, if I sell before 3 years I keep my principle shares but I loose the free shares.
This isn't as good as I originally thought. Its still pretty darn nice though! My answer on whether to max the IRA/401k or the sharematch would depend on:
A) How much of your net worth/investments is $9,000 (3k/year for 3 year holding period)? If you have 100k in retirement accounts, 9% being wiped out isn't THAT big of a deal. If you have 18k in retirement accounts, 50% being wiped out is a huge deal.
B) How stable do you think the company (and the stock price) is? This is a MUCH more risky bet than Indexing a 401k for all sorts of reasons. How likely is a 33% stock price cut in the next 3 years?
C) Would I be investing in my company if I didn't work here? Does the company have a dividend? Does the price match your expectations for revenue targets or is it overpriced?
Personally, with the company I work with now and my current net worth, I would absolutely be doing the share match to the max before filling out my 401k (granted I'd be maxing both as I max my 401k and have leftover saving funds to work with). But we have different situations. Honestly though, neither choice is a bad one.
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I ended up signing up for the sharematch program. My company is global and is doing well per the financials.