I'm an asshole

[steviesterno]

I'm newer to this MMM stuff and I'll admit I haven't embraced it as hard as many of you. I've always tried to make better financial decisions than average, but like many I was mostly ignoring stuff. Never really had CC debt and din't buy stupid expensive cars, but listen to this. I spent $43,000 on my credit card last year. that's fucking ridiculous! Last year was an anomaly. my wife and I had our first kid in January. She stayed home from work for a while without maternity, because she was hit by an idiot driver October the year before, and that used up some of her disability, which is how we deal with pregnancy in America because we're idiots.

Anyway, her job picked her over on insurance for the kid, so she came close to rage quitting, but stuck it out until we found her a new work from home gig. No commuting, but had to pay for day care. Her pay cut meant combined were down from ~110k to ~100k for the year.  with a fresh baby we got fast food way more than I care to admit, and went out or ordered in too much. I know that. but damn.

I'm thinking about doing a case study, but here's some ballpark. We've already decided to make changes and have started, so it's going alright and getting better every day. We have no CC debt, the baby has $6k in college account now and gets $100/month to grow. $4k in after-tax investments built up last year getting $200/month.  $61k combined 403 (me) 401 (her). owe $196k on a house worth $275 (bought for 215 2.5 years ago).  I owe 3k on a 15k car and hers is 11k on a 15k car, but both are at 0.9% interest. currently putting $800/month into retirements and getting company matches, plus $100/month into my HSA.

so of the 43,000
9500 or so was day care. Can't get rid of that but started a dependant care account to get the max this year. plus her company does 10% match so free money!
12,000 or 1000/month in my student loans. Have a doctorate but work for a non-profit. rate varies between 3 and 7%, but in 5 years the balance is wiped clean since I work at non-profit. rough math shows me that's better than paying it off early. Made less than great decisions when I was younger so it grew a bit, but making headway now.
$3k a year for cell phones and internet! that shit's crazy. Shopping for cheaper
$1k travel for bro's wedding. hotel paid for in points, so that's not bad.
$3k dining out/food. honestly lower than I thought it would be. We did host family a lot this year
$2k on insurance. Already adjusted this stuff to drop it a bit, up the deductibles.
$1k gas/cars. neither of us are really interested in downsizing, not sure we can do better. should be less this year with her not commuting
$16k in merchandise and food. No idea WTF that is. we ordered off amazon a lot, but I don't have new clothes or furniture or anything crazy like that, so i honestly have no idea. we're going to look at curbing that immediately, that's for damn sure. It seems like we spend a fuckton too much on food. we got an instapot and are going to be taking a real hard look at this.


we pay $1700 a month on mortgage/taxes/PMI but the PMI will be going away shortly, filing for it today actually. that will save $180 a month, but it's the only way we were able to buy a house when we did so I chalk that up as a win.
I'm thinking about selling some stuff to pay off my car, which frees up $260 a month.

On the plus side we have a happy, healthy babes that's good. Wife was safe after the accident. She got a raise and bonus this year and will be almost back up to where she was, and I am allegedly slated for a big raise this year after 4 years of nothing. I'll believe it when I see it, but still. We're also putting the remainder into investment stuff, so that's good I guess.

So how do I stop being a terrible, wasteful, shitty human being while still taking care of my family and enjoying my life? I feel shitty and broke even though I know it's not true. I feel like we're falling behind even though I know (and the math shows) we're not.

I'm not looking to retire in less than 18 years, and our retirement will be to a super LCOL bit of land that will be mostly self sufficient and paid off. We will inherit some money and property when either set of parents pass, but I'm hoping that's many many many years from now. I'm planning to have no help from anyone or any govt subsidy or SS in my old age, too, just to be ready.

so what do I do now? or do I have a beer, face the music, and start making changes?

[LalsConstant]

Well look, as someone who has done far worse than you financially, few things:

1. Making mistakes with money has more to do with your inexperience and a lack of priorities than your character.  While it's true that getting your financial house in order will improve your character I don't think people get into messes because they're bad people, there's all kinds of reasons.

2. You're already doing it.  Confronting reality is step one.

3. What I've done is I pick one thing to either cut costs or increase income, and I work on that.  Right now I'm trying to get my housing cost down.  I found a cheaper place and I'm moving soon.  Is it a perfect solution, no.  Is it better?  Yes.  After that I'll work on something else.

4. Comparing yourself to other people will drive you mad.  I'm far less accomplished than many here, but the thing is, they're them and I'm me.  We didn't start the race from the same mark or with the same training and conditioning.  I'm doing fairly well for what I have to work with and from, but I see things I could do better and I try to change them.

[mudstache]

You don't sound like an asshole!  You are facing the reality of your spending and looking to make changes...nothing screams "asshole" about that to me.

It may help you right away to sign up for Mint or You Need A Budget so you can start seeing exactly where your money really is going.  My husband and I got to the end of every month, asking ourselves, "Wait, if I make $X each month, where did it all go?"  Sticking all of our info into Mint was super eye-opening!  Like, if that $16k can go away, or even get cut in half, that's a nice chunk of money that you can max out your 401ks and IRAs, or invest post-tax, or whatever.  Then add in the savings on changing your internet and cell bills, and you get a lot of that annual spend back.  Your food spending doesn't seem all that bad, unless that's just eating out, and if that's what it is, that's a LOT more money you can cut down.  You don't have to necessarily do everything cold turkey.  Start by cutting in half.  Then when you see how that feels and what it does to your bottom line, maybe you'll be up to cut even more.  We were spending $600/month on take-out/delivery, so we set our budget to $100.  But then we didn't find a time when it seemed "worth it" to spend that $100, so we just add it to our investments each month.  I'm sure some months, we'll use it, and it's in the budget, so we know we can without derailing our savings plans.

So have a beer, pull up the MMM posts from the beginning, and try to read each one as a personal challenge.  It's really easy to read some and think, "I could never do that," but that's where the good stuff is!  When I first went through, I cherry-picked which things I wanted to do, and ignored a lot.  But then as I saw the money staying in my account, I went back to some of the things I never thought I would do (cut cable, shop for new car insurance, change cell plans).  Every bit counts!  And the case studies were my favorite part - anyone can do this!  Including you.

Cheers!

[meghan88]

Well look, as someone who has done far worse than you financially, few things:

1. Making mistakes with money has more to do with your inexperience and a lack of priorities than your character.  While it's true that getting your financial house in order will improve your character I don't think people get into messes because they're bad people, there's all kinds of reasons.

2. You're already doing it.  Confronting reality is step one.

3. What I've done is I pick one thing to either cut costs or increase income, and I work on that.  Right now I'm trying to get my housing cost down.  I found a cheaper place and I'm moving soon.  Is it a perfect solution, no.  Is it better?  Yes.  After that I'll work on something else.

4. Comparing yourself to other people will drive you mad.  I'm far less accomplished than many here, but the thing is, they're them and I'm me.  We didn't start the race from the same mark or with the same training and conditioning.  I'm doing fairly well for what I have to work with and from, but I see things I could do better and I try to change them.

This.  Baby steps.  Then you can start stripping down and questioning everything, bit by bit.  Your Future You will thank you.

[Digital Dogma]

OP, I see you've got an Amazon habit.

I do too, and I'll tell you something I've learned...

Enable 2 factor authentication for your (and your wife's) amazon accounts so that every time one of you orders something, its going to ding both your phones with an authentication code you need to enter prior to logging on to complete your transaction.

This is going to be your second chance to stop spending money, when your text message comes in and you've got to pull out your cell phone to take a look at that code to spend more money. Often times I get to the 2 factor authentication part and snap out of my amazon daze, coming to grips with the fact that no - I don't really NEED that grappling hook, and if I DO need one someday they will not be hard to find on amazon. Its also going to alert both of you to how frequently the other is purchasing things online, and will make you both more self conscious about your spending decisions since every transaction is being openly shared by these authentication texts between you.

Additionally, I've found that putting a barrier up to purchasing on Amazon makes me more likely to look at alternative sites for cheaper products (such as Walmart), when in the past I'd just buy something out of convenience and not bother to check for a better deal elsewhere.

Furthermore, I've heard nightmare stories about amazon accounts being compromised and used to steal money in the form of amazon gift cards, draining the individual's credit card balance onto gift cards that are delivered to a PO box somewhere never to be seen again. Thats another reason for 2 factor authentication, even if you don't have self control issues when it comes to amazon.

[faithless]

The thing that looks kinda crazy is

$16k in merchandise and food. No idea WTF that is. we ordered off amazon a lot, but I don't have new clothes or furniture or anything crazy like that, so i honestly have no idea.

That's a lot of money if you don't know where it went. One thing that might be good to do is try to work out what some of those purchases were, eg if they were all online purchases go through your account history on that website and see what you bought. I founderstand being confronted with how much I spent on things I can barely remember buying is quite good at reinforcing the 'do I really need it' question I try to ask myself now before buying stuff. Seeing last year's must have/impulse purchases as this year's clutter helps me focus.


Otherwise, don't worry too much, what's done is done, the only way to compound your earlier errors/poor decisions is to pass up the opportunity you have now to learn from them. Best of luck for a more MMM future!

[Just Joe]

There are a few different Amazon shopping tools you can make use of. CamelCamelCamel is a good one. It tracks the costs of items so you aren't paying some inflated price for that gizmo you want. Also, you can use it when you are looking at the same item on other websites. Is it REALLY a deal?

[marty998]

Agree with the above - you don't sound assholish.

Also - don't forget the big picture...look forward 4-5 years from now (if you're done with baby making). Both your childcare fees and student loans will be gone and you'll have an extra $20,000 a year cash flow, on top of pay rises and reductions to spending on other areas.

Stick at it and you'll be saving / investing a mint in no time.

[bigalsmith101]

$3k dining out/food. honestly lower than I thought it would be. We did host family a lot this year

My first though was, "A married couple and their child, spending less on food than my wife and I, while admittedly eating out way too much, not possible. He's got something missing. I bet he spends $800-$1000/mo+ on food and has no idea it's that much".

$16k in merchandise and food. No idea WTF that is.

Then I see this, and I'm thinking, "I bet was was right." It's very easy to accumulate a large amount of expenses when eating out. You can easily burn $20-40/meal for your wife and you. Do that 20 times a month and you're sitting at $4-800/mo with 70 more meals to buy/eat!

I'd be willing to bet that your food consumption is half of that craziness.


All of that aside. Like everyone else has said, the first step is realizing it, and the second step is acting on it. You've accomplished the first step, and are working on the second at the moment. It all becomes VERY straight forward when your mindset is in tune with saving and accumulating.

One pertinent question, "Is your wife on board?"

[NorthernBlitz]

$3k a year for cell phones and internet! that shit's crazy. Shopping for cheaper

Here's a pretty good place where you can cut.

(1) Get the slowest high speed internet you can get. You'll still be able to stream Netflix on multiple devices at the same time. Should be sufficient for a family of 3. Price ~ $45 / month (at least by us).

(2) There are a bunch of cell providers you can get references from on here. I'd suggest reading the Tech Meshugana's communications guide. That's where we found out about PTel, who were awesome before they went out of business. My wife now uses Ting ~ $12-15/month and I use H2O wireless  ~ $3.50/month (really $10/90 days). But we have almost no data use (easier now that you can DL maps). The most I've even spend on phones was the T-Mobile $30/month plan through Walmart (unlimited data & text + 100 mins).
http://www.techmeshugana.com/theguide/

To do this you will need to buy unlocked phones. If you buy something reasonably priced, it will pay for itself in less than 1 year. I currently have a 2nd gen Moto X (2.5 years old). I hope to replace at Thanksgiving 2018.

So, if you went with basic internet and "extravagant" phone usage, you'd be at $105/month or $1,260. That saves you more than 50% of your bill. If you can eliminate your data / text needs, you could go as low as $625/year. Since my wife texts a fair amount, she's on Ting so we spend ~ $765/year.

We also set up a free google voice land line for calling family in Canada. This is free, but has some start up cost to buy the hardware (below).
https://www.amazon.com/OBi200-1-Port-Adapter-Support-Service/dp/B00BUV7C9A/ref=sr_1_1?ie=UTF8&qid=1493126208&sr=8-1&keywords=obihai

[Noodle]

$3k dining out/food. honestly lower than I thought it would be. We did host family a lot this year

My first though was, "A married couple and their child, spending less on food than my wife and I, while admittedly eating out way too much, not possible. He's got something missing. I bet he spends $800-$1000/mo+ on food and has no idea it's that much".

$16k in merchandise and food. No idea WTF that is.

Then I see this, and I'm thinking, "I bet was was right." It's very easy to accumulate a large amount of expenses when eating out. You can easily burn $20-40/meal for your wife and you. Do that 20 times a month and you're sitting at $4-800/mo with 70 more meals to buy/eat!

I'd be willing to bet that your food consumption is half of that craziness.


All of that aside. Like everyone else has said, the first step is realizing it, and the second step is acting on it. You've accomplished the first step, and are working on the second at the moment. It all becomes VERY straight forward when your mindset is in tune with saving and accumulating.

One pertinent question, "Is your wife on board?"

Not to mention, where are the diapers? If the 16K includes diapers (since most daycares require disposables) and possibly formula, plus it seems like day care kids go through more disposable items like binkies, bottles etc. as items get lost in transit or trashed due to hygiene rules, that could account for a lot. Man, formula in itself, if you need to use it, is a budget line on its own. We had preemie twins in the family some years ago and I just about fainted when I found out how much their specialized formula cost. A drug habit would have been cheaper.

Honestly, it seems like a lot of people really start taking finances seriously when the baby arrives and that is also the financial low point for most people of a whole marriage...because of added expenses, and either paying for day care or losing an income on top of it. I mean, yes, of course start working on the situation, but I wouldn't be too self-shamey about the past.

[Inaya]

To do this you will need to buy unlocked phones. If you buy something reasonably priced, it will pay for itself in less than 1 year. I currently have a 2nd gen Moto X (2.5 years old). I hope to replace at Thanksgiving 2018.

Ting will let you port most phones into their network. It's the whole reason we picked them over Google Fi. You may need to buy a new sim card, but they're much cheaper than a new phone. You also may need to have your current carrier unlock your phone. Ting has a tool that will tell you if you can port your device(s) to their network: https://ting.com/byod 

I have a link in my sig for $25 off your first bill if you decide to switch to Ting. However, if you as a family use a lot of data (more than a gig), this may not be the right option for you.