Author Topic: I feel so far behind  (Read 14508 times)

diggingout

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I feel so far behind
« on: November 18, 2015, 07:17:55 PM »
First off, I'm grateful to have come across personal finance blogs in the past few months.  However, reading so many success stories has really weighed me down -- like to the point of depression where I don't find joy in much of anything and don't feel like I deserve anything that costs money (besides necessities) due to my financial shortcomings.  It's true, comparison is the thief of joy, but I can't really seem to control my thoughts.  Regardless, I have some plans, but would also like some insight from all you pros!  Apologies in advance if this is somewhat scattered.

I'll be 29-years-old at the end of next month.  I know it goes against all things finance savvy, but I'm putting off saving for retirement until I'm 30.  Like MMM says, debt is an emergency and I have so much I'm not very proud of.  I moved in with my boyfriend and racked up about $11k in credit card debt to furnish our condo...that we're renting.  I was previously CC debt free, and just had student loans, but I love decorating and it is what it is (this would be my dream job;).  I plan to have that paid off by the end of 2016, i.e. my 30th birthday.

A little background: I came from a family who apparently loved debt.  My parents are divorced, but each managed to foreclose on each of their houses.  I was basically told that all I needed to do was go to college, and I could get any job I wanted.  No one really taught me the importance of selecting a major.  You'd think graduating near the top of your class would make you a little smarter, but alas, I was going off my parents.  My mom has had a six figure salary for almost 15 years with nothing to show for it.  Like literally, nothing.  However, she managed to become fairly successful as a supply chain manager (salary-wise) coming from another country and having not completed her Bachelor's (she was studying economics and is a statistics wizard), hence her advice to "just go to college".  My dad loves to gamble.  He had over a million dollars saved up when I was a teenager and blew it all, now working as a machine operator making $9.50 per hour at the age of 63.

Well, I got accepted to a big ten, in-state university and financed the whole thing, including books, living expenses, and partial food expenses.  I graduated with $90k in student loans...with an English degree.  I was originally going to school to become a teacher, but due to some unforeseen circumstances, had to withdraw for a semester.  Which meant I had to withdraw from the College of Teaching within the university.  I'd have to wait a year to reapply, and then wait to get re-accepted, and then wait to start taking teaching classes again.  All-in-all, it was going to add about three more years to my college education, so I decided to graduate with a Bachelor of Arts in English, with a minor in advertising/communication.

I dated a guy for four years, who had his finances together.  He had $60k saved by the time he was 23, and an additional $40k in his 401k by the time we broke up (at age 26).  While it's definitely best we broke up, if it weren't for him, I likely would have never started saving.  This sparked a great interest in saving, so I began paying down my student loans, as well as building an emergency fund.  Today, I have $20k saved up and $58k left in student loans.  I still didn't comprehend the need for a 401k when retirement was SO far away, and I also wasn't really making enough to fund one when my priorities were saving the emergency fund and paying down my student loans. 

I ended up in the legal field.  I work as a paralegal/legal assistant (title has changed between jobs).  I currently make $55,500, but I get paid overtime, and am closer to $63k for this year.  Additionally, my mom gives me $400 per month (helping with my student loans), sometimes more, so I'll make close to $68k by the end of the year.  My take-home pay is generally $3600 per month, with my mom's money in there too.  This is definitely the most I've ever made.  It's great that I get paid for my overtime, but since I'm hourly, it's pretty frowned upon.  There's an "acceptable" amount, but last year, they advised that we should try our best to cut back, so it's no guarantee. 

So there we go -- take-home pay is usually around $3600 per month, after taxes.

My monthly bills are as follows:
-Rent: $700
-Car Payment: $353.48
-Car Insurance: $184.70
-Student Loans: $500.82
-Planet Fitness: $10
-Monthly Spending for gas/groceries/cosmetics/life in general: $600
-Utilities: ~$80
TOTAL: $2429

I'm also putting $850 per month toward that CC debt to have it paid off by the end of next year, and will throw anything extra into savings.  Why do I have a car payment?  Well, I was pretty desperate after my last car.  I financed a used 2007 Honda Fit in 2011, for around $12,000.  Last year, I still owed $6000 on it, but spent about $3000 in repairs the year prior.  I probably got a dud, but I pretty much lived at the dealership with that car and with our midwest winters recently, I kept getting stuck in snow.  On top of that, my mom lives four hours away, and there were several times when I'd drive there in the winter, that I would have to sleep in my car overnight because I kept sliding everywhere and couldn't see.  Pretty unsafe to do in the middle of nowhere for a 5'1", 105 pound female.  Anyway, after being so fed up, I decided to give up my dream car (yes, I WANTED a Honda Fit so badly), for a more practical crossover SUV.  But since I still owed on my Honda, I had to pay that off and thus, ended up with a higher monthly payment.

My current boyfriend and I have been together for almost two years and talk about marriage pretty frequently.  I wouldn't be surprised if he pops the question early next year.  He recently got a new job, but haaaaaates it.  He hates the field in general, and got lucky with his last job, but they lost the account so he had to find something new.  He's considering a career change and it might require going back to school, which he would try to do without accruing anymore debt.  Anyway, his current financial situation is that he's debt-free, has $4k saved up, and another $5k in his 401k.  Not the best, but I give him mad props for living within his means on a lower salary and being debt-free.  That is total awesome sauce to me and a great place to build a successful future upon.

We're considering living with his mom for a year or two after our lease is up to save up for a 20% down payment on a house.  Clearly, currently paying $1400 a month in rent is ridiculous and we have friends who have $300k McMansions with a lower mortgage payment.  Our home buying budget would be around $150k, $200k max.  It would probably suck to live with his mom for two years (we all get along, but the house is quite small), but being able to save close to $20k per year would be amazing.  We would continue putting that $1400 per month in savings, instead of just saving "whatever we can".

My plan for age 30 is to start investing.  Since my monthly payments won't be changing by then, my game plan would be to save 10% of my income into my 401k (which does not offer a match, but a year-end contribution); max out a Roth IRA, as well as add an additional $3000 per year into my high yield savings account, totaling $14,000 per year in savings.  That's really the best I can do until my lease on my car is up and until I can stop putting $700 a month toward a down payment on a house.

OH, I almost forgot the most depressing part of my situation.  I had to take out private loans my first two years of college because my mom made too much money for me to qualify for federal loans.  I used my dad on my FAFSA application the last two years because he was unemployed.  Anyway, my mom co-signed for me on a $25,000 loan, my very first year of college.  While I made every single payment on it, my mom filed for bankruptcy while this loan was in repayment.  The loan agreement had an auto-default clause, wherein it automatically went into default if either person filed for bankruptcy.  I tried to see if there was a way out of this to no avail.  The bright side is that this loan hasn't accrued any interest since it's now at a collections agency.  My mom's bankruptcy is lifted at the end of 2016, and based on the horror stories I've read online, I'm likely to get sued or have my wages garnished / they might take every spare dollar I earn.  My mom keeps saying this loan is her responsibility because it was her fault it went into default.  She's even said she'd take a loan out of her 401k to pay it off, but it brings me to tears to even think about.  She's almost 52 and can't even get a reliable car (obviously because she doesn't have any money saved and can't get approved for a loan in bankruptcy).  I want her to be able to breathe for the first time in her life.  Despite her poor decisions, I can honestly say it was all for my brother and I.  I'm crying just typing this.  She deserves a lot more :\

So that's my outline.  I guess I'm asking if it's an okay one considering my situation?  The rest of my student loans are set to be paid off in five years, and I feel as okay as I can about that given my circumstances.  There's a part of my that would love to knock them out sooner, but that would require sacrificing saving for retirement, and I know that's not wise.  If any of you have suggestions on how to further boost my income / other career fields I could go into, please chime in!  After the holidays, I'm considering taking on a part-time job for an extra 10-15 hours per week. 



« Last Edit: November 18, 2015, 07:41:35 PM by diggingout »

MDM

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Re: I feel so far behind
« Reply #1 on: November 18, 2015, 07:41:16 PM »
diggingout, welcome to the forum.

Appears you haven't had the easiest road but are doing pretty well nonetheless.  Do you have any particular questions for this audience?

Mustache Fatty

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Re: I feel so far behind
« Reply #2 on: November 18, 2015, 07:47:44 PM »
Well, you have 20k saved up at age 29, so that is better than me when I was your age, so nice job!  I assume that you are seeking comments on your situation...

I see that you want to spend next year paying off your CC debt, but I don't see why you don't just pay it off right now, assuming the 20k is just sitting in a checking or savings account earning virtually no interest.  Also, depending on the interest rate on your car loan, I would consider going ahead and paying that off too.

Once you free up this $1200 / month from your budget, things will look a lot better.  Browse around this site and these forums, and you are sure to find plenty of things that you can cut back on without harming your standard of living in the slightest.  I bet you could have that student loan that is bothering you and your mom so much paid off by the end of next year and have a reasonable emergency fund as well if you put your mind to it.  In short, pay off the CC, pay off the car, cut budget using tactics learned here, and pay off the 25k student loan by the end of next year with the resulting savings....and don't move in with your BF's parents.  I have to think that they are just being nice offering up that possibility, but I could be wrong.

Best of luck to you!

moneyandmillennials

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Re: I feel so far behind
« Reply #3 on: November 18, 2015, 11:51:48 PM »
your story resonates with me because we are quite close in age, I just turned 30 this year.

First..stop taking money from your mom. she's in a more dire situation than you because of her age and finances.

Second..move in with his mom to save money.  if it's super tiny, just move to a cheaper, less luxury apartment. where do you live that cost $1,400?

Third...$600 for misc is a lot. Cut that down. There no breakdown but cosmetics need to go.  Also the $20 to planet fitness, cancel that, work out at home for free.

Fourth...I can't remember but contribute at least to get an employer match.

former player

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Re: I feel so far behind
« Reply #4 on: November 19, 2015, 02:25:08 AM »
I agree with moneyandmillennials: why are you taking $400 a month from your bankrupt mother when you are in good health, have no dependents, and have a decent job paying more that the national average?  Time for you to adult-up on your life.

Your default mode for any life decision at the moment seems to be to spend money.  For instance, deciding to buy a 4 wheel drive was probably a mistake when you could have dealt with the problem with 1) snow tires, 2) a winter driving skills course and 3) not making long voluntary journeys in bad weather late in the day.   Spending $11,000 on (depreciating,, probably now mostly financially worthless) furniture for a rental home was a mistake when you and your boyfriend could have bonded over finding ways to furnish stylishly on the cheap - $11,000 is a deposit on a house to buy in many parts of the USA.

So your first task is to re-orientate your thinking: whenever you come up against a problem, your first action should be to brainstorm a list of all the ways you can solve it without spending money.  Then list the ways you can solve it which do cost money, cheapest to most expensive.   Take your time to think about those lists and put your intelligence and education to work in optimising which choice you make.

Your second task is to take your $20,000 in savings and your $1,200 a month spare income and apply them to your credit card debt, your car loan debt and your student loan debt.  Work out the best return for you, depending on the interest you are paying and the anguish it is causing - you could be rid of that $25,000 student loan within four months if you wanted, even without making any changes to the rest of your life, and if it is the best return for you and your mother.

Your third task is to look at your expenses and optimise those - there is lots of advice here on how to do that.  A smaller, cheaper apartment could be a good start - I bet your less-well paid SO would appreciate that as well.  Your car insurance seems high, as do your utilities.


GuitarBrian

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Re: I feel so far behind
« Reply #5 on: November 19, 2015, 03:18:09 AM »
As others have said... I would put the money you have saved towards your highest interest loan. That should be a number one priority.

You only need to keep enough savings to cover periodic bills.

If your credit cards are at typical 15% interest you will save a sizable chunk, around 1,000 it looks like... by paying them off now.

In a true emergency, you will still have access to the credit line, and can put your self right back where you are now, if you so choose.

You will want to have a low credit card utilization rate when you apply for a mortgage. Also your SL come into play. Perfect payment history and low debt to income will get you approved easier and at better interest rates when you go to buy a house.

I would say your expenses are OK. $600 per month of groceries and everything else... is OK I think. But it could be better.

You seem to be around 37% in taxes, if I did the math correctly... That seems high for your income, but if you are in California or Oregon with high state income tax, that would explain it.

Once you kill the CC debt with the dead money in savings, tackle the next one and snowball them.

If the loan is at 3%... then your normal rate of payoff is acceptable.
At 6%... much less so. GET THEM GONE.

Your expenses are listed as 2,429 and 850... leaving around 330 extra. That needs to go towards loans as well.
Hopefully you didn't purchase a new car. Which it doesn't appear that you did, from the $353 payment (I get 16-20k loan amount at 3% interest depending on the term)

With that in mind... I would propose a this.

Move in with BFs mother.

Pay credit card debt with 11k from savings.
Pay down high interest loans. (or loans that are causing you problems)

After you are down to low interest debt... take that 2,800 a month (minus payments for low interest debt) and save for a house. Your SO will contribute I assume? If so, at 3-4-5-6K a month... A downpayment will be in reach in months instead of years.

I just reread your post... You said "car lease is up... and stop putting $700 a month towards a downpayment" Did you lease the car? Even when you stop saving for the downpayment, you will then have the actual payments... Also how exactly do you have a $500 payment on ~90k of SL and a 5 year repayment? Are you calculating a different payment in the future? Or is the figure lower now?


You are on a multi year road. And some might disagree with what I have posted.... But from here... it looks like there is no quick way out. But it is pretty clear.

You need to go into minimize mode. (cut expenses, sell unneeded things.)
You need to kill high interest debt.

Then worry about saving for a house... investing... etc.

That is my recommendation.




Stop accepting money from your mother. You will get out of this just fine. It is your problem, your an adult.
If you have the time, get that second job/side gig.

Tigerpine

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Re: I feel so far behind
« Reply #6 on: November 19, 2015, 05:07:39 AM »
The fact that you're here, and your mother is in bankruptcy tells me that you're better with money than she is.  It sounds to me like she could use a "forced" savings plan.

Therefore, I think you should continue to accept her $400 / month, but do not use it to pay your bills.  Instead put it in a money market account / tax efficient bond fund / high yield savings, whatever you're comfortable with that has low risk.  Label that account "Mom's Money."  Use the money for her and her only.

Eric222

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Re: I feel so far behind
« Reply #7 on: November 19, 2015, 06:07:36 AM »
Hi Diggingout!

Welcome!  I completely understand the feeling of being behind - it can be intimidating seeing how well some of the people here are going!  The thing to remember is that they've been working hard for a long time, and are seeing the rewards for their work and discipline over the years. 

From my perspective, you are miles ahead of me!  I'm 36 and $250k in debt - but making progress is possible and time is a powerful lever.  There is a post from MMM that puts it in perspective (but I can't find it right now) - it boils down to:  People on here are saving 500k, 750k, and upwards towards their goal of financial independence.  Compared to that, what is some debt on the front end?  Yes, it is an emergency - but from my perspective, every time you make a payment towards principal you are getting a guaranteed return.  My little green workers are going off to fight battles for me - and I know the rate at which they are winning.

Finally, this:
Quote
It's true, comparison is the thief of joy, but I can't really seem to control my thoughts.
You are right, it is true - and you are comparing yourself to people who have done exceptionally well.  There will always be someone with more and always someone with less.  YMMV, but this post helped me:  http://www.mrmoneymustache.com/2011/10/02/what-is-stoicism-and-how-can-it-turn-your-life-to-solid-gold/

You can become one those success stories you envy, but don't kill the joy in your life!   

Ducky

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Re: I feel so far behind
« Reply #8 on: November 19, 2015, 07:01:22 AM »
Welcome to the forum! Any age is a great age to start! You've saved up some cash and are starting. Thats better than a good chunk of the population. I have no doubt you will achieve your goals.

Malum Prohibitum

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Re: I feel so far behind
« Reply #9 on: November 19, 2015, 07:03:12 AM »
Don't move in with your boyfriend's mother.  Sheesh, you're almost 30 years old.  Don't do it!  Stop taking the $400 from your mother.  Sheesh, you are almost 30 years old!  Tell them both, thanks, but no thanks.  It's time to stand on your own two feet.

You have a higher income than the national household average.  That average includes two person incomes.  You do much better all by yourself.  You will be fine without the economic life support of parents or in-laws, and your relationships with these people will be immeasurably better once you no longer have finances tied into the relationship.

diggingout

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Re: I feel so far behind
« Reply #10 on: November 19, 2015, 07:13:27 AM »

Pay credit card debt with 11k from savings.
Pay down high interest loans. (or loans that are causing you problems)

I did take $5k out of my savings to pay off the credit cards with interest.  So I'm paying myself back $5k, as well as my paypal account, which is interest free for 6 months.

Also how exactly do you have a $500 payment on ~90k of SL and a 5 year repayment? Are you calculating a different payment in the future? Or is the figure lower now?

My monthly payment used to be $750 when the loan in default was included in there.  I continued making monthly payments even while it was in default, but the loan "owner" kept changing and I couldn't get any sort of receipts.  Minus the $25k loan, I have about $33k left to pay, which I tend to pay more than the minimum.  All but one are set to be paid off in 5 years, and I will throw in extra to ensure that other one will also be paid off on the same timeline.



diggingout

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Re: I feel so far behind
« Reply #11 on: November 19, 2015, 07:25:45 AM »
Don't move in with your boyfriend's mother.  Sheesh, you're almost 30 years old.  Don't do it!  Stop taking the $400 from your mother.  Sheesh, you are almost 30 years old!  Tell them both, thanks, but no thanks.  It's time to stand on your own two feet.

You have a higher income than the national household average.  That average includes two person incomes.  You do much better all by yourself.  You will be fine without the economic life support of parents or in-laws, and your relationships with these people will be immeasurably better once you no longer have finances tied into the relationship.

I think about the fact that I make more than the national household average and feel quite fortunate for that.  With regard to not living with my boyfriend's mom, how do we then save for a down payment on a home and a likely wedding?  We'd have to save at least $30k for a $150k home -- there isn't much cheaper in Michigan that doesn't require a substantial amount of work, which would require even more savings.  Plus housing prices keep going up.  By the time we have $30k saved, the down payment requirement could potentially continue to grow.  It's also kind of a mutually beneficial situation because very, very sadly, my boyfriend's dad died unexpectedly over the summer and we're already over there 2x a week to keep his mom company and help out around the house.  While it'd be nice to just save throughout our 30s to get out of debt and save for a house and a wedding, neither of us really want to wait until we're 35-40 to start a family and buy a house.  I think sacrificing a year of living independently to be able to accomplish what would otherwise take 2-3 years is worth it to both of us. 

The other option that's been thrown around is my best friend is looking to buy a home and doesn't want to live alone.  She'd charge us 1/2 of what we pay now to be roommates, which would help immensely, but that's not a sure thing just yet.

Axecleaver

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Re: I feel so far behind
« Reply #12 on: November 19, 2015, 07:45:10 AM »
The student loan in default is your #1 problem, and you need to deal with that first. If you don't deal with it, you'll never be able to get a mortgage for a house. How's your credit? You and your boyfriend both need a 750 credit score (lenders use the lowest of your scores) to qualify for the best terms on a mortgage.

Auto-defaults on student loans are a growing problem, and the source of a lot of complaints from people who get caught up in the scenario. They're often triggered when a parent dies, which causes the loan to go into default without the student borrower ever missing a payment. It's in place because of the desire for Sallie Mae and others in the loan world to repackage loans into securities, prior to 2008 subprime crash.

You have a good job, decent credit and the ability and willingness to repay the loan. You should figure out who holds the loan now and get in touch with them to release the cosigner from the loan and resume making payments. If they're unwilling to do it, look at refinancing the loan yourself with another lender. You have a good story and a lender who understands the situation is very likely to help you out.

diggingout

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Re: I feel so far behind
« Reply #13 on: November 19, 2015, 07:56:27 AM »
The student loan in default is your #1 problem, and you need to deal with that first. If you don't deal with it, you'll never be able to get a mortgage for a house. How's your credit? You and your boyfriend both need a 750 credit score (lenders use the lowest of your scores) to qualify for the best terms on a mortgage.

Auto-defaults on student loans are a growing problem, and the source of a lot of complaints from people who get caught up in the scenario. They're often triggered when a parent dies, which causes the loan to go into default without the student borrower ever missing a payment. It's in place because of the desire for Sallie Mae and others in the loan world to repackage loans into securities, prior to 2008 subprime crash.

You have a good job, decent credit and the ability and willingness to repay the loan. You should figure out who holds the loan now and get in touch with them to release the cosigner from the loan and resume making payments. If they're unwilling to do it, look at refinancing the loan yourself with another lender. You have a good story and a lender who understands the situation is very likely to help you out.

You're right -- and based on the replies to my posts, it appears I should just use my savings to pay off this loan.  I did consider refinancing, but didn't know how it worked when the loan is in default.  I really like the idea of keeping my $20k in savings, but can part with it if necessary.  My credit score is 700 and my boyfriend's is 750, so despite the default, I'm not in terrible shape, but it could be better and was before the default (I was at 750).  I have gotten in touch with who owns the loan now, but it's a collections agency and they refuse to do anything until the bankruptcy is released.  I actually just spoke to them last week to see if anything can be done NOW.  My mom filed for Chapter 13, so all of her debts were consolidated for five years of repayment.  I have a year until the bankruptcy is lifted so I'll try to save as much as I can until then, on top of what I have saved now.  Thank you for your input!

purple monkey

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Re: I feel so far behind
« Reply #14 on: November 19, 2015, 06:26:13 PM »
Don't move in with your boyfriend's mother.  Sheesh, you're almost 30 years old.  Don't do it!  Stop taking the $400 from your mother.  Sheesh, you are almost 30 years old!  Tell them both, thanks, but no thanks.  It's time to stand on your own two feet.

You have a higher income than the national household average.  That average includes two person incomes.  You do much better all by yourself.  You will be fine without the economic life support of parents or in-laws, and your relationships with these people will be immeasurably better once you no longer have finances tied into the relationship.

+1, but would like to say it a little different.  Consider moving out and find a roommate.  This will show you if the relationship is indeed marriage material.    The $400 from your mother is not cool.  You are doing very well for your age and if you continue to be successful on your own, the relationships with others will improve without the money stipends.  Those just muddy your waters.  Good luck.

bridget

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Re: I feel so far behind
« Reply #15 on: November 20, 2015, 12:30:48 PM »

Pay credit card debt with 11k from savings.
Pay down high interest loans. (or loans that are causing you problems)

I did take $5k out of my savings to pay off the credit cards with interest.  So I'm paying myself back $5k, as well as my paypal account, which is interest free for 6 months.



Just to make sure I'm understanding this right - You originally were carrying $16k of cc debt, $5k of which was accruing interest, and the remaining $11k is at 0% for 6 months? (Not clear where the paypal account is coming in, so I may be misunderstanding). If that's the case, I get why you are holding your $20k of savings in cash and not just clearing out the cc debt all at once; you don't have any incentive to do it sooner rather than later. If I'm not understanding, and your cc balance does involve interest, I think action #1, that needs to be done TODAY, is to pay off your entire balance. Keeping it in cash is not paying "yourself" back, because your cc bill is ALSO you; you received goods in the form of furnishings in the amount of at least $11k.

This may come down to a fundamental disagreement about whether it's worth paying a penalty (in the form of high interest rates) in order to have cash on hand. As a contrasting example, I do not have anywhere near $20k in liquid savings; most of my stash is in retirement accounts that I couldn't access quickly or without penalty. I try to keep more like $5k on hand to account for unexpected expenses. But, I have never carried a balance once on my credit card, even if in some months I'm scraping the barrel to pay it off. I would have a very hard time justifying letting a balance carry over into the next month if I had the cash to pay it off in full.

Think of it this way: if you pay off your cc right now, you are running a risk. The risk is that you have an unforeseen emergency that you can't pay for with cash, because your liquid savings will be lower. You'd have to use your line of credit (now freely available) to cover it. So, there is some risk you will end up with a hefty cc balance. It will accrue interest (although with the benefit that it will not relate back all the way to your original furnishing purchases), and it may take some time to pay off.

On the other hand, if you DON'T clear your cc balance, you are GUARANTEEING that outcome, regardless of whether you in fact have an emergency you have to cover, and the interest will be higher because you are accruing it for a longer period of time. You are choosing to significantly increase the purchase price of your furnishings (which were already, in my opinion, excessive) with no actual emergency reason to force your hand.

If your cc balance has no interest for six months, increase your monthly payments accordingly (dipping into savings) so that the balance will be cleared at the six month mark, and not by the "end of next year." The extra six months of interest is unnecessary and expensive, with no added benefit to you. After that, throw all that money at the next highest debt (either student loans or car payment), keeping only a few thousand dollars in cash at a time as a small buffer and keeping your cc line open for true emergencies that go over that (which at your age, should be incredibly few and far between).
« Last Edit: November 20, 2015, 12:33:26 PM by bridget »

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Re: I feel so far behind
« Reply #16 on: November 20, 2015, 12:47:17 PM »
Don't move in with your boyfriend's mother.  Sheesh, you're almost 30 years old.  Don't do it!  Stop taking the $400 from your mother.  Sheesh, you are almost 30 years old!  Tell them both, thanks, but no thanks.  It's time to stand on your own two feet.

You have a higher income than the national household average.  That average includes two person incomes.  You do much better all by yourself.  You will be fine without the economic life support of parents or in-laws, and your relationships with these people will be immeasurably better once you no longer have finances tied into the relationship.
Thanks for writing this for me, MP.

To which I would add to the OP... You made this mess, now dig your own self out of it. Nobody owes you anything and you won't believe how much figuring this out on your own will elevate your self-esteem. BTW - you spent that much money for furniture and your SO is sitting/sleeping on it but not helping you pay for it? That's a very valuable lesson you've just taught yourself, if you can see it.

Thirty is an interesting age. A little late to blossom into a mature adult, and not to late to start building a solid financial future. Asking for help here is a very good step.

JLee

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Re: I feel so far behind
« Reply #17 on: November 20, 2015, 01:45:44 PM »
Your car insurance seems exceptionally high.  I would get quotes from other companies and see if you can cut that in half.

diggingout

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Re: I feel so far behind
« Reply #18 on: November 20, 2015, 02:06:42 PM »
Your car insurance seems exceptionally high.  I would get quotes from other companies and see if you can cut that in half.

I live in Michigan where the roads are horrible and on the border of Detroit.  My car insurance went up $30 just for moving closer to a dangerous city.

diggingout

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Re: I feel so far behind
« Reply #19 on: November 20, 2015, 02:10:41 PM »

To which I would add to the OP... You made this mess, now dig your own self out of it. Nobody owes you anything and you won't believe how much figuring this out on your own will elevate your self-esteem. BTW - you spent that much money for furniture and your SO is sitting/sleeping on it but not helping you pay for it? That's a very valuable lesson you've just taught yourself, if you can see it.

Thirty is an interesting age. A little late to blossom into a mature adult, and not to late to start building a solid financial future. Asking for help here is a very good step.

I really don't think I filed for bankruptcy and caused a default on my student loan that will likely require immediate payment once the bankruptcy is lifted.  If I did that to my child, or anyone for that matter, I'd feel responsible for that loan too.  I could never be like, "Oh yeah, sorrynotsorry for doing that to your credit and financing plan!  Good luck!"

JLee

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Re: I feel so far behind
« Reply #20 on: November 20, 2015, 02:11:09 PM »
Your car insurance seems exceptionally high.  I would get quotes from other companies and see if you can cut that in half.

I live in Michigan where the roads are horrible and on the border of Detroit.  My car insurance went up $30 just for moving closer to a dangerous city.

That's still really high! Are you paying it in full every 6 months, or is that a split monthly payment? Generally there is a substantial discount for paying in full.

diggingout

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Re: I feel so far behind
« Reply #21 on: November 20, 2015, 02:18:33 PM »

Pay credit card debt with 11k from savings.
Pay down high interest loans. (or loans that are causing you problems)

I did take $5k out of my savings to pay off the credit cards with interest.  So I'm paying myself back $5k, as well as my paypal account, which is interest free for 6 months.



Just to make sure I'm understanding this right - You originally were carrying $16k of cc debt, $5k of which was accruing interest, and the remaining $11k is at 0% for 6 months? (Not clear where the paypal account is coming in, so I may be misunderstanding). If that's the case, I get why you are holding your $20k of savings in cash and not just clearing out the cc debt all at once; you don't have any incentive to do it sooner rather than later. If I'm not understanding, and your cc balance does involve interest, I think action #1, that needs to be done TODAY, is to pay off your entire balance. Keeping it in cash is not paying "yourself" back, because your cc bill is ALSO you; you received goods in the form of furnishings in the amount of at least $11k.

This may come down to a fundamental disagreement about whether it's worth paying a penalty (in the form of high interest rates) in order to have cash on hand. As a contrasting example, I do not have anywhere near $20k in liquid savings; most of my stash is in retirement accounts that I couldn't access quickly or without penalty. I try to keep more like $5k on hand to account for unexpected expenses. But, I have never carried a balance once on my credit card, even if in some months I'm scraping the barrel to pay it off. I would have a very hard time justifying letting a balance carry over into the next month if I had the cash to pay it off in full.

Think of it this way: if you pay off your cc right now, you are running a risk. The risk is that you have an unforeseen emergency that you can't pay for with cash, because your liquid savings will be lower. You'd have to use your line of credit (now freely available) to cover it. So, there is some risk you will end up with a hefty cc balance. It will accrue interest (although with the benefit that it will not relate back all the way to your original furnishing purchases), and it may take some time to pay off.

On the other hand, if you DON'T clear your cc balance, you are GUARANTEEING that outcome, regardless of whether you in fact have an emergency you have to cover, and the interest will be higher because you are accruing it for a longer period of time. You are choosing to significantly increase the purchase price of your furnishings (which were already, in my opinion, excessive) with no actual emergency reason to force your hand.

If your cc balance has no interest for six months, increase your monthly payments accordingly (dipping into savings) so that the balance will be cleared at the six month mark, and not by the "end of next year." The extra six months of interest is unnecessary and expensive, with no added benefit to you. After that, throw all that money at the next highest debt (either student loans or car payment), keeping only a few thousand dollars in cash at a time as a small buffer and keeping your cc line open for true emergencies that go over that (which at your age, should be incredibly few and far between).

Oh, no!  I did not pay $16k.  I paid $11k, $5k of which I paid off from my emergency fund to avoid interest.  As to paypal, they give you credit and offer interest free payments for six months on anything purchased over $100.  I guess I technically have $6k of credit card debt, and have to pay my savings account back $5k.  So I will not have CC debt in six months, but I'll still have to pay my savings back throughout the year.  So to break it down, I have $6k of cc debt, $5k owed back to my savings, and $20k sitting in my savings -- $25k once I manage to pay it all back in there.  All-in-all, no interest is being paid.

Malum Prohibitum

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Re: I feel so far behind
« Reply #22 on: November 20, 2015, 02:19:57 PM »
I ended up in the legal field.  I work as a paralegal/legal assistant (title has changed between jobs).  I currently make $55,500, but I get paid overtime, and am closer to $63k for this year.  Additionally, my mom gives me $400 per month (helping with my student loans), sometimes more, so I'll make close to $68k by the end of the year.  My take-home pay is generally $3600 per month, with my mom's money in there too.
  Forget your mom'e money.  You make good money for Detroit and your age and an English degree.  Don't give up on teaching if that is what you really want to do.  I got my degree while working full time.  It can be done.  I also paid cash for tuition as I went.

Quote
  This is definitely the most I've ever made.
  If you are any good, it is going to keep going up from here, even if you have to make a lateral move to increase your income.

Quote
-Car Payment: $353.48
-Car Insurance: $184.70
. . .
Why do I have a car payment?  Well, I was pretty desperate after my last car.  I financed a used 2007 Honda Fit in 2011, for around $12,000.  Last year, I still owed $6000 on it, but spent about $3000 in repairs the year prior.
  After 3000 in repairs, I would have kept it at least another 10 years.

Quote
. . . a more practical crossover SUV.  But since I still owed on my Honda, I had to pay that off and thus, ended up with a higher monthly payment.

. . .  That's really the best I can do until my lease on my car is up . . .
  Oh, wait, you leased?  So you do not even own it?  I have never leased a car, but I would start looking for ways to get out of that lease.

When the lease is up, you have to go and buy a car, right?

With a cheaper car, you could have just liability insurance.   Those two expenses listed in the quote above could be almost nothing each month.

Start doing some research.
http://www.edmunds.com/car-leasing/get-out-of-your-lease-the-cheap-and-easy-way.html

Sigh.
« Last Edit: November 20, 2015, 02:21:32 PM by Malum Prohibitum »

former player

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Re: I feel so far behind
« Reply #23 on: November 20, 2015, 02:25:37 PM »

To which I would add to the OP... You made this mess, now dig your own self out of it. Nobody owes you anything and you won't believe how much figuring this out on your own will elevate your self-esteem. BTW - you spent that much money for furniture and your SO is sitting/sleeping on it but not helping you pay for it? That's a very valuable lesson you've just taught yourself, if you can see it.

Thirty is an interesting age. A little late to blossom into a mature adult, and not to late to start building a solid financial future. Asking for help here is a very good step.

I really don't think I filed for bankruptcy and caused a default on my student loan that will likely require immediate payment once the bankruptcy is lifted.  If I did that to my child, or anyone for that matter, I'd feel responsible for that loan too.  I could never be like, "Oh yeah, sorrynotsorry for doing that to your credit and financing plan!  Good luck!"
You didn't file for bankruptcy.  But it was your decision to tie your finances to someone who did end up filing for bankruptcy.  And your decision not to pay the loan off as soon as you could, even though you are employed and earning good money.  And your decision to keep cash in hand rather than using it to pay off the loan that is causing you so much anguish and doing so much damage to your credit.

Your first step to getting your finances fully in order is to take full responsibility for them.

mikefixac

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Re: I feel so far behind
« Reply #24 on: November 20, 2015, 08:11:29 PM »
Well, I'm older and this is just me. But:

If you're only 29 and have discovered MMM, trust me, you've won the lottery. You may not think so now, but apply the principles and check back in 5 years.

GuitarBrian

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Re: I feel so far behind
« Reply #25 on: November 21, 2015, 02:40:01 AM »
With your responses since my first post... To me, the situation looks better.

It seems you might be waiting to buy a house while your BF is saving enough to pay his share in the downpayment.

That 25k SL debt in collection will need to be taken care of ASAP. You REALLY need it gone. That loan needs to show paid off for at least a few years.

As I said before, and others have said. You don't need 20k or 25k in a savings account. Not while you have loans you are paying interest on.

At least 6 months before you apply for a mortgage, you will need the money in the account for the downpayment. The bank will want to see that. Until then, figure a couple months of stripped to the bone frugal expenses and work with that.

Assuming you move in with BF's mom, I see you basically out of debt in 2 years and at 3 years, enough for your downpayment with help from BF.. or at 4 on your own.

You are about 65k in debt. (33k+25k+20k+6k-20k) and are spending about 1,000 a month on expenses. An excess 2,600... that is 98k after 3 years. Basically enough to pay off all your loans and build a nice house fund.

You can of course continue carrying the loans and take on more for the house sooner...

In all, reading your responses... I am not sure what help you are asking for...

Exflyboy

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Re: I feel so far behind
« Reply #26 on: November 21, 2015, 12:43:40 PM »
Like others have said, you have a good income and your not in so deep that you can't dig out. I really didn't start saving until my late thirties with $160k mortgage debt and total income of just under six figures on average.

17 years later we were FI.. So it can be done.

Rather than focus on the digging out I wanted to state the obvious about the behaviours that got you into this mess in the first place.

1) $11k on furniture when there is perfectly good stuff in thrift stores.. (buying stuff you don't need)
2) Buying a new car.. then making that dumb decision 3 times worse by leasing it.. Even financing it is bad!
3) Not looking around for the best deals on stuff.. cell phones, internet service etc etc.

These badassity skills need to be practiced every day until it becomes second nature.. Like the brand off toothpaste.. scan all the other offerings and find the $0.78 a tube.. not the $5 tube.. this has to become like breathing.

Cars are depreciating heaps of crap.. It doesn't matter what it looks like as long as it provides reliable transport.

Unless you get into these habits you'll never get to a significant savings rate.

Here's an example.. Our liquid NW (not including the paid off house) is just under $2M.. The car I drive now cost me $350.. It works fine and I don't care what people think.

You can get to a similar place that we have in 18 to 20 years... But it takes discipline and to a degree even sacrifice. but all is not lost.

Good luck


alsoknownasDean

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Re: I feel so far behind
« Reply #27 on: November 21, 2015, 11:32:59 PM »
Aside from the car costs your expenses aren't that bad.

$185 a month for insurance is crazy. Shop around for another provider, the rates may vary between insurers.

So, let me get that straight, there's:

$6K in cc debt at x% interest
$33K in 'normal' student loans, at x% interest
$25K in 'defaulted' student loans which is with a collection agency due to your mum's bankruptcy
$x amount in the car loan, at x% interest

I'm sure you'll be fine in a couple of years if you concentrate on killing the debt monster. What are the interest rates on each debt?

I'm surprised that a collection agency isn't after any repayments.

Honestly there's nothing insurmountable there. A few years of work and you'll be fine. Just look at changing cars to something cheaper when you can (and WTF at that insurance), maybe find a cheaper apartment, and take care of the debt one step at a time.

Shit, if you combine your BF's savings and yours, you're not far off a downpayment anyway if that's important to you. Having 20% deposit should put you in good stead there regardless. With houses at only $150-200K and a $1400pm rent, would buying be cheaper overall?

green daisy

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Re: I feel so far behind
« Reply #28 on: November 22, 2015, 10:14:10 AM »
I am not very familiar with bankruptcy, but I think I read once that if a person has filed for bankruptcy, by law, collectors cannot continue to attempt to collect on the debt.

I just googled it.  It's called an "automatic stay."  The collections agency likely cannot allow her to pay, even if she wants to. 

FrugalShrew

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Re: I feel so far behind
« Reply #29 on: November 22, 2015, 11:34:42 AM »
Well, I'm older and this is just me. But:

If you're only 29 and have discovered MMM, trust me, you've won the lottery. You may not think so now, but apply the principles and check back in 5 years.

This. MMM radically changes everything. I'm only 2 years in, but I just finished digging myself out of a huge student loan debt hole. Mustachianism gave me the focus to do that. Try to use the success stories here as inspiration and not get discouraged by comparing yourself to others who are further along in the journey (easier said than done, I know).

As far as your current dilemma, I will add my voice to the chorus advising you to use your savings to pay off the $25K student loan in default. I think it's normal to be hurt that your mom's bankruptcy affected your credit and caused a default on your loan, and want her to take responsibility for it. But it sounds like her intentions have always been good (to provide for you), and she is just no good at keeping her financial house in order. She's clearly struggling, and paying off this loan would remove a burden from both your plates (though she admittedly accelerated the burden, and forgiving her for that may be the hardest part of this process). If it were me, I'd probably keep ~$3,000 on hand for an emergency fund and put the rest toward the loan.

I'm also taken aback by the number of people advising you not to move in with your boyfriend's mom because you're an "adult." One of the most liberating ideas of mustachianism to me has been questioning the conventional norms of being an "adult" - buying a house, having a shiny new car, etc. Plenty of people who live with relatives carry responsibility within the family and have to take care of their family members -- that's very adult. Further, intergenerational housing is the norm in many parts of the world. As long as you are planning to carry your own weight in the household, and don't expect BF's mom to cook and clean for you, it could be a great option. With the passing of BF's dad (my sympathies for your loss), it sounds like it could actually be mutually beneficial for BF's mom to have you two around the house for support and assistance.

Exflyboy

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Re: I feel so far behind
« Reply #30 on: November 22, 2015, 12:27:56 PM »
I agree.. I would certainly move in with BF's Mom's basement in order to dig out of the debt more rapidly.

SachaFiscal

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Re: I feel so far behind
« Reply #31 on: November 22, 2015, 12:48:00 PM »
I also agree with FrugalShrew and Exflyboy about moving in with your BFs mom.  I lived with my mom throughout the latter half of my 20s after my father passed away and I think it was really good for both of us. I wasn't relying on her financially, however. It really helped her not to be alone in the house and it helped us learn how to get along with each other and accept each other's faults and flaws. I think that experience has helped me learn how to live with people I don't necessarily have a lot in common with.

Maybe you can help with chores around the house to help "pay" for your stay there.

I think you're doing pretty good. Sounds like you are determined to get yourself out of debt. You just have to be careful about big purchases of depreciating assets (car, furniture).  If I were you, I would not use my credit cards at all until my debts were paid off. In fact I would freeze them in a block of ice in my freezer and only thaw them for use in the most dire emergency.

Take pride in every extra payment you make towards principle. Instead of shopping for things, spend the money toward your debt and feel like you are buying freedom for your future self, she will appreciate it :-)

Valetta

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Re: I feel so far behind
« Reply #32 on: November 22, 2015, 01:07:46 PM »
I agree with much of what has been said - get out of debt ASAP, you don't need that much cash, look for ways to lower expenses, etc.

One thing you mention - you are considering saving for a wedding? Huh? Why in the world are you planning on spending money on a wedding with your financial situation - go get married at the courthouse if you want and then have a potluck at your house afterwards. Or have a friend get ordained online and get married in a park and have a picnic. A wedding doesn't need to be expensive, that's just wacky. It's one day. Later on when you are financially better off you can have a big blowout anniversary party if you want to. I think having been married 10, 20 or 50 years is more of a special thing to celebrate anyway than just  getting married. LOTS of people get married, not everyone makes it for all those years though.

I had a very cheap, informal wedding and am happily married. People still talk years later that it was their favorite wedding they've been to - meaningful and simple. Friends and family pitched in for things and it was low stress - we just got to enjoy the day.

brainfart

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Re: I feel so far behind
« Reply #33 on: November 22, 2015, 02:09:45 PM »
I don't live in the US (and maybe life is much different in my corner of the world), but I don't even consider buying a house or apartment for myself anytime soon. I'm a happy renter, because that's cheaper and frees up much more time (e.g. for a second job, and quality time with the loved ones) and money which I save and invest instead. Ask yourself why you want a house. Because everyone else thinks it's the right thing to do? A house is just another depreciating asset which happens to be damn expensive and requires a lot of work. I currently have better things to do than wasting my weekends fixing stuff, mowing lawns and trimming hedges.

You said house prices are already going up and you are afraid to miss out. Don't be. I can guarantee you there will be another housing bubble in your lifetime and you will be able to get great houses for relatively little money. So for now concentrate on that debt and then start saving and investing.


SachaFiscal

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Re: I feel so far behind
« Reply #34 on: November 22, 2015, 04:09:28 PM »
I agree with much of what has been said - get out of debt ASAP, you don't need that much cash, look for ways to lower expenses, etc.

One thing you mention - you are considering saving for a wedding? Huh? Why in the world are you planning on spending money on a wedding with your financial situation - go get married at the courthouse if you want and then have a potluck at your house afterwards. Or have a friend get ordained online and get married in a park and have a picnic. A wedding doesn't need to be expensive, that's just wacky. It's one day. Later on when you are financially better off you can have a big blowout anniversary party if you want to. I think having been married 10, 20 or 50 years is more of a special thing to celebrate anyway than just  getting married. LOTS of people get married, not everyone makes it for all those years though.

I had a very cheap, informal wedding and am happily married. People still talk years later that it was their favorite wedding they've been to - meaningful and simple. Friends and family pitched in for things and it was low stress - we just got to enjoy the day.

+1

If my boyfriend and I ever get married, I want to just have the wedding in my back yard. I have a friend who is ordained who would be an awesome officiant. After I would just have a buffet lunch or dinner that I cooked myself or have some close friends each cook something.

I second the small wedding now and big anniversary party later. I think that's a great idea!

astvilla

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Re: I feel so far behind
« Reply #35 on: November 22, 2015, 11:02:44 PM »
A lot of great replies and comments.

Just wanna add that don't be discouraged.  I'm doing better and I'm discouraged when I read other people's cases.  Like why do they have so much and how envious I am.  But in the end, it's about taking care of your own house/situation.  Don't sweat what others think, that's part of healthy living and mustachianism. There are always people who have more and look like they have more (very common the latter).  In the end you're racing yourself to FIRE.

Find joy in simple things that consumerism normally dulls your senses to, be appreciative of the comforts modern society provides. 

diggingout

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Re: I feel so far behind
« Reply #36 on: November 23, 2015, 07:08:50 AM »
I agree with much of what has been said - get out of debt ASAP, you don't need that much cash, look for ways to lower expenses, etc.

One thing you mention - you are considering saving for a wedding? Huh? Why in the world are you planning on spending money on a wedding with your financial situation - go get married at the courthouse if you want and then have a potluck at your house afterwards. Or have a friend get ordained online and get married in a park and have a picnic. A wedding doesn't need to be expensive, that's just wacky. It's one day. Later on when you are financially better off you can have a big blowout anniversary party if you want to. I think having been married 10, 20 or 50 years is more of a special thing to celebrate anyway than just  getting married. LOTS of people get married, not everyone makes it for all those years though.

I had a very cheap, informal wedding and am happily married. People still talk years later that it was their favorite wedding they've been to - meaningful and simple. Friends and family pitched in for things and it was low stress - we just got to enjoy the day.

+1

If my boyfriend and I ever get married, I want to just have the wedding in my back yard. I have a friend who is ordained who would be an awesome officiant. After I would just have a buffet lunch or dinner that I cooked myself or have some close friends each cook something.

I second the small wedding now and big anniversary party later. I think that's a great idea!

We do want to have a small wedding.  In a backyard.  But we still need to save money for it and find someone with a backyard ;]  My boyfriend's best friend is ordained and we've discussed just using him since he also knows both of us very well.  One of my other friends is a highly sought after wedding photographer and she gives us all huge discounts, and her husband is just starting out as a wedding videographer.  And my other friend, who will also be a bridesmaid, is a web designer and her gift to all of her friends has been doing their invites for the shower/wedding/saves the date/etc.  BUT, our attire, food, drinks, chairs and tables will not appear out of thin air and since I've been advised to use my savings for my default loan, we'll still have to save for our small wedding.  I understand going to a courthouse, but it's the one day we get to celebrate us in our whole lives (neither my boyfriend nor I like being the center of attention, and I'll likely decide against a wedding shower unless someone forces it upon me, and it won't be my mom haha).  I'm a sentimental person, and I'd really like to capture that day with close friends and family. 

diggingout

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Re: I feel so far behind
« Reply #37 on: November 23, 2015, 07:13:40 AM »
I am not very familiar with bankruptcy, but I think I read once that if a person has filed for bankruptcy, by law, collectors cannot continue to attempt to collect on the debt.

I just googled it.  It's called an "automatic stay."  The collections agency likely cannot allow her to pay, even if she wants to.

You are correct.  Like I said, I've contacted the collections agency throughout the bankruptcy process and they'll accept payments, which I continued at the beginning.  But they can't call me until the bankruptcy is lifted.  I just feel uncomfortable sending a $25k check to them because, like I also said, they don't provide any receipts.  Once the bankruptcy is lifted, I would ask for verification of the loan, as well as a proper invoice to make the payment. 

diggingout

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Re: I feel so far behind
« Reply #38 on: November 23, 2015, 07:18:35 AM »
Well, I'm older and this is just me. But:

If you're only 29 and have discovered MMM, trust me, you've won the lottery. You may not think so now, but apply the principles and check back in 5 years.

This. MMM radically changes everything. I'm only 2 years in, but I just finished digging myself out of a huge student loan debt hole. Mustachianism gave me the focus to do that. Try to use the success stories here as inspiration and not get discouraged by comparing yourself to others who are further along in the journey (easier said than done, I know).

As far as your current dilemma, I will add my voice to the chorus advising you to use your savings to pay off the $25K student loan in default. I think it's normal to be hurt that your mom's bankruptcy affected your credit and caused a default on your loan, and want her to take responsibility for it. But it sounds like her intentions have always been good (to provide for you), and she is just no good at keeping her financial house in order. She's clearly struggling, and paying off this loan would remove a burden from both your plates (though she admittedly accelerated the burden, and forgiving her for that may be the hardest part of this process). If it were me, I'd probably keep ~$3,000 on hand for an emergency fund and put the rest toward the loan.

I'm also taken aback by the number of people advising you not to move in with your boyfriend's mom because you're an "adult." One of the most liberating ideas of mustachianism to me has been questioning the conventional norms of being an "adult" - buying a house, having a shiny new car, etc. Plenty of people who live with relatives carry responsibility within the family and have to take care of their family members -- that's very adult. Further, intergenerational housing is the norm in many parts of the world. As long as you are planning to carry your own weight in the household, and don't expect BF's mom to cook and clean for you, it could be a great option. With the passing of BF's dad (my sympathies for your loss), it sounds like it could actually be mutually beneficial for BF's mom to have you two around the house for support and assistance.

I just wanted to let you know I really appreciate your response.  My family is from Europe and my grandparents lived with me my whole life.  In fact, my grandpa still lives with my dad (the rest of my grandparents have passed).  Of course, we would carry our own weight.  Like I said, we already go over there several times a week to help with chores.  Thanks for your condolences and support in our decision to live with my BF's mom.  I just don't see why we wouldn't live there for 1-2 years to save $40k, instead of renting for several more years.  :)

diggingout

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Re: I feel so far behind
« Reply #39 on: November 23, 2015, 07:25:18 AM »
I don't live in the US (and maybe life is much different in my corner of the world), but I don't even consider buying a house or apartment for myself anytime soon. I'm a happy renter, because that's cheaper and frees up much more time (e.g. for a second job, and quality time with the loved ones) and money which I save and invest instead. Ask yourself why you want a house. Because everyone else thinks it's the right thing to do? A house is just another depreciating asset which happens to be damn expensive and requires a lot of work. I currently have better things to do than wasting my weekends fixing stuff, mowing lawns and trimming hedges.

You said house prices are already going up and you are afraid to miss out. Don't be. I can guarantee you there will be another housing bubble in your lifetime and you will be able to get great houses for relatively little money. So for now concentrate on that debt and then start saving and investing.

I always joke with my boyfriend that I hope there's another housing bubble so we can get a steal!  I know, that's kind of awful, but I see so many of my friends getting FHA loans and putting only 3.5% down on homes that are way more than they can afford, so I know it's inevitable that it will happen again.  I can't believe such loans exist and lenders feel comfortable with it since the recession was just a few years ago!   I get where you're coming from on preferring to rent.  For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family); and I'd like to not have a housing payment in my retirement.  It definitely has nothing to do with what I "should" do. 

Malum Prohibitum

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Re: I feel so far behind
« Reply #40 on: November 23, 2015, 07:34:21 AM »
For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family)
  Uh, rent a cheap one bedroom and worry about more rooms when you get some family to fill them.

diggingout

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Re: I feel so far behind
« Reply #41 on: November 23, 2015, 07:45:14 AM »
For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family)
  Uh, rent a cheap one bedroom and worry about more rooms when you get some family to fill them.

So it's okay to plan for retirement in the future, but not a family?  Interesting.  It's not like we're going out to buy a house this instant.  You're basically telling me to start worrying about saving for a down payment when I get pregnant.  9 months to save for a house isn't very much time.  I don't think you read any of the other posts, but the plan is to live with his mom for 1-2 years to save.  A house is still at least 2-3 years away. 

Ceridwen

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Re: I feel so far behind
« Reply #42 on: November 23, 2015, 07:53:52 AM »
Are you going to keep accepting the $400 from your mom? Sorry if I missed this in the earlier replies.

Exflyboy

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Re: I feel so far behind
« Reply #43 on: November 23, 2015, 08:00:51 AM »
For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family)
  Uh, rent a cheap one bedroom and worry about more rooms when you get some family to fill them.

So it's okay to plan for retirement in the future, but not a family?  Interesting.  It's not like we're going out to buy a house this instant.  You're basically telling me to start worrying about saving for a down payment when I get pregnant.  9 months to save for a house isn't very much time.  I don't think you read any of the other posts, but the plan is to live with his mom for 1-2 years to save.  A house is still at least 2-3 years away.

Yes, and of course having a kid is one of the most costly things you can do. My Wife and I never wanted kids but of course that was a conscious decision.

Making sure your on a solid financial footing before having kids is very wise IMHO

Faraday

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Re: I feel so far behind
« Reply #44 on: November 23, 2015, 08:14:40 AM »
Well, I'm older and this is just me. But:

If you're only 29 and have discovered MMM, trust me, you've won the lottery. You may not think so now, but apply the principles and check back in 5 years.

+1000 to this!

I was never quite as bad off as you are now but at 30, I didn't know financial shit from Shineola. Go through the bad time right now to get to the good stuff on the other side. You are getting great comments and advice. Go and Kick Ass.

former player

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Re: I feel so far behind
« Reply #45 on: November 23, 2015, 08:16:55 AM »
For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family)
  Uh, rent a cheap one bedroom and worry about more rooms when you get some family to fill them.

So it's okay to plan for retirement in the future, but not a family?  Interesting.  It's not like we're going out to buy a house this instant.  You're basically telling me to start worrying about saving for a down payment when I get pregnant.  9 months to save for a house isn't very much time.  I don't think you read any of the other posts, but the plan is to live with his mom for 1-2 years to save.  A house is still at least 2-3 years away.

I think (I hope) that no-one here was telling you not to plan for a family and a house, but rather to 1) prioritise - as you say, family and house are some time away for you still, and 2) not overdo the size of the house or buy it before you know you need it - by all means save up the deposit once your more immediate financial needs are on track, but don't go too big or too soon on actually buying one.  I don't have kids, but from all I have heard they are so time consuming and attention-absorbing in the early years that taking on a bigger house than you really need becomes an added burden of work at the time you need it least, as well as an unnecessary expense.

Your plans for your wedding sound excellent - you and your boyfriend seem to have an excellent network of friends and family.  That is worth a lot, not just socially/emotionally but also financially - people like you who have developed those networks tend to prosper in the long run whatever their income, because of the resilience and mutual support they provide.

Can I also say congratulations on rolling with the facepunches and keeping on coming back to this thread?  So often people ask for advice and disappear when they get it, but your coming back speaks well for your attitude and fortitude.

Good luck: I think you and your boyfriend will do fine.

queenie

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Re: I feel so far behind
« Reply #46 on: November 23, 2015, 08:17:29 AM »
For me, the only reasons I want a home is because it's hard to find a rental with three bedrooms for cheap (so we can start a family); and I'd like to not have a housing payment in my retirement.

First off, I wanted to say that I think that you can 100% turn this around.  You're younger than I am and you are in much better shape than I was when I found MMM.  I was already in my early 30s, with zero savings, substantial debt, 4 kids and our family on a single income (my husband's).  I'm still at the beginning of my journey too.

Secondly - you don't need a 3 bedroom!  You can definitely do a 1 bedroom for another couple of years at minimum.  Firstly, even if you were to get pregnant today, you'd have several months before baby arrived.  After that, baby can comfortably sleep in your room in a crib or bassinet for another year or two.  At MOST you'd need a 2 bedroom, even if you have more than one kiddo.  Upgrading to more space is nice, but don't trick yourself into thinking it's necessary and screwing yourself because of that.  And I'm thinking that you're not ready to try get pregnant today.  Additionally, you don't know how long it will take when you do start trying.

We've got 4 kids (bless 'em) and our first home was a 3 bedroom.  Our oldest got his own room and the three youngest shared the largest bedroom.  This year we moved into a bigger home where all the kids could have their own rooms.  Guess where they are sleeping?  Oldest in his own room, and the three youngest still wanting to sleep together and share a single room.  :P

I don't live that far from you.  I'm on the other side of the border in Ontario, about 3 hours from Detroit area.  I've never owned an SUV or all wheel drive vehicle, even when I lived in Northern Ontario with snowbanks taller than people, and I've never gotten stuck or had to sleep in my car.  It's easy to trick yourself into thinking that you need things that you just don't need. 

Good luck to you!

queenie

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Re: I feel so far behind
« Reply #47 on: November 23, 2015, 08:19:07 AM »
Oops, I see your reply that you mean that the house you plan to save for in the future would be a 3 bedroom.  Gotcha.

Red Beard

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Re: I feel so far behind
« Reply #48 on: November 23, 2015, 09:03:44 AM »
Add me to the "live with future MIL" camp. Rent is your biggest expense right now. If I could eliminate my biggest expense for the next few years I would do it in a heartbeat.

Valetta

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Re: I feel so far behind
« Reply #49 on: November 24, 2015, 08:58:07 PM »
I agree with much of what has been said - get out of debt ASAP, you don't need that much cash, look for ways to lower expenses, etc.

One thing you mention - you are considering saving for a wedding? Huh? Why in the world are you planning on spending money on a wedding with your financial situation - go get married at the courthouse if you want and then have a potluck at your house afterwards. Or have a friend get ordained online and get married in a park and have a picnic. A wedding doesn't need to be expensive, that's just wacky. It's one day. Later on when you are financially better off you can have a big blowout anniversary party if you want to. I think having been married 10, 20 or 50 years is more of a special thing to celebrate anyway than just  getting married. LOTS of people get married, not everyone makes it for all those years though.

I had a very cheap, informal wedding and am happily married. People still talk years later that it was their favorite wedding they've been to - meaningful and simple. Friends and family pitched in for things and it was low stress - we just got to enjoy the day.

+1

If my boyfriend and I ever get married, I want to just have the wedding in my back yard. I have a friend who is ordained who would be an awesome officiant. After I would just have a buffet lunch or dinner that I cooked myself or have some close friends each cook something.

I second the small wedding now and big anniversary party later. I think that's a great idea!

We do want to have a small wedding.  In a backyard.  But we still need to save money for it and find someone with a backyard ;]  My boyfriend's best friend is ordained and we've discussed just using him since he also knows both of us very well.  One of my other friends is a highly sought after wedding photographer and she gives us all huge discounts, and her husband is just starting out as a wedding videographer.  And my other friend, who will also be a bridesmaid, is a web designer and her gift to all of her friends has been doing their invites for the shower/wedding/saves the date/etc.  BUT, our attire, food, drinks, chairs and tables will not appear out of thin air and since I've been advised to use my savings for my default loan, we'll still have to save for our small wedding.  I understand going to a courthouse, but it's the one day we get to celebrate us in our whole lives (neither my boyfriend nor I like being the center of attention, and I'll likely decide against a wedding shower unless someone forces it upon me, and it won't be my mom haha).  I'm a sentimental person, and I'd really like to capture that day with close friends and family.

This sounds like a great wedding plan and very similar to what we did. Some tips that may or may not help you out:
- I got my dress off the rack, on sale at David's Bridal. It was only $200. Shorter dresses are usually cheaper and perfect for outdoor weddings. I also really wanted a tea length dress so it was no sacrifice.
- I did my own makeup and a friend did my hair (she's a professional). I don't normally wear makeup so I needed some help with it - I just went to the mall and had them show me how to do everything so I could replicate.
- Friend played violin.
-Another friend got ordained.
- Another friend took the photos.
- Husband also elected to wear all white and he got a white linen shirt and white linen pants for pretty cheap on sale.
- Neither of us wore shoes so there was an expense we got to skip.
- Food doesn't have to be too much. We had brunch after my wedding and it was really cheap and easy to make yummy egg bakes for a large group of people - 25 people total, food was only $110. My mom and aunt cooked it all themselves.
- Mom baked a rhubarb cake with rhubarb from her own garden. Rhubarb cake is a family tradition so it was cheap and meaningful!
- Drinks - it was morning so we only did champagne. The liquor store just let me buy a bunch and return whatever I didn't open. They did a tasting for me for free so I could find something good and reasonably priced.
- Chairs and tables - my workplace has them and they just let staff borrow them if they aren't in use (we only use them a couple times a year for work functions). They don't charge people for this and you just need to find a truck to haul them. Ask around at the companies of friends and families. This is an easy perk that companies can offer to employees essentially for free. I know other people that have managed to find similar arrangements with their church or school too.

I think it's smart to save up for it, but it really doesn't have to be expensive nor take much more work than working with rental companies for all this stuff.

Sorry if I was a little hard on you, I saw "saving up for a wedding" and I immediately assumed $30,000+ celebration since that's what people usually mean when they say they are saving up for a wedding.