Author Topic: MY first post! Getting started on MMM  (Read 4698 times)

BeastofaMan

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MY first post! Getting started on MMM
« on: January 18, 2015, 10:54:58 AM »
So about 3-4 months ago, I posted something on Reddit and someone got back to me stating that I should check this site out and post my particular situation in this forum. Well, I couldn't stop thinking about it and while we're not struggling per se, me and my wife's financial situation is far from stable. We still live month to month.

A little background:
I have an ok paying job - I take home about 2800 a month after medical insurance, 3% to 401k (my company doesn't match), and taxes. I'm on the verge of getting a promotion/raise, although it isn't technically official. This should bump my monthly take home about 300 a month and I expect it to begin the raise in a month or less. I also have occasional bonuses, although most (or all) of it goes to my parents. My wife works at a restaurant and doesn't make too much, but it's very inconsistent so hard to plan with that money. She's from Thailand and sends a lot of it home to help her mom with some construction they're doing on the house. I really pay for everything, and she'll buy groceries or dinner sometimes.

She loves traveling and I love buying stuff, which can conflict sometimes. I am cheap in some regards (only buy used cars, eat pretty cheap at home) but splurge in other ways (compulsive/unnecessary purchases at times). I also go out to eat regularly while at work. While I don't mind taking food in every now and then, I do make bonds with coworkers by going to lunch a couple times a week, and it also feels great to get out of the office. This has been a hard one for me to get out of.

Me and my wife would both love to travel more, but it's always tight when we do take a trip. We also use credit cards although we've been trying hard to get out of that cycle. We don't owe a ton of debt, but we do have a couple thousand on loans plus some car payments. I do own my motorcycle outright which is nice.

I've read through several posts on this site but I can't quite get my mind around the concept portrayed here. I'm not sure if this post has relevant information, or if this is the best way to start, but hopefully it is. I hate living like this, and getting out of the month to month cycle is constantly on my mind. Despite all that, I constantly want things and usually just buy them (although I do try to do it cheaply). I'm knocking on 30 and my savings are laughable. Seriously, it's a bit embarrassing. If I lost my job tomorrow, we'd be screwed. I couldn't even pay rent next month, which probably says a lot.... We'd like to eventually retire in Thailand, but it seems like a dream at this point in my life. While I always think I'd like to get paid more, I still feel like I should be better at working with what I have, and there's always the idea that even if I got paid more, I'd be in the same situation as my habits aren't the best.

Any advice to starting on this road the right way would be GREATLY appreciated.

MDM

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Re: MY first post! Getting started on MMM
« Reply #1 on: January 18, 2015, 11:26:50 AM »
I'm not sure if this post has relevant information, or if this is the best way to start, but hopefully it is.
Any advice to starting on this road the right way would be GREATLY appreciated.
BeastofaMan, welcome to the forums.

See http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/ and http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/msg274228/#msg274228, among others, for ways you can best present your information.

Good luck!

swick

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Re: MY first post! Getting started on MMM
« Reply #2 on: January 18, 2015, 11:31:33 AM »
Welcome :)

Having shared and set goals will make all your financial planning easier. It is a good place to start. Also, in regards to your spending, it sounds like that with your "constantly wanting things and just going out and buying them" suggests that you are trying to fill a hole in your life or getting an emotional high from the shopping.

One of the best resources I have found for really getting into the "why" of your purchases is a post from Erica at NorthWest Edible Life:
http://www.nwedible.com/2012/10/mini-money-challenge-occupy-your-brainwhat-you-want-isnt-really-what-you-want.html

I would challenge you to print out a couple of sheets and start getting into the habit of examining all your purchases. You might learn a lot about yourself :)

former player

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Re: MY first post! Getting started on MMM
« Reply #3 on: January 18, 2015, 11:42:22 AM »
Congratulations on the imminent raise.

You have disclosed three problems on the expenditure side.   The first is that most or all of your bonuses goes to your parents.  Why?  The second is that your wife sends a lot of money to her mother in Thailand for construction on her mother's house.  Why?  Unless her mother is living in a hovel (by Thai standards, not by US standards), time to redirect that money to your own living situation.  The third is your unnecessary/compulsive spending.

You need to knock all of these on the head until as a minimum you have an emergency fund which would cover your basic expenses for six months.  While you are accumulating your emergency fund, you can sit down with your wife and agree some longer-term financial goals and how you get to them.  Good luck.

JLee

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Re: MY first post! Getting started on MMM
« Reply #4 on: January 18, 2015, 11:51:27 AM »
Regarding the constant spending / buying stuff -- I had a recent realization when I was considering doing contract work all over the US.  I realized that everything I'd "need" for six months could fit in my vehicle...which caused me to reevaluate the stuff I already own, as well as the stuff I was planning on buying eventually.  My Amazon wish list was immediately trimmed wayyy down and I've stopped buying stuff on a whim.  I can pull up Slickdeals.net (which is very dangerous, btw) and read through all the incredible deals that are popping up and not feel like I want any of it. If you view every purchase through the filter of "Will I be using actively using this five years from now", maybe it'll be easier to stop the impulse purchases. :)

frugaldrummer

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Re: MY first post! Getting started on MMM
« Reply #5 on: January 18, 2015, 12:04:11 PM »
I also recommend reading the book Your Money or Your Life.
 Some of the investment advice is dated (it was written when bond rates were really high) but it will radically change how you view purchases.

Also I recommend setting up an envelope system for budgeting, and forcing yourself to limit impulse buys to whatever you have set aside in that envelope for that purpose.

I admire you for helping your wife's mother. Are your payments to your own parents are some kind of lian repayment?

Having a clear goal....in your case, achieving financial independence so you can move to Thailand...can be very motivating. How much do you think you would need to live comfortably in Thailand? If you can give us cost of living estimates we can give you an idea of your savings target.

Cheddar Stacker

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Re: MY first post! Getting started on MMM
« Reply #6 on: January 18, 2015, 12:28:38 PM »
Congratulations on the imminent raise.

You have disclosed three problems on the expenditure side.   The first is that most or all of your bonuses goes to your parents.  Why?  The second is that your wife sends a lot of money to her mother in Thailand for construction on her mother's house.  Why?  Unless her mother is living in a hovel (by Thai standards, not by US standards), time to redirect that money to your own living situation.  The third is your unnecessary/compulsive spending.

You need to knock all of these on the head until as a minimum you have an emergency fund which would cover your basic expenses for six months.  While you are accumulating your emergency fund, you can sit down with your wife and agree some longer-term financial goals and how you get to them.  Good luck.

+1.

I'll add, you have to figure out what you want the most. Do you want that stuff more than financial stability/independence? If so, you will never overcome that month to month feeling. Keep hanging out around here and you'll start to figure some things out.

BeastofaMan

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Re: MY first post! Getting started on MMM
« Reply #7 on: January 18, 2015, 12:36:32 PM »
Wow! I knew this was a vibrant community, but I didn't expect so many replies while I was at the grocery store! I'll try to provide some more info and answer some questions.

Expenses:
*My rent (Bills/TV/Internet included!) is 950. It's a great spot too, but we'd like to own a house eventualy. I'm more ok with staying than the wife, but I'd love to have a garage so I don't have to work on the car/bike outside in the winter.
*145/mo for 1 car payment (about 6000 left)
*135/mo for 2nd car payment (about 900 left)
*100/mo for car insurance
*About 150/mo on gas and 200-300 on groceries (those are estimates)

We do eat out pretty often but since my wife works at a restaurant she often brings home food which she gets an awesome discount on. We have been trying to cook more and are getting better about it, but I've grown up eating frozen food so still in that habit. I try to spend less than 6 per meal at home.

I haven't really thought about long term goals, but I figure by 55 I'd like to move to Thailand with my wife. Houses are cheaper there, especially out in the country, and living expenses are significantly lower. This is something I think me and the wife need to talk about in more detail.

Giving money to parents:
My parents have kind of fallen on hard times, so I told my mom I'd give her 600 out of my quarterly bonus. It's not much, but I know it helps them pay some bills. If I make more (which depends on the quarter) then I keep the remainder. I do have a large bonus coming at the end of this month, although I don't have exact figures yet. It should be an extra 1000 - 1200 or so going into my pocket.

In Thailand, it is part of the culture to help your parents out with finances. It's a big deal over there (evidently) and my wife brought this up before we got married. I'm ok with it and I understand and respect the idea. Her mom just built a house, so she's sending a little more than normal now. She sends about 1000 a month to her mom. Again, this is a cultural thing and a big deal to her.

Unnecessary expenditures:
A lot of these come with the idea that in the long-term, it's worth it. I usually don't buy crap just to buy, but these purchase aren't necessities. For example, in the last month I've bought:
*a new mouse and keyboard (I have several keyboards and mouses, but I have wrist/finger pain from working on the computer all day and I'm trying to prevent bigger issues in the future)
*glove liners and a face mask (so I can ride the motorcycle while it's cold, potentially making the money back in gas savings)
*an extension cord and inflator (to go with a fee air compressor I received, so I can fill my own tires)
*a new helmet for my motorcycle (completely unnecessary, but it was a good deal)
*a new keychain knife (I have reasons, but ultimately I don't really need it)

So out of these, two could be called impulse purchases. The others may be questionable, but not impulse buys per se...


I spoke with my wife and according to her, we'd need about 500/month to live a similar life in Thailand (excluding house and vehicle).

I appreciate the feedback and will look at some of the links/resources provided. I also like the envelope system. I am pretty good with cash but it's harder for me to track plastic expenses.

swick

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Re: MY first post! Getting started on MMM
« Reply #8 on: January 18, 2015, 12:49:25 PM »
There are lots of folks here who are in relationships similar to yours - might be useful for picking brains.

One thing I am wondering about is can helping out her mom and paying for housing upgrades help you out in the long run? Because you want to retire to Thailand one day...Does your wife have any other siblings (specifically male)? does her mother have a will?  It might be easier to look at if you are looking at it as a future investment. If there is a need for someone to look after her mom at some point, who will be doing it?

Also, does your wife receive tips? Is this money be accounted for? I know it is hard to build a budget around a fluctuating income, but tips shouldn't be considered "extra" money because it seems to just seep away.

pachnik

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Re: MY first post! Getting started on MMM
« Reply #9 on: January 18, 2015, 12:56:02 PM »
Welcome to the forum!

You will not regret getting your financial house in order.  Plus, you are young still and don't have decades of spendyness (not sure if this is really a word :) ) to overcome.  I found this site when I was 48 years old and have been hanging out here for about a year and a half and my finances have never been better.

Like the other posters, I would recommend tracking your spending.  You don't need anything fancy.  I just do it in an Excel spreadsheet with columns "Food" "Eating Out" - you get the picture.  See where your money is actually going.  I would say this is your first step.   

Good luck and come back often!   

former player

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Re: MY first post! Getting started on MMM
« Reply #10 on: January 18, 2015, 01:05:33 PM »
Hang on a minute.  Your wife thinks that the pair of you could live in Thailand on 500 a month but she is currently sending her mother 1000 a month?  And the house has already been built, so none of that 1000 a month is going into build costs?

Given the circumstances you have outlined, your wife's mother is doing better than you are: she has her own new-build house and an unearned income twice what she needs to live on.  That's a pretty nice "culture" she's got going there.

BeastofaMan

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Re: MY first post! Getting started on MMM
« Reply #11 on: January 18, 2015, 01:08:25 PM »
One thing I am wondering about is can helping out her mom and paying for housing upgrades help you out in the long run? Because you want to retire to Thailand one day...Does your wife have any other siblings (specifically male)? does her mother have a will?  It might be easier to look at if you are looking at it as a future investment. If there is a need for someone to look after her mom at some point, who will be doing it?

Also, does your wife receive tips? Is this money be accounted for? I know it is hard to build a budget around a fluctuating income, but tips shouldn't be considered "extra" money because it seems to just seep away.

My wife does have a sister and brother, but their culture is different from ours (in the US). I'm 100% sure we could potentially go live there in the future, or my wife says we can build a house on the property, so in a way it could be considered an investment. It very well may be coming back to us.

I'm not sure who would take care of her mom as she gets older. That is not something I'd thought about, but if it did come up it's something my wife would definitely consider, and since I'm pretty free flowing with my life I probably wouldn't resist if it was feasible.

She works almost completely off of tips, but she basically uses that money for whatever. I've tried to combine it but it's just easier for me to pay for things since I can more or less afford it. I forgot to mention that she is paying off a larger loan we have (about 1800 left), but otherwise most of her money goes for her own shopping and for food, and the rest to her mom.

Like the other posters, I would recommend tracking your spending.  You don't need anything fancy.  I just do it in an Excel spreadsheet with columns "Food" "Eating Out" - you get the picture.  See where your money is actually going.  I would say this is your first step.   

This is something I've been meaning to do for a long time. I've created a spreadsheet and I think I'll start now. Thanks for the words of encouragement!

Hang on a minute.  Your wife thinks that the pair of you could live in Thailand on 500 a month but she is currently sending her mother 1000 a month?  And the house has already been built, so none of that 1000 a month is going into build costs?

Given the circumstances you have outlined, your wife's mother is doing better than you are: she has her own new-build house and an unearned income twice what she needs to live on.  That's a pretty nice "culture" she's got going there.

Haha, I suppose that's true. But again, helping your parents out financially is a big deal in their culture. That's part of the reason I started giving money to help my parents as well (because I liked the concept). Her mom got a loan on the house and it's still under construction and she actually built a room for me and my wife for when we go back to visit as well.

swick

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Re: MY first post! Getting started on MMM
« Reply #12 on: January 18, 2015, 02:07:01 PM »
BeastofaMan,

I totally get it is a different culture. Just some things to consider - former player  has some good points. The reason I was asking is because I have a friend who sent money back to her family for years and years (at the expense of her financial security)  and when her mom died all of her property went to a male heir, despite an understanding that she was essentially helping out her mom with what would eventually be her retirement house.

If you are going to be spending THAT MUCH a month (which is WELL beyond what is necessary for living expenses over there) you should have your wife's name on title - or however it happens to work. You aren't just helping her out, you are putting your financial security at risk, especially as you don't make that much money.

In addition to that - what happens to your wife if you are injured or killed or you have an ongoing medical diagnosis? (put aside the option of going back to Thailand for a second) Are all the bills in your name, can she authorize account changes? Does she have access to your bank account where the emergency fund is? Does she have any credit history here?

Not only does she not make enough to support herself if something were to happen, she is getting into the habit of being able to basically spend whatever she makes. (Unless of course she knows all this and has her own savings and emergency fund etc put aside - in which case nothing I say applies)

Don't mean to be hard on you, just some things to consider while you get everything sorted out :)

former player

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Re: MY first post! Getting started on MMM
« Reply #13 on: January 18, 2015, 02:19:56 PM »
My wife does have a sister and brother, but their culture is different from ours (in the US). I'm 100% sure we could potentially go live there in the future, or my wife says we can build a house on the property, so in a way it could be considered an investment. It very well may be coming back to us.

It's not an investment unless it's in your name.  Can you get a part of the property put in your and your wife's names?

Your wife's sister and brother, and your wife's sister's children and your wife's brother's children, may have different ideas about what is due to their "wealthy" American sister and her husband.

In other words, you are taking a big risk if you are planning your financial future around someone else giving you something at some point in the future, whatever you think that culture currently is.

Cheddar Stacker

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Re: MY first post! Getting started on MMM
« Reply #14 on: January 18, 2015, 04:10:06 PM »
$6/meal at home is better than eating out, but it's very high. Even at 2x/day it's $12x30=$420 per person. And that's only 2 meals and 1 person. I'm not one of them, but there are plenty of couples around here who live on $200-300/month in grocery money with no eating out. You are likely spending $1k on groceries plus eating out on top of that. Go read MMM's "how to kill your $1,000 grocery budget."

BeastofaMan

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Re: MY first post! Getting started on MMM
« Reply #15 on: January 18, 2015, 06:17:45 PM »
If you are going to be spending THAT MUCH a month (which is WELL beyond what is necessary for living expenses over there) you should have your wife's name on title - or however it happens to work. You aren't just helping her out, you are putting your financial security at risk, especially as you don't make that much money.

In addition to that - what happens to your wife if you are injured or killed or you have an ongoing medical diagnosis? (put aside the option of going back to Thailand for a second) Are all the bills in your name, can she authorize account changes? Does she have access to your bank account where the emergency fund is? Does she have any credit history here?

Not only does she not make enough to support herself if something were to happen, she is getting into the habit of being able to basically spend whatever she makes. (Unless of course she knows all this and has her own savings and emergency fund etc put aside - in which case nothing I say applies)

As far as a contingency plan for her - my company does have a pretty nice contingency plan in the event of an employee death, plus I have life insurance. She'll get a nice chunk of change if I die. You do have some great points regarding the house and I'll definitely bring this up with my wife. I can never have it in my name (property in Thailand can only be owned by a Thai citizen), but I agree that we should have her name on the property. I think she and her mother may be open to the idea.

I want to thank everyone for all the feedback, yall have given me some great things to think about and brought up aspects of my finances that I simply had not thought about. I was raised in a financially stable environment, but was never taught about finances and spending. It's no excuse, but it's gone on too long. I'm feeling very motivated about all this right now and this seems like a great time to start.