The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: wrangler05 on April 06, 2015, 02:12:18 PM
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Hello Everyone,
I have been lurking around for a week and registered today and this is my first post. I am ready for any face punches as I deserver them the most. Here is a brief description of my back ground:
I am in my early 30s married, DW is also in her early 30s. We have no kids, but planning for kids in an year or two. I am the crazy one in my family, I have zero savings and live pay check to pay check till now. DW has been saving in her 401k when she joined full time 3 years ago. Here is a breakdown of our finances and expenses. please let me know if you need more information, i will edit the post and append the required info:
Please note that we share(divide equally) the combined bills and pay our individual bills separately and also have independent savings account. I never touch her savings.
Income: (post tax)
Me : $4000 ( no 401K, I am a contract employee, no benefits)
DW: $4350 (after tax and 401k)
Combined Bills:
Mortage: $1820 ($240k @ 3.75% with a $200 PMI)
gas heating/hot water: $200
Electric: $100
Water: $45
Internet: $45
car gas : $200 ( we have a 30 mile commute dialy)
total: $2410 ( $1205 each)
my bills:
car payment: $500 ( 2013 Scion FR-S, I am trying to get rid of it, but I owe $22k and KBB value is $18k)
car insurance: $100
credit cards: $300 ( $6000 debt, all cards maxed out, I only pay minimum payments)
parents: $350 ( I support my mom financially by transferring her this amount every month)
phone: $65 ( I need to have a unlimited call, data as I work for production support and Employer or Client doesnt pay for this)
hospital bills: $100
loan from Cousin: $6300 ( I borrowed $8300 @0% interest from my Cousin and I am giving $1000 every month. This money was borrowed to put down payment for our house that we bought in dec, 2014)
total : $2415
DW bills:
car payment: $300 ( 2013 VW Jetta, she will pay off her car in another 4 months)
car insurance: $100
credit cards: $100 ($5k total credit, $2k debt, she will pay it off in another 4 months)
parents: $400 (same as me)
phone : $65 (she is project lead, and also needs unlimited talk, data with good network coverage)
total: $965
monthly spending: (divide equally again)
groceries: $300
restuarant/take outs : $150
clothes/dresses: $50 ( DW buys $50 dresses/tops etc., I never buy clothes unless my work wear is torn/damaged or there is a special occassion)
total: $500
my Salary - (combined bills/2 + my bills + monthly spending/2) = $4000 - ($1205 + $2415 + 250) = $130
DW saves her what is left in her salary in her savings account, honestly I dont know what her savings worth, but know that she saves it in her banks savings account and maxes out her 401k.
We both have an agreement that we should contribute equally to combined expenses/bills. So if we need to pay extra $1000 to our mortgage every month, I need to contribute $500 also.
I need to wake up and sell the car right away, But do not have the money to pay it off a little and sell it. So, I am stuck with monthly payments. I also donot want to borrow money from anyone as I have substantial debt.
I am planning to pick up a weekend job, as I work 5 days a week and mostly free on weekends.
I am 31 now, I have no savings so far. I live pay check to pay check and I am ashamed to say this. I want to start saving and stop living an irresponsible, that i lived so far.
I really appreciate all your suggestions.
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Do you have to support your parents financially? Honestly you can't afford it. I used to do this for my mom, but I had to cut her off. Magically she was able to make it work without my help.
Have you heard of Republic Wireless? You can get a smart phone monthly plan as low as $5.
Are your jobs stable? Can you move closer? A 30 mile commute is a lot.
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What's the sq footage of your house? LCOL or HCOL area? Your utilities seem high, and you seem to have bought more house than you can afford.
Ditch the parents and pay off your credit cards.
How did you get the credit cards maxxed out? Buying stuff? Eating out? Your incomes together are pretty high, so I don't understand where the rest of your money is going.
Also, list your assets.
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Do you have to support your parents financially? Honestly you can't afford it. I used to do this for my mom, but I had to cut her off. Magically she was able to make it work without my help.
Have you heard of Republic Wireless? You can get a smart phone monthly plan as low as $5.
Are your jobs stable? Can you move closer? A 30 mile commute is a lot.
Thank you, i will search for republic wireless and will try to ditch my current cellular plan.
My Wife has a stable job, but I am a contracting IT guy. We thought of moving closer, but cost of living at where we work is more than our house payment + gas for commute.
Our parents need us at this time, They did a lot for us and its time for us to repay them.
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Car insurance of $100 a month seems high but if we exclude the car payment and credit card as things that we're obviously going to fix then you're looking at predictable monthly expenses of around $1300 of which $700 is building equity in the house. That's not so bad. That's your base level of unavoidable spending and given you have an income of $4000 post tax you're in great shape.
$6000 on the credit card is an emergency obviously but you can pay that off in around 2.5 months, 3 at most. I wouldn't worry about an emergency fund before paying off the credit cards, if an emergency strikes the worst case scenario is you just put the debt back onto the credit cards. I wouldn't delay digging yourself out of the hole for fear that you might get thrown back in, you need to pay that off asaply. You also need to change whatever habits got you $6000 in debt.
Cousin debt, see what you can do to buy yourself three months to pay off the credit cards first. Depends on your relationship with your cousin and how much faith he has in you. You still should be able to pay more than the minimums on the card, even paying $1000 to your cousin, but he's not charging 20% interest and the cards probably are.
Mother, same as cousin, if you can delay, defer or reduce the amounts in the short term without endangering her then do so because again, she isn't charging interest. Every $ you send her costs you more than a $ because you are literally borrowing money on expensive terms to send to her. Put it in those terms in your head and reevaluate the decision. It may be unchanged, if it is then so be it, she's your mother. At the very least talk to her about it though because you can't afford to give money away right now but you could reasonably afford to do it soon.
Car payment, downsize or pay it off asaply. You owe 22k and you pay 6k a year? How many years do you have left on it, what is the % interest on that debt?
In your position I would put 2k a month at the credit card debts, 1.2k at combined expenses and the remaining $800 between car payment, insurance, phone and hospital (assuming my mother wasn't literally starving). If she was then I'd put 1.6k to credit card debts. 3 months and those are gone, it's the start of April now so we're talking start of July to be credit card free, end of July if you're feeding your mother. You've saved yourself paying the interest on those and generated $6k of emergency credit to call upon if you had to. Well done.
Next emergency is the car. At 2k a month there it'll be the start of September before it's worth what you owe on it. That's really not so long to go. By Halloween you'll have enough money lying around to trade the car for a cheaper one which you'll own outright, no payments to make. Now you'll have no credit card debt, no car payment and $6k emergency credit to call upon. We've been paying $100 a month on the hospital bill for 6 months at this point too, I'm assuming that at some point that will be paid off but we're still good there.
At this point we've cut $800 from your monthly bills and an incredible $28000 from your debts and it's not even Thanksgiving yet. You're still earning $4000 but your expenses are around $1400 (before mother). You're now looking at being able to pay back your cousin around 2 to 2.5k a month rather than the intended 1k. We're aggressive about this debt because he's been a very good sport about you not paying him back since April so we're gonna do 2.5k a month. Your original schedule was going to take 6.3 months from today so you were going to finish paying him off in November 2015. Even though we delayed starting payments until the start of November we're still going to pay him off in just 2.5 months so you'll be out of debt to your cousin just two months late, even though you delayed it by six months.
That gets you to January of 2016. Things look somewhat different now. You're still building equity in your home, half of your monthly expenses are on the mortgage which are savings of a sort, and you have an overall savings rate of around 60%. You're maxing retirement accounts, saving money, investing in yourself and generally being awesome. Now we look at this to project a date.
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
Around 12 years. Well done.
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What's the sq footage of your house? LCOL or HCOL area? Your utilities seem high, and you seem to have bought more house than you can afford.
Ditch the parents and pay off your credit cards.
How did you get the credit cards maxxed out? Buying stuff? Eating out? Your incomes together are pretty high, so I don't understand where the rest of your money is going.
Also, list your assets.
The house is 1100 sq ft cape cod. I am a first time home buyer and I am trying to learn how to minimize my utilities.
We love supporting our parents. I am ready to skip meals to save money if needed, but can not stop sending money to parents.
I got the credit cards maxed out when we got married on 2013.
We have separate accounts, I am left with only $130 per month after my expenses/shared bills etc.,
I do not have any other account other than my checking account. I do not have 401k, no other accounts.
DW has 15k in her 401k. and approx $20k in her savings account.
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If you and your wife are in it together financially the only rational thing to do with that 20k is paying off debt with it immediately. Even if you're financially separate you ought to try and borrow it from her because she charges lower interest than a credit card company and the being able to borrow a dollar on the credit card is as good as having a dollar in an emergency.
Also if your real terms monthly surplus is $130 after your cousin and $1130 before repaying your cousin then you understand that you are giving 90% of your income to him on that debt, right? $1000 on a $4000 income doesn't sound like much but you need to deduct fixed expenses before you work out what your real monthly surplus is.
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Where are you at geographically?
You might be able to cut that gas bill down quite a bit as well as it gets warmer out.
Sell the car at a loss, how far from work do you live??
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If you and your wife are in it together financially the only rational thing to do with that 20k is paying off debt with it immediately. Even if you're financially separate you ought to try and borrow it from her because she charges lower interest than a credit card company and the being able to borrow a dollar on the credit card is as good as having a dollar in an emergency.
Also if your real terms monthly surplus is $130 after your cousin and $1130 before repaying your cousin then you understand that you are giving 90% of your income to him on that debt, right? $1000 on a $4000 income doesn't sound like much but you need to deduct fixed expenses before you work out what your real monthly surplus is.
Thank you, I am thinking of borrowing money from her, but she is not comfortable basing on how careless I am till now. So, I want to save a little or clear off the credit card debt and show her that I am changed now and then borrow money from her.
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Where are you at geographically?
You might be able to cut that gas bill down quite a bit as well as it gets warmer out.
Sell the car at a loss, how far from work do you live??
We live in CT. yes, we can cut down from $200 to $40 when it gets warmer as we will stop using heat and only use gas for hot water.
I have thought of selling the car at loss, but I do not have $4k to pay the difference.
We both have around 30 miles commute to work daily. The rents or house payments near to our work > our current mortgage + gas required for commute. Also, we live in a small town with a peacefull neighborhood.
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The good news is that I don't find borrowing money for a house, to be bad debt (nice cousin btw). If you are paying off a $1,000 you'll be done in 6 months at which point you can start worrying about saving. Right now your entire focus you be getting out of expensive debt.. Credit card is just crazy expensive debt and you should never ever have it except for the most dire of emergencies.
If you are 31 that makes probably makes you parents 55-65 range. IMO that is way too young an age for a parent to be receiving financial support from their kids.. I don't think anyone that contribute to their parents support qualifies for a completely irresponsible life so don't beat yourself up too much. However,you can't afford to contribute to your mom's financial support until you get out of credit card debt. Maybe after you finish paying off your credit card debt and your cousin then you can start paying again. But you are living paycheck to paycheck, and as independent contractor you are hosed if you get sick, hit bad stretch of find work etc. So have a talk with mom, and any other siblings you have about how to deal with this in the short term. Where does your mom live?
If your spending is in fact accurate than you don't have a lot of fat to cut. Yes it was mistake to buy a new car, (I didn't buy a new car until I could pay cash), how ever it isn't a crazy expensive car, and there doesn't seem to be an short term options available. AFTER you pay your cousin off it maybe worth asking if he would be interested in offer you a debt consolation at reasonable interest rate 6-8%. One of the problems us saver have is find reasonable interest rates, so I am happy to loan money to family member, good friends with a good track record.
As far as kids go, you can't afford them. Now maybe your wife can, but if you guys have kids she's going to need to A. continue to work, and B. pay for them. I'm not married but this doesn't seem like particular good plan for martial bliss.
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Car insurance of $100 a month seems high but if we exclude the car payment and credit card as things that we're obviously going to fix then you're looking at predictable monthly expenses of around $1300 of which $700 is building equity in the house. That's not so bad. That's your base level of unavoidable spending and given you have an income of $4000 post tax you're in great shape.
$6000 on the credit card is an emergency obviously but you can pay that off in around 2.5 months, 3 at most. I wouldn't worry about an emergency fund before paying off the credit cards, if an emergency strikes the worst case scenario is you just put the debt back onto the credit cards. I wouldn't delay digging yourself out of the hole for fear that you might get thrown back in, you need to pay that off asaply. You also need to change whatever habits got you $6000 in debt.
Cousin debt, see what you can do to buy yourself three months to pay off the credit cards first. Depends on your relationship with your cousin and how much faith he has in you. You still should be able to pay more than the minimums on the card, even paying $1000 to your cousin, but he's not charging 20% interest and the cards probably are.
Mother, same as cousin, if you can delay, defer or reduce the amounts in the short term without endangering her then do so because again, she isn't charging interest. Every $ you send her costs you more than a $ because you are literally borrowing money on expensive terms to send to her. Put it in those terms in your head and reevaluate the decision. It may be unchanged, if it is then so be it, she's your mother. At the very least talk to her about it though because you can't afford to give money away right now but you could reasonably afford to do it soon.
Car payment, downsize or pay it off asaply. You owe 22k and you pay 6k a year? How many years do you have left on it, what is the % interest on that debt?
In your position I would put 2k a month at the credit card debts, 1.2k at combined expenses and the remaining $800 between car payment, insurance, phone and hospital (assuming my mother wasn't literally starving). If she was then I'd put 1.6k to credit card debts. 3 months and those are gone, it's the start of April now so we're talking start of July to be credit card free, end of July if you're feeding your mother. You've saved yourself paying the interest on those and generated $6k of emergency credit to call upon if you had to. Well done.
Next emergency is the car. At 2k a month there it'll be the start of September before it's worth what you owe on it. That's really not so long to go. By Halloween you'll have enough money lying around to trade the car for a cheaper one which you'll own outright, no payments to make. Now you'll have no credit card debt, no car payment and $6k emergency credit to call upon. We've been paying $100 a month on the hospital bill for 6 months at this point too, I'm assuming that at some point that will be paid off but we're still good there.
At this point we've cut $800 from your monthly bills and an incredible $28000 from your debts and it's not even Thanksgiving yet. You're still earning $4000 but your expenses are around $1400 (before mother). You're now looking at being able to pay back your cousin around 2 to 2.5k a month rather than the intended 1k. We're aggressive about this debt because he's been a very good sport about you not paying him back since April so we're gonna do 2.5k a month. Your original schedule was going to take 6.3 months from today so you were going to finish paying him off in November 2015. Even though we delayed starting payments until the start of November we're still going to pay him off in just 2.5 months so you'll be out of debt to your cousin just two months late, even though you delayed it by six months.
That gets you to January of 2016. Things look somewhat different now. You're still building equity in your home, half of your monthly expenses are on the mortgage which are savings of a sort, and you have an overall savings rate of around 60%. You're maxing retirement accounts, saving money, investing in yourself and generally being awesome. Now we look at this to project a date.
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
Around 12 years. Well done.
Spot on.
I could not think of more appropriate solution. In fact, I just called my cousin and left a voicemail to him. I will try to work on things as you suggested.
car loan details:
original loan amount: 29k
amount owed today: 22k
interest : 6.99
72 months (24 months paid so far)
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The good news is that I don't find borrowing money for a house, to be bad debt (nice cousin btw). If you are paying off a $1,000 you'll be done in 6 months at which point you can start worrying about saving. Right now your entire focus you be getting out of expensive debt.. Credit card is just crazy expensive debt and you should never ever have it except for the most dire of emergencies.
If you are 31 that makes probably makes you parents 55-65 range. IMO that is way too young an age for a parent to be receiving financial support from their kids.. I don't think anyone that contribute to their parents support qualifies for a completely irresponsible life so don't beat yourself up too much. However,you can't afford to contribute to your mom's financial support until you get out of credit card debt. Maybe after you finish paying off your credit card debt and your cousin then you can start paying again. But you are living paycheck to paycheck, and as independent contractor you are hosed if you get sick, hit bad stretch of find work etc. So have a talk with mom, and any other siblings you have about how to deal with this in the short term. Where does your mom live?
If your spending is in fact accurate than you don't have a lot of fat to cut. Yes it was mistake to buy a new car, (I didn't buy a new car until I could pay cash), how ever it isn't a crazy expensive car, and there doesn't seem to be an short term options available. AFTER you pay your cousin off it maybe worth asking if he would be interested in offer you a debt consolation at reasonable interest rate 6-8%. One of the problems us saver have is find reasonable interest rates, so I am happy to loan money to family member, good friends with a good track record.
As far as kids go, you can't afford them. Now maybe your wife can, but if you guys have kids she's going to need to A. continue to work, and B. pay for them. I'm not married but this doesn't seem like particular good plan for martial bliss.
You are right about the kids. We are still debating, DW wants kids, I want to delay for atleast 2 years.
My parents are separated and My mom lives in INDIA. She depends on what I send her per month. I will try to cut down other things rather than stop sending her money.
I will try to clear off the credit card debit and then clear off cousin's debt. You gave me a very good idea, i will first clear my cousin's debt and then will borrow money from him for interest.
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I'm confused - you borrowed money from the cousin to buy a house that you and your wife live in, correct? If so, then why isn't your wife also contributing to the repayment of that debt - after all, that is joint debt incurred to buy the marital home.
I would have her contribute to that debt as well and keep paying it off- you should not take advantage of your cousin by asking them to delay payment.
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I'm confused - you borrowed money from the cousin to buy a house that you and your wife live in, correct? If so, then why isn't your wife also contributing to the repayment of that debt - after all, that is joint debt incurred to buy the marital home.
I would have her contribute to that debt as well and keep paying it off- you should not take advantage of your cousin by asking them to delay payment.
I assume that she put down her share of the down-payment via savings she had while OP borrowed his from his cousin.
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It would be better if you and your wife could work together as a married couple. Recommend combing yourselves financially and working towards your goals as a family instead of separately.
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I'm confused - you borrowed money from the cousin to buy a house that you and your wife live in, correct? If so, then why isn't your wife also contributing to the repayment of that debt - after all, that is joint debt incurred to buy the marital home.
I would have her contribute to that debt as well and keep paying it off- you should not take advantage of your cousin by asking them to delay payment.
I assume that she put down her share of the down-payment via savings she had while OP borrowed his from his cousin.
Yes, you are right. she put half the money down.
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You are right about the kids. We are still debating, DW wants kids, I want to delay for atleast 2 years.
My parents are separated and My mom lives in INDIA. She depends on what I send her per month. I will try to cut down other things rather than stop sending her money.
I will try to clear off the credit card debit and then clear off cousin's debt. You gave me a very good idea, i will first clear my cousin's debt and then will borrow money from him for interest.
Based on your strong conviction, I was guessing either the Philippines or India. Just FYI, the assumption I (and suspect others) were making was that mom was living in the US and eligible for Social Security and/or had employment prospect. Given that's not true and the $350/month goes a lot further in India than it would in the US, I can see why cutting it is not an option. I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
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It really jumps out at me that you and your wife are not a team. She won't LOAN you money??? Even though that would keep way more money between the two of you as a couple? She does not trust you. Maybe she loves you, but I would personally be alarmed that she wants to combine DNA (aka, have a baby) but not even start to combine finances. (Just as an example of teamwork--when my sister married her husband, he quit his job to take care of her kids from previous marriages and their kid together and she paid off all his credit cards [after cutting them up, of course--he is cash-only now] and bought him a car.)
I'm not saying this to knock your wife, just pointing out that it sounds like the two of you have some serious work to do to become a real partnership where you are planning for the future together, not this I-have-my-money-you-do-your-own-thing status. Please don't have a baby until you've earned her trust and she has granted it.
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Oh, and welcome :-).
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frugalparagon: That was harsh.
- You are only getting one side of the story (the OPs)
- You have no idea of other pertinent information such as culture/tradition which may have a strong bearing on the nature of the relationship between the OP and spouse.
That said, I'd try to follow dsmexpat's excellent suggestion with just one change. Pay back the cousin before the car even though it is not the best move financially. Wishing you good luck.
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It would be better if you and your wife could work together as a married couple. Recommend combing yourselves financially and working towards your goals as a family instead of separately.
+1
Crazy situation that would be even crazier if you have children together... yet not only don't have combined finances, but don't know what the other person has as far as money/assets? Yikes.
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I'm curious to see what you end up doing.
Best of luck getting on top of things.
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My advice won't be too far from what's already been said:
You and your wife are earning a good salary between you -- more than my husband and I earn, in fact, though we have much more to show for it -- but, as others have said, you need to begin working together as a team, and it's imperative that you do this now before you have children. Children will make everything more complicated. I agree with you that waiting two years to begin a family is a good idea; with your salary, you should be able to improve this situation in that time, and then you'll be ready.
One thing that jumped out at me is that you're considering borrowing MORE from your cousin (for interest?). You can never borrow your way out of debt, so forget that plan. Don't borrow from anyone for any reason.
Your transportation costs are crazy high. Between just car payments and insurance, you're spending $1 out of every $8 you earn on your cars -- that's an incredibly high percentage for transportation, and it doesn't include gas or maintenance. Do whatever you can to reduce this. Do either of you have the option of working from home? Could you share a car? Can you sell a car and get something that requires no monthly payment. Note, I didn't say, "Would it be convenient to do these things?" I said, is it possible? This one thing can make a giant difference in your budget.
Your utilities are pretty high for a small house. This makes me think you have inefficient windows, doors, whatever. Start reading up on home maintenance, and check around your house to see if you can increase your efficiency.
For two people $300 in groceries + $150 in take out is pretty high. Search out less expensive recipes and learn to cook them.
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You've gotten good advice so far.
I disagree on the emotion around the wife not "sharing" her income. The dude maxed out his credit cards, borrowed money from a cousin and bought a new car. Why should his wife have to pony up when she was responsible and saved/sacrificed before spending all of her money.
How many here would pay off someone else's credit card debt?
We drive cars we paid cash for, we pack our lunches, we ride bikes, we don't go out to eat or to bars etc etc....why should we pay for folks who didn't do all of those things?
Pay off the cousin, pay off the credit cards and THEN start saving. You have a good income. You are just going to have to dig out of the hole that you dug.
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It really jumps out at me that you and your wife are not a team. She won't LOAN you money??? Even though that would keep way more money between the two of you as a couple? She does not trust you. Maybe she loves you, but I would personally be alarmed that she wants to combine DNA (aka, have a baby) but not even start to combine finances. (Just as an example of teamwork--when my sister married her husband, he quit his job to take care of her kids from previous marriages and their kid together and she paid off all his credit cards [after cutting them up, of course--he is cash-only now] and bought him a car.)
I'm not saying this to knock your wife, just pointing out that it sounds like the two of you have some serious work to do to become a real partnership where you are planning for the future together, not this I-have-my-money-you-do-your-own-thing status. Please don't have a baby until you've earned her trust and she has granted it.
Thank you for taking time to respond to my post. I should have been more clear in my previous post. It is my decision not to borrow money from her till I change my lifestyle. She packs her lunch, while i eat out everyday. She bought a preowned car, (though it is 2013) for almost 5k less than KBB value, while I bought a flashy new car which can accomodate 2 grown adults (scion fr-s) and doesnt even work in New England winters due to its RWD.
She shares all the information about her 401k, savings accounts and motivates me to save atleast half of what she is saving. I used to nod and forget about it. That is why I do not have any idea about her savings. She provided for both of us when we were dating back in 2011 for complete one year, when i was unemployed. So, I want to change my lifestyle, clear off my credit cards, cousin debt and sell the car this year and then discuss about our finances together.
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My advice won't be too far from what's already been said:
You and your wife are earning a good salary between you -- more than my husband and I earn, in fact, though we have much more to show for it -- but, as others have said, you need to begin working together as a team, and it's imperative that you do this now before you have children. Children will make everything more complicated. I agree with you that waiting two years to begin a family is a good idea; with your salary, you should be able to improve this situation in that time, and then you'll be ready.
One thing that jumped out at me is that you're considering borrowing MORE from your cousin (for interest?). You can never borrow your way out of debt, so forget that plan. Don't borrow from anyone for any reason.
Your transportation costs are crazy high. Between just car payments and insurance, you're spending $1 out of every $8 you earn on your cars -- that's an incredibly high percentage for transportation, and it doesn't include gas or maintenance. Do whatever you can to reduce this. Do either of you have the option of working from home? Could you share a car? Can you sell a car and get something that requires no monthly payment. Note, I didn't say, "Would it be convenient to do these things?" I said, is it possible? This one thing can make a giant difference in your budget.
Your utilities are pretty high for a small house. This makes me think you have inefficient windows, doors, whatever. Start reading up on home maintenance, and check around your house to see if you can increase your efficiency.
For two people $300 in groceries + $150 in take out is pretty high. Search out less expensive recipes and learn to cook them.
Thank you Mrs Pete. I want to pay off my cousins debt first, then want to borrow money from him for more interest and pay off credit cards and pay a little towards my car and sell it. Then, I willl start paying off my cousin. I can pay off my credit cards and car without borrowing money from him, but that way I will be paying more interest as I have high interest credit cards.
I concur with your suggestion. We dont need two cars. I will try and sell my car as soon as possible. Also, the take out expense is high because I eat out almost everyday for lunch. I will try and cut that expense.
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You've gotten good advice so far.
I disagree on the emotion around the wife not "sharing" her income. The dude maxed out his credit cards, borrowed money from a cousin and bought a new car. Why should his wife have to pony up when she was responsible and saved/sacrificed before spending all of her money.
How many here would pay off someone else's credit card debt?
We drive cars we paid cash for, we pack our lunches, we ride bikes, we don't go out to eat or to bars etc etc....why should we pay for folks who didn't do all of those things?
Pay off the cousin, pay off the credit cards and THEN start saving. You have a good income. You are just going to have to dig out of the hole that you dug.
Spot on Sir. I needed this slap on my face. I totally agree with what you say and trying to change my lifestyle.
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Also, the take out expense is high because I eat out almost everyday for lunch. I will try and cut that expense.
No "trying" on that one. That ones an easy no brainer and adds up majorly financially. I go out to eat maybe once every few months for lunch and it's due to a special occasion, boss is visiting, I'm working off-site, etc.
Pack whatever, cook the night before, bring leftovers. Peanut butter and Jelly's, ham sandwiches, instant pasta's where you add water and microwave, anything is much cheaper! We cook all our meals for the week on Sunday's and Wednesdays. I eat 6x per day, and 4 of those are pre-cooked meals, so we (well, my gf) cook a lot all at one time.
Also, maybe show your wife this thread? I think there is a lot of good info here for you guys to discuss and her to see as well.
Regarding your mom, especially beings she is in India, I find that honorable how much you're willing to sacrifice to make sure she is taken care of. I think that situation is more more appreciable than what typical Americans think of in that situation - supporting a parent who only needs support because they overspend.
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It really jumps out at me that you and your wife are not a team. She won't LOAN you money??? Even though that would keep way more money between the two of you as a couple? She does not trust you. Maybe she loves you, but I would personally be alarmed that she wants to combine DNA (aka, have a baby) but not even start to combine finances. (Just as an example of teamwork--when my sister married her husband, he quit his job to take care of her kids from previous marriages and their kid together and she paid off all his credit cards [after cutting them up, of course--he is cash-only now] and bought him a car.)
I'm not saying this to knock your wife, just pointing out that it sounds like the two of you have some serious work to do to become a real partnership where you are planning for the future together, not this I-have-my-money-you-do-your-own-thing status. Please don't have a baby until you've earned her trust and she has granted it.
Thank you for taking time to respond to my post. I should have been more clear in my previous post. It is my decision not to borrow money from her till I change my lifestyle. She packs her lunch, while i eat out everyday. She bought a preowned car, (though it is 2013) for almost 5k less than KBB value, while I bought a flashy new car which can accomodate 2 grown adults (scion fr-s) and doesnt even work in New England winters due to its RWD.
She shares all the information about her 401k, savings accounts and motivates me to save atleast half of what she is saving. I used to nod and forget about it. That is why I do not have any idea about her savings. She provided for both of us when we were dating back in 2011 for complete one year, when i was unemployed. So, I want to change my lifestyle, clear off my credit cards, cousin debt and sell the car this year and then discuss about our finances together.
Glad that I misunderstood and that there is not as much distance as I thought! Sounds like your wife has been trying to show the way without nagging. Funny how sometimes we are more willing to listen to outsiders (eg, MMM) than our own spouses :-).
I agree that there is no "try" on lunches. Just don't even make it an option. Never buy lunch at work again. Starting tomorrow. If you have to, run to the grocery store tonight/before work/whenever and get some canned soup, crackers, string cheese, whatever you like. Once you get in the habit, you can optimize even more by bringing home-cooked food/leftovers, but seriously, just work something else out. I work in the afternoons and often have to my leave my house in the morning with three lunches (one for me, two for the kids), three changes of clothes (my work clothes--since I'm wearing gym clothes at first--and their in-case-they-pee clothes), my own coffee for work, and my morning and afternoon snacks (damn, I hate being hungry). If I can pull off that feat of engineering, you can pack a lunch :-).
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[quote author=clifp link=topic=34935.msg617395#msg617395
I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
[/quote]
I was a bit surprised to read the first few recommendations was to cut the parents off. I would understand it if the backstory was the parents were wastrels, grifters, abusers, etc, but if not, I'd think many other things would be cut first before cutting off parents.
As much as I want to FIRE in 12 years--which is possible based on my personal spend rate, I'm planning to FIRE in 16-17 years as I've factored in parental financial support.
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Thank you Mrs Pete. I want to pay off my cousins debt first, then want to borrow money from him for more interest and pay off credit cards and pay a little towards my car and sell it. Then, I willl start paying off my cousin. I can pay off my credit cards and car without borrowing money from him, but that way I will be paying more interest as I have high interest credit cards.
No, no, no -- it makes no sense to pay off your cousin, then borrow from him again. I'll repeat what I said before: You cannot borrow you way out of debt. Pay him off, and do not borrow again. No "trying" on that one. That ones an easy no brainer and adds up majorly financially. I go out to eat maybe once every few months for lunch and it's due to a special occasion, boss is visiting, I'm working off-site, etc.
I hate packing lunch every night, but I don't have the luxury of buying lunch at work ... so, to avoid eating cheese crackers, I often pack 3-4 lunches on Sunday night and store them in the refrigerator at work. Thus, I have lunch ready for the whole week.
I also keep canned ravioli and soup in my drawer, and when I make homemade soup or casseroles, I sometimes pack up leftovers in individual-sized portions and freeze them /leave them at work in the freezer. This means I'm never caught with nothing.
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I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
I was a bit surprised to read the first few recommendations was to cut the parents off. I would understand it if the backstory was the parents were wastrels, grifters, abusers, etc, but if not, I'd think many other things would be cut first before cutting off parents.
As much as I want to FIRE in 12 years--which is possible based on my personal spend rate, I'm planning to FIRE in 16-17 years as I've factored in parental financial support.
He has less than zero dollars to support his parents with. Every dollar he sends them has an opportunity cost of paying down debt. It can be justifiable to borrow money and pay credit card interest on it for your parents but if you can reduce or delay it at all then it would help a lot.
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Does your mom know what a tight financial bind you are in? What would she do if something (god forbid) happened to you? How would she support herself? I get that there are cultural differences and it is admirable that you want to support her but you don't have the money (especially if you insist on eating out for lunch every day).
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I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
I was a bit surprised to read the first few recommendations was to cut the parents off. I would understand it if the backstory was the parents were wastrels, grifters, abusers, etc, but if not, I'd think many other things would be cut first before cutting off parents.
As much as I want to FIRE in 12 years--which is possible based on my personal spend rate, I'm planning to FIRE in 16-17 years as I've factored in parental financial support.
He has less than zero dollars to support his parents with. Every dollar he sends them has an opportunity cost of paying down debt. It can be justifiable to borrow money and pay credit card interest on it for your parents but if you can reduce or delay it at all then it would help a lot.
What if his Mom and lives, eats, and breathes on that $350 a month?
Fuck off with the cutting off his Mom stuff. She popped the guy out and raised him, $350 is pennies compared to the act of raising a human being. I think bigger gains can come from getting rid of his over priced car and cutting his frivolous spending.
Clearly, helping your parents is not something that clicks for white America. Things operate a little different in India, so you can't expect this guy to really come around to full circle American lifestyle.
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I concur with your suggestion. We dont need two cars. I will try and sell my car as soon as possible. Also, the take out expense is high because I eat out almost everyday for lunch. I will try and cut that expense.
Your wife is awesome, you have a living example right with you, now it is time for you to take action. I really don't like the phrasing of your last sentence, "I will try and cut that expense"... It really doesn't sound like you get it yet. YOU DON'T HAVE MONEY TO EAT OUT. PERIOD. No "trying to cut", you need to realize the cuts happened when you got your hair on fire debt, and now you have no choice but to change your lifestyle radically. No incremental changes, just rip the old lifestyle off like a bandaid and get used to your new lifestyle. It's really not that bad, it just hurts to change that much all at once. Your future self will really thank you
The lifestyle should be so entirely complete and overwhelming, that your wife knows without doubt you are serious and are a changed person. Read this every day for a while, just to keep your focus: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/
The actual way you go about getting rid of your car and handling your debts are important to you and will change the speed at which you get out of this fire, but they are just the details. Your lifestyle is the main problem, so make sure to focus on that just as much as you focus on the details like where you will get the $4,000 to get rid of your car.
Once she sees you living mustachian for a couple weeks, I don't think she would mind loaning the $4000 to help you get rid of the car, something like that shows clear desire to change your situation and spend less. It is very different than helping pay off your cc debt, etc.
Finally, it's ok if your new lifestyle affects her to some extent. She is doing well financially, but you aren't, and she chose to marry you. If she wants to eat out then she pays for it, because you can't afford it. That means you tell her "I can't afford it", not "you need to pay for it". But you don't go out and do expensive things together if it affects you financially, and that is another way she will realize you mean business. Once you get your "hair on fire" debt put out then you can work out a new lifestyle with some balance, but right now you need to not think about "balance", you need to live a life of frugality and reset your financial muscle memory to a new setting.
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I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
I was a bit surprised to read the first few recommendations was to cut the parents off. I would understand it if the backstory was the parents were wastrels, grifters, abusers, etc, but if not, I'd think many other things would be cut first before cutting off parents.
As much as I want to FIRE in 12 years--which is possible based on my personal spend rate, I'm planning to FIRE in 16-17 years as I've factored in parental financial support.
He has less than zero dollars to support his parents with. Every dollar he sends them has an opportunity cost of paying down debt. It can be justifiable to borrow money and pay credit card interest on it for your parents but if you can reduce or delay it at all then it would help a lot.
What if his Mom and lives, eats, and breathes on that $350 a month?
Fuck off with the cutting off his Mom stuff. She popped the guy out and raised him, $350 is pennies compared to the act of raising a human being. I think bigger gains can come from getting rid of his over priced car and cutting his frivolous spending.
Clearly, helping your parents is not something that clicks for white America. Things operate a little different in India, so you can't expect this guy to really come around to full circle American lifestyle.
You're replying to something completely different to what I wrote. I said it can be justifiable but it is important to recognise that he is borrowing money to do it. If I had to I'd borrow money on a credit card for my parents, I think pretty much anyone would if they literally needed it to eat. But if it can be reduced, or even just delayed until after the credit card is paid off, then it should be.
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Thank you Everyone!!!!
1) I brought leftovers for lunch and will continue to pack lunch. I am inspired by the above posts (packing 3-4 lunches/for kids etc.,) and thought I can do it and will do it.
2) I will pay off my credit cards first, then part of my car loan required to sell it and then to my cousin. My cousing is okay with me paying $100 a month from now rather than $1000 a month. He wants me to pay $100 a month, so that I will not forget about him, sounds like a good plan to me.
3) I am planning to be debt free by the end of this year (except for mortgage) and then start saving for my future.
Thanks again for your wonderful comments and suggestions. If anyone is interested, I will update this thread as I progress and also ask for more suggestions.
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Please update - would love to see your progress!
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Please update - would love to see your progress!
I agree. Best of luck making these changes. Your wife sounds awesome. I'm curious where the two of you will be in at within a year, in terms of net worth and savings rates. :)
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I just want to say that (while I'm glad I don't have to do it), it's a refreshing switch seeing somebody help out their parents. The number of people your age we see (even here in the forums) getting economic outpatient care and leeching off their folks without remorse well into their 30s is downright embarrassing. I think you've taken more criticism than they usually do.
...And your 3 major steps sound good. Best of luck!
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I just wanted to let you know that doing the Mustachian 180 is totally possible.
You are so lucky that your partner is already frugal and can be a great example for you.
If you continue with the hair on fire attitude, in a year or two, you will be amazed at how much you accomplished.
Examine every single expense you have and determine if it can be eliminated, reduced, delayed.
Attack every single monthly bill and apply the same: eliminate, reduce, delay.
YOu can do it!
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I also want to note my approval of supporting your parents. In America, we have it ass-backwards. Kids living at home and leeching off of their parents well into their 30's. It's almost more acceptable to borrow money from your parents than it is for parents to get money from their grown children. As if the parents haven't given them enough already. hell, parents support their kids for at least the first 18 years of their lives. Why in the world would they not pay it back when they are working and supporting themselves.
I have twins and a younger child. The twins are 11 years older than the younger girl. I am completely paying for the twins college education. I demanded in return that the twins begin contributing small dollars to their sister's college fund so that she has money for college when she's ready. I mentioned it in passing and you would have thought I asked them to give up an arm. I got so much backlash for that on finance forums. "You can't make children pay for their sister's college!" ....the hell I can't. I just paid for each of them to get college degrees, paid cell phones, cars and car insurance for 22 years. You think I can't make them take a few bucks each month and put it towards their sister to pay it forward. And for the record, the twins didn't even blink. But then again, I didn't ask. I pretty much told them how it would be.
there is just no sense of family in this country.
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I'll say its very admirable quality which is pretty foreign to most native born American, to prioritize the needs of your parents over your own.
I was a bit surprised to read the first few recommendations was to cut the parents off. I would understand it if the backstory was the parents were wastrels, grifters, abusers, etc, but if not, I'd think many other things would be cut first before cutting off parents.
As much as I want to FIRE in 12 years--which is possible based on my personal spend rate, I'm planning to FIRE in 16-17 years as I've factored in parental financial support.
He has less than zero dollars to support his parents with. Every dollar he sends them has an opportunity cost of paying down debt. It can be justifiable to borrow money and pay credit card interest on it for your parents but if you can reduce or delay it at all then it would help a lot.
What if his Mom and lives, eats, and breathes on that $350 a month?
Fuck off with the cutting off his Mom stuff. She popped the guy out and raised him, $350 is pennies compared to the act of raising a human being. I think bigger gains can come from getting rid of his over priced car and cutting his frivolous spending.
Clearly, helping your parents is not something that clicks for white America. Things operate a little different in India, so you can't expect this guy to really come around to full circle American lifestyle.
You're replying to something completely different to what I wrote. I said it can be justifiable but it is important to recognise that he is borrowing money to do it. If I had to I'd borrow money on a credit card for my parents, I think pretty much anyone would if they literally needed it to eat. But if it can be reduced, or even just delayed until after the credit card is paid off, then it should be.
Sorry man, over reaction from my part. Just think there is a lot he can do before cutting off his Mom (assuming she's dependent on the loot).
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Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
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Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
I don't want this thread to digress, but the above sentence really grates on me (and I'm a guy). Why can't he make daal in bulk for both of them to take for lunch?
Sometimes following culture and traditions is good, and other times not.
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I also want to note my approval of supporting your parents. In America, we have it ass-backwards. Kids living at home and leeching off of their parents well into their 30's. It's almost more acceptable to borrow money from your parents than it is for parents to get money from their grown children. As if the parents haven't given them enough already. hell, parents support their kids for at least the first 18 years of their lives. Why in the world would they not pay it back when they are working and supporting themselves.
I have twins and a younger child. The twins are 11 years older than the younger girl. I am completely paying for the twins college education. I demanded in return that the twins begin contributing small dollars to their sister's college fund so that she has money for college when she's ready. I mentioned it in passing and you would have thought I asked them to give up an arm. I got so much backlash for that on finance forums. "You can't make children pay for their sister's college!" ....the hell I can't. I just paid for each of them to get college degrees, paid cell phones, cars and car insurance for 22 years. You think I can't make them take a few bucks each month and put it towards their sister to pay it forward. And for the record, the twins didn't even blink. But then again, I didn't ask. I pretty much told them how it would be.
there is just no sense of family in this country.
You approach to teach kids that they should be responsible for their younger sister is good. When they are contributing towards their sister's college fund, they will know the value of your effort in completely paying for their college education.
I just wanted to let you know that doing the Mustachian 180 is totally possible.
You are so lucky that your partner is already frugal and can be a great example for you.
If you continue with the hair on fire attitude, in a year or two, you will be amazed at how much you accomplished.
Examine every single expense you have and determine if it can be eliminated, reduced, delayed.
Attack every single monthly bill and apply the same: eliminate, reduce, delay.
YOu can do it!
Thank You N!!!
I just want to say that (while I'm glad I don't have to do it), it's a refreshing switch seeing somebody help out their parents. The number of people your age we see (even here in the forums) getting economic outpatient care and leeching off their folks without remorse well into their 30s is downright embarrassing. I think you've taken more criticism than they usually do.
...And your 3 major steps sound good. Best of luck!
Thank you Kaspian, you guys are all very supportive and this forum is amazing.
Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
I actually have diet restrictions due to my IBD(Inflammatory Bowel Disease), But I am planning on preparing meals over the weekend and wednesday as @MrsPete suggested above
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Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
I don't want this thread to digress, but the above sentence really grates on me (and I'm a guy). Why can't he make daal in bulk for both of them to take for lunch?
Sometimes following culture and traditions is good, and other times not.
We share all household work. My wife is awesome at cooking. I clean up after, do the dishes, mop the floors etc., I sometimes cook too, when she is tired or doesnt want to cook but I am a below average cook and can only cook a few items :-)
Making my spouse feel inferior or making her to do designated household work basing on gender was never a part of our culture or tradition.
I am always more than happy to take work load of her and do all the house hold work, whenever I am working from home and she does the same when she is working from home.
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Does your mom know what a tight financial bind you are in? What would she do if something (god forbid) happened to you? How would she support herself? I get that there are cultural differences and it is admirable that you want to support her but you don't have the money (especially if you insist on eating out for lunch every day).
My mom is not aware of my financial situation. If something happens to me, I have life insurance and part of it will be contributed to my mom. I have an younger brother who will be starting his first job in few months. He will support her also eventually.
I stopped eating outside starting from today and will continue to pack lunch.
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Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
I don't want this thread to digress, but the above sentence really grates on me (and I'm a guy). Why can't he make daal in bulk for both of them to take for lunch?
Sometimes following culture and traditions is good, and other times not.
We share all household work. My wife is awesome at cooking. I clean up after, do the dishes, mop the floors etc., I sometimes cook too, when she is tired or doesnt want to cook but I am a below average cook and can only cook a few items :-)
Making my spouse feel inferior or making her to do designated household work basing on gender was never a part of our culture or tradition.
I am always more than happy to take work load of her and do all the house hold work, whenever I am working from home and she does the same when she is working from home.
I did not imply so. I was responding to the different poster above..
Good to hear and good for you. Learn how to cook well. Start by spending time in the kitchen with your wife helping her. Cooking together is one of my joys. Cooking is not that hard. Look at recipes online especially for things your wife does not make currently and to match your dietary requirements. Shop ahead of time. Cook with love and passion for the people you are feeding (including yourself). It always comes out delicious.
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General stuff:
Track every penny that you spend for several months to make sure that you plug any holes. Mint, YNAB, excel, Quicken, pen and paper, whatever you have and free options only.
No clothes buying. Free entertainment.
Do you and your wife have separate insurance policies? I'm not clear on that. Every insurance company I've heard of gives discounts for multiple policies.
Look at Dave Ramsey's stuff for getting out of debt.
DIY home repairs and energy efficiency efforts. There's a lot of little things you can do to tighten up a house that are easy and cheap but pay off.
Turn the heat down and wear proper clothes. (You're cold, put on a sweater.).
Ask your wife to help keep you honest here, then when she calls you out don't get angry, thank her and fix it. It'll help show her you're serious and will help you change your habits.
Meal plan. Don't waste food. Make sure to eat what you have instead of buying more food.
Keep at it, it'll become habit and you won't miss the old spendypants lifestyle.
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Do you eat daal?
Daal and rice makes a cheap lunch and your wife can make daal in bulk.
I don't want this thread to digress, but the above sentence really grates on me (and I'm a guy). Why can't he make daal in bulk for both of them to take for lunch?
Sometimes following culture and traditions is good, and other times not.
We share all household work. My wife is awesome at cooking. I clean up after, do the dishes, mop the floors etc., I sometimes cook too, when she is tired or doesnt want to cook but I am a below average cook and can only cook a few items :-)
Making my spouse feel inferior or making her to do designated household work basing on gender was never a part of our culture or tradition.
I am always more than happy to take work load of her and do all the house hold work, whenever I am working from home and she does the same when she is working from home.
I did not imply so. I was responding to the different poster above..
lol - well the culture I originate from actually holds women as equals and gives them rights that are equal to men. Also we regard them highly for being the givers of life. I just assumed the guy wasn't good at cooking, honestly. :)
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Thank you Everyone!!!!
1) I brought leftovers for lunch and will continue to pack lunch. I am inspired by the above posts (packing 3-4 lunches/for kids etc.,) and thought I can do it and will do it.
2) I will pay off my credit cards first, then part of my car loan required to sell it and then to my cousin. My cousing is okay with me paying $100 a month from now rather than $1000 a month. He wants me to pay $100 a month, so that I will not forget about him, sounds like a good plan to me.
3) I am planning to be debt free by the end of this year (except for mortgage) and then start saving for my future.
Thanks again for your wonderful comments and suggestions. If anyone is interested, I will update this thread as I progress and also ask for more suggestions.
I was going to come here and harp on you on eating out. Seriously.
I wasn't going to harp on you for helping your mom though. One of my best friends sends money to her parents in China. It's definitely a cultural thing and I'm glad you are helping your mother out.
I also don't blame your wife for not loaning you money.
On the lunches thing - always remember peanut butter sandwiches. I pack lunch every day for myself, 4x a week for my 3rd grader. I make sure that we have leftovers, or lunch makings for my husband (he packs his own). But sometimes I run out and there's ALWAYS peanut butter sandwiches. I had an Indian coworker here who was even more frugal than me.
1. He didn't drive. He rode his bike or walked. He didn't even have a driver's license! He learned to drive at 31 and bought an old Camry.
2. He was a vegetarian and ate peanut butter sandwiches every day for months.
Oh, and you can learn to cook. My husband did ALLLL the cooking for our first 9 years together. I didn't learn until I was almost 32. It's worth it to learn how to cook just a few things.
One other thing - 1100 sf house - 2 BR I assume? I'd consider getting a roommate to bring in rent money.
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Thank you for taking time to respond to my post. I should have been more clear in my previous post. It is my decision not to borrow money from her till I change my lifestyle. She packs her lunch, while i eat out everyday. She bought a preowned car, (though it is 2013) for almost 5k less than KBB value, while I bought a flashy new car which can accomodate 2 grown adults (scion fr-s) and doesnt even work in New England winters due to its RWD.
She shares all the information about her 401k, savings accounts and motivates me to save atleast half of what she is saving. I used to nod and forget about it. That is why I do not have any idea about her savings. She provided for both of us when we were dating back in 2011 for complete one year, when i was unemployed. So, I want to change my lifestyle, clear off my credit cards, cousin debt and sell the car this year and then discuss about our finances together.
Your wife clearly understands how to manage finances - why not just give her control of your income and let her set you a budget? If she's good at money and you're not, then it seems to me that you should both take advantage of her skills in this area.
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Thank you Everyone!!!!
1) I brought leftovers for lunch and will continue to pack lunch. I am inspired by the above posts (packing 3-4 lunches/for kids etc.,) and thought I can do it and will do it.
2) I will pay off my credit cards first, then part of my car loan required to sell it and then to my cousin. My cousing is okay with me paying $100 a month from now rather than $1000 a month. He wants me to pay $100 a month, so that I will not forget about him, sounds like a good plan to me.
3) I am planning to be debt free by the end of this year (except for mortgage) and then start saving for my future.
Thanks again for your wonderful comments and suggestions. If anyone is interested, I will update this thread as I progress and also ask for more suggestions.
I was going to come here and harp on you on eating out. Seriously.
I wasn't going to harp on you for helping your mom though. One of my best friends sends money to her parents in China. It's definitely a cultural thing and I'm glad you are helping your mother out.
I also don't blame your wife for not loaning you money.
On the lunches thing - always remember peanut butter sandwiches. I pack lunch every day for myself, 4x a week for my 3rd grader. I make sure that we have leftovers, or lunch makings for my husband (he packs his own). But sometimes I run out and there's ALWAYS peanut butter sandwiches. I had an Indian coworker here who was even more frugal than me.
1. He didn't drive. He rode his bike or walked. He didn't even have a driver's license! He learned to drive at 31 and bought an old Camry.
2. He was a vegetarian and ate peanut butter sandwiches every day for months.
Oh, and you can learn to cook. My husband did ALLLL the cooking for our first 9 years together. I didn't learn until I was almost 32. It's worth it to learn how to cook just a few things.
One other thing - 1100 sf house - 2 BR I assume? I'd consider getting a roommate to bring in rent money.
I am learning to cook and can cook specific dishes, but somehow they all end up below average if my wife is not around to suggest.
1100 sf house - 4 bed , 2 bath - I thought of getting a roommate, but My wife is not willing to share our house with a stranger(m or f). If I clear off my debt and live a mustachian lifestyle, I think a roommate would not be necessary.
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Thank you for taking time to respond to my post. I should have been more clear in my previous post. It is my decision not to borrow money from her till I change my lifestyle. She packs her lunch, while i eat out everyday. She bought a preowned car, (though it is 2013) for almost 5k less than KBB value, while I bought a flashy new car which can accomodate 2 grown adults (scion fr-s) and doesnt even work in New England winters due to its RWD.
She shares all the information about her 401k, savings accounts and motivates me to save atleast half of what she is saving. I used to nod and forget about it. That is why I do not have any idea about her savings. She provided for both of us when we were dating back in 2011 for complete one year, when i was unemployed. So, I want to change my lifestyle, clear off my credit cards, cousin debt and sell the car this year and then discuss about our finances together.
Your wife clearly understands how to manage finances - why not just give her control of your income and let her set you a budget? If she's good at money and you're not, then it seems to me that you should both take advantage of her skills in this area.
frankly, I didnt realize how deep I am drowned in debt untill a few weeks ago. I lived from pay check to pay check.
Now, I want to change my lifestyle. I want to do it on my own, if I fail then I will do as you suggested. But first, I want to give it my best to alter my lifestyle and spending habits
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Thank you for taking time to respond to my post. I should have been more clear in my previous post. It is my decision not to borrow money from her till I change my lifestyle. She packs her lunch, while i eat out everyday. She bought a preowned car, (though it is 2013) for almost 5k less than KBB value, while I bought a flashy new car which can accomodate 2 grown adults (scion fr-s) and doesnt even work in New England winters due to its RWD.
She shares all the information about her 401k, savings accounts and motivates me to save atleast half of what she is saving. I used to nod and forget about it. That is why I do not have any idea about her savings. She provided for both of us when we were dating back in 2011 for complete one year, when i was unemployed. So, I want to change my lifestyle, clear off my credit cards, cousin debt and sell the car this year and then discuss about our finances together.
Your wife clearly understands how to manage finances - why not just give her control of your income and let her set you a budget? If she's good at money and you're not, then it seems to me that you should both take advantage of her skills in this area.
frankly, I didnt realize how deep I am drowned in debt untill a few weeks ago. I lived from pay check to pay check.
Now, I want to change my lifestyle. I want to do it on my own, if I fail then I will do as you suggested. But first, I want to give it my best to alter my lifestyle and spending habits
I think it's not only awesome, but imperative that you try to figure this out on your own. And as a bonus, you have your wife's moral support and knowledge to rely on if you stumble.
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Sruvari, congrats to you. I have a family member who is lifelong mooch and in debt up to eyeballs and never learns or changes. So what you are doing is admirable. I wish you the best.
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I think it's not only awesome, but imperative that you try to figure this out on your own. And as a bonus, you have your wife's moral support and knowledge to rely on if you stumble.
Sruvari, congrats to you. I have a family member who is lifelong mooch and in debt up to eyeballs and never learns or changes. So what you are doing is admirable. I wish you the best.
Thank you!!!
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He has less than zero dollars to support his parents with. Every dollar he sends them has an opportunity cost of paying down debt. It can be justifiable to borrow money and pay credit card interest on it for your parents but if you can reduce or delay it at all then it would help a lot.
He and his wife earn a good living. As other posters have pointed out, he has many, many ways to cut his spending and trim his debt. He's in a bad situation now but not one that can not be solved with some sensible adjustments to living and spending standards. My point is if he has 15 ways to do all of this, maybe support to mom should be option #15 rather option #2 or 3. Maybe cutting off his MOTHER should be pretty low on the priority list. But as I pointed out in my original post, cutting mom off was mentioned pretty much right at the beginning of the thread as the first 2 or 3 options. My brain has a problem processing that.
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Didn't see it mentioned anywhere else yet, but why doesn't your wife pay off her credit cards now? between her monthly surplus and her large savings there is no reason for her to carry a balance especially not for 4 more months. Its just costing her interest. Unless she just got the card and is in a 0% period then disregard my comment here.
DW bills:
car payment: $300 ( 2013 VW Jetta, she will pay off her car in another 4 months)
car insurance: $100
credit cards: $100 ($5k total credit, $2k debt, she will pay it off in another 4 months)
parents: $400 (same as me)
phone : $65 (she is project lead, and also needs unlimited talk, data with good network coverage)
total: $965
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Didn't see it mentioned anywhere else yet, but why doesn't your wife pay off her credit cards now? between her monthly surplus and her large savings there is no reason for her to carry a balance especially not for 4 more months. Its just costing her interest. Unless she just got the card and is in a 0% period then disregard my comment here.
DW bills:
car payment: $300 ( 2013 VW Jetta, she will pay off her car in another 4 months)
car insurance: $100
credit cards: $100 ($5k total credit, $2k debt, she will pay it off in another 4 months)
parents: $400 (same as me)
phone : $65 (she is project lead, and also needs unlimited talk, data with good network coverage)
total: $965
Yes, She just got her $2.5 Credit card and it is 0% APR for next 12 months.
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I'd love to see more updates from you. I'm glad that you have taken everyone's advice and are working your way out of your hole.
And I want to apologize if I offended you in any way in suggesting cutting off support to your mother. I didn't know the background behind it. I think what you're doing is very admirable. My mother is very bad with money, and she doesn't feel bad taking money from her children. If she just made some changes she could support herself on her own but refuses to. From now on I'll take cultural differences into account before suggesting cutting off financial support to parents before knowing the entire story.
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Id like to say that I dont think there is nothing wrong with sending money to parents, or tithing, or charity-
the problem is when youre hair is on fire and you are essentially borrowing money to do those things. If you dont want to cut something parental support, you better cut everything else. nothing that is totally unnecesary. thats the sacrifice. if and when you get out of debt, then the rules change.
I think most people in the thread are not objecting to the idea of parental support. Its the situation that the OP is in, overspending, debt emergency, etc.
you might consider keeping a journal on the forum. its a great way to get encouragement and support. There is a real community there.
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I'd love to see more updates from you. I'm glad that you have taken everyone's advice and are working your way out of your hole.
And I want to apologize if I offended you in any way in suggesting cutting off support to your mother. I didn't know the background behind it. I think what you're doing is very admirable. My mother is very bad with money, and she doesn't feel bad taking money from her children. If she just made some changes she could support herself on her own but refuses to. From now on I'll take cultural differences into account before suggesting cutting off financial support to parents before knowing the entire story.
No, you did not offend me. You shared your opinion. I am really amazed with lot of valuable responses I got in very less time on this forum. I am very happy that all of you took some time, read my post and gave your suggestions. Some suggestions might work, some might not depending on my personal commitments/preferences.
Please keep sharing suggestions, I really got a starting point by joining this forum.
BTW, this is my second consecutive day packing lunch and DW is really surprised today. Thanks @MrsPete for giving that extra push :-)
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Id like to say that I dont think there is nothing wrong with sending money to parents, or tithing, or charity-
the problem is when youre hair is on fire and you are essentially borrowing money to do those things. If you dont want to cut something parental support, you better cut everything else. nothing that is totally unnecesary. thats the sacrifice. if and when you get out of debt, then the rules change.
I think most people in the thread are not objecting to the idea of parental support. Its the situation that the OP is in, overspending, debt emergency, etc.
you might consider keeping a journal on the forum. its a great way to get encouragement and support. There is a real community there.
Yes, you are right. lot of people objected parental support as diverting that amount towards credit cards or car payment will get me out of debt in less time. I really appreciate their concern and suggestions. So, I cleared again in another post that my mom really needs that money.
Can you please tell me how to keep a journal on this forum? I will search in other posts too as to how to keep a journal. Thanks!
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Just make a thread in this section -
http://forum.mrmoneymustache.com/journals/
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Just make a thread in this section -
http://forum.mrmoneymustache.com/journals/
Thank you!
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It would be better if you and your wife could work together as a married couple. Recommend combing yourselves financially and working towards your goals as a family instead of separately.
+1
Crazy situation that would be even crazier if you have children together... yet not only don't have combined finances, but don't know what the other person has as far as money/assets? Yikes.
Now, lookee here!
My wife and I run our finances EXACTLY as the OP explained in his original post. We've done it that way for 23 years. It works.
Just what state do you think the OP's marriage would be in now if they had combined their finances at marriage and he had continued to spend money like a drunken sailor while his wife pulled her hair out by the roots and resented him more and more and more???
THINK!
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It would be better if you and your wife could work together as a married couple. Recommend combing yourselves financially and working towards your goals as a family instead of separately.
+1
Crazy situation that would be even crazier if you have children together... yet not only don't have combined finances, but don't know what the other person has as far as money/assets? Yikes.
Now, lookee here!
My wife and I run our finances EXACTLY as the OP explained in his original post. We've done it that way for 23 years. It works.
Just what state do you think the OP's marriage would be in now if they had combined their finances at marriage and he had continued to spend money like a drunken sailor while his wife pulled her hair out by the roots and resented him more and more and more???
THINK!
+1
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I also want to note my approval of supporting your parents. In America, we have it ass-backwards. Kids living at home and leeching off of their parents well into their 30's. It's almost more acceptable to borrow money from your parents than it is for parents to get money from their grown children. As if the parents haven't given them enough already. hell, parents support their kids for at least the first 18 years of their lives. Why in the world would they not pay it back when they are working and supporting themselves.
I have twins and a younger child. The twins are 11 years older than the younger girl. I am completely paying for the twins college education. I demanded in return that the twins begin contributing small dollars to their sister's college fund so that she has money for college when she's ready. I mentioned it in passing and you would have thought I asked them to give up an arm. I got so much backlash for that on finance forums. "You can't make children pay for their sister's college!" ....the hell I can't. I just paid for each of them to get college degrees, paid cell phones, cars and car insurance for 22 years. You think I can't make them take a few bucks each month and put it towards their sister to pay it forward. And for the record, the twins didn't even blink. But then again, I didn't ask. I pretty much told them how it would be.
there is just no sense of family in this country.
I would hope that you mentioned this to them as a condition before you paid for them to go to college and not after they graduated? I think saying I have X amount for college for kids, you can have Y share (a third?) if you want Z share you will need to contribute back to the fund for your younger sibling to be able to get a fair share when it's their turn to go go school. I see no problem with that but if my parents freely gave the money and told me they wanted it back essentially when I started working that is a loan imo and it would have been nice to know about in advance because I might have decided to make other arrangements.
For the record, I paid for my own college and grad school.
Also, sravuri2710 it's nice to see you trying to turn things around! I look forward to updates on your progress!
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I would hope that you mentioned this to them as a condition before you paid for them to go to college and not after they graduated? I think saying I have X amount for college for kids, you can have Y share (a third?) if you want Z share you will need to contribute back to the fund for your younger sibling to be able to get a fair share when it's their turn to go go school. I see no problem with that but if my parents freely gave the money and told me they wanted it back essentially when I started working that is a loan imo and it would have been nice to know about in advance because I might have decided to make other arrangements.
For the record, I paid for my own college and grad school.
Also, sravuri2710 it's nice to see you trying to turn things around! I look forward to updates on your progress!
Thank you Megma. I am thinking of starting a journal (as suggested above) to share my updates and also that I will get constant inspiration. So far, I am packing lunch daily, rejected an offer to go to NY autoshow to save money this weekend(Wife doesnt like autoshows, I love autoshows).
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I would hope that you mentioned this to them as a condition before you paid for them to go to college and not after they graduated? I think saying I have X amount for college for kids, you can have Y share (a third?) if you want Z share you will need to contribute back to the fund for your younger sibling to be able to get a fair share when it's their turn to go go school. I see no problem with that but if my parents freely gave the money and told me they wanted it back essentially when I started working that is a loan imo and it would have been nice to know about in advance because I might have decided to make other arrangements.
For the record, I paid for my own college and grad school.
Also, sravuri2710 it's nice to see you trying to turn things around! I look forward to updates on your progress!
Thank you Megma. I am thinking of starting a journal (as suggested above) to share my updates and also that I will get constant inspiration. So far, I am packing lunch daily, rejected an offer to go to NY autoshow to save money this weekend(Wife doesnt like autoshows, I love autoshows).
sravuri2710 -- I am impressed. Look forward to your journal as well. Good Luck on this journey.
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for those who might be interested, I made a small progress. I sold my car. I had to pay $2k out of my pocket to pay the difference between selling price and amount I owe, but I got rid of a $600 per month burden. I will never take an auto loan again!!!
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Congrats!
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I know you're focused on paying down debt right now, and that's what everyone has focused on so far (and rightly so), but something I noticed from your original post is that you mention you're an independent contractor without a 401k. Assuming you're 1099'd (not w2) this could actually be a great thing in its way in that you're essentially self employed so you can open a solo 401k which can mean even higher contribution limits than a regular employee plan.
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for those who might be interested, I made a small progress. I sold my car. I had to pay $2k out of my pocket to pay the difference between selling price and amount I owe, but I got rid of a $600 per month burden. I will never take an auto loan again!!!
good job man!
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for those who might be interested, I made a small progress. I sold my car. I had to pay $2k out of my pocket to pay the difference between selling price and amount I owe, but I got rid of a $600 per month burden. I will never take an auto loan again!!!
good job man!
Thank you!
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for those who might be interested, I made a small progress. I sold my car. I had to pay $2k out of my pocket to pay the difference between selling price and amount I owe, but I got rid of a $600 per month burden. I will never take an auto loan again!!!
good job man!
Thank you!
I think that is a big progress, not small! 600/month is huge when it comes to debt reduction/savings.
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Suprabhat, Sravuri2710: (or Kahli vanakum, or whatever your local dialect is) Namaste! All the best to you, your wife, and family in India. I’m originally from the South… (Alabama) where family is also a strong tie-that-binds-for-life.
Good work so far - but there is more you can / should do. Comments here have (correctly) focused on the debt - a Hair-On-Fire-Debt-Emergency - make no mistake. But after a month, you might see the light at the end of the HOFDE tunnel.
Sounds like your 'stashe is starting to GROW... Congratulations!
I hope by now you're:
1) 'Brown Bagging' your lunch EVERY DAY. (saving $50/week - assuming $10/day)
2) Taking public transit or riding your bike, or driving a used car to work. (now that the car has been sold - congrats!)
3) Selling excess junk / things you haven’t used in 6 months on CraigsList/Ebay.
Now for the face punches:
You're still spending too much on monthly bills. People have been focused on the Credit Card debt - correctly - but there's room for savings in the routine stuff. You may already be doing some-or-most of this. If so… GREAT! If not, here are some ideas to help you (and other lurkers who are in the same situation but don't want to admit it).
Electric bill:
LED lights - cost $4/bulb Amazon, 60w/800 lumens - each saves $11.07/year vs incandescent. The old advice was move to CFL's (Compact Fluorescents), but CFL's save only 20% over incandescent, and are currently MORE EXPENSIVE than similar cost LED bulbs. Concentrate on 'color' and LUMENS when bulb shopping - a display at your local home store shows bulbs compared.
Start small - try out bulbs, 1-per-week until you find a bulb/brightness you like, eventually replacing all the bulbs in the house. If you get 1-2 that you don't like, put them in the garage, or outdoors where they're not used that often.
Power Strips - 'vampire power' is the trickle of power that's used every minute of every day by devices waiting to be used, or laptop transformers constantly converting 120v into 12v for laptops even when the laptops are OFF. Switch OFF power strips to computers, TV's, everything but the refrigerator (and perhaps DVR) at night, and when not at home. You may lose a few seconds of 'instant on' for the TV, but you'll save on power as most laptops, computers, monitors, etc. use some small amount of 'vampire power'.
Make it a game - Set A Goal: get your power bill down to $30/month.
Kill-A-Watt P3 - a handy device to measure each plug-in-device's power consumption watts/hour to find your 'power hogs'. (Refrigerator, dryer/washer, dishwasher) There are expensive kill-a-watt power strips, but you can plug any strip into a Kill-A-Watt, and measure them that way until you understand how much power draw you've got.
Wash dishes BY HAND: Saves on both water AND electricity. Best to wash-as-you-go, and don't let them pile up in the sink.
Natural Gas Bill:
Thermostat timer - you don't mention this, so you may already have a timer on your thermostat, it's a basic thing, but you never know. Here are my settings: (your hours may vary)
Winter: turn heat UP to 65@ 6am. DOWN to 50 @8am, UP to 65 @ 5pm, DOWN @10pm to 60@ night.
Summer: OFF - use window fans, vent hot air to attic. (but I'm in the NW, not AT ALL familiar with Vermont).
Hot Water: set your hot water heater at 120-degrees. Investigate getting a water heater timer (easy for electric hot water, not so easy - but doable - for gas).
Laundry: Dry clothing on a drying rack or outdoor clothes line instead of using the dryer.
Phone Bill:
I'm in the same situation as you - I'm a senior website management consultant with a 24hr potential on-call capacity, and make extensive use of conference bridge calls. For this, I extensively use...
Skype - $3/month for unlimited US calling. You can set Skype's callerID to show as your cell number.
I'm unsure of the calling plans for Skype to India, but I'm sure it's cheaper than the cellular carriers.
Use Skype from both your laptop, and your cell phone. I'm assuming you have access to WIFI at home, and WIFI at the office. If you're currently taking public transit, you *may* have wifi access there also. For everything else...
Google Voice: FREE. WIFI calling, like Skype, and this may work for you - I use it infrequently but I’m willing to pay the $3/month for Skype.
AirVoice wireless - $10/month pre-paid plan. This is a 'workable if you get accustomed to it' plan. 2˘/text, 4˘/min. voice calling, 6˘/Mb data. I've been on this plan since Sept 2014. You can pre-pay more at any time. Start with $10, add $10 more if you need it. It seemed hard at first, but now that I learned to TURN OFF 'cellular data' on the iPhone, and use WIFI almost exclusively, I don't miss it at all. I use a FreedomPop free 500Mb WIFI hotspot for travel ($45 on eBay).
Or, if AirVoice seems harsh, use...
Republic Wireless. A little more per month, but less than you’re paying today. And can seem like less of a 'sacrifice'.
My thinking on cellular data / cell phone plans... it's not sacrifice, it's breaking an ADDICTION.
We lived almost our entire lives WITHOUT cellular data. Why are we paying thru the nose for cellular data today? Because we *can*, and habits are hard to break.
[Disclaimer: my day job is in the 'cellular industry']
Bottom line: Keep at it, and all the best. And please UPDATE your original post (OP), or create a new post, and update your OP to say - see current numbers from May 1st - to show your CURRENT budget / usage. Have a great weekend - find something new & free to do this weekend (street fair, movie showing, etc.)
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Wash dishes BY HAND: Saves on both water AND electricity. Best to wash-as-you-go, and don't let them pile up in the sink.
I don't think this is actually true.
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Sravuri2710, this post and your enthusiasm are inspiring to me!
Best of luck to you :)
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Wash dishes BY HAND: Saves on both water AND electricity. Best to wash-as-you-go, and don't let them pile up in the sink.
I don't think this is actually true.
I'm frugal with water when hand washing, and my dishwasher is older, so I think I've got the machine beat. For more reading...
http://www.treehugger.com/kitchen-design/built-in-dishwashers-vs-hand-washing-which-is-greener.html
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I look forward to following your progress! At this point, a key thing is to not make your situation WORSE. Don't borrow any more. Don't feel like you should "reward" yourself for every small milestone.
Be sure you're taking full advantage as your position as an independent contractor. You can set up an Independent 401k or SEP IRA. Be sure you're keeping track of all your expenses and getting the appropriate write-offs for business expenses. You can find lists online (search things like "tax advantages for small business owner/self employed"). There's a lot of overhead you're swallowing if you aren't doing your taxes properly.
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If I were you...
1. I'd start renting your house out (assuming you could get enough to pay the mortgage), and move closer to work in an apartment that is more efficient and not to expensive.
2. Sell your car and buy something like a 2005 Corolla or similar (sounds like you are already planning on this, good job)
3. Since it seems you and your wife have fairly separate finances, I'd separate the clothing budget so her clothes don't come out of your budget.
4. Make your new utilities bill in your new apartment significantly cheaper, $345 spent on utilities is ridiculous, try to get it down to $150
5. Search for cheaper car insurance for your new car, get a bunch of quotes and get the cheapest option.
6. You'll use much less gas because you'll be closer to work
7. Switch to Republic Wireless for your Cell Phone Provider, they are cheaper and offer great coverage and have plans for unlimited everything.
8. Cook more at home, less restaurants and take out. Especially while your hair is on fire and you still have credit card debt, a huge car loan, and other loans.
9. Pay off all of that debt... quick!
10. If you can afford to help support your mother while also getting rid of your debt, then go for it and good for you. But if you start amassing more credit card debt, then that means you can't afford to support yourself, let alone another person. So choose to reduce your spending or stop helping.
That's what I would do in your situation.... You should do whatever fits you best. If you just decide to change your car, you'll still be way ahead of where you are now. Good Luck!
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Suprabhat, Sravuri2710: (or Kahli vanakum, or whatever your local dialect is) Namaste! All the best to you, your wife, and family in India. I’m originally from the South… (Alabama) where family is also a strong tie-that-binds-for-life.
Good work so far - but there is more you can / should do. Comments here have (correctly) focused on the debt - a Hair-On-Fire-Debt-Emergency - make no mistake. But after a month, you might see the light at the end of the HOFDE tunnel.
Sounds like your 'stashe is starting to GROW... Congratulations!
I hope by now you're:
1) 'Brown Bagging' your lunch EVERY DAY. (saving $50/week - assuming $10/day)
2) Taking public transit or riding your bike, or driving a used car to work. (now that the car has been sold - congrats!)
3) Selling excess junk / things you haven’t used in 6 months on CraigsList/Ebay.
Now for the face punches:
You're still spending too much on monthly bills. People have been focused on the Credit Card debt - correctly - but there's room for savings in the routine stuff. You may already be doing some-or-most of this. If so… GREAT! If not, here are some ideas to help you (and other lurkers who are in the same situation but don't want to admit it).
Electric bill:
LED lights - cost $4/bulb Amazon, 60w/800 lumens - each saves $11.07/year vs incandescent. The old advice was move to CFL's (Compact Fluorescents), but CFL's save only 20% over incandescent, and are currently MORE EXPENSIVE than similar cost LED bulbs. Concentrate on 'color' and LUMENS when bulb shopping - a display at your local home store shows bulbs compared.
Start small - try out bulbs, 1-per-week until you find a bulb/brightness you like, eventually replacing all the bulbs in the house. If you get 1-2 that you don't like, put them in the garage, or outdoors where they're not used that often.
Power Strips - 'vampire power' is the trickle of power that's used every minute of every day by devices waiting to be used, or laptop transformers constantly converting 120v into 12v for laptops even when the laptops are OFF. Switch OFF power strips to computers, TV's, everything but the refrigerator (and perhaps DVR) at night, and when not at home. You may lose a few seconds of 'instant on' for the TV, but you'll save on power as most laptops, computers, monitors, etc. use some small amount of 'vampire power'.
Make it a game - Set A Goal: get your power bill down to $30/month.
Kill-A-Watt P3 - a handy device to measure each plug-in-device's power consumption watts/hour to find your 'power hogs'. (Refrigerator, dryer/washer, dishwasher) There are expensive kill-a-watt power strips, but you can plug any strip into a Kill-A-Watt, and measure them that way until you understand how much power draw you've got.
Wash dishes BY HAND: Saves on both water AND electricity. Best to wash-as-you-go, and don't let them pile up in the sink.
Natural Gas Bill:
Thermostat timer - you don't mention this, so you may already have a timer on your thermostat, it's a basic thing, but you never know. Here are my settings: (your hours may vary)
Winter: turn heat UP to 65@ 6am. DOWN to 50 @8am, UP to 65 @ 5pm, DOWN @10pm to 60@ night.
Summer: OFF - use window fans, vent hot air to attic. (but I'm in the NW, not AT ALL familiar with Vermont).
Hot Water: set your hot water heater at 120-degrees. Investigate getting a water heater timer (easy for electric hot water, not so easy - but doable - for gas).
Laundry: Dry clothing on a drying rack or outdoor clothes line instead of using the dryer.
Phone Bill:
I'm in the same situation as you - I'm a senior website management consultant with a 24hr potential on-call capacity, and make extensive use of conference bridge calls. For this, I extensively use...
Skype - $3/month for unlimited US calling. You can set Skype's callerID to show as your cell number.
I'm unsure of the calling plans for Skype to India, but I'm sure it's cheaper than the cellular carriers.
Use Skype from both your laptop, and your cell phone. I'm assuming you have access to WIFI at home, and WIFI at the office. If you're currently taking public transit, you *may* have wifi access there also. For everything else...
Google Voice: FREE. WIFI calling, like Skype, and this may work for you - I use it infrequently but I’m willing to pay the $3/month for Skype.
AirVoice wireless - $10/month pre-paid plan. This is a 'workable if you get accustomed to it' plan. 2˘/text, 4˘/min. voice calling, 6˘/Mb data. I've been on this plan since Sept 2014. You can pre-pay more at any time. Start with $10, add $10 more if you need it. It seemed hard at first, but now that I learned to TURN OFF 'cellular data' on the iPhone, and use WIFI almost exclusively, I don't miss it at all. I use a FreedomPop free 500Mb WIFI hotspot for travel ($45 on eBay).
Or, if AirVoice seems harsh, use...
Republic Wireless. A little more per month, but less than you’re paying today. And can seem like less of a 'sacrifice'.
My thinking on cellular data / cell phone plans... it's not sacrifice, it's breaking an ADDICTION.
We lived almost our entire lives WITHOUT cellular data. Why are we paying thru the nose for cellular data today? Because we *can*, and habits are hard to break.
[Disclaimer: my day job is in the 'cellular industry']
Bottom line: Keep at it, and all the best. And please UPDATE your original post (OP), or create a new post, and update your OP to say - see current numbers from May 1st - to show your CURRENT budget / usage. Have a great weekend - find something new & free to do this weekend (street fair, movie showing, etc.)
sorry for the late response. I was tied up with work and didnt visit the forum regularly
I really appreciate forum members like you taking time and responding with great advices.
I am packing lunch, replaced all lights to LEDs. Now as this is spring/early summer our gas bill came down to $50 per month and we reduced our electric bill to $60 per month.
I have a contract with sprint for two years and I have to pay $500 if i break my contract. I am trying to sell my phone and pay off the contract with that money and get republic wireless.
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If I were you...
1. I'd start renting your house out (assuming you could get enough to pay the mortgage), and move closer to work in an apartment that is more efficient and not to expensive.
2. Sell your car and buy something like a 2005 Corolla or similar (sounds like you are already planning on this, good job)
3. Since it seems you and your wife have fairly separate finances, I'd separate the clothing budget so her clothes don't come out of your budget.
4. Make your new utilities bill in your new apartment significantly cheaper, $345 spent on utilities is ridiculous, try to get it down to $150
5. Search for cheaper car insurance for your new car, get a bunch of quotes and get the cheapest option.
6. You'll use much less gas because you'll be closer to work
7. Switch to Republic Wireless for your Cell Phone Provider, they are cheaper and offer great coverage and have plans for unlimited everything.
8. Cook more at home, less restaurants and take out. Especially while your hair is on fire and you still have credit card debt, a huge car loan, and other loans.
9. Pay off all of that debt... quick!
10. If you can afford to help support your mother while also getting rid of your debt, then go for it and good for you. But if you start amassing more credit card debt, then that means you can't afford to support yourself, let alone another person. So choose to reduce your spending or stop helping.
That's what I would do in your situation.... You should do whatever fits you best. If you just decide to change your car, you'll still be way ahead of where you are now. Good Luck!
Thanks for the advice/comments Jeremy and sorry for the late response.
1. We can not rent another apartment as this is my wife's dream house and Also, If we have just one month gap between renters, we will end up paying an extra $1500 per month. (mortgage is $1600 and rent near work will be > $1500).
2. I already sold my car. Both me and my wife now drive a 2013 VW Jetta which we bought for 5k less than market value and it is paid off now. We intend to keep this untill it dies on us.
3. Clothing budget is separate, other than occassional gifts from me to her :)
4. We got down our gas bill to $50 (summer no heater usage), electric bill to $60.
5. I am trying to get cheaper quotes, but I was in an accident recently. A drunk driver hit my car and he has no insurance. My insurance has to pay for my car damages. Though it is not-at-fault, my rates went up.
6. Same as 1
7. I am trying to sell my iphone, pay off the contract and switch to republic wireless
8. My wife is amazed as I stopped eating outside and started cooking at home. I am worst at cooking but got better in the recent weeks (though I cook very limited variety of dishes)
9. Got rid of the car, paid half the credit card balances, paid $7k to cousin out of his $8k debt.
10. I am trying to better my financial situation. I will never stop supporting my mother. Sorry if it is un-mustachian, But this is the only thing, I will not change no matter what my condition/situation is.
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Sravuri2710, this post and your enthusiasm are inspiring to me!
Best of luck to you :)
Thank you Avalanche. There are huge amount of inspiring posts here that make you think 'what the #%$@ am I doing with my life and money'
I realized how much I would saved and lived life without tensions if I had followed atleast 10% of mustachianism (if i can say so)
people over here, their posts inspire me to better my way of life and be happy now and LATER too
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sorry to dig up my old post. I just want to share my progress. So far I sold my car, paid off my cousin, paid off half of the Credit card balance. We are planning to rent out a room in our house for extra income (~$500 per month)
though I am eating out occassionally, it came down to 4-5 times a month compared to 4-5 times a week.
my bills updated as of today :
car payment: 0
car insurance: 0
credit cards: $3k out of total $6k (i am paying off $500 permonth or more)
parents: $350
phone: $65 looking at metroPCS plan, but have to sell my Iphone and pay off the contract first
hospital bills: $100
loan from Cousin: paid off Hurrayy!!
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Awesome! You are doing great:)) Some people just don't seem to understand that in some countries there is not a safety net for people so your Mom probably needs that $ you give her to live & I think it is awesome that you are doing this & even have a plan to provide for her if you die. I don't know why people can't wrap their heads around the fact that mom lives in India-not America.
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Good work, keep it up!
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The level of proud while I reread this entire thread is tremendous!!
You are making leaps and BOUNDS!!!
Just wait till interest is on your side of the court earning you money vs having to pay it to someone else .
All of these small steps and debts paid off, plus the extra income will add up to so much extra cash flow sooner than you can imagine.
Congratulations and keep it up!! You just changed your life profoundly for the better.
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The level of proud while I reread this entire thread is tremendous!!
You are making leaps and BOUNDS!!!
Just wait till interest is on your side of the court earning you money vs having to pay it to someone else .
All of these small steps and debts paid off, plus the extra income will add up to so much extra cash flow sooner than you can imagine.
Congratulations and keep it up!! You just changed your life profoundly for the better.
+1. Way to go sravuri2710! That's an ENORMOUS amount of progress in a very short time - you're ahead of 90% of the rest of the people in the US. Stay strong, and wear that 'stache with PRIDE!
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You're making it look super easy with your progress. While I'm sure it wasn't easy and it's an awesome achievement you are smashing this. Congrats.
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WOW you are doing great - fabulous job, your wife and your mom can be proud of you, and I bet your cousin is very happy with you too right now:).
So maybe now would be a good time to take a deep breath and shift gears.
Start a journal towards FIRE in the journal section of this forum. Play with spreadsheets and dream a little and make plans for your future together.
Start saving for an emergency fund, start reading the section on Ask a Mustachian and of course the section on Investor Alley .....
As far as the finances, we have ours separated too and it suits us fine. As far as your mom, as soon as you paid off everything but the house send her an extra $50 a month, it is the least you can do. Don't forget to give her a raise once in a while:) She raised a great kid, a son who is finally coming into his own, you has become the man she always knew you could be. (I know these things, I'm a mom too).
Kudos to your wife for hanging in there, time to celebrate and move on. As for having children - I'd say you are right to wait at least two more years, give yourself a little more time to become financially stronger.
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Great job yaar.
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Congratulations! Doesn't it feel great to be in control of spending? You will look back and kick yourself for what you spent, but please don't. Just look forward and be SO PROUD of yourself and your new good habits! Your wife must be so happy!
I'd look into eventually combining your finances. Hubby and I do that. One account for house bills, one account for him and one for me. It works out great. Working together on a budget, and spending money, is good too. You are a team now, and she can see that you are now grown up and trustworthy with money.
You really should be so proud of yourself!
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You are doing SO AWESOME!!! Please keep updating - we are all cheering for you!
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Hey OP, I saw your other thread. Congrats on making such impressive changes since you orifinally posted here.
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Hey OP, I saw your other thread. Congrats on making such impressive changes since you orifinally posted here.
thank you! I needed that push and suggestions on how to save. I am glad I found MMM before its too late.
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Great work so far. It sounds like you'r getting some good advise and working on implementing it.
Something I can say having struggled with eating out. I don't know what kind of foods you like to eat when eating out and if it is mostly for lunches or dinners, but for dinners there are good ways in savings money and doing some of it yourself.
A good example of something I like is steak dinners. For the cost of 1 steak dinner eating out you can easily buy everything needed to make one yourself at restaurant quality and after that you will be paying 1/4th by doing it yourself and it is easy to make similar quality with a little bit of practice. For tea for example you can get a cast iron skillet for under $20 which does most of the work upgrading your steak to restaurant quality flavour. All you need for the steak is salt and pepper and it takes mere minutes to cook a steak once the cast iron skillet has been pre-heated in an oven. At this point you can have a $60 steak dinner for under $15. The same can be done for some of the other types of eating out.
Of course this should be done instead of eating out not on top of considering it still is well above what a regular meal should cost you.
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Just wanted to say thank you for being honest and posting here. I'm inspired by your story, and although I was never super spendy, I allowed myself to get into debt and not worry about it while it grew quietly. I too had to support a parent, and used that as an excuse to stay in debt. No more! I'm slowly working my way out and I love reading success stories! Keep up the good work and know that you're not alone!
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It's mentioned above, but a can of chunky soup in your desk will save you $10 on a day you don't pack a lunch.
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This is an awesome story! Congrats on all your progress and hard work -- please keep us posted on how it's going!
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Nice work.
Soon your CC debt will be gone, what's the plan from here?
IMO paying off the debt yourself rather than borrowing from your wife was the right thing to do. It cost a little in interest, in return you proved to yourself and your wife that you can be responsible and stick to a reasonable budget.
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Great work so far. It sounds like you'r getting some good advise and working on implementing it.
Something I can say having struggled with eating out. I don't know what kind of foods you like to eat when eating out and if it is mostly for lunches or dinners, but for dinners there are good ways in savings money and doing some of it yourself.
A good example of something I like is steak dinners. For the cost of 1 steak dinner eating out you can easily buy everything needed to make one yourself at restaurant quality and after that you will be paying 1/4th by doing it yourself and it is easy to make similar quality with a little bit of practice. For tea for example you can get a cast iron skillet for under $20 which does most of the work upgrading your steak to restaurant quality flavour. All you need for the steak is salt and pepper and it takes mere minutes to cook a steak once the cast iron skillet has been pre-heated in an oven. At this point you can have a $60 steak dinner for under $15. The same can be done for some of the other types of eating out.
Of course this should be done instead of eating out not on top of considering it still is well above what a regular meal should cost you.
Thank you for the great suggestion. I am trying to cook more at home and trying different varieties. I feel tired after coming home, working out and cook, so started exercising in the morning and cooking 3-4 dishes on Sunday and freezing them(another suggestion that I got from this forum)
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Nice work.
Soon your CC debt will be gone, what's the plan from here?
IMO paying off the debt yourself rather than borrowing from your wife was the right thing to do. It cost a little in interest, in return you proved to yourself and your wife that you can be responsible and stick to a reasonable budget.
Here's the plan for this year:
1) open a savings account - done
2) save for a 6 months emergency fund. (Ally @1%, but found out in this forum posts that LMCU checking account offers 3%) - in progress
3) open traditional IRA and fund it fully.
4) show all this progress to wife and then We live on one salary, saving the other salary.
Sent from my SM-G920T using Tapatalk
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Great work so far. It sounds like you'r getting some good advise and working on implementing it.
Something I can say having struggled with eating out. I don't know what kind of foods you like to eat when eating out and if it is mostly for lunches or dinners, but for dinners there are good ways in savings money and doing some of it yourself.
A good example of something I like is steak dinners. For the cost of 1 steak dinner eating out you can easily buy everything needed to make one yourself at restaurant quality and after that you will be paying 1/4th by doing it yourself and it is easy to make similar quality with a little bit of practice. For tea for example you can get a cast iron skillet for under $20 which does most of the work upgrading your steak to restaurant quality flavour. All you need for the steak is salt and pepper and it takes mere minutes to cook a steak once the cast iron skillet has been pre-heated in an oven. At this point you can have a $60 steak dinner for under $15. The same can be done for some of the other types of eating out.
Of course this should be done instead of eating out not on top of considering it still is well above what a regular meal should cost you.
Thank you for the great suggestion. I am trying to cook more at home and trying different varieties. I feel tired after coming home, working out and cook, so started exercising in the morning and cooking 3-4 dishes on Sunday and freezing them(another suggestion that I got from this forum)
Sent from my SM-G920T using Tapatalk
Awesome jobs on the changes so far! amazing!
as for the food, I do this all the time. i make a big batch of something like chilli and freeze it. another hint? double up your size of your supper, all the left overs automatically are ready for your next day or to freeze. your dishes are already dirty, and peeling a few extra vegetables isn't that hard when you're already doing it
if you don't have a little chest freeze, hunt around your local buy and sell and find one. i have mine packed full after some productive cooking days, and won't have to cook a work meal for probably 2 or 3 months now
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You made incredible progress! Congratulations!
You may want to learn about Netspend accounts.
First, you apply for a Netspend prepaid debit card, once you have it set up, you transfer your money in, and move it over to a savings account that is connected to the debit account. The savings account earns 5% every 3 months on up to 5K.
http://forum.mrmoneymustache.com/welcome-to-the-forum/netspend-5-interest-up-to-$5000-who-has-one/
I think its a good place to park some emergency funds.
You can get up to 3 cards per person, so you can earn 5% on up to 15K. or 30K if you wife wants to do it as well.
awesome on the IRA. that will really help you at tax time!
if you have a journal, you could post the link here so readers can find it easily.
keep up the good work!
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Welcome to MMM!
You're already getting a lot of advice, so I won't pile on. But congratulations on being willing to make changes. You don't regret this.
NDQ
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You made incredible progress! Congratulations!
You may want to learn about Netspend accounts.
First, you apply for a Netspend prepaid debit card, once you have it set up, you transfer your money in, and move it over to a savings account that is connected to the debit account. The savings account earns 5% every 3 months on up to 5K.
http://forum.mrmoneymustache.com/welcome-to-the-forum/netspend-5-interest-up-to-$5000-who-has-one/
I think its a good place to park some emergency funds.
You can get up to 3 cards per person, so you can earn 5% on up to 15K. or 30K if you wife wants to do it as well.
awesome on the IRA. that will really help you at tax time!
if you have a journal, you could post the link here so readers can find it easily.
keep up the good work!
Great!!! I will look in to the netspend cards. Thanks!
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I have a referral link http://www.mynetspendcard.com?uref=2707820297
or pick one from the netpsend thread for an extra 20$ for each of us :)
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I have a referral link http://www.mynetspendcard.com?uref=2707820297
or pick one from the netpsend thread for an extra 20$ for each of us :)
just ordered a netspend card with your referral!
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thanks!
:)
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Hey, just wanted to say good job. I'm happy to see the progress. :)
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Here's the plan for this year:
1) open a savings account - done
2) save for a 6 months emergency fund. (Ally @1%, but found out in this forum posts that LMCU checking account offers 3%) - in progress
3) open traditional IRA and fund it fully.
4) show all this progress to wife and then We live on one salary, saving the other salary.
Add a goal:
5) open Roth IRA, and immediately convert the max annual contribution just added to the t-IRA into the Roth IRA.
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I want to send my hearty congratulations to OP. It's impressive when someone sees "the light" and takes concrete steps to change their life. It's you who welds the power to change your life, and you're taking the responsibility to do so.
I would imagine in one short year, you'll look back at this and marvel how much you've accomplished. As an aside, you'll see benefits way beyond what you've never thought about.
To the commenters, what a joy seeing the encouragement. Even one commenter realizing OP's mom is Indian and backtracking about OP's support. Way to go. Makes me proud to be part of this community.
OK, so here's my little idea on saving money. I forgot how far you said to get to work, but might a scooter be practical? Mine gets 85mpg, and costs less than $100/yr for insurance and registration. I do the maintenance including changing tires and oil.
Again, many thanks. Wishing you well on your path to FI.
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Super impressed with your progress. It's really motivating to see how well it has gone for you and is encouraging me to do more!
Thank you for updating us and I look forward to reading more about your journey :)
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I wanted to add that really the hardest part of getting on track financially is fixing the space between your ears. Don't forget that the psychology and motivation is the most important part. It sounds like your well on your way with that though.
And about your mother, I think that is awesome that you are making sure to pay back your raising and take care of her. Could you not talk with her, though, and ask her if there is anything she could cut back for a little while (the rupee being down might help). Let her know what kind of a bind you're are in because your debt is an emergency. Maybe you could tell her you will be able to send even more than the $350 once you get your finances back on track, because you will.
Also, could you ask your mom to teach you how to cook? I think that would help you on your quest to cut out the restaurants, and would help her to see that you're cutting back too. If your mother is anything like the average Indian woman, she can probably cook better than just about any restaurant in CT. The best things I've ever eaten were homecooked meals on a trip to India. That's hard to admit being of Italian descent.
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Ok, didn't notice that the original post was 2015 not 2016.
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Something helpful if time is an issue might be freezer slow cooker meals. I can bulk buy ingredients for just over $200 and spend 1 day off packing them up in freezer bags for about 6 hours and then I have dinners for 2 months, without kids that is. Then all i have to do is take a meal out of the freezer in to the fridge the night before, pop it in the slow cooker before leaving for work and I have a meal ready and waiting when I come home for about 0 effort except for that one day of 6 hours of packing. Only thing that you might need to do is make some rice for some of the meals and that is also barely any effort.
It costs me a bit under 2 dollars for all the ingredients per person a meal and comes out to about 3-6 minutes of time spent per meal.
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You (and the other poster who is in a similar situation) are awesome for making supporting your parents non-negotiable, knowing full well that it will take you guys longer to reach your financial goals.
IMO, being financially-free allows us to spend our time and money on those we love, and it would be incongruous to be withholding that on the journey there, especially given wrangler05 has made such a tremendous turn-around in such a short time! Comparatively, it took one of my sisters YEARS to convince me to save for the future, and after that a few more years for me to get a handle on my finances, so good on ya!