Author Topic: Noob Mustachian w/Debt - Help Me With My Plan  (Read 9212 times)

jimithng23

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Noob Mustachian w/Debt - Help Me With My Plan
« on: May 03, 2013, 11:48:55 AM »
I've just recently converted to Mustchianism.  Made me realize I have a very big uphill battle to fight, but it's one that is definitely winnable. 

I've come here to lay everything out to look for advice/face-punching/direction.  Mistakes were made in the past which I am dealing with and doing all that I can to move forward to FIRE.

I have a steady job/career in the auto biz at ~$115k/yr gross.

My wife is a SAHM with our 2 kids - 4 & 2, she's 36 at the end of this year.  No retirement account.  Our plan is to get her back in the workforce in 2-3 years when both kids are in school full-time.  She has a small part-time gig helping a friend of ours with his books and gets ~$200/mo cash, which I have included in the stats below.

I stumbled upon DR's TMMO & Baby Steps 30 days ago and it opened my/our eyes - save me the stuff about DR...I'm on the MMM forum for a reason ;-).  We've since setup our EF and are aggressively paying down debt using the snowball method.

While working through these beginning stages I began researching more and more and stumbled upon MMM.  Consider me/us a convert.  We have drastically reduced our silly consumerism spending and have developed a budget, hashed out our goals, and put a plan in place to get out of debt and free ourselves.

Here we go...

Stats:
Consumer Debt: $47k, combination of CC debt, auto loan, student loan, and back taxes... paying ~$2200/mo and targeting August 2014 as debt-free, sans mortgage
Mortgage: $104.5k // home appraises for $129k-ish ...$950/mo including PMI, taxes, and insurance
Monthly Expenses: $3600 - these are the "non-negotiable" expenses
Monthly Income (net): ~$6600 (commission gig, so this is a rough average)
Savings: $1000 EF...drained all emergency funds to snowball debt... $14k in 401(k)
Age: 34 by end of the year / wife 36 by end of the year

Goals:
-Debt free, sans mortgage by August 2014
-6 months of expenses in EF (~$22k) by July 2015
-(re)Begin retirement accounts August 2015 - $6250/yr in my 401(k) (not including 2% emp match at 4% contribution), max trad & roth IRA for both myself and my wife.  The reason I don't have "max 401(k)" here is due to the budget - once debt is gone and EF fully funded, I'm forecasting ~$2300/mo to save for retirement, which doesn't leave enough to reach the $17.5k limit
-save for down payment for new home (~$250k *20% = $50k / $2100/mo) by July 2017 *see below
-save for kids' college - we're still discussing how much because I'd like our kids to understand the value of an education and the hard work needed to obtain one

*Here's where I need some advice - based on current income and expenses, once we begin contributing to our retirement accounts, there won't be any leftover to save for the 20% down payment.  The reason for getting into a new(er) home is we'd like to get our kids into a different/better school district.  $250k is the high-side for homes in the preferred school district.  What I'm thinking is, sure there will likely be things in our current expense budget we could tweak for more savings but that will only get us so far.  We need a net increase of $2100 somewhere, and that somewhere has to be either more income generated by me (not likely without a promotion; I'm already near the top of the food chain) or get my wife back to work.  Correct me if I'm wrong, but we shouldn't consider the 6-mo EF for down payment funds, should we?

By August of 2015, the mortgage should be under $102k.  I've read that equity in a home shouldn't be considered towards NW and such so it wouldn't be wise to count on the gains from selling the home when shopping for another home, right?

Lastly, the way I see it, once I get the retirement accounts rolling we've got nothing leftover to invest towards FI.  Seems to me the answer is clear....

The big X-factor in all of this is if and when my wife is able to land a decent job/career.  She's been approached multiple times, with solid offers, to become a real estate agent and we both believe she would do really well in this field.  The reason we haven't jumped on it is the income (at first) just doesn't outweigh daycare costs for 2 young children....

Based on the information I've given, how would you advise me/us to best reach our goals?

Catbert

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #1 on: May 03, 2013, 11:58:41 AM »
I think you need to re-think those "non-negotiable" $3600 in monthly expenses.  If you aren't willing to even think about saving money on food, phones, cars, internet, etc. then you've set yourself up for throwing up your hands and saying "it's just too hard." 

twinge

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #2 on: May 03, 2013, 12:21:25 PM »
Yes, $3600/mo seems high for "non-negotiable expenses".  We have 2 kids and have a house that is more than 3x as expensive as yours, and live in one of the highest cost of living areas in the country, feel like there's a decent amount of fat in our monthly expenses which range between 3600-3900/month.  Our income level is about 30K higher/year.

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #3 on: May 03, 2013, 01:50:05 PM »
If you aren't willing to even think about saving money on food, phones, cars, internet, etc. then you've set yourself up...

Oh, I'm definitely willing...like I said, we started on this journey 30 days ago so we're still tweaking and identifying areas that can be cut back.  Thanks for the face-punch!

Yes, $3600/mo seems high for "non-negotiable expenses"...

Non-negotiable was what I used for lack of a better term/phrase.  I meant expenses that need to be paid to keep the household running. 

Digging further, here's where I believe we could make some cuts:

Expenses in the "non-negotiable" category
-There's the $97/mo DirecTV bill that I want to go away but I can't get DW on board.  Cut it, don't need it.  $97 per month.

-Phone bill is ABSURD at $214/mo with Verizon.  Contract on my line is up October of this year and hers isn't until November of 2014.  I believe ETF is $175 for each line, possibly more since we both have iPhones.  I think I'll do the math on paying the ETF + monthly savings + selling both iPhones and doing a sharetalk or other cheaper plan.  If it all works out, I think we could potentially save $115+ per month here.

-Our water bill has nearly doubled, along with the sewer bill, in the last few months due to a leaky toilet - I'm planning to replace the flapper this weekend to hopefully curb that expense, AND our sewer bill is tied into our water usage so we should see a drop there.  This could net us nearly another $50 per month (both are billed at 90 days).

Household expenses that could be tweaked:
-We are currently budgeting $215/mo for gas between 2 vehicles.  After last month, with normal driving to/fro work and the wife's weekly errands/kid's school trips I think we'll come in around $150-$160.  Possibly another $55 per month.

-Food budget is at $385.  We are on the Primal/Paleo style of eating - lots of eggs, whole veggies (farmer's market is back!), bacon, beef, whole milk (dairy doesn't upset us) etc.  We're still working on tweaking this and hoping to get closer to $325-$350.  Possibly $35 per month here.

-Children's clothing is at $30.  Hit up friends and family members for hand-me-downs.  Shop at thrift stores.  Kids grow and need clothes/shoes.  Not sure if this should be cut out altogether or simply slide it into the budget on a needs-only basis...thoughts?  $30 savings per month.

-We're spending nearly $70/mo on diapers for our 22-month old boy.  Potty training is around the corner.  $70 per month in 6-ish months...

-We're setting aside $400/mo for household repairs and maintenance.  Our home is in need of sprucing up prior to selling.  As I type this out I'm wondering if we can tweak/postpone this budget.  If we postpone, I need to find a place in the budget for regular maintenance - light bulbs, A/C filters, etc....

So...based on these adjustments, we're looking at a potential $450/mo, dropping our expenses to $3150 and possibly even more depending on how we choose to handle the children's clothing and the household repair/maintenance side of things.

$450/mo over 4 years gets us $21.6k. 

I think we're getting somewhere....
« Last Edit: May 03, 2013, 01:53:51 PM by jimithng23 »

KingMe

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #4 on: May 03, 2013, 02:16:48 PM »
I'd call both DirecTV and Verizon Wireless to reduce your plans. If you ask for the DirecTV retention department, they will deal with you. Even if you're on contract there are discounts if you ask. They have a $29.99 basic plan that they do not advertise. I understand that your wife may want certain channels while she's home with the kids, so I'd ask her what channels are essential for her. A lower priced plan may include those channels.

I don't have experience downgrading plans with VZW, but about a year ago I reduced the cost of an AT&T wireless plan. Why is that bill so expensive? My wife and I now have iPhones on contract with  VZW and we pay about 25% less than you. If you don't share a plan, look into it. Do you have more data than you need?  My wife and I share 1 GB/month, which is enough so long as we don't watch streaming video when off wifi.

Calling around to other service providers could result in additional savings.

Any way to cut that transportation budget? Is there an alternative to driving to work?


FI@2022Jem

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #5 on: May 03, 2013, 02:22:20 PM »
Jim-
Just want to say congrats on actually following through with suggestions.  Of course, it's always harder to put them in place than just agree to them but it is refreshing to read your willingness to be flexible!

Also, to answer your questions:
I wouldn't consider your EF as part of your down payment fund although you may decide you feel comfortable with a smaller EF than 6 months worth of expenses- really it just comes down to personal preference. 
I do calculate equity in my net worth but not towards my FI numbers.  If you are planning on selling your current home you should consider your equity as a boost to your down payment.  Just be sure to be VERY conservative in your estimates of value and also keep in mind extra real estate transaction costs as well as extra real estate complications of having the purchase of a new home be contingent on the sale of an old home.  This can be simplified by selling first and renting or staying with family while house shopping but this may or may not be feasible with small children. 

Best Wishes, Jennie

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #6 on: May 03, 2013, 02:25:31 PM »
There are so many thing i want to say, that i don't even know where to start.

First, get dw over to babycenter. It is a dave ramsey inspired group..however...us chicks over there can really rock a budget... $70 for diapers??? Should be $40. Your kid can shit in luvs. Or cloth. Or let them run naked..he'll be potty trained in 3 days ;-) Plus, getting wifey over there will get her up to speed with you and she'll hear (read) many many many telling her that direct tv is a ripoff...

http://community.babycenter.com/groups/a48205/we_are_debt_free

Second, i don't understand the 401k issue.. Did you just drain $14k out of it? Or is $14k the current balance? Are you currently contributing 4% to get the match?? If not, then at least do this!!!

I understand your reasons for wanting to contribute to the roth ira before maxing out 401k, you have easier access to it, however lowering your AGI by $17,500 will open up some tax savings. You'll have to run the math to see how much you should contribute vs how much savings you'll get.

Have you adjusted your withholdings? Did you get a tax refund?

Can your break down the debt? How much is cars vs sl? Etc.

I know you're in the car biz..but i bet that car NEEDS to go.. I could be wrong...but...

What sl repayment plan are you on?

I'm getting about a $3000 snowball?? Is this correct??

Ok, i'll stop there... By the way, we started with dave ramsey and moved over to mmm too ;-)

The Bearded Bank Builder

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #7 on: May 03, 2013, 02:47:38 PM »
Just curious - what else is included in that $3,600 total? The things you listed out add up to around $1500ish

twinge

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #8 on: May 03, 2013, 03:08:07 PM »
Just my 2c but I think it's hasty to be moving unless your current school district is really problematic.  Selling a house incurs a lot of costs--and you're still paying PMI on your first one. As for schools, don't go chasing test scores; they don't tell all that meaningful a story.   Also when looking at schools look to the middle and high school--the quality of the school matters more at that point.  For elementary schools, the teacher is the most important rather than overall school quality.  Since your wife is at home, she may want to start getting to know the different kindergarten teachers and get a sense of whether they seem like a good fit etc.   Observe some classes, how kids act, talk to the principals of both schools you are considering. The gossip on which are the "good" schools is not always accurate and you may be find you like your local school better than you thought.

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #9 on: May 03, 2013, 04:09:14 PM »
WOW!  I am really diggin' this community!  Thank you for the responses...let's keep going.

...They have a $29.99 basic plan that they do not advertise. I understand that your wife may want certain channels while she's home with the kids, so I'd ask her what channels are essential for her...

We dropped from the top money-wasting package down to the most basic listed on the website.  Of course, they tack on fees for two HD boxes, taxes, etc.

...I now have iPhones on contract with  VZW and we pay about 25% less than you. If you don't share a plan, look into it. Do you have more data than you need?  My wife and I share 1 GB/month, which is enough so long as we don't watch streaming video when off wifi...

We have 3 lines - me, wife, and my mother.  Mom's contract is up July this year and we'll be cancelling that line.  My line is grandfathered in to the unlimited data package and she's on 2GB.  We could likely make some changes with the data package and save some $ until the contracts expire.  Good idea.

Any way to cut that transportation budget? Is there an alternative to driving to work?

I could bike to work, and I'd love to as I'm an avid mountain biker however - I work in a professional setting and without a shower, I'd hate to be smelling up my office all day.  Imagine coming in to pick up your new vehicle and the guy doing all your paperwork smells like a ripe onion!  Not good for my bottom line!  My transportation to work is essentially free, other than the cost of gas.  I drive a company vehicle - new inventory, turned in at 4000 miles.  Currently, I'm driving an economy car, getting 34mpg through town.  I think I'm doing pretty good on that side of things.

We own..err, the BANK owns, our vehicle - a VERY non-mustachian full-size SUV.  When we first sat down and had "the talk" the idea of selling the vehicle threw my wife for a loop.  She thought I was taking away her nicest "thing" she has.  After a few days, when the seas had calmed, we were able to seriously discuss selling the vehicle and getting something for cash.  This option has since been taken off the table, but my be brought up once again as we've gained considerable "equity" - I could gain $3-$4k in a private sale.

Just want to say congrats on actually following through with suggestions.  Of course, it's always harder to put them in place than just agree to them but it is refreshing to read your willingness to be flexible!

Thanks!  Over the last 30 days, I've really been able to focus on the big picture and where I want us to be in 5-10 years.  My wife had a hard time at first, but she's there with me now.

This can be simplified by selling first and renting or staying with family while house shopping but this may or may not be feasible with small children...

Living with family *may* be an option.  Something I am going to discuss with my father in the coming weeks.  The only problem - he lives 35 miles away from my job.

First, get dw over to babycenter...

Emailed her the link!  Thanks!

... $70 for diapers??? Should be $40. Your kid can shit in luvs. Or cloth. Or let them run naked..he'll be potty trained in 3 days ;-) Plus, getting wifey over there will get her up to speed with you and she'll hear (read) many many many telling her that direct tv is a ripoff...

She tried the cheaper diapers last week, poor guy wet through nearly every one of them.  Keep in mind, this budget just started last month.  $70 was her approximate amount needed.  We very well may end up spending less.

Second, i don't understand the 401k issue.. Did you just drain $14k out of it? Or is $14k the current balance? Are you currently contributing 4% to get the match?? If not, then at least do this!!!

Per DR's Baby Step program, contributions to the 401(k) cease until debt is gone.  I have $14k in there now.

I understand your reasons for wanting to contribute to the roth ira before maxing out 401k, you have easier access to it, however lowering your AGI by $17,500 will open up some tax savings. You'll have to run the math to see how much you should contribute vs how much savings you'll get.

I have time to deduce this strategy and I definitely appreciate your input.  This option could make sense.

Have you adjusted your withholdings? Did you get a tax refund?

No.  $1100 liability.

Can your break down the debt? How much is cars vs sl? Etc.

Sure (sorry, this post is getting really long, but you asked!)
IA IRS $950.06 - snowball will pay this off this month
FED IRS $5,350.00
DAD1 $169.00 - snowball will pay in full June
VS CC $429.00 - snowball will pay in full June
IH CC $633.09 - snowball will pay in full July
SIG LOAN1 $630.60 - snowball will pay in full June
SIG LOAN2 $1,368.39
DAD2 $2,000.00 - this was a "gift" from a few years back, he isn't expecting repayment but I'm paying him back!
MERRICK CC $2,613.42
MEDICAL $3743
STUDENT LOAN    $4,217.94
USAA CC $4,519.71
SUV $20,360.84

I know you're in the car biz..but i bet that car NEEDS to go.. I could be wrong...but...

See above in my response to KingMe - I drive a new car for "free" and my wife drives an un-mustachian SUV.

What sl repayment plan are you on?

Not entirely sure, but the interest rate is at 2.5%.  Payment is setup on autopay at $83/mo

I'm getting about a $3000 snowball?? Is this correct??

$2182 this month, $2327 in June (small bonus coming in June, going toward debt)

Ok, i'll stop there... By the way, we started with dave ramsey and moved over to mmm too ;-)

Thank you very much for your face punching.  Keep it coming.

Just curious - what else is included in that $3,600 total? The things you listed out add up to around $1500ish

Here's the entire $3600-ish:
Mortgage $949
H/hold maint $400
Groceries $385
Gas $215
Vehicle repairs/tires/maint $200 - saving for tires and brakes needed before this winter
License $145 - annual fee on our vehicle is $421, due every September, just started saving for this last month :-/
Gas & Elec $138
Water $70 - saving each month for 90-day billing
Trash/sewer $188
Phones $214
Internet $72 - monopoly in our area
TV $97
Kid's clothes $30
Life/Auto Ins $182
ID Theft $13
Toiletries/Hair cuts $60
Daughter's School $125
Netflix $8 - I'd be happy with *just* Netflix and drop DirecTV...trying to bring my wife around
Pets (black lab and cat) $70
Diapers $70
TOTAL $3631

So I've elminated from this "necessity" (I use that term loosely at this point, guys) any spending cash for either of us, vacation and entertainment fund, and any other small miscellaneous stuff - vitamins, babysitters, clothing for us, gift giving.  Trying to get this down to the nitty-gritty.

Thank you all for your input to this point...keep it rolling!!  I'm excited to get this figured out!

KingMe

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #10 on: May 03, 2013, 05:09:53 PM »
DirecTV - call retentions, do not rely on the plans listed on the website. I'm next to positive they have a $29.99 plus some junk fees package. They don't advertise it, but it's available. If you read the fine print of their contracts, they say you have to maintain a package priced ate $29.99 or more. I have had this package offered to me when I called retentions. I didn't downgrade to it, but they did offer to waive a ton of their add on junk fees instead. If you call retentions and say you are considering cancellation of your service, they will offer to lower your bill. Before you call, check the cable company's bundled rate for TV, phone, and Internet. Use that as leverage. They can verify the cable company's offer, so don't try to BS them.

So why are you paying for your mother's cell phone plan?

Tip for biking to work with no showers - baby wipes.  You have plenty of those in your house, I'm sure. Change clothes t work after wiping yourself down with baby wipes. 2nd tip for biking to work - have a stink buddy. Ask someone you trust to tell you the truth if you stink.

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #11 on: May 03, 2013, 05:41:27 PM »
Good stuff, KingMe...I'll contact DirecTV ASAP.  Wife is concerned with losing Disney for "the kids."  Funny.  I never had Disney when I was a kid!

Yes, plenty of baby wipes in the house!  I'll need to acquire some rain gear...but I think I'm gonna give the "bike to work" thing a go. 

icefr

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #12 on: May 03, 2013, 06:07:01 PM »
On diapers, I found this blog post recently: http://betterinrealife.com/2013/04/newborn-product-review-diapers/

My recommendation as a non-parent would be to buy one pack each of a few, try them all and then stick with the cheapest one that works. Try ordering them on Amazon - they sometimes have discounts and automatically send you them too: http://www.amazon.com/gp/mom/signup

StarryC

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #13 on: May 03, 2013, 06:27:06 PM »
It's not very big but what is "ID Theft $13"
Presumably a $13 a month fee for "identity theft protection"?

Others may have a different opinion, but I don't think that is necessary.  First, your credit cards already have protection.  Second, your homeowner's insurance may have some coverage for this (look at your policy/ call your agent).  Third, I think you can be self insured on this for a while.  Fourth, I don't think those services actually do that much anyway. 

Cancel the service, buy a shredder, and get a free credit report every 4 months (3 companies providing 1 free each year.) 

Also $72/month for internet based on a "monopoly" still sounds high.  Any monopoly is only partial, there is always cable, DSL, and Satelite internet available in most places.  I have the second lowest DSL speed and have never had any problems streaming.  We pay $25 a month.  I call back every time it goes up to $40 and get a different discount. 

Mint Chip

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #14 on: May 03, 2013, 06:47:47 PM »
FWIW, I've had great success with Kawaii cloth diapers.  Since your youngest is already 2, this won't be an issue for much longer.  Plus, you can sell the used diapers online.

I'm a newbie here, too, and, like you, we are 40-ish and also have a long, uphill climb ahead of us to FI.  But after receiving the very thoughtful replies to my first inquiry here, my "aha" moment arrived.   MMM isn't about sacrificing or giving up your "one nice thing" -- and I do sympathize with your wife b/c I have a weakness for sturdy German cars, myself -- and feeling deprived.  It's about embracing a completely different way of life, and a completely different mindset, that to me is very empowering, very liberating, and which gives me a lot of hope that I CAN fix our situation, and I can start immediately, and I don't need to make a million bucks in order to achieve our goal.  I'm actually excited about the whole thing.
 
Anyway, hope that helps. Good luck with everything!

KingMe

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #15 on: May 03, 2013, 06:49:42 PM »
I can sympathize with the Disney kids thing. My daughter would hate me if she didn't get Disney Junior. Please let me know if you can downgrade plans and keep Disney Jr.

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #16 on: May 03, 2013, 08:48:47 PM »
ID Theft is the Credit Monitoring program through USAA.  But, you're right.  This is something that I can and should cancel immediately. 

CenturyLink just started up in our area for Internet service.  I'll check them out and see where they're at. 

On the diaper issue...I'm pretty confident we won't have too far to go before our son begins potty training.  Also, my wife informed me that baby wipes were included in her estimation of $70/mo so that seems a bit more reasonable to me. 

I'm surprised I haven't been face-punched for our gas-guzzling oversize SUV that has us riddled in debt....

<ready to stand up and take the punches>

Rollin

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #17 on: May 03, 2013, 09:49:11 PM »
"-Our water bill has nearly doubled, along with the sewer bill, in the last few months due to a leaky toilet - I'm planning to replace the flapper this weekend to hopefully curb that expense, AND our sewer bill is tied into our water usage so we should see a drop there.  This could net us nearly another $50 per month (both are billed at 90 days)."

Talk with your water supplier.  Ours has a policy that addresses your situation.  Show them your receipt for the repair part, they will look at your average, and credit you the difference.

The reality of your situation is that your wife is an individual and seems to have a different opinion on ditching the SUV.  Giving you a facepunch won't do much good.  It's a logical thing to cut, but often this will not happen.  We are human.  She may come around.

On a related note, I wonder what the difference in insurance would be (between a SUV and another vehicle)?
« Last Edit: May 03, 2013, 10:04:04 PM by Rollin »

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #18 on: May 04, 2013, 07:26:19 AM »
We're gonna leave the SUV alone for a bit.  We've talked through the scenario of selling the vehicle, using the proceeds to pay off the loan and the remainder to pay cash for a decent used minivan.  This option isn't fully off the table and the more we fine tune this budget and the brighter the big picture becomes in her mind, we may make this change.  When we went to the SUV from a mid-size sedan, our premium increase wasn't much at all.  In fact, thanks for bringing this up as I tend to shop for a cheaper auto/home ins policy on Monday.

I'll be repairing the toilet tomorrow.  I never thought to contact the water company - I'll give that a go after I repair the leak.  Another thing we were talking about was to replace our 3 toilets in the house with new ones that use less water.  The water and sewer bills are a hot topic at our house since it has doubled in the last 6 months.


Mazzinator

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #19 on: May 04, 2013, 11:15:46 AM »
So, i just re read my post..i'm gonna lay off the extra cup of coffee for a while..

Also, i wanted to correct/clarify.. You can feel free to join babycenter too. There are a few dudes over there that are very informative. I hang out there too because most of the people there have debt, have kids and it's more active. Just keep in mind the majority are moms, so there are some hormones, lol...

Also, i vote for you to contribute to your 401k up to the match. It's free money!

Some other forums you might like..

http://www.early-retirement.org/forums/

http://www.bogleheads.org/forum/index.php

I'm not very good with taxes, but it seems you need to adjust your withholdings, to a lower number?? Most noobs have the opposite issue.. Here's a link to the calculator..just tryin to help ;-)

http://apps.irs.gov/app/withholdingcalculator/


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I'm a newbie here, too, and, like you, we are 40-ish and also have a long, uphill climb ahead of us to FI.  But after receiving the very thoughtful replies to my first inquiry here, my "aha" moment arrived.   MMM isn't about sacrificing or giving up your "one nice thing" -- and I do sympathize with your wife b/c I have a weakness for sturdy German cars, myself -- and feeling deprived.  It's about embracing a completely different way of life, and a completely different mindset, that to me is very empowering, very liberating, and which gives me a lot of hope that I CAN fix our situation, and I can start immediately, and I don't need to make a million bucks in order to achieve our goal.  I'm actually excited about the whole thing.

I agree!!

Another thing that may help with dw, is to try and get her involved with the end goal. What are her goals? What does FI means to her? Why should she give up the suv, disney jr, etc... Maybe she wants to work?? I'm a sahm with 2 kids, and some days going to work seems like a great idea (especially when your elbows deep in a diaper)

But, what helped my dh get on board, was I started including him in my dream, which crazy enough, was so HE didn't have to work... Never thought I needed to tell him that was why we weren't going out to eat every week!!! Facepunch!!

We are also a bit more DR in FI, not that we want a 14 bedroom house, but I would like to turn the heat up a degree or two in the winter (so i don't have to sleep with a hat on) and we really want to travel. I know we can travel on the cheap...but we will need some money, or at least more than we spend now..

Anyways, good luck!!!

Mazzinator

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #20 on: May 04, 2013, 11:32:25 AM »
Also, you may want to add to your budget for irregular spending. Eventually, you'll need new clothes, oil changes in the suv, birthday gift, etc... You can either save a bit each month or lower your snowball the months you need to purchase those items. Think of your budget in terms of a year. What will you need to buy over the next year?? Then divide by 12. And save that each month.

Ynab or mint can help a ton with this!!

kkbmustang

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #21 on: May 04, 2013, 11:54:21 AM »
Also check with your water company about whether they offer incentives for installing low flow toilets. Ours does. For residents in my county, you can either get a $70 credit towards your water bill or get up to 2 free toilets (but you have to install them yourself). It's worth doing some research.

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #22 on: May 04, 2013, 12:25:20 PM »
Also, you may want to add to your budget for irregular spending. Eventually, you'll need new clothes, oil changes in the suv, birthday gift, etc... You can either save a bit each month or lower your snowball the months you need to purchase those items. Think of your budget in terms of a year. What will you need to buy over the next year?? Then divide by 12. And save that each month.

Ynab or mint can help a ton with this!!

Have YNAB and Mint.  The thing I don't like about Mint, and I hear this from other 'Stachians, is it is more reactive than proactive - meaning it shows you what you've spent after the fact.  YNAB is too....involving and convoluted, IMHO, for lack of better terms.  My pay is irregular on a monthly basis - each week I receive a draw against my commission check that arrives in the middle of the month.  The draw is constant, the commission varies.  So, I used DR's "Allocated Spending Plan" document, modified it for our purposes and created a google docs sheet.  I've become a bit obsessed with this doc as well as the budget I created and it's working so far!

We've set our budget up to track where the money is being spent and we made it through the first 30 days without exceeding any category in the budget; even managed to squirrel away an extra $100.  I'd say we're on the right track.

I think you spell out a great idea for strategy moving forward.  Things are going to come up - we've already been talking today about saving for our fall order of beef.  We split a cow with our uncle.  Usually around 350lbs of red meat - mostly grass-fed, some grain - for $2.50ish/lb.  Hard to pass that up.

Even more great info on the water/sewer bill topic.  Friggn' awesome guys and gals!!  Thank you all so much for talking through all this with me. 

Jb10484

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #23 on: May 04, 2013, 02:53:41 PM »
I follow DR and teach his FPU, but I don't agree 100% with everything.  For instance I suggest not stopping your 401k, but contribute enough to get the match.  We only have our mortgage left and 10k on a home equity loan.  I am paying it off quickly and will do so by December.  If I would have stopped the 401k, it would be paid off next month, but I would have given up 6k in employer match and the 12% returns I am getting this year.  We also still use our credit cards, but we pay them off each month and only use cash back cards.  Good job on opening your eyes.  The hardest part for me was to get my DW on board who is also a SAHM with our 3 kids.  What we had to do was to open a 2nd bank account that is completely hers.  Whatever she makes through side gigs, garage sales, etc go directly there.  I fund it each month for her blow money so that our main account is used for essentials and we cut out arguments on if she is spending too much on stuff I thought was frivolous or excessive.
« Last Edit: May 04, 2013, 03:06:10 PM by Jb10484 »

jimithng23

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #24 on: May 08, 2013, 05:08:02 PM »
Funny story...

The president of our local water company was in my office last night taking delivery of his new vehicle.  What a perfect time to ask him about credits on my water bill for repairs made or installing high efficiency toilets.  The water company will credit any repairs but offers no credit for equipment replacement. 

Actually, not really a funny story but highly coincidental to have the president of the water company in my office while I'm working through this water leak!

Rollin

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #25 on: May 20, 2013, 06:09:52 AM »
Funny story...

The president of our local water company was in my office last night taking delivery of his new vehicle.  What a perfect time to ask him about credits on my water bill for repairs made or installing high efficiency toilets.  The water company will credit any repairs but offers no credit for equipment replacement. 

Actually, not really a funny story but highly coincidental to have the president of the water company in my office while I'm working through this water leak!

"Everything is in Divine order" as my DW always says!

zhelud

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Re: Noob Mustachian w/Debt - Help Me With My Plan
« Reply #26 on: May 20, 2013, 07:16:35 AM »
I second the idea to drop the ID theft coverage. I actually had my identity stolen 2 years ago. And it really wasn't a big deal. I had to do a lot of paperwork and spend some time on the phone with the security people at some phone companies (the thief had used my SSN to get a bunch of cell phones and plans) but the only expense for me (other than my time) was the $5 it cost to obtain an official copy of my report to the police.