Author Topic: I could use some advice on the rest of my life  (Read 24495 times)

nawhite

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Re: I could use some advice on the rest of my life
« Reply #50 on: May 09, 2014, 11:11:39 AM »

So over time our loan vs investing idea has moved (due to some loans having different interest rates and me getting a better understanding of the tax benefits of investing) but now we max out 401k's and IRA's and then put every other cent we can spare into loans. Currently today we put about $30k into 401ks and IRAs, $45k into student loans and $12k into a mortgage per year. We'll have all the student loans paid off in another 2 years and are planning to retire to fun part time jobs in 3 years. By saving in the retirement accounts now, we'll have 150k in them at age 30 so if we never add to them again, we're hoping they'll be around 400-600k at 65.

What kind of work do you do now and what fun job are you looking to retire to?

This is good stuff! I'm in a very similar situation to what you were in, so this is a great help. And I agree, admitting that I'm poor is a big help when debating on spending. Need a new couch? Better find one for free because I'm too poor to buy one!

OldDog, that's some good advice. Living in the area not only lets you get a feel for it but it also allows plenty of time to see every house on the market throughout the year!

I saw your question in there and wanted to reply. Now I do cybersecurity IT work for an ISP and my wife is a Special Education Preschool Teacher.

After "retirement" we're looking at a number of different ideas: Whitewater raft guides, kayak instructors, Campground hosts, living with our parents and fixing up their houses for a season while they pay living expenses (in-laws have 2 rooms that have been stripped to the studs and need to be rebuilt for instance), ski instructors, bus drivers, whitewater vacation planner etc. When there are 2 of us and we only need to cover living expenses, there are a lot of options.

homeymomma

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Re: I could use some advice on the rest of my life
« Reply #51 on: May 09, 2014, 07:53:46 PM »
Personally, and this might just be me, I wouldn't be comfortable marrying someone until they got that debt under control.

This is awful. Marriage is about so much more than net worth.

golfer44

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Re: I could use some advice on the rest of my life
« Reply #52 on: May 10, 2014, 05:58:35 AM »
Personally, and this might just be me, I wouldn't be comfortable marrying someone until they got that debt under control.

This is awful. Marriage is about so much more than net worth.

No, relationships are about so much more than net worth. Marriage is a legal and financial agreement.

Name me one thing you can do in a marriage that you can't do in a relationship that isn't related to laws or money, and I may change my mind.

nawhite

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Re: I could use some advice on the rest of my life
« Reply #53 on: May 11, 2014, 08:23:18 AM »
Personally, and this might just be me, I wouldn't be comfortable marrying someone until they got that debt under control.

This is awful. Marriage is about so much more than net worth.

Yes, its about not arguing with your spouse over long term plans and purchasing decisions. I wouldn't be comfortable marrying someone with vastly different life goals than I have the same way I wouldn't be comfortable marrying someone with vastly different financial goals.

OldDogNewTrick

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Re: I could use some advice on the rest of my life
« Reply #54 on: May 11, 2014, 09:46:01 AM »
#1 cause of divorce? Disagreements over money. It is an important factor, very important.

Exflyboy

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Re: I could use some advice on the rest of my life
« Reply #55 on: May 11, 2014, 11:14:38 AM »
Personally, and this might just be me, I wouldn't be comfortable marrying someone until they got that debt under control.

This is awful. Marriage is about so much more than net worth.

Amen!... No way I would marry her until SHE shows a heck of a lot of progress on paying down her debt. I know you love her but this is a HUGE red flag and its also HER opportunity to show you she has what it takes to slay the beast of debt.

i would be putting off getting married for at least a year, during which time you will see if she has the laser focus required to get out from under this mountain of crap.

If you merry her this will become your problem and if it turns out she is not as dedicated as you are after all then you'll be saving and she'll be spending and it will all end in the divorce court.. Of curse, you'll then be paying off her debt anyway.

Forget buying a house also as Cheddar said, they really are not that great of an investment on average anyway, plus your life is going to be in a state of flux most likely, you'll probably be moving a lot anyway due to jobs.

Sorry Kev, I know this is harsh but this is hugely important.

Frank

MissPeach

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Re: I could use some advice on the rest of my life
« Reply #56 on: May 12, 2014, 07:36:47 AM »
I wish I did things differently when I got married (we've since divorced). I got married right out of college too to someone in about $100k of debt. We were constantly trying to get by with the house and the debt. The debt was sinking us and caused us to run up credit cards for groceries when XH had an unexpected drop in income.

For the wedding, I had thought about the destination wedding somewhere exotic like Europe or having a beach wedding. I wound up with the big family wedding which was nice but I wouldn't have done in hindsight. We were able to have a nice wedding for 10k. Where I live the reception charges a huge fee $4,000 average, if you use a church (we didn't) it was an extra $1500-2000. It adds up fast between location, food, and photos.

Doing it again, it would have just hired someone to marry us on the beach (or had someone we knew get ordained). I would have kept it to our closest friends and immediate family. En just taken them out to our favorite restaurant to celebrate.

For the house, we bought a second one shortly before divorcing. We lost a chunk of the down payment even though we were in a very trendy, high demand area that appreciated due to the fees. The margate was double what I could rent for here. Currently I'm in a luxury apartment for half of my former mortgage payment for only 600 feet less in another expensive area. Fwiw, I also live in a high col area where homes are about $600k min and rents are about $1600 for a 1 br.

If you're worried about kids, my dd and I loved living in a studio. It really wasn't an issue until around 5-7 when they start wanting a little more independence and privacy.

« Last Edit: May 12, 2014, 07:44:49 AM by MissPeach »

Kev

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Re: I could use some advice on the rest of my life
« Reply #57 on: May 12, 2014, 03:10:35 PM »

So over time our loan vs investing idea has moved (due to some loans having different interest rates and me getting a better understanding of the tax benefits of investing) but now we max out 401k's and IRA's and then put every other cent we can spare into loans. Currently today we put about $30k into 401ks and IRAs, $45k into student loans and $12k into a mortgage per year. We'll have all the student loans paid off in another 2 years and are planning to retire to fun part time jobs in 3 years. By saving in the retirement accounts now, we'll have 150k in them at age 30 so if we never add to them again, we're hoping they'll be around 400-600k at 65.

What kind of work do you do now and what fun job are you looking to retire to?

This is good stuff! I'm in a very similar situation to what you were in, so this is a great help. And I agree, admitting that I'm poor is a big help when debating on spending. Need a new couch? Better find one for free because I'm too poor to buy one!

OldDog, that's some good advice. Living in the area not only lets you get a feel for it but it also allows plenty of time to see every house on the market throughout the year!

I saw your question in there and wanted to reply. Now I do cybersecurity IT work for an ISP and my wife is a Special Education Preschool Teacher.

After "retirement" we're looking at a number of different ideas: Whitewater raft guides, kayak instructors, Campground hosts, living with our parents and fixing up their houses for a season while they pay living expenses (in-laws have 2 rooms that have been stripped to the studs and need to be rebuilt for instance), ski instructors, bus drivers, whitewater vacation planner etc. When there are 2 of us and we only need to cover living expenses, there are a lot of options.
Haha, nice catch, don't know how that got in there.

I wish I did things differently when I got married (we've since divorced). I got married right out of college too to someone in about $100k of debt. We were constantly trying to get by with the house and the debt. The debt was sinking us and caused us to run up credit cards for groceries when XH had an unexpected drop in income.

For the wedding, I had thought about the destination wedding somewhere exotic like Europe or having a beach wedding. I wound up with the big family wedding which was nice but I wouldn't have done in hindsight. We were able to have a nice wedding for 10k. Where I live the reception charges a huge fee $4,000 average, if you use a church (we didn't) it was an extra $1500-2000. It adds up fast between location, food, and photos.

Doing it again, it would have just hired someone to marry us on the beach (or had someone we knew get ordained). I would have kept it to our closest friends and immediate family. En just taken them out to our favorite restaurant to celebrate.

For the house, we bought a second one shortly before divorcing. We lost a chunk of the down payment even though we were in a very trendy, high demand area that appreciated due to the fees. The margate was double what I could rent for here. Currently I'm in a luxury apartment for half of my former mortgage payment for only 600 feet less in another expensive area. Fwiw, I also live in a high col area where homes are about $600k min and rents are about $1600 for a 1 br.

If you're worried about kids, my dd and I loved living in a studio. It really wasn't an issue until around 5-7 when they start wanting a little more independence and privacy.
We're both up for wedding on the beach, I have a large family so it may be tricky choosing how to invite. Either way that's very far down the road! not doing anything yet.

Cinder

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Re: I could use some advice on the rest of my life
« Reply #58 on: May 13, 2014, 10:31:44 AM »
A few good links here
http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/  along with some discussino - http://forum.mrmoneymustache.com/real-estate-and-landlording/rent-vs-owning-with-jlcollinsnh/
More rent vs buy conversation, the forum is FULL of great threads and advice.
http://forum.mrmoneymustache.com/ask-a-mustachian/ny-times-rent-v-buy-calculator
http://forum.mrmoneymustache.com/ask-a-mustachian/is-home-ownership-antithetical-to-fi/

and in general the stock series - http://jlcollinsnh.com/stock-series/
http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/
http://jlcollinsnh.com/2013/06/04/my-path-for-my-kid-the-first-10-years/

As far as 401k vs student loan payoff, I didn't see anyone else mention that you should almost always contribute up to the match, as that is 'free money'.  Then after you contribute up to the match, that's when the 'interest rate on outstanding loans vs expected gains on investment' considerations come into play. 

Good luck!  I hope that you two can see eye to eye financially and draw your line in the sand as to where your priorities lie.  Early Retirement?  How fast to pay off the loans?  etc...

Rebecca Stapler

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Re: I could use some advice on the rest of my life
« Reply #59 on: May 13, 2014, 11:08:30 AM »
Kev, I am so jealous that you found this site even before the wedding! I kick myself for not having started aggressively paying off our student loans sooner. I'm psyched for you that you're starting off in the enviable position of even asking the question: "should I use my $30k in cash to pay off loans?" Because the answer for me would be a resounding "YES!" But that's probably because I have a lot more than $40k in SLs.

I've thought about the SL payoff question a lot, and what it comes down to is that it's a logical and emotional decision. If you feel like the SLs are weighing you down, even at 3% (or whatever rate they have), then get them off your chest. If they're high interest (like 8.5%), then get rid of them -- there isn't much logic to keeping them even if you're investing the $30k. I also believe in getting rid of as many monthly payments as possible. So, if you have 4 SLs, and one is $12k, get rid of the other 3 loans so you can free up those monthly payments -- then tackle the $12k loan with all the monthly payments you're not sending to the other 3 loans. I have a post about it on my blog here: http://staplerconfessions.com/index.php/paying-off-200000-in-student-loans/

Here's the thing about wedding planning: If you do it by reading magazines and comparing yourself to other weddings you've been to, it's very easy to get lost down the rabbit hole. But if you're already in a frugal community (like here!) it gets easier and easier to "spend your values." That is, look at your priorities for your wedding and put money towards that but ratchet it way down on the other things. For us, we wanted to (a) get married, (b) give our family and friends a fun party, and (c) have photos of the entire thing. To that end, we prioritized the photographer and DJ and the rest was just basic (borrowed my sister's wedding dress, dinner was turkey, a friend made our cake and cupcakes, I made the centerpieces and invitations, etc.).

Rebecca Stapler

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Re: I could use some advice on the rest of my life
« Reply #60 on: May 13, 2014, 11:15:36 AM »
Ah, I posted before I read all the stuff about not marrying someone with debt. So, just a comment about that ... my husband was even worse than I was with money, but when it came down to fixing our financial situation, he was 100% on board. He's not involved in the financial planning side of things, because I love to do that, but he works his ass off at side hustles so we have the money for our extra payments. His side hustles have paid for all of our loan payoffs and he works hard at it.

Also, if I understand your post correctly, all of your debts are student loans. They're still debts, and should be slayed, but they're not necessarily an indication of  rampant spending or skewed values. You said that she has already tamped down her spending, and it doesn't sound like you're buying fancy cars or carrying tens of thousands of dollars in credit card debt. SLs are a different beast.

So, don't believe the naysayers. If she's a good teammate, marry her!

Kev

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Re: I could use some advice on the rest of my life
« Reply #61 on: May 13, 2014, 02:24:35 PM »
A few good links here
http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/  along with some discussino - http://forum.mrmoneymustache.com/real-estate-and-landlording/rent-vs-owning-with-jlcollinsnh/
More rent vs buy conversation, the forum is FULL of great threads and advice.
http://forum.mrmoneymustache.com/ask-a-mustachian/ny-times-rent-v-buy-calculator
http://forum.mrmoneymustache.com/ask-a-mustachian/is-home-ownership-antithetical-to-fi/

and in general the stock series - http://jlcollinsnh.com/stock-series/
http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/
http://jlcollinsnh.com/2013/06/04/my-path-for-my-kid-the-first-10-years/

As far as 401k vs student loan payoff, I didn't see anyone else mention that you should almost always contribute up to the match, as that is 'free money'.  Then after you contribute up to the match, that's when the 'interest rate on outstanding loans vs expected gains on investment' considerations come into play. 

Good luck!  I hope that you two can see eye to eye financially and draw your line in the sand as to where your priorities lie.  Early Retirement?  How fast to pay off the loans?  etc...
Thank you for the links! I really need to take a look deeper into my 401k vs SL numbers asap!


Rebecca, thank you for the tips and advice! All of the weddings that I go to tend to be pretty much the same so I'm excited that my girlfriend wants a beach wedding. I really like the idea of having a very different wedding which will save money, but will also stand out in everyone's mind for a long time. Would you mind sharing your financial story a bit? I'm always interested to hear how much dept people were in and how far along they are at paying it off.

Rebecca Stapler

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Re: I could use some advice on the rest of my life
« Reply #62 on: May 14, 2014, 10:56:42 AM »

Rebecca, thank you for the tips and advice! All of the weddings that I go to tend to be pretty much the same so I'm excited that my girlfriend wants a beach wedding. I really like the idea of having a very different wedding which will save money, but will also stand out in everyone's mind for a long time. Would you mind sharing your financial story a bit? I'm always interested to hear how much dept people were in and how far along they are at paying it off.

We are 7 years into our student loans form law school (where we met), which were originally at $235k total. Now, they're at $188k. We didn't make a point of aggressively paying them down until last year (after discovering MMM and getting facepunched in my journal: http://forum.mrmoneymustache.com/journals/stan's-journey-to-pay-off-$200k-in-student-loans/msg81730/#msg81730). We paid off at $12k loan, and then I got laid off and have since then picked up work on a contract basis as an attorney but our income is not the same as it was when we were paying off the loans. But last month, my income increased and we were able to get back on track (http://staplerconfessions.com/index.php/may-2014-back-on-track/) with a $2100 payment to the next student loan. We hope to continue the momentum. 

Also since getting laid off, my husband and I started a small business that uses his programming and legal skills. We made our first sale last month! (it's a business to business product, so we have fewer sales and more money per sale). We hope to build more products, particularly for this client, and maybe even get acquired by them sometime down the road, since my husband would love to work for this business. I am also trying to sell the current product to other businesses. Before, my husband would pick up consulting jobs -- in software development -- and his price increased with each gig. But now we want to build something that's worth even more than the actual hours he spends on it. 

Kev

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Re: I could use some advice on the rest of my life
« Reply #63 on: May 15, 2014, 11:23:50 AM »
It sounds like you two have a lot of great things ahead of you! Congratulations and good luck!

fxsts12

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Re: I could use some advice on the rest of my life
« Reply #64 on: May 20, 2014, 08:22:41 PM »
If she thinks she"needs" an expensive weddings after 110k in loans to be a teacher then she is self centered and selfish. She is not the one until she grows up. When she is able to put the family needs first then reconsider.  End it soon and move on. Sorry about it but her actions don't seem to line up with a healthy future as your spouse.

nawhite

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Re: I could use some advice on the rest of my life
« Reply #65 on: May 21, 2014, 09:39:19 AM »
If she thinks she"needs" an expensive weddings after 110k in loans to be a teacher then she is self centered and selfish. She is not the one until she grows up. When she is able to put the family needs first then reconsider.  End it soon and move on. Sorry about it but her actions don't seem to line up with a healthy future as your spouse.

Well that sounds a bit strict. I've always been a fan of communicating with my wife as opposed to throwing her out when she acts illogically or fiscally irresponsibly. Call me old fashioned.

homeymomma

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Re: I could use some advice on the rest of my life
« Reply #66 on: May 22, 2014, 09:13:18 AM »
If she thinks she"needs" an expensive weddings after 110k in loans to be a teacher then she is self centered and selfish. She is not the one until she grows up. When she is able to put the family needs first then reconsider.  End it soon and move on. Sorry about it but her actions don't seem to line up with a healthy future as your spouse.

Yeah teachers are notoriously selfish and self-centered.