Hello all,
I am 56, married, three offspring, two on their own, the third inching out of the nest. I am currently working two jobs in my career to keep our heads above water and try to overcome years of what can only be described as perverse, anti-mustachian living. Underwater mortgage, two overpriced cars, unfettered spending on every whim, huge parent loans to finance private college, I could go on and on but my chest hurts just writing this. I took the plunge this last few months and finally pulled my head out of my ass and had a good look at our spending. I write this in the first person as I am the money person in the family with a reluctant spouse albiet one making progress.
I have four goals:
Get out of debt
Sell our underwater house
Move to a warmer clime (rent versus own??)
Stop working so much
Here are the deets:
Income:
Average monthly last three month 13,000
This is take home from working weekly overtime in my primary job and from a once a week second job
I have 5% take out for retirement (4% match from my employer) I also have my health insurance taken out.
This is what I currently spend:Expenses:
mortgage 1900
taxes 500
house and car insurance 409
gas 100
electric 110
cable 138
water 50
oil 500
food/wine 1200
entertainment/travel 2300
clothes 200
yearly fees (EZ Pass, licenses, pet vaccinations etc.) 150
household expense 150 (paint, repair stuff, LED bulbs, new clothesline)
two car leases 840
our phones 40
daughter/son phone 110
CC #1 500
CC #2 400
School Loans 709
Assets: retirement savings 484465
NO Emergency funds or "buffer"
Liabilities:
Credit cards:28909
parent plus loans: 56000
mortgage: 218834 (7 more years on a 15 year note, listed as a liability as we are under about 25000)
The lease on two cars
Yes my hair should be on fire, to say I am trying sounds so LAME, trying is not winning!
How can I rid myself of the leases? Where can I put approximately $2000 that I am sure I can "squeeze" out of this mess? WWMMMD????
Thanks everyone for your thoughtful replies.
My demographics: We live in Connecticut, the winters are long, cold and miserable (not Maine or Alaska miserable but still lousy) We live in a city with high taxes and high risk for car insurance. We will move as soon as we can sell the house. I live a mile from work, no excuse not to ride in summer/spring/fall. I could also walk.
The ridiculously expensive lease is the result of rolling high car debt into the lease, this one ends in 2 years.
My salary will be dropping to about 8800 monthly take home in January. This represents the return of 6.5% for SS and my increase to 5% on my retirement. It also reflects one week a month where I will only work three days (still a 40 hour work week). It will cut the income, but I can't keep working these hours. I am in excellent health but I sure am pooped. Here's the budget we are aiming for:
Income average 8400 each month, I do have one child on health insurance, she's a free lance photographer, will leave her on til 26.
I would like to stash the income from my second job into an emergency fund. This would average about $1000 a month. I wonder if I should just save an EF then of about 5000 then dump the rest on debt???
Mortgage/taxes/insurance 1900/500 (includes old car taxes)/100
Car insurance 250 (USAA, live in an urban area that is high risk)
Gas 75 (ride to work at least once a week, cut back on clown car driving)
Stupid leases VW CC at 575, VW Golf at 270
Phones 40 cut the umbilical cord of cell phones for kids
Food 500 (all cooking at home)
Dining out 200
Beer and wine 200
Electric less than 100 (LED, clothesline, I am already seeing a decrease of about 40)
Oil 500 (this is a cost average, thermostat at 66, lots of sweaters and slippers, a newer, efficient burner)
Water 50
Cable/internet 68 (baby steps)
Yearly stuff 150
Clothes 0 (ouch)
Travel/vacation 350
CC this is where extra will go
Parent Plus this will be the next payoff 706
This will leave an extra 2500 for credit debt. I could pay off one of the leases early, not sure if this would be helpful versus paying off credit debt with average of 9% interest. The house loan is at 4.2 so I will not work on that until the debt is paid off. Then I want to sell it when I can (figure I can sell it for 180,000 in three years).
We would then love to move south. I want to rent, we are not "homey people". I hate yard work, really just need the basics. A condo would be perfect.
Thanks everyone! I was a little nervous about a pow to the kisser! I would love to rid myself of the CC, I feel like it's penance for some really bad decisions. It still doesn't beat the years we drove a Ford Excursion at $700 a month. That was a ridiculous monstrosity. I think the credit cards, then the loan will be the way to go. I still think I should save a little toward retirement then put the full court press on in my last five years. Hopefully that won't still entail lots of OT. Really at 60, I think it would be a little unseemly.
In response to the more recent posters, again thank you for your help.
We can definitely ditch the going out, we have been cooking like demons, baking bread, looking for thrifty ways to decrease our food costs. With all our debt, it's foolish to even think about going out.
The wine habit is a bit much. I personally love my black box Chardonnay and it will last a month. We can cut back on the red wine to about $100 a month if we really are careful. Wine is sooooo tasty!
My spouse is unfortunately disabled, he was hit by a car a couple of years ago and then broke his leg last year. This year will hopefully be trauma free. I am happy in my career and was always the main breadwinner. With the kids out of the house, our expense are less so we can certainly get by without his income.
Heat in CT is ridiculous, I do have a programmable thermostat and drop the heat to 60 at night. I work nights so need a little warmth when I sleep during the day! We set it at 66 during the day.
Those stupid leases will be the albatross around our necks for the next two years. I am going to look into paying off one early and turning it in. We don't need two cars for sure.
Travel is tricky. It is an indulgence for sure. My youngest is serving in the Army and I miss him so much. We made two trips to see him last year and he will be returning from Afghanistan in January. I really want to be on the tarmac when he steps off the plane!!! It is an "spendy" area that needs to be trimmed otherwise.
Thanks again for all your input! I have been cruising around the forums and have found some great information for saving money!