Author Topic: Reader Case Study: What work to do or help with the stubble  (Read 4404 times)

fredcanfly

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Reader Case Study: What work to do or help with the stubble
« on: September 16, 2014, 07:19:00 PM »
A little bit about me and my situation, then on to the numbers.  I am a disabled veteran, with the only skill that I posess any kind of experience for being satellite communications installer/troubleshooter.  The jobs for that skill that I have seen have all required quite a degree of physical labor that I can unfortunately no longer perform.  I am receiving both VA disability payments and Social Security Disability Insurance (SSDI).  My works as a Certified Nurses Assistant (CNA).  We are also trapped with a house that we can't live in (but the rent almost covers the mortgage payment).  Between all forms of income, we are able to make quite a debt payment (I only just figured this out).

I think that at our current level of income vs. expenses, we could achieve financial freedom in about 14 years.  That number is nice, but not good enough for me.  So, we need to cut expenses and/or improve income.  My vote is for both.  However, my wife is holding us locked on one major anti-mustachian expense and some of the areas I know could use improvement.  Just need to figure out how.

On to numbers:

Income
VA Disability:  $24,400
SSDI:  $21,276 <---------- $600/mo of this goes to the wife as a "caretaker".
Rent:  $10,116 <----------- This is from that awful house that we are upside down in.
Wife's Job:  $12,000 <----- This is after taxes and health insurance that covers the family.

Total Income: $67,792

Expenses
Rental House Mortgage:  $10,500 <----------- This is PITI
Primary House Mortgage:  $5,400 <----------- Also PITI
Ugly Stupid SUV loan:  $3,852 <--------------- Cannot dump due to constraints by wife - she fought with me for years to get this.
Student Loans:  $1,572 <----------------------- From my wife going to school, trying to pay before interest kicks in.
Insurance for Stupid SUV: $1,330 <------------ Cheapest I can find, will decrease as stash increases and we can increase deductible.
Groceries:  $8,440 <----------------------------- This is for 5 people, still a little high, working on changes to whittle it down - any face punches/suggestions would be welcome.
Stupid SUV Gas:  $1,800 <----------------------- Ugh.
Household Goods:  $1,800 <--------------------- This is also high, but this includes 2 dogs, a cat, and a child with eczema, and covers basically everything else needed to run a household - again, would welcome face punches or suggestions.
Spending Money:  $600 <------------------------ This is an investment in curbing my wife's spending habits.  I give her this and she spends much less.
Cell Phones:  $406 <------------------------------ Thanks to MMM for getting us on Republic!  This is for 3 lines.
Taxes for Stupid SUV:  $300 <------------------- This damn truck is costing us way too much.
Electric:  $2400 <--------------------------------- How did I leave this off the list?  One of the things I need help cutting back on!

Total Expenses:  $38,400

Total to debt principal: $29,392

Assets
Rental House:  $88,600 (Zillow)
Primary House:  $78,000
Stupid SUV:  $18,569 (KBB)
Money Market:  $1,000 (for emergencies)

Total Assets: $186,169

Liabilities
Rental House Mortgage:  $98,603.24 (7% interest)<----------- $10,000 to go if the market holds
Primary House Mortgage:  $45,305.39 (3.125%)
Stupid SUV Loan:  $19,246.57 (3.2%)
Student Loans:  $17,622.29 (currently 0%, goes up to between 3-7% when wife stops school)

Total Liabilities:  $180,777.49

Total Net Worth:  $5,391.51

Ok, here are some things I am thinking about.  Most of the jobs in my area that are available are minimum wage.  As I would lose SSDI, that's a no-go.  I have posted ads on Craigslist for computer tech support as this is a skill I have, but no real job experience or licenses.  I have an interest in becoming a landlord, and have my eye on a house that is asking $27,500, but I could probably get for $22,000.  It is currently rented for $525/mo.  I would like to have that extra money per month, but I don't know if that would be good for my current situation.  Any ideas for increasing income?

I would also like to reduce expenses, however, there is a limit to that based on what my wife will tolerate (although I think she would tolerate more than we are doing now if I can figure it out).  I have pushed her on the issues and I continue to do it (eventually there will be success, but it's going to take a while).  My wife would not argue with me making more money.  So that is a potential unlimited upside.

Anyway, I will take as much as advice as you are willing to give out.  Someday soon, I hope to have a fully-formed 'stache.  Right now, I just have a little stubble.  The sooner I can replace my income, the better - mostly because I am feeling better all the time than I was when I took the physicals for the disability, which means that I will soon not have as much from VA and probably lose SSDI altogether.  I need to be prepared.

Thank you all so much for your help.  This community is awesome!
« Last Edit: September 17, 2014, 08:26:35 AM by fredcanfly »

MBot

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #1 on: September 16, 2014, 08:39:43 PM »
If there are often deals in real estate like that near you, I would do a lot of research about landlording and building up a few investment properties.

Of course you may not be suited to it. But there are lots of recommendations on the forums here.  And lots of cautions about making it practical. 

fredcanfly

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #2 on: September 16, 2014, 08:54:46 PM »
If there are often deals in real estate like that near you, I would do a lot of research about landlording and building up a few investment properties.

Of course you may not be suited to it. But there are lots of recommendations on the forums here.  And lots of cautions about making it practical. 
I wouldn't say they are often, but it is one that has presented itself through Craigslist at this moment.  I am pretty that it's a good deal, but the thought of the possibility of having to cover it in empty months is my only real concern.  The owners of the particular property moved for a better job.  I also get concerned taking on more debt as well, as I already have so much.  But, then again, the monthly extra could go to the rental house that I currently have, allowing me to cut that loose sooner.  This would let me cut almost $100K of our debt right there (at 7% interest, too - ouch!).  I think I will add interest rates to the liabilities section to make that area more clear.  I will have to talk to the wife about obtaining yet another rental property.

Also, I know quite a bit about landlording.  I could do it in my sleep, pretty much.  Something breaks, I fix it.  Tenant leaves, I find a new one.  Clean place up.  Account for deposits, deal with neighbor issues, clean up a tenants stuff when they suddenly decide to move without warning or even telling you they left.  The difference with this house is that it will be an e-bike ride away, instead of in another state (which will make it cheaper because I won't necessarily be having to pay someone else to deal with it).

Thanks for the advice.  I will try looking around for others' posts about it.  I have only been in the game for 4 years on a single property (the one from hell), but I know that there is always something to learn!

Terrestrial

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #3 on: September 16, 2014, 10:51:22 PM »
I personally don't think you're approaching your problem from the right perspective with attempting to build a passive income portfolio based on where your income and assets are at right now. 

First, how would you be planning to purchase this property.  You don't seem to be able to buy it outright with only 1k of liquid assets, and you will have a hard to nearly impossible time getting a bank to lend you the money because 1) you already have fairly substantial ammt of debt and 2 mortgages, 2) you have no cash for a downpayment, 3) even if you did banks don't like to do mortgages for 25k, but lets say for arguments sake you could get a small local bank or a relative to lend you the money.  While the return on the property isn't bad if purchased with cash, if you have to finance it after the property taxes/insurance and financing payment, you would probably not be making much at all on 525 of gross rent.  Any unexpectedly large maintenance items or extended vacancy and it could actually cost you money.

Your expenses could be better but they aren't horrible compared to your income.
If i was you in the short term i would do anything you can for under the table income where you can get paid in cash.  How disabled are you, can you do day labor?  Start knocking on doors and mowing lawns, you say you are handy enough to maintain a rental house so i'm assuming you can do maintenance side jobs for people. Doing that should avoid compromising your disability payments and start slamming all that extra money into your rental mortgage until its paid off enough that you can get out from under it and that will improve your situation immensely. 

bugbaby

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #4 on: September 16, 2014, 11:23:43 PM »
I think your biggest asset is your equity on primary house.. It doesn't seem like bankruptcy is a threat in the least, so you could:

- get a heloc on the house to sell off the underwater rental with a loss ( i'd do this myself in your shoes) or at least refi down to sub-5% rate and ride out the market.
- buy the new rental for 22k (after super thorough due-diligence) with plan to pay it off very soon with the cash flow and trimming budget.

seattlecyclone

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #5 on: September 17, 2014, 12:08:27 AM »
I would find a way to get rid of that rental house as soon as possible. The rent doesn't even cover the fixed costs. Throw in maintenance and you're bleeding cash. The good news is you have about $2,650/month of excess cash coming in. Throw all of this amount at the rental house mortgage until you're no longer underwater on it, and then cut the house loose. You should be able to do this within a year.

Once you're done with that, your cashflow situation will improve a bit. If houses in the $25k range come on the market fairly often in your area, and you feel good about landlording, this might be a good option for you. Don't worry about paying off any of your other debt right away (except for any student loans that start charging 5% or more -- kill those with prejudice). Instead, save up some cash until you can buy a rental property in cash. Repeat this a couple of times and you could have a pretty good income stream coming in from the houses.

Meanwhile, keep working on your wife regarding the SUV. You know it's stupid, I know it's stupid, figure out a way to make her understand it's stupid as well. Have you tried explaining that she's spending 60% of the amount she earns at work on a big hunk of metal to get her to and from the job?

All this said, I would ask whether you even need to worry too much about investments at all. Between your VA disability income and SSDI, you have $45k/year coming in. You only spend $36,000/year, and that includes $10,500 for a house you want to sell. Unless there's some end date to these income sources that I don't know about, it seems to me that you could retire now as long as you don't increase your spending any.

fredcanfly

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #6 on: September 17, 2014, 08:22:55 AM »
First, how would you be planning to purchase this property.  You don't seem to be able to buy it outright with only 1k of liquid assets, and you will have a hard to nearly impossible time getting a bank to lend you the money because 1) you already have fairly substantial ammt of debt and 2 mortgages, 2) you have no cash for a downpayment, 3) even if you did banks don't like to do mortgages for 25k, but lets say for arguments sake you could get a small local bank or a relative to lend you the money.  While the return on the property isn't bad if purchased with cash, if you have to finance it after the property taxes/insurance and financing payment, you would probably not be making much at all on 525 of gross rent.  Any unexpectedly large maintenance items or extended vacancy and it could actually cost you money.

Your expenses could be better but they aren't horrible compared to your income.
If i was you in the short term i would do anything you can for under the table income where you can get paid in cash.  How disabled are you, can you do day labor?  Start knocking on doors and mowing lawns, you say you are handy enough to maintain a rental house so i'm assuming you can do maintenance side jobs for people. Doing that should avoid compromising your disability payments and start slamming all that extra money into your rental mortgage until its paid off enough that you can get out from under it and that will improve your situation immensely. 

Here is the breakdown for the cashflow on the house and how I would purchase it.  My parents have already agreed to loan me the money at 3% for 15 years = $138.12/mo for P&I.  Taxes are $530/yr = $44.17/mo.  Insurance is $320/yr = $26.67/mo.  Total PITI payment of $208.96.  Factor in a month of vacancy per year = $43.75/mo.  Maintenance of $50/mo.  We are looking at $302.71/mo expenses total.  $525 - $302.71 = $222.29/mo cashflow.  That seems like a lot to me.  Loan from parents eliminates closing costs, and no realtors eliminates those costs as well (my dad has done several house deals on his own before so he can help make sure sales paperwork is right).  If I was factoring in those costs, you would probably be right.

The problem with my disability is that I can do work for about 10 minutes and then the pain gets so bad that I have to take a break for an hour.  The pain pills my doctor gave me don't seem to help too much, so I just don't take them.  My grocery store is about 2 blocks away, and after going there, getting the couple items I need (while leaning on a shopping cart), and coming back, I have to sit down for a good half hour before I can even think about doing anything else.  If I could find clients that would be OK with me doing this, I would gladly mow a lawn or two.  I cut my own sometimes, others, the wife does it.  It is improving with all the back exercises I am doing, but it is not quite there yet.  I could do a fair bit of maintenance work around the rental house, but when it comes to bigger projects, I would probably need to hire out (unless the place was empty and I could spend a couple days doing it).

I think your biggest asset is your equity on primary house.. It doesn't seem like bankruptcy is a threat in the least, so you could:

- get a heloc on the house to sell off the underwater rental with a loss ( i'd do this myself in your shoes) or at least refi down to sub-5% rate and ride out the market.
- buy the new rental for 22k (after super thorough due-diligence) with plan to pay it off very soon with the cash flow and trimming budget.


That is probably a good idea about the HELOC.  I will have to look into that.  Is that an adjustable rate thing?  Unfortunately refi on an upside down house doesn't seem like an option.  Lenders don't seem to like to lend out more than the house is worth.

Given what I have said above, I would probably hit other loans before the rental house.  Having my parents as the bank means I have some flexibility and the 3% interest rate is the lowest of them all.  I realize you didn't know this when you made your post.

If houses in the $25k range come on the market fairly often in your area, and you feel good about landlording, this might be a good option for you. Don't worry about paying off any of your other debt right away (except for any student loans that start charging 5% or more -- kill those with prejudice). Instead, save up some cash until you can buy a rental property in cash. Repeat this a couple of times and you could have a pretty good income stream coming in from the houses.

Meanwhile, keep working on your wife regarding the SUV. You know it's stupid, I know it's stupid, figure out a way to make her understand it's stupid as well. Have you tried explaining that she's spending 60% of the amount she earns at work on a big hunk of metal to get her to and from the job?

All this said, I would ask whether you even need to worry too much about investments at all. Between your VA disability income and SSDI, you have $45k/year coming in. You only spend $36,000/year, and that includes $10,500 for a house you want to sell. Unless there's some end date to these income sources that I don't know about, it seems to me that you could retire now as long as you don't increase your spending any.

There are sub-$25K house that come on the market all the time, but usually they need $20-25K worth of work to get them rentable.  This is the first one I have seen that would be rentable at the sub-$25K price.  I kind of want to go after it as I see it to be a good deal.  I'll keep thinking on it.

My wife is aware (or at least has been told) about every financial aspect of owning the SUV.  The problem is that she views it as a prize that she has "earned" by finally talking me into doing it.  This was before I found MMM, but I still knew it was probably a bad idea.  She really wants it, though, so for now we are stuck with it.  I even showed her how much faster we could get to retirement money if we didn't have it.  She didn't seem to care.  She loves her job, and therefore doesn't see the need to save up that quickly.

Which brings me to why I see that need.  The VA disability and SSDI don't just go forever once you get them.  SSDI is all about whether or not you can work.  If they think you can, then they will take it all away immediately.  They usually review it about once a year (going through one now).  I just don't feel comfortable with that situation and would like to definitely replace that income right away.  VA disability is a little different in that they will actually figure out to what degree you are disabled and give you that percentage.  There is a chart that tells you how much you will get for each percentage (they round all percentages to the nearest 10).  I am rated high right now (90%), but I don't think that I will be rated that high in the future.  I am doing exercises every day and eating healthier all of the time, which have been helping me feel better.  I should do everything I can to get better, and if I get better, then I should be honest about it.  If I do that, I expect the SSDI payment to go away, and the VA payment to probably cut in half (at least).  I would like to replace both of them completely so that it VA goes up or down, it doesn't really matter.  My path to pay my expenses is independant of that.  Of course, I do only need to replace up to $36K minus my current loan expenses (although I would like some cushion there - maybe $300/mo or so).  That seems to be $14,676 (I am still trying to figure out if that could actually be right - seems low - wait, it is).  I forgot to put electric on the list!  Going to add that because it is a mighty chunk of change - $2400.  That would put us at $17,000!  More around the range I thought we were at.  Lowers our available debt payment quite a bit, too.

Anyway, thank you to everyone for suggestions, thoughts, and comments.  Advice has been excellent.  I am considering all the wisdom you have imparted on me, and am working toward getting it all straight in my head to make a plan to get to where I want to go.

mollyjade

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #7 on: September 17, 2014, 10:30:46 AM »
Is there a way you could take a course at a community college or online to get a bit of certification for IT work? Or could you do some volunteer IT work at a nonprofit? Just something to get you in the door for work that pays pretty well and would work with your disability.

fredcanfly

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #8 on: September 17, 2014, 11:51:50 AM »
Is there a way you could take a course at a community college or online to get a bit of certification for IT work? Or could you do some volunteer IT work at a nonprofit? Just something to get you in the door for work that pays pretty well and would work with your disability.

Good idea.  I looked a local tech college, but they want to do the full degree type of stuff that takes 3 years to complete.  I would like to just take a course that would get me a certification.  I could look online to see what is offered, but a more hands-on approach would be ideal.  I looked around for nonprofits or even a for-profit that would be willing to take on an unpaid apprentice.  Someone that could show me all I need to know about the work to get a certification with some studying, and then possibly even working for themafterward (would have to be a pretty high salary to cover the 1773/mo I currently get to do nothing plus make it worth my time to show up and get paid).  I was looking into the start my own business thing because SSDI doesn't consider self-employment to be employment, and they don't care how much money I make.

The other thing that came up while perusing Craigslist is there is a real estate investor (well known in my area) that needs someone to help manage his properties.  I guess he finally bought enough that managing on his own is enough of a pain that he needs some assistance in this area.  Instead of going the normal pay someone to do it, he is offering to teach someone how to do it and then how to invest.  He says in his ad that he will give access to a wealth of resources including where he finds said properties to buy.  He will also help with financing the first rental to help get the ball rolling.  Of course, the work of managing the properties would go unpaid (monetarily, anyway).  So, I e-mailed him.  Haven't gotten a response yet, but that was just this morning.  We'll see how it goes.  Might be just what I am looking for.

In the mean time, I am going to talk to my wife about at least looking at the other rental property.  I think that it would help, rather than harm the finances, and allow us to put more towards paying down other debts, by about $2,640/yr.  I will put all of my available income into paying down the rental house we currently have (just until there's enough there to sell it), and then hit the student loans.  The SUghV would be next at a half time rate, with the other half going to savings.  Then would be our primary house (still funding savings), and finally the new rental.  All told to get out of debt would be about 6 months for the current rental (paying a realtor and closing costs).  Then about 4 months to carve out the student loans.  SUghV payment time is longer, due to only half going to it, but we could get it done in about 10 months (got to love the effects of snowballing).  Our primary house at about 1 yr 8 months.  All told for debt (other than the other rental): 3 year, 6 months.  In savings, I am looking at least $64,500.  That is a nice start to my 'stache.  I could be financially free in this plan in 8 years, 6 months.  I am much more comfortable with that than the 14 year alternative.

fredcanfly

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #9 on: September 17, 2014, 08:33:43 PM »
- get a heloc on the house to sell off the underwater rental with a loss

Question:  Where would you recommend I get one from?  I have done a small amount of shopping around online and seems like most HELOCs are floating at about 4% variable.  Thank you very much again!

bugbaby

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #10 on: September 17, 2014, 11:41:27 PM »
I'm not personally experienced with Helocs, but pretty much any credit union or bank would do. I know Wells Fargo, USAA advertise them. The thing is interest rate which varies by bank and your credit score so shop around.   I've seen 4.5-6% rates online.  I don't know if there are deals for Veterans but you should look in Veteran web sites.  Remember you are borrowing against your primary home. You wanna pay it off *promptly* this is not an ATM!

Once you get the heloc maybe take out 15k from it to pay down the rental mortgage and sellers cost.  talk to a realtor about this.

Great that your parents are offering a loan for the rental. Have they loaned you cash before? Pls make sure this is a smart move for family harmony.

UnleashHell

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #11 on: September 18, 2014, 03:57:28 AM »
Theres only a couple of suggestions I have.
YOu are clearly against the SUV as you can see how much its costing you. rightly so. However you do not want to turn this into being against the wife as she likes the SUV.

for this purpose I'd suggest using something like mint totrackall your expense - and make sure that everything for the SUV is tagged as such.. That way you'll get a clearer picture of your cash flow and how much is taken up by the suv.. You can then work with your wife and get her to see how much of your money, after mortgages, this is costing you.
Be nice to sell it and clear that loan - get something more suitable for the budget.

As for the loans, work etc - do you have a counselor you work with at the VA? some of them are very good and not just talk - they can point you in the direction of cheaper loans, suitable work etc etc. It might be worth a shot to reduce expenses / increase income.


you are paying out over 5k a year related to an SUV that's not worth as much as the SUV loan. and 7k a year in interest on a rental property that's not at a good rate. if you can find  a way to drop the SUV and then even lease a new car (a stepping stone to owning something sensible and maybe a step down that the wife would agree too - not a long tem solution) then you could throw more money at reducing the Rental mortgage and then refi it asap at a sub 5% deal.

If you also are using a tool like mint then you'll get a better idea of where all of your money is going and be able to find areas of waste there.  Detail is king.

fireferrets

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #12 on: September 18, 2014, 05:53:59 AM »
Groceries:  $8,440 <----------------------------- This is for 5 people, still a little high, working on changes to whittle it down - any face punches/suggestions would be welcome.

Some ideas to cut back on this category might be:
1) Join a wholesale club like Sam's Club, BJ's or Costco and buy expensive things like oil, meat, etc. in bulk. Since you have 5 mouths to feed, this is probably a worthwhile investment to save you from buying the same things every week.

2) Get your produce from a produce market. So many people go to mega-size grocery stores as a one-stop-shop, but produce there is usually a rip-off. Look for a produce-only market near you.

3) Shop at the cheapest grocery store. For example, where I live we have at least 6 options (ordered by least-to-most expensive): Bravo, Aldi, Winn Dixie, Publix, Whole Foods, The Fresh Market.

4) Shop at "ethnic" grocery stores. It is SO much cheaper to buy a big bag of rice at the asian supermarket than at my closest Winn-Dixie and it lasts all year. If you are new to "ethnic" stores, check out your area to see if there are Hispanic, Asian and/or Indian stores nearby. Sometimes the deals on produce are better at these stores, too.

5) Potluck! If you have friends or family nearby and some culinary skills to share (or develop ^,< like me) hold a potluck and encourage your attendees to bring their "world-famous" dishes to share. I always find that we have SO many leftovers after potlucks and no one wants to take home any. That means you get to eat amazing leftovers for several days after. Preparing a bit extra of what you were making anyways is a small price to pay for the deliciousness and selection of potluck food. Hint: if you want your potluck attendees to bring real food (ie. not a bag of potato chips or a box of cookies) tell them what you are planning on making when you invite them (Zucchini lasagna, anyone?) and ask them to let you know what they'll be bringing. If your friends are show-offs like mine, they'll do their best to cook up something to try to out-do you. ^,<

As a side note to potlucks: if you can make a weekly tradition out of potlucking, you are not only going to grow closer to your friends/family, but also - you are gonna eat like a king all the time and save lots of dough. (It is cheaper to double a recipe than to make two separate meals).

fredcanfly

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Re: Reader Case Study: What work to do or help with the stubble
« Reply #13 on: September 18, 2014, 07:42:12 AM »
That way you'll get a clearer picture of your cash flow and how much is taken up by the suv.. You can then work with your wife and get her to see how much of your money, after mortgages, this is costing you.

As for the loans, work etc - do you have a counselor you work with at the VA? some of them are very good and not just talk - they can point you in the direction of cheaper loans, suitable work etc etc. It might be worth a shot to reduce expenses / increase income.

If you also are using a tool like mint then you'll get a better idea of where all of your money is going and be able to find areas of waste there.  Detail is king.
As far as my wife is concerned, she already knows all of this.  I even showed her impact on our retirement MMM-style.  She sees and knows how much it is costing us, but it's what she wants.  She doesn't see the problem as we are living below our expenses.  A little background - up until about 3 months ago, we were the typical consumerism family.  What you see here is the result of us already making a change in lifestyle - one that she has yet to embrace.  Right now, I have to look at the SUV as her holding on to those last bits of consumerism.  As much as I hate paying for it, it may be an investment in her sanity.  I think she feels like she needs it in a world where everything is getting just a bit smaller.  I will not give up on getting rid of it by any means, but I may have to accept this reality for a while just as she has to accept cutting back some as hers.

I tried Mint, I didn't particularly care for it.  Felt too... reactive?  I still have it and get their financial statements (there are features I like), but I still wanted something more proactive.  YNAB fit my wife and I better.  It's more geared toward making your money go where you want vs reacting to the money you already spent.  Since getting it, my wife is finally an active participant in the budget.  She has and manages her own budget within the program.  I made her set it up where she gets to see how much of her checks are going to the SUV.  She knows how much of the budget is spent on the truck, because she pays those bills with her money.  However, her money also includes $600/mo from SSDI which essentially pays for the SUV completely.  All other bills we share based on proportion of income.  However, with the SUV, I put my foot down and told her that if she wanted it, she would have to pay for it completely.  If we got something else, I would pay my share of the costs.


Some ideas to cut back on this category might be:
1) Join a wholesale club like Sam's Club, BJ's or Costco and buy expensive things like oil, meat, etc. in bulk. Since you have 5 mouths to feed, this is probably a worthwhile investment to save you from buying the same things every week.

2) Get your produce from a produce market. So many people go to mega-size grocery stores as a one-stop-shop, but produce there is usually a rip-off. Look for a produce-only market near you.

3) Shop at the cheapest grocery store. For example, where I live we have at least 6 options (ordered by least-to-most expensive): Bravo, Aldi, Winn Dixie, Publix, Whole Foods, The Fresh Market.

4) Shop at "ethnic" grocery stores. It is SO much cheaper to buy a big bag of rice at the asian supermarket than at my closest Winn-Dixie and it lasts all year. If you are new to "ethnic" stores, check out your area to see if there are Hispanic, Asian and/or Indian stores nearby. Sometimes the deals on produce are better at these stores, too.

5) Potluck! If you have friends or family nearby and some culinary skills to share (or develop ^,< like me) hold a potluck and encourage your attendees to bring their "world-famous" dishes to share. I always find that we have SO many leftovers after potlucks and no one wants to take home any. That means you get to eat amazing leftovers for several days after. Preparing a bit extra of what you were making anyways is a small price to pay for the deliciousness and selection of potluck food. Hint: if you want your potluck attendees to bring real food (ie. not a bag of potato chips or a box of cookies) tell them what you are planning on making when you invite them (Zucchini lasagna, anyone?) and ask them to let you know what they'll be bringing. If your friends are show-offs like mine, they'll do their best to cook up something to try to out-do you. ^,<

1.  The nearest Sam's Club is two hours away.  Are those savings that big that 4 hrs of highway gas (18 mpg) is worth it?  If so, looks like a trip is in order.

2.  No produce only stores around here.  Living out in rural Kansas.  However, my local Farmer's market is great in all seasons except the winter ones.  In those months, I am relegated to grocery stores.

3.  The only grocer on that list that I even recognize is Aldi.  It is an hour away, and I find it's not cheap enough to be worth the trip.  However, sometimes we will go and stock up as we have family near the store, so we hit it when we are in town anyway.

4.  There are two ethnic stores about half an hour from where I live.  They are both Korean markets (don't ask me why, because I have no idea).  I didn't really check rice prices, etc. when I was in there as I was looking for Bulgogi ingredients.  I will check next time I am there.

5.  Potlucks are a wonderful idea!  I am big into BBQing and that has lead to some of those.  Usually I go cheap, as I can get pulled pork done for right about a $1/lb.  That includes charcoal, seasonings, sauce, etc.  This allows for tons of leftovers of everything else as well.  Zucchini and whatnot would be even cheaper.  Unfortunately, most of my friends are still back in the military and rural Kansas doesn't seem to offer much in the way of Mustachian compadres.  But, I can usually get some family and a couple of friends out for a BBQ - I wonder if they would still come for a potluck.

You guys are awesome with all of your ideas!  Just to give you a little info on my area:  rural Kansas town.  We have a grocery store (Heartland), a Dollar General, a gas station, and a wonderful butcher (if I need meat, this is where I go - far cheaper than even the grocery stores in the bigger towns).  Last time I bought hamburger meat at this butcher shop, it was $2.75/lb and is higher quality than the stuff I get from the grocer at $3.50/lb.  I did just recently read MMM's post about what groceries he buys, and I may be looking into buying more other stuff and less meat.

Good news, though, I sent my mom a link to a bicycle I want.  I want to bike for health purposes, but may need to be able to get back from wherever I have biked to without physical strain due to disability.  Enter the ebike.  They are not available on Craigslist in my area, so I checked out Amazon and found a nice one with great reviews for $550 (includes shipping).  If anyone is in the same situation, or just wants the link, let me know.  I will post it here.  Anyway, my mom was talking about getting it as a Christmas gift for me (she still insists on giving gifts, but doesn't get upset when she doesn't get one.  Anyway, today I woke up and found an e-mail from Amazon saying that it is arriving next week!  I will no longer have to walk anywhere anymore (unless I want to).  I can't wait to pedal down the street on my bike (and probably look like a drug dealer while doing it as that's how they handle their business in this town).

babybug - I have been loaned money by them before and loaned them money as well.  There is no harmony issues there, as my parents don't think of them as loans but more as gifts that they might get paid back on.  Of course, I would always pay them back, especially when there's money coming into the bank from the rental with some left over for me.  Even if there wasn't, we are living far enough below our means right now that we would be able to pay.  However, I realize how risky debt is now that I am avoiding as much of it as I can.  I cannot predict the future, therefore, I need to get out of any contracts as quickly as possible that say that I will pay money each month for an extended period of time.  That is what I plan to do.