Hey all,
I am wondering what to do with my tax refund, and deployment money that will both be coming in march/april. I am going to post my budget as best I can, feel free to face-punch away but out spending adds up to something like $1500 a month, the rest is going towards debt. I would sell a vehicle but we are upside down on most of them (bad past decisions), and we have a little bit of credit card debt. I am military, so my paycheck is nice and steady(for now... damn cutbacks) and my wife doesn't have a job at all, and we have 2 dogs and no kids. Let me know what you all would do, Ill post specific questions/options after the budget. Thanks for the enlightenment.
Income:
Base pay - $3812.10
BAH(housing) - $1776.00
BAS(food) - $246.24
Flight pay - $125.00
Until april deployment pay - $375
Total normal pay - $5959.34
While deployed - $6334.34
Yearly before taxes, not deployed - $71,512.08
Pre Paycheck Expenses:
Federal Taxes - $358 (not paid while deployed)
FICA SS - $234.01
FICA MEdicare - $54.73
SGLI - $29.50 (only pay 2.50 while deployed)
Dental - $10.66
Total - $686.90 ($301.90 while deployed)
Living expenses:
Mortgage - $1221.31 P+I is $925.31
Insurance - $183.00 (1 new vic, 1 used, 1 motorcycle)
Electricity/Gas - $164.43 (max, usually less but I can't control any of it right now)
Water/Sewer - $71.30 (max, usually less as well, closer to $50 lately)
Trash - $32.00
Pest control - $30
Food - $200? (just a guess, helps that I am not at home)
Gas - $200 (includes 10 hour driving to utah every month or two)
Vehicle payments:
Car - $577.77 (paying $600)
Truck - $341.82
Motorcycle - $254.6 (paying $600)
Total vic - $1541.82
Netflix - $8.19
Internet - $48.68
Cell Phone - $139.47 (Currently thinking of getting republic)
Pet expenses - $56 ($34 food, rest is heartworm meds)
Life Insurance - $27.07
Credit Report - $13.02
Career starter loan - $594.70
Credit card payments - $450
Savings - $254.21 (getting an emergency fund setup, once we have $1000 the rest will go to the credit cards)
Total spent - $5283.10
Assets:
House - $205-230000 no official appraisal yet, but the same house in the same neighborhood brand new would be $235000
Car - $22-26000 depending on who appraises it. 2013 Ford Mustang GT(punch away)
Truck - $12-15000 2006 Ford F-150 (Yes it is a gas hog, yes I love it still)
Motorcycle - $8-9000 2011 Harley Sportster 1200
Roth IRA - $7000
Emer savings - $700
Other savings - $115
Cash on hand - $3000 (Just got paid, and wife is traveling, so this will pay off the monthly payments and the rest will bet put on the credit cards.
Debts:
House - $203000 3.49% interest
Car - $30500 3.15%
Truck - $14750 3.5%
Motorcycle - $12500 10%
Career starter loan - $17,725 0.5% (Think of it as a student loan for my college path)
Credit card 1 - $1680 4% interest until april
Credit card 2 - $2600 6% interest until april
Line of credit 1 - $650 8%
Line of Credit 2 - $875 6% interest until april
Questions!
I am getting about $2200 in my tax refund as soon as the govt decides to part with the money (should be in the next few weeks) and $2000 in Family separation pay after I get back to the states.
I am not worried about the house currently, I am going to be moving and selling it within a year (I love when the military changes their minds on how long I am going to be somewhere).
I am planning on selling the mustang as soon as I can, but it is a fun car, and my wife loves it, so that might take a few months before I can convince her to let it go. We would either get a small efficient SUV or a Sedan to replace it, but I have to still convince the wife that we don't need an SUV and a Truck. I am planning on refinancing the motorcycle (price is so high because of a face-punching warranty and maintenance plan we got with it), I can't refi until we don't owe more than what it is worth.
My question is which option from the list below would you recommend, and why.
Option 1: Pay off all credit card debt by May (when rates go back up, 9% on one, 15% on the larger one), then use that money to pay down the car and motorcycle to sell and refinance. Very tempting because then we won't have credit card debt hanging over us.
Option 2: Put all money to the car and sell as soon as we can find a buyer, worry about paying off the rest of the cards/loans as soon as we can.
Option 3: Put enough money towards the Motorcycle to get it refinanced at a much lower rate, I can get somewhere between 5 and 8 % depending on where I get the loan. I would put the rest towards either the car or the credit cards, probably cards, then worry about the rest as soon as we can.
Option 4: Tell me what you think would work best!
I also see trading in the car for a cheaper car ($5-10000) at a stealership, I would roll the excess debt onto the small car's short loan (3 years or less), and pay it off ASAP, at least the same money that is going to the current car. That seems like it would get us out from upside-down on the vehicles a lot sooner.
On our spending front, except for the phones, utilities maybe, and gas, we don't have much where we can cut back. according to my excel spreadsheet if I take out all the debt payments and the savings we are only spending about $1220 a month. Which in my mind is pretty good, beats MMM last I checked. This is with living with a wife that only started budgeting 6 months ago just before I left (hence the credit card debt). my math also says that if we saved the roughly $4000 a month we would have a 70% savings rate, which would be freaking awesome! that means FI would be here in 7-8 years... again on my bad math abilities. Also I am getting a pay raise of about $600 at the end of may, another one next may, then every 2 years after that until I either leave or retire from the military... plus the whole 1% pay raises every year(unless congress deems them unnecessary of course...)
Let me know what you all think I should do with the $4200 I am getting, and what else I can do to smartly get rid of all my debt. and if I were going for FI how soon do you think I could reach it?
Thanks!