Author Topic: Where to start?  (Read 9251 times)

brandonc

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Where to start?
« on: June 22, 2012, 07:14:40 AM »
Hello Mustachians!

I just stumbled upon this amazing blog. I've been looking for something like this for a long time.

I really think I'm in a good position to be living like a mustachian, but still far from that goal.

I'm 26 years old, I have a fiance (23 years old), and a 2 year old son. I work as a software engineer, although not paid great since I don't like in the middle of any good tech culture. I currently live in an "in-law apartment" at my parents house... I know I know. It's super embarrassing. I was laid off from my last job, 3 days before my son was born. I was denied unemployment at the time and got evicted after a few months of paying my bills with all my savings. I moved into the in-law apartment at my parents to start over.

I've been working at my current job for a little over a year (almost a year and a half). I make $44k/yr. My wife works a part time job as a teacher at the boys and girls club pulling in $10k/yr (It's more important for me she's there to raise our son, than to work the hours that I Do).

Our debt it's gigantic by any means, but it's still looming and murdering my credit! My credit score is a horrible 550 (god this post keeps getting more embarrassing).

My debt is about ~$10,000
  • Student loans (~$7,000)
  • Small loan sent to collections (~$1,000)
  • Misc. small stuff (~$2,000)

Her debt is just about the same ~$10,000 which is almost ALL student loans.

We financed a car not long ago, since my credit sucks I got a ridiculous interest rate.
$8,000 at 22.23% of course they sold me on the fact that "on time payments for a year, and you'll be able to refinance to a lower rate no problem!". What can I say... I'm young, stupid, and definitely naive when it comes to these things. These are all first time experiences for me.

We also have a credit card, it's a Wells Fargo Secured card with a $300 limit. I just got it, but I'm trying to spend as little as possible on this. I don't want to use it more than $100/mo and pay it off in full every time.

Our other assets are my checking and savings accounts. We have almost $3,000 between those two accounts.

I'm doing pretty good learning to budget. It's saved my ass so far, I just had a $1250 car repair bill out of nowhere, without budgeting I never would have had that cash on hand. I owe it all to http://youneedabudget.com

Sorry if my thoughts are a bit scattered throughout the post. I hope it made some sense!

Help me Obi Wan mustachians! You're my only hope.

AmbystomaOpacum

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Re: Where to start?
« Reply #1 on: June 22, 2012, 07:53:00 AM »
Thoughts as they occur to me:

- Is your fiance (wife? You said fiance and wife in your post) actually making any money? Figure in gas, any extra clothing expenses, day care costs, etc. If she just stayed home with your son, you might actually come out ahead.

- What are the interest rates on all your debts? (And why is the car not included in your debt figures?) This matters, because paying off debt should start at the highest interest rate. If you have $3000 cash on hand, I would immediately put some of that toward the highest debt. A 22% interest rate is insane. It's almost impossible that anything is more important financially than getting that paid off as fast as possible.

- What is your monthly budget? Where does the money go? If you don't know this, this is the next most important thing to figure out. If you aren't paying rent, you should easily be saving at least $1k a month. If you aren't, you need to figure out why.

- Can you get rid of the car and walk/bike to work?

- Read this post: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/ You should be spending as little as humanly possible to not die of starvation while getting this debt paid off.

bogart

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Re: Where to start?
« Reply #2 on: June 22, 2012, 08:14:09 AM »
Thoughts as they occur to me:

- Is your fiance (wife? You said fiance and wife in your post) actually making any money? Figure in gas, any extra clothing expenses, day care costs, etc. If she just stayed home with your son, you might actually come out ahead.


Very true (though perhaps your parents are helping with childcare?), but it's also worth factoring in what your wife wants.  If she wants to stay home and can save money doing so, great.  If her job is a valued opportunity/break for her, that matters.

Thoughts as they occur to me:

- What are the interest rates on all your debts? (And why is the car not included in your debt figures?) This matters, because paying off debt should start at the highest interest rate. If you have $3000 cash on hand, I would immediately put some of that toward the highest debt. A 22% interest rate is insane. It's almost impossible that anything is more important financially than getting that paid off as fast as possible.


(Emphasis added).  Amen to that!

James

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Re: Where to start?
« Reply #3 on: June 22, 2012, 08:21:40 AM »
Staying with your parents is perfect, knowing your debt is good, just need to live mustachian for a while and knock those debts out!

First the car, need to sell that and get something cheap.  Are you underwater?  I suggest selling it on craigs list and finding something else cheap on craigs list, but I'm open to details that we don't yet know that make that seem like a bad move.

Next, work out a plan for getting out of debt.  It's rice and beans time.  Obviously you will be able to splurge here and there, but start by cutting out every little expense possible, cut to the bone.  Then slowly add in small things over a couple months, maybe a date night here and there, etc.  Find free activities and enjoy life, just don't spend money.  You are pulling in $54,000 per year, and with limited housing expenses you should be able to pay off that debt relatively quickly.  Set all your spending goals aside, maybe throw a couple thousand into a Roth than can be pulled out in a real emergency, and then hammer the debt hard.

The bright side is that once you are out from under your debt your income should be plenty for a very nice living, and the experience you get while paying off debt will provide you with an appreciation for how to enjoy life on a limited budget.  That can allow you to build a nice mustache which will serve you well over time.

If you give more of your spending details we are happy to point out suggestions...  :)

brandonc

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Re: Where to start?
« Reply #4 on: June 22, 2012, 08:37:00 AM »
Thoughts as they occur to me:

- Is your fiance (wife? You said fiance and wife in your post) actually making any money? Figure in gas, any extra clothing expenses, day care costs, etc. If she just stayed home with your son, you might actually come out ahead.

- What are the interest rates on all your debts? (And why is the car not included in your debt figures?) This matters, because paying off debt should start at the highest interest rate. If you have $3000 cash on hand, I would immediately put some of that toward the highest debt. A 22% interest rate is insane. It's almost impossible that anything is more important financially than getting that paid off as fast as possible.

- What is your monthly budget? Where does the money go? If you don't know this, this is the next most important thing to figure out. If you aren't paying rent, you should easily be saving at least $1k a month. If you aren't, you need to figure out why.

- Can you get rid of the car and walk/bike to work?

- Read this post: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/ You should be spending as little as humanly possible to not die of starvation while getting this debt paid off.

Thanks for the response.

She is my fiance, but I've gotten used to saying wife, because everyone around me just calls her my wife (co-workers, parents, etc). I would like to think she's actually making me some money, but I guess I'll have to sit down tonight and figure it out. We don't have any day care costs at the moment. I guess the only thing I could factor in would be gas (at least that I can think of).

The interest rates (the ones I know off hand)
  • Car loan: 22.23%
  • Credit Card: 18%
  • Student loan 1: 6.0%
  • Student loan 2: 6.8%

Monthly spending - ~$2400
  • Groceries - $600 (6 people, in lieu of rent)
  • Cell phone - $95
  • Car payment - $370 (bill is about $340, includes a 3yr/36,000mi warranty)
  • Insurance - $131
  • Cable/Internet - $20
  • Xbox Live/Netflix - $15
  • Doctors vists - $230 (I goes twice per month)
  • Prescriptions - $400
  • Cigarettes - $75
  • Credit Card - ~$100
  • Diapers, Wipes, etc - ~$70
  • Health Insurance - $250 (Fiance and son)
  • Cigarettes - $75

Unfortunately I can't get rid of the car. I don't live in a city. Nothing is within walking distance to my house. Only a few things are in Biking distance to my house. My job is 20 miles from the house.

Uncephalized

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Re: Where to start?
« Reply #5 on: June 22, 2012, 08:39:09 AM »
Staying with your parents is perfect, knowing your debt is good, just need to live mustachian for a while and knock those debts out!

First the car, need to sell that and get something cheap.  Are you underwater?  I suggest selling it on craigs list and finding something else cheap on craigs list, but I'm open to details that we don't yet know that make that seem like a bad move.

Next, work out a plan for getting out of debt.  It's rice and beans time.  Obviously you will be able to splurge here and there, but start by cutting out every little expense possible, cut to the bone.  Then slowly add in small things over a couple months, maybe a date night here and there, etc.  Find free activities and enjoy life, just don't spend money.  You are pulling in $54,000 per year, and with limited housing expenses you should be able to pay off that debt relatively quickly.  Set all your spending goals aside, maybe throw a couple thousand into a Roth than can be pulled out in a real emergency, and then hammer the debt hard.

The bright side is that once you are out from under your debt your income should be plenty for a very nice living, and the experience you get while paying off debt will provide you with an appreciation for how to enjoy life on a limited budget.  That can allow you to build a nice mustache which will serve you well over time.

If you give more of your spending details we are happy to point out suggestions...  :)

Not to mention the relief of stress when you get the debt paid off will be IMMENSE. You might not even remember what it feels like to breathe freely at this point if you've under that much debt for a while. It's pretty nice. :-)

brandonc

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Re: Where to start?
« Reply #6 on: June 22, 2012, 08:46:44 AM »
Staying with your parents is perfect, knowing your debt is good, just need to live mustachian for a while and knock those debts out!

First the car, need to sell that and get something cheap.  Are you underwater?  I suggest selling it on craigs list and finding something else cheap on craigs list, but I'm open to details that we don't yet know that make that seem like a bad move.

I'm not sure if it would be wise to sell the car or not. What do you mean by underwater? I don't have any trouble paying it each month and on time. I pay a little extra each month as well. I could probably start paying more of it each month as well. Would it be smart to keep it around to help repair my credit?

Next, work out a plan for getting out of debt.  It's rice and beans time.  Obviously you will be able to splurge here and there, but start by cutting out every little expense possible, cut to the bone.  Then slowly add in small things over a couple months, maybe a date night here and there, etc.  Find free activities and enjoy life, just don't spend money.  You are pulling in $54,000 per year, and with limited housing expenses you should be able to pay off that debt relatively quickly.  Set all your spending goals aside, maybe throw a couple thousand into a Roth than can be pulled out in a real emergency, and then hammer the debt hard.

I'd really like to get a small apartment for my family. Do you think this is out of the question at the moment? I don't mind going full on rice and beans, but I'm feeding a family of 6 in lieu of rent right now, so I'll still end up spending a ton on groceries each month. We don't even mind not having a date night, we both work super hard all week that we enjoy hanging around the house and playing with our son, so that won't be so bad. I mean we go see a movie together every now and then. We also like to get sushi once every month or so (we only buy about $40 worth of sushi).

Can you expand more on what a Roth (IRA right?) would do for me in this situation? I'm scared not to have emergency cash on hand. Like with my car, a small problem I thought would be a few hundred dollars max turned into almost $1500 in a day or two. Without the cash in the bank I'd have been screwed.

The bright side is that once you are out from under your debt your income should be plenty for a very nice living, and the experience you get while paying off debt will provide you with an appreciation for how to enjoy life on a limited budget.  That can allow you to build a nice mustache which will serve you well over time.

If you give more of your spending details we are happy to point out suggestions...  :)

Thanks so much for your answer!

mechanic baird

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Re: Where to start?
« Reply #7 on: June 22, 2012, 08:55:13 AM »


The interest rates (the ones I know off hand)
  • Car loan: 22.23%
  • Credit Card: 18%
  • Student loan 1: 6.0%
  • Student loan 2: 6.8%

Monthly spending - ~$2400
  • Groceries - $600 (6 people, in lieu of rent)
  • Cell phone - $95
  • Car payment - $370 (bill is about $340, includes a 3yr/36,000mi warranty)
  • Insurance - $131
  • Cable/Internet - $20
  • Xbox Live/Netflix - $15
  • Doctors vists - $230 (I goes twice per month)
  • Prescriptions - $400
  • Cigarettes - $75
  • Credit Card - ~$100
  • Diapers, Wipes, etc - ~$70
  • Health Insurance - $250 (Fiance and son)
  • Cigarettes - $75

Unfortunately I can't get rid of the car. I don't live in a city. Nothing is within walking distance to my house. Only a few things are in Biking distance to my house. My job is 20 miles from the house.

Dude, you are in the state of emergency here with those interest rate on your debt.
$95 for cell phone? Sorry dude, with this debt, everything has to go including the cell phone. My friend who makes $45K a year feeding a family of 5 uses a prepaid cell phone card and he uses cell phone for only emergency so it runs him 10 bucks a month.

No, you can't have XBOX. I remember there once was a 1% girl here who pulled in $20K a month and no debt and she was advised XBOX is a luxury and shouldn't be on the list. For your situation, no XBOX, the time you play game can be used to learn a skill, work on your finance, spend with family... Not until you are in the positive territory and have a nice size of money socked away.. no xbox.. it kills your time more than your wallet

Smoking? are you insane? it kills you, your wallet, seriously, if you go see doc twice a month, that means your health needs a bit help. That $75 can be used in so many great ways. For one, that covers your baby's diaper expense.  But quitting smoking is always harder than said, but you gotta work on it, seriously...
« Last Edit: June 22, 2012, 08:59:09 AM by mechanic baird »

sol

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Re: Where to start?
« Reply #8 on: June 22, 2012, 08:56:40 AM »
While I agree that the 22% car loan is top priority, I'd consider clearing your loan that is currently in collections. 

If you have $3000 in savings, why didn't you pay off the $1000 before it was sent to a collection agency?  This is the kind of thing that absolutely ruins your credit.  If you want to start rebuilding, I'd call that collection agency and work out a repayment plan in order to start repairing your credit score.

James

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Re: Where to start?
« Reply #9 on: June 22, 2012, 09:04:26 AM »
The interest rates (the ones I know off hand)
  • Car loan: 22.23%
  • Credit Card: 18%
  • Student loan 1: 6.0%
  • Student loan 2: 6.8%
Monthly spending - ~$2400
  • Groceries - $600 (6 people, in lieu of rent)
  • Cell phone - $95
  • Car payment - $370 (bill is about $340, includes a 3yr/36,000mi warranty)
  • Insurance - $131
  • Cable/Internet - $20
  • Xbox Live/Netflix - $15
  • Doctors vists - $230 (I goes twice per month)
  • Prescriptions - $400
  • Cigarettes - $75
  • Credit Card - ~$100
  • Diapers, Wipes, etc - ~$70
  • Health Insurance - $250 (Fiance and son)
  • Cigarettes - $75
Unfortunately I can't get rid of the car. I don't live in a city. Nothing is within walking distance to my house. Only a few things are in Biking distance to my house. My job is 20 miles from the house.

Even with those expenses (which can be lowered), you should be putting about $2,000 toward your debt every month.  How much are you currently putting toward your debt each month?

I realize you can't go without a car, but if you can get rid of the $370 cost per month that would be $4,440 per year toward your other debt while at the same time getting ride of the debt at 22% interest.  Two huge birds with one stone.  Even if you have to break even or lose money selling (under water just means you owe more than it's worth), and use most of your $3,000 savings to get a cheap high mpg car, you will be hugely ahead in the future by making that one change.

Cigarettes???  Big punch in face...  moving on...

Nothing else on your list is super horrible, obviously review your medical cost to check for savings.  Maybe there is a way to save on the prescriptions by changing your pharmacy (Walmart?) or using generics, etc, but if it needs to be that high you can work around it.  Things like phone expenses are not as bad as some people, but you need to remember you are paying over 20% interest on every dollar you spend since that dollar could have gone toward your debt.  I'd cut back lots more on the whole list and hammer the debt.

Roth IRA allows you to invest the money but pull it out without penalty if needed.  I don't think it's any problem to just keep your emergency fund in cash though as long as it isn't used for non-emergencies.  If you had a big thing like the car repair you should be able to pay minimum payments on the loans for a month to build the emergency fund back up and then get right back to maximum debt payments.

tannybrown

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Re: Where to start?
« Reply #10 on: June 22, 2012, 09:09:45 AM »
The cigarettes, Xbox, and Cell Phone are the quick wins. Those could be done this month.

But here's the big win, IMO:

•Doctors vists - $230 (I goes twice per month)
•Prescriptions - $400

Those two items are over 26% of your $2400 budget.  Add in health insurance and healthcare now represents 37% of your budget.  I know nothing about the situation and none of these costs may ultimately be negotiable, but they're worth looking at every month to re-validate that nothing can be done to reduce them.

As you're in the debt repayment phase, I recommend checking out Dave Ramsey.  He has a good plan for addressing debt agressively -- most of the stuff at MMM is more directed to what you do after you get high-interest, non-mortgage debt out of your life.

On the plus side: congratulations on getting a budget and deciding to tackle your finances.  That decision alone puts you ahead of most people.
« Last Edit: June 22, 2012, 09:15:58 AM by tannybrown »

bogart

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Re: Where to start?
« Reply #11 on: June 22, 2012, 09:19:38 AM »

The interest rates (the ones I know off hand)
  • Car loan: 22.23%
  • Credit Card: 18%
  • Student loan 1: 6.0%
  • Student loan 2: 6.8%


What's that credit card?  Is it part of the $2k misc. debt you list?  If so, given that it's smaller than the amount you have saved, I'd probably just pay it off in full to get it off my list of things to worry about.

Monthly spending - ~$2400
  • Groceries - $600 (6 people, in lieu of rent)
  • Cell phone - $95
  • Car payment - $370 (bill is about $340, includes a 3yr/36,000mi warranty)
  • Insurance - $131
  • Cable/Internet - $20
  • Xbox Live/Netflix - $15
  • Doctors vists - $230 (I goes twice per month)
  • Prescriptions - $400
  • Cigarettes - $75
  • Credit Card - ~$100
  • Diapers, Wipes, etc - ~$70
  • Health Insurance - $250 (Fiance and son)
  • Cigarettes - $75



I'm actually neutral on the XBox, proof I'm not a full Mustachian.  Hey, you gotta have some fun. 

You should stop smoking.

I pay $25/month for a cell-phone through Consumer Cellular, am thrilled with the service, and get 300 minutes/month which is plenty for me (if I need to run over, I can up the contract month-by-month, or drop it down ditto, or I can use gmail to place phone calls.  That's not a smartphone and I don't text (though I could, cheaply, add texting to my plan).  Get rid of the $95 phone.

Your medical expenses are strikingly high, but without knowing more it's difficult or impossible to say what if anything you could do to cut them back.  I'm sorry you're dealing with health issues.

brandonc

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Re: Where to start?
« Reply #12 on: June 22, 2012, 09:24:57 AM »
No, you can't have XBOX. I remember there once was a 1% girl here who pulled in $20K a month and no debt and she was advised XBOX is a luxury and shouldn't be on the list. For your situation, no XBOX, the time you play game can be used to learn a skill, work on your finance, spend with family... Not until you are in the positive territory and have a nice size of money socked away.. no xbox.. it kills your time more than your wallet

I'm aware it has to go, and I'm not making excuses for it. But the only thing xbox is used for is movies and tv (you need xbox live gold to use netflix UGH), so I can keep my cable bill down while allowing my fiance and I to stay home for entertainment, rather than go out to a movie.

Smoking? are you insane? it kills you, your wallet, seriously, if you go see doc twice a month, that means your health needs a bit help. That $75 can be used in so many great ways. For one, that covers your baby's diaper expense.  But quitting smoking is always harder than said, but you gotta work on it, seriously...

I'm currently working on quitting smoking, but I haven't quite convinced my fiance. It won't be near $75 this month, more like $35 but I agree it absolutely has to go. I'm actually in pretty decent health.

I'll know I'll probably get some judgement for this but... the reason I go to the doctor twice per month is for opioid dependency. I broke my back in several places and was on pain killers for a few years. Unfortunately by the time it was time to come off I was physically and mentally addicted. I continued use (buying them on the street) for about a year after that. I used to spend about $1000/mo on pain pills. I'm not proud of that part of my life. I really consider myself lucky to have kept my job and my family together and to have made it out alive.

brandonc

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Re: Where to start?
« Reply #13 on: June 22, 2012, 09:28:18 AM »
The cigarettes, Xbox, and Cell Phone are the quick wins. Those could be done this month.

But here's the big win, IMO:

•Doctors vists - $230 (I goes twice per month)
•Prescriptions - $400

Those two items are over 26% of your $2400 budget.  Add in health insurance and healthcare now represents 37% of your budget.  I know nothing about the situation and none of these costs may ultimately be negotiable, but they're worth looking at every month to re-validate that nothing can be done to reduce them.

As you're in the debt repayment phase, I recommend checking out Dave Ramsey.  He has a good plan for addressing debt agressively -- most of the stuff at MMM is more directed to what you do after you get high-interest, non-mortgage debt out of your life.

On the plus side: congratulations on getting a budget and deciding to tackle your finances.  That decision alone puts you ahead of most people.

The cigarettes are on the way out (hopefully sooner than later). I know I need to get rid of the Xbox, but that's what keeps my cable/internet bill so low. I only use it to watch NetFlix for movies and TV and I use a friends Hulu so I can watch new tv shows.

I can't get rid of the doctor or prescription YET. I'm working on weening myself off the medication. The doctor doesn't want me to because he wants his money. They don't take insurance, only cash and all patients visit every 2 weeks. The medication is ridiculous, there is no substitute, only the brand name drug. Once I comfortably get off the medication, both of those expenses are gone for good.

brandonc

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Re: Where to start?
« Reply #14 on: June 22, 2012, 09:33:16 AM »

What's that credit card?  Is it part of the $2k misc. debt you list?  If so, given that it's smaller than the amount you have saved, I'd probably just pay it off in full to get it off my list of things to worry about.

That's my current card. I spend about $100/mo on it and pay it in full every month (it's a secured card, limit on it is $300)

I'm actually neutral on the XBox, proof I'm not a full Mustachian.  Hey, you gotta have some fun. 

You should stop smoking.

I pay $25/month for a cell-phone through Consumer Cellular, am thrilled with the service, and get 300 minutes/month which is plenty for me (if I need to run over, I can up the contract month-by-month, or drop it down ditto, or I can use gmail to place phone calls.  That's not a smartphone and I don't text (though I could, cheaply, add texting to my plan).  Get rid of the $95 phone.

Your medical expenses are strikingly high, but without knowing more it's difficult or impossible to say what if anything you could do to cut them back.  I'm sorry you're dealing with health issues.

I don't even play games on the Xbox (as I mentioned in the last few posts, since I'm getting slammed for having it haha). I use it for Netflix/Hulu (which I don't pay for Hulu) to get my tv/movie fix. It keeps me from having to have a real cable bill, right now I pay for internet and get free regular channels.

I'm definitely quitting smoking, I'm in the middle of quitting now. I know everyone is going to tell me "Just quit, if you don't quit right this second you're not actually quitting". It's hard to quit, I'm not going to lie. The hardest part is having a fiance that doesn't want to quit yet.

The cell phone... that's a tough one. I intend on changing to a pre-paid plan as soon as the pre-paid iPhones come out. They'll be much much cheaper. And before anyone say anything about not needing a smart phone, etc. I make money on the side working on iPhone apps. I consider this a business expense, also one that I can claim on my taxes at the end of the year.

Should I just move my plan down to the lowest plan available?

twinge

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Re: Where to start?
« Reply #15 on: June 22, 2012, 09:39:50 AM »
Quote
I can't get rid of the doctor or prescription YET. I'm working on weening myself off the medication. The doctor doesn't want me to because he wants his money. They don't take insurance, only cash and all patients visit every 2 weeks. The medication is ridiculous, there is no substitute, only the brand name drug. Once I comfortably get off the medication, both of those expenses are gone for good.

This and continuing the good work of holding your family together strike me as the top priorities.  In my opinion, you should hold tight living in the in-law apartment until you are entirely off the meds and have paid off the car loan.  At that point re-assess your situation.  Holding out the "own apartment" as a reward doing the hard work of correcting past mistakes would be a pretty good motivator.  I know there might be a temptation to feel, "hey, I'm a software engineer with a pretty decent wage and a family, we SHOULD be able to live on our own," but I think it's important to remember that you're paying off the debt of your life before that situation. You'll also probably get out of the debt hole a lot quicker if you have that "we can move out to our own place" beacon fighting against the temptations of sushi, meds and cigs.
« Last Edit: June 22, 2012, 09:44:04 AM by twinge »

James

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Re: Where to start?
« Reply #16 on: June 22, 2012, 09:44:44 AM »
I forgot to talk about the small apartment idea, I have two thoughts.  At your current spending and debt, I would absolutely not do that.

BUT...  IF you make the changes you need to make, get rid of the car payment, get rid of the high interest debt, get rid of the smokes, get rid of the prescriptions and doctor visits, etc.  THEN I don't see any reason why not if you consider it vital to your family interests.  But take your time.  The medical issues of resolving your addiction is important, obviously get off of that train as soon as possible, but don't jeopardize your full recovery.  You can't afford to backtrack in that regard.

I don't see any chance of renting and all the associated costs of moving being less or even close to the extra you are spending toward food right now.  I would make your living situation last as long as possible, hammer off as much debt as possible before moving.  Consider it a challenge and make the most of it, you will be very glad you did later.

Regarding the phone and xbox, just remember to prioritize and fix the areas with the biggest benefits first.  If you can get rid of the car loan it will make a difference many times the effect of your phone bill, xbox, etc.

mechanic baird

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Re: Where to start?
« Reply #17 on: June 22, 2012, 09:55:39 AM »
No, you can't have XBOX. I remember there once was a 1% girl here who pulled in $20K a month and no debt and she was advised XBOX is a luxury and shouldn't be on the list. For your situation, no XBOX, the time you play game can be used to learn a skill, work on your finance, spend with family... Not until you are in the positive territory and have a nice size of money socked away.. no xbox.. it kills your time more than your wallet

I'm aware it has to go, and I'm not making excuses for it. But the only thing xbox is used for is movies and tv (you need xbox live gold to use netflix UGH), so I can keep my cable bill down while allowing my fiance and I to stay home for entertainment, rather than go out to a movie.

ahh, here is an idea for you if you are not using XBOX for online gaming.. Sell that sucker and cancel your Live account. But go buy a network enabled DVD player on craigslist or whereever you can get cheap. I got a blue ray/DVD combo player for $50 that has Netflix built in. That way, you pay once and don't have to pay the XBOX subscription fee.. Which Microsoft has been raising up in recent years..

brandonc

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Re: Where to start?
« Reply #18 on: June 22, 2012, 09:59:56 AM »
No, you can't have XBOX. I remember there once was a 1% girl here who pulled in $20K a month and no debt and she was advised XBOX is a luxury and shouldn't be on the list. For your situation, no XBOX, the time you play game can be used to learn a skill, work on your finance, spend with family... Not until you are in the positive territory and have a nice size of money socked away.. no xbox.. it kills your time more than your wallet

I'm aware it has to go, and I'm not making excuses for it. But the only thing xbox is used for is movies and tv (you need xbox live gold to use netflix UGH), so I can keep my cable bill down while allowing my fiance and I to stay home for entertainment, rather than go out to a movie.

ahh, here is an idea for you if you are not using XBOX for online gaming.. Sell that sucker and cancel your Live account. But go buy a network enabled DVD player on craigslist or whereever you can get cheap. I got a blue ray/DVD combo player for $50 that has Netflix built in. That way, you pay once and don't have to pay the XBOX subscription fee.. Which Microsoft has been raising up in recent years..

That's a great idea. I'll start looking around for something this weekend. Thanks!

AmbystomaOpacum

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Re: Where to start?
« Reply #19 on: June 22, 2012, 10:10:29 AM »
I think given all the information, the plan is simple.

Focus completely on the drugs. Use the savings to pay off the 22 and 18 percent debts. That will save over $1000 per month. Everything else on the list is practically irrelevant compared to that. Don't worry about the next steps at all yet.

AJ

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Re: Where to start?
« Reply #20 on: June 22, 2012, 10:22:11 AM »
No, you can't have XBOX. I remember there once was a 1% girl here who pulled in $20K a month and no debt and she was advised XBOX is a luxury and shouldn't be on the list.

If you're talking about who I think you are, I don't think that is an accurate assessment of what folks said. She used her XBox subscription as the example of a luxury item that brought her enjoyment and indicated she struggled with whether to keep it or donate the money. The consensus here is NOT that everyone should ditch every possible luxury item (I would think that would be obvious). But, rather, that if you're in a bad spot (like the OP) you should go bare bones, and if you're in a good spot (>50% savings rate, no debt) you should carefully analyze your luxury spending to ensure you are getting the biggest bang for your buck.

I'm normally in favor of keeping NetFlix as a cheap form of entertainment, but given the debt load and rates, this may be an emergency all-hands-on-deck kind of situation.

However, there is one additional unusual factor here. OP is suffering from multiple dependencies (pills and cigarettes). brandonc - This is a personal question, so feel free not to answer, but have you been through rehab? I know its expensive, and it feels easier to just try to do it on your own, but they teach you valuable coping skills, in addition to the moral support the community provides. Its hard for people who have never been through addiction (which is most of us here) to really get how hard quitting is. The people you network with in rehab can give you the support and encouragement that many of us just can't.

I say all that because one of the things they taught my mom in rehab was to never allow herself to get hungry, angry, tired, or lonely because those are triggers for addictive behavior. I would say if you get yourself into an outpatient program, and if Netflix can provide a distraction to help you get off pills, keep it. Don't use it as an excuse, but really assess what you need to do to get sober and do whatever it takes. Right now, your addictions are really holding you back.

JR

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Re: Where to start?
« Reply #21 on: June 22, 2012, 10:39:49 AM »

The cell phone... that's a tough one. I intend on changing to a pre-paid plan as soon as the pre-paid iPhones come out. They'll be much much cheaper. And before anyone say anything about not needing a smart phone, etc. I make money on the side working on iPhone apps. I consider this a business expense, also one that I can claim on my taxes at the end of the year.

Should I just move my plan down to the lowest plan available?

Do you by chance have your current iPhone through AT&T?  H2O wireless is a prepaid carrier that uses AT&T's network and has a 60/mo plan that includes 2gb of data per month.  We recently switched my wife's phone from AT&T to H2O's $40 unlimited voice (she uses her phone for work and is reimbursed 100%) and didn't even have to unlock her phone.

A savings of $35 per month is not really going to impact your current situation that much but why spend an extra $420 per year if you don't have to.
« Last Edit: June 22, 2012, 10:41:32 AM by JR »

brandonc

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Re: Where to start?
« Reply #22 on: June 22, 2012, 10:40:40 AM »
However, there is one additional unusual factor here. OP is suffering from multiple dependencies (pills and cigarettes). brandonc - This is a personal question, so feel free not to answer, but have you been through rehab? I know its expensive, and it feels easier to just try to do it on your own, but they teach you valuable coping skills, in addition to the moral support the community provides. Its hard for people who have never been through addiction (which is most of us here) to really get how hard quitting is. The people you network with in rehab can give you the support and encouragement that many of us just can't.

I say all that because one of the things they taught my mom in rehab was to never allow herself to get hungry, angry, tired, or lonely because those are triggers for addictive behavior. I would say if you get yourself into an outpatient program, and if Netflix can provide a distraction to help you get off pills, keep it. Don't use it as an excuse, but really assess what you need to do to get sober and do whatever it takes. Right now, your addictions are really holding you back.

Thanks AJ. I haven't been to rehab. I personally, and please don't take this as arrogance or anything similar, don't think I need rehab. I know that's what they all say but I feel as if I've come far enough already not to need it now. I've been off of pain killers since about December. I started on Methadone, and moved to Suboxone which is what I'm still taking. I haven't had cravings or urges since midway through December. My family is more important to me than anything. I wasn't ready to quit, I (thought I) was in so much pain that I was using for a reason. It turns out that the pain I was in was just from withdrawing (I didn't know the physical pain got that bad to be honest...).

All it took for me to realize what I was doing and quit, was a look from my fiance. I was nodding out -

quick aside for those of you who don't know what I mean, nodding out is something that happens on high doses of opiates or opioids. You pretty much fall asleep for a few seconds at a time. Like when you were a kid and stayed up for a whole day, you'd close your eyes for a second and your head would "nod". That happens to a lot of opiate/opioid users.

Anyway... I was nodding out in the chair. I told her I was super tired and she just looked at me with this scorn look. She knew I was really tired. She knew I had taken way too many pills. That was the last time I used. I stopped that day, gave away my last stash (about $400 worth) to a "friend" and buckled up for a few days of withdrawal (you need to be in active withdrawal to start on methadone or suboxone. If you're not you get thrown into precipitated withdrawals which are 1,000,000,000 times worse).

I've been "clean" ever since. I don't consider myself clean, because I still need medication from getting sick. I've cut my own dose of Suboxone from 2 a day to 1 a day. That's a really big leap, a total of 8mg. It's only safe to jump 2mg every 2weeks to a month. In the next few weeks I'll drop down to 6mg per day. I hope to be off of them completely by the end of the year.

I do attend counseling sessions though. If I ever get urges or cravings I'll see myself to a local NA meeting. The other plus in situation? I live in the pain killer capital of the world and they're cracking down hard. It's getting super hard to find, and I told all of my connections to go f*** themselves, so that even if I did call them ever again, they wouldn't want to talk to me (I also deleted their numbers, and changed my numbers). They aren't people I'd see regularly, only if I needed something. So luckily they're not around, they're not my friends.

Sorry for the novel. I tend to go on and on a little bit when I'm talking about this stuff.

brandonc

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Re: Where to start?
« Reply #23 on: June 22, 2012, 10:41:52 AM »

The cell phone... that's a tough one. I intend on changing to a pre-paid plan as soon as the pre-paid iPhones come out. They'll be much much cheaper. And before anyone say anything about not needing a smart phone, etc. I make money on the side working on iPhone apps. I consider this a business expense, also one that I can claim on my taxes at the end of the year.

Should I just move my plan down to the lowest plan available?

Do you by chance have your current iPhone through AT&T?  H2O wireless is a prepaid carrier that uses AT&T's network and has a 60/mo plan that includes 2gb of data per month.  We recently switched my wife's phone from AT&T to H2O's $40 unlimited voice (she uses her phone for work and is reimbursed 100%) and didn't even have to unlock her phone.

No I have my iPhone through Sprint. I'm planning on moving to Virgin when they release a prepaid iphone.

I don't think we have h20 in the US. Isn't that a UK company?

JR

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Re: Where to start?
« Reply #24 on: June 22, 2012, 10:47:28 AM »

The cell phone... that's a tough one. I intend on changing to a pre-paid plan as soon as the pre-paid iPhones come out. They'll be much much cheaper. And before anyone say anything about not needing a smart phone, etc. I make money on the side working on iPhone apps. I consider this a business expense, also one that I can claim on my taxes at the end of the year.

Should I just move my plan down to the lowest plan available?

Do you by chance have your current iPhone through AT&T?  H2O wireless is a prepaid carrier that uses AT&T's network and has a 60/mo plan that includes 2gb of data per month.  We recently switched my wife's phone from AT&T to H2O's $40 unlimited voice (she uses her phone for work and is reimbursed 100%) and didn't even have to unlock her phone.

No I have my iPhone through Sprint. I'm planning on moving to Virgin when they release a prepaid iphone.

I don't think we have h20 in the US. Isn't that a UK company?

We live in the US.  The service is run by a company out of NJ named Locus Communications.

grantmeaname

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Re: Where to start?
« Reply #25 on: June 22, 2012, 11:05:17 AM »
  • There's no way you can spend less money on your medical expenses, while still getting everything you need? Could you pay for it with money from an HSA you contribute to at work, which wouldn't get taxed? Could you negotiate a lower rate with the doctor's office by disclosing your financial hardship? Could you see him once in person a month and once as an online consultation through an online chart site? Is there a pre-existing condition group buy pool in your state that's negotiated a cheaper rate on the prescription? Could you convince your doctor to write you a prescription for a doubled dosage, then cut the pills in half? Could you trade in-kind IT services if this is a little one-off kind of place (do you know how to reimage a pc and change a failed power supply? configure a network?) Many of these possibilities will turn up dry for you, but if you exhaustively take a look into all of them, you might be able to trim some serious money.
  • Read this, and ask questions if you don't understand what to do. I.P. Daley hasn't stopped by to punch you in the face yet, so I will. Having an iPhone is a luxury. I won't criticize you for choosing it, but I will for what you're spending. There's no way in hell you can afford $115 a month of telecom bills when you owe almost your annual income in debt. Go find a way to do your phone and ISP cheaper.
  • Are there any financial products available to you to lessen your debt load? Could you join a credit union and refinance your car loan? Could you consolidate your student loans? Could you get a balance transfer card with a promotional low rate to allow you to focus on the car loan for a little bit?
  • What is your car worth and what do you owe on it? Think long and hard about whether or not that's worth it, especially considering fuel costs and the higher costs of insurance. If you at all can, I highly encourage you to look into dumping it for a little $5k hatchback or something. Check out the list of mustache-approved cars, for example. If you need a car, you need a car. But that doesn't mean you need an expensive one.
  • Last, and least in importance, look into cutting your other little expenses (cigarettes, diapers, sushi, xbox live...) and ways to increase your iPhone app income. You've got a handful of big budget problems, not a million small ones, but small changes could still add up to something substantial.
Best of luck, we're rooting for you!

brandonc

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Re: Where to start?
« Reply #26 on: June 22, 2012, 11:32:38 AM »

The cell phone... that's a tough one. I intend on changing to a pre-paid plan as soon as the pre-paid iPhones come out. They'll be much much cheaper. And before anyone say anything about not needing a smart phone, etc. I make money on the side working on iPhone apps. I consider this a business expense, also one that I can claim on my taxes at the end of the year.

Should I just move my plan down to the lowest plan available?

Do you by chance have your current iPhone through AT&T?  H2O wireless is a prepaid carrier that uses AT&T's network and has a 60/mo plan that includes 2gb of data per month.  We recently switched my wife's phone from AT&T to H2O's $40 unlimited voice (she uses her phone for work and is reimbursed 100%) and didn't even have to unlock her phone.

No I have my iPhone through Sprint. I'm planning on moving to Virgin when they release a prepaid iphone.

I don't think we have h20 in the US. Isn't that a UK company?

We live in the US.  The service is run by a company out of NJ named Locus Communications.

Doh!! I was thinking of O2 wireless, not h2o. I'll check them out thanks!

brandonc

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Re: Where to start?
« Reply #27 on: June 22, 2012, 12:05:56 PM »
  • There's no way you can spend less money on your medical expenses, while still getting everything you need? Could you pay for it with money from an HSA you contribute to at work, which wouldn't get taxed? Could you negotiate a lower rate with the doctor's office by disclosing your financial hardship? Could you see him once in person a month and once as an online consultation through an online chart site? Is there a pre-existing condition group buy pool in your state that's negotiated a cheaper rate on the prescription? Could you convince your doctor to write you a prescription for a doubled dosage, then cut the pills in half? Could you trade in-kind IT services if this is a little one-off kind of place (do you know how to reimage a pc and change a failed power supply? configure a network?) Many of these possibilities will turn up dry for you, but if you exhaustively take a look into all of them, you might be able to trim some serious money.

There's definitely no way I can spend less than I am now on the medication. I get a coupon once a month that gives me $50 off. I will talk to the doctor and see what we can do to make it cheaper on his end. I'm going to ask him if I can just skip the urinalysis each appointment. That's $65 alone right there ($65 for visit, $65 for urinalysis).

Technically there's no point in taking a drug test, the prescription that I'm on LITERALLY makes it so opiates/opioids don't work at all. It blocks the mu-opioid receptors in the brain so that the drugs can not attach. I'm obviously not going to blow money on drugs that don't work.

I'm very well versed in IT stuff. Even though I'm a software engineer now, I started my career as an IT engineer. So I take care of my companies servers as well as the code. I could see if he needs me to do anything around the office.


  • Read this, and ask questions if you don't understand what to do. I.P. Daley hasn't stopped by to punch you in the face yet, so I will. Having an iPhone is a luxury. I won't criticize you for choosing it, but I will for what you're spending. There's no way in hell you can afford $115 a month of telecom bills when you owe almost your annual income in debt. Go find a way to do your phone and ISP cheaper.

I'm hoping Virgin mobile releases their prepaid iPhone soon. That will make it a lot cheaper. I think one of their plans was 29.99, which would be a welcome change.

  • Are there any financial products available to you to lessen your debt load? Could you join a credit union and refinance your car loan? Could you consolidate your student loans? Could you get a balance transfer card with a promotional low rate to allow you to focus on the car loan for a little bit?
  • What is your car worth and what do you owe on it? Think long and hard about whether or not that's worth it, especially considering fuel costs and the higher costs of insurance. If you at all can, I highly encourage you to look into dumping it for a little $5k hatchback or something. Check out the list of mustache-approved cars, for example. If you need a car, you need a car. But that doesn't mean you need an expensive one.

I don't think I can refinance right now, my credit still isn't great. I'm hoping to bring it up above a 600 then try to refinance then. What's a balance transfer card?


  • Last, and least in importance, look into cutting your other little expenses (cigarettes, diapers, sushi, xbox live...) and ways to increase your iPhone app income. You've got a handful of big budget problems, not a million small ones, but small changes could still add up to something substantial.

I'll be cutting a lot of these little expenses VERY soon!

Best of luck, we're rooting for you!

Thanks!!! You guys are so awesome and welcoming!

grantmeaname

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Re: Where to start?
« Reply #28 on: June 22, 2012, 01:51:34 PM »
A balance transfer card is like refinancing for credit card debt. The balance transfer card pays off your old card and then it holds your balance. I don't know about availability with your credit score, but normally you can get a card with no initial fee and lower initial rates than market going rates (as low as 0%) for an introductory period like 6, 12, or 18 months, and then a high rate after that. If you can move it to a card that's initially cheap, you're paying much less interest and much more principal with every dollar during the introductory period, and it can give you enough breathing room to totally pay the card off if the period is long enough. Sites like bankrate aggregate balance transfer card offers, or you could look for a competitor with Google.

sol

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Re: Where to start?
« Reply #29 on: June 22, 2012, 02:32:39 PM »
Threads like this remind me of how me of how lucky most of us are.

Most people show up at this forum with similar complaints: I have a crappy job and bad student loans and a baby on the way, or something similar.  The community tries to help them.

This guy shows up and says his credit is ruined and he's living in his parent's basement while wasting his money on drugs.  My initial reaction is to declare that some people are just beyond help, but I'm glad to see others step up and try to be helpful.

The next person who posts here with a story about how anxious he is about rebalancing his portfolio because he's afraid the market will dip should get referred to this thread and told to STFU.  Or the guy who was so conflicted about whether to spend $1500 or $3000 on a new mountain bike.  First world problems, man.
« Last Edit: June 22, 2012, 03:08:49 PM by sol »

mechanic baird

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Re: Where to start?
« Reply #30 on: June 22, 2012, 02:40:57 PM »

The next person who posts here with a story about how anxious he is about converting his bonds to stocks because he's afraid the market will dip should get referred to this thread and told to STFU.  Or the guy who was so conflicted about whether to spend $1500 or $3000 on a new mountain bike.  First world problems, man.

Are u hinting the so called "first world problems" are not welcome here?

You better STFU if you've got no debt and a 5 figure in your bank account. go somewhere else!  you ain't have a problem here.!!   I thought this forum is more open than that.. maybe I am wrong..

sol

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Re: Where to start?
« Reply #31 on: June 22, 2012, 02:48:09 PM »
Are u hinting the so called "first world problems" are not welcome here?

Quite the contrary, most everyone here deals with these kinds of problems, and they seem horrible and paralyzing until you realize other people are this much worse off.

Everyone's welcome, but I think these more extreme perspectives bring more value to the group than another person trying to understand how a HELOC works.

brandonc

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Re: Where to start?
« Reply #32 on: June 22, 2012, 02:51:20 PM »
Threads like this remind me of how me of how lucky most of us are.

Most people show up at this forum with similar complaints: I have a crappy job and bad student loans and a baby on the way, or something similar.  The community tries to help them.

This guy shows up and says his credit is ruined and he's living in his parent's basement while wasting his money on drugs.  My initial reaction is to declare that some people are just beyond help, but I'm glad to see others step up and try to be helpful.

The next person who posts here with a story about how anxious he is about converting his bonds to stocks because he's afraid the market will dip should get referred to this thread and told to STFU.  Or the guy who was so conflicted about whether to spend $1500 or $3000 on a new mountain bike.  First world problems, man.

I don't think you're quite getting the right picture of my life. The way you explain it, it sounds like I'm a junkie sleeping in a damp basement with a needle sticking out of my arm. It really couldn't be further from the truth. Sure my finances aren't fantastic, yet, or may not even get there in the opinions of a mustachian. That doesn't mean my life isn't good. I wouldn't say I'm beyond help, in fact there a ton of different types of people that would say I don't need help at all. I have a job that I love, regardless of taking a pay cut to work here, a wonderful family, and great friends. I don't stay in my parents basement. I don't even stay in my parents house. It's an in-law apartment. It's 962sqft 2bd, 1ba, and sweet sweet jacuzzi tub. Just because I got addicted to legal drugs, doesn't make me a scumbag. It means I have an addictive personality and I made a few mistakes. Did I ever steal to support my habit? No. Did my family ever go without because of my habit? No. Did I ever do my friends wrong because of my habit? No.

sol

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Re: Where to start?
« Reply #33 on: June 22, 2012, 03:06:29 PM »
I don't think you're quite getting the right picture of my life.

Sorry man, didn't mean to bag on your life.  As others have pointed out, seeking some help to get things turned around is often the hardest part, and you're already past that.

But your situation isn't exactly typical of our forum members, either.  Your life has very real problems of a sort that most of the complainypants around here can't envision, and I think it's awesome that you showed up with a positive attitude and a desire to change.  There are folks here with huge incomes and three cars who bitch about how rough they have it, so a little perspective is sometimes beneficial.

mechanic baird

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Re: Where to start?
« Reply #34 on: June 22, 2012, 03:14:21 PM »
Are u hinting the so called "first world problems" are not welcome here?

Quite the contrary, most everyone here deals with these kinds of problems, and they seem horrible and paralyzing until you realize other people are this much worse off.

Everyone's welcome, but I think these more extreme perspectives bring more value to the group than another person trying to understand how a HELOC works.

Well said man.. I hear ya!

Aside the legal drug addiction part, I think brandon your finance part of issue is still quite common... I thank you for being open and frank with your situation and having an open mind with all of ppl's suggestions/advises.. Right on man, kick a few habits to the curb and ya'll be alright..
« Last Edit: June 22, 2012, 03:19:21 PM by mechanic baird »