Author Topic: Where to start and how  (Read 3692 times)

kraftykiwi

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Where to start and how
« on: July 30, 2015, 12:07:37 PM »
So here's the lowdown. I am in school full-time working towards my nursing degree with 2 years to go until I am done. My husband is a mechanical engineer making right around 73K a year for a stable company. We have 2 kids, a house with a 2k monthly mortgage (with 180K left to pay, value around 390K), a $163/month car payment (from a used, high mileage 4runner we purchased to replace out truck) that we plan to pay off as soon as I'm done with school, various other vehicles either to keep or to sell for profit, and about 9K debt on our credit cards currently. When I'm in school we barely make ends meet between my tuition(3K a semester+books/gas/various supplies), daycare, and now my daughter's kindergarten full-time fee of $200 a month (I have yet to determine the cost of daycare making the switch to just one child and a changed class schedule). We live in between my school and my husband's job and are able to use public transport but also drive a fair amount. After I'm finished with school we know we want to move states and get him a new job. I've been diving headfirst into the MMM posts from the very beginning and love everything about it but have no idea where to start. My husband doesn't want to sell our house until we're ready to move states, we can't change costs associated with school, and the only way we get spare cash is him slaving away doing mechanic work for neighbors and friends. I'm open to any and all suggestions of places to start and how to get my husband on board. He wasn't a fan of Dave Ramsey to say the least.
« Last Edit: July 30, 2015, 12:12:11 PM by kraftykiwi »

tarheeldan

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Re: Where to start and how
« Reply #1 on: July 30, 2015, 12:23:53 PM »
Hello!

Presentation ideas:
http://www.mrmoneymustache.com/wp-content/uploads/2013/09/happiness_vs_riches.pdf?6d6156

http://www.slideshare.net/slidehill/make-our-money-sing-an-adventure-in-mustacheianism?

What I got from your post:

Income:
$73,000/yr gross. Net = ?
One more income coming in ~2yrs

Expenses:
Housing: $24,000/yr
Kindergarten: $2,400/yr
Car Loan: $1,956/yr
Tuition: $6,000/yr
Other School: ?
Daycare: ?
Public Transport: ?
Other Auto: ?


Assets:
Home: $390,000

Liabilities:
Mortgage: $180,000 @ ?%
Car: ? @ ?%
Credit Cards: $9,000 @ ?%

« Last Edit: July 30, 2015, 12:27:25 PM by tarheeldan »

kraftykiwi

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Re: Where to start and how
« Reply #2 on: July 30, 2015, 12:38:25 PM »
Income:

$73,000/yr gross. Net = Looks to be around 60K, I can't find the right paper to get an exact amount.
One more income coming in ~1yr (I have my license by next summer at ~40-60K, bachelors w/pay raise the next year)

Expenses:
Housing: $24,000/yr
Bills and Utilities: $5,200/yr
Food: $7,600/yr
Tithing: $7,300/yr
Gas: $2,800/yr
Phone: $1,680/yr
Kindergarten: $1,800/yr
Car Loan: $1,956/yr
Tuition: $6,000/yr
Others School: ~$1,500/yr
Daycare: ~$2,300/yr
Public Transport: $1,000/yr
Other Auto: ~$2,500/yr but will decrease as car projects come to an end

So that totals to $65,636/yr (I might have rounded somewhere so not an exact figure but I don't think it matters)


Assets:
Home: $390,000
Camry (my summer commuter): $12,000
Celica(husband's summer commuter): $3,000
Allroad (winter commuter): $4,000

Liabilities:
Mortgage: $180,000 @ 3.875% (We have a 15 year mortgage)
Car: 10,635 @ 2.740%
Credit Cards: $9,000 @ 7-15% with the bulk (5k) of the amount being on the 7% APR card.
« Last Edit: July 30, 2015, 12:49:03 PM by kraftykiwi »

Cheddar Stacker

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Re: Where to start and how
« Reply #3 on: July 30, 2015, 01:12:35 PM »
Income:

$73,000/yr gross. Net = Looks to be around 60K, I can't find the right paper to get an exact amount.
One more income coming in ~1yr (I have my license by next summer at ~40-60K, bachelors w/pay raise the next year)

Expenses:
Housing: $24,000/yr
Bills and Utilities: $5,200/yr
Food: $7,600/yr
Tithing: $7,300/yr
Gas: $2,800/yr
Phone: $1,680/yr
Kindergarten: $1,800/yr
Car Loan: $1,956/yr
Tuition: $6,000/yr
Others School: ~$1,500/yr
Daycare: ~$2,300/yr
Public Transport: $1,000/yr
Other Auto: ~$2,500/yr but will decrease as car projects come to an end

So that totals to $65,636/yr (I might have rounded somewhere so not an exact figure but I don't think it matters)


Assets:
Home: $390,000
Camry (my summer commuter): $12,000
Celica(husband's summer commuter): $3,000
Allroad (winter commuter): $4,000

Liabilities:
Mortgage: $180,000 @ 3.875% (We have a 15 year mortgage)
Car: 10,635 @ 2.740%
Credit Cards: $9,000 @ 7-15% with the bulk (5k) of the amount being on the 7% APR card.

This is a touchy subject around here for some, but the most obvious item to cut is......... tithing. Don't give 10% of your income away when you have $9K credit card debt at 7-15%. If you can't see how backwards this is, I'm sorry to say you might never dig out of the hole you're in.

Also, sell a car. 2 adults shouldn't require 3 cars. Also also, get a student loan rather than paying all your tuition out of pocket. There are other areas you can save, but that should get you started.

tarheeldan

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Re: Where to start and how
« Reply #4 on: July 30, 2015, 01:25:10 PM »
Agree w/ Cheddar on getting rid of a car

Food can be slashed ($633/mo for 4 right now)

Phone can be cut from current $140/mo

Paying $433/mo in "bill & utilities" - what can be cut there?

If you work on those but keep the tithing you might manage to keep from sliding backwards (current 60k in vs. 65.6k out).

You'll have to do more if you want to build the net worth these next ~2 years, which will definitely mean getting everyone on board.

That mortgage is rough right now, 40% of take home!

kraftykiwi

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Re: Where to start and how
« Reply #5 on: July 30, 2015, 01:44:21 PM »
If getting rid of one or multiple of our cars was my choice I would have made it ages ago. We actually have 5 and that's 100% my husband's choice and place of interest so there's no modifying that. Trust me, there have been lots of conversations about it.
I'm going with tarheeldan in that I'm going to cut back on food big time, figure out where I can cut back on utilities, and try to cut back gas as well. That with my husband pulling in some car work should help us survive the crapstorm that is this next year until I get a job and we can make some serious progress.

And in regards to Cheddar's comment, it is neither respectful nor helpful to suggest that my personal held belief is either backwards or a sign I'll be stuck in a hole forever. It's a touchy subject because it's a personal and religious choice and while I could go into detail about how paying it has helped my family and many others, suffice it to say that it's a non negotiable. And I 100% believe that it will not hinder my ability to someday reach my financial goals.

BarkyardBQ

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Re: Where to start and how
« Reply #6 on: July 30, 2015, 02:04:15 PM »
If getting rid of one or multiple of our cars was my choice I would have made it ages ago. We actually have 5 and that's 100% my husband's choice and place of interest so there's no modifying that. Trust me, there have been lots of conversations about it.
I'm going with tarheeldan in that I'm going to cut back on food big time, figure out where I can cut back on utilities, and try to cut back gas as well. That with my husband pulling in some car work should help us survive the crapstorm that is this next year until I get a job and we can make some serious progress.

And in regards to Cheddar's comment, it is neither respectful nor helpful to suggest that my personal held belief is either backwards or a sign I'll be stuck in a hole forever. It's a touchy subject because it's a personal and religious choice and while I could go into detail about how paying it has helped my family and many others, suffice it to say that it's a non negotiable. And I 100% believe that it will not hinder my ability to someday reach my financial goals.

But no where in the Bible does it actually tell you to give 10%.

WingsFan4Life

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Re: Where to start and how
« Reply #7 on: July 30, 2015, 02:46:00 PM »
And in regards to Cheddar's comment, it is neither respectful nor helpful to suggest that my personal held belief is either backwards or a sign I'll be stuck in a hole forever. It's a touchy subject because it's a personal and religious choice and while I could go into detail about how paying it has helped my family and many others, suffice it to say that it's a non negotiable. And I 100% believe that it will not hinder my ability to someday reach my financial goals.

It 100% will hinder your financial goals. Numbers don't lie. Gods and men do.

Dominator

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Re: Where to start and how
« Reply #8 on: July 30, 2015, 02:46:44 PM »
And in regards to Cheddar's comment, it is neither respectful nor helpful to suggest that my personal held belief is either backwards or a sign I'll be stuck in a hole forever. It's a touchy subject because it's a personal and religious choice and while I could go into detail about how paying it has helped my family and many others, suffice it to say that it's a non negotiable. And I 100% believe that it will not hinder my ability to someday reach my financial goals.

I don't think he was implying your belief is backward, just that giving $7300 to the church when you're in debt is backward. I don't know of any churches that absolutely require you to give 10%, it is more of a recommendation for those who are able to give. If you're struggling financially I'm sure the church will understand if you cut back for awhile on your tithe. When you're both working and making lots of dough then you can ramp up the tithe and even give more than 10% to make up for the previous shortfall if you feel inclined.

To quote Warren Buffett, "When you're in a hole, the first thing you need to do is stop digging"

Cheddar Stacker

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Re: Where to start and how
« Reply #9 on: July 30, 2015, 03:00:40 PM »
I'm not trying to be disrespectful or rude, just trying to open your eyes to the fact that you are financing your charitable contributions. No one should be doing this. Give what you can give without hurting yourself. You are hurting yourself, which hurting your ability to give more.

Put on your oxygen mask first, then assist everyone else around you. You will have enormous surplus to give eventually. Now is not the time.

And there are plenty of threads on this specific topic. You are not alone in your beliefs. I understand and respect them, but I completely disagree with them. Disagreement does not equal disrespect. If I implied disrespect in my word choice I'm sorry, it was not my intent. Disagreement was my intent. Help was my intent. You could even say charity was my intent. You came here looking for help. Keep your mind open to the help that's offered.

markbike528CBX

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Re: Where to start and how
« Reply #10 on: July 30, 2015, 03:30:59 PM »

But no where in the Bible does it actually tell you to give 10%.

However in LDS- (Mormon) scriptures Doctrine and Covenants Section 119,  1-5
the 1/10th interest is specified

https://www.lds.org/scriptures/dc-testament/dc/119?lang=eng

Disclosure: I'm not an LSD member (although I do have 6 LDS step-grandkids).
Not exactly sure what is meant by "interest". 
If I had to pay it it would include unearned income only :-)

I concur that 10% of gross is a bit high at this income/expense level.  Not my call though.

NoraLenderbee

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Re: Where to start and how
« Reply #11 on: July 30, 2015, 03:36:58 PM »
Hi kraftykiwi,

Welcome!

It's a bit hard to evaluate your situation because of missing information. It will help if you add the actual net income your family takes home every month. Also tell us the amounts withheld for taxes, medical insurance (if any), retirement savings (if any), and anything else that goes out of the paycheck before you take it home.

From what you've posted so far, your gross income after tithing but before any taxes is about 67K. Your expenses are 65-66K. So you are spending almost your entire gross income. When taxes are taken out, you guys are spending quite a bit more than you make (again, based on the numbers we can see). Either the numbers are off, or you guys are spending a lot more than you bring in. If you are, that's not the end of the world, especially since you'll be adding income soon--but you really need to know how much you're in the red. 

There is a discussion here about the information needed for a case study, and a spreadsheet that can be useful for organizing your information:

http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/msg274228/#msg274228

If you don't want to use a spreadsheet, the first post in the linked thread is a handy summary.

Quote
http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/msg274228/#msg274228

The spreadsheet linked here: https://drive.google.com/file/d/0Bxe0EgraZFRBT2pGYjBEbG1qYlk/edit?usp=sharing can be downloaded and used to help organize a case study posting.  It includes income, expense, and investment categories usually applicable to case studies.

Case study posts should specify gross income, then list (at least approximately) all pre-tax deductions and the taxes themselves that lead to after-tax income.

For "not too complex" cases the spreadsheet will calculate IRS, SS, and Medicare taxes exactly, and state taxes approximately, helping one evaluate the after-tax effects of 401k, HSA, etc.  It includes various credit calculations, including EIC, Child, Foreign income exclusion, and Saver's.

kraftykiwi

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Re: Where to start and how
« Reply #12 on: July 30, 2015, 03:58:47 PM »
I'm not trying to be disrespectful or rude, just trying to open your eyes to the fact that you are financing your charitable contributions. No one should be doing this. Give what you can give without hurting yourself. You are hurting yourself, which hurting your ability to give more.

Put on your oxygen mask first, then assist everyone else around you. You will have enormous surplus to give eventually. Now is not the time.

And there are plenty of threads on this specific topic. You are not alone in your beliefs. I understand and respect them, but I completely disagree with them. Disagreement does not equal disrespect. If I implied disrespect in my word choice I'm sorry, it was not my intent. Disagreement was my intent. Help was my intent. You could even say charity was my intent. You came here looking for help. Keep your mind open to the help that's offered.

Thanks for the clarification, and I'm completely OK that people disagree. As it seems to be important to the context of my question and the help suggested, we have not paid tithe every single month as we have been unable to many months during my schooling and prioritized staying afloat. But as another poster commented we will eventually catch up the amount. Our church does require full tithe to have access to certain things and we put it as a priority, but that's another discussion entirely. I appreciate the help being offered.

kraftykiwi

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Re: Where to start and how
« Reply #13 on: July 30, 2015, 04:25:35 PM »
Hi kraftykiwi,

Welcome!

It's a bit hard to evaluate your situation because of missing information. It will help if you add the actual net income your family takes home every month. Also tell us the amounts withheld for taxes, medical insurance (if any), retirement savings (if any), and anything else that goes out of the paycheck before you take it home.

From what you've posted so far, your gross income after tithing but before any taxes is about 67K. Your expenses are 65-66K. So you are spending almost your entire gross income. When taxes are taken out, you guys are spending quite a bit more than you make (again, based on the numbers we can see). Either the numbers are off, or you guys are spending a lot more than you bring in. If you are, that's not the end of the world, especially since you'll be adding income soon--but you really need to know how much you're in the red. 


Our take home each month is $4,278 which ends up being $51,336 when totaled. My husband also brings in varying amounts of money from car projects, usually a few thousand each year. We do spend more than we bring in but always managed to make up for it until we have increased school expenses and daycare this last year of my schooling. We will be in a much better situation when I work and then when we pay off our car and house to move. But I just need to do a little more than survive this coming year.