Author Topic: getting married in 2 months where do i start?!! (RE edited)  (Read 4412 times)

Mrkineticz

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getting married in 2 months where do i start?!! (RE edited)
« on: March 04, 2015, 01:35:57 AM »
Hi all My name is ren 32 years old and i am getting married in 2 months to the woman of my dreams. Im gonna simplify my question!! since my question was really complicated when i posted it
What should I start paying off in order from my list of debts?

Stats
no kids
no credit card debts for both of us.
will greatly reduce costs when we move in together after we're married
We can live off one income
job reimburses $860 monthly for my car that covers for car payment,gas,maintenance
fiance maxes out her 403b yearly

main questions
-what do i pay off first?
- advice if any?
-where should i start investing money.

Income:
-Registered nurses x2 we make roughly 180k yearly combined
-18,000 yearly to put into a 403b

Current debts (list from order of priority in my opinion what do you think?
-fiances student loans 15,000 3% loan from fiances parents
-first property 126,000  3.25 fha loan with pmi
-primary residence 300,000 (currently looking to buy our primary residence)
-car 17,191.54 with 7% apr car loan (2010 prius) I use this car for work I drive alot

investments
-60k 403b my fiance has







« Last Edit: March 10, 2015, 03:33:34 AM by Mrkineticz »

Spondulix

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Re: getting married in 2 months where do i start?!!
« Reply #1 on: March 10, 2015, 12:43:06 AM »
Can you do us a favor and write out all of the details in a list (it's pretty confusing to look at a paragraph about financial details)

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #2 on: March 10, 2015, 03:34:14 AM »
thanks spondulix here hope this simplifies it! any questions please feel free to ask !

zolotiyeruki

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #3 on: March 10, 2015, 09:57:38 AM »
You have a very nice income.  What's your spending like?  What is this first property--a rental unit?  Why $300k for a primary residence--are you in a HCOL area?  What's your time frame for moving into a primary residence?

In general, you want to get rid of high-interest-rate debt first, and minimize your income tax liability.  With that in mind, here's my advice (in order):

1) Max out the 401k/403b for both you and your (soon to be) wife. ($36k/year)
2) Max out traditional IRA for both you and your wife ($11k/year)
3) Tackle the car loan--it has far and away the highest interest rate.
4) After that, hit the first property so you can get rid of PMI.
5) Pay back the student loan to family.  Sure, it's your lowest interest rate, but IMO it's extremely important to fulfill that obligation when it's a family member on the other end.

With steps 1 & 2, plus standard deduction and 2 exemptions, your taxable income will be about $115k and your income tax will be about $20k.  Your take home pay will then be about $95k.

With steps 1&2, you aren't paying off any loans yet.  You said that you can live off one income, but that's $90k (assuming you're earning the same as your fiance), which is an enormous sum, especially since it's your take home pay.  If you keep your spending to a princely $60k/year, that means that in addition to maxing out both 401(k)s and IRAs, your debt would look like this:

Year 1: pay off car and get first property to <80% LTV to eliminate PMI ($18k paid off mortgage, down to $108k minus normal payments)
Year 2: pay off student loan and have $20k left over to invest or pay down debt

If you're slightly more frugal and keep your spending at $45k, you could knock out PMI, car loan, and student loan in 1 year.  After that, it's up to you--mathematically, it makes more sense to invest the leftover income in traditional investments, but it's also nice to be debt free.  You'll have to make that judgment call.

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #4 on: March 10, 2015, 10:36:56 AM »

thanks zolotiyeruki for the advice. to answer your questions

My spending right now is a bit on the high side. Considering I know what a typical mustachian spends in a year. I am spending about 45k a year on my own. I planned to sit down with my fiance when we're married to figure out what our spending will be like together. she is frugal as well so I wouldnt have a problem with her cooperating.

First property is the first house I bought prior to meeting my fiance. I wanted to convert into a rental property and ive been doing my own renovations to it so when i get married it will be rented for 1500-1600 a month.

My fiance and i live in the houston metro area she wants a house that is in a good area that is close by to the city without a long commute to work. Im perfectly fine living in a cheaper house but  the area were targeting has good resale value and good schools.

my time frame to move in is within this year.

so a good target goal this year is to max out both 401k and roth ira's, knock out my pmi, get rid of the student loan, get rid of car loan, and have enough money for my wedding .. smh lol

questions

-what if my company does not match me in my 401k? do i still put my max in
-how to start a traditional ira?
-should i invest any excess money in other accounts?
-how long until i can be FI? I really would like to pay off all my house debts as well?


Thanks!!

zolotiyeruki

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #5 on: March 10, 2015, 12:17:32 PM »
I used to live in the Houston metro (Kingwood).  $300k for a home for two is INSANE.  Just before we moved (4 years ago), we were looking to buy a 3400+ sq ft home for about $220k.  What area specifically are you looking to buy?

-what if my company does not match me in my 401k? do i still put my max in Since you're solidly in the 25% tax bracket, I'd max out the 401k, even without a match, unless the fees are crazy high.  You're trying to minimize your taxable income, and therefore your tax liability, and 401k's reduce your taxable income.
-how to start a traditional ira? Give Vanguard a call, or visit their website https://investor.vanguard.com/home/  There's a big red button there labeled "Open an Account"
-should i invest any excess money in other accounts? For the first couple years, focus on the 401k's, the IRAs, and knocking out PMI, car loan, and student loan.  After that, you'll continue maxing out 401ks and IRAs, and the remainder of your extra cashflow can go towards mortgages or retirement savings.
-how long until i can be FI? I really would like to pay off all my house debts as well? This is VERY dependent on your spending habits.  Reducing spending has a double effect on your retirement date.  Not only does it free up money that you can now invest, but (if you continue the same lower spending habits in retirement) it will decrease the total amount you need in order to be FI.

If you have a strong desire to eliminate your house debts, then you can certainly divert your excess cash flow towards paying off the mortgage(s) rather than towards traditional investments.

What does a single guy spend money on that totals $45k!?  I don't think our whole family of 8 spends that much outside our mortgage!

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #6 on: March 10, 2015, 07:53:10 PM »
Westbury or meyerland. It would be a place to renovate and have our first child shortly after we get married.. plans to stay in that house for 5-7 years then move back to Philadelphia or new York city.

My spending habits aren't bad. The majority of it goes into food, mortgage And other expenses here is a breakdown of payments I have currently. When I get married all my bills will be halved. But I think as a single un married man it is expensive.. when student loans,car payments are finally paid I can finally put money into other investments. I make enough to still be able to max out my 401k and an ira

661 (fiance student loan) we have 20 more payments left
1413 mortgage & hoa (room mate pays 500)
750 food,gas,restaraunts (includes going out  with fiance)
500 monthly dues to family business in real estate
400 car payment
67.37 att internet
35 natural gas
80 electric
92.68 insurance

= 41988

zolotiyeruki

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #7 on: March 11, 2015, 10:12:25 AM »
Westbury or meyerland. It would be a place to renovate and have our first child shortly after we get married.. plans to stay in that house for 5-7 years then move back to Philadelphia or new York city.

My spending habits aren't bad. The majority of it goes into food, mortgage And other expenses here is a breakdown of payments I have currently. When I get married all my bills will be halved. But I think as a single un married man it is expensive.. when student loans,car payments are finally paid I can finally put money into other investments. I make enough to still be able to max out my 401k and an ira

661 (fiance student loan) we have 20 more payments left
1413 mortgage & hoa (room mate pays 500)
750 food,gas,restaraunts (includes going out  with fiance)
500 monthly dues to family business in real estate
400 car payment
67.37 att internet
35 natural gas
80 electric
92.68 insurance

= 41988
Wow, Meyerland is an expensive area.  Out of curiosity, why choose that particular area?

A few notes on your budget:
1) Your total ($42000) is about $500/month less than the budget you posted.  Does that mean that your net mortgage payment is $913 ($1413 minus $500 from roommate)?
2) If you're going to pay off your fiance's student loan with "extra" money, then the $661/mo won't be part of your monthly budget
3) You're spending an ungodly amount of money on food/gas/eating out.
4) You can probably bargain down AT&T on your DSL, assuming you have Comcast or Time Warner in your area.  Give 'em a call, say you're considering leaving for cable internet, and ask if they have a special you can get onto.
5) Other than food/gas/restaurants, your spending *does* look pretty good.  Nice going!

So...a couple questions:
1) Your spending is obviously far lower than your income.  Where are you putting the unspent money each month?
2) When are you going to buy a place with your wife(-to-be)?  Unless you both have a bunch of money socked away, you'll need to save up for a down payment.  (This is why I asked #1 :) )
3) How are you planning on handling finances once married?  Joint everything? Separate finances?

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #8 on: March 11, 2015, 01:34:40 PM »
Thank you so much for all your advice. Yes my room mate is currently paying 500 a month all bulls paid.. I just called att and lowered my Internet bill to 42 dollars a month. Also my car payment is only 327 a month but I'm paying 200 biweekly . After all this wedding stuff is done I plan to put money into paying down our loans, 401k and an ira..
if I decide to retire early why would a traditional ira be beneficial. I also have plans to start a house flipping business in the side this year as well.

1)I currently have 25,000  in the bank for my upcoming wedding. I've been saving all my money for this wedding for the past year. I've already paid 20,000 for my wedding. I know 45 grand is an ungodly amount for a wedding I'd prefer to have eloped but you only get married once. I've been saving all my money for my wedding. once my wedding is done on may 16th I will put all that money into my 401k... I'm currently putting only 10% at this time to my 401k

2) my fiance has 26,000 currently in her bank that we both saved for our down payment for our house and we planned to buy a house by this time but we haven't found the right house yet so we are still waiting to buy but sometime this year .
3) I thought about separate finances and one joint account but I will be the main person to handle finances but with my fiance being in the loop

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #9 on: March 11, 2015, 01:38:04 PM »
Meyerland, westbury has actual houses in the close in metro area of houSton. I factored in commute times since we both work in the med center area.. we both didn't want a townhouse due to hoa fees, wanted a backyard.And wanted privacy. Meyerland and westbury has good schools for when we have children.  Last it is in the middle between our parents homes

ShoulderThingThatGoesUp

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #10 on: March 11, 2015, 01:41:35 PM »
You don't have kids now, I'm not sure it makes sense to buy a house because of what schools are good now, when your kids who would go to them don't exist yet. (Especially if you want to leave Houston when your first is reaching school-age).

Lots of incredible deals just over 288 from the Med Center that you could do well off of with some sweat equity.

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #11 on: March 11, 2015, 02:00:00 PM »
We looked over there east of 288.. it still looks like the 5th ward. We dont mind having some sweat equity Since im a handy guy. We even looked around the tsu area and the neighborhoods aren't established yet. I agree with u on not buying a house for that since we don't have kids.  I guess we're pretty set on 300k as a budget and it still frees us to live off of one persons paycheck. On a side note that 300k budget is  based off of my fiancÚs earnings alone. I know if I was part of the loan process our budget would be higher

ShoulderThingThatGoesUp

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #12 on: March 11, 2015, 02:22:18 PM »
Did you look at all just south of 610 and east of 288? Or South Main kind of area?

I'm wondering how much sense buying in Houston intending to hold for only 5 years makes right now anyways. Prices are just finishing a huge climb...

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #13 on: March 11, 2015, 05:34:18 PM »
Did you look at all just south of 610 and east of 288? Or South Main kind of area?

I'm wondering how much sense buying in Houston intending to hold for only 5 years makes right now anyways. Prices are just finishing a huge climb...

Shoulderthingthatgoesup I have thought about where I wanted to live. My fiance is adamant about being outside of 610 but west of 90/main st. Meyerland is really expensive. Westbury is the next best area or willowmeadows. I do question our decision sometimes but as I look at the housing market THat area is very much sought after, Has a good inner community, Neighborhoods are well established and the house values there have risen from 100k to an average of 250-350k in that area. Its in the middle between my parents and her parents house. After much thinking it doesnt make sense to pay that much but Id rather pay for closeness than live all the way out in katy or in the ghetto just because its cheaper. My fiance wants to live there and we have looked at so many places inside the loop and out but that area just feels like the right fit for both of us.

5-8 year plan to stay is a long way out. I plan on paying my first property off in 3 years and I plan to make a dent into the new house mortgage as well before I leave.

zolotiyeruki

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #14 on: March 12, 2015, 07:26:47 AM »
Thanks for clarifying on the house and where you're putting your disposable cash.

What is the budget for your wedding?  "but you only get married once" is liable to land you in the Antimustachian Wall of Shame and Comedy :)

Mrkineticz

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Re: getting married in 2 months where do i start?!! (RE edited)
« Reply #15 on: March 17, 2015, 03:15:24 PM »
Thanks for clarifying on the house and where you're putting your disposable cash.

What is the budget for your wedding?  "but you only get married once" is liable to land you in the Antimustachian Wall of Shame and Comedy :)


Dont face punch me but my budget is 45k fr our wedding. each side of the family is putting 10k each in our wedding. i have 20k already paid and 25k in my bank to pay the rest. Once I get married my spending will go back to normal or be less.