Learning, Sharing, and Teaching > Case Studies
43, divorced + child support = paycheck to paycheck but want FI
TheRobotWatcher:
The first act – “the main characters, their relationships and the world they live in”
Pre-2009, I was living the regular American man lifestyle with a wife and three daughters. Getting up in the morning to go to work and coming home in the evening for dinner and spending family weekends together. We were in debt to our eyeballs in CC debt, had two houses with those crazy mortgages and an hour commute one way.
One we had rented out and the other one was supposed to be my wife’s dream house. I had been contributing to my 401k at my jobs but nothing too fancy at that time. Life seemed to be going okay around us.
In 2009, both my father passed-away and my wife left me – the marriage ended in divorce.
She took half my 401k and I decided to just cash out the rest to help pay off some of those CC bills.
My father’s life insurance went directly to pay for the divorce and pay off the marriage bills.
She moved into the rental house and I stayed in the family home 2 miles away. I was forced to pay a pretty hefty monthly child support monthly.
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With all that happening, I decided to live life in happiness and just keep on marching forward.
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My ex-wife had leased an SUV from a dealership while we were married and after my grandmother passed away (also in 2009) I took the money from that inheritance to get rid of that bad money decision.
And after that the housing bubble burst. There was no way, I could ever pay the mortgage on the family home and my ex couldn’t pay the mortgage on the house she was in either. So, we had to short sale both of them this past year.
In between all this, my oldest daughter turned 18 and my ex-wife would not lower the child support, so I had to go back to court for joint custody of my two youngest children and a lower child support. The lawyer’s cost was substantial again.
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In those years, I found myself out of work for five months but I had enough in the bank to cover life.
While that storm was raging all around me. My daughters were growing up and I had actually found someone to love and we got married again. I adopted her daughter and we now have a three year old son.
Life as a whole, isn’t too bad. I have a government job now.
The second act - "rising action"
With life comes experience, and with experience comes maturity. With that experience and maturity, I am now 43 years old and for all intents and purposes financially ruined.
I do have a 9 to 5 government cubicle job and I have started an Ebay store on the side. My wife is a stay at home mom and wife – with the 5 kids it is cheaper that way and our values align with that decision.
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With all that being said, I feel like I cannot just give up and condemn myself to a life in a cube and never being able to enjoy a solidly FI type of lifestyle. I have always had a positive outlook that I will be successful in life. An inner voice, one might say. That has always driven me to fight for life.
But, I know, I am 43 now and investing the “simple way” isn’t what I think is the best idea. I could be wrong though. That is why I am reaching out to you all now.
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The third act – “the resolution of the story and its subplots”
In the end, I was inspired to write a letter to you and your team.
In my mind’s eye, I want to be able to leave work in 10 years or even less; live a frugal life in the Virginia valley or in another low cost of living area with a monthly income from investments.
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I don't have a high savings rate and I am currently living paycheck to paycheck.
I have no other assets currently
Praying for a miracle at this time ~ thanks
plog:
--- Quote ---I don't have a high savings rate and I am currently living paycheck to paycheck...Praying for a miracle at this time
--- End quote ---
I'm not the biggest bible nerd, but something about those that help themselves? Usually in the Case Study forum people list their assests/ liabilities and get face punches and advice. You posted a story and a wish, so I will hand out a wake-up slap and advice:
What do you want from us? Commiseration? Pity? Empathy? Fake encouragement? Acknowledgement that your situation is unfixable and therefore you have our blessing to wallow in the life you have created? No seriously, what do you want?
This site just provides the plan for achieving the life you want. Ultimately its on your shoulders to enact that plan. And its pretty simple--live on less than you earn and save. So, if you are serious about this life you want to achieve, take a step today toward that end. I don't care what it is--cut out soda, disconnect cable, ride your bike to the store, mow your own lawn, etc. Do soemthing today toward that end.
Then tomorrow something else. Cut your expenses, increase your savings rate. Get moving. You can do it, but do you really want to?
Raenia:
We can't help you without information - how you got where you are is all very well, but we need to know your salary, expenses, and savings before we can make suggestions. Take a look at the "How to write a case study" sticky and use that to write up the information we need. Help us help you.
thesis:
Welcome, TheRobotWatcher!
Sorry to hear of all the difficulties, but I'm glad things seem to be looking up. That inner voice telling you that you can succeed is extremely important, and the fact that you are reaching out for advice is further proof that you can really turn things around.
It sounds to me like you need to focus on the smaller goals first before you start looking at early retirement. Some people will hate me for saying this, but if you look up Dave Ramsey online or check out his book The Total Money Makeover from the library, that is a good place to start for analyzing your current situation and what your first steps should be. Love him or hate him, he is very good at motivating people out of debt and onto the right track. Most people don't like his investing advice, though, but you aren't ready for that anyway, so it shouldn't be a problem :)
You haven't mentioned whether you do still have debt, though, and it doesn't sound like any major life event specifically caused you to change your spending habits. This is the first place to look. It is also smart to have an emergency cushion of some kind, and since you have child support and kids to look after, I'm guessing that might be between 5-10k. This cushion gives you the stability to begin to rebuild, but focus small and just get that first 1k if you don't currently have it.
And I don't know much about government jobs but I have always heard that they don't pay as well as the private sector but have great benefits. This may prove instrumental later if there is an excellent 401k match and whatnot, but I think it is smart to be making money on the side, as long as there is low risk of that falling on top of you :)
When my parents went through money struggles, we kids had no idea until the house was gone. They continued to pay us allowance and give us money for lunch and fun with friends, but I wish they had sat us down to explain the situation and brainstorm, as a family, how we could all pitch in and reduce our expenses. Don't be too proud to do this, I feel it would have brought us closer as a family and I'd have learned about frugality much earlier.
My $0.02 :)
Nick_Miller:
@TheRobotWatcher,
I greatly appreciate the rather literary spin you put on your story! (Shhh...there are lots of engineering nerds around here who only care for numbers and data..."must compute")
And it sounds you have a freaking horrible last few years. Damn. But even after that, you did marry a new woman and take on the responsibility for raising/paying for even more kids, including a very young one, so you sorta knew that going in.
"Praying for a miracle" won't do jack. You have to make a plan.
So as the engineering type nerds suggested, give us an actual case study with income and expenses and all the data so people can start making some concrete suggestions. I'm your age too...we're not in the grave yet, my friend! Give us the data, and then be prepared for a LOT of facepunches (made out of love....or misplaced aggression).
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