Author Topic: 43, divorced + child support = paycheck to paycheck but want FI  (Read 8309 times)

TheRobotWatcher

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43, divorced + child support = paycheck to paycheck but want FI
« on: October 17, 2017, 10:13:27 AM »
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.



-----------------------------


With all that happening, I decided to live life in happiness and just keep on marching forward.

-----------------------------



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.



-----------------------------

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.

-----------------------------


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.

-----------------------------

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.



-----------------------------



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

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #1 on: October 17, 2017, 11:49:51 AM »
Quote
I don't have a high savings rate and I am currently living paycheck to paycheck...Praying for a miracle at this time

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

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #2 on: October 17, 2017, 11:53:40 AM »
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

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #3 on: October 17, 2017, 11:59:02 AM »
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

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #4 on: October 17, 2017, 12:07:36 PM »
@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).

Laura33

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #5 on: October 17, 2017, 12:09:05 PM »
The bad news is there are no financial miracles.  The good news is that you don't need one.  Your past is done; your future is in your own hands now. 

In the past, a combination of bad choices and bad luck led to hard times and bad outcomes.  I can only imagine how frustrating that was.  But you are back on solid ground now, with a presumably safe job at a reasonable income, and those bad debts off your back.  That is huge progress over the past 8 years!

What you do from here on out determines your future.  If you keep doing what you have always done, you will get what you always got.  So if you want a different ending, you need to change the way you think and behave, right now.

Start with this for perspective: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/.  If you are currently saving almost nothing, you are on the "never retire" path -- that is not optimal.  On the other end of the spectrum, your dream of retiring in 10 years would require saving 2/3 of your income.  Given five kids and child support and all, I doubt that is a reasonable expectation.  But that doesn't mean you need to give up entirely!  If you can save 30% or so, you can retire comfortably at normal retirement age.*  Anything that you can do now will shave years off your working life.

In terms of "how":  the first thing you need to do is track your spending religiously.  You can't fix overspending if you don't know what you're currently blowing money on.  Use Mint or You Need a Budget or any other system that is easy for you to stick with. 

Once you start to see what your money is going to, evaluate what you can cut.  This means evaluate everything -- house, car(s), food, insurance, etc.  Every penny that you spend today is a quarter that you need in retirement to fund your standard of living.  E.g., if your wife is a SAHM, can you get by with only one car -- or none?  Can you move to a smaller/cheaper home?  Can you have cheap vacations near home instead of flying somewhere?  Read MMM and the forums here for all sorts of ideas.  And if you have time to fill out the Case Study template, there are many folks here who will provide specific suggestions.

And don't forget the income side of things.  What is the potential for your EBay store?  Since at least some of the kids are older, can your wife do an in-home daycare or an online business?  Is she particularly interested in/good at something that she could do part-time?  What about the kids -- can some of the older ones mow lawns or do odd jobs or babysitting to cover their own spending money and activities?

Finally, if your job offers a match on the 401(k), begin investing up to the match, today.  You are literally giving up free money while you are figuring everything else out.

*Note that this chart doesn't consider Social Security or pensions or such, so the necessary savings rate to be ready to retire at 65-70 is probably a lot lower.

marty998

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #6 on: October 17, 2017, 02:36:35 PM »
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.

Investing "the simple way" is always the best way to go. What are you thinking? 43 with 5 kids and as sole breadwinner and you want to try your hand at speculative trading? Derivatives and options? Currency plays?

Please do not put your family at risk and be sucked into the sales pitches of high returns and no work. Your boring basic index funds in retirement accounts in combination with paying down your mortgage (if you have one) is the way to go here.

TheRobotWatcher

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #7 on: October 18, 2017, 01:13:43 PM »
Hey All, In my excitement about posting to this forum I forgot to read the directions in full above. I'll like to say thank-you for the people that pointed me to that link and schooled me on in.

Below is my first attempt at putting it all together, while I take the time to learn that spreadsheet. I'm a nerd, but not that much of one. Thanks again for all the replies and information above.


-----------------------------------------------------

Tax       Marital    Status    Exemptions     Add'l
FED        M            4            0
[XX]       M            5            0

-----------------------------------------------------

Cumulative Retirement
FERS: 9,507.97

-----------------------------------------------------

CURRENT EARNINGS
                                      Current      Year to Date
GROSS PAY                      3,508.80    72,589.60
TAXABLE WAGES              3,263.42    67,464.24
NONTAXABLE WAGES        245.38        5,125.36
TAX DEFERRED WAGES       
DEDUCTIONS                    1247.44        25,807.85
AEIC       
NET PAY                            2261.36        46,781.75

-----------------------------------------------------

DEDUCTIONS
TYPE                        CURRENT        YEAR TO DATE
FEGLI                        14.10            291.75
FEHB                          173.59         3,626.61
OASDI                       202.33          4,182.78
TAX, FEDERAL            310.28          6,356.51
TSP LOANS                 91.97            1,931.37
VISION                        17.00           353.68
FEGLI OPTNL                20.85        432.05
MEDICARE                    47.32        978.23
RETIRE, FERS               154.39            3,193.94
TAX, STATE                  160.82        3,315.86
DENTAL                           54.79        1,145.07

-----------------------------------------------------

BENEFITS

TYPE                CURRENT        YEAR TO DATE
FEGLI                7.05        145.91
MEDICARE            47.32        978.23
RETIRE, FERS        417.55        8,638.16
FEHB                505.22        10,576.18
OASDI                202.33        4,182.78
TSP BASIC            35.09        725.91


-----------------------------------------------------
Current Debt
Name                        Current Balance            Interest Rate
CareCredit                     1,799.04                  [ ... ]
Discover                     6,989.85                12.40%
Navient (College)           17,331.03                [ ... ]
Powersaver                     6,271.36 (?)            [ ... ]
USAA MC                     14,422.8                 12.40%
USAA Honda Pilot            13,464.12                 [ ... ]
Medical                     5,172.05 (?)            [ ... ]
Credit Card Fees              [ ... ]                 [ ... ]

-----------------------------------------------------
Monthly Average Expenses

Name                          Monthly Average
Rent                           1500
Child Support               320 [Goes down to 160 in March]
Water                          183
Electricity                    200
Powersaver                  180
Netflix                         10
Car Insurance              158
Dry Cleaning                 30
Fuel                             217
Groceries                      890
Hair Care                      30
Internet                        52
Phone                          196





-----------------------------------------------------

Gin1984

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #8 on: October 18, 2017, 01:30:06 PM »
Get on the phone and cut your car insurance bill and your cell phone bill.  Those two jumped out at me as way too high.  Next, start recording your spending, you are missing a lot.

cchrissyy

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #9 on: October 18, 2017, 01:37:57 PM »
Your groceries are very high. Is there alcohol in there? Is there house stuff like cleaning products or clothing or toiletries in there?  If so, break that apart.

rockstache

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #10 on: October 18, 2017, 02:02:54 PM »
Phone bill is way way too high. What is powersaver? Also, what are you going to do with the extra $160 when your child support goes down? Make a plan for this ahead of time. Find out which of your debts is the highest interest and put the full $160 towards it.

Goldielocks

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #11 on: October 18, 2017, 02:27:19 PM »
Cell phone is very high, indeed.  What is Powersaver - a credit card?   Food is reasonable in a higher cost area, with 18 y.o, 3 kids between 10 and 17years and a 3 y.o.   But in many flyover states, this is a high food bill.  Your wife needs to be included on budgeting this number and can really make a dent in it, potentially, but that is only another $200 or so.

This income / expenses shows nearly $8k coming in every month, after all work deductions, and only $3.9k per month in expenses, plus whatever you pay on your loans.  So, your problem must be your loans and a lot of voluntary extra payments?  Likely not, and you are missing a LOT of expenses.

Debts -- $20k general debts, $28k car loans (!!!!), $10k (assumed) TSP loan, and $17k College
Please add in minimum CC and loan payments and all the interest rates as soon as you can.

Early feedback -- look  (today!) into getting rid of one of the cars... if you can manage this, without buying another car, it will be a dramatic impact on your numbers.   Perhaps an electric bike will get you (or your teenagers) around town?

Comment:
The 18 year old (out of school I assume?) should be paying for all of their own expenses, except for food, laundry, utilities and a room to sleep in. (Some parents even cut back on this, but for divorced Dad to do so may cause havoc).  I assume you are spending more than that on your young adult.  Whether that is through student loans, work or whatever, this kid should not be costing you very much anymore.  With 5 kids it is likely reasonable to expect that you are not footing a large tuition bill.   If needed, once you figure out your budget plan, sit down with your 18 year old and show him/her all the numbers and discuss it like an adult.  (I have a 17 year old, now out of HS, this worked quite well for us, now I am trying to get her to take her first part time job rather than doing nothing except college because she has limited funds...  Parenting is not easy.)


dandarc

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #12 on: October 18, 2017, 02:51:19 PM »
Basically - what everyone else said.

You're making over $90K / year and have federal benefits.  A lot of people manage to keep financially solvent on less than that, even with the large family, so you've got enough income to get out of this hole.

You've got to really track your spending and cut wherever you can.  Once you've got the day-to-day expenses down, suddenly the debt repayments won't be putting you in such a bind every month.  The balances start going down.  Of what you've listed, Grocery and phone jump off the page.  Can you also find a cheaper place to rent?  Sell a car or two?  Everything should be on the table.

Laura33

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #13 on: October 19, 2017, 08:49:13 AM »
I'm going to be blunt:  you cannot afford the life you're living.  I am assuming you get 2 paychecks a month?  If so, it looks like you have @$4500 net income and $4K listed expenses, without even considering your debt payback.  Clearly those expenses are not accurate, because in however long you have been in your Act II, you have also added a TSP loan, CC debt, car loans, medical debt, college debt, and some others I can't identify.  (How much is the TSP loan for?  We need the loan amounts, minimum monthly payments, and interest rates on everything).  You have $65K in debt, not including the TSP loan -- that is more than a full year of your net income!  And I am confident you are continuing to add to that total every month.  Do you have any other assets -- bank accounts, emergency savings, anything?

It seems to me that you have been living the kind of lifestyle you expected to have, based on what looks like a big salary, and didn't pay attention to the kind of lifestyle you can actually afford on your actual net pay after you take out the @$2500/mo in taxes and deductions.  The reality is that people with your salary and five kids and a SAHW can't afford all the stuff that you are buying and doing, so you need to look for every opportunity to slash spending and bring in more income.  Nothing can be sacred here; question everything.  You can't afford a Honda Pilot -- that is a large, expensive vehicle, and you cannot afford that size car loan or the insurance/gas it requires.  If you need a larger vehicle because of the number of kids you need to transport, look for a cheap, older, reliable minivan -- preferably one that you pay for in cash, which would allow you to cancel all but the liability portion of your insurance.  The apartment is costing you 1/3 of your take-home pay; that is technically "affordable" under common standards, but given that you are running up CC debt, *you* cannot afford it.  You cannot afford to take on college loans for your child(ren) in college.  You can't afford $900 in groceries every month.  And you cannot afford a SAHW at this point -- certainly not if you want to stay in your current apartment and keep your current lifestyle.  Either you need to cut back dramatically, or she needs to find a way to bring in some income.

Your debt is an actual emergency.  See https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/.  As of right now, you need to work more than a full year just to pay off your past consumption choices.  And the best part is, because of the interest charges, you get to pay more than those things actually cost!

But you are young, and you have time to turn this around.  Start digging in, start tracking, start slashing costs, and throw every extra dollar at your highest-interest debt.

Goldielocks

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #14 on: October 19, 2017, 01:45:34 PM »
Laura33 -- how did you get such a low income?  I looked at the annual YTD at $72k, an assumed it is roughly to October 1st week paid out, so there is a little less than $8k/month coming in the door...

boarder42

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #15 on: October 19, 2017, 01:51:29 PM »
Name                          Monthly Average
Rent                           1500
Child Support               320 [Goes down to 160 in March]
Water                          183
Electricity                    200
Powersaver                  180
Netflix                         10
Car Insurance              158
Dry Cleaning                 30
Fuel                             217
Groceries                      890
Hair Care                      30
Internet                        52
Phone                          196


Gonna focus on this - phone way too high should be sub 20 with your debt emergency\
hair care - should be 0 you cant afford this
Dry Cleaning - should be 0 you cant afford this
Groceries - holy hell this should be sub 400 you cant really even afford that so it should be sub 200
Car insurance- crazy high should be 1/3rd of that or less
All utilities seem insanely high to me but this could vary based on region.  you should keep your house at 60 in the winter max and 78 in the summer minimum
water - do you water your lawn you should quit.

boarder42

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #16 on: October 19, 2017, 01:52:17 PM »
and really you cant afford the ten bucks for netflix you should drop that too.

Goldielocks

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #17 on: October 19, 2017, 01:58:33 PM »

Gonna focus on this ... you cant afford this

Although I agree with the basic review of some expenses being higher than need be, I think we need to wait for OP to comment and verify income and what the missing expenses are.

Or am I missing something? I see roughly $7800/month in take home and $3900 in listed expenses (plus debt minimums and repayment).

The only indicators that the OP can't afford this is crazy CC debt, (half of it possibly related to a mix of medical bills and lawyer fees) and his comments about life being very hard to afford.   

The numbers so far don't back up the claim that he can't afford his lifestyle, plus a healthy retirement savings rate.

dandarc

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #18 on: October 19, 2017, 02:11:36 PM »
Or am I missing something? I see roughly $7800/month in take home and $3900 in listed expenses (plus debt minimums and repayment).
I see $2261 every 2 weeks - most months that's $4500 take-home, twice per year $6700.

OP needs to slash spending until "expenses" + "debt service" is less than or equal to the $4500 figure.  That'll at least mean they aren't systematically accruing more debt.

cchrissyy

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #19 on: October 19, 2017, 02:15:47 PM »
Yeah OP please confirm!
Goldielocks, in reply #7 he says his year-to-date gross is 72589 and net 46781.  if we assume that represents 10 months, his monthly gross is about 7200. Take home is about 4700, not 7800.

Goldielocks

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #20 on: October 20, 2017, 01:02:30 AM »
Got it. Thanks.

TheRobotWatcher

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #21 on: October 20, 2017, 07:48:07 AM »
-----------------------------------------------------

"I see $2261 every 2 weeks - most months that's $4500 take-home, twice per year $6700", Yes this is essentially correct. I could not figure out how to figure in the extra two months in the spreadsheet. I am working as fast as I can to lower the learning curve here as I get faced punched. But, I enjoy being in the arena - Thank-you, Everyone.

Below is September's report from Mint and a couple of more comments: 1.) Yes, the water is high. Just the hook-up fee alone is $100 a month and the whole county is mad at the state government and the company for the high bills 2.) The college bill belongs to the SAHM 3.) the CC bills are whats leftover from medical and lawyer. 4.) The commute is 40 mins to and fro 5.) Living here because to be close to ex-wife and custody with older children but contemplating and thinking seriously about either moving closer to work or a very cheap area with the same commute. 6.) Ebay is actually bringing a couple of $100 month now and I think can help a lot 7.) I started a blog and I want to monetize that as well 7.) A YouTube channel is coming too. 8.) SAHM does network marketing which pays for itself righ now 9.) Raise in April 10.) Child Support lowered after graduation next year.

I hope this helps more - it is sure helping me - understand more and not feel so overwhelmed.

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Groceries ...... $890.21
Fast Food ...... $68.64
Coffee Shops ... $43.12

Total .......... $1,001.97

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Auto and Clown Car

Auto Payment ...... $509.81
Gas & Fuel ........ $217.02
Auto Insurance .... $123.93

Total ............. $850.76

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Utilities

Utilities ......... $317.98
Home Phone ........ $196.19 (Just switched to Verizon and we will save money)
Internet .......... $54.39 (Canceling this and just going to use personal hotspots from phones)

Total ............. $568.56

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Finance Fees and Late Charge (Ugh!)

Finance Charge ..... $161.73

Total .............. $161.73

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ATM (Half Ebay Sourcing and Half for the day)

ATM Withdrawal ..... $100.00
Total .............. $100.00

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Lowe's ........................ $27.05
Target ........................ $43.80
Dry Cleaners ........... $28.70
Dollar General ................ $12.78
Dollar Tree ................... $5.07
Amazon ........................ $30.39
Family Health ........ $20.00 (Should be in Healthcare Catagory)
Carecredit .................... $53.00 (Should be in Healthcare Catagory)
Netflix ....................... $10
Goodwill Industries ........... $35 (Ebay)
Hair Cuttery .................. $32.00
Video  ............. $17.75 (Ebay and Kids)
Dry Cleaners ........... $22.80
CVS ........................... $4.42

Total ......................... $343.00


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Child Support .............. $379.00
Discover ................... $174.00

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Round-up

$1,001.97
$850.76
$568.56
$161.73
$100.00
$343.00
$379.00
$174.00

Total - $3,579.02
« Last Edit: October 20, 2017, 07:58:21 AM by TheRobotWatcher »

BrightFIRE

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #22 on: October 20, 2017, 01:49:46 PM »
Groceries ...... $890.21
Fast Food ...... $68.64
Coffee Shops ... $43.12

Total .......... $1,001.97

TheRobotWatcher, I can't get over this insane food spending. I couldn't spend that much to feed 4 people if I tried, even if I bought $32/lb cheese and imported truffle oil. There are only 2 adults and 2 children in your household, one of whom is a toddler. Do you buy a shopping cart full of food, not cook what you buy and then throw it all out?

Your wife is a SAHM, she should really be cooking every meal you eat, packing your lunches, and you should not be eating out until you get some of that debt under control. I know some people don't enjoy cooking like I do, but eating at home is the best way to save here, and that would be another way for her to contribute.

Goldielocks

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #23 on: October 20, 2017, 05:59:11 PM »
The plan to move closer to work is a good one.   The goal of this is to ditch the car and free up more of your time, which you can spend on increasing your skills, or at work if that eventually helps out a promotion.   If the new area has cheaper rent, that is great, but don't squish yourselves into something tiny just to save $100 per month.  Instead, look for places with water  / garbage included, like a townhouse ?

Network marketing -- if she is multi level marketing, please take of the blinders, this is highly, highly unlikely to be paying for itself.   Maybe breaking even if you don't count the upfront or annual fees (training?) or meetings, don't count obsolete samples / inventory, don't allow for any $'s towards her time and gas to get around, and only count the cost of product, cost of website versus dollars received.  Also note that in our city, any home based sales intended for profit needs a business license. 

Ideally, instead, she would ditch the MLM and babysit another kid before / after school. $300 per month would make a difference to you and still keep her front and centre with your 3 y.o..  And without the MLM effort, she could focus on the grocery budget.

$2261 per 2 weeks averages out to $4900 per month.   However, for easy calculations, many people budget to the $4500 per month number, like you don, then take the extra paycheques and put them towards Christmas / vacations (50%); Retirement or debt repayment (50%).

I think your goals are possible with your income, but you will need a focus on debt repayment (the cc, medical and tsp loans, etc), followed by a focus on savings.  If both of you have your eyes on the goal, it is amazing how quickly extra expenses can fall off.


Curious -- in hindsight, was it worth the lawyer cost to reduce the monthly child support?   How much in legal fees vesus how much per month  x # months saved?  (No one knows this until after, so I am not knocking your choice, just getting an understanding)

calimom

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #24 on: October 20, 2017, 09:44:55 PM »
In an ideal world your wife would not be simply 'breaking even' in 'network marketing' but looking for a full-time job which would both justify and help pay down the Navient loans. While respecting the values you have for a SAHM, you simply cannot afford this luxury. This forum is filled with parents who are not FI who work to both stay out of debt and build real savings and security for their families. Read around here, no children are being harmed by being in daycare or after school care. The amount of debt you have is insane. Child support is the least of it.

You've had one marriage implode and dealt with the fallout. You've blown through what looks to be three separate small inheritances. You've lost houses - many of us here also bought property in that time frame and not abandoned them.  You've traded one career for a new secure one. Hang on to that, it's what's keeping you from total financial disaster. Keep contributing; you'll eventually get a standard issue retirement in about 20 years. Sure have a blog, have a youtube channel, do some eBay. It's possible one of those ventures might stick, it's good to strive.

But you are in serious circumstances here. You know that, everyone here knows that. You've gotten some good advice so far. What are you going to do to improve your situation?

Freedomin5

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #25 on: October 21, 2017, 05:53:13 AM »
Based on September, it looks like you have almost $1000 left over each month. Throw it at your CC debt. Better yet, see if you can transfer your CC balances to a 0% card...and then throw all your extra money each month to pay off the CC debt before the 0% rate expires. Paying off your credit cards is like getting a guaranteed 12.4% return on your money.

kpd905

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #26 on: October 21, 2017, 07:51:38 AM »
How much are you going to be paying for Verizon?  There are options out there that would cost about $30/month for two people.

Dee18

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #27 on: October 21, 2017, 09:14:31 AM »
Clown car and crazy grocery expenses are two key places to cut. A cheaper car will also mean cheaper insurance. Break down that grocery bill and see where it is going.  Is someone buying bottled water? Ready to eat frozen foods? Fruits and veggies out of season?  Try shopping at Aldi.  Phone should be way less (let any teens pay for their own from money they earn). Quit buying dry clean only clothes and make sure items you are dry cleaning actually need it (many items that say dry clean only can actually get washed...check the fabric content).

dmmms

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #28 on: October 21, 2017, 10:40:47 AM »
Based on September, it looks like you have almost $1000 left over each month. Throw it at your CC debt. Better yet, see if you can transfer your CC balances to a 0% card...and then throw all your extra money each month to pay off the CC debt before the 0% rate expires. Paying off your credit cards is like getting a guaranteed 12.4% return on your money.

I did not see the $1500 rent payment in the September summary. Adding that he is over. All debt payments included? Not sure as I only see Discover & the car.

SimpleCycle

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Re: 43, divorced + child support = paycheck to paycheck but want FI
« Reply #29 on: October 23, 2017, 09:47:37 AM »
I think you've gotten a kick in the pants from other posters, and I have to say I enjoyed your narrative.  A few things stand out to me in the narrative - first, you have had to bail yourself out of credit card debt once before and got yourself back into the same situation, which means you are habitually spending above your means.  If the income/spending equation is out of balance, you'll never be able to get ahead.  Second, you call out child support a few times as part of the reason you are so financially stretched, but it is less than 8% of your net income and supports your children.  Finally, I am getting the sense that you feel you are a victim of circumstance (the divorce, the child support) rather than having gotten yourself into this mess.  While circumstances were setbacks, the fundamental problem is you are spending more than you are earning.  The great news is that can be fixed.

In terms of specifics, the grocery bill stands out as an area your wife can really dig into as a SAHM.  High food bills are often due to tradeoffs of money for time (prepared foods, precut veggies, etc.) but she has time to economize.

I'd be careful about canceling home internet and just using your data plans.  Cellular data is generally much more expensive than wired data, and home use can add up quickly.  Instead, I would look into cell options like MintSIM to greatly reduce the cell phone bill and keep the home internet.  Choose an option that works with your current phones.

I would keep meticulous records to determine how much your side hustles are netting.  MLM and eBay are fine hobbies, but you don't want to be losing money on them.  Like others said, they often are not money making ventures without substantial time, effort, and luck.

I think you can do this, but it is going to take some pretty major changes and a commitment from everyone to pitch in.

 

Wow, a phone plan for fifteen bucks!