Breakdown of mortgage payment: Principal and interest $908.86 Property insurance $72.42 Mortgage insurance premium (MIP) $115.44 City tax $167.57 Other tax $458.52 Late charges $38.66 Total $1,761.47 Assets: Primary home – Owe $164,717, worth $175k Rental – Owe $25k HELOC + $9k taxes, worth $70k to $80k Car – Owe $4,500, worth $15k to $17k Cash - $850 401k - $5,000 Liabilities: Income tax - $40k Property tax on rental - $9k |
This is a good start, I'm glad you are sticking it out :)
You should include all of your liabilities as well - the 40,000 Tax bill, owed property taxes, everything. You won't be able to get a totally clear picture unless it is all included.
This is a good start, I'm glad you are sticking it out :)
You should include all of your liabilities as well - the 40,000 Tax bill, owed property taxes, everything. You won't be able to get a totally clear picture unless it is all included.
Thanks!
Added those!
Also, look at this: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/) - most people post the case studies on the Ask A Mustachian forum (http://forum.mrmoneymustache.com/ask-a-mustachian/ (http://forum.mrmoneymustache.com/ask-a-mustachian/)), not here. You will get a lot more feedback there. A mod can move this thread over if you ask, or just start another one and direct people here to it.
I posted this ^ on your original thread as well.
This is a good start, I'm glad you are sticking it out :)
You should include all of your liabilities as well - the 40,000 Tax bill, owed property taxes, everything. You won't be able to get a totally clear picture unless it is all included.
Thanks!
Added those!
There still aren't interest rates listed on anything. Especially on the CCs, you need to know what those are.
Questions Mostly from discussion in your other thread
Age of kids - how long before they are in preschool?
Federal tax owed is not showing
Pre-tax deductions mentions everything but taxes, are your taxes being deducted and are they the proper amount?
Cable/internet - how much of that is cable and how much internet? Whatwould it be ifwill it be when you cut cable? Time to make a phone call.
Interest rates? on mortages? Credit cards? This information matters.
Don't be surprised if you get lots of questions/comments, most posters end up revising their initial budget several times because it is easy to overlook things.
Also, look at this: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/) - most people post the case studies on the Ask A Mustachian forum (http://forum.mrmoneymustache.com/ask-a-mustachian/ (http://forum.mrmoneymustache.com/ask-a-mustachian/)), not here. You will get a lot more feedback there. A mod can move this thread over if you ask, or just start another one and direct people here to it.
I posted this ^ on your original thread as well.
Yes, I saw it!
I followed the instructions.
I didn't see it say anywhere that it has to be posted anyplace particular, sorry if I missed that!
Pre-tax deductions: $806 / month (health, dental, vision, 401k, 401k loan, HSA)
This is a good start, I'm glad you are sticking it out :)
Questions Mostly from discussion in your other thread
Age of kids - how long before they are in preschool?
Federal tax owed is not showing
Pre-tax deductions mentions everything but taxes, are your taxes being deducted and are they the proper amount?
Cable/internet - how much of that is cable and how much internet? Whatwould it be ifwill it be when you cut cable? Time to make a phone call.
Interest rates? on mortages? Credit cards? This information matters.
Don't be surprised if you get lots of questions/comments, most posters end up revising their initial budget several times because it is easy to overlook things.
One is preschool age. The other is a little one.
Fed tax is right under Gross Income (above). Taxes: $615 / month
Cable and Internet is an even split with my company. Well, almost. About a $5 difference.
Questions Mostly from discussion in your other thread
Age of kids - how long before they are in preschool?
Federal tax owed is not showing
Pre-tax deductions mentions everything but taxes, are your taxes being deducted and are they the proper amount?
Cable/internet - how much of that is cable and how much internet? Whatwould it be ifwill it be when you cut cable? Time to make a phone call.
Interest rates? on mortages? Credit cards? This information matters.
Don't be surprised if you get lots of questions/comments, most posters end up revising their initial budget several times because it is easy to overlook things.
One is preschool age. The other is a little one.
Gas and electric total 1500/month!!!? That's 2 years worth for me(1500$), can you elaborate more on these bills! With that list of debt, start the dave ramsey plan and get a snowball rolling and knock a few small debts off the list quick!
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
Face punches incoming:
You OWE those fees and penalties. You did not pay your taxes. This is the punishment. That's how it works.
Sorry for the bad news, but it is time to grow up and stop blaming anyone else- YOU did this. YOU are in this mess. You did not get your identity stolen, or a bad creditor after a medical debt. No. You spent foolishly. You will get a LOT of harsh criticism if you keep trying to place external blame for YOUR bad choices.
How would you feel if your 4 year old cried because they were cold because they refused their mittens? Currently how we are feeling about your tax situation. TAKE RESPONSIBILITY.
Now, that being said, talk to the IRS and see if you can get those reduced and a payment plan in place. Like other have referenced, a non profit that helps with debt negotiation could be a good idea. (Caveat: making sure they're legit)
Hmm, I respectfully disagree about selling your house. Sell the rental and hustle and do what you need to do to build up your home equity. If you currently lived in a McMansion, I would say sell. But after realtor expenses and the hassle of moving I'm not sure it's a sound idea. Your mortgage payment seems high for the home value, is it a 15 year mortgage?
Hmm, I respectfully disagree about selling your house. Sell the rental and hustle and do what you need to do to build up your home equity. If you currently lived in a McMansion, I would say sell. But after realtor expenses and the hassle of moving I'm not sure it's a sound idea. Your mortgage payment seems high for the home value, is it a 15 year mortgage?
Well done! Thank you for adding the interest rate. A couple things stand out right away: that car loan has GOT to go. It's easy to get rid of- sell the car and buy something cheaper. And of course those credit cards are eating you alive!
This is exciting stuff! Look: if you don't eat out or get a massage in January, you've knocked out CC4 and CC3 is down to $335. If you don't eat out or get a massage in February + CC4's $25 payment, then in March you can get rid of CC3 and knock CC5 down to $332. By April, with just those two changes, you can totally get rid of 3 of those credit cards that have been hanging over your head.
ITEM| MONTHLY | TOTAL | INTEREST RATE GARBAGE 36 CALE/INTERNET 114 WATER 50 GEICO AUTO 135 MASSAGE 70 AUTO LOAN 393 3591 6.54% MORTGAGE 1761 164,717 5.125% FUEL 200 GAS/ELECTRIC 150 GROCERIES 1100 EATING OUT 600 CAMERAS 25 PARENTS 0 30,K CC1 194 856 25.24% CC2 134 4495 24.49 CC3 25 505 23.24% CC4 25 452 10.23% CC5 20 692 18.49% CC6 75 797 24.15 CC7 (STORE CARDS) 100 2020 25.24 TOTAL 5196 44,455
Well done! Thank you for adding the interest rate. A couple things stand out right away: that car loan has GOT to go. It's easy to get rid of- sell the car and buy something cheaper. And of course those credit cards are eating you alive!
I was pleasantly surprised when I saw my car loan balance.
I thought it was 4500 but its down to almost 3500 now.
It'll be paid off in 9 months.
Do you still think I should sell it?
Another easy win: that car insurance seems high. When was the last time you compared rates? It'll take you an hour tops, and you could be saving up to $60/month - that's a pretty incredible hourly rate of return right there!
You have a ton of fat to trim. What is your game plan with expenses? There are still a lot of questions you haven't addressed, like whether you or your wife are the big spender, etc.
Probably, as long as you aren't upside down in it. Use whatever equity you can get out of it to buy a cheaper vehicle cash & drive. Do not finance!
Another easy win: that car insurance seems high. When was the last time you compared rates? It'll take you an hour tops, and you could be saving up to $60/month - that's a pretty incredible hourly rate of return right there!
You have a ton of fat to trim. What is your game plan with expenses? There are still a lot of questions you haven't addressed, like whether you or your wife are the big spender, etc.
We both are, in different ways.
For example, I can go a long time without buying anything. But then i'll get a hankering for something; Like our 90 inch flatscreen TV with the amoled LED backlit display that beams so beautifuly against my wall, and the wireless SONOS speakers that complete the home theater. So I can go a while, but then I'll spend $3,000 in one day.
My wife on the other hand never buys big things, but will buy a $10 makeup kit, and then a $25 pair of plates, then a $5 new snowglobe ... And so forth.
Another easy win: that car insurance seems high. When was the last time you compared rates? It'll take you an hour tops, and you could be saving up to $60/month - that's a pretty incredible hourly rate of return right there!
You have a ton of fat to trim. What is your game plan with expenses? There are still a lot of questions you haven't addressed, like whether you or your wife are the big spender, etc.
We both are, in different ways.
For example, I can go a long time without buying anything. But then i'll get a hankering for something; Like our 90 inch flatscreen TV with the amoled LED backlit display that beams so beautifuly against my wall, and the wireless SONOS speakers that complete the home theater. So I can go a while, but then I'll spend $3,000 in one day.
My wife on the other hand never buys big things, but will buy a $10 makeup kit, and then a $25 pair of plates, then a $5 new snowglobe ... And so forth.
Are you willing to change?
This is exciting stuff! Look: if you don't eat out or get a massage in January, you've knocked out CC4 and CC3 is down to $335. If you don't eat out or get a massage in February + CC4's $25 payment, then in March you can get rid of CC3 and knock CC5 down to $332. By April, with just those two changes, you can totally get rid of 3 of those credit cards that have been hanging over your head.
ITEM| MONTHLY | TOTAL | INTEREST RATE GARBAGE 36 CALE/INTERNET 114 WATER 50 GEICO AUTO 135 MASSAGE 70 AUTO LOAN 393 3591 6.54% MORTGAGE 1761 164,717 5.125% FUEL 200 GAS/ELECTRIC 150 GROCERIES 1100 EATING OUT 600 CAMERAS 25 PARENTS 0 30,K CC1 194 856 25.24% CC2 134 4495 24.49 CC3 25 505 23.24% CC4 25 452 10.23% CC5 20 692 18.49% CC6 75 797 24.15 CC7 (STORE CARDS) 100 2020 25.24 TOTAL 5196 44,455
This is just an illustration, since in your case it might make sense to first pay down some of the tax & mortgage debt, and wiser heads than I can advise you there. But give yourself a few minutes to dream about how amazing it could be to knock down one of these debts every month. Think of how much faster the above will be if you also cancel cable & cameras & cut $400 of your groceries. If you are willing to make some hard changes, this is so, so doable! But it means really making those hard changes and making them right now. Every month you delay pushes later the moment you won't have that horrible feeling in the pit of your stomach!
Tell us tomorrow that you have cancelled cable, massages, and cameras and you will get a lot of high fives.[/td][/tr][/table]
Make sure you do the math on getting out of your cable contract. When we got out of ours there was a penalty but it was cheaper to pay that penalty than pay the remaining monthly payment on the contract.
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
You can so do this. But it's like weight loss- this isn't a crash diet, this is a lifestyle change. You've got to be in for the long haul. I'm seriously admiring you right now- you've faced up to some major harshness today, and looked head on at some rough numbers. But you *can* do this.
I highly recommend you sit down with your wife and go over these "goal setting" questions:
http://www.frugalwoods.com/2016/12/19/uber-frugal-month-the-ultimate-guide-to-saving-more-money-than-you-ever-thought-possible/ (http://www.frugalwoods.com/2016/12/19/uber-frugal-month-the-ultimate-guide-to-saving-more-money-than-you-ever-thought-possible/)
You guys need to make a game plan *together*. That's the only way you'll succeed- mutual accountability. The fact that you have two different 'types' of spendiness is actually a strength- you can keep each other in check this way if you're a team =)Make sure you do the math on getting out of your cable contract. When we got out of ours there was a penalty but it was cheaper to pay that penalty than pay the remaining monthly payment on the contract.
This is virtually always true. I've had this be true with breaking apartment leases even.
QuoteI was pleasantly surprised when I saw my car loan balance.
I thought it was 4500 but its down to almost 3500 now.
It'll be paid off in 9 months.
Do you still think I should sell it?
Probably, as long as you aren't upside down in it. Use whatever equity you can get out of it to buy a cheaper vehicle cash & drive. Do not finance!
I blue booked it and its worth $13k from a private owner and $15k to a dealer.
It's actually kinda surreal to break it down like this.
ITEM MONTHLY | TOTAL | INTEREST RATE GARBAGE 36 CALE/INTERNET 114 WATER 50 GEICO AUTO 135 MASSAGE 70 AUTO LOAN 393 3591 6.54% MORTGAGE 1761 164,717 5.125% FUEL 200 GAS/ELECTRIC 150 GROCERIES 1100 EATING OUT 600 CAMERAS 25 PARENTS 0 30,K CC1 194 856 25.24% CC2 134 4495 24.49 CC3 25 505 23.24% CC4 25 452 10.23% CC5 20 692 18.49% CC6 75 797 24.15 CC7 (STORE CARDS) 100 2020 25.24 TOTAL 5196 44,455
QuoteI was pleasantly surprised when I saw my car loan balance.
I thought it was 4500 but its down to almost 3500 now.
It'll be paid off in 9 months.
Do you still think I should sell it?
Probably, as long as you aren't upside down in it. Use whatever equity you can get out of it to buy a cheaper vehicle cash & drive. Do not finance!
I blue booked it and its worth $13k from a private owner and $15k to a dealer.
Sell it. Take it to a used car dealership tomorrow, but go armed with a price you are willing to sell it for. After you have sold it, use a portion of your cash to buy an older car about $5,000. Keep the rest for your upcoming snowball. Do not splurge with it.
And something doesn't jive about your monthly mortgage payment, at that interest rate. It's not bad, but not great either. Looks like your local property taxes are what is killing you, here. What state is this? And what would the property taxes on the rental be, above your HELOC payment? This is important for a fair comparison, but I'm still leaning towards moving into the rental. I know that I'm asking a lot of you to move out of your "dream home", but I suspect you moved out of it at one point in the recent past, and started down this death spiral with home ownership.
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
No one has answered this yet ^^
Should I revisit having them pay it?
I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
Some points:
- You should be taking depreciation on the rental. If you sell it, you'll have to do Depreciation recapture (https://en.wikipedia.org/wiki/Depreciation_recapture_(United_States)) whether you take it now or not.
- Consider using the Free Debt Reduction Calculator for Excel (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) (scroll down past the annoying DOCtoPDF download button and use the download "for Excel, OpenOffice, and Google Sheets". Pick a payoff order that makes sense to you and do it.
- See Investment Order (http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153). At this point you probably shouldn't go past step #2:
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
Even the HSA might save you "only" 15% while getting the high interest CCs paid off will save 25%.
I may have been light on the food categories.
It's the 7th of the month and we've spent $640 on food. So we are on pace for ... A lot
(http://i68.tinypic.com/20548li.png)
Oh my gosh. What in the world did you buy? Was it actually all food? I hope it wasn't, I can't imagine how 2 adults, a toddler and a baby can eat $600 worth of food in a week.
You and your wife can do so much better!
Would you be able to post a photo of your receipts from grocery stores?
Take the photo then click on attachments and other options below the box where you post a message on here. Click on choose file then click on photo library.
Oh my gosh. What in the world did you buy? Was it actually all food? I hope it wasn't, I can't imagine how 2 adults, a toddler and a baby can eat $600 worth of food in a week.
You and your wife can do so much better!
MerchantSpending
Grocery Store$357.90
PayPal$115.16
Aldi$87.79
Sakura$42.47
Pizza$37.23
Total$640.55
(Paypal is what I use to pay for the office lunches on GrubHub)
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
No one has answered this yet ^^
Oddly enough, I wouldn't be surprised if the hardest thing for you to face right now is telling your coworkers that you're not going to be buying lunch anymore. I'm sure that feels really revealing and personal, and you've kind of been the hero for those people by buying them lunch.
But you cannot afford to spend $150 a week on that. You just can't. That's $600 a month. You've spent $115 already in January, leaving you $485 that could be sent to one of your credit cards once you've accomplished the truly difficult task of letting your coworkers know that you can't buy lunch anymore.
Tell them tomorrow. You can even buy them lunch tomorrow so they don't have to plan ahead. That would then leave you $435 to send to one of those high debt credit cards - Dave Ramsey would say send it to the one with the smallest balance; others recommend sending it to the one with the highest interest rate.
I know it's going to be hard. But once you have done that, you will have six hundred more little green workers every single month to do your bidding,
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
No one has answered this yet ^^
Mr Beatle:
I can't agree with the advice you've gotten to contact the IRS ASAP without further information. I have to ask, are you just in arrears with payments to the IRS or are you also a year or 2 (or more) delinquent in filing? You previously commented that you've kept your head down, does this mean you've neglected timely filing?
I have some experience in this. At one time in my life I was 4 years delinquent in filing and about to go 5 years before I got my shit together. I was very surprised they never caught up with me earlier. I went to an accountant and in about 2 weeks got caught up on all my filings. If you are delinquent I recommend exactly the same--hire a CPA and take a week to do nothing but catch up. And I mean *next* week, before they get crazy busy. It really sucks but until you get your filings up to date you can do real harm to your position by contacting the IRS.
The other important part of hiring a CPA is that you should NEVER deal or negotiate with the IRS on your own when you're in this position. You are in an adversarial situation and any answer you give to a specific question will be part of your file and their decision making process. It's like going into court defending yourself without a lawyer. If you DO decide to deal with them directly, and this is extremely important, any question they ask that you do not have a ready answer that will help your position, you MUST say "I don't know, I'll have to get back to you".
Some nuts and bolts questions. You have previously stated you are self-employed, you have also made reference to co-workers and an office staff. Your budget also seems to indicate a regular paycheck. This doesn't all jive without more info. Are you a business owner with employees? Are you an independent contractor? What type of business do you have: a corporation (LLC, S-corp, etc?) or a sole proprietorship? If a corporation, are the business taxes up to date? Sales taxes current? If you have employees, are all the withholding taxes paid-up to date (extremely important!)?
This is why I can't agree with the advice to call the IRS on Monday morning. There are potential landmines in each of those questions.
Dude, I wish you the best. I'm a fellow New Yorker now (just moved to the Syracuse area) and I hear you on the taxes. BTW did you file for the STAR rebate? We just bought our house in November, I filed for the STAR yesterday (it took less than 10 minutes) and will get the first check around September. No reason you shouldn't get one then also.
You haven't said much about your wife other than that she is on board. This is not going to be an easy road for her.
Holy moly, that food spending is diabolical.
It will get better tomorrow, once you send out that email about office lunches. Hell, they should be feeding you!
Food spending is the easiest to control, you can get great results very quickly, once you get organized. Organization and meal planning, plus reducing waste is the key in my experience. Batch cooking is great money and time saver, so are the premeditated leftovers. The 7 dollar store brought grilled chicken can be turned into several meals. Try this- Day one. Chicken caesar salad. Day 2 chicken stir fry. Day 3. Chicken fried rice. Plus chicken soup from the bones with noodles and extra veg. For about 12 dollars worth of chicken, rice, veg and noodles, you can get 4 days of main meals. I did that last week because it's so hot around here and i didn't feel like cooking and there were no complaints.
What do you eat that it cost you over 600 in a few days??? I am really curious now.
Can your wife cook? If she is busy with the kids, she should cook a large batch of bolognese sauce, a huge pot of mild chili and a stew, freeze them in portions of 2 and that should feed you for dinners for almost 2 weeks for less than 30. Give it a go. It won't kill ya if you eat the same menu 2 weeks in a row. You can use these differently, ie spag bol or pasta bake. Stew with rice or noodles or dumplings. Chili w rice or cornbread. Nachos. Pie. Burritos, enchilladas. It is not rocket science, really.
Watch out those snacks, juices, fancy cheeses, dips, lunch meat, prepared food, organic whatnot.
Alcohol?
Any chance you can transfer the balances of CC2 and CC7 to CC4?
That will give you an extra $77 to apply towards CC6.
So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
No one has answered this yet ^^
No - you need t sell your rental property. With money in hand - sit down with the IRS and talk to them. Take an attorney with you if want. Offer your actual taxes plus interest as an Offer in Compromise. They might take it - and at least they'll be negotiating with you. And you'll have one advantage - tell them you have a source so that you can pay them in cash once you come to a number. That is a good dealing point with the IRS. Then pay them what you negotiate and be done with it. And make sure that you are on a paycheck or quarterly basis keeping up with what you owe so that you never get in this situation again. But - DO NOT LET MOMMY AND DADDY GET YOU OUT OF THIS. You and your wife got yourself here - get yourselves out. And you can ignore this - but IRS debt doesn't get smaller and go way - they will eventually act to get their money and the easy target is your rental. So take care of getting it on the market for a quick sell NOW. Even if you don't have your rental they have more draconian ways of getting what you owe. Take care of this now so it doesn't grow bigger and swallow you.
Oh, and no more juices or soft drinks.
Learn how to make lemonade and sweet teas. It is VERY easy.
For example, take a stick of cinnamon, put into a pot of water and boil. Then add one spoonful of sugar per cup (approximately, adjust to your tastes). Drink hot, or pour into a pitcher, refrigerate and drink cold.
Blend any soft juicy fruit (like mangoes, pineapple, etc, whatever is at the store) in a blender with lots of water. Add sugar to make sweeter. Bam, homemade fruit juice. May not actually be cheap. But the side benefit is that since it takes effort to produce you will consume less.
Lemonade: 1/4 lemon juice + 1/4 cup sugar + pitcher of water. Stir. Bam, yummy lemonade.
I feel like we need a local mustachian to go over to your house and teach your wife how to cook.
You guys eat out so much! You need to make a plan for that together. Can you be in charge of dishes and clean-up if your wife promises to cook 3 meals every day?
Just a heads-up....I know advertising makes it seem like prepackaged crap is normal, but its not. We literally buy 0 single-serving pouches of anything, and in fact no packaged food at all beyond an OCCASIONAL box of ritz crackers or cereal.
Plenty of people on the forums have sub-$400/month grocery budgets with 4+ person families. Should be especially easy since your kids are so young- you still have a ton of power to shape their tastes.
Here are some threads you may benefit from reading:
http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/ (http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/)
http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/)
http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/ (http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/)
And best of all, a challenge thread:
http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/ (http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/)
Plenty of people on the forums have sub-$400/month grocery budgets with 4+ person families. Should be especially easy since your kids are so young- you still have a ton of power to shape their tastes.
Here are some threads you may benefit from reading:
http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/ (http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/)
http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/)
http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/ (http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/)
And best of all, a challenge thread:
http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/ (http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/)
Thanks. Reading them now.
Wish people would post a sample daily menu their family eats, including drinks and snacks.
I feel like we need a local mustachian to go over to your house and teach your wife how to cook.
This is what I don’t get. It seems that you own your own business and you have employees. So you are getting a conventional paycheck, correct ? And yet you’re looking for sidework at $10/hour ? Can you not just increase your business ? Do you have too many employees ? What type of business is it that you as the owner are only paying yourself about $30 / hour? Can you give yourself a raise ? (only to pay down the debt of course - or actually give yourself a raise and have it all withheld to pay off the tax debt). Can you ‘hire’ your wife to do at home bookkeeping or something ?
I’m assuming that you didn’t always have a conventional paycheck and that is how you got behind on the IRS estimated payments maybe ? Also assuming that you have an accountant doing your business taxes and making sure that you are filing on time / filing at all / filing properly by taking advantage of all deductions. You can go back 3 years and re-do if they were not done correctly.
You should not be buying your office staff lunch ever much less 3x a week for heaven’s sake !! However, what was spent in 2016 should be an office expense out of petty cash or something else - ask your accountant - not out of your after-tax personal paycheck. Please take advantage of your rightful deductions.
So your business did well enough to give yourself a $6000 bonus and you spent the entire thing on things you can’t categorize (shopping, food, uncategorized) - cause it’s Christmas? - instead of paying off your first 3 CC’s. YIKES - this just makes my frugal brain hurt! Is there anything you bought with this spree that you can still return - 90” TV - really - wtf - who needs that ?
Do you have more than one car? Your insurance seems really high, but it depends on what you’re driving, how old, etc. - this is an easy one to reduce.
You’re paying a late fee on your mortgage ! Is that every month? or just last month? WHY? Set up your mortgage as an auto pay to go out as soon as your paycheck clears (use direct deposit) - most of your other bills should be set up this way also. That way all your bills are paid first - then you can think about buying food.
Are you throwing out a lot of food? Is the baby still in diapers? You really need to separate what is actual food (and only buy real food - no packaged snacks, juice boxes or other bs) and what is cleaning supplies, baby supplies, toys, etc. It’s incomprehensible how one can spend that much on food in one month, so it’s probably not all food - and get rid of the sugar - you’ll all feel better.
While I was writing this I see you added a furniture loan ?? Good grief. And you also have a 401k loan - how much is that? I’m guessing you just bought this house within the last year or so? And instead of using the HELOC from the rental for the 20% down payment you used it for upgrades and put down the minimum - so now you're paying PMI also?
I feel like we need a local mustachian to go over to your house and teach your wife how to cook.
I noticed that too. Given the fake-food spending, she needs to step up to the plate.
I keep asking the kids' ages. Unless the little one is super little (i.e. 0-3 months) she can do things at home. I was in a sleep-deprived fog the first few months of Mommy-hood, so have zero expectations for someone in those circumstances. After that, time for her to get her act together.
Good general books for her:
Leanne Ely - Saving dinner and Saving dinner the low-carb way, and SavingDinner.com
Once the basics are in place: To make life easier and get you invnovled in meal prep:
Mimi Wilson and Mary Beth Lagerborg - Once-A-Month-Cooking Family Favorites
Any crock-pot recipe books
Fruits are full of sugar, I would go even less for the fruit juices than Wench senior posted. In the summer when it is hot, a bottle of RealLemonTM and water and a bit of sugar go a long way, if lemon prices are high in your area.
What we hope to see posted on January 15:
Staff lunch $150 (already done, no more)
Grocery Stores (all your grocery stores) $100 (you have so much stuff already, only perishables)
Burger King $0
Dave & Buster $0
Cheese $0
Mcdonald $0
Walgre $20 (onlyh pharmacy stuff, only if you have nothign equivalent at home)
GrubHub $0
Pf Cha $0
Pizza $0
Thai $0
Pizza $0
Taco Bell $0
Pizza $0
Burger King $0
You may not be able to sell that rental right away, but I suggest that you get some assistance with talking to the IRS right away - needs to be done asap. As in PRIORITY #1.So, parents offered to pay the IRS debt a while back.
Said no for a couple reasons, but mainly because I didn't want to give the IRS the extra fees and penalties they tacked on and also because it gIves the parents the ability to have a say in what we spend money on.
Should I revisit having them pay it?
No one has answered this yet ^^
No - you need t sell your rental property. With money in hand - sit down with the IRS and talk to them. Take an attorney with you if want. Offer your actual taxes plus interest as an Offer in Compromise. They might take it - and at least they'll be negotiating with you. And you'll have one advantage - tell them you have a source so that you can pay them in cash once you come to a number. That is a good dealing point with the IRS. Then pay them what you negotiate and be done with it. And make sure that you are on a paycheck or quarterly basis keeping up with what you owe so that you never get in this situation again. But - DO NOT LET MOMMY AND DADDY GET YOU OUT OF THIS. You and your wife got yourself here - get yourselves out. And you can ignore this - but IRS debt doesn't get smaller and go way - they will eventually act to get their money and the easy target is your rental. So take care of getting it on the market for a quick sell NOW. Even if you don't have your rental they have more draconian ways of getting what you owe. Take care of this now so it doesn't grow bigger and swallow you.
Agreed.
We are looking into selling it now.
We have to figure out a few things though.
Roof definitely needs to be replaced. Also, there is renters in there (month to month).
Wish people would post a sample daily menu their family eats, including drinks and snacks.
Plenty of people on the forums have sub-$400/month grocery budgets with 4+ person families. Should be especially easy since your kids are so young- you still have a ton of power to shape their tastes.
Here are some threads you may benefit from reading:
http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/ (http://forum.mrmoneymustache.com/ask-a-mustachian/cutting-grocery-budget-for-family-of-five/)
http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-do-you-spend-on-groceries/)
http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/ (http://forum.mrmoneymustache.com/ask-a-mustachian/groceries-for-a-family-of-3/)
And best of all, a challenge thread:
http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/ (http://forum.mrmoneymustache.com/throw-down-the-gauntlet/stick-to-a-grocery-budget-2016/)
Thanks. Reading them now.
Wish people would post a sample daily menu their family eats, including drinks and snacks.
One potentially controversial piece of advice- take steps to ensure you do not have a third child until your financial house is in order. You are on the edge of ruin as it is. (the nearly 2 year old, with previous child spacing, makes me wary that this could be upcoming). Assuming she's a similar age, you and your wife are young enough that a one year delay before any further children should make no difference in eventual number of children, etc.
Also a tip for getting the kiddos on board. Instead of saying you're no longer buying X snack or eating X, just start having "cooking lessons" with him or her. They can use a butter knife to make cheese slices, an apple corer, etc. When they cook it, they're much more enthusiastic about eating it.
Don't believe me? My sons just helped to make warm broccoli and pear salad with cranberries (from Budget Bytes) and corn muffins for lunch--and ate it! They are 8 and 9.
But to put it simply, I do NOT have employees. I am self employed and work with other self employed people, under a company umbrella. So I, and other self employed people, share secretaries and office staff and their expense is pooled and split.
...
Accountant says because of the structure and who receives the food, I am not allowed to deduct the lunch expense.
Glad you asked!You guys eat out so much! You need to make a plan for that together. Can you be in charge of dishes and clean-up if your wife promises to cook 3 meals every day?
Just a heads-up....I know advertising makes it seem like prepackaged crap is normal, but its not. We literally buy 0 single-serving pouches of anything, and in fact no packaged food at all beyond an OCCASIONAL box of ritz crackers or cereal.
Do you have kids?
You guys eat out so much! You need to make a plan for that together. Can you be in charge of dishes and clean-up if your wife promises to cook 3 meals every day?
Just a heads-up....I know advertising makes it seem like prepackaged crap is normal, but its not. We literally buy 0 single-serving pouches of anything, and in fact no packaged food at all beyond an OCCASIONAL box of ritz crackers or cereal.
Do you have kids?
*snip*
We don't throw away food due to expiration dates. But our kids will eat part of an orange and throw the rest away. Or open a banana and then not want it and we have to throw it away.
*snip*
Glad you asked!You guys eat out so much! You need to make a plan for that together. Can you be in charge of dishes and clean-up if your wife promises to cook 3 meals every day?
Just a heads-up....I know advertising makes it seem like prepackaged crap is normal, but its not. We literally buy 0 single-serving pouches of anything, and in fact no packaged food at all beyond an OCCASIONAL box of ritz crackers or cereal.
Do you have kids?
I have 4: a just turned 5 year old, twin 4 year olds, and a 2 year old! I also work part-time and run a vacation rental.
Wish people would post a sample daily menu their family eats, including drinks and snacks.
Here's what we typically eat in the 1967 family!
Breakfast:
Oatmeal (from scratch, not packets) with toppings that I keep in a box with tiny jars of: brown sugar, craisins, raisins, blanched almonds, coconut (I can hear 1967dada chopping apples right now for the oatmeal!)
Homemade granola (sometimes with milk, sometimes over yogurt) - buy a full sized container, not little cups of yogurt)
Toast
Eggs and toast
Eggs and bacon
Eggs and sausages
Lunch:
Any leftovers reheated
Homemade bread from the freezer - sandwiches: pbj, chicken salad, egg salad, ham (from a whole ham), cheese and cucumber, grilled cheese
Soup made with frozen bone broth from chicken bones
Homemade pizza
Eggs (poached, fried, scrambled, put in a wrap with grated cheese)
Dinner:
A whole roasted chicken with carrots and potatoes
Spaghetti and meat sauce
Chili and buns with raw veggies
Casserole with bits of chicken, veggies and rice
Homemade hamburgers on the grill (and homemade buns)
Beef stew with biscuits
Chicken stew and dumplings
Curry
Snacks:
Smoothies (no mixes - frozen fruit - save those 1/2 pieces of fruit from the kids in a ziplock in the freezer and also chop up and freeze fruit that is about to go bad)
Popcorn
Homemade baked goods - cookies, homemade granola bars, the brownie mixes you have - use them up
Then make your own)
Fresh fruit cut up
Cheese cut into little squares
Drinks:
Milk
Water
Homemade iced tea and lemonade
ETA photo from today's breakfast. Those are the little jars I was mentioning with toppings for the oatmeal.
Just thought of something. Does your wife do the grocery shopping with the kids? I definitely know how annoying it is for them to be whining in the store for something. I could see how that might influence her purchases.
Can you do the shopping on your way home from work from now on? With your meal plan, you'll be able to get the next day's food. (We shop everyday for one day's food...its a small town in mexico thing. You might also do weekly shopping but leave the kids at home).
Here's what we typically eat in the 1967 family!
Breakfast:
*snip*
Lunch:
Any leftovers reheated
Homemade bread from the freezer - sandwiches: pbj, chicken salad, egg salad, ham (from a whole ham), cheese and cucumber, grilled cheese
*snip*
Why do you make your own bread?
At least where I live, bread is very cheap.
But to put it simply, I do NOT have employees. I am self employed and work with other self employed people, under a company umbrella. So I, and other self employed people, share secretaries and office staff and their expense is pooled and split.
...
Accountant says because of the structure and who receives the food, I am not allowed to deduct the lunch expense.
Let us know how the "Hey folks, I've had my turn - who's going to start buying the lunches for 2017?" talk goes tomorrow.
How much does a 1-pound loaf of decent quality, non-Wonderbread cost in your area? How much are the ingredients for a one-pound loaf of homemade bread? (https://www.budgetbytes.com/2015/02/no-knead-english-muffin-bread/) Bread flour, salt, water, yeast/sourdough starter, plus add-ins. Homemade bread can be cheaper than store-bought for basic bread, but homemade bread tends to be MUCH cheaper if you get into fancier (tastier) loaves, fancy ingredients, etc. 1967mama and family might like really fancy artisan oatmeal and whole wheat bread with baked-in nuts. That might run $4+ in the store, while the ingredients might run $1. So, it makes sense for them to bake four or more loaves at once, then store them in the freezer until they are needed.
We buy sliced bread occasionally (I should start making it), but I make all of our muffins, biscuits, cinnamon rolls, and rosemary buns from scratch. It really isn't difficult, and the taste is so much better. Have you ever had fresh, homemade cinnamon rolls? They are a treat!
This is my favorite idea as far as the lunches go.Yep. You might need to be the candy coated rock, or the velvet covered iron bar, or whatever metaphor you prefer - just smile nicely when you convey the message, but do convey the message.
Instead of telling people "too bad, the lunch ride is over", spin it as my turn is simply over, and who is taking over the torch next?
This is my favorite idea as far as the lunches go.Yep. You might need to be the candy coated rock, or the velvet covered iron bar, or whatever metaphor you prefer - just smile nicely when you convey the message, but do convey the message.
Instead of telling people "too bad, the lunch ride is over", spin it as my turn is simply over, and who is taking over the torch next?
OMG Beatles. Thank you for posting this. Lightbulb just went on. You shop at Wegmans, don't you?
I lived in upstate NY, outside Syracuse for 20 years and I totally understand Wegmans. For the other forum members in other parts of the country -- Wegmans is an excellent, upscale grocery chain. Here's the thing about Wegmans -- they have reasonable/cheap prices on food staples. An independent study by a Syracuse newspaper reporter a few years ago showed that Wegmans beat the other local chains hands-down on costs for staples. The thing is -- (1) Wegmans cannot beat Aldi (discount grocery) overall for costs. And (2) Very, very few people have the discipline to just buy staples at Wegmans, but not the insanely good, upscale items. Wegmans is very, very seductive.
Beatles -- here's what you must do: Stop going to Wegmans. (I say that with a pang, because part of me loves Wegmans.) But you must stop going. You can't afford it right now. As of now, you shop at Aldi. Trust me, you will be able to get what you need at Aldi. Until your financial situation is stabilized, you are an Aldi shopper. Please trust me on this.
Shop -- without the kids-- at Aldi.
I agree with the Aldi advice. Also, just a back of the envelope figure and snack, candy, and desert foods make up about 1/3 of that grocery bill. The good thing is if you cut all those out today, you could see an instant 1/3 drop in your bill. I also notice there's a lot of diet food there--cutting out snacks and candy will help watch the calories. Finally, you can still have snacks and goodies--just enjoy preparing them. Don't have time? Eat fruit.
Here's my envelope:
Silk Nutchello Nut-Based Beverage, Rich Dark Chocolate + Walnuts 4.49
Skinny Cow Candy, Dreamy Clusters, Milk Chocolate 3.99
Generic Sweet Bread & Butter Chips 2.49
Nest Skin Cow Crsp 3.99
Wg Dessert Cups 2
Special K Pastry Crisps, Strawberry 2.99
Generic Organic Food You Feel Good About Fruit Twists, Variety Pack, FAMILY PACK 6.99
Generic Food You Feel Good About Cinnamon Apple Sauce Pouches 2.19
Nest Skinny Mk Cho 5.84
A & W Root Beer, Diet 1.59
Sprite Soda, Lemon-Lime 1.69
Stonyfield Organic YoKids Smoothie, Strawbana, 1% Milkfat 3.99
Honest Kids Juice Drink, Organic, Apple Ever After 3.19
Skinny Cow Candy, Dreamy Clusters, Dark Chocolate 3.99
Carnation Breakfast Essentials Complete Nutritional Drink Creamy Strawberry 18.87
LesserEvil Buddha Bowl Foods Popcorn, Organic, Himalayan Pink 3.19
Yasso Frozen Yogurt Bars, Greek, Coffee Chocolate Chip 4.49
Special K Cracker Chips, Honey Barbecue 5.98
Nestle Skinny Cow Candy Bar, Heavenly Crisp, Peanut Butter Flavor 3.99
TOTAL: 85.94
Our situation was a little different, but we paid off debt a few years ago, drank the kook aid, and are on our way to FIRE. It's uncomfortable at first, but totally worth it!
The Frugalwoods are always good to read (I recommend you and especially your wife read their whole blog) and today's is relevant.
http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/ (http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/)
The Frugalwoods are always good to read (I recommend you and especially your wife read their whole blog) and today's is relevant.
http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/ (http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/)
Do you have any other recommended blogs?
I tried reading that one and it feels very disorganized.
The Frugalwoods are always good to read (I recommend you and especially your wife read their whole blog) and today's is relevant.
http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/ (http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/)
Do you have any other recommended blogs?
I tried reading that one and it feels very disorganized.
The Frugalwoods are always good to read (I recommend you and especially your wife read their whole blog) and today's is relevant.
http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/ (http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/)
Do you have any other recommended blogs?
I tried reading that one and it feels very disorganized.
Zen habits might be more to your liking perhaps:
https://zenhabits.net/the-10-key-actions-that-finally-got-me-out-of-debt-or-why-living-frugally-is-only-part-of-the-solution/ (https://zenhabits.net/the-10-key-actions-that-finally-got-me-out-of-debt-or-why-living-frugally-is-only-part-of-the-solution/)
https://zenhabits.net/no-debt/ (https://zenhabits.net/no-debt/)
Or a similar 'minimalism' blogger:
http://www.becomingminimalist.com/33-proven-ways-to-reduce-personal-debt/ (http://www.becomingminimalist.com/33-proven-ways-to-reduce-personal-debt/)
A different blog yet again:
http://www.frugaldebtfreelife.com/main/2015/1/13/how-to-stop-living-paycheck-to-paycheck.html (http://www.frugaldebtfreelife.com/main/2015/1/13/how-to-stop-living-paycheck-to-paycheck.html)
Perhaps audio interviews are more your style:
http://financially-blonde.com/financial-grown-moments/ (http://financially-blonde.com/financial-grown-moments/)
http://financially-blonde.com/overcoming-spending-addiction/ (http://financially-blonde.com/overcoming-spending-addiction/)
http://slowyourhome.com/22/ (http://slowyourhome.com/22/)
Or a youtube channel:
https://www.youtube.com/playlist?list=PLN4yoAI6teROXXGb3OKTBfQ8FnIGRzoPw (https://www.youtube.com/playlist?list=PLN4yoAI6teROXXGb3OKTBfQ8FnIGRzoPw)
What I'm wondering is why you keep digging the debt hole. You're clearly worried enough about it to post here, and you've gotten a lot of great advice, but it doesn't seem like you've gone after even the low-hanging fruit, like stopping the work lunches and eating out. And now you've added couches to boot. Why is that? Is it that you can't say no because you don't want to disappoint people? Is it that you really value your role as provider and don't want your coworkers or your wife to see you as less successful than you want to be? Is it that you feel like you "deserve" it? Is it just no impulse control or ability to delay gratification?
The Frugalwoods are always good to read (I recommend you and especially your wife read their whole blog) and today's is relevant.
http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/ (http://www.frugalwoods.com/2017/01/09/my-foolproof-method-to-stop-impulse-spending/)
Do you have any other recommended blogs?
I tried reading that one and it feels very disorganized.
The reason I suggested today's Frugalwoods blog is because she talks about how not to make impulse purchases. Your wife does a lot of little ones and you do a few huge ones, according to an early post of yours. Most of the recent comments have been on your food spending but if the money you save there gets spent on instant gratification you have gained nothing.
Yes the Frugalwoods are extreme but look at what they have accomplished. Most of us here are not that extreme but either our dreams don't need that much commitment or we are not in terrible hair on fire circumstance
What I'm wondering is why you keep digging the debt hole. You're clearly worried enough about it to post here, and you've gotten a lot of great advice, but it doesn't seem like you've gone after even the low-hanging fruit, like stopping the work lunches and eating out. And now you've added couches to boot. Why is that? Is it that you can't say no because you don't want to disappoint people? Is it that you really value your role as provider and don't want your coworkers or your wife to see you as less successful than you want to be? Is it that you feel like you "deserve" it? Is it just no impulse control or ability to delay gratification?
I'm not sure what you mean?
I posted this on Saturday and haven't purchased a single thing since then.
What I'm wondering is why you keep digging the debt hole. You're clearly worried enough about it to post here, and you've gotten a lot of great advice, but it doesn't seem like you've gone after even the low-hanging fruit, like stopping the work lunches and eating out. And now you've added couches to boot. Why is that? Is it that you can't say no because you don't want to disappoint people? Is it that you really value your role as provider and don't want your coworkers or your wife to see you as less successful than you want to be? Is it that you feel like you "deserve" it? Is it just no impulse control or ability to delay gratification?
I'm not sure what you mean?
I posted this on Saturday and haven't purchased a single thing since then.
I'm guessing she means when you got BACK into debt, after your parents bailed you out last time. Clearly there is some REASON you ended up getting back into debt. Until you can answer WHY you let yourself get back into debt, you won't have a clear picture of your own behaviors. Ex- if every time you lost 50 lbs, you immediately gained it back, you need to figure out what you are doing that caused you to gain it back. Make sense? Spend some time analyzing your own behaviors. WHY have you been spending more than you earn, and WHY did you go back into debt?
I have one more suggestion - which I suspect you'll reject (and that's fine, I'm not the boss of you) but I'm going to throw it out there anyway.
You mentioned that your parents were willing to sit down and go through your budget with you and help you get control of your finances. You mentioned it as a condition of them giving you another basically year's salary. Don't take more money from them - because honestly, you are already f'ing them over spending their retirement savings on soda and tvs, when they could have easily invested it and earned 8% on it last year alone.
But ... take their advice without taking more of their money. That's someone familiar with your costs and needs who is willing to spend significant amount of time coaching you and helping you out of this mess. Don't let your ego get in the way of saving your family. If your concern is that it makes you feel like a child instead of an adult, well, you're already there - you are spending your parents' money like it's your allowance, instead of paying back what you borrowed. Ideally, they would have taught you budgeting and how to run a household when you were still living at home, but somehow that didn't happen. Let them teach you now.
And when you have some free time, you - and your wife - should read through this thread: http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/relatives-who-just-don't-get-it/
What you'll see there - in part - is the frustration and fear of people watching their parents or siblings live exactly as you are living, and the forum members here freaking out because now we are being set up to have to choose between letting our parents or brothers and sisters become homeless, or give up our own retirement plans to bail them out over and over again. Your parents are doing that for you now, but also I see that in 20 years, your children are going to be the people posting in that thread. You aren't just robbing your parents of their retirement; you're also actively robbing your children of their future.
That's the mindset you need to hold on to, every time you look at a new tv, or new speakers, or a trip to hawaii. It's not a choice between getting a new tv, or not getting one. It's a choice between getting a new tv, or allowing your children to have a secure future. Do you love fancy vacations and electronics and new couches more than you love your children? Print that question out and put in on your fridge, so it's in your face every day.
We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
I have one more suggestion - which I suspect you'll reject (and that's fine, I'm not the boss of you) but I'm going to throw it out there anyway.
You mentioned that your parents were willing to sit down and go through your budget with you and help you get control of your finances. You mentioned it as a condition of them giving you another basically year's salary. Don't take more money from them - because honestly, you are already f'ing them over spending their retirement savings on soda and tvs, when they could have easily invested it and earned 8% on it last year alone.
But ... take their advice without taking more of their money. That's someone familiar with your costs and needs who is willing to spend significant amount of time coaching you and helping you out of this mess. Don't let your ego get in the way of saving your family. If your concern is that it makes you feel like a child instead of an adult, well, you're already there - you are spending your parents' money like it's your allowance, instead of paying back what you borrowed. Ideally, they would have taught you budgeting and how to run a household when you were still living at home, but somehow that didn't happen. Let them teach you now.
And when you have some free time, you - and your wife - should read through this thread: http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/relatives-who-just-don't-get-it/
What you'll see there - in part - is the frustration and fear of people watching their parents or siblings live exactly as you are living, and the forum members here freaking out because now we are being set up to have to choose between letting our parents or brothers and sisters become homeless, or give up our own retirement plans to bail them out over and over again. Your parents are doing that for you now, but also I see that in 20 years, your children are going to be the people posting in that thread. You aren't just robbing your parents of their retirement; you're also actively robbing your children of their future.
I hear what you're saying.
The thing is, $40k wouldn't put my parents in a bad spot.
It's not even robbing them of their retirement.
More like getting an inheritance early.QuoteThat's the mindset you need to hold on to, every time you look at a new tv, or new speakers, or a trip to hawaii. It's not a choice between getting a new tv, or not getting one. It's a choice between getting a new tv, or allowing your children to have a secure future. Do you love fancy vacations and electronics and new couches more than you love your children? Print that question out and put in on your fridge, so it's in your face every day.
Agreed.
Just last night our freezer was full so we started looking online for an extra freezer to put in the garage.
Then I remembered and stopped.
We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
That's the mindset you have to change: you don't get to have these things until you have earned them - by which time you may appreciate that so much time/work/effort goes into the earning of them that they are not worth it.
You are in marketing, but on this one you have been played by the marketing messages that you are getting about what you need/deserve. Well, you've got what you deserve, which is six figures in non-mortgage debt to pay off.
2) Great job not buying a freezer! Do you know what most people do when their freezer is full? They eat out of it. We call it "freezer diving" where I live - we make meals out of little tubs of leftover chili, that pack of spanokopita, and a bag of berries from last summer. Sunday supper, for the win!
We actually bought a reasonably-priced chest freezer for our basement and that has helped with lower our food costs BECAUSE we buy giant quantities of cheap staples with very low unit prices. Which means we buy family-pack sizes of generic staples and DIVIDE them up into freezer packs and put them in the chest freezer.
We buy shredded cheese, actually, the biggest bag they sell, and divide it up into ziploc bags at home. Same with huge pack of sliced cheese, largest size of frozen veggies, chicken nuggets, burrito shells, pizza dough, etc and we buy 4-5 loafs of 100 whole wheat bread. Family packs of pasta, pasta sauce, apples, greek yogurt and eggs are also a very good deal.
We are a family of 4 (3 and 6 year old) and we don't buy any single servings pouches of anything or any candy. Apples, baby carrots, veggie straws in ziploc bags with reusable bottles of water or milk do the trick for on the go snacking. The closest thing I get a a bulk box of fig bars for the rare, desperate moments in the car where we are close to eating out.
My children have been conditioned to know that they can have practically unlimited servings of apples or carrots, but no gimmicky "snack" stuff unless we are on vacation. Breakfast is non-sugar cereals, eggs, toast, or waffles (make big batch on Sunday and leftovers to kids Mon morning).
We shop at Aldi and Wegmans, because many bulk items that are cheaper at Wegs. Maybe TJs once a month to grab the 3-4 (cheap) items that I prefer from there.
You can totally do this. You can get debt-free and you can get back in control of your life. This is the way I would tackle things with your 3, 6, 12 month goal markers.
3-Month Goals:
- Put rental house on the market. You can give a roof credit at closing instead of worrying about that now.
- Sell car and buy something for under $5000
- Sit down with your wife and make a budget. In this situation, I think you two going to Financial Peace University from Dave Ramsey would be absolutely a good idea. It will put all your cards on the table and help you two create a reasonable spending plan. This plan doesn't work without you two being a united front and deciding that you don't want to live on the edge anymore.
- Cut up all you credit cards except for maybe (MAYBE) one card. Do not put any more purchases on credit card. Pay for everything on debit or cash. I'd even consider getting your grocery money in cash and once it's gone, it's gone.
- Cut out all eating out. I left you $30/month for the very rare unplanned need to go through the drive through with the kids. But no restaurants.
- Cut the massage and the cameras. Get your Groceries below $600
- Go through your house and sell enough things to get your emergency fund of cash up to $2000
6-Month Goals:
- Sell the rental house and pay off the property taxes and the IRS
- Use your $605 cashflow to pay off the credit cards. I'd probably do a mixture of snowball/avalanche: CC1, CC3, CC6, CC5, CC4, Furniture Loan, CC7, CC2. Each time you pay off a new card, take the payment from that paid off card and roll it forward to pay off the next one more quickly. Within 6 months you should have it whittled down to just the Furniture Loan, CC7 and CC2 and you would have about $900/month at that point to keep throwing at the cards.
12-Month Goals:
- By February 1, 2018, you could be down to only the 30k debt owed to your parents and about $1500/month in cashflow.
- Talk to your parents about a payment plan for the 30k. If they really are not looking to give you interest, then I'd tell them your plan now about when you will be able to start paying them back and at what pace. If it were me, I'd see about doing $1000/month to parents and put $500/month in savings until you get a decent 3 month emergency fund, maybe $10k. Then I'd put all $1500 toward the loan with the parents until its gone.
- Start planning for how you will save after you're debt-free. Maybe allow yourself some small rewards once you pay off all except the parent's loan and then once you are totally debt free. My husband and I did a steak dinner at the fancy restaurant in town after we got debt-free and it was the best steak I've ever had.
- Don't let up! Keep optimizing your budget, looking for things to sell or extra jobs you can pick up (dog sitting or your wife watching a kid every once in awhile). Keep talking about where you want to be in 10 years and what you want retirement to look like. Don't let your spending creep up.
NEW PLAN (these numbers reflect after the rental is sold)
TAKE-HOME Income without Rental: $3875
Monthyly cashflow to put towards debt with spending below: $605
Expenses:
GARBAGE 36
CALE/INTERNET 114
WATER 50
GEICO AUTO 135
MASSAGE70If this is massage envy, you can cancel if you try hard enough. Talk to manager, explain situation.AUTO LOAN 393 3591 6.54%Sell car ASAP, paying it off in 9 months means nothing because you have no money.
MORTGAGE 1761 164,717 5.125%
FUEL 200
GAS/ELECTRIC 150
GROCERIES1100600
EATING OUT60030
CAMERAS25
PARENTS 0 30K
CC1 194 856 25.24%
CC2 134 4495 24.49
CC3 25 505 23.24%
CC4 25 452 10.23%
CC5 20 692 18.49%
CC6 75 797 24.15
CC7 100 2020 25.24
Furniture Loan 276 1950 25.00TOTAL 5472 46,405
NEW TOTAL 3270 41,767
Assets:
Primary home – Owe $164,717, worth $175kRental – Owe $25k HELOC + $9k taxes, worth $70k to $80kSell it ASAPCar – Owe $4,500, worth $15k to $17kCar - $5000, paid in Cash after selling financed car
Cash -$850$2000 funded by selling crap from around the house - you need an emergency fund
401k - $5,000
Liabilities:Income tax - $40k35k Paid off with sale of Rental, 5k paid off with sale of carProperty tax on rental - $9kPaid off with sale of rental
I shop at Wegman's with my three-year-old and you won't find any individually packaged crap in my cart.
I'm a Wegmans shopper/acolyte too! To the point where I've about decided I don't want to retire somewhere that doesn't have a Wegmans!
But I do spend more at Wegmans than I would at our local ShopRite and Giant. Wegmans is brilliant at combining super cheap staples like pasta, sauce, family size chicken and hamburger with expensive cheeses, prepared foods, and tempting baked goods. Their cookie display? That shit is $12 a pound!
And because they put the produce in the middle of the store, the "keep to the outside aisles" advice doesn't really work at Wegmans. They also put the expensive stuff right next to the produce - the cheeses, deli offerings, and baked goods. To get to eggs, OJ, and milk, you have to walk past basically the entire store.
What would you think about only shopping at Aldi for the rest of January? That's not even three more weeks now. Just try it. Give Wegmans a rest and see what new worlds Aldi opens up for you.
ok....I'm actually new here (but not new to 'stacheing). I've followed this post long enough.
I hate to say this...but here is what you need to do.
1. Sell EVERYTHING luxury in your house. That huge tv. Those couches. Any video game systems. Everything goes except for your beds, cooking supplies, work-related equipment, some toys for the kids, and a few basics for working out.
2. Sell one of your properties
4. WTF are you eating organics? What are you thinking? SERIOUSLY.
6. I sure hope you aren't spending any money on entertainment. From now on, the library, free parks, free cultural events are your entertainment. Kids are bored you say? Get off your butt, and go play catch or make a snowman with them.
7. Where in New York, are you living? You might be able to sell all vehicles, and take public transit instead.
8. Massage????? Really???? Get your wife to give you one. For reals.
Beatles- how about you give this one a try? We explained the "why" on the last one quite thoroughly. So how about you have a turn, and we'll give feedback on that? You know, "see one, do one, teach one" as the best way to learn.
What can you eliminate? What can you substitute? You can use this to help you: http://flyer.wegmans.com/Default.aspx (http://flyer.wegmans.com/Default.aspx)
Quote6. I sure hope you aren't spending any money on entertainment. From now on, the library, free parks, free cultural events are your entertainment. Kids are bored you say? Get off your butt, and go play catch or make a snowman with them.
This is actually part of the reason why my wife says it's hard to keep our grocery budget down.
She doesn't let them sit in front of the TV, they're always out doing things which creates 2 problems.
1) She packs snacks, but they run out and then are hungry.
2) She's gone all day doing activities with them, which gives no time (and energy) for making food.
Beatles- how about you give this one a try? We explained the "why" on the last one quite thoroughly. So how about you have a turn, and we'll give feedback on that? You know, "see one, do one, teach one" as the best way to learn.
What can you eliminate? What can you substitute? You can use this to help you: http://flyer.wegmans.com/Default.aspx (http://flyer.wegmans.com/Default.aspx)
I dont do shopping - ever - so I dont really know whats a good deal and whats not.
But i'll see if my wife is willing to hop on at some point.
We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Generic Food You Feel Good About Shells, Jumbo 2 OZ
.99
Bananas LB
.78
Dannon Danimals Smoothie, Value Pack 37 FO
4.79
Generic Wet Sweeper Cloths, Citrus Fresh Scent 24 CT
6.99 SAVINGS-0.50
Generic Italian Classics Cheese Tortellini 20 OZ
6.49
Generic Shredded Whole Milk Mozzarella Cheese 8 OZ
2.49
Sprite Soda, Lemon-Lime
3.49
Generic Large Apple Crumb Pie 43 OZ
3.00
REESE'S Shell Topping, Chocolate & Peanut Butter 7 OZ
2.49
Generic In-Store Baked Bagels EA
3.56
Pepperidge Farm Goldfish Baked Graham Snacks, Vanilla Cupcake 7 OZ
.99
Breyers Indulgences Gelato, Raspberry Cheesecake 28 FO
4.69
Weg Sandwich Bag Z 00 CT
2.99
Smuckers Marmalade, Sweet Orange 8 OZ
2.99
Generic Assorted In Store Baked Muffins, 4 Pack 8 OZ
9.00
Coca-Cola Cola
3.49
Stewart's Fountain Classics Soda, Cream 48 FO
3.99
Generic Food You Feel Good About Mixed Peppers, FAMILY PACK 2 LB
5.49
Jif Peanut Butter, Creamy 40 OZ
5.99
Quaker Popped Rice Crisps, Apple Cinnamon 7 OZ
2.99
Generic Food You Feel Good About Unsweetened Apple Sauce Pouches, FAMILY PACK 77 OZ
8.99
Juicy Juice Apple 00% Juice 54 FO
2.99
Generic Italian Classics Alfredo Sauce 5 OZ
3.98
Generic Shredded Colby Jack Cheese 8 OZ
2.49
Kraft Macaroni & Cheese Dinner, Original Flavor, 5 Pack 36 OZ
4.79
Generic Food You Feel Good About Parmesan Romano Sauce, FAMILY PACK 72 OZ
2.69
Generic Food You Feel Good About Distilled Water 28 FO
0.99
Gummi Peach LB
.58
Saranac Hand-Crafted Soft Drinks, Premium Orange Cream 72 FO
5.49
Generic Fancy Shredded Parmesan & Romano Cheese 6 OZ
2.49
Popsicle Ice Pops, Slow Melt, Mighty Minis, Assorted, 20 Pack
3.99
Generic Food You Feel Good About Cheese Whole Milk Ricotta 32 OZ
3.99
Generic Ultimate Chocolate Chip Cookies LB
5.88
Generic Food You Feel Good About Steamables Jasmine White Rice 0 OZ
.9
Generic Food You Feel Good About Long Grain Brown Rice 0 OZ
.9
Chex Mix Snack Mix, Bold Party Blend 9 OZ
.99
Mayfair Jellies Orange Slices LB
2.0
Uncle Ben's Whole Grain Medley Pouch, Ready, Brown & Wild 8 OZ
.99
Dried Cherries LB
4.29
Dole 00% Juice, Pineapple Orange Banana 59 FO
3.9
Generic Cheese Tortellini Pasta 6 OZ
2.99
Fairlife Milk, Ultra-Filtered, Reduced Fat, Chocolate, 2% 52 FO
3.99
Generic Tissues, 3-Ply, FAMILY PACK 750 CT
8.99
Energizer Batteries, Lithium, 2032 4 EA
5.99
Generic Food You Feel Good About Macaroni & Cheese 0 OZ
20.93
SHOPPERS CLUB SAVINGS-3.50
• SHOPPERS CLUB SAVINGS 4.00
• TOTAL SAVINGS 4.00
• BOTTLE DEPOSIT .0
• TAX 3.98
• TOTAL 200.84
• BOTTLE RETURN 0.00
• COINSTAR 0.00
• *****457 Credit Card 200.84
When going without new cars and fancy clothes and crown molding, I like to remind myself that while we can see our neighbor's fancy cars, we can't see their bank statements.
Listen, the tough talk here is that your wife's job is being a stay at home mom and homemaker. If she wants to keep that job, she needs to stop spending 25% of the takehome income on muffins and juice. It's a hard hard job, but it's a vital job in your family and she can turn things around so fast by taking on this job with passion. You probably need to help more with that. When you're not at work, you should be able to do about half of the work on food/child-rearing. Let her go to the store without the kids on Saturday morning while you spend some good dad time with them. Help out by prepping your lunches on Sunday evening for the work week. Do the dishes after dinner, help with cooking, or keep the kiddos entertained while she is cooking. Find crockpot recipes to try out so that she doesn't have to focus a ton on prep time. Let go of your soda addiction.
Quote6. I sure hope you aren't spending any money on entertainment. From now on, the library, free parks, free cultural events are your entertainment. Kids are bored you say? Get off your butt, and go play catch or make a snowman with them.
This is actually part of the reason why my wife says it's hard to keep our grocery budget down.
She doesn't let them sit in front of the TV, they're always out doing things which creates 2 problems.
1) She packs snacks, but they run out and then are hungry.
2) She's gone all day doing activities with them, which gives no time (and energy) for making food.
My Wife and I really enjoyed reading everyone who broke down our receipt and showed us where to save..
But she was a little annoyed that I posted a receipt that was a few months old (oops!), as she feels she has gotten better recently.
So would anyone be willing to critique our latest receipt (I double checked I had the right now this time)?
We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Here is a win.
Told everyone today that I wasn't purchasing lunches on M/W/F anymore.
They asked me to buy one more time, so I bought lunch today. One final time for $33.90
Beatles - you don't need to put a roof on the rental to sell it - you just offer a credit for a new roof at closing. Get a quote from a couple of roofers for the credit at closing. Get the rental on the market now. You are just procrastinating because, as I read it, you still have the idea that mommy and daddy can bail you out. Stop it. Sell the rental and payoff the property taxes and the IRS.
Nobody I know with kids is gone all day. Kids can learn to sit on the floor in the kitchen and keep themselves busy while mom does what she needs to do. I imagine that part of the problem with spending is the daily outings.
Here is a win.
Told everyone today that I wasn't purchasing lunches on M/W/F anymore.
They asked me to buy one more time, so I bought lunch today. One final time for $33.90
Beatles - you don't need to put a roof on the rental to sell it - you just offer a credit for a new roof at closing. Get a quote from a couple of roofers for the credit at closing.Nor do you need to wait till the lease is up. In fact, an investor prefers a current lessee, because it tells them right away that it is in a rentable condition.
Beatles - you don't need to put a roof on the rental to sell it - you just offer a credit for a new roof at closing. Get a quote from a couple of roofers for the credit at closing. Get the rental on the market now. You are just procrastinating because, as I read it, you still have the idea that mommy and daddy can bail you out. Stop it. Sell the rental and payoff the property taxes and the IRS.
Nobody I know with kids is gone all day. Kids can learn to sit on the floor in the kitchen and keep themselves busy while mom does what she needs to do. I imagine that part of the problem with spending is the daily outings.
Do you think it'll be harder to sell without the roof?
Here is a win.
Told everyone today that I wasn't purchasing lunches on M/W/F anymore.
They asked me to buy one more time, so I bought lunch today. One final time for $33.90
Advice: sell the rental.
Answer: can't, need to fix roof first.
Subsequent advice: forget the roof, list it today and get rid of it asap.
Subsequent answer: can't, want to fix roof first.
Advice: sell all unnecessary stuff from your house (that fourth TV, that third couch, etc.).
Answer: nah, I really don't want to.
Advice: tell your coworkers the free meal gravy train has come to a screetching halt.
Answer: none. literally, nothing. You have not said anything in this regard, and I'm afraid you're trying to ignore this particular piece of advice.
Beatles - you don't need to put a roof on the rental to sell it - you just offer a credit for a new roof at closing. Get a quote from a couple of roofers for the credit at closing. Get the rental on the market now. You are just procrastinating because, as I read it, you still have the idea that mommy and daddy can bail you out. Stop it. Sell the rental and payoff the property taxes and the IRS.
Nobody I know with kids is gone all day. Kids can learn to sit on the floor in the kitchen and keep themselves busy while mom does what she needs to do. I imagine that part of the problem with spending is the daily outings.
Do you think it'll be harder to sell without the roof?
Kids who get their way all the time turn into terrible tyrants, and you definitely don't want to live with two little tyrants.
Just had another idea: maybe choose to make all your sweet treats at home instead of buying them at the grocery. Teaching kids to make cookies is one of life's greatest joys, and it's a memory they will have forever. Make Saturday morning or Sunday afternoon or whatever time you choose Cookie Time--kids get to pick recipes, "help" with the mixing, rolling, cutting--and will be invested in eating the results. :) Who knows--this might even take the place of an "activity" and save even more money in the long run!
Not really. Kids under the age of six can't really revolt. YOU are the boss of the kids, remember? At the most, they can pout for a few days, at most. And as adults, you can just wait out the pouting. Really, just don't back down.We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Wowzer.
I think my kids would revolt!
I want to sell the rental, but I also want to get the most we can for it.
If fixing the roof nets us $10k more, isn't that worth it!?!?
Not really. Kids under the age of six can't really revolt. YOU are the boss of the kids, remember? At the most, they can pout for a few days, at most. And as adults, you can just wait out the pouting. Really, just don't back down.We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Wowzer.
I think my kids would revolt!
Personally, I would just eliminate tv altogether for a couple of years, then they might truly enjoy an occasional show. I did this with my kids, and they totally aced school (and athletics. and music). I realize this might be too hardcore even for the MMM crowd, but just saying.
LadyStache rocks.
I want to sell the rental, but I also want to get the most we can for it.
If fixing the roof nets us $10k more, isn't that worth it!?!?
Maybe, maybe not. You have to do the analysis:
Listing price with old roof
Price of new roof
Listing price with new roof
You'll need advice from a good realtor on this. More often than not, though, you don't get a full "payback" from capital improvements. Also, consider the market you're likely trying to attract: investors, who have either the skills or the contacts to get it done cheaply and might chomp at the bit to buy your property with the older roof.
Run the numbers, then decide.
My gut tells me it's best to list without fixing the roof, but talk to a realtor and make the call, and get the thing on the market!
It doesn't really feel like were the boss all the time.
Not really. Kids under the age of six can't really revolt. YOU are the boss of the kids, remember? At the most, they can pout for a few days, at most. And as adults, you can just wait out the pouting. Really, just don't back down.We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Wowzer.
I think my kids would revolt!
Personally, I would just eliminate tv altogether for a couple of years, then they might truly enjoy an occasional show. I did this with my kids, and they totally aced school (and athletics. and music). I realize this might be too hardcore even for the MMM crowd, but just saying.
LadyStache rocks.
It doesn't really feel like were the boss all the time.
It doesn't really feel like were the boss all the time.
As a parent, you are the boss.
A boss of mine once told me: you are not given authority--you take it.
Kids will look to you for structure, boundaries, limitations. As a children's choir educator hero of mine says, "structure relieves anxiety."
Give your kids the gift of being in charge.
Advice: sell the rental.
Answer: can't, need to fix roof first.
Subsequent advice: forget the roof, list it today and get rid of it asap.
Subsequent answer: can't, want to fix roof first.
I want to sell the rental, but I also want to get the most we can for it.
If fixing the roof nets us $10k more, isn't that worth it!?!?
It doesn't really feel like were the boss all the time.
A boss of mine once told me: you are not given authority--you take it.
Kids will look to you for structure, boundaries, limitations. As a children's choir educator hero of mine says, "structure relieves anxiety."
Not really. Kids under the age of six can't really revolt. YOU are the boss of the kids, remember? At the most, they can pout for a few days, at most. And as adults, you can just wait out the pouting. Really, just don't back down.We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Wowzer.
I think my kids would revolt!
Personally, I would just eliminate tv altogether for a couple of years, then they might truly enjoy an occasional show. I did this with my kids, and they totally aced school (and athletics. and music). I realize this might be too hardcore even for the MMM crowd, but just saying.
LadyStache rocks.
It doesn't really feel like were the boss all the time.
That sounds like how you feel about money, too. Guess what? Not only are you the boss, your family needs you (plural, including your wife) to be the boss.
Advice: sell the rental.
Answer: can't, need to fix roof first.
Subsequent advice: forget the roof, list it today and get rid of it asap.
Subsequent answer: can't, want to fix roof first.
I want to sell the rental, but I also want to get the most we can for it.
If fixing the roof nets us $10k more, isn't that worth it!?!?
You can't afford to fix the roof -- you don't have the money. First rule of holes: when you're in one, stop digging.
If you want to determine whether fixing the roof is worth it financially, you need to talk to a Realtor and to whomever is going to lend you the money for the repairs to determine (i) the likely net profit from the sale both with/without the roof, taking into consideration the repair costs + interest; (ii) the timeframe to sell if you list immediately as-is vs. wait until you can get it fixed; (iii) the difference in income (rent payments) and outflow (mortgage/taxes) over that timeframe; and (iv) the extra $$ you will pay in interest/penalties on the back taxes (IRS/property) during any extra time it takes to repair the roof (because delaying the sale for repairs likely means delaying the date on which you can get that resolved). You may be right, it may be best to fix the roof first, but you don't know that based on a $10K guesstimate.
My sense is that this is another example where the perfect is the enemy of the good. It will take a lot of time and effort to fix the house up for sale, and you might not get as much out of it as you think when you consider all of the interest you're paying elsewhere in the meantime. You may be better off in the long run cutting bait on the rental so you can focus your limited time/energy on all of the other issues you need to address.
Big congrats on the lunches, btw -- that's a hard thing to do.
It's ok. I'm going to let her experience this emotion while I set the limit.
It's not just that I don't want to, it's that I dont understand how that helps us.
We have loans against those items... And we'll receive pennies on the dollar for selling them.
Even another frugler in this thread said that doesn't make sense to do so.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
Advice: sell the rental.
Answer: can't, need to fix roof first.
Subsequent advice: forget the roof, list it today and get rid of it asap.
Subsequent answer: can't, want to fix roof first.
I want to sell the rental, but I also want to get the most we can for it.
If fixing the roof nets us $10k more, isn't that worth it!?!?
You can't afford to fix the roof -- you don't have the money. First rule of holes: when you're in one, stop digging.
If you want to determine whether fixing the roof is worth it financially, you need to talk to a Realtor and to whomever is going to lend you the money for the repairs to determine (i) the likely net profit from the sale both with/without the roof, taking into consideration the repair costs + interest; (ii) the timeframe to sell if you list immediately as-is vs. wait until you can get it fixed; (iii) the difference in income (rent payments) and outflow (mortgage/taxes) over that timeframe; and (iv) the extra $$ you will pay in interest/penalties on the back taxes (IRS/property) during any extra time it takes to repair the roof (because delaying the sale for repairs likely means delaying the date on which you can get that resolved). You may be right, it may be best to fix the roof first, but you don't know that based on a $10K guesstimate.
My sense is that this is another example where the perfect is the enemy of the good. It will take a lot of time and effort to fix the house up for sale, and you might not get as much out of it as you think when you consider all of the interest you're paying elsewhere in the meantime. You may be better off in the long run cutting bait on the rental so you can focus your limited time/energy on all of the other issues you need to address.
Big congrats on the lunches, btw -- that's a hard thing to do.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
I thought we were past the "running back to mummy and daddy for money" thing?
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
My parents could pay for the roof if we want.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
I thought we were past the "running back to mummy and daddy for money" thing?
Find a better realtor. One that specialises in selling rentals, if there is such a thing. The one you asked just wants easy money for no effort, which is what selling houses in perfect condition is for her.
Yes, the roof will put off some people. It won't put off a serious investor, although they will try to knock you down on price because of it. That is why you get a couple of estimates to counter them in the negotiations.
My parents could pay for the roof if we want.
Oh, and of course, if your parents are paying for the roof, pay them back out of the proceeds of the sale.
This is critical for your relationship with them, their own financial health, and your ability to stand on your own financial feet.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
It's not just that I don't want to, it's that I dont understand how that helps us.
We have loans against those items... And we'll receive pennies on the dollar for selling them.
Even another frugler in this thread said that doesn't make sense to do so.
They were talking about the furniture and I agree there. Yes, there's absolutely no point in selling used furniture since it will net you literal pennies to the dollar at most. The car is a different story though. Based on what you've told us you own roughly $3,500 and have a $400 monthly payment. The car is worth around $13,000 based on your own research, which means:
+ $13,000 when you sell the car this month
- $3,500 pay back dealer/bank
- $5,000 buy used car in good condition (no SUV! Toyota/Honda/Kia minivan or sedan!)
-----------
$4,500 you can use to pay off credit cards CC2 in January 2017.
This move will also free up an additional $530 each month ($400 car payment + $130 CC2 payment) that you can use to pay off your credit card debt. Together with the meals that you're no longer buying for your coworkers (congrats on that by the way, well done!) we're talking about $1,130 every month that you will be able to pay towards your credit card debt. Here's the simple math behind it:
Jan 2017: sell car, buy cheaper used car, pay off CC2
Feb 2017: use $1,130 to pay off CC3 & CC5 -> extra $45 starting March
Mar 2017: use $1,175 to pay off CC1 & start paying off CC2 -> extra $195 starting April
Apr 2017: use $1,370 towards CC2
May 2017: use $1,370 towards CC2
Jun 2017: use $1,370 to pay off CC2 -> extra $135 starting July
Jul 2017: use $1,500 to pay off CC6 and start paying off CC7 -> extra $75 starting August
Aug 2017: use $1,575 to pay off CC7 -> extra $100 starting September
Sep 2017: use $450 to pay off CC4, put remaining $1,225 towards furniture loan, parents, IRS debt, etc.
It is now October 2017, and you've paid off every single dollar of credit card debt, your car loan is gone, and you've got an additional $1,700 to pay off your debt every single month. And all you had to do in order to achieve this is a) sell your car, and b) stop buying lunches for your coworkers (which you already did, congratulations on that by the way!)
Imagine how much more you will be able to achieve if you stop buying and eating/drinking junk, you and your wife start home cooking your meals, and you bring down your grocery budget to $600 per month.
I've actually tried paying them back for stuff in the post.
Once in a while they'll accept it, but most of the time they say "No, no" and hand it back.
Or they'll take the check and then never cash it.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
I'm starting to realize that our differences in the other thread are likely due to your parents subsidizing your lifestyle well into your adult life. Nothing wrong with that, but I guess it would change your outlook on whether or not you took care of them when they retired regardless of their choices.
I'm glad you've got them in your life. Having that sort of support behind you is one of the things which means that your little family of four will probably never completely fall off the grid into homelessness, or social housing, or long-term grinding poverty. But it's time for you to step up and be the same awesomeness that you see in your parents. They obviously love you, support you, and want you to do well, and you have everything you need (good job, wife and two healthy children) to make them proud of you too.I thought we were past the "running back to mummy and daddy for money" thing?
Find a better realtor. One that specialises in selling rentals, if there is such a thing. The one you asked just wants easy money for no effort, which is what selling houses in perfect condition is for her.
Yes, the roof will put off some people. It won't put off a serious investor, although they will try to knock you down on price because of it. That is why you get a couple of estimates to counter them in the negotiations.
I know, I know.
It's just hard not to turn back to them.
They've given us about $50k over the last few years.
They're awesome, and they're our fallback.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
I thought we were past the "running back to mummy and daddy for money" thing?
Find a better realtor. One that specialises in selling rentals, if there is such a thing. The one you asked just wants easy money for no effort, which is what selling houses in perfect condition is for her.
Yes, the roof will put off some people. It won't put off a serious investor, although they will try to knock you down on price because of it. That is why you get a couple of estimates to counter them in the negotiations.
I know, I know.
It's just hard not to turn back to them.
They've given us about $50k over the last few years.
They're awesome, and they're our fallback.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You START here. Once you have DONE THIS you tackle your grocery spending, your sense of entitlement and all of the other problems you have. You have been given so many ideas and options and things to consider doing at this point, you have to stop making excuses and asking for MORE INFORMATION and DO THE WORK - that is how you make it happen faster.
My parents don't say No and I couldnt imagine saying No back to them.
My parents could pay for the roof if we want.
We did talk to a realtor and she said that the roof not being finished will drive buyers away.
She said that even the way a picture is angled for their house listing online affects open house visits.
So a bad roof in a picture is going to cut our potential by a lot.
I'm starting to realize that our differences in the other thread are likely due to your parents subsidizing your lifestyle well into your adult life. Nothing wrong with that, but I guess it would change your outlook on whether or not you took care of them when they retired regardless of their choices.
Possibly.
My parents don't say No and I couldnt imagine saying No back to them.
They're the kindest, most amazing people i've ever met and I'm so fortunate to have been birthed by them.
You don't have a problem with this? You are a grown adult with your own children. The bank of Mommy and Daddy should be CLOSED.
Your parents not being able to say no is the reason you're in the mess you're in :) Still think they're the greatest?
Now, if they're super rich (billionaires), then just ignore this thread, leave us alone, and let them bail you out over and over again for the rest of your life and then burn through your inexhaustible inheritance.
If they're not super rich, then guess what, you're going to have to say no to them when they're old and need your help and you've burnt through all their money.
ok....I'm actually new here (but not new to 'stacheing). I've followed this post long enough.
I hate to say this...but here is what you need to do.
1. Sell EVERYTHING luxury in your house. That huge tv. Those couches. Any video game systems. Everything goes except for your beds, cooking supplies, work-related equipment, some toys for the kids, and a few basics for working out.
Won't work, unfortunately.
We wouldn't be able to sell them for much. Definitely not even close to what we bought them for. And they're still financed.Quote2. Sell one of your properties
Agreed.
Just need to get a roof on it.Quote4. WTF are you eating organics? What are you thinking? SERIOUSLY.
I dont think we eat any organics?Quote6. I sure hope you aren't spending any money on entertainment. From now on, the library, free parks, free cultural events are your entertainment. Kids are bored you say? Get off your butt, and go play catch or make a snowman with them.
This is actually part of the reason why my wife says it's hard to keep our grocery budget down.
She doesn't let them sit in front of the TV, they're always out doing things which creates 2 problems.
1) She packs snacks, but they run out and then are hungry.
2) She's gone all day doing activities with them, which gives no time (and energy) for making food.Quote7. Where in New York, are you living? You might be able to sell all vehicles, and take public transit instead.
We live in a suburb. Closest bus station is 3 miles away. We don't have Uber here. Work is 20 miles away.Quote8. Massage????? Really???? Get your wife to give you one. For reals.
Agreed.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You START here. Once you have DONE THIS you tackle your grocery spending, your sense of entitlement and all of the other problems you have. You have been given so many ideas and options and things to consider doing at this point, you have to stop making excuses and asking for MORE INFORMATION and DO THE WORK - that is how you make it happen faster.
What sense of entitlement?
Can you point to a specific thing so I know what you're speaking of.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You don't have a problem with this? You are a grown adult with your own children. The bank of Mommy and Daddy should be CLOSED.
I'm honestly trying to figure out why its a problem.
Whats the problem with parents helping their kids?
Even when they're an adult, whats the harm?
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
What sense of entitlement?
Can you point to a specific thing so I know what you're speaking of.
What sense of entitlement?I'm not the one you asked - but I think it's obvious to most of the people in this thread that for some reason you feel entitled to the money your parents earned. The attitude seems to be: "They don't need it and it's gonna be mine as soon as they die anyway, I may as well use it now instead of being self-sufficient - but I'm not willing to be accountable to them for how I spend their money." I really wonder if you'd be comfortable telling your parents directly that you've decided you ought to be able to use their money now, since they don't need it.
Can you point to a specific thing so I know what you're speaking of.
Your parents not being able to say no is the reason you're in the mess you're in :) Still think they're the greatest?
Now, if they're super rich (billionaires), then just ignore this thread, leave us alone, and let them bail you out over and over again for the rest of your life and then burn through your inexhaustible inheritance.
If they're not super rich, then guess what, you're going to have to say no to them when they're old and need your help and you've burnt through all their money.
Of course I read this *after* I post that last item haha.
They're not billionaires... But I don't think theyre going to have any money problems in retirement, I'll put it that way.
I've actually tried paying them back for stuff in the post.
Once in a while they'll accept it, but most of the time they say "No, no" and hand it back.
Or they'll take the check and then never cash it.
I've actually tried paying them back for stuff in the post.
Once in a while they'll accept it, but most of the time they say "No, no" and hand it back.
Or they'll take the check and then never cash it.
Here's an idea.
If you do let them bail you out this one last time by fronting the money for the roof repair, take the equivalent amount from the proceeds of the sale and start a 529 investment account for your kids. If the roof is $5K, set up two accounts, for $2500 each.
Then when you sell the house, tell your mom and dad, "I know you won't take this money back, because you never cash the checks I write to pay you back. So I put the money in savings for college for the kids."
This will have two effects: it will make THEM see that you are taking financial responsibility for your future, and it will make YOU see that you are taking financial responsibility for your future.
A third (bonus) effect is that you will not have access to that money from the sale, so the effect of the loan on your personal financial situation will be zero. But 15 years from now, your kids will reap the rewards.
You don't have a problem with this? You are a grown adult with your own children. The bank of Mommy and Daddy should be CLOSED.
I'm honestly trying to figure out why its a problem.
Whats the problem with parents helping their kids?
Even when they're an adult, whats the harm?
I'm honestly trying to figure out why its a problem.
Whats the problem with parents helping their kids?
Even when they're an adult, whats the harm?
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You START here. Once you have DONE THIS you tackle your grocery spending, your sense of entitlement and all of the other problems you have. You have been given so many ideas and options and things to consider doing at this point, you have to stop making excuses and asking for MORE INFORMATION and DO THE WORK - that is how you make it happen faster.
What sense of entitlement?
Can you point to a specific thing so I know what you're speaking of.
Your response that the IRS is scamming you. Your multiple responses that your parents can pay off your debt, pay for your roof, that you are just getting your inheritance early. Buying furniture and Tv's and such on credit. You have been living beyond your means because you have felt that you deserve/need/want these things. it is an attitude of entitlement. Most of the excuses you have come up with for why you can't do something, it sounds like it is coming from someone who still feels like they are entitled to these things, not someone who is one breath away from homelessness.
I'm honestly trying to figure out why its a problem.
Whats the problem with parents helping their kids?
Even when they're an adult, whats the harm?
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
The problem is precisely that: they don't get anything done without their parents' help. Have you ever stopped to think why "daddies daughter" is not necessarily a positive description of a young woman? You probably don't know this, but the Germans use "Beruf: Sohn" which translates to "Profession: son" to mock entitled spoiled young adult brats whose only achievement in live is to have been born. Look at it this way: your kids will never have a proper role model. All they will see is daddy mooching off of his parents while mommy is spending her time binge shopping for useless crap. Take an educated guess how your kids will turn out. Is that the role model you want to be for them?
The problem is that by helping their kids over and over again their're enabling them to fail. The harm is that the "kids" will be 50 or 60 at some point and ask for more money from their parents, because oh gosh darnit that new TV set was so important, and it matches the new couch that they got after they had the replace the carpet in that one room because, you know, the home makeover would not have been complete without.
See the problem? If not then I'm afraid you're a lost cause. If so, and I really hope you do see the problem, there's still hope for you ;-)
Here is what i've done
* Signed up for Mint and linked my checking account. This has allowed me to categorize my spending and see what's happening.
* Downloaded the spreadsheet that MDM recommended and plugged in all my credit cards and interest rates.
* Canceled massage membership (I have 30 days to use all my unused massages, which sucks).
* Put the dog up for sale on Craigslist.
* Stopped buying co-workers lunch.
* Creating a food budget. Thinking $100 per week for grocery store and $25 per week for eating out?
(the dog thing is a joke)
Here is what i've done
* Signed up for Mint and linked my checking account. This has allowed me to categorize my spending and see what's happening.
* Downloaded the spreadsheet that MDM recommended and plugged in all my credit cards and interest rates.
* Canceled massage membership (I have 30 days to use all my unused massages, which sucks).
* Put the dog up for sale on Craigslist.
* Stopped buying co-workers lunch.
* Creating a food budget. Thinking $100 per week for grocery store and $25 per week for eating out?
(the dog thing is a joke)
Sept 2017 is far away though.It will take as long as it takes.
How do I make it happen faster?
WOWOW You're even getting rid of the dog! You're doing great Beatles! Keep it up!!! I approve your food budget.
Now make sure you make a menu plan. Again, I'll recommend pepperplate.com because it's super easy to use and FREE. Include which day of the week you'll be eating out as part of the plan.
Edited to add: oh the dog was a joke. How big is the dog? How much does he eat monthly? Can we get rid of him too? :)
Here is what i've done
* Signed up for Mint and linked my checking account. This has allowed me to categorize my spending and see what's happening.
* Downloaded the spreadsheet that MDM recommended and plugged in all my credit cards and interest rates.
* Canceled massage membership (I have 30 days to use all my unused massages, which sucks).
* Put the dog up for sale on Craigslist.
* Stopped buying co-workers lunch.
* Creating a food budget. Thinking $100 per week for grocery store and $25 per week for eating out?
(the dog thing is a joke)
I'll admit, the dog thing got me. I was like "okay, I was wrong, this is a troll after all". I had a relieved chuckle at the end there!
Be sure you recognize though that only two of those are direct actions that will save you money directly- the massages and the lunches. Those are both huge and awesome things! And everything else on there is good to do, but it will not directly save you money unless you act on it. Just a reminder =)
so wife is on board? As the homemaker, she has the most control over all of this. I mean you can do it in your off-time, but it'll be much easier if she does. So have you talked about her role specifically going forward?
Here's an idea.I might be in the minority here, but I don't like this plan. He's taking someone else's money (granted, it's money he feels entitled to, but it still is someone else's money).
If you do let them bail you out this one last time by fronting the money for the roof repair, take the equivalent amount from the proceeds of the sale and start a 529 investment account for your kids. If the roof is $5K, set up two accounts, for $2500 each.
Then when you sell the house, tell your mom and dad, "I know you won't take this money back, because you never cash the checks I write to pay you back. So I put the money in savings for college for the kids."
This will have two effects: it will make THEM see that you are taking financial responsibility for your future, and it will make YOU see that you are taking financial responsibility for your future.
A third (bonus) effect is that you will not have access to that money from the sale, so the effect of the loan on your personal financial situation will be zero. But 15 years from now, your kids will reap the rewards.
Beatles - you don't need to put a roof on the rental to sell it - you just offer a credit for a new roof at closing. Get a quote from a couple of roofers for the credit at closing. Get the rental on the market now. You are just procrastinating because, as I read it, you still have the idea that mommy and daddy can bail you out. Stop it. Sell the rental and payoff the property taxes and the IRS.
Nobody I know with kids is gone all day. Kids can learn to sit on the floor in the kitchen and keep themselves busy while mom does what she needs to do. I imagine that part of the problem with spending is the daily outings.
No - you offer a credit on closing for the roof repair. Most people will be thrilled with that because they can choose the person that repairs the roof. But you've been told this by many here and you are still questioning.
Do you think it'll be harder to sell without the roof?
Op, glad you are still here. You need these facepunches. It is a hard thing to take I know, i commend you for taking the hard blows. Sometimes, it us easier to be told off by an internet stranger than by someone you know. You got great advice so far.
Just out of curiosity, as a kid were you a little tyrant who thought mom and dad are put on earth to serve your every need? You sound like a nice peraon, but the others are right, there is a sense of entitlement there. What were you like as a teenager? Are your kids heading the same direction? Will you be able to bail them out when they are 30?
Well done on the progress so far. Have you called a cpa yet? Any progress on the irs? The outcome of those conversations will determine what you are doing with the rental and how quickly you can sell it.
If you hate shopping, you should be the family shopper. I bet you can get in and out of the shop on a friday night in half an hour if you have a shopping list, and you won't buy all the fancy prepackaged crap. Or definitely do the groceries online if wife can't help herself around the desert section.
Your wife has to step up as a homemaker. No excuses. Nobody should be buying frozen mac and cheese. Make your own. Honestly, about 2 pans of mac and cheese should cost less than 3 to make, they are ready in 40 mins (incl 10 min prep, 20 min oven, 10min cleanup). Portion it and freeze And i don't want to hear the busy stay at home mother crap, we all know how hard it is. I work part time and cook from scratch, because we like to eat well. You should live on lobster and rib fillet on that food budget, not mac n cheese.
Actually, i have an exercise for the mrs. Do a pantry, freezer and fridge inventory and write the menus for the next 2-3 weeks. Post it here so that we can see you are both serious?
A different exercise for both of you. Do a home inventory. How much you spent on furnishing the brand new house and how much you can sell those for (it will be good for you to see that the sofa you financed at 23% is now worth x and you avtually paid y for it so far, and is still not paid off). It might just be the exercise that changes your mindset and sets you up for life. Will be hard and tedious, but totally worth it on the long term.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
Ah, no. That's a rich-kid thing. Stop buy crap that you can do without on credit. You don't need 2 couches, much less 4. And you don't need more than one tv, either, if that thought has already crossed your mind.
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
We have a sofa in the living room, which we got for free, and a futon in the sun room, which we bought for $300 20 years ago. We also have two twin beds at right angles as banquettes in two places in the house.
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
Ah, no. That's a rich-kid thing. Stop buy crap that you can do without on credit. You don't need 2 couches, much less 4. And you don't need more than one tv, either, if that thought has already crossed your mind.
Lmao!Definitely not a local thing. I live in Texas. Everything is bigger in Texas. Including people's ginormous asses :D And I don't even know what a sitting room is. I was thinking of another ass-size-related joke here but I think we're done with that ;-)
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
Ah, no. That's a rich-kid thing. Stop buy crap that you can do without on credit. You don't need 2 couches, much less 4. And you don't need more than one tv, either, if that thought has already crossed your mind.
Im honestly surprised.
I thought everyone has multiple couches.
We also have 3 tv's. Living room, basement and bedroom.
Having just chewed through all 300+ posts I would like to express how incredibly impressed I am with the forum for all of the advice, suggestions and patience displayed.
Thread should be stickied for all the goodness. It basically covers absolutely everything one needs to know to get their shit together.
Beatles man - which one do you resemble? John, Ringo, George or Paul? I feel like it would be easier to interact with you if you had a name that we can identify you as :)
Oh yes! Start a journal.
And. When your wife does step up, jumps into being a homemaker, keeps the kids engaged, and lowers all of your costs, give her a big high five and lots of respect, because it's hard work.
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
I think until you are able to come to terms with what you can really afford - you are doomed to fail. We lived in a brand new house for 4 years before furnishing the living room - waiting until we could pay cash for that furniture.
Doesn't your wife want to create her own profile name and come on here and talk with us directly? We're fun!
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You START here. Once you have DONE THIS you tackle your grocery spending, your sense of entitlement and all of the other problems you have. You have been given so many ideas and options and things to consider doing at this point, you have to stop making excuses and asking for MORE INFORMATION and DO THE WORK - that is how you make it happen faster.
What sense of entitlement?
Can you point to a specific thing so I know what you're speaking of.
You don't have a problem with this? You are a grown adult with your own children. The bank of Mommy and Daddy should be CLOSED.
I'm honestly trying to figure out why its a problem.
Whats the problem with parents helping their kids?
Even when they're an adult, whats the harm?
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
I think until you are able to come to terms with what you can really afford - you are doomed to fail. We lived in a brand new house for 4 years before furnishing the living room - waiting until we could pay cash for that furniture.
Yes this. I just braided my hair in the reflection of my bedroom window because I DONT HAVE A MIRROR IN THE BATHROOM. I didn't think ok, I have a bathroom, time to fill it with all the things "normal" people have. No, I'm waiting until we can afford it. (In case you're wondering why the bathroom didn't have a mirror when we moved in, it's because we built our house ourselves, so it's pretty bare bones until we can afford to furnish it).
My husband uses the left over shard of mirror from when we had a hand mirror to shave.
You may laugh at me and think we're poor and that you're "above" living like that. But newsflash! My networth is bigger than yours.
I think until you are able to come to terms with what you can really afford - you are doomed to fail. We lived in a brand new house for 4 years before furnishing the living room - waiting until we could pay cash for that furniture.
Yes this. I just braided my hair in the reflection of my bedroom window because I DONT HAVE A MIRROR IN THE BATHROOM. I didn't think ok, I have a bathroom, time to fill it with all the things "normal" people have. No, I'm waiting until we can afford it. (In case you're wondering why the bathroom didn't have a mirror when we moved in, it's because we built our house ourselves, so it's pretty bare bones until we can afford to furnish it).
My husband uses the left over shard of mirror from when we had a hand mirror to shave.
You may laugh at me and think we're poor and that you're "above" living like that. But newsflash! My networth is bigger than yours.
You must be joking. I've collected 3 quality mirrors I found randomly in the alley. You can find mirrors in the free section on craigslist all day. Mirrors at goodwill don't cost a whole lot either.
I don't laugh at you and think you're poor, but I do find your deferred furnishing strategy to be illogical and off putting for someone who is seeking financial advice. Clearly this dude and his family will not be inspired to be more frugal by knowing there are wealthier people out there using shards when they need to shave.
I think there's something else at play here - the use of self-deprivation as some sort of physcological tool. I wouldn't risk promoting this strategy to a normal guy with a wife and kids. He could come off as a total kook and lose his credibility when pushing for better financial habits.
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
I derive happiness from a nice house. So we spend some of our money on things like throw pillows and new paint. But I shop around, and put up with the fact that some of our rooms will stay outdated for a few years. I buy what I can used (like our dresser and night stands) and shop sales for other things (like a new duvet cover when our old one had holes all over it). I don't think it's bad to like having nice things, I love watching HGTV and admiring houses...just do it within your budget. And if you have to put it on a credit card it's likely not in your budget (we use credit cards for purchases for the points and protection it offers, but pay in full each month).
I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
Yes, I do feel badly that they get such a huge head start in life and in business because of their parentage. I believe in meritocracy (although, not total). It sickens me that Donald Trump thinks he is more successful than I am or that he believes he is smarter than I am. He started out with vastly more than I did and was able to keep it without losing too much to inflation. Pretty sure anyone on this forum could have done better. His children clearly believe that he (and they) deserve the wealth they have. And that attitude really really bothers me.
I derive happiness from a nice house. So we spend some of our money on things like throw pillows and new paint. But I shop around, and put up with the fact that some of our rooms will stay outdated for a few years. I buy what I can used (like our dresser and night stands) and shop sales for other things (like a new duvet cover when our old one had holes all over it). I don't think it's bad to like having nice things, I love watching HGTV and admiring houses...just do it within your budget. And if you have to put it on a credit card it's likely not in your budget (we use credit cards for purchases for the points and protection it offers, but pay in full each month).
I think this is a very important comment, and it's spot on. There are way too many extreme frugalists in these forums, which can be shockingly discouraging (or rather just shocking) even to regulars such as myself. Someone such as beatles, who is not familiar with the system and has been living a life of unaccounted for luxury needs to be shown that a frugal life does not mean complete and utter abstinence. If they come here looking for help and then read about people using broken glass shards for mirrors I guarantee they will promptly turn away again and never think back. The bottom line is to figure out what's important and then prioritize within ones means. For some it's a nicely decorated family home, some pimp out their cars, and others spend their money travelling around the globe. And that's absolutely fine, there's no one-ring-rules-them-all solution here. That's very important to understand.
Still, given the amount of debt that beatles is in my personal advice would be to try and monetarize as much furniture as conveniently possible. After all he was the one considering Sept 2017 a long way into the future asking how to speed things up, and selling furniture one does not really need (the old WANT vs. NEED debate) is certainly one way to pay off ones debt exponentially faster.
That sounds good.
Sept 2017 is far away though.
How do I make it happen faster?
You START here. Once you have DONE THIS you tackle your grocery spending, your sense of entitlement and all of the other problems you have. You have been given so many ideas and options and things to consider doing at this point, you have to stop making excuses and asking for MORE INFORMATION and DO THE WORK - that is how you make it happen faster.
What sense of entitlement?
Can you point to a specific thing so I know what you're speaking of.
Wanting to default on your credit cards and reward yourself with a trip to Hawaii is entitlement.
Good grief, 350 comments in two days? Beatles, I applaud you for not giving up already. I would have run for the hills when I was new if I had received that type of welcome.
Okay, so here's another perspective from someone who is not all that frugal but who has really learned a lot over the past few years on this forum. I've made some life-changing decisions based on knowledge and advice from some of the people who are giving you advice now, and I've been implementing it as I can incorporate it into my life.
1. People on this forum tend to be self-made and we're proud of our accomplishments, even more so when we endure some pain (stoicism) or baddassity to get there. So when you consider taking an easy-out (your parents), you'll get whiplash from all the face-punches!
2. Regarding the stocism and badassity mentioned above, it's a real badge of honor around these parts to do something that others might consider a hardship and to find joy in doing it. If we could all walk 10 miles in the snow to school each day, we would! But not everyone adopts badassity in every aspect of their life. I might do one badass thing, like install my own plumbing fixtures or try a DIY project, but then be a sissy and hire cleaners to wash my windows. You've been pounded from all directions by different people who want to be badass, but you don't have to do ALL of these things. Just get started and start making progress.
3. Regarding the groceries and eating out. I hate cooking and I find every excuse in the world not to do it, but I've improved 10-fold since finding the MMM path. I do use a slow cooker and make at least one big batch of something per week for all of my lunches. I still have a long way to go because I see how large my grocery bill is and when I add it all up, I think about how many future days I could buy with the food I throw in the garbage each week. This year I'll focus on groceries and planning my meals better. I had an injury a few years ago and having groceries delivered once per week forced me to plan (and stick to that plan). But I let go of that when I could walk again and I need to reinstitute some of that planning.
4. Your couches, TV, house. I bought a too-big house and budgeted to furnish it in my first few years. I spent a shit-ton of money. It's furnished. I look like all of my neighbors and have a couch and a TV where you would expect to find them. That's not how you find happiness. Another poster mentioned to stay off Facebook -- I agree, it's an environment that is all about "keeping up with the Joneses". Instead, I read these forums and I try to keep up by seeing how low I can get my thermostat. Or how long I can go without using my car (I don't use my car on weekends anymore unless I'm sleeping somewhere that is not my house - I do all my errands by foot or by bike!) These things make me so proud to see what I'm capable of and after you do it for a while, you don't want to go back.
5. Buying stuff -- no-spend days, weeks, or months are challenging at first. I started with cash-only and if I didn't have the cash, I walked out of a store. Can't tell you how many times I did a "Shop and Drop" when I got started. It forced me to prioritize what I really needed. Especially in the grocery store.
Point is, all the trappings of normal suburban life are really trappings -- they're not getting you what you really want. Slow and steady wins this race. Find a way to get your wife on board. Small things count and they lead to bigger things.
Good luck, I'm rooting for you!
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
Yes - I have two in my vacation home and two in my regular home. But my NW is over $4M, and our annual income is over 5 times yours. I paid cash for all four of them. And NONE OF THEM COST $1000 EACH. I'm wondering what is wrong with you when you are still laughing about this? You are freely admitting that paying for these will cost you more than 10% of what you earn in a year. Do you see how absolutely ridiculous that is?
I think until you are able to come to terms with what you can really afford - you are doomed to fail. We lived in a brand new house for 4 years before furnishing the living room - waiting until we could pay cash for that furniture. I think in the back of your mind - you believe you are as well off as your parents are - and that drives your spending - and so does the fact that you know that they will bail you out and pat you on the head and tell you what a good boy you are.
It might well be the case that you are going to inherit a bunch of money. I can guarantee you that if you don't learn to live within your means now you will blow right through that and end up working until you die the way you are going. You'll just ratchet up the spending. If you are serious about getting on track and getting your finances under control - part of what you need to do is to come to grips with this attitude.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Having just chewed through all 300+ posts I would like to express how incredibly impressed I am with the forum for all of the advice, suggestions and patience displayed.
Thread should be stickied for all the goodness. It basically covers absolutely everything one needs to know to get their shit together.
Beatles man - which one do you resemble? John, Ringo, George or Paul? I feel like it would be easier to interact with you if you had a name that we can identify you as :)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Once you're debt free? A good deal, when you need it, is a great idea.
But right now? People have been chipping cars out of snow for a long time. Until your hair is no longer on fire (aka, debt emergency), then you only get your NEEDS, not your WANTS, if you are going to get out of this giant hole.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
Looks like you found a weekend project! Move all that stuff to the basement and reward yourself with a nice and cozy spot to park your car throughout the winter. It's free!
Your two and four year olds have motorized jeeps? Oh my.I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
Looks like you found a weekend project! Move all that stuff to the basement and reward yourself with a nice and cozy spot to park your car throughout the winter. It's free!
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
You are still confused about needs versus wants. This is a great way to test your judgment and apply the analysis I set forth above.
Do you NEED a remote car starter? No.
Do you WANT a remote car starter? Yes.
How IMPORTANT is that want? Answer is probably moderately, considering you brush snow off your car for what, three months of the year.
Would it be EFFICIENT to buy that now given your current situation? Absolutely not.
I too live in the snowbelt (NE Ohio). I've wanted a remote starter since I've had my car (2008) and still don't have one. Usually because I say "meh I'll wait one more year." Usually the winter passes and then I don't care too much anymore--this is a classic example of letting time help you realize that something is a want, not a need. Understanding that difference is the key to saving $200 on a purchase you don't need.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
A 2 yr old and a 4 yr old don't need motorized jeep(S!!). Sell that stuff pronto, get your car spot back, and you can pat yourself on the back on doing something proactive!
In that case maybe I take back what I said about selling them early. Maybe you should try and sell them for 2k and pay them off right away. Think about it.
By the way: sofas? as in plural? If so why would you need more than one? How many sofas can you sit on at the same time? Or has your ass become so big from all the pop and snacks that you need more than one sofa to fit on comfortably? (just kidding)
Lmao!
I laughed at that ass comment.
But seriously, you only have one sofa in your house? There's one for the living room, one for the sitting room, one for the basement, and we were thinking about one for the bedroom.
Maybe it's a local thing?
Yes - I have two in my vacation home and two in my regular home. But my NW is over $4M, and our annual income is over 5 times yours. I paid cash for all four of them. And NONE OF THEM COST $1000 EACH. I'm wondering what is wrong with you when you are still laughing about this? You are freely admitting that paying for these will cost you more than 10% of what you earn in a year. Do you see how absolutely ridiculous that is?
I think until you are able to come to terms with what you can really afford - you are doomed to fail. We lived in a brand new house for 4 years before furnishing the living room - waiting until we could pay cash for that furniture. I think in the back of your mind - you believe you are as well off as your parents are - and that drives your spending - and so does the fact that you know that they will bail you out and pat you on the head and tell you what a good boy you are.
It might well be the case that you are going to inherit a bunch of money. I can guarantee you that if you don't learn to live within your means now you will blow right through that and end up working until you die the way you are going. You'll just ratchet up the spending. If you are serious about getting on track and getting your finances under control - part of what you need to do is to come to grips with this attitude.
I know this is going to make me sound bad, but my biggest question from this post is "What the heck do you do that makes you over $300k and how do I get into that business?"
Haha :)
Do you understand how it sounds when you say you want to spend $200 on a remote car starter because you have a kid-size motorized jeep taking up the space in your garage where you should park your car?
This might be controversial with other Mustachians, but could you have a big garage sale this spring? Get together things you don't need, put good prices on all of it and start selling. Any proceeds you get go to paying debt.
Best items to sell: Dvds, tools, sporting equipment, extra toys, jewelry, unused kitchen stuff, furniture. Clothes probably won't sell well but you can put them out too. Of course, anything really highend should be sold on Craigslist, for example, high quality chainsaws or generators.
Oh come on, you can't sell a kids prized possesion!
Break their little heart.
Do you understand how it sounds when you say you want to spend $200 on a remote car starter because you have a kid-size motorized jeep taking up the space in your garage where you should park your car?
Back to your question on how someone earns so much money, I can't answer for that particular poster, but we earn more than that by being two engineers in a HCOL area. There is a separate thread around here for "what do you do and how much do you earn?" that you might find interesting when you need a little down time.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
A 2 yr old and a 4 yr old don't need motorized jeep(S!!). Sell that stuff pronto, get your car spot back, and you can pat yourself on the back on doing something proactive!
Oh come on, you can't sell a kids prized possesion!
Break their little heart.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I'veneededWANTED a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
Fixed that for you, beatles. That's a want, not a need. You don't have a garage?
We do, but it's full of stuff.
Kids motorized jeeps, and sports equipment, and tools and so forth. Thats in 1 spot.
And then my wifes vehicle is in the other spot.
A 2 yr old and a 4 yr old don't need motorized jeep(S!!). Sell that stuff pronto, get your car spot back, and you can pat yourself on the back on doing something proactive!
Oh come on, you can't sell a kids prized possesion!
Break their little heart.
Not to make excuses (dont facepunch me!)Some do, some don't. One of the mods round here, Arebelspy, retired in his 30s on public school teacher income. I was a civil servant earning not much more than you do now at top whack. Generally the ones who earned less started working, saving and investing earlier on in life, and rode the life-changing magic of compound interest working for them rather than against them (as it is currently working against you), or retired a little later (I retired at 50 with multiple millions).
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
I haven't read through all the comments on this thread (I can't keep up as new ones are posted) but I wanted to say you don't have to be as extreme as some people here to still live frugally, it's all relative.
For example, we own two TVs, a couch, and TWO love seats and two chairs! But all were paid for with cash, one of the love seats is from Craigslist and the other set we bought last year when we got our house and suddenly had a living room and a family room (and no, it's not a McMansion, it's 1200 square feet, just well laid out). Perhaps it's excessive, and generally we only use one room at a time (my husband and I generally like spending time together), but sometimes he wants to play video games in one room while I watch a show in the other room. We already had both TVs from when we lived in two homes, and we were easily able to afford the new couch set while still paying aggressively on our student loans.
I derive happiness from a nice house. So we spend some of our money on things like throw pillows and new paint. But I shop around, and put up with the fact that some of our rooms will stay outdated for a few years. I buy what I can used (like our dresser and night stands) and shop sales for other things (like a new duvet cover when our old one had holes all over it). I don't think it's bad to like having nice things, I love watching HGTV and admiring houses...just do it within your budget. And if you have to put it on a credit card it's likely not in your budget (we use credit cards for purchases for the points and protection it offers, but pay in full each month).
Congrats on the progress you have made, and good luck in the future.
Not to make excuses (dont facepunch me!)Some do, some don't. One of the mods round here, Arebelspy, retired in his 30s on public school teacher income. I was a civil servant earning not much more than you do now at top whack. Generally the ones who earned less started working, saving and investing earlier on in life, and rode the life-changing magic of compound interest working for them rather than against them (as it is currently working against you), or retired a little later (I retired at 50 with multiple millions).
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Not to make excuses (dont facepunch me!)No facepunch, just something to think about.
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Not to make excuses (dont facepunch me!)Some do, some don't. One of the mods round here, Arebelspy, retired in his 30s on public school teacher income. I was a civil servant earning not much more than you do now at top whack. Generally the ones who earned less started working, saving and investing earlier on in life, and rode the life-changing magic of compound interest working for them rather than against them (as it is currently working against you), or retired a little later (I retired at 50 with multiple millions).
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
One last idea. Write a list of all the things you want. Hawaii vacation, car start, new car, new fishing pole, whatever. Then look through the list and show yourself that you don't need a single one of them.
I haven't read through all the comments on this thread (I can't keep up as new ones are posted) but I wanted to say you don't have to be as extreme as some people here to still live frugally, it's all relative.
For example, we own two TVs, a couch, and TWO love seats and two chairs! But all were paid for with cash, one of the love seats is from Craigslist and the other set we bought last year when we got our house and suddenly had a living room and a family room (and no, it's not a McMansion, it's 1200 square feet, just well laid out). Perhaps it's excessive, and generally we only use one room at a time (my husband and I generally like spending time together), but sometimes he wants to play video games in one room while I watch a show in the other room. We already had both TVs from when we lived in two homes, and we were easily able to afford the new couch set while still paying aggressively on our student loans.
I derive happiness from a nice house. So we spend some of our money on things like throw pillows and new paint. But I shop around, and put up with the fact that some of our rooms will stay outdated for a few years. I buy what I can used (like our dresser and night stands) and shop sales for other things (like a new duvet cover when our old one had holes all over it). I don't think it's bad to like having nice things, I love watching HGTV and admiring houses...just do it within your budget. And if you have to put it on a credit card it's likely not in your budget (we use credit cards for purchases for the points and protection it offers, but pay in full each month).
Congrats on the progress you have made, and good luck in the future.
I just can't get over the thought of buying used furniture on Craigslist.
Every time I sat on the couch I would think of the fact that someone else probably had sex on this thing, or sat in their boxers on it sometime, or was scratching who knows what on it, or had their dog on it ... Etc.
That doesn't gross anyone out?
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
One last idea. Write a list of all the things you want. Hawaii vacation, car start, new car, new fishing pole, whatever. Then look through the list and show yourself that you don't need a single one of them.
LMAO!
I'm just imagining how that is going to go.
"Ok honey, think about the palm trees ... The warm breezy air ... The clear blue ocean ... The pina colada's. Thinking about all that now? OK... *slap* You dont need that! Now get back to chopping carrots"
I'm not sure i'd wake up the next day...
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
There are only two possible explanations for this thread...
Either "The Beatles" is a troll with lots of time on his hands OR he is the most ignorant, self-absorbed, immature, spoiled dumb*ass on this forum.
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
I just can't get over the thought of buying used furniture on Craigslist.
Every time I sat on the couch I would think of the fact that someone else probably had sex on this thing, or sat in their boxers on it sometime, or was scratching who knows what on it, or had their dog on it ... Etc.
That doesn't gross anyone out?
What type of engineer?
I have two friends. One is an electrical engineer and the other is a software engineer.
Both make under 100k.
It may be our area though
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
I don't have to apologize for working my arse off from undergrad to job(+ kids) to job+grad school(+ kids) to owning a business(+ kids) to owning a business + grad school again(+ kids) to just a job - and that is just me. We did not start out at that income - that income represents a progression based on increasing education and experience in the very difficult fields we both chose to pursue.
But despite our income increasing over the years - we still live in the same house we built 25 years ago. My car is a 2006. My husband just sold his 2001. Our "vacation home" is the small home I bought at the very bottom of the market when I was working remotely from home for six years, to save on rent. In my "spare time" I gutted and remodeled it and it will become our main home when we sell the family home soon. But I bought the smallest home in the neighborhood when we could have bought the best and biggest in the neighborhood. And the gutting and remodel was all done in cash pay as you go. So are the furnishings and everything inside.
And I'm a little over 20 years older than you - I assume that you expect people that have been working longer with more education and experience to make more than you? I do have to say that we could have spent every penny - most of our friends have - but we've given generously to charity each year and saved for our future without work - supposing we can actually get health insurance now. We've never spent more than we've earned - ever - even in the beginning when we weren't making much. And, BTW, somehow we discovered that both of us working did net out to a positive even with child care.
And no - most people don't. We are in the top 1 % of earners. As a matter of fact - you are in the top 18% of earners according to (http://blogs.wsj.com/economics/2016/03/02/what-percent-are-you-2/).
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
There are only two possible explanations for this thread...
Either "The Beatles" is a troll with lots of time on his hands OR he is the most ignorant, self-absorbed, immature, spoiled dumb*ass on this forum.
Wow.
Thanks.
I've gone back and forth on whether beatles is a troll, I've gotta say. Currently thinking he's not an intentional troll but his posts might as well be calculated to troll as they hit all the MMM spendypants, complainypants hot buttons.
There have been a lot of great, realistic suggestions for beatles on this thread, as well as some that are more out there but still fun, but he continues to post questions that read as if he hasn't taken anything in. I don't get this.
Either you want to live within your means or you don't. If you do, there are a lot of good suggestions here and also on the MMM blog. Start reading at the first article. If you don't, well, OK. No amount of querying specific bread, sofa, car starter purchases is going to change that.
I hope that you choose financial freedom for your family - but you are free not to.
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
I just can't get over the thought of buying used furniture on Craigslist.Earlier you mentioned you wanted a vacation in hawaii. Were you planning to stay in a hotel in hawaii? Were you planning to buy a brand new bed and furniture for your hotel room for the week you stay there, and pay for storage for the ones the hotel owns while you're there?
Every time I sat on the couch I would think of the fact that someone else probably had sex on this thing, or sat in their boxers on it sometime, or was scratching who knows what on it, or had their dog on it ... Etc.
That doesn't gross anyone out?
I just can't get over the thought of buying used furniture on Craigslist.
Every time I sat on the couch I would think of the fact that someone else probably had sex on this thing, or sat in their boxers on it sometime, or was scratching who knows what on it, or had their dog on it ... Etc.
That doesn't gross anyone out?
Earlier you mentioned you wanted a vacation in hawaii. Were you planning to stay in a hotel in hawaii? Were you planning to buy a brand new bed and furniture for your hotel room for the week you stay there, and pay for storage for the ones the hotel owns while you're there?
Do you ever stay in hotels? If you do, do you sleep in the bed?
If you don't have a problem with that, then you don't have a problem with used furniture.
If it's cloth, have it steam cleaned. If it's not, clean it by whatever method is appropriate.
Cost of furniture on Craigslist + cleaning cost is still WAY less--heck, an order or two of magnitude less--than new furniture.
I've gone back and forth on whether beatles is a troll, I've gotta say. Currently thinking he's not an intentional troll but his posts might as well be calculated to troll as they hit all the MMM spendypants, complainypants hot buttons.
There have been a lot of great, realistic suggestions for beatles on this thread, as well as some that are more out there but still fun, but he continues to post questions that read as if he hasn't taken anything in. I don't get this.
Either you want to live within your means or you don't. If you do, there are a lot of good suggestions here and also on the MMM blog. Start reading at the first article. If you don't, well, OK. No amount of querying specific bread, sofa, car starter purchases is going to change that.
I hope that you choose financial freedom for your family - but you are free not to.
There's over 8 pages and 300+ posts in this thread.
If you look back, I've already taken several steps.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
There are only two possible explanations for this thread...
Either "The Beatles" is a troll with lots of time on his hands OR he is the most ignorant, self-absorbed, immature, spoiled dumb*ass on this forum.
Wow.
Thanks.
Although kind of roughly worded, this is similar to what I have been thinking as I was reading through the past few posts about toy cars, car starters, couches and such.
By now you should be developing a pretty clear picture of the folks you are interacting with on this site. As a marketer, part of your skill set should be "reading your audience". These folks will not respond favorably to comments suggesting your garage is too full of stuff to use as a garage, purchasing other items to compensate for lack of garage space or any other consumerism.
You painted a pretty dire situation at the outset of this posting. You have been told many times "stop buying" and "sell shit". How do you think folks will respond to comments that reflect "buy more shit"?
As for income, as others have said it's irrelevant. Your family only needs (needs) x amount of money to subsist per month. It of no consequence if you make 2x or 6x in income - x never changes. If it does this is called lifestyle creep and you need to shut it down and return to x. Anything above x is used for savings (debt repayment) until you are financially independent - I.e. 4% of your investments = x. Then you can consider early retirement.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
There are only two possible explanations for this thread...
Either "The Beatles" is a troll with lots of time on his hands OR he is the most ignorant, self-absorbed, immature, spoiled dumb*ass on this forum.
Wow.
Thanks.
Although kind of roughly worded, this is similar to what I have been thinking as I was reading through the past few posts about toy cars, car starters, couches and such.
By now you should be developing a pretty clear picture of the folks you are interacting with on this site. As a marketer, part of your skill set should be "reading your audience". These folks will not respond favorably to comments suggesting your garage is too full of stuff to use as a garage, purchasing other items to compensate for lack of garage space or any other consumerism.
You painted a pretty dire situation at the outset of this posting. You have been told many times "stop buying" and "sell shit". How do you think folks will respond to comments that reflect "buy more shit"?
As for income, as others have said it's irrelevant. Your family only needs (needs) x amount of money to subsist per month. It of no consequence if you make 2x or 6x in income - x never changes. If it does this is called lifestyle creep and you need to shut it down and return to x. Anything above x is used for savings (debt repayment) until you are financially independent - I.e. 4% of your investments = x. Then you can consider early retirement.
Ya wanna know what?
I've had enough.
You win.
Bye.
I have to admit--OP is getting ripped for "instant gratification," yet many people on here seem to want him to change his entire lifestyle overnight.
He's made a reasonable amount of changes from what I've seen--signing up for Mint, realizing how much money is going to groceries, organizing his credit card debts, etc. That's a lot for someone in his situation.
Most of the responses are asking him to change his entire worldview towards finances, and that's going to take time. It's why I've recommended "Your Money or Your Life" in multiple posts to OP--he needs a worldview change, and that takes a lot of time and effort.
I think month-by-month goals would be awesome, and I would recommend a journal. This thread seems to have caught a lot of steam so I think you'd have a lot of interest/support.
I feel like I know the answer but i'll ask anyway.
What about expensive items that happen to be GREAT DEALS?
For example. I've needed a remote car starter for a while. We live in NY and get dumped on with snow.
A local place is offering a remote car starter for only $199. (usually $500)
There are only two possible explanations for this thread...
Either "The Beatles" is a troll with lots of time on his hands OR he is the most ignorant, self-absorbed, immature, spoiled dumb*ass on this forum.
Wow.
Thanks.
Although kind of roughly worded, this is similar to what I have been thinking as I was reading through the past few posts about toy cars, car starters, couches and such.
By now you should be developing a pretty clear picture of the folks you are interacting with on this site. As a marketer, part of your skill set should be "reading your audience". These folks will not respond favorably to comments suggesting your garage is too full of stuff to use as a garage, purchasing other items to compensate for lack of garage space or any other consumerism.
You painted a pretty dire situation at the outset of this posting. You have been told many times "stop buying" and "sell shit". How do you think folks will respond to comments that reflect "buy more shit"?
As for income, as others have said it's irrelevant. Your family only needs (needs) x amount of money to subsist per month. It of no consequence if you make 2x or 6x in income - x never changes. If it does this is called lifestyle creep and you need to shut it down and return to x. Anything above x is used for savings (debt repayment) until you are financially independent - I.e. 4% of your investments = x. Then you can consider early retirement.
Ya wanna know what?
I've had enough.
You win.
Bye.
One last idea. Write a list of all the things you want. Hawaii vacation, car start, new car, new fishing pole, whatever. Then look through the list and show yourself that you don't need a single one of them.
LMAO!
I'm just imagining how that is going to go.
"Ok honey, think about the palm trees ... The warm breezy air ... The clear blue ocean ... The pina colada's. Thinking about all that now? OK... *slap* You dont need that! Now get back to chopping carrots"
I'm not sure i'd wake up the next day...
And then my wifes vehicle is in the other spot.
And then my wifes vehicle is in the other spot.
Wait, now you have two cars? Is this one paid for? Can you sell your's outright and make it on one vehicle for 6 months? On days your wife can stay home, you could just take the car, on days that she needs to drive somewhere, she can drop you off at work and let you take Uber/Lyft home, or vis versa. Even 4 trips per month by a ride service would save you money, car payment and insurance payments considered.
You don't need to buy on craigslist if it weirds you out. There's a lot of in between ground from "buy nothing" to "craigslist" to "carefully researched sale price of reasonably priced furniture bought with cash". This is akin to letting the mirror shard story scare you away from making any changes at all.That's a valid point.
And then my wifes vehicle is in the other spot.
Wait, now you have two cars? Is this one paid for? Can you sell your's outright and make it on one vehicle for 6 months? On days your wife can stay home, you could just take the car, on days that she needs to drive somewhere, she can drop you off at work and let you take Uber/Lyft home, or vis versa. Even 4 trips per month by a ride service would save you money, car payment and insurance payments considered.
I sent you, and others, a private message. We can continue talking on there if you'd like. I'm tired of being called a troll.
And yes, we have 2 cars. 1 is paid off a long time and 1 has 8-9 payments left.
... Are you going to forever buy new cars because someone could have done something gross in it?
Sorry Beatles. I feel bad now, especially since apparently me and my mirror shard are pretty crazy.I liked the story, FWIW. It's not something everyone's going to aspire to, but the extreme frugal stuff can help balance out the moderately frugal choices. If you feel like you're only getting a choice between fancy rosemary bread at $5/loaf, or cheap store bread at $1/loaf, the dollar bread can feel sad. If it's a choice though between those two options or growing your own wheat and handgrinding it to bake your own bread for free, that puts the middle choice of buying a normal loaf of bread into perspective. The normal loaf isn't an extreme sacrifice, it's just a routine purchase instead of a luxury one.
^^ Thanks for the offer you two.
I'm hopping off for a bit, but I'll message you later.
For the rest of you, I want you to imagine something.
I want you to imagine that you wake up one day and you're tired of the way you're living.
You're tired of whatever it is that's causing you to live that way so you set out to change.
You Google a few things and it leads you to a website that shows you how to fix the problem in your life.
You find that this website has a message board where other people who had fixed the same problem you have, are discussing how great life is now without that problem.
So you join.
You spill your entire life to them. Your family, your finances, where you live, etc.
You're brand new to this and you dont understand a lot of the things they're telling you.
You try to grasp the concept but these are people who fixed the problem you are having years and years and years ago.
It's second hand nature to them.
To you, it's brand new.
You're a child, walking for the first time.
They are adults, running, doing marathons.
When you ask questions, you get sniped at for not knowing the answer.
For being so stupid to not understand.
For not realizing the intricacies of what you just learned 3 days prior.
You're called a troll. A dumbass.
How would you feel?
How long would you stick around?
Some of you are great people. But many of you, you're so used to this life that you dont realize that there are people who don't know the first thing about it.
Sorry Beatles. I feel bad now, especially since apparently me and my mirror shard are pretty crazy.I liked the story, FWIW. It's not something everyone's going to aspire to, but the extreme frugal stuff can help balance out the moderately frugal choices. If you feel like you're only getting a choice between fancy rosemary bread at $5/loaf, or cheap store bread at $1/loaf, the dollar bread can feel sad. If it's a choice though between those two options or growing your own wheat and handgrinding it to bake your own bread for free, that puts the middle choice of buying a normal loaf of bread into perspective. The normal loaf isn't an extreme sacrifice, it's just a routine purchase instead of a luxury one.
Same with your mirror - it makes it obvious that buying a cheapo mirror from target will get the job done without sacrificing any quality of life.
Plus, I can't be the only one enjoying the image of you wandering around baja accosting people who are living beyond their means, and shanking them with your mirror shard.
Thanks jakejake. Not to derail the thread too much, but I couldn't resist posting the picture of the offending mirror shard. Cmon, It's a pretty decent shard!Ah, look at you, Ms. Fancypants, with your real glass for windows instead of saran wrap! ;)
By now you should be developing a pretty clear picture of the folks you are interacting with on this site. As a marketer, part of your skill set should be "reading your audience". These folks will not respond favorably to comments suggesting your garage is too full of stuff to use as a garage, purchasing other items to compensate for lack of garage space or any other consumerism.
You painted a pretty dire situation at the outset of this posting. You have been told many times "stop buying" and "sell shit". How do you think folks will respond to comments that reflect "buy more shit"?
As for income, as others have said it's irrelevant. Your family only needs (needs) x amount of money to subsist per month. It of no consequence if you make 2x or 6x in income - x never changes. If it does this is called lifestyle creep and you need to shut it down and return to x. Anything above x is used for savings (debt repayment) until you are financially independent - I.e. 4% of your investments = x. Then you can consider early retirement.
Ya wanna know what?
I've had enough.
You win.
Bye.
MOD NOTE: OP has some good points, we can learn as a community from him, while he hopefully sticks around to learn from us.
When you are responding, keep in mind the forum rules. Repeatedly calling someone a troll falls under the forum rule don't be a jerk. If you don't think it is worth it, or OP is not sincere, don't engage in the thread.
Sorry Beatles. I feel bad now, especially since apparently me and my mirror shard are pretty crazy.I liked the story, FWIW. It's not something everyone's going to aspire to, but the extreme frugal stuff can help balance out the moderately frugal choices. If you feel like you're only getting a choice between fancy rosemary bread at $5/loaf, or cheap store bread at $1/loaf, the dollar bread can feel sad. If it's a choice though between those two options or growing your own wheat and handgrinding it to bake your own bread for free, that puts the middle choice of buying a normal loaf of bread into perspective. The normal loaf isn't an extreme sacrifice, it's just a routine purchase instead of a luxury one.
Same with your mirror - it makes it obvious that buying a cheapo mirror from target will get the job done without sacrificing any quality of life.
Plus, I can't be the only one enjoying the image of you wandering around baja accosting people who are living beyond their means, and shanking them with your mirror shard.
Thanks jakejake. Not to derail the thread too much, but I couldn't resist posting the picture of the offending mirror shard. Cmon, It's a pretty decent shard!
^^ Thanks for the offer you two.
I'm hopping off for a bit, but I'll message you later.
For the rest of you, I want you to imagine something.
I want you to imagine that you wake up one day and you're tired of the way you're living.
You're tired of whatever it is that's causing you to live that way so you set out to change.
You Google a few things and it leads you to a website that shows you how to fix the problem in your life.
You find that this website has a message board where other people who had fixed the same problem you have, are discussing how great life is now without that problem.
So you join.
You spill your entire life to them. Your family, your finances, where you live, etc.
You're brand new to this and you dont understand a lot of the things they're telling you.
You try to grasp the concept but these are people who fixed the problem you are having years and years and years ago.
It's second hand nature to them.
To you, it's brand new.
You're a child, walking for the first time.
They are adults, running, doing marathons.
When you ask questions, you get sniped at for not knowing the answer.
For being so stupid to not understand.
For not realizing the intricacies of what you just learned 3 days prior.
You're called a troll. A dumbass.
How would you feel?
How long would you stick around?
Some of you are great people. But many of you, you're so used to this life that you dont realize that there are people who don't know the first thing about it.
I think the disconnect is in part because he's accustomed to getting into debt and being bailed out, whereas we've been internalizing the "hair-on-fire debt emergency" language.
Beatle: I like to set all the rooms on fire at once every day! And the driveway too! I see big flames, they're exciting, I enjoy them! Sometimes the fire department comes and saves us, but then I can start new fires!
MMMs: NO! Put the matches down now! Connect the hose to the hydrant and start spraying everything down!
The voice of moderation, as perceived by forum members: He can't change all at once! For now, just pick one room in your house that you don't set on fire - you can stop setting fire to the other rooms in a couple months!
For people here to expect everything to change overnight immediately with updates every hour I think is a bridge too far to ask.
Ya wanna know what?
I've had enough.
You win.
Bye.
For people here to expect everything to change overnight immediately with updates every hour I think is a bridge too far to ask.
I don't think anyone expects him to change immediately overnight.
However, just TODAY he asked about spending $200 on a "great deal" remote car starter, since there is too much junk littering the garage to park his vehicle inside!!!
I understand this is all completely new to him. But a grown adult in his financial position, after receiving all of the advice he's been given, still wonders if it is OK to spend $200 on more consumer crap???
Back to your question on how someone earns so much money, I can't answer for that particular poster, but we earn more than that by being two engineers in a HCOL area. There is a separate thread around here for "what do you do and how much do you earn?" that you might find interesting when you need a little down time.
What type of engineer?
I have two friends. One is an electrical engineer and the other is a software engineer.
Both make under 100k.
It may be our area though.
Sigh.
There's no winners and no losers here. I'm pretty sure everyone wants you to straighten out your financial mess.
You have 2 ways to go. Start climbing out of your hole or keep digging it deeper. It's up to you.
If your parents can bail you out indefinitely, well I'd say good for you and your family. It's not what most here would want to do but if your folks can float your boat, who's to say no? Other than you??
Good luck. From your posts I'm pretty sure I live within 10 miles of you. I'll buy you a beer anytime you want.
Beatles, I'm really sorry it was my post that put you over the edge. After reading your follow on posts and rethinking some of what you stated in earlier posts, I can see now that you were only "window shopping" debt free frugal living. I completely understand. It's a big change. I guess in my mind I thought you were further along in the process and ready for action. And I think that was my disconnect between what was being offered and your responses. Somehow I expected you to be more acclimated to the conversation I guess. I can see how coming on here cold turkey would be off putting. On the other hand, kudos to you for not being a lurker and diving right in.
After you mull over this idea of debt free a bit, I hope you will find a fianancial mentor or coach. Not an investments advisor, but someone who can work with you daily to help you understand the impact of these thousand little paper cut decisions. I've been where you are and in retrospect, I wasn't all that willing to change initially either. it's a big adjustment.
Good luck.
Sigh.
There's no winners and no losers here. I'm pretty sure everyone wants you to straighten out your financial mess.
You have 2 ways to go. Start climbing out of your hole or keep digging it deeper. It's up to you.
If your parents can bail you out indefinitely, well I'd say good for you and your family. It's not what most here would want to do but if your folks can float your boat, who's to say no? Other than you??
Good luck. From your posts I'm pretty sure I live within 10 miles of you. I'll buy you a beer anytime you want.
Fairport?
Sigh.
There's no winners and no losers here. I'm pretty sure everyone wants you to straighten out your financial mess.
You have 2 ways to go. Start climbing out of your hole or keep digging it deeper. It's up to you.
If your parents can bail you out indefinitely, well I'd say good for you and your family. It's not what most here would want to do but if your folks can float your boat, who's to say no? Other than you??
Good luck. From your posts I'm pretty sure I live within 10 miles of you. I'll buy you a beer anytime you want.
Fairport?
Nope. I guess we're further. Liverpool.
PF Changs and Dave & Busters had me thinking you were at Destiny. Which is where I work.
Sigh.
There's no winners and no losers here. I'm pretty sure everyone wants you to straighten out your financial mess.
You have 2 ways to go. Start climbing out of your hole or keep digging it deeper. It's up to you.
If your parents can bail you out indefinitely, well I'd say good for you and your family. It's not what most here would want to do but if your folks can float your boat, who's to say no? Other than you??
Good luck. From your posts I'm pretty sure I live within 10 miles of you. I'll buy you a beer anytime you want.
Fairport?
Nope. I guess we're further. Liverpool.
PF Changs and Dave & Busters had me thinking you were at Destiny. Which is where I work.
Still, not far.
I pass you on the way to SU games.
Dear Mr. Beatles
I think you thought we all asked you to jump off the end of the dock into deep water instead of wading in the shallows. Some of us did, some of us suggested getting a toe wet, some of us suggested ankles/knees, etc. But we may have been somewhat overwhelming as a group.
You seem to think you have a bit of a cash flow problem (as far as I can tell) while we were all seeing hair on fire debt emergency. Different world views. Since I have heard that the Canada Revenue Agency is nicer to deal with than the IRS, and you have the IRS breathing down your neck, I took you seriously.
I hope you read the MMM Blogs before coming back here. Mr. MM articulates things very clearly. He is aiming at fairly high-income readers, but he would certainly put you in that group. There have been much more frugal forums online than this one. I hope you lurk and start to see where we were coming from. I'm sorry your wife never came on, because you are in this as a couple. I hope she lurks too.
For the record, the most I ever made in a year was $80,000 CAN (which is about $60,450 US at the moment), I went through a prolonged and expensive divorce, and I am financially OK and retired. So it is certainly doable on a salary well under yours.
Sigh.
There's no winners and no losers here. I'm pretty sure everyone wants you to straighten out your financial mess.
You have 2 ways to go. Start climbing out of your hole or keep digging it deeper. It's up to you.
If your parents can bail you out indefinitely, well I'd say good for you and your family. It's not what most here would want to do but if your folks can float your boat, who's to say no? Other than you??
Good luck. From your posts I'm pretty sure I live within 10 miles of you. I'll buy you a beer anytime you want.
Fairport?
Nope. I guess we're further. Liverpool.
PF Changs and Dave & Busters had me thinking you were at Destiny. Which is where I work.
Still, not far.
I pass you on the way to SU games.
Beer's on me if you want. For real.
I echo the others who say that this thread has alerted me to some slipping back into useless spendy ways. I almost felt like I needed to write a disclaimer on all my grocery posts. See back when we earned $40K per year for a family of four, I was a MUCH more effective homemaker. I made a price book. I meal planned everything. We NEVER went out to eat. We managed to be completely debt free including our house.
About 10 years later we're still debt free but certainly a bit bloated in the food budget. This sort of thing takes constant vigilance. Be gentle with your wife. She's about to have to earn a self-taught masters of home economics with two kids on her hips. It can be fun to be sure, but it's still work. I hope she joins. I'd love to help her out.
Here's the post a couple people have referred to - I'm only a few months into this, and I've read it more than once in that time.
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/ (http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/)
Here's the post a couple people have referred to - I'm only a few months into this, and I've read it more than once in that time.
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/ (http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/)
This is actually part of the reason why my wife says it's hard to keep our grocery budget down.
She doesn't let them sit in front of the TV, they're always out doing things which creates 2 problems.
1) She packs snacks, but they run out and then are hungry.
2) She's gone all day doing activities with them, which gives no time (and energy) for making food.
Not to make excuses (dont facepunch me!)
But...
I bet most people on this site have very large incomes that make this easier.
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
The latter, because there is no economic advantage to making pasta from scratch. The machines that make pasta do it too well for any homemaker to compete.
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
The latter, because there is no economic advantage to making pasta from scratch. The machines that make pasta do it too well for any homemaker to compete.
Great post. My little two year old girl just turned three. She is a cute little doll, but, being from a home of all boys, and having had all boys (three boys, and she is the only girl), I was not prepared for the emotions a little girl brings and all the whining and crying. Your example, the blue cup or the red cup, is a good one. I give her the choice you said, except I stopped ignoring her tantrums. I got tired of listening to her screaming, so I started offering her a choice there, too. She can stop it, or she can go to her room until she is done.Not really. Kids under the age of six can't really revolt. YOU are the boss of the kids, remember? At the most, they can pout for a few days, at most. And as adults, you can just wait out the pouting. Really, just don't back down.We racked it back up because we bought a new house.No, not really. You racked it up because you had to have everything in that house shiny and new and perfect, and so you bought moldings and new sofas when you could have made done with some paint and craigslist for furniture.
Beatles, here's some perspective for you. The only debt we have is a 30k mortgage (0% interest loan from grandma which we are paying back monthly). Even still, we don't own a couch because we don't have the money! Or we do have the money, but we are choosing to spend that money on our investments, not our current comfort.
I'm posting a picture of our "family room". It's in quotes, because we (a family of SIX) don't even have a living room. We have a kitchen and a bedroom. In our kitchen is a hard-bench picnic table. It serves as our table and also as our "couch" in the evenings when we watch tv.
If you look carefully up on the shelf to the left is our TV, the SMALLEST (and cheapest) one they had at the store. We use it with a chromecast ($30 bucks) to watch Netflix ($10/month). We have no other cable other than that.
We sit on our picnic table bench, lean back against the wall, and put our feet up on the bench. What luxury! But hey, learning to be a frugal god feels better than drowning in debt. Learning to MAKE DO feels good, like the way you feel after a hard workout.
And, when our butts get tired from being on the hard bench at night, then guess what, that means it's time to stop watching TV (waste of time anyway) and GO TO BED, not look into buying a couch.
Wowzer.
I think my kids would revolt!
Personally, I would just eliminate tv altogether for a couple of years, then they might truly enjoy an occasional show. I did this with my kids, and they totally aced school (and athletics. and music). I realize this might be too hardcore even for the MMM crowd, but just saying.
LadyStache rocks.
It doesn't really feel like were the boss all the time.
That sounds like how you feel about money, too. Guess what? Not only are you the boss, your family needs you (plural, including your wife) to be the boss.
OK, so now you really need to read Janet Lansbury. I'll give you a quick summary. Kids need you to be in charge and need to know that their emotions are ok. When they have a tantrum, they need to know that it doesn't phase you (even though it might be driving you nuts), because you're in charge. If you start bending over backwards for every whim ("no, I want my milk in the blue cup") then that's scary for them because it means they're in charge, and they know they don't know what they're doing. Get it?
So when they say "no i want my milk in the blue cup" you say, "you can have it in this red cup I've already poured or you can have no milk". they might scream and throw a fit. You say, "wow, you're really upset" (say this with empathy), and then take the milk away and put it in the fridge for later.
If they keep screaming, you just ignore them and go about your day. If they start hurting things you say, "you're very angry, but I won't let you hit things. I'm going to hold your arms and keep us safe until you can stop hitting". You might also add "It's ok to be angry but it's not ok to hit. You can hit this pillow if you'd like".
This is getting long, and I'm supposed to be cleaning the kitchen.
Basically, its ok for kids to be upset. Internalize that. It's ok for my kid to be upset. It's ok for her to experience anger. Frustration. Even sadness. It's ok. I'm going to let her experience this emotion while I set the limit.
Not to make excuses (dont facepunch me!)
But...
The income talk should probably be had.
Because there are at least 4 people (2 posters and their spouse) in just the last 10 posts or so, that make over $300k per year.
So they can save 80% and STILL make what I make lol.
Big difference there.
I bet most people on this site have very large incomes that make this easier.
Something I haven't seen addressed here: Somehow you found out the remote car starter was on sale. What was the source of that information? Why do you know that, if you weren't actively looking to spend money on something when you discovered the sale?
and of course the followup questions:
Can you remove that marketing stream from your life?
How many other pieces of consumer marketing can you remove from your life?
Something I haven't seen addressed here: Somehow you found out the remote car starter was on sale. What was the source of that information? Why do you know that, if you weren't actively looking to spend money on something when you discovered the sale?
and of course the followup questions:
Can you remove that marketing stream from your life?
How many other pieces of consumer marketing can you remove from your life?
There's nothing wrong with pasta with jarred sauce for an occasional quick meal, but if that's your entire repertoire you're going to get bored quickly, plus it's not that nutritionally balanced.One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
You can totally do this. You can get debt-free and you can get back in control of your life. This is the way I would tackle things with your 3, 6, 12 month goal markers.
3-Month Goals:
- Put rental house on the market. You can give a roof credit at closing instead of worrying about that now.
- Sell car and buy something for under $5000
- Sit down with your wife and make a budget. In this situation, I think you two going to Financial Peace University from Dave Ramsey would be absolutely a good idea. It will put all your cards on the table and help you two create a reasonable spending plan. This plan doesn't work without you two being a united front and deciding that you don't want to live on the edge anymore.
- Cut up all you credit cards except for maybe (MAYBE) one card. Do not put any more purchases on credit card. Pay for everything on debit or cash. I'd even consider getting your grocery money in cash and once it's gone, it's gone.
- Cut out all eating out. I left you $30/month for the very rare unplanned need to go through the drive through with the kids. But no restaurants.
- Cut the massage and the cameras. Get your Groceries below $600
- Go through your house and sell enough things to get your emergency fund of cash up to $2000
6-Month Goals:
- Sell the rental house and pay off the property taxes and the IRS
- Use your $605 cashflow to pay off the credit cards. I'd probably do a mixture of snowball/avalanche: CC1, CC3, CC6, CC5, CC4, Furniture Loan, CC7, CC2. Each time you pay off a new card, take the payment from that paid off card and roll it forward to pay off the next one more quickly. Within 6 months you should have it whittled down to just the Furniture Loan, CC7 and CC2 and you would have about $900/month at that point to keep throwing at the cards.
12-Month Goals:
- By February 1, 2018, you could be down to only the 30k debt owed to your parents and about $1500/month in cashflow.
- Talk to your parents about a payment plan for the 30k. If they really are not looking to give you interest, then I'd tell them your plan now about when you will be able to start paying them back and at what pace. If it were me, I'd see about doing $1000/month to parents and put $500/month in savings until you get a decent 3 month emergency fund, maybe $10k. Then I'd put all $1500 toward the loan with the parents until its gone.
- Start planning for how you will save after you're debt-free. Maybe allow yourself some small rewards once you pay off all except the parent's loan and then once you are totally debt free. My husband and I did a steak dinner at the fancy restaurant in town after we got debt-free and it was the best steak I've ever had.
- Don't let up! Keep optimizing your budget, looking for things to sell or extra jobs you can pick up (dog sitting or your wife watching a kid every once in awhile). Keep talking about where you want to be in 10 years and what you want retirement to look like. Don't let your spending creep up.
NEW PLAN (these numbers reflect after the rental is sold)
TAKE-HOME Income without Rental: $3875
Monthyly cashflow to put towards debt with spending below: $605
Expenses:
GARBAGE 36
CALE/INTERNET 114
WATER 50
GEICO AUTO 135
MASSAGE70If this is massage envy, you can cancel if you try hard enough. Talk to manager, explain situation.AUTO LOAN 393 3591 6.54%Sell car ASAP, paying it off in 9 months means nothing because you have no money.
MORTGAGE 1761 164,717 5.125%
FUEL 200
GAS/ELECTRIC 150
GROCERIES1100600
EATING OUT60030
CAMERAS25
PARENTS 0 30K
CC1 194 856 25.24%
CC2 134 4495 24.49
CC3 25 505 23.24%
CC4 25 452 10.23%
CC5 20 692 18.49%
CC6 75 797 24.15
CC7 100 2020 25.24
Furniture Loan 276 1950 25.00TOTAL 5472 46,405
NEW TOTAL 3270 41,767
Assets:
Primary home – Owe $164,717, worth $175kRental – Owe $25k HELOC + $9k taxes, worth $70k to $80kSell it ASAPCar – Owe $4,500, worth $15k to $17kCar - $5000, paid in Cash after selling financed car
Cash -$850$2000 funded by selling crap from around the house - you need an emergency fund
401k - $5,000
Liabilities:Income tax - $40k35k Paid off with sale of Rental, 5k paid off with sale of carProperty tax on rental - $9kPaid off with sale of rental
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
The latter, because there is no economic advantage to making pasta from scratch. The machines that make pasta do it too well for any homemaker to compete.
Yes... but I am trying to take note of all the added sugar and salt warnings that are permeating this thread. If you make it yourself you can control exactly what goes in it.
I'm surprised there was not that many responses about the grocery items at all.
As I read it, there is a giant, fire-y asteroid named EATING HABITS that is pointed right at them. Money aside, the items they buy at the grocery store will send them to the hospital with time. Obesity, diabetes, heart disease, not to mention dental work and cavities... you name it... and if the kids are eating it... ugh.
Quite frankly, it shows the lack of discipline the parents have. Eating is unhealthy, finances are unhealthy, etc. Reigning in one will help with the other.
. . . in eight of the ten occupational categories, gift receivers [those who receive economic outpatient care] have smaller levels of net worth (wealth) than those who do not receive gifts.
Malum, that was the best post in the history of the internet.Wow, thanks OurTown! :)
Malum, that was the best post in the history of the internet.Wow, thanks OurTown! :)
That is exactly what happened to me an my wife. We felt like we did not eat out very often, but the act of tracking it opened our eyes to how much money we actually were flushing away. It was a shock.Malum, that was the best post in the history of the internet.Wow, thanks OurTown! :)
I need to do some of this myself. In fact, we are re-instituting the cash allowance for meals out. You know, even the act of tracking the spend (to determine the amount of the allowance) has reduced the spend. I am literally ashamed of the amount we have been spending eating out.
In those four days, you have already cut out $600 monthly spending on lunches for other self employed people at work.
You have cut off the massages ($70 monthly?)
You are now looking into budgeting for groceries and meals out.
Even without the grocery and meals out - you have saved $670 monthly, or $8040 a year. That's more than $80,000 over a decade.
Start calculating the value of your savings over ten years, and you will see that even little expenses (on a monthly basis) add up to large amounts.
One question I have not seen asked yet--how experienced at cooking are you and especially your wife? There's no point telling you to make your own bread and yogurt from scratch right now if you're at the "boil pasta, add sauce" level. There are still ways to cook and shop more efficiently, but I would give different advice depending on the experience level.
I'm embarrassed now because I'm at that stage!
Do I have to make the pasta and sauce myself from elemental ingredients or is it acceptable to buy the pasta and sauce and just toss it in the saucepan?
Guys, Beatles owes 40k to the IRS, plus multiple other high-cost debts. While it's great that he can save 80k over the next 10 years by eating out less, do you think the IRS will stop charging interest and penalties for 10 years while he figures this out?Let me back up and say that I am not so sure I "disagree," as I wrote, as I think these steps probably need to be taken, but, again, it has been only four days. He is making improvements and I trust he will continue to make them.
Again, his next steps need to be sell the rental, as in, put it on the market TODAY, and sell the car. He has another car, selling this one will instantly free up 10k. It would take a LOT of eating out to make back that amount. Beatles is in SERIOUS shit here. IMO cutting out groceries is great but at this point, in his specific (dire!) situation, it is pissing in the wind.
Hey, the beatles!
I am completely hooked on this thread and following it intently. I just got caught up.
Let's recap.
FIRST - this is only four days since the original post. Right?
SECOND - You already have accomplishments.
........
Second, move on to groceries, comparison shop, buying whole food (not processed) and reduce or eliminate entirely eating out.
Third, calculate all of these savings on ten year terms to figure out what these things are really costing you.
Fourth, find the next issue and move on to it.
One step at a time!
Even if these expenses only add up to an additional $200 per month, you are currently accumulating debt at about $1200 per month, or $14000 per year. And that is not counting the interest accumulating on that debt, or your other major liabilities. This is probably the worst hair on fire emergency I have seen on this site.
Even if these expenses only add up to an additional $200 per month, you are currently accumulating debt at about $1200 per month, or $14000 per year. And that is not counting the interest accumulating on that debt, or your other major liabilities. This is probably the worst hair on fire emergency I have seen on this site.
You are forgetting that he has a bottomless pile of money at his disposal...from mommy and daddy.
He said earlier that mom & dad have given him in excess of $50K in just the last few years!!!
He'll just tap them for another bundle of money to wipe out the most urgent debts that have accumulated, then go back to living a lifestyle he can't afford.
Rinse and repeat.
Even if these expenses only add up to an additional $200 per month, you are currently accumulating debt at about $1200 per month, or $14000 per year. And that is not counting the interest accumulating on that debt, or your other major liabilities. This is probably the worst hair on fire emergency I have seen on this site.
You are forgetting that he has a bottomless pile of money at his disposal...from mommy and daddy.
He said earlier that mom & dad have given him in excess of $50K in just the last few years!!!
He'll just tap them for another bundle of money to wipe out the most urgent debts that have accumulated, then go back to living a lifestyle he can't afford.
Rinse and repeat.
Malum Prohibitum- do you have a link to your journal? I would love to read it since we have 4 kids too. I would love to get groceries to $600. We are at $800-$950Here you go. It needs more face punches, that's for sure! http://forum.mrmoneymustache.com/journals/i-wasted-all-my-money!/
Be gentle with op, he has been through a lot in the past few days and accomplished a lot. Facing his situation must have been hard. Making these difficult decisions is hard. Plus i imagine there is also a domestic storm going on with the wife in the background. Whatever you do, whoever racked up the debt, move on. Come up with a plan you are both comfortable with and as we told you, you can dig out of this hole by the end of the year.While I was one of the first to advise beatles on baby steps and I stand by that I have to disagree here. It's not hard. Infact it's the exact diametrical oppositve of hard. Raising one or several children as a single parent is hard. Fighting cancer is hard. Losing a limb in an accident is hard. Helplessly watching your children, parents, siblings, or other loved ones die is hard. Not spending money on useless crap, however, is not hard. Infact, it's so easy they had to skip step 2) and 3) of the three step "Not Purchasing Crap" program because they realized that after "1) Stop purchasing crap" they were done.
Getting themselves out of this hole will not actually be that hard, they have assets and good income. What is going to be hard for them is the psychological change, and acceptance that their lives have to change - forever. And actually doing it.
But they can do it - they are young, healthy and educated. No external forces pushing against them.
In response to people talking about whether the first priority is to reduce the grocery bill or sell the rental - my vote is to do both now.
There are two adults in the house. Not buying soda and junk food doesn't take effort, so neither has to put energy into that or work their way up to it. They just have to not put it in a shopping cart.
The person who isn't putting effort into listing the rental property can focus on reductions in groceries. Doesn't have to be "make your own bread" - but putting regular bread instead of the gourmet stuff in the shopping cart, or grabbing a box of pasta and jar of sauce instead of a frozen pizza is not an excessive amount of effort. Nor is sprinkling chicken legs with salt and pepper and jamming that into the oven instead of buying frozen gourmet chicken at $10/lb.
If we were talking about normal grocery habits - where a reduction would be a savings of $50-100 a month, yeah, I would prioritize that as nice to get to someday.
But that's not the case - they are hemorrhaging as much money here as he would blow buying a remote car starter not just once, but every single week. It looks like they can save maybe as much as $1000 on food - without making their own bread or having mad cooking skills. Which means if they sell the car now and don't get around to seriously reducing the groceries til June (for example), or do the reverse, the comparison of cumulative savings is something like this:
Sell 2nd car in Jan, reduce foods in June:
Jan: Up $5k
Feb: Up $5k
Mar: Up $5k
Apr: Up $5k
May: Up $5k
June: Up $6k
Jul: Up $7k
Aug: Up $8k
Sep: Up $9k
Oct: Up $10k
Nov: Up $11k
Dec: Up $12k
Reduce food in Jan, sell car in June:
Jan: Up $1k
Feb: Up $2k
Mar: Up $3k
Apr: Up $4k
May: Up $5k
June: Up $11k
Jul: Up $12k
Aug: Up $13k
Sep: Up $14k
Oct: Up $15k
Nov: Up $16k
Dec: Up $17k
There's some extra math to calculate interest on credit cards they can save assuming the extra all goes to debt, but I'm too lazy to do it. :)
Beatles - first off, you should be commended for sticking with this through all of the face punches.
Here is my contribution toward your situation. You need to set up a payment plan with the IRS. My SO used to work for the IRS, in collections, so he knows a lot about how that all works. The worst thing you can possibly do is simply ignore your IRS debt - it will just get worse and worse and they will pile on all kinds of fees and interest. If you had contacted them immediately upon realizing you owed them money, and set up a payment plan at that point in time, you would be fine. Their lowest payment option allows you to only pay $200 per month indefinitely until it is paid off. My SO is visually impaired and in 2013 he went on disability due to his blindness and as a result his outstanding student loans were forgiven, but he had to pay taxes on them as if they were income. He owed over $6,000 in taxes that year and he was only receiving $1200 per month in disability income. He called them up immediately, asked for a payment plan, and he now pays $200 per month. At this point you may need a lawyer to help you, but the IRS will work with you and help you set up payment plans. Hiding from your problems never works; it just makes them bigger.
Even if these expenses only add up to an additional $200 per month, you are currently accumulating debt at about $1200 per month, or $14000 per year. And that is not counting the interest accumulating on that debt, or your other major liabilities. This is probably the worst hair on fire emergency I have seen on this site.
You are forgetting that he has a bottomless pile of money at his disposal...from mommy and daddy.
He said earlier that mom & dad have given him in excess of $50K in just the last few years!!!
He'll just tap them for another bundle of money to wipe out the most urgent debts that have accumulated, then go back to living a lifestyle he can't afford.
Rinse and repeat.
I made a blog.
Wonderful progress, Beatles. I *might* forgive you for calling us minion money hippies. Although it is a rather catchy moniker. I do appreciate a good alliteration.
IRS STUFF: When you have processed the info, please consider sharing the solution your CPA advised. We might all learn something and there are lots of accountants on here who might be able to help you clarify the options.
Good job on sticking it out and starting to make changes. Once you get started there will be no stopping you and the Mrs. If you are in it together, you will be able to achieve amazing things really quickly!
Dude, I just read your blog, and it's AMAZING.
Keep writing, keep writing, keep writing! I can't wait to hear the stories of your journey. :)
Dude, I just read your blog, and it's AMAZING.
Keep writing, keep writing, keep writing! I can't wait to hear the stories of your journey. :)
Haha thank you.
That makes me feel good.
I don't know how we could make it work without a 2nd car.
I agree that in a perfect world getting rid of the 2nd car would be ideal.
But we don't live in a city that has dense population and businesses and bus lines.
Wife did weekly shopping today.
$13!
We only needed "essentials" as we've been eating all the stuff that has been accumulating in our pantry and freezer.
Ok, ok, ok...She can have that win :) Although, won't be able to happen too many more times, no more sugary beverages, right? :) But eating from the pantry and a
She is mad that I didn't include the fact that she returned cans for $3 so it was actually only $10.
Gotta include that, apparently lol.
Wow, i missed about 5 pages worth of drama!
I agree with Marty, this thread is an MMM forum classic, and deserve a sticky. If it doesn't, we definitely should compile the grocery advice mentioned here and post it separately (with a sticky).
Be gentle with op, he has been through a lot in the past few days and accomplished a lot. Facing his situation must have been hard. Making these difficult decisions is hard. Plus i imagine there is also a domestic storm going on with the wife in the background. Whatever you do, whoever racked up the debt, move on. Come up with a plan you are both comfortable with and as we told you, you can dig out of this hole by the end of the year.
We have been carrying on about the outrageous grocery spending, the parents and the IRS debt too long. There is enough information about them. Let them rest.
Let's move on to the other problem areas. OP, as others pointed out, there are several items missing from your budget and we suspect they go straight to your credit cards (@ 23%). Do you want to discuss these? Can we help you with these?
Missing budget items in my view. Kids toys (motorized vehicle? Wtf). Clothes. Haircuts. If you had a massage line in your budget, i suspect there are expensive haircuts, manicures and facials as well. Gym? Healthcare? Kids activities( wife is away all day doing activities. What sort ). Babysitting. Holidays. Christmas and birthdays. Gifts. These have to be planned and budgeted for or else you will find yourself in an even deeper hole. It is better to know that you can spend 100 dollars on the kids clothes than going crazy at the clearance racks. People will jump in about thrift stores, and about kids needing only empty boxes to play with, ignore them if you wish, but you need to understand how much you can realistically spend.
I know several people like Beatles.They are very real. I wish i could help them personally, but of course you don't preach to your friends about money. I almost fainted last year, when a friend told me that they finally managed to refinance their loans to save 7k a month in interest. They looked very successful, waterfront house, the investment properties, the suv, the convertible, the boat, the sahm, and it turns out they are living large on borrowed money and having health problems due to all the associated stress.she picked up a daily cleaning job to help them stay afloat, it was that bad. Imagine her rocking up in a 70k car payment to scrub someone's toilet for 5o dollars. 😢
I like the term, "Money Hippies".
What's the formula for net worth?Check http://www.thesimpledollar.com/how-to-calculate-your-net-worth/.
I'm assuming ours would be in the negatives, but what would it be?
What's the formula for net worth?
I'm assuming ours would be in the negatives, but what would it be?
Wow, i missed about 5 pages worth of drama!
I agree with Marty, this thread is an MMM forum classic, and deserve a sticky. If it doesn't, we definitely should compile the grocery advice mentioned here and post it separately (with a sticky).
Be gentle with op, he has been through a lot in the past few days and accomplished a lot. Facing his situation must have been hard. Making these difficult decisions is hard. Plus i imagine there is also a domestic storm going on with the wife in the background. Whatever you do, whoever racked up the debt, move on. Come up with a plan you are both comfortable with and as we told you, you can dig out of this hole by the end of the year.
We have been carrying on about the outrageous grocery spending, the parents and the IRS debt too long. There is enough information about them. Let them rest.
Let's move on to the other problem areas. OP, as others pointed out, there are several items missing from your budget and we suspect they go straight to your credit cards (@ 23%). Do you want to discuss these? Can we help you with these?
Missing budget items in my view. Kids toys (motorized vehicle? Wtf). Clothes. Haircuts. If you had a massage line in your budget, i suspect there are expensive haircuts, manicures and facials as well. Gym? Healthcare? Kids activities( wife is away all day doing activities. What sort ). Babysitting. Holidays. Christmas and birthdays. Gifts. These have to be planned and budgeted for or else you will find yourself in an even deeper hole. It is better to know that you can spend 100 dollars on the kids clothes than going crazy at the clearance racks. People will jump in about thrift stores, and about kids needing only empty boxes to play with, ignore them if you wish, but you need to understand how much you can realistically spend.
I know several people like Beatles.They are very real. I wish i could help them personally, but of course you don't preach to your friends about money. I almost fainted last year, when a friend told me that they finally managed to refinance their loans to save 7k a month in interest. They looked very successful, waterfront house, the investment properties, the suv, the convertible, the boat, the sahm, and it turns out they are living large on borrowed money and having health problems due to all the associated stress.she picked up a daily cleaning job to help them stay afloat, it was that bad. Imagine her rocking up in a 70k car payment to scrub someone's toilet for 5o dollars. 😢
Hmm.
I didn't really think about those small things.
Kids get a haircut once a year. Wife probbaly twice.
No facials or manicures but a pedicure probably once per year.
Honestly, most of the kids toys (including the Jeep) are gifts from the grandparents.
No babysitter.
Gotta add clothing and birthday/Christmas gifts though.
Honestly, most of the kids toys (including the Jeep) are gifts from the grandparents.
Honestly, most of the kids toys (including the Jeep) are gifts from the grandparents.
Had a thought when I read this.
Maybe have a conversation with the grandparents to say something like "we so appreciate all the gifts for the kids, but they've got more toys than they can play with; what would you think of maybe getting them one small toy and then making a contribution to their college fund for birthdays and Christmas instead?"
That's not worded very well, but I have to be at "work" (that is, commute from my home computer to my work computer, as I'm working from home today!) in 3 minutes. ;-) But you get the idea--help break the cycle of gifting of consumer "crap" that will be broken or forgotten or considered clutter in a year's time, in favor of setting the kids up for success when they launch as adults.
I haven't used Mint or Personal Capital, so I can't compare them, but I really like You Need a Budget for my budgeting. It still took me 9-12 months to really figure out how to set it up so it works best for me and how I budget now, but even just setting it up in the template made a big difference to how I look at what I'm spending each month.
www.youneedabudget.com (http://www.youneedabudget.com)
Honestly, most of the kids toys (including the Jeep) are gifts from the grandparents.
Had a thought when I read this.
Maybe have a conversation with the grandparents to say something like "we so appreciate all the gifts for the kids, but they've got more toys than they can play with; what would you think of maybe getting them one small toy and then making a contribution to their college fund for birthdays and Christmas instead?"
That's not worded very well, but I have to be at "work" (that is, commute from my home computer to my work computer, as I'm working from home today!) in 3 minutes. ;-) But you get the idea--help break the cycle of gifting of consumer "crap" that will be broken or forgotten or considered clutter in a year's time, in favor of setting the kids up for success when they launch as adults.
One more idea while my computer is booting. :)
Set up an Amazon wish list for the kids with things they need--items of clothing, stuff for activities, stuff for school. Encourage people giving gifts to your kids to check the wish list when buying.
Excellent idea! Also, if you do gift-giving for the adults now is maybe the time to step back from doing that. Take a look at how much you spent on all gifts this past Christmas season, not just for your kids, but for everyone you gave to. Adds up quick doesn't it? The time to have that conversation is now and be honest but kind when you do. Suggest that instead of giving gifts you have a huge potluck dinner and that their company is better than any material gift. My friends and I do this every year and it's always a big hit.We just started doing that two years ago. 3 years ago, we got my parents their first ever amazon prime subscription (a service, not a "thing"). They loved it and have been reporting back with shows they binge watch. So last year I was going to renew it for them - but also for myself I wanted an instant pot, which was about the same price and I could pick it up at a walmart within biking distance. I called them and said "here's what I want to get you, and here's what I want ... but wouldn't it be so much easier if instead of me figuring out now how to add a year into your account on amazon, and you having to pay to ship something that's a mile away from me, we just each got these things for ourselves and considered it a "gift"?
We have everything here - Mini Mustache area for kids (well, parents of kids), the Tax section, the investment section, the DIY section, the challenge section, the boast section (Share Your Badassity) - you can stay on here forever. ;-)And it's all here in one handy thread! We could probably do away with the rest of the forum now. :)
We have everything here - Mini Mustache area for kids (well, parents of kids), the Tax section, the investment section, the DIY section, the challenge section, the boast section (Share Your Badassity) - you can stay on here forever. ;-)And it's all here in one handy thread! We could probably do away with the rest of the forum now. :)
Wife did weekly shopping today.
$13!
We only needed "essentials" as we've been eating all the stuff that has been accumulating in our pantry and freezer.
She is mad that I didn't include the fact that she returned cans for $3 so it was actually only $10.
Gotta include that, apparently lol.
Congrats, Beatles. You say you can't live with only one car, how about selling the expensive car, buying a cheap car, and pocketing the difference, as others have suggested? This will bring in an quick ~$5000.
And are you talking to a real estate agent about putting the rental house on the market, or is that coming soon?
You've made great progress by sticking around. I just am here to push you to not forget about the big items, that could make a serious dent in your debts.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
Try another estate agent, hopefully one who deals in rentals.
We actually did talk to a real estate agent (same one who sold us our current home).
She said that we would be foolish to sell the home without doing the roof, as it will push away a lot of buyers and drive our price down.
But then other posters on here say I should sell without the roof done. I dont know.
I did something kinda stupid this morning.Remote starter?
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
What's the formula for net worth?
I'm assuming ours would be in the negatives, but what would it be?
Try another estate agent, hopefully one who deals in rentals.
We actually did talk to a real estate agent (same one who sold us our current home).
She said that we would be foolish to sell the home without doing the roof, as it will push away a lot of buyers and drive our price down.
But then other posters on here say I should sell without the roof done. I dont know.
My take is: you only need one buyer, not lots, and you are probably looking at an investment buyer who is unlikely to be put off by the need for a new roof, and may well be in a better position to get the roof done than you are (eg likely to have contacts and expertise).
The price will go down, but the question is: will it go down by more than the cost of a new roof? If not, then you are not losing anything (the estate agent is losing a bit of commission, of course and may have a slightly harder job than usual if they are not used to doing anything other than selling McMansions in the suburbs to owner occupiers). And given that you don't in any case have the money to fix the roof, what is your alternative to putting it on the market and negotiating a decent price that takes the roof into account?I did something kinda stupid this morning.Remote starter?
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
Get back on the horse, beatles! You're on a long journey; there's gonna be a few "one step forward, two steps back" moments. At least you recognize it for what it is.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
Use this as a learning experience.
First: Can you undo the damage, take it back?
Second: Identify the circumstances that caused you to slip. Was it the environment, was it something emotional, was it just being on autopilot, was it a habit?
Third: What is the "why" behind the purchase what need were you trying to meet? Copying the advice I suggested earlier
****
Blogs recommendation: Northwest Edible Life's money category:
http://www.nwedible.com/topics/productive-home/frugality-finance/
IF YOU ONLY READ ONE THING:http://www.nwedible.com/mini-money-challenge-occupy-your-brainwhat-you-want-isnt-really-what-you-want/ (http://www.nwedible.com/mini-money-challenge-occupy-your-brainwhat-you-want-isnt-really-what-you-want/)
Print out the blank worksheet: https://dl.dropboxusercontent.com/u/35224895/NWEdible_What_I_Really_Want_From_My_Purchases_Chart.pdf
DO THIS FOR EVERY SINGLE PURCHASE. HAVE YOUR WIFE DO THIS FOR EVERY PURCHASE.
Those "diet" full of sugar, fake snack foods? Why do you want them? What is the purpose those are meeting? What are the FEELINGS you think it will address...what do you REALLY want?
Same with the TV, same with the extra freezer...everything. You have to start thinking critically and thinking deeper. Print out multiple copies of this worksheet. Share your thought process if it helps. This is something you can do RIGHT NOW that will make a BIG difference.
****
Ideally, you ask these questions BEFORE you buy, but you can also ask them afterward to figure out where your head was at.
What I want?
Why I want it?
Problems I think it will solve?
Feelings I think it will address?
What I really want?
Going through this exercise would make a great blog post!
I'll just say it.
It's a TV.
I may be able to cancel the order before it even ships.
I'll just say it.
It's a TV.
I may be able to cancel the order before it even ships.
I'll just say it.
It's a TV.
I may be able to cancel the order before it even ships.
I would be really interested in the thought process behind this purchase. As in what exactly happened that led to you purchasing a TV you don't need with money you don't have? I can't imagine it being like "well, I need milk for the boys, gloves for myself since it's getting cold, and I'll also take that $3000 TV set because why the hell not". I just don't understand it since to me, a TV is nothing one buys spontaneously. It involves a lot of thinking, reading, and tons of research in regards to model, capabilities, quality, price, etc.
What's the dynamic here? What made you buy another TV? You've mentioned that you already own three TVs in your house, why did you feel the "need" to purchase a fourth one?
I'm really curious here.
I canceled it.:(:)
The prize for this week’s challenge is about Nine Thousand Dollars, plus getting the equivalent of about 36 weeks of extra vacation time each year. That would bring you up fairly close to my own level of leisure.
The challenge, of course, is to immediately and completely cancel your cable television service forever.
Now I will admit that TV programming has really advanced in modern years, with a spectacular array of new channels. At one moment, you could be watching a young Brazilian girl blow a Vuvuzela at the World Cup game, and with just the press of a thumb you could be transported into the deepest reaches of a smoke-filled senior center watching a bingo game. You can study the most incredibly well produced commercials for an average of 16.5 minutes out of every hour, which will keep you informed of the must-have products of the day, protecting you from accidentally thinking your current products were sufficient.
Contemporary television must be great, because everyone has it. If you’ve ever gone for a night time walk around your town, as I like to do often, you’ll notice that almost EVERY SINGLE HOUSE has flashing blue light streaming out through its windows. If you peek through into their living rooms, as I also like to do . . .
Don’t be a drone.
Turn off your television. Not just for a day, or a week, but for months. Don’t watch advertisements. Get yourself off all of those electronic mailing lists. All of these are turning you into a drone.
It will take a while, but as you un-program yourself, you’ll begin to see how stupidly the world is run. You’ll begin to scratch your head when you occasion to run across those ads in your everyday life. Their nectar will no long smell as sweet. Their clever patterns will no longer lure you in. You will no longer be a Bumblebee of Consumption.
I would start by swapping out TVs for a while to see if it's the signal or the actual machine.
http://www.mrmoneymustache.com/2012/04/21/guest-posting-its-all-bullshit/QuoteDon’t be a drone.
Turn off your television. Not just for a day, or a week, but for months. Don’t watch advertisements. Get yourself off all of those electronic mailing lists. All of these are turning you into a drone.
It will take a while, but as you un-program yourself, you’ll begin to see how stupidly the world is run. You’ll begin to scratch your head when you occasion to run across those ads in your everyday life. Their nectar will no long smell as sweet. Their clever patterns will no longer lure you in. You will no longer be a Bumblebee of Consumption.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
I did something kinda stupid this morning.
At risk of being called a troll, I won't say what it is.
But i'll just say that i'm still learning to control the urge to spend - apparently.
Return it. Now. So simple.
If you are interested in troubleshooting the problem with your TV, try posting in the DIY section:
http://forum.mrmoneymustache.com/do-it-yourself-forum!/
I would start by swapping out TVs for a while to see if it's the signal or the actual machine.
Stupid.this is how i got fat and you poor.
*Just a fun factoid, I really did wear a granny dress to a live performance of Hair back in the late 60's. How much hippier can I be without having ever done drugs? Yup, honest to dog money hippie here. ;-)
Well, i am usually kind and very understanding, but that replacement third tv broke the back of the camel. Toughen up buttercup.
*Just a fun factoid, I really did wear a granny dress to a live performance of Hair back in the late 60's. How much hippier can I be without having ever done drugs? Yup, honest to dog money hippie here. ;-)
You could have dressed to match the cast in a certain scene... ;)
You can have two cars, but they don't need to be expensive cars. Lots of Mustachians use $7000ish cars and they work just great.
I wonder what the average value of a mustachian car is...has a poll been done?
She said that we would be foolish to sell the home without doing the roof, as it will push away a lot of buyers and drive our price down.
But then other posters on here say I should sell without the roof done. I dont know.
I don't know how we could make it work without a 2nd car.
.*Just a fun factoid, I really did wear a granny dress to a live performance of Hair back in the late 60's. How much hippier can I be without having ever done drugs? Yup, honest to dog money hippie here. ;-)
You could have dressed to match the cast in a certain scene... ;)
Yup, I could have tied my hair back to make it look like it had been cut short and I was in the military. ;-) I do remember the plot, a bit. My hair was nearly to my waist then
Svenster, I try not to be defensive when another poster disagrees with something I've written, but in this case, you aren't disagreeing with me, you are attempting to redefine the category of my comment and that is not okay, particularly within the current political climate.I mean, do you feel bad that Donald Trump's kids get money from their dad? Or just non-billionaire parents?
Yes, I do feel badly that they get such a huge head start in life and in business because of their parentage. I believe in meritocracy (although, not total). It sickens me that Donald Trump thinks he is more successful than I am or that he believes he is smarter than I am. He started out with vastly more than I did and was able to keep it without losing too much to inflation. Pretty sure anyone on this forum could have done better. His children clearly believe that he (and they) deserve the wealth they have. And that attitude really really bothers me.
Let's not derail an excellent thread by talking about the political situation. There are threads elsewhere for that.
.*Just a fun factoid, I really did wear a granny dress to a live performance of Hair back in the late 60's. How much hippier can I be without having ever done drugs? Yup, honest to dog money hippie here. ;-)
You could have dressed to match the cast in a certain scene... ;)
Yup, I could have tied my hair back to make it look like it had been cut short and I was in the military. ;-) I do remember the plot, a bit. My hair was nearly to my waist then
Preeeetttty sure that's not the scene mustachepungoeshere is thinking of ;)
Toronto was still pretty strict back then ;-)
beatles, dang man, way to go on that cancellation!! Even better, you identified your impulse AND made a correction, in one day!
....I will admit I have considered replacing the TV that is now at college with my son. Bottom line is that it's not necessary to my day to day life. He bought it just two years ago, and I've only had cable one year in my adult life, so it's not like I was even used to watching TV. So I won't buy one. And definitely won't after your good example :)
I canceled it.
:(
It was actually a replacement of the third.
The bedroom TV had started to act a little strange.
In the middle of a show it'll fuzz out for a moment, and then come back.
I think it's only a matter of time until its done for good.
I also don’t get this whole ‘renter’ house and find a realtor who knows investors / rental market? What is that all about? It’s a house. People live in it. Why label it as something that seems to have negative connotations - as if it has less value. You could ask the tenants if they are interested in buying it and not go through a realtor at all and save the fees.
So, tell us what your accountant is suggesting and when you are implementing it.
So, tell us what the real estate agent thinks you can get for the second house.
So, tell us the $ amount of the roofer bids.
It's Friday. How was lunch at work today? This would have been "buy the office lunch" day - how is that going? I ask because sometimes the hardest steps are not the big huge scary ones, they are the ones that impact other people outside the family. We are a social animal and we are built to care what others think of us. That is why this is such a good place for you to be, we will be your responsible spending social group.
Plus of course I am wondering if anyone else has started buying lunch for the group. I bet no-one has.
I also don’t get this whole ‘renter’ house and find a realtor who knows investors / rental market? What is that all about? It’s a house. People live in it. Why label it as something that seems to have negative connotations - as if it has less value. You could ask the tenants if they are interested in buying it and not go through a realtor at all and save the fees.
I think that you might be talking about me here. I said that, originally, because I wasn't imagining a single family, detached home as the rental. I was imagining a small building deliberately built as an investment property, such as a duplex or quad.
It's Friday. How was lunch at work today? This would have been "buy the office lunch" day - how is that going? I ask because sometimes the hardest steps are not the big huge scary ones, they are the ones that impact other people outside the family. We are a social animal and we are built to care what others think of us. That is why this is such a good place for you to be, we will be your responsible spending social group.
Plus of course I am wondering if anyone else has started buying lunch for the group. I bet no-one has.
This marks the first week in, I'm not sure how long, that I only purchased 1 day of lunch.
I'm guesstimating that I saved around $145.
This marks the first week in, I'm not sure how long, that I only purchased 1 day of lunch.
I'm guesstimating that I saved around $145.
This marks the first week in, I'm not sure how long, that I only purchased 1 day of lunch.
I'm guesstimating that I saved around $145.
Great job!! Do you have enough money in the bank to send that amount to your CC card with the highest rate, right away? When is payday?
We actually moved out of the rental home into a $300k beautiful home. I'd describe how awesome it was but it'll just piss you all off, so I won't go there.
After a few years we couldn't afford the mortgage anymore and moved to our current house.
Thank you.I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
Some points:
- You should be taking depreciation on the rental. If you sell it, you'll have to do Depreciation recapture (https://en.wikipedia.org/wiki/Depreciation_recapture_(United_States)) whether you take it now or not.
- Consider using the Free Debt Reduction Calculator for Excel (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) (scroll down past the annoying DOCtoPDF download button and use the download "for Excel, OpenOffice, and Google Sheets". Pick a payoff order that makes sense to you and do it.
- See Investment Order (http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153). At this point you probably shouldn't go past step #2:
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
Even the HSA might save you "only" 15% while getting the high interest CCs paid off will save 25%.
I just downloaded the calculator.
Thank you.I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
Some points:
- You should be taking depreciation on the rental. If you sell it, you'll have to do Depreciation recapture (https://en.wikipedia.org/wiki/Depreciation_recapture_(United_States)) whether you take it now or not.
- Consider using the Free Debt Reduction Calculator for Excel (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) (scroll down past the annoying DOCtoPDF download button and use the download "for Excel, OpenOffice, and Google Sheets". Pick a payoff order that makes sense to you and do it.
- See Investment Order (http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153). At this point you probably shouldn't go past step #2:
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
Even the HSA might save you "only" 15% while getting the high interest CCs paid off will save 25%.
I just downloaded the calculator.
Just curious - what payoff order have you picked?
We actually moved out of the rental home into a $300k beautiful home. I'd describe how awesome it was but it'll just piss you all off, so I won't go there.
After a few years we couldn't afford the mortgage anymore and moved to our current house.
You're house poor.
We actually moved out of the rental home into a $300k beautiful home. I'd describe how awesome it was but it'll just piss you all off, so I won't go there.
After a few years we couldn't afford the mortgage anymore and moved to our current house.
You're house poor.
Sorry, I may have not been clear.
We no longer live in the 300k house.
That's fine. You should do whatever works best for you.Thank you.I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
Some points:
- You should be taking depreciation on the rental. If you sell it, you'll have to do Depreciation recapture (https://en.wikipedia.org/wiki/Depreciation_recapture_(United_States)) whether you take it now or not.
- Consider using the Free Debt Reduction Calculator for Excel (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) (scroll down past the annoying DOCtoPDF download button and use the download "for Excel, OpenOffice, and Google Sheets". Pick a payoff order that makes sense to you and do it.
- See Investment Order (http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153). At this point you probably shouldn't go past step #2:
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
Even the HSA might save you "only" 15% while getting the high interest CCs paid off will save 25%.
I just downloaded the calculator.
Just curious - what payoff order have you picked?
I decided to do lowest amount first.
I know there's a lot of people who say to do highest interest first.
So I almost did an eeny meeny miny mo type of deal.
Mrs. Beatles shopping today.
That's fine. You should do whatever works best for you.Thank you.I added a lot more details, and dug down to get the exact amounts as requested.Looking good.
Some points:
- You should be taking depreciation on the rental. If you sell it, you'll have to do Depreciation recapture (https://en.wikipedia.org/wiki/Depreciation_recapture_(United_States)) whether you take it now or not.
- Consider using the Free Debt Reduction Calculator for Excel (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) (scroll down past the annoying DOCtoPDF download button and use the download "for Excel, OpenOffice, and Google Sheets". Pick a payoff order that makes sense to you and do it.
- See Investment Order (http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153). At this point you probably shouldn't go past step #2:
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
Even the HSA might save you "only" 15% while getting the high interest CCs paid off will save 25%.
I just downloaded the calculator.
Just curious - what payoff order have you picked?
I decided to do lowest amount first.
I know there's a lot of people who say to do highest interest first.
So I almost did an eeny meeny miny mo type of deal.
Paying toward the highest interest loans first will in fact cost you the least amount of money - as the Excel calculator should have shown - provided you do keep current on all the loans.
But there is also a psychological benefit to reducing the number of outstanding loans that makes it more likely you will keep current on all of them.
People can tell you what seems best to them. Only you can say what is best for you.
She's doing great, but can she return the calendar, mascara, cups, and whatever plates are? You sent back a TV, target can take back cups! I get home, go "what was I thinking, I don't need or really even want any of this." Then take it back next trip. Stores, target in particular, are so good at getting us to put things in our carts, it's almost criminal.
She said shopping makes her feel happy.
Mrs. Beatles is doing great and she needs some support.
She said shopping makes her feel happy.
She needs a new hobby.
She told me that sometimes she'll go online and fill up her cart on Amazon or something, but then not complete the purchase.
She said shopping makes her feel happy.
I think some of her spending is a coping mechanism or something.That's a normal feeling.
She told me that sometimes she'll go online and fill up her cart on Amazon or something, but then not complete the purchase.
She said shopping makes her feel happy.
The best way to get to the root of all this spending is to realize what we are all really trying to buy. In fact, it is the reason for every single action we take in our lives. It’s happiness.
My "cure" for shopping is the public library. I can bring home all these physical objects and it didn't cost me anything.The library is definitely my cure for book shopping. If I find myself borrowing the same book for the third time I might actually buy it. Mrs. Beatles may also find lots of DVDs she likes at their library. Some communities also have toy libraries - sure beats buying a new toy whenever the kids get tired of the ones they are playing with.
I think some of her spending is a coping mechanism or something.
My "cure" for shopping is the public library. I can bring home all these physical objects and it didn't cost me anything.The library is definitely my cure for book shopping. If I find myself borrowing the same book for the third time I might actually buy it. Mrs. Beatles may also find lots of DVDs she likes at their library. Some communities also have toy libraries - sure beats buying a new toy whenever the kids get tired of the ones they are playing with.
If either beatle gets handy, there are also tool libraries in some communities.
Alright, what’s your startup idea Mr. Beatles?
I’m not sure I’m ready to divulge that yet.
The beta test version of the website will be available for user testing very soon. Probably in 3 weeks, or less. The first challenge may prove to be one of the most difficult. I will have to find a user base willing to give me honest and direct feedback. Traditional digital advertising, such as posting a request on Craigslist and Facebook, would likely not yield adequate results. I can imagine many people would view the website out of curiosity, but not take the time to give me their detailed opinion and user experience. Surveys are notoriously ignored.
From your blog:QuoteAlright, what’s your startup idea Mr. Beatles?
I’m not sure I’m ready to divulge that yet.
The beta test version of the website will be available for user testing very soon. Probably in 3 weeks, or less. The first challenge may prove to be one of the most difficult. I will have to find a user base willing to give me honest and direct feedback. Traditional digital advertising, such as posting a request on Craigslist and Facebook, would likely not yield adequate results. I can imagine many people would view the website out of curiosity, but not take the time to give me their detailed opinion and user experience. Surveys are notoriously ignored.
Err, hello?
From your blog:QuoteAlright, what’s your startup idea Mr. Beatles?
I’m not sure I’m ready to divulge that yet.
The beta test version of the website will be available for user testing very soon. Probably in 3 weeks, or less. The first challenge may prove to be one of the most difficult. I will have to find a user base willing to give me honest and direct feedback. Traditional digital advertising, such as posting a request on Craigslist and Facebook, would likely not yield adequate results. I can imagine many people would view the website out of curiosity, but not take the time to give me their detailed opinion and user experience. Surveys are notoriously ignored.
Err, hello?
Haha good point.
I would reward yourself by knocking out a credit card. Suggest CC #6 + accrued interest to clear that entirely. Remainder can go towards building that EF.
Then call the bank to confirm closing the account.
Latest blog article: Essay about startups and frugality (http://stackingpennies.org/origin-of-the-best-website-startups/)
Also started a journal: Here it is (http://forum.mrmoneymustache.com/journals/stacking-pennies-a-beatles-journal)
Latest blog article: Essay about startups and frugality (http://stackingpennies.org/origin-of-the-best-website-startups/)
Also started a journal: Here it is (http://forum.mrmoneymustache.com/journals/stacking-pennies-a-beatles-journal)
Journal =/= blog. What you posted both places is "blog-y". As in, you cut and pasted your blog to your journal.
Journal - needs a purpose, most of us use it to define our goals, ponder our progress, figure out what makes us tick. The first 2 you are doing here, so your journal might be put to better use by reflecting on your life (pre and post marriage), defining influences on you and mrs. b, how you got where you are (psychologically) and how you are addressing those issues. Actually, you are doing a little bit of that here too.
You don't really need a journal, you have this thread and the blog, and it is just one more thing for you to tend (be distracted by).
Latest blog article: Essay about startups and frugality (http://stackingpennies.org/origin-of-the-best-website-startups/)
Also started a journal: Here it is (http://forum.mrmoneymustache.com/journals/stacking-pennies-a-beatles-journal)
Journal =/= blog. What you posted both places is "blog-y". As in, you cut and pasted your blog to your journal.
Journal - needs a purpose, most of us use it to define our goals, ponder our progress, figure out what makes us tick. The first 2 you are doing here, so your journal might be put to better use by reflecting on your life (pre and post marriage), defining influences on you and mrs. b, how you got where you are (psychologically) and how you are addressing those issues. Actually, you are doing a little bit of that here too.
You don't really need a journal, you have this thread and the blog, and it is just one more thing for you to tend (be distracted by).
I would reward yourself by knocking out a credit card. Suggest CC #6 + accrued interest to clear that entirely. Remainder can go towards building that EF.
Then call the bank to confirm closing the account.
Sounds good. Who needs 6 credit cards?* Except he may want to be pickier about which accounts get closed - don't long-standing accounts help your credit rating more than just-opened ones? OF course closing some is definitely a good idea, less available credit.
*That was a rhetorical questions, cc churners - beatles is not at churner stage right now.
I'm now questioning whether to just start attacking CC2.
The high balance and high interest rate is rough.
I'm now questioning whether to just start attacking CC2.One could make the case that establishing a $1000 e-fund this month (e.g., at one of the best online savings accounts (http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001/) costs only $1000 * 0.25 / 12 = $21 and might be psychologically worthwhile.
The high balance and high interest rate is rough.
Latest blog article: Essay about startups and frugality (http://stackingpennies.org/origin-of-the-best-website-startups/)
Also started a journal: Here it is (http://forum.mrmoneymustache.com/journals/stacking-pennies-a-beatles-journal)
Journal =/= blog. What you posted both places is "blog-y". As in, you cut and pasted your blog to your journal.
Journal - needs a purpose, most of us use it to define our goals, ponder our progress, figure out what makes us tick. The first 2 you are doing here, so your journal might be put to better use by reflecting on your life (pre and post marriage), defining influences on you and mrs. b, how you got where you are (psychologically) and how you are addressing those issues. Actually, you are doing a little bit of that here too.
You don't really need a journal, you have this thread and the blog, and it is just one more thing for you to tend (be distracted by).
I agree.
Only reason I did that is because a few people told me to. Not sure why.
One thing I have noticed that I want to draw your attention to is you have said "Because x told me to" as a reason and/or excuse for many things you have done. Planning Trips to Hawaii, declaring bankruptcy etc.
When you are getting so much feedback it is critical that you take in the information, really process it and figure out a plan of action that works best FOR YOU.
Maybe you aren't sure but have narrowed something down to a couple of different options and you return for more feedback - that is great! Or maybe you need more information from people before you can weigh their suggestion. so dig deeper!
But you really need to go the extra step of acting from a place of "I am making this decision because of x,y,z and I feel this is the right decision for me and my family"
We can't all be right 100% of the time, but if you go through the process and can really defend to yourself and others why you are making the decision you are, going through the process will help you from making decisions that are not optimal.
You mentioned being late on your mortgage. Do you now have enough to pay it on time?
Prioritize that, keep maybe $500 cash until your >20% debts are gone, then consider upping your cash a bit.
Also will chime in on selling the car that has payments left. You mentioned, IIRC, that you have a 20 mile commute and it's a large SUV? Buy something under $5k that gets 40 mpg and save on insurance as well as gas.
Late to the party, but just read this whole thread and I'm glad you're sticking it out and turning things around!
I'm now questioning whether to just start attacking CC2.
The high balance and high interest rate is rough.
Here's the list of your credit cards from your first post in this thread:
CC1 194 856 25.24%
CC2 134 4495 24.49
CC3 25 505 23.24%
CC4 25 452 10.23%
CC5 20 692 18.49%
CC6 75 797 24.15
CC7 100 2020 25.24
In effect, you really have two groups of cards: higher interest and lower interest.
HIGHER INTEREST (CC1, CC2, CC3, CC6, CC7)
Total debt = $8673
Total minimum payment = $528
LOWER INTEREST (CC4, CC5)
Total debt = $1144
Total minimum payment = $45
In addition to the minimum payments you are already making, you will have $600 from not buying work lunches.
With these details, I'd do the following:
* STOP USING THE CARDS--you are on a cash-only diet right now, with all expenses being paid in cash or with a debit card (no, I don't care about points or miles--your goal is to get out of debt and establish good credit habits before learning credit ninja tactics like that)
* focus on the low-balance cards in the Higher Interest group
In this way, you get BOTH the psychological benefit of paying off an account in full, and the math benefit of paying down high interest debt first. (The small difference in the "higher interest" group cards isn't worth bothering with, especially when you'll be paying off the entire account in just a couple of months.)
Here's what I would do this month:
* Pay the minimum payment that you are already paying on your highest-interest card CC1 ($194) plus another $662 (get the extra $62 from grocery savings!)
--this will completely wipe out $856 of high interest debt and give you a $0 balance on that card
* Pay the minimum payments on your other cards, as usual
In February, you will have an extra $194 that you are no longer paying to CC1. Use this $194 and the $600 you freed up ($794) as follows:
* Pay the minimum payment that you are already paying on CC6 ($75), plus the $194 you were paying on CC1, plus an additional $528 to wipe out CC6
* Pay the minimum on your other cards, as usual
In March, you will have the $194 from CC1 plus the $75 from CC6 plus the $600 from not buying lunch ($869). Do this:
* Use about $500 to pay off CC3
* Send the rest to CC7
* Pay the minimum on your other cards, as usual
In April, you will have $194 + $75 + $25 + $600 ($894). Do this:
* Pay the $100 minimum on CC7, plus the $894
* This will get you awfully darn close to knocking out CC7--see if you can scrounge some money from somewhere else (grocery savings, selling stuff) to knock this one out this month
So by the end of April--in just four payment cycles--you can completely wipe out four of your seven cards. :)
In May, your balances on CC4 and CC5 will be low enough that you can wipe them out with your $194 + $75 + $25 + $600 + $100 (from CC7, which you paid off in April). Go ahead and knock both of these out, and send anything left to CC2.
Then in June, you can pay $194 + $75 + $25 + $600 + $100 + $25 + $20 = $1019, plus your usual minimum payment of $134 (total of $1153) to CC2. Do it again in July. Do it again in August. Do it again in September. Then in October, pay whatever's left.
Then you are DONE.
In just nine months, you can kill ALL OF THIS DEBT. Now go do it! :)
(edited for math, and to add that I am ignoring accrued interest and to an extent ignoring the effect of the minimum payments on the balances, just to make my post easier to tabulate) :)
Forgive me if this has already been addressed -- I think I read all 14 pages of this thread yesterday, but may have missed a few posts.
Have you considered trying to sign up for a 0% credit card deal and transferring some of the high interest card balances to that card? Because those cards with high interest are really killing you. Even if you have to pay a 3% balance transfer fee, if you can move that $4495 balance to a 0% card for a year, you will be paying $134.85 for the balance transfer, versus nearly $1123.75 in interest at that nearly 25% rate. Granted, you are freeing up money to throw at that card by cutting your expenses and paying off the other cards, but it is the largest balance and one of the highest interest rates, so it seems like it might be worth it to pay the balance transfer fee up front and move that one down the list in your snowball.
Another thing that is not clear to me -- are you still using the credit cards to pay your monthly living expenses? Because while it may make sense to do that if you pay off the balance every month and can benefit from the "float" as well as earning points, etc., if you are adding more to any of these cards every month you are essentially charging yourself up to 25% EXTRA on every single thing you buy because you are putting the charges on a card with a revolving balance. NOT GOOD!!!! If you don't have the cash to cover your monthly expenses via a debit card linked to your primary checking account, then my recommendation would be to put that $1000 you have into that account so you have a bit of a cushion. And then save up an extra small emergency fund. You guys need to STOP using the credit cards, because you clearly have trouble managing them, and your impulses. Maybe knowing that the extra $50 on little bits of this and that at Target is going to mean there is not enough money in the checking account to buy milk next week will help your wife curb her urge to spend on stuff you don't really need.
Also, although it is dated I also recommend you try to find the complete Tightwad Gazette collection at the library, and have both of you read it. Because the best thing that could happen to you guys at this stage is that you have a total switch and take all the time and energy you were spending on acquiring more stuff and throw that at becoming blackbelt frugalistas. Amy D is the queen of frugalistas because, like MMM, she focused on the PROCESS of becoming a money saving machine. If you can learn to adopt some of her approaches, you will become more creative problem solvers and save a ton of money at the same time.
We only use credit cards for toys right now.
Mainly the Best Buy credit card.
We only use credit cards for toys right now.
Mainly the Best Buy credit card.
Why are you using present tense here? You know your kids literally don't need any toys, right? Literally 0. Don't worry though, since they already have toys, your kids will have more than 0 toys, without you buying any more. Because you're not buying any more, right? Right?!
Property taxes? !!!
How much and due when? You need to plan ahead for them.
This is why I recommended up top somewhere that you do multiple sheets in a spreadsheet. You don't want to be doing nicely on the CCs and get blindsided by municipal taxes.
So how much and when - if you can pay them out of excess (now that you have excess) and just pay basics on the CCs one month, then fine - otherwise you need to be saving up so you are ready. If less goes to the CCs then less goes to the CCs. You need the whole picture, not just bits and pieces.
We only see your bits and pieces, not the whole picture, so we cannot plan for you. Only you (i.e. beatles and mrs. beatles) can do that.
Oh, and for the planning, take EVERTYHING that is not monthly, figure out yearly cost, and divide by 12 - you need to save that much every month to meet these expected but not monthly expenses - they are not unexpected, just not tidy.
PS just saw your last post We only use credit cards for toys right now. Mainly the Best Buy credit card. Well that means you aren't using any credit cards, because you aren't buying any toys right now, right? Kids probably have more toys than they know what to do with, since Christmas is less than a month past. You and mrs. don't need any more toys either. That was easy.
Yes, property taxes.
We are 2 years behind and owe 9k.
We also have this years taxes which will be due in March at about 4K.
Rental Income, Actual Expenses, and Depreciation: $595 NET ($1,100 rent - $130 HELOC - $375 taxes)
Yes, property taxes.
We are 2 years behind and owe 9k.
We also have this years taxes which will be due in March at about 4K.
Ouch. Ouch. Ouch. Where I live if you are 3 years behind on property taxes the municipality can seize the house and sell it for back taxes. If you lived here you would be less than a year away from losing your house. What are the rules where you live? This and your IRS situation are a lot more hair-on-fire emergency that the CCs (not that they are good, not just as horrible).
So you need 9K in 2 months. And for 2017, can you spread them out (most municipalities allow 2 or 3 payments over the year)? A lot of people don't like adding taxes to their mortgage payment, but it does help the planning if you pay principal, interest and taxes every month and the bank pays your taxes out of that. Given everything, I am surprised your bank didn't insist on that for your mortgage.
You need to talk to the people at your local municipal tax office. Or maybe the CPA who is helping with the IRS does municipal tax problems too?
You do realize these two expensive houses have helped you dig your financial hole, right? Was your original house (now the rental) that bad? It is hard to enjoy life (the enjoy life means not be stressed out by being 2 years overdue on taxes) when you are house-poor. Is your present house truly bringing you huge amounts of pleasure and joy? Or was it bought to keep up with the Jones/what was expected at your stage of life and income?
Where we live, the town sells unpaid tax liens to a 3rd party collection agency.
We asked the collection agency if they could take the house and they said yes, but probably won't because we don't owe a lot.
They said we could put 10% down and pay monthly as well.
I agree with other posters that the CC's have to take a back seat to the property tax issue. You could lose the house over this.
I think at this point it would be good to go back to the numbers you posted in your original case study and go over them with a fine tooth comb to see if there is ANYTHING you left out: any income, any debt, anything.
The recommendations this group can make need to be based on a COMPREHENSIVE picture of your financial situation. Had the people in this thread known about the property tax issue, the recommendations would likely have been vastly different.
As for September being a long time away, it's actually a very short time when considering how long some others have taken to climb their way out of CC debt (measured in years, not months). In that sense you are lucky that you haven't saddled yourself with as much CC debt as some others.
But the property taxes need to come first. As part of your get-current strategy, look in to having an escrow feature on your mortgage whereby you pay the mortgage company and they pay your property taxes for you. Then you will not have to worry about this in the future.
But seriously: go revise your case study to add the $9K of property tax debt, and anything, anything, anything else that's "out there." Our recommendations may actively be harmful if we don't have the full story.
The property tax has been on the case study since the beginning.
I don't know why people are just noticing it!?!
The property tax has been on the case study since the beginning.
I don't know why people are just noticing it!?!
My apologies for the oversight--I do see it's on there in the liabilities section at the bottom.
What was missing was the word delinquent and the time frame of three years. Owing property taxes is one thing--any homeowner has a property tax bill. Owing delinquent property taxes for three years is quite another. Those details are important in considering the overall strategy of righting the ship. Paying off CC's is rearranging deck chairs when you have a gaping hole in the hull.
I was wrong.
It's 3 years, not 2.
Ugh.
I'm going to call tomorrow and see how much it'll cost to start the payment plan.
And if that is your actual past due bill the total is $11,398 delinquent and another $3800 due in March ?
You should update your original case study numbers. You don't seem to be in much of a panic for being $125k + in the red.
Is there some reason you can't send what's left of the rent check each month to this debt ?
I'm still trying to shake the feeling of September being far away :/
I was wrong.In my jurisdiction, they sell a tax lien, and the purchaser can foreclose on the property in 12 months if it is not paid in full with a high interest rate. In other words, they auction off your house on the courthouse steps. You need to do some research on the effect that this tax sale has had on your property.
It's 3 years, not 2.
Ugh.
Mainly because we've been using it all for Bills and expenses.
GROCERIES 1100
EATING OUT 600
CAMERAS 25
CC7 (STORE CARDS) 100 2020 25.24
Furniture Loan 276 1950 25.00
I do not pay TI, just PI, but the bank will add on TI in a heartbeat to protect its interests if I failed to pay the taxes even once. Why has this not happened?
Something is off in your story here. What are we missing?
In this situation, in order to get the taxes paid and the debt under the OP's control, would a HELOC against the rental property for $15K be an option?
Get on a payment plan, then sell the rental. The balance will be paid off at closing and you'll be out from under that.
But on no payment plan -well, in my county your property would have been put up for sale already.
I went and read your second blog post. This was interesting: I will have to find a user base willing to give me honest and direct feedback. I started to wonder if that was us here on the Forums, you have already experienced the direct feedback part. Then I read this: What I can tell you is that the website streamlines the way consumers shop for a particular high priced item. and that is certainly not someone people here would be interested in.
So why in the world are you spending time/energy on this start-up idea when you have so much else on your plate? If it is a good idea it will still be good in October.
Priorities. Priorities. Geesh. It's like you are weeding one dandelion out of your lawn while the giant hogweed looms.
I was wrong.In my jurisdiction, they sell a tax lien, and the purchaser can foreclose on the property in 12 months if it is not paid in full with a high interest rate. In other words, they auction off your house on the courthouse steps. You need to do some research on the effect that this tax sale has had on your property.
It's 3 years, not 2.
Ugh.
http://www.bankrate.com/finance/real-estate/buying-a-home-in-a-tax-lien-sale-1.aspx
The lender normally will pay the tax to keep this from happening, because they can sell it right out from under the mortgage. Then the lender comes back to you and escrows the money, making you pay higher payments to pay off the existing tax debt and the expected taxes owed for the next year, plus a cushion. Banks love doing this because they make their money on investing the surplus from these escrow accounts.
I have no clue why this has not happened in your situation.
You do not pay PITI (I thought you said you did?). The TI in PITI stands for taxes and insurance, and the bank adjusts the amount to collect all expected debts.
I do not pay TI, just PI, but the bank will add on TI in a heartbeat to protect its interests if I failed to pay the taxes even once. Why has this not happened?
Something is off in your story here. What are we missing?
I went and read your second blog post. This was interesting: I will have to find a user base willing to give me honest and direct feedback. I started to wonder if that was us here on the Forums, you have already experienced the direct feedback part. Then I read this: What I can tell you is that the website streamlines the way consumers shop for a particular high priced item. and that is certainly not someone people here would be interested in.
So why in the world are you spending time/energy on this start-up idea when you have so much else on your plate? If it is a good idea it will still be good in October.
Priorities. Priorities. Geesh. It's like you are weeding one dandelion out of your lawn while the giant hogweed looms.
Mainly because it's a project I started before I ever learned about frugality.
I went and read your second blog post. This was interesting: I will have to find a user base willing to give me honest and direct feedback. I started to wonder if that was us here on the Forums, you have already experienced the direct feedback part. Then I read this: What I can tell you is that the website streamlines the way consumers shop for a particular high priced item. and that is certainly not someone people here would be interested in.
So why in the world are you spending time/energy on this start-up idea when you have so much else on your plate? If it is a good idea it will still be good in October.
Priorities. Priorities. Geesh. It's like you are weeding one dandelion out of your lawn while the giant hogweed looms.
Mainly because it's a project I started before I ever learned about frugality.
You may have started it before frugality, but why are you posting about it now? Looking at your present (dire) financial situation, it should be last on your time/energy scale*. So why post? Why even have a blog if that is what it is going to be about? Get back to it when you have your financial situation taken care of.
*Time energy scale:
1a do everything you can to take care of IRS, municipal taxes and CCs
1b Do everything you can to support mrs b while she does her side of things.
.
.
sell rental house or sell present house and move back into rental
.
.
72z the blog and project
You may have started it before frugality, but why are you posting about it now? Looking at your present (dire) financial situation, it should be last on your time/energy scale*. So why post? Why even have a blog if that is what it is going to be about? Get back to it when you have your financial situation taken care of.
*Time energy scale:
1a do everything you can to take care of IRS, municipal taxes and CCs
1b Do everything you can to support mrs b while she does her side of things.
.
.
sell rental house or sell present house and move back into rental
.
.
72z the blog and project
Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.
What county do you live in? This can be researched on a county's website usually.
You may have started it before frugality, but why are you posting about it now? Looking at your present (dire) financial situation, it should be last on your time/energy scale*. So why post? Why even have a blog if that is what it is going to be about? Get back to it when you have your financial situation taken care of.
*Time energy scale:
1a do everything you can to take care of IRS, municipal taxes and CCs
1b Do everything you can to support mrs b while she does her side of things.
.
.
sell rental house or sell present house and move back into rental
.
.
72z the blog and project
Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.
It's not the paying off debt that takes all the time, it is the figuring out how you got in this mess and how you will get out of it that takes time. Your parents bailed you out before, but that was obviously a band-aid solution. So if you want to spend 20 minutes a day writing, then spend it writing about your life, your growing up and how that affected your attitudes to money and debt, how you ended up moving out of house 1 to house 2 to house 3, etc. Use it for self-reflection. You don't need to show ti to anyone, except maybe mrs. b.
And you missed my point, anyway - you can write on a blog or wherever, but why are you taking about a project or startup or side hustle or whatever - that is what is distracting you.
Use that project energy to do your detailed spreadsheet with projections. You even got handed one. You don't seem to have a good grip yet on your total financial picture. Or at least that is the impression you are giving us, we get dribs and drabs.
Hey its Monday - little things, what happened at work for lunch today?
People dont always want to be thinking about their finances.
People dont always want to be thinking about their finances.
People dont always want to be thinking about their finances.
We're scared for you. You're dealing with some major debts here, and are majorly delinquent on them. You won't have the privilege to *not* think about your finances all the time if you lose your home. We just want to help you avoid that. I think Retired@63 is seeing you being fairly unconcerned about the property tax thing ("that's not how it works in my county"), and is worried about anything that will pull your attention away.
It's not to say you have to be staring at a spreadsheet every minute of every day. But fundamentally, you don't have an income problem, you have a spending problem, so it's easy as a 'spectator' to see you looking at side hustles and get worried.
I don't think it's so bad to be working on a little side gig, if it relaxes you. But I would agree with recent posters that selling off some troublesome possessions is the way to go. Get rid of the stressful rental and big car loan. Simplify. They add nothing but worry to your life, let them go.
People dont always want to be thinking about their finances.
We're scared for you. You're dealing with some major debts here, and are majorly delinquent on them. You won't have the privilege to *not* think about your finances all the time if you lose your home. We just want to help you avoid that. I think Retired@63 is seeing you being fairly unconcerned about the property tax thing ("that's not how it works in my county"), and is worried about anything that will pull your attention away.
It's not to say you have to be staring at a spreadsheet every minute of every day. But fundamentally, you don't have an income problem, you have a spending problem, so it's easy as a 'spectator' to see you looking at side hustles and get worried.
He literally wants me to not write on a blog because its not about my finances.
Seriously?
That's ridiculous.
I'm well aware of the tax situation.
But I cant think about it every minute of every day.
I even tried calling today but theyre closed for MLK day.
Isn't it on the market yet? If not, why not?I don't think it's so bad to be working on a little side gig, if it relaxes you. But I would agree with recent posters that selling off some troublesome possessions is the way to go. Get rid of the stressful rental and big car loan. Simplify. They add nothing but worry to your life, let them go.
I wish I could make the rental go bye bye right now.
$35k to $40k in cash sounds sooooo good right now.
If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.
https://www.redfin.com/
Tell them the property is on the market at a realistic price, that the whole amount owed will be paid from the sale proceeds and in the meantime you wish to set up a payment plan (first payment that day) until the sale is finalised.If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.
https://www.redfin.com/
What should I say
Tell them the property is on the market at a realistic price, that the whole amount owed will be paid from the sale proceeds and in the meantime you wish to set up a payment plan (first payment that day) until the sale is finalised.If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.
https://www.redfin.com/
What should I say
Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
It would take "only" ~6.4%/yr to turn $35K into $223K in 30 years.
You would "earn" 25%/yr while you pay down those CC debts....
Yes, you could invest the $500 or $650 also, but....
Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.
People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.
Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.
People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.
Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant. This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1. Finish the MVP (prototype). A couple of weeks of coding should do it.
2. Conduct advanced testing and debugging of the software and system.
3. Find people to use the website and give me feedback."
You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.
I'll say it again, your extra time is better spent delivering pizzas or driving for Uber. You need more income in your spare time, even if it temporary. While driving, listen to podcasts about getting out of debt. When you're broke you need to get to work.
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Holy shit, why are you not freaked out by the property tax and IRS issue?!? You get this are serious problems, yes? This is a BFD. Are you trying to be zen-like on here about it, or are you ostriching, or do you genuinely not get why we think this is a huge problem?
If I might lose my house to foreclosure, I'd be freaked out. And you've got two kids! As it is, I'm even freaked enough on your behalf to wander down the Alice in Wonderland rabbit hole and wonder if you maybe should accept your parent help to bail you out one last time on the IRS/taxes (except that I think that you need to learn to fix these financial issues on your own rather than always going to the Bank of Mom and Dad, and if you do this, you may never learn to be an adult and stand on your own two feet).
Can your wife put the kids in daycare and get a job?
Deliver pizzas. You can make $1000 month doing that. What about Lyft. I live in the middle of nowhere and we have Uber and lyft here.I'll say it again, your extra time is better spent delivering pizzas or driving for Uber. You need more income in your spare time, even if it temporary. While driving, listen to podcasts about getting out of debt. When you're broke you need to get to work.
Sent from my iPhone using Tapatalk
I'd love to.
I wish Uber was in my area.
Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant. This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1. Finish the MVP (prototype). A couple of weeks of coding should do it.
2. Conduct advanced testing and debugging of the software and system.
3. Find people to use the website and give me feedback."
You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.
You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?
Deliver pizzas. You can make $1000 month doing that. What about Lyft. I live in the middle of nowhere and we have Uber and lyft here.I'll say it again, your extra time is better spent delivering pizzas or driving for Uber. You need more income in your spare time, even if it temporary. While driving, listen to podcasts about getting out of debt. When you're broke you need to get to work.
Sent from my iPhone using Tapatalk
I'd love to.
I wish Uber was in my area.
Sent from my iPhone using Tapatalk
Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
After reading all of your posts, it is very obvious that your head is in the clouds when it comes to dealing with this financial disaster.
It is clear you still don't get it, even after HUNDREDS of posts offering very good advice & education.
Here are a few of the things that have transpired just in the past few days...
- Bought a TV
- Told us "we only use credit cards for toys right now."
- You are delinquent on your property taxes for the last three years.
- Explained your wife shops as a "coping mechanism" to "make her feel happy."
- Have an irrational attachment to this rental property and an unwillingness to put it on the market.
- Meanwhile, you're spending significant amounts of time on a "startup" dream that assists in buying "high end" products.
Dude, wake up!!!
I won't get into specifics, but you need to do the following immediately...
- Put the startup on the back burner
- Sell the rental ASAP
- Continue cutting spending
- Get marital counseling
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant. This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1. Finish the MVP (prototype). A couple of weeks of coding should do it.
2. Conduct advanced testing and debugging of the software and system.
3. Find people to use the website and give me feedback."
You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.
You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?
For Christ's sake, do you really need this spelled out for you?
Here are just a few examples of how you should be spending your spare time...
- Read as many books about debt/personal finance/budgeting you can get your hands on
- Create financial/budgeting spreadsheets/databases and analyze data
- Spend time reviewing & making actual changes to your budget
- Have conversations with your wife about the source of her unhappiness
- Spend time learning to cook and meal planning (to avoid eating out)
At the very least, you should use that 5 hours/week reading the stack of books you should have checked out from the library.
You act like paying off debt takes study time.
Half (or more) of this post is just wrong.
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant. This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1. Finish the MVP (prototype). A couple of weeks of coding should do it.
2. Conduct advanced testing and debugging of the software and system.
3. Find people to use the website and give me feedback."
You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.
You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?
For Christ's sake, do you really need this spelled out for you?
Here are just a few examples of how you should be spending your spare time...
- Read as many books about debt/personal finance/budgeting you can get your hands on
- Create financial/budgeting spreadsheets/databases and analyze data
- Spend time reviewing & making actual changes to your budget
- Have conversations with your wife about the source of her unhappiness
- Spend time learning to cook and meal planning (to avoid eating out)
At the very least, you should use that 5 hours/week reading the stack of books you should have checked out from the library.
Alright did all of that.
Next?
You act like paying off debt takes study time.
Call each credit card company and have a chat?
Deliver pizzas. You can make $1000 month doing that. What about Lyft. I live in the middle of nowhere and we have Uber and lyft here.I'll say it again, your extra time is better spent delivering pizzas or driving for Uber. You need more income in your spare time, even if it temporary. While driving, listen to podcasts about getting out of debt. When you're broke you need to get to work.
Sent from my iPhone using Tapatalk
I'd love to.
I wish Uber was in my area.
Sent from my iPhone using Tapatalk
We don't have Uber or Lyft.
I would love to have either. I think it would be fun.
Pizza's are not an option.
You and your wife also need to spend your time learning how to cook, meal plan and shop only what is on sale. You are only 30, learning those skills will pay off FORYEARSDECADES.
Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.
People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.
Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant. This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1. Finish the MVP (prototype). A couple of weeks of coding should do it.
2. Conduct advanced testing and debugging of the software and system.
3. Find people to use the website and give me feedback."
You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.
You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?
I get the impression from your posts that you are only "kinda freaked out" because the parents can always bail you out. And besides, foreclosures and repossessions and getting kicked out on the street with your kids in their pajamas doesn't happen to (people like) you.
(People like) you also don't have garage sales to sell expensive toys, buy secondhand, deliver pizzas or seriously budget.
(People like) you get takeout and eat in nice restaurants.
(People like) you buy based on brand labels.
(People like) you have an online side business that you can brag about and cars that show just how successful you are.
(People like) you have a rental because you "own real estate."
(People like) you are broke and won't face it.
You act like paying off debt takes study time.
Actually, it does. Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans. If you add it up, it's likely hundreds of hours.
Take the time to write Craigslist posts and sell your stuff. Take the time to work with a realtor. Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take. The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.Call each credit card company and have a chat?
Yes, actually, you SHOULD do this. Ask them to lower your interest rate, and see if they'll budge. Sometimes they will. Sometimes they may have offers. Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate. Play the game--you need every win you can get, however small.
Really? How much did you net from selling stuff on Craigslist? How much are the roofing bids?You act like paying off debt takes study time.
Actually, it does. Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans. If you add it up, it's likely hundreds of hours.
Take the time to write Craigslist posts and sell your stuff. Take the time to work with a realtor. Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take. The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.Call each credit card company and have a chat?
Yes, actually, you SHOULD do this. Ask them to lower your interest rate, and see if they'll budge. Sometimes they will. Sometimes they may have offers. Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate. Play the game--you need every win you can get, however small.
Everything you've mentioned, we've already done.
Would you like me to do it a 2nd and 3rd time for fun sake?
Malum Prohibitum - I think you are confusing the two houses. The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner. The house they are living in has a mortgage.If that were the case, then the solution is easy. Sell the big house and live in the rental house. Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
^for real. You need to expand your knowledge of investments, opportunity costs, and such. The above is such an over simplification of your rental situation. Are you accounting for the new roof? How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances. All of these things have a usable life that will expire at least once in the next 30 years. Did you look into the possible investments you could make with that money? Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market.
If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.
Oh, yeah.
http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/
It's a good read, if someone hasn't linked it before.
Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Where we live, the town sells unpaid tax liens to a 3rd party collection agency.
We asked the collection agency if they could take the house and they said yes, but probably won't because we don't owe a lot.
They said we could put 10% down and pay monthly as well.
Malum Prohibitum - I think you are confusing the two houses. The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner. The house they are living in has a mortgage.If that were the case, then the solution is easy. Sell the big house and live in the rental house. Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.
Do you think I'm a moron?
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.
Where we live, the town sells unpaid tax liens to a 3rd party collection agency.
We asked the collection agency if they could take the house and they said yes, but probably won't because we don't owe a lot.
They said we could put 10% down and pay monthly as well.
I am going to let you in on a little secret.
Here is how these companies make money. There are two options. (A) the owner redeems the property, in which case the company gets a really good interest rate on the money it used to pay the taxes, or (B) the company gets the property.
I personally know persons who have built millions in net worth mainly by getting the property. They look at getting their money back with interest as a downside to this business. Their goal is always to buy tax liens that are small in relation to the value of the property and thus grow their net worth very quickly.
There is just a teeny-tiny chance* that the person to whom you spoke on the phone has a vested interest in encouraging you not to freak out and redeem your property.
*By teeny-tiny chance, I mean that there is absolutely no incentive for them to want you to redeem your property. They are really out to obtain properties. So, the teeny-tiny here is something close to 100%. I was being facetious.
You act like paying off debt takes study time.
I had to follow-up on this quote, as it proves my point that your head is in the clouds about the situation at hand.
Paying off debt is actually a very small part of the problem you are facing! You have far greater issues that you should also be addressing, like learning how to set up & live on a budget and why your wife uses shopping as a coping mechanism.
I find it interesting that you mention this about Paul Graham in your blog...
"He is brilliant, brilliant. Transcending higher education status quo, brilliant. And because of this, or perhaps forced by this, I read his blog and study his advice as if they are the last written words of wisdom on earth."
So you are willing to study this guy's words for your side venture, BUT you don't think your financial situation requires study time???
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
^for real. You need to expand your knowledge of investments, opportunity costs, and such. The above is such an over simplification of your rental situation. Are you accounting for the new roof? How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances. All of these things have a usable life that will expire at least once in the next 30 years. Did you look into the possible investments you could make with that money? Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market.
If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.
Oh, yeah.
http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/
It's a good read, if someone hasn't linked it before.
Do you think I'm a moron? That's an open question to everyone, as that's the vibe I'm getting.
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.
We lived in that house, and as such, everything is new.
We tore the house down to its studs.
It has brand new dry wall (2012). Brand new subfloors (2012). Brand new carpets (2013). Brand new tile (2013). Brand new bathroom (2013). Brand new 30 yr rated furnace (2014). Brand new hot water heater (2015). Brand new driveway (2013). Brand new recessed lighting and ceilings (2012). Brand new ceiled concrete floor in the basement (2012). Brand new concrete patio in the backyard (2012). Brand new siding (2013). Brand new stove and refrigerator - both stainless steel (2014).
The only thing that isn't new is the roof and that's because we ran out of money.
I didn't over simplify anything. The fact is that nothing is going to need to be replaced, other than the roof, for a very long time.
As far as opportunity cost. How are we going to make any investments with that money??
The money we get from the sale would pay off our debt. Not go toward an investment.
And the very most the debt could extrapolate to, even at 25% interest, is a sum many times less than the nearly 250k we would be given up.
If you have a difference of opinion, fine. But don't ever insult my intelligence.
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
^for real. You need to expand your knowledge of investments, opportunity costs, and such. The above is such an over simplification of your rental situation. Are you accounting for the new roof? How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances. All of these things have a usable life that will expire at least once in the next 30 years. Did you look into the possible investments you could make with that money? Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market.
If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.
Oh, yeah.
http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/
It's a good read, if someone hasn't linked it before.
Do you think I'm a moron?
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.
We lived in that house, and as such, everything is new.
We tore the house down to its studs.
It has brand new dry wall (2012). Brand new subfloors (2012). Brand new carpets (2013). Brand new tile (2013). Brand new bathroom (2013). Brand new 30 yr rated furnace (2014). Brand new hot water heater (2015). Brand new driveway (2013). Brand new recessed lighting and ceilings (2012). Brand new ceiled concrete floor in the basement (2012). Brand new concrete patio in the backyard (2012). Brand new siding (2013). Brand new stove and refrigerator - both stainless steel (2014).
The only thing that isn't new is the roof and that's because we ran out of money.
I didn't over simplify anything. The fact is that nothing is going to need to be replaced, other than the roof, for a very long time.
As far as opportunity cost. How are we going to make any investments with that money??
The money we get from the sale would pay off our debt. Not go toward an investment.
And the very most the debt could extrapolate to, even at 25% interest, is a sum many times less than the nearly 250k we would be given up.
If you have a difference of opinion, fine. But don't ever insult my intelligence.
You act like paying off debt takes study time.
I had to follow-up on this quote, as it proves my point that your head is in the clouds about the situation at hand.
Paying off debt is actually a very small part of the problem you are facing! You have far greater issues that you should also be addressing, like learning how to set up & live on a budget and why your wife uses shopping as a coping mechanism.
I find it interesting that you mention this about Paul Graham in your blog...
"He is brilliant, brilliant. Transcending higher education status quo, brilliant. And because of this, or perhaps forced by this, I read his blog and study his advice as if they are the last written words of wisdom on earth."
So you are willing to study this guy's words for your side venture, BUT you don't think your financial situation requires study time???
We already did.
Budget set up on Mint and everything.
Next?
Really? How much did you net from selling stuff on Craigslist? How much are the roofing bids?You act like paying off debt takes study time.
Actually, it does. Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans. If you add it up, it's likely hundreds of hours.
Take the time to write Craigslist posts and sell your stuff. Take the time to work with a realtor. Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take. The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.Call each credit card company and have a chat?
Yes, actually, you SHOULD do this. Ask them to lower your interest rate, and see if they'll budge. Sometimes they will. Sometimes they may have offers. Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate. Play the game--you need every win you can get, however small.
Everything you've mentioned, we've already done.
Would you like me to do it a 2nd and 3rd time for fun sake?
Additional:
Have you put together a budget with your wife? If so, then post it up.
Getting a spending plan is step one. You have to know where the money is going.
Have you instituted tracking of your spending? If so what are you doing to track it? Is your wife tracking, too?
Doing the math on the rental.The problem is you're bad at math. If you were any good at it you wouldn't be in this mess in the first place.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.
Sent from my iPhone using Tapatalk
^for real. You need to expand your knowledge of investments, opportunity costs, and such. The above is such an over simplification of your rental situation. Are you accounting for the new roof? How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances. All of these things have a usable life that will expire at least once in the next 30 years. Did you look into the possible investments you could make with that money? Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market.
If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.
Oh, yeah.
http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/
It's a good read, if someone hasn't linked it before.
Do you think I'm a moron? That's an open question to everyone, as that's the vibe I'm getting.
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.
We lived in that house, and as such, everything is new.
We tore the house down to its studs.
It has brand new dry wall (2012). Brand new subfloors (2012). Brand new carpets (2013). Brand new tile (2013). Brand new bathroom (2013). Brand new 30 yr rated furnace (2014). Brand new hot water heater (2015). Brand new driveway (2013). Brand new recessed lighting and ceilings (2012). Brand new ceiled concrete floor in the basement (2012). Brand new concrete patio in the backyard (2012). Brand new siding (2013). Brand new stove and refrigerator - both stainless steel (2014).
The only thing that isn't new is the roof and that's because we ran out of money.
I didn't over simplify anything. The fact is that nothing is going to need to be replaced, other than the roof, for a very long time.
As far as opportunity cost. How are we going to make any investments with that money??
The money we get from the sale would pay off our debt. Not go toward an investment.
And the very most the debt could extrapolate to, even at 25% interest, is a sum many times less than the nearly 250k we would be given up.
If you have a difference of opinion, fine. But don't ever insult my intelligence.
But then explain how you are "giving" away $223K? Include in that formula paying off the HELOC, roof, and property tax. Then you'll have our attention. That is what people here are telling you. Do a believable formula where you really end up putting $500 or $600 in an investment account after the house is free and clear of debt of all kinds and the roof is put on. BTW - I imagine that part of your credit card debt is because of all of the NEW STUFF in the rental house - right? You still owe the money for all of that new.
This was actually our original thought, but after speaking to a realtor and breaking down the numbers, we would be losing money on the sale and we literally dont have the money to make up the difference.Malum Prohibitum - I think you are confusing the two houses. The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner. The house they are living in has a mortgage.If that were the case, then the solution is easy. Sell the big house and live in the rental house. Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.
Does Mr Money Mustache himself ever post on these forums?Yes, but not as much as he used to.
For the house you are currently living in, your case study shows a value over mortgage of $10k. What would your sale costs be?Malum Prohibitum - I think you are confusing the two houses. The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner. The house they are living in has a mortgage.If that were the case, then the solution is easy. Sell the big house and live in the rental house. Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.
This was actually our original thought, but after speaking to a realtor and breaking down the numbers, we would be losing money on the sale and we literally dont have the money to make up the difference.
I am no house/rental expert, but there might be other types of maintenance fees, such as :
- Changing the Windows (did that this year, pretty expensive)
- What if the water heater breaks? Those things are only good for 10 years right?
- Plumbing issues : a drain came loose with our dishwasher, and we found out because the bathroom wall in the basement was getting damp.
- Are you at risk of flooding? Would you have to pay a deductible on it?
- Vacancy is always a risk as well, apparently you should estimate 10% vacancy in calculations
In your first post, you note that the rental brings in 1100$ per month
You then posted that the expenses were 130$ for the HELOC and 375$ for taxes, bringing it to a net of 595$.
Do you have any insurance on the property?
I think there should be at least some maintenance calculated into this as well. I suppose the renters are paying electricity, trash and all those expenses?
For the house you are currently living in, your case study shows a value over mortgage of $10k. What would your sale costs be?
]
Insurance dropped us because of the roof.
The beatles,
What is your goal for this thread?
I just now went back and read all of page 1. I realized that you really never said. We may be imposing our goals on you, rather than helping you meet your own goals.
If your goal is maximizing your savings rate and financial independence, then you have to cut down spending drastically. In your case, that is easiest accomplished by selling stuff, lots of it. Either sell the rental house, sell the big house, or sell both and go rent for a while. Rent a place so close to work you can walk or even bike (we still, on page 17, do not know how far away your house is from work, or your rental house is from work). Then sell one or both cars. Stop buying so much shit, yes, that includes birthdays and Christmas.
Moving into the rental house probably means you can't fit everything, which means, of course, selling more stuff. Craigslist, yard sales, empty it out!
BUT YOUR GOAL MAY NOT BE A HIGH SAVINGS RATE AND FINANCIAL INDEPENDENCE!
So share what you hope to get out of this experience, and we can better tailor our advice to fit what it is you and your wife want out of life.
Help us help you.
]
Insurance dropped us because of the roof.
Your only asset and it is not insured????? Oh god.
If your statement is true you "literally don't have the money" to pay the property tax or for the roof on the rental. PUT IT ON THE MARKET TODAY. DON'T LET ANOTHER DAY GO BY.This was actually our original thought, but after speaking to a realtor and breaking down the numbers, we would be losing money on the sale and we literally dont have the money to make up the difference.Malum Prohibitum - I think you are confusing the two houses. The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner. The house they are living in has a mortgage.If that were the case, then the solution is easy. Sell the big house and live in the rental house. Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.
What would the house sell for (different than its value on page 1?) and what is the realtor's commission? Lets see the breakdown in numbers and how much you are losing (I assume by losing you mean the amount you would net is slightly less than what is owed). Even if you have to come up with a little at the closing table, this might still be the best option. It has to be a tiny amount if your page 1 value was anywhere close to accurate. Then we can discuss how to raise that amount of money.
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.I have two degrees. I am certainly not an idiot. I am an engineer. Still doesn't mean I know how to program a VCR.
I don't think you want MMMs response on this thread. It would be the same as what you've heard but are ignoring - sell the car, the rental, every unnecessary gadget in your home, including kids toys, get a second job (that will pay hourly, vs some pie in the sky startup dream that will COST money you don't have.) And he would tell you that your hair is on fire and that this debt is an emergency.
So you've heard the dozens of hours of wisdom everyone is imparting here - have you done any of these things? As far as I can tell you've called an accountant about your income taxes, signed up for mint, saved a few bucks on groceries, and that's about it. You have very few choices here- you HAVE to take some of these actions you're avoiding. And forget about a startup at this point in your life - where are you going to get the money for this??? You should be making these debts a #1 priority. How to do that? SELL YOUR ASSETS!!
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.I have two degrees. I am certainly not an idiot. I am an engineer. Still doesn't mean I know how to program a VCR.
What I'm saying is that having two degrees unfortunately does not save you from making horrible decisions. We've all been there, and like pretty much everyone I know I too have made terrible decisions based on knowledge and experience I should have had due to my degrees. Still made those calls and sometimes needed outside help to fix the ensuing havoc. Nobody says you're an idiot, it's just that many of those things that we learn at university turn out only to work in a perfect and ideal world. Especially when it comes to finance, I took a few classes because I was interested and boy did these professors idolize their models...
Anyhow, I'm proud of how far you've come. And I actually agree with you that keeping the rental property might be the smarter choice. This will, however, only work out well for you if you manage to pay off your debt as soon as possible - all of it - and treat that rental as the investment that it is supposed to be. Re: invest those $500 each month and make sure to have enough cash to fix whatever needs to get fixed. Then and only then does the math add up and you will make a profit. Right now, however, you're losing money left and right. Here's another idea that hasn't been tossed into the ring yet:
# Inform your current renters that unfortunately, they will need to move out in X months due to a personal emergency.
# Move back into the rental yourself. Yes, it'll be crowded but this will be the perfect opportunity for you to declutter and sell tons of stuff to make some money you can throw at those credit cards.
# Rent out the house you're currently living in. As far as I understand this should make you much more money in rent than the current rental, meaning you'll increase your incoming cashflow. That money, in turn, can be used to pay off debt faster.
Would that be a viable option? It sounds like both houses are in pretty good or at least decent condition and won't need any expensive repairs anytime soon.
I disagree. Keeping the rental is not an option. First - it needs a new roof. Second - it is encumbered by property tax debt that must be paid immediately or the third party collections people are just likely to buy it for themselves, third IT IS UNINSURED, fourth - it is highly unlikely he can rent the house they are living in for mortgage payment plus property taxes, plus insurance, plus cash buffer for house emergencies, plus cash buffer for period when it isn't rented, fourth they are in too much debt to make it work.Neither the roof nor the insurance will matter if they live in their by themselves. He may be able to fix the roof himself, who knows?
You act like paying off debt takes study time.
Actually, it does. Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans. If you add it up, it's likely hundreds of hours.
Take the time to write Craigslist posts and sell your stuff. Take the time to work with a realtor. Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take. The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.Call each credit card company and have a chat?
Yes, actually, you SHOULD do this. Ask them to lower your interest rate, and see if they'll budge. Sometimes they will. Sometimes they may have offers. Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate. Play the game--you need every win you can get, however small.
Everything you've mentioned, we've already done.
Would you like me to do it a 2nd and 3rd time for fun sake?
The beatles,
What is your goal for this thread?
I just now went back and read all of page 1. I realized that you really never said. We may be imposing our goals on you, rather than helping you meet your own goals.
If your goal is maximizing your savings rate and financial independence, then you have to cut down spending drastically. In your case, that is easiest accomplished by selling stuff, lots of it. Either sell the rental house, sell the big house, or sell both and go rent for a while. Rent a place so close to work you can walk or even bike (we still, on page 17, do not know how far away your house is from work, or your rental house is from work). Then sell one or both cars. Stop buying so much shit, yes, that includes birthdays and Christmas.
Moving into the rental house probably means you can't fit everything, which means, of course, selling more stuff. Craigslist, yard sales, empty it out!
BUT YOUR GOAL MAY NOT BE A HIGH SAVINGS RATE AND FINANCIAL INDEPENDENCE!
So share what you hope to get out of this experience, and we can better tailor our advice to fit what it is you and your wife want out of life.
Help us help you.
Our goal is to:
1) Pay off every ounce of debt we have.
2) Save a lot of money and feel finanically secure (at least $25k in readily accessible funds).
what is your goal here? What are you looking to get from this?Look at my similar question to him, and his response.
He makes roughly $60K per year. He owes $40K to the IRS, $60K to Credit Card, $15K to property taxes, $4K to fix the roof - that is almost 2 years of before tax pay. I don't see how you calculate he can pay off all of this debt and live on any grocery budget at all? Can you elaborate please? Because he already doesn't think his hair is on fire. And his rental house has no insurance because it needs a new roof - BTW - if that roof fails it could ruin all of the "new" stuff in the house his parents paid for.I keep forgetting about he $40k to the IRS.
BTW - when you have a failing roof - why do you put new appliances in a house? Why isn't the first priority the roof?
I don't think you want MMMs response on this thread. It would be the same as what you've heard but are ignoring - sell the car, the rental, every unnecessary gadget in your home, including kids toys, get a second job (that will pay hourly, vs some pie in the sky startup dream that will COST money you don't have.) And he would tell you that your hair is on fire and that this debt is an emergency.
So you've heard the dozens of hours of wisdom everyone is imparting here - have you done any of these things? As far as I can tell you've called an accountant about your income taxes, signed up for mint, saved a few bucks on groceries, and that's about it. You have very few choices here- you HAVE to take some of these actions you're avoiding. And forget about a startup at this point in your life - where are you going to get the money for this??? You should be making these debts a #1 priority. How to do that? SELL YOUR ASSETS!!
The beatles only real asset isn't. The rental property is uninsured with people living in it that could trip on something and have lifelong injuries. The rental property is a net liability in my book. SELL IT. GET IT ON THE MARKET TODAY. TAKE A SICK DAY TO DO THIS. YOUR HAIR IS ON FIRE. YOU ARE RISKING YOUR FAMILY KEEPING THE RENTAL WITHOUT INSURANCE.
Going in a totally different direction than other posts here for the last page or two. Or dozen. :)
I want to go back to a couple earlier points - your wife shopping because it makes her happy, and driving all over town every day to keep the children occupied and entertained.
There's a real opportunity here. For whatever reason, through your posts here the day to day life of your family members is coming across as somewhat unfulfilling, like a void that needs to be filled by external things. Not that they hate their life - but that something on a very fundamental level is missing.
Other people are saying drop the blog side hustle, put ALL your time into negotiating credit cards, researching when your foreclosure might happen, tax laws, etc.
As a person who is working to undo 30 years of accumulated clutter in my own house, now that I'm retired - I see that I am making good progress but I cannot just clean and craigslist and donate to thrift shops every minute of my waking life. I can keep up with regular chores, and accomplish one or two other tasks on my infinite to-do list and then I hit a wall and need a break.
I understand why people are saying you can't take a break - this is an emergency. Going back to the hair-on-fire metaphor, you can't be the fireman and decide in the midst of the fire - I'm going to just sit for ten minutes. Because the fire will get worse. I get that. But also - I get that you will need some down time. Even firemen battling raging wildfires take shifts.
What I want to toss out though is that a different sort of break might have more value to your family. Your blogging side hustle is about you getting a break to do something you find fulfilling. But you have a wife who is struggling to find something other than shopping that makes her feel happy. You probably get to talk to other adults in your day to day job, and then the side hustle is something you find intellectually stimulating on top of that. It's so much harder as a stay at home mom, spending all the waking hours solely interacting with toddlers. And you have children who apparently are struggling to find happiness on their own, who need to be entertained by outside activities or things. What if you used your spare time to create family experiences and traditions and memories with your wife and children, instead of coding a website, or retreating to a mancave in the basement to watch a giant tv or play video games?
It could be building an outside temporary fort with the kids (out of items you find, blankets and chairs - not a trip to the hardware store), and having a picnic in it once a week - and having an indoor picnic weekly if it's raining out. It could be a talent (or "no-talent") show once a week, where you take turns singing, or telling a joke, or doing a dance, or performing athletic feats, or telling a story, or doing a puppet show. You could have a weekly "kids pick a meal they like, and we learn together to cook it" night. Find multiple things like this that add value to your family life, and make your time together what brings happiness to your wife and the planning for these things during the day could be the thing that keeps your kids actively engaged in the world, instead of outsiders having the create the entertainment or environment for them.
Sorry Mr. Beatles, I went to bed and it looks like you got pretty buffeted overnight!
Folks, beatles HAS been making a lot of steps in his first week... small steps, but forward steps. He DID cancel that TV. He DID stop buying lunch for everyone. He DID get his wife on the same page, and they HAVE been cutting spending. Etc. He DOES seem willing to sell his rental although understandably scared to take such a large step after throwing so much money into it. Yes, most of us would be running and screaming long before we got to the point where he is, but at least he is tiptoeing away from the fire, not further into it.
Do you think I'm a moron?
I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.
According to Thomas Stanley, the profession that most grossly UNDERaccumulates wealth in relation to income is . . . drum roll please . . . doctors.
Do you think doctors are morons? Are they idiots? After all, they have degrees!
There is no relationship to your IQ and your net worth today.
The only thing that matters is your savings rate. This is the percentage of your net income that you do not spend. Do you even know what yours is? Your college degrees will not tell you what it is. Your IQ will not, either. My grandparents did not graduate high school, but they had huge savings rates. Yours probably did, too.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I don't get the impression it is a HCOL area. Beatle - you say don't want to lose the $500 a month in rent, I understand, but how much will insurance cost? And what if property taxes go up? And what happens when they move out and it needs to be painted and carpets cleaned or they break the microwave. What happens when the tenants move out in the middle of the night and you find they left a pile of crap for you to clean up. These things have all happened to me with rentals. $500 is just not enough per month to justify when you are in this kind of situation. Maybe you are not truly freaked out because your parents will bail you out. Maybe you just don't think it will happen to you. But, you need to sell the rental or move into it and sell the other house. You can't have a rental without insurance, that is potential financial ruin, please don't do this to yourself or your family.
I don't think you want MMMs response on this thread. It would be the same as what you've heard but are ignoring - sell the car, the rental, every unnecessary gadget in your home, including kids toys, get a second job (that will pay hourly, vs some pie in the sky startup dream that will COST money you don't have.) And he would tell you that your hair is on fire and that this debt is an emergency.
So you've heard the dozens of hours of wisdom everyone is imparting here - have you done any of these things? As far as I can tell you've called an accountant about your income taxes, signed up for mint, saved a few bucks on groceries, and that's about it. You have very few choices here- you HAVE to take some of these actions you're avoiding. And forget about a startup at this point in your life - where are you going to get the money for this??? You should be making these debts a #1 priority. How to do that? SELL YOUR ASSETS!!
The beatles only real asset isn't. The rental property is uninsured with people living in it that could trip on something and have lifelong injuries. The rental property is a net liability in my book. SELL IT. GET IT ON THE MARKET TODAY. TAKE A SICK DAY TO DO THIS. YOUR HAIR IS ON FIRE. YOU ARE RISKING YOUR FAMILY KEEPING THE RENTAL WITHOUT INSURANCE.
I was wrong.
It's 3 years, not 2.
Ugh.
Pizza's are not an option.
Going in a totally different direction than other posts here for the last page or two. Or dozen. :)
I want to go back to a couple earlier points - your wife shopping because it makes her happy, and driving all over town every day to keep the children occupied and entertained.
There's a real opportunity here. For whatever reason, through your posts here the day to day life of your family members is coming across as somewhat unfulfilling, like a void that needs to be filled by external things. Not that they hate their life - but that something on a very fundamental level is missing.
Other people are saying drop the blog side hustle, put ALL your time into negotiating credit cards, researching when your foreclosure might happen, tax laws, etc.
As a person who is working to undo 30 years of accumulated clutter in my own house, now that I'm retired - I see that I am making good progress but I cannot just clean and craigslist and donate to thrift shops every minute of my waking life. I can keep up with regular chores, and accomplish one or two other tasks on my infinite to-do list and then I hit a wall and need a break.
I understand why people are saying you can't take a break - this is an emergency. Going back to the hair-on-fire metaphor, you can't be the fireman and decide in the midst of the fire - I'm going to just sit for ten minutes. Because the fire will get worse. I get that. But also - I get that you will need some down time. Even firemen battling raging wildfires take shifts.
What I want to toss out though is that a different sort of break might have more value to your family. Your blogging side hustle is about you getting a break to do something you find fulfilling. But you have a wife who is struggling to find something other than shopping that makes her feel happy. You probably get to talk to other adults in your day to day job, and then the side hustle is something you find intellectually stimulating on top of that. It's so much harder as a stay at home mom, spending all the waking hours solely interacting with toddlers. And you have children who apparently are struggling to find happiness on their own, who need to be entertained by outside activities or things. What if you used your spare time to create family experiences and traditions and memories with your wife and children, instead of coding a website, or retreating to a mancave in the basement to watch a giant tv or play video games?
It could be building an outside temporary fort with the kids (out of items you find, blankets and chairs - not a trip to the hardware store), and having a picnic in it once a week - and having an indoor picnic weekly if it's raining out. It could be a talent (or "no-talent") show once a week, where you take turns singing, or telling a joke, or doing a dance, or performing athletic feats, or telling a story, or doing a puppet show. You could have a weekly "kids pick a meal they like, and we learn together to cook it" night. Find multiple things like this that add value to your family life, and make your time together what brings happiness to your wife and the planning for these things during the day could be the thing that keeps your kids actively engaged in the world, instead of outsiders having to create the entertainment or environment for them.
Have some good and bad news.
I called around and got the property tax payment plan set up.
The monthly payment is a bit of a shocker, but what can you do?
Moving forward...
http://stackingpennies.org/property-tax-payment-plan-rental-house/
WHY?
Have some good and bad news.
I called around and got the property tax payment plan set up.
The monthly payment is a bit of a shocker, but what can you do?
Moving forward...
http://stackingpennies.org/property-tax-payment-plan-rental-house/
Have some good and bad news.
I called around and got the property tax payment plan set up.
The monthly payment is a bit of a shocker, but what can you do?
Moving forward...
http://stackingpennies.org/property-tax-payment-plan-rental-house/
Have some good and bad news.
I called around and got the property tax payment plan set up.
The monthly payment is a bit of a shocker, but what can you do?
Moving forward...
http://stackingpennies.org/property-tax-payment-plan-rental-house/
AWESOME work. Now you know what the requirement is, and you have a path forward.
The next step is figuring out how much money you have in your budget to devote to debt repayment. That's your starting "snowball" amount.
Run the numbers and calculate what that number is. Then go back and look at your budget again, and see where you might be able to squeeze more money out of it. Be ruthless.
Report that number back to us, and we can then suggest a payment plan.
Great work!
Taking everything at face value in your blog post - You can pay at 18% interest
OR
you can sell and walk away with $30,000.
Then use the 30,000 to pay off debt.
Just by selling, you will have eliminated the property tax debt, the HELOC, the car note, all of the credit cards, and, if I am correct, be left with no debt but your mortgage and the $40k to the IRS.
Is that right?
I know which way I would go. In one fell swoop, you will have eliminated ALL of those monthly recurring obligations. The $535 to the property tax lien holder. The $670 you already did (lunches and massages). The $393 to the car . . . are you adding this up? By the way, once you payoff the car, you can reduce the insurance on it and save monthly there, too ($135 a month for insurance is insane). Plus the $850 monthly on credit cards and furniture debt. Plus the monthly payment on the HELOC ($135???). How much a month is that, total? Start setting it aside each month, stockpiling cash to workout your IRS issue. Then start saving for real.
The zoot's post is worded awkwardly, but he said in the first line, "now you know what the requirement is." He is asking you to figure out how much room you have in your budget to pay it faster.
The zoot's post is worded awkwardly, but he said in the first line, "now you know what the requirement is." He is asking you to figure out how much room you have in your budget to pay it faster.
From your blog:
"Either way, we have the payment agreement setup, and that means we have a small moment to breathe and assess our next steps."
How do you figure you have a moment to breathe? Your blog doesn't take into account that you soon owe more than $4K more in property tax on this unit , that you cannot afford this payment, and that it is uninsured - leaving you open to unlimited liability - for instance - if a visiting child trips on a tree root on the property and has lifelong injuries.
Selling the home would save you almost $3000 monthly in expenses. Seriously, add up the categories I put up there in post #854 (HELOC, property tax, credit cards, furniture, car payments, and I am including the $670 already saved in work lunches and massages).
Grocery/eating out expense modification could save you another $1000.
That's $4000 a month just by selling the rental.
How soon could you pay off the IRS with an extra $4000 a month available?
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
How soon could you pay off the IRS with an extra $4000 a month available?
btw, MMM has an article in which he laid out the math on a decision to rent rather than sell a house that he renovated. His conclusion was that he should have sold and put the money into the market even though he would have sold the house at a loss. It's worth a read re: your math on your own rental house.
Ugh. I dont think any of you realize how frustrating this is.
Beatles, why are the insurance companies refusing to insure the rental?
Have you read MMM's blog? It's a great read, very entertaining, and I highly recommend reading the whole thing from the beginning. It's hard not to spend money freely in our culture, particularly when you are used to doing so. It requires a complete mind shift and habit change, which are things that take a long time to cultivate. I find reading his blog articles helpful whenever I get off track with spending or my mindset, even 6+ years after finding his blog.
I think he might have some articles that address parents constantly driving kids around to activities that your wife might like.
**** "the other rental"? What? You have two?
But don't forget; He would have put it into the market. Not paid off debt.
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
Yeah, but it's honestly not even worth getting into that whole backstory.
You have another rental you haven't told us about??????
"But i'd almost rather sell the other rental that has $100k in equity than walk away with $30k on this one."
And if you do - why is the decision to sell this rental so hard? You are open to so much liability with that rental - I would not be able to sleep if I were you. I guess that is because I'm a lawyer and I've seen what can happen.
btw, MMM has an article in which he laid out the math on a decision to rent rather than sell a house that he renovated. His conclusion was that he should have sold and put the money into the market even though he would have sold the house at a loss. It's worth a read re: your math on your own rental house.
I've seen it.
But don't forget; He would have put it into the market. Not paid off debt.
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.You tell them the truth. You got in way over your heads, it had become a liability because it was uninsurable, you made the difficult decision to cut your losses now instead of risking losing all of it (or more) in a fire or other accident. That you don't consider it a total loss because it was the final push you needed to realize you need to start being responsible for your own financial decisions. And that you are going to use the profits to pay off your existing debts instead of running to them yet again to be bailed out.
Selling the home would save you almost $3000 monthly in expenses. Seriously, add up the categories I put up there in post #854 (HELOC, property tax, credit cards, furniture, car payments, and I am including the $670 already saved in work lunches and massages).
Grocery/eating out expense modification could save you another $1000.
That's $4000 a month just by selling the rental.
How soon could you pay off the IRS with an extra $4000 a month available?
10 months.
Or less if they accept the lesser amount the accountant is proposing.
But i'd almost rather sell the other rental that has $100k in equity than walk away with $30k on this one.
Ugh. I dont think any of you realize how frustrating this is.
Selling the home would save you almost $3000 monthly in expenses. Seriously, add up the categories I put up there in post #854 (HELOC, property tax, credit cards, furniture, car payments, and I am including the $670 already saved in work lunches and massages).
Grocery/eating out expense modification could save you another $1000.
That's $4000 a month just by selling the rental.
How soon could you pay off the IRS with an extra $4000 a month available?
10 months.
Or less if they accept the lesser amount the accountant is proposing.
But i'd almost rather sell the other rental that has $100k in equity than walk away with $30k on this one.
Ugh. I dont think any of you realize how frustrating this is.
But don't forget; He would have put it into the market. Not paid off debt.
By paying off your debt, you are in fact investing.
The rate of return is the interest rate on the debt you're paying off.
By paying those debts, you are getting a return in the amount of interest you would have paid had you kept the debt.
If I had the choice between investing at 8% and paying off debt at 25% (or 18%, or 10%), I'd pay off the debt.
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
Do you think I'm a moron? That's an open question to everyone, as that's the vibe I'm getting.
I understand why people are saying you can't take a break - this is an emergency. Going back to the hair-on-fire metaphor, you can't be the fireman and decide in the midst of the fire - I'm going to just sit for ten minutes. Because the fire will get worse. I get that. But also - I get that you will need some down time. Even firemen battling raging wildfires take shifts.
YOU HAVE ANOTHER RENTAL???
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
I don't get the impression it is a HCOL area. Beatle - you say don't want to lose the $500 a month in rent, I understand, but how much will insurance cost? And what if property taxes go up? And what happens when they move out and it needs to be painted and carpets cleaned or they break the microwave. What happens when the tenants move out in the middle of the night and you find they left a pile of crap for you to clean up. These things have all happened to me with rentals. $500 is just not enough per month to justify when you are in this kind of situation. Maybe you are not truly freaked out because your parents will bail you out. Maybe you just don't think it will happen to you. But, you need to sell the rental or move into it and sell the other house. You can't have a rental without insurance, that is potential financial ruin, please don't do this to yourself or your family.
Being a landlord yourself, what is enough to make it worthwhile for you?
How much do you require your properties to net you?
YOU HAVE ANOTHER RENTAL???
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
YOU HAVE ANOTHER RENTAL???
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
Beatles, you are going to have to explain how you "forgot" to mention before now that you own another house that has $100k in equity. That obviously has a huge bearing on all the advice you've been given. If you don't explain that, then more of us are going to conclude you are having us on.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
How soon could you pay off the IRS with an extra $4000 a month available?
10 months.
Or less if they accept the lesser amount the accountant is proposing.
But i'd almost rather sell the other rental that has $100k in equity than walk away with $30k on this one.
Ugh. I dont think any of you realize how frustrating this is.
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
I don't get the impression it is a HCOL area. Beatle - you say don't want to lose the $500 a month in rent, I understand, but how much will insurance cost? And what if property taxes go up? And what happens when they move out and it needs to be painted and carpets cleaned or they break the microwave. What happens when the tenants move out in the middle of the night and you find they left a pile of crap for you to clean up. These things have all happened to me with rentals. $500 is just not enough per month to justify when you are in this kind of situation. Maybe you are not truly freaked out because your parents will bail you out. Maybe you just don't think it will happen to you. But, you need to sell the rental or move into it and sell the other house. You can't have a rental without insurance, that is potential financial ruin, please don't do this to yourself or your family.
Being a landlord yourself, what is enough to make it worthwhile for you?
How much do you require your properties to net you?
I only have two properties. One we bought as a rental 9 years ago. Mortgage interest, taxes and insurance are around $425 per month, principal is another $360. It rents for $1,150 per month, so $725 extra per month which includes the principal payoff amount. But this one turns over a lot. Second one is my old house. The seller's market sucks, but the rental market is great so it's been rented for the last four years and I'm only on my second tenant who just renewed for another year. Mortgage interest, taxes and insurance are around $730 per month, principal is another $500. It rents for $1,650 per month, so $920 extra per month which includes the principal payoff amount. Neither one is great for cash flow, last four years we've ended up pretty cash neutral due to AC units, hurricane damage, new roof and tenant turnover. But, we take depreciation each year which gives me a loss for my taxes.
Looking at those numbers, not so hot, I am the first to agree and probably some of the longtime landlord experts here on MMM would laugh at me. But in three years (my teen graduates high school in 2.5 years), the plan is to move back to that town and into my house for two years, then sell it. That converts it back into a primary residence and wipes out any depreciation I'd have to pay back. After it's sold, move into the rental, repeat and then find a new place to live.
This is long, but my point is that I had to look at all four aspects to get my justification. The cash is not enough, there always seems to be something to pay for. Someone else paying the mortgage, nice also, but still not enough. A paper loss for tax purposes and being able to wipe out having to pay it back by living in them - put all four together and it's worth it to me.
In your situation, I'd put emotion aside and sell the damn thing. I took a $90k loss on a house once, it was painful and I still kick myself over the stupidity, but it had to be done so we did it.
btw, MMM has an article in which he laid out the math on a decision to rent rather than sell a house that he renovated. His conclusion was that he should have sold and put the money into the market even though he would have sold the house at a loss. It's worth a read re: your math on your own rental house.
I've seen it.
But don't forget; He would have put it into the market. Not paid off debt.
**** "the other rental"? What? You have two?
Yeah, but it's honestly not even worth getting into that whole backstory.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
YOU HAVE ANOTHER RENTAL???
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
What?
I never forgot the IRS debt.
It has been part of this thread since day 1. People just didn't see it at the bottom of the post.
The only thing I didn't tell people about is the 2nd rental and I REGRET THAT I DID. There is NOTHING I can do about it. It's an impossible situation. Why bring up something you cant change? It's like being mad that the sky is blue.
**** "the other rental"? What? You have two?
Yeah, but it's honestly not even worth getting into that whole backstory.
Now I'm thinking the T word. As explained time and time again, you can't get honest and useful help without the full picture. Is this mommy and daddy's rental? What is it?
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, "it's not consequential" and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
The only thing I didn't tell people about is the 2nd rental and I REGRET THAT I DID. There is NOTHING I can do about it. It's an impossible situation. Why bring up something you cant change? It's like being mad that the sky is blue.
btw, MMM has an article in which he laid out the math on a decision to rent rather than sell a house that he renovated. His conclusion was that he should have sold and put the money into the market even though he would have sold the house at a loss. It's worth a read re: your math on your own rental house.
I've seen it.
But don't forget; He would have put it into the market. Not paid off debt.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
The only thing I didn't tell people about is the 2nd rental and I REGRET THAT I DID. There is NOTHING I can do about it. It's an impossible situation. Why bring up something you cant change? It's like being mad that the sky is blue.
If there is anything else you want to put into the mix, now would be a good time. Some recent details that have come to light after the original case study have in fact been critical to planning the strategy (the fact that the property taxes were delinquent for three years, the fact that the rental was not insured). If there's anything else that might be significant, especially in regards to cash flow, liabilities, insurance, tax, or any other issues related to Rental #2, get it out now, to the extent you can.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Jumping in here, I have one rental property and have learned my fair share about landlording and real estate investing.I don't get the impression it is a HCOL area. Beatle - you say don't want to lose the $500 a month in rent, I understand, but how much will insurance cost? And what if property taxes go up? And what happens when they move out and it needs to be painted and carpets cleaned or they break the microwave. What happens when the tenants move out in the middle of the night and you find they left a pile of crap for you to clean up. These things have all happened to me with rentals. $500 is just not enough per month to justify when you are in this kind of situation. Maybe you are not truly freaked out because your parents will bail you out. Maybe you just don't think it will happen to you. But, you need to sell the rental or move into it and sell the other house. You can't have a rental without insurance, that is potential financial ruin, please don't do this to yourself or your family.
Being a landlord yourself, what is enough to make it worthwhile for you?
How much do you require your properties to net you?
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Oh my gosh, Beatles! Could your family move in the 1,000 s.f. apartment, even temporarily? Then you could sell current house and rental property, and your wife would have some adult company nearby but not underfoot.
You've got a lot of moving parts. Imagine if you took two of them - your current house and your rental house - and *poof* did away with them.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
Just to be clear though, I didn't leave those items out (example; taxes).
They're right there in the case study.
People just didnt see them for whatever reason.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Just to be clear though, I didn't leave those items out (example; taxes).
They're right there in the case study.
People just didnt see them for whatever reason.
Yes, you mentioned $9K in taxes. I myself missed that, and apologized for doing so. I still owe you a careful re-read of the case study details, which I should be able to do later tonight.
The reality, however, was that it was ~$11K in delinquent taxes, and another ~$4K in current taxes, for a total of ~$15K.
The higher amount, and the nature of the tax as delinquent or current, make a difference in how they should be handled.
Delinquent taxes can get your house taken away today; failure to pay current taxes might get your house taken away next year, but not today.
See the difference? See why it's important for us to know these things so we can give solid advice?
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
None of the above. I was kicked out when I was 14 (story for another time) , saw how badly my parents had managed money and was determined not to follow that path (they both died broke). I had friends whose fathers were bankers and accountants who gave me very good money advice, which I follow to this day: "live like you are poorer than poor". I made a career in the kitchen (I was a Chef), saved over half of what I made, invested wisely and didn't buy anything I didn't need. I do own a house, which I paid off over 20 years ago and I just paid cash for a brand-new car, which I will keep for many years (probably for the rest of my life). I still don't buy anything I don't need, nor do I buy the latest-greatest toys. Live minimal, save maximal. Sell your shit, be brutally honest with your parents, pay off your debts. When you do that, you will breath better, sleep better, feel better and then you can save better. Your kids will thank you, far more than you think.
YOU HAVE ANOTHER RENTAL???
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
What?
I never forgot the IRS debt.
It has been part of this thread since day 1. People just didn't see it at the bottom of the post.
The only thing I didn't tell people about is the 2nd rental and I REGRET THAT I DID. There is NOTHING I can do about it. It's an impossible situation. Why bring up something you cant change? It's like being mad that the sky is blue.
You never said you were 3 years delinquent in your taxes. You seemed to forget that part.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Oh my gosh, Beatles! Could your family move in the 1,000 s.f. apartment, even temporarily? Then you could sell current house and rental property, and your wife would have some adult company nearby but not underfoot.
You've got a lot of moving parts. Imagine if you took two of them - your current house and your rental house - and *poof* did away with them.
It's a 1 bedroom apt. I really don't know how we would possibly make that work.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
How about they buy it from you? They're not really doing you a favour by keeping 100k in equity locked up.
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Oh my gosh, Beatles! Could your family move in the 1,000 s.f. apartment, even temporarily? Then you could sell current house and rental property, and your wife would have some adult company nearby but not underfoot.
You've got a lot of moving parts. Imagine if you took two of them - your current house and your rental house - and *poof* did away with them.
It's a 1 bedroom apt. I really don't know how we would possibly make that work.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
None of the above. I was kicked out when I was 14 (story for another time) , saw how badly my parents had managed money and was determined not to follow that path (they both died broke). I had friends whose fathers were bankers and accountants who gave me very good money advice, which I follow to this day: "live like you are poorer than poor". I made a career in the kitchen (I was a Chef), saved over half of what I made, invested wisely and didn't buy anything I didn't need. I do own a house, which I paid off over 20 years ago and I just paid cash for a brand-new car, which I will keep for many years (probably for the rest of my life). I still don't buy anything I don't need, nor do I buy the latest-greatest toys. Live minimal, save maximal. Sell your shit, be brutally honest with your parents, pay off your debts. When you do that, you will breath better, sleep better, feel better and then you can save better. Your kids will thank you, far more than you think.
I guess this is sort of a philosophical question, but what's the point of saving all that money if we only buy what we need?
I could probably cut our expenses to half of my salary if we only bought what we need need.
Because then you can get to financial independence- no debt, and enough investments that their earnings cover what you need. Then you can either not work, or not work for money, or work and spend your money on toys and vacations- debt free.I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
None of the above. I was kicked out when I was 14 (story for another time) , saw how badly my parents had managed money and was determined not to follow that path (they both died broke). I had friends whose fathers were bankers and accountants who gave me very good money advice, which I follow to this day: "live like you are poorer than poor". I made a career in the kitchen (I was a Chef), saved over half of what I made, invested wisely and didn't buy anything I didn't need. I do own a house, which I paid off over 20 years ago and I just paid cash for a brand-new car, which I will keep for many years (probably for the rest of my life). I still don't buy anything I don't need, nor do I buy the latest-greatest toys. Live minimal, save maximal. Sell your shit, be brutally honest with your parents, pay off your debts. When you do that, you will breath better, sleep better, feel better and then you can save better. Your kids will thank you, far more than you think.
I guess this is sort of a philosophical question, but what's the point of saving all that money if we only buy what we need?
I could probably cut our expenses to half of my salary if we only bought what we need need.
Have them move into the one bedroom and you all move back into the house and sell the other two to fix the debt.There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
How about they buy it from you? They're not really doing you a favour by keeping 100k in equity locked up.
The reason they're renting it is because they can't buy a house.
(they have a couple hundred thousand due in back taxes and cant get a mortgage and even if they could buy a house cash the govt would come after it)
There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
How about they buy it from you? They're not really doing you a favour by keeping 100k in equity locked up.
The reason they're renting it is because they can't buy a house.
(they have a couple hundred thousand due in back taxes and cant get a mortgage and even if they could buy a house cash the govt would come after it)
Of course you could make this work temporarily. People quite literally do this all the time because they HAVE to. There is a journal on here by a woman who moved into a one-bedroom apartment with her two children after a divorce. You could take take care of all your problems and babysitters nearby when cabin fever sets in. This is an absolute gift. Take it, save up some money, and never go back to your old lifestyle.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
None of the above. I was kicked out when I was 14 (story for another time) , saw how badly my parents had managed money and was determined not to follow that path (they both died broke). I had friends whose fathers were bankers and accountants who gave me very good money advice, which I follow to this day: "live like you are poorer than poor". I made a career in the kitchen (I was a Chef), saved over half of what I made, invested wisely and didn't buy anything I didn't need. I do own a house, which I paid off over 20 years ago and I just paid cash for a brand-new car, which I will keep for many years (probably for the rest of my life). I still don't buy anything I don't need, nor do I buy the latest-greatest toys. Live minimal, save maximal. Sell your shit, be brutally honest with your parents, pay off your debts. When you do that, you will breath better, sleep better, feel better and then you can save better. Your kids will thank you, far more than you think.
I guess this is sort of a philosophical question, but what's the point of saving all that money if we only buy what we need?
I could probably cut our expenses to half of my salary if we only bought what we need need.
I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success. Learn to listen to some people who may have been where you are but turned it around. They may have degrees, too. They may not. But learn what you can from those who have succeeded in having high savings rates.
I am a junior-high dropout. Yep, never went to high school or college, worked since I was 14 and am stupid as hell about math. But my net worth (at last check) was almost $2M. Yep, a dropout worth 2 Million and whose monthly expenses are just shy of $900/month. And I still put money away monthly too :).
How'd you do that??
Spill the beans.
Do you have a family? Single? High paying job?
None of the above. I was kicked out when I was 14 (story for another time) , saw how badly my parents had managed money and was determined not to follow that path (they both died broke). I had friends whose fathers were bankers and accountants who gave me very good money advice, which I follow to this day: "live like you are poorer than poor". I made a career in the kitchen (I was a Chef), saved over half of what I made, invested wisely and didn't buy anything I didn't need. I do own a house, which I paid off over 20 years ago and I just paid cash for a brand-new car, which I will keep for many years (probably for the rest of my life). I still don't buy anything I don't need, nor do I buy the latest-greatest toys. Live minimal, save maximal. Sell your shit, be brutally honest with your parents, pay off your debts. When you do that, you will breath better, sleep better, feel better and then you can save better. Your kids will thank you, far more than you think.
I guess this is sort of a philosophical question, but what's the point of saving all that money if we only buy what we need?
I could probably cut our expenses to half of my salary if we only bought what we need need.
For fucks sake...That's HUGE, The Beatles, HUGE!
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
Of course you could make this work temporarily. People quite literally do this all the time because they HAVE to. There is a journal on here by a woman who moved into a one-bedroom apartment with her two children after a divorce. You could take take care of all your problems and babysitters nearby when cabin fever sets in. This is an absolute gift. Take it, save up some money, and never go back to your old lifestyle.
Where does everyone sleep!?!?
Either way, would have to wait until August at the minimum for the tenants lease to be up.
Of course you could make this work temporarily. People quite literally do this all the time because they HAVE to. There is a journal on here by a woman who moved into a one-bedroom apartment with her two children after a divorce. You could take take care of all your problems and babysitters nearby when cabin fever sets in. This is an absolute gift. Take it, save up some money, and never go back to your old lifestyle.
Where does everyone sleep!?!?
Either way, would have to wait until August at the minimum for the tenants lease to be up.
Of course you could make this work temporarily. People quite literally do this all the time because they HAVE to. There is a journal on here by a woman who moved into a one-bedroom apartment with her two children after a divorce. You could take take care of all your problems and babysitters nearby when cabin fever sets in. This is an absolute gift. Take it, save up some money, and never go back to your old lifestyle.
Where does everyone sleep!?!?
Either way, would have to wait until August at the minimum for the tenants lease to be up.
guess this is sort of a philosophical question, but what's the point of saving all that money if we only buy what we need?
I could probably cut our expenses to half of my salary if we only bought what we need need.
Have them move into the one bedroom and you all move back into the house and sell the other two to fix the debt.There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
How about they buy it from you? They're not really doing you a favour by keeping 100k in equity locked up.
The reason they're renting it is because they can't buy a house.
(they have a couple hundred thousand due in back taxes and cant get a mortgage and even if they could buy a house cash the govt would come after it)
Is the issue your pride? I see a theme here, you pay for lunch for your coworkers so you look like the rich guy, and you let your in-laws live in a house that you have $100k in equity tied up in so you can save them from their financial problems. Again you look like the rich guy. Meanwhile you are up to your eyeballs in debt.
For fucks sake...That's HUGE, The Beatles, HUGE!
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
You left out a major part of your situation that affects:
Assets
Liabilities
Net Worth
Risk
Cash Flow
This changes everything!
For fucks sake...That's HUGE, The Beatles, HUGE!
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
You left out a major part of your situation that affects:
Assets
Liabilities
Net Worth
Risk
Cash Flow
This changes everything!
I really don't see how this changes anything at all.
Have them move into the one bedroom and you all move back into the house and sell the other two to fix the debt.There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
How about they buy it from you? They're not really doing you a favour by keeping 100k in equity locked up.
The reason they're renting it is because they can't buy a house.
(they have a couple hundred thousand due in back taxes and cant get a mortgage and even if they could buy a house cash the govt would come after it)
Is the issue your pride? I see a theme here, you pay for lunch for your coworkers so you look like the rich guy, and you let your in-laws live in a house that you have $100k in equity tied up in so you can save them from their financial problems. Again you look like the rich guy. Meanwhile you are up to your eyeballs in debt.
The reason we moved out is because we can't pay the mortgage on that place.
How would moving back in help the problem?
I guess this is sort of a philosophical question, but what's the point ofsavingspending all that money if weonlycan't buy what we need?
You are giving quite a gift to your wife's family if they are living there rent free.LOL! You are going to keep playing this game with him, Zoot??? Good luck.
If you had renters there, what would that house rent for?
Let's say the main house would rent for $1500/month, and the apartment for $500/month. (Numbers may not be right for your area, but just for the sake of example let's use them.) This is $2000/month, or $24K a year in gross income that you could be making, but aren't.
Can you really afford to give your wife's family $24K a year, at the expense of your own household?
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
You act like paying off debt takes study time.
I had to follow-up on this quote, as it proves my point that your head is in the clouds about the situation at hand.
Paying off debt is actually a very small part of the problem you are facing! You have far greater issues that you should also be addressing, like learning how to set up & live on a budget and why your wife uses shopping as a coping mechanism.
I find it interesting that you mention this about Paul Graham in your blog...
"He is brilliant, brilliant. Transcending higher education status quo, brilliant. And because of this, or perhaps forced by this, I read his blog and study his advice as if they are the last written words of wisdom on earth."
So you are willing to study this guy's words for your side venture, BUT you don't think your financial situation requires study time???
We already did.
Budget set up on Mint and everything.
Next?
In your first post, you note that the rental brings in 1100$ per month
You then posted that the expenses were 130$ for the HELOC and 375$ for taxes, bringing it to a net of 595$.
Do you have any insurance on the property?
Insurance dropped us because of the roof.
LOL! You are going to keep playing this game with him, Zoot??? Good luck.
What about this:
1) Sell current house.
2) Sell roof-issue rental house.
. . .
OR
1) Sell $100K equity house
2) Sell roof-issue rental house.
. . .
OR
Sell all three houses, rent a smaller, different house where your family and wife's parents can live until you all get your financial issues in order.
I think the deadbeat relatives are paying rent on that $300K house. Otherwise, he'd have lost it already.Nope. They are "covering costs," according to The Beatles.
I think the deadbeat relatives are paying rent on that $300K house. Otherwise, he'd have lost it already.Nope. They are "covering costs," according to The Beatles.
What about this:
1) Sell current house.
2) Sell roof-issue rental house.
. . .
OR
1) Sell $100K equity house
2) Sell roof-issue rental house.
. . .
OR
Sell all three houses, rent a smaller, different house where your family and wife's parents can live until you all get your financial issues in order.
LOL!
We'll see.
The answer for a guy with over half a million in assets that are not producing income and just a small fraction of that in debt SOME OF WHICH COULD WIPE HIM OUT is to sell some of the assets and get rid of the super risky, high interest debt.
The beatles has to know this.
Sell two of the three properties. All of the fires are immediately extinguished.
Then you can "easily" save half your income, as you suggested above, The beatles.
I think the deadbeat relatives are paying rent on that $300K house. Otherwise, he'd have lost it already.Nope. They are "covering costs," according to The Beatles.
Does this mean they're paying the mortgage/HELOC? I think that's how I read it and that The Beatles is saying it doesn't matter because it's the family's problem, not his. They couldn't get a mortgage on their own, so they're essentially stepping in for Beatles. The issue will become what happens if the family staying in the house can no longer pay those bills, it's not in their name, it's not their credit/assets that would be affected.You already know what will happen when the family can no longer pay the bills, BabyShark, and so does The beatles. This whole thread has passed the silly point now.
You are giving quite a gift to your wife's family if they are living there rent free.
If you had renters there, what would that house rent for?
Let's say the main house would rent for $1500/month, and the apartment for $500/month. (Numbers may not be right for your area, but just for the sake of example let's use them.) This is $2000/month, or $24K a year in gross income that you could be making, but aren't.
Can you really afford to give your wife's family $24K a year, at the expense of your own household?
I think the deadbeat relatives are paying rent on that $300K house. Otherwise, he'd have lost it already.Nope. They are "covering costs," according to The Beatles.
Your deadbeat in laws are scamming you just as they are scamming the tax man. What you say to them is "Sorry. [That bit's a lie, but you are being polite here.] I need to take the equity out of this house, as I can't afford not to have a return on it. I'm putting the house on the market and you need to leave. If you still want to rent from me, I'm willing to give notice to my tenants in [rental house] and you can move in there for a rent of $600 a month. If not, good luck finding your new home". Then you call up an estate agent and put it on the market, pronto. If there are renters in the annex (who are presumably paying rent to your deadbeat in laws, which is part of the in laws' scam), you look at ways to get them out before August, including an offer of payment of a thousand or so if they vacate at closing. That gives you $100k in equity which sorts all your problems.
You urgently need to talk to an expert insurance agent about getting the rental insured. It should be possible to get limited cover, eg for fire damage and occupier's liability but excluding water/storm damage. That would mitigate the worst of the risk you are currently carrying.
For fucks sake...That's HUGE, The Beatles, HUGE!
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
You left out a major part of your situation that affects:
Assets
Liabilities
Net Worth
Risk
Cash Flow
This changes everything!
I really don't see how this changes anything at all.
The beatles,
You are playing with me, right?
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
It's really not worth discussing. This family living there is irresponsible, and he is taking on more risk to have them there. The beatles is not in a position to take on more risk. He has way too much financial risk already.I think the deadbeat relatives are paying rent on that $300K house. Otherwise, he'd have lost it already.Nope. They are "covering costs," according to The Beatles.
Yes, I see the distinction. What I meant was that beatles wasn't paying the mortgage and the family then living there for free. The family is paying the mortgage/utilities - it's like rent, only he's not calling it that.
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
Think about what you're saying!!!
I cant just kick my wifes family to the curb.
Maybe youre OK with that, but I am not.
I'd prefer to stay married.
Beatles, with the two rentals, would it be accurate to say that you have a positive net worth? If you could really quickly add up the assets vs liabilities with the 2nd rental included, I'd really appreciate seeing it.
If you can lay that out there, then I'd like a chance to lay out a pretty simple plan that can get you squared away in way less than 8 months (disclaimer, it will likely involve you selling 3 things). At that moment, this thread can close down and you can join the "getting to 100k net worth" thread in the throwing down the gauntlet section.
They're not living there rent free.
They're paying the mortgage!
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
Think about what you're saying!!!
I cant just kick my wifes family to the curb.
Maybe youre OK with that, but I am not.
I'd prefer to stay married.
Your deadbeat in laws are scamming you just as they are scamming the tax man. What you say to them is "Sorry. [That bit's a lie, but you are being polite here.] I need to take the equity out of this house, as I can't afford not to have a return on it. I'm putting the house on the market and you need to leave. If you still want to rent from me, I'm willing to give notice to my tenants in [rental house] and you can move in there for a rent of $600 a month. If not, good luck finding your new home". Then you call up an estate agent and put it on the market, pronto. If there are renters in the annex (who are presumably paying rent to your deadbeat in laws, which is part of the in laws' scam), you look at ways to get them out before August, including an offer of payment of a thousand or so if they vacate at closing. That gives you $100k in equity which sorts all your problems.
You urgently need to talk to an expert insurance agent about getting the rental insured. It should be possible to get limited cover, eg for fire damage and occupier's liability but excluding water/storm damage. That would mitigate the worst of the risk you are currently carrying.
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion talk with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
Think about what you're saying!!!
I cant just kick my wifes family to the curb.
Maybe youre OK with that, but I am not.
I'd prefer to stay married.
What is wrong with this then?
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
The beatles,
Sell two of the three properties.
Your problems will be solved at the closing table, or within 24 hours (however long it takes you to mail the payoffs to each creditor).
I no longer understand your self imposed problems.
You have all the assets needed to wipe out the debts and do it now.
Yes, it changes everything.
Think about what you're saying!!!
I cant just kick my wifes family to the curb.
Maybe youre OK with that, but I am not.
I'd prefer to stay married.
Where in that post did Malum say anything about "kicking your wife's family to the curb?"
Many poster have offered up several possibilities...
- Sell rental and current house, move into big house with in-laws
- Sell rental and current house, move into detached apartment of big house
- Sell rental and big house, have in-laws live with you in current house.
Beatles, with the two rentals, would it be accurate to say that you have a positive net worth? If you could really quickly add up the assets vs liabilities with the 2nd rental included, I'd really appreciate seeing it.He has said that they are like this:
beatles, I've been holding my tongue on this for a while but since you brought up the state of your marriage yourself, I'll bite. You know financial disagreements and problems are the #1 cause of divorce, right? And just take a look through these forums to see the havoc that divorce plays in your overall financial well being. You have young children and you sound like a caring father. I assume you want to be in their lives. Even before today, I've been worried that if you don't right this financial ship of yours ASAP, you're going to have some serious marriage problems soon. There's just too much stress not to.
Then you posted about your wife's unhappiness/loneliness being addressed by retail therapy. Then you posted that your broke in-laws (and if they owe $100K to the IRS they are broke no matter what their cash flow) have ensconced themselves on top of $100K of equity in your third home.
You aren't just in financial trouble, man. You are heading for some serious marital troubles if you aren't careful. It is for this reason I highly recommend doing one of the rip-the-band-aid-off solutions suggested that include selling cars/property and going for a full financial/family obligation reset. If you are in agreement, it will cement you as a couple.
Where in that post did Malum say anything about "kicking your wife's family to the curb?"
Many poster have offered up several possibilities...
- Sell rental and current house, move into big house with in-laws
- Sell rental and current house, move into detached apartment of big house
- Sell rental and big house, have in-laws live with you in current house.
2. * Posts how he is going to either borrow or cash flow to get a roof on the uninsured house himself in the next two weeks.Why? Let the new owners insure it and put a new roof on it after they buy it.
* I think 100% of us agree he should do 1, and that 2 is a collosally bad idea, but still better than continuing to let it be uninsured.
Really there is not point in further engagement without action on the uninsured house.
When you give dismissive answers like this, it seems like you are not taking us seriously. Remember, a case study starts off with a large list of a sorts of information. We have analyzed that information and given feedback. Now, as time goes on, your answers for how you are improving things should include more information. Not just "we set up a budget," but "Wife and I set up a budget, here it is! [massive list of budget info] We think it's good as-is, but tell us if you see anything we missed or forgot to cut!"
Paying off debt does take study time. It is not the simple "write a check to CC #1 for $50;" it is changing your mindset toward money and spending. Though you guys have made some good progress already, it has only been a few days since you posted the case study. Learning to optimize and reduce your spending on all areas of your life is going to take a LONG time. We want you to spend your spare time - when you are not working at your job, cooking with your wife, or playing with your kids - to be spent reading books on frugality and on investing. We want you to get immersed in this non-consumer mindset. It is REALLY HARD to change your habits and patterns of behavior in the long-term, so we are doing what we can to encourage that. We want your mindset to change so that you don't backslide, buy something big, and in one day destroy the past month of progress toward freedom from your crushing debts.
2. * Posts how he is going to either borrow or cash flow to get a roof on the uninsured house himself in the next two weeks.Why? Let the new owners insure it and put a new roof on it after they buy it.
* I think 100% of us agree he should do 1, and that 2 is a collosally bad idea, but still better than continuing to let it be uninsured.
Really there is not point in further engagement without action on the uninsured house.
I didn't realize people saw that as dismissive.I am not trying to be rude, The beatles, but fully one third or more of your posts are dismissive of one thing or another that somebody suggests. It has been that way since the first page. Most of us just take it in stride because it is the way newcomers here always react. "I can't sell the car. I owe more than it is worth." Dismissive. But we're used to it, because it takes time to acclimate to new ways of thinking.
I can definitely post my budget.
He's not being dismissive of you, ddmesser. He is ignoring you. There is a distinct difference.2. * Posts how he is going to either borrow or cash flow to get a roof on the uninsured house himself in the next two weeks.Why? Let the new owners insure it and put a new roof on it after they buy it.
* I think 100% of us agree he should do 1, and that 2 is a collosally bad idea, but still better than continuing to let it be uninsured.
Really there is not point in further engagement without action on the uninsured house.
I keep saying this - but the proposed solution below would solve all of the Beatles purported issues nicely:
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
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**** "the other rental"? What? You have two?
Yeah, but it's honestly not even worth getting into that whole backstory.
Now I'm thinking the T word. As explained time and time again, you can't get honest and useful help without the full picture. Is this mommy and daddy's rental? What is it?
I'm refusing to respond to anyone who calls, or hints at calling me a troll.
I'm tired of it.
I have spent over a week on this forum, countless hours, PHOTOS, receipts, interest rates ... Eveything.
If people want to think i'm a troll - fine.
But I'm not going to respond to them.
This is definitely the TLDR version of this thread. :)
I understand why people are saying you can't take a break - this is an emergency. Going back to the hair-on-fire metaphor, you can't be the fireman and decide in the midst of the fire - I'm going to just sit for ten minutes. Because the fire will get worse. I get that. But also - I get that you will need some down time. Even firemen battling raging wildfires take shifts.
Yes, firemen need to take breaks. But he is not a metaphorical fireman.....he's the person on fire. If you were literally on fire, would you sit down and take a ten minute break??
Jokes aside, ok he's not really on fire.....but the MMM community, at least me, would like to have him act as if he was. I want to hear screaming(oh gawd oh gawd OH GAWD!!!!!!!), running around in circles, swatting at himself maniacally, third degree burns on 90% of his body kind of behavior.
But, I am not getting that vibe. What I hear is, "Soooooooo, I have this SITUATION. It kind of sux. There are ways to get out of it.....mainly my parents money. I don't really want to go that route, cuz, well, I am thirty years old. You guys(MMM) seem to have your act together. Can I pick your brain for ideas?" Of course we oblige. "Ummmmmmm, I don't wanna do most of those things and even if I did, I want it to take less than nine months to reach my goal." After many face punches, "You guys are wrong, overreacting, getting up in my grill, implying that I'm mentally retarded." We rebuttal with our own arguments. "No, I'm right cuz of blah blah blah." No, you are wrong cuz of one, two, three, etc. "I've got it totally under control after one whole week!! Phew!!! The last few days have been INSANE. I think I have earned the right to spend some unwind time on my new blog/startup. Hun?, do we have any more of those tasty Skinny Cows left in the house? Oh, and bring me a soda too."
He's not being dismissive of you, ddmesser. He is ignoring you. There is a distinct difference.2. * Posts how he is going to either borrow or cash flow to get a roof on the uninsured house himself in the next two weeks.Why? Let the new owners insure it and put a new roof on it after they buy it.
* I think 100% of us agree he should do 1, and that 2 is a collosally bad idea, but still better than continuing to let it be uninsured.
Really there is not point in further engagement without action on the uninsured house.
I keep saying this - but the proposed solution below would solve all of the Beatles purported issues nicely:
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
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There's a new twist every day!$5 on another $100k debt somewhere that beatles intentionally didn't mention. Because, you know, it's not consequential and "there is NOTHING he can do about it. It's an impossible situation. Why bring up something you cant change?"
Anyone want to take a guess at the next one?
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
What is wrong with this then?
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
What is wrong with this then?
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
I think that is actually a very fair solution.
I hope you can understand that even though its fair, her family is not going to see it that way.
They're going to see it as an insult.
Us downgrading them from a 300k house with granite countertops, marble bathrooms and heated floors to a $75k rental.
I get how that sounds.
I get how ALL this sounds.
I feel like posters are mad at me because they wonder how I could be so stupid.
But i'm not stupid.
It's just a very difficult situation when its not even your family.
This is the type of situation that could tear a family apart.
What is wrong with this then?
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
I think that is actually a very fair solution.
I hope you can understand that even though its fair, her family is not going to see it that way.
They're going to see it as an insult.
Us downgrading them from a 300k house with granite countertops, marble bathrooms and heated floors to a $75k rental.
I get how that sounds.
I get how ALL this sounds.
I feel like posters are mad at me because they wonder how I could be so stupid.
But i'm not stupid.
It's just a very difficult situation when its not even your family.
This is the type of situation that could tear a family apart.
They're not living there rent free.
They're paying the mortgage!
Good point--my math is wrong on this one.
What you're giving them is the difference between the mortgage and the rental fee. If your mortgage is $1200/month, and it would rent for $2000/month, you are giving them the difference ($800/month or $9600/year).
Still a generous gift which you can't afford to give.
Not to mention the risk: one missed payment and they will foreclose on YOUR house, and wreck YOUR credit. They've already proven that they are not the best with managing money, so that's not far from the the realm of possibility.
Also, just a point to consider: if this isn't your primary residence, property taxes on it will be higher than on your primary residence. Be sure your PITI payments are enough to cover the higher amount.
Having said everything I've said, I'm with Malum Prohibitum and the others who are advising you to sell one or more of the properties. You are putting yourself and your family at huge risk right now, and going into serious debt in the bargain. Get out, while you still can.
They're going to see it as an insult.So, you owe them a place with granite countertops and marble bathrooms and heated floors for how long, exactly?
Us downgrading them from a 300k house with granite countertops, marble bathrooms and heated floors to a $75k rental.
He's not being dismissive of you, ddmesser. He is ignoring you. There is a distinct difference.2. * Posts how he is going to either borrow or cash flow to get a roof on the uninsured house himself in the next two weeks.Why? Let the new owners insure it and put a new roof on it after they buy it.
* I think 100% of us agree he should do 1, and that 2 is a collosally bad idea, but still better than continuing to let it be uninsured.
Really there is not point in further engagement without action on the uninsured house.
I keep saying this - but the proposed solution below would solve all of the Beatles purported issues nicely:
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
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Why don't you just leave the thread?I beg to differ. Read my reply #1000, above. If you still feel the same way, then I will be happy to leave your thread alone, as you wish.
You're being the opposite of helpful here.
Is your wife reading this thread? How about bringing that suggestion to her and having a heart-to-heart with her about the mess you are in, the several proposed solutions this thread has given you, and together choosing which one will work best for you? She needs to be honest with you and herself (and her family to some extent) how much this desire to keep her financially irresponsible parents living in absolute luxury is crippling your own financial situation and the security of your family. I'd be that most of us don't live in big houses with granite counter tops and heated floors and we (mostly) have large net worths or are well on our way to having it. As they used to say in the 90s, "reality bites". That is just how the situation is and you can't protect your in-laws from reality indefinitely because your boat is *thisclose* to sinking entirely and bringing everyone down with it, in-laws included.
You are a kind and generous person and reasonable people will see this if you lay the facts out. Offering to continue housing them is still generous. It is balancing the needs of your in-laws to mooch off of you due to their own poor decision making with your need to take care of your kids who are about to get put out on the street. Strike a balance.
My wife is very upset with this thread at this point.
My wife is very upset with this thread at this point.
Can we just ignore the 2nd house?We can if you wish, but there will be no further point in anybody giving advice, then. That's like asking if we could ignore the Van Gogh hanging above the fireplace, or the yacht your wife just purchased, or the large commercial building you own in Manhattan.
Go back to focusing on rental 1.
Why don't you just leave the thread?I beg to differ. Read my reply #1000, above. If you still feel the same way, then I will be happy to leave your thread alone, as you wish.
You're being the opposite of helpful here.
They're going to see it as an insult.Does your WIFE understand how it all sounds?
Us downgrading them from a 300k house with granite countertops, marble bathrooms and heated floors to a $75k rental.
I get how that sounds.
I get how ALL this sounds.
Can we just ignore the 2nd house?
Go back to focusing on rental 1.
He's got to explain to his parents why his in-laws are moving into the rental house. They have to to tell the in-laws what their options are.They are probably paying close to $2000 in rent, utilities, property taxes and any other carrying costs.
Beatles, with the two rentals, would it be accurate to say that you have a positive net worth? If you could really quickly add up the assets vs liabilities with the 2nd rental included, I'd really appreciate seeing it.
If you can lay that out there, then I'd like a chance to lay out a pretty simple plan that can get you squared away in way less than 8 months (disclaimer, it will likely involve you selling 3 things). At that moment, this thread can close down and you can join the "getting to 100k net worth" thread in the throwing down the gauntlet section.
I have laid that out:
What is wrong with this then?
His bad roof rental property has month to month renters. They need to go. Sell the car with equity.You can make it with one car until the big equity house sells. Use the money to fix the roof and insure the small rental. The renters are month to month so they can go. Offer the wife's family the option of renting the small rental at market rate or finding housing on their own. Sell the big equity house (most of the time you can even sell it with a tenant in the apartment). Pay off ALL debt to everyone. Put remainder in emergency fund. Then you avoid the awkward discussion with your parents and your wife's family is housed. Then your rental income improves because all of it except for taxes and insurance is money you can invest. But you must sell the car now to get the money to get the roof fixed immediately so you can get insurance.
How is that for a good solution?
Can we just ignore the 2nd house?
Go back to focusing on rental 1.
Can we just ignore the 2nd house?
Go back to focusing on rental 1.
You want to ignore $100K?LOL! More than the property debt, IRS debt, credit card debt, and car debt put together. Just ignore it, MSquared.
Your inlaws don't have to move into the other rental--it's just an option you can offer to them in case they are unable to secure another rental.
To Mrs. Beetles,
I want you to know that I am sincerely sorry if this thread upsets you or if we come across as being judgey. I can honestly say that I am very scared for you. As a SAHP, you have the MOST to lose from this entire situation--even more than your children. I am a SAHP as well, so don't think I'm downing your for that. But the fact is that we are the ones who's workplace value diminishes the longer we stay at home and away from the office. When there is a SAHP in the family it is so much more important to have sufficient savings and no debt. If your husband got in an accident and couldn't work for one, maybe two months, this entire financial house of cards would collapse nearly overnight. As Whoopi Goldberg said in "Ghost," "Girl, you in danger!" I can only imagine how awkward it will be to tell your folks that you need to sell the house they are living in, knowing full well they are in no position to purchase it themselves.
My wife is very upset with this thread at this point.
Will she be more or less upset when you and your children are homeless?
*Added after reading this back to myself*
This comment is an extreme scenario, but I meant it to be.
You're living on a knife edge financially and even a small loss of balance could be catastrophic, I really hope your wife can see this so that there isn't a follow on post in 6 or 12 months time when they come to repossess your house.
Now grow a set and man up or continue with this childlike behavior and come up with excuses, delays, etc.
YOU HAVE ANOTHER RENTAL???+1
You know what, I'm out. This is ridiculous. You do realize that at this point nobody can take you serious anymore? You're acting like a little child here and occasionally, every couple of pages, you drop a bomb like this. You "forget" 40k IRS debt. You "forget" property tax debt. You "forget" to mention that in addition to house #1 and house #2 there's another house.
This is a total waste of time, and not worth any effort. At this point, I am beating the troll drum, and I think you're making all this up as we go. And even if this is all true and you're not making it up then you, sir, are the only person in here not realizing how frustrating trying to help you is.
Good luck. I'm out.
but I can't look away.LOL! I plead guilty!
It is possible that Mrs. Beatles' family needs a place to live because their nonpayment of debts has shot their credit rating and no one else will rent them an apartment. In which case moving them into the smaller rental is a reasonable option.
But, yeah, no, the big house has gotta go. You need that $100K, stat. Like the airplanes say, put your own oxygen mask on first.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
Mrs Beatles, you and your husband were sucked into some bad choices to meet the convenience of your parents. You bought a house from them that was totally unsuitable because they wanted you to, you put $100k into it, and now they are back living there at your expense. You are in unpayable amounts of debt while they are sitting on $100k of your cash and giving you nothing for it. Your parents are also living in that big, smart house at the expense of your husband's parents, who are effectively subsidising your parents by bailing you out because you are short that 4100k - how is that fair?I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
No, this is pretty much exactly the story we've been getting for 20 pages. Life is hard, but it's harder if you willfully keep making bad choices and living beyond your means. That's not "living differently". It's refusing to act like a responsible adult. Your life is (metaphorically) a flaming car crash OF YOUR OWN MAKING, and you want us to have sympathy?
This is just unbelievable.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc.
Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now.
You created this mess together, time to fix it together.
Our debt gets racked up to who knows how much.This is a big part of the problem. I think if you had realized how much trouble you were getting into, you might have sold the big house early on - before your parents moved back into it, and then you wouldn't be in the awkward position of having to tell them they need to move out so you can sell it.
In my house, my husband manages the big spreadsheet of money, and on the final Friday of each month he prints it out, and shoves it in front of my face.
In my house, my husband manages the big spreadsheet of money, and on the final Friday of each month he prints it out, and shoves it in front of my face.
I love this.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
Well, there's $160 someone can earn in their spare time!
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
I am the wife. This will probably be my only post.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
You need to be nicer of people who live differently than you.
I agree with the others -- you don't see that you're subsidizing your parents. You think they are "covering expenses" but think about whether this would be a fair arrangement if they were not related. If you were bleeding this kind of money on a stranger, I think you'd be quicker to make a decision.
I agree with the others -- you don't see that you're subsidizing your parents. You think they are "covering expenses" but think about whether this would be a fair arrangement if they were not related. If you were bleeding this kind of money on a stranger, I think you'd be quicker to make a decision.
It's worse than that. Mr. Beatles parents are subsidizing all of the Beatles and Mrs.B's family. I wonder if they realize it.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
I agree with the others -- you don't see that you're subsidizing your parents. You think they are "covering expenses" but think about whether this would be a fair arrangement if they were not related. If you were bleeding this kind of money on a stranger, I think you'd be quicker to make a decision.
It's worse than that. Mr. Beatles parents are subsidizing all of the Beatles and Mrs.B's family. I wonder if they realize it.
No - I have come to the conclusion that it is so much worse than just finances. The Beatles have conspired with their in-laws to hide 100k from the IRS. They could go to jail.
Have you guys ever considered going through Dave Ramsey's* Financial Peace University? It's a nine-week course where you and other families strive to get out of debt and build a strong foundation for future wealth. The slower format and in-person support/accountability structure might be a better fit. It's not free, but frankly free help doesn't seem to be enough at this point.
Also, the DR crowd is WAY more understanding about the allure of "luxury" than the MMM forums. They would probably be more sympathetic to how you got in your current position and would be more willing to help you figure out which luxuries you can keep.
We wish you the best.
*Note: a LOT of forum members take issue with some of DR's advice but the general consensus is his plan is good for the average family.
Looks like we still need to find things to cut. At $4,948 --- We only have $100 to put towards debt repayment that isn't property tax. |
This our updated budget.
Looks like we still need to find things to cut.
At $4,948 --- We only have $100 to put towards debt repayment that isn't property tax.
This our updated budget.
Now we're getting somewhere! :)Looks like we still need to find things to cut.
At $4,948 --- We only have $100 to put towards debt repayment that isn't property tax.
First thing I'd cut: eating out. Dave Ramsey says that when you're in debt, the only reason you should see the inside of a restaurant is because you're working there. More here:
http://www.daveramsey.com/askdave/posts/124444
Agreed.
I was just leaving something in case of emergency.
Where is your health insurance?
I don't think it's been brought up specifically, but what is the "cameras" $25 line item?
Of course you could make this work temporarily. People quite literally do this all the time because they HAVE to. There is a journal on here by a woman who moved into a one-bedroom apartment with her two children after a divorce. You could take take care of all your problems and babysitters nearby when cabin fever sets in. This is an absolute gift. Take it, save up some money, and never go back to your old lifestyle.
Where does everyone sleep!?!?
Either way, would have to wait until August at the minimum for the tenants lease to be up.
This our updated budget.
Now we're getting somewhere! :)Looks like we still need to find things to cut.
At $4,948 --- We only have $100 to put towards debt repayment that isn't property tax.
First thing I'd cut: eating out. Dave Ramsey says that when you're in debt, the only reason you should see the inside of a restaurant is because you're working there. More here:
http://www.daveramsey.com/askdave/posts/124444
Next thing I'd do: find $500 worth of stuff in your house that you can sell. Books and CD's, fancy purses, power tools, whatever it is. Use Craigslist. Have a yard sale. Whatever it takes, get $500 from somewhere.
Next thing I'd do: Pay off CC4 (your lowest rate card) with the $500 from what you sold. Transfer as much of your ~25% debt to this card as you possibly can. This lowers the overall interest rate on your debt and makes your payments that much more effective at killing principal.
Next month, you have the $100 surplus, plus $100 from not eating out, plus $25 that you are now not paying to CC4, for a total of $225. Pay off half of CC3. If you can find another $250 that month (sell more stuff, mow a yard or two, economize on groceries, whatever), pay off CC3 totally.
Next month, you have $100 + $100 + $25 + $25 for $250. Target CC1 next. You can pay this off in 3 months (or less if you economize more--see how it works?), and then roll that $194 into your snowball.
Now you have $100 + $100 + $25 + $25 + $194 for a total snowball of $444. CC6 can be history in a month or two.
You really can do this. It just requires focus, discipline, and having the whole family on board. I believe you have the skills to do it, and we are all here to help.
Now go for it!
It'll be a bummer but I do have a drone I can sell for probably $350.
I'm also trying to find some sort of online work. Even for just a couple hundred per month, that could really add to the process you listed above.
/-------
You current budget has no room for:
- an IRS repayment plan when it is settled
- the next property tax bill for the rental
- the new roof for the rental
- insurance for the rental
You need to sell car and house type assets, but the drone is a good start.
This our updated budget.
Expenses:
ITEM MONTHLY | TOTAL | INTEREST RATE GARBAGE 36 CALE/INTERNET 114 WATER 50 GEICO AUTO 135 AUTO LOAN 393 3591 6.54% MORTGAGE 1761 164,717 5.125% FUEL 150 GAS/ELECTRIC 150 GROCERIES 650 EATING OUT 100 CAMERAS 25 PARENTS 0 30,K CC1 194 856 25.24% CC2 134 4495 24.49 CC3 25 505 23.24% CC4 25 452 10.23% CC5 20 692 18.49% CC6 75 797 24.15 CC7 (STORE CARDS) 100 2020 25.24 Furniture Loan 276 1950 25.00 Property Tax 535 11,380 18% TOTAL 4948 59,720
Looks like we still need to find things to cut.
At $4,948 --- We only have $100 to put towards debt repayment that isn't property tax.
He has an uninsured property with $4K+ in property tax due in a couple of months that he has no way to pay. He has $40K in IRS debt with no way to pay. He said he owes for something not paid for Escrow soon. He probably owes income tax for 2016.
You current budget has no room for:
- an IRS repayment plan when it is settled
- the next property tax bill for the rental
- the new roof for the rental
- insurance for the rental
You need to sell car and house type assets, but the drone is a good start.
Right - his house is on fire and burning down. He has an uninsured property with $4K+ in property tax due in a couple of months that he has no way to pay. He has $40K in IRS debt with no way to pay. He said he owes for something not paid for Escrow soon. He probably owes income tax for 2016.
Beatles -what are you going to do about selling a rental or two to get beyond this? You don't have enough shit to sell to pay those things. You are a second away from financial ruin. And the IRS probably really wants the house with $100K of equity ....
What are you waiting for to make a read decision that matters?
I think we have no other choice than to sell the rental (70k rental).
I wonder what the closing cost would be on it.
I could use Redfin.com but that's only saving 1.5% so it may make more sense to just list it with a local realtor who knows buyers.
Second part of my post... ideas to turn things around.
This is a tricky puzzle, because one good action (selling the rental) results in a reduced cashflow, and selling inlaw property results in a lot of relationship problems...
Let's start at the top -- Goals. My assumption for Mr. B goals includes in sort of priority order:
1) Getting a positive cashflow each month immediately. Stop digging a hole.
2) keeping inlaws in their home.
3) resolving the roof and property tax issue (to avoid foreclosure / add insurance)
4) Paying off IRS or starting an aggressive repayment plan.
5) Keeping wife in current home
6) Starting new business venture
My first instinct is that the Beatles need a fresh slate. All of this agonizing over debt and payment and expenses is taking a lot of time away from focusing on a new business venture and enjoying life. In fact, some of the extra spend (TVs) may be related to respite from the stress of dealing with all of this.
A) Cut expenses by at least $1000 (getting there!) This is an urgent short term need.
B) Earn more income
In addition to cutting expenses, you need to net quite a bit more income... or slash your current home costs and move to a rental.
This is the basic problem in your situation. For too many years,you have been living like you earn more, and taking from IRS, Property taxes and 401k to allow you to spend more each month. Now you don't have a lot of options left.
Quite frankly, making $60k per year, gross, for a family of 4, who wants to live in a nice family home, while buying TV's and furniture, renovations, starting businesses, thinking about vacations, owning cars worth more than 20k, supporting your parents (sometimes)..just isn't going to cut it. You can afford, like, ONE of these "extras" on your income. You are far from the income level you need to support your lifestyle as is.
------------------------BIG NEW IDEA -----> one idea to solve all problems! ---------
Move the in-laws in with you in your home, and sell the big place. Charge them a low rent. That 100k in equity would go a long way to clearing the over $55k in property tax, IRS, new roof, plus $15k or so of consumer debt, plus pay down your mortgage to get rid of the extra mortgage insurance on your primary home, etc.
Sell it as a way for your wife to not have to work while the kids are young. They may also choose to rent elsewhere, on their own costs, too.
You keep your car, wife does not need work, you still need to cut expenses but to real life levels instead of cutting to the bone... your parents will need to wait a while (until wife can work?) before getting repaid, I am afraid.
So -- Can you move your kids into a shared room and free up a room for the In laws? Because the second place option is to have them give you up to 100k in capital (the equity in the home), which they may not actually have.
Move the in-laws in with you in your home, and sell the big place.If it were just about the math, I'd agree this makes sense.
> Our take home pay will be reduced to $3,941 /monthHave you checked this number with commercial tax software, or at least the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/)?
I don't know what i'm going to tell my parents about netting $30k from a house they have been $120k into.
btw, MMM has an article in which he laid out the math on a decision to rent rather than sell a house that he renovated. His conclusion was that he should have sold and put the money into the market even though he would have sold the house at a loss. It's worth a read re: your math on your own rental house.
I've seen it.
But don't forget; He would have put it into the market. Not paid off debt.
Second part of my post... ideas to turn things around.
This is a tricky puzzle, because one good action (selling the rental) results in a reduced cashflow, and selling inlaw property results in a lot of relationship problems...
Let's start at the top -- Goals. My assumption for Mr. B goals includes in sort of priority order:
1) Getting a positive cashflow each month immediately. Stop digging a hole.
2) keeping inlaws in their home.
3) resolving the roof and property tax issue (to avoid foreclosure / add insurance)
4) Paying off IRS or starting an aggressive repayment plan.
5) Keeping wife in current home
6) Starting new business venture
My first instinct is that the Beatles need a fresh slate. All of this agonizing over debt and payment and expenses is taking a lot of time away from focusing on a new business venture and enjoying life. In fact, some of the extra spend (TVs) may be related to respite from the stress of dealing with all of this.
A) Cut expenses by at least $1000 (getting there!) This is an urgent short term need.
B) Earn more income
In addition to cutting expenses, you need to net quite a bit more income... or slash your current home costs and move to a rental.
This is the basic problem in your situation. For too many years,you have been living like you earn more, and taking from IRS, Property taxes and 401k to allow you to spend more each month. Now you don't have a lot of options left.
Quite frankly, making $60k per year, gross, for a family of 4, who wants to live in a nice family home, while buying TV's and furniture, renovations, starting businesses, thinking about vacations, owning cars worth more than 20k, supporting your parents (sometimes)..just isn't going to cut it. You can afford, like, ONE of these "extras" on your income. You are far from the income level you need to support your lifestyle as is.
------------------------BIG NEW IDEA -----> one idea to solve all problems! ---------
Move the in-laws in with you in your home, and sell the big place. Charge them a low rent. That 100k in equity would go a long way to clearing the over $55k in property tax, IRS, new roof, plus $15k or so of consumer debt, plus pay down your mortgage to get rid of the extra mortgage insurance on your primary home, etc.
Sell it as a way for your wife to not have to work while the kids are young. They may also choose to rent elsewhere, on their own costs, too.
You keep your car, wife does not need work, you still need to cut expenses but to real life levels instead of cutting to the bone... your parents will need to wait a while (until wife can work?) before getting repaid, I am afraid.
So -- Can you move your kids into a shared room and free up a room for the In laws? Because the second place option is to have them give you up to 100k in capital (the equity in the home), which they may not actually have.
First, I appreciate both your posts.
They were awesome.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
For fucks sake...
The other rental is a home we owned in the past.
I actually mentioned it in this very thread, several pages ago, but left out the part that we still own it.
It's worth about $300k, and with mortgage/heloc included we owe about $200k.
It is a 2,500 sq foot house with a 1,000 sq foot apartment that is detached from the primary home, but shares a driveway.
The monthly payment was simply too much which is why we moved out.
We were going to sell the property but then my wifes family needed a place to live so a deal was worked out where they could live and just assume the bills for that property.
So we pay NOTHING over there.
It's all on them.
That's why it doesn't matter and it wasn't worth bringing up.
Fuck.
However, if we sell the rental, I don't think we will need to do anything else.
Second part of my post... ideas to turn things around.
This is a tricky puzzle, because one good action (selling the rental) results in a reduced cashflow, and selling inlaw property results in a lot of relationship problems...
Let's start at the top -- Goals. My assumption for Mr. B goals includes in sort of priority order:
1) Getting a positive cashflow each month immediately. Stop digging a hole.
2) keeping inlaws in their home.
3) resolving the roof and property tax issue (to avoid foreclosure / add insurance)
4) Paying off IRS or starting an aggressive repayment plan.
5) Keeping wife in current home
6) Starting new business venture
My first instinct is that the Beatles need a fresh slate. All of this agonizing over debt and payment and expenses is taking a lot of time away from focusing on a new business venture and enjoying life. In fact, some of the extra spend (TVs) may be related to respite from the stress of dealing with all of this.
A) Cut expenses by at least $1000 (getting there!) This is an urgent short term need.
B) Earn more income
In addition to cutting expenses, you need to net quite a bit more income... or slash your current home costs and move to a rental.
This is the basic problem in your situation. For too many years,you have been living like you earn more, and taking from IRS, Property taxes and 401k to allow you to spend more each month. Now you don't have a lot of options left.
Quite frankly, making $60k per year, gross, for a family of 4, who wants to live in a nice family home, while buying TV's and furniture, renovations, starting businesses, thinking about vacations, owning cars worth more than 20k, supporting your parents (sometimes)..just isn't going to cut it. You can afford, like, ONE of these "extras" on your income. You are far from the income level you need to support your lifestyle as is.
------------------------BIG NEW IDEA -----> one idea to solve all problems! ---------
Move the in-laws in with you in your home, and sell the big place. Charge them a low rent. That 100k in equity would go a long way to clearing the over $55k in property tax, IRS, new roof, plus $15k or so of consumer debt, plus pay down your mortgage to get rid of the extra mortgage insurance on your primary home, etc.
Sell it as a way for your wife to not have to work while the kids are young. They may also choose to rent elsewhere, on their own costs, too.
You keep your car, wife does not need work, you still need to cut expenses but to real life levels instead of cutting to the bone... your parents will need to wait a while (until wife can work?) before getting repaid, I am afraid.
So -- Can you move your kids into a shared room and free up a room for the In laws? Because the second place option is to have them give you up to 100k in capital (the equity in the home), which they may not actually have.
First, I appreciate both your posts.
They were awesome.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
Yes- you are. How are you going to pay the $40K to the IRS and $60K in high interest credit cards? Why are you still considering letting your in-laws stay in the big house and enabling them to continue to leach off of your immediate family, teach your kids that they must provide a swanky home for their parents while struggling themselves, enabling them to evade what they owe to the IRS (and teach your kids that is okay too),and have your parents subsidize her parents.
If you wfe is the one that doesn't want to kick the parents out - she needs to get a job, drop the kids off there everyday for childcare, and help you pay down all of that debt. Why isn't that a good daycare solution if you are enabling them to live in the lap of luxury that you cannot afford?
Second part of my post... ideas to turn things around.
This is a tricky puzzle, because one good action (selling the rental) results in a reduced cashflow, and selling inlaw property results in a lot of relationship problems...
Let's start at the top -- Goals. My assumption for Mr. B goals includes in sort of priority order:
1) Getting a positive cashflow each month immediately. Stop digging a hole.
2) keeping inlaws in their home.
3) resolving the roof and property tax issue (to avoid foreclosure / add insurance)
4) Paying off IRS or starting an aggressive repayment plan.
5) Keeping wife in current home
6) Starting new business venture
My first instinct is that the Beatles need a fresh slate. All of this agonizing over debt and payment and expenses is taking a lot of time away from focusing on a new business venture and enjoying life. In fact, some of the extra spend (TVs) may be related to respite from the stress of dealing with all of this.
A) Cut expenses by at least $1000 (getting there!) This is an urgent short term need.
B) Earn more income
In addition to cutting expenses, you need to net quite a bit more income... or slash your current home costs and move to a rental.
This is the basic problem in your situation. For too many years,you have been living like you earn more, and taking from IRS, Property taxes and 401k to allow you to spend more each month. Now you don't have a lot of options left.
Quite frankly, making $60k per year, gross, for a family of 4, who wants to live in a nice family home, while buying TV's and furniture, renovations, starting businesses, thinking about vacations, owning cars worth more than 20k, supporting your parents (sometimes)..just isn't going to cut it. You can afford, like, ONE of these "extras" on your income. You are far from the income level you need to support your lifestyle as is.
------------------------BIG NEW IDEA -----> one idea to solve all problems! ---------
Move the in-laws in with you in your home, and sell the big place. Charge them a low rent. That 100k in equity would go a long way to clearing the over $55k in property tax, IRS, new roof, plus $15k or so of consumer debt, plus pay down your mortgage to get rid of the extra mortgage insurance on your primary home, etc.
Sell it as a way for your wife to not have to work while the kids are young. They may also choose to rent elsewhere, on their own costs, too.
You keep your car, wife does not need work, you still need to cut expenses but to real life levels instead of cutting to the bone... your parents will need to wait a while (until wife can work?) before getting repaid, I am afraid.
So -- Can you move your kids into a shared room and free up a room for the In laws? Because the second place option is to have them give you up to 100k in capital (the equity in the home), which they may not actually have.
First, I appreciate both your posts.
They were awesome.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
Yes- you are. How are you going to pay the $40K to the IRS and $60K in high interest credit cards? Why are you still considering letting your in-laws stay in the big house and enabling them to continue to leach off of your immediate family, teach your kids that they must provide a swanky home for their parents while struggling themselves, enabling them to evade what they owe to the IRS (and teach your kids that is okay too),and have your parents subsidize her parents.
If you wfe is the one that doesn't want to kick the parents out - she needs to get a job, drop the kids off there everyday for childcare, and help you pay down all of that debt. Why isn't that a good daycare solution if you are enabling them to live in the lap of luxury that you cannot afford?
Please explain where you got $60k in credit cards from.
Seller our lesser rental would pay off every debt we have except for IRS (which is in the process of being taken care of).
The kids sleep in sleeping bags in a an area you set aside for them - or in a corner of your room. A 1000 sf apartment is huge for one bedroom. If it has a dining room and a breakfast room - turn the dining room into their bedroom and curtain it off. It is quite doable. Make sure your wife goes to work and then the in-laws can do the day care as part of their living arrangements. Get creative. 99% of the world sleeps with large families in a fraction of that space.
How is it being taken care of? Sorry if I missed the solution to that problem.
And, again, I don't know why you are letting your in-laws leach from your immediate family and the US tax payers.
I second the idea of selling the lesser rental.
But beatles, one word of caution. I think you have a habit of taking part of an action and considering the problem solved. Example, you said you've cut your grocery budget by $1000. You've only been here a few weeks. You may have changed the number on a spreadsheet but you haven't actually LIVED with a lower grocery budget. The steps of cutting a budget are:
1. Evaluate spending and cut fat (done)
2. Set new goal (done)
3. Set up milestones for checking in to see if spending matches budget--ideally daily or weekly until you're used to the new habit
4. Do a comprehensive evaluation at the end of a month or two weeks.
5. Evaluate spending and cut fat
6. Set new goal...
The fact is that it often takes several cycles to actually make your original goal. Old habits creep in, you forget about certain big necessary items, you run out of stores in your pantry/freezer, etc. Just look at how many of us money hippies have admitted that this thread makes us realize that our own grocery budgets have crept away from our goals--and we're the money hippies!! Also, once you've economized, then you may see easy ways to economize further with ease. Why not? In any case, it requires vigilance and periodic evaluation.
Same is true if you sell the rental. Yes, you will cut out a bunch of bills hanging over you right now. But past behavior is the greatest predictor of future behavior. In the past when your parents have solved problems with an influx of cash, you've slipped back into debt spending, right? To avoid that again with the influx of cash from the rental sale, you'll need to keep goal setting, keep evaluating, keep meeting milestones. You asked earlier why it should take so much TIME to economize that you couldn't do other ventures--this is why.
I know you can do this--you're just going to need to be vigilant. This board is here to help you with that. Oh, and anyone who can create an index to his own thread on the first post can absolutely manage working with a debt repayment plan! That was awesome!
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
We have not shopped for groceries since I started this case study.I noticed that, and it is a good investment in your future. Pay attention to what others are telling you, though. It is going to take weekly reassessment on where you are at on the grocery budget and where you are going, or old habits will creep back in more quickly than you might guess. How does the wife feel about the new budget for groceries? Is she fully on board, or does she have reservations? Her attitude toward this part of the venture is going to be more important to success than yours, since she is the stay at home mom.
Well, we did buy milk, applesauce, bread and a couple other staples. But that's it.
We skipped last weeks shopping and ate what we could out of the pantry and freezer.
Today is our 1st shopping trip since joining, and my wife is bringing $100 to spend.
Second part of my post... ideas to turn things around.
This is a tricky puzzle, because one good action (selling the rental) results in a reduced cashflow, and selling inlaw property results in a lot of relationship problems...
Let's start at the top -- Goals. My assumption for Mr. B goals includes in sort of priority order:
1) Getting a positive cashflow each month immediately. Stop digging a hole.
2) keeping inlaws in their home.
3) resolving the roof and property tax issue (to avoid foreclosure / add insurance)
4) Paying off IRS or starting an aggressive repayment plan.
5) Keeping wife in current home
6) Starting new business venture
My first instinct is that the Beatles need a fresh slate. All of this agonizing over debt and payment and expenses is taking a lot of time away from focusing on a new business venture and enjoying life. In fact, some of the extra spend (TVs) may be related to respite from the stress of dealing with all of this.
A) Cut expenses by at least $1000 (getting there!) This is an urgent short term need.
B) Earn more income
In addition to cutting expenses, you need to net quite a bit more income... or slash your current home costs and move to a rental.
This is the basic problem in your situation. For too many years,you have been living like you earn more, and taking from IRS, Property taxes and 401k to allow you to spend more each month. Now you don't have a lot of options left.
Quite frankly, making $60k per year, gross, for a family of 4, who wants to live in a nice family home, while buying TV's and furniture, renovations, starting businesses, thinking about vacations, owning cars worth more than 20k, supporting your parents (sometimes)..just isn't going to cut it. You can afford, like, ONE of these "extras" on your income. You are far from the income level you need to support your lifestyle as is.
------------------------BIG NEW IDEA -----> one idea to solve all problems! ---------
Move the in-laws in with you in your home, and sell the big place. Charge them a low rent. That 100k in equity would go a long way to clearing the over $55k in property tax, IRS, new roof, plus $15k or so of consumer debt, plus pay down your mortgage to get rid of the extra mortgage insurance on your primary home, etc.
Sell it as a way for your wife to not have to work while the kids are young. They may also choose to rent elsewhere, on their own costs, too.
You keep your car, wife does not need work, you still need to cut expenses but to real life levels instead of cutting to the bone... your parents will need to wait a while (until wife can work?) before getting repaid, I am afraid.
So -- Can you move your kids into a shared room and free up a room for the In laws? Because the second place option is to have them give you up to 100k in capital (the equity in the home), which they may not actually have.
First, I appreciate both your posts.
They were awesome.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
Our goal is to:
1) Pay off every ounce of debt we have.
2) Save a lot of money and feel finanically secure (at least $25k in readily accessible funds).
You might want to read the book Boundaries by Henry Cloud. From what you have shared, it sounds like you have boundary issues with both sets of parents.
You sound like a loving and caring father and husband that needs to really look at what his wife is saying with her actions about that house. If my DH would not even entertain the idea of selling to alleviate our financial crisis, I would seriously question his loyalty to me and our children. It may be that your wife does not see this as a crisis (perhaps because her own family owes six figures to the IRS) but her opinion does not change reality.
My best to you. I hope you can get a plan in place so you can have peace.
You might want to read the book Boundaries by Henry Cloud. From what you have shared, it sounds like you have boundary issues with both sets of parents.
You sound like a loving and caring father and husband that needs to really look at what his wife is saying with her actions about that house. If my DH would not even entertain the idea of selling to alleviate our financial crisis, I would seriously question his loyalty to me and our children. It may be that your wife does not see this as a crisis (perhaps because her own family owes six figures to the IRS) but her opinion does not change reality.
My best to you. I hope you can get a plan in place so you can have peace.
+1000000 But I have to bow out now. I think that the beatles have so many emotional issues tied to their finances and financial entanglement with family that they are going to be unable to resolve the financial issues until they resolve the fundamental emotional issues first. And they have to want to resolve those.
1.) I would feel betrayed if my husband even suggested having family move into a house we could not afford to make payments on and that has $100K in equity in it - especially in a situation where our immediate family has its hair on fire. I would go so far as to say it would be a matter of divorce for me.
2.) It would be divorce on the spot if my husband suggested enabling his family members to avoid paying legitimate IRS debt under any circumstances. - and especially so when it meant our immediate family suffered.
3.) I wouldn't want my children around grandparents that are evading paying taxes they owe to the IRS - it suggests so much else unethical about their character - including not bucking up and working out a plan to pay.
4.) I couldn't take money from any family member no matter how wealthy to bail me out. Ever. And I could not respect my husband if he did it. How can a adult MAN or adult WOMAN command respect from their spouse or anyone else when mommy and daddy are paying their bills? I don't want to crawl in bed each night with a child. I want an adult as my partner.
5.) I think Mrs. Beatles thinks that her in-laws are rich and that they should just take the money they need from them. That is what I got out of her pathetic, woe is me, blame everyone else post. As long as she thinks this no budget effort is going to work.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
Given all of this - no amount of help here will resolve their issues. And I've spend way too much time and emotional energy in it already.
Good luck. I do hope you guys make it be sincerely doubt you will.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
The beatles,
Buddy, hey, is there something you are not telling us? Selling the small rental is a GREAT step in the right direction, and I commend you for waking up and smelling the coffee, but selling the large rental, too, would literally solve all of your problems. Literally. You could pay off everything to everybody. You could keep your cars, furniture, televisions, and garage full of stuff, and it would all be paid off.
You could even keep your current house. You would still have a mortgage.
What would THAT do to your monthly expenses???
But there is something else, and we need to know what it is. The first time I brought this up as the solution to your financial problems, and an immediate one at that, you said your wife would divorce you.
So what is the back story?
I cannot imagine my wife wanting to divorce me for liquidating six figures of cash when we are trying to survive and owing multiple tax authorities in ways that could bring everything crashing down, even IF her parents were involved. She, quite simply, would never see our obligation to them as tying up six figures of cash to keep them in marble, heated floor, luxury. Also, the fact that they have the money each month to pay all of the expenses for that place, which YOU could NOT afford, means that they will be ok.
If you or your wife think they will not be ok, then help us understand WHY they won't be ok? The first excuse, they owe the IRS, is not going to matter one bit to most real estate investors, who will be happy to rent them a place. Is this just a matter of the inlaws being whiny and your wife not wanting to hear about it from them? Are the inlaws controlling over their daughter? What?
So what is the deal? Your wife's one post, above, really did not illuminate the situation any further. You mentioned she was upset by reading this thread. So what is going on?
Nope, nothing hidden.Can you share with us any idea why? I ask because I gather the following from what you wrote. They have plenty of money coming in each month. Indeed, they are paying more than a couple grand a month to live there, between mortgage payments, taxes, utilities, and so on.
It's just not something she is willing to do to her family.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
It's just not something she is willing to do to her family.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
In-laws owe six figures in back taxes.If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
Wow. This is by far the best advice on this thread.
It's just not something she is willing to do to her family.
I though I had bowed out a few days ago, but I have to respond to this. And rephrase what you said.
She is not willing to do this to her parents. She IS willing to do it to HER FAMILY. Because you and the kids are her primary family.
Years ago I was at the wedding of two friends who were just graduating university. The priest pointed out that when you get married, the fancy wording means that you and your spouse are now each other's primary family. "Forsaking all others" means your parents are lower on your priority scale than your spouse and future children.
So let us be clear here. She is willing to have her primary family people, including her children, be massively in debt and at risk of a lawsuit (until the rental gets sold). She is also willing to have her third priority family (your parents, so your second priority family people) keep giving the 2 of you money.
All this is so that her secondary priority family people can live in luxury.
Financially what you need to do is clear. Sell both houses. To any buyer. Cut the financial strings with both sets of parents. Of course that is the hard part.
You two don't need us. You need a marriage counselor.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
Also, the longer her family is there, they will have paid a larger and larger share of the equity in the property. When (if?) the house is eventually sold, who gets to keep the profit may become quite contentious. Given that the original sale of the house to the Beatles family was within the family, there may be a very complicated history that would make pocketing the $100k very difficult, and it is highly unlikely that the $300k house has $100k of equity in it that really belongs to the Beatles family.
Thinking about it more, the beatles family certainly hasn't paid $100k of equity in the few years they owned it, and prices in his area have certainly not risen 33%. They had to borrow $15k from his parents to "pay closing costs" initially. There's no way that $100k of equity is unambiguously beatles' to use. Some of it (maybe all of it?) has to belong to the in-laws, or to beatles' parents, but I'd guess very little to beatles and family. Which makes this worse. Beatles, you have a massive liability (taxes and mortgage in your name) with no access to the asset (physically or financially).
So, this is a very good time to initiate this conversation with the in-laws. You are in massive debt and it's clear that this situation can't continue indefinitely, which gives you an excellent reason to bring the topic up. It will be uncomfortable, but some plan must be made for how this will eventually unwind. Also, avoiding uncomfortable topics is what got you here in the first place, so time to change that behavior.
Also, the longer her family is there, they will have paid a larger and larger share of the equity in the property. When (if?) the house is eventually sold, who gets to keep the profit may become quite contentious. Given that the original sale of the house to the Beatles family was within the family, there may be a very complicated history that would make pocketing the $100k very difficult, and it is highly unlikely that the $300k house has $100k of equity in it that really belongs to the Beatles family.This is a good point. To strengthen any defense to BS here, even if you end up leaving the in-laws in that house, it might make sense to have the in-laws sign an explicit lease on the property, and have them pay YOU the bills, and then YOU pay the bills. That way it's clear that they are RENTING it from you in a proper landlord-tenant relationship, not giving you money that pays for expenses of the house they probably still think of as theirs. Also, that way you're sure everything is getting paid so nothing extra-stupid happens to push you off a cliff.
Thinking about it more, the beatles family certainly hasn't paid $100k of equity in the few years they owned it, and prices in his area have certainly not risen 33%. They had to borrow $15k from his parents to "pay closing costs" initially. There's no way that $100k of equity is unambiguously beatles' to use. Some of it (maybe all of it?) has to belong to the in-laws, or to beatles' parents, but I'd guess very little to beatles and family. Which makes this worse. Beatles, you have a massive liability (taxes and mortgage in your name) with no access to the asset (physically or financially).
So, this is a very good time to initiate this conversation with the in-laws. You are in massive debt and it's clear that this situation can't continue indefinitely, which gives you an excellent reason to bring the topic up. It will be uncomfortable, but some plan must be made for how this will eventually unwind. Also, avoiding uncomfortable topics is what got you here in the first place, so time to change that behavior.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
It's just not something she is willing to do to her family.
I though I had bowed out a few days ago, but I have to respond to this. And rephrase what you said.
She is not willing to do this to her parents. She IS willing to do it to HER FAMILY. Because you and the kids are her primary family.
Years ago I was at the wedding of two friends who were just graduating university. The priest pointed out that when you get married, the fancy wording means that you and your spouse are now each other's primary family. "Forsaking all others" means your parents are lower on your priority scale than your spouse and future children.
So let us be clear here. She is willing to have her primary family people, including her children, be massively in debt and at risk of a lawsuit (until the rental gets sold). She is also willing to have her third priority family (your parents, so your second priority family people) keep giving the 2 of you money.
All this is so that her secondary priority family people can live in luxury.
Financially what you need to do is clear. Sell both houses. To any buyer. Cut the financial strings with both sets of parents. Of course that is the hard part.
You two don't need us. You need a marriage counselor.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
However, if we sell the rental, I don't think we will need to do anything else.
Selling the rental will reduce our expenses $1,777 per month.
We have already reduced our food expense by 1,000 per month.
This changes our situation in the following way:
> Our take home pay will be reduced to $3,941 /month
> Our expenses will be reduced to $3,246 / month
This will result in a surplus of $695 / month.
If I am missing something, please let me know.
The beatles,
Buddy, hey, is there something you are not telling us? Selling the small rental is a GREAT step in the right direction, and I commend you for waking up and smelling the coffee, but selling the large rental, too, would literally solve all of your problems. Literally. You could pay off everything to everybody. You could keep your cars, furniture, televisions, and garage full of stuff, and it would all be paid off.
You could even keep your current house. You would still have a mortgage.
What would THAT do to your monthly expenses???
But there is something else, and we need to know what it is. The first time I brought this up as the solution to your financial problems, and an immediate one at that, you said your wife would divorce you.
So what is the back story?
I cannot imagine my wife wanting to divorce me for liquidating six figures of cash when we are trying to survive and owing multiple tax authorities in ways that could bring everything crashing down, even IF her parents were involved. She, quite simply, would never see our obligation to them as tying up six figures of cash to keep them in marble, heated floor, luxury. Also, the fact that they have the money each month to pay all of the expenses for that place, which YOU could NOT afford, means that they will be ok.
If you or your wife think they will not be ok, then help us understand WHY they won't be ok? The first excuse, they owe the IRS, is not going to matter one bit to most real estate investors, who will be happy to rent them a place. Is this just a matter of the inlaws being whiny and your wife not wanting to hear about it from them? Are the inlaws controlling over their daughter? What?
So what is the deal? Your wife's one post, above, really did not illuminate the situation any further. You mentioned she was upset by reading this thread. So what is going on?
Nope, nothing hidden.
It's just not something she is willing to do to her family.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
Did I read that they are keeping the rent that comes in from the apartment that has a lease through August? . . . and 3) they're making money off rent on a property they don't even own! How is that fair to YOU, beatles?I wonder if they are reporting that income to the IRS??? LOL! Since they do not own the property they are renting, can they even deduct anything against that income? I am not an accountant, but I am guessing not.
Mrs. Dinero is smart and has a moral compass.If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
Ok I'm back in.
I'm starting to wonder if the reason the OP & his wife are excruciatingly resistant to selling this house is because they are knowingly helping their in-laws hide from the IRS. If the family were to leave this house and go rent somewhere else then that place would run a credit check and their report. If they are accepted as tenants somewhere then their credit report (most likely) will be updated to reflect this new address. If they keep living in this house, though, then no address is registered.
You can see the way the OP has normalized their in-laws unethical behavior using the phrase "like millions".
Did I read that they are keeping the rent that comes in from the apartment that has a lease through August? Do they know that you are not meeting your obligations every month and that money could be helping? You think of them as "covering costs" on that big house, but from the outside, it looks like they are taking terrible advantage of you and their daughter. They are set up in a sweet situation where 1) they don't feel any urgency to pay back the "couple hundred thousand" they owe because they have found housing that doesn't require that of them; 2) they know a landlord isn't going to snoop into their business too much; and 3) they're making money off rent on a property they don't even own! How is that fair to YOU, beatles?
And I'd like to see some source or citation for your assertion that "millions of Americans" owe back taxes. I have never in my life missed a tax payment.
We actually have!
We have not shopped for groceries since I started this case study.
Well, we did buy milk, applesauce, bread and a couple other staples. But that's it.
We skipped last weeks shopping and ate what we could out of the pantry and freezer.
Today is our 1st shopping trip since joining, and my wife is bringing $100 to spend.
Did I read that they are keeping the rent that comes in from the apartment that has a lease through August? . . . and 3) they're making money off rent on a property they don't even own! How is that fair to YOU, beatles?I wonder if they are reporting that income to the IRS??? LOL! Since they do not own the property they are renting, can they even deduct anything against that income? I am not an accountant, but I am guessing not.
If the inlaws are paying all the bills to the big house, why not just sell it to them? Their costs will remain the same every month and you get your equity out.
Because if the in-laws appear to have any assets the IRS will take them.
Wait, what? I read through the thread but I missed that. What's the deal?
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
Ok I'm back in.
I'm starting to wonder if the reason the OP & his wife are excruciatingly resistant to selling this house is because they are knowingly helping their in-laws hide from the IRS. If the family were to leave this house and go rent somewhere else then that place would run a credit check and their report. If they are accepted as tenants somewhere then their credit report (most likely) will be updated to reflect this new address. If they keep living in this house, though, then no address is registered.
You can see the way the OP has normalized their in-laws unethical behavior using the phrase "like millions".
Did I read that they are keeping the rent that comes in from the apartment that has a lease through August? Do they know that you are not meeting your obligations every month and that money could be helping? You think of them as "covering costs" on that big house, but from the outside, it looks like they are taking terrible advantage of you and their daughter. They are set up in a sweet situation where 1) they don't feel any urgency to pay back the "couple hundred thousand" they owe because they have found housing that doesn't require that of them; 2) they know a landlord isn't going to snoop into their business too much; and 3) they're making money off rent on a property they don't even own! How is that fair to YOU, beatles?
And I'd like to see some source or citation for your assertion that "millions of Americans" owe back taxes. I have never in my life missed a tax payment.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.
That said, this is another example of how things got to this level, because performing this service (which is, for all intents and purposes, tax evasion) for Mrs. Beatles' parents for free has given the Beatles family another hidden cost that they have ignored. They are assuming loan risk, risk which an actual mortgage lender would never assume. It is time to look this in the face and deal with it. Much more important than starting up a side-project, and not something that is going to take only an hour of effort.
I wonder if they are reporting that income to the IRS??? LOL! Since they do not own the property they are renting, can they even deduct anything against that income? I am not an accountant, but I am guessing not.
People are looking too far into it.
In-laws, like millions of Americans, can not own property because they have past due taxes owed.
So they rent.
Ok I'm back in.
I'm starting to wonder if the reason the OP & his wife are excruciatingly resistant to selling this house is because they are knowingly helping their in-laws hide from the IRS. If the family were to leave this house and go rent somewhere else then that place would run a credit check and their report. If they are accepted as tenants somewhere then their credit report (most likely) will be updated to reflect this new address. If they keep living in this house, though, then no address is registered.
You can see the way the OP has normalized their in-laws unethical behavior using the phrase "like millions".
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
Stay tuned later today when Beatles will reveal that he still owes 100K on a yacht that his inlaws use. Plus, a single post by a new user claiming to be "the father in law" explaining his misfortunes.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
This would allow them at a later date to return to their "fancy home" once they sort out debt and/or mr. gets a raise. This might be what mrs. counts on, and why she doesn't want to let go of it: if she doesn't they're "temporarily" living in a cheaper place, if she does she becomes "normal" and loses her big mansion with acres of land, and knows she might never be able to get it back.The beatles has posted nothing like this about it, in spite of interrogation aimed at getting the complete story. If that was the explanation, he would have already made it. It would have been quite simple to say, "We don't own the $100k in equity. It belongs to my inlaws. We have an agreement that they will get the house once their issues are worked out." But he didn't. Instead it was just, "My wife won't do that to her parents." Whatever "that" is.
First off, I am not a tax lawyer, but, in doing a sham transaction, the IRS troubles actually spread to other family members. The IRS can come after the person holding the property. The IRS can still file a lien, a "nominee lien."
In other words, transferring your property to another spreads your IRS problem to the other like an infectious disease.
The IRS actually does not like to take houses. They will do so, however, in egregious cases where the parties have poked at them. This appears to be a case ripe for that sort of consequence.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
Don't forget Mr Beatles won't delivery pizzas either because he can't get in and out of his car that much. Maybe he has a real disability but it sounds like an excuse to me (since he hasn't mentioned a real physical disability).
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
People making up lies helps nothing.
This would allow them at a later date to return to their "fancy home" once they sort out debt and/or mr. gets a raise. This might be what mrs. counts on, and why she doesn't want to let go of it: if she doesn't they're "temporarily" living in a cheaper place, if she does she becomes "normal" and loses her big mansion with acres of land, and knows she might never be able to get it back.The beatles has posted nothing like this about it, in spite of interrogation aimed at getting the complete story. If that was the explanation, he would have already made it. It would have been quite simple to say, "We don't own the $100k in equity. It belongs to my inlaws. We have an agreement that they will get the house once their issues are worked out." But he didn't. Instead it was just, "My wife won't do that to her parents." Whatever "that" is.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
People making up lies helps nothing.
Did I read that they are keeping the rent that comes in from the apartment that has a lease through August? . . . and 3) they're making money off rent on a property they don't even own! How is that fair to YOU, beatles?I wonder if they are reporting that income to the IRS??? LOL! Since they do not own the property they are renting, can they even deduct anything against that income? I am not an accountant, but I am guessing not.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
People making up lies helps nothing.
People asking for help but not giving the whole story significantly handcuffs those who would like to help.
I'm a non-practicing JD, but still a law school grad. I agree that this is some serious stuff. I could absolutely see the IRS being ruthless with these facts. It reads like a law school exam.
Beatles, you better get a good CPA/tax lawyer and tell him/her EVERYTHING. Get a real estate agent and sell these properties ASAP. If you don't: Best case scenario - you avoid prosecution and financial ruin for a few more years and then probably succumb to bankruptcy and divorce once this all blown up. Worst case scenario - you go to prison.
I would suggest that, Mrs. Beatles' parents do, de facto, own the property. I'm guessing this is also the understanding of all parties. The Beatles hold the de jure ownership because otherwise the IRS would take it. But it is in name only. Everyone understands this, which is why it isn't the solution to the case study, and why it would result in divorce to suggest stealing her parents' house to Mrs. Beatles.Well, this would explain why he does not want to answer the questions posed in Post #1104. They would be very uncomfortable to answer if this is just a aiding and abetting tax evasion.
It would also explain a great many other things, like why $100,000 in equity is "irrelevant." It is irrelevant because it belongs to the tax dodgers, and does not belong to The beatles and his wife at all.
This makes more and more sense and explains The beatles' odd behavior in this thread.
Conspiracy.
People making up lies helps nothing.
beatles, people aren't making up lies. People are trying to fill in the blanks you are leaving in your responses by positing credible theories. Trust me, we are trying to HELP YOU. We think you are getting shafted by your in-laws. We think your wife doesn't fully understand the situation in which you have found yourself, and we think you are having a hard time waking up to the true awfulness of it all.
First off, I am not a tax lawyer, but, in doing a sham transaction, the IRS troubles actually spread to other family members. The IRS can come after the person holding the property. The IRS can still file a lien, a "nominee lien."
In other words, transferring your property to another spreads your IRS problem to the other like an infectious disease.
The IRS actually does not like to take houses. They will do so, however, in egregious cases where the parties have poked at them. This appears to be a case ripe for that sort of consequence.
I am the wife. This will probably be my only post.
1) When Mr.B and I met I already owned Rental #1 (the one we owe $25k on).
2) Shortly before getting married, I received an annuity for $14k. I wanted to put the $14k on the HELOC to pay it down to $11k, but he wanted to use it on a business idea of his. So we used it on his business idea and now its all gone.
3) After our honeymoon, we moved into the $300k house. This house was previously owned by my family, but they couldnt own it anymore for various reasons so we purchased it from them, and then we moved in and they moved out.
4) The $300k house was a lot to handle. Keep in mind that $300k in our area is different than $300k in a big city. $300k in our area is a 2500-3000 Sq foot big house on several acres with a pond and a rental apartment. It's huge. Just the lawn mowing was $160 per month.
5) The mortgage was very expensive and the interest rate is high. It was a big burden. We got into a lot of debt in this house. About $25k in debt. My husbands parents give us $25k in cash to pay this debt off.
6) A couple years go by and my family needs a place to live again (their lease ended). So we decided to move out of the $300k house and let my family move back in and pay the expenses.
7) We find our current house, which is much cheaper than the $300k house. We buy it and move in. My husbands parents give us $15k for closing costs.
8) We move into the current house and it doesn't have nearly the luxuries that our previous house did so Mr. B buys crown moulding, hires a landscaper etc. Our debt gets racked up to who knows how much. I honestly dont even know how much its at right now. My husbands parents bail us out several times. Along the way we have had several months where we cant pay the mortgage and my husbands parents give us cash for it.
Thats the story. A lot of you have it wrong. You need to be nicer of people who live differently than you.
Furthermore - when you knowingly go about cheating the IRS - then there are criminal penalties. People go to jail. Husbands and wives with kids go to jail. This is serious shit. The in-laws are living large at the expense of their daughter's family and have asked her family to be conspirators in defrauding the IRS. Wow - just wow. I don't know many mother's who would let their children be put at such risk - but maybe Mrs. Beatles doesn't mind if the state takes the kids while she is in prison.
You're seriously still making up lies?
First the made up $60k in credit cards and now this.
NO ONE IS CHEATING THE IRS OF ANYTHING.
We purchased the house fair and square after our honeymoon.
The house was bought with the intention of her eventually owning it.
It was designed by my wifes specifications and everything.
Thing is, beatles, however you and Mrs Beatles are looking at the situation, and however well intentioned you are, the facts as currently presented on this forum could very easily be presented by the IRS in court to make you and Mrs Beatles look as guilty as hell. And why wouldn't they, when there is nearly a quarter of a million in unpaid taxes hanging around - the inlaws $200k and your $40k, plus whatever they would deem to be your "income" on the payments made by your inlaws and their sub-renters on the mansion.
Please, please, please, this has already gone way beyond any sort of saving face for your inlaws or indulging Mrs Beatles' hopes of future gracious living.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
Don't forget Mr Beatles won't delivery pizzas either because he can't get in and out of his car that much. Maybe he has a real disability but it sounds like an excuse to me (since he hasn't mentioned a real physical disability).
Actually I did.
You just don't want to bother to read it.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
Don't forget Mr Beatles won't delivery pizzas either because he can't get in and out of his car that much. Maybe he has a real disability but it sounds like an excuse to me (since he hasn't mentioned a real physical disability).
Actually I did.
You just don't want to bother to read it.
the only thing you said about delivering pizzas is that you can't get in and out of your car that much.
Please point me to the post where you described the physical disability (I may have missed it, there are a lot of posts) and you will get a real apology.
beatles if you can say with a straight face, in big bold print, in all caps, that "NO ONE IS CHEATING THE IRS OF ANYTHING", then I really do think you are deluding yourself.
YOU are cheating the IRS right now. You owe thousands of dollars in unpaid taxes. That's what they are. It's not a "scam". You didn't pay. That's cheating. Wake up.
6.) Mrs. Beatles could work nights and weekends but isn't. If we were in this position I would be working every hour I could when my spouse were home.
Don't forget Mr Beatles won't delivery pizzas either because he can't get in and out of his car that much. Maybe he has a real disability but it sounds like an excuse to me (since he hasn't mentioned a real physical disability).
Actually I did.
You just don't want to bother to read it.
the only thing you said about delivering pizzas is that you can't get in and out of your car that much.
Please point me to the post where you described the physical disability (I may have missed it, there are a lot of posts) and you will get a real apology.
A reason why the wife can't deliver pizza wouldn't hurt either.
Or, you know, taking the pizza delivery for what it is - the suggestion that someone get a reliable, wage-earning side gig to help get you out of your quandary. It doesn't literally have to be pizzas.
Bad back.
Probably on page 20-21ish.
We have been working really hard the last few weeks to turn things around and have run into a few snags.
Our rental has a bad roof. The consensus on here was to offer a concession at closing for the cost of the roof.
Our realtor says that every lender she knows of will require the roof be replaced prior to funding. As in they literally won't approve the funding with the roof the way it is.
She said if it's a cash buyer, then yeah we could do it but a cash buyer is not likely in this area.
You/your husband posted this same issue in the locked thread and you received a mountain of advice.
Yet fast forward several weeks, and you still haven't acted on the advice, and are just asking the exact same question over again!
- The buyer's lender might not consider the roof to be "bad."
- A cash buyer may make an offer.
- You and the buyer can work out an agreement on the roof, once you've received a formal offer & earnest money.
Remember, you have no insurance on this property and you owe thousands in back taxes.
How do you know a cash buyer isn't likely in the area?
If it's priced right, they'll come out of the woodwork.
For those who don't know what I'm talking about, the original case study is here (http://forum.mrmoneymustache.com/case-studies/the-beatles-case-study/). I would reply in the thread itself but it's been locked and my husband isn't allowed to post for 90 days.
Have you spoken to more than one realtor? She may be giving you advice that works out best for her self-interest.
It is common (In Canada, not sure about the US) to have an offer contingent on a home inspection. The home inspection will show the roof (and any underlying damage) and will not be a surprise to the purchaser and they will probably come back with a counter-offer depending on what they want to do with it.
Have you spoken with your tenants to gauge their interest in purchasing the property? Even if you give them a better deal, you would save on realtor fees, they know what they are getting into and it could be off your shoulders - and therefore less of a liability as it is not insured, quicker.
For those who don't know what I'm talking about, the original case study is here (http://forum.mrmoneymustache.com/case-studies/the-beatles-case-study/). I would reply in the thread itself but it's been locked and my husband isn't allowed to post for 90 days.
It is not my intention to be mean, but I want to offer some frank thoughts about your husband.
For lack of a better explanation, it seems like he is slipping deep 'down the rabbit hole' in his attempt to deal with this financial disaster.
I came across his "blog" and reviewed his most recent post. Have you read it?
Either he is not taking this situation seriously, or is psychologically paralyzed take quick/meaningful/efficient actions.
He is not focusing on practical/actionable research that can have an immediate positive impact on his dire situation.
Instead, he's written a nearly 5,000 word dissertation on "The complete world history of frugal living." Here's an excerpt...
"My research began with determining whether frugality is a modern construct, or if it can be retraced to times long gone. It was quite a fascinating journey...
I studied the course of frugality throughout each era in order to understand how it became popular, to provide the reason behind their becoming frugal, and to unearth examples of famous people that we can model ourselves after today."
WTF?!?! Why is he spending his available time/energy on this? Why isn't he reading about Do-It-Yourself Roofing or Cheap Family Meals?
Buyers have many options for financing houses that need work. They won't be able to get a standard or FHA mortgage but at the right price that won't matter. I think you need a different realtor. Consider looking for listings that say "cash only" and seeing which local realtors pop up often.
We have acted. The tenants were told of our plans to sell and we are in talks with the realtor on how to move forward.You are making this more complicated than it needs to be. Interview 3 realtors, decide on one, and list the property the next day. Done.
I started this topic because the advice we were given on here, the realtor is saying is false. We are looking for further advice
Honey, the shingles are gone and all you see is plywood in several parts of the roof. The reason we don't have insurance is because the insurance company dropped us because the roof was so bad. I don't think there is any degree worse than this.I believe this property has asphalt shingles. Why not buy 1-2 bundles of shingles and replace the missing sections yourself? It's not difficult. This would allow you to get insurance on the house AND be able to sell it without worrying about the buyers financing.
My husband and I suggested this to the realtor and her response was that we run a risk in doing that. If the house doesn't sell, we then will have to put on the roof and buyers will be put off wondering if the roof caused rot damage below the new shingles. Do you think this is true?Get a new realtor! This one just keeps coming up with excuses. You cannot control what buyers may wonder about. Your disclosure sheet, and their inspection, should provide them with the information they need.
You're right that we have no insurance. We are now on our property tax payment plan for the back taxes.Is there also a plan in place to pay for the $4,000+ in taxes that are due next month?
Sent messages to 2 other realtors. Waiting for their response.
2nd realtor texted back. Said that we would have to list it as "cash only". It will take a large percentage of buyers out of the equation but it can be done.
Waiting for the 3rd realtor.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
It would probably be worth taking that "loss" of less money for it though. It sounds like you can't afford to fix the roof yourselves right now, and selling it would get rid of all of the other expenses and liabilities related to it too.
I say go for it - try to find a cash buyer.
Good luck!
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
You're not in a situation that allows you the luxury of waiting to maximize the return on your investment. Your situation is such is that you need to stop hemorrhaging money, immediately, or you'll go bankrupt. Sell as quickly as possible and don't dwell on an alternate version of reality where you sell and make a ton of money.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
It would probably be worth taking that "loss" of less money for it though. It sounds like you can't afford to fix the roof yourselves right now, and selling it would get rid of all of the other expenses and liabilities related to it too.
I say go for it - try to find a cash buyer.
Good luck!
Also, the risk of not having it insured is MUCH worse than walking away with less cash.
2nd realtor texted back. Said that we would have to list it as "cash only". It will take a large percentage of buyers out of the equation but it can be done.
You want a cash buyer! They close fast (you can have the money in your bank in 7-10 days) and don't have a ton of contingencies that might make the deal fall through. Find a realtor that specializes in this.. there are people waiting for these deals
Correct.
And all 3 realtors warned that cash buyers typically pay less than financed buyers. So we will likely walk away with less money.
I just want to say that I'm really impressed you're here and looking for feedback and taking action. I followed along with the other thread and it would be overwhelming to say the least. I can't offer constructive feedback other than that right now, but good work.
I, too, would like to add in my support for you, Mrs Beatles. Good job coming back, good job asking questions. We really want you to succeed. Choose a realtor and get that sucker on the market right away. Good luck!
I just want to say that I'm really impressed you're here and looking for feedback and taking action. I followed along with the other thread and it would be overwhelming to say the least. I can't offer constructive feedback other than that right now, but good work.I, too, would like to add in my support for you, Mrs Beatles. Good job coming back, good job asking questions. We really want you to succeed. Choose a realtor and get that sucker on the market right away. Good luck!
+1 and +1
I read through all of the other thread in a couple of long sittings, and it was overwhelming even for me! And I know it upset both you and your husband at times. Yet you seem to have been able to get past that, and see past that to the fact that there's good advice here, and now we see you taking the reins and trying to move forward on what's been suggested.
Tenants know this when they sign the lease - there will be regular inspections and they will need to be cooperative during a potential selling process.
All part of the deal, hopefully your ones are reasonable people and don't make things a hassle.
Good luck with your sale.
Quote- The buyer's lender might not consider the roof to be "bad."
Honey, the shingles are gone and all you see is plywood in several parts of the roof. The reason we don't have insurance is because the insurance company dropped us because the roof was so bad. I don't think there is any degree worse than this.
If anyone has advice on how to tell the tenant that we will be bringing a realtor over without freaking them out and making them look at other houses to move to, i would appreciate it.
The issue is not whether they understand this, but rather we dont want them to leave or find another place to live before we sell (we need the rent money).
Can he cut his hours writing and Uber or deliver pizzas, sell stuff on eBay to help pass some time?
I really admire you coming on here. I'm no real estate expert, but it seems to me you need to replace the roof and have a relator sell the property within a month or 2. I also read the blog by Mr. Beatles. Very long, as noted. I get that writing is cathartic for him; I write myself. Can he cut his hours writing and Uber or deliver pizzas, sell stuff on eBay to help pass some time?There is no point suggesting that the beatles replace the roof: they don't have the money to pay anyone else (they are close to bankruptcy) or the knowledge and physical ability to do it themselves. They have to sell the house "as is" for whatever they can get, as soon as they can get it, so that it doesn't get foreclosed (or burn down while uninsured) and to give themselves some breathing room on their other debts.
If anyone has advice on how to tell the tenant that we will be bringing a realtor over without freaking them out and making them look at other houses to move to, i would appreciate it.
I thought you had already told the tenant??? Earlier you said this...
"We have acted. The tenants were told of our plans to sell and we are in talks with the realtor on how to move forward."
If you've told them your plans to sell, then they shouldn't be "freaked out" about bringing a realtor over.
Mrs. Beatles - I thought that you did not have an outside job. Why don't you have more time to do this research yourself? I think you both need to step up to the plate here.
Sorry I got off topic! Mrs. Beatles, I assume you already thought of this, but can any family or friends recommend a realtor that can be trusted? Have you received at least a few quotes on the roof yet? I see no reason why you can't list the property now and inform potential buyers that a new roof will be added.
Is that quite right? I thought your first realtor told you you needed to replace the roof, which you can't do so you have ended up doing nothing for months. It seems that the others have said you can list for cash buyers, so that is something you can do immediately. That's a considerable difference.Sorry I got off topic! Mrs. Beatles, I assume you already thought of this, but can any family or friends recommend a realtor that can be trusted? Have you received at least a few quotes on the roof yet? I see no reason why you can't list the property now and inform potential buyers that a new roof will be added.
The realtor our family uses is the one that everyone in this thread has told me not to trust. I've since contacted other realtors and they said the same thing.
Mrs. Beatles - I thought that you did not have an outside job. Why don't you have more time to do this research yourself? I think you both need to step up to the plate here.
Taking care of children is a full time job, mind you.
I really admire you coming on here. I'm no real estate expert, but it seems to me you need to replace the roof and have a relator sell the property within a month or 2. I also read the blog by Mr. Beatles. Very long, as noted. I get that writing is cathartic for him; I write myself. Can he cut his hours writing and Uber or deliver pizzas, sell stuff on eBay to help pass some time?
Is that quite right? I thought your first realtor told you you needed to replace the roof, which you can't do so you have ended up doing nothing for months. It seems that the others have said you can list for cash buyers, so that is something you can do immediately. That's a considerable difference.Sorry I got off topic! Mrs. Beatles, I assume you already thought of this, but can any family or friends recommend a realtor that can be trusted? Have you received at least a few quotes on the roof yet? I see no reason why you can't list the property now and inform potential buyers that a new roof will be added.
The realtor our family uses is the one that everyone in this thread has told me not to trust. I've since contacted other realtors and they said the same thing.
The issue is not whether they understand this, but rather we dont want them to leave or find another place to live before we sell (we need the rent money).
I really admire you coming on here. I'm no real estate expert, but it seems to me you need to replace the roof and have a relator sell the property within a month or 2. I also read the blog by Mr. Beatles. Very long, as noted. I get that writing is cathartic for him; I write myself. Can he cut his hours writing and Uber or deliver pizzas, sell stuff on eBay to help pass some time?
Actually, he started doing freelance work. He's probably gonna be really mad at me now because he wanted to tell everyone himself, but he is very good at what he does and quickly picked up two clients. He signed a $3,600 contract with the first client and received $500 for a quick project with the second client. We won't receive the $3,600 until May I was told but got the $500 literally today ($456). We don't have Uber in our area but he would love to do that. He can't deliver pizzas because of a medical issue.
Our first realtor told us we could list it cash too. Which we didn't consider as an option because we didn't really think there would be anyone with that much money who would want our house.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
Mrs. Beatles - I thought that you did not have an outside job. Why don't you have more time to do this research yourself? I think you both need to step up to the plate here.
Taking care of children is a full time job, mind you.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
Just a little advice in case you ever find yourself in such a situation again - before you improve and add "luxuries" to the inside of a house - you must take care of it structurally and on the outside least you end up with nothing. If the roof collapses you will loose everything. It is better to have a sound roof than granite countertops for that reason...
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
Just a little advice in case you ever find yourself in such a situation again - before you improve and add "luxuries" to the inside of a house - you must take care of it structurally and on the outside least you end up with nothing. If the roof collapses you will loose everything. It is better to have a sound roof than granite countertops for that reason...
Forgive me if this has already been addressed, but if the house is brand new why is the roof in such bad condition?
In Australia a rash of new rental properties were thrown up so quickly that cosmetic and structural problems became apparent six or 12 months later (rendering falling off external walls was common). Various owners corporations had to either threaten or undertake legal action to get necessary repairs.
Would you have any recourse with the builder?
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
Just a little advice in case you ever find yourself in such a situation again - before you improve and add "luxuries" to the inside of a house - you must take care of it structurally and on the outside least you end up with nothing. If the roof collapses you will loose everything. It is better to have a sound roof than granite countertops for that reason...
Forgive me if this has already been addressed, but if the house is brand new why is the roof in such bad condition?
In Australia a rash of new rental properties were thrown up so quickly that cosmetic and structural problems became apparent six or 12 months later (rendering falling off external walls was common). Various owners corporations had to either threaten or undertake legal action to get necessary repairs.
Would you have any recourse with the builder?
IIRC from the original thread, mustachepungoeshere, it's not literally a brand new house.
It's a house that they previously lived in, and while they were there, thebeatles' parents made significant contributions to upgrade a whole lot of stuff in the house.
Theotherbeatles:
You might not have seen it in the other case study, as it was rather buried, but it came to light that you OWE 19,000 in back taxes on the rental. You OWE ANOTHER 4,000 bill for this year.
YOU ARE MORE THAN 3 YEARS BEHIND ON THE TAXES.
This is important because in the county you live in they have the right to TAKE YOUR PROPERTY after TWO YEARS.
If they take it for unpaid taxes, you will get nothing.
YOU HAVE NO INSURANCE. If something happens on your property, you could lose it and get nothing Worse, you could be SUED and LOSE EVERYTHING - all your houses, all your possessions - leaving you, your children, your parents all homeless.
I know it is hard to think about the money that was put into updating the house. I know it is hard to think of taking less money than you think it is worth, but you have to drastically alter your thinking. You have so much debt that the worst scenario you can imagine could happen. You need to protect yourself and your family. Nothing else matters.
I know you're right. We are working on a day to meet the realtor at the house.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
The issue is not whether they understand this, but rather we dont want them to leave or find another place to live before we sell (we need the rent money).
I have had several friends leave rentals because the properties were sold. In all cases, they waited until the last possible minute to leave--either when the property sold, or when the landlord kicked them out to stage the place. Moving is a pain, most people will delay it for as long as possible.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
I am not doubting your honesty, but I am doubting the accuracy of that statement. Considering that bare plywood has been visible for some time, there is certain to be significant water damage. If not in the ceilings, it is probably running down into the walls causing rot and mold.
Since you lack the resources to repair the roof, you should sell the house as is, right away. The price it brings will no doubt be very painful to you and your husband, but think of it a cauterizing a wound. Barbaric, hurts like hell, but it saves your life from bleeding out and infection.
Just stopping by to wish you and Mr. Beatles well. You are making progress!
It's a painful thing to acknowledge that you've messed up and say goodbye to some things that could have been so nice (like rental income from the house) but it sounds like you've done the hard part already! You will dig yourselves out, and when you start snowballing those credit cards you'll feel great. And with the skills you learn in saving, you will become rich again and then you can buy an even better rental. I don't discuss this much, but I dug myself out of a $80K debt, while on a $23K salary, in my early 30s and although I sometimes think about how rich I would be now if I had just saved that money, I am plenty well off now and I think my life and marriage are even stronger for what my husband and I went through. Blessings on you both.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
I am not doubting your honesty, but I am doubting the accuracy of that statement. Considering that bare plywood has been visible for some time, there is certain to be significant water damage. If not in the ceilings, it is probably running down into the walls causing rot and mold.
Since you lack the resources to repair the roof, you should sell the house as is, right away. The price it brings will no doubt be very painful to you and your husband, but think of it a cauterizing a wound. Barbaric, hurts like hell, but it saves your life from bleeding out and infection.
If it sells for less than $60k, we won't be walking away with much of anything. That's the most painful part. Selling a house for no profit at all.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
I am not doubting your honesty, but I am doubting the accuracy of that statement. Considering that bare plywood has been visible for some time, there is certain to be significant water damage. If not in the ceilings, it is probably running down into the walls causing rot and mold.
Since you lack the resources to repair the roof, you should sell the house as is, right away. The price it brings will no doubt be very painful to you and your husband, but think of it a cauterizing a wound. Barbaric, hurts like hell, but it saves your life from bleeding out and infection.
If it sells for less than $60k, we won't be walking away with much of anything. That's the most painful part. Selling a house for no profit at all.
The profit isn't going to be monetary, it's going to come from peace of mind that you're no longer dealing with that liability.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
If it sells for less than $60k, we won't be walking away with much of anything. That's the most painful part. Selling a house for no profit at all.
Would you mind telling your complete story?
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
I am not doubting your honesty, but I am doubting the accuracy of that statement. Considering that bare plywood has been visible for some time, there is certain to be significant water damage. If not in the ceilings, it is probably running down into the walls causing rot and mold.
Since you lack the resources to repair the roof, you should sell the house as is, right away. The price it brings will no doubt be very painful to you and your husband, but think of it a cauterizing a wound. Barbaric, hurts like hell, but it saves your life from bleeding out and infection.
If it sells for less than $60k, we won't be walking away with much of anything. That's the most painful part. Selling a house for no profit at all.
The profit isn't going to be monetary, it's going to come from peace of mind that you're no longer dealing with that liability.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
I really admire you coming on here. I'm no real estate expert, but it seems to me you need to replace the roof and have a relator sell the property within a month or 2. I also read the blog by Mr. Beatles. Very long, as noted. I get that writing is cathartic for him; I write myself. Can he cut his hours writing and Uber or deliver pizzas, sell stuff on eBay to help pass some time?There is no point suggesting that the beatles replace the roof: they don't have the money to pay anyone else (they are close to bankruptcy) or the knowledge and physical ability to do it themselves. They have to sell the house "as is" for whatever they can get, as soon as they can get it, so that it doesn't get foreclosed (or burn down while uninsured) and to give themselves some breathing room on their other debts.
You are not looking for a "retail" or "full price" buyer with a house in this condition. You're looking for the equivalent of the clearance shopper. :)
That really bothers me. Aside from the roof, the house is immaculate. It is brand new.
Loss aversion
Loss aversion is the emotional tendency to strongly prefer avoiding losses over acquiring gains. As an example, loss aversion implies that one who loses $100 will feel twice the emotional pain as another person will feel satisfaction from receiving $100. Common indications include checking your portfolio on an almost daily basis, selling funds before you intended to lock in profits, or selling when you didn't intend to in order to avoid further losses.
If it sells for less than $60k, we won't be walking away with much of anything. That's the most painful part. Selling a house for no profit at all.
This is the exact thinking that Mr. Beatles couldn't get over. it is painful, but it is a learning experience. You will be removing liabilities that put your family IN IMMEDIATE DANGER.
Mr. Beatles said he didn't want to lose the rental income - but it wasn't income since you OWE so much property tax, the rental has been COSTING you more money than it is bringing in and it has been hidden in the fact that there is no insurance and the roof has gone unrepaired.
Selling and settling your biggest debts including the property taxes and the IRS DEBTS may not get you any profit, but it may keep a roof over your head and your husband OUT OF JAIL. Side note: I do hope Mr. Beatles has been following up with a tax attorney and has been actively working out how to deal with the IRS issue.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
Quote- The buyer's lender might not consider the roof to be "bad."
Honey, the shingles are gone and all you see is plywood in several parts of the roof. The reason we don't have insurance is because the insurance company dropped us because the roof was so bad. I don't think there is any degree worse than this.
Then replace the roof.
Use a credit card.
Then sell the rental.
Then sell the house you are living in now.
Rent something small. Really small.
Sell all materials possessions that will not fit into the rental house when you move.
Use money from selling shit to pay down debt.
Use money saved from not making mortgage payments to payment to pay down debt.
Use money saved from not paying property taxes anymore (renters do not pay property taxes) to pay down debt.
Use money saved from reduced utilities to pay down debt.
Sell the big mansion, too.
That's three home sales in short order. You are going to make some real estate agent very happy, and you are going to have hundreds of thousands of dollars in cash.
Invest the cash. Do not buy another home. Keep renting a small house.
Once all debts are gone, invest the money you are saving from not living the prior lifestyle.
You will be rich in very short order.
Did I leave anything out?
They have the option to take a "loan" from parents IIRC.
What? The IRS debt? The property taxes? How?QuoteSelling and settling your biggest debts including the property taxes and the IRS DEBTS may not get you any profit, but it may keep a roof over your head and your husband OUT OF JAIL. Side note: I do hope Mr. Beatles has been following up with a tax attorney and has been actively working out how to deal with the IRS issue.
That's already done and paid.
What? The IRS debt? The property taxes? How?QuoteSelling and settling your biggest debts including the property taxes and the IRS DEBTS may not get you any profit, but it may keep a roof over your head and your husband OUT OF JAIL. Side note: I do hope Mr. Beatles has been following up with a tax attorney and has been actively working out how to deal with the IRS issue.
That's already done and paid.
What? The IRS debt? The property taxes? How?QuoteSelling and settling your biggest debts including the property taxes and the IRS DEBTS may not get you any profit, but it may keep a roof over your head and your husband OUT OF JAIL. Side note: I do hope Mr. Beatles has been following up with a tax attorney and has been actively working out how to deal with the IRS issue.
That's already done and paid.
The IRS debt is taken care of. We received a check to help pay that, as we found it most important.
LOL! It's either that or Readers Digest Sweepstakes . . .QuoteThe IRS debt is taken care of. We received a check to help pay that, as we found it most important.
Boy, I sure hope that check didn't come from one of your parents.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
Then it sounds like you have already made your decision. Whether the members of the forum agree or not is irrelevant if this is what you really want to do, having considered all of the advice that has been put forward.
Get three bids today (or choose between bids you already have) and get the work done. Break the analysis paralysis, and move on your decision.
I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000. Seems like an easy decision.
Then it sounds like you have already made your decision. Whether the members of the forum agree or not is irrelevant if this is what you really want to do, having considered all of the advice that has been put forward.
Get three bids today (or choose between bids you already have) and get the work done. Break the analysis paralysis, and move on your decision.
theotherbeetle -
You've been given many reasons, by dozens of posters, why this rental property needs to be sold ASAP. You even appear to accept this conclusion...
"I know you're right. We are working on a day to meet the realtor at the house."
But then, just 12 hours later, you post something like this...
"I'm sorry but I have a hard time with that logic. We could sell as-is and maybe make nothing. Or we could put a $4,000 roof on and perhaps make $35,000.
Seems like an easy decision."
Where is your head at???? I'm not sure why you continue to solicit feedback if you already have your mind made up.
And if replacing the roof is the route you want to go, then GET IT DONE!
Do you have $4000 credit available anywhere? A $35,000 return on $4000 justifies paying a little bit of interest.
QuoteThe IRS debt is taken care of. We received a check to help pay that, as we found it most important.
Boy, I sure hope that check didn't come from one of your parents.
QuoteDo you have $4000 credit available anywhere? A $35,000 return on $4000 justifies paying a little bit of interest.
Is that a validated number though? I don't know that I trust it. Besides which, every moment spent arguing about fixing the roof or not is a moment that a tenant could be hurting him/herself and causing the downfall of this entire card-based empire. PUT THE RENTAL ON THE MARKET TODAY. Argue about fixing the roof or not AFTER it is listed. If you get an immediate cash offer then TAKE IT and run. If it doesn't sell immediately AND you manage to line up funds to fix the roof AND you have lined up a contractor who can do it IMMEDIATELY, then go ahead. But please, stop dithering and list the property because you are massively exposed to the risk of losing everything.
I don't normally "yell" online but sheesh, I have never seen such a scary and urgent situation in all of the case studies I have read over the years. This situation is dire.
We have decided to sell the house, that is a given
We may have seen this movie before...
No its fine we consulted a tax attorney and he said as long as we count the money we receive as income then the IRS has no problem with it at all. It's legal. I was concerned about that and we did our due diligence.
Sell all three houses . . .
****
Hundreds of thousands in equity converted to cash . . .
That's already done and paid [IRS and property taxes owed].
Mrs. Beatles: I strongly recommend that you & your husband spend some minutes reading through the Bogleheads wiki article on Behavioral Pitfalls. https://www.bogleheads.org/wiki/Behavioral_pitfalls (https://www.bogleheads.org/wiki/Behavioral_pitfalls) This is very important reading for pretty much everyone because these are the ways that our human brains trick us into making bad financial and investment decisions. I think you are heavily stuck in what is called Loss Aversion.
Sell all three houses . . .
****
Hundreds of thousands in equity converted to cash . . .
I understand your point, I do. Thank you for being so helpful and concerned. But please, allow us to stay on topic with the rental I beg you.
To be honest my husband is far further past than where I am. I'm still struggling a little. This morning he was talking about using less toothpaste and unplugging the darn stove when were not using it, and i'm just not at that level yet.
Mrs. Beatles: I strongly recommend that you & your husband spend some minutes reading through the Bogleheads wiki article on Behavioral Pitfalls. https://www.bogleheads.org/wiki/Behavioral_pitfalls (https://www.bogleheads.org/wiki/Behavioral_pitfalls) This is very important reading for pretty much everyone because these are the ways that our human brains trick us into making bad financial and investment decisions. I think you are heavily stuck in what is called Loss Aversion.QuoteLoss aversion
Loss aversion is the emotional tendency to strongly prefer avoiding losses over acquiring gains. As an example, loss aversion implies that one who loses $100 will feel twice the emotional pain as another person will feel satisfaction from receiving $100. Common indications include checking your portfolio on an almost daily basis, selling funds before you intended to lock in profits, or selling when you didn't intend to in order to avoid further losses.
To relate this to your situation, you are afraid of potentially losing a potential $35K (unconfirmed) of additional gains in the rental property that quite frankly, you have no reasonable way of attaining (you can't fix the roof yourself, you don't have the money to pay for the new roof, your finances are such a disaster that you can't borrow the money to fix the roof). In focusing on this, you are neglecting the massive scary imminent crushing debt you have accumulated that leaves you THISCLOSE to losing absolutely everything. Please recognize what is going on here and use your higher-level thinking to set this mental trap aside and do what you need to do. Sell that sucker immediately for anything you can get. Just being out from the really scary liability you carry now by having no insurance will be worth any cash you can walk away with.
Please, please, do the right thing. For you, for your kids, for your security.
I am not saying the Beatles are trolls at all.
But the extremely similar style of just dropping in partial information and never explaining it, makes me think thebeatles and theotherbeatle are both the same person.
In ~2 years of being on this forum, I've never seen a poster with this style of writing. What are the odds that both of them just happen to have the same style.
That's actually where most of the frustration comes from, I think. Boneheaded people doing stupid things- yup, common, see AMWOSAC. But this "dropping in" of partial info about paying stuff off, and then the follow-up of the attorney ok'ing it, while never explaining where the fuck the money came from? That is unique.
It is okay not to give every detail of our life, I would think. I feel that the pieces can be put together without us having to spell everything out and air our laundry out here. Hopefully you understand.
For people who seem to be very indecisive in their real life, the beatles are very firm about how they want to interact with this forum, i.e. how responses should be focussed, what topics are off limits, what tone is OK or not, what information should be given or not.
That's OK but I'm confused about what the beatles actually want from the forum? Can't help but think it's partly (mostly?) attention, to be honest. (The actual advice doesn't seem welcome. But maybe it's being absorbed.)
For people who seem to be very indecisive in their real life, the beatles are very firm about how they want to interact with this forum, i.e. how responses should be focussed, what topics are off limits, what tone is OK or not, what information should be given or not.
That's OK but I'm confused about what the beatles actually want from the forum? Can't help but think it's partly (mostly?) attention, to be honest. (The actual advice doesn't seem welcome. But maybe it's being absorbed.) And the forum, including me, delivers!
*considers popcorn for breakfast*
It is okay not to give every detail of our life, I would think. I feel that the pieces can be put together without us having to spell everything out and air our laundry out here. Hopefully you understand.
But you are leaving out crucial pieces of information!! And without this information no one can give you meaningful advice!!
The main issue at hand is getting rid of this rental property.
You keep fighting back with everyone, wanting to keep the property until you are assured you can get top dollar for it.
Yet we keep asking...where are you going to get the $5000 to pay for a new roof, how are you going to pay for the $4,500 tax bill?
You don't provide ANY answers to these questions, but then happen to mention that $49,000 of debt has magically been repaid!!
Don't you think it is important to explain how that is possible?
3rd realtor responded. Said the same thing as the first two. Cash only unless the buyer is willing to pay for the roof prior to closing.
Ok. But in post #102, a part of it said "Replace the roof. Use a credit card."Sell all three houses . . .
****
Hundreds of thousands in equity converted to cash . . .
I understand your point, I do. Thank you for being so helpful and concerned. But please, allow us to stay on topic with the rental I beg you.
theotherbeatleWould admitting that be grounds for a ban of this second username? Just asking.
Can I point out that the type and pattern of your responses in the past 48 hours is amazingly similar to beatles posting style, after the first posting? (I noticed because beatles had a unusual posting style / frequency / type of comment for this forum, in general).
May you are now the beatles posting under a wife's name?
theotherbeatle
Can I point out that the type and pattern of your responses in the past 48 hours is amazingly similar to beatles posting style, after the first posting? (I noticed because beatles had a unusual posting style / frequency / type of comment for this forum, in general).
May you are now the beatles posting under a wife's name?
Likely wont be necessary though, I think i've received the answer that I came here for. Thanks.
Likely wont be necessary though, I think i've received the answer that I came here for. Thanks.
If you decide to come back to the forums afterward, consider looking through some of the many old case studies and journals, so that you can see how other people have managed to get past things like emotional attachments to things they own, sunk cost fallacies, family dynamics re: money, and the felt need to keep up with neighbours. You are not the only one who has wrestled with taking these first big steps! But once you get it done, and start to make headway, you will feel so unencumbered, you'll hardly understand how you stood up under the pressure of your debt before. We've seen it before, and we're hoping the same for you! (And some of us - myself included - are still in the midst of figuring it all out!)
Here’s my pitch: So why not have your parents move into the guest house; you move into the big house. You pay the P&I; your parents pay for the T&Ins. Mow your own lawn or plant wildflowers and get rid of the grass ! With your parents nearby perhaps they can help out with babysitting so you could work 2 days/ week - aren’t you a med tech? You should be able to bring in some decent money with that. This way the property stays in the family which seems to be important and everybody wins.
Sell the house you are currently in - it might be a small loss - but better in the long run.
The rental house is another emotional attachment. You need to decide if that neighborhood is going to turn-around or is going to continue to decline - tough decision, but look around and be honest. You already have way more money in it than it’s worth - it seems. That’s a sunk cost. You can either hang on to it for nostalgic reasons...
Regarding the debt - The simplest solution that would reduce the stress level is to make a real and legitimate loan from the parents assuming that they can loan enough to cover all current debt — (that means pay interest, notarize it, make it legal and binding!) BUT the caveat here is that you have to admit the mess you’re in to yourselves and to your families (parents), commit to turning it around and not continue to live a lifestyle that you can’t afford on 60k/year.They are already sucking the parents dry!!! The parents have already given them well over $150,000 and counting!!!
If the money was a gift from the in-laws, be sure that they are complying with the IRS rules for gift tax. More info here: https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax/INF12036.html
I'm going to PM you with a more specific question.
How many times are you all willing to say the same things over and over? It is comical!
Also, because I can't resist joining in either...
I sent a couple PM's.
Last question (I hope): Does anyone know of any insurance options where we can insure the rest of the house, absent the roof?
Oh golly.... Anyone remember InDeepDooDoo?
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I sent a couple PM's.
Last question (I hope): Does anyone know of any insurance options where we can insure the rest of the house, absent the roof?
LOL! Stop it!
Oh baby... someone pliiiz compile Case Study Hall of Fail. . . for when we just crave some mustachian self-flagellation . . . or an excuse to get drunk sillyOh golly.... Anyone remember InDeepDooDoo?
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Yes!