Learning, Sharing, and Teaching > Case Studies
Where should I start?
Sugaree:
I've lurked around for awhile, but have recently decided to start getting serious about this. I'm way behind the curve
Me: 36
DH: 43
One kidlet who's 5
Income:
Me: $71k/year
DH: $26k/year*
Kidlet: $0....the lazy bum.
Debt:
$15k @ 1.25% - recent semi-involuntary house renovation
$1995 @ 0% (for 18 months) - replacing the engine of DH's Jeep. It will be paid off before the promotional period ends
$27k @ 3-ish% - DH's student loans
No mortgage, no car loans, no carried CC debt other than the car engine
Savings:
Emergency fund: $40. It's usually in the $1-3k range, but we were hit by a tornado this spring and my husband's car blew up all in the same month. We still haven't quite recovered from it.
Kidlet's college fund: $11.5k in a Roth IRA. I did consider a 529. However, I live in a state that only recognizes it's own plan for tax breaks, but also has a history of severely mismanaging it's college plan.
TSP: $23k. I currently contribute 9% to the Roth TSP and get a 5% match into the traditional TSP. I'm considering switching back to traditional contributions and also raising the percentage to 11% or so.
Retirement plan:
The plan is to retire somewhere warm and cheap. Probably Central America depending on what their political situations look like then. I don't plan on buying property as I don't want to get caught up in political strife (look what's been going on in Nicaragua). I also don't want my kid to have to deal with foreign property after I'm gone. I'll have a pension of about $24k/year in today's dollars assuming that I make it to minimum retirement age (57) at the same job. If I go early, then it will be reduced by about $900 a year for each year before I turn 57.
So, obviously the first things I need to be concentrating on are rebuilding my emergency funds and paying off the motor on DH's vehicle. Then I'm thinking that I should look at my TSP and convert back to traditional vs. Roth (I asked a little about this in the taxes forum). I've run the numbers and unless I end up with a ton of capital gains during a given year I don't see how my AGI would be any higher than it is now. I also want to take a look at my tax withholding next year too. While I like getting a decent tax refund back, if I could reduce the amount I get back and save more during the course of the year, I think I'd be better off in the long run.
As far as cutting expenses go, I'm already pretty frugal. We didn't have cable TV hooked back up at the house when we moved back in and moved to streaming only. We bought the modem/router for our Internet so we wouldn't have to lease one from the cable company. We have a programmable thermostat that turns the air down when no one's home (okay, it's part of my planned smart home, which isn't as frugal as it could be). We spend $400/month on food including paper products, cleaning products, and pet food. There are things we could still cut down on. I have a couple of expensive hobbies and get my hair done every six weeks. We also have several subscription services that could go (Prime is a big one, but we do watch a good bit of their TV programming). We have a gym membership at a community recreation/aquatics center to the tune of $45/month that I guess could go once the kid learns how to swim better. Speaking of the kid, I'd love to move him from the after-school program he's at to a cheaper one, but DH is adamant about the one he's at. He does pay the difference though.
*DH is decidedly not mustachian. He's awful with money. But he does a good job at insourcing things around the house, so I guess I'll keep him around. We have separate finances and since a particularly grievous incident several years ago, his access has been limited so that he can't do too much damage to the family finances. As such, his income goes to pay for things like my life insurance and the travel fund. I also try to keep a slush fund so that when he does something stupid and runs out of money before payday that there's a little left for him.
nurseart:
Thanks for posting and nice job limiting mortgage, car loan and carried CC debt!
Without seeing a clear budget or current retirement savings it is hard to give much advice other than to be really blunt you are not set up for retirement at all with $40 in your emergency fund.
Talking about finances with a partner is tough, real tough. Arguments about money is also the leading cause of divorce. Do what works for you but I'd really prioritize getting on the same page hard as that might be. There was a great forum topic on talking with spouses about finances. I found the MMM post but not the forum thread http://www.mrmoneymustache.com/2012/03/22/selling-the-dream-how-to-make-your-spouse-love-frugality/
I've personally found that using personal capital (all accounts linked!) has really helped had conversations with the husband about money. The tools are very graphical and data driven which helps take any of the emotion or blame out of the conversation.
best of luck to you!
MDM:
Investment Order is a decent generic answer to the thread title.
zeli2033:
--- Quote from: nurseart on September 25, 2018, 09:31:54 AM ---Thanks for posting and nice job limiting mortgage, car loan and carried CC debt!
Without seeing a clear budget or current retirement savings it is hard to give much advice other than to be really blunt you are not set up for retirement at all with $40 in your emergency fund.
Talking about finances with a partner is tough, real tough. Arguments about money is also the leading cause of divorce. Do what works for you but I'd really prioritize getting on the same page hard as that might be. There was a great forum topic on talking with spouses about finances. I found the MMM post but not the forum thread http://www.mrmoneymustache.com/2012/03/22/selling-the-dream-how-to-make-your-spouse-love-frugality/
I've personally found that using personal capital (all accounts linked!) has really helped had conversations with the husband about money. The tools are very graphical and data driven which helps take any of the emotion or blame out of the conversation.
best of luck to you!
--- End quote ---
Here's a related forum thread that may have additional insight regarding "converting your SO to MMM", if that's something you want to do: https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/
As far as everything else, I'd really second what was already posted. The Investment Order sticky MDM posted is probably a good place to begin, followed by leveraging what FWP and nurseart shared around building an e-fund that's a bit more sizable (which is the first step in the Investment Order stick).
If you decide you want to get a little more cutthroat about expenses, you can always post your specific numbers and people will be happy to provide their input on recommendations for freeing up additional cash. Either way, welcome to the forums and good luck!
Watchmaker:
Standard advice for this forum when you are carrying consumer debt: cut all possible expenses and get out of debt asap. The only thing that can take reasonable priority over debt repayment is rebuilding an emergency fund. Until then, no hair cuts, no expensive hobbies, no eating out.
The good news is you've only got 17k in consumer debt, so you should be able to pay it off in a matter of months.
It's not clear from your post whether you have the issues surrounding your SOs spending dealt with. Is having separate finances working? Is he paying all his own costs?
I'd need to see a budget to say anything more.
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