Author Topic: Financial Stickiness  (Read 4687 times)

SingleIncomeFather

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Financial Stickiness
« on: November 10, 2016, 08:12:26 PM »
All right, I want to start off saying hello to everyone, and I appreciate anyone's help.
I'll get started right away, I haven't read much about the blog, and I stumbled across this forum by googling whether or not I should sell my 2016 Subaru Forester. And I guess that's as good of a place as any to start with my financial stickiness.
This last year has been one of the most emotionally devastating years for me, but that's beside the point; this year has been financially devastating for me as well. I've come to this forum looking for advice, and I'l try to keep my personal / emotional details out of it as much as possible. My first issue is my new car, should I sell it, re-finance it, or trade it in? I don't think re-financing would do me much good, I have pretty much the longest note possible. I talked to my brother tonight, and he said he would be willing to take over the note for me. I personally think this would be the best option: I wouldn't lose money from depreciation and I could have it off my hands within a few weeks. The only issue is I would have to get a small loan, I'm thinking $3,000-$5,000 for a reliable method of transportation. I do need a car, I have a 2 year old son to take care of, otherwise I would be completely okay without one. Which option would you suggest?
My next issue I wanted to address was my cell phone plan. I made a dumb mistake about two months ago, and purchased an iphone 7, paying for it month to month. I owe $623 on it, which is insane to me and I honestly cannot believe I purchased one in the first place. I do have roughly $1000 in emergency fund money that I could use to pay it off, and switch my service to selectel, which would save me roughly $115/mo in cellphone bills. Would paying it off, even though it would cost me a large some of my emergency fund money be a wise decision?
Next, I purchased a new bed on credit about two months ago as well, another poor decision on my part. The pay off amount would be roughly $422. The loan is interest free for six months, which if I don't pay it off immediately with my emergency fund money, I would pay it off in the next few months. Paying it off would save me $90/mo, but again I would be using my emergency fund money. Would it be wise to pay the bed off as well as the phone and dump the saved money into savings?
In total, paying off the phone and the bed would save me about $205/mo, which isn't too bad, though I'm hoping to cut that down more with getting rid of my new car for a cheaper alternative.
If there's any questions I can answer, please feel free to ask. I'm going to head over to the blog and read up as much as possible. Thanks again to anyone that has made it this far.

Edit: Case Study:

Life Situation: IRS filing status is Married. I have one dependent, he is two years old. I live in Norman, Oklahoma, USA. I am 23 years old.
Though I am filing married for this year, next year I will be filing Single, because I am in the process of getting a divorce.

Gross Salary: My full time job is an apprentice wireman, at the pay rate of $16.97/hr, which comes out to about $34,000/year.
I do have a second job, though I started last Saturday (11/05), and it's a serving job, so I don't know how much I'll actually be bringing in from there.

Pre-tax deductions: I am taking out 10% for my 401k, my insurance is included in my employment 'package'.

Qualified Dividends: I have a 48 mo traditional IRA CERT through my credit union, with a balance of $2,869.97, paying 1.16% APY

Rental income:  I am also renting out my house at $900/mo, with a profit of $134/mo. This is a long story, and I can explain why I am charging so little for my house, but that won't change how much I'm charging, so let's leave it at that.
The rent adds $1608/year, for a total of $35,000/year gross income.

Adjusted gross income: Roughly $35,000

Taxes: I'd have to check a pay stub, if I find one tomorrow, I'll fill this in.

Current Expenses: Okay this is a quick run down of where my money is going; it's something I wrote up on my break earlier this month. It is what made me realize I needed to get a second job, and change my spending habits.

Monthly Bills:
Rent: $754 <--- I am planning on moving when my lease is up in May 2017. I would like to move to a cheaper apartment / house and still rent out my house. Moving closer to my job will never happen either, if you've never worked in construction, it's hard to understand, but I will never, unless I am extremely fortunate or no longer an apprentice, be the same jobsite for longer than a year.

Water: ~ $65/mo <--- The way my complex does it is BS, but essentially one is given an allotment factor (mine is 1.5 for my son and I) and the total complex's water billed is appropriated accordingly.

Electric: ~$100/mo <--- This is an estimate for when my ex-wife lived with me, I keep the house much warmer (I turn the thermostat off before I leave for work in the morning, and do not turn it back on until roughly 6:00 p.m.), as well as turn off lights when not in the room, or using natural light as much as possible, plus I haven't watched T.V. in a month, so I'm hoping to see a cheaper bill for this month.

Internet: $50/mo <--- I considered canceling this, but with my apprenticeship, I have homework to turn in online almost daily, and with my hectic schedule (working 40 hrs/week at my full time job, working Tuesday / Thursday / Saturday / Sundays, and spending time with my son during all the hours I do not work.), I have very little time to visit my moms, or public cafe with free wifi. I am going to call cox to see if I can downgrade to their cheapest service.

Car loan: $350 / mo <--- this is definitely my most expensive bill, and I am trying to cut it back, whether that means signing my note over to my brother, or trading it in and taking the $6k loss on it.

Insurance: $243 / mo, <--- This is lower than what I have been paying, it includes rental insurance, full coverage, and my home owner's insurance. When I rid myself of my car loan, the money saved here will be an added benefit.

Gas: $112 <--- I fill up once a week, at around $28 / week. This I know I can work on, I've begun minimizing my trips out, and I'd like to purchase a bike with a toddler carried wagon, but I may have to wait until I rid myself of the car loan before I see any positive increase in my money to afford a bike

Groceries: $280 / mo <--- I spend roughly $70 / week on groceries, I'm vegan so I'm pretty much forced to cook all my meals myself, so that means no money for eating out (thankfully). This last week, I did only spend $54.

Daycare: $400 / mo <--- I pay 60% of daycare costs, an agreement my ex-wife and I came to. This is a new bill for me, we just started sending him last week.

phone bill: $128 / mo <--- I am already in the works of riding myself of this bill, I have put my iphone 7 on craigslist, but I think my brother is going to buy it as well. I owe $622, and he's paying me $500, A loss I'm okay with, since one month without this phone bill will make up the difference.

Genesis: $90 / mo <--- This is the account my new bed is on, $90 is not the minimum payment but the amount I need to pay every month so that I pay it off during the six months that the load is interest free

Union dues: ~$35 / mo <--- I'm apart of the IBEW, this is something that I cannot change.

Attorney fees: $100 / mo <--- this is an agreement I came to with my divorce attorney

Child support: $100 / mo

Total expenses: $2807 / mo

Assets: I don't really know what qualifies as an asset; between my retirement accounts, I have roughly $9k saved up.
I owe on my house still, so that's not an assets. I owe on my car, so that's also not as asset.

Liabilities:

Auto-loan:
Loan amount: $23,600
Monthly payment: $350 (I always pay a whole number)
Loan length: I believe it's a 7 year note

Mortgage:
Loan amount:$92,000
Monthly payment: $766
Loan Length: 30 year

Genesis (bed financing):
Loan amount: $422
Month payment: $90
Loan Length: 6 mo

Questions:

My original question was what the best plan of action for my car would be, whether it was trade it in and take the loss, or sign the note over to my brother, and be free and clear.

My second question was if I should pay off my genesis account with the small savings I have, or just pay it off in the 6 month interest free window I have, which is what I am doing now.

My third question was if I should pay off my iphone, and move to a wireless company like selectel, but I've already made steps to sell it to my brother for a roughly $122 loss. He is going to give me his old phone, so that saves me from having to purchase one for a cheaper wireless company.

My fourth question is when I sell / rid myself of my car, should I buy a cash car ( I currently only have about $1000 in savings), or finance one through my credit union? I'd only get a load for roughly $3000. I understand it's a bad idea to buy anything on credit, but I do believe this may be unavoidable. I do have decent credit, roughly a 740, so qualifying shouldn't be an issue. My argument for needing a vehicle, vs biking to work, is that my job is over an hour bike ride away, which would mean I'd have to drop my son off at day at least an hour before I go to work, but they are not open at that time. Also, I believe, that while I won't be driving as much as I did before, having a vehicle is good for emergency situations, especially with a toddler. Either option I choose, whether it's buy a car for around $800 or finance one with a small load of $3000, I will be saving money compared to my current situation.

My fifth question is what are some ways I can cut back? I already live decently frugally, I don't eat out, or buy frivolous things (aside from the bed and Iphone 7, but there's a little back story behind those purchases. Bottom line is they are purchases I would not have made on my own.). I know rent is a big thing I can change, but that won't be something I have control over for another 6 months. I'm working on paying off my genesis bill, and my attorney fees, I already acquired a second job to help make up the difference between my monthly income vs my expenses.

And please, not facepunching or whatever, this year has already been hard enough without the extra grief from compete strangers ridiculing me for trying to get help out a situation I sort of half fell into / half caused. I know what kind of situation I am in, I am trying to remedy it, and this situation didn't arise until my ex-wife and I began the divorce process. We had two incomes, and no daycare costs prior to this last month.
« Last Edit: November 11, 2016, 10:36:48 PM by SingleIncomeFather »

Goldielocks

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Re: Financial Stickiness
« Reply #1 on: November 10, 2016, 08:26:54 PM »
Okay,
You don't provide enough info on how much make versus expenses, or why you need a car, just having a kid is not enough, so ...  I will reply with the best answers that assume a lot, too.  Such as you buy too much shiny new stuff.   Hair on Fire!  you need more  money each month!

First,  start reading the Blog.  Seriously, if you do nothing else, do this.

Second.  Sell the car.   Figure out a way to use transit, bike, walk electric bike, borrow a car, etc. for a while.   

Third - how can you return / sell the phone to someone?   Then check out the thread for cheap cell phone plans.  Truly awesome smartphones are available for very very low money right now.  Even if you take a small loss to sell it to a friend, get out of that phone!

Fourth -- use your emergency savings to pay off that bed before it comes due, I bet your interest charges are horrible.

Fifth - start saving for an emergency fund and car.   

Not having a car until you save for it should be great motivator to you.

Good Luck.

SingleIncomeFather

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Re: Financial Stickiness
« Reply #2 on: November 10, 2016, 08:50:31 PM »
I make roughly $2229 / mo, and my expenses are roughly $2659, with me over estimating on groceries, and gas for the month. I am living well beyond my means, and I just got a second job last week. I'll be working roughly 20 hours a week there. It's a waiting job, so I cannot say for sure how much I will be making, but the general manager informed me most servers make around $60-100 / night. Being conservative, working the four nights a week I will be working, I'll be bring in an extra $50 a night.
I do disagree that having a car isn't a necessity for having a kid, but I would rather not get into that. I suppose I could find a bike, and a cheap toddler-bike-rack-carrier thing. I do enjoy biking, and I would like to get a second form of cardio.
I am aware I am spending too much money, which is why I am here. I have limited time to read, but I've already read a couple articles. I'll continue to do so, and paying off my debt is my first priority.
Would selling the car be the best option? I would end up with about $6000 from the loan, would signing over the loan to my brother free and clear not be a better option?
I'll look into selling it, I guess I didn't really consider that as an option but that makes more sense than paying it off. I'll look further into the thread for cheap phones, I skimmed over it briefly before I went to my second job.

Edit: I googled how long it would take to bike to my job, and it would take 1:15 to get there. I have to be there at 7 a.m., and my son's daycare doesn't open until 6 a.m., so I guess biking wouldn't work out.
« Last Edit: November 10, 2016, 09:02:48 PM by SingleIncomeFather »

MDM

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Re: Financial Stickiness
« Reply #3 on: November 10, 2016, 10:29:15 PM »
If there's any questions I can answer, please feel free to ask.
SIF, welcome to the forum.

If you can follow the outline shown in How To Write a "Case Study" it will make it easier for folks to give you specific advice.

If you don't have a good idea of your annual spending broken down into some reasonable number of categories, well, that's usually the first bit of advice: start keeping track!  Don't need to follow every single dollar, but if you can keep "miscellaneous" down to ~3% of your non-mortgage (or non-rent) total, that's probably about right.  Good luck!

UKMustache

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Re: Financial Stickiness
« Reply #4 on: November 11, 2016, 01:07:07 AM »
I make roughly $2229 / mo, and my expenses are roughly $2659, with me over estimating on groceries, and gas for the month. I am living well beyond my means, and I just got a second job last week. I'll be working roughly 20 hours a week there. It's a waiting job, so I cannot say for sure how much I will be making, but the general manager informed me most servers make around $60-100 / night. Being conservative, working the four nights a week I will be working, I'll be bring in an extra $50 a night.
I do disagree that having a car isn't a necessity for having a kid, but I would rather not get into that. I suppose I could find a bike, and a cheap toddler-bike-rack-carrier thing. I do enjoy biking, and I would like to get a second form of cardio.
I am aware I am spending too much money, which is why I am here. I have limited time to read, but I've already read a couple articles. I'll continue to do so, and paying off my debt is my first priority.
Would selling the car be the best option? I would end up with about $6000 from the loan, would signing over the loan to my brother free and clear not be a better option?
I'll look into selling it, I guess I didn't really consider that as an option but that makes more sense than paying it off. I'll look further into the thread for cheap phones, I skimmed over it briefly before I went to my second job.

Edit: I googled how long it would take to bike to my job, and it would take 1:15 to get there. I have to be there at 7 a.m., and my son's daycare doesn't open until 6 a.m., so I guess biking wouldn't work out.

If you continue living your current lifestyle you are setting no kind of example for your son.  will likely struggle to ever get ahead. 
Edited as noted the OP has acknowledged the problems and maybe doesn't need any more facepunching

I'm sorry if that sounds harsh but you're one hiccup away from complete financial disaster which would be much more harmful to all involved than using public transport so you don't need more debt.

You've taken a step in the right direction, you've realised that living above your means is not sustainable for any length of time and you've started looking for solutions.  It will be difficult but it will be worth it. 

I started a year ago with £13,000 in credit card debt, now I've got no debt and £6k in investments.  If I can do it you can do it.

I echo the post above, please post a detailed case study and then people can offer advice more specific to your situation.
« Last Edit: November 11, 2016, 06:22:50 AM by UKMustache »

human

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Re: Financial Stickiness
« Reply #5 on: November 11, 2016, 04:17:49 AM »
If you want quick answers here they are:

Sell car, buy a beater and pay off the loan you will be underwater on.

Ditch the iphone sell it and pay off the difference.

You don't say how close work is just that day care is far. Move closer to work in a smaller place if you have to and shorten that commute.

Track your spending using mint, a few months of tracking will be an eye opener. If you are like me money is leaking by eating out all the time and buying useless gadgets (tablets, iphones etc.)

Now the sympathy my dad raised two kids alone in the eighties, rent about 600-800 babysitting almost a grand a month. He did it serving beers in a shit hole or several at a time. He didn't turn out to be a big success but his kids did.

You have to control your spending or you may wind up like my poor pops bankrupt at 60.
« Last Edit: November 11, 2016, 05:53:18 AM by human »

Ayanka

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Re: Financial Stickiness
« Reply #6 on: November 11, 2016, 05:41:36 AM »
I am going to try to answer your questions as much as possible with the limited information.

First of all, I understand you want to have a car. But frankly, with the limited numbers you have given, I have my doubts whether it will work. If you sign over the note to your brother, you would need to get a car loan, would you qualify for one? If so, this might be the least of the 3 evils. However, if it is at all possible to move closer to your job, especially in a cheaper place, that might be highly preferable. I don't think the other members are necessarily suggesting not to sign the note, they merely are saying to get the car and the loan out asap, because it is probably sucking you dry.

Right now I would keep the EF, and try to stop the bleeding as much as possible. So try to really think about every expense. We will need a lot more info to be able to form a whole picture.

Guys, please watch your tone. I know you are probably all trying to help, but thinking and proofreading before you hit post can be a good thing, especially when the OP stated it has been a hard emotional year for them. Yes, we are into facepunching, but being harsh against someone because of your personal background isn't going to help them.

human

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Re: Financial Stickiness
« Reply #7 on: November 11, 2016, 06:00:12 AM »
You're right ayanka I was a bit of a jerk there.

To OP, I know where you are at simply by being raised in this situation. You have tough choices.to make but once you get rid of the car and find a cheaper place to stay closer to work you'll realize it was the right choice.

Try to stay positive for your kids, they can tell when things aren't going well. Not sure how old they but downsizing may be hard for them but they will have to tough it out too.

ducky19

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Re: Financial Stickiness
« Reply #8 on: November 11, 2016, 08:47:58 AM »
I just checked and Republic Wireless still has Moto G (3rd Gen) phones for $129. Couple that with their refund plan and you can be paying under $20/month for a phone. Not sure what you will need to do to get rid of the iPhone and plan (hopefully not locked in), but I would do whatever I could to get out of it.

As for the mattress, use that zero percent to your advantage but make sure you pay it off before you're hit with interest charges. Taking care of the phone situation would be the better use of your emergency fund if you have to dip into it.

The car: if your brother is willing to take over the note as it stands, he's a good brother. I am assuming from your post that you are underwater on the loan, so selling it outright is probably not an option if you don't have the scratch to make up the difference. To me, your brother's offer sounds like your best option. How much will that save you per month?

I hope you are able to take the time to do a full case study. Having a budget that is $430 more than your income is definitely unsustainable (although you already knew that). I have to give you props for getting the second job, it sounds like you recognize the problem and are willing to tackle it head on. If you can do the case study though, I'm sure there are plenty of areas the gurus around here can help you trim the fat on.

Being new to the forum, you should know that facepunches are common around here and we've all gotten our share. Don't take them personally - the person delivering said punch has the best of intentions and is trying to help. I hope you read through the blog and continue taking steps to turn this situation around. Best of luck!

BTDretire

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Re: Financial Stickiness
« Reply #9 on: November 11, 2016, 09:04:30 AM »
I don't see that anyone has said, if your brother will take over the note, and you have no more liability, this is far superior to selling and needing to take a loan to cover the loss.
 Start looking now for a cheap car that will get you around for the next year or two, spending as little as possible.
 See if you can find someone to buy your phone, even if you must discount it $100 below what you owe.
Then find a cheap month to month phone. and use it as little as possible, there is plenty of info about cheap phone
in this forum. if you have a home phone, cancel it. Cable, cancel it, and build an antenna for a a few dollars ($5) to get local channels.
  You can think of this as temporary, until you are out of dept and get some savings. After that you might decide,
you like living below your means and seeing you bank account grow.
   You see where you went wrong, you have won half the battle, most don't ever come to the realization you have and continue to live paycheck to paycheck, making minimum payments.
  Keep reading the blog, if you make the changes required to on save those constant monthly charges, it helps
you get turned around quicker.
  Stay with the group, lots of support here.

 

rpr

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Re: Financial Stickiness
« Reply #10 on: November 11, 2016, 09:33:01 AM »
@SIF -- Welcome to the MMM forum!

I don't have much to say other than to echo MDM's suggestion to write a Case Study. That will really help both you and the helpful posters here get a better understanding of your financial situation. The Case Study does take some time but I believe it is well worth the effort.

Good Luck and Best Wishes.

SingleIncomeFather

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Re: Financial Stickiness
« Reply #11 on: November 11, 2016, 10:37:47 PM »
All right, I added a case study edit to my original post. I don't know if I followed the outline correctly, but I did my best. Anymore questions, post them and I'll be happy to answer.

MDM

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Re: Financial Stickiness
« Reply #12 on: November 12, 2016, 12:16:38 AM »
Life Situation: IRS filing status is Married. I have one dependent, he is two years old. I live in Norman, Oklahoma, USA. I am 23 years old.
Though I am filing married for this year, next year I will be filing Single, because I am in the process of getting a divorce.
This year is MFJ with 3 exemptions (you, spouse, child), while for 2017 you will file single because the child will no longer be your dependent (otherwise you could file as Head of Household), correct?

Quote
Qualified Dividends: I have a 48 mo traditional IRA CERT through my credit union, with a balance of $2,869.97, paying 1.16% APY
Given your age (i.e., you have many years for this to grow) it would probably be better invested in stocks than in a CD.  See Getting started - Bogleheads for some information.

Quote
Rental income:  I am also renting out my house at $900/mo, with a profit of $134/mo.
Is the profit before or after depreciation?

Quote
Taxes: I'd have to check a pay stub, if I find one tomorrow, I'll fill this in.
You should be able to get a decent estimate of federal taxes from the spreadsheet mentioned in the case study post (don't know about state/local taxes).  You may or may not be withholding a "correct" amount.

Quote
Daycare: $400 / mo <--- I pay 60% of daycare costs, an agreement my ex-wife and I came to. This is a new bill for me, we just started sending him last week.
There are tax options (credits, pre-tax deductions, etc.) for childcare - are you familiar with these?

Quote
Assets: I don't really know what qualifies as an asset; between my retirement accounts, I have roughly $9k saved up.
I owe on my house still, so that's not an assets. I owe on my car, so that's also not as asset.
That's probably good enough for now.  Your house and car are assets.  They contribute to your net worth in the amount ("what you could sell for" minus "how much you currently owe").

Quote
Auto-loan:
Loan amount: $23,600
Monthly payment: $350 (I always pay a whole number)
Loan length: I believe it's a 7 year note
$350/mo to pay a $23,600 loan in 7 years implies a 6.5% interest rate.  Is that correct, or do you pay significantly more than the minimum each month?

Quote
Mortgage:
Loan amount:$92,000
Monthly payment: $766
Loan Length: 30 year
I hope your tax & insurance escrow payment is part of that, otherwise you have a very high interest rate....

Quote
My second question was if I should pay off my genesis account with the small savings I have, or just pay it off in the 6 month interest free window I have, which is what I am doing now.
Just pay it off during the window.

rpr

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Re: Financial Stickiness
« Reply #13 on: November 12, 2016, 01:55:15 AM »
Car: Is it possible to buy a decent used car for $3k? If so, I'd see what sort of terms you can get on a loan presumably at a credit union for 24-36 months?

Phone: That is your next biggest discretionary expense. Do you need a smartphone with a data plan?

Internet: If super high speed is not important, see if it is possible to get DSL internet through the phone company. Sometimes, I see offers for as low as $19.99-29.99/month for the first year.

If between the car, the phone, and the bed payments, you are able to reduce your spending by ~$400 that would go a long way to help you on your path. 

Good Luck.



MrsPete

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Re: Financial Stickiness
« Reply #14 on: November 12, 2016, 09:12:47 AM »
My original question was what the best plan of action for my car would be

Yes, the car has to go.  It's way too expensive a car ... well, $350/month is really a big payment for a middle class person, and if you do finance a car, you want to stick to the shortest pay period, not seven years!  If your brother really wants the car, let him take it -- and thank him profusely.  Otherwise, sell it, turn it in, do whatever you have to do to get it off your back. 

You say you'd be okay without a car if it weren't for your son?  Would your ex-wife say the same thing?  Could the two of you share a car AND a child?  That is, purchase a car together, and whoever has the child also has the car ... the parent without the child makes do without?  I know that doesn't sound appealing, but you recognize you're in a mess and getting out of it will require some sacrifice.

Edit: I googled how long it would take to bike to my job, and it would take 1:15 to get there. I have to be there at 7 a.m., and my son's daycare doesn't open until 6 a.m., so I guess biking wouldn't work out.

Assuming YOU take him to daycare.  Perhaps you have a neighbor who'd like to earn a few dollars by simply dropping him off in the morning?  A number of times I hired a high school student to provide transportation for my kids (of course, I teach high school and have the benefit of a large pool of kids interested in such temp jobs).  Beyond this initial thought, the bigger picture:  To get out of this situation, you may need to think outside the box -- go beyond your first thought ideas and ask, "What are my other options?" 

My second question was if I should pay off my genesis account with the small savings I have, or just pay it off in the 6 month interest free window I have, which is what I am doing now.


Hold onto your savings.  As someone else said, you are a hiccup away from disaster -- not forever, but for now -- and if you were to have a small crisis, you might NEED this emergency account.  At the same time, throw whatever you're making from this second job towards paying off the account BEFORE your interest-free period is gone.  Circle that "now I owe interest" date on your calendar; if you reach that date and still owe, THEN dip into your savings ... but not until then.

My third question was if I should pay off my iphone, and move to a wireless company like selectel, but I've already made steps to sell it to my brother for a roughly $122 loss. He is going to give me his old phone, so that saves me from having to purchase one for a cheaper wireless company.

First let me ask a question:  You say you're keeping your home internet so that you can turn in apprenticeship homework?  I assume this homework is working you towards a better job /more money -- and that's a good choice long-term -- but if you keep the fancy phone, could you drop the home internet and use the phone to turn in homework?  At least part of the time?  If so, keep the phone and use it to its fullest potential.  If not, take your brother's trade -- and, again, thank him profusely.

My fifth question is what are some ways I can cut back?

You say you're working as a server.  Will you eat free on the nights you work?  Be able to bring home food?  If so, take advantage of that. 

Pre-tax deductions: I am taking out 10% for my 401k, my insurance is included in my employment 'package'.


Do not stop this.  I know, you feel like you're at the bottom of your fortunes now ... but your biggest retirement asset is your age.  Time is on your side, but if you were to stop this now, you'd be giving up that advantage.  Keep plugging away at this 401K.

Rent: $754 <--- I am planning on moving when my lease is up in May 2017. I would like to move to a cheaper apartment / house and still rent out my house. Moving closer to my job will never happen either, if you've never worked in construction, it's hard to understand, but I will never, unless I am extremely fortunate or no longer an apprentice, be the same jobsite for longer than a year.


You sound like a perfect candidate to buy an RV/camper.  Used models are very difficult to sell, so you should be able to get a low price, and then you can move it to your next jobsite easily.  You won't have a lot of space, but your son is still small ... and you have every reason to think that by the time he's an adult-sized teen, you'll have moved up in your field and will be able to stay in one place /get into a house.

Alternately, do you have a relative or friend from whom you could rent a room cheaper than this? 

If you stay in an apartment, I'd think you'd be good with a studio.  A single guy doesn't need all that much space, and not having your son full-time, you want to spend all your time with him anyway. 

Water: ~ $65/mo <--- The way my complex does it is BS, but essentially one is given an allotment factor (mine is 1.5 for my son and I) and the total complex's water billed is appropriated accordingly.


Yeah, that's outrageous.  You might ever say that your apartment is truthfully $919 ... I know things vary, but my daughter's college apartment included water, electricity and cable/internet in the rent, so it was more of a truthful number.  When you look around, try to look TOTAL COST, not just rent. 


Electric: ~$100/mo <--- This is an estimate for when my ex-wife lived with me, I keep the house much warmer (I turn the thermostat off before I leave for work in the morning, and do not turn it back on until roughly 6:00 p.m.), as well as turn off lights when not in the room, or using natural light as much as possible, plus I haven't watched T.V. in a month, so I'm hoping to see a cheaper bill for this month.


Watching TV won't help or hurt your electrical bill.  Things that produce heat -- the hot water heater being the biggest culprit -- cost "real money".  A TV, radio, computer costs pennies.  Ditto for lights. 

Insurance: $243 / mo, <--- This is lower than what I have been paying, it includes rental insurance, full coverage, and my home owner's insurance. When I rid myself of my car loan, the money saved here will be an added benefit.


Shop around.  You're paying more than I pay for my house and four cars /four drivers -- two of those cars have full coverage. 

Groceries: $280 / mo <--- I spend roughly $70 / week on groceries, I'm vegan so I'm pretty much forced to cook all my meals myself, so that means no money for eating out (thankfully). This last week, I did only spend $54.


I understand that you became Vegan for a reason, but it is more expensive than eating a standard diet -- I spend about $100/week for four adults.  I definitely spend more on my vegetarian daughter than on the rest of us.  Start searching for non-supermarket store places to buy food.  Aldi's is great, as is the day-old bread store.  I buy spices at a health food store that sells everything else at very high prices ... but the spices are usually lower than .50 for the quantity you buy at the grocery store for $5-8.  I shop at a place nicknamed "The Yard Sale of Groceries" that sells mostly food destined for fast-food joints ... but in damaged packages.  We LOVE to shop at a Chinese grocery store that's quite some distance for us -- we make the trek about twice a year when we can justify it by going to other spots nearby.  Similarly, when we travel to a nearby city (used to go regularly to take the kids to the zoo), we stop at the Stouffers' frozen food outlet -- no fancy boxes, just metal trays, but so cheap -- we'd always take our big cooler.  A church near us sells boxes of food through a big distributor -- no choice on what people get, but it's a BUNCH of food for a moderate price, and anyone of any income level is welcome to buy.  Similarly, a couple farms near us sell "shares" -- you go every Saturday morning and pick up a box; you never know just what vegetables you'll get, but it's an adventure and a budget price.  The big point:  Just look around, and you'll find options you didn't know existed. 

Pay attention to your beverages.  They account for about 30% of the average person's grocery cart, yet they add little to no nutrition.  This is a good starting point on getting your grocery bill down. 

Daycare: $400 / mo <--- I pay 60% of daycare costs, an agreement my ex-wife and I came to. This is a new bill for me, we just started sending him last week.


That's not a terrible price,  but I suggest you and your wife agree to re-evaluate every year and ask, "Is this location the best option for us?"  I say this because three-year old options abound and tend to be cheaper than two-year old choices.  Regardless, this is a three-year gig ... then you'll still be paying for before/after school care, but it'll be lower.  Above all, you do want your son to have good care.

We had two incomes, and no daycare costs prior to this last month.  

I'm missing something:  How is it that she was working pre-separation without daycare costs ... but now paid daycare is necessary?  Is your previous form of daycare completely impossible now?  I suspect her finances aren't any better than yours, so I'd think she'd value going back to it too.

Attorney fees: $100 / mo <--- this is an agreement I came to with my divorce attorney

While unavoidable, this is money down the toilet.  When you and your ex-wife argue -- and you will -- try to remind one another that it's so much cheaper for the two of you to reach an agreement together. 

Child support: $100 / mo

So you're paying $100/month and $400 towards day care ... so about 20% of your income is going to your son PLUS you're supporting him during the time he's with you.  This is a big chunk. 

In conclusion, you're taking some good steps: You're looking at getting rid of some big expenses.  You're bringing in more money.  You're looking for ways to decrease your living expenses.  You're on the right track, and you need to see the course through.  The tough part is going to be maintaining motivation. 

« Last Edit: November 12, 2016, 09:29:17 AM by MrsPete »