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Guinness posted:I'd aim to max out your RIRA contribution ($5k/yr) and then plow the rest into your student loans, especially at 7%. Ok so the Roth would be 5000/12 = $417 per month, leaving me with $383 for student loans. Is it advisable to max out the Roth while having student loans outstanding?
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Mar 16, 2012 03:34
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Binary posted:Ok so the Roth would be 5000/12 = $417 per month, leaving me with $383 for student loans. Is it advisable to max out the Roth while having student loans outstanding? Probably since it's a one time thing. Also note, that your $1000 contribution will probably go towards your 2011 contribution, so you have the full $5000 for 2012.
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Mar 16, 2012 14:20
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This IRS tax stuff is confusing. I know someone already answered my question telling me I can withdraw Roth contributions at any time penalty free, but why does the IRS flowchart on http://www.irs.gov/publications/p590/ch02.html#en_US_2011_publink1000231061 ask the five year thing as the first question for a qualified distribution?
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Mar 17, 2012 02:20
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We are considering cashing out our Roth IRA. Wife just went on indefinite disability and is certified by her physician. She's had the account with T Rowe price for 5+ years, this was with an old 401k from a previous employer. 2.5 years ago she transferred money from 401k to Roth IRA in same account. It's getting us 6 percent gains per year with 0 contributions other than 5 years ago. We've stopped increasing our debt, and have been paying off debt for the last 18 months, and have paid off 9 grand, but only if you don't include purchasing a second car when I sold the motorcycle. Our total unsecured debt sits at 11 grand, and this roth IRA will pay off between 30-35 percent of the unsecured. That amount depends on where the IRA sits at any given time and if the IRS certifies my wife as disabled. This would put us in a position to pay off the remaining unsecured debt in 8-10 months depending on how long wife gets disability and how much I earn. We already have a emergency fund. My wife also has Starbucks RSU in value of $500. We want to know if we are able to get any of that monetary value before they let her go (>12 weeks FMLA). I am under the impression that she might not get any monetary value, but am pretty dumb in regards to the details of that program. Our overall financial plan is such that we can get by without closing the roth IRA, but from what we've seen that IRA isn't really working for us now. We hope to open a new IRA once we get out of debt, and start funding my thrift savings plan. But I can't see the positive of 6 percent interest gained when you compare it to 10-26 percent interest lost (depending on card.)
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Mar 17, 2012 02:41
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So, my application for a $4000 loan got rejected, on account of I have next to no credit history (5 months with a credit card is all I've got on file) and I've never used that bank before. I thought it'd be best to try a credit union first. So I'm thinking I'll try Bank of America next, where I've been handling my checking account for six years or so. I don't want to apply to too many places, as I know it hurts your credit score. But if that fails, I'll have to go to an online lender. Does anyone know who the most reputable one is?
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Mar 17, 2012 03:58
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Binary posted:This IRS tax stuff is confusing. I know someone already answered my question telling me I can withdraw Roth contributions at any time penalty free, but why does the IRS flowchart on http://www.irs.gov/publications/p590/ch02.html#en_US_2011_publink1000231061 ask the five year thing as the first question for a qualified distribution? Up above the image it says: quote:You generally do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). Also, at the bottom of the image if you say "No" to the 5 year it says: quote:The portion of the distribution allocable to earnings may be subject to tax and it may be subject to the 10% additional tax. Basically it's saying that you can't withdraw anything that's not your original contribution until after 5 years of opening the Roth no matter what. So if you contribute $5K for the first time when you are 57 and it grows to $6K in the next year, you have to wait until you're 62 to withdraw more than $5K without being taxed, even though 59 1/2 is the usual age requirement. You can still withdraw the $5K whenever you want, just the same as if a 27 year old opened one. Does that make sense? Sophia fucked around with this message at 04:33 on Mar 17, 2012 |
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Mar 17, 2012 04:30
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Anonymous Robot posted:So, my application for a $4000 loan got rejected, on account of I have next to no credit history (5 months with a credit card is all I've got on file) and I've never used that bank before. I thought it'd be best to try a credit union first. If it's a debt collector have you tried negotiating the amount down? Usually they pay pennies on the dollar for the debt so it's quite easy to get them to decrease it by certain amounts. Without knowing your budget it's impossible to give suggestions. Whatever you negotiate with the school get it in writing. You might be able to get them to release the transcripts if you pay a large sum and agree to a payment plan. I'd definitely try and offer less for the debt.
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Mar 17, 2012 04:36
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Sophia posted:Up above the image it says: Yeah that helps. It makes me feel better about socking money away for use decades later knowing that I could always hit the abort switch and get it all back at any time.
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Mar 17, 2012 05:02
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HClChicken posted:If it's a debt collector have you tried negotiating the amount down? Usually they pay pennies on the dollar for the debt so it's quite easy to get them to decrease it by certain amounts. Without knowing your budget it's impossible to give suggestions. Whatever you negotiate with the school get it in writing. You might be able to get them to release the transcripts if you pay a large sum and agree to a payment plan. I'd definitely try and offer less for the debt. It's not a debt collector (any longer), they returned the debt to the school. The school has no interest in negotiating, unfortunately, I've tried that before. There's no agreement other than "pay us the entire balance or we will never release your transcript".
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Mar 17, 2012 06:11
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Anonymous Robot posted:(5 months with a credit card is all I've got on file) That is not entirely true. Your credit also consists of $10,000 in bad debt. quote:So I'm thinking I'll try Bank of America next, where I've been handling my checking account for six years or so. I don't want to apply to too many places, as I know it hurts your credit score. But if that fails, I'll have to go to an online lender. Does anyone know who the most reputable one is? You can obviously try. Applying for a loan and having your credit pulled is a negative but a small one. It's effect is insignificant compared to the collection account. You may not be able to qualify for a loan based on your current income and credit. A credit union or small bank is always a good place to start because they will take the time to hear your story and think about it, but sometimes the answer is no. They have a responsibility to their depositors too, not just the people who need money. I know you really want this loan but my advice is that rather than get a loan shark pay day loan type thing, and that might be the only place who would give you one, you need to figure out a way to save $4000. Zeta Taskforce fucked around with this message at 04:43 on Mar 18, 2012 |
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Mar 18, 2012 04:40
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Hey guys, I just want to thank this sub forum and all of your hard work. I used to be paralyzed about finance and always felt guilty about it (had 401k though, but that just bare minimum. Also never got into credit card debt thankfully!). Beginning of this year I got super serious about a lot of things in my life, including finances. Thanks to this forum, threads and book recommendations I was able to finally: -Made sure I am putting maxing amount of money in new 401k that employer will match -Rolled over my old 401k into new Traditional IRA (been putting this off for 2 years... so stupid) -Opened Roth IRA and max it out for year 2011 and set up monthly automatic payments that will max it out in 2012. -Opened individual investing account for saving for downpayment (3-5 year plan) with automatic monthly contributions from my paycheck (money in the market fund right now, waiting market prices to drop a bit before investing into indexing , stupid move maybe?) . -Set up monthly auto payments, in full, on all of my cards. -Set up monthly deductions from a paycheck to a regular emergency savings account, if I need quick money. -Opened yodlee (similar to mint) and connected everything in one place. Spend a week on categorizing and tracking all of my monthly purchases. It really opened my eyes on how much money I spend on stupid poo poo, like getting wasted and eating out all the time. It helped me stop doing it, learn how to cook, drink less (which feels great). -Created a budget, still need some adjustments, but it is super helpful already. Download an envelope app for my smartphone, that tracks my budget on going out/shopping monthly. It is super helpful to have it on hand and enter stuff as you do them, before it shows up on yodlee. Keeps me on track! Only thing left is to open brokerage account and start playing with stocks with small amount of money, nothing crazy. Again guys, thanks for putting together amazingly helpful sub forum! This elevated so much stress and guilt! Deadreak fucked around with this message at 12:20 on Mar 18, 2012 |
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Mar 18, 2012 12:17
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Deadreak posted:This elevated so much stress and guilt! I hope you mean alleviate! Sounds like you're on a roll, keep up the dedication! Personally , I wouldn't wait for the market to drop before investing...you never know what's going to happen. I feel like the law of averages and getting in earlier rather than later is *almost* always better in the long run.
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Mar 18, 2012 14:54
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Deadreak posted:Hey guys, I just want to thank this sub forum and all of your hard work. I used to be paralyzed about finance and always felt guilty about it (had 401k though, but that just bare minimum.
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Mar 18, 2012 18:47
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What's the best place/rate right now for a savings account? Right now I sort of just keep my money in my checking account even though I have a bunch left over I am just saving for an emergency. If I have like 10K to put somewhere to grow/store, would I do a savings or a money market account? I don't mind if its online, in fact that's probably preferred. 
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Mar 19, 2012 00:33
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Here is my debt situation now: £1200 overdraft at 19.9% £800 overdraft at £1 a day (overdraft up to £300 is free) £4000 credit card debt at 21.9% £1000 credit card debt currently at 0% Figures are rough but I expect close enough. It's built up over a long time, I've spent about a year out of work and prior to that I spent years making way less than I should have been, always thinking the pay review would come or whatever and I'd be able to sort it out, until later on it became a matter of not having anything I could do. As mentioned earlier I looked at a loan to consolidate and manage it all, but my bank is only offering an 18.8% rate, rather than the 8.8% they offer people that don't need loans. Maybe I should go for that anyway, pay it all back over 3 years or whatever, though the repayments will be high, but at that rate I don't know if it's better than paying it all off normally over a similar period and seeing the interest paid decrease each month. Should I hold off on the loan and go back in a few months and see if they offer a better rate after I've been in work longer? Otherwise, I think I should let money build in my main account (£1 a day overdraft) get out of the overdraft there and just pay the minimum on the other stuff, then put what I can into the credit card I'm currently getting the high rate on. Is this the right way to go? Is there anything I can do to get the rates down or
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Mar 19, 2012 01:55
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BizarroAzrael posted:Here is my debt situation now: I roughly calculated your weighted average interest rate to be 19.3%. I calculated your overdraft to be 45% (£1 per day is £365 per year for use of £800) Interest rates did not get you into this mess. Being underemployed and then unemployed did. Another thing that is not messing your life up is the time required to make 4 separate payments a month. There is no magic that happens when you consolidate debt, and you cannot consolidate your way out of debt. People still try. My boss’s favorite expression is it is like rearranging the deck chairs on the Titanic. If you can get a better rate, then you should, but that will make paying it off 5% easier. The other 95% is still you living below your means, sacrificing, and paying it off. If you listen to Dave Ramsey, he would have you pay off the smallest debt first regardless of interest rate while you make minimum payments on everything else. As it turns out, your smallest debt is also your highest. Your 2nd and 3rd smallest are practically the same amount, but #3 is a much higher rate, I would do that next. If I were you, I would try to pay off the 2 overdraft loans as soon as you can, and then try again for your bank loan. By that time your debts will be lower, your debt to income ratio better because you won’t have 2 payments anymore, your credit will improve and you will have longer on the job. All of those will be elements in your favor. You can have them pay the big credit card and depending on when the 0% ends, have them pay that one too. Finally, stop using all the cards. Even the 0% one. It is still debt, not free money.
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Mar 19, 2012 15:04
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I don't think that's possible, my pay at the end of the month will take me out of my current account overdraft (£1 a day one) after rent I should barely be in the free portion of overdraft.
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Mar 19, 2012 15:51
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BizarroAzrael posted:I don't think that's possible, my pay at the end of the month will take me out of my current account overdraft (£1 a day one) after rent I should barely be in the free portion of overdraft. Then it sounds like you only need one more month of using your card to buy only the bare minimum of things (i.e. food and toilet paper) and starting in May you won't need to use your card anymore at all and can move to a cash system with minimal extra debt. It's seriously your best bet, as you've gotten used to spending more than the money you currently have because of difficult circumstances. You need to retrain your brain to spend only what you have in your pocket and no more. Overdrafts and increasing credit card balances should be a thing of the past.
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Mar 19, 2012 16:00
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I, too, want to thank this thread. It is super helpful. A few months back I started researching ways to get my finances in order. While I had next to nothing in debt, I had little credit history and no savings. I asked a few simple questions here and there and today I have some really great information to work with. After signing up with Credit Karma, I was able to get a regular Platinum Card. I also set up some rules for accruing savings without having to think about it (A certain % moved into a savings account each paycheck). I have used the CC sparingly, just a few hundred bucks a month and always paid off in full. I also set up a Mint account to watch my spending habits more closely. Today, after only a few months with some simple tweaks to my spending habits, I have a nice little savings account and a rapidly rising credit score. Thank you so much for your help, everyone!
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Mar 19, 2012 16:06
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I wanted to add a piece of info that I'm sure most people don't know. Paying the minimum is a red flag to some Triad systems that will prompt a credit review. If your credit has changed (a bunch of inquiries, additional utilization, etc.) this may prompt a credit line decrease. This will increase your utilization and could snowball into other issues. I recommend even if you plan to pay the minimum as part of a snowball methodology, to pay at least the minimum plus interest accrued.
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Mar 19, 2012 16:17
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Just checked my checking account and saw four transactions called "CHKCARDAPL*APPLE ITUNE866 71253 CAUS" totaling about $200. I dont use iTunes. I got a call from my bank seconds later asking if the charges were legitimate, and they helped me lock the account and submit the refund appeal. I checked all my various accounts to make sure nothing else is askew, but is there anything I need to do right now to be safe? I swiped my debit card in some sketchy places on St Patrick's day and must've been skimmed.
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Mar 20, 2012 00:18
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GoGoGadgetChris posted:Just checked my checking account and saw four transactions called "CHKCARDAPL*APPLE ITUNE866 71253 CAUS" totaling about $200. I dont use iTunes. I got a call from my bank seconds later asking if the charges were legitimate, and they helped me lock the account and submit the refund appeal. Probably not if it's just a standard credit card number being stolen. I'm assuming they didn't make the purchase through your own iTunes account, correct? Otherwise I'd just make sure to check your accounts as you seem to have done. Cards being swiped are pretty common and not that big of a deal anymore. Likely nothing you could have done about it.
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Mar 20, 2012 00:22
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I have about 15.4k in student loans at 6.25%. I had some money sitting around in a savings account and instead of putting the money toward the loans, or stupid poo poo that I would inevitably purchase, I did the maximum contribution for a Roth IRA for the 2011 tax season. What should my strategy be for the next year? Should I maximize my Roth as soon as possible or be paying off my student loans as fast as possible? I do not have any other debts.
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Mar 20, 2012 01:28
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How much extra over $5,000 will you have to work with?
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Mar 20, 2012 01:49
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I'm close to having the $1000 needed to open a Vanguard Roth. I'm deliberating between the Star fund and the target retirement fund. I was considering investing the first few thousand in the star so it won't fluctuate as much with stocks, perhaps giving me an option for emergencies or a home purchase. After that I'll allocate to the more aggressive target fund, which is around 90% stocks. Is this sensible or should I put all of it into the riskier target fund to maximize retirement earnings? Also, if a fund dips below my contributions and then comes back up over time my contribution basis stays the same right? Example: $1000 invested, dips to $500 this year, then goes to $1200 next year. In this scenario I assume I can still take out my $1000 penalty free.
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Mar 20, 2012 01:50
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Binary posted:I'm close to having the $1000 needed to open a Vanguard Roth. I'm deliberating between the Star fund and the target retirement fund. I was considering investing the first few thousand in the star so it won't fluctuate as much with stocks, perhaps giving me an option for emergencies or a home purchase. After that I'll allocate to the more aggressive target fund, which is around 90% stocks. Is this sensible or should I put all of it into the riskier target fund to maximize retirement earnings? If the target retirement fund for your age group is too risky you can invest in a target retirement fund for people a decade or two older than you. Most people seem to agree that the Star fund is kinda all over the place. A fund diarrhea, if you will.
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Mar 20, 2012 02:00
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A GIANT PARSNIP posted:If the target retirement fund for your age group is too risky you can invest in a target retirement fund for people a decade or two older than you. I'm 27, I've read Berstein's Four Pillars of Investing and a bunch of stuff on the internet. I think I understand logically that right now a high percentage of stocks is advantageous given my time to retirement but it's daunting psychologically.
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Mar 20, 2012 02:52
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Harry posted:How much extra over $5,000 will you have to work with? I will have roughly 4-6k more.
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Mar 20, 2012 05:57
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BotchedLobotomy posted:What's the best place/rate right now for a savings account? Right now I sort of just keep my money in my checking account even though I have a bunch left over I am just saving for an emergency. Just quoting this, the link in the OP has links for good rates up to early 2011 so wondering thats still valid or not!
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Mar 20, 2012 07:40
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There are no good rates for anything anymore, but you can still use bankrate.com to compare rates for things like CDs and savings accounts and poo poo.
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Mar 20, 2012 08:04
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Binary posted:I'm 11011. Fixed that for you  I've been lurking this thread for a few weeks and you all are quite awesome. I have $1,000 of credit card debt that I haven't been able to shake (medical scare a couple months back) and I'm trying to get it down to zero. I have received and accepted a small personal loan from family to help out, but I don't feel any closer to my goal regardless. It still feels like a mountain of debt.
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Mar 20, 2012 09:17
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Reginald posted:I will have roughly 4-6k more.
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Mar 20, 2012 13:33
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LARGE THE HEAD posted:Fixed that for you That isn’t that much debt. What seems to be the main barrier to paying it off? I ask not to pick on you or run you down. Are you unemployed/underemployed and just eating is a struggle? Are you making what should be enough but you get to the end of the month and you have not made much progress? One thing I would note is that borrowing money from family is rarely a good idea. It worked out in the cornholio’s case, but more often than not, loans between family member end up being tough relationally and it is not healthy to mix together the family bonds with that of a lender/debtor relationship.
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Mar 20, 2012 14:19
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moana posted:I'm glad you're finding BFC useful; we really do have a bunch of smart people in here. The whole "feeling guilty about finances" thing is something I come across a LOT when talking with other people my age about this stuff. I'm glad you were able to break out of it - I think a lot of pressure on young people about this stuff is the stigma against talking openly about financial issues and the general lack of education on the topic. Hopefully you can spread the love elsewhere! Sadly my coworkers/friends in my age group, or heck even older, take some kind of pride of not knowing how much they spend or carrying about investing. Amount of people in credit card debt is staggering too  I noticed people kind of shut down when finances/saving/investing comes up, I mean I used to be like that too. I also work in video games industry, my few friends who work in finance have none of these problems heh.
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Mar 20, 2012 14:33
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Deadreak posted:my few friends who work in finance have none of these problems heh. You might be surprised. I work at a credit union and one time our collector’s cell phone rang and it was a collection call. It was kind of amusing to see him squirm dealing with it  . How many doctors eat like crap? I work next to a hospital that is a smoke free zone and right beyond the perimeter there is always a crowd smoking. There is something about the human experience in knowing what we have to do and actually doing it. Glad you are doing it.
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Mar 20, 2012 14:45
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I have a student loan of 23,000 at 6% with no other debt. My new budget is set up, and right now I have about $500 left over per month(a $300 payment is already included for the student loan). Based on the OP, I know I should start on an emergency fund. But once I have at least $1,000 in my savings, is it best to do an even split for the rest of this money? $250 for my savings and $250 for my loan? There are a few more sources of income that I have: Every month I put about $200 in a ESPP. In the past I have cashed it out right away to pay down other debts that I had. It's just an easy way to save because I make at least 15%. I have some company stock that will vest this June, about $2,000. Again, would it be best to sell half to go straight towards my loans, or do all? I also have about $50,000 in stock, but it's tied to an inheritance, so I don't have control of it yet. There is really no plan for this money because it might be 10 or 20 years down the road until I can do anything with it. So is it best to just go 50/50, or maybe pay off more of my loan? At what point should I stop with the emergency fund? I also have about 20,000k in available credit in case of an emergency. I know that isn't ideal, but it's something to fall back on. Thanks for the advice!
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Mar 20, 2012 17:16
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guggs posted:I have a student loan of 23,000 at 6% with no other debt. My new budget is set up, and right now I have about $500 left over per month(a $300 payment is already included for the student loan). Based on the OP, I know I should start on an emergency fund. But once I have at least $1,000 in my savings, is it best to do an even split for the rest of this money? $250 for my savings and $250 for my loan? What does “tied to an inheritance” mean? Does that mean it is tied up in a trust and you don’t have day to day control yet? Or the individual is still alive? Also, What does making 15% mean? Stocks have done well the last few years as they have rebounded from a very severe bear market/correction, but you should not have the expectation of making a guaranteed 15%. I am not so crazy about getting out of debt that I would tell someone to give up a retirement match. But other than what is being matched, I would throw the rest at the debt unless you have some need for the money in the short to medium term.
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Mar 20, 2012 17:28
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Zeta Buttforce posted:Also, What does making 15% mean? Stocks have done well the last few years as they have rebounded from a very severe bear market/correction, but you should not have the expectation of making a guaranteed 15%. My guess is that he makes an instant 15% because his ESPP sells him his stock at a discount.
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Mar 20, 2012 17:31
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Zeta Buttforce posted:Also, What does making 15% mean? Stocks have done well the last few years as they have rebounded from a very severe bear market/correction, but you should not have the expectation of making a guaranteed 15%. I think he's talking about an employee stock purchase plan, where the employer lets the employees buy stock in the company at a discounted price. If the price discount is 15%, selling it immediately would guarantee him that profit. The tax implications of selling it immediately are fairly disadvantageous though, I believe, so the profit may be reduced in the end. Edit: Though maybe not if you sell it exactly at the market price? I'm not a tax person, so I could easily be wrong.
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Mar 20, 2012 17:33
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Zeta Buttforce posted:What does “tied to an inheritance” mean? Does that mean it is tied up in a trust and you don’t have day to day control yet? Or the individual is still alive? Also, What does making 15% mean? Stocks have done well the last few years as they have rebounded from a very severe bear market/correction, but you should not have the expectation of making a guaranteed 15%. The person who gave me the stock is still alive, so I'll get full control once he passes. For the ESPP, I get the stock at 15% below market price, so if I sell it right away I make 15% on the sale. I still have a 401k with employee matching, so I'm taking advantage of that. I don't really have any big purchase plans in the future, so maybe it's best to use most of my extra money to pay down the debt.
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Mar 20, 2012 17:34
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