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kansas posted:Credit companies look at total utilization, not on an account by account basis. That said 20% utilization is high and probably hurts your credit. If by credit companies, you mean Experian, Equifax, and Transunion, then this is false. The 3 FICO scores take into account both total utilization as well as individual account utilization.
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Jan 16, 2013 14:27
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pancaek posted:I have a question about financing and how it impacts credit scores. I want to buy a home within the next year or so, and I want to make sure that I minimize the potential damage to my credit score before then. foundtomorrow is probably right in that part of the FICO algorithm takes into effect an account being maxed out, but it’s also true that the bigger factor is credit utilization across the board. However I can’t see this preventing you from getting a mortgage if everything else is reasonably solid. I guess it couldn't hurt to close it after you buy the house, but if your strong enough financially to buy a house, that won't matter either. If you happen to be that borderline where it would matter, you shouldn't be buying a house. I would still pay it off in its entirety before you buy the house. If you can’t do this and still have enough money to pay closing costs, make a down payment, and still have an emergency fund, you are not ready to buy a house.
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Jan 16, 2013 15:11
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asaf posted:Istanbul, I should have just said so. Sorry. No country specific advice for you, but I am a fan of Roman and Byzantine history, so I am so jealous of you. I was sort of thinking of your situation, but I think you need to think about your future as a resident of Turkey. If this is a temporary thing, like less than a couple years, then yeah, I probably do agree with you that you are better off spending more on housing if that means everything is furnished and you are more central to all the culture and history a world class city like Istanbul has to offer. However if you see yourself settling down there, you enjoy the country, you fall in love with someone, your career is going places, you probably want live in a place that is cheaper and allows you to have a more sustainable lifestyle. Especially if you stay there, you need to be saving money for your future. I know nothing about the strength of the Turkish pension system, but I wouldn’t trust my future to it. The little I know about the economy, it has a lot of long term potential, but it is in an unstable part of the world and goes through periodic financial crises.
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Jan 16, 2013 15:27
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I have a question on loan repayment. I'm currently making 53k/year and have some extra money. My income will be going up approximately 2-3k/year until 2017, at which point I will earn significantly more by several factors. I have the following loans: Car loan: 10,000ish @ 2%, car is worth 17kish. Private educational foundation loan: 18k at 2%, goes up to 5% in July of 2013 Private alumni foundation loan: 15k, 0% now, 5% in July of 2013. Comedy Federal Stafford/Perkins loans: 160kish @ 6.8% I'm currently under IBR on the federal loans, so those aren't causing me too much grief. My question is now that I have a 6k emergency fund saved up, what should I do with extra money, if I have it? Option A: Pay off 15k loan @ 5% Option B: Pay off 10k car loan @ 2%, even though it's only 2% 50% Comedy Option C: Screw it, don't worry about loans for the next 4 years, and just buy that Eames Lounge Chair i've been lusting after.
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Jan 16, 2013 16:24
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In your shoes, I'd do the debt snowball method. Pay minimums on these except the one you are working on knocking out in this order: Private alumni foundation loan: 15k, 0% now, 5% in July of 2013. Private educational foundation loan: 18k at 2%, goes up to 5% in July of 2013 Comedy Federal Stafford/Perkins loans: 160kish @ 6.8% Car loan: 10,000ish @ 2%, car is worth 17kish. <-- just keep making payments on it normally, since you are not upside down. Pay off as much of those first two private loans by July. The 160K loan is generating $11k in interest EVERY YEAR right now, so once you've got the first 2 knocked out you can then start to pay off the big one. I would live as cheaply as you can until you're debt free, drive that same car until it falls apart around you. I know that Doctors tend to want to project an air of being rich, but you can be smart here and pay your loans off in 3-4 years and be way ahead of the curve. Don't buy a brand new luxury car, $500k house, and get married right away just because that's what society thinks a doctor should do. Best of luck!
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Jan 16, 2013 16:40
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cheese eats mouse posted:Hope you like. I've been with them for a year now and couldn't go anywhere else.
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Jan 17, 2013 02:11
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moana posted:AHHHH just found out Ally used to be GMAC. For whatever reason I thought they were a credit union but nope. Maybe I was thinking of Alliant instead. Gonna have to go back and check but I really wanted to switch to a credit union and not a bank that got in a lot of trouble for fraud things. Alliant is a CU, I use them and have been pleased.
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Jan 17, 2013 02:42
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I took a look through the megathreads in the OP and a skim of BFC, but I'm sorry if this question has a thread already. Where can I get comparisons or recommendations of accounting software? I know only Excel and what I've learned of Mint in an hour's time. I've got a weird, semi-accounting job for which I use Excel and I have screwed it up multiple times. Working with Mint hooked to my bank account is a nice feature that minimizes the miscalculations I'm afraid of, but I want to know if there are better options. edit: Fixed a weird sentence. Hydrocodone fucked around with this message at 09:00 on Jan 18, 2013 |
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Jan 17, 2013 21:28
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Quicken, maybe, but I've really grown to dislike it. If excel stuff is your thing, look into find the old version of PEARBUDGET. It was essentially a really nice excel file that was circulated for free. Now its an online paid subscription based item.
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Jan 18, 2013 00:54
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I use quicken, I like it but it seems overkill or rear end backwards for me sometimes. It does hook into my bank which is super helpful for reconciliation. I really don't have issues anymore with missing transactions. I do miss the simplicity of the now defunct ms money, though. e: mint is too simple for me
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Jan 18, 2013 02:47
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Hydrocodone posted:I took a look through the megathreads in the OP and a skim of BFC, but I'm sorry if this question has a thread already. Gnucash (http://www.gnucash.org/) is free opensource accounting software designed for the layperson, though not without its share of buggyness. Drove me mad when I couldn't get the budget tool to display correctly because it gets confused between different date styles (i.e. dd/mm/yy vs mm/dd/yy) and forgets which one its meant to be using and screws up months and days regardless of what you do. Having said that though its not difficult to use otherwise, and can quickly spit out analysis of your income vs expenditure and so on. Supposedly it can cope with accounting for a business too, but that's way over my head at the moment.
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Jan 18, 2013 14:07
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Another loan repayment question for you guys. Loans: Credit line: 60k @ 3% I'm currently a student but will graduate in june. Current placement rates are around 100% in my field and hourly wages start at 55-60$/hr (I'm in healthcare). I'd like to pay back this loan ASAP. However, I'm not sure what's a realistic timetable and how much of my monthly income I should put towards it. (I'm also obviously worried that I permanently screwed myself and will be in debt for the rest of my life  Thanks in advance for any help you can provide.)
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Jan 20, 2013 01:02
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BlackWidowCult posted:Another loan repayment question for you guys. Uhh, if you're making close to $60 an hour (and you'll be working full time) you could pretty comfortably pay like $5000/month and have it paid off in around a year so long as your living expenses are not outrageous. You are far from screwed.
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Jan 20, 2013 01:10
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Yeah, you'll be OK. http://www.bankrate.com/calculators/college-planning/loan-calculator.aspx Put in your balance and rate, assuming a 10 year repayment term. Be sure to look at the amortization table underneath, to see the schedule of how your loan declines in balance. Then you can mess with stuff like adding extra monthly payments, or a big extra payment at the beginning, etc.
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Jan 20, 2013 05:13
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wahh
AKP fucked around with this message at 15:50 on Mar 24, 2014 |
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Jan 20, 2013 15:16
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AKP posted:EDIT: I've also done some calculations, I've already spent close to $60 within the past 20 days alone on miscellaneous things! I really need to find a way to cut back on misc. purchases The trick that worked to get me to break that misc spending was paying cash for everything. Take out a set amount to "use" for two weeks and get it in large bills (at least 20s). There's something about breaking a large bill or laying a few of them out that makes you re-think what you're buying and if you really NEED that soda and chips at the convenience store or that $5 DVD from the bargin bin at Wal Mart.
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Jan 20, 2013 16:05
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Emergency funds are BFC gospel, but you should know why they are recommended. For someone who has accumulated a five figure credit card balance, they're probably used to using credit to buy an extravagant lifestyle. For this person, they have a toxic relationship with debt and need to not increase their balance again for any reason. An emergency fund is a cash cushion, where they use that money when income or expenses suddenly change in an extreme way. You accumulated $2k in credit card debt by having some income problems and spending more than you should. This is a bad thing, but not a super-bad thing (like the first example). Were I in your position, I think it would be wise and prudent to mirror savings and extra debt payments until the debt is gone. E.g, if you have $400/mo to go towards either savings or extra debt payments, put $200 in savings an an extra $200 towards the debt. Or just put it 100% towards the debt, because 20 years old and living at home means that there is a decreased (but not totally eliminated) risk of huge financial disasters.
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Jan 20, 2013 20:17
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The idea of having cash savings while paying off debt is that if something bad comes up, you don't have to go back in debt to take care of it, you can use your cash instead. If you have $5000 to your name and $8000 on your card, you can put all of it on the cards and have a lower balance, but if suddenly something comes up, you have to go back into more debt to take care of it. Having a cash savings allows you to keep your debt under control, even if you pay a little more in interest in the long run. From Dave Ramsay -- It's not about math, it's about behavior. If it was about math, you wouldn't be in this in the first place.
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Jan 20, 2013 22:15
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zz
AKP fucked around with this message at 15:51 on Mar 24, 2014 |
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Jan 20, 2013 22:37
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AKP - I just want to say that you being so young and looking into educating yourself on these matters is really awesome. A lot of folks ask the same questions and seek help, but wait until they are 30 and 50 grand in debt with a wife and a kid. Kudos to you.
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Jan 20, 2013 22:42
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Nocheez posted:In your shoes, I'd do the debt snowball method. Pay minimums on these except the one you are working on knocking out in this order: As a lawyer with double the income in pretty much an identical financial picture, you will NEVER. EVER. EVER. pay this off in 3-4 years. Taxes exist. Shoot for 8-9.
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Jan 20, 2013 23:06
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Hi newbie financial thread. I'm thinking of opening a Roth IRA but I have no idea how to go about doing so. -income: Poor grad student, generally around 22k but it fluctuates between 20k-26kish as I cobble together teaching, fellowships, etc -savings: 13k currently in an online "high yield" (har) account at 0.9% -checking: Right now it has 3800 in it; I try to move some over to the savings whenever it seems worthwhile -investments: I have 330 in a 401(a) which will probably be divested and returned to me soon because I'm no longer working for them -loans: 13k in Stanford/Perkins, mostly at 6.8% but they are currently deferred until after I graduate (probably in about 2 years) -budget: Somewhat laughable. Thanks to COL here half my income goes to my rent; I automatically transfer $50 a month to the savings and I generally save at least $100/month overall but it can really vary. FWIW I've never touched the savings account and the checking account has remained stable and so at least I know I'm not beyond my means. This semester the bulk of my income is in one 8500 lump sum. I originally planned to put most of it into the savings account and then transfer a monthly allowance back into the checking, but it occurred to me that maybe this would be a good opportunity for me to reorganize the money sitting in the savings a bit and put some of it into a higher-yield longer-term plan. I understand a Roth IRA is what I should be looking at, but I don't know the first thing about doing so and quite frankly my eyes started to glaze over looking at the retirement planning thread. I have absolutely no interest in picking funds or learning what all these acronyms mean; I kind of just want a prepackaged option (if one exists). Looking at Fidelity and Vanguard's websites, I'm basically immediately overwhelmed by the variety of options and lose interest in pursuing it. I should also note that I'm naturally a very cautious risk-adverse person so I see Vanguard's target retirement fund asset allocation tool putting 90% into stocks until I'm 40 and I'm automatically worried. I'm also concerned about my financial situation when I graduate; the loans will come due, and it may be some time before I find a stable job considering how lousy the academic job market is. If I find a post-doc I won't be making that much more than I am now, and I have to consider things like moving expenses and the likelihood that I will have to live off my savings for a period of time, possibly for just a summer but likely for longer. So if all my money is wrapped up in an account that's supposed to be off-limits it wouldn't be so great.
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Jan 20, 2013 23:13
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I love Roth IRA's, but in your case I would suggest staying pat until you graduate and get a postdoc. Cash is a great buffer against uncertainty and you're lucky enough to have more than a lot of people in your position. Plus there are the loans - they are (about to be) quite expensive, so pay them off before you start investing. Conveniently, that approach is well-tailored for the risk-averse :> When you're ready, it's pretty easy to open a Roth IRA with Vanguard, and their website will walk you through it. Since you - quite reasonably - don't like the Target Retirement Funds, their Life Strategy Moderate Growth Fund might be more to your taste: VSMGX, 40% US stock, 20% international stock, 40% bonds. 0.16% expense ratio. $3000 minimum to open, like most of their funds. It's highly diversified and perfectly fine as your only long-term investment unless/until you get around to studying up more ...in my opinion. Commence debate I guess. Check out the long-term/retirement thread if you want more on this topic.
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Jan 21, 2013 12:56
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I personally would go with the Roth (at least a partial funding), since if everything else bad hits the wall you can always withdraw your initial investment and the cash is not gone forever, but if you don't need it then you've already got everything started up. However, this is definitely a debatable point because there's always the risk of losing value with investments, and if you wanted to keep the cash on hand because you know there's an upcoming period of financial uncertainty for you, I wouldn't say that's wrong. However, when you eventually do decide you're comfortable with your situation enough to put some money away and not touch it, I'm as risk-averse as they come and having 40% of your retirement savings in bonds when you're under 30 years old is madness. You're not going to touch this money for almost 30 years, maybe more; the long investment time horizon makes you able to take on what would be high short-term risk and moderate it nicely and earn a higher rate of return over that time period. You don't have to go with the target funds because you might want to step away from equities sooner than they do or want a different mix of investments but their not wrong to put a high percentage in stocks when you're still more than 20 years away from touching the money.
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Jan 21, 2013 15:58
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If you want to be conservative, you can always start with, say, the Target Retirement 2030 fund which is a little more bond-heavy. If you decide to change funds later, it's really easy to exchange them into another fund. It's common for people to get hung up on not knowing everything and being certain about investing, especially when just starting. YOU JUST HAVE TO START. Don't worry about being perfect at first; you can always switch things up later.
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Jan 21, 2013 17:49
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Feces Starship posted:As a lawyer with double the income in pretty much an identical financial picture, you will NEVER. EVER. EVER. pay this off in 3-4 years. Taxes exist. Shoot for 8-9. Yeah, I've got 4 years of residency left before I begin earning "real" money. I'm hoping to have them paid off within 2-3 years after starting residency, so hopefully 7 yearsish.
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Jan 21, 2013 18:40
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PRADA SLUT posted:The idea of having cash savings while paying off debt is that if something bad comes up, you don't have to go back in debt to take care of it, you can use your cash instead. The solution isn't to continue let it be about behaviour, it's to make it about math.
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Jan 21, 2013 19:07
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My partner has about 60k in student loan debt, and has a year and a half left in her masters program, beyond which point she'll make quite a nice income (starting $65k or so) in healthcare. She just received an inheritance from a relative, and I've helped budget out her remaining year - beyond which point she'll have $25k remaining in the inheritance. My thinking is this: Since the student loan costs nothing to carry (0% interest until six months after she graduates), she might as well invest that $25k for the next 2 years and get a better return than high-interest savings or GIC. I've been doing ETF investing for a while, and I have a good idea of what to put it in, but I wanted to run an asset allocation by the crowd here. I'm financially secure, and pay our rent, food costs, etc, so there's limited downside - she's unlikely to need that $25k, and even if she does, we'll manage easily from my income. Here's what I'm thinking: code:Any thoughts? Any horrendous macroeconomic things I might not have considered? Lexicon fucked around with this message at 20:08 on Jan 21, 2013 |
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Jan 21, 2013 19:54
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My 13 year old car has worn out tires, random check engine lights, and bad brakes. Going by the grinding noises, it sounds like I'm going to need new rotors too. The costs to fix all of this is likely more than the car is worth. This is a wake up call because I can't afford to fix it. I have pretty close to nothing in both checking and savings accounts at the moment. I get paid every 2 weeks, but one paycheck ($1465) always goes to rent ($1200), and the remaining $200 goes to 2 payday loans. The $100 is simply to extend the loans, and I know I need to just pay these off. The second paycheck of the month goes to student loans, insurances, bills, and whatever monthly holiday/birthday thing I always irresponsibly spend money on. I intend to continue paying my bills, and use the balance to knock out the 2 payday loans. I'm living paycheck to paycheck, and this has to stop. My main concern right now though is transportation. I have terrible credit. Should I just see if I can get a loan from a friend to fix the brakes and try to ride out the rest? Should I use my 2nd paycheck to buy a cheap car for $1k, and continue driving it while I pay off the payday loans and can actually work on other debts? Am I going about this all the wrong way? (Yes.)
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Jan 21, 2013 19:58
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How long does it take for my money to start compounding in my Ally accounts? I opened up a new checking and savings with them a couple weeks ago and deposited money and it's there and available to be used, but the 'daily interest accrued' field is still at $0 even though their website says they compound daily.
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Jan 21, 2013 19:59
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After your first statement I believe.
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Jan 21, 2013 20:13
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Lexicon posted:My partner has about 60k in student loan debt, and has a year and a half left in her masters program, beyond which point she'll make quite a nice income (starting $65k or so) in healthcare. She just received an inheritance from a relative, and I've helped budget out her remaining year - beyond which point she'll have $25k remaining in the inheritance. I don't think you'd be getting anything for free. Say you get a 4% return with that allocation - you've only made $1500 more than you would earn with a 1% GIC, at the cost of added risk. I dunno, it seems like a lot of farting around for not getting much back. It would be perfectly reasonable to put the $25k toward the loans right away - earn a little less money, but avoid the extra paperwork too. It's not like you're talking decades of compounding interest here.
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Jan 21, 2013 20:26
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Satellite posted:My 13 year old car has worn out tires, random check engine lights, and bad brakes. Going by the grinding noises, it sounds like I'm going to need new rotors too. The costs to fix all of this is likely more than the car is worth. Welcome to my life 4 years ago. Step 1: Understand your position. Can you come up with a chart? Monthly income: $2930 (for simplicity's sake) Rent: 1200 Payday loans: 200 Insurance: ?? Student Loans: ?? Groceries: ?? Gas: ?? Phone: ?? Utilities: ?? Porn subscriptions: ?? (or anything else) Based on current incomplete knowledge, I'd start looking for a roommate or a cheaper place to live. (edit: i realize this may not be possible but drat, that is high rent) Get the brakes fixed with the next paycheck and please do not drive an unsafe car. Satellite posted:Should I just see if I can get a loan from a friend to fix the brakes and try to ride out the rest? Please do not go into any more debt. Beg for rides or take the bus if your car isn't safe to drive. Satellite posted:Should I use my 2nd paycheck to buy a cheap car for $1k, and continue driving it while I pay off the payday loans and can actually work on other debts? Oh Lord no. If you think your current car has problems, wait until you see what the craigslist crowd is offering for $1000. If you can't afford to fix one car, you definitely can't afford repairs on two cars. Satellite posted:Am I going about this all the wrong way? (Yes.) Step 2: Once you get a detailed, honest, numbers-on-paper idea of your situation, post them here and you can make decisions about where to go without beating yourself up. Your income is pretty good so I'm sure you can dig yourself out of this hole. Life will definitely suck for a while. MrKatharsis fucked around with this message at 20:40 on Jan 21, 2013 |
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Jan 21, 2013 20:29
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Robo Kitty posted:Hi newbie financial thread. I'm thinking of opening a Roth IRA but I have no idea how to go about doing so. Make sure your income is eligible for a Roth IRA before you open one. If it's not reported on a W-2, it probably isn't.
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Jan 21, 2013 20:29
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Satellite posted:My 13 year old car has worn out tires, random check engine lights, and bad brakes. Going by the grinding noises, it sounds like I'm going to need new rotors too. The costs to fix all of this is likely more than the car is worth. Can you figure out a cheaper living situation? Even a reduction to $800/month in rent would give you some breathing room - most places with super high rent are urban areas where car ownership isn't necessary.
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Jan 21, 2013 20:33
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slap me silly posted:I don't think you'd be getting anything for free. Say you get a 4% return with that allocation - you've only made $1500 more than you would earn with a 1% GIC, at the cost of added risk. I dunno, it seems like a lot of farting around for not getting much back. It would be perfectly reasonable to put the $25k toward the loans right away - earn a little less money, but avoid the extra paperwork too. It's not like you're talking decades of compounding interest here. Yeah, that's a reasonable argument. I realize this proposal is not riskless, but it struck me as a decent opportunity to hopefully make at least $1-2k while that debt is carried for free. However, it's between ETFs or a GIC - I realize that some people may need to remove the temptation to spend and so paying off would be wise, but if you have self-control (girlfriend does for sure), early pay off is irrational in my view. Might as well keep the money working for a while...
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Jan 21, 2013 20:46
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Lexicon posted:My partner has about 60k in student loan debt, and has a year and a half left in her masters program, beyond which point she'll make quite a nice income (starting $65k or so) in healthcare. She just received an inheritance from a relative, and I've helped budget out her remaining year - beyond which point she'll have $25k remaining in the inheritance. Don't invest the money if you think you might want it in the next 2 years or so, and that includes wanting it to pay off student debt. There's always a chance your investments will go down (and in my opinion there's a good chance of that in the short-term), and you just shouldn't be in equities if that's your timeframe. Just pay off the drat debt. Edit: Would you tell someone to invest the way you are advocating if they were retiring in 2 years and needed to start drawing down capital (or worse, liquidating like in your situation) then? You have no business being in equities, honestly. Fraternite fucked around with this message at 21:14 on Jan 21, 2013 |
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Jan 21, 2013 21:10
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Fraternite posted:Edit: Would you tell someone to invest the way you are advocating if they were retiring in 2 years and needed to start drawing down capital (or worse, liquidating like in your situation) then? You have no business being in equities, honestly. Respectfully, I don't think it's the same scenario. Not only is she going to be working afterwards, but I'm able to support us now and in the future. Despite my originally phrased question, this is less a "what's the worst that could happen" question than a "what's the optimal decision" question. Still, you've given me food for thought. Leaving aside the actual equities, you still think the preferred shares and bonds are a bad idea?
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Jan 21, 2013 21:53
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Don't invest in something you "need" the money for, unless you're okay with being able to push that need out for 5 years.
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Jan 21, 2013 21:55
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PRADA SLUT posted:Don't invest in something you "need" the money for, unless you're okay with being able to push that need out for 5 years. Ok, fair point.
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Jan 21, 2013 21:56
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