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MrKatharsis and Engineer Lenk, thanks for your quick replies. To answer a question both of you posed, I'm living in a studio in a suburb outside of Los Angeles, and I'm locked into this lease until July of this year. I'm not sure how feasible it is to find a roommate in such a small space without being able to provide any privacy. I can definitely take public transportation to and from work until I can save up the money to have the brakes done. I just got a quickie quote, and it sounds like it'll be $400 since the rotors are grinding. This is drat shameful that I can't fix it immediately without worrying about paying rent in full, on time. The hard part has been explaining to other people that I don't just have some credit card I can throw this charge onto or something. I'm working on putting together an honest chart of every bit of debt I have, and will post it here for feedback. It involves terrible things like owing the IRS money, and payday loans.
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Jan 21, 2013 23:32
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You have the tools to fix the situation, the hard part is to stand up and face it. All of the epic BFC success stories involve some rough lessons in humility so you are in good company.
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Jan 21, 2013 23:54
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Satellite posted:
Do you have a simple tool set (ratchets, wrenches, etc.) and some know-how? Or even better, a friend with a garage and a jack, stands, tools, and a little bit of experience? Then save yourself a boatload of money and do it yourself. Pads and rotors on most cars are extremely easy to do yourself. If you can have someone show you what to do, you'll only have to pay for parts and a case of beer. I did all 4 corners on my friend's car, and it took about 2.5 hours total. The total cost for him was $200, he was quoted at $650 at a local shop before I told him to come to my place and I'd do it for him. Also, Sam Adams has some great beers out right now 
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Jan 22, 2013 00:11
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Satellite posted:MrKatharsis and Engineer Lenk, thanks for your quick replies. To answer a question both of you posed, I'm living in a studio in a suburb outside of Los Angeles, and I'm locked into this lease until July of this year. I'm not sure how feasible it is to find a roommate in such a small space without being able to provide any privacy. Yeah, LA sucks for this sort of thing - high rent and patchy public transport, though at least now they've built up some light rail. Any part-time work you can get would be useful to get around the payday loan trap, and save up for a share of a new security deposit in the summer. Locating cheaper shared housing will go a good ways towards getting you back on track.
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Jan 22, 2013 00:11
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How is your credit? Honestly if I was in your situation (which I was close to or worse about three-four years ago) I would just find a room to rent and bail on the apartment. Then I would use the savings to save up for another used car on craigslit and find a scrapper/mechanic to take the old one off my hands. I got $700 for our old 1996 Rav4 which leaked (poured) oil, had a cracked head gasket and had bad A/C. I then used that money along with a bit of savings to buy a 2000 Chevy Prizm at $2500. It's been two years and the car still runs great.
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Jan 22, 2013 01:47
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MrKatharsis - Thanks again for the support. It helps to know others have gone through this and come out the other side. Did it take you all 4 years to feel better about your situation? Nocheez - I entertained the idea of doing it myself somehow, but I have a single screwdriver, no garage, and I can't think of a single friend that's handy with cars, otherwise I would have hit them up by now. Once this crisis is over though, I'm definitely looking into getting some decent tools. Besides, I'd probably drink the beer myself just to temporarily escape this O GOD I SUCK feeling. Engineer Lenk - Both loans are for around $300 or less, so I'm hoping if I just craigslist a couple of instruments and ebay some items I've been gifted but have never worn might pay them off. I'm really, really hoping to avoid needing a 2nd job but if it comes down to it, I'll certainly try. Thing is, am I hireable for something easy like.. being a barista if my work experience is all corporate as hell? I'll keep in mind to save up for the eventual upcoming security deposit. Orange_Lazarus - Absolutely terrible credit. I really need to break some bad behavior. As for bailing on the apartment, wouldn't this make it harder to rend in the future? Aren't there additional legal costs i'd have to cover somehow? It does seem that the high rent I'm paying here is what's keeping me from making a lot of progress. it's possible if I stay with the same leasing company as my current apartment, but find another cheaper complex, that it wouldn't break the lease. However, then I start thinking about moving costs and oh god oh god oh god
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Jan 22, 2013 02:52
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Satellite, what if you stopped paying on your payday loans? I'm always in favor of people paying their debt if they can, but you can't. You will need to close down the account that you gave them access to, have your direct deposit go elsewhere and then they will threaten you with everything. They can't do anything immediately but you will need to save up the money to settle with them at some future date. Here are some other ideas. How much is your car worth this instant? Could you sell it as is, and live without a car? That would save on gas, insurance, and maintenance. It would also mean it would be harder to go places and spend money. Zipcar is in Los Angeles. Is there one by you? Between public transit, zipcar, and biking, can you make it? Can you put your student loans on hardship deferral? Are you on a written budget? If you bail on the apartment it does make it a lot harder to rent places in the future. Certainly you should ask if there are cheaper apartments in the complex. If you can get yourself on a written budget and simplify your life, I would rather you hold out until July and then look for a much cheaper place or roommate situation and use the savings to establish an emergency fund first, and second go back and clean up your bad debt.
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Jan 22, 2013 04:45
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edit: ^ Follow this advice. I'm not 100% on how it affects your ability to rent; I would expect that you may have to pay a higher rate or drop a larger security deposit but if I was single I would probably just plan to room regardless. After thinking it over it's probably better for you to find a room-mate. Bailing on the apartment and finding a room to stay would probably be cheaper but that opens up other risks and you'll lose more freedom. Sephiroth_IRA fucked around with this message at 04:52 on Jan 22, 2013 |
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Jan 22, 2013 04:50
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Orange_Lazarus posted:I'm not 100% on how it affects your ability to rent; I would expect that you may have to pay a higher rate or drop a larger security deposit but if I was single I would probably just plan to room regardless. After thinking it over it's probably better for you to find a room-mate. Bailing on the apartment and finding a room to stay would probably be cheaper but that opens up other risks and you'll lose more freedom than the alternative. To answer your question, if you break a lease and they want to be bastards about it and take you to court, etc, and it gets reported as a judgement, the only places you could rent in the future would be places that don't check your credit. You wouldn't be homeless, but you might be limited to roommate situations, small landlords renting out their duplex and who don't know how to check someones credit, sublet situations and the like.
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Jan 22, 2013 04:55
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Yeah so probably a bad idea. :| July suddenly sounds closer than it did before.
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Jan 22, 2013 04:59
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Satellite posted:MrKatharsis - Thanks again for the support. It helps to know others have gone through this and come out the other side. Did it take you all 4 years to feel better about your situation? Four years ago I had a pile of consumer debt, a motorcycle loan and student loans on the 20-year plan. I had a "rich week" right after I got paid and a "poor week" until I got paid again. My bank had an extremely convenient line of credit that I could utilize instantly so any time an emergency came up (read: I want something), it was done in a few mouse clicks. My finances had been yo-yoing for a few years and I realized that I was making way too much money (roughly $3000/mo in a low cost of living area) to be that desperate. What really opened my eyes was moving in with my girlfriend who earned half what I did but always made rent with a comfortable margin to spare. She had an emergency fund and zero consumer debt. What the hell was wrong with me? Starting with the obvious, I resolved to sell the motorcycle. I had to max out my line of credit and throw in a month and a half of pay to cover the $5500 bike loan and get the title. Since this was late 2008, early 2009 and I was in Florida, there were literally NO PEOPLE with extra money to spend on a bike. I think we've already forgotten how horrifying the financial crisis was. After two more months, I dropped my price to $3500 and sold it to a doctor who paid cash. I took a 50% hit on the new cost of the thing, not to mention all the money spent on tires, repairs after crashing, gear, and modifications. Those costs were still sitting on my nearly maxed out CapitalOne card. The good doctor and I shook hands and I went inside to lay out the $3500 on the coffee table. It was more money than I had ever seen. It was beautiful. It could have done so many awesome things. My stupid brain was still trying to trick me into spending it. What? My 401k was in the crapper, net worth way in the negative, job on the rocks, and I'm thinking of ways to spend this pile of cash? I felt like a piece of poo poo, worse than nothing. I didn't even have a motorbike to transform me into King Badass anymore. I went to the bank, gave them all the money, and started planning my paychecks. Every once in a while an impulse purchase would happen and I'd miss a monthly goal, feel guilty and berate myself. Why aren't other people feeling this way? It seemed like everyone else had nice things. How come Mike has a new truck and Dave just bought a TV for his bedroom and I can't afford beer with them tonight because I'm down to my last $20? God drat, it was embarassing. I sold some more stuff and after months of payments to the bank and CapitalOne, got clear of consumer debt. I saved some money just in time for our move to Tennessee, then made another bad bad impulse purchase. I actually used the CapitalOne card again. What. The. gently caress. I swore that would be my last credit card purchase ever, paid off the card and closed it. I was so embarassed I didn't even tell my girlfriend. Then I lost all sympathy for myself and just got mean with the student loans. I budgeted obsessively. I deprived myself of fun. I would have starved myself if the girlfriend had let me. I still have the big pad of graph paper with weekly and monthly projections from each pay cycle. In the margins are "to buy" lists for the day when I finally have a dollar. I thought it would never come. When the student loans were gone, I took my CapOne card out to the shooting range and put a bullet through it with the Colt revolver that it had funded 11 months previous. It took $18,000 in 10 months, well over half my take home. I spent the next paycheck on stupid crap from Amazon, then got down to saving. In the last year we cash flowed a wedding and honeymoon, sold the cars, and moved to Seattle. After paying off the wife's undergrad student loans last month, we are almost back to a 6-month emergency fund. Our retirement planning is in order and we are in control of our future. It is incredible. The old feelings are not completely gone: I still clench up and shudder when I think about those bad decisions and I still grit my teeth when I think about loan payments. I follow the tuyop thread because his stories sound so familiar that I just want to give him a hug. I judge others much less harshly now and bit by bit I am becoming less angry with myself. Geezum crow, wall of text. tl;dr: Paying for mistakes sucks but it's better to just get it over with.
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Jan 22, 2013 07:34
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Zeta Taskforce posted:Satellite, what if you stopped paying on your payday loans? I'm always in favor of people paying their debt if they can, but you can't. You will need to close down the account that you gave them access to, have your direct deposit go elsewhere and then they will threaten you with everything. They can't do anything immediately but you will need to save up the money to settle with them at some future date. I'm not saying this is a bad idea, but didn't he say they were only $300ish each? That seems like something he'd be able to knock out in a couple of months, even with that crazy rent. If he decided to ride the bus for a while, that would save more money on gas, and it might be good motivation too.
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Jan 22, 2013 13:21
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I think she's throwing $100 bucks away a month just to extend those loans and the extra $100 goes to paying down some of the principal or interest. It's probably a good idea to knock them out completely or to stop paying all-together. It really depends on how much principal she owes which I haven't seen explicitly stated.
Sephiroth_IRA fucked around with this message at 14:35 on Jan 22, 2013 |
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Jan 22, 2013 14:32
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MrKatharsis, that’s amazing. You have accomplished a lot and your experience shows that it’s not easy, sometimes it’s two steps forward one step back, but there is a reward at the end.Orange_Lazarus posted:I think she's throwing $100 bucks away a month just to extend those loans and the extra $100 goes to paying down some of the principal or interest. It's probably a good idea to knock them out completely or to stop paying all-together. It really depends on how much principal she owes which I haven't seen explicitly stated. Exactly. Those of you who have your act together might have a hard time placing yourself in her situation. I’ve said it before but broke, desperate and stupid all hang out together. All you end up doing is reacting to crises. And everything is a crisis. You patch things together the best you can when something happens, but you are not planning for the future. You get worn down, you aren’t even dealing with your problems efficiently or in a cost effective manner, you don’t have the physical or mental energy to. And that creates a tunnel vision that means it’s inevitable that life will knock you on your rear end all over again. You don’t see anything coming. I got the impression that she has a couple payday loans adding up to $500 or $600, and she pays $100 every couple weeks to extend them. If someone owed $600 on a credit card at 30%, (as bad as that is) they can pay $20/mo to keep it current. But these loans are eating her alive. Either she has the money to kill them for good, or she lets them go. There is no middle option. Giving them another $1000 in interest is not a good use of her money. So what if they report it on her credit. It’s already destroyed, which is why she went to them in the first place. What she needs to do is to be intentional with her money. She doesn’t have enough money to pay everyone and by deciding who does get paid and who doesn’t, and not paying them, is infinitely more liberating than paying who happens to be screaming the loudest the moment she gets paid and having zero money to your name for the next 13 days until you get paid again.
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Jan 22, 2013 16:19
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Do any of you have a suggestion of a good place to open a Roth IRA? I know that I should be contributing to one, I am just not sure if there are major differences around who manages it.
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Jan 22, 2013 17:23
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Vanguard. Vanguard has the lowest fees and they're a great company overall, mainly because they're a co-op and the customers own the company, so they're interests lie with helping you and not typical shareholders/owners. I believe other companies may have slightly higher fees but may have more options but I've been very happy with my experience with Vanguard. The only reason why they have competitive fees is because they're competing with Vanguard. edit: If you want more informed advice I suggest checking out the Long-term investing thread. http://forums.somethingawful.com/showthread.php?threadid=2892928 Progressive JPEG posted:Vanguard is structurally a coop. The central organization is owned by the funds, which are owned by the fund investors. Thus Vanguard's obligation is ultimately to its customers, leading to them charging at-cost of providing the service. Sephiroth_IRA fucked around with this message at 17:58 on Jan 22, 2013 |
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Jan 22, 2013 17:37
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Zeta Taskforce posted:Exactly. Those of you who have your act together might have a hard time placing yourself in her situation. I’ve said it before but broke, desperate and stupid all hang out together. All you end up doing is reacting to crises. And everything is a crisis. You patch things together the best you can when something happens, but you are not planning for the future. You get worn down, you aren’t even dealing with your problems efficiently or in a cost effective manner, you don’t have the physical or mental energy to. And that creates a tunnel vision that means it’s inevitable that life will knock you on your rear end all over again. You don’t see anything coming. Exactly this. You've completely hit the nail on the head with all of this, from detailing the loans to my reaction to constant crises. I'll call my bank today and see if they can stop doing these transfers on payday to those 2 companies, until I can afford to knock them out for good. The car's in the shop right now just getting the rear brakes repaired, a "gift" from my boyfriend. There are other major repairs needed, but it's definitely worth more than the car. While I can get to work and back using public transportation, my main concern is visiting my mother, who's in another county and has health issues due to a stroke. I'd like to have a car for this reason at least. I can defer my student loans on forbearance for 6 months or so. I'll do this today or tomorrow. As for a written budget, I've never made or followed an honest one. I'd make spreadsheets with monthly expenses and income and guesstimates, but it seems I always forget non-monthly things like car registrations, or renter's insurance, or someone's birthday, or new contact lenses, so on. I convince myself the budget's not going to help, and as long as I pay whatever is asked of me on the bills, I should be fine. I keep chugging along, paying exactly what the bills tell me to pay, along with whatever late fees or penalties apply because of the whole paycheck to paycheck situation. Then I make a retarded impulse purchase. MrKatharsis, you've given me hope. That feeling of embarrassment when I can't even have a quick lunch with friends, the impulse purchases, all of that is exactly what I'm feeling and going through. I just want to get to a baseline so someday, if I get married, I don't have this excessive burden along too. Hell I just want to get rid of it just to no longer have this feeling. Still working on putting together actual expenses, should have something together by tomorrow evening.
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Jan 22, 2013 20:01
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The non monthly things aren't going to be the things that take all your money away (usually), it's the spending $400 a month on eating out/groceries along with other frivolous spending. Don't just break a lease and leave money owed to the land lord. Terrible credit isn't something that's cared about much when it comes to rental applications, judgements and evictions are what matter the most.
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Jan 22, 2013 20:06
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Satellite posted:There are other major repairs needed, but it's definitely worth more than the car. I only say this because when my car was towed a couple years ago, the "storage fees", repair of the tire they destroyed etc. was more than I could pay at the time and because I already had debt, I was willing to give them the car outright rather than pay it. I'm lucky they had a policy against that, because despite my being convinced my car was at death's door for the past 5 years it is still going despite all sorts of undiagnosed oddities, and the cost of maintenance has still been well under what I would've paid replacing it with something comparable out of the want ads. Being broke and shock at what the towing company was charging me to get my car back (with NO recourse and a bill that would climb daily if I did not pay it) almost made me throw away a car that was perfectly serviceable- I just couldn't afford to service it at the time.
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Jan 22, 2013 21:18
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I'm glad you have decided to put together a budget. It will set you free. Putting together a budget and sticking to it, knowing you are progressing towards debt elimination as a goal, will give you a feeling of relief almost as powerful as when you finally are debt free. When you put together a budget using your spreadsheet program of choice, add a column to divide the monthly totals by 30 (days). It is my favorite method of putting cash flow in perspective. People are usually surprised to see how little money is left over each day after paying for food/shelter/transportation. Here's a rough example (the figures aren't important, they're just here for illustration):  In this case, the user has a gross income of $3400/month. That works out to a daily gross income of $113. MONEYBAGS, RIGHT? Well, you lose $16 of that each day as taxes. And almost $7 towards making minimum payments on your credit card. etc. etc. The grey category at the top represents expenses you pretty much have to pay no matter what. Surprise! $73 (or 64%) of this user's money is spoken for before he has even done anything with it. Now this user's got a per diem limit of $40/day for everything else, including food. If payday money burns a hole in your pocket, you need to think of it on an accrual basis. "If I spend more than $xx total today on items that are not [grey rows], I am not going to have enough money for [grey row] bills at the end of the month."
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Jan 22, 2013 21:55
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Thanks for all the responses! You've given me a lot to think about.slap me silly posted: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. Is there an info page somewhere that demystifies a lot of this stuff, like acronyms (VSMGX) and how to find/compare different funds? I only clicked on Target Retirement Funds because it has the word "retirement" in it. Even the long-term thread seems to assume more basic knowledge than I have (it also seems to assume I have a lot more money than I have).Sophia posted: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. moana posted: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. Right now I'm waffling between going with sticking with my current status and opening the account with just the minimum $3000. I feel like I'm never going to be in a state where I feel "ready" to commit some of my money to a long-term plan; I'm always going to perceive financial instability whether in terms of finding a job or moving expenses or later down the line, things like house and car payments. I feel it might be good to just do something now while I'm actively considering it and have little in the way of major financial commitments beyond my loans, even if it's not much. This leads to another couple of questions: - What happens if I put the $3000 in now, maybe a little bit more for the next few years, and then have to withdraw? I understand there's no penalty for withdrawing contributions, but what if your remainder drops below the $3000 initial? - Why is having 40% of your retirement savings in bonds when you're under 30 years old madness? I graduated college at the absolute height of the financial crisis and so maybe I'm a bit beyond risk-averse to risk-terrified. Yes, investing in the stock market scares me. disheveled posted: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 23, 2013 00:08
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Robo Kitty posted:- Why is having 40% of your retirement savings in bonds when you're under 30 years old madness? Bonds, in general and in the long-term, will earn less money than stocks because stocks, as you say, carry more risk. However, the major risk in stocks (assuming you have a fund portfolio instead of picking individual ones yourself) is mainly the short-term fluctuations - if I invest today and need the money in a year, God only knows what might have happened to the market. Long time-horizons will mitigate this risk quite a bit. If I invest today and don't need the money for 30 years, the overwhelming majority of scenarios will have me earning a good return, almost certainly a higher one than in bonds. But, bonds do not have the same kind of fluctuation risk, so they are good to mix in to your portfolio when you will need the money relatively soon (5-10 years). If you need money before that, equities should maybe not be in the mix at all. Because a retirement account by definition is a very long time horizon investment for an under-30 year old, the risk involved in stocks is much smaller than how we would usually think of it. So what if the market drops in August of 2013? You don't need to care how much money you have until August of 2043! People with money in the stock market during the financial crisis, if they were in well-diversified mutual or target funds, almost certainly came out ahead by the end of the next year. My overall return was still positive throughout that time. The people who got screwed are the ones who wanted to retire in that year or in a couple of years, not people like me who are just turning 30. And in that case, being into equities was probably a mistake for their investment horizons anyway. Investing in bonds won't kill you by any means, and you don't have to go 100% stocks either, but by going that heavy in bonds you're sacrificing a lot of likely return to minimize a risk that is already pretty small. If the entire stock market or US economy collapses for an extended period, we're going to have a lot more to worry about than our 401(k)s. It can be really scary, and tempting to watch that account number fluctuate every day with bated breath, but ideally you are putting that money away in a drawer and forgetting about it. Hopefully some of that makes sense.
Sophia fucked around with this message at 00:43 on Jan 23, 2013 |
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Jan 23, 2013 00:39
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Satellite posted:Not using a budget. At a minimum you could setup a really basic budget with Mint.com, especially if you want to save time. My wife and I tried an excel budget and it just didn't work for us that much because we felt like we were just spending a lot of time entering data without any real savings benefit. With Mint we both just look over transactions in our spare time (probably only takes a couple minutes each day, I do it at work) and if something pops up, say for example an impulse buy at Target that one of us made, we are free to question it's worth and then return it to the store if need be. Robo Kitty posted:Why is having 40% of your retirement savings in bonds when you're under 30 years old madness? I really recommend reading The Four Pillars of Investing by William Bernstein. Like you, I was considering being really risk averse (although, it was primarily because I wanted to use my Roth as a short term savings vehicle) because of all the same reasons (I see bubbles everywhere) before I read it. http://www.amazon.com/The-Four-Pill...rs+of+Investing The book makes pretty much the same points Sophia makes. Even though I had goons like Sophia telling me the same thing the book really helped me get over my fear of the market and stocks. The Four Pillars as well as a ton of other good books are mentioned in the Long-Term Investing thread. Sephiroth_IRA fucked around with this message at 01:07 on Jan 23, 2013 |
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Jan 23, 2013 00:50
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disheveled posted: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. Could you (or someone else) elaborate on this? I'm a graduate student on a fellowship, my income isn't reported on a W-2 as far as I know, and I've been putting money in a Roth IRA recently. I haven't heard anything this to suggest that fellowship income isn't eligible for a Roth IRA - it's certainly taxable income (at the federal level at least).
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Jan 23, 2013 07:18
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FrictionlessEmu posted:Could you (or someone else) elaborate on this? I'm a graduate student on a fellowship, my income isn't reported on a W-2 as far as I know, and I've been putting money in a Roth IRA recently. I haven't heard anything this to suggest that fellowship income isn't eligible for a Roth IRA - it's certainly taxable income (at the federal level at least). When I was on a fellowship I understood the fellowship money to be non-earned income so it wasn't eligible for a Roth (it's not subject to SSI either). I had a 10-hour RA as well and used that income to cover the Roth. http://www.marketplace.org/topics/your-money/getting-personal/fellowships-and-iras
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Jan 23, 2013 07:39
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Engineer Lenk posted:When I was on a fellowship I understood the fellowship money to be non-earned income so it wasn't eligible for a Roth (it's not subject to SSI either). I had a 10-hour RA as well and used that income to cover the Roth. Well, poo poo. I guess I better call Vanguard and see about withdrawing my 2012 contribution. (Fortunately I had enough earned income in 2011 that my contribution from then is OK, and I should have enough this year that my contribution for 2013 is ok...). I'm glad someone pointed that out, since it would never have occurred to me to think that fellowships don't count towards "earned income" otherwise.
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Jan 23, 2013 08:04
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In dealing with the weird "what qualifies as income in what circumstances" issues that I've run into as a grad student I'm starting to think I need a second PhD in accounting just to deal with this stuff. I mean, for my 2013 taxes I will have income sources from: - my (public) university, as a teaching assistant (earned income) - my university, in the form of a fellowship (not earned income) - my university, in the form of competitive grants (not earned income) - a soft-money grant via a private research institute, as a research assistant, but it's earned income because the money goes through the research institute first - my particular department, in the form of small supplemental grants (not earned income) My 2012 taxes will be slightly easier as I didn't have the fellowship last year but it's otherwise the same. Not to mention the complexities of dealing with the tuition/fees remission and healthcare benefits that somehow get factored in too. Amusingly TurboTax fails to catch most of these things. In the past I've also been a contractor (for a private company) and a research assistant through the university (still earned income, but somehow the SSI withholding was different?). Who knows, maybe next year I'll get an external fellowship and get to deal with that too!
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Jan 23, 2013 09:32
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Weird, I keep getting these EDI transfers from Vanguard, usually less than $1.00 each and only once or twice a month for the past couple months. The only accounts I have funded are my Roths. Any explanation?
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Jan 23, 2013 14:14
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Orange_Lazarus posted:Weird, I keep getting these EDI transfers from Vanguard, usually less than $1.00 each and only once or twice a month for the past couple months. The only accounts I have funded are my Roths. Any explanation? Might need to ask them. I know that if I am linking accounts together to gain the ability to move funds around they will send a small deposit and make a small withdrawal, and you have to go back to the website and confirm the amounts. I don't know why they would keep doing it.
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Jan 23, 2013 14:51
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Orange_Lazarus posted:Vanguard. Vanguard has the lowest fees and they're a great company overall, mainly because they're a co-op and the customers own the company, so they're interests lie with helping you and not typical shareholders/owners. Vanguard looks good. I guess I am running into something that I didn't realize in that there is a minimum contribution. I am used to the 401(k) model where I contribute a certain amount from my paycheck rather than a lump sum to start it. Once I contribute the minimum 3k can I then make monthly or semi monthly contributions of small amounts? Will I need to hit a threshold of 3k the following year as a lump sum as well? I am sorry if these are super dumb questions. I have no clue about how any of this works.
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Jan 23, 2013 16:31
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demonachizer posted:Vanguard looks good. I guess I am running into something that I didn't realize in that there is a minimum contribution. I am used to the 401(k) model where I contribute a certain amount from my paycheck rather than a lump sum to start it. Once I contribute the minimum 3k can I then make monthly or semi monthly contributions of small amounts? Will I need to hit a threshold of 3k the following year as a lump sum as well? I am sorry if these are super dumb questions. I have no clue about how any of this works. https://personal.vanguard.com/us/whatweoffer/mutualfundinvesting/accounts Target Retirement Funds have a minimum of $1000. They have a minimum manual contribution of $100 or $50 if you setup an automatic payment. Once the money is in, you don't have to add any more and I don't believe there are any fees outside of the $20/year/fund fee if you have less than $10k invested, but this is waived if you do electronic statements.
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Jan 23, 2013 18:25
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Orange_Lazarus posted:Weird, I keep getting these EDI transfers from Vanguard, usually less than $1.00 each and only once or twice a month for the past couple months. The only accounts I have funded are my Roths. Any explanation? Somebody might mistakenly be using your bank account for their Vanguard account? This could just be a failed verification attempt or something. I would call and ask. Although, as far as I can remember, Vanguard does not do these types of attempts to verify bank accounts. They have always sent a letter by US mail with the pin number. Edit:maybe you mistakenly selected to receive dividends to your bank account instead of reinvested? 80k fucked around with this message at 21:30 on Jan 23, 2013 |
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Jan 23, 2013 21:25
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80k posted:Somebody might mistakenly be using your bank account for their Vanguard account? This could just be a failed verification attempt or something. I would call and ask. Actually, they now do this sort of verification. I did it on my account.
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Jan 23, 2013 22:54
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Canadian Tax / RRSP general question: Is it better to use a tax refund to pay down a chunk of my student loan or to put that tax refund into my RRSP? I'd like to improve my paltry RRSP and save for the future and make the best use of the tax benefits of doing so, but I'd also like to get rid of the student loan as fast as possible so that hopefully in a few years when it's paid off the money that was formerly going to monthly payments could be going into savings (or anything else really). From what I've read (admittedly not much, in a search for similar questions) and for my own psychological benefit I would think to pay down the debt as quickly as possible, but if there's a dissenting opinion I'm all ears.
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Jan 24, 2013 05:11
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Lobok posted:Canadian Tax / RRSP general question: Is it better to use a tax refund to pay down a chunk of my student loan or to put that tax refund into my RRSP? I'd like to improve my paltry RRSP and save for the future and make the best use of the tax benefits of doing so, but I'd also like to get rid of the student loan as fast as possible so that hopefully in a few years when it's paid off the money that was formerly going to monthly payments could be going into savings (or anything else really). Personally, I would pay down the debt. If you are in a stage in life where it's becoming critical to save for retirement, you might want to to invest. Technically speaking, if you think you can consistently hit a return rate higher than your student loan interest, you'll come out ahead in the long game (retirement) by investing the money in RRSPs. Also, since RRSPs are tax deferred until you withdraw, it's not a bad idea to stick your tax return (which partially exists because the RRSP lowers your taxable income) into the RRSP to cover the taxes upon withdrawing the money when you are old and wrinkly. On a side note, consider maxing out your TFSA before putting money in RRSP. TFSA is the same idea as an RRSP (a tag you attach to investments), except you are not taxed ever (current limit is $25,500 total and it increases $5500 every January 1. May be lower if you are under 22 years old). TFSAs do not reduce your taxable income, however. I'm not sure how the math ultimately checks out in the end, but 40 years worth of $5000 TFSA increases, assuming no future government touches it (someone probably will  ), hits $200,000 on principle alone. Factor in compounding interest and that's quite the meaty, tax-free retirement savings account.TFSA is tearing apart the idea of RRSPs being the only way to personally save for retirement right now. It depends on your personal situation if contributing to RRSP lets you avoid a tax bracket, etc. RRSPs are also valuable to some people because it locks the money away. It's a costly hassle to get money out of your RRSPs unless you are buying your first home or retiring. TFSAs are liquid: I can walk into my bank today and get that money with no penalty. If you can't handle that temptation, you might want to talk to your bank about setting up limitations on that account. But again, I would personally pay off that debt. It might not be the best mathematical decision, but I really don't like the idea of betting with my own money (my student loans are 5%, but I might be able to hit 6% on investments) when I could do the sure thing of clearing my mind and my loans.
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Jan 24, 2013 19:05
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If you're hitting 6% on your investment, I want to know where you're investing. I'd pay down the debt. What I used to do for RRSP is wait until I'm filling using Dr. Tax, then just fiddle around with the RRSP field until I maximize my tax return, then contribute whatever I needed to meet that number. Of course, that means you have to file your taxes before the cut-off date. Of course, it depends of the APR on your debt, but my off the cuff advice is to pay that off first.
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Jan 24, 2013 19:15
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Thanks for the hefty post, reflex. Yeah, I'd rather not play a game of chance with the interest vs. return and I'll consider TFSAs more in the future. I hadn't been entirely clear on them because I didn't know you weren't ever taxed (despite the name, duh). Frozenvent: I'm using TurboTax for the second year, and I plan on maximizing my return in the same way. But there's no way I'm meeting my contribution limit so the tax return could all go into the RRSP if I choose.
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Jan 24, 2013 19:17
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Lobok posted:I hadn't been entirely clear on them because I didn't know you weren't ever taxed (despite the name, duh). You aren't taxed on the returns you receive from the investment, but it comes from post-tax income. RRSP are essentially pre-tax income, since they come off your taxable income.
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Jan 24, 2013 19:21
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Lobok posted:Thanks for the hefty post, reflex. Yeah, I'd rather not play a game of chance with the interest vs. return and I'll consider TFSAs more in the future. I hadn't been entirely clear on them because I didn't know you weren't ever taxed (despite the name, duh). I agree, I think that’s smart. One thing about student loans compared to other debt is the rates seem so low, the payments seem so low it’s easy to be complacent about it, especially if you think you are sophisticated and think you can do better in the market. But when you take that to the logical conclusion, you will wake up one day as a 40 year old and realize your student loans are old enough to vote.
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Jan 24, 2013 19:36
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Lobok posted:Thanks for the hefty post, reflex. Yeah, I'd rather not play a game of chance with the interest vs. return and I'll consider TFSAs more in the future. I hadn't been entirely clear on them because I didn't know you weren't ever taxed (despite the name, duh). You do realise that you'll have to pay tax on your RRSP when you withdraw it in the future, yes? You're not actually building anything if you spend your return; let the RRSP feed itself and find a different way to pay down your debt. Edit: More to the point, unless you're making a buttload of money it doesn't make sense to max your RRSP because you won't be getting a significant tax advantage from it. If it's reducing your 22% burden or moving you from 26% to 22% or something, great. But if you're just putting down money to reduce the amount you're paying 15% at, you're not doing yourself any favours unless you think that's what your retirement bracket will look like too. Fraternite fucked around with this message at 00:48 on Jan 25, 2013 |
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Jan 25, 2013 00:45
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