|
We refinanced our house <yay!> and we got back money from escrow. So, now what to do with it? The check in question is $3200.00. We are paying the plumber out of it, so we have about $2000 and some change left total. We can use it to pay 1k into each of our IRA's. We are not maxed out yet on it at all. Or, we pay the full 2k towards the home equity loan we have. We currently owe $22500 at 3% interest. That and the mortgage are really the only big bills we have, not counting utilities and the visa that we pay off each month. Alternatively, we can throw the 2k into our emergency savings...we have about 19k total in that. We are going back and forth about which way to go. I just want to do the best with it so that it is used wisely. What are your suggestions?
|
#
?
Aug 10, 2013 23:55
|
|
|
|
| # ? May 11, 2024 07:33 |
|
|
Make sure you don't need it for whatever the escrow was setup for.
|
|
#
?
Aug 11, 2013 00:13
|
|
|
Already checked...its all good according to the new lenders.
|
|
#
?
Aug 11, 2013 00:17
|
|
|
Disco Salmon posted:We refinanced our house <yay!> and we got back money from escrow. I would max out IRA accounts before I would pay extra on the mortgage. But is $22,500 all you owe, or did you mean to say $225,000? Because if it is the former I would almost be tempted to try to save up another $10,000, then drain the emergency fund to $10,000 and be debt free. If the later, the IRA is a no brainer.
|
|
#
?
Aug 11, 2013 05:04
|
|
|
Disco Salmon posted:Already checked...its all good according to the new lenders. Sounds good, but I'd check with someone who won't go "yeah well, we're wrong and increasing your escrow payment by $400 a month" if possible.
|
|
#
?
Aug 11, 2013 05:22
|
|
|
Zeta Taskforce posted:I would max out IRA accounts before I would pay extra on the mortgage. The $22,500 is the home equity loan. We owe 170k on the house now with the new refinancing. Those two plus the utilities, and the visa we pay off every month are all that we owe. Harry posted:Sounds good, but I'd check with someone who won't go "yeah well, we're wrong and increasing your escrow payment by $400 a month" if possible. I will call everyone again on Monday and double check, but it seems that its all good from what we were told. Still I guess better to be safe than sorry.
|
|
#
?
Aug 11, 2013 05:53
|
|
|
Disco Salmon posted:The $22,500 is the home equity loan. We owe 170k on the house now with the new refinancing. Those two plus the utilities, and the visa we pay off every month are all that we owe. You did say Equity Loan. That makes sense. Based on those numbers, I think maximizing your tax advantaged investing (your IRA) makes most sense.
|
|
#
?
Aug 11, 2013 19:56
|
|
|
Anyone ever heard of Simple Bank? What's the deal with it? And more importantly, what's the catch?
|
|
#
?
Aug 12, 2013 05:57
|
|
|
It's backed by a real bank. It's a startup that put together the web UI and 'experience' of Simple. No catch, really.
|
|
#
?
Aug 12, 2013 12:51
|
|
|
Re planning the best way to organize the finances for my wife and I, get out of debt, etc. Debts: Wife's undergrad loans: Sallie Mae: $5,566.0 at 6.8% Great Lake loans: $2500 at 1.75% (can that be correct?) We have an impending $50-60K in grad loans as my wife is about to finish grad school. That's obviously going to be the big change My undergrad: Ed Financial: $13,045 at 5.65% $1860 at 5.65% Vehicles: Wife: $5,600 Me: $11,600 Credit card: $2,000, no interest for 10 months (for a Macbook, so partially justifiable, partially unnecessary expense on my part) Investment: My company matches 100% of 6% of my paycheck into my 401K, so I do that (currently at $2000, just started the job this year). I have $800 in a Roth that I just started. $8,500 in a fund my family started for me years ago (no contributions on my part, it just accrues interest right now in different funds). Current payments: Student loans: I pay $100 a month (minimal, which I know isn't good), $300 per car payment, then standard rent, utilities, etc. Her student loans are deferred until November when she is officially out of school. Income: I make $50-60K a year depending on commission. She makes $12K a year currently just working part time at 10ish hours a week (her other internship just ended), and is now applying both to PT and FT jobs. Savings: $5,000ish in emergency funds, $3,000ish in checking. We aren't hurting financially overall, and things will get even more flexible once my wife starts working more hours or full time, so now its just a matter of addressing debt and increasing savings/long term investing. I have an idea on where to start, but I figure having someone with a fresh pair of eyeballs looking at things would help me get a better focus on where to start.
|
|
#
?
Aug 12, 2013 15:46
|
|
|
What are the minimum payments on everything, and also the interest rates on your cars and her grad loans? I'll edit the rest of this once you post those figures. ------------------------------------------------------- I'd kill that Macbook credit card now, out of savings, to make sure you don't get whacked with retroactive interest. Then I'd snowball it, so based on what you have posted (cars/grad loans may change this): Pay the minimum on all of your loans. Then target one specific loan, and throw as much money as you can at it, until it's gone, in this order: Sallie Mae: $5,566.0 at 6.8% Ed Financial: $1860 at 5.65% Ed Financial: $13,045 at 5.65% Great Lake loans: $2500 at 1.75%
|
|
#
?
Aug 12, 2013 16:09
|
|
|
Duckman2008 posted:Re planning the best way to organize the finances for my wife and I, get out of debt, etc. What are the nature of your other expenses? What are you paying for rent, what are typical utiliity payments and food bills? Anything unique going on, like super long commutes, regular travel, health care expenses for a cronic condition? Its better if you can come up with what you really spent by looking at receipts, bank statements, etc rather than imagine what you want your perfect monnth to be. We can talk about the order to pay the debts, but that is a small point.
|
|
#
?
Aug 12, 2013 17:06
|
|
|
Zeta Taskforce posted:What are the nature of your other expenses? What are you paying for rent, what are typical utiliity payments and food bills? Anything unique going on, like super long commutes, regular travel, health care expenses for a cronic condition? Its better if you can come up with what you really spent by looking at receipts, bank statements, etc rather than imagine what you want your perfect monnth to be. Good point for both of you. I have a doc on our expenses and use Mint, so I can follow it fairly easily. Listing as total and not per person, Here are our expenses: Rent: $1120 Car insurance: $158, paid every 6 months, that's actually part of that credit card I owe on Gym: $50 Car: they are both about $280, but I like to round to $300. So $600 total My loans: $100 Netflix and Spotify: $20 Health insurance: about $70, comes out of paycheck directly Rental insurance: $15 Electricity: bout $80-120 Comcast: $90 Cell phones: $100 Gas: $300 a month? Food and groceries: $500-1000 Total expenses are about $3500 a month. Her loans are unknown, I would imagine her current loans would be $100ish a month, and the big loans coming in is what we need to adjust for (I would imagine a minimum of $300-500). So one goal is potentially paying off a car payment or student loan payment to be able to bring down the minimums for more flexibility. We have full health insurance and the only extra expenses coming up are a car checkup of $400 and I have some dental work that is mostly covered. We are taking a two day beach trip this week to satisfy the need for a summer vacation. Main weakness spending is eating out and buying microbrews. We have started to curb back at least until she gets a full time job. Income wise until recently my wife had a 2nd job, which is a loss of about $1300. Working on gaining something like that back, but of course we don't have that yet. Otherwise income is what is described above, my base is basically $3000 a month after taxes, and if I have a good commission month bonuses can be from $200 more to $1000 more (twice this year) to $2000 more (once this year). So my income can take care of the current bills overall, and the main goal is to start saving and paging stuff off with her extra income whenever she gets that.
|
|
#
?
Aug 12, 2013 21:50
|
|
|
One thing after another, it seems. After a lovely month in which my wife had a miscarriage and we spent about $600 on doctor's bills, my wife's grandmother dies. We live in Australia, and her grandmother - the last remaining grandparent - lived in Ohio. So the funeral is on Saturday. We're paying $2200 for last-minute flights. Not a huge deal, we definitely have the money and we're still stocked with a good emergency fund. I just hate losing cash.
|
|
#
?
Aug 13, 2013 00:29
|
|
|
CelestialScribe posted:One thing after another, it seems. After a lovely month in which my wife had a miscarriage and we spent about $600 on doctor's bills, my wife's grandmother dies. We live in Australia, and her grandmother - the last remaining grandparent - lived in Ohio. So the funeral is on Saturday. We're paying $2200 for last-minute flights. You've probably taken advantage of it, but I think many airlines will give you a duress discount on a last minute flight if you can show a death certificate or something like that.
|
|
#
?
Aug 13, 2013 00:39
|
|
|
FrozenVent posted:You've probably taken advantage of it, but I think many airlines will give you a duress discount on a last minute flight if you can show a death certificate or something like that. Oh really? Interesting, I should check that out. I shouldn't complain, this is an expense we have to pay, and it's a serious matter. I guess I'm just glad we've saved enough money to prepare for this sort of stuff.
|
|
#
?
Aug 13, 2013 00:48
|
|
|
$2200 doesn't particularly expensive for a last second fight from Australia to Ohio.
|
|
#
?
Aug 13, 2013 01:45
|
|
|
Scratch that - found a better deal at just $1,311. Hooray!
|
|
#
?
Aug 13, 2013 03:19
|
|
|
That's a lot of money to go to one of the worst states. (I have to drive there this weekend to visit family  )
|
|
#
?
Aug 13, 2013 03:37
|
|
|
Duckman2008 posted:Good point for both of you. I have a doc on our expenses and use Mint, so I can follow it fairly easily. Listing as total and not per person, Here are our expenses: On food, $500 to $1000 is a big range. If it is closer to $1000, your food budget is high for 2 people. I assume this is eating out/not cooking and where the microbrews come into play. What are your cars worth?
|
|
#
?
Aug 13, 2013 04:42
|
|
|
Zeta Taskforce posted:On food, $500 to $1000 is a big range. If it is closer to $1000, your food budget is high for 2 people. I assume this is eating out/not cooking and where the microbrews come into play. What are your cars worth? Our food budget is high due to eating out and such. My car is a 2012 Honda civic, her car is a 2006 Passat (has 95K miles). I'm not a car guy, no idea on the worth.
|
|
#
?
Aug 13, 2013 04:57
|
|
|
Duckman2008 posted:Our food budget is high due to eating out and such. You can use kbb.com to figure out how much they are worth. Have you considered cutting cable? Since you have netflix you might not even miss it. Also, what is the interest rate on your car loans? The $1,860 loan should probably be first to go since it is so small. How would you feel about using the $8,500 investment to pay off some of your debt?
|
|
#
?
Aug 13, 2013 13:49
|
|
|
Hashtag Banterzone posted:You can use kbb.com to figure out how much they are worth. Don't use just KBB, use NADA and Edmunds as well to get a good picture of what your car is worth. When selling your car, put the highest one on your windows.
|
|
#
?
Aug 13, 2013 13:53
|
|
|
Hashtag Banterzone posted:You can use kbb.com to figure out how much they are worth. I'm not looking to sell either car in any case, I am planning on using my tax return next year to pay off most to all of her loan,and then mine will just pay off over time. Car knowledge is a weakness of mine, we know what we currently have and that's worth paying a bit extra over trading out for a different car. Considered cutting cable, but at this point it's not much more for cable over just internet with Comcast, and Comcast is literally my only internet option (in Philadelphia amazingly). The $8500 is via a life insurance plan, so I get a very low rate for that. I've considered using it towards bills but I crunched the numbers a few months back and I'm leaving it where it is for now. The main lifestyle change we need to adjust is likely just eating in more and buying cheaper beer from time to time. As much as it would be nice to completely cut everything, at this point my main goal is just paying the minimums and deciding which to put the extra income towards payoff wise. Duckman2008 fucked around with this message at 14:16 on Aug 13, 2013 |
|
#
?
Aug 13, 2013 14:12
|
|
|
Duckman2008 posted:The $8500 is via a life insurance plan, so I get a very low rate for that. I've considered using it towards bills but I crunched the numbers a few months back and I'm leaving it where it is for now. Well, that is a big part of the solution there. Your family in order to be nice to you bought you a crappy whole life insurance policy, and because your family has been overcharged for years, the insurance company has been putting some of it into a crappy savings account. Whole life insurance is a rip off in so many ways, but the insurance industry has convinced people that it is this miracle thing that grows and helps you plan for the future. I'm curious how your numbers crunched out, because everyone else is so much better off investing on their own in a real investment, like mutual funds in an IRA, and buying term insurance, where you can get hundreds of thousands of coverage for the price of a couple craft beers. Use that money to pay off your debts and cut back lifestyle by cooking more and drinking less, and suddenly your budget and your body will get healthier simultaneously.
|
|
#
?
Aug 13, 2013 15:14
|
|
|
Duckman2008 posted:The main lifestyle change we need to adjust is likely just eating in more and buying cheaper beer from time to time. As much as it would be nice to completely cut everything, at this point my main goal is just paying the minimums and deciding which to put the extra income towards payoff wise. Fellow Philadelphian with the same problem -- why do great beers and food have to be everywhere here?? Do you guys both work out in the suburbs of something? I don't miss having a car at all in Philly - it's an extremely walkable city. At this point, I really can't even imagine the hassle of dealing with parking or the drivers.
|
|
#
?
Aug 13, 2013 15:21
|
|
|
Zeta Taskforce posted:Well, that is a big part of the solution there. Your family in order to be nice to you bought you a crappy whole life insurance policy, and because your family has been overcharged for years, the insurance company has been putting some of it into a crappy savings account. Whole life insurance is a rip off in so many ways, but the insurance industry has convinced people that it is this miracle thing that grows and helps you plan for the future. I'm curious how your numbers crunched out, because everyone else is so much better off investing on their own in a real investment, like mutual funds in an IRA, and buying term insurance, where you can get hundreds of thousands of coverage for the price of a couple craft beers. I'll take another look at life insurance. Any suggestions on term insurance? I looked at it and felt that I would save when I got older and it was more expensive, but I could be wrong. I appreciate the advice on that. Edit: to clarify on the life insurance: it currently has $8500 in it, it is an investment style so it is all different mutual funds (I went with a split between small, large, bonds, etc), and it is $250-300 a year for $150K coverage. HooKars posted:Fellow Philadelphian with the same problem -- why do great beers and food have to be everywhere here?? Outskirts of Philly (Roxboro) and I drive out to Exton for work, so a car is essential for both of us unfortunately. Duckman2008 fucked around with this message at 15:46 on Aug 13, 2013 |
|
#
?
Aug 13, 2013 15:36
|
|
|
Duckman2008 posted:I'm not looking to sell either car in any case, I am planning on using my tax return next year to pay off most to all of her loan,and then mine will just pay off over time. Car knowledge is a weakness of mine, we know what we currently have and that's worth paying a bit extra over trading out for a different car. I figured you weren't looking to sell the cars, but you should still know what they are worth. Definitely understand on the cable+internet vs internet alone thing. Though I would suggest calling comcast and doing the whole threatening to drop cable act to see if they will give you a discount. quote:I'll take another look at life insurance. Any suggestions on term insurance? I looked at it and felt that I would save when I got older and it was more expensive, but I could be wrong. I appreciate the advice on that. You also might want to figure out if you actually need life insurance. My work would pay 1 year of salary if I were to die, you should see if your work has something similar. Since your wife can work and you don't have kids, that might be all you need right now.
|
|
#
?
Aug 13, 2013 15:44
|
|
|
Comcast's lowest basic internet plan, at least here in Maryland, is $40/mo, which is much lower than $90.
|
|
#
?
Aug 13, 2013 15:54
|
|
|
Duckman2008 posted:I'll take another look at life insurance. Any suggestions on term insurance? I looked at it and felt that I would save when I got older and it was more expensive, but I could be wrong. I appreciate the advice on that. Some life insurance would still be a good idea, that way you are not leaving your wife halfway through school earning $12,000. It does get more expensive as you get older, but the point of life insurance is for it to cover you while people are depending on your income, which is not your entire life, and you make good financial choices in the meantime so that you build savings, investments, and wealth. If you save and invest, you will have a lot more than $150,000. check out Zander. Other goons have found them to be responsive and give a great value. https://www.zanderins.com/
|
|
#
?
Aug 13, 2013 17:40
|
|
|
Hashtag Banterzone posted:I figured you weren't looking to sell the cars, but you should still know what they are worth. My work offers dirt cheap life insurance, its just a matter of if I ever leave work I lose it, and that ties into my life insurance expense when older concern. I'll be readdressing it though.
|
|
#
?
Aug 13, 2013 23:15
|
|
|
My GF is trying to refinance the mortgage on her condo to a 15 year loan. I'm wondering how many months of payments a bank would want to see in savings? We have a joint account that we both put money into each weak and use it to pay for joint bills, eating out, etc. Would the bank count this as one of her assets for determining savings if I have access to it? Is the bank going to question every weekly transfer I make into the account? Thanks and sorry if this should go in the home buying thread.
|
|
#
?
Aug 14, 2013 02:35
|
|
|
Duckman2008 posted:My work offers dirt cheap life insurance, its just a matter of if I ever leave work I lose it, and that ties into my life insurance expense when older concern. I'll be readdressing it though. How old are you and are you in reasonably good health? 20 year level term doesn't start getting expensive until you are in your 50's. mcpringles posted:My GF is trying to refinance the mortgage on her condo to a 15 year loan. I'm wondering how many months of payments a bank would want to see in savings? We have a joint account that we both put money into each weak and use it to pay for joint bills, eating out, etc. Would the bank count this as one of her assets for determining savings if I have access to it? Is the bank going to question every weekly transfer I make into the account? Thanks and sorry if this should go in the home buying thread. They will count it. Usually they like to see a couple months of reserves, but they will also look at retirement accounts and investments too.
|
|
#
?
Aug 14, 2013 03:34
|
|
|
OMG JC a Bomb! posted:Is it possible to live on 41k a year while working and living just outside of Washington DC? I have a potential offer, and I would murder puppies to get over 30k a year, but the apartment rates are loving insane. Like, a minimum of 300 more than what I'm paying now. I don't even know about gas and food. Yes - it is easily doable IF you don't have a car, and you can control rent costs somewhat. With a car will make it more difficult, but if you can avoid driving commute/paying for parking/etc you'll be much better off.
|
|
#
?
Aug 14, 2013 23:14
|
|
|
Zeta Taskforce posted:How old are you and are you in reasonably good health? 20 year level term doesn't start getting expensive until you are in your 50's. 27 and in good health.
|
|
#
?
Aug 15, 2013 04:37
|
|
|
Duckman2008 posted:27 and in good health. If this is true I'd just get the insurance. If your work's coverage is dirt cheap it's probably not that high and given even your not-insane debt loads it would better to be slightly over-covered than under-covered until you're clear of all of that. A 20 or 30 year term policy will probably never be cheaper for you unless you're a really bad driver or something. You can always stop paying for it once you no longer need the extra coverage.
|
|
#
?
Aug 15, 2013 11:17
|
|
|
Sophia posted:If this is true I'd just get the insurance. If your work's coverage is dirt cheap it's probably not that high and given even your not-insane debt loads it would better to be slightly over-covered than under-covered until you're clear of all of that. A 20 or 30 year term policy will probably never be cheaper for you unless you're a really bad driver or something. You can always stop paying for it once you no longer need the extra coverage. To clarify: I have insurance, just not through work. My life insurance is a little over $250 (I pay once a year in January) and my work life insurance would be $10ish a month. So $120 vs $250. My thought process was having an outside source for coverage means I'm fine if i am ever laid off or need to switch jobs. I'm open to suggestions if this is wrong.
|
|
#
?
Aug 15, 2013 13:51
|
|
|
Duckman2008 posted:To clarify: I have insurance, just not through work. My life insurance is a little over $250 (I pay once a year in January) and my work life insurance would be $10ish a month. So $120 vs $250. My thought process was having an outside source for coverage means I'm fine if i am ever laid off or need to switch jobs. I'm open to suggestions if this is wrong. If you're out of work, it makes relatively little sense to continue paying for life insurance. You'll cost less to support when you're dead vs alive. You're paying $130/yr to avoid the hassle of getting a term life plan if you change jobs.
|
|
#
?
Aug 15, 2013 14:31
|
|
|
Duckman2008 posted:To clarify: I have insurance, just not through work. My life insurance is a little over $250 (I pay once a year in January) and my work life insurance would be $10ish a month. So $120 vs $250. My thought process was having an outside source for coverage means I'm fine if i am ever laid off or need to switch jobs. I'm open to suggestions if this is wrong. To add to what EL said, you (or someone else) are paying too much for too little insurance in order to fund an investment with high fees that no one gets to keep when you die. If you got it through your job you would get a lot more and pay a lot less, and you can use your “investment” to knock out more of your debts. If you are concerned about not having insurance if you leave your job, get a quarter million 20 year term policy on your own, which you should be able to get for almost nothing. The point is if you didn’t have debt payments, you were spending reasonable amounts on food and craft beers, and you used the savings to regularly invest, there will be a point when you have built wealth and you don’t need life insurance anymore, and because it is your investment, you can pass it along instead of having your life insurance company keep it. This isn’t an emergency and you don’t need to do anything today. And don’t do anything because some guy on an internet comedy forum told you to do it. Use this conversation to start a research process and only do things when you believe in it.
|
|
#
?
Aug 15, 2013 16:55
|
|
|
|
| # ? May 11, 2024 07:33 |
|
|
Probably should be asking in the investment thread... I recently found out my mother has had an Axa Whole Life policy on me since I was little. Now that I'm in my 20's she wants to either turn the policy over to me (so I can pay the premiums, and continue it) or cash out it's value to give me towards a house down payment or other savings. It's currently worth about $7K. The caveat is that if I want to take the cash I have to promise to establish my own life insurance policy equivalent in pay-out value. Well I intended on getting a term policy anyway eventually, but I'm wondering if I'm better off taking over the policy and paying the $25 or so a month forever to maintain it, or would it be better to cash it out and use it for savings. Most financial information says whole-life policies are bunk, unless of course your able to start really early and get low rates when your a child. Any thoughts my dear financial thread goons.
|
|
#
?
Aug 18, 2013 09:37
|
|
