|
Yeah, you guys are right. I ran the numbers again, and if I used $20k to pay down the highest interest loans, the difference between the interest I'd save on loans and the interest I'd lose on the deposit is only $883. THF13 - I have one of those Kasasa accounts, where there are some hoops to jump through. I think they vary by bank, but with mine I only need one ACH (deposit or payment) and 15 POS transactions. There has only been one month where I didn't qualify, so mine isn't very onerous. Thanks for the perspective, everyone!
|
#
?
Aug 21, 2014 20:45
|
|
|
|
| # ? May 12, 2024 01:35 |
|
|
Quick question, when people talk about the % of income they are saving. Is that gross income? After tax income? If it's after tax does a pre-tax 401k count into that? What about a Roth IRA?
|
|
#
?
Aug 21, 2014 20:59
|
|
|
Steampunk Hitler posted:Quick question, when people talk about the % of income they are saving. Is that gross income? After tax income? If it's after tax does a pre-tax 401k count into that? What about a Roth IRA?
|
|
#
?
Aug 21, 2014 21:27
|
|
|
posh spaz posted:I just crunched the numbers and it'll cost $3352 in interest for one year. So the weighted average effective rate is actually closer to 4.65%. I'll keep making 1.5% on my checking account, so effectively I guess liquidity isn't that expensive, compared to running out of money and needing to get short-term funding (credit cards).
|
|
#
?
Aug 21, 2014 21:48
|
|
|
Cicero posted:Net income including pre-tax retirement account contributions is what I think most people do. I dunno how people factor in employer match though. Ok cool, Just factoring out the employer match and the extra two pay checks (biweekly, so 26 a year - My budget ignores those and treats them as windfalls, same as my quarterly bonuses) I'm saving 37% then currently. That's better then I expected!
|
|
#
?
Aug 21, 2014 22:21
|
|
|
I am turning my brain in knots and need some help with this math. I just had two kids and am going to add them to my health insurance through my employer. My employer covers 80% of my premiums, but none of my spouse or children. So the only benefit they get from being on my plan is I save money on taxes by lowering my taxable income. I am squarely in the 15% bracket, so we can assume that is the savings for pre-tax money spent on premiums. I believe I can enroll my spouse and children through the health insurance exchange in my state, and have priced out some plans. We may qualify for assistance but I haven't factored that in yet. Just on the basis of pre-tax, it looks like my options are: Through my employer: $910 per month for spouse + 2 children Exchange plan 1: $695 per month Exchange plan 2: $785 per month What is the "break even point" - where the savings in the premiums is equals or starts to pass the marginal loss of increasing my taxable income? How do I calculate savings beyond that point? Is it price difference * 1.15?
|
|
#
?
Aug 22, 2014 04:00
|
|
|
kaishek posted:I am turning my brain in knots and need some help with this math. I just had two kids and am going to add them to my health insurance through my employer. My employer covers 80% of my premiums, but none of my spouse or children. So the only benefit they get from being on my plan is I save money on taxes by lowering my taxable income. I am squarely in the 15% bracket, so we can assume that is the savings for pre-tax money spent on premiums. They will probably not qualify for assistance on the exchange, based on how the government determines whether they your spouse and children have an "affordable plan" available. It's worth looking into but don't get your hopes up. You can calculate whether the insurance is cheaper by multiplying the pre-tax number ($910) by 0.85 (=1-15%). So if you can buy a comparable plan on the exchange for less than $773.50 it would probably be worth taking it. I say comparable, because it's very possible that the plan on the exchange will have higher deductible and copays, and will restrict you to fewer doctors and hospitals than your employer plan. There are other small advantages to having the entire family on one plan (it gets very technical), so if it's close you might want to put them on the employer plan.
|
|
#
?
Aug 22, 2014 04:47
|
|
|
esquilax posted:They will probably not qualify for assistance on the exchange, based on how the government determines whether they your spouse and children have an "affordable plan" available. It's worth looking into but don't get your hopes up. I think I understand because 910*.85 is what I would have if I just took the money instead of paying for the insurance. Got it. And thanks for the advice - I was looking through the benefits packages and found two plans that are fairly similar in terms of network, deductible, copays, etc. But as you point out, the difference even in a best case is about $80/month and it probably isn't worth it like that. I guess the question is how do they decide if your work plan is "affordable" - at the moment, not including the part my employer pays for (80% of my premiums), I pay 16.67% of my salary for insurance. EDIT: I see that the standard is 9.5% of income for self-only coverage - so my plan would be considered affordable. But if my wife applied separately (having no employer), she wouldn't qualify for anything because she is coverable under my "affordable" plan? Hufflepuff or bust! fucked around with this message at 15:08 on Aug 22, 2014 |
|
#
?
Aug 22, 2014 15:02
|
|
|
kaishek posted:I think I understand because 910*.85 is what I would have if I just took the money instead of paying for the insurance. Got it. And thanks for the advice - I was looking through the benefits packages and found two plans that are fairly similar in terms of network, deductible, copays, etc. But as you point out, the difference even in a best case is about $80/month and it probably isn't worth it like that. Yes. Affordability is based on having a self only contribution (i.e. the 20% you pay) less than 9.5% of family income. The cost to cover your spouse and children is not included in those calculations. However, if the plan is affordable for you, it becomes "affordable" for your spouse and children regardless. Yes, it's dumb.
|
|
#
?
Aug 22, 2014 15:23
|
|
|
I am also correct that nothing was done to make premium payments made outside of an employer plan tax deductible, right? That to me seems the dumbest thing of all.
|
|
#
?
Aug 22, 2014 15:51
|
|
|
kaishek posted:I am also correct that nothing was done to make premium payments made outside of an employer plan tax deductible, right? That to me seems the dumbest thing of all. I believe (not an accountant) that if you itemize you're able to include post-tax health insurance premiums in your itemized medical expenses deduction. There are caps and minimums and stuff, so you might get some tax benefit and you might not.
|
|
#
?
Aug 22, 2014 15:59
|
|
|
I believe they are deductible as medical expenses, yes, but only if you itemize (this is what I was told about my cobra payments, at least, so it seems to make sense it would apply to any post-tax premium). Unfortunately the rule for deducting medical expenses is crap; you can only deduct expenses that exceed 10% of your gross income. So if you go with your employer plan, you would by paying $910 a month, or $10,920 a year - but you can only claim the part of that that exceeds 10%. So if your AGI is $50,000 (as an example), you would only be able to deduct $5,920 in medical expenses. But just the standard deduction for married filing jointly in 2014 is going to be $12,400, so unless you have $6000+ of other deductions to itemize, it's probably going to be better for you to take the standard deduction than try and itemize your medical costs.
|
|
#
?
Aug 22, 2014 16:43
|
|
|
Ashcans posted:I believe they are deductible as medical expenses, yes, but only if you itemize (this is what I was told about my cobra payments, at least, so it seems to make sense it would apply to any post-tax premium). Contributions for employer health insurance (like the $910) are pre-tax and are almost definitely not able to be included as an itemized deduction. You can't get tax benefits twice. Only post-tax medical expenses (like premiums paid through an exchange) can be deducted.
|
|
#
?
Aug 22, 2014 17:00
|
|
|
You are correct. I started that post intending to use one of the plans from the exchange, and then switched to use the employer premium figure because it was the highest without registering that it wouldn't actually qualify for what I was talking about.  The information re: 10% gross and the standard deduction should still hold true, though.
|
|
#
?
Aug 22, 2014 17:10
|
|
|
You should also save FICA tax on your health insurance if you do it through your employer, so that's another 7.5% or so cheaper. It's total bullshit that they didn't fix the tax deductibility of employer/exchange provided insurance one way or another.
|
|
#
?
Aug 22, 2014 17:16
|
|
|
I posted about this last tax time, and never did anything with it for no good reason, so I'm back with one more question. Firstly, a quick recap.Grumpwagon posted:I have a smallish amount of money (not sure of the exact balance, but more than $5.5k, less than $11k) in a regular, non-tax advantaged account that was a gift. I'd like to add that to my own IRA accounts at vanguard before April, so I can roll it all over at once, since it's definitely more than 1 year's contribution max. I have both a Roth IRA and a rollover IRA already established there. Obviously, the ship has sailed on moving it all in one go, but I'd like to move at least a chunk of it. I don't know anything about investment taxes, so this is probably a stupid question. If I were to do this (sell $5.5k from this non-tax advantaged account, contribute it to my vanguard Roth), would I have to pay any capital gains taxes or anything like that? I vaguely recall there is a capital gains exemption to some amount of money far more than I have, but quick googling isn't turning that up. I'd like to move it to vanguard from where it is now (non-vanguard), but if it matters, the fund it is in now isn't too bad. I could probably just call the current place up and start an IRA with them if that would allow the funds to be moved without selling. Most of this money was contributed well over a year ago, but a small amount of it (~$1000?) was contributed this year. Thoughts? Am I overthinking this? Grumpwagon fucked around with this message at 17:36 on Aug 24, 2014 |
|
#
?
Aug 24, 2014 17:23
|
|
|
Bankruptcy thread doesn't seem live anymore, so I'll post here. If that is wrong, please let me know. My wife and I just finished our Chapter 13 bankruptcy, which is awesome. Under the bankruptcy we decided to give up our house, and so we were told to stop making payments on it. Two weeks ago we got our letters saying we are done (case closed), and we received our check for the remainder of the money they were holding for creditors. Today, we received 5 letters from the mortgage company, 2 of them we had to sign for. Basically saying that we owe $18k and need to pay now, or they will start the foreclosure process. This is the normal process for what we decided to do, correct? Basically, I'm wondering if we need to hire a lawyer to help us through this process, or if we just keep an eye on the local public records for our case to show up and start packing. We are fine with losing the house, as that is what we decided to do, we just want to make sure there isn't anything that could take us unawares. Anyone have any ideas? Thanks!
|
|
#
?
Aug 26, 2014 03:31
|
|
|
You should send the letters on to your bankruptcy lawyer, he'll tell you what to do.
|
|
#
?
Aug 26, 2014 03:37
|
|
|
Honestly didn't think of that. One reason for that is we had questions about it before the case closed, and we were told that they were representing us in the bankruptcy, but not in the foreclosure.
|
|
#
?
Aug 26, 2014 03:40
|
|
|
I'm looking for some help, my wife is trying to get her first credit card but is having issues, she has no debt to her name but she wants to start building a credit history. We've tried multiple different places but she keeps getting denied, she has a good work history but only makes around 25k a year, it seems to be ridiculously hard considering when I was 18 I was just thrown credit cards with no history either. We just tried applying for a chase freedom card and I believe she was denied again. We also tried for an Amazon Credit Card and that was denied, i'm at a loss because she's only 25
|
|
#
?
Aug 27, 2014 00:17
|
|
|
What bank does she use and does she use direct deposit? She should be able to get a card from that bank. Also of you try target you can get approved pretty easily.
|
|
#
?
Aug 27, 2014 00:23
|
|
|
spwrozek posted:What bank does she use and does she use direct deposit? She should be able to get a card from that bank. we're using a local credit union (pawtucket credit union) and yes she does do direct deposit. edit: i noticed my bank has a secured card which i assume is just a deposit based credit card, is that a possible route we should pursue? Photex fucked around with this message at 00:31 on Aug 27, 2014 |
|
#
?
Aug 27, 2014 00:27
|
|
|
Photex posted:
Yea a secured card is "You give us $XXX and we hold it as collateral against a credit card with a $XXX limit". If they need to charge off the debt they'll use that money to get their money back. If she can't get any other card than that is probably her best bet. After awhile you can ask (or something they'll do it for you) to have it converted to an unsecured card and get your deposit back.
|
|
#
?
Aug 27, 2014 01:14
|
|
|
Hello, hopefully this is the right thread for this. My mother is fairly terrible with money to the extent that she recently has given up on trying to figure it out herself and instead calls me for advice (largely because I am an economist, which is almost irrelevant to her situation hence this post). She was just cold called by a debt firm (Select Finance) where they discussed a plan for debt reduction with credit card companies where they would get a fee of 30% for the amount of debt they saved her and a payment plan and all sorts of stuff. Instinctively, this seems like a terrible idea since it is a debt company that advertises constantly on TV cold calling old people but I'm not exactly sure why I should tell her no. Her financial situation is this as far as I know: $80k income a year roughly. Lives at home alone with two cats so she has very low current expenses to meet. Two mortgages on a ~$100k house. I believe she is underwater at this point. $25k in credit card debt. Several thousand dollars in savings. I know she accumulated a ton of debt when we were kids but at this point she is basically lighting money on fire by paying interest and not principal. She is aware of this and at this point seems willing to grasp at any person that calls her offering help. Obviously I need to sit down with her and go through her debts (which she seems embarrassed to even talk about), but in the short term why exactly should (or shouldn't) she stay away from debt agencies?
|
|
#
?
Aug 29, 2014 16:51
|
|
|
For the most part those are effectively scams. Give her a link to the CFPB page maybe? http://www.consumerfinance.gov/askcfpb/1459/should-i-use-debt-settlement-service-help-me-deal-my-debt-and-debt-collectors.html
|
|
#
?
Aug 29, 2014 17:12
|
|
|
Also are your numbers right? I'm having trouble figuring out how someone can be bringing in 80k/year and also having problems with 25k in credit card debt and 100k in mortgage (or even double that). It sounds like what she really needs is to track expenses and make a budget that incorporates paying down those cards. With that income, it shouldn't even necessarily need to be all that strict of a budget to still knock out those cards within a year or two. This is assuming no other major unavoidable bills are in play...
|
|
#
?
Aug 29, 2014 17:17
|
|
|
Yeah I agree that the numbers don't really add up so there is either something weird she is dumping money on or debts she has that she isn't telling me about. She has always done the weird paternal 'don't worry the kids about money' thing and not ever talked about it, so hopefully she is changing her attitude on it because there isn't really a reason for her to be in debt to this extent. Thanks e: the CFPB link is very helpful, thanks GOOD TIMES ON METH fucked around with this message at 17:34 on Aug 29, 2014 |
|
#
?
Aug 29, 2014 17:31
|
|
|
I'm going to guess "giving money away to family members" or gambling.
|
|
#
?
Aug 29, 2014 19:13
|
|
|
Hello there I need some advice to see how things are going and whether I should be changing it up. My main recurring expense is 16k left in student loans. up to 4 months ago I had it set as a minimum payment and then realized the interest just killed it. Now for the past months I've been contributing 1K a month towards paying it off and so far its been going well. I have 20k in savings and the loan payment never comes from my savings. I was wondering if I should use some of those savings to more aggressively pay off the loan. I'm fine as is just taking 1k from my pay every month but have just been anxious because it feels like my savings aren't even savings with this debt hanging over my head.
|
|
#
?
Aug 29, 2014 19:31
|
|
|
Manic Mongoose posted:Hello there I need some advice to see how things are going and whether I should be changing it up. My main recurring expense is 16k left in student loans. up to 4 months ago I had it set as a minimum payment and then realized the interest just killed it. Now for the past months I've been contributing 1K a month towards paying it off and so far its been going well. I have 20k in savings and the loan payment never comes from my savings. I was wondering if I should use some of those savings to more aggressively pay off the loan. I'm fine as is just taking 1k from my pay every month but have just been anxious because it feels like my savings aren't even savings with this debt hanging over my head. Depends on the rate and your confidence in the stability of your job/appetite for risk, but I'd probably just leave it. Student loans are usually pretty low interest, and cash is worth having. If you wanted to pay a chunk off (~$10k?), you could do that, but I wouldn't want to nearly drain my savings to pay it completely off. Again, depends on the interest though.
|
|
#
?
Aug 29, 2014 20:20
|
|
|
Manic Mongoose posted:Hello there I need some advice to see how things are going and whether I should be changing it up. My main recurring expense is 16k left in student loans. up to 4 months ago I had it set as a minimum payment and then realized the interest just killed it. Now for the past months I've been contributing 1K a month towards paying it off and so far its been going well. I have 20k in savings and the loan payment never comes from my savings. I was wondering if I should use some of those savings to more aggressively pay off the loan. I'm fine as is just taking 1k from my pay every month but have just been anxious because it feels like my savings aren't even savings with this debt hanging over my head.
|
|
#
?
Aug 29, 2014 20:28
|
|
|
SiGmA_X posted:If your job is stable, don't think twice. Write a check (you know what I mean) and pay it off today. Then throw that 1k/mo either at your CC/auto loan (if applicable) and pay them off, and then replenish savings till you have 6mo of expenses in there. Then bump retirement savings up. I would say it's somewhat stable. I work for a startup but I've also been looking for new opportunities; which is why I've been so hesitant. Thanks for the advice! I don't have any CC or auto loan debt to pay so I think I might also take grumpwagons advice and pay off a chunk (10k?). Does that sound reasonable?
|
|
#
?
Aug 29, 2014 20:41
|
|
|
As the end of the month approaches and I am looking at the $900 balance on my credit cards that is due on the 26th of September. Normally I pay the things off every two weeks but this month I told myself I'd just let Chase automatically pay the full statement balance for me every month and I'd stop micromanaging it, since functionally I'm not going to pay interest that way either. But having the balance sitting there staring at me just makes me nervous because I really don't trust that something's not going to go wrong with the payment processing and I'll get hit with interest or something like that. I'm just worrying about nothing, right?
|
|
#
?
Aug 29, 2014 20:48
|
|
|
It will be fine. Two possible problems: one, you let your bank account get low and there isn't enough in it to cover the automatic payment. Two, you start spending more than you meant to with the card because you're paying less close attention. Bank-initiated autopay fuckups really aren't even on the radar.
|
|
#
?
Aug 29, 2014 21:09
|
|
|
I don't mind waiting for the statement and paying once, but I don't really like waiting for the 3 weeks after the statement is generated to actually see it get paid. I feel like it makes it harder to notice potential security issues quickly, and is kind of weird. If you can set it up to pay as soon as the new statement is available you would still have at least 2 weeks to solve any problems that come up though.
|
|
#
?
Aug 29, 2014 21:10
|
|
|
This is going to sound like a series of stupid questions but this is the newbie thread, so... Background: I live in Canada right now. I recently opened an account with Questrade and have maxed out my contributions to the TFSA and RRSP accounts I have with them. However, because I was an idiot about investing and never did it until now, I had about $18,000 sitting in my checking account with RBC, taking up space and gathering dust. I transferred about $15,000 of that cash into Questrade, opening an individual margin account with it and buying Canadian Couch Potato approved ETFs. What I want to know is: 1) Was opening the margin account to invest some of that checking account money a good call? If not, what can I do with my checking account money, preferably investment-wise? 2) Can I open more than one TFSA and RRSP account? If not with Questrade, then maybe with TD? Or is that illegal / will cost too much tax / etc.?
|
|
#
?
Aug 29, 2014 21:11
|
|
|
slap me silly posted:It will be fine. Two possible problems: one, you let your bank account get low and there isn't enough in it to cover the automatic payment. Two, you start spending more than you meant to with the card because you're paying less close attention. Bank-initiated autopay fuckups really aren't even on the radar.
|
|
#
?
Aug 29, 2014 21:30
|
|
|
Trying to figure out what my focus should be the next few years... Background: Age 28 No real risk of job loss (tenured, in a high-need position, etc) I make enough to live decently and have some fun, too Great health insurance Put 10% pre-tax into my 401(a), will receive a pension - this year + 3 more to be vested Put an additional $100 per month into a Roth Emergency Fund: $3,000 Debt: Car loan: $12,827.58 remaining at 2.9% Minimum payment is $299, I pay $400. Balloon payment of $1,200 once a year as well. At the rate I am paying, this will be paid off in Jan of 2017. The situation: I am starting my Masters on Oct. 1st. The cost of the entire degree (incl. books and various fees) is $12,600. The first $7000 will be covered by a Loan Forgiveness Program, which takes care of the entire first year plus a smidge of the second. Loan Interest is 6.21% My original goal was to have $5,000 in the e-fund. However, since my income is extremely stable… I've been thinking. Idea 1: $5k in e-fund (would be completed in January) Continue paying $400/mo on car loan Start saving in Feb. for the $5,600 of the Masters I would be responsible for. Barring a huge emergency, I'd need to take out $3k in loans. Idea 2: $3k in e-fund (done) Continue paying $400/mo on car loan Start saving Nov. 1 for Masters degree Barring a huge emergency, no additional loans needed for the Masters. Build the e-fund up to 5k once I have enough $$$ for the Masters. This may all be moot as my Nana said she'd give me $5k for the Masters, but she often says these things and then forgets about them… so I'd rather be happily surprised than disappointed later. Is putting off the final $2k of the e-fund too much of a risk?
|
|
#
?
Aug 30, 2014 17:06
|
|
|
Your emergency fund should cover more than just finding a pink slip on your desk. For instance, if some kind of personal or family emergency that requires travel pops up, you can easily blow through a few grand on last-minute plane tickets and lodging, let alone whatever money it takes to actually deal with the issue. If you suddenly need to hire a lawyer, it's a lot easier with a couple thousand dollars to put down as a retainer. If you're in an accident and need to take unpaid medical leave, your health insurance might cover the medical bills, but even good disability insurance will only pay out a percentage of your salary. I'm sure you can come up with other improbable-but-not-implausible emergencies yourself. Because of all this, it's a really good idea to have a sizable cash emergency fund. Living debt free is fantastic, but people don't accept "I'm debt free" in place of cash. You might be able to use a strong credit history to finance your emergency with debt (which isn't necessarily a bad idea if you're in a true emergency!), but if lenders pick up on the fact that you're in the middle of an emergency, they'll get nervous about risk. Have you considered redirecting the principal payments you put towards the car to the emergency fund instead? 2.9% isn't a bad rate at all, and once you're up to your emergency fund target, you can put that monthly/annual allocation back towards the car. You could keep up with the Idea 2 strategy to dodge student loans entirely, as well.
|
|
#
?
Aug 30, 2014 20:28
|
|
|
|
| # ? May 12, 2024 01:35 |
|
|
It's a completely subjective decision. But your loan amounts and rates are not bad, you have decent income, just make it $5k and revisit things after you finish the masters.
|
|
#
?
Aug 30, 2014 20:34
|
|