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From a strictly mathematical point of view, if your investment returns are more than your interest rates on debt, you should keep the money in your investments (minus your minimum payments on the debt of course). But on top of investment returns usually not being guaranteed, there are a lot of psychological factors to consider as well. Even if you would have made a few more bucks keeping your money in investments, I think getting out of debt sooner is usually the better choice because it is a huge burden lifted from you and in my opinion being out of debt is probably worth more to my general happiness and sanity than having that much more money in investments. Of course if you're getting a guaranteed 15% or something in investments and your debt is 3.5%, I'd stick with investing and just pay off the minimum on your debts, but that is a pretty far fetched scenario.
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Nov 10, 2014 17:01
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My former employer set up a traditional IRA for me. Apparently I had a pension and I didn't know it. They discontinued their program and everyone who didn't respond in a timely manner got traditional IRAs. My IRA has ~$2200. My goal is to save this for retirement. Does it make sense to convert my traditional IRA to a roth IRA? My understanding is that I'll have to pay for early withdrawal and taxes if I convert it, but even with these upfront costs the Roth IRA would be better for retirement savings because I'm paying taxes as a 26-year old making $41.5k/year instead of paying higher taxes as a near-retirement age adult. I also like the idea of being able to withdraw from the roth for a house if I wanted, but honestly my main focus is retirement savings. Does this make sense or am I wasting my time? legsarerequired fucked around with this message at 18:53 on Nov 10, 2014 |
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Nov 10, 2014 18:51
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I'm in some serious need of ideas. My wife and I just got married and moved into our own place. With her bills and my bills combined, we are in the hole about 99.9% of the time. I've cancelled anything excess I can find. We don't buy anything that isn't necessary. It isn't our spending killing us but our monthly bills. Mostly debt we both created before we were together. Right now, our credit card debt from before is our biggest issue. Knocking 1-2 of them out will pretty much save us. The problem is, how do we get ahead enough to do that without driving ourselves farther into debt to do it? I can only think of a loan but that might be just shifting money  Edit: Current bills Rent: 810/mo Car 1: 387/mo Car Insurance: $210/mo Internet: $60/mo Gas: Around $150/mo (her car is older and only takes premium. Mine is newer and better gas milage) Short Term Loan: $180/mo ($658 left) Credit Card 1: $33/mo ($156 left) Credit Card 2: $27/mo ($934 left) Credit Card 3: $62/mo ($1908 left) Credit Card 4: $92/mo ($3,300 left) Credit Card 5: $188/mo ($5,109 left) Credit Card 6: $422/mo ($10,929 left) Student Loan: $50/mo ($9,000 left) Medical bills: $100/mo ($600 left) We both make around $16 an hour. Around $3800 a month take home. About the only thing I haven't lowered completely is Internet but it saves $35/mo tops.  I know it's a ton of CC debt. We both did the worst possible thing but we're fine living sparse to fix it. I know the snowball method and such but I can't even reach that point right now
Irritated Goat fucked around with this message at 19:14 on Nov 10, 2014 |
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Nov 10, 2014 18:51
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By cutting spending and increasing your income, which is about the best answer you're going to get with the details you've posted. You need to evaluate all of your income, spending, and debts and post them here if you want us to be able to give you relevant advice. Look a few posts up for examples. Really, the first step to figuring out the solution is to completely understand the problem - which, in your case, is a complete picture of your financial situation.
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Nov 10, 2014 18:59
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Unless I missed something it seems like your total expenditures is about: $2771 a month. Although you left out food, electricity, entertainment and I'm sure a few other things. Could you please estimate your total monthly expenditures? Do you think you'll have anything left over at the end of the month?
Sephiroth_IRA fucked around with this message at 19:28 on Nov 10, 2014 |
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Nov 10, 2014 19:24
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Sephiroth_IRA posted:Unless I missed something it seems like your total expenditures is about : $2771 a month. Although you left out food, electricity and I'm sure a few other things. Do you think you'll have anything left over at the end of the month you can pay your debt down with? Do you have anything you can sell? I did forget food. We're trying to keep it to $150\mo as best we can. Energy is coming as it's in the middle of transferring from the complex to my name. Yay! Another bill! We often don't have anything left. I can find some small things to sell but I don't think it would amount total to enough to get us in a more stable position.
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Nov 10, 2014 19:27
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How much do you owe on the car you are paying off, how much is it worth and what's the interest rate? Is the $210 a month insurance bill due to multiple accidents or something? Edit - Also can you provide the interest rates for the loans?
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Nov 10, 2014 19:30
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Yeah I was about to say that $210 seems pretty high for car insurance.
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Nov 10, 2014 19:33
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Hashtag Banterzone posted:How much do you owe on the car you are paying off, how much is it worth and what's the interest rate? About $10k on the car. It's a 2013 Civic so Kelley says 17,090 - $17,944. The insurance is cause I live in Louisiana, home of some horrible bastards. 1 claim on my record but it'll fall off shortly. My short term is real low. 5% I believe. It's a thing by my credit union. I can get the exact number on it if need be. Irritated Goat fucked around with this message at 19:37 on Nov 10, 2014 |
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Nov 10, 2014 19:33
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It's a BFC cliche, but you and your wife should talk about selling your car and getting something cheaper. A $10k car could probably get your payments down to like $200 a month and you could pay off a lot of your debt with the cash. Plus your insurance would decrease. And speaking of insurance, you should look into getting cheaper insurance. Maybe even considering state minimum coverage.
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Nov 10, 2014 19:46
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Irritated Goat posted:About $10k on the car. It's a 2013 Civic so Kelley says 17,090 - $17,944. The insurance is cause I live in Louisiana, home of some horrible bastards. 1 claim on my record but it'll fall off shortly. Is it possible to go without a car at all, at least until you pay off your credit cards? For the record, I'm not talking out of my rear end here. I live without a car. I rent one occasionally on the weekends, but that's it. And I have no debt. I'm just a frugal bastard who bikes a lot.
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Nov 10, 2014 20:01
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Rick Rickshaw posted:Is it possible to go without a car at all, at least until you pay off your credit cards? Not really. Most things around here are spread out and I live on a road with no sidewalks and people who will almost hit you. I'm going to see about maybe refinancing to see if I can get the bill down. If it makes a decent dent, I'll be a step better off than I am now.
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Nov 10, 2014 20:09
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Irritated Goat posted:Not really. Most things around here are spread out and I live on a road with no sidewalks and people who will almost hit you. I'm going to see about maybe refinancing to see if I can get the bill down. If it makes a decent dent, I'll be a step better off than I am now. What about moving to a more walkable/bikeable area? Is family keeping you where you are?
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Nov 10, 2014 20:18
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Irritated Goat posted:I did forget food. We're trying to keep it to $150\mo as best we can. Energy is coming as it's in the middle of transferring from the complex to my name. Yay! Another bill! You state your combined take-home is 3800 but, as was said, doing the math on what you've posted shows 3000 in expenditure. But then again, you say that at the end of the month, you have nothing left. So, now, you need to reconcile these two statements. You basically have 800 dollars that you're either not getting paid or getting stolen from you, from exactly what you've said. Do you and your wife have fixed hours or do they fluctuate? Really figure out how much you're getting paid each month, especially if it's the latter. Figure out where your money is going. Save every single receipt, categorize it, record it. It's a huge pain in the rear end but you absolutely need to do it. I imagine rent is fairly cheap in Louisiana? Is cheaper housing an option? How about eliminating one of the two cars? Is that feasible?
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Nov 10, 2014 20:29
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totalnewbie posted:You state your combined take-home is 3800 but, as was said, doing the math on what you've posted shows 3000 in expenditure. But then again, you say that at the end of the month, you have nothing left. Hours are static. Rent is average. $810 is going rate for a 2 bedroom but we just moved in so moving isn't an option. Our difference in schedules kills any chance of a car elimination. She works at 1pm and I don't leave till 4pm and only get 30mins lunch. I'll have to record every pay and see how I am there because I know my account is empty and the estimate on pay is pretty close (maybe $20-30 off tops).
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Nov 10, 2014 20:36
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Rick Rickshaw posted:What about moving to a more walkable/bikeable area? Is family keeping you where you are? This is a bit of a generalization, but the south sucks in terms of infrastructure for public transit. Unless Louisiana means downtown New Orleans, I would bet that it would be really hard to function without a car Edit: that's $30K in credit card debt, and $3800 over 12 months is $45K combined yearly income. Personally, the only real answer is for one of you two to find a higher paying job. But on the income level, if you split it evenly you both are making about $12 an hour. Even getting a bump up to $15 for just one person for 40 hours a week would be an extra $120 a week, and an extra $6K a year. I don't know enough about bankruptcy to know if that is a good idea to look at or not, but at least your debt isn't student loans on it, so if you ever get to that point you aren't completely stuck. Duckman2008 fucked around with this message at 20:58 on Nov 10, 2014 |
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Nov 10, 2014 20:50
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As a complete side note, would just watching the YNAB videos on budgeting be a good starter? I think I'm going about that part all wrong and maybe it's part of my problem? It's a terrible feeling to tell your SO that we have $0 in the bank account.
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Nov 10, 2014 20:56
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Yes. Yes, it is. Consider reducing your debt your second job and this as training for that job. quote:Hours are static. Rent is average. $810 is going rate for a 2 bedroom but we just moved in so moving isn't an option. Our difference in schedules kills any chance of a car elimination. She works at 1pm and I don't leave till 4pm and only get 30mins lunch. I'll have to record every pay and see how I am there because I know my account is empty and the estimate on pay is pretty close (maybe $20-30 off tops). Maybe consider a small 1BR for the future. If you can get an extra few hundred dollars a month, it will go a long way towards getting those numbers moving in the right direction. There's no reason you need a 2BR (I'm sorry, but don't even think about having a child until you get your finances sorted). totalnewbie fucked around with this message at 21:13 on Nov 10, 2014 |
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Nov 10, 2014 21:11
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Irritated Goat posted:As a complete side note, would just watching the YNAB videos on budgeting be a good starter? I think I'm going about that part all wrong and maybe it's part of my problem? If you're prepared for a little tough-love, feel free to check out this blog post from YNAB regarding getting out of debt. Again, it's tough-love. Only read it if you are looking for constructive criticism of your situation. Really though, if you want to fix your situation fast, you have to deal with the car situation. Having two cars is scary to me. Having two cars while in debt 30 G's is terrifying. Move somewhere that doesn't require (two?) car ownership. These places exist. You don't have kids, right? You have that going for you. Use it to your advantage. There are people dealing with these types of debt loads who also have kids. That's the stuff of nightmares.
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Nov 10, 2014 21:36
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Rick Rickshaw posted:
I understand the thought and the intentions behind this, but it's really, really easier said than done, because likely it will require them both to find better jobs (which, if you're looking for, you should). Plus, it will probably be in a more metro area, where rent will be more expensive. I'm not saying it's bad advice, but just that it's much, much easier said than done.
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Nov 10, 2014 22:25
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Especially when the guy said he just moved into his current apartment. The car is the biggest outlier though, a 2013 Civic is not "living sparse"
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Nov 10, 2014 22:31
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Hashtag Banterzone posted:Especially when the guy said he just moved into his current apartment. It was fine when I was just engaged and such. I'm looking into what I can do with that as it'll be a good way to cut down funds.
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Nov 10, 2014 22:45
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Priorities first, though. Figure out exactly how much money you've got coming in and how much and where that money is going. Then, you can see where you can start cutting. The car payment makes me cringe, but there IS something to be said for having a reliable car under warranty, versus getting some shitbox that may cause more problems than it solves. Irritated Goat posted:It was fine when I was just engaged and such. I'm looking into what I can do with that as it'll be a good way to cut down funds. No. This was not an okay purchase. You may have thought it was okay at the time, you may still think so, but at no point was this a "fine" financial decision. But, done is done and you could have done worse (e.g. a Chrysler). totalnewbie fucked around with this message at 22:58 on Nov 10, 2014 |
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Nov 10, 2014 22:54
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Irritated Goat posted:Our difference in schedules kills any chance of a car elimination. She works at 1pm and I don't leave till 4pm and only get 30mins lunch. Rick Rickshaw posted:If you're prepared for a little tough-love, feel free to check out this blog post from YNAB regarding getting out of debt.
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Nov 11, 2014 00:10
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Irritated Goat posted:With her bills and my bills combined, we are in the hole about 99.9% of the time. Irritated Goat posted:It was fine when I was just engaged and such. So either the great majority of this debt was hers and she was underwater before you were married, or one of you wasn't paying rent or something. Because typically when two people paying for things independently combine expenses, it should get cheaper (ie, no double rent/utilities, bulk food, etc.). Irritated Goat posted:Credit Card 1: $33/mo ($156 left) My first thought is knock down the internet for 3-4 months. Use that $35 to make double payments on this card. When that's done, use the spare $33/mo on another loan (probably the short term, since I imagine that has dreadful terms). Then keep doing the snowball, based on card amount or interest rate, depending on which suits your fancy more. But you really need to learn to budget. The snowball doesn't work if every time you free up money you "lose" it on mindless purchases rather than consciously saving it to pay down debt. And from your credit cards, at least one of you needs to be more conscious of how they are spending their money.
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Nov 11, 2014 00:43
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moana posted:I can't believe I've never read this, it's a great post. There's one quote from that article that really hit home for me: jesse posted:In that instant, you’re doing something that others would find absurd, bizarre, or disturbing, and in that moment, you’ll know you’re on the right track. This applies to how I live my life now that I've gone full-on BFC Approved Frugal®. I think of that quote at least once a week when I find myself doing something others would fine insane.
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Nov 11, 2014 02:13
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Rick Rickshaw posted:If you're prepared for a little tough-love, feel free to check out this blog post from YNAB regarding getting out of debt. drat that was brutal... I feel pretty bad now. Good news is where are working out of debt super fast!
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Nov 11, 2014 02:35
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You have about $1000 you're not accounting for. I'd look into that first. You might also try to consolidate your debt (or the two large ones atleast) onto one card for 0% interest if possible. This would probably save you $4000 or so.
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Nov 11, 2014 03:05
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Rick Rickshaw posted:If you're prepared for a little tough-love, feel free to check out this blog post from YNAB regarding getting out of debt. Thanks for prompting a reread. It's a drat good article.
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Nov 11, 2014 03:08
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moana posted:She drops you off in the morning, you take the bus home or vice-versa, she takes the bus to work and you pick her up. If it takes two hours, who cares. You said your hours were static, here are two hours you can spend every day to save a literal shitton of money. Or buy your way into a carpool from your complex, it's way cheaper than what you owe on car + insurance. Or something. Jesus, get creative here! Don't try to find excuses to stay mired in debt. I've said earlier, there is 0 public transportation in my area of town. There are no sidewalks for portions of my entire way to work. I wouldn't even know where to begin finding a carpool. There's no excuses there. If I had a choice of public transportation, I'd take it in a heartbeat. I checked google with "car pool <my area\town>". The results were sites saying people car pool less but nothing on if it got started. RogueLemming posted:So either the great majority of this debt was hers and she was underwater before you were married, or one of you wasn't paying rent or something. Because typically when two people paying for things independently combine expenses, it should get cheaper (ie, no double rent/utilities, bulk food, etc.). It's actually both. She was underwater and I didn't pay rent. I am aware of the snowball effect but I agree totally I need to learn to budget first before I can even get to step 1. Irritated Goat fucked around with this message at 16:13 on Nov 11, 2014 |
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Nov 11, 2014 16:10
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Do you have thick skin? Are you really willing to take your debt by the balls and knock it out, giving you and your wife the chance to live without crippling debt? If so, start your own thread. Figure out how much you ACTUALLY are bringing in, and how much you are ACTUALLY spending. Do you and your wife share your finances? It's hard to get on the same page if you don't know what each other are doing.
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Nov 11, 2014 16:44
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I am looking at my deductions and retirement planning for next year and cannot make a decision. My employer offers a 401k with a free 5%, regardless of employee deferral. The 401k was new last year as we were in a SIMPLE before that. I have found that the sweet spot for me the past year was contributing 10%, for a total of 15% between my employer and I. The plan also offers a post-tax roth contribution as well. I am stuck between deciding to contribute the amount that I would into a Roth ($458 per monthly paycheck)into the plan instead. The plan is very cheap with fees, so that is not an issue. My thoughts are that if my wife or I were to come into a larger than normal quarterly bonus, we could then fund my actual Roth with that. Am I missing something here?
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Nov 11, 2014 17:08
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something clever posted:I am looking at my deductions and retirement planning for next year and cannot make a decision. My employer offers a 401k with a free 5%, regardless of employee deferral. The 401k was new last year as we were in a SIMPLE before that. I have found that the sweet spot for me the past year was contributing 10%, for a total of 15% between my employer and I.
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Nov 11, 2014 17:33
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Dik Hz posted:Nope, you seem to have a handle on it. Although, keep in mind that you can elect for different deferrals for bonuses. As long as you don't hit the contribution cap. Thank you. I wanted to make sure that I was not missing anything.
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Nov 11, 2014 18:10
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Irritated Goat posted:I've said earlier, there is 0 public transportation in my area of town. There are no sidewalks for portions of my entire way to work. I wouldn't even know where to begin finding a carpool. There's no excuses there.
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Nov 11, 2014 21:06
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moana posted:Motorized bicycle. Scooter. Shitheap car. Find a library near your work that you chill at for a few hours before she comes to pick you up at night or vice versa, she finds a place to chill early in the day after you drop her off [edit: I swear to christ if you say "but there's no libraries nearby waaaaaaa" I'm going to pull this thread over and throw you out]. Any of these is not a ten thousand dollar depreciating noose of debt. Why am I coming up with ideas for you? You know where you live, you start coming up with ideas for you. My car costs half what yours does, and I made a quarter of a million dollars this year. loving stop finding reasons to keep your pretty nice new car; you cannot afford it. It was stupid of you to buy it, and it's stupid of you to want to keep it.
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Nov 11, 2014 22:54
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Edited. Sell the car you froot loop! You have some equity, about 7k or so. Take that money and buy a boring rear end Japanese sedan for 5k, and now you have a small emergency fund (that you never, ever dip into unless you truly have an emergency). Now you go get cheaper car insurance, liability only. There's $300/month between car payments and insurance that you can put towards your debt. You won't need collision because it's a cheap car, and you are going to be extra cautious because you can NOT afford an accident or a ticket. You'll still save on gas, because you are going to cut down or combine trips. You have opportunities here, but they are going to require action and sacrifice. You could be debt free in 2 years if you reign in your spending now. If you think this hurts now, wait until your utilities are getting cut off and eviction notes on your door. You are literally one surprise expense from that reality. Nocheez fucked around with this message at 00:19 on Nov 12, 2014 |
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Nov 12, 2014 00:09
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Rick Rickshaw posted:If you're prepared for a little tough-love, feel free to check out this blog post from YNAB regarding getting out of debt. Way too many words to say, "Spend less money, and make more money." Is that how you get out of debt, really?
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Nov 12, 2014 00:28
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jarjarbinksfan621 posted:Way too many words to say, "Spend less money, and make more money." Is that how you get out of debt, really? I read a whole lot about challenging assumptions and breaking out of an entitled mindset that you seemed to have missed. The point of the article was mostly that you get into debt by allowing comfort/convienance that you cannot afford, and getting out of debt involves shedding a lot of that. It's very much a moralistic argument on top of being  spend lesse: veer right, way right. Now cut Medica--move into an apartment.  I'm a pretty big leftist, but I still like the message. e2: vvvvv mlyp, etc vvvvv DNK fucked around with this message at 01:01 on Nov 12, 2014 |
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Nov 12, 2014 00:38
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DNK posted:I read a whole lot about challenging assumptions and breaking out of an entitled mindset that you seemed to have missed. I don't care for the moralistic slant of the article. It's unnecessary, and comes off smug.
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Nov 12, 2014 00:57
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