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Faerunner posted:This is not the best course of action depending on card issuer as they may continue to charge delinquent/late fees, but have her make calls to her card companies and see about negotiating lower payment options. I was able to negotiate with Discover - on an $8k debt (don't put student loans on your credit card, kids!) they allowed $100/mo payments and no more interest charges as long as I paid on time every month. EugeneJ posted:Is her credit hosed at this point? If she isn't behind on payments and still has a decent credit score, have her apply for a couple new cards that have 12-18 month no interest promotions and have her do balance transfers to the new card(s). That way she can pay down the debt without having it gain more interest.
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Dec 6, 2015 08:33
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She would probably be better off declaring bankruptcy than doing what you're suggesting. She either needs to get those cards on a zero-interest balance transfer, or make substantially more money, or substantially cut her expenses. She may want to talk to a bankruptcy attorney, too. If she does the balance transfer thing, just have her put it on the card, then don't give her the number to it. She can make payments online without it.
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Dec 7, 2015 00:01
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Why is she making only $900 a month? That's the real issue here. Besides outrageous spending problems.
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Dec 7, 2015 17:04
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Are there any resources available to help people reframe budgeting and spending choices? I helped someone set up a budget. They have some significant student loan debt (no other debt than student loan). They are having a hard time feeling like they can spend money on 'fun' things. There is ~100 per month budgeted for hooker's and blow, and everything else is pretty tightly budgeted to pay down the loans asap to avoid thousands of dollars in interest. I've tried the explanation around hour debt is negative savings. I recommended they make a large payment with some savings they have, while still maintaining an emergency fund. That suggestion didn't go too well. Overall their spending choices are pretty solid without extraneous unneeded purchases. Unfortunately they have a ton of student loans because they got no help from family and they were unable/didn't know if they could file without parents income level (which was high enough to disqualify them from getting any financial aid.) The issue is just around feeling they can't make purchases of things they want, even with a fairly significant allowance for discretionary spending.
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Dec 7, 2015 17:28
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Maybe I am a debt repaying robot, but I fail to see the issue... Have them make a wish list of things they definitely want and set the money aside?
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Dec 7, 2015 18:34
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Yea I've been having trouble understanding what the issue is which was why my op was so long.
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Dec 7, 2015 19:41
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"They can't" meaning they don't have enough money for the things they want or meaning they can't justify buying stuff while in so much debt?
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Dec 7, 2015 20:09
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It's more that they feel they can't make purchases of things they want, but the budget seems pretty reasonable to me. They understand the need for a budget and sticking to it, just the 'sticker shock' of having so much of it go to loans may be the issue.
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Dec 7, 2015 20:20
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Massasoit posted:It's more that they feel they can't make purchases of things they want, but the budget seems pretty reasonable to me. They understand the need for a budget and sticking to it, just the 'sticker shock' of having so much of it go to loans may be the issue. Maybe they don't want to be debt free. Lots of people are in that group. $100 a month is a very very small amount of blow money, but priorities matter. If you want to pay minimums for 20yrs, do that, and blow more. If you want to be debt free and have your entire income at your disposal, stick to a budget. If this is a SO, sever. I speak from experience.
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Dec 7, 2015 20:56
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It's possible that this is just the initial moaning about being on a budget. They will either get over it with time or they won't stick to it. Otherwise the extent of the indebtedness has hit them and they don't realise how important the fun money is. The scale of debt and the length of time to repay can be overwhelming.
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Dec 7, 2015 23:03
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Honestly when you have a lot of debt, even "good debt" like student loans, it is daunting. It can cause burn out when you have a tight budget and you are trying to knock them out fast. Not everyone can withstand the pressure while doing that. There are times when spending $50-100 more a month may push back the debt payoff a year or two but your mental state is much better off. This year I feel like I made the choice to spend more money for fun and I have had a better life cause of it.
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Dec 8, 2015 00:07
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Debt and consumption are friends with each other. The truth is that they could probably have afforded $250/month in "fun" spending all along, but because they became accustomed to spending $400/month, they can now only afford to spend $100/month for a while until they can get back to a good equilibrium.
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Dec 8, 2015 01:00
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Anyone maxxing out their discounted employee stock plan to get the free money? Do you keep it for a year to save on taxes or sell right away? I'm leaning towards keeping it for a year. Both my company's stock and my wife's are around 2 on Yahoo Finance's recommendation summary (1 = strong buy, 5 = strong sell), so it should be somewhat safe. At most we will have like 10% of our net worth tied up in company stock.
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Dec 8, 2015 14:32
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Hashtag Banterzone posted:Anyone maxxing out their discounted employee stock plan to get the free money? Do you keep it for a year to save on taxes or sell right away? Is an extra 15%ish in tax savings worth the risk of the stock going down by more than 15%?
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Dec 8, 2015 14:51
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Any idea how to get back that 15%? My company withholds taxes on it as an imputed income item.
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Dec 8, 2015 15:17
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Hashtag Banterzone posted:Anyone maxxing out their discounted employee stock plan to get the free money? Do you keep it for a year to save on taxes or sell right away? I sell that poo poo as soon as I get it and just use it to buy index funds in my Roth. Enron was a strong buy for a long time too.
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Dec 8, 2015 15:37
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Hashtag Banterzone posted:Anyone maxxing out their discounted employee stock plan to get the free money? Do you keep it for a year to save on taxes or sell right away? I'm not legally qualified to give tax advice, but you should probably wander over to the income tax forum. My understanding is that the "free money" (typically a 15% discount) is treated as ordinary income regardless of when and whether you sell. The only place where the 1 year hold comes in to play is related to capital gains on the stock price above and beyond the market price on the day the purchase executes. In short, holding for a year won't have any impact on the tax you owe due to the discounted purchase price.
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Dec 8, 2015 16:09
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danielski posted:I'm not legally qualified to give tax advice, but you should probably wander over to the income tax forum. My understanding is that the "free money" (typically a 15% discount) is treated as ordinary income regardless of when and whether you sell. The only place where the 1 year hold comes in to play is related to capital gains on the stock price above and beyond the market price on the day the purchase executes. A lot of people hold for 366 days to receive preferential tax treatment. IMO, it doesn't offset the risk. See: Enron comments. Now, if you are comfortable with gambling with 10% of your net worth (a lot of people are comfortable with 5-10% of their NW in single stocks), go for it. I cash out the day after the offering period ends.
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Dec 8, 2015 17:40
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Our tax documents say that 2 years makes the 15% taxed as capital gains.
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Dec 8, 2015 17:55
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Rurutia posted:Our tax documents say that 2 years makes the 15% taxed as capital gains. That sounds like a tax qualified "section 423" plan. My understanding is that discount of the stock is still treated as ordinary income even if you hold for the two years. I do believe you get the benefit of avoiding SS and Medicare withholding.
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Dec 8, 2015 18:30
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Hello money nerds. I don't know exactly what kind of advice I'm looking for so I'll do my best to explain my situation and accept some suggestions for how to optimize what I have going on. I'm a software developer and I'm making $90k gross. After everything I take home $4748/month. This is great because I am fully supporting myself, paying all of my bills on time, and living well. I have lovely credit but I am also slowly working on that. HOWEVER, I have spending issues (probably due to the fact that prior to my career I had terrible, terrible habits) and end up driving myself into negatives and I'm unable to save money. The obvious answer is to stop spending money, but that's not all that fun (my main life goal at this point), so I'm wondering what types of ways exist to force myself to save, and maybe get something back. I know nothing about investments, and my savings account is a normal boring Chase savings account. I have a budget spreadsheet, it's probably OK but maybe could be more comprehensive, and I really just want to pay someone to do all of this for me but I should probably know how to handle it on my own. Thanks for any help.
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Dec 9, 2015 01:07
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Put more in retirement? Spend less money.
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Dec 9, 2015 01:10
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Put your savings into a 1% online savings account and make some actual money - Ally comes highly recommended around here Post your budget if you want and we'll point out areas you can improve upon
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Dec 9, 2015 01:21
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EugeneJ posted:Put your savings into a 1% online savings account and make some actual money - Ally comes highly recommended around here This seems cool, thanks for the suggestion.
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Dec 9, 2015 01:36
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Power Ambient posted:This seems cool, thanks for the suggestion. You won't be content with saving more and spending less until you set some goals. You have to change the underlying principle, not just the action. Why do you want to change your habits?
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Dec 9, 2015 01:43
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Piggybacking off that - do you get a 401k match from your employer? If you're not already putting in enough to get the maximum match, you're losing out on free money. The generally accepted steps for savings here are: -Emergency fund with 6 months worth of expenses, stored in a 1% savings account -401k up to the match -Max an IRA (and an HSA if you want) -Max your 401k And then you're on the way to becoming rich EugeneJ fucked around with this message at 13:43 on Dec 9, 2015 |
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Dec 9, 2015 01:46
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SiGmA_X posted:Why do you want to change your habits? Mainly because paycheck to paycheck I blast through all my money and end up in the negatives and it seems really wasteful so I'd like to figure out a way I can do the things I want to do but still be building savings. I still have farther to go in my career and will end up making more money but I'd like to setup better habits now. EugeneJ posted:Piggybacking off that - do you get a 401k match from your employer? Not sure about the employer 401k. A thing I should probably know, but don't. I know I'm contributing but it's probably not very much. That emergency fund is likely my first real step but that will take a while to get to the 6 month level. I know nothing about IRAs either and wouldn't really know where to begin with that. Any relevant reading on the subject is very happily accepted. Asshole Masonanie fucked around with this message at 03:42 on Dec 9, 2015 |
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Dec 9, 2015 03:38
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Well, you need an emergency fund in cash (i.e. in a checking account) so at some point, you're going to have to learn to control yourself enough to not dip into that. Otherwise, max out a Roth IRA every year and max out a 401k. And then, as long as your emergency fund is healthy, the rest can be fun money, as long as you don't have any savings goals like a new car, house, etc. But step one will be a budget to tell you where your money is going and find alternatives. And here's a hint, you clearly can't do the things you want to do and still build savings. You already know that. There's no magic to anything we tell you, just numbers.
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Dec 9, 2015 03:47
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Power Ambient posted:Mainly because paycheck to paycheck I blast through all my money and end up in the negatives and it seems really wasteful so I'd like to figure out a way I can do the things I want to do but still be building savings. I still have farther to go in my career and will end up making more money but I'd like to setup better habits now. If you invest money other than retirement savings you can actually grow your income each year. That income can reach a point where you get the lifestyle that you want. Sticking to your budget is important no matter how much you make. You don't want to end up with $120k of high interest debt in 10 years time as that would really cut into your lifestyle spending. Do max out your retirement savings to get as many free contributions as possible.
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Dec 9, 2015 05:47
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Power Ambient posted:Mainly because paycheck to paycheck I blast through all my money and end up in the negatives and it seems really wasteful so I'd like to figure out a way I can do the things I want to do but still be building savings. I still have farther to go in my career and will end up making more money but I'd like to setup better habits now.
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Dec 9, 2015 06:17
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Thanks for the advice. CLEARLY, I have some work to do.
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Dec 9, 2015 08:12
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Power Ambient posted:Thanks for the advice. CLEARLY, I have some work to do. I'm guessing you do live in an expensive area of the country, so some of your income is def going to cost of living. But what else are you spending to blow through money? Is it bars, food, collectibles, Star Wars, etc?
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Dec 9, 2015 14:14
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Duckman2008 posted:I'm guessing you do live in an expensive area of the country, so some of your income is def going to cost of living. But what else are you spending to blow through money? Is it bars, food, collectibles, Star Wars, etc? All different types of things. Bars, restaurants, lots of money spent on taking Uber because of my location, household things, occasionally fun toys, clothes... I guess most of the stuff I buy is above-average expensive. And most of the places I eat and drink are above-average expensive. Like I'm not eating 50$ steaks all the time but I use Grubhub a lot. I'm likely just nickle and diming myself and need to stick to a much more strict budget. I'm liking the ideas of putting my money into these various kinds of accounts that build on interest, especially if I don't have immediate access to it. Everyone who has said I should stop spending is 100% correct and I figured that was the real answer here but I decided to ask anyway. In the event I wanted to hire someone to manage my money for me on a semi-regular basis and walk me through making a budget, what type of person should I look for? CPA? Is there a way to find reputable ones? Also, is there any budgeting software that isn't the basic spreadsheet I'm using right now that's actually good? I'm stepping away at this point. I'm going to read the threads in this forum and try to implement some new rules. Thanks again for all the feedback. Asshole Masonanie fucked around with this message at 19:46 on Dec 9, 2015 |
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Dec 9, 2015 18:51
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You should sign up for mint so you can see how much you are spending on stuff. Just seeing the monthly total spent on food, uber, alcohol, etc will help.
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Dec 9, 2015 19:10
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You don't make enough money to have someone manage your money. You should just start by maxing out your 401k every year and then Roth IRA if you qualify. How much are you putting per year into retirement?
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Dec 9, 2015 20:02
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Power Ambient posted:In the event I wanted to hire someone to manage my money for me on a semi-regular basis and walk me through making a budget, what type of person should I look for? CPA? Is there a way to find reputable ones? Unfortunately CPAs have a bad record in relation to sensible financial planning. While this is completely counter intuitive it's an unfortunate truth. There are financial planners who would be more helpful with what you are trying to achieve and would give advice similar to what you are getting in this thread/subforum. Start out with what you are doing now. If you use mint (which I also think would be helpful) and figure out where you money is going then you have something to action. Once you know what you spending issues are then it might be a good time to get on-going financial advice to help keep some financial discipline. In the mean time you have a bit of interesting reading to do. Definitely check out the retirement thread OP as there are recommendations that lead to good investing decisions.
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Dec 9, 2015 20:06
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spwrozek posted:You don't make enough money to have someone manage your money. You should just start by maxing out your 401k every year and then Roth IRA if you qualify. How much are you putting per year into retirement?
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Dec 9, 2015 20:07
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Power Ambient posted:All different types of things. Bars, restaurants, lots of money spent on taking Uber because of my location, household things, occasionally fun toys, clothes... I guess most of the stuff I buy is above-average expensive. And most of the places I eat and drink are above-average expensive. Like I'm not eating 50$ steaks all the time but I use Grubhub a lot. I'm likely just nickle and diming myself and need to stick to a much more strict budget. I'm liking the ideas of putting my money into these various kinds of accounts that build on interest, especially if I don't have immediate access to it. Everyone who has said I should stop spending is 100% correct and I figured that was the real answer here but I decided to ask anyway. You should make a thread in here. Start tracking your spending, post a budget spreadsheet, etc. The way retirement savings works is that money saved now is worth much more than money saved later. Additionally, given the caps on tax-advantaged savings accounts, you're costing yourself a ton of free money by not taking advantage of them now. When you realize how much you cost yourself by not maxing out your retirement funds this year (which you could easily afford to do), you'll be kicking yourself.
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Dec 9, 2015 20:22
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Power Ambient posted:In the event I wanted to hire someone to manage my money for me on a semi-regular basis and walk me through making a budget, what type of person should I look for? CPA? Is there a way to find reputable ones? Part of the issue with spending is that you get so used to lifestyle inflation, it doesn't make you happy anymore. And then you're on a hedonic treadmill, spending more and more and not being any happier for it. Setting budgets for yourself will help the symptoms, but fixing the root cause (why do you want to spend?) will help you go farther and be happier in the long run.
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Dec 9, 2015 23:33
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So, I've been dropping money into my company's ESPP for the last 3 years without really thinking much about it. Recently, I realized that I probably shouldn't leave my money just hanging out in one stock, and should probably switch to a method of selling shortly after the purchases, since there are no holding limits, and based upon the previous purchases, I'd net out about a 20-25% gain each quarter. It's worked out in my favor that I've held on for so long, since the first few purchases were around $20 or so, and the stock has been holding steady in the mid 40s for the last few months. Right now, my overall gains are around 40%. Since I've been holding for so long, approximately 40% of the funds are "qualified", meaning I'd only need to pay the 15% LTG tax, while the remaining 60% are unqualified, whose profits would be taxed at my 28% income tax rate. I'm wondering if I should cash in the first 40% now, and then start cashing out the other 60% as it becomes qualified every quarter, or if I should just suck it up and cash everything out all at once? I'm leaning towards cashing the whole thing out, but then if I do that, I'm wondering if I should do it now, or wait until the new year, just to push the extra tax burden off until next year. Starting with the next purchase in February, I'll just start selling the funds the day after the purchase, I'm just unsure of when to liquidate the existing holdings.
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Dec 10, 2015 07:37
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