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izorpo posted:Funny you should say that. The system just changed in Australia to include positive data rather than only recording black marks. So we're probably going to more closely resemble the US in coming years. quote:The comprehensive credit reporting system should, over time, give credit providers a clearer and more accurate understanding of your ability to repay debts. For instance, if you’ve had trouble making repayments in the past, this may be balanced with information that shows your repayment behaviour has changed since then, and you have more recently been making your repayments on time. Guinness posted:That's pretty much how it is in the US, too. Though having literally zero credit history can be tough, if you have any credit history (even just a basic credit card or some student loans or whatever) at all and don't have anything sent to collections then your credit score pretty much takes care of itself. I don't get why so many people are so hyperconcerned with their credit score unless they are in the act of buying a house with a mortgage.
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Jul 10, 2014 03:41
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I was informed recently that I will be receiving 2% of a $5.5 million trust sometime in the next month or so. Now what do I do with it? Me: 37, single, no kids I will make somewhere between $75-77k this year. Assets: Checking & savings, $22k Stocks, CDs and precious metals, ~$90k Combined IRA & 401k, ~$240k A recently paid off, reliable car that I shouldn't need to replace anytime soon, worth ~$14k A 3 bedroom house, being taxed at ~$90k. I don't know how accurate that is as far as the true market value, I assume it's pretty close? I live in a pretty cheap area for housing. It's not a cardboard box, it's in an area I like and I don't particularly want to trade up to a nicer house or go through the trouble of moving. My Little Pony figurine collection, ~$80k Not really MYLP figurines. Just a fairly nice collection of collectible "stuff". I'm being purposely vague. I put about 11% of my income into pre-tax retirement, no employer match. I save a varying amount of money post-tax each month, usually $400-500 now that my car's paid off. Debt: 89k on the house at 5.75%, 10 years into a 30 year mortgage. I guess I have credit card debt, but IMO it doesn't really count because I always pay off the balance each month. My first thought was take $89k and pay off the house, $5-7k and do some house repairs that should probably be done sometime in the next couple years (new roof, etc) and save the rest. Use the ~$8k/year I now have extra from not having a mortgage towards more pre-tax retirement savings. I like one this best because I like the idea of being debt-free. But I'm easily paying my mortgage right now so this might be a little conservative. My second thought was to use $5-7k for repairs and then use the rest to max out my pre-tax retirement savings for however many years I can. Assuming the $17.5k 401k and $5.5k IRA contribution limits remain the same, and I keep doing the ~$8k/year I'm already doing now, then I'll be able to put in an extra $15k/year for about 7 years. My third thought was that someone else might have a better idea, so that's why I'm making this post.
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Jul 11, 2014 03:48
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I'm kind of thickwitted but I don't see any better ideas off the top of my head. You could argue it either way but my preference would be to pay off the mortgage - 5.75% isn't super high but it would be a nice thing to get out from under. The extra cash flow would be nice too. But also take 5 grand and go on a cool trip or something, yo.
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Jul 11, 2014 04:36
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If you have an HSA through work you could throw some duckets in there I guess.
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Jul 11, 2014 04:43
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slap me silly posted:But also take 5 grand and go on a cool trip or something, yo. I had a much smaller windfall (low 5 figures) about 10 years ago and I blew a lot of it. I already spend too much on stupid stuff (see the "MYLP figurine" collection) and don't need to repeat previous experiences. Also I'm a contractor and get no paid time off so I don't take many vacations, because it's effectively money out of my pocket when I'm not working. Yes, I'm working on getting a different job. Veskit posted:If you have an HSA through work you could throw some duckets in there I guess. Noooope.
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Jul 11, 2014 05:29
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IntensivePorpoises posted:I was informed recently that I will be receiving 2% of a $5.5 million trust sometime in the next month or so. Now what do I do with it? Boring financial situation by BFC standards so I'll just go with the go-to BFC advice of cutting your cell phone bill and spend less on restaurants. Oh wai..
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Jul 11, 2014 05:37
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IntensivePorpoises posted:I had a much smaller windfall (low 5 figures) about 10 years ago and I blew a lot of it. I already spend too much on stupid stuff (see the "MYLP figurine" collection) and don't need to repeat previous experiences. Also I'm a contractor and get no paid time off so I don't take many vacations, because it's effectively money out of my pocket when I'm not working. Yes, I'm working on getting a different job. Heh, I'm gonna go ahead and say you seem to have your poo poo pretty much under control.
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Jul 11, 2014 05:40
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IntensivePorpoises posted:I had a much smaller windfall (low 5 figures) about 10 years ago and I blew a lot of it. I already spend too much on stupid stuff (see the "MYLP figurine" collection) and don't need to repeat previous experiences. Also I'm a contractor and get no paid time off so I don't take many vacations, because it's effectively money out of my pocket when I'm not working. Yes, I'm working on getting a different job. But yeah, it's not as if paying down the home loan would be staggeringly stupid or anything. It's largely six of one, half a dozen of the other, and comes down to how much you personally value liquidity. Ham Equity fucked around with this message at 09:21 on Jul 11, 2014 |
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Jul 11, 2014 09:18
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If I were to come into 100K (note: I owe roughly the same amount as you do on your home) I would send a check to Chase Mortgage Company and enjoy having no home payment. 5.75% is high enough that paying it off is a pretty good return on your investment. I would then take my mortgage payments for the rest of the year and toss them in a Smartypig and take a vacation to Hawaii over the winter.
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Jul 11, 2014 15:20
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Nocheez posted:If I were to come into 100K (note: I owe roughly the same amount as you do on your home) I would send a check to Chase Mortgage Company and enjoy having no home payment. 5.75% is high enough that paying it off is a pretty good return on your investment. Yeah, 5.75 is high enough I'd just pay that off. What to do with the rest is up to you, maybe keep it around for an extra large emergency fund in order to help change jobs.
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Jul 11, 2014 18:52
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IntensivePorpoises posted:I was informed recently that I will be receiving 2% of a $5.5 million trust sometime in the next month or so. Now what do I do with it?
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Jul 11, 2014 21:58
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Well, sounds like paying it off is the best idea. Now just to wait for the trustee to mail the check...
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Jul 11, 2014 22:07
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You could also use that money to support you taking days off to go to interviews and such to find a better job. You could also use that money to support you in taking a pay cut if your current job really is lovely like you're making it sound like.
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Jul 11, 2014 22:19
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I just sold $15k worth of stock, which I added to the $3k I had in savings. I paid off my credit card debt(1k) in full. I have no other debts besides $45k in student loans -- mostly at 3% except for $5k at 6.8%. I pay the minimum payment every month, $325. What should I do with this money? Reinvest? Throw at my student loans? Hookers and blow? edit: also, how much will I need to reserve for taxes? ashgromnies fucked around with this message at 00:18 on Jul 14, 2014 |
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Jul 14, 2014 00:09
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ashgromnies posted:I just sold $15k worth of stock, which I added to the $3k I had in savings. Private student loans or federal student loans?
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Jul 14, 2014 00:13
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EugeneJ posted:Private student loans or federal student loans? I have $38,500 in private and $6,500 in federal
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Jul 14, 2014 00:18
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At least pay off the 6.8% loans.
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Jul 14, 2014 02:28
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nelson posted:At least pay off the 6.8% loans. Good idea. Done.
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Jul 14, 2014 03:02
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ashgromnies posted:Good idea. Done. Do you have an emergency fund with 6 months worth of expenses?
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Jul 14, 2014 03:57
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EugeneJ posted:Do you have an emergency fund with 6 months worth of expenses? Nope. Not according to my Mint budget spending, at least.
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Jul 14, 2014 05:23
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Also, how much will I owe in taxes on my sale of $15k in stocks? I have $35k in my old employer's 401k, and am contributing 10% of my salary to my new employer's 401k. Am I better off rolling that $35k into my new 401k or should I open a IRA? I don't know anything about those. Thanks for the help. I want to get my budget under control this year, it's stupid that I don't have more money saved up.
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Jul 14, 2014 05:27
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ashgromnies posted:Also, how much will I owe in taxes on my sale of $15k in stocks? As with everything in life, "it depends". What was it bought at, and how long did you hold it? That would determine if it is subject to long term or short term capital gains. Was it multiple lots purchased at different times, part off an Employee Stock Purchase Plan, or some other kind of pre-discounted price compared to market price?
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Jul 14, 2014 05:56
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SpelledBackwards posted:As with everything in life, "it depends". What was it bought at, and how long did you hold it? That would determine if it is subject to long term or short term capital gains. Was it multiple lots purchased at different times, part off an Employee Stock Purchase Plan, or some other kind of pre-discounted price compared to market price? Employee stock plan, purchased at $12.50, sold at $31. Executed and sold on the same day.
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Jul 14, 2014 05:57
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ashgromnies posted:Employee stock plan, purchased at $12.50, sold at $31. Executed and sold on the same day. Turbotax has a good writeup here of some scenarios and calculations for them. In your case, you are selling under disqualifying disposition and short-term capital gains: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Employee-Stock-Purchase-Plans/INF12047.html
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Jul 14, 2014 08:00
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Question on HSAs: Link on article about using it to supplement savings: http://lifehacker.com/max-out-your-hsa-to-supplement-your-retirement-savings-1603113892 My health care deductible is currently $500 a person in network (wife and I) per year. I'm about to move up from my union position, so sadly the biggest loss is my deductible goes up to I think $1300 a person. I'm guessing/hoping I just keep my current plan until the standard January re enrollment at my company, but I'm not completely sure (not impending health spending on the horizon either way). Advice on how a HSA works, and how much to put into it? I'm thinking using it as an extra savings account is a bit extreme, but since it's before taxes I would also guess its a decent savings on health costs? For perspective: so far this year I have used pretty much nothing in healthcare myself, but my wife would be close to the $1300 (she had an ear issue, etc).
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Jul 14, 2014 13:59
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Duckman2008 posted:Advice on how a HSA works, and how much to put into it? I'm thinking using it as an extra savings account is a bit extreme, but since it's before taxes I would also guess its a decent savings on health costs? For perspective: so far this year I have used pretty much nothing in healthcare myself, but my wife would be close to the $1300 (she had an ear issue, etc). Depends on how much you're contributing to your ROTH, your 401k, how old you are, and how prone you are to health issues. IE, overweight, smoker, power lifting, active contact sports ect.
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Jul 14, 2014 16:42
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Okay, I have a two parter and I'd be really grateful for some opinions/advice. First, I'm looking for a general assessment of my financial situation, and second thoughts on the emergency fund/saving/investing strategy I should be taking to help improve things. Here's the basic run down: The good: Current income after all expenses is in the ballpark of 1400. I'm looking for some advice on what to do with it. The okay: Savings - 4400 401a - 4,709.15 403b - 8,033.82 (contributing 4%, which is employer match) No Roth IRA. And the bad: Card A - 185, 13.24% Card B - 4,000, 10.9% Auto - 21,181.75, 8.99% Student Loan A - 14,246.74, 6.8% Student Loan B - 11,626, 6.55% Student Loan C - 4,502.20, 5.75% Student Loan D - 5,470.80, 5.35% Student Loan E - 5,390.30, 4.25% Student Loan F - 1,934.20, 3.15% My wife is contributing a very small amount to a 401, but her company virtually has no match without several years of service and she's relatively new. So, a) how bad of shape am I in? I'm 28, my wife is 25. And b) If I'm clearing between 1000-1400 a month, where should that money be going? I'm having a really hard time doing hard time thinking strategically about my money (savings/debt repayment/investment accounts) - I was unemployed for two years after a layoff and it's sortof screwed me up where I'm only able to think short term and am in constant terror that I'm going to get laid off again.  I want to get to a place where I'm not worried about short term finances, save up a down payment, but also have a good solid retirement plan.
Fifteen of Many fucked around with this message at 17:02 on Jul 14, 2014 |
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Jul 14, 2014 16:59
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You financial situation is: "Mixed". Having high five figures of debt sucks, but having $1400/mo extra coming in after expenses gives you some control over things. As for what to do with it: 1. Layoff protection (savings) 2. Loans Forget everything else. How much you put to each is a function of how likely you are to get laid off and how scared about it you are. How much would 6 months' expenses be? That's a good target for the savings account. Oh, and keep the 401k going enough to get the match, in case I wasn't clear about that.
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Jul 14, 2014 17:07
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slap me silly posted:Forget everything else. How much you put to each is a function of how likely you are to get laid off and how scared about it you are. How much would 6 months' expenses be? That's a good target for the savings account. That's the thing, I don't think it's very likely - I think my hangup about it is just a psychological thing from having been out of work for so long, but it's impacting my ability to think reasonably and long term. Six months of expenses would be around 20k. At what point is it wise to shift into Roth, or saving up for a home down payment? Or does the home downpayment come out of emergency funds for most people?
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Jul 14, 2014 17:38
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So accumulate emergency savings between $10k and $20k, depending on your other resources: family, job security, employability, wife's job security and employability, etc. You could do that in about year and a half if you split your extra between savings and prepayments on the loans. At that point do nothing but pay ahead on the loans until the high rate ones are paid off - e.g. the ones over 6% and yes that is a completely arbitrary point, just a suggestion. Then start thinking about saving for a house down payment. And no, absolutely do not use your emergency fund to buy a house because you are way more likely to need it once you have a house that can break in expensive ways. How do you feel about selling that car and getting a cheap one so you can get rid of the rapacious 9% car loan? It'll be expensive but there's a decent chance you could come out financially on top in the longer term. That's a loan you should never have signed up for, you clearly spent beyond your means there.
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Jul 14, 2014 17:47
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Fifteen of Many posted:Okay, I have a two parter and I'd be really grateful for some opinions/advice. First, I'm looking for a general assessment of my financial situation, and second thoughts on the emergency fund/saving/investing strategy I should be taking to help improve things. Congrats on getting income solidly above expenses  I would personally take the following steps:1) Burn down Card A and B to zero immediately, even if it drops your savings a bit low 2) Build savings back up a bit, start trying to sell your new car for a decent price. $21k of debt just to have a newer car that will depreciate faster is usually a bad idea. You've spent 2x more on that car than I've spent on vehicles (plus maintenance) in the past 15 years. Buy a reliable(ish) used car for 3-8k. 3) Build emergency fund up to 3-6 months of expenses 4) start paying off loans, from the most expensive interest rate down. Celebrate milestones, like 50% of the big loan paid off and then 100% big loan paid off, etc. 5) Start saving/investing - read some books in OP between now and then so you'll be able to be comfortable in your strategy from here Yeah the debt blows, but you'll be able to burn it down eventually. At a previous point in my life I had about the same amount of debt other than the car loan, and it took a bit to pay off but getting debt free (other than mortgage) just took an enormous weight off. Keep focused on burning it down and celebrate the milestones during that process and before you know it you'll be out and be able to focus on investments instead of debts. edit> Also, Mr Money Mustache has some case studies. Heavily focused on cutting spending, but he also addresses the car issue a lot. Here is a decent one that might be helpful: http://www.mrmoneymustache.com/2013/04/16/reader-case-study-stashless-in-seattle/ Vilgan fucked around with this message at 18:27 on Jul 14, 2014 |
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Jul 14, 2014 18:18
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Moved to the income tax thread
Happiness Commando fucked around with this message at 19:27 on Jul 14, 2014 |
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Jul 14, 2014 19:21
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Pittsburgh Lambic posted:Thanks for the advice, everyone. I did wind up applying for a Chase Freedom card. I don't really use Amazon enough to feel drawn to their card, and I already bank with Chase so it made sense to me. From the sound of things, I still won't have a credit score at all for about six months, but after that my credit history should start to take shape somewhat. Denied for not having any credit history  Welp, this is a bit of a catch-22. What other options are available?
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Jul 15, 2014 13:45
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Pittsburgh Lambic posted:Denied for not having any credit history If you just applied online go to a physical branch and talk to someone. The worst that can happen is they can say no. Get a free copy of your credit history from https://www.annualcreditreport.com/index.action make sure there isn't something on there you don't know about. If Chase didn't change their minds apply for either a college student or "limited or no credit" credit card from this page. http://www.nerdwallet.com/the-best-credit-cards A secured credit card works by giving them money in advance as collateral, and they give you a credit card with a limit equal to that money. You still pay a bill every month, which establishes your credit. After a few months you can typically convert it into a standard credit card.
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Jul 15, 2014 14:02
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Student cards are easy to get without credit. That aside, whichever bank you have an account with will probably have a greater chance to give you a credit card than some bank that you don't have an account with.
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Jul 15, 2014 14:45
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I got an e-mail from Chase today saying I may now request a credit limit increase. 1) They've never sent an e-mail before, I'd just get a card in the mail saying "Hey guess what, your credit limit is now increased by 2500$! Good for you, for the love of God go by something stupid and take a few months to pay it off we beg of you." Is this just what credit card companies do now? I'd rather not request as that means there's a new inquiry either way. 2) I currently don't have any debt on my credit cards, is there any point to increasing my credit limit? 0% utlisation is 0% utilisation whether it's 12,000 or 15,000 right?
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Jul 16, 2014 00:45
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Yeah, 2 of my 3 cards have recently asked me to ask them for an increase. I don't recall it ever happening in years past. One of the cards even offered me $5 cash back to request an increase.
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Jul 16, 2014 07:30
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pathetic little tramp posted:I got an e-mail from Chase today saying I may now request a credit limit increase. Unless you care about chasing a higher credit score, it really doesn't matter. Utilization is factored in proportionally to your total available credit. If you don't forsee any 5-figure purchases in your near future, there's no point.
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Jul 16, 2014 15:55
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I just lucked into my first Real Grown-up Job and am hoping you guys can help me get started on the path to Responsible Adulthood. Despite my math degree I've always found personal finance incredibly confusing/a huge pain in the rear end, probably because my parents never taught me anything about money. Thus far this has always been no big deal; I've lived paycheck-to-paycheck for my entire adult life and have been incredibly lucky to never have any unanticipated expenses. But now, for the first time in my life, I actually have enough money to bother saving it - and consider buying the occasional luxury item. I also want to start thinking about retirement, and what I'll do in case of emergency. And I have no idea what to do - partly because most financial advice seems geared towards people who are paying off debt, or have significant expenses. - A list of all your debts and assets ("I owe $5k in student loans and have $2k in my savings account"). I have no debt whatsoever. I have $2100 in a savings account. I have a completely paid-off 2008 sedan in good condition with about 50k miles. - Your budget, including income and expenses. Check out the Let's Share Our Budgets Thread for ideas if you don't know what a budget looks like. As of a couple weeks ago, I make $1500-2000 a week pre-tax (my job is part-time and hourly, so it's difficult to predict exactly how much I'll make in a given week, but 1500 is a very conservative estimate.) My necessary expenses amount to about $600 a month. Until now, my husband has always made much more than I do, so he pays our rent ($2200 a month) and my car insurance, while I pay for groceries and bills. I'm covered for health insurance under him, although this isn't a significant expense because his workplace provides it effectively free (barely more expensive than just his coverage alone). Our insurance is excellent, and even if we had a medical emergency it would cost us very little. I have two dumb, expensive hobbies: road biking and painting Warhams. I also like expensive beer. Until now, these things have usually expanded to fill whatever money I have left over. I could really use a new pair of glasses (about $600-700 after insurance). I also would like to get LASIK in the near future ($4-5k), and buy myself a nice road bike ($5k+) to replace my beat-up entry-level one. - Your goals. If you say "I make $5k a month and want to start investing!", well, we're gonna need to know what you're investing for. Retirement? A house? Future college fund? If you're not sure, we'll help figure it out with you. I want to retire in the smallest number of years possible, without investing huge amounts of time/energy micromanaging my income. --- Okay here are my questions, although I'd also appreciate any advice regarding things you think I'm missing 1. Should I get a credit card? If so, how the hell do I get a credit card? I went to my credit union and asked for one, but they said that since I have zero credit history, they can't give me one, period. I also applied for a store card on a whim a few years ago and was declined because they 'couldn't find me in the system'. My husband has a credit card, I know, so if I had some kind of huge financial emergency he'd be able to help me out - so is there still any reason for me to have one? Do I need to have credit 'in my own name'? 2. My husband and I have completely separate finances (except, obviously, that we both live in the apartment he pays for, both eat the food and use the internet I pay for, and we're both on his health insurance. We also file our taxes jointly). Is this a problem? What benefits/drawbacks are there to combining them? And what does it actually mean to combine your finances - do we share a checking account? Savings accounts? Retirement savings? 3. My job doesn't offer any benefits. I know that this means I can't get health insurance through them, which is irrelevant. But I'm also vaguely aware that you can usually save for retirement through your job (by having a small amount of money taken from each paycheck?). Does 'no benefits' mean that I also can't do this? If so, is this something that I can approximate on my own - i.e. is there a better way to save retirement funds than just having them pile up in the savings account my credit union gave me? 4. What % of the money I have on hand is it reasonable to spend on a single large 'luxury' purchase, in my situation (no debt, no major expenses, no plans to take any on in the near future)? I'm really itching to buy a new bicyle, now that I have this job - but I'm trying to be responsible about it and not buy it until it won't pose a major financial burden. At the same time, I really want to have my dream bike while I'm still young and dumb enough to use it to its fullest potential. 5. I believe my husband has a small amount of student loan debt (and no other debt). He's making small payments on it because, while he could pay it off, he can make more than the interest by having that money invested elsewhere. (I don't know anything about how this works - and I may well be remembering his explanation incorrectly). Should we be more aggressive about this, now that we have significantly more money coming in? Or is the basic principle here still sound? 6. Am I missing anything? Thanks a ton, guys, and I'm sorry if I've asked anything that I could really obviously Google. If that's the case, then I'd appreciate being pointed to some keywords I could search for - I am a total, total beginner here, and while I'm willing to learn, the amount of information out there is kind of overwhelming.
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Jul 17, 2014 19:34
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quote:Until now, my husband has always made much more than I do, so he pays our rent ($2200 a month) You're paying almost $30,000/year for rent - I'm guessing you guys live in a penthouse or something? Does the $2200 include utilities?
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Jul 17, 2014 19:43
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