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What are your student loan interest rates? Maxing out retirement instead of paying down the loans could be a pretty poor choice. If they are at over 5% I would be skeptical about getting a better return in the stock/bond market.
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Nov 29, 2014 22:08
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DogsCantBudget posted:1) I was paying more in rent at my apartment then I am paying on my mortgage + HOA fees 1) in your old thread your rent was 800. In this thread you said your mortgage payment is 1432. Is there something im missing? Or are you just full of BS? 2) your house appreciated by 12% in one year even though it's in a bad area? Wow, that's amazing. Again, is it a bad area or do you just think it isn't good enough for you? Again, for the second house you plan to buy, what percentage will you put down? What price range are you looking at? Do you have a cushion for when renters trash the place? Don't count on a home warranty covering damage done by renters unless it specifically mentions that.
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Nov 29, 2014 22:26
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Scenty posted:2) your house appreciated by 12% in one year even though it's in a bad area? Wow, that's amazing. Again, is it a bad area or do you just think it isn't good enough for you? That's actually legit for Austin, real estate on the east side of town (the "bad" side) has been crazy this past year and tear downs are going for ridiculous prices. It's very bubbly tho' so I don't know if it's sustainable. The area is really convenient to downtown but a lot of the other fundamentals like crime (you see $400k flipped hipster pads next to crack houses) and schools are pretty bad. But I don't get a lot of the other expenses; even if you eat out every day, Austin's not NYC, there are a ton of cheap places. Heck, I don't use my kitchen, mostly rely on Whole Foods take-out and spend less.
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Nov 29, 2014 23:02
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Scenty posted:1) in your old thread your rent was 800. In this thread you said your mortgage payment is 1432. Is there something im missing? Or are you just full of BS? OK. I guess there is some catchup I failed to play 1) In May of 2013 we sold a house which was costing us 2500$ a month in mortgage. Basically broke even on that sale and moved into a friends "guest house" for 800 a month. Most of our stuff was placed into a storage unit. Late 2013 we moved from MA to TX into a larger place, but still most of our stuff was taking up space in the garage. Rent was 1495. Now we are in a place where the mortgage is ~1500 with HOA included, and with enough space that none of our stuff isn't in the garage that shouldn't be. 2) I think ToraToraTora did it pretty well when he stated what Austin is like. The house was purchased for 200 and is worth ~225 now. Thats a 12% gain.
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Nov 29, 2014 23:41
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Scenty posted:Again, for the second house you plan to buy, what percentage will you put down? What price range are you looking at? Do you have a cushion for when renters trash the place? Don't count on a home warranty covering damage done by renters unless it specifically mentions that. DogsCantBudget fucked around with this message at 04:06 on Nov 30, 2014 |
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Nov 29, 2014 23:41
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I would never count how other houses are selling now as 'gain' in your house, but I don't think waggling a finger about it is productive either. Even if you get 20% back out of your house, its better than the 0% of rent. I also live in a college town and rents are crazy high while house prices are manageable.
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Nov 30, 2014 03:49
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Uncle Jam posted:I would never count how other houses are selling now as 'gain' in your house, but I don't think waggling a finger about it is productive either. Even if you get 20% back out of your house, its better than the 0% of rent. I also live in a college town and rents are crazy high while house prices are manageable. I agree, I'm just using it as a way to get PMI off the mortgage once I break that 20% mark...
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Nov 30, 2014 04:06
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DogsCantBudget posted:I agree, I'm just using it as a way to get PMI off the mortgage once I break that 20% mark... Stop your retirement investments man. Clear your non-home debt. Be wealthy like your income should support.
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Nov 30, 2014 04:55
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SiGmA_X posted:Didn't you put 5% down? And you estimate 12% gain. What's the diff in principle to get you to 20%, from where you sit now? I'm not saying to pay ahead the mortgage more to save $900/yr, when you pay WAY more than that on other interest items, but it will be nice when you get there. We put 5% down. I need to pay off 7% or 13k more of the house principle(or accrue that value to the home) to hit the 20% number. Am I wrong to just say "I can pay off most of the debt in 4 months" and be happy about it? Stopping my retirement payments for those 4 months would make it so I could probably pay things off in 3 months...but is it worth it for 1 extra month? Current plan is: Save 3k in December Wipe wife's School Loan @9% in January Wipe wifes School loan @7% in February Wipe 0% Chase card in March During that time the Lowes balance will also disappear in January just due to regular payments of 452 that we have been making on it...
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Nov 30, 2014 05:01
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DogsCantBudget posted:We put 5% down. I need to pay off 7% or 13k more of the house principle(or accrue that value to the home) to hit the 20% number. E: you need to count ALL your non-house debt in this debt load. I don't care if it's 2% or 12%. That just changes the order or arrack, not the need to attack it.
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Nov 30, 2014 05:18
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SiGmA_X posted:I would say no, one month faster doesn't move the needle enough to do that. However, I'm not seeing how your budget (I don't actually see a budget, I think I'm referring to take home based on that - tho I'm on my phone and that could be why I can't find the budget... I did look on all 4 pages tho... Idk) clears ~70k in debt in 3 months. Sorry, I wasn't talking about all the debt(such as the ~50k of student loans that will be left after this and the 8k of car loan(though I'm pretty sure thats it as far debt that has any interest rate associated with it....) I would like to balloon the Haverty's and Lowe's payment into the school loan payments (which will add ~650 a month into them) but think that building a ~6 month cash reserve would take priority over paying those down aggressively, no? My hope was to have 40k in cash reserve socked away be end of 2015... DogsCantBudget fucked around with this message at 15:42 on Nov 30, 2014 |
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Nov 30, 2014 15:22
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You will be using that 40k cash as down payment right? Why not just call it the down payment fund and not emergency fund. Call it what it is, dont play the shell game. Or if it isnt the down payment, what are you planning on using for a down payment at the end of 2015 when you get a house?
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Nov 30, 2014 15:56
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Spermy Smurf posted:You will be using that 40k cash as down payment right? Why not just call it the down payment fund and not emergency fund. Call it what it is, dont play the shell game. Again: let's get off the downpayment discussion. As of right now I've moved that off the table. We need an emergency fund and know we are failing for not having one.
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Nov 30, 2014 16:01
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Also, I'm curious, when does BFC say I am ready to save that downpayment for another house? Does one have to have 0$ of debt before buying a home according to BFC? If my DTI is 4%(calculated by saying 400$ of school loan payments would be ~4% of my monthly take home) is it time to start saving for a house, or does BFC assume everyone should have no debt other then a mortgage? I want to set my own(and your) expectations...
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Nov 30, 2014 16:23
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DogsCantBudget posted:Also, I'm curious, when does BFC say I am ready to save that downpayment for another house? Does one have to have 0$ of debt before buying a home according to BFC? If my DTI is 4%(calculated by saying 400$ of school loan payments would be ~4% of my monthly take home) is it time to start saving for a house, or does BFC assume everyone should have no debt other then a mortgage? Dude you already own one house so don't play this game. I mean, if you didn't want to live there you shouldn't have bought it to save 50 bucks on rent or whatever. Yes, I believe all debt [including student loans] should be gone before you buy a SECOND house.
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Nov 30, 2014 18:36
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Scenty posted:Dude you already own one house so don't play this game. I mean, if you didn't want to live there you shouldn't have bought it to save 50 bucks on rent or whatever. Yes, I believe all debt [including student loans] should be gone before you buy a SECOND house. Guess I was a bit snarky at having that thrown in my face by someone with nothing constructive to add to the post... My current though: 40k savings 40k downpayment 10k rental house "fund" Before getting into a new place and renting this place out.
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Nov 30, 2014 18:44
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DogsCantBudget posted:Guess I was a bit snarky at having that thrown in my face by someone with nothing constructive to add to the post... People are asking you about the house you plan to buy because even by your own timeline you only put it one, maybe two years out. Most people are going to want to see a plan for that at this point in time. A house is one of, if not the, largest purchase you will ever make. You show a history of potentially making bad decisions when buying houses. In the old thread you said you bought your original house with 3.5% down, and you said it was a mistake you would never make again. You then bought a house with 5% down if I am reading correctly. It's natural that people are going to bring up your future plans because those should be factored into your budget and savings plan. So questions such as what percent down are you planning on, price range, etc are important for your long-term plans. Thankfully you make enough money that if you are careful with money you could pay off your student loans AND get ahead on your current house relatively quickly, but you haven't shown signs of reigning in your budget, you still went way, way over on food costs in November. Buckle down! Oh yeah, edit: I'm glad to see you have a rental house cushion there. It's hard to know if the 40k down is really enough though without knowing what price range you are looking at.
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Nov 30, 2014 19:37
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spwrozek posted:What are your student loan interest rates? Maxing out retirement instead of paying down the loans could be a pretty poor choice. If they are at over 5% I would be skeptical about getting a better return in the stock/bond market. Doesn't that depend on if you have 401k matching and what your income tax bracket is? My understanding was that as long as you make enough, you start off with a pretty high rate of return just by dodging the 20-30% income tax rate on the top 17.5k of your income.
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Nov 30, 2014 19:47
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Horking Delight posted:Doesn't that depend on if you have 401k matching and what your income tax bracket is? My understanding was that as long as you make enough, you start off with a pretty high rate of return just by dodging the 20-30% income tax rate on the top 17.5k of your income. Our tax bracket is pretty high(though we're not quite 1%ers yet I guess since that requires 250k earnings). Part of this is definitely a tax hedge as well as retirement savings. I could see arguments for stopping investing in the RothIRA since that is post tax(and almost 1k a month). But it's investment savings that I really want to keep doing. That 11k a year we put in the roth IRA would probably have us paying our student loans off by ~4 months earlier(per year of savings skipped) then we could by keeping it... As of now, I hope to put 650 towards student loans starting in February(on top of existing payments, which should lead to them going down.
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Nov 30, 2014 20:00
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Could you make a simple list of debts, balances, rates, and min payments vs what you are paying? I know a lot of it has been disclosed but a single post with all the data would be helpful. Maybe updating the first post with a link to the post so it doesn't get lost?
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Nov 30, 2014 23:06
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DogsCantBudget posted:Guess I was a bit snarky at having that thrown in my face by someone with nothing constructive to add to the post... Sorry I was snarky. I just dont see any change from last thread and see a lot of parallels between you and SlowMo. How much do you currently have in savings? I see 0 cash savings in the OP, but I am on my phone and likely missed it.
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Nov 30, 2014 23:57
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Spermy Smurf posted:Sorry I was snarky. I just dont see any change from last thread and see a lot of parallels between you and SlowMo. I'm going to single quote you so I can do as SigmaX requested earlier in a seperate post, but you are correct...as of right now there is 664$ in savings(after this past month....) before then it was 0. I'm not arguing it was not good.
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Dec 1, 2014 02:03
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40k is supposed to be a 6 month emergency fund? Your emergency fund needs to be for expenses of $6500 a month?
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Dec 1, 2014 02:31
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SiGmA_X posted:Could you make a simple list of debts, balances, rates, and min payments vs what you are paying? I know a lot of it has been disclosed but a single post with all the data would be helpful. Maybe updating the first post with a link to the post so it doesn't get lost? Current loans/apr's/minimum payments:  I still have 263 on cabelas due to automatic withdrawals on there, but as I said before I'm slowl removing them... DogsCantBudget fucked around with this message at 03:01 on Dec 1, 2014 |
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Dec 1, 2014 02:34
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So summing them up into logical categories looks like: Mortgage: 197k Student Loan: 60k Car: 8k -- how much is the car itself worth? You're not underwater on it, are you? IRS: 2k Consumer Debt: 6k Medical: 3k And you have 600 in savings? What's in your checking account? Do you have anything that can be used as a buffer if your car breaks down or whatever? My understanding is that you do, right?
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Dec 1, 2014 04:27
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Horking Delight posted:So summing them up into logical categories looks like: I have 1k in my checking account, and another 1500 coming in on Thursday. My car is worth ~11k, so no I'm not underwater on it.
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Dec 1, 2014 05:18
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DogsCantBudget posted:I'm going to single quote you so I can do as SigmaX requested earlier in a seperate post, but you are correct...as of right now there is 664$ in savings(after this past month....) before then it was 0. I'm not arguing it was not good. I thought you said you put $1700 a month into savings? Man this poo poo is confusing. You gotta stop looking at bank accounts and start looking at budgets. If you budget, it doesn't matter where the money is. You also get to use credit cards and not worry about it because they get paid off in full every month. A credit card is a tool to spend the money you already have, not a crutch to borrow from your future. If you don't have the money available to budget right that minute, don't use the credit card. And get a month ahead. The difference that made for me was astounding. It's really easy to do.
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Dec 1, 2014 06:28
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I couldn't find how much extra you said you can put toward debt, but a grand sounds about right. I would say do a lot more, but you gotta set your own budget. If I was doing a grand extra, this would be my game plan:  If you wanted to do a round 4k/mo (+1865):  Or 5/mo (+2865):  If I Were you, I would throw as much money at the problem as you can see it to. And then throw more money. It'll feel good. Do realize this plan leaves with you 5k to spend on mortgage (1600 w HOA?) and living expenses. You can easily do that. If you stick to a moderate budget. Old Fart posted:I thought you said you put $1700 a month into savings? However, I 100000% agree with getting and using a budget! It has made my life so much easier. E: Oh yeah, if you did 5k/mo + House, you would have the house paid off by 2/2020. #Ballin'  Or no snowball, just do the minimum:  (I did not calculate these tables, they were all made with an old spreadsheet from Vertex that I found on the internets at some point in the past: http://www.vertex42.com/Calculators/debt-reduction-calculator.html) SiGmA_X fucked around with this message at 06:56 on Dec 1, 2014 |
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Dec 1, 2014 06:41
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^^^ Awesome post. SiGmA_X posted:Getting a month ahead was not a big deal for me personally. It didn't change anything at all. That was my experience with it, at least. I was also surprised at how easy it was to do. Most bills are already basically a month ahead. For example, the hydro bill might arrive on the 15th, but it's not due until the 6th. And while my rent was due on the 1st, when I wasn't a month ahead I still had to save for it because I didn't get paid on the 1st. The stuff that was paid in the current month was mostly consumables. I was already straddling two months anyway, so it didn't take much to convert entirely over. It's just so nice for me to know exactly how much money I have to spend every month. And instead of savings being whatever is left over, now it's the very first thing I do. Different strokes for different folks, but that's how it worked for me. It's no coincidence my net worth graph started skyrocketing that very same month I made the switch.
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Dec 1, 2014 07:24
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Old Fart posted:I thought you said you put $1700 a month into savings? I think to clarify, I put 1250/mo into 401k(pretax). I also put 900 a month into RothIRA(post tax). So more like 2100 a month into savings, but its not the most visible thing since some of it comes out of gross income and some from net income... SiGmA_X posted:I couldn't find how much extra you said you can put toward debt, but a grand sounds about right. I would say do a lot more, but you gotta set your own budget. Wow this is probably one of the better posts I've read in BFC in a while...I need to spend some time thinking about this...I see the benefit of 5k a month(2020 payoff on house would be ballin), but also know that getting up there is going to be really hard to do cold turkey. I do want to ask BFC one more question: Is there any reason BFC is against us renting a bedroom out in our home? Currently we have a 4br/3ba house, and like I may/may not have said, it's just us. We do use some of the bedrooms for other things(one is an office...one is basically gun related storage) but we have an empty bedroom that is fully furnished, which might not be bad to rent out...
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Dec 1, 2014 13:25
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Also, Sigma_X, can you please share what your order is for entering them? I just downloaded the same calculator you did and can't quite get it to work the same way... Or would you be willing to save and email it to me? dogscantbudget AT gmale.com
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Dec 1, 2014 13:48
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DogsCantBudget posted:Wow this is probably one of the better posts I've read in BFC in a while...I need to spend some time thinking about this...I see the benefit of 5k a month(2020 payoff on house would be ballin), but also know that getting up there is going to be really hard to do cold turkey. This isn't the most popular opinion around here, but I'm of the belief that going cold turkey can really be effective for certain people. For instance, when we were trying to slowly cut back, I found that I could make excuses about going over JUST THIS TIME or maybe I didn't realize it would put us over, whoops. Instead, we went cold turkey, and if you make it so you just flat out don't get any entertainment money until the CC is paid off or whatever, then there are no excuses to make. I'm fully aware this wouldn't work for everyone, but it's something to consider.
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Dec 1, 2014 14:20
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ObsidianBeast posted:This isn't the most popular opinion around here, but I'm of the belief that going cold turkey can really be effective for certain people. For instance, when we were trying to slowly cut back, I found that I could make excuses about going over JUST THIS TIME or maybe I didn't realize it would put us over, whoops. Instead, we went cold turkey, and if you make it so you just flat out don't get any entertainment money until the CC is paid off or whatever, then there are no excuses to make. DogsCantBudget posted:Also, Sigma_X, can you please share what your order is for entering them? I just downloaded the same calculator you did and can't quite get it to work the same way...  Also, I think that the payoff time may be wrong for the home loan due to amortization tables vs straight line interest. I would have to do math to figure that out, and I have work today, and math for other people... SiGmA_X fucked around with this message at 17:24 on Dec 1, 2014 |
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Dec 1, 2014 17:07
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DogsCantBudget posted:I think to clarify, I put 1250/mo into 401k(pretax). I also put 900 a month into RothIRA(post tax). So more like 2100 a month into savings, but its not the most visible thing since some of it comes out of gross income and some from net income... Opinions probably vary for this, but I think that's somewhat dangerous and really doesn't save enough. I like to completely ignore pre-tax retirement savings that come out of paychecks. Have you ever used a retirement calculator to figure out how just using 401k and IRAs will work for you? To give some perspective, a friend of mine was smart with budgeting and investing in his 20s and retired at age 40, and owns a house in an awesome neighbourhood in Berkeley. Now he volunteers and travels the world. At the prime of his life. Of course, you're buried in debt. I don't understand how you're not throwing $3-5k on that every month. I suppose you're past the threshold of pain, which is why you're talking about buying more houses. And absolutely yes rent out a room.
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Dec 1, 2014 18:11
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Old Fart posted:Opinions probably vary for this, but I think that's somewhat dangerous and really doesn't save enough. I like to completely ignore pre-tax retirement savings that come out of paychecks. Have you ever used a retirement calculator to figure out how just using 401k and IRAs will work for you? To give some perspective, a friend of mine was smart with budgeting and investing in his 20s and retired at age 40, and owns a house in an awesome neighbourhood in Berkeley. Now he volunteers and travels the world. At the prime of his life. Wait, for real? Between HSA, 401k, IRAs, and ESPP, we sock away 41k per year (mix of pre and post tax) with just payroll deductions. Is your friend married with kids? Did he put away more than that in his 20's?
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Dec 1, 2014 19:46
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Old Fart posted:Opinions probably vary for this, but I think that's somewhat dangerous and really doesn't save enough. I like to completely ignore pre-tax retirement savings that come out of paychecks. Have you ever used a retirement calculator to figure out how just using 401k and IRAs will work for you? To give some perspective, a friend of mine was smart with budgeting and investing in his 20s and retired at age 40, and owns a house in an awesome neighbourhood in Berkeley. Now he volunteers and travels the world. At the prime of his life. Thats a good point, and adding an extra 1000$ into the mix would be quite nice...adding that to my snowball made a significant difference as to when our dates are(as it of course should!) Let's slightly change topics: It's time to talk about our Roth's. We've been investing in them for a while now, and have ~60k there. We also carry it with a financial advisor, who we of course, pay on a year to year basis... Of course, I know BFC's position on Financial Advisors and that I should get rid of him nearly immediately. The only wrinkle is he is a semi-friend. So given that, how hard is it to actually roll things into Vanguard's index funds? I have been reading some of the long term retirement fund and it seems like Vanguard is the "goto". Can anyone suggest a good allocation for us? Also, is it ok if that money just sits with no new investment into it for a year or two while we pay off a large chunk of this debt/get our stuff in order? Seems that we could be "close to ready" in the next 2 years to move(including the rental fund).
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Dec 1, 2014 19:56
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Rurutia posted:Wait, for real? Between HSA, 401k, IRAs, and ESPP, we sock away 41k per year (mix of pre and post tax) with just payroll deductions. Is your friend married with kids? Did he put away more than that in his 20's? Well that sounds pretty good, and I'm by no means an expert. I'm only going by what you tell me. $1700/mo is $20k a year. But now it's apparently twice that. You're a slippery one. I honestly don't know his details. He's married, no kids. He's a smart dude. Get your goddamn debt paid off. It's easy to slip into more debt when you're six figures underwater. Threshold of pain.
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Dec 1, 2014 20:08
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Old Fart posted:Well that sounds pretty good, and I'm by no means an expert. I'm only going by what you tell me. $1700/mo is $20k a year. But now it's apparently twice that. You're a slippery one. Rurutia posted that, not me... BTW: unless you count the house mortgage, I am not 6 figures underwater...I don't feel a house mrotgage should be factored into this calculation since it's a backed loan that the item you bought has some residual value...as we said. I do however agree that it should be paid off sooner rather then later
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Dec 1, 2014 20:11
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1) Definitely move to Vanguard. My friend loses 15% of his annual return from higher ER, not to mention his mgt fee! 2) If you provided a little info on age, I'm sure some of us could suggest some allocations. Alternative, mirroring the Target Date fund allocations for your rough retirement year using either Admiral or regular (investor?) shares would be very good too. 3) You definitely don't have to keep adding to have a Vanguard open. 4) Open the Vanguard today! E: New posts since I started my post! I wouldn't count the house in your debt load either, until it becomes a rental. Yeah, getting rid of PMI will be FTW, but I wouldn't say that is a #1 goal compared to clearing the promo period or higher interest debt. It may be worth pausing your snowball for a month or two (AFTER clearing the above mentioned debts) and knocking out the PMI, and then getting back to clearing the lower interest / higher balance student loans and car, and then savings. You make too much money to have 24k in consumer payments per year. You guys can do this, man. SiGmA_X fucked around with this message at 20:33 on Dec 1, 2014 |
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Dec 1, 2014 20:15
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Old Fart posted:Well that sounds pretty good, and I'm by no means an expert. I'm only going by what you tell me. $1700/mo is $20k a year. But now it's apparently twice that. You're a slippery one.  I was just asking because I was doing our forecasting and with saving 50% of our gross income for 'retirement' but also paying for 2 kids + college, it seemed like we wouldn't be able to retire until 55. Just wanted to understand how he did what he did especially since I calculated travel to increase our expenses. I was also surprised that you personally don't count your payroll deductions in your savings since it is such a huge portion of ours. 17.5k per person is a pretty large amount in 401k alone.To be clear, I wasn't saying that your advice was wrong for the OP. Rurutia fucked around with this message at 20:20 on Dec 1, 2014 |
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Dec 1, 2014 20:17
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