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Here's a newbie question then. I've got $5000 sitting around in savings that I was going to put into my car. Current payoff's $18.5k, about $550/mo at 7.85% interest (sticker was 17k--I went in badly upside down due to some lovely decisions in college). When I mentioned the 5k to a mate, he suggested I open a Roth IRA with it instead since (I guess) that's the cap for annual contributions. Which sounds good--my 401k is chugging along (I'm 25) but hell the more the merrier when I retire, right? So now my question is, what would I be better served by: pouring every spare dollar into the car until I get my title, or make the $5000 for the Roth, THEN start pouring into the car? (if this somehow matters, it's a Honda Civic EX that had 36k miles at the time--at 39k an engine cylinder cracked and I got a replacement engine under warranty so the car's in good shape  )(edit) While I'm thinking of Roth IRAs, I'm having trouble understanding something about them: when exactly is it taxed, when I deposit it? Wouldn't that mean I'd be double-dipping on taxes if I deposited already-taxed money (paychecks) as opposed to being taken direct from my post-tax wages? (edit again) Or hell are you even allowed to contribute outside of directly from your paycheck, making this whole edit moot? Ciaphas fucked around with this message at 02:37 on Jan 21, 2010 |
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Jan 21, 2010 02:25
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Alright folks, here's some background. After 401k and taxes I take home about $3,200 a month right now. I'm paying $550/mo on my car (current payoff is $12k, interest rate 6.8%), $70/mo on my cellphone plan, and about $125/mo on entertainment expenses (internet, wow, gamefly, netflix, a game every month-and-a-bit). No credit card or student loan debt, or other loans/liens. I still live with my parents. I want to get into an apartment on my own. In fact, I have wanted for a long time, and have felt able financially for the past year. The problem is, my mother was laid off ten months ago, and her (strenuous and frustrating) efforts to get a new job have thus far yielded nothing. So in order to prevent her from bailing out her own 401k, I've been giving about $1,200/mo (give or take a couple hundred) to help her keep up with the bills. (Or you can think of it as me paying the rent--it's about $1,200--and her paying the rest with her unemployment+savings. Whichever.) The result is that I've felt I shouldn't try to move out until she gets re-employed, but I've been pretty ready to get the hell out of there for a long time (hell, I'm 25, I drat well should have been out of there YEARS ago  ), so I'm looking around for apartments again. I still need to be able to help her out though, if only to stop her breaking out the 401k (again).I listed out my current estimated monthly expenses (minus the actual apartment rent) below: pre:Cell $80
Internet $50
Groceries $200 I lumped prescriptions in here--actual doctor visits are free via insurance
Car $550
Electric/Gas $100 guess, +-$20 depending on apartment policy re: sewer, water, etc
Mom $1,000
WoW $15
Gamefly $20
Netflix $10
PC game $30 very approximate--figure one new game every month and a half or so
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$2,055 in expenses
1) What should probably be my target rental price for when I go apartment hunting, given the above? 2) Are there any other recurring expenses I forgot to enumerate? Ciaphas fucked around with this message at 22:08 on Jul 14, 2010 |
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Jul 14, 2010 21:59
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alreadybeen posted:1) Only experience I had apartment shopping was I saw a couple places which said your gross monthly income must be at least 3.5x rent. Not sure how common this is/if you'll run into issues. I'm guessing your gross is like 50-55k/year so you're looking at about a $1100-1200 max. Obviously this takes up about the entire rest of your budget so I'd look cheaper than that. Because your mom's payment isn't debt your landlord don't know you plan on sending $1000 away, but in a pinch at least you'll have that money available. Bottom line you'll likely be able to spend more than you will want to. The car was purchased two years ago with a heaping helping of negative equity--something like a $30k grand total for the car and my negative. I did stupid things in college, not the least of which was owning a Harley. That's come down to about $12k as of last Saturday, like I mentioned, thanks to a goodly number of overpayments. (If you're curious, it's a used Honda Civic '06 bought at 30k on the odometer for $18k sticker. Got a new engine at 39k, though--go go warranties on engine failures!  )Your analysis of my entertainment budget as 'goonish' is harsh but mostly correct, unfortunately--I do hang out with friends but I'm a teetotaler so bars are right out, and most of our hangouts pretty much involve kicking the crap out of each other in rock band or street fighter or what have you. vOv Restaurants/eating out I didn't think of, but I don't eat out all that often. Not sure what dollar amount to write down for that. At home I tend to cook simple dishes, but during the week I get lunch and usually dinner free from work, so that's half the groceries right out. Beyond that though, the $200 is pure estimate Hope that answers things sufficiently. I know a few apartments around here that'd suit me just fine 'round the $800-850 range, which seems like it'd leave enough for incidentals--especially when my mom finally regains employment and I can thin out/eliminate that 'debt' 
Ciaphas fucked around with this message at 02:28 on Jul 15, 2010 |
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Jul 15, 2010 02:25
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alreadybeen posted:Good news is you make a decent enough amount, and aside from that rather poor vehicle decision live a fairly frugal life. Thanks for the thoughts. No, dad's worse than useless (being a drunk ex-con ) so no support from that direction. I'm in Las Vegas, looking for a place preferably in the central-south part of town, in line with the airport. I thought about a studio, then toured one and realized I'd go up the loving wall if I had to live in one--1br1bath at least.I'll try mint out and observe for a month or two, thanks. Though you're not wrong about my goonishness--besides those things I listed I hardly spend anything on entertainment . You're probably right about food though, so I'll see what shakes loose.(incidentally, I've only got three months of emergency fund right now, so making a big ol' payment from that is out) Something I thought of on the way home tonight. Normally I think of withdrawing from one's 401k as a batshit-loco way of resolving debt issues--and it probably is--but I gave it some thought anyway because it's a boring-rear end 30 minute drive from work. Between my 401k and my Rollover IRA from my last job I've got about $24k in retirement savings; more than enough to eliminate that stupid car loan for good and put me loan-free, even given tax and penalties. Yeah, in the long term my retirement is set back, but, well, I'm 25--I have a ton of time to make up for it so long as I don't make a habit of withdrawals. And it would eliminate that $550 car payment, putting me WAY ahead in the short-medium term and enabling the move to an apartment I so crave. What do you all think, still a terrible idea or not too awful? Ciaphas fucked around with this message at 05:20 on Jul 15, 2010 |
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Jul 15, 2010 05:18
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I've got about $8,500 worth of unsecured personal medical loan at 9% interest I'd like to see go away sooner than the planned June 2017 end date. I know loans on 401k and IRA accounts are usually verboten as hell--and with good reason--but spare cash is in a bit of a crunch (not a critical one, just one that makes me  a bit every paycheck) for the next few months. Besides which, I'm bored as hell at work so I'd like to explore it a little even if the right answer is what I think it is (that being "just keep doing what you're doing").When taking a loan from one's 401k, I'm paying the principal and interest back into my own account, if I understand it correctly. I'm aware that any money I take out is no longer invested and therefore not making money, but--for the purposes of this question--assuming the market doesn't change or even gets worse during the repayment term (ed: or perhaps even grows, but less than the 9% interest on my current loan), have I lost anything by the end of the term? (I realize that's crazy talk crystal balling, I'm just trying to clarify how the loan works in my head.) I'm also aware that if I were ever to quit/get fired, I'd be immediately liable for full repayment of that loan, else I eat income tax and excise tax/disbursement penalty/whatever it's called. Are there any other significant gotchas on such a loan that make it untenable, or is it just that and the fact that the money's no longer invested? Some background, I'm 31 (as of today; happy birthday ), have about $110k in my 401k and IRA (mostly the 401k, the IRA's a rollover), have worked my job 7 years and am highly stable/happy there, and am currently paying 8% pre-tax into my 401k (with my employer contributing 4% at that contribution, so that's effectively as low as I can go without losing literally free money).
Ciaphas fucked around with this message at 00:57 on Dec 11, 2015 |
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Dec 11, 2015 00:53
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Thanks for the answers, and the link. Great to get some clarity on the subject. I didn't get a chance to call HR (or Fidelity for that matter) and ask them, is repayment generally handled automatically, i.e. by redirecting your normal 401k contribution, or by effectively garnishing your take-home paycheck, or just a separate bill? Or does it depend on employer/finance company? I'm probably going to give the whole thing a pass since things aren't exactly dire, I just want to know my options in advance if things start getting worse, like another nasty fall or something. (and if I did take the loan the market would probably be its usual cruel fickle bitch self and go up 15% in 18 months just to spite me)
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Dec 11, 2015 04:20
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I decided to let Intuit have my info in trade for getting to look at charts in Mint. Mostly seems pretty intuitive and well explained as far as letting me see where my money is going (oh god so much fast food  ), but it definitely isn't wholly accurate. Anyone have any tips for using the thing to figure out how much money I'm really spending where?Basically I'm trying to figure out what "six months living expenses" really means 
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Oct 9, 2018 01:57
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Hoodwinker posted:Why is it not wholly accurate? Figured out how to recategorize, turned out my disability income not being properly listed as income, and ditto my rent payments going the other way. Guess I answered me own question (e) Oh no wait I did have one. Is there any reason to add my billers separately to Mint if my payments to them are already going through tracked accounts?
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Oct 9, 2018 02:08
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(preface: again i know it's a bad idea. still might take the money plus 5k prior roth contribution and Quit Job for six months because my mental health is in the shitter at this place and that's no lie) Just checking on the rules for penalized retirement withdrawal. If I take out, say, $16k, that's first penalized by 10% then taxed by my bracket, right? So probably $10k take-home at my bracket? It's either that or the other way around where they cut me a check for 16k and my account eats the taxes/penalty, right?
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Oct 9, 2018 19:15
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