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Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal
Purpose of thread and how we'll meet our goals:
The main reason I created this thread was for accountability and to get help reaching our goals.


Debt situation at or near the beginning of the thread:
Car - $26,769
Student Loans - $8,600
Baby - $3,500 ($3,800 in medical expenses in 2015, so this is a very close estimate)
Grandma - $2,000
Speeding Ticket (was before thread) - $1,000
Wells Fargo Credit Card - $1,000
Back Taxes - $2,700
Credit Union Collection - $350

Total:
$45,919 ($43,219 not including back taxes)


Now (3/16/2016):
Car - $14,966
Student Loans - $7,028

Principal payment set aside: $8xx

Total:
>$21,594

Net debt paid down:
>$24,325



Net Monthly Income:
Me: $4240
Her: $1500
---
Total: $5,700

Gross Yearly Household Income:
Start of Thread
~$82,000
April 2015
~$88,000
October 2015
~92000

Goals:
Get 3-6 months of emergency funds setup and save (April 2015 - Monthly Expenses = roughly $3,500)
Pay off the debt
Save for a house down payment ($0/30,000) 0% met

Progress:
Start of thread
Savings: $0
Retirement: $0
HSA: $0

12/3/2013 Update:
Emergency Savings: $514.03
House Down Payment: $0
Retirement: $0
HSA: $0

8/31/2014 Update:
Emergency Savings: ~$4,700.00
House Down Payment: $0
Retirement: $0
HSA: $0

4/30/2015 (Forecasted on 4/16) Update:
Savings: $7000
House Down Payment: $0
Retirement: $0
HSA: $6000

7/31/2015 Update:
Emergency Savings: $10,000
House Down Payment: $0
Retirement: $0
HSA: $2000 (paid off birth)

3/11/2016 Update:
Emergency Savings: $1,000 (+ $5,700 for the following month's expenses INCLUDING debt pay down)
House Down Payment: $0
Retirement: ~$1,000 (401k)
HSA: $750 invested in VFINX, ~$300 remainder for medical bills

E/N Bullshit (backstory):
Age: 29
Wife: 27
Son: 0

In early 2013 we were living very near the poverty line. My wife makes $11/hr, and we were pretty much living solely off her income. I lost my part time job in January that made me around $250.00 a week. I was a student, so I took out student loans to help get us through the rough times. I decided to apply like crazy to jobs in my field, which is computer programming even though I did not have a degree yet. I managed to find one and get hired at a rate that I've never come close to making before this. I currently work here.

I think part of the reason we've been going nuts spending is the shock of going from almost nothing, to making an insanely high amount of money (for us) in a very low cost of living area.

Also my credit is obviously terrible. Her credit is pretty terrible as well. We can't get a credit card or whatever as an alternative backup.

February 19, 2015: Officially a party of 3 (had a baby)

Thanks.

Knyteguy fucked around with this message at 23:14 on Mar 17, 2016

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big shtick energy
May 27, 2004


If those numbers are accurate, you're not doing too badly, although at 2000/month it'll still take a couple of years to knock out your debt so a house might take a little while longer than that.

crazyfish
Sep 19, 2002

With you being $2000 in the black and in the situation you're in, you almost definitely are not tracking your spending well at all. Keep track of every single expense down to the cent for a month. If you were able to throw even $1500 extra towards debt continuously, you'd be done in under two years.

edit: You mentioned bad credit, otherwise I would have instantaneously said refinance the 17% car loan.

slap me silly
Nov 1, 2009
Grimey Drawer
Ugggh, your vehicle loans are brutal. Have you brainstormed ways of changing that situation? Selling one of them and getting something cheaper; begging an old car off your family; refinancing a loan; it's worth exploring anything you can think of. Although maybe you already have. High rate car loans are harder to get rid of than they are to acquire in the first place.

Other than that, you do have a spending problem if you lost track of $1500 last month. Crazyfish has the answer, track everything really carefully for say Dec and January, and see what's going on. I will say, the $300 extra you did put toward the loans is huge and I hope you can keep it up. Run a calculation if you haven't, to see how much sooner you can be done with the loans by putting in extra money: https://origin.bankrate.com/calculators/auto/auto-loan-calculator.aspx

Congrats on dropping the ciggies by the way!

Oh, and don't make decisions based on how it affects your credit score, for fucks sake - your actual financial situation is infinitely more important. The credit score will take care of itself once you get your poo poo together.

in_cahoots
Sep 12, 2011

crazyfish posted:

With you being $2000 in the black and in the situation you're in, you almost definitely are not tracking your spending well at all. Keep track of every single expense down to the cent for a month. If you were able to throw even $1500 extra towards debt continuously, you'd be done in under two years.

edit: You mentioned bad credit, otherwise I would have instantaneously said refinance the 17% car loan.

I'm seconding this. When did you get your job? +$2000/month does not equate to taking out a $400 payday loan. These numbers just don't add up at all. To give you the benefit of the doubt, are you sure you're using the software correctly?

That being said, $80 on pet food? Are you running a petting zoo, or are your pets eating caviar? My pet food costs me $30, and they eat pretty well. Expenses like this make me think you're not reporting the numbers accurately, because splurging on pet food suggests a standard of living far higher than $3,000 per month.

ZentraediElite
Oct 22, 2002

I'd look into doing something about the interest rates on your auto loans, those are destroying you and ridiculous.

You're spending an awful lot on food every month. Have you considered packing lunches and preparing foods that create a lot of leftovers? Not trying to suggest eating red beans and rice for every meal, but we can all reduce our spend on food to a certain extent.

WampaLord
Jan 14, 2010

Knyteguy posted:

Monthly Expenses
Rent: $1,100
Car payment: $340
Truck payment: $260
Food/Eating Out: $600-$800 (I think this is higher than usual)
Fuel: $200
Internet: $33 (no tv services)
Cell Phone: $55
Car Insurance (both): $172
Pet Food: $80
Other Misc Pet: $20
Netflix / Hulu: $16
Power: $60

And that's all you spend? Bullshit. Where's the shopping? Where's the clothing purchases, electronics, makeup, etc.? poo poo you buy off Amazon? Do you honestly just not buy new stuff ever besides pet food?

My point is you are not tracking your expenses accurately, and if you don't do that, then you're not being honest with yourself.

On the plus side, you are much more sane than Slow Motion and your wife seems like a nice lady, so there's plenty of hope for you! I'd suggest signing up for Mint and tracking all of your expenses for a month or two, you'd be surprised at what you end up spending your money on.

Slow Motion
Jul 19, 2004

My favorite things in life are sex, drugs, feeling like a baller, and being $30,000 in debt.
You should divide that 'Food/Eating out' line into 'Groceries' and 'Eating Out'. They are vastly different ways to spend money on food.

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal
Thanks all for the replies.

Because our goal is to buy house I (and my wife will have input as well) will attempt to be as honest as possible. Again I know that especially I am impulsive and I like new things, so I need this thread for accountability.

As for the questions:

quote:

I'm seconding this. When did you get your job? +$2000/month does not equate to taking out a $400 payday loan. These numbers just don't add up at all. To give you the benefit of the doubt, are you sure you're using the software correctly?
7 months ago. Yes YNAB is being used correctly, but only since the 7th of this month. We used to use it when we were near poverty line because we had to, but any real budget pretty much went out the window for the past 6 months. We're ready to try to handle things responsibly now.

Our pets eat well yes. We have 1 dog and 3 cats. Does anyone want some cats?

The dog food is the most expensive at $55.00 / 30lb bag. The cats cover the rest. The cats get the cheapest good food we can buy (grain free). The dog gets stuff that doesn't make her mess all over the house.

I think the numbers are fairly accurate. Here's since the 7th of this month (when we restarted YNAB):
Top Level

Biggest Category:


I bought the Playstation 4 this week, so that's where the largest amount of that spending cash comes from. It's pretty much our Christmas present this year (more mine, I'll still get my wife something). The business expenses cost $193.00 so far, and made us $224.00 (gross). As stated earlier I also cut quite a few of these expenses which won't be reflected for the next few months (a quarterly bill hit us this month).

I can't remember what the payday loan was for, which sucks because it was a lot of money. It's been a couple months and we were only paying interest so we could have more spending cash. We haven't exactly needed it lately.

Also yes the groceries and restaurants happen to be exactly the same.

Both of our paydays fall on this Friday; we'll budget for it Thursday night and I'll be sure to post it for scrutiny.

Just saw this:

quote:

I'd look into doing something about the interest rates on your auto loans, those are destroying you and ridiculous.

You're spending an awful lot on food every month. Have you considered packing lunches and preparing foods that create a lot of leftovers? Not trying to suggest eating red beans and rice for every meal, but we can all reduce our spend on food to a certain extent.

The car loan is only 3 months old and I don't think a refinance is quite yet possible. The truck my wife is going in Friday to see if they'll refinance now. We've gone a year without even a late payment on it. It's also our credit union so they can see our cash flow and stuff. I'm in the drat Chex system with another credit union that ended up charging me over $200.00 in overdraft fees for a $0.04 overdraft, so once I finally pay those guys I'll get on my wife's checking account (I just use her card and my Paypal debit card with that account as a backup) I'll speak to them about getting our loan with them instead.

We do pack lunches pretty much every day. Maybe once a month do I go out to lunch; same with my wife. We definitely do not always make food that leaves a lot of leftovers, but this is something we've been trying to do (we made BBQ chicken pizza last night with a premade crust). Really if the bill gets as high as stated it's because we'll go somewhere an expensive. We went to a $40.00 breakfast buffet one day, the night before we went and got coffee and a beer at a casino that ended up costing about $40.00, etc.

I'd say that restaurant spending like that comes in spurts though. We definitely try to eat at home most nights. Sometimes this will turn out to be more expensive if we end up smoking ribs.

Re: The lost money
I was just thinking about this, and I realized that we both bought quite a bit of clothes last month. That's probably where a lot of money went. I had to go on a business trip out of town for a week so I had to buy some dress shirts and another pair of Khakis. I also bought a pair of jeans since I had only one pair, and some nice polos for normal days at work. I also bought a winter jacket (I didn't have one) at Costco for $40. We bought pretty much everything on clearance, but it was still like $400.00 after everything was said and done.

Then we bought an electric tooth brush which is awesome and will probably save us money in the long run, and a bunch of BBQ food for my wife's birthday party. That wasn't cheap, either. We did make enough rub to last us a year or so which required a lot of spices. We make enough BBQ that I think the rub was worth it, though. We just used it last night on our chicken. Add in beer, whiskey, etc it got expensive.

[Fake Edit]
Hopefully this post will clear up the most recent questions.

NJ Deac
Apr 6, 2006

Knyteguy posted:

Savings / Retirement: 0

Knyteguy posted:


I bought the Playstation 4 this week, so that's where the largest amount of that spending cash comes from. It's pretty much our Christmas present this year (more mine, I'll still get my wife something).

Re: The lost money
I was just thinking about this, and I realized that we both bought quite a bit of clothes last month. That's probably where a lot of money went. I had to go on a business trip out of town for a week so I had to buy some dress shirts and another pair of Khakis. I also bought a pair of jeans since I had only one pair, and some nice polos for normal days at work. I also bought a winter jacket (I didn't have one) at Costco for $40. We bought pretty much everything on clearance, but it was still like $400.00 after everything was said and done.

Then we bought an electric tooth brush which is awesome and will probably save us money in the long run, and a bunch of BBQ food for my wife's birthday party. That wasn't cheap, either. We did make enough rub to last us a year or so which required a lot of spices. We make enough BBQ that I think the rub was worth it, though. We just used it last night on our chicken. Add in beer, whiskey, etc it got expensive.


This here is the toughest thing about reigning in your budget - getting past the idea that "We just need to spend a little extra this month. A new game console only comes out every few years/it's the holidays/it's my wife's birthday". You have to realize that there's always something like this and you need to 1) budget for it 2) treat it as a need and reduce your spending elsewhere or 3) acknowledge that it's a want and not a need and do without.

I feel your pain, because I had a PS4 preordered too, but after going over the numbers with my wife, we discussed it and decided now wasn't a good time to be spending ~$500+ (console, extra controller, PS Plus subscription, games) on a new console. You can't look at it from the perspective of "It's the holidays, I deserve this". You have to be mindful of the fact that you have no savings. What if you lose your job or your wife loses hers? What if one of the cars needs an expensive repair? What if one of your pets needs surgery?

Going out and buying a PS4 when you have no money in savings is exactly the reason you're broke, and you'll continue to be broke until you can change the way you think about your money.

NJ Deac fucked around with this message at 20:03 on Nov 20, 2013

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

NJ Deac posted:

This here is the toughest thing about reigning in your budget - getting past the idea that "We just need to spend a little extra this month. A new game console only comes out every few years/it's the holidays/it's my wife's birthday". You have to realize that there's always something like this and you need to 1) budget for it 2) treat it as a need and reduce your spending elsewhere or 3) acknowledge that it's a want and not a need and do without.

I feel your pain, because I had a PS4 preordered too, but after going over the numbers with my wife, we discussed it and decided now wasn't a good time to be spending ~$500+ (console, extra controller, PS Plus subscription, games) on a new console. You can't look at it from the perspective of "It's the holidays, I deserve this". You have to be mindful of the fact that you have no savings. What if you lose your job or your wife loses hers? What if one of the cars needs an expensive repair? What if one of your pets needs surgery?

Going out and buying a PS4 when you have no money in savings is exactly the reason you're broke, and you'll continue to be broke until you can change the way you think about your money.

Thanks. I realize now the PS4 was a bad decision. It made this week difficult for us as well. I am absolutely doing my best to change the way we think about money. Instead of buying 3 games for it, I invested that money on an eBay sale for the business that netted about $30 after a few days for a 20% return. We have enough money now to buy another game, but I'm holding out just in case we need extra gas or something. Both of these decisions actually took some willpower.

I'm fighting myself to ensure I don't buy a Wii U and 3DS this Friday (a couple new things are coming out). We could "afford" it with plenty of money leftover to pay the bills, but I'm going to talk to my wife about holding onto it in savings if nothing else. We're probably just going to use a gift card we have and go to the movies instead though.

Also yes I'm deadly afraid of losing my job. The area I live in had the highest rate of unemployment in the United States, and I was just in the right industries to lose two jobs in a very short time. Then I lost my third job as a contractor because the boss was a complete rear end in a top hat (everyone else left a couple months after I did). Luckily my now boss and I get along very well (we just tailgated this past weekend), and I literally have billed clients as a consultant for about 2 months of my wages in the past 2 weeks or so. I would actually prefer my wife quit her job. It doesn't pay enough, and if she could focus on running our eBay business (we only have a small fraction of our products up), we could probably nearly make up the difference while improving her quality of life, at least.

Anyway I'm really hoping this thread stays on a boring positive track. If it's anywhere near as entertaining as some of the ones I've seen in here then I know we've hosed up.

What should our priorities be from here though? Like if we work at it and reign in our spending hard core, what do we do with the extra money? Do we stash it all away in an emergency fund? Do we spend every extra dollar on paying off our debts (we're going to pay off the truck first)? Our long term goals are opening a Vanguard Total Stock admiral fund, but obviously that's a little ways off. When do we start saving for our house? For retirement?

My sister lives with us currently with our two step nieces (she has guardianship). When she moves out to live with her new fiance we'll have a 2,000 sq/ft 3 story town house with 3 bedrooms and a loft. Our rent will also shoot up $500 / mo and our heating will double. Breaking the lease would cost us something like $5,000 and it's up in July or August, so I imagine we should just eat the cost now and move into a really cheap apartment afterwards?

Bhaal
Jul 13, 2001
I ain't going down alone
Dr. Infant, MD
What's the KBB for that car and how bad are we talking with bad credit? If you're near the break-even point on loan:value for the car and if your credit score isn't south of, say, 600, I'd look at your local used lots to see if you can trade it in for a much better deal. Even something like an $8k loan @ 10% while not super is a considerable improvement. That's a quick way to slash down your debt thanks to having a valuable asset to go against it (compared to, say, credit card debt). You might not have as sweet a ride once you're in an '08 Subaru or whatever, but if you pick a new car that will be reliable that'll help out your financial situation quite a bit compared to sticking with the current car. If however you're way upside down on the current car this becomes a much more thorny choice to consider. But I'm not very good with the world of car dealerships and the stuff they offer, so there might be options to help that out as well. The extent of my knowledge with that stuff is try to go shopping near the end of month (or better, end of quarter/year) because salespeople will be feeling some pressure for sales goals and quotas and what have you so will be more flexible with negotiations if their desire to close more deals becomes a bigger priority. This might be a total outdated wive's tale though so best to seek out some details on that because I think the most bang for your buck right now is to get out from under that loan and into a car that costs less, has a lower interest rate, and will last a good number of years without too many complaints.

For pet food, I'm personally of the opinion that it's an expense you don't skimp on. What I mean is not that you have to go extravagant and treat your pets to $10/meal top shelf "gourmet" stuff, but rather don't settle for questionable generic brands of bargain chow and put some effort into making sure they're healthy and eating right. I've got a good friend who's a vet with the ASPCA so her opinions and experiences have definitely influenced my own on the subject, but basically what they eat matters a hell of a lot in the long run so don't roll the dice on their health just to save a few bucks. Not only could it come back to bite you in the wallet if the pet gets sick or has other diet-related problems but add on the suffering it could cause and it just doesn't seem like a responsible decision. Anything at Royal Canin quality is reasonable in my book and I'd say your budget for that is in the ballpark. Bringing those costs as they are into considerations for changes to your budget also brings in the whole "responsible pet owner" bag of considerations. Don't get any more pets for sure, but IMHO this isn't a worthwhile line item to tool around with for your situation especially considering the other stuff.

I'd also definitely work on separating groceries vs. dining (& vs. fast food as a bonus) so that you can get a clearer picture on where that $600-800+ is going. Price sensitivity is a strange beast, especially when basic fundamentals of existence get involved such as eating food, it's easy to take things for granted. A $13 meal out somewhere during your lunch break will barely register in the moment because you've got time constraints, hunger, stress, etc all bearing down on you, but that poo poo adds up fast. It sounds like you already make an effort to pack meals and so on, but that being said your budget still seems pretty high so I'd bet if you subcategorized it a bit more you'll find one or two culprits that are driving up your food budget just because they hide under the easy habits & second nature of eating.

And to pile on about your spending sheet, you are definitely leaving things out. Not that you're doing so maliciously or whatever but definitely take some time to capture the stuff that maybe doesn't happen every month or comes up unexpectedly. I don't think you're averaging 2k left over at the end of the month and having a misleading picture of your monthly surplus can have a compounding effect where you feel like on paper you have that much extra money to spend so you make extra expenses (on anything from a PS4 to an extra heaping of debt repayment), but that wasn't really the reality of how your checking account was going to play out for the coming weeks so you end up skidding close to the margins, and that tends to be where you bump into things like overdraft fees and so on.

Not that I'm chiding you for the PS4. So maybe it's not the most responsible financial decision in history but it can certainly fit into an entertainment budget if you draw back for an appropriate number of months so that the $400(?) price tag gets spread out over the next couple months. Then it's just a high upfront cost item that has a long heavy tail of utilization for your entertainment needs. Of course, the thing to be watchful of is throwing down another $400 just as quickly with games and accessories and so on (which of course is where they get you).

EDIT: Wife and I, too, were on track to get the PS4 but our current budget plans include a honeymoon in the spring and eradicating the remainder of our non-mortgage debt (a ~3 year old car loan), so we got cold feet on it for the time being. But we might just postpone getting it until we're nearer christmas so it's more of a gift to ourselves, and/or when the game selection is a little broader because right now it seems to be almost exclusively shooters, which she has no interest in and I'd rather bite off my own ear than play an FPS on anything other than PC :smuggo:

Bhaal fucked around with this message at 21:02 on Nov 20, 2013

Cicero
Dec 17, 2003

Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Knyteguy posted:

What should our priorities be from here though? Like if we work at it and reign in our spending hard core, what do we do with the extra money? Do we stash it all away in an emergency fund? Do we spend every extra dollar on paying off our debts (we're going to pay off the truck first)? Our long term goals are opening a Vanguard Total Stock admiral fund, but obviously that's a little ways off. When do we start saving for our house? For retirement?
If your employer does 401k matching, you should be saving up to the match yesterday. Past that, for retirement and a house, you should probably start once you're out of debt. Effective 'returns' from removing debt are generally much larger and virtually always more dependable than returns you get from investing or appreciation on property. I mean just look at your car loans, you're not going to find anywhere that can dependably get you 11%/17% returns with minimal effort.

Have you tried reading frugality/financial independence blogs like Mr. Money Mustache? While I wouldn't expect you to go as extreme as he does to get out of debt, these kinds of blogs can provide some useful insight and perspective. For example: News Flash: Your Debt is an Emergency!!

dreesemonkey
May 14, 2008
Pillbug
One thing you should do is plan some discretionary spending for both you and your wife. Then everything that's not an already agreed-upon budget item that either of you want comes from that money. PS4 games would be a good example of that.

For example, every payday we take out $50/pay in cash. She gets $20, I get $20, and our son gets $10. It's a game changer in that I really have to think long and hard about anything fun I want to buy myself because it takes me so long to accrue my money. Am I really going to get $80 worth of fun out of <electronic gismo>? Does my wife really want those shoes? (The answer is yes, money burns a hole in her pocket)

This year I've been really good about saving my blow money, income from side jobs, or any other acquired money (birthdays, etc). I blew a huge chunk of it on an RC truck setup that I now pretty much regret, but it wasn't a burden to our finances because it was my money to do what I decided with it. My latest big purchase was ~$300 worth of supplies to refurnish a pool table (which I still haven't done), I'm hoping I won't regret that too.

KS
Jun 10, 2003
Outrageous Lumpwad

Knyteguy posted:

If it's anywhere near as entertaining as some of the ones I've seen in here then I know we've hosed up.

What should our priorities be from here though? Like if we work at it and reign in our spending hard core, what do we do with the extra money? Do we stash it all away in an emergency fund? Do we spend every extra dollar on paying off our debts (we're going to pay off the truck first)?

Don't worry -- buying a new $400 console while in that kind of debt is definitely entertaining.

An 18% rate on an auto loan is murderous. You might as well have put it on a credit card. That's over $200 in interest you're paying every month.

If I were you, I'd try and get a $1000 emergency fund saved up and then sink everything else into the debt, highest APR to lowest. And definitely look into refinancing.

Once you get the bleeding stabilized you can start small by contributing to your 401k up to the match, but as others have said, no investment is going to reliably beat the return you'd get by putting it toward that car loan.

wintermuteCF
Dec 9, 2006

LIEK HAI2U!
Seriously, unless you're seriously underwater on that car loan (e.g. loan is currently at 14k, car value is only 12k) then sell that car and then buy something used and significantly cheaper. It's not sexy, but you can definitely get a good used Accord or whatever for less than that, and the 18% is just killer. Why is the interest rate on that loan so high? I think mine is 5%!

Other than that, you need to budget your discretionary income. If you guys bring in 5k monthly, you need to budget at least $500 should immediately go into savings, then bring out your expected living expenses (rent/food/internet/phone). The rest is discretionary, and you should plan accordingly.

Also, buying video games at your level of debt? Totally uncool. Then you post that you just bought a PS4 and are going to need some serious willpower to not buy ANOTHER console (the 3DS)!? Get a grip, man! You want to get out of debt and start preparing for buying a house! You can't do that and drop large sums of money on impulse purchases.

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal
So I'm at work and trying not to slack off too hard, so I can't get to everyone's responses yet (which I appreciate, I've read them). My grandma stopped by my work today so we could have lunch, as we do every Wednesday. I mentioned to her our plans to start knocking down our debt, and our want to buy a house in the next 2 years or so. She's definitely the type of person that is good with finances so I generally talk to her about this stuff (she has her house paid off, very frugal and selective about her purchases, etc). Anyway before I digress too much I want to mention she put an offer on the table: if we can get out of debt, and also save $20,000 for a house, she will match us $20,000 :holy:. We have until the end of 2015, so 2 years.

I'm not sure how we'll do it yet, but I think if we really sacrifice we definitely can with some help. This is now dire for us; we're absolutely retarded if we lose a free $20,000.

Engineer Lenk
Aug 28, 2003

Mnogo losho e!
What are the rates on the student loans?

What other accounts do you have in arrears? It sounds like you have some outstanding bank fees that need to get squared away to get off chexsystems, but do you have anything else that has gone to collections?

If I was in your position, I would budget as if you had no debt and you were making exactly your wife's income (so monthly net of $2600). Then use everything above that artificial limit to start an emergency fund (1k), service and pay down your debts, and eventually channel into savings for a house or retirement.


This sets you up to live below your means, pay off your debts, and get a good jump on savings. It also makes a job loss for you slightly less catastrophic, because you'd have a basic emergency fund set up and could get by on a much lower-earning position.

Your credit score being horrible is probably connected with not having much credit history. Student loans and car loans will help, but as you can see you're paying through the nose on the car loan, and closed trade lines are not weighted as heavily as open ones. A low-limit credit card that is paid in full each month would be a good next step for building credit for an eventual mortgage once you've got everything under control (and contingent on your ability to not go nuts with spending).

Knyteguy posted:

I'm not sure how we'll do it yet, but I think if we really sacrifice we definitely can with some help. This is now dire for us; we're absolutely retarded if we lose a free $20,000.

This sounds like financial crash dieting. You're 30k in debt, so you'd have to make up 50k in 24 months. Add to that a reasonable emergency fund (particularly important for a homeowner), and you're beyond what you can realistically do.

Engineer Lenk fucked around with this message at 23:30 on Nov 20, 2013

Bhaal
Jul 13, 2001
I ain't going down alone
Dr. Infant, MD
It is unrealistic but I would go for it anyway (or rather something like it, don't literally try to make ends meet on what's nearly half your income). Not only will it get you out of debt and so on, but grandmas who make offers like that are also notorious for saying things 2 years from now like, "oh, you're debt free but only squirreled away $7k for the house? Tell you what..."

wintermuteCF
Dec 9, 2006

LIEK HAI2U!
So you want to pay off $30,000 in debt and save an additional $20,000 in cash in two years. Let's start mathing this out. First, assumptions:

a. You and your wife average $5,000 in net take-home pay.
b. Neither of you significantly alters your work hours or gets a raise. Let's plan for base expectations - if you get a raise, or she gets a higher paying job, great! Treat that as bonus.
c. We ignore any incidental income from your side-business on eBay. It's somewhat unreliable, so don't plan on it.

Let's start with your living expenses:

1. Saving $20,000 in two years is easy on paper. 20,000 divided by 24 is $833 - let's round up to $850 to keep the math simple. Set this aside each month (ideally in a separate account, like a savings account) and don't touch it. This money also functions as a buffer in case of emergencies (car breaks, computer dies, vet bills). Take all reasonable and prudent measures to not spend this money unless it's unavoidable.
Remaining monthly cash: $5,000 - $850 = $4,150

2. Living expenses - housing, food, electricity, water, internet - are somewhat fixed, but there are ways to reduce them. When your lease is up, you could consider a cheaper apartment; I don't know where you live, but $1,100 is somewhat expensive for what I assume to be a 2br/1ba apartment. Look around and see what's available. Based on the numbers in your OP, your "living expenses" minus your food expenses are about $1750.
Remaining monthly cash: $4,150 - $1,750 = $2,400

3. Your food budget is definitely high for two people, and I suspect a lot of it is eating out. I think two people eating at home with food bought from a grocer and cooked should reasonably be able to eat on $100/week or $400/month. Try to reduce your eating out, maybe do it once a week as a special treat.
Remaining monthly cash: $2,400 - $400 = $2,000

We're already this far and we haven't even talked about debt repayment, and we now have $2,000/month in cash to throw at the problem. Over 24 months, this equates to $48,000, larger than your current debt load of $30,000, so on paper this is doable. Hooray! But don't get too excited yet, because there's a lot of hard decisions to make here, and that $2,000/month also includes your discretionary spending budget.

Take a deep breath, and let's talk about your debts, and how to pay them off at an accelerated rate (2 years):

1. The car loan with $14,000 left in principal at 18% is the gorilla in the room. That's an absolute disaster of a loan - as people have pointed out, that's credit card territory in interest rates - and it's seriously damaging your ability to reach your goal. You need to get rid of that loan. As I see it, you have a few options.
a) Talk to the lender, point out the usurious interest rates, negotiate a reduction in rate
b) Shop around at banks and find an institution willing to refinance your loan and pay off the original lender
c) Sell your car, pay your loan with the proceeds, find a cheaper USED car, make sure you don't get a stupidly high interest rate on your new loan

For obvious reasons, I favor option C. In most metropolitan areas, you should be able to get a mid-2000's Japanese sedan for $4,000-6,000. This allows you instantly erase up to a third of your debt, having a lower principal loan means you pay less interest, and having a less-expensive car you should be able to get a lower rate. If you don't like option C - you're too attached to your car - then pursue option B, shop around and look at potential loans, then either go with a new lender or use this as ammunition to negotiate a lower rate with your current lender. Further, having a less expensive car should reduce your insurance premiums.

For reference, a $6,000 loan at your current ridiculous rate of 18% in 24 months is an average monthly payment of $300. Contrast this with paying off your existing loan at $700/month, which is what you'd need to average to pay it off in 24 months!

2. Without changing the truck note, just paying off the remaining principal at the existing interest rate means you need an average of $350/month to do it in 24 months.

3. About your student loan, I don't know the interest rate, so I'm just going to arbitrarily choose 6% (that sounds good to me). Paying off your remaining principal in 24 months is about $350/month.

4. Your wife's student loan is small bananas. Call it $50/month.

How does all this add up?
Without changing any of the terms of your existing debts, you need $1450/month to make your goal happen. If you take my suggestion about the car, you can reduce that to about $1050, which is much more reasonable. $2000 less whatever number slots in here is your available discretionary income.

Why does this matter? Discretionary spending comes last on the budget, and it's whatever is left over after all your other poo poo gets taken care of! So looking at your current profile, you really only have $550 left of your $5,000 income to spend once you take care of your living expenses and debts. $550 to make it the whole month, and that has to be all you spend on ALL your extra poo poo: eating out, new clothes, movie tickets, video games, books, music, etc. That's not a lot of money, and you'll need to make it stretch. You can raise your available discretionary funds by reducing your expenses, but short of my car suggestion, there's not a lot to cut.

wintermuteCF fucked around with this message at 15:03 on Nov 22, 2013

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

Bhaal posted:

What's the KBB for that car and how bad are we talking with bad credit? If you're near the break-even point on loan:value for the car and if your credit score isn't south of, say, 600, I'd look at your local used lots to see if you can trade it in for a much better deal. Even something like an $8k loan @ 10% while not super is a considerable improvement. That's a quick way to slash down your debt thanks to having a valuable asset to go against it (compared to, say, credit card debt). You might not have as sweet a ride once you're in an '08 Subaru or whatever, but if you pick a new car that will be reliable that'll help out your financial situation quite a bit compared to sticking with the current car. If however you're way upside down on the current car this becomes a much more thorny choice to consider. But I'm not very good with the world of car dealerships and the stuff they offer, so there might be options to help that out as well. The extent of my knowledge with that stuff is try to go shopping near the end of month (or better, end of quarter/year) because salespeople will be feeling some pressure for sales goals and quotas and what have you so will be more flexible with negotiations if their desire to close more deals becomes a bigger priority. This might be a total outdated wive's tale though so best to seek out some details on that because I think the most bang for your buck right now is to get out from under that loan and into a car that costs less, has a lower interest rate, and will last a good number of years without too many complaints.

Ok we'll be looking Friday & Saturday to either refinance or get rid of this car. It's a 2011 Ford Fusion. I actually wish I could get my 2006 Subaru WRX back (which was paid off at least). I would trade this car for it in a heartbeat.

quote:

For pet food, I'm personally of the opinion that it's an expense you don't skimp on. What I mean is not that you have to go extravagant and treat your pets to $10/meal top shelf "gourmet" stuff, but rather don't settle for questionable generic brands of bargain chow and put some effort into making sure they're healthy and eating right. I've got a good friend who's a vet with the ASPCA so her opinions and experiences have definitely influenced my own on the subject, but basically what they eat matters a hell of a lot in the long run so don't roll the dice on their health just to save a few bucks. Not only could it come back to bite you in the wallet if the pet gets sick or has other diet-related problems but add on the suffering it could cause and it just doesn't seem like a responsible decision. Anything at Royal Canin quality is reasonable in my book and I'd say your budget for that is in the ballpark. Bringing those costs as they are into considerations for changes to your budget also brings in the whole "responsible pet owner" bag of considerations. Don't get any more pets for sure, but IMHO this isn't a worthwhile line item to tool around with for your situation especially considering the other stuff.

Cool I was hoping there wouldn't be too much uproar about it. We do buy in bulk at least. We buy a 30 lb bag for $50 that lasts an entire month. Same with the cats (that even lasts longer usually). Our animal's health is extremely important to use. We're in our mid-late 20s without kids (for now), so I figure taking care of what we do is a smaller expense than it could be.

quote:

I'd also definitely work on separating groceries vs. dining (& vs. fast food as a bonus) so that you can get a clearer picture on where that $600-800+ is going. Price sensitivity is a strange beast, especially when basic fundamentals of existence get involved such as eating food, it's easy to take things for granted. A $13 meal out somewhere during your lunch break will barely register in the moment because you've got time constraints, hunger, stress, etc all bearing down on you, but that poo poo adds up fast. It sounds like you already make an effort to pack meals and so on, but that being said your budget still seems pretty high so I'd bet if you subcategorized it a bit more you'll find one or two culprits that are driving up your food budget just because they hide under the easy habits & second nature of eating.

Sorry, we do on the actual budget. I combined it here because it was too difficult to estimate. Some months we eat out maybe twice, others we'll eat out a few times a week every week.

Cicero posted:

Money Mustache & 401k

Neither of our employers offer a 401k. We are also avid readers of MMM, and have been since March of this year or so. We think about the philosophy of his methods often, we just haven't yet put it into to practice. It's been hard for us to become motivated to start so deep in the hole.

dreesemonkey posted:

Discretionary spending
We'll try this thanks. I don't know if we can do it at such a low rate, but we'll definitely try to find some kind of balance.

wintermuteCF posted:

Budget

Thanks for the outline; we're going to budget our paychecks for tomorrow, tonight. My wife currently takes an almost half day on Sundays so we can hang out more. She has good days off for a retail job (Friday Saturday), but I work Fridays and she works Sundays. I'll see how she feels (she's also keeping up on this thread, I'll try to get her an account) about working full Sundays more often to help increase the buffer a bit.

We're underwater on the car loan. I'm not sure how much (I don't know our trim level). My wife accidentally curbed one of our hub caps, so it's not in pristine condition anymore either. We're going to talk to our Credit Union where our checking account and truck loan is, and see if they'll take over the car as well. Barring that we'll take a short loss now and see if we can trade it in for a cheaper car. We almost got a $28,000 Mercedes C-Class before this car; I'm extremely thankful we didn't.

We're overdue for our 160,000 service for our truck, and it also needs an oil change. I'm not sure what that will cost, but we definitely won't be making much progress until the 7th (my next paycheck) at the earliest.

One concern of ours is Christmas. There's already been tension from some in my wife's family about us suddenly making a lot more money. It's going to be a balance to not look like stingy assholes, or conversely overdoing it. Ideally we'll get away with small gifts (like cookies) to the adults and be able to splurge a bit on the 6 kids in the family (without going overboard).

Also the student loan interest is the subsidized rate of half, and the unsubsidized rate on half. It's like 4.5% and 6%. I can't get an exact number because apparently I don't have Dept Ed/Sallie Mae account to check. We're not being billed on these yet, but since I dropped out we will be in January I imagine.

Oh one more thing to take into account is our Tax returns. Since I'll only be working about 7 months this year, and I was a qualified student for half the year, we're looking to get about $8,000 back according to a couple tax calculators. I qualified for a Pell Grant because we were in such bad shape, so we get a nice fat credit for paying for school even though it didn't cost much out of pocket. I think the IRS withholding calculator told me I needed to claim 8 dependents to break even on taxes this coming season; I claimed 2 or 3.

Thanks all for the helpful posts.

E: Typos

Knyteguy fucked around with this message at 18:43 on Nov 21, 2013

wintermuteCF
Dec 9, 2006

LIEK HAI2U!
Good, I have high hopes for you Knyteguy (unlike Slow Motion, who I only have high hopes for entertainment in his thread due to his catastrophically poor decision making). If I may dispense some more advice:

- Treat your tax returns the same way you would a bonus. If you guys get a return of 8k, then I suggest you take a small amount and treat yourselves (maybe take a weekend holiday somewhere reasonable) and put the rest toward your savings and debts. Maybe put 2k into your savings for the house, then the rest throw it at your highest interest% debt that remains.

- For Christmas, don't let guilt on the part of your families entice you to spend more than you plan to. Talk to your wife about it now, and plan how much you'd like to spend in total, then figure out how to divide that between the necessary parties. If someone gets their panties in a knot because you didn't buy them an expensive gift, gently caress 'em - you're in debt and you need to take care of what's important. And if they ask why, don't feel obligated to discuss your finances, because it's not their loving business in the first place. Try to focus on thoughtfulness as opposed to expensive for your gifts as well. It's one thing to give a child a $50 video game because you don't know what he wants, it's another thing entirely to give him a $20 gift that he's really interested in.

Good luck! Let us know how the car/financing research goes. If you want more specific advice, post your trim level, approximate miles, and region and we can probably help you with book values and such.

Cicero
Dec 17, 2003

Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Knyteguy posted:

One concern of ours is Christmas. There's already been tension from some in my wife's family about us suddenly making a lot more money.
This is probably none of our business, but tension because of making more money? That sounds weird. "I can't believe they got a better-paying job, those dicks!"

edit: is your wife's family all devout marxists?

Harry
Jun 13, 2003

I do solemnly swear that in the year 2015 I will theorycraft my wallet as well as my WoW
I'd use your refund to pay down some of your debt if you can take out more student loans.

Nur_Neerg
Sep 1, 2004

The Lumbering but Unstoppable Sasquatch of the Appalachians

Knyteguy posted:

My wife accidentally curbed one of our hub caps, so it's not in pristine condition anymore either.
This might be something you can find in a junk yard super cheap, or on any model-specific forums online from people upgrading to proper rims or something, at the worst it shouldn't be too expensive to replace, if you decide to sell or trade this for something else—or even if you just want to hold onto it and fix up the hub cap.

Knyteguy posted:

We're overdue for our 160,000 service for our truck, and it also needs an oil change. I'm not sure what that will cost, but we definitely won't be making much progress until the 7th (my next paycheck) at the earliest.
My real question is how do you owe $7,000 on a vehicle with 160,000 miles on it? :aaa:

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

wintermuteCF posted:

Good, I have high hopes for you Knyteguy (unlike Slow Motion, who I only have high hopes for entertainment in his thread due to his catastrophically poor decision making). If I may dispense some more advice:

- Treat your tax returns the same way you would a bonus. If you guys get a return of 8k, then I suggest you take a small amount and treat yourselves (maybe take a weekend holiday somewhere reasonable) and put the rest toward your savings and debts. Maybe put 2k into your savings for the house, then the rest throw it at your highest interest% debt that remains.

- For Christmas, don't let guilt on the part of your families entice you to spend more than you plan to. Talk to your wife about it now, and plan how much you'd like to spend in total, then figure out how to divide that between the necessary parties. If someone gets their panties in a knot because you didn't buy them an expensive gift, gently caress 'em - you're in debt and you need to take care of what's important. And if they ask why, don't feel obligated to discuss your finances, because it's not their loving business in the first place. Try to focus on thoughtfulness as opposed to expensive for your gifts as well. It's one thing to give a child a $50 video game because you don't know what he wants, it's another thing entirely to give him a $20 gift that he's really interested in.

Good luck! Let us know how the car/financing research goes. If you want more specific advice, post your trim level, approximate miles, and region and we can probably help you with book values and such.

Thanks my wife and I will go over your post regarding both. I too agree it's none of their business. There's been a lot of drama as of late that I really don't want to deal with any further. Hopefully it won't continue.

Cicero posted:

This is probably none of our business, but tension because of making more money? That sounds weird. "I can't believe they got a better-paying job, those dicks!"

edit: is your wife's family all devout marxists?

My brother in law had a totally weird moment when he found out about my job. The day after we found out I got the job he basically got really jealous and insecure, saying that we all live in really nice houses (my wife and I were sharing a 950 sq/ft house with my sister and two kids for $400/mo) and that we need to be more thankful to him for serving in the military and that he really deserves stuff like that. It was really weird and it definitely hurt our relationship. It's been awkward ever since.

Nur_Neerg posted:

My real question is how do you owe $7,000 on a vehicle with 160,000 miles on it? :aaa:
http://www.kbb.com/ford/f150-super-...7%7ctrue#survey
http://www.kbb.com/ford/f150-super-...7%7ctrue#survey

4 wheel drive trucks hold their value really well around here. I live in Reno, where even in my snow ready AWD Subaru this city has had me pinned in the snow overheating from clearance on city streets. Actually we're going to try to refinance the truck on Saturday too; I'm going to remove gap insurance because it appears the truck is worth more than the actual loan right now. That will save us at least $20.00 more a month. The car also has gap but we'll keep it on there. We'll check the junk yards. I'm still kind of annoyed because they looked so close to actual wheels that I thought they were.

Harry posted:

I'd use your refund to pay down some of your debt if you can take out more student loans.

This right here is why we have such a lovely loan. I was going to pull $12,000 in student loans (my limit for my third year) and use it to put it towards the car. At least then we would have had a decent interest rate. I dropped out though because I couldn't handle work and school at the same time; I travel for work and stuff. No-go on the student loans.

Nur_Neerg
Sep 1, 2004

The Lumbering but Unstoppable Sasquatch of the Appalachians
Dunno if these are right, but should give you an idea as to how much a replacement hubcap'll cost: http://www.ebay.com/itm/NEW-2010-2011-Ford-FUSION-Hubcap-Wheelcover-/110797321608

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

Nur_Neerg posted:

Dunno if these are right, but should give you an idea as to how much a replacement hubcap'll cost: http://www.ebay.com/itm/NEW-2010-2011-Ford-FUSION-Hubcap-Wheelcover-/110797321608

Hey awesome thank you that's really cheap. We'll just replace all four if we sell, so people can't say "But KBB says good means all wheels are flawless!".

Weatherman
Jul 30, 2003

WARBLEKLONK

Knyteguy posted:

We can't sell the cars, or at least we need to have two cars at all times. My wife and I shared a vehicle for 3 years, but my current boss set an expectation that I have my own vehicle in case I need to go to a client's office for something. There wasn't enough time to save. I know we spent too much, and it was stupid.

Have you tried asking your boss to give you an allowance for the company-mandated maintenance of the car?

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

Weatherman posted:

Have you tried asking your boss to give you an allowance for the company-mandated maintenance of the car?

He mentioned he was unable to cover a company car right now or something so I'd imagine the answer is no. The company I work for is really really small (I'm the only full time employee, and the other employee is my boss' sister in law).

Actually that brings me to my next point. I just got this email:

quote:

Payday this period is going to be a day late. Rather than being paid tomorrow on the 22nd, you’ll be paid on Monday the 25th. I’m sorry that this had to be this way, we just didn’t have the cash in the bank until we received a check today and the direct deposit takes two days. If this causes an issue for you, let me know and we’ll figure out something.

I mean luckily my wife gets paid tomorrow but we have two car payments due. I told him no problem but it's worrying. I love my job for the most part because I'm the lead developer and I have the entire office to myself most weeks because my boss travels so often. The work is interesting enough and my boss has told me multiple times that he wants to make me a true lead / manager when we get another developer in here. Should I blow this off as a one time thing? I mean it is the first time it's happened, it just makes me a little afraid of the future again (and I just recently started feeling secure about having a job after the past few years).

He just sent me another email as well that said it's been a good month for cash flow, he just hasn't been paid yet. I mean Amazon's recruiters have invited me twice to expense paid interviews in Vegas and stuff, and two other firms found me on LinkedIn that would mean probably a six figure income (extremely in demand stuff) but if poo poo were to really hit the fan it's difficult to say if I could find something -that- quickly. Plus it would require at least a month of planning with relocation to who knows where. I think it would be wise to get an emergency fund going.

Again my boss is a great guy; I don't like being in this spot. I do know that one of the checks of his just came yesterday (as I got the mail for the office).

Knyteguy fucked around with this message at 23:30 on Nov 21, 2013

WampaLord
Jan 14, 2010

Holy poo poo, your company is delaying paychecks due to lack of cash on hand? You need to be looking for a new job yesterday.

Uncle Jam
Aug 20, 2005

Perfect
I guess you're getting bites but did you finish your degree before you started the new job?

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

Uncle Jam posted:

I guess you're getting bites but did you finish your degree before you started the new job?

No, I dropped out due to a lack of time. I'm fairly confident I can continue in my industry without one though. I've also considered going into consulting, as I'm pretty comfortable with business.

This is terrible though; now I'm actually worried. I mean like I said I bill $150.00 / hr to clients and get paid 1/5th of that, and I did a lot of billing this month (like 60-80 hours in the past 30 days). I've seen our client work queues and I think there was probably just an estimation that was off that caused this.

Josh Wow
Feb 28, 2005

We need more beer up here!

Knyteguy posted:

Hey awesome thank you that's really cheap. We'll just replace all four if we sell, so people can't say "But KBB says good means all wheels are flawless!".

Why buy four when you only need 1?

SiGmA_X
May 3, 2004
SiGmA_X
That's really sketch regarding payroll. They should have had the bank cut counter checks for everyone. At least they told you a day ahead of time - my friends company was doing fine financially but everyone's checks were (I forget exactly) 40-50% of what they should have been and all the directors were at a retreat or something. It was resolved, the company is still doing fine, it was a processing glitch basically (their payroll person, not the 3rd party processor...)

Can you get us your student loan rates when you are able to access their site?

There is some great info in this thread already. I think you really need to try to reduce the interest rates on your vehicle loans, and/or get rid of the vehicles and buy cheaper vehicles.

Rent problem: When does the sister move? What *I* would do is save up money for a deposit/first/last (whatever is common in your area), and list your townhouse on craigslist for a lease takeover. Its pretty straight forward usually, and you pass the lease off to the new person with the landlords assistance. It will save you a ton of money. Get an apartment within your price range so you can save more and get debt free and downpayment ready over the next 25 months.

Do work!

Bhaal
Jul 13, 2001
I ain't going down alone
Dr. Infant, MD
In a way I'm not too surprised, small business & revenue through billable hours to companies is a pretty inviting environment for cashflow problems. It's really easy for a company in that spot to be looking great on paper what with all these accounts receivable and so on yet get stuck on paying what's due. I used to do software consulting some years back and have had those conversations of "We're flying you out to X to spend some time with a client, but we need you to book the air and hotel on your dime. Keep the receipts and we'll reimburse you a couple weeks after you get back. Also please keep this to yourself, we've got enough to cover payroll and checks are coming in but we don't want to create any worry". If you're that small you should have a pretty good idea of how the business is doing and whether this is a sign of a failing venture or a rare and hopefully never repeated incident. If you're putting in a ton of billable work and so is everyone else, unless they are royally loving up then things should be fine.

That said, usually a company will do everything in its power to make payroll and while we probably don't have the full picture it doesn't look like they pulled out any sort of emergency measures to make sure their staff are paid in full and on time. If I were you I'd be paying close attention to how they regard this situation with you. If they don't seem to be taking this as a very serious problem then that's quite the red flag. A good company that screws up payroll will make some effort to re-assure you it was an unexpected accident, working on making sure it doesn't happen ever again, very sorry etc, and will commonly offer something to the effect of "if you get an overdraft or bounced check on a bill or otherwise reasonable expense or are directly affected by this delay in any other way please bring it to us and we will see about helping cover the damages". This for an employer should be viewed on or near the level that an employee would view the seriousness of being a no call / no show for a day of work. The owners are the ones taking the risks and you're the one foregoing equity in what you're doing for a stable salary (to your point about only earning ~20% of your billable rate, part of that reduction is for the stability of pay that they're offering you). It's completely unreasonable for them to shift that risk to you when they hit a cash crunch. It's just one day and I get that the check is in this was a matter of them losing the race on having it clear the banks in time but if they don't seem too bothered by it then for me that'd be a big knock to my confidence in my employer looking out for their end of the agreement.

Bhaal fucked around with this message at 01:07 on Nov 22, 2013

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

Bhaal posted:

In a way I'm not too surprised, small business & revenue through billable hours to companies is a pretty inviting environment for cashflow problems. It's really easy for a company in that spot to be looking great on paper what with all these accounts receivable and so on yet get stuck on paying what's due. I used to do software consulting some years back and have had those conversations of "We're flying you out to X to spend some time with a client, but we need you to book the air and hotel on your dime. Keep the receipts and we'll reimburse you a couple weeks after you get back. Also please keep this to yourself, we've got enough to cover payroll and checks are coming in but we don't want to create any worry". If you're that small you should have a pretty good idea of how the business is doing and whether this is a sign of a failing venture or a rare and hopefully never repeated incident. If you're putting in a ton of billable work and so is everyone else, unless they are royally loving up then things should be fine.

That said, usually a company will do everything in its power to make payroll and while we probably don't have the full picture it doesn't look like they pulled out any sort of emergency measures to make sure their staff are paid in full and on time. If I were you I'd be paying close attention to how they regard this situation with you. If they don't seem to be taking this as a very serious problem then that's quite the red flag. A good company that screws up payroll will make some effort to re-assure you it was an unexpected accident, working on making sure it doesn't happen ever again, very sorry etc, and will commonly offer something to the effect of "if you get an overdraft or bounced check on a bill or otherwise reasonable expense or are directly affected by this delay in any other way please bring it to us and we will see about helping cover the damages". This for an employer should be viewed on or near the level that an employee would view the seriousness of being a no call / no show for a day of work. The owners are the ones taking the risks and you're the one foregoing equity in what you're doing for a stable salary (to your point about only earning ~20% of your billable rate, part of that reduction is for the stability of pay that they're offering you). It's completely unreasonable for them to shift that risk to you when they hit a cash crunch. It's just one day and I get that the check is in this was a matter of them losing the race on having it clear the banks in time but if they don't seem too bothered by it then for me that'd be a big knock to my confidence in my employer looking out for their end of the agreement.

I thought I recognized your name from CoC.

I'll pay closer attention then. This was his followup email, and I doubt I'll hear much more in person or in email:

quote:

Keep doing billable work – which of course means, tell your boss to get you more billable work! We should have a wave of it pretty soon. This has been a good month, we just have to wait to get paid and both COMPANY 1 and COMPANY 2 are really slow at paying. We should have some good cash flow by the end of this month and the first weeks of next month though.

I definitely know that there have been times where he has foregone pay while I was paid on time, so I think that says something.

We're trying to get a SAAS rolling. Apparently a big player in the industry will be working hard on selling it January 1 as he is a partner in the project, so hopefully things will look up from there. This is why I was nervous about working at such a small firm. Hopefully things will work out. I really wish I could focus on mostly billable work. The skillset is rare and valuable if something happens and it also pays my boss well. The job security it gives is nice too.

SiGmA_X:
Can you get us your student loan rates when you are able to access their site?
Sure I'll do that ASAP

Rent problem:
It's tough to say for sure because she is working on adopting the two kids she has guardianship over, and the parents are flaky drug addicts who threaten to go to court to take the kids back every week or so. She can't move until the process is finalized, or she reapplies successfully for guardianship where she's moving. She's looking at around February though. We'll definitely move out as soon as we can though. The place is just way too big for us, so we'll try to keep it sub $1,000 while keeping the pets.

Knyteguy fucked around with this message at 16:43 on Nov 22, 2013

dreesemonkey
May 14, 2008
Pillbug

Knyteguy posted:

Rent problem:
It's tough to say for sure because she is working on adopting the two kids she has guardianship over, and the parents are flaky drug addicts who threaten to go to court to take the kids back every week or so. She can't move until the process is finalized, or she reapplies successfully for guardianship where she's moving. She's looking at around February though. We'll definitely move out as soon as we can though. The place is just way too big for us, so we'll try to keep it sub $1,000 while keeping the pets. Plus our neighbors are really uptight about everything which is annoying.

Is there CYS involvement with these children? If so, does the CYS agency have legal custody (i.e. court granted CYS agency legal custody, they placed the children where they are currently now - I'm not sure who we're talking about)? If so, these things take time. If the goal is adoption for the children and the parents aren't having any regular visits with them, typically there aren't too many issues if the court can prove the parent's aren't trying to get their kids back. It's just a long process to terminate parental rights. I work for a CYS agency but don't do casework, so I don't know all the ins and outs but I have an ok understanding of the process.

Some other thoughts: Don't buy 4 hubcaps if you don't need 4, we just saved you at least $75. If you're going to sell the car, clean it up first to inspect the damage. If the hubcap isn't really that noticeable with the wheel covers all shined up then I doubt many people would honestly care. You can offer any serious buyers that complain about it that you'll replace it for $25.

Very cool of your grandma to offer matching your down payment on a house, I hate to be the gloom and doom guy but it doesn't seem doable at this point. $30k to get out of debt, $20k to save for a down payment, but you're not including a stout emergency fund which should be at least a couple of thousand dollars especially since your current employment situation seems questionable. I'd give your boss the benefit of the doubt for now since it's only three people, but if this problem continues after a few good billable months something is definitely up.

Good news though, a number of years ago my wife and I, newly married, dug ourselves out of the same hole as you in just under 2 years making roughly the same (or a little less) takehome than you so it's completely possible, but we were intense about us. It took us 713 days from our wedding date to pay $51,541.87 off (wife's student loans). Over that time we also bought a house and took advantage of the $8k homeowner buyers credit, so we basically broke even on that from money out of pocket. (5% down and closing costs was approximately ~$8-10k, I think which we had saved). So it is possible, but it's a big lifestyle change. You may notice I have it tracked down to the penny, well it was a HUGE milestone for both of us and something I'm very proud of. I had figure out that it somewhere between 30-35% of our takehome pay, which I think is pretty awesome. We're a bit looser with money these days but the basics have still stuck with us, we have no debt other than our house and have enough money to save, buy occasional stupid poo poo, and cashflow fixing up our house. We're also saving for retirement (maybe not quite as much as we should) and have an educational savings plan for our son. All those still come first, then what's left at the end of the month is saved for other purposes.

Exactly what wintermuteCF was saying, pay your bills and debts first and what is left is somewhat up to your discretion, I cannot stress this enough. Every time I get paid I will shuffle money around into various accounts to save for future stuff, and pay bills that will come from this money. I don't care if they're not due for 1 day or 15 days, I pay it and get it out of the way. From there, I have a good estimation of "what's left" for agreed-upon discretionary spending. Seriously, this is the easiest thing to do and at least to me, gives the best picture of "what's left after things that I absolutely had to pay".

Hopefully once you do this for a while you're going to get to a point where you're watching your finances like a hawk and really thinking before making every purchase. Skip buying a soda at the store, don't buy the new release movie, and see what happens. Eventually you'll look at your end of month finances and see money left over. This is extra you can put in emergency savings and throw at your debt. It becomes kind of a game.

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal

dreesemonkey posted:

Is there CYS involvement with these children? If so, does the CYS agency have legal custody (i.e. court granted CYS agency legal custody, they placed the children where they are currently now - I'm not sure who we're talking about)? If so, these things take time. If the goal is adoption for the children and the parents aren't having any regular visits with them, typically there aren't too many issues if the court can prove the parent's aren't trying to get their kids back. It's just a long process to terminate parental rights. I work for a CYS agency but don't do casework, so I don't know all the ins and outs but I have an ok understanding of the process.


Thanks I'm not sure. Here's the story: http://www.gofundme.com/5ecjx4 maybe you can draw more from that. I'm not soliciting donations for my sister (seriously), but she tells the story better than I can.

quote:

Some other thoughts: Don't buy 4 hubcaps if you don't need 4, we just saved you at least $75. If you're going to sell the car, clean it up first to inspect the damage. If the hubcap isn't really that noticeable with the wheel covers all shined up then I doubt many people would honestly care. You can offer any serious buyers that complain about it that you'll replace it for $25.

The hubcaps are pretty chewed up, but yea probably only one needs to be replaced. I will keep that in mind.

quote:

Very cool of your grandma to offer matching your down payment on a house, I hate to be the gloom and doom guy but it doesn't seem doable at this point. $30k to get out of debt, $20k to save for a down payment, but you're not including a stout emergency fund which should be at least a couple of thousand dollars especially since your current employment situation seems questionable. I'd give your boss the benefit of the doubt for now since it's only three people, but if this problem continues after a few good billable months something is definitely up.

I figure like someone else mentioned, we can use our house savings as an emergency fund in the worst case scenario. Before we actually put money down on a house, we can meet our goals and save up another emergency/house fund. At least that's what we were thinking.

I gave it some real thought yesterday and early today after getting all screwed up about it, and I think the company will be OK. It's been around for 7 years, I'm not the company's first developer (plenty of contractors, and I think one real employee), and I think the big check just took a lot longer than they expected. Hopefully they will take this as seriously as I have and be more conservative. Regardless, I don't think the company will be gone tomorrow, or even 6 months from now.

On that note, we absolutely will still be saving an emergency.

quote:

Good news though, a number of years ago my wife and I, newly married, dug ourselves out of the same hole as you in just under 2 years making roughly the same (or a little less) takehome than you so it's completely possible, but we were intense about us. It took us 713 days from our wedding date to pay $51,541.87 off (wife's student loans). Over that time we also bought a house and took advantage of the $8k homeowner buyers credit, so we basically broke even on that from money out of pocket. (5% down and closing costs was approximately ~$8-10k, I think which we had saved). So it is possible, but it's a big lifestyle change. You may notice I have it tracked down to the penny, well it was a HUGE milestone for both of us and something I'm very proud of. I had figure out that it somewhere between 30-35% of our takehome pay, which I think is pretty awesome. We're a bit looser with money these days but the basics have still stuck with us, we have no debt other than our house and have enough money to save, buy occasional stupid poo poo, and cashflow fixing up our house. We're also saving for retirement (maybe not quite as much as we should) and have an educational savings plan for our son. All those still come first, then what's left at the end of the month is saved for other purposes.

Congratulations. That must have felt absolutely amazing. Thanks for the positive note, I haven't seen too many in this forum, really. (When it comes to people deep in debt)

quote:

Exactly what wintermuteCF was saying, pay your bills and debts first and what is left is somewhat up to your discretion, I cannot stress this enough. Every time I get paid I will shuffle money around into various accounts to save for future stuff, and pay bills that will come from this money. I don't care if they're not due for 1 day or 15 days, I pay it and get it out of the way. From there, I have a good estimation of "what's left" for agreed-upon discretionary spending. Seriously, this is the easiest thing to do and at least to me, gives the best picture of "what's left after things that I absolutely had to pay".

Hopefully once you do this for a while you're going to get to a point where you're watching your finances like a hawk and really thinking before making every purchase. Skip buying a soda at the store, don't buy the new release movie, and see what happens. Eventually you'll look at your end of month finances and see money left over. This is extra you can put in emergency savings and throw at your debt. It becomes kind of a game.

Well we put another $40 towards the truck which is something I guess, and insurance pulled out. We don't budget until we're pretty drat close to our paydays, so we won't have much to post budget wise until Monday when I get paid. Everything else has pretty much come out automatically and drained us. We definitely wait until the last minute to pay bills, but generally that's because of auto deduction. We both have direct deposit, which until this week has meant we know exactly when the money will be coming.

What's cool though is pretty much all of this paycheck will be free for whatever.

A couple of monthly expenses I've missed and will add to YNAB and post on here:
GameFly - $22.95 / mo - This will probably be a bulk of my entertainment budget.
Sirius/XM - ~$16.95 / mo

The Sirius is for the car. If we sell and don't refinance, we'll get rid of this.

Also we got hit with $112 in overdraft fees because we had money in Paypal, but they still decided to bill our bank when we weren't ready (I mean we used our PayPal MasterCards which tie directly to our PayPal funds). To ensure this won't happen ever again I removed our bank as a backup funding source for the card. We get 1% back for using the MasterCard, but it's not worth it. Maybe once we are very good about YNABing things and we have every single expense predicted and entered we'll go back to using it for the 1%, but that really sucks. Also it just ate most of our eBay business revenue as well (which is the whole reason for having the card and money in PayPal). We've only been in business for 2 months so there wasn't much to eat. Also our credit union charged us on 3 overdraft fees, but only let one of the charges go through. Does anyone else think that's pretty dumb?

Anyway other than that we spent $34.00 eating out and on drinks (for me) yesterday. I was kind of screwed up after the whole payroll thing and needed to clear my head. I figured we didn't do too bad though (1 margarita and 2 $12.00 meals) considering.

Also I swear State Farm is loving us. Our insurance went up $13.00 for no reason that I can figure out. We've been with them for years, and my wife for even longer. Insurance budget went up to $184.84 from $171.85 last month. It seems like we get rate increases pretty often from them, so I'll be watching this closely in the months to come.

I think that's it. I'll get everything posted Sunday night at the latest.

Knyteguy fucked around with this message at 23:12 on Nov 22, 2013

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Bugamol
Aug 2, 2006
I don't understand how you can say you potentially have $2,000 worth of "extra" cash each month, with an absurd food budget, and yet get an overdraft fee.

Also you bought a $400-$500 "new game system", talk about the other "new game systems" you want to buy, and you get an overdraft fee?

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