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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.
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Nov 20, 2013 23:01
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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 |
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Nov 21, 2013 01:43
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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.
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Nov 21, 2013 18:49
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Truthfully - and I have high hopes for OP - I wouldn't co-sign a car loan for him if I had any idea of the current state of his finances and his splurge spending (PS4, upcoming Christmas, etc). It would be a nice gesture, and it's a huge savings, but it's also a big risk with OP being on the edge with regard to solvency.
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Nov 24, 2013 00:28
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Cancel your satellite radio subscription. It's $16/month that's pointless - regular radio is FREE. Or listen to audiobooks you can probably check out from your public library. Or literally anything that's not paying $16/month for very little value.
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Nov 25, 2013 21:58
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Knyteguy posted:Well I might use my budgeted spending cash to hit up Gamestop on Black Friday. They have a "must have" subscription service card for $30.00 (regularly $50 for a year). This will be the only Black Friday shopping we do. Since it's normally about $4 a month for the service and constantly gives away free games I think it's worth it. quote:Some quick updates: quote:I've been tempted to just give her complete control of the spending decisions, but I think I need to work through my spending habits instead of just taking the easy way out. I'll talk to her about specific roles anyway though. quote:Thanks all for the ideas on the gifts. We agreed to do something like homemade ornaments for the adults, and under $10 toys for the kids as well. We're going to be baking cookies with my grandma for gifts too. We're on track to spend less than $100 on Christmas now. The budget in my head before was $1,000. We might still use that Best Buy card too, or we might sell it. I got an estimate for $123.00 from a gift card buying site (value $137). Good luck Knyteguy!
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Nov 28, 2013 00:45
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HooKars posted:How in God's name were you planning on spending $1,000 on Christmas? It's you and your spouse ALREADY bought a $400 playstation for the two of you as your main Christmas gift and you're apparently not even counting that in the budget? Aside from that, you have 6 kids to buy presents for and maybe a couple of adults who can't expect pricey gifts because who still gets really expensive gifts for their brothers/sisters/parents at that age? Christmas is about the kids at some point, and kids who are not your own don't need ~$150 spent on them. Calm down. Knyte and his wife have already realized the folly of spending this much, and are not going to. No need to yell at him further.
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Nov 28, 2013 15:50
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Depending on how frequently you change blades, Dollar Shave Club can also help you out on razors. I think I pay $6 every other month because I only change blades (the 4-bladed kind because I'm lazy) every other week, so 4 blades lasts 2 months. Far cheaper than buying in a drugstore, and you don't have to think about it.
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Dec 2, 2013 04:14
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WampaLord posted:Rather than subscribe to their dumb "pay every month" model (which is just a trick to make you forget to cancel and keep your subscription going forever), you can just go to https://www.dorcousa.com and buy the razors in bulk. Spent $24 bucks, now have enough razors to last me 6 months. 4 razors is $5.50 + shipping through Dorco 4 razors is $6.00 with shipping included through Dollar Shave Club? You can also sign up for every-other-month shipments, so 6 months of razors for me is $18 ($6 x 3). Don't be a twat.
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Dec 2, 2013 21:19
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Old Fart posted:It's okay to skip them from time to time. Some advice on the economics of video games. There are two types of games: 1. Games that need to be played now in order to get the full experience. These are almost entirely ONLINE multiplayer games, like an MMORPG or [insert flavor-of-the-month first-person-shooter game]. The game is dependent upon the community of players, and that community will be in full force for a limited period of time, then will move on. You have to own the game at the right time to really get the value out of it, and that usually means soon after release for full- or nearly-full cost. 2. Games that can be played at any time ('timeless') with the majority of the experience intact. These comprise virtually every single-player game, as well as anything with a local multiplayer option (like Mario Kart or Goldeneye 007). It doesn't matter when you buy this game, you'll still get the value out of it, and that means you can wait until it gets much cheaper. The more you can get games in the second category, the cheaper your overall gaming expenditures will be. And truthfully, a lot of people overlook the fact that current- and even last-generation systems still have incredible value for money. There was a recent article in The Verge (which I will attempt to find and link) that discussed this phenomenon, posing the hypothetical question of how to maximize benefit from $600 spent on gaming. It went something like this. $600 buys you: 1. An Xbox One, one new game, and maybe a second controller or a few XBLA indie games. 2. A PS4, two games, a second controller, a PS+ subscription. 3. A PS3 or Xbox 360, a second controller, a PS+ or Live subscription, at least a half dozen used or 'Greatest Hits' games. 4. A PS2, as many controllers as you could want, and a truckload of games, many of which still look and play great. This is not to say that you need to be perpetually a generation behind the times, but you could have easily waited a year on your PS4 purchase, until launch titles were selling for half their value (or less!), consoles were plentiful, and there are more games. Video games are rapidly depreciating assets. That new high-budget triple-A title that releases and sells for $60 will only be worth half that in a year, and depending on how quickly Sony releases a Greatest Hits version of it, it can tank even faster. Consider the example of Ni no Kuni: released in North America in January of this year for $60, and you can buy it today on Amazon for 1/4 of that, and if you're a PS+ subscriber, you can get a digital version for under $10. Okay, enough of a derail. Back to Knyte and his newfound fiscal responsibility. Income > Taxes > Save > Bills > Living expenses > Whatever is left over. Video games are a loooooooooong way down the list.
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Dec 3, 2013 03:12
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Knyte - I still believe you're making positive mentality changes toward spending and saving. You haven't disappointed me yet, please don't do so! And Icarus is right, those cars represent the bulk of your debt, and selling them and finding something cheaper can erase a large chunk of obligation in one shot. Really look in to this.
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Dec 3, 2013 21:17
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Minor point: you're understating your assets because you don't have your car values included. Possibly just me being pedantic.
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Dec 3, 2013 22:10
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Knyteguy posted:I've been debating adding this... I kind of like seeing our "total all accounts" being worth -$30,000 on YNAB because it motivates both of us, and lets us know that even though we have $2,000 in the bank or whatever, we're still broke. Seeing that in the black will be awesome either way though And I recommend getting on that train sooner rather than later. All cars (or at least, all cars that you or I would be buying) are depreciating assets, but they depreciate at different rates. A 17k car is going to lose a lot of value over the next year or two, whereas a 7k car has already had most of its depreciation and will lose less value over the same time period. On an unrelated note, gently caress Slow Motion. He makes a big deal about how he likes the baller lifestyle, but it's like he expected his posts from elsewhere on the forums to be ignored so we could all focus on his finances. He would have probably gotten sick of us calling him stupid about his finances, but people lost sight of that and started ragging on his appalling taste instead. Then he picked up his ball(er) and went home to his overpriced idiot box (apartment).
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Dec 4, 2013 01:44
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Someone remind me: why are we ditching the TRUCK and not the CAR? IIRC, the car loan has twice the outstanding principal and 7% more interest rate?
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Dec 5, 2013 15:28
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Knyteguy posted:Will explain the last two later, but our debt just increased by $2000 What happened now? 
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Dec 6, 2013 17:54
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Knyte - do NOT give me a heart attack! Until I got to the second paragraph, my thoughts were: "oh god he is EXACTLY Zaurg". Chest freezer sounds cool if you use it.
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Dec 9, 2013 15:23
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Knyteguy posted:Well she makes like $19,000 gross now without benefits (maybe she'll get lucky and get a week of paid vacation every couple years), so even at $40k she's still doubling her salary. She's at the highest management spot she can possibly get to at her current store, and corporate thinks she needs more experience. She's considered the marketing manager, so she sends out email blasts, makes stuff come up on the sign outside telling people the specials, does store radio recordings, counts and reconciles the money, draws up the cash bank deposit, etc. And she only makes $11/hr, quote:and her boss straight up told her she doesn't believe in raises (despite being a very nice person). quote:She's on a path to possibly franchising one of their grocery stores some day according to big wigs like the company CEO/VP and stuff, and she has all the right connections, but it's just tough. quote:Wife career
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Dec 12, 2013 16:01
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spwrozek posted:That credit card sounds like a bad idea to me since you have to pay a yearly fee and you have to front the money locked away for 2 years as your limit. If you have a checking account with chase and it has direct deposit you can get a freedom card no questions asked. The limit will be low but that is really all you want. Use it a couple times a month and pay it off. This. Do this. Revolving credit is good to have on your report if used responsibly, and your bank should be willing to give you a card (even one with a low limit).
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Dec 19, 2013 16:29
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SiGmA_X posted:Really? Is this normal? My state gives you 30 days. So do both states north and south of me. Though that's only 3/50. Further car ad advice: 1. Use full sentences with proper spelling, grammar, and punctuation. 2. Include pertinent information, including at least: Year, make, model, mileage, trim packages (ex. Accord DX, LX, or EX), major options (ex. navigation). 3. When photographing your car, squat down a bit to get closer to eye level, otherwise pictures are all angled down. 4. Get your car washed, take pictures when it's shiny. 5. You want a couple of good exterior shots (side profile, front 3/4) and at least one shot of the instrument cluster while the car is on for mileage.
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Feb 3, 2014 16:05
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Anyone heard from Knyteguy in the last few months? Wondering how everything turned out for this guy!
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May 20, 2014 16:38
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Knyteguy posted:[*]Wife got a new job, $13.50 from $11.00 per hour.  Knyteguy posted:[*]Traded in both cars for a new corolla. Down to one car for the foreseeable future. Interest 10.99% (other car was 18%, truck was 10.95%). Our net worth is roughly the same but we're not bleeding so much interest (still too much but see below). . On the one hand, good job getting rid of the 18% loan, that was a clusterfuck. Also, good job getting something that sounds reasonably reliable (Toyota) and economical (Corolla). On the other hand, you're going to eat some depreciation quickly. Having 1 car is both a blessing and a curse, but you guys will make do.Knyteguy posted:[*]Our lease is up July 31st. Current rent is $1,560.00 per month. We are moving into a new apartment that will be $695-$700 per month. Wife will then be across the street from her work. Especially since this mitigates the sting of dropping down to 1 car in two months.Knyteguy posted:[*]According to our YNAB history on non-optional bills and expenses, we will have around $4,000 a month in discretionary funds with my wife's new paycheck and rent. We're aiming to save $3,000 per month for the car which will get it paid off in 8 months, and use the additional $$ as buffer and small stuff like entertainment. 1. How much is the outstanding $$$ amount on the car note for the Corolla? 2. How much emergency cash fund do you have set aside in a bank account? Overall though, good steps! Proud of ya Knyteguy!
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May 28, 2014 19:35
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Knyteguy posted:Thanks! OK, priority 1 is to build a buffer in the form of a savings account or sub-account to your checking that holds rainy day funds. Build this before you pay down your car at an accelerated rate. You say you have a $4000 surplus per month - or will, once you move to the cheaper place - so you should be able to build this pretty fast. Ideal value for this fund would be 6 months expected expenses. So if you and your wife both lost your jobs, you'd be able to make rent, car note, put food on the table, etc. I don't know what your current budget looks like (and if you want advice, feel free to post it), but you will probably want 5-10k here. THEN pay off your car at an accelerated rate. (You don't want to sink a lot of money into the car, then lose your job and not be able to make rent, etc.)
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May 29, 2014 00:23
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Inept posted:Sounds like my experience with lease breaking is different than the norm. It might be because I only ever dealt with small time landlords, not rental property companies. Total cost of ownership might be lower. Car is more fuel efficient, only one car driven equals less fuel expense, an old truck could have had big repair bills in the unforeseen future. I would have paid them off and eaten the difference and bought a cheap car, but this isn't the worst possible thing. At least he bought something economical and reliable.
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May 29, 2014 03:11
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Grumpwagon posted:1 small piece of advice going forward: With bigger purchases (such as a possible house w/ Grandma's matching funds), it seems like sometimes you get blinders on, and focus more on 1 thing, like meeting the date, or lowering your interest rate, and not the big picture. When you were buying a car, you wanted a car with a lower interest rate. You could have ended up with a PT Cruiser. Take things slow, research the hell out of the thing you're doing, and buy it when YOU'RE feeling prepared and ready, not when other people want you to. This is excellent advice, Knyteguy. If I may piggyback on it, I would say you need to be comfortable with asking for help or advice sometimes. You have a lot of people who want to help you in this thread, and we would have been happy to advise you and steer you in the right direction, but you didn't consult us. OK, we're 'internet people', most people wouldn't think to ask an internet forum if buying a new car is a good idea, but we really do want to help. But whether it was a good decision or not (I think it's kind of a wash, really), it's done, and it's not worth pointing fingers or blame. It'll all work out for you guys if you get back on track and stay diligent (and don't fall back into bad spending habits).
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May 29, 2014 15:44
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spwrozek posted:You do know that doesn't just happen right? Accidents happen. Condoms break, pills can fail. Unless one of them has their tubes tied or she has an IUD, it could have been a mistake. Well, now you have 9 months to start planning ahead for the baby. Start saving like crazy so her maternity leave doesn't screw you with the reduced income, and please for the love of god resist the temptation to buy all-new stuff for your baby. Be frugal with your baby items, know that a lot of the things people go "OMG YOU MUST GET THE DIAPER WIPE WARMER OR THE BABY WILL FREAK OUT OVER ROOM TEMP WIPES" is bullshit intended to get you to buy more poo poo, and get hand-me-downs from family whenever possible.
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Jun 11, 2014 23:12
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| # ¿ Apr 28, 2024 11:13 |
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n8r posted:How is your car payment $800/month? You better be driving a 911. They had a paid off truck but were underwater on their other car, there wouldn't be much equity between the two of them. A $25,000 loan for the Corolla (I'm guessing here) at 11% for a 3 year note is $818/month.
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Jun 22, 2014 17:10
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