Let's talk about financial fitness

[Dilnad]

Ok so the wife was good on her promise and we spent our wedding gift money on debt. As soon as all the checks clear, we will be closer to debt free. Just a 6k car loan and a mortgage is all we have left. HELL YEAH!!

[Snawesome]

I'm in the military, and they have a lot of great systems set up to help me save. Currently 5% of my gross pay check goes into a 401k (Roth) and the DoD matches 5% in a traditional 401k. We don't even see it, so I never have to worry about not contributing that month. The money deposited is invested into index funds and I have an app on my phone that tracks their growth. I put away an extra 5% into a separate Roth IRA with more options for investing. It took years to be able to afford this, and I'm able to do it after paying off my car loan, food, internet, netflix etc.

[Trixie Falsae]

I paid off a loan a month early.  I could theoretically have all my debt paid off in 5 years, but I am not sure if it will happen quite that quickly.  I've had an easy summer with not having to pay for childcare half the summer.  I'm going to have to tighten the budget come school time. 

[Snawesome]

5 hours ago, Trixie Falsae said:

I paid off a loan a month early.  I could theoretically have all my debt paid off in 5 years, but I am not sure if it will happen quite that quickly.  I've had an easy summer with not having to pay for childcare half the summer.  I'm going to have to tighten the budget come school time. 

Child care costs more than my car payment. It's crazy. They work hard, too.

[Machete]

I've completed my budget sheet, and it appears that I've been constantly spending more than I'm making. I don't know how I'm able to do this, but there it is. (It might be of note that I'm paying off credit cards and counting it as expenditure.) The big things I seem to be spending on are groceries and eating out, and I'm looking for ways to tighten those up.

 

Anyone here know anything about debt consolidation? I've been constantly getting letters from several companies.

 

On 7/24/2018 at 9:53 PM, Snawesome said:

I'm in the military, and they have a lot of great systems set up to help me save. Currently 5% of my gross pay check goes into a 401k (Roth) and the DoD matches 5% in a traditional 401k. We don't even see it, so I never have to worry about not contributing that month. The money deposited is invested into index funds and I have an app on my phone that tracks their growth. I put away an extra 5% into a separate Roth IRA with more options for investing. It took years to be able to afford this, and I'm able to do it after paying off my car loan, food, internet, netflix etc.

 

I got out 3 years ago and have been a mess ever since. Savings are done, credit cards are maxed, sold all my stocks to be able pay the bills. I had stocks in Apple, Microsoft, Amazon, Starbucks, Delta, and Facebook. All gone. Haha.

 

But hey, at least I don't need to shave every morning...

[Snawesome]

How well are you budgeting food costs? COSTCO memberships pay themselves off quickly, in our case. And we make sure to pack left overs so nothing is wasted.

When you get your finances in order, have you considered investing in index funds?

[Trixie Falsae]

On 7/26/2018 at 4:32 PM, Snawesome said:

Child care costs more than my car payment. It's crazy. They work hard, too.

I pay more in childcare than I do on my mortgage. I have two in childcare full time and my mortgage is pretty low. I got a great deal on the house and the interest is low. 

 

 

10 hours ago, Machete said:

 

Anyone here know anything about debt consolidation? I've been constantly getting letters from several companies.

 

 

I took one out a few years ago to pay off my credit cards.  It wound up being the same amount per month that I was paying in minimum payments,  but it will be paid off in 3 years instead of 10-20. My last payment will be in November.  The only problem is I then had credit cards with Open Lines so I wound up using those to get me through a rough patch.  I am now paying off the consolidation loan and the credit cards I paid off with the loan.  They also take some of the money as an origination fee and have a high interest rate.  I have heard financial gurus that don't like them.  I still think it was a good move for me at the time.  I just could have handled it better.  I didn't have any savings so there was nothing to fall back on when issues came up.  

[Machete]

2 hours ago, Snawesome said:

How well are you budgeting food costs? COSTCO memberships pay themselves off quickly, in our case. And we make sure to pack left overs so nothing is wasted.

When you get your finances in order, have you considered investing in index funds?

 

Not well at all. I paid off all of the wife's credit cards earlier this year, but she ended up maxing both out again. I might have to keep those cards on lockdown, which is weird because sh's the one who studied accounting. 

 

I have no idea what index funds are. Haha

 

1 hour ago, Trixie Falsae said:

I took one out a few years ago to pay off my credit cards.  It wound up being the same amount per month that I was paying in minimum payments,  but it will be paid off in 3 years instead of 10-20. My last payment will be in November.  The only problem is I then had credit cards with Open Lines so I wound up using those to get me through a rough patch.  I am now paying off the consolidation loan and the credit cards I paid off with the loan.  They also take some of the money as an origination fee and have a high interest rate.  I have heard financial gurus that don't like them.  I still think it was a good move for me at the time.  I just could have handled it better.  I didn't have any savings so there was nothing to fall back on when issues came up.  

 

Yeah, my credit took a dive some years ago. I was looking at a few earlier today, but the ones I got approved for had insane interest rates, so I decided against them.

 

I currently have 3 high-APR cards that are hitting me with comparatively big interest fees. Right now I'm looking to kill those ASAP, or maybe open another card and transfer the balances to buy us more time to get our shit together. (I already have one I transferred a substantial balance to with zero APR for 18 months and I'm only paying the minimum.) I also have a large one with medium APR that's been staring me down for the past 2 years. The financing charges hurt, but compared to its size, it doesn't hit nearly as hard as the little ones. This is the final boss I have to level-up for. Maybe I'll look to refinance that one when my credit is in better shape. Tips, anyone?

[Elastigirl]

13 hours ago, Machete said:

Anyone here know anything about debt consolidation? I've been constantly getting letters from several companies.

No experience here, but the budgeting guru I listen to , Dave Ramsey, suggests that instead of doing that you call the companies yourself and make a deal. According to him, most companies are willing to deal with you  and will give you a lower rate. But I haven't tried it. 

None of that works unless you stop getting into debt though.  Somehow you and your wife need to get on the same page as that.

Another thing that Dave Ramsey suggest is actually paying off the card with the least debt first. It seems backwards. But the reason is that seeing that debt paid off gives you the  momentum and motivation to work on the next one. If you do the biggest debt first, it feels like such a hug mountain, it's hard to keep going. Working at the smaller debts first gives you the level up mental payoffs

[Machete]

7 hours ago, Elastigirl said:

No experience here, but the budgeting guru I listen to , Dave Ramsey, suggests that instead of doing that you call the companies yourself and make a deal. According to him, most companies are willing to deal with you  and will give you a lower rate. But I haven't tried it. 

None of that works unless you stop getting into debt though.  Somehow you and your wife need to get on the same page as that.

Another thing that Dave Ramsey suggest is actually paying off the card with the least debt first. It seems backwards. But the reason is that seeing that debt paid off gives you the  momentum and motivation to work on the next one. If you do the biggest debt first, it feels like such a hug mountain, it's hard to keep going. Working at the smaller debts first gives you the level up mental payoffs

 

It's mostly credit card debt really. Yeah, I figured that one out after stubbornly trying to make a dent on the big one for a long time, then realizing it's the smaller cards are the ones with the higher APR. 

 

I've been [over] analyzing it all night last night, and I'm kind of seeing that in the big picture securing a decent loan with my credit right now would maybe cut my financing fees by like $50 a month--not much of an ROI considering the hoops I'd have to jump through and people to deal with. It's like fitness-wise I'm inquiring about intermittent fasting and keto and OrangeTheory--understandable, because when you have limited knowledge about the subject a lot of these options sound attractive and we tend to believe everything we read on the first two Google search results.

 

My self-audit allowed me to see that I do need to pretty much spend less, earn more and not worry about the minutia. Biggest spending areas are rent and food. I'm pretty happy with the place we're in, so I'm willing to shell out the extra cash for it. The eating out though, I'll have to watch how many times we eat a month, as it has doubled the past 3 months. The grocery bills have also doubled, though I'll probably have to look deeper, as Amazon, supplements, some car parts, and household items are all grouped with it (and we recently had to do some maintenance). I also neglected to account for the earn more part, as my hours have been cut because of the summer, and I've had a few trainees drop off. Need to take some steps to remedy that as well. SMART goal-setting time. (e.g. number of times we eat out, "grocery" bill breakdown and setting a food spending limit, and taking steps to getting a target for number of trainees to sign. This gives me a 4-week challenge idea.)

[Rooks]

Can't say I know anything about Dave Ramsey, but I will agree with the statement about tracking EVERYTHING. Just make a Google Sheet and document everything. Always say yes to receipts when asked, then just put them into the spreadsheet before you dispose of the receipt. It will require you and your wife to do it, but do it for 2-3 months. Then you'll know where the money is going. I'm happy to share a template with people if they want to see mine. 

My other recommendation would be to stop carrying more than 1 credit card. Find a card that you want to keep (maybe it has solid rewards) and only use that one. I feel like having multiple cards is just an easy way to have to track MORE expenses all the time. Get things consolidated down to 1 card, then use and maintain that card. If you can do that, you can even start using their online tools to figure do expense tracking since most of them seem to have solid online tools (my Capital One card is pretty good with their tool selections). That said, if credit cards are just out of control, I'd say kill all of them and go strictly off a debit card until you can get things under control. Maybe keep 1 in your house as an emergency tool (like we don't have food for the next 3 days) and take it to the grocery store. But then pay it off as soon as you get the money to do that.

 

Another tip that might come in handy, don't allow websites to remember your card information. Sites make it so easy to just click and buy anything now. I find that if I can just 1-click buy anything, a lot more stuff gets bought. If I have to go find my wallet, type out my card info, I have a little more time to actually process whether this is something I want, or something that actually needs to be bought right now. For example, the only thing that I have remember my credit card information is my password manager (Dashlane). If I want to have it enter my credit card information, it requires to me to type out a long complex password. Again, it's just thinking time for me to stop and process whether I actually want said thing or if I can put it on a list for a few weeks, then actually figure out if I want it. 

 

That's about all I can add. Overall, I've never had to struggle with money, and I've always made very good money with my job. The 1 time I actually went over board and racked up 10k in Credit Card debt, I was able to pay it down in about 4 months pretty easily by just limiting a few expenses. So I might not be the best person to talk with about this subject.

[Sloth the Enduring]

A friend kept her emergency credit cards frozen in an ice cream bucket in the freezer. That way she wasn’t tempted unless it was serious.

[Dilnad]

51 minutes ago, Sloth the Enduring said:

A friend kept her emergency credit cards frozen in an ice cream bucket in the freezer. That way she wasn’t tempted unless it was serious.

Um, this is a real challenge. I wont touch the credit cards, but the ice cream is in trouble!!

[Dilnad]

So we took every dime we got from wedding gifts and chunked it all on debt.  All we have left is 6200 on a car and 69k on the Condo. Things were looking good, and then it happened......

 

Her family's business is closing. She's out of a job.  Lost her company phone, company car, company paying for her insurance and she's lost the ability to contribute to our monthly bills.

 

At first, I went into a deep depression but as I look at the numbers, WE CAN AFFORD THIS!!! We made a smart decision with our money and put ourselves in a financial position where we are able to handle this temporary setback. I'd love to pay off the rest of the debt and put lots of money away but for the first time in my entire life, disaster has struck and after my knee-jerk reaction, I realized I'm/we're prepared!!

 

We WILL survive this. We will get her a car and we will NOT go further into debt. NOPE. Never again!

[Elastigirl]

5 minutes ago, Dilnad said:

So we took every dime we got from wedding gifts and chunked it all on debt.  All we have left is 6200 on a car and 69k on the Condo. Things were looking good, and then it happened......

 

Her family's business is closing. She's out of a job.  Lost her company phone, company car, company paying for her insurance and she's lost the ability to contribute to our monthly bills.

 

At first, I went into a deep depression but as I look at the numbers, WE CAN AFFORD THIS!!! We made a smart decision with our money and put ourselves in a financial position where we are able to handle this temporary setback. I'd love to pay off the rest of the debt and put lots of money away but for the first time in my entire life, disaster has struck and after my knee-jerk reaction, I realized I'm/we're prepared!!

 

We WILL survive this. We will get her a car and we will NOT go further into debt. NOPE. Never again!

Sorry about the job. But it is so nice to  know  that financially you can handle it. 

our dishwasher just died. Sad, but such a nice feeling to know we have money in savings to pay for it. True, there are other things I'd rather use the money on, but so much less stress to have money right now for it

[Trixie Falsae]

2 hours ago, Dilnad said:

Um, this is a real challenge. I wont touch the credit cards, but the ice cream is in trouble!!

I think the idea is to fill an empty bucket with water to get a solid ice block you would have to melt to use the credit card.  I keep my credit cards in a desk drawer. I am so thankful to be at a place where I don't have to worry about emergency credit purchases.  

[Dilnad]

14 hours ago, Trixie Falsae said:

I think the idea is to fill an empty bucket with water to get a solid ice block you would have to melt to use the credit card.  I keep my credit cards in a desk drawer. I am so thankful to be at a place where I don't have to worry about emergency credit purchases.  

I have mine. I swore them off though. Haven't used them in a very long time. I close them one at a time to make the least credit impact

[Dilnad]

17 hours ago, Elastigirl said:

Sorry about the job. But it is so nice to  know  that financially you can handle it. 

our dishwasher just died. Sad, but such a nice feeling to know we have money in savings to pay for it. True, there are other things I'd rather use the money on, but so much less stress to have money right now for it

This is all soooo true. I hate when something dies(Like our fridge a couple months ago) and I actually have money for it. I hate that I have to spend money on it but there's some pride in stuff not being a financial emergency.

[Snawesome]

On 8/1/2018 at 10:05 PM, Machete said:

 

Not well at all. I paid off all of the wife's credit cards earlier this year, but she ended up maxing both out again. I might have to keep those cards on lockdown, which is weird because sh's the one who studied accounting. 

 

I have no idea what index funds are. Haha

Index funds are collections of stocks that cover major companies in the US's economy. Like the S&P 500. They're managed by institutions like Vanguard, USAA, Fidelity. They're job is to meet the market's rate of return which averages about 9.8% a year. It's not flashy, and don't beat the market or by much, but they're great for long term investing and building your retirement portfolio. And since they're actively managed by other people, you aren't burdened with day trading (I have 2 kids and 50 hour work weeks, no time to constantly check).

The other reason I like them is since the market generally corrects itself, I can invest more and make more money (like buying more during the 2008-10 financial crisis). Check out the ticker VFINX to see how Vanguard's 500 index performed. Imagine buying more than usual at a price of $68, and ~9 years later it's up to $260. Not bad.

[Machete]

I've been tracking for a few months and I'm kind of seeing where I'm messing up. I think I just need to keep it a habit to do a bi-monthly audit so I know whether I have any wiggle room or not. It's like tracking calories. Funny how that works.