Hi everyone. I am 27 years old with a wife and 2, almost 3 kids. I have lived the last 7 years spending money and making sure I make all my payments, without saving a dime. I have a total of 117K in debt. I am finally ready to save money and pay my debt off. Please join me in my journey to pay off my debt and save money for my family's future.
Here is my current situation.
03/19/17:
Current Savings: $0
Current 401K: $0
Current Debt:
46,359 - Student Loan (Mine)
41,978 - Car #1
14,040 - Car #2
5,256/6,000 - Walmart CC
3,724/3,800 - Capital One CC (Mine)
1,215/2,900 - Lowes CC
1,079/5,000 - GE Capital CC
973 - Old Court Fine
786 - Student Loan (Wife's)
578/600 - Wells Fargo CC
498/500 - Teamsters CC
192/300 - Bank of America CC
160/500 - Kohls CC
110/4,900 - Care Credit C
94/200 - Capital One CC (Wife's)
Upcoming Bills:
600 - Taxes
100 - Filing for taxes
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Monthly Bills:
750 - Rent
560 - Car #1
330 - Car Insurance
320 - Car #2
300 - Gas
300 - Groceries
250 - Phones
150 - Walmart CC
120 - Electric
100 - Lowes CC
100 - GE Capital CC
87 - Life Insurance
80 - Capital One CC #2
80 - Water
50 - Student Loan #1
45 - Tanning
30 - Bank of America CC
30 - Care Credit CC
30 - Capital One CC #1
30 - Wells Fargo CC
30 - Kohls CC
30 - Teamsters CC
30 - Trash
20 - Gym
20 - Oil Changes
20 - Old Court Fine
12 - Netflix
11 - Ipsy Subscription
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Current Month (March):
1,590 - Current money
1,500 - Forecasted income for rest of the month
3,090 - Total money for current month
2,010 - Total bills left for current month
1,080 - EXTRA Money this month.
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I plan on spending the 1,084 on filing taxes (100) and the rest to an emergency fund (980). I will keep you updated!
3 years later.....worse off than when I started
March 20th, 2017 at 07:58 am
March 20th, 2017 at 10:00 am 1490004007
March 20th, 2017 at 11:08 am 1490008080
March 20th, 2017 at 11:52 am 1490010745
March 20th, 2017 at 01:57 pm 1490018278
Congrats on the new baby, and best of luck with your goals.
March 20th, 2017 at 02:19 pm 1490019572
March 20th, 2017 at 03:28 pm 1490023681
But bigger picture what is the cars you are driving? They are too expensive car insurance and payment wise.
Doesn't matter if it was $25k for new car, it should have been a gently used $10k minivan. To fit the 3 kids you mentioned. And if your wife drives locally then why couldn't it have been a used minivan?
March 20th, 2017 at 05:57 pm 1490032628
The cars and phones are really expensive. What kind of job do you have?
Can you renegotiate the phone rates?
How can you make some extra money to pay off debt fast?
You are paid weekly? bi-weekly?
Get on an all cash diet today and stop using the cards. If there is no cash for the purchase then do not buy it.
I would pay that tax debt as soon as possible while you have the money.
Then focus on those credit cards with little balances:
94/200 - Capital One CC (Wife's)
110/4,900 - Care Credit C
160/500 - Kohls CC
192/300 - Bank of America CC
498/500 - Teamsters CC
578/600 - Wells Fargo CC
DO not close the accounts as that could affect your credit score but stop using them.
Once a card is paid off roll that payment amount into the next debt to pay off.
Get those little ones paid off with a specific goal: all 6 paid off by say end of May.
You can do this!
March 20th, 2017 at 06:28 pm 1490034533
Good luck!
March 20th, 2017 at 06:31 pm 1490034718
March 20th, 2017 at 07:53 pm 1490039596
I don't know what kind of vehicle you have that costs $42K but in your situation you cannot afford it.There is no way you can justify that. If you're serious about paying down the debt, you can find something much cheaper.
March 20th, 2017 at 10:19 pm 1490048353
I would also look at getting extra income, such as from overtime, surveys, mystery shopping, etc.
If you are current on student loan payments, see if you can refinance. That could decrease your payment.
Do you have any rewards you can cash in on any credit card? If so, cash them in and put that money towards a debt.
Seriously, you are in this much debt and paying for tanning? That's a no brainer and something that you should cancel right away. Also, I looked up what Ipsy is and I would cancel that now also. And get one of the cheaper Netflix plans.
Are you in a contract with the phones? That rate is way to high for a normal cell phone plan. I would look at something cheaper like a prepaid phone plan. I have had Tracfone for years and love it. Unless you are in a contract with the gym, cancel that too. Exercise at home to videos on Netflix, Youtube, DVD, etc. Or run, walk, etc. outside. Leave all your credit cards at home and only shop for necessities with cash.
March 21st, 2017 at 06:42 am 1490078568
I am a Front Office Manager at a hotel in Sacramento. I make ok money, 47k a year salary. My wife brings home on average $400 every 2 weeks. She works from home and home schools our kids.
So I put this months bills but within the last few days I have made some changes:
1) Got rid of tanning. We still need to pay for April because they want a 30 day cancellation.
2) Reduced phone bill from 280 to 250. In 4 months, one of our "payments" for the wives phone will stop and that will save an extra $30 a month. That will take it to $220. I am going to cancel our total coverage insurance for both phones, and that will take it to $200. Finally, in about a year, my phone will be paid off and that will take the total bill down to about $160. That is for unlimited data, so I could still take it down to about $120 at that point as well.
3) I would cancel Ipsy and Netflix but those are mainly for the wife and kids. We homeschool and we do not pay for cable so I feel like the $12 we spend on Netflix is a good compromise, especially for the kids. My wife also has that Ipsy subscription but honestly she uses everything that comes in it. If she didn't get that bag every month, then she would be buying that stuff at the store. As someone else said, "she can't exactly use magic markers instead". lol
4) The gym is really my only luxury I spend on myself, and I do work out 4-5x a week so it really is a good use for me. I am on a month to month contract though so I can cancel any time.
5) My savings this month went from 1080 to 989 because I added some bills that are due in the beginning of next month and changed them to the end of this month. I first ran into this problem one month when I thought I had all the bills paid, then realized on the 1st that I had no money for rent. I started adding rent to my bills on the 31st so I knew I would have to have the money the month before. Now I am adding in bills that are due in the first week of the month to the month before. Sometimes we will not get a paycheck until the 7th and it always screws us when the next month comes and there are bills due on there 1st, 3rd, 5th, etc. Talk about living paycheck to paycheck
Crazy lib lady - I do have some rewards on some cards, about $50 total. I will cash those in! Thanks!
PatientSaver - Here are the interest rates:
46,359 - Student Loan (Mine) - 5%
41,978 - Car #1 - 3.24%
14,040 - Car #2 - ?
5,256/6,000 - Walmart CC - 23.15%
3,724/3,800 - Capital One CC (Mine) - 12.4%
1,215/2,900 - Lowes CC - 0% until 02/19/18
1,079/5,000 - GE Capital CC - 0% until 02/14/18
973 - Old Court Fine - 0%
786 - Student Loan (Wife's) - 5.6%
578/600 - Wells Fargo CC - 17.99%
498/500 - Teamsters CC - 19.99%
192/300 - Bank of America CC - 20.74%
160/500 - Kohls CC - 24.49%
110/4,900 - Care Credit CC - 26.99%
94/200 - Capital One CC (Wife's) - 23.4%
March 21st, 2017 at 08:44 am 1490085899
Beyond that, it's easy to see that the combined car payments and the phone bill are way too much given your income and other bills. ($300 a month for gas also seems extremely high.) IMHO, you are taking baby steps to deal with a massive debt problem. IMHO, you need to do more.
I give you credit for putting yourself out there and laying it all on the line because I know it's not easy and all of us are telling you things you probably don't want to hear. Call it tough love, and please know we want to help you.
You mentioned your wife home-schools the kids. Is that a non-negotiable for you? If they were in public schools, you wife could get at least a p/t job and that would help your debt pay-down enormously.
Is your wife on board with you as to the absolute necessity to get a handle on this debt?
March 21st, 2017 at 12:26 pm 1490099172
Kohl's
Teamsters
Well Fargo
Also, do you need a second car?
March 25th, 2017 at 03:11 pm 1490454705
March 25th, 2017 at 07:46 pm 1490471192
March 30th, 2017 at 11:14 am 1490872464
July 30th, 2017 at 07:36 am 1501400173
I just got a new job, and it is a life changer. I will be switching from management in the hotel industry to become a union pipe fitter in San Francisco as an apprentice. What is amazing about this opportunity is all of the benefits that come with the job. I will have a 401(a), pension, 401(k) with the employer and also extremely good medical/dental/vision for me, my wife and 3 children. I will finally be able to plan out my retirement the way I want and have options with my money. Right now we have a hard time saving because the little extra we do have we want to spend on making memories with our family, whether its spending gas money to travel to the beach, or bowling, etc. We don't blow our money on stupid things, but I will admit we have a hard time saving.
My new starting salary will be 55k. Every 6 months I will get around a $3 raise. My wife currently works from home, and is going to start babysitting as well. She has a few kids lined up already. She will be bringing in around $1,200 a month cash, I will be bringing $3,300 every month. Our income will be about $4,500 a month, and our bills are around $4,000 a month.
My future salaries will look like this:
1st year: 55k
2nd year: 67k
3rd year: 80k
4th year: 93k
5th year: 106k
6th year +: 128k
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Current Installment Debt:
48,000 - Student Loan (Mine) - ~6%
40,500 - Car #1 (Wife's)- 3.24%
13,000 - Car #2 - ~6%
873 - Old Court Fine - 0%
590 - Student Loan (Wife's) - 5.6%
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Current CC Debt:
0/500 - Victoria Secret (Wife's)
0/1000 - Kay Jeweler's (Wife's)
0/200 - Capital One (Wife's) - 23.4%
70/300 - Bank of America (Wife's) - 20.74%
251/2000 - Kohls (Wife's) - 24.49%
0/7600 - Kay Jeweler's
0/4,900 - Care Credit - 26.99%
413/500 - Teamsters - 19.99%
515/600 - Wells Fargo - 17.99%
680/5,000 - GE Capital - 0% until 02/14/18
800/4,000 - Lowes - 0% until 02/19/18
3,750/3,800 - Capital One - 12.4%
5,800/6,000 - Walmart - 23.15%
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My goal is to first establish an emergency fund of $1,000. After that, it will be the snowball effect for the credit cards. After paying off the smaller credit cards and installments, I will be focusing on paying off the 2 big credit card balances (Capital One and Walmart). Once the CC debt is completely eliminated, I will then focus on paying off Car #2 (my Honda). My student loans are currently deferred and I will keep it that way until I pay off everything besides Car #1 (Wife's). I will also hopefully get my EF to about 3 months of expenses by that time as well.
I have a lot of questions about my retirement, but with my current credit card debt, I know I will have to focus on retirement in 2018, not this year. However I am confused on what to do about retirement. It looks like we have a 401(a), but also a normal pensions (defined benefit plan). The 401(a) looks like it is a defined contribution plan. But then should I also try to get a 401(k)? And what about a Roth IRA, would it be useful to do one of those as well? I just want to make sure I take full advantage of everything I am offered. I will find out next week more details about all of this. I want to see what they will match as well. Does anyone know how to read the paper I have that shows how much is going toward the 401(a) and the Defined Benefit Plan? Anyone else here work in a union?
Anyway, thank you for reading! It is good to be back and I am so happy I am getting the opportunity to make enough for me and my family, and be able to set ourselves up for success down the road.
July 30th, 2017 at 11:16 am 1501413379
Great work on reducing the phone bill.
I'm not familiar with 401(a)s, but the conventional wisdom on 401(k)s is to contribute at least enough to receive the employer match, if any. Otherwise you're leaving money on the table. A Roth IRA is also great but again i would really focus on getting rid of the highest interest credit card debt asap, because that will go on forever and mushroom into bigger and bigger balances until you deal with it. If you did not have enough $$ to attack those credit card balances AND contribute to the Roth IRA, I would skip the Roth IRA.
July 30th, 2017 at 11:43 am 1501414998
So I will have a 401(a) and a pension. It looks like I can even voluntarily contribute more to the 401(a). I will call the Trust Fund on Monday and get more info to see how much they match. Everything is contracted with the local union, but I still work for a company. So the company is required to pay all my non-taxable fringe benefits, like the 401(a), pension, health, and other trust funds. However, I believe I can still do a 401(k) directly with the company. But one of the ladies was a little confused when I asked about the 401k because she said most people do the 401a.
Either way, I need to focus on this CC debt before I get too carried away with the retirement. It is just so exciting to know I could have millions when I retire! Never thought that would ever be a possibility for me.
July 30th, 2017 at 01:43 pm 1501422205
I know I like to project out when I get a new job or when planning for long-term goals like retirement, but after clearly understanding what I need to do to get from point A to point B, i try not to dwell on it too much, becus a lot can happen in the intervening years to put your well-laid plans in jeopardy.
That's why it's so important to carefully prioritize your goals and do the most important things first, because you never know what will happen to your job, etc. S*** happens.
August 6th, 2017 at 11:55 am 1502020536
There is no match on my 401a, and I also cannot start that for another 2.5 years. However, my pension looks pretty solid. Instead of a formula to determine my future pension amount, it is a flat amount. Every year of service gets me $275 a month. The amount continues to increase (it was $125 in 1998, $200 in 2013 and now $275). The retirement age is 60. If I want to retire before that, they take off 3% of my pension for every year before 60. So assuming I will work until I am 60, that will be 33 years. That will give me a pension of $9,075 a month.
In 33 years with 3% inflation, that will only be worth $3,400. I would like to have about $8,000 a month in future dollars when I retire, so I would still need an extra $4,600 in today's dollars (extra $12,000 in future dollars). I will assume that I want my retirement to last 20 years (until I am 80 years old). In order to have 12,000 last me 20 years (with a 2% inflation rate and a 7% rate of return) I will need my 401a to be at 1.75 million.
I then ran some final numbers and figured that over 30 years at a rate of 7%, I would need to save 17k a year ($320 a week). I only did 30 years because the next 2 years will be spent focusing on paying off my debt. It seems like I have to save so much considering I will have a pretty good pension, but my wife is a stay at home mom and babysits so there won't be any retirement in her name. I also am not really saving until 30 so I wish I would have started sooner obviously.
Does wanting $8,000 a month seem excessive? That is $21,000 a month in the future. It sounds crazy to talk about wanting that much every month lol. I just figure it would be plenty to have for my bills and vacations and my kids.