Shooby
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Post by Shooby on Dec 28, 2014 11:37:06 GMT -5
I think living for Today is a great attitude. And, it took me years to learn to do more of that. I was too future oriented when I was younger. However, that did serve me well. Now, I realize we really only have today and am much more focused on getting the most out of everyday. And, like you I enjoy concerts, sporting events, eating out, etc. But, we as human beings seem to get into the most trouble when we get out of balance. We need moderation in everything. A little bit of dessert is a great. A lot of dessert, not so much. Saving money is great. Never enjoying today because you refuse to spend a dime, not so much. It's about achieving that balance. Save some, spend some, give some away. Every day focus on living for today and also focus on planning for tomorrow. It's not either/or. It isnt' all or nothing. It isn't hoard every penny and not enjoy today. Nor is it throwing all caution to the wind and foolishly spending every dime. Find the balance that works for your family and allows you to achieve your family goals. Obviously you want nice things for your dd and your family. We all do. Who doesn't? But, you also want to have some money banked for that future Rainy day that WILL come. There is no greater peace of mind than not living check to check. And, financial peace and stability makes your home far more pleasant for your family and dd.
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Shooby
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Post by Shooby on Dec 28, 2014 11:41:46 GMT -5
I just spent $500 for 2 Taylor Swift tickets. I spend $1k on a drumset for my son. I spent a lot of money for a Roland Digital piano and Fender P bass. I spent $200 for the past attachments for my Kitchen Aid to make pasta I could buy for 99cents. We bought 2 new cars instead of used and mine has heated leather seats. DD has Ugg boots and for my son's birthday one year, I ordered him a pair of custom Nikes. So, you can achieve your goals and buy pretty much what you want. But you have to set financial priorities to get there.
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wonderland
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Post by wonderland on Dec 28, 2014 11:46:32 GMT -5
Seriously in her position I would not lose sleep over a 2 year old having 10 pair of shoes. What is done is done, move forward and upward.The thing is, it is not the fact the kid has 13 pair of shoes. It is what this represents. It is $1000 birthday parties, $6000 vacations, no savings, little retirement and debt. No one would give a squat about shoes if there was no debt, savings, retirement. However she is setting her kid up for expectations in the future. If a kid is receiving $1000 parties a 2, is she going to expect $10,000 blow outs at 16? Will 13 pair of shoes translate to buying a pair of $700 shoes at 16? It is really hard to scale back as adults. How do you explain this to a child, when they have been given everything that they have ever wanted.....and more? Here is the thing: to me a $1,000 for a 1 year birthday party doesn't seem extravagant. But I am from a culture that tend to go big for 1 year old parties... I call it a party for the grownups not really the kid but that is besides the point. I don't know OP's background but based on mine, $1,000 was meh. Second: she did not ask us how she should raise her daughter. She asked about improving their financial lives and putting themselves in a better situation. If she is Mexican a $10,000 blowout for her 15th birthday would not be unheard of. Yes YM will make a big deal out of it but that is their culture and their reality. I guess I am not that hang up on the small details and more focus on the big ones: - start saving for retirement - start saving period, make it a habit - take on extra shifts to pay down the debt quicker I'm not any nationality beyond American, a mish mash of backgrounds and cultures in my family tree, mostly Caucasian and Native american. I am southern, and when I entertain, I like to go big. Hot dogs and chips won't cut it, I show people I care by showing then a good time. We eat healthy most of the time, but the occasional celebrations we have, we are all about the food! Her 16th b'day will likely be quite the affair, no doubt about that. But by then I should be on a better financial plan.
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Deleted
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Post by Deleted on Dec 28, 2014 11:50:15 GMT -5
I just spent $500 for 2 Taylor Swift tickets. I spend $1k on a drumset for my son. I spent a lot of money for a Roland Digital piano and Fender P bass. I spent $200 for the past attachments for my Kitchen Aid to make pasta I could buy for 99cents. We bought 2 new cars instead of used and mine has heated leather seats. DD has Ugg boots and for my son's birthday one year, I ordered him a pair of custom Nikes. So, you can achieve your goals and buy pretty much what you want. But you have to set financial priorities to get there. Yes, but your net worth is what again?
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wonderland
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Post by wonderland on Dec 28, 2014 11:52:42 GMT -5
I think living for Today is a great attitude. And, it took me years to learn to do more of that. I was too future oriented when I was younger. However, that did serve me well. Now, I realize we really only have today and am much more focused on getting the most out of everyday. And, like you I enjoy concerts, sporting events, eating out, etc. But, we as human beings seem to get into the most trouble when we get out of balance. We need moderation in everything. A little bit of dessert is a great. A lot of dessert, not so much. Saving money is great. Never enjoying today because you refuse to spend a dime, not so much. It's about achieving that balance. Save some, spend some, give some away. Every day focus on living for today and also focus on planning for tomorrow. It's not either/or. It isnt' all or nothing. It isn't hoard every penny and not enjoy today. Nor is it throwing all caution to the wind and foolishly spending every dime. Find the balance that works for your family and allows you to achieve your family goals. Obviously you want nice things for your dd and your family. We all do. Who doesn't? But, you also want to have some money banked for that future Rainy day that WILL come. There is no greater peace of mind than not living check to check. And, financial peace and stability makes your home far more pleasant for your family and dd. Yes, moderation is what I am shooting for. But it seems as if a lot of the posters are frustrated that I want moderation, not a complete shut down of the spending. Cutting the vacations in half, setting up retirement, putting a hold on the clothes and shoes until we really need them, saying NO to the concert, these are all big changes for me, and changes that, while not a complete stop to spending, will add up to significant savings. I think if I cut the extra spending for a year, I can make a huge dent in our debt and bring bit down to a more manageable level.
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Shooby
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Post by Shooby on Dec 28, 2014 11:55:25 GMT -5
Sounds like a good plan.
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wonderland
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Post by wonderland on Dec 28, 2014 11:55:32 GMT -5
Minnesota- my net worth isn't negative. We have one paid for car, a second car that is 2/3 paid for and is worth more than we owe, a small retirement account, a college account, a house with decent equity, and material goods that would fetch a fair amount of money. While I'm not worth millions, we aren't destitute.
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wonderland
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Post by wonderland on Dec 28, 2014 11:55:55 GMT -5
Thanks, Shooby
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wonderland
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Post by wonderland on Dec 28, 2014 11:59:01 GMT -5
If I were to work 168 hours in a 4 week period, which is just a smidgen more than most full timers, we would roughly have a combined total of $7,00/month after taxes, insurance, etc.
I can get our expenses to $3700, leaving $3300. I can put $500 of that into a Roth for now, leaving $2,800 a month
I can pay off $2000/month in debt, saving the remaining $800 for things like clothing, car repairs, gifts, etc.as they come up.
budgeting each of those items down to the penny will frustrate me and I will likely not stick with it, but having a pool of money to draw those from will work better for me.
for the vacation and birthday party, I will just have to work a few extra weeks of overtime.
At that rate, I will have paid off $24,000 in debt this year, and saved $6,000 in my retirement account, which I think is a pretty good head start. I just have to really stick to it.
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Shooby
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Post by Shooby on Dec 28, 2014 12:01:48 GMT -5
I guess the main thing is to have confidence in your own plan. But, in order to have confidence, first you need to really look at where your money is going. And, there is nothing inherently wrong with spending on shoes or a party or anything else. We all spend on what is important to us. I am sure I have done a lot of stupid spending according to others. And, you don't have to justify it or explain it to anyone but yourselves. But, it does help to hear from a lot of different points of view and maybe find something applicable to you. Or , not.
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wonderland
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Post by wonderland on Dec 28, 2014 12:05:46 GMT -5
You are absolutely right, it has been extremely helpful to hear other opinions and advice.
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Deleted
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Post by Deleted on Dec 28, 2014 12:09:23 GMT -5
Minnesota- my net worth isn't negative. We have one paid for car, a second car that is 2/3 paid for and is worth more than we owe, a small retirement account, a college account, a house with decent equity, and material goods that would fetch a fair amount of money. While I'm not worth millions, we aren't destitute. I never said it was. I was just picking on Shooby, because hers is in the millions...or million anyhow.
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wonderland
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Post by wonderland on Dec 28, 2014 12:19:12 GMT -5
When I am coming up with our budget, should I include our minimum credit card payments as part of our monthly expenses or part of the $2000/ month I have earmarked for debt repayment?
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Shooby
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Post by Shooby on Dec 28, 2014 12:23:26 GMT -5
How much in total do you owe on CC's? One of the things my dad told me was to never carry cc debt. So, from day 1 of getting a CC, I paid them off in FULL every month. I have done so my entire life. I have never run a balance. Not even for one month. I also refuse to have more than 2 cc's. I have a Visa and a MasterCard, major card. I dont' need store cards. I dont' care if get 20% off my purchase today to open one. No, just No. And, I buy what I want as long as I know I can pay it off in full. If not, that is how I know to not buy. It is a very simple way to moderate your buying.
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wonderland
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Post by wonderland on Dec 28, 2014 12:26:08 GMT -5
I'll have to sit and add up each card tomorrow. It's a lot of small balances, mostly store cards for the "discount" (I know, I know...), and 2 major credit cards.
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wonderland
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Post by wonderland on Dec 28, 2014 12:27:15 GMT -5
I hope to get the cards paid off first and then work on the student loans. The car loan is at 0%, so it isn't as pressing.
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Shooby
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Post by Shooby on Dec 28, 2014 12:29:07 GMT -5
My advice is to pay off then the store cards. Seriously. It is much easier to keep track of one larger bill in my opinion. And, if you have a rewards type card, why not put it all on one card?
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wonderland
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Post by wonderland on Dec 28, 2014 12:31:13 GMT -5
I don't have a rewards type card. Maybe, maybe, when I get back on track, I will try to get a rewards card, to help pay for the vacations. But right now I need to learn to live without credit. I do plan to close each card as I pay it off.
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Apple
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Post by Apple on Dec 28, 2014 12:31:33 GMT -5
I would put the minimum payments as monthly expenses, because you HAVE to pay them. Then, as they get paid off, just apply one minimum payment toward the next card. The $2k would be on top of that.
Do you have a plan for paying balances off? I would put them on a spreadsheet and pay them off in the order of what saves the most money, even if it took a long time to get any paid off. However, I'm very math minded rather than needing that emotional "one is gone!" type thing. So, maybe for someone else it would be better to pay off the smallest balance first and get that emotional milestone early.
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Shooby
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Post by Shooby on Dec 28, 2014 12:33:27 GMT -5
Here is my approach ( a bit controversial depending on whom you talk too)
1. Pay off CC's in full. 2. Student loan, you may want to leave it ride if fairly low interest or pay it off if it annoys you. Debt is HIGHLY annoying to me. I pretty much HATE debt so for me, paying off loans has always been a priority. 3. Pay down your home - the more you chip away at your home loan, the much less interest you are paying monthly and can get the principal down. Sorry but the Great Mortgage deduction of paying $1 to save 20cents seems bassackwards to me. No thanks. I can hardly call that a deal. However, if you are a great investor aka Phil, then fine, but I am not and I recognize I am not so for me, owning my home feels great. 4. Finance your cars - I paid for my last cars in cash. Now, i don't see what purpose that served. What is the hurry to own something that depreciates almost instantaneously? Doesn't it make more sense to own your home, a real asset instead? So, put more money onto the mortgage and finance your cars.
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 12:34:44 GMT -5
We were poor when I grew up, but although there were some residual emotional issues my parents needed to work out, we did not grow up in what I consider the culture of poverty. We didn't live with the mentality which tends to keep people poor. It doesn't sound like you did either MPL. Me too. Grew up "working class poor" until about age 8, when my Dad's terminal illness began and then we were really poor (lived on SS Disability). Both of my parents were young children during the Great Depression. Both were poor, but only my mother grew up hungry. (My Dad lived on a dairy farm, so did not go hungry). But neither of my parents had that poor mentality. While we were living on SSD, my mother got a seasonal job at a frozen food processing plant and saved every cent to buy a small house. She still lives in that house today. It has been paid for since I was about 12. She never invested, but has savings. She is not wealthy, but she is secure.
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Deleted
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Post by Deleted on Dec 28, 2014 12:35:41 GMT -5
Have you ever read Dave Ramsey's Total Money Makeover? A lot of people here don't like him much and his investment advice sucks, but for debt repayment his plan is very effective. Of course he may come off as being too extreme to you, but the snowball method can still be used even if you're not as intense about it.
For sure I'd start wiping out the small balance cards first.
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Plain Old Petunia
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bloom where you are planted
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Post by Plain Old Petunia on Dec 28, 2014 12:36:42 GMT -5
I do think it's odd that someone that grew up so poor wouldn't prioritize financial security and be almost miser-like, but my ex is the same way. Grew up in a family of 7 kids with no money and now if he has it he spends it. Of the seven, only two of them aren't like that...maybe 3. Why is it odd? Not everyone turns out the same. Yes some will be miser like, while others will spend it all because they never had nothing and some will be well balanced. Not everyone has the same outcome from the same upbringing. Same way 2 siblings from the same household can turn out completely different. I think OP is in a great position to set her family up nicely financially and undo her past mistakes. - relatively still young / time on her side - high earning potential with unlimited overtime / pay debt down faster - good career path / nursing - career mobility / she can follow her husband anywhere with her nursing degree if that is what they choose. Seriously in her position I would not lose sleep over a 2 year old having 10 pair of shoes. What is done is done, move forward and upward. Absolutely. OP can easily turn this around and get herself and her family on firm financial footing.
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wonderland
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Post by wonderland on Dec 28, 2014 12:39:47 GMT -5
Have you ever read Dave Ramsey's Total Money Makeover? A lot of people here don't like him much and his investment advice sucks, but for debt repayment his plan is very effective. Of course he may come off as being too extreme to you, but the snowball method can still be used even if you're not as intense about it. For sure I'd start wiping out the small balance cards first. I tried to read that book and it just seemed like a very long advertisement for his financial peace university. Dave Ramsey annoys me for more reasons than that. I think I can get out of debt without giving my money to a hypocrite who uses his status a "good Christian" to sell products and get rich off the backs of the poor.
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moneymaven
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Post by moneymaven on Dec 28, 2014 12:42:43 GMT -5
I don't have a rewards type card. Maybe, maybe, when I get back on track, I will try to get a rewards card, to help pay for the vacations. But right now I need to learn to live without credit. I do plan to close each card as I pay it off. Food for thought. You can close the accounts now and negotiate lower interest rates with each card company. I did that and am paying no more than 6% on the cards as I pay it off.
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Deleted
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Post by Deleted on Dec 28, 2014 12:43:29 GMT -5
Have you ever read Dave Ramsey's Total Money Makeover? A lot of people here don't like him much and his investment advice sucks, but for debt repayment his plan is very effective. Of course he may come off as being too extreme to you, but the snowball method can still be used even if you're not as intense about it. For sure I'd start wiping out the small balance cards first. I tried to read that book and it just seemed like a very long advertisement for his financial peace university. Dave Ramsey annoys me for more reasons than that. I think I can get out of debt without giving my money to a hypocrite who uses his status a "good Christian" to sell products and get rich off the backs of the poor. Are you sure you were reading TMM? I don't know that there are any references to FPU in there at all. But obviously he's not a good fit for you if you hate him. He has helped a lot of people get out of debt though. A lot.
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Formerly SK
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Post by Formerly SK on Dec 28, 2014 12:43:34 GMT -5
First, get ST/LT disability insurance. Then you need life insurance (7-10x your pay in a term policy).
It sounds like you are not a detail/spreadsheet person which is totally fine. I'd suggest a better budget process for you might be taking your monthly net (use a lower average amount to be conservative). Then put 15% to retirement, $X to debt, $X to your fixed bills, then you have your remaining monthly amount to spend as you please. Then you don't have to justify spending on a particular item/vacation, it's just your money. As long as you don't spend more than that amount (no CC use) you should be fine and can put your finances on autopilot. The biggie though is you have to do the savings and debt payments FIRST, and then live on the rest.
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wonderland
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Post by wonderland on Dec 28, 2014 12:44:12 GMT -5
I don't have a rewards type card. Maybe, maybe, when I get back on track, I will try to get a rewards card, to help pay for the vacations. But right now I need to learn to live without credit. I do plan to close each card as I pay it off. Food for thought. You can close the accounts now and negotiate lower interest rates with each card company. I did that and am paying no more than 6% on the cards as I pay it off. I didn't realize that. I thought I had to pay them off to close them. Thanks!
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 12:47:07 GMT -5
Have you ever read Dave Ramsey's Total Money Makeover? A lot of people here don't like him much and his investment advice sucks, but for debt repayment his plan is very effective. Of course he may come off as being too extreme to you, but the snowball method can still be used even if you're not as intense about it. For sure I'd start wiping out the small balance cards first. I tried to read that book and it just seemed like a very long advertisement for his financial peace university. Dave Ramsey annoys me for more reasons than that. I think I can get out of debt without giving my money to a hypocrite who uses his status a "good Christian" to sell products and get rich off the backs of the poor. I like you, Wonderland.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Dec 28, 2014 12:47:38 GMT -5
Have you ever read Dave Ramsey's Total Money Makeover? A lot of people here don't like him much and his investment advice sucks, but for debt repayment his plan is very effective. Of course he may come off as being too extreme to you, but the snowball method can still be used even if you're not as intense about it. For sure I'd start wiping out the small balance cards first. I tried to read that book and it just seemed like a very long advertisement for his financial peace university. Dave Ramsey annoys me for more reasons than that. I think I can get out of debt without giving my money to a hypocrite who uses his status a "good Christian" to sell products and get rich off the backs of the poor. I gave up reading after page seven. I'm hoping this got all back on track by page 14. So, if your goal is to stop living off of credit--which I agree with and had to do about seven years ago--I would also suggest perusing YNAB.com. For the next few months, read and align yourself to their strategies. All of their philosophy and information is free. After a few months of trying to understand their philosophy and apply it to your life--which would most definitely include not using credit that carries a balance to make purchases--then you might consider purchasing their budgeting and tracking program. Good luck to you.
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