Shooby
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Post by Shooby on Dec 28, 2014 16:23:35 GMT -5
Is anyone else starting to get these two thread mixed up from relatively new posters! lol
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wonderland
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Post by wonderland on Dec 28, 2014 16:23:50 GMT -5
It's really nice that you can get as much OT as you want. But you describe your work and daily life as stressful. That you don't relax until you go on vacation. It just seems odd that you'll add more stress to your life to go on vacation and have a blowout birthday instead of cutting elsewhere. i.e. you're working an extra 8 days (and taking that away from family time) to take a 7 day vacation. Do you get paid vacation time? Because I don't really have a set work schedule, everything in my life can be counted as working extra days to pay for it. The vacation is worth it, plain and simple. It is the lack of time together that we make up for on vacation. That likely won't change whether or not I work some extra shifts. DH is busy, and I usually work when he is unavailable to us. On the days I work, there is only a couple hours of time that we miss, and usually if I am home he goes and studies during that time.
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wonderland
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Post by wonderland on Dec 28, 2014 16:25:55 GMT -5
I also don't see how you will homeschool, if that is a priority. If you really want that to happen it will take starting to plan, now. Presumably, DH will be making more by then, so I can drop down to 2 16 hour shifts a week. We do some homeschool now, but it is basic preschool stuff, nothing intense. Mother in law, who watches the kid, is also a retired teacher and can help do lessons if I have to work on a "school day".
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wonderland
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Post by wonderland on Dec 28, 2014 16:28:06 GMT -5
I agree that paying off debt, opening Roths for 2014 and 2015 for both of you $5500 each x 2 = $22,000 and cutting your spending habits is really ambitious. If it were me, I'd prioritize the roths and reducing spending. Any overtime should go to funding your roths, not vacations. Create a budget to accommodate affordable vacations within your non-overtime income. The Roths can be your emergency fund if you find yourself in a crisis. See how that goes through 2015 and then tackle the debt in 2016. Good luck! You are young and taking the steps now will make a world of difference! Wait another year to tackle debt? I was more planning to just do $6000 in retirement vehicles and put a ton towards debt. When the debt is paid off I can be more aggressive with retirement
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 16:29:43 GMT -5
Is anyone else starting to get these two thread mixed up from relatively new posters! lol Yes!
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justme
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Post by justme on Dec 28, 2014 16:31:58 GMT -5
It's really nice that you can get as much OT as you want. But you describe your work and daily life as stressful. That you don't relax until you go on vacation. It just seems odd that you'll add more stress to your life to go on vacation and have a blowout birthday instead of cutting elsewhere. i.e. you're working an extra 8 days (and taking that away from family time) to take a 7 day vacation. Do you get paid vacation time? Because I don't really have a set work schedule, everything in my life can be counted as working extra days to pay for it. The vacation is worth it, plain and simple. It is the lack of time together that we make up for on vacation. That likely won't change whether or not I work some extra shifts. DH is busy, and I usually work when he is unavailable to us. On the days I work, there is only a couple hours of time that we miss, and usually if I am home he goes and studies during that time. I wasn't saying don't take the vacation. Just that I'd personally consider cutting elsewhere instead of working more - especially at a job I found stressful.
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gooddecisions
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Post by gooddecisions on Dec 28, 2014 16:33:17 GMT -5
I agree that paying off debt, opening Roths for 2014 and 2015 for both of you $5500 each x 2 = $22,000 and cutting your spending habits is really ambitious. If it were me, I'd prioritize the roths and reducing spending. Any overtime should go to funding your roths, not vacations. Create a budget to accommodate affordable vacations within your non-overtime income. The Roths can be your emergency fund if you find yourself in a crisis. See how that goes through 2015 and then tackle the debt in 2016. Good luck! You are young and taking the steps now will make a world of difference! Wait another year to tackle debt? I was more planning to just do $6000 in retirement vehicles and put a ton towards debt. When the debt is paid off I can be more aggressive with retirement Yes, for the exact reason Phil articulated in an earlier post. Your $22,000 to roths will be worth way more than paying off the $25K in debt immediately. The $25K in debt should get paid off, but not before funding the roths. Phil button computes...a lump sum investment of $22,000.00 bearing an annual return of 11% could grow to $503,630.52 in 30 years! Imagine what it would be if you're adding $12K to it every year. ETA, you don't have to imagine, just hit the phil button... According to my Phil Script, a yearly investment of $12,000.00 bearing an annual return of 11% could grow to $2,650,958.09 in 30 years!
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Deleted
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Post by Deleted on Dec 28, 2014 16:34:10 GMT -5
Something to consider when running numbers. You currently work an average of 29 hours a week (95k- 35k = 60k / 40$ = 1500 hr / 52 wk = 28.8).
You are setting your new budget at 42 hours per week, not counting overtime for extras. This is basically working 1.5 X the amount you are now. And you are already stressed.
I know you think I'm being mean. I am not trying to be. I just don't think you are being realistic or logical in your approach. I think you are setting yourself up for failure and I'd hate to see that.
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wonderland
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Post by wonderland on Dec 28, 2014 16:35:15 GMT -5
The only place to cut would be the debt repayment, so should I be less agrees I've on the repayment? I could drop it to $1500 a month repayment and free up another $6000,to be used for vacation, party, and entertainment.
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gooddecisions
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Post by gooddecisions on Dec 28, 2014 16:38:06 GMT -5
The only place to cut would be the debt repayment, so should I be less agrees I've on the repayment? I could drop it to $1500 a month repayment and free up another $6000,to be used for vacation, party, and entertainment. sigh, I'm so excited at your opportunities to build wealth and still have a good life, but then after 16 pages you post this.
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Deleted
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Post by Deleted on Dec 28, 2014 16:38:35 GMT -5
If you actually want help with budgeting, you need to post all of your debt, with interest rate and terms, and all of your set expenses.
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wonderland
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Post by wonderland on Dec 28, 2014 16:38:40 GMT -5
Something to consider when running numbers. You currently work an average of 29 hours a week (95k- 35k = 60k / 40$ = 1500 hr / 52 wk = 28.8). You are setting your new budget at 42 hours per week, not counting overtime for extras. This is basically working 1.5 X the amount you are now. And you are already stressed. I know you think I'm being mean. I am not trying to be. I just don't think you are being realistic or logical in your approach. I think you are setting yourself up for failure and I'd hate to see that. I think being stressed is just par for the course when you have young children and jobs and a spouse in school. And it more works out to a 48 hour week, a 24 hour week, a week off, very erratic. I think regularly working 36 and 48 hour weeks, while not very fun, will be manageable. That's still only 3-4 days a week, which still gives me more time off than most.
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wonderland
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Post by wonderland on Dec 28, 2014 16:39:37 GMT -5
If you actually want help with budgeting, you need to post all of your debt, with interest rate and terms, and all of your set expenses. Yes, and I will do that tomorrow. I don't have time to do that until DH is at work/off the computer and DD is asleep.
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justme
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Post by justme on Dec 28, 2014 16:40:41 GMT -5
Are you 100% sure that's the case. Have you gone through all your spending you do in a month and see where your money is going and where you are cutting? Oped's point is something to consider too - is the increase in income coming from you working more? Moving from 29 to 42 hours a week is a lot, then the OT for the other stuff.
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wonderland
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Post by wonderland on Dec 28, 2014 16:40:55 GMT -5
The only place to cut would be the debt repayment, so should I be less agrees I've on the repayment? I could drop it to $1500 a month repayment and free up another $6000,to be used for vacation, party, and entertainment. sigh, I'm so excited at your opportunities to build wealth and still have a good life, but then after 16 pages you post this. Just me suggested I cut other places rather than work more overtime. I was simply pointing out what cutting other places would look like.
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Deleted
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Post by Deleted on Dec 28, 2014 16:43:43 GMT -5
I'll look forward to your numbers. I also encourage setting the new budget based off of what you are currently making/working, or just slightly above. IF you end up working more, then you can add to savings and debt payment, but I would not build my bare bones around working 42+ hours a week
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wonderland
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Post by wonderland on Dec 28, 2014 16:44:25 GMT -5
Wait another year to tackle debt? I was more planning to just do $6000 in retirement vehicles and put a ton towards debt. When the debt is paid off I can be more aggressive with retirement Yes, for the exact reason Phil articulated in an earlier post. Your $22,000 to roths will be worth way more than paying off the $25K in debt immediately. The $25K in debt should get paid off, but not before funding the roths. Phil button computes...a lump sum investment of $22,000.00 bearing an annual return of 11% could grow to $503,630.52 in 30 years! Imagine what it would be if you're adding $12K to it every year. ETA, you don't have to imagine, just hit the phil button... According to my Phil Script, a yearly investment of $12,000.00 bearing an annual return of 11% could grow to $2,650,958.09 in 30 years! Ok, so a better plan for 2015 is to spend the first quarter funneling as much a s possible into a 2014 Roth for myself and one for DH, then spend the rest of the year putting approximately $1200/month into a 2015 roth for each of us, and use the remaining $800 a month for those 9 months to pay off debt?
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wonderland
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Post by wonderland on Dec 28, 2014 16:46:36 GMT -5
I'll look forward to your numbers. I also encourage setting the new budget based off of what you are currently making/working, or just slightly above. IF you end up working more, then you can add to savings and debt payment, but I would not build my bare bones around working 42+ hours a week I am determined to work at least the 36/48 each pay period during 2015. I need to bust my butt to get back a on track. In January I have scheduled a few 60 hour weeks. It won't be fun, but I really need to discipline myself to work more hours.
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Deleted
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Post by Deleted on Dec 28, 2014 16:47:04 GMT -5
What remaining 800 a month?
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gooddecisions
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Post by gooddecisions on Dec 28, 2014 16:50:23 GMT -5
Yes, for the exact reason Phil articulated in an earlier post. Your $22,000 to roths will be worth way more than paying off the $25K in debt immediately. The $25K in debt should get paid off, but not before funding the roths. Phil button computes...a lump sum investment of $22,000.00 bearing an annual return of 11% could grow to $503,630.52 in 30 years! Imagine what it would be if you're adding $12K to it every year. ETA, you don't have to imagine, just hit the phil button... According to my Phil Script, a yearly investment of $12,000.00 bearing an annual return of 11% could grow to $2,650,958.09 in 30 years! Ok, so a better plan for 2015 is to spend the first quarter funneling as much a s possible into a 2014 Roth for myself and one for DH, then spend the rest of the year putting approximately $1200/month into a 2015 roth for each of us, and use the remaining $800 a month for those 9 months to pay off debt? Yes, but if something has got to give, make it the debt repayment. If you find yourself getting stressed and anxious again, you'll end up taking 2 steps forward and 4 steps back. So, don't be overly ambitious with the debt repayment. Just try to cut back your expenses and spending without it hurting your quality of life. You got this!
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wonderland
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Post by wonderland on Dec 28, 2014 16:50:43 GMT -5
People keep talking about how stressed I am and working more will make it worse, but honestly, I think it will help tremendously. I have found that in my life, when I have less free time, I am able to spend my free time more wisely. If I only have 2 days off instead of four, I can't procrastinate. I am more likely to just get things done and over with. If I have an endless amount of time off, I can easily tell myself to "do it later".
I find the structure/chaos flows into other areas of my life too. When I am working more, and taking more control of finances, I am also cleaning more efficiently, and taking better care of my body. It's such an all or nothing mindset, but when I start to get lazy in one area, I seem to get lazy in all areas.
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wonderland
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Post by wonderland on Dec 28, 2014 16:51:27 GMT -5
What remaining 800 a month? I was going to put $2000/month to debt repayment. Instead, it will take $1200/month to fund Roths, then $800 will be left for debt
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Deleted
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Post by Deleted on Dec 28, 2014 16:55:43 GMT -5
Regardless of how well you think you'll handle working more, you base your budget on base, not OT and bonus so to speak. I'd look at budget as average of 29-36 hours.
Do you get paid weekly?
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 16:56:28 GMT -5
What remaining 800 a month? She has 2k per month she was planning to throw at debt. She's clarifying that she should instead send $1200 to Roths and the rest ($800) to debt.
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wonderland
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Post by wonderland on Dec 28, 2014 17:01:13 GMT -5
Regardless of how well you think you'll handle working more, you base your budget on base, not OT and bonus so to speak. I'd look at budget as average of 29-36 hours. Do you get paid weekly? I get paid every 2 weeks.
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 17:01:49 GMT -5
People keep talking about how stressed I am and working more will make it worse, but honestly, I think it will help tremendously. I have found that in my life, when I have less free time, I am able to spend my free time more wisely. If I only have 2 days off instead of four, I can't procrastinate. I am more likely to just get things done and over with. If I have an endless amount of time off, I can easily tell myself to "do it later". I find the structure/chaos flows into other areas of my life too. When I am working more, and taking more control of finances, I am also cleaning more efficiently, and taking better care of my body. It's such an all or nothing mindset, but when I start to get lazy in one area, I seem to get lazy in all areas. I think you will find that once your finances are on track, you will feel much less stressed.
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wonderland
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Post by wonderland on Dec 28, 2014 17:03:54 GMT -5
People keep talking about how stressed I am and working more will make it worse, but honestly, I think it will help tremendously. I have found that in my life, when I have less free time, I am able to spend my free time more wisely. If I only have 2 days off instead of four, I can't procrastinate. I am more likely to just get things done and over with. If I have an endless amount of time off, I can easily tell myself to "do it later". I find the structure/chaos flows into other areas of my life too. When I am working more, and taking more control of finances, I am also cleaning more efficiently, and taking better care of my body. It's such an all or nothing mindset, but when I start to get lazy in one area, I seem to get lazy in all areas. I think you will find that once your finances are on track, you will feel much less stressed. That is probably true. I hate that "oh crap, did I really spend all that money" feeling.
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Deleted
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Post by Deleted on Dec 28, 2014 17:05:59 GMT -5
The only place to cut would be the debt repayment, so should I be less agrees I've on the repayment? I could drop it to $1500 a month repayment and free up another $6000,to be used for vacation, party, and entertainment. This is totally the problem I see. Your plan is based on 1) you working 1.5X current levels while 2) budgeting 800 a month for the things you are currently spending 3-4x as much on... If you can't make the $, or the stuff in that category costs more, I don't see you cutting the stuff, I see you cutting debt repayment and or savings and ending up in th exact same place. YOU are the one who said you have a stressful job... You seem to contradict yourself sometimes. As for budgeting. START with income.
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Deleted
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Post by Deleted on Dec 28, 2014 17:12:27 GMT -5
I've been lurking on YM since 2007 and it figures that this would be the thread that would get me to post!
OP- I've been an even worse YM-er than you and I knew better to not get myself into the hole I found myself in with consumer debt (that had accumulated over years due to me not living within my income). I had always thought I could out-earn my stupidity and was aware of my debt burden, but had never seriously tackled it figuring I would "make more" or some year my expenses would magically be less than the previous year. Well, in mid-2014 I received a totally unexpected $15k paycut due to the capricious whims of my boss. As I had been previously earning over 6 figures (and I'm not that much older than you), this should not have been an emergency, but because I was spending a 115% of my income it suddenly became a challenge just to make the minimum payments each month.
Despite having worked in finance, having read nearly every financial book out there (my personal fav is written by a guy who went thru debtor's anonymous), and just having been raised to know better, nothing made me more serious about tackling my debt problem than seeing a good portion of my income THAT I RELIED ON disappear overnight. I sold everything in sight, reduced every bill that was a "need", eliminated every bill that was a "want", paid down debt, and even purchased a few "wants" for myself. Now, my mercurial boss has given me a huge pay raise for next year but I'm not going to rely on it to the same extent I previously did since I know it can vanish in an instant. My #1 priority this year is to pay down a significant portion of this consumer debt since this past year, although I did pay down about 20% of my debt, I felt like I was keeping my head above water. I had to make some hard choices (such as selling my beloved fuel inefficient and costly SUV and getting something used and more reasonable) but I wouldn't say I feel particularly deprived. I 2nd the recommendation that you take the time to set up YNAB, especially since you've already purchased it. I find that Mint is insufficiently proactive in curbing overspending. I've been using YNAB for the past 3 months and have gone from overspending about $3k/mo to about $300/mo. Maybe this month I'll finally get it right and have something left over!
You haven't had the wake-up call I had yet. You may have the ability to set your schedule now and work additional hours but you absolutely need 100% of your income to survive and this is not sustainable nor sufficient to keep "Murphy" away. You also seem to have difficulty in distinguishing needs vs wants. How you want to live your life is your business, but if you think it's difficult to support your family now, it will get much more burdensome as you get older- especially if you hold on to the expectations you seem to currently have. As a reformed high-income spender, my #1 advice to you regarding your shopping addiction is: if you want to stay dry, don't hang out in wet places! That means no mall, no internet browsing, nothing where you see advertisements. I'm still learning to tell myself "no", but when I look around my house and see all of the crap I don't need that was purchased via debt I feel sick and disgusted with myself.
I also slightly disagree with Phil and I think you should make paying off this debt a priority. With your income and O/T, you should be able to knock it out by June and after you still have the rest of the year to contribute to retirement accounts. I've read all of the posts and my #1 concern with you is that you, like most overspenders (myself included), will continue to overspend even after you've paid this $10k off leaving an even bigger mess a few years down the line.
Bottomline, don't take your high income for granted. My $2.
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Plain Old Petunia
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Post by Plain Old Petunia on Dec 28, 2014 17:19:17 GMT -5
I've been lurking on YM since 2007 and it figures that this would be the thread that would get me to post!
OP- I've been an even worse YM-er than you and I knew better to not get myself into the hole I found myself in with consumer debt (that had accumulated over years due to me not living within my income). I had always thought I could out-earn my stupidity and was aware of my debt burden, but had never seriously tackled it figuring I would "make more" or some year my expenses would magically be less than the previous year. Well, in mid-2014 I received a totally unexpected $15k paycut due to the capricious whims of my boss. As I had been previously earning over 6 figures (and I'm not that much older than you), this should not have been an emergency, but because I was spending a 115% of my income it suddenly became a challenge just to make the minimum payments each month.
Despite having worked in finance, having read nearly every financial book out there (my personal fav is written by a guy who went thru debtor's anonymous), and just having been raised to know better, nothing made me more serious about tackling my debt problem than seeing a good portion of my income THAT I RELIED ON disappear overnight. I sold everything in sight, reduced every bill that was a "need", eliminated every bill that was a "want", paid down debt, and even purchased a few "wants" for myself. Now, my mercurial boss has given me a huge pay raise for next year but I'm not going to rely on it to the same extent I previously did since I know it can vanish in an instant. My #1 priority this year is to pay down a significant portion of this consumer debt since this past year, although I did pay down about 20% of my debt, I felt like I was keeping my head above water. I had to make some hard choices (such as selling my beloved fuel inefficient and costly SUV and getting something used and more reasonable) but I wouldn't say I feel particularly deprived. I 2nd the recommendation that you take the time to set up YNAB, especially since you've already purchased it. I find that Mint is insufficiently proactive in curbing overspending. I've been using YNAB for the past 3 months and have gone from overspending about $3k/mo to about $300/mo. Maybe this month I'll finally get it right and have something left over!
You haven't had the wake-up call I had yet. You may have the ability to set your schedule now and work additional hours but you absolutely need 100% of your income to survive and this is not sustainable nor sufficient to keep "Murphy" away. You also seem to have difficulty in distinguishing needs vs wants. How you want to live your life is your business, but if you think it's difficult to support your family now, it will get much more burdensome as you get older- especially if you hold on to the expectations you seem to currently have. As a reformed high-income spender, my #1 advice to you regarding your shopping addiction is: if you want to stay dry, don't hang out in wet places! That means no mall, no internet browsing, nothing where you see advertisements. I'm still learning to tell myself "no", but when I look around my house and see all of the crap I don't need that was purchased via debt I feel sick and disgusted with myself.
I also slightly disagree with Phil and I think you should make paying off this debt a priority. With your income and O/T, you should be able to knock it out by June and after you still have the rest of the year to contribute to retirement accounts. I've read all of the posts and my #1 concern with you is that you, like most overspenders (myself included), will continue to overspend even after you've paid this $10k off leaving an even bigger mess a few years down the line.
Bottomline, don't take your high income for granted. My $2. Well, I hope you keep it up! (Posting). Congrats on getting your financial house in order.
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