Updated my money plan...

[ScrimpAndSave]

$100,000 Money Race




Salary Month Projected Savings (what I need to save each month)

$42,298 July 1st 2008 $2,735 ($800)
$42,298 August 1st 2008 $3,535 ($800)
$48,696 September 1st 2008 $4,335 ($800)
$48,696 October 1st 2008 $5,135 ($2000)
$48,696 November 1st 2008 $7,135 ($2000)
$48,696 December 1st 2008 $9,135 ($2000)
$48,696 January 2nd 2009 $11,135 ($2000)
$50,298 February 1st 2009 $13,135 ($2000)
$50,298 March 1st 2009 $15,135 ($2000)
$50,298 April 1st 2009 $17,135 ($2000)
$50,298 May 1st 2009 $19,135 ($2000)
$50,298 June 1st 2009 $21,135 ($2000)
$50,298 July 1st 2009 $23,135 ($2000)
$50,298 August 1st 2009 $25,135 ($2000)
$57,725 September 1st 2009 $27,135 ($2500)
$57,725 October 1st 2009 $29,635 ($2500)
$57,725 November 1st 2009 $32,135 ($2500)
$57,725 December 1st 2009 $34,635 ($2500)
$57,725 January 1st 2010 $37,135 ($3000) (This is when hubby is done with the bar and starts contributing)
$57,725 February 1st 2010 $40,135 ($3000)
$57,725 March 1st 2010 $43,135 ($3000)
$57,725 April 1st 2010 $46,135 ($3000)
$57,725 May 1st 2010 $49,135 ($3000)
$57,725 June 1st 2010 $52,135 ($3000)
$57,725 July 1st 2010 $55,135 ($3000)
$57,725 August 1st 2010 $58,135 ($3000)
$67,232 September 1st 2010 $64,635 ($3500)
$67,232 October 1st 2010 $68,135 ($3500)
$67,232 November 1st 2010 $71,635 ($3500)
$67,232 December 1st 2010 $75,135 ($3500)
$67,232 January 1st 2011 $78,635 ($3500)
$67,232 February 1st 2011 $82,135 ($3500)
$67,232 March 1st 2011 $85,635 ($3500)
$67,232 April 1st 2011 $89,135 ($3500)
$67,232 May 1st 2011 $92,635 ($3500)
$67,232 June 1st 2011 $96,135 ($3500)
$67,232 July 1st 2011 $99,635 ($3500)
$67,232 August 1st 2011 $103,135 ($3500)
$75,849 September 1st 2011 $106,635 ($4000)
$75,849 October 1st 2011 $110,635 ($4000)
$75,849 November 1st 2011 $114,635 ($4000)
$75,849 December 1st 2011 $118,635 ($4000)


Then me and my fiance (the husband) move out and buy our forever home! (hopefully)

What even better is that my dad is thinking of selling his house at the end of 2011 and giving each of us $50,000...sort of an early, partial inheritance.

[noppenbd]

Originally Posted by ScrimpAndSave

What even better is that my dad is thinking of selling his house at the end of 2011 and giving each of us $50,000...sort of an early, partial inheritance.

That's great, it looks like a great plan. Just be careful with your dad's gift, it could be subject to gift tax unless it is handled properly. Make sure you see an estate attorney before he gives you the money.

[bjl584]

Did you include the effects of compounding interest in your projections. It may take less time than you think to get to 100K. But, that's an aggressive plan. I hope that it works out for you. Good luck.

[ScrimpAndSave]

No I actually didn't...and I will be saving it in my ING account with acrues 3% APR. I thought I would try to be on the more conservative side.

[bjl584]

Being conservative is good. On a side note, you can probably do better than 3% at ING. HSBC is currently 3.5%, IGOBanking is 3.28%. There are others too. Just something to consider.

[gamecock43]

Thats nice of your dad to offer the 50k to you Scrimp, just make sure that he first has comprehensive health insurance, and plans for his 'old age'.

If he does not have either of those, you could be paying alot more than 50k to take care of him in a few years and in the long run, the $$ would be cheaper to you to be invested wisely into his future.

But he sounds like a smart man, so I would guess he has that taken care of. I just hear so many stories of parents wanting to 'provide for their children' and failing to provide for themselves, creating a financial nightmare later on.

[ScrimpAndSave]

Yeah, he is definitely taken care of.

[jeebuss31]

Originally Posted by noppenbd

That's great, it looks like a great plan. Just be careful with your dad's gift, it could be subject to gift tax unless it is handled properly. Make sure you see an estate attorney before he gives you the money.

Hi! I apologize in advance and not trying to steal this thread here, but what is the proper way to handle if a parent gives you a large amount of money to put down? My dad is going to give me $40,000 to add onto the mortgage. How can the lender tell?

[ScrimpAndSave]

You are not stealing the thread at all..I am interested in seeing the responses...

[cptacek]

Are you talking tax wise? The lender can't tell and most like doesn't care. The tax man will. A person can give $12,000 a year to someone without triggering the gift tax. So, your dad can give you $12,000 this year. If you are married, he can also give $12,000 to your spouse. If your dad is married she can give you $12,000 and she can give $12,000 to your spouse.

If you or dad are not married, he can give you $12,000 this year and $12,000 next year and $12,000 the year after and $4000 the year after that.

[noppenbd]

Right, it is not the lender that you need to worry about. The proper way to give a large amount like that if you cannot break it up over a few years to keep it under the gift tax limit ($12000 a year per person) is to structure it as a loan. Then the lender (your father) can forgive a certain amount each year to keep it under the gift tax limit. But it needs to be written up as a proper loan, with a market interest rate. I would suggest a tax attorney write it up.

[money2009]

Looks good I hope everything works out ok for you.

[jeebuss31]

Originally Posted by cptacek

Are you talking tax wise? The lender can't tell and most like doesn't care. The tax man will. A person can give $12,000 a year to someone without triggering the gift tax. So, your dad can give you $12,000 this year. If you are married, he can also give $12,000 to your spouse. If your dad is married she can give you $12,000 and she can give $12,000 to your spouse.

If you or dad are not married, he can give you $12,000 this year and $12,000 next year and $12,000 the year after and $4000 the year after that.

Thanks for the break down! But wouldn't it be easier if our dads just wrote the check to the mortgage lender? That way it'll be just one simple payment.

[cptacek]

If your dad just wrote a $40,000 check to the mortgage company, that is one payment of $40,000 to one of you from him, so it triggers the gift tax. Tax rules are tax rules, as silly as they may be. To make it abundantly clear in case you got audited later, I would have him write different checks (still don't know if you are married or if he is married, so don't know if there would be 4 checks to write or multiple years to work with). It would just take the same trip to the bank to deposit them, so it isn't that much more of a hassle, and you would then have a paper record of the amount of the checks and to who they were written out to and from who they were from.

[jeebuss31]

Originally Posted by cptacek

If your dad just wrote a $40,000 check to the mortgage company, that is one payment of $40,000 to one of you from him, so it triggers the gift tax. Tax rules are tax rules, as silly as they may be. To make it abundantly clear in case you got audited later, I would have him write different checks (still don't know if you are married or if he is married, so don't know if there would be 4 checks to write or multiple years to work with). It would just take the same trip to the bank to deposit them, so it isn't that much more of a hassle, and you would then have a paper record of the amount of the checks and to who they were written out to and from who they were from.

My dad is married and we're not married yet, In fact, we'll be moved into the house before we're married.

[Beccagold]

Originally Posted by cptacek

Are you talking tax wise? The lender can't tell and most like doesn't care.

Actually, they can tell. Most lenders will ask for you bank statements for a specific amount of time. If a large deposit shows up that doesn't match up with salary or other regular deposits, they will question it. If its a gift, you and whomever gave the gift need to fill out a form. I believe this is to protect the bank from "loans" from family that will throw off the calculation. For example, if dad gave you $10k to keep in your account to look like you had more money, but you'll return it after closing.

If its a real gift, no biggie, just fill out forms, but that brings you back to the tax issues.