Need advice on personal finance

[lillyb]

Try using cash for grocery expenses. Some call it the 'envelope system'. I just know it works for me. I use to be able to blow tons on groceries when I swiped the debit card. It didn't hurt so much cause I never really saw it leaving. But carrying cash really hurts when you spend it. And I watch prices so much more closely this way, as well. We cut the food budget about $400 a month by doing this one thing. When the envelope was empty, I'm done.

I believe Dave Ramsey's way of getting out of the lease would be to get the actual cost of getting out of the lease ($5,000, correct?), get a loan for that amount plus a few thousand more for a cheaper used car. Just because they're older and used doesn't make them junk. Mine's six years old and pushing 100,000 miles, but I wouldn't hesistate to drive it across America today. We keep our well maintained. Just for example, borrowing $8,000 to get out of the lease and getting a decent used car for $3,000 would still greatly reduce your payments per month along with your insurance. Three small children CAN fit in a sedan. (.. just thinking here.. $8,000 for 2 years at, say, 9% would make your payments of $365 per month, also reducing your insurance per month) My daughter drives a car we bought last year for $1,000. Roomy, comfy, and would go anywhere today. They are out there.

Great job cancelling the whole life!

For the house, I didn't really see that you are 'in love' with the home. If you were, you might think of keeping it. However, renting isn't a bad idea, either. At least until you're out of debt. Your goal of renting until this debt is cleaned up and then putting 20% (at least, but a good solid number) down is a good plan. Debt free, with a decent emergency fund, decent down payment... sounds great to me!

[amberbamber]

Try using cash for grocery expenses. Some call it the 'envelope system'. I just know it works for me. I use to be able to blow tons on groceries when I swiped the debit card. It didn't hurt so much cause I never really saw it leaving. But carrying cash really hurts when you spend it. And I watch prices so much more closely this way, as well. We cut the food budget about $400 a month by doing this one thing. When the envelope was empty, I'm done.

I will work on this

I believe Dave Ramsey's way of getting out of the lease would be to get the actual cost of getting out of the lease ($5,000, correct?), get a loan for that amount plus a few thousand more for a cheaper used car.

This is the one thing my DH is fighting me on. He says we know the car is reliable and blah, blah blah. He's of the mind set that if we buy used we are buying someone else's junk. I'll keep working on him

For the house, I didn't really see that you are 'in love' with the home. If you were, you might think of keeping it. However, renting isn't a bad idea, either. At least until you're out of debt. Your goal of renting until this debt is cleaned up and then putting 20% (at least, but a good solid number) down is a good plan. Debt free, with a decent emergency fund, decent down payment... sounds great to me!

[/quote]

Nope, not in love with this house. Although I do love the space. We will definately be downsizing, but I also see that as an opportunity to get rid of things we don't need, use, etc.

Alright, off to do some organizing

Thank you all for you advice and help

[autoxer]

Originally Posted by amberbamber

The 3rd CC is usually for emergencies- although we've been using it for other things also. I am working on this though.

I have tried many different ways of controlling my CC usage, leaving the CC at home was somewhat effective, but cutting them up worked best. Buying gas & groceries becomes an emergency when you don't have any cash, but planning becomes an emergency when you don't have the credit cards.

There still seems to be something missing from your budget. I don't see much entertainment listed besides the cable tv/internet. What about haircuts? clothing? hobbies? Your monthly expenses total $4435, only about 56% of your gross income. I don't know what your take home $ is, but I'm guessing there is another >$1000/month that isn't accounted for. If you plug up those leaks, you'll be able to wipe out those debts.

[lillyb]

Originally Posted by amberbamber

This is the one thing my DH is fighting me on. He says we know the car is reliable and blah, blah blah. He's of the mind set that if we buy used we are buying someone else's junk. I'll keep working on him

I feel for you on that one, my dh was the exact same way. We were upside down on an SUV by $8,000 (kept rolling it into another new car, really dumb). He wanted me to keep it for reliability, no known problems, felt safer with me driving it... etc. It took five months of me nagging and paying down $11,000 on it to finally convince him I didn't need something that new, especially since I was a sahm and only ran around town mostly. He had all the arguments, believe me. To shut me up he finally let me trade it for my present vehicle last February. We compromised, he let me trade down in car IF I went with a dealership known for it's used car inspection processes, and I compromised by trading in the SUV, thereby losing some equity. He felt better knowing I was driving something that was went over thoroughly, even if it cost us some at the end. I felt better owing way less on a car over an SUV that I'd come to hate. We paid the car off in May. Had I kept the SUV I wouldn't have been able to pay it off this year at all.

Here it is, 6 months later, not a lick of problems from my car, I've been driving a paid for car for 3 months now. Don't regret one bit. He still grumbles, yes, but finally admits it was a good thing.

Here's my worry on the lease... you pay and pay and pay... and at the end it still isn't yours. You still would have to pay a huge amount to finish purchasing the vehicle or you lease again. Or you get away and have nothing to show for everything you've paid. Would he like not ever getting out of a lease or paying tons of money and not having anything to show for it from now on?? Just food for thought if you ever try arguing about the lease again.

Vehicles... the bane of our financial existences. It's sickening to see how much I've wasted over the years on a stupid car. It gets me from point A to point B,... that's it! It's a car. I can't even bring myself to add up everything I've paid over the years. So sick over it I've decided I will never again have a loan on a car, it's not worth it.

(excuse the rant, just beating myself up here )

[Ima saver]

Do you need the cell phone? I have never had one, so that is why I am asking. Do you have to pay $125 a month for preschool? Can the child go to public school?

[greedy4chips]

Amber,

I think you are doing great utilizing all the suggestions so far! You have seen the light on the whole life policies, what a waste of money they are. Term + a mutual fund costs the same and returns so much more to you over time.

I realize the lease is a sticking point right now with DH. He doesn't want to buy other people's problems and likes to have a reliable vehicle for you and the kids to use. If you use "lillyb's" suggestion and buy your way out and get the $3K vehicle for 1 yr you can have an emergency fund for any repairs and have $100/month to help with debts. Biggest benefit is you are free from payments in 2 yrs vs whatever is left on your lease + you actually own the vehicle to keep or sell to the next victim...j/k. With the lease you have no clue what extra charges you will get once the lease is done, extra mileage of 2000 miles already leads me to believe you will owe around $800 for extra mileage alone or you will have to park it to get back under the allotted mileage.

Selling the house seems to be your best choice given all the reasons you stated. If it was strictly a financial one, I would be against it, but you have given very valid reasons to sell.

What was your income tax refund amount this year? I think that is your next way to get a pay increase!!!!

[amberbamber]

There still seems to be something missing from your budget. I don't see much entertainment listed besides the cable tv/internet. What about haircuts? clothing? hobbies? Your monthly expenses total $4435, only about 56% of your gross income. I don't know what your take home $ is, but I'm guessing there is another >$1000/month that isn't accounted for. If you plug up those leaks, you'll be able to wipe out those debts.

We don't do any entertainment besides free entertainment, parks, swimming pool, etc. My DH cuts his own hair and I cut the kids hair, mine hasn't been cut in two years. We don't buy clothing either. The kids get new clothes for their birthdays from grandparents...and other than that, it's handme downs or given to us. Hobbies? HUM...we don't really have any hobbies that cost money.

There isn't another $1000. My Dh brings home 1200 every two weeks. Usually there is a $100-$150 cushion which usually is gone with misc things by the next time he gets paid. Again, I am working on cutting this spending out completely!!!

[Wealthizfreedom]

My Dh brings home 1200 every two weeks.

I thought you said in the first post that your family's income was $95,000?

[disneysteve]

Something is wrong with your numbers. Your husband can't bring home $1,200 every two weeks. You list monthly expenses of over $4,500.

[amberbamber]

Originally Posted by Ima saver

Do you need the cell phone? I have never had one, so that is why I am asking. Do you have to pay $125 a month for preschool? Can the child go to public school?

Yes, the cell phone for me is a must. We just moved to Charlotte, NC and I don't know my way around that well, and with 3 children under the age of 4, I'm very nervous about being out - without knowing that I can reach my husband right away.

Preschool - is an extra for us, yes. But I think she needs it. She's shy and this is helping her get her social skills. Plus they do a gymnastics program there, so we are not spending any extra money for that.

[amberbamber]

Originally Posted by Wealthizfreedom

My Dh brings home 1200 every two weeks.

I thought you said in the first post that your family's income was $95,000?

That is his gross income, not his net.

[amberbamber]

Originally Posted by disneysteve

Something is wrong with your numbers. Your husband can't bring home $1,200 every two weeks. You list monthly expenses of over $4,500.

He does get a bonus check at the end of the year...so we save that and pay bills with that also.

[disneysteve]

Originally Posted by amberbamber

That is his gross income, not his net.

A gross of 95K is a net of a lot more than 1,200 every two weeks. That would only be 31,200/year. That can't be right. Your monthly expenses listed are 54,000 or so.

Or are you including the bonus in that 95,000?

[creditcardfree]

Sounds like selling the house is a REALLY good idea with that amount of take home pay. I hope that happens fast for you. Keep the house spic and span and decluttered.

[amberbamber]

Originally Posted by disneysteve

A gross of 95K is a net of a lot more than 1,200 every two weeks. That would only be 31,200/year. That can't be right. Your monthly expenses listed are 54,000 or so.

Or are you including the bonus in that 95,000?

Yes, I am including the bonus. Also, we got relocation money to move here, but we have to count that as income. So, we are taxing his income at the single rate until the relocation money has been "forgiven" through his company.

[disneysteve]

Originally Posted by amberbamber

Yes, I am including the bonus.

This is a big red flag waving to me. So you have your lifestyle and monthly expenses based on his regular pay AND his anticipated bonus, correct? What happens if the company has a slow year and the bonus is 10% less, or 20%, or 50%? How will you make up the shortfall? Bonuses are not guaranteed, no matter how consistent they have been in the past.

[autoxer]

I still don't understand your income. You say you recieve $95,000 gross, which I'm guessing would be between $65k & $70k after taxes. But Dh only brings home $1200 every two weeks (which is $1200x26=$31,200/year) plus a bonus? Something just doesn't seem right. Either the bonus is $35,000 or you bring home $1200 every week, instead of every two weeks, or the 95k gross is way off.

[amberbamber]

Originally Posted by disneysteve

This is a big red flag waving to me. So you have your lifestyle and monthly expenses based on his regular pay AND his anticipated bonus, correct? What happens if the company has a slow year and the bonus is 10% less, or 20%, or 50%? How will you make up the shortfall? Bonuses are not guaranteed, no matter how consistent they have been in the past.

True and yes...Red flags waving here also. And yes, we do rely on his bonuses and if they would happen to stop coming in, then yes, we would be in big trouble!
I am trying to prepare for the worst case and get the debt paid off and save, save, save!

[amberbamber]

Originally Posted by autoxer

I still don't understand your income. You say you recieve $95,000 gross, which I'm guessing would be between $65k & $70k after taxes. But Dh only brings home $1200 every two weeks (which is $1200x26=$31,200/year) plus a bonus? Something just doesn't seem right. Either the bonus is $35,000 or you bring home $1200 every week, instead of every two weeks, or the 95k gross is way off.

Dh gets a bonus every year and it generally is 35,000 (after taxes) He does bring home 1200 every other week. That is our income. Honestly. I am not making it up.

[sweeps]

Originally Posted by amberbamber

Dh gets a bonus every year and it generally is 35,000 (after taxes)