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Path to debt free...just starting and need advice

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    All great points and thanks again!

    I noticed about this time last year that we were hemorrhaging money (and this was when my wife was grossing roughly $34k a year) and I decided to make a spreadsheet in excel to determine which one of us had a spending problem and where the money was going. Low and behold it was this guy who was bleeding money everywhere. From eating out, eating at work, buying guns, car parts, etc. I was dropping money worse than a rapper in a music video.

    Since then I have tried to budget and cut way back on my frivolous spending (although I still fail at it sometimes) and the spreadsheet that I keep daily is very very helpful in keeping me on track. I find that our worst spending is on the weekends, and I work alternating Fridays so I'm off every other Friday which means a three day weekend twice a month and increased spending habits. On the other hand if I work a 70 hour week I spend maybe $15-$20 total for the week (mostly in food as I treat myself to going out for lunch maybe once or twice a week - but I have found I enjoy subway for this excursion and use a subways points card to eventually get a couple of free subs along the way so I feel better about my little weekly splurge)

    As for the reason for the credit card debt, a majority of it was installing windows in our home this year (home was built in 1937 and still had the original single pain glass windows which led to ~$400 electric bills for almost 4 months straight during the winter). Once again an emergency fund would have negated this debt but so far our electric bill has been sub-$175

    But you are correct I am definitely a mixed bag, I want to act like I'm 17 and don't have to worry about anything while I know that I need to be financially responsible and save money for the inevitable rainy day. But the 17 year old in me really wants his toys so I'm hoping the 29 year old in me thinks he can use that to drive toward the responsibility goals our family needs. So I'm wondering what kind of goal I'd have to meet to warrant my latest obsessive toy.....a used Maserati Gran Turismo (yeah I know,I'm crazy)

    I'm guessing over $50k saved in an EF and nothing but a house I need a raise


      Originally posted by Togeneral99 View Post
      So I'm wondering what kind of goal I'd have to meet to warrant my latest obsessive toy.....a used Maserati Gran Turismo (yeah I know,I'm crazy)
      Haha, that's a beautiful car and you remind me of myself. I'm pretty sure I'm going to own a corvette someday and I can't stop thinking about building a factory five roadster. I came to the conclusion that I should tie the goal to my net worth. If you have a low net worth and you buy a fancy car, the depreciation will put a hugh dent in your net worth. But if your net worth is $1.5M and you buy a $70k car, the depreciation might only be 1-2% of your net worth, easily overcome by your smarter investments.


        While part of you may wish to be 17 y/o again, the decade zoomed by for a DW and baby who love and adore you. Kudos to DW who understand the importance of an EF and has agreed to delay purchase of desired SUV.

        In the future, getting efficient windows will add value and reduce heating/cooling costs significantly. As I see it, in the dollar and cents world 2013, you've exchanged lower heating bills for $7,300. in CC debt at 8.99%. How much interest will you pay on those windows over 4 years [$ 7,300. @ $145. = 50 months]? Would you consider selling items no longer used and loved to escalate paying off that CC? Along with creating an EF, could OT dollars likewise be directed to debt?

        What is your long term plan for the Cavalier and Miata? Have you done a cost analysis on the Cavalier to determine what it will need in dollars and time to be operational? Would it be more cost efficient to sell it in 'as is, where is' condition? Do you see it as a l-o-n-g term hobby project that can entertain you long into the future?


          Cars come later when you are riding on the front of your money wave. When you are making more from investments and saving less. And really doing well. Nothing wrong with spending it. You can't take it with you!
          LivingAlmostLarge Blog


            Long term for the current vehicles are to get the cavalier operable and drive the miata daily, so a DD and a backup/toy.
            Cost to fix cavalier would be nil as I have a factory head sitting in the garage and could easily change it over a 2-3 day W/E.

            It looks like the CC at the $145 payment would take ~64 months to pay off and end up costing ~$1900 in interest during that time. So if I'm saving roughly $150 a month 4 months a year, then during that 5 year time I'd be saving only $3000 - $1900 = $1100. I definitely don't want to only make the 145 though and I hope to have it paid off by 10/14

            I do not plan on having the CC debt for very long and have considered selling the miata and combining that with OT and tax returns to knock out the big 3 (401k loan, CC & med bills) but the miata has a new engine that I personally overhauled, fresh paint in the last 2 years and a newish top in the last 4 years -practically a new car!

            I'm very mechanically inclined (machinist by trade) and do all of my own maintenance on my vehicles (saves tons!) so my cost of owning these 2 cars isn't much I don't believe - both have liability only iirc.

            I'm going to give Ting a try as I'm already on sprints service so this should be a seamless move and hopefully save about $50 a month and I'm going to keep the Internet ($65 a mo) and cancel cable (~$85 a mo) so I should be able to save over $130 a month there which should go toward an EF.

            Maybe I'm wrong about the vehicles and I should just unload them but I have always felt like a car without a payment is a good thing to keep so long as the maintenance doesn't equal another car payment every month.
            Last edited by Togeneral99; 11-23-2013, 08:40 PM.


              T99, Are you ready to take your 1st steps forward? 1st what car does wife choose, VW Jetta, BMW, Miata or Cavalier? Since her desire for a SUV on hold just now she gets 1st dibs. You can choose a car or put the remaining 3 vehicles on all your local e-sell sites and keep the one that doesn't sell.

              2nd...Take a photo and write ads just like those already on-line or in advertisements year, color, [best] features, mileage & price OBO [Or Best Offer]. Complete your plan to " pillage through the house and see what I don't use and could sell." Put up photos at work, tell everyone you know you're selling stuff! Take photos and write ads for CraigsList & local Buy 'N Sell all the items no longer used or loved. It accomplishes two goals, rids the house of potential clutter and generates cash.

              3rd...Call to began the process to change phone service to Ting or less expensive carrier. STOP impulse purchases. If you write down every purchase you'll quickly learn how much money has been leaking away un necessarily. It's a terrific exercise in awareness .


                You could unload whatever cars you don't want and when you have more cash flow and savings then start to keep paid off cars?
                LivingAlmostLarge Blog


                  What to do?

                  I would look at the cell phone/internet. But honestly, we live in an exp. place and with iphones and just internet (no cable) we pay 150 for the phones (with my company 20% discount) and 40 for internet. (no cable, we use our entertainment system and xbox boom baby!)

                  As for the car, you obviously LOVE your wife...and she just had a baby. have to keep this goddess happy. Is there ANYWAY you guys could compromise? Maybe get a used SUV that is still high on safety features, or get a hybrid crossover that would be a bit cheaper AND cut down on gas bills? The toyotas have released a pretty cute hatchback etc. and even larger version. The hyrbid hatchback is not an SUV but its like 18-20k and has amazing fuel mileage. A normal SUV mileage is going to eat up a lot of that money. Better yet, if she can deal with a nice used subaru or something (even just 5 years old) you could easily save over 10k. Then, wait a bit, sell it, and use it as a downpayment on an SUV lexus if she wants...she might go for that....(they have a hybrid lexus low $$$ mileage money)

                  That sucks about the mortgage, I think you are doing the right thing by paying off the 401k loan asap though. Also, I'd focus on the emergency fund, even just 100 here and there makes a difference.

                  Plus with a BABY...there will be extra costs. My newborn sister turned out to get fevers, be allergic to soy...oh you don't want to many random costs. My xmas presents will never be the same. That child is a miracle but expensive.

                  Congrats on the baby and being a family man!


                    Thanks everyone for the advice! I have been super busy (knocked out over 160 hours of OT in the last 2 months!) and with any luck we should have a grand in an EF by the beginning of January
                    Although I constantly feel strapped I do feel better that we are working to control our spending and better our financial situation. Hopefully the OT will keep up and, with a good tax return, allow us to knock out a couple of the big items.


                      Best Wishes for the New Year. While it's terrific to plan to knock out some debt with major payouts from overtime and tax refund, it's the small spends that add up over the month and smack the cash flow. Every extra dollar you can pay on those windows reduces interest on that debt. Looking forward to cheering when you get that EF in place.


                        Snafu you are definitely right on the small spending adding up! Thankfully we got through Christmas without using any credit cards and with gifts from the inlaws and my family, I think we may have broken even!
                        My wife is on board with saving money and she is now more sensitive as to where the money goes and how much we truly spend each month. I set up an old cell phone on Ting's service (sprint basically) to try it out and everything seemed to work well and the bill at the end of the month was only $27! So we are going to switch both my wife and my's cell phones over to ting and hopefully cut out cell phone bills in half (wanted to make sure there wasn't anything wonky with their service before we switched, hence the trial with the old phone)
                        So far we have $991.00 in savings for an EF and all the bills are paid for the month. This past months electric bill was $353.00 - looks like the windows didn't help at all on the heating bill hopefully it won't be a bad winter and I can replace the doors in the house during the spring,

                        until then we will just have to battle the cold best we can to keep the electric bill in check :

                        On a brighter note, I checked my 401K today and I've crested $82K 100k here I come!


                          Definitely Time For A Change

                          Sorry to hear about the debt challenge your up against, I can relate for sure and kudos for reaching out for advice!

                          I'm definitely in the Dave Ramsey party at this point in my debt-fighting life, some people consider his method extreme because it purposefully disregard interest rates, BUT being an amateur behavioral psychologist I can tell you his system works! And it IS working for me right now. The reason why it works is because it's designed around human motivation and constant wins, not just the numbers which mean nothing if we psyche ourselves into not following the path. I can't post URL's yet (too new on the forums) but you'll want to Google "Dave Ramsey Debt Snowball" to get started. The Financial Peace books are well worth the few bucks that's how I got started. Good luck!!


                            T-99, terrific to make it through the holiday season without using CCs. Retirement plan might roller coaster some 2014 but stay the course, you know what to do. Were you able to sell any of the cars? We've had a brutal winter here in the great white north, typically minus 30C [minus 22 F] and wind chill can take us to minus 50 where skin wll freeze in under 2 minutes. Most annoying is car tires freeze and we clunk, clunk, clunk down the feels like driving with a flat tire.


                              I am impressed with all the efforts you are going through so that you can buy a car for your wife and still keep your finance in check. Today, about 70% of the people would buy the car at high interest finance and think about it later. Also, looking at your debt interest rates, I see them really really low. Well done.