What should I do?

[docstudent]

Stats:

Take home: $3714 per month
Deductions: 403(b), $400 per month, Aflac disability, $167, Credit Union, $150 (automatic deduction) to finance my yearly vacation.

Salary $77,700
Savings: $10,000
403(b) #1: $28,000
403(b)#2: $16,000 minus $6,000 loan
Retirement account: $60,000


Mortgage: $1447- 30 yr fixed, 3.75
HOA: $349, CAR: $426
Phone: $89, Car insurance, $146, Internet, $56.
Credit card #1: $6045 ($180 a month)
Credit card #2: $3300 ($146 a month)
403(b) loan: $6000 ($140 per month)
Electricity: $30 Gym: $150
Student loans: $120,000 deferred until 2/14
Estimated payment, $800

What can I do to save myself? FYI: I eliminated 5 credit card bills in 2/13, so I'm trying to get things in order.

[lorraineb]

Not sure exactly what you are asking -- if you have already eliminated cc bills, then continue doing what you have been doing and look for even more ways to tighten up where possible. What, specifically, are you looking for advice about?

[kv968]

I guess what you're worried about is that estimated $800 student loan coming up when you currently have only $555 left over now after your expenses?

If so, a couple of quick suggestion would be:

A) you're not going on vacation this year and start using that $150 towards the CC's

B) try and sell the car and get something cheaper

C) find a cheaper gym since $150/month sounds a bit high

[humandraydel]

To me, your housing expenses are too high - almost 50% of your net pay! Your car is also very expensive. Can you sell it and buy something cheaper? If you did that, your car insurance would also come down. You can exercise for free, so get rid of the gym completely.

Do you not eat? I don't see a food budget. I also agree with previous poster, you really can't afford a $1800 yearly vacation.

[siggy_freud]

OP with all the expenses you've listed out you're left with $304 bucks a month at the end of the month in profit. That doesn't appear to include any food, clothing, etc, and certainly won't cover your upcoming $800 per month.

Since you know you have that $800 a month coming, you need to figure out how to pay for that and still have AT LEAST the same you have at the end of the month today. The car and the gym would be a big step. Both those are high payments.

Have you considered getting a roommate? Your HOA is crazy expensive. Where are you at? I'm guessing it's a condo you're in?

You need to change some things OP. You're living like you're making 110k+ on a 70k budget.

Any chance you could do income-based repayment on the student loans and drop the payment amount for awhile?

[FrugalDad123]

Hi,

Save yourself? Thinking... You listed each item as a monthly transaction. I guessed random days of the month and plugged your items into a tool that I use. I figure if you start with 10k at the beginning of the year you would be at 9.7k at the end of the year.

Meh, you're slightly negative for a year (with the recurring items you listed).

I wonder what is not listed. I wonder how it would look with those added in there.

I'd want to visualize the cash flow chart with everything included. Food?

Maybe go for a less expensive gym. $150 per month -- You can explore other gyms.

Regards,
FrugalDad123

[docstudent]

I'm thinking, should I use the 10k in savings to eliminate two of the credit card debts? If I skip my vacation, I can save about $2000 or so dollars. I live in Southern Cal, and I have a studio condo-I'm allowing a friend to stay with me, and I'm collecting $350 a month, not sure how much longer I'm willing to do this. Should I eliminate my 403b contribution, plus Aflac? That would bring my take home to $4,000 a month. I'm "looking" for a better job, interviewing now, should expect a 12g increase, which will solve most of my issues. I haven't purchased clothes, a computer or anything else in years..Broke my IPod, learned to live without it--the gym is my only splurge. Typically, I rent my condo out in the summer, and use the money to travel--

[docstudent]

I forgot to add my life insurance expense, $33 per month for $500,000. Of course gas, I'm paying about $9 a month, barbershop, $60 a month. I have not made a single credit card charge in over two years.

[docstudent]

I meant $90 on gas, plus I pay an extra $130 on my mortgage.

[FrugalDad123]

Hi,

Thinking still... with the 90 per month on gas, 133 extra on the mortgage, skipping a summer vacay, life insurance and barbershop (without the 12g higher paying job) the scenario cash flow chart would kinda look like the chart at this link.

So, I think if I were in your scenario I would be thinking/feeling:

"If I pay off my two credit cards with the 10g cash that I have it would be like shifting that cashflow chart downwards by 10g then seeing a increasing slope due to absence of CC min monthly payments. I'd probably end up bouncing up and down around zero and needing to use my CC once in a while."

I wonder how much money you figure for groceries and eating out. The link above charts the scenario without any food budget. What are your thoughts on food? How much do you spend on eating out and groceries?

Just thinking...

Regards,
FrugalDad123

[docstudent]

I average about $65 per week on grocery, and I pack a lunch for work. I do not eat out or anything.
My take is $3700'ish. However, I get to work extra hours, but it's not always guaranteed. For the past seven months or so I've averaged about $4350 a month, but it could end at anytime. So, would it be wise to stop my deductions or continue?

[FrugalDad123]

Hi,
I updated the cash flow chart with the 65 weekly for groceries. Now this is how it looks. I guess you're kinda set up to hover above 5.5g.

If there are additional items missing from the budget we should add them. But...

Given what we've input so far, I would say keep the 403b and disability insurance deductions. If I stopped paying into my retirement and insurance I think I personally would end up just spending it on nothing as good.

I'm interested to know what others would recommend based on that cash flow chart. I am no pro. I am only an addict of creating hypothetical cash flow charts.

Like I said, I would keep the deductions. I would hit the CC balances with no more than 5 thousand of my cash. Then I would every month apply the delta in minimum monthly CC payments to accelerate my CC payoff. I would keep looking for competitive rates and ways to spend less in other areas so that I could start re-building my 5k toward a 6 month safety net.

Regards,
FrugalDad123

[breathemusic]

Definitely cut the gym. You can't afford it and if you really need a gym go to a 24 hr fitness or one of those super cheap gyms.

I'd pay off both credit cards and then keep the vacation fund as an emergency fund instead (you can't afford a vacation either).

Next thing you need to do is look for a part-time job. I agree with others that your car is too expensive given all your other bills, so if you can sell it at break even or profit, go for it and get something more affordable. But right now you don't have higher paying job lined up (though that's great that you're applying). In the short term, a second job could really save you here.

[riverwed070707]

Agree with Breathe. Also doesn't make sense to pay extra on your mortgage when you have high interest debt on the table. Stop those and reapply them to your CC debt.

[docstudent]

Update

Thanks for all of the input. I will be able to keep contributing to my 403b account, plus paying extra on my mortgage.
I finally secured a new job, and I now earn 95g a year, YES. Now, I will be able to climb my way out of debt. Therefore, in three years, I will have enough experience to really make even more--