Please help me with what to do about saving

[hehateme000]

OK guys, I am starting to get back on track. Although we recently made some big purchases, I still know that we are on the right track.

First of all, I make my own budget on Excel and I have it budgeted till December. I know that is a little crazy but we pretty much have fixed income and that way I know when things will be paid off, and when we ill be able to start saving.

By December 2015, my fiance and I will have paid all credit card debt, an have 12,000 saved up. The only debt we will have are 2 cars, student loans, and our house. However, we will be able to start saving money as soon as September of this year. Until then we are paying off cc debt and have very little extra money. The CC debt needs to be paid off by then because most of them are on interest free plans that expire in August. Mainly house stuff when we bought our house we put stuff on 6 month interest free plans and if it not all paid off we get charged interest from the day we purchased them.

This is what I have as priorities, sort of based off Dave Ramseys baby step:

Emergency Fund – 1 mo
Debt
EF – 3 mo
401k
EF – 6 mo
Kids
Silver
Sinking Fund
Vacations
EF – 12 mo
Stocks
House

I know it is smart to have an EF, but I also want to put money into my 401k (only has about $4500 so far). Then I realize we have debt with high interest that should be paid off as well. So I am not sure which way to go. Sorry if this is confusing I know my scenario is sort of confusing but basically we can start saving in September. From September till December 2015 (16 months) we can save a total of 12,000 that can go toward anything. EF, 401k, kids, debt, etc.

[Petunia 100]

Do you have any cash savings right now at all? In a savings account, or surplus in your checking?

Are you currently contributing at all to your 401k? You should always contribute at least enough to get the full match.

In my opinion, those two things are a very high priority.

If you have high interest consumer debt, you should consider applying for a 0% balance transfer. Chase is offering one right now on their Slate card, 0% for 15 months with no balance transfer fees. That beats paying high interest. Playing the balance transfer game can be a useful tool to help pay down debt.

Can you explain your list a bit more? What is "Silver"? What is "kids", college funds? What is "stocks", a taxable brokerage account?

[hehateme000]

Do you have any cash savings right now at all? In a savings account, or surplus in your checking?

Are you currently contributing at all to your 401k? You should always contribute at least enough to get the full match.

In my opinion, those two things are a very high priority.

If you have high interest consumer debt, you should consider applying for a 0% balance transfer. Chase is offering one right now on their Slate card, 0% for 15 months with no balance transfer fees. That beats paying high interest. Playing the balance transfer game can be a useful tool to help pay down debt.

Can you explain your list a bit more? What is "Silver"? What is "kids", college funds? What is "stocks", a taxable brokerage account?

No cash savings at all but that will only be for 3 more months.

I stopped contributing so we could pay off the cc debt but I don't get a company match anyway.

I will look into the balance transfer. Does that include all cc debt?

Silver I mean physical silver as an investment. Basically the 90% silver coins just so I have something physical instead of cash or investing in silver ETF's. And kids I mean a college plan, and stocks would be last basically any extra money I could throw into some single stocks, high risk high reward but I wouldn't mess with stocks until my EF was 12 months, max to my 401k, etc.

[snafu]

While it's important to pay off interest free accounts before September, I believe it's even more important to have $ 1,000. cash in a linked saving account as the base of an Emergency Fund. Can you eek out small savings from each pay? Would you be willing to sell items you no longer use, need or love? What is the breakout of your monthly mortgage? Are you paying [PMI] mortgage insurance as part of your monthly expenses? What sum goes to interest, property taxes and principal?

If you're willing to share how you've allocated spending in your specific categories we may see some savings/cost avoidance to make the money go a little bit further for the short term. How many months out will the cars be paid off? Have you worked out when SLs will be completed?

[Singuy]

Can you please update this so we can take a look at your budget?
Income:
Me - 2300 (This is after taking 5% for 401K, about $150/month) (Also I get paid weekly so sometimes I get 5 checks in a month)
Fiance - 1400 (Bartender so it fluctuates, but this is the minimum)
Roommate - 300 (Older guy, plans on staying with us a while. He makes a lot of money just stays with us so he doesnt have to commute)

Total Income: $4,000

Expenses:
$1295 - Rent
$60 - Tanning membership for fiance
$320 - Engagement Ring
$155 - Car Insurance
$40 - Credit Card 1
$40 - Credit Card 2
$100 - School Loan Me
$50 - Traffic Ticket
$55 - Direct tv
$50-$80 - PGE
$50 - Water
$40 - Comcast Internet
$55 - Gym
$50 - TV financed no interest
$28 - Fiance car insurance (SR22 when she got in accident)
$278 - Car
$170 - Phone (hard to cancel because we have some of her family on there and it would be couple hundred to cancel each line)
$175 - Fiance Bail (she got arrested one time, couldn't stand being in jail for more than 3 hours. If she stayed overnight we never would have gotten this $5500 bill......geez)
$105 - Fiance old car accident (Some collection is making us pay or they suspend her license)
$20 - Old court fees

Total Current Expenses: $3,136

As of right now, we also budget $650 a month for gas and extra stuff like diapers, clothes, etc.

Debts:
Student Loan, 4 Groups:
$3,459.67----5.6%
$2,365.41----6.8%
$4,514.24----3.4%
$6,424.67----6.8%
$2,642.96----6.8% (Fiance Student Loan)
$12,392.87 --9.49% - Car
$3,080 ------0% ----Court Fees
$1440 -------0%----Fiance Bail
$1,596-------0%----Diamond Rings
$1,377-------0%----Fiance old car accident collection
$500---------0%----TV
$475---------0%----Fiances old credit card she cancelle, went to collections
$223---------0%----Traffic Ticket

Total Debt: $40,491



I know you bought a new house so rent is no longer there...you also lost that income of 300?. How much is your new mortgage and also new furniture?

[hehateme000]

While it's important to pay off interest free accounts before September, I believe it's even more important to have $ 1,000. cash in a linked saving account as the base of an Emergency Fund. Can you eek out small savings from each pay? Would you be willing to sell items you no longer use, need or love? What is the breakout of your monthly mortgage? Are you paying [PMI] mortgage insurance as part of your monthly expenses? What sum goes to interest, property taxes and principal?

If you're willing to share how you've allocated spending in your specific categories we may see some savings/cost avoidance to make the money go a little bit further for the short term. How many months out will the cars be paid off? Have you worked out when SLs will be completed?

I could possibly sell some stuff. I know if we really wanted to we could cut out some monthly bills, but most of them I think would have a cancellation fee.

Mortgage is 1260/month. 650 Interest, 400 Taxes/PMI, 210 principal

I will post all my bills and my budget in the next post

[hehateme000]

Ok here is what I have for the next 3 months. All bills are the same except for the bottom ones.

June/July/August
Take home Income:
Me - 2650/3325/2650
Wife - 2000/2000/2000
Ebay - 100/100/100

Total Income: 4750/5425/4750

June/July/August

Expenses:
$1260 - mortgage
$415 - Car 2
$400 - Gas/Food
$300 - Car 1
$300 - Babysitting
$250 - Car Insurance
$220 - Phone (hard to cancel because we have some of her family on there and it would be couple hundred to cancel each line)
$130 -Wife Invisalign
$110 - Direct tv
$105 - Fiance old car accident
$90 - Water
$63 - Tanning membership for fiance
$60 - PGE
$60 - Comcast Internet
$50 - Wife Student Loan
$40 - Credit Card 1
$40 - Credit Card 2
$25 - Wife CC 1
$25 - Wife CC 2
$20 - Old court fees

Total Base Monthly: 3963

GE Capital: 245/670/240
Lowes: 110/440/160
Walmart: 180/180/180
Probation Classes: 144/144/180
Garbage (June only): 80

Total Monthly Expenses: 4722/5397/4723

Leftover: 28/28/27



In September, my debt will be:

Student Loan: 21,500, 3.4%-6.8% interest rate
Walmart T.V. 400
Kays 400
WF 600
Cap 1 1250
Priority 1020
Napa 1400
M Loan 2210
Care credit 3100
Car 8800
Car 2 20000

Total Debt: $60,680


My budget is sort of complex till September. In September we can actually start saving

[Eagle]

Expenses:
…
$250 - Car Insurance
$220 - Phone (hard to cancel because we have some of her family on there and it would be couple hundred to cancel each line)
$110 - Direct tv
…
$60 - Comcast Internet

Looks like there may be a bit you could possibly cut from your budget.

Car Insurance:
Who do you have your car insurance through? When was the last time you got a car insurance quote?

Cell Phone plan:
What service do you have your cell phones through?

Direct TV:
We don’t have a satellite or cable bill. That said have you considered cancelling your Direct TV for a few months? When does the contract expire? Can you combine it with your internet service for a better deal?

Internet:
Internet bill seems a bit high too. Again possible to combine these two bills (TV/Internet) for a discount? When does the contract expire? Through AT&T we only pay $35 a month.

[Eagle]

From April 2013:

Debts:
Student Loan, 4 Groups:
$3,459.67----5.6%
$2,365.41----6.8%
$4,514.24----3.4%
$6,424.67----6.8%
$2,642.96----6.8% (Fiance Student Loan)
$12,392.87 --9.49% - Car
$3,080 ------0% ----Court Fees
$1440 -------0%----Fiance Bail
$1,596-------0%----Diamond Rings
$1,377-------0%----Fiance old car accident collection
$500---------0%----TV
$475---------0%----Fiances old credit card she cancelle, went to collections
$223---------0%----Traffic Ticket

Total Debt: $40,491

In September... It will be.

In September, my debt will be:

Student Loan: 21,500, 3.4%-6.8% interest rate
Walmart T.V. 400
Kays 400
WF 600
Cap 1 1250
Priority 1020
Napa 1400
M Loan 2210
Care credit 3100
Car 8800
Car 2 20000

Total Debt: $60,680


My budget is sort of complex till September. In September we can actually start saving

Some observations in comparing these two: Looks like your debt has increased 20k from April 2013 (40.5k) to September of 2014 (60.7k). You owed 19.4k in SL in 2013. This year you owe 21.5k in SL. And on top of this you have a mortgage now...

Still not clear what your debt balances and interest rates are as of today?

I agree with others that you need to really start saving now. Get $1000 in your emergency fund and fast. With 2 kids, cars, and a house emergencies are bound to happen. Don't want to have to use another credit card as a safety net... A good way to do this and start your emergency fund would be to cut or reduce items from your budget.

[LivingAlmostLarge]

I noticed that they somehow increased debt by $20k over the past year, buying Car 2 with a $20k loan is the difference.

I'm not sure how that works into paying down debt, but seriously you are planning for 2015 to have $12k cash to "save". You need to "Save" that into debt instead of accruing more debt so you can get back to 2013 debt levels.

By 2015 you'll have paid off CC, but still have traffic/court fees? And student loans and two cars and a mortgage?

READ above statement and explain how you aren't drowning in debt.

[BuckyBadger]

This is sort of ringing a bell. The "tanning membership for fiance" is because she was a model, right? But at least back then she wasn't making any money and some of us urged you to drop the expensive membership. Is the $2000 a month she's making now from modeling? How do you know that it will be so stable over the coming months? Ditto with whatever "ebay" is.

As far as this:

Emergency Fund – 1 mo
Debt
EF – 3 mo
401k
EF – 6 mo
Kids
Silver
Sinking Fund
Vacations
EF – 12 mo
Stocks
House

Silver I mean physical silver as an investment. Basically the 90% silver coins just so I have something physical instead of cash or investing in silver ETF's. And kids I mean a college plan, and stocks would be last basically any extra money I could throw into some single stocks, high risk high reward but I wouldn't mess with stocks until my EF was 12 months, max to my 401k, etc.

I think you need to rethink some things. Physical gold and silver isn't investment - it's speculation, and I would dump the stock picking that you think you're going to do after you save some more money. Stick to a simple three fund-type portfolio with Total US Stock, Total US Bond, and Total International Stock type index funds. You can lose a lot of money going for what you're calling "high risk, high reward." The potential of some high reward is not worth that risk, and it's a slippery slope. You lose all your "speculative" money and what do you do? Re-fund your speculative stock account with other money - you'll trickle a lot of money out of your accounts like that.

I'd also not worry about saving for kids until you get your financial house in order. Paying down debt now is the best thing you can do to help them with that. That'll allow you to cash-flow things when necessary.

In my opinion, this should be our order of operations:

EF – 3 mo
Debt
401k
EF – 6 mo
Sinking Fund/Vacations
EF – 12 mo
House/Kids

I'm assuming that your "sinking fund" and "vacations" are like what I call my slush fund. about $5000 that we have in an account for unusual purchases (like deciding to buy a new couch) or spending a big chunk on a trip. We re-fund that account after we use it and it just sort of hangs out there as a buffer between regular monthly spending and having to dip into investments for a big purchase. I think having funds for things like that are important.

But most importantly is that you need to actually start PAYING DOWN DEBT. It seems like you're falling into the trap of *planning* all theses fancy spreadsheets about how you're going to pay it down, but you're not actually *doing* anything about it. Stop talking about it and START DOING IT.

And I really worry that your budget isn't realistic. $400 a month for gas AND food? I really don't think that's what you're spending. Even if you fill up both cars only twice a month that's more than half that. And I can't imagine you're spending less than $200 a month on food for the both of you. *edit: the FOUR of you*

Cut back and get serious. Stop thinking about stock picking and buying silver and just start paying off debt.

Taking out a loan for $20k for a new car wasn't a good way to keep you on track. It would be a lot better to dig yourself out of this hole if you didn't have $700+ in car loans every month.

[Petunia 100]

Bucky Badger gave you some great advice.

[hehateme000]

I noticed that they somehow increased debt by $20k over the past year, buying Car 2 with a $20k loan is the difference.

I'm not sure how that works into paying down debt, but seriously you are planning for 2015 to have $12k cash to "save". You need to "Save" that into debt instead of accruing more debt so you can get back to 2013 debt levels.

By 2015 you'll have paid off CC, but still have traffic/court fees? And student loans and two cars and a mortgage?

READ above statement and explain how you aren't drowning in debt.

Yea a second car was the difference. I got a newer civic because i commute 160 miles a day for work so i needed something reliable. I will have this car for the next 10+ years so I wasnt worried about a payment.

When I save 12k, that isnt what I really mean. I think that was the whole point of my post actually, because I know I will have 12K by then but I dont have to put it all in savings. I know I should pay debt first, but what would be a good amount of money to have in an EF before I throw money toward debt?

I dont think I am drowning in debt just because I have car payments and a deferred student loan. I wont have traffic or court fees in 2015. Drowning in debt to me is not affording your bills because you dont have enough money. But we make enough to pay all our debt, we just dont have any savings. We used it all for the house. So now I want to be able to save and pay debt down.

[hehateme000]

Looks like there may be a bit you could possibly cut from your budget.

Car Insurance:
Who do you have your car insurance through? When was the last time you got a car insurance quote?

Cell Phone plan:
What service do you have your cell phones through?

Direct TV:
We don’t have a satellite or cable bill. That said have you considered cancelling your Direct TV for a few months? When does the contract expire? Can you combine it with your internet service for a better deal?

Internet:
Internet bill seems a bit high too. Again possible to combine these two bills (TV/Internet) for a discount? When does the contract expire? Through AT&T we only pay $35 a month.

Car Insurance is through Mercury. My policy just gets renewed every 6 months and if something falls off my record then it should go down. Phone is through Verizon which honestly I can probably get out of that. I can trade in my smart phone and get one of those rock phones from 2004. I could care less about my phone. My fiance likes to have direct tv for her and the boys, but 110 is a lot for just TV. And internet is 60 but i think its month to month. Although I do need internet I can probably get it cheaper.

[hehateme000]

From April 2013:



In September... It will be.



Some observations in comparing these two: Looks like your debt has increased 20k from April 2013 (40.5k) to September of 2014 (60.7k). You owed 19.4k in SL in 2013. This year you owe 21.5k in SL. And on top of this you have a mortgage now...

Still not clear what your debt balances and interest rates are as of today?

I agree with others that you need to really start saving now. Get $1000 in your emergency fund and fast. With 2 kids, cars, and a house emergencies are bound to happen. Don't want to have to use another credit card as a safety net... A good way to do this and start your emergency fund would be to cut or reduce items from your budget.

Yea the 20k debt was from a second commuter car.

Ok I just called and looked online at every debt I have and found out the balance and interest rate.
Debt Balances and interest rates: (By highest Interest rate)

Kays: 392 - 24.99%
WF CC: 580 - 17.49%
Cap 1 CC: 1270 - 11.9%
Car 1: 21604 - 10.99%
Car 2: 9672 - 9.49%
Fiances SL: 2213 - 6.55%
SL 1: 8500 - 6.8%
SL 2: 3300 - 5.6%
SL 3: 5300 - 3.8%
SL 4: 4300 - 3.4%
Fiances Invisalign: 3495 - 0%
Court Fees: 2472 - 0%
Collection: 1320 - 0%


My Furniture, Walmart, and Lowes CC are all being paid off by August and I have to pay those off because they were on the interest free plans and they all expire in August. So No point in getting those interest rates and balances because I already have them budgeted to be paid off by August.

I am still in school so my SL payments are deferred for a while. Also would it help to get a student loan at a lower interest rate and put that money toward on of the cars, or put it in the bank to have a quick emergency fund?