I could use a little direction please....

[mr.gatsbury]

I'm new to the forum. I've been trolling the internet and reading trying to figure out how I can get myself into a better situation. I'm 33 years old. In a job that I hate. It's not the work, it's the time. Nights, holidays, weekends, etc. I was recently married in April but we have no kids or plans for kids for the next few years. I would like to go back to school but while I'm not sure I could swing it with a 55-60 hour work week, I also don't know if I can afford it. I have a condo in another state that I barely go to but pay the mortgage every month. I live with my wife at my brother in laws because it's very close to my wife's work and my brother in law actually likes the company. lol. I have a mortgage on the property of $162k and I can't sell it. It's probably worth approximately $140k so I'm upside down there. I have $50k in savings, no 401 and about $7,000 in stock that's worked out pretty well long term. I want to move and change my line of work which would mean most likely taking a considerable pay cut (approx. $90K now). If I rent it, I may not be able to afford it in the long run. Should I dump $30k or so towards it and try to unload it or should I pay it down, refinance and rent it? I don't know what to do. I'm a saver but my money certainly isn't "working" for me.

Thanks in advance.

[97guns]

if you sell you kick out over 20K to pay off the mortgage.

if it was me i would try for a short sell with a wash on the negative 20K mortgage, if the bank doesn't oblige i would default but after i bought and closed on something with the 50K in the bank

[mr.gatsbury]

Don't think I haven't thought of it. Problem with that is I've never missed a beat with my credit. I'm super protective of it and I don't want it killing my score or ability to buy things. Would it be smart to have a renter in There and also make my payment as usual. It'd be like double paying for a year or so...

[Eagle]

I'm new to the forum. I've been trolling the internet and reading trying to figure out how I can get myself into a better situation. I'm 33 years old. In a job that I hate. It's not the work, it's the time. Nights, holidays, weekends, etc. I was recently married in April but we have no kids or plans for kids for the next few years. I would like to go back to school but while I'm not sure I could swing it with a 55-60 hour work week, I also don't know if I can afford it. I have a condo in another state that I barely go to but pay the mortgage every month. I live with my wife at my brother in laws because it's very close to my wife's work and my brother in law actually likes the company. lol. I have a mortgage on the property of $162k and I can't sell it. It's probably worth approximately $140k so I'm upside down there. I have $50k in savings, no 401 and about $7,000 in stock that's worked out pretty well long term. I want to move and change my line of work which would mean most likely taking a considerable pay cut (approx. $90K now). If I rent it, I may not be able to afford it in the long run. Should I dump $30k or so towards it and try to unload it or should I pay it down, refinance and rent it? I don't know what to do. I'm a saver but my money certainly isn't "working" for me.

Thanks in advance.

Welcome to the forums Gatsbury! Congrats on getting married!

So you have a 90k income. Some questions for clarification...

1. How much are you bringing home a month?

2. Does your wife work? If so how much does she bring home a month?

Assets
Savings: 50k
Stock: 7k
Condo: 140k
Total: 197k

Debts: 162k condo

3. Any other debts? Credit cards, student loans, personal loans, car loans, etc.?

4. Are you on a budget?

5. How much are you guys spending a month? Say for the month of October 2014 for example?

[Eagle]

if you sell you kick out over 20K to pay off the mortgage.

if it was me i would try for a short sell with a wash on the negative 20K mortgage, if the bank doesn't oblige i would default but after i bought and closed on something with the 50K in the bank

Don't think I haven't thought of it. Problem with that is I've never missed a beat with my credit. I'm super protective of it and I don't want it killing my score or ability to buy things. Would it be smart to have a renter in There and also make my payment as usual. It'd be like double paying for a year or so...

Sorry 97guns but defaulting or short selling is horrible advice IMO. If Gatsbury does that not only would he ruin his credit he'll have a seriously hard time buying another home.

DO NOT short sell your house Gatsbury. Get your finances in order and knock out the debt. See previous post with questions.

[ua_guy]

Clarifying question: So, you're paying on a mortgage, but the place is unoccupied? Meaning, you don't live there, and you don't have any tenants paying rent? That sounds very, very, unnecessarily expensive for your budget.

It sounds like you need to come up with a solid goal of what you want to do, and start making real plans. Whether it be going back to school or just getting free from the condo so you can take a different job that may pay more, or less. Or moving and living in the condo and finding new jobs.

I put a high value on independence--I'd encourage you and your wife to live in your own place and not with family. You're 33 years old and you make decent money, all this can be fixed.

I'd encourage you to take Eagle's lead in this thread and let's work through looking at where your money goes every month.

[mr.gatsbury]

Thanks for the responses guys!

My YTD is $76,600 gross which includes $5,000 ($500 a month) for my car allowance. It's a use it or don't get it policy so that's practically a wash after taxes. My wife makes about $30-$33k.

Mortgage $1480
HOA $220
Car ins $156
Phone $150
Heat,Air Electric $50 a month avg. (not there too much)
Gym Membership $20

We do go out to eat once in a while but mostly we cook. And we don't really spend too much $$$ on random things. We do smoke, however, which I know is a ridiculous expense but it's the only real thing I think we WASTE money on.

I get 5 checks a month, one bonus and one for the car ($500)

Out of those 5 checks $75 goes straight to a joint account I have with my wife for a total of $375 a month. That account is about $7,000 now but I just started that with $4,000 of our wedding money in May. I also stupidly put $12,000 of our wedding money in a 36 month CD. I left that out before, sorry.

From my 4 regular paychecks $125 goes right to my savings for $500 a month.

So my assest are:

Savings $50k
Checking $4-5k floats monthly
Stock $7k
Joint Svgs $7k
CD $12k

I'm on my wife's health ins cause it's better which is why I took the $75 I would pay for that a week and started putting it in our savings.

I work an our from where the condo is and where I live now. Same distance really just in opposite directions but I don't have to pay the $5 bridge toll every day like I did at the condo. If we were to live at the condo, my wife's now 10 minute drive to work would be an hour and 25 minutes which I really don't want to do. If I can get rid of the condo I can start to move on but I'm not sure what to do there. The place looks like a hotel suite, all new and staged. Just a bad market in the area which is one of the highest taxed states and area in that state. Taxes are about $4600 a year which is included in the above mtg pymt.

Let me know if I left anything out. I'm trying to spill it all out and I may have missed a few important details.

Thanks again guys!

[Eagle]

Let me know if I left anything out. I'm trying to spill it all out and I may have missed a few important details.

Thanks again guys!

I think we're getting a clearer picture now. Let's look at the revised information:

1. How much are you bringing home a month?

You make about $76,600 a year or about $5400 take home (net income) a month?

2. Does your wife work? If so how much does she bring home a month?

Your wife makes about $33k and brings home (net income) about $2000 a month?

So you guys bring home (net income) about 6.5k to 7.4k a month between the two of you after taxes?

3. Any other debts? Credit cards, student loans, personal loans, car loans, etc.?

So the cars are paid off then? No student loans? No Credit Cards?

So your only debt is the condo mortgage? – $162k

[Eagle]

(cont.)

4. Are you on a budget?

So you've started thinking about a budget. So these are your monthly expenses then? Do you pay your brother in law rent or help with bills? Please look at the additional categories for other possible expenses you may have missed:

Savings: $375 – Joint
Savings: $500 – His account
Mortgage $1480
HOA $220
Car Ins $156
Phone $150
Heat, Air Electric $50 a month avg. (not there too much)
Gym Membership $20
Vehicles - Gas: $?
Vehicles - Maintenance: $?
Food - Groceries: $?
Food - Eating Out: $?
Cell Phones: $?
Cable/Satellite: $?
Internet: $?
Cigarettes Him: $?
Cigarettes Her: $?
Fun/Entertainment: $?
Shopping: $?
Debt Reduction: $?

5. How much are you guys spending a month? Say for the month of October 2014 for example?

Try using www.mint.com to track your expenses. We’ve used it for the past 4-5 years. It’s very helpful.


6. Assets:
Savings $50k
Checking $4-5k floats monthly
Stock $7k
Joint Savings $7k
CD $12k

7. Is the condo not in a good place where you can rent it out for say $800-1100 a month?

8. Does your company offer a matching 401k program? Have you heard of a Roth IRA?

[mr.gatsbury]

Ok,

My YTD is $76,600 so I'll probably be closer to $88K-$90K by year end. Take home varies on my bonus check but I would think between $4800 and $5,300 net a month. I'm not 100% sure on my wife but I think $2000 net is a pretty close estimate.

I have a credit card that I use just for cashback purposes but I pay the bill in full the day it posts so I never carry a balance. No student loans. Her car is paid for but it's getting up there so I'm not sure if replacement will be necessary in the next 1-2 years. My car, while I do have a note, is a wash with the check I get from my company (the $500/mo I mentioned earlier). The main debt is the $162k on the condo. The last 6 months I've been sending an additional $300 principal trying to chip away as little as it may seem. My wife pays her brother $600 a month in rent which she was paying before we met. I don't have a "budget" but I pay attention to my checking and I never let it dip below $4k-$3800. So I'm disciplined in that area.

Savings $375 - joint
Savings $500 - his
Mortgage $1480
HOA $220
Car Ins $156
Phone-cell $150 - mine and hers
Heat/Air $50
Gym $20 - me
Gym $20 - her
Vehicle gas $400 month - me
Vehicle gas $100 month - her
Groceries $400
Eating out $100
Cable ---
Internet $75
Cigaretts $200 - me I know, I know about a pack a day
Cigaretts $180 - her
Fun/Ent $100
Shopping $100
Debt Red ???

I could probably rent the condo for $1300 or so a month which means that I'll be responsible for the $220+$180 difference + quarterly sewer $85 totaling roughly $485 and any possible HOA hikes. Now I know paying $485 is a hell of a lot better than paying $1,700 but I worry about a few things. First, when I move and possibly take a significant pay cut, that $485 might seem like a fortune with my new income. Plus I have to keep it always rented or risk not being able to swing my current rent/mortgage and my secondary property. Also, the heat and ac aren't original but are getting up there. So if I'm renting to someone and I get that call, It could be a significant bill to replace and I'm not sure if the money would be there if needed. I worry a lot btw. My company does not offer a 401k match. I have heard of a roth IRA but I'm not sure if I should be using one or have a financial advisor to control my cash or what...

[ktmarvels]

I could probably rent the condo for $1300 or so a month which means that I'll be responsible for the $220+$180 difference + quarterly sewer $85 totaling roughly $485 and any possible HOA hikes. Now I know paying $485 is a hell of a lot better than paying $1,700

So DH and I had a house that was underwater and then had to move from the area for work. We have kept the house, but rented it out. We lose a little bit every month, but it's a whole lot less than if we had to make the entire payment and/or sold it at a loss. Is it possible to rent it for more? Look at Zillow, Craigslist, apartment pamphlets, etc. Sometimes the fact that it is already furnished is a bonus.

We first rented to friends, but then they moved from the area too, so we have a property manager. They take their cut (10%), but we only paid them once the place was rented and we only have to deal with tenant issues about once or twice a year when something breaks.

[Eagle]

Ok,

My YTD is $76,600 so I'll probably be closer to $88K-$90K by year end. Take home varies on my bonus check but I would think between $4800 and $5,300 net a month. I'm not 100% sure on my wife but I think $2000 net is a pretty close estimate.

I have a credit card that I use just for cashback purposes but I pay the bill in full the day it posts so I never carry a balance. No student loans. Her car is paid for but it's getting up there so I'm not sure if replacement will be necessary in the next 1-2 years. My car, while I do have a note, is a wash with the check I get from my company (the $500/mo I mentioned earlier). The main debt is the $162k on the condo. The last 6 months I've been sending an additional $300 principal trying to chip away as little as it may seem. My wife pays her brother $600 a month in rent which she was paying before we met. I don't have a "budget" but I pay attention to my checking and I never let it dip below $4k-$3800. So I'm disciplined in that area.

Savings $375 - joint
Savings $500 - his
Rent $600
Mortgage $1480
HOA $220
Car Ins $156
Phone-cell $150 - mine and hers
Heat/Air $50
Gym $20 - me
Gym $20 - her
Vehicle gas $400 month - me
Vehicle gas $100 month - her
Groceries $400
Eating out $100
Cable ---
Internet $75
Cigaretts $200 - me I know, I know about a pack a day
Cigaretts $180 - her
Fun/Ent $100
Shopping $100
Debt Red ???
Sewer (Quarterly) $28.33 (or 85/3)
Total: $5254.33

I could probably rent the condo for $1300 or so a month which means that I'll be responsible for the $220+$180 difference + quarterly sewer $85 totaling roughly $485 and any possible HOA hikes. Now I know paying $485 is a hell of a lot better than paying $1,700 but I worry about a few things. First, when I move and possibly take a significant pay cut, that $485 might seem like a fortune with my new income. Plus I have to keep it always rented or risk not being able to swing my current rent/mortgage and my secondary property. Also, the heat and ac aren't original but are getting up there. So if I'm renting to someone and I get that call, It could be a significant bill to replace and I'm not sure if the money would be there if needed. I worry a lot btw. My company does not offer a 401k match. I have heard of a roth IRA but I'm not sure if I should be using one or have a financial advisor to control my cash or what...

Let’s assume for a moment your lower end figure and you make $4800 and your wife makes $2000 a month take home (net income). That would be $6800 a month in net income.

I’m adding the $600 in rent to your list. I’m also adding $28.33 a month to your budgeted expenses for sewer. So you have listed a total of $5254.33 in expenses.

Assuming the $6800 number there is still $1545.67 unaccounted for in your budget. Assuming the larder number where you make $500 more that is $2045.67 accounted for. Where is your money going? The reason you are worried is because you aren’t managing your money you are letting your money manage you.

Now for what you may not want to hear:

A. Brother in Law
Your brother in law loves having you guys at his place because he gets you to pay for the internet ($75), heat/air ($50), and $600 a month in rent. So he’s getting $725 a month that goes directly to either his savings or towards his mortgage. That’s $8700 a year that he gets from you. Great deal for him. No wonder he loves having you at his place huh?

B. Disciplined
I disagree that you are disciplined. You have no idea where your money is going in my opinion. The only reason you have accumulated 50k in savings is because you have a huge income. Not because of your supposed discipline.

C. Cell Phones & Internet
$150 for cell phones for two people is way too much. Call and negotiate a better plan. Or consider switching providers. We pay $150 for 4 cell phones on our family plan. Also $75 for internet services is way too much. Call and negotiate a discount or switch providers.

[Eagle]

(Cont.)

D. Groceries, Eating Out, Shopping, & Fun/Entertainment
I find it very unlikely that you only spend $700 in all these categories.

E. His & Her Cigarettes
You are spending $380 a month on cigarettes. That is $4560 a year… Spent to kill yourselves. Consider getting on a patch or using an electronic cigarette instead. The cost to your overall health in this category in the long-term could be devastating. Not to mention the risks of lung, tongue, throat, etc. cancer that would significantly reduce your life span.

F. Retirement
You are way behind on saving for retirement. You need to start saving for retirement ASAP. Contact Vanguard or Fidelity to find out how to open up a Roth IRA.

Bottom line: You need to get on a budget and track your expenses. You have 50k in the bank so there’s no need to worry about house expenses when you have a savings account for emergencies. There is no reason for you to worry about money in general with 120k (90k his & 30k hers) in your family income. Assuming you put 1500 towards the mortgage you should be able to pay off the mortgage in 9 years. Assuming you put 2000 towards the mortgage in 6.8 years. Time to get to it!

[snafu]

mr g, Eagle has done all the work for you, pulled out the details necessary to create a financial snapshot, chided you & DW for blowing $ 4560. in deadly cigarette smoke [visit an assisted living/long term care for emphysema facility], pointed out you are behind in retirement planning for your age group, and more. I sincerely hope you'll stop floating and take the actions needed.https://www.youtube.com/watch?v=xEDpJTTDZP8

BTW, renting the apt. gives you a tax deduction in the present and an opportunity to get out from under in the not too distant future. If you hate your job, can you seek something else using your skill sets and experience? Can you take some courses at a Community College that would be transferable to a 4 year program degree?

Most important, look at Vanguard on-line and start your retirement program. Next year use the tax refund it garners to add to your contributions. Aim for 15%.

[Eagle]

mr.gatsbury did return to the forum on 11/18/14. I wonder if after all this there will be an re-evaluation of what was discussed?