Back again....need to turn things around

[hehateme000]

Hi everyone,

I have been here on and off for a few years. Every time I have posted in the past I have gotten great advice. However, I rarely followed it and am pretty much in the same situation I was in back then. It could be worse, but I honestly feel a little embarrassed to post here knowing I have not progressed, and have kept the same habits. However things are turning around and I am pretty much locked into a Union job in the bay area (HVAC/Pipefitting) that tops out at a 140k salary plus a pension and health benefits. I should start around August, if not then definitely by January of 2018.

Because of this new career change, I feel like I will finally have the opportunity to really start preparing for my future. For the past 7 years, we have had the mindset that 1) We are young and everyone our age is doing the same thing we are doing; 2) While our kids are young, we want to be able to spend money on/for them. The last reason is the main reason why we have never saved money and why we always are cutting it close. I have never wanted to not be able to take my kids somewhere, or not get them presents for their birthday, etc. This has always been very important for me and my wife, but it has hindered us to stay out of debt or save money.

My main goal is to start planning for our future. A lot needs to change whether I get this new job or not, but I would like to plan this *assuming* I get the job next January. I really want this and I know I sound stupid for making another post, but I really like this website and I know you guys know what to do. I don't have a lot of people in my life that are savvy with their money. If i told anyone that having 1 million in their 401k was still not enough to retire on, they would look at me like I am crazy. lol. I am 100% serious about getting on track. I have talked with my wife and she is as well. The only allowable expenses besides our monthly bills would be necessities for our children.

Background Info:
27 years old (Wife is 28)
3 children - 6, 4 and a third on the way (she is 30 weeks pregnant)
47k salary
60k salary household
$3,800 - Monthly take home income
$3,700 - Monthly Bills
Nothing saved

I can post a more detailed breakdown of our bills when I get home from work. We have a few credit cards that have small balances that we could eliminate by next month. We also could cut a couple bills, like gym, tanning and Netflix. I will post a breakdown in a few hours.

[rennigade]

What advice is anyone going to give you that you'll actually listen to? You said before you have asked questions, users have given advice and you never followed through with it.

The bigger salary you will be making in the future means absolutely nothing. Just more liquid money to spend on things.

You dont have any savings...pretty scary considering you have 2 children and another on the way. Dont take this the wrong way but you should stop having children until you are more financially secure.

Good luck to you. Saving money isnt done by us...it doesnt matter what we say. Unless you are mentally/emotionally ready to start saving every piece of advice you will receive is worthless.

[hehateme000]

What advice is anyone going to give you that you'll actually listen to? You said before you have asked questions, users have given advice and you never followed through with it.

The bigger salary you will be making in the future means absolutely nothing. Just more liquid money to spend on things.

You dont have any savings...pretty scary considering you have 2 children and another on the way. Dont take this the wrong way but you should stop having children until you are more financially secure.

Good luck to you. Saving money isnt done by us...it doesnt matter what we say. Unless you are mentally/emotionally ready to start saving every piece of advice you will receive is worthless.

Ok, thanks.

[disneysteve]

pretty much in the same situation I was in back then.

$3,800 - Monthly take home income
$3,700 - Monthly Bills

Welcome back. You say you are in pretty much the same situation but that isn't quite true.

In April 2016, you had a monthly take home of $4,766 and bills of $4,975. So your income has dropped by about $1,000/month. On the positive side, you reduced your expenses by almost $1,300/month. And your income now slightly exceeds your bills rather than being a $200/month deficit. So that's a good thing.

Let's see the budget so we can see what has changed specifically.

As for what to do going forward, you really need to base everything on your current income. It sounds like that new job may or may not happen and you don't know when it will start (which sounds really strange to me. How can you be hired for a job that won't start for 9 more months?).

[hehateme000]

Welcome back. You say you are in pretty much the same situation but that isn't quite true.

In April 2016, you had a monthly take home of $4,766 and bills of $4,975. So your income has dropped by about $1,000/month. On the positive side, you reduced your expenses by almost $1,300/month. And your income now slightly exceeds your bills rather than being a $200/month deficit. So that's a good thing.

Let's see the budget so we can see what has changed specifically.

As for what to do going forward, you really need to base everything on your current income. It sounds like that new job may or may not happen and you don't know when it will start (which sounds really strange to me. How can you be hired for a job that won't start for 9 more months?).

Thank you DS. I really feel like I am that boy who cried wolf and I feel stupid for it but I am older and very serious about my future. I really, really appreciate you taking the time to reply to me and not hold it against me for not listening in the past.

My wife works from home and also home schools our kids. We get a $2500 annual allotment to spend on each kid for classes, supplies, etc which really helps. She makes less than what she did a while ago but we also have 0 childcare or school expenses.

I will post my budget as soon as I get home, in about an hour. As far as the future job, it is an apprenticeship that I applied for, tested and interviewed for and ranked pretty high. Out of about 2,000 people, I ranked #76. Anyone who gets ranked gets put on a list that is good for 2 years. They started the list in August 2016 and as of last week they have called 65 people. So I am only 10 people away from getting into the apprenticeship. The apprenticeship starts classes every January and August, so it depends on when they call me. The good thing is that it starts at about the same pay I currently get ($24/hr), and every 6 months I will get a $3 raise. Of course I will have added expenses because the job is in the bay area so I will have more gas and toll expenses.

[disneysteve]

She makes less than what she did a while ago

Why is that? Is it due to her home-schooling?

Just think where you'd be if you still made $4,766 and had expenses of $3,700.

[hehateme000]

Why is that? Is it due to her home-schooling?

Just think where you'd be if you still made $4,766 and had expenses of $3,700.

Just a different job. She used to serve/bartend and always make good tips. Now she is a wholesale representative and makes commission only. Sometimes she will make 200 in 2 weeks, sometimes 1200 in 2 weeks.

Also I make a little less than I did by taking a new job that was closer, so I also reduced my gas, parking and toll expense.

[GoodSteward]

Welcome back. Since you have already been here and asked questions, to me it sounds more like you already know the answers you will be given. Coming here is just a way to confirm it. Per the usual, others here can surely help you sift through your budget, but again..not sure there is any "new" light that can be shed. I say that because I did the same thing you did, more than once. There is a no "Oh man, how did I miss that!" kind of moment. Not since you have already gone through a sifting here before. You just have to take what you have learned, and actually practice it. It will take time, but that time it takes is what teaches you new habits and new thinking. That's all anybody really needs for finances, not just cutting expenses or earning more money(those are just up front fixes), they need long-term fixes. That comes by way of new thinking and new habits. You can do it!

Just a different job. She used to serve/bartend and always make good tips. Now she is a wholesale representative and makes commission only. Sometimes she will make 200 in 2 weeks, sometimes 1200 in 2 weeks.

Every little bit helps, but not having at least a somewhat set idea of income really messes up making a budget. I normally advise taking the least you know you should get, and the rest goes into savings first(in your case). Don't take the average unless you are good at leaving a surplus to cover several weeks of well below average. From the sounds of it that won't be the case with you yet.

You need to be set in your new ways before ever getting a new job. It sounds like even when you get the job it will still take time from there to really increase. Could be two years out before you see a significant difference in income. Learn to increase with what you have and you will have no problem with more.

Just a couple thoughts on that.

[hehateme000]

Welcome back. Since you have already been here and asked questions, to me it sounds more like you already know the answers you will be given. Coming here is just a way to confirm it. Per the usual, others here can surely help you sift through your budget, but again..not sure there is any "new" light that can be shed. I say that because I did the same thing you did, more than once. There is a no "Oh man, how did I miss that!" kind of moment. Not since you have already gone through a sifting here before. You just have to take what you have learned, and actually practice it. It will take time, but that time it takes is what teaches you new habits and new thinking. That's all anybody really needs for finances, not just cutting expenses or earning more money(those are just up front fixes), they need long-term fixes. That comes by way of new thinking and new habits. You can do it!



Every little bit helps, but not having at least a somewhat set idea of income really messes up making a budget. I normally advise taking the least you know you should get, and the rest goes into savings first(in your case). Don't take the average unless you are good at leaving a surplus to cover several weeks of well below average. From the sounds of it that won't be the case with you yet.

You need to be set in your new ways before ever getting a new job. It sounds like even when you get the job it will still take time from there to really increase. Could be two years out before you see a significant difference in income. Learn to increase with what you have and you will have no problem with more.

Just a couple thoughts on that.

Thanks GoodSteward. I know what you mean. I know what to do. I just like being able to share with people who are also doing the same thing. There is literally no one I could talk to about this. Thank you for the encouragement. I do feel like sometimes it is so much to look at, and it is nice to get other peoples perspective.

Here are my monthly bills, and my account balances.

Monthly Bills:
750 - Rent
560 - Car 1
330 - Car Insurance
320 - Car 2
280 - Phones
250 - Gas
200 - Groceries
150 - Walmart CC
120 - PGE (Electricity)
100 - Lowes CC
100 - Furniture CC
90 - Life Insurance
80 - Water/Sewer
80 - Capital One CC
50 - Student Loan (Wife's)
45 - Tanning
40 - Oil Changes
40 - Haircuts for me and my 2 boys
30 - Cap 1 CC
30 - Teamsters CC
30 - WF CC
30 - BofA CC
30 - Kohls CC
30 - Care Credit CC
30 - Trash
20 - Court Fine
20 - Gym
12- Netflix
10 - Ipsy (Wife's makeup subscription)

Installments:
47,000 - Student Loan (Me)
41,978 - Car 1
14,040 - Car 2
1,100 - Napa Fine (Court fine from 2008)
732 - Student Loan (Wife)

Credit Cards:
5,256/6,000 - Walmart CC
3,724/3,800 - Capital One CC (Mine)
1,215/2,900 - Lowes CC
1,079/5,000 - Furniture CC
578/600 - Wells Fargo CC
498/500 - Teamsters CC
192/300 - BofA CC
160/400 - Kohls CC
110/4,900 - Care Credit CC
94/200 - Capital One CC (Hers)
0/7,600 - Kay Jewelers CC (Mine)
0/1,000 - Kay Jewelers CC (Wife's)
0/500 - Victoria Secret CC

Total:
12,906/33,700

Just typing this out makes me sick. Between this month and next month, we will have about $1,200 after expenses (work bonus). I plan on using that to pay off the small cards like Capital One (94), Care Credit (110), Kohls (160), BofA (192) and Teamsters (498). That is 1054 total and will save us $150 a month. I also plan on cutting out some expenses, like tanning (45) and haircuts (40). Her ipsy subscription is actually just a normal expense because it domes with a lot of makeup every month that she would normally buy anyway. Also the gym is basically my only outlet from life, and 20 is a really good deal. It is also month to month. Netflix is for our kids because we don't have basic cable or Comcast, DirecTV, etc. As for our phone bill, I am waiting for the lease to be up which should be in another year.

Next, I would like to save $1000 in an EF. I know it is small but it will be a big peace of mind knowing we have some emergency cash without having to use a CC like always.

What do you guys think about life insurance? I got term life insurance, 30 year term at a 89$ rate which includes me, my wife and 2 kids. I could cancel it but it seems like with the amount of driving I do, plus her not having a career, that is is a good insurance to have. It would knock off 90 a month though if we did cancel it.

[97guns]

Your already over your 1.87 US average for children and bringing in another will significantly increase your spending. Children are wonderful but if you can't guide them into their future then it will be nothing but burden for yourselves and them. They learn by example so yes I would suggest buckling down hard just as your thought process but more than thinking about it put it into action NOW, whatever your game plan is. Don't wait because procrastination leads to non action.

[porkpistol]

How far under (if any) are you in your vehicles. Your total household income does not support owning a vehicle at 41k.

- You can't afford the gym membership
- You can't afford a makeup membership
- You can't afford netflix
- You definitely can't afford tanning
- Can you shop around for better car insurance rates?
- Can you decrease your data plan etc. for your phone bill to save cash there?
- Can you learn to do your own haircuts at home? Especially for your kids?

Getting rid of the tanning, makeup membership, netflix, and the gym saves you $87 right away. Look for better rates etc on insurance or phones and you could probably easily gain $100 a month to put towards a debt.

[Jluke]

that's a long list of monthly payments - more power to you if you never miss one.

Great that you have a plan to pay off those low balance cards - just be sure to do exactly that.

cell phones: we pay $34 each (boost mobile, virgin mobile, cricket, whichever is tied to the big carrier, but not the big carrier fees). We both have iPhones so not a basic phone. switch as soon as possible. you may actually make out better paying the cancellation fee than continuing to pay $280x12.

[porkpistol]

that's a long list of monthly payments - more power to you if you never miss one.

Great that you have a plan to pay off those low balance cards - just be sure to do exactly that.

cell phones: we pay $34 each (boost mobile, virgin mobile, cricket, whichever is tied to the big carrier, but not the big carrier fees). We both have iPhones so not a basic phone. switch as soon as possible. you may actually make out better paying the cancellation fee than continuing to pay $280x12.

This idea may work if he had any savings and more that $100 of extra income a month to spare.

[rennigade]

$40 for an oil change monthly? Are you driving 5,000+ miles a month?

$45 for tanning...wut??

[AJ444]

It is great you want to improve your situation.

I would suggest reading the total money makeover by Dave Ramsey and follow his advice on getting out of debt. It isn't the optimal way, but in your situation may be the best way to get out of debt. I would take his advice until you get to the investing section, then read the bogleheads wiki on their website.

I would have a discussion with your family that it is going to be a team effort to get on solid financial ground. Everyone is going to have to contribute, you do your kids more of a disservice being so close to financial peril then you do saying no to a lot of the extras.