I updated my budget projection

[Magic Johnson]

Your comments are welcome.

Category	Amount	Notes
Monthly Income	$5,677	Full-time job salary = 4561 Part-time gig = 1116
Child Support	$1,296	3 minor kids
Tax Withholdings	$776
Food and Toiletries	$500
Credit Card Payments	$491	Total debt of $7126 and growing because of legal action against my ex wife (custody issues).
Apartment Rent	$450	garbage, water, and sewer included in rent.
Gasoline for Truck	$440	I get 15.2 miles per gallon with my truck.
Truck Loan	$344	2010 Ford F-150. Current value of $11K. It will be paid off on Sept. 1, 2023.
Retirement Savings	$300
Wedding/Honeymoon/House down payment savings	$200	my fiance is also saving $200/mo. Wedding planned for October 2023.
Auto Insurance	$120	$100 comprehensive deductible and a $500 collision deductible.
Electricity	$110	Home heated w/ electricity
Health and Dental Insurance	$174
Engagement Ring Loan Payment	$94	Scheduled to be paid off August 2023
Phone	$84
2021 Federal Income Tax Debt	$76	72 Installments
Cable and Internet	$69
Laundry	$60
Church Giving	$40
Gifts	$18
Auto Registration	$14	Due in November
Renter's Insurance	$11	$20K of personal property coverage, and $500K of personal liability coverage
Life Insurance	$9	$57,000 policy, employer sponsored
Total Expenses	$5,676
Net	$0

[james.hendrickson]

I'd cancel that life insurance and see about getting cheaper car insurance.

[Magic Johnson]

Additional information:

I'm 49, and plan to work 20 more years
My minor children are 16, 14, and 12
I have about $225,000 in retirement savings
My EF is $1,000
I owe $1512 on the ring loan (18 mo. loan, 5.9% APR) and $5673 on the truck (originally 5-year loan, 3.59% APR)
I owe on two credit cards. One is at $3269 (9.9% APR) and the other is at $2857 (0% APR until next April 1, then 14.7%). Extra payments go toward the 9.9% APR card. All new legal debt gets put on 0% card.
I owe $5362 in 2021 federal income tax debt.
Complete guess, but I expect $2-3K more in legal expenses before the case is over (court date June 21, and I'm trying to settle out of court).

[LivingAlmostLarge]

raise the auto deductibles. what will happen if you move in with fiancee? Will it help financially? Maybe move in sooner

[Magic Johnson]

I'd cancel that life insurance and see about getting cheaper car insurance.

Cancel life insurance? Really? As is, I'd only leave about $22K for my four kids from insurance. See spreadsheet below. I know they'd get my retirement fund, but still ...

I shopped around for auto insurance in March. That's a reputable, name-brand insurance carrier. I've heard too many horror stories about cut-rate auto insurance companies to consider cheaper auto insurance.

life insurance payout	$57,000
estimated funeral costs	-$10,000
other "end of life" costs	-$5,000
pay off CC debt	-$7,126
pay off ring debt	-$1,512
pay off truck debt	-$5,673
pay off income tax debt	-$5,362
remainder	$22,327

[Magic Johnson]

raise the auto deductibles. what will happen if you move in with fiancee? Will it help financially? Maybe move in sooner

I can ask my insurance agent about the impact of raising deductibles.

My fiance and I are talking about moving in together this fall (October or November), not right away, anyway.

[Magic Johnson]

Because I couldn't help myself, I made up a spreadsheet to determine how much money would be available for our wedding/honeymoon/house down payment.

When we get married in October 2023, we will both be in our 50s, and neither one of us want to spend a bunch of money on a wedding. We both understand that every dollar spent on a wedding is a dollar unavailable for honeymoon/house down payment.

	beginning balance	$250	running balance	Notes
May-22	monthly contribution	$400	$650
Jun-22	monthly contribution	$400	$1,050
Jul-22	monthly contribution	$400	$1,450
Aug-22	monthly contribution	$400	$1,850
Sep-22	monthly contribution	$400	$2,250
Oct-22	monthly contribution	$400	$2,650
Nov-22	monthly contribution	$400	$3,050
Dec-22	monthly contribution	$400	$3,450
Jan-23	monthly contribution	$400	$3,850
Feb-23	monthly contribution	$400	$4,250
Mar-23	monthly contribution	$400	$4,650
Apr-23	monthly contribution	$400	$5,050
May-23	monthly contribution	$400	$5,450
Jun-23	monthly contribution	$400	$5,850
Jul-23	monthly contribution	$400	$6,250
Aug-23	monthly contribution	$400	$6,650	pay off ring
Sep-23	monthly contribution	$494	$7,144	pay off truck
Oct-23	monthly contribution	$838	$7,982
Oct-23	withdraw for wedding	-$3,000	$4,982
Oct-23	withdraw for honeymoon	-$4,900	$82
Nov-23	monthly contribution	$838	$920
Dec-23	monthly contribution	$838	$1,758
Jan-24	monthly contribution	$838	$2,596
Feb-24	monthly contribution	$838	$3,434
Mar-24	monthly contribution	$838	$4,272
Apr-24	monthly contribution	$838	$5,110
May-24	monthly contribution	$838	$5,948
Jun-24	monthly contribution	$838	$6,786
Jul-24	monthly contribution	$838	$7,624
Aug-24	monthly contribution	$838	$8,462
Sep-24	monthly contribution	$838	$9,300
Oct-24	monthly contribution	$838	$10,138
Nov-24	monthly contribution	$838	$10,976
Dec-24	monthly contribution	$838	$11,814
Jan-25	monthly contribution	$838	$12,652
Feb-25	monthly contribution	$838	$13,490
Mar-25	monthly contribution	$838	$14,328
Apr-25	monthly contribution	$838	$15,166
May-25	monthly contribution	$838	$16,004
Jun-25	monthly contribution	$838	$16,842
Jul-25	monthly contribution	$838	$17,680
Aug-25	monthly contribution	$838	$18,518
Sep-25	monthly contribution	$838	$19,356
Oct-25	monthly contribution	$838	$20,194
Oct-25	withdraw for down payment	-$20,000	$194

[bjl584]

You're on the razors edge.
Anything unexpected will throw you into a financial death spiral.

I'd definitely be looking for ways to cut my expenses, across the board.

What did you do to your truck to be getting such poor fuel economy?
Is it lifted or have oversize tires on it?
A F150, even with a V8 should be doing better than 15mpg
my F350 does better than that.

[Magic Johnson]

You're on the razors edge.
Anything unexpected will throw you into a financial death spiral.

I'd definitely be looking for ways to cut my expenses, across the board.

What did you do to your truck to be getting such poor fuel economy?
Is it lifted or have oversize tires on it?
A F150, even with a V8 should be doing better than 15mpg
my F350 does better than that.

I’m actually not sure about gas mileage. That’s just what shows up on the screen as calculated by my truck. I’ve never done a calculation.

But no, I’ve not jacked up my truck or anything. The cab is really big. My 4 kids and I can sit in it very comfortably.

[disneysteve]

Do you want an honest response? I'll be blunt. I think you need to overhaul how you're handling money. You have a fair amount of debt and are continuing to take on more. Some of that debt was unavoidable (such as the IRS) but some was totally discretionary (like the engagement ring). You still have 17 payments left on a 12-year-old vehicle. It will be almost 14-years-old when you pay it off. You're putting away $200/mo for wedding/honeymoon/house. We can debate the third item on that list but the first two shouldn't be there. You're broke. Wedding should be a justice of the peace at the courthouse and "honeymoon" maybe an inexpensive weekend somewhere relatively nearby. You also need way more life insurance, so that's one area where I don't think you're spending enough.

I think you need to hunker down and get laser-focused on your debt. Cut out luxuries. Bare bones until you've got this cleaned up. I don't agree with everything he preaches, but Dave Ramsey's plan wouldn't be a bad idea here at all.

If you really focus, you'll be surprised how fast progress happens. It can seem insurmountable now because you're spending (or "saving") money in various places, but when you drill down, things start happening quickly and you'll find yourself in far better shape before you know it.

[Magic Johnson]

Do you want an honest response? I'll be blunt. I think you need to overhaul how you're handling money. You have a fair amount of debt and are continuing to take on more. Some of that debt was unavoidable (such as the IRS) but some was totally discretionary (like the engagement ring). You still have 17 payments left on a 12-year-old vehicle. It will be almost 14-years-old when you pay it off. You're putting away $200/mo for wedding/honeymoon/house. We can debate the third item on that list but the first two shouldn't be there. You're broke. Wedding should be a justice of the peace at the courthouse and "honeymoon" maybe an inexpensive weekend somewhere relatively nearby. You also need way more life insurance, so that's one area where I don't think you're spending enough.

I think you need to hunker down and get laser-focused on your debt. Cut out luxuries. Bare bones until you've got this cleaned up. I don't agree with everything he preaches, but Dave Ramsey's plan wouldn't be a bad idea here at all.

If you really focus, you'll be surprised how fast progress happens. It can seem insurmountable now because you're spending (or "saving") money in various places, but when you drill down, things start happening quickly and you'll find yourself in far better shape before you know it.

Thanks. I’ll consider what you’ve said, but honestly, there has to be a balance between savings and enjoyment of life.

[bjl584]

Thanks. I’ll consider what you’ve said, but honestly, there has to be a balance between savings and enjoyment of life.

To also be blunt, that mindset put you in the position you are in today.
If you had true balance, then you wouldn't be on a financial forum asking for advice on how to get out of the mess you find yourself in.

[Magic Johnson]

To also be blunt, that mindset put you in the position you are in today.
If you had true balance, then you wouldn't be on a financial forum asking for advice on how to get out of the mess you find yourself in.

Mess? Compared to what? My credit score is 750. I’m 49, and have +$200K saved for retirement. Most people retire with $200K or less. No, I don’t have a 3-6 mo. EF. Do most people? Do most people have a $1K EF?

Absolutely I have room for a lot of improvement, but I’m not in a mess.

[disneysteve]

Mess? Compared to what? My credit score is 750. I’m 49, and have +$200K saved for retirement. Most people retire with $200K or less. No, I don’t have a 3-6 mo. EF. Do most people? Do most people have a $1K EF?

Absolutely I have room for a lot of improvement, but I’m not in a mess.

"Mess" is a subjective term for sure. Yes, with 200K in retirement you are in better shape than most, but that doesn't mean all is well either. The point isn't to judge yourself against others anyway. It's to come up with a plan to do the best you can.

Not suggesting this is "the way" but just think about something. You are putting $200 into savings for wedding/honeymoon/house and $300 into retirement. How much faster would you be debt-free if you temporarily redirected that $500/mo toward debt repayment instead? That would be an extra $6,000/year. You've got about $19,600 in debt right now so that $6,000 alone would retire the debt in just over 3 years. Add it to the $1,000/mo you're already spending on payments and you'd be debt-free in a little over 2.5 yrs. If you could also trim any other spending temporarily and throw that money at the debt too, you could get the repayment period even shorter.

Yes, balance is important but I bet if you went bare bones scorched earth you could be 100% debt-free in 2 years or less. Wouldn't that be an awesome way to start your new life together?

[Jluke]

My tv broke last week. I spent 2k to replace it.

think of all the things you own that could break and how you would manage that? A truck repair. Cell phone breaks. Etc.

it’s good that you have a plan through 2025 that ends with buying a house but I just have a feeling that life will get in the way of that best laid plan.

looking like the wedding will add up to almost 10k (ring, etc).

try to avoid adding any more monthly payments.