Rebuilding Life

[bjl584]

Here is a post from someone, 37 years old and trying to rebuild their life after a divorce.




Hey there,

Due to a series of unfortunate events, mostly brought on by my own idiocy in my 20s and early 30s, I am in quite the financial position.

Here’s the tldr;

37M in CA
Divorced w/3 kids

Salary $250k+ year
Debt $250k (law school student loans + car)

Savings= $1,000
Retirement= $0
Investments= $0

Monthly take home after taxes= $12,000

Rent/utilities: $2,500
Car payment: $350
Fuel: $200
Insurance: $225
Child Support $4,100 (CA is high and ex only works part-time)
Food: $200 (really only for my kids since I eat at work every day)
Student Loan Payment: $1,000 (lowest possible)
Phone: $150 (stupid device installment plan)
WiFi: $100
Credit Cards $400
Misc expenses for kid activities: $400 (have them every other weekend so we try to get out and do as much as possible)

Total expenses: $9,525

Net: $2,475

I have about $250,000 in invested equity at my job so staying there will help a lot. I can sell about $75k in 5 months.

I also will receive a cash bonus of about $30,000 next year as well.

My thought is rice and beans and just pay off as much debt as possible with a small emergency fund. I have life insurance for my kids $500k so if i get hit by a bus they have something small.

To me it doesn’t make sense to invest or save until I’m debt free.

Im sure wondering how in the world i got here.. thats another story for another post…

[Fishindude77]

First thing that comes to mind is get a roommate to share rent costs, freeing up +/- $1000 per month.
Could also downgrade car to something bare bones and paid for, for the short term while working down debt.
Quit using credit cards and pay that off.

[LivingAlmostLarge]

The car is bare bones and the rent is minimum to keep the kids. The car likely has negative equity from rolling over old car loans. That's usually what happens. And the rent is for a 2-3 bedroom apartment needed to keep kids in HCOLA. Pay off the car and the phone and then maybe start retirement savings and the kids college then focus on the student loans. Can they freelance and get more income on weekends they don't ahve the kids?

[myrdale]

He makes +$250k and is dead broke.

He is 37 and owes $250k in student loans.

I don't understand what invested equity at his job means. As an attorney, he owns his own business and this is the building / furniture / etc? I am doubting that because he is planning on a $30k bonus next year.

The life insurance policy is irrelevant.

I'm not convinced a room mate fixes any of the above. He needs to do the rice and beans plan and stick to it. There is no indication how much debt is a car. $5k? $50k?

[LivingAlmostLarge]

He makes +$250k and is dead broke.

He is 37 and owes $250k in student loans.

I don't understand what invested equity at his job means. As an attorney, he owns his own business and this is the building / furniture / etc? I am doubting that because he is planning on a $30k bonus next year.

The life insurance policy is irrelevant.

I'm not convinced a room mate fixes any of the above. He needs to do the rice and beans plan and stick to it. There is no indication how much debt is a car. $5k? $50k?

he likely works in house counsel and the $30k is bonus like everyone else. He probably needs to not just do rice and beans but also work whenver he doesn't have the kids freelance or something.