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I’m 27 year old man and I’ve got problems with money. This is a thread for people to point and laugh and berate me into fixing my financial life. It's also a way for me to keep myself honest and not blissfully stick my head in the sand. The OP will be fairly sparse. I will try to answer questions and provide background as I go. I would do more but I think getting the ball rolling is the most important thing. Here’s the problem:  I got here with help from my ex-wife, who really brought out the worst of my self-destructive tendencies. If you’re hip to the breakup thread in E/N you know what I mean. I’ve been separated from her for 3 months and I just moved into my own (expensive) place. Now’s the time to get my poo poo under control. This is a high level summary of what I have to work with:  There are a lot of moving pieces in my financial life. The biggest one is the bonus accrual. After my first 108 hours billed in a month (which justifies my salary and benefits) I accrue bonus at $75/hr. This gets paid out at different points throughout the year. The big payouts happen at the end of July and mid-December. There are a bunch of other little payouts and non-hours based bonuses but I can get into that later. My immediate goal is to pay off all of the credit cards as soon as possible. I haven’t put NEARLY enough thought into the specifics of it, so maybe that will be an update in the next few days. I have a few 'moves' I think I’m going to make and I’m sure you guys will enjoy to comment on them: - My July bonus will be something like $13,000 before taxes, and a little under $10,000 after taxes. I’m going to dump that onto the AMEX and eradicate that debt entirely. I want to have some fun on my bonus too, but I think the $1000 I would usually put towards the AMEX from my checking will be the ‘fun’ part of the bonus. December bonus could be twice that if I can convince myself to put in the hours. - I can loan myself up to $8,000 from my 401k (I did this for $5,000 last year which is A: why I have a payment for it on my monthly income and B: why I can ‘only’ loan myself 8k) I would pay $75 to originate the loan, but then pay my own 401k back with interest (so I’m paying myself interest rather than a bank). It might be smart to do this and kill off another CC. For some reason I feel dirty taking money from my 401k. - I have a MasterCard with a $13,000 limit and nothing on it right now which will have zero interest till 2015. I may use it to sequester some debt if I start having to pay interest on it (at a 3% balance transfer fee). - After next month I will not be paying my ex wife’s rent anymore. So that’s a big chunk of money every month. On top of that part of our settlement was that I would receive the security deposit when she moves out (end of September) which is $2,600. I’m fairly certain I will get most of that back (my mama is a real estate attorney). That’s all income I’m perfectly happy to put towards killing debt. The only other super relevant item to this discussion is my future earnings: if I devote some hours to studying and pass some exams I can dramatically increase my earning potential. I did this last year thinking I could take on some debt and then just pay it off with the higher pay grade. I went from a $58/hr bonus accrual to my present $75/hr. I could probably get this up to $90 by the end of the year if I put my nose in a book. Passing exams would also have little bonuses attached to each ($1,500 to $4,000). So my decision tree isn’t just Work/Play. The work part is divided into ‘Earn Money Now’ and ‘Grow Future Earning Potential’. Ok goons. That’s my OP. I’ll do monthly reviews of my spending and keep y’all abreast of stupid purchases I make. Feel free to ask questions. Besides personally identifying information or questions about where I work I will try to stop in at least once a day to answer them.
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Jul 19, 2013 00:38
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No budget for food, the wife's rent going away will be great, and you seem to focus a lot on "coulds". Until you pay down the debt, you need to find a way to be cash neutral/slightly positive ignoring your bonus.
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Jul 19, 2013 01:29
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Harry posted:No budget for food, the wife's rent going away will be great, and you seem to focus a lot on "coulds". Until you pay down the debt, you need to find a way to be cash neutral/slightly positive ignoring your bonus. 1,300 seems like plenty for food and entertainment. I guess the poo poo might hit the fan if I looked at my monthly sending there. I've gone months eating nothing but catered meals at work and bar food. But no more. Costco eggs and Greek yogurt sustain me, with some BBQ'd meets every now and then.
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Jul 19, 2013 01:48
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Can you post the interest rates on the CCs? I'm sure you know how to debt snowball. It's just for 
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Jul 19, 2013 01:52
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tuyop posted:Can you post the interest rates on the CCs? Chase Slate: 9.99% Chase Sapphire: 12.24% Amex: 15.24% Discover: 16.24% GE RB: 29.99% Wow the general electric card is gonna burn once it gets out of the promotional period. Better make sure I never feel a bit of that.
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Jul 19, 2013 03:02
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Slow Motion posted:1,300 seems like plenty for food and entertainment. I guess the poo poo might hit the fan if I looked at my monthly sending there. I've gone months eating nothing but catered meals at work and bar food. But no more. Costco eggs and Greek yogurt sustain me, with some BBQ'd meets every now and then. How are you saying you want to pay down the debt as soon as possible and then saying it's okay to have some unknown $1300 category that food might be taking up a large part of?
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Jul 19, 2013 03:34
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Dude. Dude. Dude. You have 26k in debt. Drop the penthouse apartment immediately. If you lived at home for a year and changed nothing else, you'd be basically debt-free. I get it - you like it. But holy poo poo it is eating you alive. You are killing 24000 of your dollars every year. You are in dire financial straits. First, you have an income that will allow you to kill those debts in, like, six months. Absolutely do that. That other stuff is bullshit. Why do you care about upgrading for a new phone? What's this other poo poo? None of it matters - kill the debt now, move on with your loving life. Your car, that you barely use, is costing you $3600 per year. Are you really serious about this? You seem to think that your "lifestyle" is worth preserving, god knows why, as if you can't be happy unless you're in a penthouse apartment. I'll stop bitching, but let's set a really, really, really easy target - be debt-free in eight months. First: MOVE. You are not rich. You have 25k in credit card debt. I don't know your area, but if a penthouse is 2k you can probably easily get by 800 a month all in. This frees up 1.4k a month. Wow, already halfway there! Second: Get rid of the car if you don't use it. Get a zipcar pass instead for your rare trips if you really need that to feel secure. You're burning 300+ a month on nothing. Third: Reduce your food/fun expenses to $800 a month. Yeah, yeah, sad, eat out less, drink fewer mixed drinks, carry more nips when you go out, you won't notice the difference soon. Fourth: Downgrade your phone plan, you can easily save $400 a year this way. This is with unlimited data. Fifth: Your wife's rent will be disappearing, freeing another 15.6k a year. Congrats! You're free. Now live that same lifestyle and save all that money. EDIT: Realistically, getting rid of the car, downgrading your rent, and not paying your wife's rent would have you done in 9 months, but you're probably tossing a lot of money out the window right now as is so this is a good time for a re-evaluation. No Wave fucked around with this message at 03:49 on Jul 19, 2013 |
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Jul 19, 2013 03:45
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No Wave posted:stuff I see your point. I don't think I'll rock this lifestyle forever. But for now it DOES make me happy. And While you make good arguments for just how much money it costs I think I can still afford it, even while I manage this horrendous debt.
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Jul 19, 2013 03:58
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Harry posted:How are you saying you want to pay down the debt as soon as possible and then saying it's okay to have some unknown $1300 category that food might be taking up a large part of? I'll draw up a budget for that income tomorrow.
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Jul 19, 2013 04:01
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Slow Motion posted:I think I can still afford it, even while I manage this horrendous debt. Please read this over and over until it clicks
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Jul 19, 2013 04:02
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Telemarchitect posted:Please read this over and over until it clicks The debt wasn't from the (current) lifestyle. It was from paying my ex wife's tuition and taking us on a bunch of vacations around the world. Neither of which I'm doing any more.
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Jul 19, 2013 05:12
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All I hear is "I am $25k in terrible, high-interest debt and I want to pay twice as much in rent as most people's mortgage BECAUSE"
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Jul 19, 2013 05:44
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I'm going to go against the grain, and say that if your other expenses are well managed, and you understand that some of your rent is definitely part of your discretionary spending, you can afford that on your salary. But you're giving up other things to pay that rent, so weigh what gives you real enjoyment.
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Jul 19, 2013 06:30
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You can totally have everything completely paid off in under two years, or heck less than one, if you stopped being so attached to your whatever lifestyle right now. You said your immediate goal is to pay off your credit card debts as soon as possible, but clearly it looks like your immediate goal is to get some rebound pussy from Brenda at the office with your sweet new mancave and super fast internet connection. If your priorities really aren't getting everything paid off and getting some more fiscally responsible habits, why is this thread still open?
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Jul 19, 2013 08:26
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Based on $1300/mo for your old place, that penthouse realistically costs you $10-12K a year or so over a normal apartment, so roughly three or four decent-sized vacations. It might still be worth it, but you'd better be tangibly happier in it because it's pretty much the reason why you won't go to {three different parts of the globe} in the next 12 months.
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Jul 19, 2013 08:48
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Turkeybone posted:You can totally have everything completely paid off in under two years, or heck less than one, if you stopped being so attached to your whatever lifestyle right now. You said your immediate goal is to pay off your credit card debts as soon as possible, but clearly it looks like your immediate goal is to get some rebound pussy from Brenda at the office with your sweet new mancave and super fast internet connection. If your priorities really aren't getting everything paid off and getting some more fiscally responsible habits, why is this thread still open? These could be a great eight months for you to get your poo poo in order, cool off a little bit, pay everything off, and figure out a strategy for saving and retirement for the rest of your life. Then once you're debt-free and hitting your targets you can actually afford to have your silly little luxuries. Of course, at that point, you'll start understanding what they're costing you in terms of savings and compound interest, so you may decide not to. No Wave fucked around with this message at 13:40 on Jul 19, 2013 |
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Jul 19, 2013 13:37
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Please don't borrow against your 401k. That's such a poor idea, and unnecessary, based on the money you could shift around if you altered your spending habits.
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Jul 19, 2013 13:54
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You can keep the penthouse and still be out of debt in a year, but it will require discipline in every other part of the budget. Create a pro forma budget for September onwards (no wife's rent, but including food, entertainment, clothing, and miscellaneous this time). Ideally your spending will fit completely within your base pay, freeing your bonuses up to pay off debt. If you can't fit the spending within your base pay, consider trading your car for a zipcar pass. You'll cut monthly spending and free up capital for paying off debt and still be able to use a nice set of wheels any time you want (which obviously isn't very often if you're driving <50mi/mo). Assuming the bonuses arrive as expected, you'll be debt-free by Christmas 2014.
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Jul 19, 2013 13:56
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Do you live in a metropolitan enough area to survive without your car? Is zipcar or an alternative available enough should you need it?
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Jul 19, 2013 13:58
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Ninja Bob posted:I'm going to go against the grain, and say that if your other expenses are well managed, and you understand that some of your rent is definitely part of your discretionary spending, you can afford that on your salary. But you're giving up other things to pay that rent, so weigh what gives you real enjoyment. I agree. Yes, he has a decent chunk of debt, but he is also coming out of a bit of an odd situation, and has a high income. Once he's no longer paying rent for his wife, and he gets the rental deposit back, he can start hammering at his debt. His penthouse, while quite expensive, is within a reasonable percentage of the income that he makes. He can afford to enjoy his life, he doesn't have to HYPER-CRAM his expenses down to near zero. He can afford a nice cell phone, nice penthouse, etc. Yeah, he should look at alternatives to owning his car, as it's quite expensive for how little he uses it, and there are a lot of good, cheaper alternatives out there. I think he just needs to really pay attention to getting the credit cards paid off before the 0% interest period runs out. However, we'll see if he's able to focus on paying down the debt or whether he goes nuts financing his bachelor lifestyle over the next few months!
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Jul 19, 2013 14:04
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I mean, it's kind of clear that you've never thought that much about budgeting etc - isn't this a great time to try to get your spending down to a minimal acceptable level for a few months, see how it treats you, then adjust from there when your debt's more taken care of? I don't think you really know which expenditures actually make you happy and which you have just as a matter of habit. The only way to find that out is to cut them for a few months and to see if you adapt. Of course your penthouse makes you happy - you're not living with your ex-wife! You'd get the advantages of that in a much cheaper place. It's probably not the "penthouse", it's probably just "not being around her".
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Jul 19, 2013 14:28
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Slow Motion posted:This is a thread for people to point and laugh and berate me into fixing my financial life. It's also a way for me to keep myself honest and not blissfully stick my head in the sand. Slow Motion posted:And While you make good arguments for just how much money it costs I think I can still afford it, even while I manage this horrendous debt. You should stop sticking your head in the sand.
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Jul 19, 2013 14:41
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Slow Motion posted:I see your point. I don't think I'll rock this lifestyle forever. But for now it DOES make me happy. And While you make good arguments for just how much money it costs I think I can still afford it, even while I manage this horrendous debt. It does make you happy because it's what you are used to. But if you downgrade like No Wave suggested, I guarantee that within 6 months you will return to your current level of happiness. Right now your lifestyle owns you. It needs to be the other way around. For gently caress's sake, you're a 27 year old high-earner. Focus on gaining some good financial habits now so you never have to worry about money ever again.
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Jul 19, 2013 14:48
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No Wave posted:For real. $2100 penthouse pad and no gym membership? For shame, playa. The building has a large gym for residents. I use it 5 times a week!
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Jul 19, 2013 16:29
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I was in your situation when I was like 25, and I made the decision to live in a cheap house rental, and pay off my debt completely. Having your net worth go from negative, to zero, to positive, is one of the most significant financial milestones in ones life. Most people never make it to zero. Paying off that debt opens up so many doors that you never would have thought possible. Rich people understand that money begets more money, and you can't even start that train until you get back to zero. It gives you far more control over your life. It gives you far more options. It gives you way more than a loving penthouse ever will.
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Jul 19, 2013 17:02
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Slow Motion posted:I'll draw up a budget for that income tomorrow.  Please tell me if you think there are any glaring omissions. This was done extremely unscientifically and is based mostly on how much I 'feel' that I spent. I'll reconcile it to my July spending at the end of the month. Hopefully I'll get the budget nailed down better then. moana posted:All I hear is "I am $25k in terrible, high-interest debt and I want to pay twice as much in rent as most people's mortgage BECAUSE" Besides the Amex I'm not paying interest anywhere. I ran up the Amex pretty much only in the past 3 months. I started paying the minimum on all cards once I knew I was going to need cash to get my own place and furnish it. Hence why it's my first priority to zero out. ZentraediElite posted:Please don't borrow against your 401k. That's such a poor idea, and unnecessary, based on the money you could shift around if you altered your spending habits. I have an aversion to it. But it seems like a pretty sweet deal: pay myself interest instead of a credit card! And the 3% fee a bank would charge me to balance transfer 8k would be $240. The $75 fee my 401k would charge me is much less AND I'm protected from fuckery like penalty APR and my own foolishness in not paying off the card before the promotional rate ends. It's pretty immaterial right now as I wont be paying any interest next month and I can probably kill the rest of the debt before I do. Still I don't understand why it would be a bad idea. It seems like the very best of the interest avoiding options available to me.
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Jul 19, 2013 17:39
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At least Zaurg confined his stupid E/N to here. Maybe you should go for the trifecta and post a fitness failure log too.
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Jul 19, 2013 18:07
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Oakey posted:At least Zaurg confined his stupid E/N to here. Maybe you should go for the trifecta and post a fitness failure log too. I'll get right on that chief  
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Jul 19, 2013 18:12
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I don't get it. What do you want? If you want to create a budget that makes you feel like you'll get out of debt in two years, you can just pretend that everything will be fine at your current standard of living, borrow against your 401(k) to refinance your credit card debt, and pay off your debt $1300 at a time every month. You can then also pretend that your expenses won't increase throughout your life, because as you learned, having a spouse is free! Contribute a pathetic 1k a month, retire at 65 with 1/2 the amount of income you're used to living with. This sounds like a loving awesome life penthouse bro, way to loving crush it! Or, if you want to have a better life and not have to worry about money, ever, with no real hit to your overall happiness, you can start taking this poo poo seriously.
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Jul 19, 2013 18:48
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What's the point of this thread?
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Jul 19, 2013 19:26
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Probably to show that you can have negative numbers be blue, which is loving absurd. They should be red.
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Jul 19, 2013 19:34
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Harry posted:Probably to show that you can have negative numbers be blue, which is loving absurd. They should be red. He highlighted his total debt in red though.  Slow Motion, part of the problem you have with your budget is that you're only budgeting a small portion of your income. I don't see you account for a few things already: 1. Annual Fees for your cards 2. Subscriptions (I'm guessing you have more subscriptions than you know what to do with 3. $400 is a huge underestimate if I've ever seen one. If you really are spending $2000 a month at some point while going out, what makes you think you're going to be able to maintain $400 consistently over time. Be realistic. 4. Rather than have a lump $150 over a month on Costco runs, why don't you be realistic and break it down into the stuff you actually get, including your household goods. 5. $15 for soap a month when it seems like you have multiple soaps for your body, face, etc. - does this come out of your costco budget as well? If I'm reading this right, and I'm barely paying attention, you seem to have $300 left over after your entire month of spending?
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Jul 19, 2013 19:47
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Now that I think about it...Slow Motion posted:I got here with help from my ex-wife, who really brought out the worst of my self-destructive tendencies. If you’re hip to the breakup thread in E/N you know what I mean. I’ve been separated from her for 3 months and I just moved into my own (expensive) place. Now’s the time to get my poo poo under control. I don't believe this. Based on everything you have said, you're just blaming your financial problems on your ex-wife. Whereas the fact of the matter is that you seem to be utterly incapable of making any good financial decisions on your own. I mean, you're up to your eyeballs in debt and you're still spending $400 on bars and alcohol. On top of this, you are ignoring all the advice people are giving you. What the gently caress is your problem?
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Jul 19, 2013 19:49
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Slow Motion posted:As Promised. You wanted honesty, so let's be honest. You're not in trouble because of your debt, you're in trouble because of your savings (or, more accurately, your not-having-savings) and your lovely financial attitude. You could probably cruise along in your bomb rear end penthouse for the next two years and shovel yourself out of debt, or dip into your 401k and get there a little faster, but then you're just stealing from your retirement savings in order to make your penthouse life happen. I happen to think both are stupid. I make the same amount you do, so I understand having all this cash every month and thinking things are cool and you'll be fine. But with such a large cash outflow, you have no buffer against possibilities like losing your job or having something bad happen to you. You also have no freedom - you are stuck in this job as long as you want to maintain your lifestyle, and your attitude indicates that your lifestyle desires will only expand with your income. Let's suppose I was plopped down in your place right now. I would keep contributing to my 401k, because I can and because saving for retirement is a high priority for me. I have $6k left each month to help knock out debt. I'd cut expenses down to $1k/month (reasonable, about what I spend now, but you will have to cut out luxuries that you're used to instead of budgeting around what you normally spend) and find a place to sublet for $500/month for the next six months. Then I'd be debt free. I'd stay in that place and finish out my lease for the year, giving me $30k savings by the end of the first year. I'd take a vacation to Hawaii to celebrate. Then I'd find a nicer place to rent for $1000-1500 and keep my expenses the same for the next year. I'd have around $70k saved by the end of the second year for a nice downpayment on a house or as an emergency buffer or as extra retirement savings. Wow, awesome. Look at me go. How loving cool am I? Now I can start spending $2k/month on a mortgage for a place I really like and can own for myself. You, on the other hand, will putz around with your dick in your hand for two years, and you might have your debt paid off by then, probably by stealing money from your 401k first, and nothing else to show for it but that you can tell everyone you lived in a really nice place for two years. I don't know what is going through your brain. You're not going to pay attention to any advice I give you so here is a picture of a marmoset: 
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Jul 19, 2013 19:53
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Shadowhand00 posted:He highlighted his total debt in red though. Ok let's see. 1. None of my cards have any annual fee. Although the Costco membership is $150 and I could budget that. 2. I subscribe to nothing. 3. My bar spending was higher when I was paying for two, and also super high the month after I left the marriage(for obvious reasons). This will be my first 'normal' month post divorce. 4. I'll try to itemize the Costco purchases when I have a chance. The 150 was for food only. I do buy clothes, household goods and some booze there occasionally but I lumped those into their respective categories. 5. The soap was on my mind because at the new place (I moved in three weeks ago) I have been griping about buying a new kind of soap nearly every other day. And you are indeed reading correctly. At my current rate I have 300 left over. That will hold next month as well. After that it will jump to 1600 as I stop paying rent on my ex wife's house. That will further jump as I eliminate these debts. I wouldn't plan for 300 in the long term. Oh and blue is an indication that it's a number that was only correct when I input it. Those balances probably changed half an hour later (but not by much).
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Jul 19, 2013 20:10
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Does the $150 Costco membership get you extra samples or something? Mine only costs $55 annually.
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Jul 19, 2013 20:17
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Oh my god, get real. You can't even bear the thought of giving up a car that you never use, how are you ever going to deny yourself anything? You're hosed. Come back when you grow up, or come back with defiant pride when you've pulled off the amazing feat of using 14% of your income over two years to pay down high-interest debt. Let's get realistic here - needing to rely on a tech job after the age of 55 is scary, scary poo poo. My roommate freaked out the other night because his dad, a mechanical engineer, lost his job at age 56. Why are you planning on putting yourself into that situation? It's crazy. No Wave fucked around with this message at 20:50 on Jul 19, 2013 |
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Jul 19, 2013 20:21
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ZentraediElite posted:Does the $150 Costco membership get you extra samples or something? Mine only costs $55 annually. It gets me the Amex which gives 3% cash back at Costco and allows me to make Costco purchases on credit rather than debit. I think there are other perks but I don't use them. No Wave posted:Oh my god, get real. You can't even bear the thought of giving up a car that you never use, how are you ever going to deny yourself anything? You're hosed. Come back when you grow up, or come back with defiant pride when you've pulled off the amazing feat of using 14% of your income over two years to pay down high-interest debt. I'm going to use the car today! But just 5 miles across the city and back. I could find parking for it outside my building. Two blocks away would be $160/mo rather than $225. Two miles a away at a friends house would be free. But I really like having it at my finger tips. Time is money and all that jazz. I am going to be free of credit card debt by the end of the year. I may have to do the 401k loan for the last of it. But you know what? That's ok. I'll pay my 401k back in the 6 months after that. I may have to adjust spending and budgets a little when I figure out just how much I'm spending here in the new life. But that will have to wait till the end of the month.
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Jul 19, 2013 21:14
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Slow Motion posted:I'm going to use the car today! But just 5 miles across the city and back. I could find parking for it outside my building. Two blocks away would be $160/mo rather than $225. Two miles a away at a friends house would be free. But I really like having it at my finger tips. Time is money and all that jazz. You're talking about "how much [you're] spending" as if it's not mutable. I mean holy cow, what a way to think. Also, time isn't money. Money is money. If you're trying to maximize both - wouldn't you be saving more? I don't get it.
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Jul 19, 2013 21:20
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Slow Motion posted:It gets me the Amex which gives 3% cash back at Costco and allows me to make Costco purchases on credit rather than debit. I think there are other perks but I don't use them. You can just use a normal, free Amex credit card at Costco instead. You also get cash back. I do. Edit: Costco membership is nitpicky and won't matter. If you don't use a car, it's goddamn insane to own one. Are you exaggerating your lack of driving? 50 miles a month average means you're putting 600 miles per year on it. Most people put ~1000 miles / month on a car. Your rent and booze consumption are where I'd start looking for real savings. Twerk from Home fucked around with this message at 21:40 on Jul 19, 2013 |
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Jul 19, 2013 21:28
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