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It may not feel like it, but you're overspending by $1,000 a month. Growing your credit card debt $12,000 per year. That's nearly 33% of your income. And you will incur significant new expenses (student loan payments, baby stuff) soon that you have no capacity to pay right now. A new car is absolutely out of the question. Are you both employed now? Will the wife stay home with the baby?
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# ¿ Jul 23, 2009 23:24 |
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# ¿ Apr 18, 2024 00:22 |
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zaurg posted:Both employed but my work is part-time at nights. So she will stay home for 8 weeks (4 of that are paid, 4 weeks we have saved for). After she goes back to work I will care for baby in morning and work at night. That's the plan. Saved for as in she has accumulated vacation time so that you will continue to receive her paycheck throughout the entire 8 weeks, or saved for as in you plan to replace her income with a drawdown of your $14.2k savings for the 2nd 4 weeks? If the latter, what is her portion of the household income? I agree with Lenk. You have got to get a handle on your expenses and that means getting you and your wife on the same page about how utterly unsustainable your current situation is. For a point of reference, you're in worse shape than CornHolio was when he started his trainwreck of a thread in terms of both accumulated debt and hemorrhaging cash flow.
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# ¿ Jul 24, 2009 01:29 |
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zaurg posted:Total Income $63,693 $5,308 So you made almost $2,000 /mo more family income last year when one of you was still in school? If that's true, you've had a major cut in income, but failed to cut expenses in any meaningful way.
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# ¿ Jul 24, 2009 22:42 |
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So how'd the discussion with the wife go?
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# ¿ Jul 26, 2009 19:19 |
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Interest rates are still pretty low at the moment. OP should consolidate the loans and choose the extended payment plan for a 25-year term. That should cut his minimum monthly payments down to around $250 and he can always accelerate payment when his situation improves.
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# ¿ Jul 26, 2009 20:42 |
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Life insurance figures into how much your estate will be worth (i.e. when you're dead). That's not relevant here. Honestly, I wouldn't worry about getting sued. You're pretty much judgment proof at the moment. Florida is a homestead state, so your primary residence is beyond the reach of any civil suit. So are your retirement funds. What few other assets you have are more than offset by your debts. So nobody's likely to go to the bother of suing you. That said, you should still consider upping your coverage because it's irresponsible to gently caress up someone else's poo poo and stick them with the bill for it.
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# ¿ Jul 29, 2009 19:17 |
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Ahz posted:so if I were you I would go with 2mil. Many auto policies won't go that high, and OP is not in a position where he needs to be spending money on an umbrella policy. A middle-of-the-road 100/300/50 policy would be fine.
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# ¿ Jul 29, 2009 19:21 |
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zaurg posted:which of these would you go with? This one: Bodily Injury & Property Damage: 50/100/50 Uninsured/Underinsured Motorist: 50/100/Non-Stacked Personal Injury Protection: Basic/$1000 Deductible/Named Insured & Resident Relatives Comprehensive and Collision on Honda: None Comprehensive and Collision on Saturn: None = increase $222.20 Ahz posted:Considering additional liability is only a few bucks a year, I don't see how 100/300/50 is nearly enough. No one can predict a collision and what the ramifications from that are. With health care costs what they are, a million is still pretty low if you paralyze someone or worse; that someone is a doctor driving a 7 series BMW. Nominally, I agree, which is why I have an umbrella policy. But the reality here is we have a judgment-proof OP who needs to balance the cost vs the coverage because he's in a tight financial spot. The additional liability is not just a few bucks a year. He'll need to up his auto coverage to 300/500/100 at a cost of $600+ per year compared to what he has now, then he'll need to up his homeowner's coverage to $300K liability for $100+ per year, and then he can add the umbrella coverage for $2M at a cost of $200+ per year. He can't afford it.
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# ¿ Jul 29, 2009 20:19 |
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Zhentar posted:IANAL, but I'm pretty sure he can still get a judgment against future earnings (And life insurance, which is why all those calculators include it...), which hardly makes him judgment proof. They can get the judgment, and then for several hundred dollars, the OP can get it discharged in a ch. 7 bankruptcy. The judgment is now a worthless piece of paper that someone spent a lot of time and money to get. This is what is usually meant by judgement proof, and why people don't generally bother to sue miscreants who have no assets.
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# ¿ Jul 29, 2009 23:00 |
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sanchez posted:I think you underestimate how miserable the humidity would be in that situation. Zaurg can still do better. I live in a hot and humid climate, and I keep my house at 78 when I'm there and 85 when I'm not - and I could afford much more AC if I wanted. 80 + fans is totally tolerable if you wear very light clothing.
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# ¿ Nov 5, 2009 17:27 |
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Trillian posted:If you choose to pay 9k more in interest you are absolutely retarded. (I know you're going to do it anyway.) Sum-of-payments (i.e. 0% discount) on a 25 year term is not a particularly meaningful number. They print it because truth-in-lending laws require it. Zaurg's got major cash-flow issues that warrant looking at options that reduce his expenses *now*, provided he *puts into action* a plan to get things under control in the long run.
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# ¿ Dec 3, 2009 00:24 |
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evensevenone posted:Yeah, if you stretch out the student loans with those minimum payment plans, you are going to end up spending $100K on a $50K debt. Figuring out a cheaper car option and getting rid of the student loans faster makes a difference of tens of thousands of dollars. Sum of payments on a 25 year amortization is not a meaningful number. Zaurg should pay down the loans because IIRC they're at 6.8% and that's a great risk-free rate of return.
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# ¿ Jan 21, 2010 15:53 |
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Paying off debt at x% is like buying an investment that grows at x%. However, with most real world investments, there is risk - sometimes the investment performance is better, and sometimes it's worse (see S&P 500 rates or return for the last 5 years to get an idea). With paying off fixed-rate debt, there's no risk - you always get exactly that return. Thus paying off debt at 6.8% allows you to get a 6.8% return on that money without taking any investment risk. Right now, that's an outstanding deal. Even the 5.6% loans are a good risk free deal. As the interest rate on the loans goes down, you eventually cross a threshold for "I'd rather do other things with the money", but give your particular situation, I think you'd be better off paying off the debt until you're on firmer ground, spending and savings wise.
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# ¿ Jan 21, 2010 16:50 |
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zaurg posted:
I vote for this one with the understanding that if you total either car it gets replaced with a $1,500 beater because you can't afford to buy anything nicer at the moment. This plan at least gets you UM/UIM coverage (you REALLY need this in FL) and reasonable liability coverage as well while keeping the cost increase down.
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# ¿ Jan 22, 2010 06:04 |
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# ¿ Apr 18, 2024 00:22 |
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zaurg posted:*edit* I like the new thread title. Seriously. Now that Zaurg has turned the corner and Cornholio is well on the path to recovery, I need a new trainwreck to keep myself entertained.
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# ¿ Mar 27, 2010 19:49 |