Debt Dumpers - 2017

Can anyone PM me off-list with their YNAB review? I am debating how easy to use and is it worth the $60/year. Also, do you use it from your phone or a PC? One or two users. Thank you...trying to gather this before I present it to the DH. :flower3:
 
Had a furnace tech in again today to look at our heat pump and try and figure out where the leak is coming from. Turns out it's not from the heat pump outside but the furnace inside in our attic :sad2: And it's not just a simple fix, some of the coils are rusted due to condensation. Fabulous. And that size of furnace is not available any more so they will have to hunt down parts. So it's probably going to be at least 2 weeks before it's fixed, if not longer. And once the coils are replaced, they still have to flush out the system, etc. Oh and had 8 pounds of refrigerant (which costs $100/lb). Final bill will probably be over $2,000. :( And property taxes are due July 4th.

Annnnnnnd still haven't heard back from the lawyer handling my dads' estate regarding paying out the remaining 20% of his estate. :headache:
 


Since most of our debt will be gone by next spring, my next goals will be an emergency fund (which I'll be able to establish in two months), retirement savings, and college funds for the kids.

I know absolutely nothing about retirement and accounts for kids. We both have a 401k set up at work, which we will bump our contributions up to max what work matches (I believe it's 5%). But I have no idea what other types of accounts I should be using for our future. I'm 32 and hubby is 46, so while I still have a while left, DH is getting closer to retirement age and I'd like to have a decent amount put back in the next 10 years.

As far as the kids accounts go, I want to be able to put enough back each month so they don't have to take out giant student loans to go to school. I have 17 and 18 years to build those accounts up, but I need to figure out what kind of account is best for that.
 
Since most of our debt will be gone by next spring, my next goals will be an emergency fund (which I'll be able to establish in two months), retirement savings, and college funds for the kids.

I know absolutely nothing about retirement and accounts for kids. We both have a 401k set up at work, which we will bump our contributions up to max what work matches (I believe it's 5%). But I have no idea what other types of accounts I should be using for our future. I'm 32 and hubby is 46, so while I still have a while left, DH is getting closer to retirement age and I'd like to have a decent amount put back in the next 10 years.

As far as the kids accounts go, I want to be able to put enough back each month so they don't have to take out giant student loans to go to school. I have 17 and 18 years to build those accounts up, but I need to figure out what kind of account is best for that.

Roth IRA for you and your husband.

529 Plans for kid's college.
 
Since most of our debt will be gone by next spring, my next goals will be an emergency fund (which I'll be able to establish in two months), retirement savings, and college funds for the kids.

I know absolutely nothing about retirement and accounts for kids. We both have a 401k set up at work, which we will bump our contributions up to max what work matches (I believe it's 5%). But I have no idea what other types of accounts I should be using for our future. I'm 32 and hubby is 46, so while I still have a while left, DH is getting closer to retirement age and I'd like to have a decent amount put back in the next 10 years.

As far as the kids accounts go, I want to be able to put enough back each month so they don't have to take out giant student loans to go to school. I have 17 and 18 years to build those accounts up, but I need to figure out what kind of account is best for that.

I would say, make sure that you are contributing enough at work for any kind of match that your employer offers. I am lucky in that I contribute 5% of my income to my 403(b) and the university matches with 10%, so that puts us at 15% of income from the get go. This money is tax advantaged, thus it reduces our overall income on our tax returns each year. But that means that we will pay taxes on it when we withdraw it after retirement. Our overall goal is to save 20% of income, since that will likely ensure enough money at retirement to maintain our standard of living, even if market returns are just mediocre over our careers. To get the extra 5%, I am contributing to a Roth IRA. This account is not tax advantaged, meaning that I am putting in money that I have already paid taxes on but that means that when I withdraw the money after retirement, I don't have to pay any taxes later. I think that in the long run, it will be good to have both types of accounts so that we can take advantage of the different benefits to help reduce our taxes later on in retirement. Starting this year, I am now capping my Roth IRA contributions ($5500 per year, since I am under 50).

DH will have been at his job for one year starting in September, so he will start getting the 10% income match for his 403(b) too. And before the end of the year, I would like to open a Roth IRA for him as well so that we can up our retirement savings to be a true 20% of our combined salaries.

As for the kid's college savings accounts, it is a good goal, but I would hold off contributing money towards those until you are putting away at least 10-15% of your income towards retirement savings first. This is especially important given that your DH is much closer to retirement than you are. I would definitely still open 529 accounts for each of your children and encourage family and friends to contribute to these accounts for your children's birthdays or holidays. This is exactly what I plan to do for our kids, since honestly, kids can only have so many toys and clothes, etc. You will need to do some research on your state's 529 account to make sure that it is a good plan. If your state plan isn't that great, you can always open a non-resident account for another state, which doesn't put any restrictions on how the money can be saved or used later. Michigan's plan is very highly rated and is administered by the well regarded company, TIAA, which is the same company that runs my 403(b). They offer good investment options with very low fees. It also will give us a state income tax reduction, which will be helpful. For those reasons, I plan to open DD's 529 account in Michigan. But if our state plan wasn't that great, I would have looked for a great plan in another state.

Check out this page to see your state's plan: http://www.savingforcollege.com/529_plan_details/
 


I would say, make sure that you are contributing enough at work for any kind of match that your employer offers. I am lucky in that I contribute 5% of my income to my 403(b) and the university matches with 10%, so that puts us at 15% of income from the get go. This money is tax advantaged, thus it reduces our overall income on our tax returns each year. But that means that we will pay taxes on it when we withdraw it after retirement. Our overall goal is to save 20% of income, since that will likely ensure enough money at retirement to maintain our standard of living, even if market returns are just mediocre over our careers. To get the extra 5%, I am contributing to a Roth IRA. This account is not tax advantaged, meaning that I am putting in money that I have already paid taxes on but that means that when I withdraw the money after retirement, I don't have to pay any taxes later. I think that in the long run, it will be good to have both types of accounts so that we can take advantage of the different benefits to help reduce our taxes later on in retirement. Starting this year, I am now capping my Roth IRA contributions ($5500 per year, since I am under 50).

DH will have been at his job for one year starting in September, so he will start getting the 10% income match for his 403(b) too. And before the end of the year, I would like to open a Roth IRA for him as well so that we can up our retirement savings to be a true 20% of our combined salaries.

As for the kid's college savings accounts, it is a good goal, but I would hold off contributing money towards those until you are putting away at least 10-15% of your income towards retirement savings first. This is especially important given that your DH is much closer to retirement than you are. I would definitely still open 529 accounts for each of your children and encourage family and friends to contribute to these accounts for your children's birthdays or holidays. This is exactly what I plan to do for our kids, since honestly, kids can only have so many toys and clothes, etc. You will need to do some research on your state's 529 account to make sure that it is a good plan. If your state plan isn't that great, you can always open a non-resident account for another state, which doesn't put any restrictions on how the money can be saved or used later. Michigan's plan is very highly rated and is administered by the well regarded company, TIAA, which is the same company that runs my 403(b). They offer good investment options with very low fees. It also will give us a state income tax reduction, which will be helpful. For those reasons, I plan to open DD's 529 account in Michigan. But if our state plan wasn't that great, I would have looked for a great plan in another state.

Check out this page to see your state's plan: http://www.savingforcollege.com/529_plan_details/

Thanks for the link. It looks like Oklahoma is managed by the same company as yours, and their ratings have it scored pretty high.

Now, as far as retirement goes, we each will have about 10% of our income automatically deposited through work. But, what about just opening a regular savings account for the rest of the retirement money? Does a Roth ira have better benefits even with the withdrawal restrictions?
 
Thanks for the link. It looks like Oklahoma is managed by the same company as yours, and their ratings have it scored pretty high.

Now, as far as retirement goes, we each will have about 10% of our income automatically deposited through work. But, what about just opening a regular savings account for the rest of the retirement money? Does a Roth ira have better benefits even with the withdrawal restrictions?

Savings accounts earn nothing as far as investment returns. You want to put your money into a diversified portfolio of mutual funds that will get you at least 5% returns annually (or better). The idea is to make all of that money work for you for years, earning even more money over your careers so that you will have a good nest egg when you retire. Since it sounds like investing is pretty new to you, I would consider looking at opening 2 Roth IRA accounts with Vanguard and putting it into a target date fund (one based on your husband's age and one based on your age). The benefit to the target date fund is that they manage the fund to ensure proper diversity and risk, based on your age. When you are younger and have more time until retirement, you can be more risky. But as you get older, you want to move money into "safer" investments to ensure against stock market fluctuations. The target date funds do this all for you. It's pretty much set it and forget it.

I would say that you should also take a look at what your 401(k) through work is being invested in as well. If your company's management firm offers a target date fund, I would move your money into that as well to ensure that you are getting appropriate returns based on your age.

ETA: You could alternatively open a traditional IRA, where pre-tax money goes into your account. This will have better tax benefits for you now, because the money you save will reduce your overall income for tax purposes. But you won't get the tax free withdrawals later on. The Roth IRA is especially attractive for younger investors because generally your income will increase over your lifetime and you may end up in a higher tax bracket at retirement than you are in right now. Its all pretty speculative though and honestly, it is better to just open an account and make investments than to fret over which type and not do it.

Also, withdrawing money from a retirement account before retirement should be a very, very last resort. You pay a penalty and taxes (if not a Roth account) on that money. And most people who take money out, never really pay it back, loosing out on very important investment returns.
 
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Savings accounts earn nothing as far as investment returns. You want to put your money into a diversified portfolio of mutual funds that will get you at least 5% returns annually (or better). The idea is to make all of that money work for you for years, earning even more money over your careers so that you will have a good nest egg when you retire. Since it sounds like investing is pretty new to you, I would consider looking at opening 2 Roth IRA accounts with Vanguard and putting it into a target date fund (one based on your husband's age and one based on your age). The benefit to the target date fund is that they manage the fund to ensure proper diversity and risk, based on your age. When you are younger and have more time until retirement, you can be more risky. But as you get older, you want to move money into "safer" investments to ensure against stock market fluctuations. The target date funds do this all for you. It's pretty much set it and forget it.

I would say that you should also take a look at what your 401(k) through work is being invested in as well. If your company's management firm offers a target date fund, I would move your money into that as well to ensure that you are getting appropriate returns based on your age.

ETA: You could alternatively open a traditional IRA, where pre-tax money goes into your account. This will have better tax benefits for you now, because the money you save will reduce your overall income for tax purposes. But you won't get the tax free withdrawals later on. The Roth IRA is especially attractive for younger investors because generally your income will increase over your lifetime and you may end up in a higher tax bracket at retirement than you are in right now. Its all pretty speculative though and honestly, it is better to just open an account and make investments than to fret over which type and not do it.

Also, withdrawing money from a retirement account before retirement should be a very, very last resort. You pay a penalty and taxes (if not a Roth account) on that money. And most people who take money out, never really pay it back, loosing out on very important investment returns.
Excellent advice!!
This is all the things my employer's Vanguard advisor told me in my 20's.

ETA: I wouldn't tap into my retirement account unless I was homeless and living in a cardboard box.
 
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Oh god, seriously, young people, take investing advice! Don't be like me, who thought that contributions automatically were taken from your paycheck for your 401k only to find ten years later that while sure, your employer was contributing the bare minimum, you were contributing 0% D:

I've since corrected it but uh. Ouch.
 
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In hilarious failed adulting news today... I finally ordered a new box spring off Amazon since the one on my side of the bed was sooooo squeaky, like wake you up at night when you roll over. DH measured our current box spring and said it was 8", and the one on Amazon was 7.5" so I figured that would be fine and you wouldn't notice a difference of half an inch. Well, either DH measured wrong or the measurement of the box spring is way off, because there is a NOTICEABLE 1"+ difference in height between the box springs! You just have to laugh- I'm lying on his side of the bed and rolling "downhill" to my side. Oh well. Guess I'll just order him one in the near future. :rolleyes:

In other news that I can't help but laugh at, today we received the quote to have Comcast service run to our house. I've posted before about how we would be getting Comcast and are excited because we're out in the country where our only options are Directv and slow hotspots that cap our data so we can't do things like watch Netflix. I knew there would be a cost to run the lines to our house (quarter-mile long driveway), but figured we would be looking at maybe around a $2000 quote from Comcast that we could lower by having someone else dig the trench for this. Well, imagine my shock when I opened the letter today to see a $7500 estimate to run to our house!! I couldn't help but laugh! Who on earth would pay that?! My "neighborhood" has had a facebook page going for some time discussing this matter as we petitioned for Comcast, and the estimates have been hysterical. My next door neighbor was quoted $11,600!! 250 homes signed this petition, and they've quoted everyone prices in the thousands. I mean, it's practically highway robbery! You figured even at $5000 each, they're making $1.25 million off us if we all bought in. Absolutely absurd. So while it was a nice dream, it looks like I'll be stuck with my crappy slow internet!
 
In hilarious failed adulting news today... I finally ordered a new box spring off Amazon since the one on my side of the bed was sooooo squeaky, like wake you up at night when you roll over. DH measured our current box spring and said it was 8", and the one on Amazon was 7.5" so I figured that would be fine and you wouldn't notice a difference of half an inch. Well, either DH measured wrong or the measurement of the box spring is way off, because there is a NOTICEABLE 1"+ difference in height between the box springs! You just have to laugh- I'm lying on his side of the bed and rolling "downhill" to my side. Oh well. Guess I'll just order him one in the near future. :rolleyes:

In other news that I can't help but laugh at, today we received the quote to have Comcast service run to our house. I've posted before about how we would be getting Comcast and are excited because we're out in the country where our only options are Directv and slow hotspots that cap our data so we can't do things like watch Netflix. I knew there would be a cost to run the lines to our house (quarter-mile long driveway), but figured we would be looking at maybe around a $2000 quote from Comcast that we could lower by having someone else dig the trench for this. Well, imagine my shock when I opened the letter today to see a $7500 estimate to run to our house!! I couldn't help but laugh! Who on earth would pay that?! My "neighborhood" has had a facebook page going for some time discussing this matter as we petitioned for Comcast, and the estimates have been hysterical. My next door neighbor was quoted $11,600!! 250 homes signed this petition, and they've quoted everyone prices in the thousands. I mean, it's practically highway robbery! You figured even at $5000 each, they're making $1.25 million off us if we all bought in. Absolutely absurd. So while it was a nice dream, it looks like I'll be stuck with my crappy slow internet!

When I moved into my house, I bought a king size platform bed from Crate and Barrel. It doesn't use a box spring, but they recommend something called a bunkie board. Crate and Barrel will sell you plywood wrapped in card board and fabric for the rock bottom price of $200! There was no way I was going to pay that much, so my dad went with me to Home Depot, had them cut two plywood boards to size, bought quilt batting and canvas, wrapped the boards and we stapled them. Cost: $40. And I doubt they will ever need to be replaced.

Just like with Comcast, some companies think they can get away with highway robbery. I do have to say though, running wires for 1/4 mile is probably pretty expensive, but $7500 sounds steep.
 
Had a furnace tech in again today to look at our heat pump and try and figure out where the leak is coming from. Turns out it's not from the heat pump outside but the furnace inside in our attic :sad2: And it's not just a simple fix, some of the coils are rusted due to condensation. Fabulous. And that size of furnace is not available any more so they will have to hunt down parts. So it's probably going to be at least 2 weeks before it's fixed, if not longer. And once the coils are replaced, they still have to flush out the system, etc. Oh and had 8 pounds of refrigerant (which costs $100/lb). Final bill will probably be over $2,000. :( And property taxes are due July 4th.

Annnnnnnd still haven't heard back from the lawyer handling my dads' estate regarding paying out the remaining 20% of his estate. :headache:


Brutal :( Homeowning is really a pain sometimes...I know from experience that refrigerant is very expensive!

We have our taxes .included in our mortgage that way we don't have to pony up thousands once a year- maybe look at that next time you do your mortgage?

Fingers crossed on the estate soon:)
 
I would say, make sure that you are contributing enough at work for any kind of match that your employer offers. I am lucky in that I contribute 5% of my income to my 403(b) and the university matches with 10%, so that puts us at 15% of income from the get go. This money is tax advantaged, thus it reduces our overall income on our tax returns each year. But that means that we will pay taxes on it when we withdraw it after retirement. Our overall goal is to save 20% of income, since that will likely ensure enough money at retirement to maintain our standard of living, even if market returns are just mediocre over our careers. To get the extra 5%, I am contributing to a Roth IRA. This account is not tax advantaged, meaning that I am putting in money that I have already paid taxes on but that means that when I withdraw the money after retirement, I don't have to pay any taxes later. I think that in the long run, it will be good to have both types of accounts so that we can take advantage of the different benefits to help reduce our taxes later on in retirement. Starting this year, I am now capping my Roth IRA contributions ($5500 per year, since I am under 50).

DH will have been at his job for one year starting in September, so he will start getting the 10% income match for his 403(b) too. And before the end of the year, I would like to open a Roth IRA for him as well so that we can up our retirement savings to be a true 20% of our combined salaries.

As for the kid's college savings accounts, it is a good goal, but I would hold off contributing money towards those until you are putting away at least 10-15% of your income towards retirement savings first. This is especially important given that your DH is much closer to retirement than you are. I would definitely still open 529 accounts for each of your children and encourage family and friends to contribute to these accounts for your children's birthdays or holidays. This is exactly what I plan to do for our kids, since honestly, kids can only have so many toys and clothes, etc. You will need to do some research on your state's 529 account to make sure that it is a good plan. If your state plan isn't that great, you can always open a non-resident account for another state, which doesn't put any restrictions on how the money can be saved or used later. Michigan's plan is very highly rated and is administered by the well regarded company, TIAA, which is the same company that runs my 403(b). They offer good investment options with very low fees. It also will give us a state income tax reduction, which will be helpful. For those reasons, I plan to open DD's 529 account in Michigan. But if our state plan wasn't that great, I would have looked for a great plan in another state.

Check out this page to see your state's plan: http://www.savingforcollege.com/529_plan_details/


Wow that's good! I've heard of companies that match contributions, but not that pay double!
With me going back to work we are going to start really getting serious about figuring out what % we contribute and if we need to up it- always plenty of places to put the cash :teacher:
 
Wow that's good! I've heard of companies that match contributions, but not that pay double!
With me going back to work we are going to start really getting serious about figuring out what % we contribute and if we need to up it- always plenty of places to put the cash :teacher:

Yes, the university's matching is pretty awesome. But everything is a trade off. I could make a lot more money in private practice than I do at the university, even when you count in my retirement match. But then again, I work 40 hours a week instead of 80 hours a week, so I don't hate my life either.
 
So, update...budget totally busted.

We got DH a new car. Long story short, he was driving the most uncomfortable car ever (a 2008 Honda Fit) with 125,000 miles on it. His commute is about to get longer in a couple weeks (going from 40 to 50 miles each way). He has been griping and moaning about his car for about a year. He wanted a more comfy car, better A/C (his car has always had super weak A/C and we live in sunny CA and his car windows had NO tint). The kicker was we were just quoted $1500 for car service that essentially is a full tune up. The car's trade in value was only estimated between $2500-3500. We had been planning to buy him a new car next summer, but over Memorial Day weekend, Honda was having a massive sale. We used USAA car buying service and got a PHENOMENAL price on a 2017 Civic Hatchback Sport Touring model. Seriously, the price was almost $1000 UNDER invoice. I don't know how they could let it go for so low. The dealer even gave us $3000 for the trade in, which shocked me honestly. We took it and ran. And now we have car payment again for the first time in six years. We got 1.9% interest financing so it's not a big deal, and my car only has 75000 miles on it and is going strong (it's a CR-V). I don't hardly drive at all...maybe 5k mikes a year, so I won't need a new car anytime soon.

However, we put down $3500 on the car, and that was basically all the money I made doing my part time scoring job. :( So, that kinda sucks. Plus the job ended earlier than anticipated so I didn't make nearly as much as I projected (I netted about $4k but hoped for closer to $6k).

Good news is that when I added the new car to our insurance, our premiums went WAY down. Like, what? I had to call and make sure there wasn't a glitch. Nope...newer cars have better safety features, I was told, so they are less likely to be involved in collisions (the new car has Honda Sense, which is a suite of accident avoidance features). I took that opportunity to bump up our insurance coverage limits, because most of our neighbors drive $100k cars and our previous limit for personal property damage was only at $50k per accident (YIKES!!!...not enough) I bumped it up to $500k per accident which makes me sleep better at night. I also increased all our other coverages and the end result was our premiums are the same as they were before the new car, but with a LOT more peace of mind.

So, back to sticking with cutting monthly expenses and staying on track to pay off the credit card by January. DH should get promoted by September (fingers crossed).

I briefly contemplated taking a quick trip to WDW with my kids this summer, but the car purchase squashed that, which in retrospect is good. NO extra travel this year unless it can be done for free (I may take a solo trip to WDW this fall which will 100% be financed through my Chase Sapphire Reserve rewards points, but I am waiting on confirmation from my husband's new boss that he can take some days off in October). If not, we will use those points for our family vacation Summer 2018.

And now to buckle down for the rest of the summer...
 
So, update...budget totally busted.

We got DH a new car. Long story short, he was driving the most uncomfortable car ever (a 2008 Honda Fit) with 125,000 miles on it. His commute is about to get longer in a couple weeks (going from 40 to 50 miles each way). He has been griping and moaning about his car for about a year. He wanted a more comfy car, better A/C (his car has always had super weak A/C and we live in sunny CA and his car windows had NO tint). The kicker was we were just quoted $1500 for car service that essentially is a full tune up. The car's trade in value was only estimated between $2500-3500. We had been planning to buy him a new car next summer, but over Memorial Day weekend, Honda was having a massive sale. We used USAA car buying service and got a PHENOMENAL price on a 2017 Civic Hatchback Sport Touring model. Seriously, the price was almost $1000 UNDER invoice. I don't know how they could let it go for so low. The dealer even gave us $3000 for the trade in, which shocked me honestly. We took it and ran. And now we have car payment again for the first time in six years. We got 1.9% interest financing so it's not a big deal, and my car only has 75000 miles on it and is going strong (it's a CR-V). I don't hardly drive at all...maybe 5k mikes a year, so I won't need a new car anytime soon.

However, we put down $3500 on the car, and that was basically all the money I made doing my part time scoring job. :( So, that kinda sucks. Plus the job ended earlier than anticipated so I didn't make nearly as much as I projected (I netted about $4k but hoped for closer to $6k).

Good news is that when I added the new car to our insurance, our premiums went WAY down. Like, what? I had to call and make sure there wasn't a glitch. Nope...newer cars have better safety features, I was told, so they are less likely to be involved in collisions (the new car has Honda Sense, which is a suite of accident avoidance features). I took that opportunity to bump up our insurance coverage limits, because most of our neighbors drive $100k cars and our previous limit for personal property damage was only at $50k per accident (YIKES!!!...not enough) I bumped it up to $500k per accident which makes me sleep better at night. I also increased all our other coverages and the end result was our premiums are the same as they were before the new car, but with a LOT more peace of mind.

So, back to sticking with cutting monthly expenses and staying on track to pay off the credit card by January. DH should get promoted by September (fingers crossed).

I briefly contemplated taking a quick trip to WDW with my kids this summer, but the car purchase squashed that, which in retrospect is good. NO extra travel this year unless it can be done for free (I may take a solo trip to WDW this fall which will 100% be financed through my Chase Sapphire Reserve rewards points, but I am waiting on confirmation from my husband's new boss that he can take some days off in October). If not, we will use those points for our family vacation Summer 2018.

And now to buckle down for the rest of the summer...

I love the USAA car buying service. We used it to buy both my VW Tiguan and DH's VW Golf Sportwagen. We got them both well below invoice price. And the best part of it is, there is no haggling at all. The price on the certificate is the price that you pay. The best car buying experience ever!
 
We're suddenly weighing a new car purchase too. We knew we needed to take it in for brakes (squeaking is driving me crazy!), but as of Wednesday night...the key sometimes won't go into the ignition and even if you can get it in there, 9 times out of 10 it won't turn. We tried two different keys (one of which is never used), same thing. They work in the doors. Wheel wasn't locked, googled everything...looks like we'd need the ignition replaced which could run us, along with the breaks, upwards of $1500. The car is almost 10 years old and we barely fit the car seats in it as it is (we have to have our seats pulled WAAAAAY UP) so a new car was on the horizon anyway. Now we just have to (quickly) figure out if we want to dump money into the old car, or use that money as a downpayment on a new one.

Ugh, cars!
 

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