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Old 10-01-2018, 04:04 PM
 
299 posts, read 161,875 times
Reputation: 233

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Quote:
Originally Posted by wheelsup View Post
Yeah I don't understand his post at all. We can help but we need a line item budget and asset/liability breakdown.

I'm also confused on how someone with no kids in their mid 40's has student loans.
Alright, a line item breakdown, all approx.:

$320,000 - mortgage
$2345 - monthly mortgage payment
$600 - monthly car lease payments
$200 - monthly car insurance
$600 - monthly student loans
$3000 - credit card balance
$10,000 - savings account

To answer your question, someone with no kids in their mid-40s gets student loans same as someone who's in their mid-20s with student loans. Maybe it wasn't the best choices that got us here, but here we are. I have an MBA, a BA, and an Associates degree. The spouse has a bachelor's. We are not rich, and didn't have rich parents. We paid our own way for college, and only borrowed tuition. Breaking news, but college is quite expensive.

Anyway - yes, we'd be looking at saving $24k in two years that pretty much takes up the commission from the sale of our house. But we aren't looking at renting here for 2 years.

The plan would be to sell here, make $80k, then rent. Then in a year, move to the other city that has much lower housing costs. We want to buy and pay off the new home in 15 yrs. The rent here is about $1900 plus $50 in utilities and we are paying $2345 plus utilities at about $150.

When the car leases are up in a year, we are buying one (a truck) and returning the other (a SUV).

We've also thought of just selling here, then moving to the other city. Catch is, we'd need jobs or at least one of us would need a job.
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Old 10-01-2018, 04:19 PM
 
Location: Central Virginia
6,535 posts, read 8,340,612 times
Reputation: 18677
Quote:
Originally Posted by wheelsup View Post
I'm also confused on how someone with no kids in their mid 40's has student loans.
It happens for a variety of reasons. I won’t get into the details because it doesn’t pertain to the OP but my DH and I are 40 & 41, no kids, and we’re making the final payment on his student loan this month (happy dance). If I hadn’t doubled up on payments mid-way, we would be mid-40s paying on loans.

So don’t let that confusion mire you down when giving advice.
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Old 10-01-2018, 04:22 PM
 
13,811 posts, read 27,378,934 times
Reputation: 14244
Quote:
Originally Posted by LoveMyPet View Post
Alright, a line item breakdown, all approx.:

$320,000 - mortgage
$2345 - monthly mortgage payment
$600 - monthly car lease payments
$200 - monthly car insurance
$600 - monthly student loans
$3000 - credit card balance
$10,000 - savings account

To answer your question, someone with no kids in their mid-40s gets student loans same as someone who's in their mid-20s with student loans. Maybe it wasn't the best choices that got us here, but here we are. I have an MBA, a BA, and an Associates degree. The spouse has a bachelor's. We are not rich, and didn't have rich parents. We paid our own way for college, and only borrowed tuition. Breaking news, but college is quite expensive.

Anyway - yes, we'd be looking at saving $24k in two years that pretty much takes up the commission from the sale of our house. But we aren't looking at renting here for 2 years.

The plan would be to sell here, make $80k, then rent. Then in a year, move to the other city that has much lower housing costs. We want to buy and pay off the new home in 15 yrs. The rent here is about $1900 plus $50 in utilities and we are paying $2345 plus utilities at about $150.

When the car leases are up in a year, we are buying one (a truck) and returning the other (a SUV).

We've also thought of just selling here, then moving to the other city. Catch is, we'd need jobs or at least one of us would need a job.
Ok this is a good start. What are your other expenses? Are you looking for a pretty drastic reduction in overhead? How dedicated do you think you can both be to spending cuts?

I don't have a lot of time but right now dumping the two cars and buying a cheapie with liability only insurance would cut $700/month right there. I have had a cheapie with liability only for 15 years! It's been great, indirect costs were under $40/month. I've kept it in good condition, I don't drive junk, but a nice car doesn't make me more money.

It appears as though you use your CC for monthly expenditures. Have you tracked them? Check out personal capital, it does an excellent job breaking the categories down. Ie, cable, cell phone, food, eating out, etc.

Lots of posters here can help! We have all been in various situations that have resulted in the need to buckle down. In my case it had a lasting effecting on what I valued in life moving forward.
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Old 10-01-2018, 04:25 PM
 
13,811 posts, read 27,378,934 times
Reputation: 14244
Quote:
Originally Posted by HokieFan View Post
It happens for a variety of reasons. I won’t get into the details because it doesn’t pertain to the OP but my DH and I are 40 & 41, no kids, and we’re making the final payment on his student loan this month (happy dance). If I hadn’t doubled up on payments mid-way, we would be mid-40s paying on loans.

So don’t let that confusion mire you down when giving advice.
That's fair. I just wasn't sure, as they wrote some other stuff like the mortgage was included in the $70k in debt. We had loans too but made less income back then and were able to pay off about $50k by 33-ish. That's cool you paid it off, it's crazy how long those things stick around for folks, even for us I thought it was insane we were paying student loans in our 30's!
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Old 10-02-2018, 10:50 AM
 
299 posts, read 161,875 times
Reputation: 233
Quote:
Originally Posted by HokieFan View Post
If I hadn’t doubled up on payments mid-way, we would be mid-40s paying on loans.
Thank you. Our student loan debt was under $20k, but I made the choice to get an MBA and that bumped us up to $60k. It was my choice, and I do regret the bill. Although I don't regret the degree.

Quote:
Originally Posted by wheelsup View Post
Ok this is a good start. What are your other expenses? Are you looking for a pretty drastic reduction in overhead? How dedicated do you think you can both be to spending cuts?
Absolutely on drastic reduction. I know that our choices are what got us here, but our choices are what can get us out too. Some things we can't change right now, like the cars. But selling our home will give us capital to use later on down the road (buying in another town) and will lessen our monthly payment by about $1k. We have also cut out dining out altogether and this month marks our first strict budget. More on the cars below.

Quote:
Originally Posted by wheelsup View Post
...dumping the two cars and buying a cheapie with liability only insurance would cut $700/month right there.
I completely agree with you, however, we are leasing our cars so can't just dump them. One is a truck and used for tools at work, therefore it provides quite a bit of value. The other is an SUV and as soon as the lease is up in less than a year, we are sending it right back to the dealership. The insurance and payments on that would free up $300-$400. Also, when you lease, you are required to carry full-comp. insurance. Liability is a very risky way of insuring your vehicle. It doesn't cover the multitudes of those driving without insurance - if they hit you, you are screwed with your auto and health coverages. It also hurts badly if you happen to be the one who causes the accident. And even the safest driver out there will tell you that they've been in accidents - their fault or the other driver's fault.

Quote:
Originally Posted by wheelsup View Post
It appears as though you use your CC for monthly expenditures. Have you tracked them? Check out personal capital, it does an excellent job breaking the categories down. Ie, cable, cell phone, food, eating out, etc.
No. We used the card for a vacation. BUT, we buy vacations we've saved up for, and then use a credit card for protection-sake (you can dispute if need be). When we return from vacay, we put our saved dollars right back on that card. We took a vacation just a month before I lost my job and chaos ensued. So in this case, the card doesn't really count as we had already saved up the balance.

Quote:
Originally Posted by wheelsup View Post
...it had a lasting effecting on what I valued in life moving forward.
This. This is exactly what I'm going for. I do not like our current lifestyle of working for corporate America, being part of the daily grind, driving 1 hr. each way for a commute and very little time to do what we want to do. I'm sick of the weight of debt on our backs.

A big part of us wanting to move is that our city has gotten REALLY expensive. And because we bought into the American dream, we have a big house, tons of crap in it, and expensive cars. This is the heart of my post.

The plan is to sell here, move to an apt., then scope out another city to move to and move to that city within a year. We will then rent there, and buy when ready. My spouse can possibly transfer within the company. Does this sound feasible given our debt?? Does this sound like a solid plan?

Quote:
Originally Posted by wheelsup View Post
...they wrote some other stuff like the mortgage was included in the $70k in debt. ...I thought it was insane we were paying student loans in our 30's!
Sorry, that was my mistake. When I said our $70k included our mortgage, I meant mortgage payment. Also, we didn't go back to school until our 30s. Not everyone goes to school right away, not everyone has solid foundations. I was the first in my family to even finish high school, and now I have an MBA.
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Old 10-02-2018, 01:06 PM
 
13,811 posts, read 27,378,934 times
Reputation: 14244
I don't see how selling your $2495 monthly housing cost to rent a $1950 monthly housing cost apartment will save $1,000/month especially when you include the mortgage pay down you currently have. I bet of the $500 difference in monthly cost you'd be close to even and certainly not worth doing *right now*.

You misunderstand liability insurance. Yes it's true if you do not own your cars you cannot get liability only and I understand you can't turn in your cars yet. But I have had liability only for 15 years and have been hit by uninsured drivers. I have uninsured/underinsured bodily and property coverage for that reason.

I understand the knee jerk reaction but you need to be a little more methodical. Do you have a written budget? What do you spend each month on various line items? Since the house is a bare even break at this point move on. Have a plan for the cars - I would again seriously suggest turning both in when the time comes and buying an older beater (can be a pickup if needed for work). What about food, cell phones, cable, eating out. You just haven't given us enough of a case study here.
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Old 10-02-2018, 01:13 PM
 
Location: Denver, CO
1,921 posts, read 4,765,811 times
Reputation: 1720
Hey OP, good job on the first step of the rest of your life. You realized that keeping up with the Joneses meant being a slave to the corporate world. You guys bring in enough to be saving enough to achieve your financial independence, if $10k is your only saving then you need to work on that stat, aim to save 30% of your take home pay. Continue to cut out unnecessary expenses and live a Spartan lifestyle, you will soon recognize that it's not things that give your life meaning.
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Old 10-02-2018, 01:59 PM
 
299 posts, read 161,875 times
Reputation: 233
Quote:
Originally Posted by wheelsup View Post
I don't see how selling your $2495 monthly housing cost to rent a $1950 monthly housing cost apartment will save $1,000/month especially when you include the mortgage pay down you currently have. I bet of the $500 difference in monthly cost you'd be close to even and certainly not worth doing *right now*.

You misunderstand liability insurance. Yes it's true if you do not own your cars you cannot get liability only and I understand you can't turn in your cars yet. But I have had liability only for 15 years and have been hit by uninsured drivers. I have uninsured/underinsured bodily and property coverage for that reason.

I understand the knee jerk reaction but you need to be a little more methodical. Do you have a written budget? What do you spend each month on various line items? Since the house is a bare even break at this point move on. Have a plan for the cars - I would again seriously suggest turning both in when the time comes and buying an older beater (can be a pickup if needed for work). What about food, cell phones, cable, eating out. You just haven't given us enough of a case study here.
No eating out - as I'm jobless and we just can't afford that - it's a matter of eating rice and beans (as Dave Ramsey says) to pay the piper and get out of the hole we dug ourselves in. Groceries are about $125 per week. Cable and internet are free as my spouse gets that as a benefit from the company.

Back to the house...it's not just paying $2345 vs. $1900. That $1900 includes parking and utilities. When you go from a 3,000 sq. ft. house to a 1,000 sq. ft. apt, utilities are much higher. We pay about $150 on avg. for heating/cooling. So add that to the mortgage payment. In addition, we have to fill our gas tanks weekly ($40 x 2) because of our home location. If we were to rent, we'd be near our jobs. My spouse could walk to work - so deduct that as well. That's how we came up with savings of $1k.

$2345 - $1900 cost of apartment = $445 SAVINGS
+ 100 utilities no longer paying by renting = $555 SAVINGS
+$320 in gas no longer using due to moving locations = $875 SAVINGS
+monthly HOA at $50/mo. = $925 SAVINGS

Not to mention the lack of maintenance on a home. For example, last month our hot water heater burst. Cha-ching! $1k just like that.

Does this make more sense as to why we are looking at selling and moving? We will make a $80k profit. So I don't know why this decision isn't so easy.
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Old 10-02-2018, 02:02 PM
 
299 posts, read 161,875 times
Reputation: 233
Quote:
Originally Posted by Moonwalkr View Post
Hey OP, good job on the first step of the rest of your life. You realized that keeping up with the Joneses meant being a slave to the corporate world. You guys bring in enough to be saving enough to achieve your financial independence, if $10k is your only saving then you need to work on that stat, aim to save 30% of your take home pay. Continue to cut out unnecessary expenses and live a Spartan lifestyle, you will soon recognize that it's not things that give your life meaning.
I feel like we get that part about things not being the path to happiness. And I hear ya on savings.

If we sell now, we'll profit $80k. But this will mean downsizing into an apt. a third of what we own now. And then an unknown - where will we move to? We know it will be somewhere in the South - NC, GA, SC, VA, FL. Wherever it will be, it will be a place with a lower cost of living than where we are now.

Yet for some reason, I'm terrified. What if we are making the wrong decision and lose our beautiful home? What if I move into a cramped apartment and totally regret selling my house??
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Old 10-02-2018, 02:04 PM
 
299 posts, read 161,875 times
Reputation: 233
Quote:
Originally Posted by wheelsup View Post
I don't see how selling your $2495 monthly housing cost to rent a $1950 monthly housing cost apartment will save $1,000/month especially when you include the mortgage pay down you currently have. I bet of the $500 difference in monthly cost you'd be close to even and certainly not worth doing *right now*.
Can you explain what you mean here? I'm not getting how our cost difference would make us close to even. Owning a house is a lot more expensive than people will tell you.

Our payment was $2,000 three years ago. Taxes and insurance keep going up. So who knows what the payment will be next year. I'm pretty sure it won't be less.
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