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My husband and I are debating how to best move forward. He has had a tumultuous few years of employment causing us to go into a tailspin of debt. We now (knock wood) seem to be stable.
We currently own our home, absolutely love it. We put it on the market and stand to make approximately $70k if we sell. We had a couple of offers who pulled out at inspection so we took off the market temporarily to fix a few things we didn't realize were in need.
If we sell, we'll be completely out of debt with the exception of our car payments.
Now we are having sellers remorse. We are currently looking to refinance to see how low we can get our mortgage. With insurance, mortgage and taxes we are at $3900 a month. Our credit card debt is $1100 per month.
If we move, we'll rent, houses around here are $3000 a month average.
How much of that are you putting into the Save/Invest accounts?
At 15% of gross... well, $25,000 can do a lot.
okay... but where will you live?
Right now we are putting a very small amount into savings, which we blew through when he was not fully employed these last three years. The only investing currently is our 401K.
If we move, it would be nearby until my daughter finishes high school, which is in a year. Essentially we would save about $1k a month because we'd have no debt.
We are definitely financially strapped. We don't own the home literally.
I am 51 and only have $80k in my 401k
My husband is 56 and has $30k
We definitely need to do a better job budgeting, we have been horrible. I now feel like we are on solid ground that we need to do something more savings. That's why we put the house on the market, get ourselves fully out of debt. If we do sell to get $70k in our pocket, we can pay everything off and invest/save $20k
Keep the house if you like it; selling, renting and buying again will easily cost you $20k between fees and moving costs. You make enough where you can tackle that CC debt within a reasonable amount of time. What are your car payments like? That would probably the first thing I would get rid of depending on age/equity/payments.
Keep the house if you like it; selling, renting and buying again will easily cost you $20k between fees and moving costs. You make enough where you can tackle that CC debt within a reasonable amount of time. What are your car payments like? That would probably the first thing I would get rid of depending on age/equity/payments.
We have one car payment for $200 a month, but do need to purchase another car.
We are definitely financially strapped. We don't own the home literally.
I am 51 and only have $80k in my 401k
My husband is 56 and has $30k
We definitely need to do a better job budgeting, we have been horrible. I now feel like we are on solid ground that we need to do something more savings. That's why we put the house on the market, get ourselves fully out of debt. If we do sell to get $70k in our pocket, we can pay everything off and invest/save $20k
Sell the house and downsize your life significantly. Get the debt paid and dump your payments into investment accounts. You have the income to fix this assuming you get serious about it but fact is you're well behind given the income.
That means you've had debt issues in the past and I promise you're not alone. Many people with decent incomes get caught in the spending trap. Anyway, keep the credit cards at home, don't buy expensive cars and once they are paid off drive them until the wheels fall off and take that payment and invest.
Now is the time to reduce your expenses and get that side of the budget in order so you can have enough to not be forced to work you're entire life. There is time but you'll need to be aggressive in both your savings, cost cutting and investments.
You should also look at your 401k investment options and ensure you're getting a decent return and not stuck in some low return fund that you barely looked at when you signed up 30 years ago.
Some napkin math for you.
Check with social security, get your estimated benefits in today's dollars, spouse can claim the larger of their own or 1/2 spouse to family max.
Then take what you're spending now monthly, subtract that social security benefit. This is your monthly retirement shortfall. Multiple by 12 for yearly shortfall and then Divide that number by .04. That will give your a rough idea of what you'll want in retirement accounts
You'll reduce some expenses, you'll actually want to have a bigger nest egg than that at current spending, surviving spouse will only take the larger of the two benefits at death etc but in the end it's just some spitball math you can do in a few minutes to show you roughly where you'll want to be.
One thing to keep in mind is most people generally don't reduce expenses as much as they plan. Not even close. You'll have no work and more play time and unless you sit in front of the TV or post on city data all day you'll have much larger entertainment, hobby and travel expenses which will eat up a lot of that savings from debt hopefully being paid. Higher earners tend to have more lavish desires, but also have the means to cut back more if they're personalities allow for it. You can play with the numbers but you have to be reasonable in what you can actually do.
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Last edited by aridon; 06-03-2019 at 01:19 PM..
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