Need help re-vamping financial life

Archived From: Finance
  • Go to page :
  • 1 2
  • Text Only
Voting History
rated:
My husband and I looked at a house the other night and decided to overhaul our finances to pay down debt as soon as possible, build a down payment, increase our emergency fund, and purchase a home within the next few years. Any help would be greatly appreciated!

Age 29 and 30, married, no children, living in an apartment below a family member’s house for low rent which includes heat, hot water, and gas.

Income:
Me: $49k, yearly pay raises around 3% - Company sponsored 401k and healthcare. Take home after taxes, insurance, 401k contributions is around $1200 paid bi-weekly
Husband: around $22k, working as an electrical apprentice, needs hours before he can get his license – working for his boss, only employee, unpredictable schedule = undependable income. Most weeks are paid at $3-400, depending on amount of work. No 401k. Paid weekly.

Monthly payments:
Rent: $500
Student Loan 1: $62
Student Loan 2: $163 – in parent’s name but I am paying, no option to refinance
Student Loan 3: $199 – in parent’s name but I am paying, no option to refinance
Car: $200
Truck Lease: $200
Food: $400
Gas: $480
Personal Loan (credit card debt refinance): $65 due but pay $200 monthly
Cellphone dual lines/Internet: $92 (no internet at home, cell internet is exclusive use)
Car insurance: $160 for 10 months, pay at $200 to pay it off faster. No payment ATM til renewal in June
Cable: $20 (basic, basic plan)

Yearly one-time payments:
Car excise tax: $300
Truck excise tax: $500
Renter’s insurance: $120

Debt balances:
Student Loan 1: Remaining balance of $1,900 @ 6.25% - will be paid off in approx. 1.5 months due to aggressive pay-down
Student Loan 2: Remaining balance of $5,700 @ 5.25% fixed
Student Loan 3: Remaining balance of $21k @ 4.25% fixed
Car: Remaining balance of $5,700 @ 1.79% fixed
Personal Loan: Remaining balance of $2,600 @ 4.9% fixed

Assets/Investments:
$6k in CD1 @ 1% – due to mature 1/24 EMERGENCY FUND
$2k in CD2 @ 0.9% - due to mature 1/6 – will use to pay off Student Loan 1
$3k in CD3 @ 3% - due to mature Sept 2013 EMERGENCY FUND
$41k in 401k, 9% of each pay check – contribution is made with my pay since my husband does not have a 401k plan
$600 Roth, 1% of each pay check

Any help, suggestions, or recommendations would be greatly appreciated.

ETA: Car is 07 Galant, bought used in 2010 to replace car that died. Truck lease is 2012 Tacoma to replace 87 Tacoma that died.

Member Summary
Most Recent Posts
I agree. Having recently picked up a used car myself, there are definitely good deals to be had. People are selling th... (more)

misterspaghetti (Jan. 06, 2013 @ 10:15a) |

This advice is more helpful to someone who is considering a new vehicle than someone who has already purchased one. A l... (more)

wizwor (Jan. 06, 2013 @ 10:53a) |

I agree with this. I was an electrician's apprentice in college, and I worked for a small contractor (2 masters, 1 jour... (more)

JTausTX (Jan. 07, 2013 @ 12:30p) |

Thanks for visiting FatWallet.com. Join for free to remove this ad.

Can you get rid of the truck lease? Between your payment, gas and insurance this is a huge chunk of your budget. Have you tried shopping around for auto insurance, it seems pretty high to me.

All told your autos are costing you about 29% of your total take home pay (840 / 2,900).

Unfortunately, no. We both travel pretty far for work, which is still cheaper than paying higher rent to live closer to work. But it also means we need more dependable vehicles (i.e. can't afford time off work, so need to be sure the car will start in the morning). Both new-ish vehicles, so higher insurance, but have been with the same agency for over 10 years. When the reneal comes in June, I will have to question discounts and shop other agencies. Thanks for that suggestion. I didn't think about that.

This is also in MA which tends to be a higher cost of living I think.

Truck lease is on a 2012 Tacoma, valid through 2014.

I'd encourage your husband to find work with another electrical company or a different line of work altogether that pays more.

The gasoline expense is really high. Can you reduce your part of that expense at all by carpooling, telecommuting a day or more per week (or getting on flex time that lets you work 10 hours 4 days a week, for example), or taking commuter rail?

I would seriously consider moving. Your cost of driving doesn't just include the gas and insurance; you also have to factor in maintenance and depreciation. The time you spend in the car also has value, either as leisure time or the opportunity cost of extra work that you are passing up.

Squeezer99 said:   I'd encourage your husband to find work with another electrical company or a different line of work altogether that pays more.
Read up on what an apprenticeship is.

Squeezer99 said:   I'd encourage your husband to find work with another electrical company or a different line of work altogether that pays more.

Right now he is working on gaining the experience to get his license, which takes quite a long time. No license = low wages.

satchelsofgold said:   The gasoline expense is really high. Can you reduce your part of that expense at all by carpooling, telecommuting a day or more per week (or getting on flex time that lets you work 10 hours 4 days a week, for example), or taking commuter rail?

I would seriously consider moving. Your cost of driving doesn't just include the gas and insurance; you also have to factor in maintenance and depreciation. The time you spend in the car also has value, either as leisure time or the opportunity cost of extra work that you are passing up.


I currently do WFH 1 day a week, but may need to request to go to 2 days a week, if possible. The one day did reduce my gas bill by about $30/month.

The only issue with moving is the rent would be at least $1,200-1,500 a month in the area to get closer to my work, but then that pushes my husbands commute out. We work in completely different directions, which makes it a pain. BUT depreciation is a big factor, it is why we got rid of the prior vehicles (age, wear and tear, maintenance bills exceeded value of car). Thanks for taking the time to reply.

I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.

greinight said:   Unfortunately, no. We both travel pretty far for work, which is still cheaper than paying higher rent to live closer to work. But it also means we need more dependable vehicles (i.e. can't afford time off work, so need to be sure the car will start in the morning). Both new-ish vehicles, so higher insurance, but have been with the same agency for over 10 years. When the reneal comes in June, I will have to question discounts and shop other agencies. Thanks for that suggestion. I didn't think about that.

This is also in MA which tends to be a higher cost of living I think.

Truck lease is on a 2012 Tacoma, valid through 2014.


No need to wait until renewal to shop for new insurance rates. You can change your insurance any time you like, and your original company will send you a refund check when you cancel.

For your "basic, basic cable" have you tried to see what stations you get with a OTA antenna? A $30 antenna will get you the locals for free, which probably pretty close to what you are getting with your cable.

What is the interest rate of your Student Loan #1, you should pay off the highest interest rates first.

ETA: removed Wawanesa recommendation since they don't service MA

I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.

greinight said:   Rent: $500 (includes heat, hot water, and gas)Stay here as long as you possibly can. You can nickel and dime your other monthly expenses, but this by far is your greatest advantage.

ironfist99 said:   
No need to wait until renewal to shop for new insurance rates. You can change your insurance any time you like, and your original company will send you a refund check when you cancel.

For your "basic, basic cable" have you tried to see what stations you get with a OTA antenna? A $30 antenna will get you the locals for free, which probably pretty close to what you are getting with your cable.

What is the interest rate of your Student Loan #1, you should pay off the highest interest rates first.

ETA: removed Wawanesa recommendation since they don't service MA


See? Learn something new every day. Did not know I could swap my insurance and get a refund, which makes me feel pretty silly.

Student Loan 1 is @ 6.25% which I believe is my highest. It was also the lowest amount to begin with, so I was aggressive with paying that one off first, then thought I would move to the personal loan @ 4.9%, then student loan 2, etc. etc.

The cable bill, I should have included in the rent payments, as part of our low rent was agreeing to pay at least one utility, and the person renting us the asked us to take it over.

bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.

How much longer until he gets his license? What kind of money is he going to make once he is licensed?

nasheedb said:   How much longer until he gets his license? What kind of money is he going to make once he is licensed?

Approx. 2 years until he is able to get licensed, salary would at least double.

greinight said:   bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.


We are asking if you really need a 2012 Tacoma (a 4cyl manual gets 21/25, a6cyl auto gets 17/21) vs a car that gets better MPG. And ditching the flease for a car loan isn't swapping one debt for another. It would be swaping a car rental for one you will eventually own. If you can get a car/truck for $5k then you break even off the flease payments after 2 years - and then own the car. At the end of the flease you own nothing.

Oh and to assume only a new car won't breakdown is a poor assumption. I am just as confident my 2006 car with 75K miles will start as I am when I get a new rental car when on a work trip.

House income 70K year 2 people
Total $2609/MO $31308/year with no variable things like clothes or gifts or entertainment which are likely several hundred a month.
Where you should cut /change
Student loan 1 should be paid off with CD2 extra 100 to student loan 2 this frees up $62/mo

Take 6K in CD1 and use to pay off debt Student loan 2 and personal loan. You get a sure return of 5.25% and in emergency can use credit card.
Get rid of truck. It is a luxury you can not afford and he does not really need a brand new truck. It is also costing you about $250/mo buy cheap used truck or a car. I doubt he really needs a truck more likely just the thing at work.
Figure out where missing money is going. 70K-31308=$38692 some and likely a large hunk is taxes some is roth and 401K but likely have some waste.
Husband needs second job to suppliment income. Bonus less time watching cable and playing on internet
Cut the cable.
Once Student loans 1,2 and personal loan paid off start building emergency fund again



Monthly payments:
Rent: $500
Student Loan 1: $62/mo $1,900
Student Loan 2: $163/mo $5,700 5.25%
Student Loan 3: $199/mo $21k 4.25%
Car: $200/mo $5,700 @ 1.79% fixed
Truck Lease: $200
Food: $400
Gas: $480
Personal Loan : $65/mo pay 200/mo $2,600 @ 4.9%
Cellphone dual lines/Internet: $92
Car insurance: $16
Cable: $20
renters insurance $10
Car excise tax: $25/mo
Truck excise tax: $42/mo

Total $2609/MO $31308/year with no variable things like clothes or gifts or entertainment which are likely several hundred a month.



Assets/Investments:
$6k in CD1 @ 1% – due to mature 1/24 EMERGENCY FUND
$2k in CD2 @ 0.9% - due to mature 1/6 – will use to pay off Student Loan 1
$3k in CD3 @ 3% - due to mature Sept 2013 EMERGENCY FUND
$41k in 401k, 9% of each pay check – contribution is made with my pay since my husband does not have a 401k plan
$600 Roth, 1% of each pay check

greinight said:   bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.


Toyota didn't make a Tacoma in 1987. They made a pickup, and I guarantee it got better gas mileage then your 2012 Tacoma. A 2012 Tacoma is like twice the size and weight of a 1987.

Get another late '80's to early 90's Toytota PICKUP. They will do 600,000 miles and are perfect work truck. You don't need a 4x4.

trekwars2000 said:   greinight said:   bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.


We are asking if you really need a 2012 Tacoma (a 4cyl manual gets 21/25, a6cyl auto gets 17/21) vs a car that gets better MPG. And ditching the flease for a car loan isn't swapping one debt for another. It would be swaping a car rental for one you will eventually own. If you can get a car/truck for $5k then you break even off the flease payments after 2 years - and then own the car. At the end of the flease you own nothing.

Oh and to assume only a new car won't breakdown is a poor assumption. I am just as confident my 2006 car with 75K miles will start as I am when I get a new rental car when on a work trip.


This. Any car can break down. Or you can wreck it. Whatever. Being temporarily left without a car is always a risk. People who make poor financial decisions regarding cars always justify it on FW as "well, can't get something that would break down!" as though that then requires a brand new status car. There was a guy a few weeks back with a $27k car because "his wife and baby can't be stranded on the side of the road!"
....

trekwars2000 said:   greinight said:   bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.


We are asking if you really need a 2012 Tacoma (a 4cyl manual gets 21/25, a6cyl auto gets 17/21) vs a car that gets better MPG. And ditching the flease for a car loan isn't swapping one debt for another. It would be swaping a car rental for one you will eventually own. If you can get a car/truck for $5k then you break even off the flease payments after 2 years - and then own the car. At the end of the flease you own nothing.

Oh and to assume only a new car won't breakdown is a poor assumption. I am just as confident my 2006 car with 75K miles will start as I am when I get a new rental car when on a work trip.


Ah, gotcha. Truck is necessary to fit ladders for work. Would love to have a manual car in place of it, but realistically can't due to need for ladder travel.

RE: New car not breaking down, should have rephrased myself. New compared to the vehicle we had. My car was bought used @ 40k miles, up to 75k now, should be good for at least 5 years (knock on wood). Replacement to vehicle that died. Same for the truck but - won't lie - the truck was an impulse lease, and I guess I am literally paying for it now. We needed a new truck in a hurry and the used ones on the lot were more expensive (crew cab, 6- or 8-cylinder, extended bed, etc.) and I just didn't want to deal with the higher payments on an out-right purchase. I will have to read my lease when I get home to see how much it costs to break the lease and then turn over to a "new to us" truck for less $.

Something doesn't quite add up.

You say you have about 3900$/month coming in. (1200*26 weeks / 12 months + 300* 52 weeks / 12 months.)
But you've only got 2750 in expenses listed.

You've got an extra 1150 every month in left over cash. Save that for the next 24 months, and you've got your downpayment.

Have you looked at consolidating your loans?

okashiraaa said:   
Toyota didn't make a Tacoma in 1987. They made a pickup, and I guarantee it got better gas mileage then your 2012 Tacoma. A 2012 Tacoma is like twice the size and weight of a 1987.

Get another late '80's to early 90's Toytota PICKUP. They will do 600,000 miles and are perfect work truck. You don't need a 4x4.

Sorry, yes it was a pickup, not a tacoma. Either way, it died and is no more (except possibly as a reincarnated metal trash can). 4x4 is necessary due to quality of job sites usually being new construction which in New England means mud and lots of it. Will def look around at used trucks for $4-5k as replacement for long term use and dump the lease. Thanks for the input!

OP, you should also track what you spend on things you may view as non-recurring or "one-time" spending. Use Mint.com or another website that categorizes spending.

Do you give each other presents? Do you buy others presents? Do you go out to dinner on Valentine's, birthdays? Do you travel anywhere for the holidays? Do you go to any weddings? Do you take weekend vacations? Do you drink? Do you buy clothes? Do you keep cash in your wallet? If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? Do you go to the doctor or the dentist? Do you have any prescription medications?

Rajin said:   Something doesn't quite add up.

You say you have about 3900$/month coming in. (1200*26 weeks / 12 months + 300* 52 weeks / 12 months.)
But you've only got 2750 in expenses listed.

You've got an extra 1150 every month in left over cash. Save that for the next 24 months, and you've got your downpayment.

Wow it really is that much extra montly and I didn't realize it. Where is it going? We do go out to eat about once a month, but I included that in the food cost.
Thanks for laying it out so black and white. I did have about $3k in medical expenses this year, so that is where SOME of it went, but that still leaves quite a bit to be found.

So my to-do list (reminder for myself I guess):
1. Look into breaking lease
2. Research avail. used trucks with value UP TO $5k
3. Start spending diary, record every penny for a month to see where spending is going to find savings opportunities

greinight said:   okashiraaa said:   
Toyota didn't make a Tacoma in 1987. They made a pickup, and I guarantee it got better gas mileage then your 2012 Tacoma. A 2012 Tacoma is like twice the size and weight of a 1987.

Get another late '80's to early 90's Toytota PICKUP. They will do 600,000 miles and are perfect work truck. You don't need a 4x4.

Sorry, yes it was a pickup, not a tacoma. Either way, it died and is no more (except possibly as a reincarnated metal trash can). 4x4 is necessary due to quality of job sites usually being new construction which in New England means mud and lots of it. Will def look around at used trucks for $4-5k as replacement for long term use and dump the lease. Thanks for the input!


I'm going to counter that. At $4-5k you're looking at a vehicle that has a lot of hard and soft costs. Hard costs are the repairs, since anything at this value is going to be at the point where the maintenance cost is significant compared to the overall payment, and a $4k pickup is an old clunker that will use a ton of gas. The soft costs are things like your husband not being to work on time, or at all, because the car breaks down. If you don't have access to a loaner vehicle from family I wouldn't go down this road. Used auto loans are so cheap I would look at a low mileage good condition used vehicle in the 10-12k range. Shop online, have the vehicle inspected by an independent mechanic, and don't be afraid to shop out of state. It will only cost $650 or so to ship the vehicle to you, much cheaper than flying/gas/hotel to pickup if you acquire out of state. Find out what your tax liability is for buying out of state (varies significantly, ex my car was $1300 in CA) and calculate that in your purchase price. 3 years ago I bought my G35 online, paid 15.2k for the vehicle, $725 shipping, $150 for inspection and $1300 for reg in CA. Total cost was still $3800 less than the best local dealer price on an equivalent car and $2600 below blue book.

Can your husband do 'cash' work on Craigslist?

bullcity said:   OP, you should also track what you spend on things you may view as non-recurring or "one-time" spending. Use Mint.com or another website that categorizes spending.

Do you give each other presents? Do you buy others presents? Do you go out to dinner on Valentine's, birthdays? Do you travel anywhere for the holidays? Do you go to any weddings? Do you take weekend vacations? Do you drink? Do you buy clothes? Do you keep cash in your wallet? If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? Do you go to the doctor or the dentist? Do you have any prescription medications?

Thanks for this. You listed a couple I didn't think about.

Do you give each other presents? No - we decided a long time ago to not bother. A card is sufficient to show our appreciation for each other.
Do you go out to dinner on Valentine's, birthdays? Vday no, birthday yes. Usually a $75/night for birthdays, $50/night once a month as "date" night
Do you travel anywhere for the holidays? No, all family is local except sister1 and sister2 who we see once every couple years
Do you go to any weddings? One this year, One last year that I was MOH for, so that was a big expense.
Do you take weekend vacations? About 1 every 6 months @ about $3-500
Do you drink? No
Do you buy clothes? About every six months we will replenish worn out clothes at about $1-200/each
Do you keep cash in your wallet? No, which means all spending is done via debit card. Good for tracking, bad for seeing the cash flow in real time as I spend it. May need to do envelope budgeting.
If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? No and this may be the biggest crack in spending I didn't think about
Do you go to the doctor or the dentist? yes, insurance for both. Doc office cost around $3k last year over insurance due to unexpected illness. Some residual this year, but banning something major, should not exceed insurance this year.
Do you have any prescription medications? About $50/month

If there is any free time, find something called a public library and look up MONEY or KIPLINGER's PERSONAL FINANCE mags, which are full of tips like the ones above from our thoughtful members.


greinight said:   bullcity said:   OP, you should also track what you spend on things you may view as non-recurring or "one-time" spending. Use Mint.com or another website that categorizes spending.

Do you give each other presents? Do you buy others presents? Do you go out to dinner on Valentine's, birthdays? Do you travel anywhere for the holidays? Do you go to any weddings? Do you take weekend vacations? Do you drink? Do you buy clothes? Do you keep cash in your wallet? If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? Do you go to the doctor or the dentist? Do you have any prescription medications?

Thanks for this. You listed a couple I didn't think about.

Do you give each other presents? No - we decided a long time ago to not bother. A card is sufficient to show our appreciation for each other.
Do you go out to dinner on Valentine's, birthdays? Vday no, birthday yes. Usually a $75/night for birthdays, $50/night once a month as "date" night
Do you travel anywhere for the holidays? No, all family is local except sister1 and sister2 who we see once every couple years
Do you go to any weddings? One this year, One last year that I was MOH for, so that was a big expense.
Do you take weekend vacations? About 1 every 6 months @ about $3-500
Do you drink? No
Do you buy clothes? About every six months we will replenish worn out clothes at about $1-200/each
Do you keep cash in your wallet? No, which means all spending is done via debit card. Good for tracking, bad for seeing the cash flow in real time as I spend it. May need to do envelope budgeting.
If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? No and this may be the biggest crack in spending I didn't think about
Do you go to the doctor or the dentist? yes, insurance for both. Doc office cost around $3k last year over insurance due to unexpected illness. Some residual this year, but banning something major, should not exceed insurance this year.
Do you have any prescription medications? About $50/month


I personally find it helpful to have a miscellaneous budget for each month or annual budgets for inevitable purchases (clothing), because there are lots of expenses that will inevitably occur that can't be budgeted for, but you know you will spend anyway. Unless you are extraordinarily disciplined, it is much wiser to plan (and budget) for these inevitabilities in life so that they don't throw off your budget. (For example, I buy gifts for friends who have babies. That could be zero in a year or 5 in a year. So I have a gifts budget for the year.) If you don't use the full miscellaneous budget for the month, you can have it roll over. If the year closes and you have accumulated dedicated "miscellaneous" funds, you can pay down debt or add to your emergency fund. Also, as you experienced last year, people don't plan on expenses like $3k in medical bills which results in debt. If you plan on unexpected things happening, it's not such a big deal when they do. Also, including these in your regular budget will make you less likely to dip into your emergency fund for "emergencies" that could have been predicted. Breaking into my "emergency fund" would be a big deal for me.

bullcity said:   greinight said:   bullcity said:   OP, you should also track what you spend on things you may view as non-recurring or "one-time" spending. Use Mint.com or another website that categorizes spending.

Do you give each other presents? Do you buy others presents? Do you go out to dinner on Valentine's, birthdays? Do you travel anywhere for the holidays? Do you go to any weddings? Do you take weekend vacations? Do you drink? Do you buy clothes? Do you keep cash in your wallet? If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? Do you go to the doctor or the dentist? Do you have any prescription medications?

Thanks for this. You listed a couple I didn't think about.

Do you give each other presents? No - we decided a long time ago to not bother. A card is sufficient to show our appreciation for each other.
Do you go out to dinner on Valentine's, birthdays? Vday no, birthday yes. Usually a $75/night for birthdays, $50/night once a month as "date" night
Do you travel anywhere for the holidays? No, all family is local except sister1 and sister2 who we see once every couple years
Do you go to any weddings? One this year, One last year that I was MOH for, so that was a big expense.
Do you take weekend vacations? About 1 every 6 months @ about $3-500
Do you drink? No
Do you buy clothes? About every six months we will replenish worn out clothes at about $1-200/each
Do you keep cash in your wallet? No, which means all spending is done via debit card. Good for tracking, bad for seeing the cash flow in real time as I spend it. May need to do envelope budgeting.
If so, do you track one-off purchases (a coffee and a muffin twice a week, etc.?)? No and this may be the biggest crack in spending I didn't think about
Do you go to the doctor or the dentist? yes, insurance for both. Doc office cost around $3k last year over insurance due to unexpected illness. Some residual this year, but banning something major, should not exceed insurance this year.
Do you have any prescription medications? About $50/month


I personally find it helpful to have a miscellaneous budget for each month or annual budgets for inevitable purchases (clothing), because there are lots of expenses that will inevitably occur that can't be budgeted for, but you know you will spend anyway. Unless you are extraordinarily disciplined, it is much wiser to plan (and budget) for these inevitabilities in life so that they don't throw off your budget. (For example, I buy gifts for friends who have babies. That could be zero in a year or 5 in a year. So I have a gifts budget for the year.) If you don't use the full miscellaneous budget for the month, you can have it roll over. If the year closes and you have accumulated dedicated "miscellaneous" funds, you can pay down debt or add to your emergency fund. Also, as you experienced last year, people don't plan on expenses like $3k in medical bills which results in debt. If you plan on unexpected things happening, it's not such a big deal when they do. Also, including these in your regular budget will make you less likely to dip into your emergency fund for "emergencies" that could have been predicted. Breaking into my "emergency fund" would be a big deal for me.


Mint.com is good for this, you can choose to have your budgets roll over if you need.
This is especially easy if, like the OP, you have debit card records of all purchases and can just import and categorize your purchases.

I really don't see why everyone is getting so bent out of shape about the truck. I think that's hardly one of the major issues here. If he had it for driving to an office job, I'd be saying get rid of it. But considering his career, I don't think a $200 lease for a new, reliable, and presentable truck is unreasonable.

I would have a different reaction to an electrician that shows up for my job in a smoking beater vs. a decent (but not over the top) newish truck.

The missing income is a much bigger deal than the truck payment right now. What else are you spending on?

OP it is refreshing to see that you are open to all these suggestions and not just immediately defensive like a lot of thread starters like you. Anyway keep at it with your attitude you will get re-vamped in short order.

greinight said:   trekwars2000 said:   greinight said:   bhardgrove said:   I like how you can justify vehicle payments with your income and debt levels.

You do not NEED a 2012 Tacoma and whatever else the other vehicle is. Your gasoline budget is very high. Do you have a fuel efficient vehicle?

~37k of debt not counting the lease. The biggest hole in your budget is a depreciating asset which is your vehicles.


The current truck was a replacement to a 1987 Tacoma that finally died. So fuel economy is better in the new truck, but understand what you're saying.

Dawgswin said:   I can certainly understand the need for a truck for his work, but at this point in his career him owning a vehicle with any payment is absurd. Now knowing where you live, it could be entirely possible to get a $4,500 vehicle that might run rough or cause a few headaches, but it would be a perfectly serviceable work truck. Depending on how much you're willing to put up with or work on yourslef, you could get one for far less.

Your first two priorities should be to dump the truck lease, in the process reducing your auto insurance some and hopefully your fuel costs some as well. Anything else is almost irrelevant from what I can tell.


I guess my question with dumping the lease and buying a $4-5k truck would be - isn't that just swapping one debt for the other, since I would need to take a loan to get a beater truck? He does do some side work of his own as a general handy man, but it's not reliable income, only generates maybe $1-200 a month extra.


We are asking if you really need a 2012 Tacoma (a 4cyl manual gets 21/25, a6cyl auto gets 17/21) vs a car that gets better MPG. And ditching the flease for a car loan isn't swapping one debt for another. It would be swaping a car rental for one you will eventually own. If you can get a car/truck for $5k then you break even off the flease payments after 2 years - and then own the car. At the end of the flease you own nothing.

Oh and to assume only a new car won't breakdown is a poor assumption. I am just as confident my 2006 car with 75K miles will start as I am when I get a new rental car when on a work trip.


Ah, gotcha. Truck is necessary to fit ladders for work. Would love to have a manual car in place of it, but realistically can't due to need for ladder travel.

RE: New car not breaking down, should have rephrased myself. New compared to the vehicle we had. My car was bought used @ 40k miles, up to 75k now, should be good for at least 5 years (knock on wood). Replacement to vehicle that died. Same for the truck but - won't lie - the truck was an impulse lease, and I guess I am literally paying for it now. We needed a new truck in a hurry and the used ones on the lot were more expensive (crew cab, 6- or 8-cylinder, extended bed, etc.) and I just didn't want to deal with the higher payments on an out-right purchase. I will have to read my lease when I get home to see how much it costs to break the lease and then turn over to a "new to us" truck for less $.


One other option for getting out of the flease is to take the car to CarMax and see what they will give you. Then compare that value to the remaining flease payments, penality to break the lease, etc. I'm not sure all the specifics but I know my neighbor took their 3 series to CarMax at lease turn in and instead of returing it to BMW made like $2k by selling it to CarMax.

barbcole said:   I really don't see why everyone is getting so bent out of shape about the truck. I think that's hardly one of the major issues here. If he had it for driving to an office job, I'd be saying get rid of it. But considering his career, I don't think a $200 lease for a new, reliable, and presentable truck is unreasonable.

I would have a different reaction to an electrician that shows up for my job in a smoking beater vs. a decent (but not over the top) newish truck.

The missing income is a much bigger deal than the truck payment right now. What else are you spending on?


Follow up to my own post, but what do the posters above figure she should budget for repairs on the beater truck she should acquire plus the cost of buying it (since she said she would have to finance)? Easily $200 or more. Sure, eventually she'd own it. But why would she want to when there are apparently $200 leases floating around?

If you want to analyze the lease, my worry is what kind of weird lease terms you got that its only $200 a month -- or does $200 really mean $299? You mentioned a long commute. If you got low miles to get a low payment, you may be in for a big shock at lease end. I guess the residual is high and that plays with the numbers, but it still sounds really low.

barbcole said:   I really don't see why everyone is getting so bent out of shape about the truck. I think that's hardly one of the major issues here. If he had it for driving to an office job, I'd be saying get rid of it. But considering his career, I don't think a $200 lease for a new, reliable, and presentable truck is unreasonable.

I would have a different reaction to an electrician that shows up for my job in a smoking beater vs. a decent (but not over the top) newish truck.

The missing income is a much bigger deal than the truck payment right now. What else are you spending on?


My concern with is that someone working in a construction trade has a consumer leased pickup truck. It's going to get beat to hell and OP will probably owe thousands in damage charges at lease end.

I'm not quite sure how to respond (and I'm not trying to be snarky), but to everyone who is making an assumption that a pickup that you spend no more initially than say $4,500 (granted it's an arbitrary number) is a "beater" or "is an old clunker that will use a ton of gas.." you clearly haven't looked around or driven one of those trucks.

If you have no idea what you're looking at, have done no research, have no mechanical acumen and no one you know or trust has any either, then I would say a $4,500 pickup isn't a good shopping trip for you.

The headache in looking for a cheap older pickup is that those who have reliable models KNOW they do and are less likely to sell. It will take some time to find one. For example, there's a huge difference between buying an old S10, Blazer or an older CK....even though you may find comparable body quality, mileage or even close on price. I'd pick the S10 over the CK every time knowing what I know about the drivetrain, and having driven several S10s in my life. But that's just me, your geography and ability to find trucks as well as your willingness to work on the truck or put up with occassional headaches may vary...

Ditch the "basic cable" and save $20 a month. Most likely the company won't disconnect the cable to your home, so you'll still get "basic cable", you just won't be paying for it.

stanolshefski said:   barbcole said:   I really don't see why everyone is getting so bent out of shape about the truck. I think that's hardly one of the major issues here. If he had it for driving to an office job, I'd be saying get rid of it. But considering his career, I don't think a $200 lease for a new, reliable, and presentable truck is unreasonable.

I would have a different reaction to an electrician that shows up for my job in a smoking beater vs. a decent (but not over the top) newish truck.

The missing income is a much bigger deal than the truck payment right now. What else are you spending on?


My concern with is that someone working in a construction trade has a consumer leased pickup truck. It's going to get beat to hell and OP will probably owe thousands in damage charges at lease end.


That's a good point. Hopefully being the electrician versus some of the other trades helps to limit the damages.

Skipping 26 Messages...
par38lamp said:   If he is apprenticing from a union hall, have him consider another contractor. One that only requires him to show up with his mandated personal tools and himself. Having to haul ladders (a tool, and I suspect material) in his personal vehicle without being compensated for it sucks. What would happen if he one day showed up driving a Ford Focus? After all, he is an apprentice with low pay.

Same should apply for a non-union large shop, too.

I have worked at two different (union/non-union) electrical contractors (150 men), and they both supplied company trucks to haul material and company supplied tools like ladders.

A two man shop is a scary proposition. His boss is not only the lead electrician, but an estimator/materials purchaser/payroll/contract reviewer, etc. Your husband might not be learning all he needs to because his boss is too busy with the other tasks needed to be a contractor. If there is a strong possibility your husband may be a partner, bide your time. But I have seen that fall to pieces, too.

Best of luck.


I agree with this. I was an electrician's apprentice in college, and I worked for a small contractor (2 masters, 1 journeyman, 2 apprentices). We were busy all the time, and so were our competitors (one caveat: my employers did agricultural, commercial, industrial, and residential, and in many places electrician's shops do not do all of this). There are hundreds of electrical contractors out there - see if your husband can find a job with one that will at least keep him busier so that he can get his journeyman hours faster.

BTW for reference I made $10/hour to start as an apprentice in 2008 in the middle of nowhere. I suspect that although pay will be higher in your location, his overall pay will still be fairly low. That's ok. The real goal is to gain hours so that he can take the journeyman test.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014