What should I focus on?

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First off why does your fiance not work, is she trying to look for a job and just can't find one or is she basically Peggy Bundy?

Sacrifice having a nice wedding, it is going to put you in more financial hell.

Look for a place further out that can hopefully cut some of that rent but still give you a reasonable distance to work from the subway.

And obviously cut back on going out for lunch and dinner and instead pack a lunch and eat dinner at home. Cut cable, get Virgin Mobile for phone.

It is amazing that making $100K in certain parts of this country is not enough.

I find it irrational to imply that one can't settle for a less-than ideal job in the short term just to have some income while looking for a better long-term position. Does looking for a job take up 8 hours a day? Do people quit their current jobs while hunting for their next job? Does working an existing job mean you somehow are prevented from finding "the right job" as the next move?

Fact is, vast majority of people look for a better job while working a current full time job. What is it about you lot that prevents you from doing what the majority have no problems doing?

GodelianKnot said:   
So, your plan (for a guy making 100k in nyc with no savings) for getting laid off is (potentially, depending on the job market and how hard it is to find a similar job) to go work at mcdonalds and move (breaking your lease or mortgage?) to a MUCH worse neighborhood and spend all your time working a minimum-wage job and commuting (and moving and selling possessions, etc.).
No, that's not my plan if you have been paying attention to the conversation. It's a hypothetical case for "average guy" with McDonalds being a worst case scenario. Focus on the core message instead of the inane details: there is no excuse for no income after 30 days. Someone capable of earning $100k should more easily find quick employment for say $50-60k?

GodelianKnot said:   
INSTEAD of paying down your 7% loan a little more slowly to accumulate an emergency fund, such that if you do lose your job, you can focus your time and energy on finding another 100k job, even if it takes a few months.
If you are only making $100k in NY and it takes you "a few months" to find a position in a job market as big as NY paying that much, you have bigger problems than emergency fund and should consider changing your field or moving to a city where your skills are more in demand.


As someone who recently spent multiple months unemployed, I can tell you having the money to continue my normal expenses while unemployed allowed me to get a far far better job than I could have if I had put myself in the position where I had to find whatever job I possibly could in less than 30 days and then spend a lot of time unnecessarily "adjusting my lifestyle" based on that job.

You have a warped perception of what is realistic and reasonable, my friend.
So you made the conscious decision to spent multiple months unemployed, forgoing many thousands in income, for the sake finding a "far far better job"? Warped perception of what's realistic and reasonable indeed.

If the motto here is "be prepared", then you should be better prepared in your career than being subject to prolonged unemployment.

I think it's weird that people are giving lifestyle advice to a financial situation question. OP seemed to be asking what their financial focus should be on, not advice on what life path they should take. Getting a dog, dual income, having kids, these are personal decisions that are between OP and fiance(e).

For OP, I think best advice is to not be satisfied with balancing income and expenses. Income should be greater than expenses. Drive down expenses and start building an emergency fund. The point of an emergency fund is not to engage in debates on how you are going to squirm out of any possible situation, it's to make what is an emergency for most people not an emergency to you.

If you have an emergency fund, when an unexpected expense comes along, you're taken care of, not scrambling to assemble some weird contingency plan depending on the scenario and pondering a job at McDonald's or hoping an auto warranty won't wriggle out of paying a claim, etc. Accepting that you may have to work at McDonald's seems like a badge of toughness to some. Having enough cash that you don't have to consider it, THAT is preparation.

Lower your expenses so you have excess (easiest way is to auto-deduct a set amount from your paycheck into savings and don't touch it!) and then when you have 6 months of income (just a random number people use, doesn't have to be 6) then start thinking about the next step. That being said, when I was in my mid 20s, I heard all this advice and ignored it. Now I feel dumb looking back that I didn't act on it. This is hard to do and you'll want to come up with every excuse why you won't need to, but trust everyone who is saying emergency fund, when your first emergency hits and you're like "wait, I have this" - that zen state is worth it.

FreddyPharkas said:   Move to the outer boroughs (Queens) if you're not there already. Rent a 1 BR in Astoria or something for ~$1600/mo


He could also opt to buy the 1-br in Queens, with a 30-year, it's cheaper than renting.

Queens to me is undervalued, especially the nicer parts (where you can find 1-br's starting in the $150k range). I bought a 1-br here at the OP's age, paid it off in 6 years at his salary and renting it out now. Most of my friends are still renting, and they've literally paid a fortune over the years.

FoxOne said:   Does looking for a job take up 8 hours a day? Do people quit their current jobs while hunting for their next job? Does working an existing job mean you somehow are prevented from finding "the right job" as the next move?

Fact is, vast majority of people look for a better job while working a current full time job. What is it about you lot that prevents you from doing what the majority have no problems doing?

Two totally different situations. Looking for a job while you're already employed is generally selective and targeted, and thus tends to take much longer. You also have the luxury to choose exactly when to conduct your search to maximize available options. Finally, people generally search for a new job when they've already established a position at their current employer and are free to take time off (to interview); it would be significantly harder to take the necessary time off at a new job (and especially if you're just taking the very first job you can find, you may find very restrictive time off policy).

You can always do a much broader search when you have more time to conduct it. When you have a decent job, it usually doesn't makes sense to quit just to do a broader search. But when your options are a much worse job vs more search opportunity, the math changes.

FoxOne said:   If you are only making $100k in NY and it takes you "a few months" to find a position in a job market as big as NY paying that much, you have bigger problems than emergency fund and should consider changing your field or moving to a city where your skills are more in demand.
Boy do you not know what you're talking about. Just curious, have you ever spent time unemployed due to circumstances outside your control? How about when unemployment was over 7%? Or looked for a job in a cyclical job market?

FoxOne said:   So you made the conscious decision to spent multiple months unemployed, forgoing many thousands in income, for the sake finding a "far far better job"? Warped perception of what's realistic and reasonable indeed.

Yes, I forwent thousands of income so I could make thousands more in the future. It's a common trade-off in adult life. I guarantee I would not have gotten my current job at my current salary if I had taken the first job I found for half that. Not to mention the insane hassle of trying to cut your fixed expenses in half for a short period of un(or under)employment.

Also, I'm not saying it ALWAYS makes sense to pass on a lower-paying job when you're unemployed. But it sure is nice (and valuable) to have that option.

It's pointless to discuss this anymore as I am beginning to repeat myself. Any casual reader who is actually curious to learn would have long lost interest in this thread. I'll chalk this up to one of those FWF things: H&B, crown vic, budgets, and emergency funds.

My wife told me this past weekend that we have $25 in our main cash flow checking account. That made me chuckle.

Good luck to the OP.

Dogs deserve love and you cant afford it and you will abandon the poor creature 12hrs a day

Fiance needs job.

NYC is an overpriced cesspool. Move somewhere else where you have a shot at a reasonable financial future.

Show your math on your expenses.

amallah said:   I think it's weird that people are giving lifestyle advice to a financial situation question. OP seemed to be asking what their financial focus should be on, not advice on what life path they should take. Getting a dog, dual income, having kids, these are personal decisions that are between OP and fiance(e).


These are all emotional decisions that cost money. Well within the scope of the question, which didn't appear from thin air; OP asked for help.

Whew! it's kinda hard to find a job while you're employed. But you can find a homebased job

Here's my killer argument. Furloughs start next week. I sure am glad to have an emergency fund!

Hi everyone,

Thanks again for all the helpful advice -- I know I'm new to this, and I'm glad to have discovered such a great forum!

To clarify a few requests above (now that I'm off work):
- We'd like to have a wedding in the ~$25k range.
- My fiance does actually have a low-paying job with benefits, but that may change sometime soon due to family issues.
- We either want a little fluffy dog or a ferocious rottweiler. Both equally good.
- Also, we're both athletes, so food / gym are known large expenses.

Here's a rough breakdown of my income / expenses:
- Take-home Income = ~$4k/month (Post 401k, HSA, insurance, etc...)
- My portion of rent = $1100
- Phone = $50
- Gym / training = $300
- Food = ~$700 (including store / restaurants)
- Student loans = ~$800
- Transit = ~$100 / month (Subway / LIRR)
- Home supplies and misc purchases make up the rest, more or less

At this point, here's the plan:
- Save up at least ~3 months expenses
- Pay down debt as much as possible, as fast as possible
- No dog for now

Open questions on my mind:
- Should I account for potential raises in my plans? How about inflation?
- Since I won't have my loans paid off for a long time, does this mean we shouldn't have a wedding until those are paid off and we're in the green? (Could be 5+ years?)
- Since my minimum loan payment will reduce over time, should I continue to pay the minimum and carry the debt longer, or should I continue to pay the current amount and close out the loans sooner?
- Is loan consolidation something I should be considering?
- Should we consider moving out of the city? (Jobs for my field are mostly located in the city, but I can work remotely. If I needed to find another job, it would be in the city.)

Thanks!

rismoney said:   Dogs deserve love and you cant afford it and you will abandon the poor creature 12hrs a day

Dogs need food, water, and a place to poop. We're talking about animals that love nothing more than to lick their own buttholes and sniff other dogs asses and genitals.

Youqianren said:   - Save up at least ~3 months expensesGood

- No dog for now Being responsible isn't fun, but props to you for being realistic right now

- Should I account for potential raises in my plans? How about inflation?Account for raises when they happen. Ignore inflation in your budget.

- Since I won't have my loans paid off for a long time, does this mean we shouldn't have a wedding until those are paid off and we're in the green? (Could be 5+ years?)You can budget / save for the wedding just like you are doing with your emergency fund and student loans. If you have an extra $200 at the end of the month and want to put it in saving towards a wedding fund, go for it. My focus would be the loans, but weddings are emotional things that can have greater meaning for some than others.

- Since my minimum loan payment will reduce over time, should I continue to pay the minimum and carry the debt longer, or should I continue to pay the current amount and close out the loans sooner?What is the average rate of your loans? Unless you have an investment making more interest than the students loans are taking, paying off the loans asap would be beneficial. Keep the payment the same since your budget will have accounted for it. Hopefully over time you can actually increase you payments.

- Is loan consolidation something I should be considering?Consolidation should lower you interest rate 0.25% I believe assuming they are all federal loans and not private. Look into it for sure. If you consolidate you eliminate the ability to pay the higher interest rates loans off first, but with just paying the minimum it may not make much of a difference. You can do the math to figure out what puts you ahead in the end.

- Should we consider moving out of the city? (Jobs for my field are mostly located in the city, but I can work remotely. If I needed to find another job, it would be in the city.)That is always the question for people like you (and me) in the city. I moved out of Manhattan to Brooklyn Heights and have never regretted it. For me it was just more space for the same amount of rent. If you go further out to Gowanus, Red Hook, or lots of areas in Queens you can lower your rent and still experience most of the NYC lifesytle. As for telecommuting, its a nice option. Any chance increasing your income with some side job you could just work from home?

Youqianren said:   
- We either want a little fluffy dog or a ferocious rottweiler. Both equally good.


Get one of each, and let them fight it out to see which one gets to stay.

- Also, we're both athletes, so food / gym are known large expenses.

Here's a rough breakdown of my income / expenses:
- Take-home Income = ~$4k/month (Post 401k, HSA, insurance, etc...)
- My portion of rent = $1100
- Phone = $50
- Gym / training = $300
- Food = ~$700 (including store / restaurants)
- Student loans = ~$800
- Transit = ~$100 / month (Subway / LIRR)
- Home supplies and misc purchases make up the rest, more or less



A full quarter of your expenses are miscellaneous. Track better.
Your transportation and phone expenses are very low. Good job.
No TV/cable. Good.
Those student loans are killer.
Any way you can reduce food expenses?

Youqianren said:   Hi everyone,

Open questions on my mind:
- Should I account for potential raises in my plans? How about inflation?
I suggest you don't. I also suggest that any raise you get, is immediately rerouted into savings, so you don't see the increase in your paycheck. I think your issue is fairly simple, something like you see a pizza, and you eat 8 slices, you make 4K, and you spend 4k.

- Since I won't have my loans paid off for a long time, does this mean we shouldn't have a wedding until those are paid off and we're in the green? (Could be 5+ years?)
Yes, but a caveat is, don't spend all of your savings for the wedding. Budget to have 2X the wedding cost in the bank. So if the wedding is 25K, have 25K in savings, that you WILL NOT touch.

- Since my minimum loan payment will reduce over time, should I continue to pay the minimum and carry the debt longer, or should I continue to pay the current amount and close out the loans sooner?
Continue to pay it down. Also, consider diverting more of your money to a forced savings account, so you don't have extra spending money.


- Should we consider moving out of the city? (Jobs for my field are mostly located in the city, but I can work remotely. If I needed to find another job, it would be in the city.)
This is entirely up to you. It would be cheaper, but you wouldn't live in New York, it is a trade off.

Thanks!


Grey

Based on your current repayment schedule of $800/mo on your student loans, you will pay $107,000 in interest on your $125,000 principal. Total cost for your education ~$230,000 all in. Every penny you put toward the principal on the 7.75% loans will reduce that $107,000 interest payment. The earlier you pay down the principal, the less money you will spend on interest in the long run. Just to give you an idea, if you were to increase your monthly payments to $1300/month, you would only pay $47,000 in interest and your loan would be paid off in 10 instead of 25 years.

Aside from being in debt and having $0 of emergency buffer, you are almost 30 and are only saving the minimum for retirement, if anything. Nor do you have any ability to change this going forward unless you and your fiance make some serious lifestyle adjustments. Moreover, tax-deferred retirement savings also reduce the federal/state/city tax bite that you are hit with in NYC. So, retirement savings are as or more important than paying down student loans.

If you changed your finances just a little:
$700/month food to $300/month food (eat at home)
$300/month gym to $100/month gym ( Coach yourself)
--------------------------------
$600/month right there toward savings/loan repayment/retirement
1/2 of your $950/month in missing misc. expenses
--------------------------------
$1050/month that could be allocated elsewhere

The biggest boon to your finances would be to have your fiance get a paying full-time job. Acquiring more income, especially in a dual-person household, is much easier than chopping expenses. Although, in your case there is definitely room to do both.

My final piece of advice is to bring fiance into the discussion soon and definitely BEFORE you get married. Finances are the #1 cause of divorce and she needs to be aware of the situation you are in and will hopefully get on board with adjusting your lifestyle to match your income. Good luck.

Kat009 said:   Aside from being in debt and having $0 of emergency buffer, you are almost 30 and are not saving any money for retirement.Op stated "Take-home Income = ~$4k/month (Post 401k, HSA, insurance, etc...)"

LiquidSilver said:   Kat009 said:   Aside from being in debt and having $0 of emergency buffer, you are almost 30 and are not saving any money for retirement.Op stated "Take-home Income = ~$4k/month (Post 401k, HSA, insurance, etc...)"

Apparently I can't read today. But based on his numbers, he can't be saving any more than 4% or so in his retirement account, which isn't enough.

I don't think you need to sacrifice everything else just to pay down the debt quickly. 7% sucks, but it's not 20%. Just doesn't seem realistic to me to do nothing major for the next decade (basically) for the sake of paying off the loan sooner. That's really a personal decision though.

If it were me, I would:
a) Save for 6 months emergency fund
b) Save for wedding
c) Go crazy trying to pay off the debt
d) Save for house
e) Have kids

In the meantime...
- Your budget looks pretty reasonable, but what happens when your fiance leaves her job? Is your portion of the rent going to double?
- Is 700 just your portion of the food? If so, that's pretty high. (Currently, I average about $800 on food for 2 in NYC.)
- You might be able to trim the gym budget. Check out Groupon for gym trials and/or training sessions.
- It's also good that you're contributing to your 401k, but I would limit that to what your employer matches, anything else would be better spent paying down your loan.

I would only get a dog if/when your fiance definitely isn't planning to work anymore. Otherwise, the expense of keeping the dog alive and sane during the day is going to be too much. If she's at home anyway, she can take care of it during the day. And maybe it'll keep her from getting baby-fever too soon...

One other thing to consider is that if you make a lot more (as it sounds like) than your fiance, getting married will actually save you several thousand a year in taxes.

GodelianKnot said:   I don't think you need to sacrifice everything else just to pay down the debt quickly. 7% sucks, but it's not 20%. Just doesn't seem realistic to me to do nothing major for the next decade (basically) for the sake of paying off the loan sooner. That's really a personal decision though.

If it were me, I would:
a) Save for 6 months emergency fund
b) Save for wedding
c) Go crazy trying to pay off the debt
d) Save for house
e) Have kids

In the meantime...
- Your budget looks pretty reasonable, but what happens when your fiance leaves her job? Is your portion of the rent going to double?
- Is 700 just your portion of the food? If so, that's pretty high. (Currently, I average about $800 on food for 2 in NYC.)
- You might be able to trim the gym budget. Check out Groupon for gym trials and/or training sessions.
- It's also good that you're contributing to your 401k, but I would limit that to what your employer matches, anything else would be better spent paying down your loan.

I would only get a dog if/when your fiance definitely isn't planning to work anymore. Otherwise, the expense of keeping the dog alive and sane during the day is going to be too much. If she's at home anyway, she can take care of it during the day. And maybe it'll keep her from getting baby-fever too soon...

One other thing to consider is that if you make a lot more (as it sounds like) than your fiance, getting married will actually save you several thousand a year in taxes.


It is sorta the American way to have a bunch of debt, not save for retirement, put the wedding on the credit card, and live paycheck to paycheck. Might as well go with it, there will always be Social Security to pay for retirement. Oh wait....

Taxes are definitely a discussion for us -- NYC + NY taxes are pretty high. We are both definitely discussing finances a lot, and every decision is made by both of us. How much of an impact would moving to NJ / getting married make on the tax situation? I suspect a lot, but I'm just not familiar with this.

The numbers above were my expenses only. We are keeping our finances split for the most part until we're married. I understand that a double income may solve issues, but I'm not sure it's an option.

Yes, food is super expensive, but we do eat a ton. That's a known cost that I'm not sure we can reduce unless the price of basic groceries in NYC drops. Gym is also expensive, and I may be able to cut $150/month of it.

Great discussion -- will check back after work

I don't understand how you are keeping your finances split if your fiance has no job. Where is the money used to pay her share of the bills coming from? Will it still be available in the future?

Drop that ridiculously priced Gym membership...order a couple of kettlebells or something!

steve1jr said:   I don't understand how you are keeping your finances split if your fiance has no job. Where is the money used to pay her share of the bills coming from? Will it still be available in the future?

Drop that ridiculously priced Gym membership...order a couple of kettlebells or something!


I am sure he said she has a low paying job.

Youqianren said:   How much of an impact would moving to NJ / getting married make on the tax situation? I suspect a lot, but I'm just not familiar with this.

Moving to NJ would drop your income tax by ~3% off the bat (~$250/mo) from NYC tax. You'll also be looking at lower sales tax for most things (like 1.5% lower), and probably cheaper stuff (including food) in general. You'll still be paying NY state income tax though, since you work in NY, so that's no gain. Near NY, I don't think NJ rent is much different than rent in brooklyn or queens; just varies based on where you look. Not sure on transit costs, might cost a little more if you have to PATH and subway to work (but if you work near the PATH, might be less).

For marriage, try this calculator

If she makes nothing and you make 100k, you'd save around 5k a year by being married. But if she makes more than 30k, you'd actually be worse-off, tax-wise. I think that's just federal taxes, but I'm not sure.

Actually, I work remotely for a college in MA. I'm assuming that I'm being taxed as though my employer is in NY -- could this not be the case? I'll need to look into this more closely..

My fiance works in the city though, and his job doesn't allow remote work. He currently earns enough to pay his portion of the rent, but if he can't hold a full-time job, we would move to a cheaper place.

Kat009 brings up a point I've been meaning to ask about too -- is there a simple way to calculate which brings the most value: saving more in retirement and earning compound interest vs paying down loans?

Youqianren said:   Actually, I work remotely for a college in MA. I'm assuming that I'm being taxed as though my employer is in NY -- could this not be the case? I'll need to look into this more closely..

In that case, you'd probably save another thousand or so if you moved to NJ (though depends how your employer is setup to pay you). I think NY will tax you if you live OR work in NY, so that may be why you're paying NY tax now.

Youqianren said:   My fiance works in the city though, and his job doesn't allow remote work. He currently earns enough to pay his portion of the rent, but if he can't hold a full-time job, we would move to a cheaper place.

Definitely sounds like a good plan. And sounds like out of NYS would be the best move. Nearby NJ is pretty nice, and really not much different from living in another borough of the city.

Also, sorry for assuming your fiance was a girl earlier (should've noted the correct spelling of fiance).

Youqianren said:   Kat009 brings up a point I've been meaning to ask about too -- is there a simple way to calculate which brings the most value: saving more in retirement and earning compound interest vs paying down loans?

Basically, it comes down to whether or not you can beat the rate on the loan (and how much risk it takes to do so). Being in a retirement account doesn't help you earn any more, it just saves you from paying capital gains taxes. If your loan was 4% or less, you might be better off just letting it ride and invest instead, but in this market especially, I'd take the guaranteed 7% untaxed gains from paying off the loan, over any investment retirement account or not.

Wow this whole time I thought OP was a dude but it turns out OP is a broad.

Youqianren said:   Actually, I work remotely for a college in MA. I'm assuming that I'm being taxed as though my employer is in NY -- could this not be the case? I'll need to look into this more closely..

My fiance works in the city though, and his job doesn't allow remote work. He currently earns enough to pay his portion of the rent, but if he can't hold a full-time job, we would move to a cheaper place.

Kat009 brings up a point I've been meaning to ask about too -- is there a simple way to calculate which brings the most value: saving more in retirement and earning compound interest vs paying down loans?



How low paying is his job? Can he find another job outside NYC? If you are paying income tax on your job so he can have his low paying job you might be ending up behind.

@Krazen1211: It's pretty low. (For NYC at least.) It's in the 30-40k range. A job outside of NYC may be possible, but only if he can continue working. I guess I'm not clear -- are you saying that we're paying more in taxes by him working? (We're not married just yet.)

Youqianren said:   @Krazen1211: It's pretty low. (For NYC at least.) It's in the 30-40k range. A job outside of NYC may be possible, but only if he can continue working. I guess I'm not clear -- are you saying that we're paying more in taxes by him working? (We're not married just yet.)

You pay more in taxes and (more importantly) rent/housing by living in a high cost high tax area, as others have said. If you have social reasons for being there that is one thing, but a $30k job is a poor reason to live in the area by itself.

DaveTheStud said:   Wow this whole time I thought OP was a dude but it turns out OP is a broad.

This is the 21st century, you may still be making incorrect assumptions!

I got married in NYC for 2k.

My now-wife found a service that arranged everything-
They reserved and roped off a really nice area in Central Park.
They got a non-denominational official.
They got a very good photographer who was trying to increase his portfolio (took hundreds of pics and gave us the cd)
They gave everyone umbrellas because it rained!

We then paid an extra $100 to rent a rickshaw to go around Central Park and the photographer took more pictures.

We paid for the whole thing with PayPal.


My dad then paid for a lunch at a neighboring restaurant for the 30 or so family members we invited (probably around $600-700 or so.)


It was a good time, right in the middle of NYC. Why would you need more than that?



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