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hello everyone, new guy here looking for some financial advice.    this site was the first result from a google search for 'finance forum'.  

anyway, story is that i am 40 yrs old with 3 kids.   i seem to live paycheck by paycheck, and barely have anything left to save at the end of the month.   i have been at my job for 10 yrs, but am thinking about quitting to pull out my retirement and start all over.   

right now i have the following:
-$7500 in savings
-$165,000 in retirement
-$100,000 life insurance policy at current job

my debt:
-$10,000 credit card
-$4200 car1 ($270/mo. @ 6.8%)
-$12000 car2 ($330/mo. @ 4.5%)
-$15000 home equity loan ($220/mo.@ 8.8%)
-$123,000 mortgage ($1500/mo. inc. tax/ins. @ 3.8%, 10 yrs left, est. appraisal $160k)

i make enough to live decent, but i am not saving anything towards college education, emergencies, or anything.   i have the option of staying at current job and paying down house and bills.  or i can sell house and take out retirement.  the 2nd option will allow me to pay off all bills, car notes, and be debt free completely and have about $105,000 left.  i would have to reolcate and find another job though.

what would you do?  i should say that  i'm pretty thankful for what i have, but i feel i wasted 15+ years squandering money, a lot of which i had no control over and due to unexpected  circumstances.  thanks for listening.

1/28 Update:
Hey everyone, this is my last update here.   I made some significant progress that I am happy about and thought I'd share.   I ended up taking the 1.5 month contract jo  which gave me 20k.    I paid off my entire credit card debt!   what a rush, what a feeling!    As someone who's carried a balance for almost a decade, I never thought I'd see this day.    With my tax return on its way, the new numbers now are:
credit card debt: $0
savings: $22,000!

I plan to pay off car1 and live life again.    Thanks everyone for your advice and good luck!

Member Summary
Most Recent Posts
Eagle got lucky with that contract.  Reduction in spending is required, and I'd still put you slack at home mom back to ... (more)

kriskos4 (Jan. 05, 2014 @ 3:46p) |

Hey everyone, this is my last update here.   I made some significant progress that I am happy about and thought I'd shar... (more)

Eagle357 (Jan. 28, 2014 @ 4:02p) |

We'll see you in a few months...

talonesi (Jan. 28, 2014 @ 4:10p) |

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What is your salary? What is your budget? Where does the money go?

You are going to want to give us alot more information if you want useful answers;

take home pay
all your bills
age of kids
married?
etc..

Eagle357 said:   -$4200 car1 ($270/mo. @ 6.8%)
-$12000 car2 ($330/mo. @ 4.5%)
 

  You don't sound too bad off, actually, especially in comparison with a lot of the people I've seen.

My first suggestion would be to carefully control your outlays and save some money.  Starbucks, dinners out, movies, theatre, new electronic toys, phone service; these are all things that most people spend way too much on.  Make a clear-headed assessment about how much enjoyment you get out of, say, an $80/mo cell fone bill, and make some changes.

My second suggestion (and my first suggestion at one of those changes you could make) is to immediately replace the nice newish cars you are making payments on with 10 year-old beaters.  Borrowing money to pay for a depreciating asset is skull-cracking stupid.  Save the money.  Live better.

Don't quit job - you can look for opportunities to improve but not wise to quit job

Dont liquidate your retirement accounts - huge tax hit - % bracket plus penalty.

Why do you have 2 cars ? Spouse ? Do they work / need a car

Put your wife back to work and divorce her when it's economically viable.  If she works currently and spends more money than she earns, divorce her now.

I would rid yourself of the idea to pay off bills by cashing in your retirement. Odds are you'd still end up with debt and the retirement wouldn't recover.

If things are tight you need to bring more $$ in and spend less. That being said:

are you underpaid? If so consider changing jobs/companies/careers
are you in an expensive area? If so consider moving to a cheaper part of town/city/state
do you have much equity in your cars? If so consider selling them off and buying cheap (but reliable) used
are you spending on luxuries? Identify all expenses you could easily live without and drop them (at least until CC debt is paid off). Dining out, toys, gifts, movie theaters, etc.

Unless you have poor credit, those are some terrible interest rates you are paying. Penfed has 1.99% auto loans and HELOCs/HELs can be obtained in the 3.5-4.5% range. And I'm sure the credit card is costing you a fortune.

Don't quit. Don't cash your retirement. Don't sell the house.

What you need is a budget. As indicated above, if you list out your income, detailed expenses, marital status, kids, etc., people here will help you with suggestions.

I think you're overestimating how much you'll have left after option 2. With taxes, penalties, and real estate fees, I bet your're closer to $55,000 after liquidating and paying off debts.

How's your credit? how much are the cars worth? Can you refinance them at a credit union (at under 2%), and use any extra to pay down the home equity loan so you can qualify to refinance the mortgage.

tell the kids to start earning their free rent or out they go.

Eagle357 said:   ...am thinking about quitting to pull out my retirement and start all over.   


 

  

So what you are saying is you want to exchange the "40 and almost broke"  to "65 and almost broke".
Go for it.  Ive never seen a Uhaul being pulled behind a hearse.

 

JaxFL said:   
Eagle357 said:   ...am thinking about quitting to pull out my retirement and start all over.   


 

  

So what you are saying is you want to exchange the "40 and almost broke"  to "65 and almost broke".
Go for it.  Ive never seen a Uhaul being pulled behind a hearse.

 

  

http://marthame.files.wordpress.com/2011/11/hearseuhaul011.jpg

So what I don't get is that you're 40 and almost broke and you hope to cure all that by quitting your job and cashing in the savings you have. Are you trying to become completely broke? Is that the goal?

In my opinion, stop being so emotional and dramatic. Figure out why you don't have money left over every month (due to either a lack of income or too much spending) and work on addressing that issue.

Oh, and if you are going the mid-life crisis route, then cash in the retirement to buy a Corvette. The new ones are incredible!

Could there be a deeper cause here as well, mid life crisis or not it isn't really logical to just quit your job and try to "start over" when you have kids and responsibilities. Have you considered therapy OP? What do you do for fun, for you.. Are you sure that just changing careers is going to give you the happiness you desire?

Just a thought.

SpeedingLunatic said:   
JaxFL said:   
Eagle357 said:   ...am thinking about quitting to pull out my retirement and start all over.   


 

  

So what you are saying is you want to exchange the "40 and almost broke"  to "65 and almost broke".
Go for it.  Ive never seen a Uhaul being pulled behind a hearse.

 

  

http://marthame.files.wordpress.com/2011/11/hearseuhaul011.jpg

     Only thing missing from that picture is Vincent Price.

Can you borrow from your 401K to pay off the CC bill? Try to see if you can refinance to get rid of the car pymts and home equity loan. Do you qualify for HARP2? How about Obama care? You may even if you get ins. through your company. If your kids are near college age, you should qualify for Fin Aid since most of your assets are either retirement, insurance and home equity so don't worry too much about college education. Whatever you decide to do, DO NOT QUIT your current job.

I think you would be surprised how many people would gladly switch places with you, from a financial perspective.

You have a decent amount saved, a relatively small mortgage, which is on pace to be gone by the time you're 50. Re-fi your car and credit card debt to better rates if possible. Depending on your income, you're not that far away from being fine.

Quitting and starting over seems to make no sense, although its hard to know without the specifics others have asked for.

kenblakely said:   Borrowing money to pay for a depreciating asset is skull-cracking stupid.
  
So taking out a five year car loan at Alliant Credit Union at 1.49% APR (plus $100 cash bonus) and using the freed up cash to open a five year 3.04% APY CD at Penfed is skull-cracking stupid?  Despite what Dave Ramsey says, math > broad generalizations. Count me in if I can get paid to borrow money.

You don't say anything about your wife.... Does she work? Or is she at home with the kids....is she a part of the picture in your future or spending too much? Your life doesn't seem that bad dude! D you know how many people don't even have a job??? The last thing you should do is quit your job!!! The last thing you should do is tap into your retirement...it's for RETIREMENT!!! You need to keep working and quit spending! Look at your expenses and see where you can cut back, don't eat out at all, pack your lunches, no more expensive toys for the kids, you claim you squander money..THAT right there IS YOUR PROBLEM and it sounds like that's your only problem and you want to compound it by diving into your retirement and squander it too!!! keep your nose out of it!! ...work to payoff your debt and stop spending!!! Keep your precious job.... You don't know how good you have it!! (Maybe get rid of one car)

You cannot start over. 3 kids + non working wife = Recipe for disaster.
As the kids grow older, your expenses will grow at a higher rate than your salary.

well for one thing i have been at a job that is 500 miles away from family and friends. i think about starting back over closer to them. my kids are 12,10, and 7. my wife isnt working now, but we need a second car since there is no bus service around here. my salary is in the mid 90s. i know, i know. where does it all go?
here's the monthly breakdown:
-mortgage 1500
-equity 220
-car1 270
-car2 330
-car ins. 200
-heating 50
-electricity 130
-water 100
-cable 40
-phone 40
-cell 100
-internet 60
-fuel 300
-cc payments 500
-groceries 500

thanks to all for your replies. yes, it is not wise to quit while taking care of kids, but i feel stuck in a rut sometimes and then everything just seems so futile

Seems like the problem is that expenses are more than income, or you're living way beyond your means, or both. Reduce your expenses!

If I were in your situation, I would sell car #2 and get by with 1 vehicle, or buy a beater. I would also use most, if not all, of my savings to pay off that cc bill and even go as far to take out as much retirement savings needed to pay off that cc bill. Yes, you will get penalized 30% - 40% on the early withdrawal, but I'd take that over a 15% APR on a cc balance over 2 - 4 years.

Edit:  Your situation seems pretty standard for most families.  Ever seen Married With Children?

If you make in the mid nineties you should be taking home about $6K (maybe 5.5K if you have money in 401k) a month after taxes. Your expenses come to 4340. Where is the other 1000 going? Why are your APRs on the car so bad? Do you have bad credit? You DO NOT NEED 2 nice cars. Get a beater. I would even look into a refinance with Penfed for a 5/5 ARM or even look into 10 year fixed which is much lower than you are currently paying. Your post is very vague and if you want answers you should be willing to listen.

1. Cut your cell phone. I don't see a reason to have $100 cell bill and $40 home bill. $35 to $40 per line has the be the highest on the phone. Switch to Ooma or something
2. Get rid of one car and get a beater. If you cannot atleast refinance the cars.
3. Internet - $60? Are you running a T1 line? If you have cable such a Comcast call them every time a promotion ends and threaten to switch and they will give you a new promo
4. What is the interest rate on the CC? Can you do balance transfers?

DesiVibe said:   If you make in the mid nineties you should be taking home about $6K (maybe 5.5K if you have money in 401k) a month after taxes. Your expenses come to 4340. Where is the other 1000 going? Why are your APRs on the car so bad? Do you have bad credit? You DO NOT NEED 2 nice cars. Get a beater. I would even look into a refinance with Penfed for a 5/5 ARM or even look into 10 year fixed which is much lower than you are currently paying. Your post is very vague and if you want answers you should be willing to listen.

1. Cut your cell phone. I don't see a reason to have $100 cell bill and $40 home bill. $35 to $40 per line has the be the highest on the phone. Switch to Ooma or something
2. Get rid of one car and get a beater. If you cannot atleast refinance the cars.
3. Internet - $60? Are you running a T1 line? If you have cable such a Comcast call them every time a promotion ends and threaten to switch and they will give you a new promo
4. What is the interest rate on the CC? Can you do balance transfers?

  
net is more like 4900.   i don't drive fancy cars and the rates are bad because my credit is shot.   low 600s.    i am looking at taking up a second job and maybe refinancing back to a 30 yr mortgage.   that would free up a ton of money, but resets the amortization sched.   right now i have 800-900 going towards principal a month.  i guess that can be considered a saving.   

Thats what I was thinking...where does the rest go? Someone is spending your money...

The majority of your expenses aren't really expenses (mortgage, credit card, heloc, car payments, etc.), rather they are payments on expenses you have already incurred.  They are all things that when you commit to paying off your debt aggressively will be gone forever and then all that money frees up.  The easiest thing to do would be to sell the cars and buy beaters with no loan and state minimum insurance, that will save you ~$700/mo.
 

Eagle357 said:   maybe refinancing back to a 30 yr mortgage. 
 

  If you're planning on working until age 70, I guess this is doable. I personally wouldn't want to do this.

Eagle357 said:   or i can sell house and take out retirement.  the 2nd option will allow me to pay off all bills, car notes, and be debt free completely and have about $105,000 left. 
  Most of America would love to be in that position.

Eagle357 said:   
DesiVibe said:   If you make in the mid nineties you should be taking home about $6K (maybe 5.5K if you have money in 401k) a month after taxes. Your expenses come to 4340. Where is the other 1000 going? Why are your APRs on the car so bad? Do you have bad credit? You DO NOT NEED 2 nice cars. Get a beater. I would even look into a refinance with Penfed for a 5/5 ARM or even look into 10 year fixed which is much lower than you are currently paying. Your post is very vague and if you want answers you should be willing to listen.

1. Cut your cell phone. I don't see a reason to have $100 cell bill and $40 home bill. $35 to $40 per line has the be the highest on the phone. Switch to Ooma or something
2. Get rid of one car and get a beater. If you cannot atleast refinance the cars.
3. Internet - $60? Are you running a T1 line? If you have cable such a Comcast call them every time a promotion ends and threaten to switch and they will give you a new promo
4. What is the interest rate on the CC? Can you do balance transfers?

  
net is more like 4900.   i don't drive fancy cars and the rates are bad because my credit is shot.   low 600s.    i am looking at taking up a second job and maybe refinancing back to a 30 yr mortgage.   that would free up a ton of money, but resets the amortization sched.   right now i have 800-900 going towards principal a month.  i guess that can be considered a saving.   

  Why would you take a second job if your wife is not working? 

Of course assuming that 130k is regular 401k/IRA you are only looking at about $60-$70k after taxes and penalties, make sure you remember that.

desivibe- thanks for the info on the internet. i called by internet provider and they dropped my down by half with faster speeds! i was paying 60 for 8mb down, now i am paying 30 for 15mb down. after 12 months its up to $50. wow, i was getting ripped all these years and didnt even know it.

Eagle357 said:   desivibe- thanks for the info on the internet. i called by internet provider and they dropped my down by half with faster speeds! i was paying 60 for 8mb down, now i am paying 30 for 15mb down. after 12 months its up to $50. wow, i was getting ripped all these years and didnt even know it.
  Congrats, but why do you keep glossing over the wife situation?  Put her butt back to work yesterday!  I don't care if it's WalMart, she needs to pull her weight.

Instead you talk about getting a second job...lol!  Your wife would be very excited if you got a second job because that means she can buy more crap and/or a nicer car.

Eagle357 said:   
DesiVibe said:   If you make in the mid nineties you should be taking home about $6K (maybe 5.5K if you have money in 401k) a month after taxes. Your expenses come to 4340. Where is the other 1000 going? Why are your APRs on the car so bad? Do you have bad credit? You DO NOT NEED 2 nice cars. Get a beater. I would even look into a refinance with Penfed for a 5/5 ARM or even look into 10 year fixed which is much lower than you are currently paying. Your post is very vague and if you want answers you should be willing to listen.

1. Cut your cell phone. I don't see a reason to have $100 cell bill and $40 home bill. $35 to $40 per line has the be the highest on the phone. Switch to Ooma or something
2. Get rid of one car and get a beater. If you cannot atleast refinance the cars.
3. Internet - $60? Are you running a T1 line? If you have cable such a Comcast call them every time a promotion ends and threaten to switch and they will give you a new promo
4. What is the interest rate on the CC? Can you do balance transfers?

  
net is more like 4900.   i don't drive fancy cars and the rates are bad because my credit is shot.   low 600s.    i am looking at taking up a second job and maybe refinancing back to a 30 yr mortgage.   that would free up a ton of money, but resets the amortization sched.   right now i have 800-900 going towards principal a month.  i guess that can be considered a saving.   

  How does mid 90s net down to $4,900? Gross should be ~$7.8-8.2k. How do you have $3k of reductions a month?

edit: Also, I assume that 100k like insurance policy is term? If so, and if you have no other insurance, you are woefully underinsured. IF something were to happen to you, your family would be completely screwed. You should have at least 5-10x that in term life insurance, especially considering your wife doesn't work.

kriskos4 said:   
Eagle357 said:   desivibe- thanks for the info on the internet. i called by internet provider and they dropped my down by half with faster speeds! i was paying 60 for 8mb down, now i am paying 30 for 15mb down. after 12 months its up to $50. wow, i was getting ripped all these years and didnt even know it.
  Congrats, but why do you keep glossing over the wife situation?  Put her butt back to work yesterday!  I don't care if it's WalMart, she needs to pull her weight.

Instead you talk about getting a second job...lol!

  oh sorry!  my wife takes care of the kids full time.  that saves on having to send them to daycare too.0   i guess she can enter into the workforce once the oldest is old enough to watch after the others.   until then i can work....no problem for me.  i probably should have done that years ago though.

Looks like you earn $95K and your expenses are about half of that.  Your wife doesn't work, and you have savings.

Just what is the issue here?

Eagle357 said:   
kriskos4 said:   
Eagle357 said:   desivibe- thanks for the info on the internet. i called by internet provider and they dropped my down by half with faster speeds! i was paying 60 for 8mb down, now i am paying 30 for 15mb down. after 12 months its up to $50. wow, i was getting ripped all these years and didnt even know it.
  Congrats, but why do you keep glossing over the wife situation?  Put her butt back to work yesterday!  I don't care if it's WalMart, she needs to pull her weight.

Instead you talk about getting a second job...lol!

  oh sorry!  my wife takes care of the kids full time.  that saves on having to send them to daycare too.0   i guess she can enter into the workforce once the oldest is old enough to watch after the others.   until then i can work....no problem for me.  i probably should have done that years ago though.

  why aren't they in school for 7 hours a day?

StevenColorado said:   Looks like you earn $95K and your expenses are about half of that.  Your wife doesn't work, and you have savings.

Just what is the issue here?

  
i guese i always expected to be debt free and have tons of money saved by the time i was 40.    my goal was not met.  

kriskos4 said:   
Eagle357 said:   desivibe- thanks for the info on the internet. i called by internet provider and they dropped my down by half with faster speeds! i was paying 60 for 8mb down, now i am paying 30 for 15mb down. after 12 months its up to $50. wow, i was getting ripped all these years and didnt even know it.
  Congrats, but why do you keep glossing over the wife situation?  Put her butt back to work yesterday!  I don't care if it's WalMart, she needs to pull her weight.

Instead you talk about getting a second job...lol!  Your wife would be very excited if you got a second job because that means she can buy more crap and/or a nicer car.

  what is working at WalMart gonna get them?  then they would have to pay for daycare. sometimes it just doesn't make sense for the other person to work when they are taking care of the kids full time.

Eagle357 said:   
StevenColorado said:   Looks like you earn $95K and your expenses are about half of that.  Your wife doesn't work, and you have savings.

Just what is the issue here?

  
i guese i always expected to be debt free and have tons of money saved by the time i was 40.    my goal was not met.  

  when you add 3 kids and a wife to the equation it doesn't always work like that.

Skipping 152 Messages...
Eagle357 said:   ​I plan to pay off car1 and live life again.    Thanks everyone for your advice and good luck!
  We'll see you in a few months...



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