$155K HHI and broke - any tips?

[Anonymous]

If you dont already, you should look into setting up a flex spending account for health and child care. With childcare you can pretax up to 5k a year. Say another 2k for health care, and in total you can save about 1750$ a year. Its free money. On the other hand, until your kid/s are out of childcare, its going to be tight but its nothing most of us on here havent had to go through.

[Anonymous]

Have you adjusted your withholding to account for your new tax deductions for your home (e.g., mortgage interest, property taxes)? Your take home sounds low based on your gross salary.

[Anonymous]

Here's what I did last year:

Pay off the cars, it'll free up a large amount of cash. Your problem seems to be cash flow more than income per se.
Hulu - no cable
Does your office offer a work cell phone? Ditch the personal one
Lose the gym. Go for a jog.
Thermostat programmable .. worthy investment
reuse tampons (just kidding)

[Anonymous]

Anonymous wrote:Here's what I did last year:

Pay off the cars, it'll free up a large amount of cash. Your problem seems to be cash flow more than income per se.
Hulu - no cable
Does your office offer a work cell phone? Ditch the personal one
Lose the gym. Go for a jog.
Thermostat programmable .. worthy investment
reuse tampons (just kidding)

OP doesn't have cable. And shouldn't she pay off her credit card debt first?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have $155K HHI and we are broke. I need advice - maybe I can cut spending somehow? Here are some of our bills:

$2500 - mortgage
$1600 - childcare
$450 - 2 cars
$45 - internet (no cable here)
$200 - 2 cell phones (no land line)


I should have added:

$725 - student loans

and

$350 - elec, gas, water/sewer, trash collection
$100 - life insurance
$80 - car insurance
$200 - credit cards ($5K)
$80 - diapers, wipes, paper goods
$120 - work parking

This is very bad. I would pay this down before you do anything else. If you save 150 on your cellphones you should put the extra into paying down your credit card. What rate are you paying on it? Any chance you could get a HELOC to pay it down? Interest rates are extremely low, e.g. 2.5 with penfed for 5 yrs.
Can you refinance your student loans? What rate are you paying on them?
What life insurance do you have? You should just have one 10-year and one-20 year term for an appropriate amount (e.g. 500k each).
personally I would lose the gym and take up cycling or some other form of exercise like body weights that you can do at home, at least till you have dealt with the credit card debt.
1600 seems a little high for childcare - have you looked into cheaper options?
I get your foot problems, but why do you need two cars?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here's what I did last year:

Pay off the cars, it'll free up a large amount of cash. Your problem seems to be cash flow more than income per se.
Hulu - no cable
Does your office offer a work cell phone? Ditch the personal one
Lose the gym. Go for a jog.
Thermostat programmable .. worthy investment
reuse tampons (just kidding)

OP doesn't have cable. And shouldn't she pay off her credit card debt first?

Its 7am, I wasnt reading too carefully. Yes, credit debt first, car second. I'd also be curious if that $2500 if mortgage or mortgage, taxes, etc. They may have overstretched frankly. We bought with a $1600 mortgage ($2200 with taxes) on $230,000 a year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You could easily save on your cars and cell phones. What is your take-home?

$7300/month take home.

We use verizon with data plans - anyone cheaper?

We cant save on the cars - one is a work car with free gas/insur for $200/mo. The other is a $13K car loan thats only $250/month, so I think with free gas it's reasonable. In 3 yrs, no more car loan.

Maybe I can find household items cheaper somehow, like I wonder what people find at dollar stores? And where can I buy avocados for less than $1 each, etc.

Our gym is expensive - $100/month.

I've been buying household stuff at home depot, like seed. maybe theres a better alternative?

Page Plus Cellular is a non-contract carrier that uses Verizon cell towers. It may not have as comprehensive coverage across the country as Verizon (check out their coverage maps), but it is MUCH less expensive than Verizon.

[Anonymous]

Get a cheaper cell phone plan. You really don't need data. We pay $80 ish/month for 3 cell phones (no data).

Lose the gym membership. Go for a run, walk, bike ride. Buy a few sets of hand weights and rent some videos from the library.

[Anonymous]

You are just guessing at your bills. Register with mint.com or YNAB (google it) and tie your accounts to it. It will log every transaction which can then be categorized (it does most of that automatically -- Safeway = groceries, etc.). After a month you will see places where you can lower expenses. Then tackle everything like insurance, cell phone plans, extra monthly draws that you have on your account that you really weren't thinking about (fee for on-line banking for example, subscription to Angies list, or Tivo, stuff like that). Lower your standing bills, and then reduce your discretionary expenses by buying cheaper or postponing gratification.

See if you can lower your student loan payments if they are Federal loans through the program that ties the payments to your income. GL!

[Anonymous]

No groceries?

[Anonymous]

If you have a good balance sheet but poor cash flow right nnow, go to Secumd.org and refinance both cars at the longest term (6 years) at 2.24%. It will improve your cash flow and the rates are favorable enough that I don't think its a bad idea.

Then keep your cars FOREVER. (If you try to sell them it might become a bad idea b/c their value at some point may become lower than principal owned on the loan)

[Anonymous]

Anonymous wrote:If you have a good balance sheet but poor cash flow right nnow, go to Secumd.org and refinance both cars at the longest term (6 years) at 2.24%. It will improve your cash flow and the rates are favorable enough that I don't think its a bad idea.

Then keep your cars FOREVER. (If you try to sell them it might become a bad idea b/c their value at some point may become lower than principal owned on the loan)

Or instead of hawking some website, she could just pay them off. That would be the smarter choice given their cash flow problems.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have a good balance sheet but poor cash flow right nnow, go to Secumd.org and refinance both cars at the longest term (6 years) at 2.24%. It will improve your cash flow and the rates are favorable enough that I don't think its a bad idea.

Then keep your cars FOREVER. (If you try to sell them it might become a bad idea b/c their value at some point may become lower than principal owned on the loan)

Or instead of hawking some website, she could just pay them off. That would be the smarter choice given their cash flow problems.

Not the PP you quoted, but it isn't that easy to "just pay them off." It doesn't sound like OP has thousands just sitting around that she can use to "just pay off" a large debt like her cars. If she had plenty of money, she wouldn't have posted her OP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have a good balance sheet but poor cash flow right nnow, go to Secumd.org and refinance both cars at the longest term (6 years) at 2.24%. It will improve your cash flow and the rates are favorable enough that I don't think its a bad idea.

Then keep your cars FOREVER. (If you try to sell them it might become a bad idea b/c their value at some point may become lower than principal owned on the loan)

Or instead of hawking some website, she could just pay them off. That would be the smarter choice given their cash flow problems.

If you call listing a local credit union hawking a website, then guilty as charged.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you have a good balance sheet but poor cash flow right nnow, go to Secumd.org and refinance both cars at the longest term (6 years) at 2.24%. It will improve your cash flow and the rates are favorable enough that I don't think its a bad idea.

Then keep your cars FOREVER. (If you try to sell them it might become a bad idea b/c their value at some point may become lower than principal owned on the loan)

Or instead of hawking some website, she could just pay them off. That would be the smarter choice given their cash flow problems.

Not the PP you quoted, but it isn't that easy to "just pay them off." It doesn't sound like OP has thousands just sitting around that she can use to "just pay off" a large debt like her cars. If she had plenty of money, she wouldn't have posted her OP.

+1
It sounds like OP has legitimate cash flow issues. Not "I have $50k in savings but don't want to touch it" cash flow issues. Most people can't just "pay off" car loans.