Money Matters
abrewer5
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Money Management Tips
Hello!
I see a lot of mixed reviews for David Ramsey's money makeover so I was wondering what people do other than following Dave Ramsey's strategies to pay off debt and boost savings. My fiance and I just bought a house and it seems we're struggling a lot to come up with the best way to pay bills, while also paying off debt and planning our wedding that's 4 months away. I know we've taken on way too much at once.
At this point:
We each have a car loan, mortgage and I have school loan. I also have 2 credit cards that I need to pay off, which is a high priority for me (about $2400, most of which came from buying the house), we also have a 24 month 0% interest card which we just opened last month for appliances. We have a combined yearly salary of $70,000 so you would think we would have month left over, but at this point it just seems like it's all gone right when we get it. He has a pretty good chunk in savings, but I don't (we don't combine money).
Unlike Dave Ramsey's advice I'd rather not sell my car considering I only owe $5000 on it and it'll be paid of relatively soon. I know we've gotten ourselves into this situation, so please don't burn me at the stake for it, I'm just looking to make improvements this year and try to rebuild my savings and pay off at least all of our credit cards. I will be getting a substantial raise at the end of this month, which should really help hopefully (about $10k), but I also know that unless we change our spending habits it won't help in the long term.
Does anyone have any advice for me to help pay off debt and save? How did you go from having only small debt to have a mortgage + utilities? This is the first time we've lived on our own so it's been an adjustment. Ideally I'd like my own savings, his own savings, a joint savings for any house related emergencies, and of course lower debt/less monthly payments.
Thanks in advance.
I see a lot of mixed reviews for David Ramsey's money makeover so I was wondering what people do other than following Dave Ramsey's strategies to pay off debt and boost savings. My fiance and I just bought a house and it seems we're struggling a lot to come up with the best way to pay bills, while also paying off debt and planning our wedding that's 4 months away. I know we've taken on way too much at once.
At this point:
We each have a car loan, mortgage and I have school loan. I also have 2 credit cards that I need to pay off, which is a high priority for me (about $2400, most of which came from buying the house), we also have a 24 month 0% interest card which we just opened last month for appliances. We have a combined yearly salary of $70,000 so you would think we would have month left over, but at this point it just seems like it's all gone right when we get it. He has a pretty good chunk in savings, but I don't (we don't combine money).
Unlike Dave Ramsey's advice I'd rather not sell my car considering I only owe $5000 on it and it'll be paid of relatively soon. I know we've gotten ourselves into this situation, so please don't burn me at the stake for it, I'm just looking to make improvements this year and try to rebuild my savings and pay off at least all of our credit cards. I will be getting a substantial raise at the end of this month, which should really help hopefully (about $10k), but I also know that unless we change our spending habits it won't help in the long term.
Does anyone have any advice for me to help pay off debt and save? How did you go from having only small debt to have a mortgage + utilities? This is the first time we've lived on our own so it's been an adjustment. Ideally I'd like my own savings, his own savings, a joint savings for any house related emergencies, and of course lower debt/less monthly payments.
Thanks in advance.
Re: Money Management Tips
1. Our mortgage is $1,250 a month
2. My car payment is $250
3. Our parents are paying for most of the wedding, which is absolutely wonderful and we're so thankful, but small costs are adding up. I never really sat down and created a budget for myself. I completely regret this now.
4. The balance on my school loan is $11,600 and there is a subsidized and unsubsidized portion so it's split on rate is 6.55% $5,000 and one is 3.15% $6,500
5. The $2400 is two cards combined one with $400 at 12.99% and one with $2000 at 17.99% which is just crazy I know.
6. We have our appliances charged on the interest free card which is $2000 for all 4, we stupidly didn't want to pass up getting the appliances we wanted on a Black Friday sale for 50% off.
Gosh writing this all out makes me feel like we're in a worse spot than initially realized.
Getting on the same page about finances is definitely a hurdle for us. We both have different money management styles, I'm a bit of a freak and plan everything out, super strict with tracking, and regularly check my accounts to make sure things are clearing properly. Since we've moved in together I've taken the brunt of the household expenses (everything but 50% of the mortgage) because I make more, which is fine, but it's getting to the point where I have no money left for myself, paying extra on credit cards, etc. which just leads to putting more on credit cards. We actually had a chat tonight about the budget and where he could contribute more so I can feel more comfortable as well. I think step 1 is making sure we're on the same page and then getting him to help more financially in order for me to be more comfortable as well.
I'll definitely try the snowballing technique and I'll work on track our expenses. I'd like to know where all of our money goes. My guess would be the majority of unnecessary expenses go to eating out, which is definitely something we need to change!
ETA: As far as the wedding registry goes, that's definitely minimal at this point. I have been buying stuff in preparation for moving out for years so the majority of our house is furnished and we have most of the stuff we need to function! We definitely plan to write our parents a big thank you! It's a huge help to have their support
Thank you so much for the advice! I makes it all seem so much more manageable.
TTC since 1/13 DX:PCOS 5/13 (long, anovulatory cycles)
Clomid 50mg 9/13 = BFP! EDD 6/7/14 M/C 5w6d Found 11/4/13
1/14 PCOS / Gluten Free Diet to hopefully regulate my system.
Chemical Pregnancy 03/14
Surprise BFP 6/14, Beta #1: 126 Beta #2: 340 Stick baby, stick! EDD 2/17/15
Riley Elaine born 2/16/15
TTC 2.0 6/15
Chemical Pregnancy 9/15
Chemical Pregnancy 6/16
BFP 9/16 EDD 6/3/17
Beta #1: 145 Beta #2: 376 Beta #3: 2,225 Beta #4: 4,548
www.5yearstonever.blogspot.com
H and I just got married in August. Pre-wedding, we were open about our finances but kept things separate. Post-wedding, we used some savings to pay off our CCs and have since committed to never carrying a balance again. H was resistant to budgeting at first, but has really come around. Key for us was budgeting some money to just be for "fun" each paycheck, and to allow each of us to save for separate goals (a new computer for H, travel for me, etc.) as well as our shared goal of a DP. I also have a second job on the weekends, and for me it has been a huge comfort that allows me to save quicker.
Good luck! Ditto PPs about dealing with this quickly. Keep it open and non-confrontational with your FI, and you should be able to get right on track.
Oh, another tip.
Shred the credit cards. If you don't have them, you won't use them.
TTC since 1/13 DX:PCOS 5/13 (long, anovulatory cycles)
Clomid 50mg 9/13 = BFP! EDD 6/7/14 M/C 5w6d Found 11/4/13
1/14 PCOS / Gluten Free Diet to hopefully regulate my system.
Chemical Pregnancy 03/14
Surprise BFP 6/14, Beta #1: 126 Beta #2: 340 Stick baby, stick! EDD 2/17/15
Riley Elaine born 2/16/15
TTC 2.0 6/15
Chemical Pregnancy 9/15
Chemical Pregnancy 6/16
BFP 9/16 EDD 6/3/17
Beta #1: 145 Beta #2: 376 Beta #3: 2,225 Beta #4: 4,548
www.5yearstonever.blogspot.com
Yes that's perfect advice and I was actually thinking the same thing too!!
I had done that at one point, and it worked out great. I have one that is still paid off and has been for a year or two now so that was a big help. I plan to cut the cards tonight and live off cash alone from here on out. I'm also hoping taxes will help me pay them down some and build a small savings until I can pay them off completely and save more. We just bought a house so I'm really hoping to get a decent refund this year, but know I cannot bank on that alone.
Like pp said I'd figure out how much emergency savings you need for your household and move that amount into a joint savings. If the appliances are in only your name then I'd say the balance owed on that is a good amount to have in a shared account until you are married then increase it.
If something were to happen before you were married you would be stuck with all the debt and him or his heir with all the money.
Personally I'd pay the 400 cc first because it is such a small amount and I'd want to be done with it then do as others said cc then appliances, car, student loan.
I have always made more than my husband but we live off of his income for the basics because he was raised as the provider and doing it this way has allowed me to be home with my baby for 9 months so that may be something you think about. If you base everything off your income because you make more then you will be expected to maintain that bread winner status through your relationship and there are times you may need to step back from it but are unable too.
When i work it is put into savings to use together. Its never his money or my money as its all developed for the common good of the household.
Thanks for the tips zzbb. The appliances are in my fiance's name and I'm an authorized signer on the account. The house is in both of our names, so not all the debt is in my name and the worth in his, it's a pretty equal split for the most part. He just has more in savings because he had more to start with before we bought our house.
Unfortunately we cannot live off either of our incomes alone, so we don't have the option to put our paychecks into savings alone, but that's awesome you're able to! Hopefully once we pay off some debt we will be in a better place to do so. We're a little non-traditional in that my money is mine, and his money is his. This might change when we get married, but I doubt it. Our main hurdle as a couple is just figuring out how to make sure each of us is pulling their weight and learning to be more strict with our budget.
Thanks again everyone for your help and tips!
One thing about money is that it's ever evolving and you will change your views with all your life changes which is good. Before we were married we had everything seperate and I had seen on suzi orman how to split it based on income when you make different incomes and keep accounts seperate.
Basically you each put a percentage into a joint account to cover all your expenses. For example say your combined bring home pay is 1000. You bring home 600 and he brings home 400. That would mean that you would add all your expenses and pay 60% and him 40% for house hold expenses. That would also need to include planning for household expenses like repairs and unplanned costs.
I found it too hard to keep everything seperate once we were married like when we had medical bills...who paid for them? So over time it all merged. We still have some seperate accounts and our own fun money and it's less stressful.
My H and I have been together 11 years, married 4 1/2, and still keep our finances separate. You just really have to be on the same page as far as finances go. We are each responsible for some of the joint bills-H pays the mortgage and I pay utilities, phone, etc. We each pay our own car payments, medical bills, student loans, etc.
I think it's perfectly fine if you keep your finances separate; however, in order for it to work, you both definitely have to be on the same page as far as who is responsible for what. One thing I find helpful is once a year or so, or whenever our salaries significantly change, I will make a list of each of our earnings vs. each of our expenses. He earns about double what I do, so we try to keep the ratio of what we pay about the same so we both have some 'fun' money. This would probably be helpful for your budget as well.
The biggest and hardest thing that we did was actually develop a spreadsheet to figure out expenses versus income and tracking our spending. The first year of home ownership was the hardest because bills varied for different times of the year (got put onto budget system with utilities so bills are equal month to month making it easier to plan for) and so much stuff comes up too. I am using DR envelope system and using cash to pay for things instead of our cc or debit cards. CC was way too easy to lose track of what was going out, debit card was better, but we were still spending more then we should. Cash is turning out to work much better for us. I think you have to play around and figure out from all the different people out there, what system will work best for you.
My husband and I have joint & seperate accounts. We figured how much each of us needs to contribute from our incomes to cover the monthly expenses & we give ourselves an allowance for lack of better terms. What each of us does with that money, is our own business. I like to save it up for clothes, he likes to go out to lunch & golf. But it's money neither of has to answer for.
On the financed items, figure out what you owe divided by the terms of the agreement to help you know what the minimum is that you need to pay each month to have it paid off in time. I financed some things at zero percent and noticed that if you pay the minimum listed on the invoices (for many companies, not all) you won't have the item paid off by the end of the finance term, which then causes all the back interest.
To save for your wedding, shopping around & searching online will be a huge benefit (also trying to keep things simple). Check out facebook to see if there are any local buy/sell groups in your area with wedding theme stuff. We have one where I live and you can get some great deals from brides trying to get rid of things after their weddings. Also many craft stores offer coupons in the newspaper, email or on their apps. That can add up to huge savings. For tuxes, compare prices of renting a tux to buying a nice black suit. Depending on what stores you have in the area (like if you have a K&G) you might be able to buy a black suit & just rent the vest & tie for less then what it costs you to rent a tux.
Good luck! This is a very exciting time in your life, and you'll figure it out, give yourself some time.