Pretty Sure We’re Never Retiring...Need Advice

[pacergal]

OP--
Thank you for the update. Dealing with a health issue for several years can be draining.
I believe you and your husband CAN get out of this situation.

That being said, do not put in a pool until your debt is paid off. Do not add any more debt! There are other things your family can do for fun that will not cost thousands of $$$.
When you land another job, keep living only on husbands salary and put your entire paycheck towards debt reduction and savings. When debt is completely gone, focus on a certain percentage (maybe 10-15%) towards "fun" ie vacations, etc and the rest plough into retirement savings (and college for kids if desired)

 

[CoolRich59]

I'm struggling with the question of 'do we build the pool' or what exactly to do with our back yard, as it still looks like a construction site... Yes, it's easy to say NO Don't Do it...but we want to live life as well and our kids would love it.

Lots of great advice in this thread. I suspect a lot more than you anticipated.

I just wanted to add my .02 on the pool. If your kids are like my kids (or like most kids), a pool is something they will "love" for a couple of weeks and then ... not so much.

When we spent the money to put in an in-ground pool (and I agree that it's going to cost a lot more than $15k), my kids were in it non-stop for the first couple of weeks. Then, as time went on, they used it less and less, until they rarely used it at all.

So, don't use your kids as a rationalization to go even deeper into debt. If you think you really "need" a pool, RobbieB had a great suggestion of getting an above-ground pool.

 

[JoeWras]

A muddy back yard can be solved with family sweat equity. It will be fun bonding experience. Rakes are cheap. Seed is cheap. Just put down some rye right now. It will grow like crazy until June in SC/NC, then die. Put something more permanent down in summer or next fall, depending on what you want.

A pool is not a required solution to that problem. It can happen later, doesn't have to happen now.

I gently suggest going into that kind of thinking mode for the future.

 

[Sunset]

Seconded.

The discussion about tiny aircraft motors was cool, however. Back when I was a kid I used to have one of those pre-RC model planes with a gas-powered engine that had two notable aspects. First, the spring-loaded starting mechanism for the prop was such that if you messed up the starting sequence, one seemingly could have lost a digit (presumably wouldn’t have passed CPSC standards today). Second, the controls were connected to one’s hand by strings, so you had to stand in one spot and spin, thereby inducing vertigo.

Wow, I’m old.

Oh the memories.
I got one, for selling Christmas cards door to door.
It was held together by elastic, so when it crashed it would fly apart instead of break.
Unfortunately for me, somehow I managed to seize up the engine one day.
After that, I gave up on them as they were too expensive since we were low income.

 

[tmm99]

So, don't use your kids as a rationalization to go even deeper into debt. If you think you really "need" a pool, RobbieB had a great suggestion of getting an above-ground pool.

Personally, if I was in their situation, I wouldn't be getting any discretionary, "want to have" items and that includes a pool, above-ground or otherwise. Nobody "needs" a pool, and nobody "needs" 5K window treatments IMO. When I didn't want to spend money (because I didn't have much) and *needed* something to cover my windows (to block the sun and so that people cannot peek in), I went and got used sheets from a thrift store and put them over windows with tacks. Not fun, but I could do it again if I had to.) From my understanding, this family already took money out of kids' educational funds to pay for other "necessities", and a pool certainly doesn't rank as high as putting money back in the educational fund.

I would tell my children, "I would love to get a pool for you, but we simply cannot afford it; we have accumulated a lot of debt and we need to focus on paying that off." Kids can adapt and that this may even teach them that money doesn't grow on trees.

Once both parents are working and the debt is all paid off, they should start focusing on getting things for fun, etc. I used to go to a community pool in the neighborhood when I was growing up, and I had a lot of fun.

 

[daylatedollarshort]

When our kids were young we either joined pool clubs or had season passes to a water park with a float river, wave pool, slides and lifeguards. That was pretty much fun for a few hundred dollars a year for the whole family, something they could do with friends and we had no initial investment, no liability concerns and no ongoing maintenance work or costs of a pool. Annual passes are cheap fun per visit if you live in an area with amusement and water parks. We used to have annual passes for Disneyland, Six Flags and a waterpark, usually bought on some kind of early season special.

 

[CoolRich59]

Annual passes are cheap fun per visit ...

Another great suggestion. My village has a very nice "aquatic center" with a couple of large pools and kiddie pool with water slides. Annual pass for a family of four is $268.

 

[Time2]

Re the pool: Mr Money Mustache did an analysis of a $30,000 pool over 18 years. It came to $18 a swim, Ma, pa and kids for s swim $72, Cha-ching!
I have to include, his analysis includes lost growth on the $30k, which is fine with me.

https://www.mrmoneymustache.com/2018/07/25/the-twenty-dollar-swim/

 

[WyomingLife]

Oh the memories.
I got one, for selling Christmas cards door to door.
It was held together by elastic, so when it crashed it would fly apart instead of break.
Unfortunately for me, somehow I managed to seize up the engine one day.
After that, I gave up on them as they were too expensive since we were low income.

Thank you for that memory!

I’m pretty sure that mine was a biplane. Red. And now that you mention it, it was held together with rubber bands to enable quick repairs after the inevitable crashes. Like yours, mine also had a short life — and I never got another one.

I also distinctly remember the sound the engine made. Very loud, with a specific whine. If I heard it today from a mile away I would know immediately what it was.

 

[GreenEggs]

I've missed a few posts, but how in the world did buying a pool come into this conversation?

My first thought was an image of the family begging on street corners holding signs saying "Please Help - We need a pool- God Bless".

"Pretty sure we're never retiring" is a fitting thread title. That's for certain.

As they say, "There are some things you just can't fix!". I'd say this is one of them.

 

[ShokWaveRider]

The way we see it the OP has 2 options:

1) Continue as they are and work till they drop, and never have any form of meaningful retirement..... just like 70 odd % of Americans.

2) Have an intervention, change their ways, exercise some self control, pay their debts and get their own (Financial) house in order. Look for ways to cut back, make a plan, suffer, if you can call it that for a few years, move on and look forward to retirement.

 

[corn18]

Now technically the OP only asked for advice about the 45K they inherited. But then they provided enough detail to springboard the rest of the advice posted here. But what else can we do, we would have had to sit on our hands to stop posting our pearls of wisdom.

In my first post on another saving forum, I asked whether I should pay off my car loans with my next bonus. It was a straightforward question and I expected straight forward answers. Well, that didn't happen. Those SOB's asked all kinds of irritating questions about my budget, savings rate, age, net worth and who knows what other irrelevant topics. I repeated my question and desire for a simple answer. They were really irritating because they would never answer the friggin' question. They were never rude, but man, did I think they were judgy mcjudgies. Well, for some reason I started to meter out additional information about our overall financial situation and that's when they really found out how bad we were at spending (that's when we were spending $3k more a month than we made and saving nothing).

After a few weeks, I started thinking about what they were saying and finally read that book The Millionaire Next Door. That changed everything (I mentioned this in another post in this thread). Had those very nice folks not kept digging, I would likely still be broke making $500k a year. Once they fond out how bad it was, they didn't judge me, they provided a lot of great advice that put us back on track.

So, the OP may not have asked anything more than a simple question of what to do with $45k, but if they stick with us through the ugly realities that will be exposed and addressed, they may be able to retire quite comfortably.

 

[ivinsfan]

I've missed a few posts, but how in the world did buying a pool come into this conversation?

My first thought was an image of the family begging on street corners holding signs saying "Please Help - We need a pool- God Bless".

"Pretty sure we're never retiring" is a fitting thread title. That's for certain.

As they say, "There are some things you just can't fix!". I'd say this is one of them.

And of course it's not the pool, the pool stands for all the things they want and if it wasn't the pool it would be something else.

 

[ncbill]

And no way is hubby getting a pilot's license for $11k unless he literally quits his job and goes full-time until he gets it...flight time is hard to get on the weekends which is why it took my kid 5 years (high school through first year of college) and over $25k to get his pilots license.

 

[WyomingLife]

The beatings will continue until morale improves.

 

[Time2]

I've missed a few posts, but how in the world did buying a pool come into this conversation?

Post # 83, " I'm struggling with the question of 'do we build the pool' or what exactly to do with our back yard," From the OP.

 

[PoorOldCountryBoy]

Hi there. I’m looking for some anonymous advice from people who have given much more thought to money and retirement than my husband and I have. I’m to receive about $45k in a small inheritance soon, and I have so many options of where to apply it that I’m just...stuck.

I now have about $200k in my 401k at 48 years old. Three years ago, I took out $100k to pay for a sweet piece of property; 5 acres with a 1/2 acre pond that we built our home on. The land is worth at least $130k. We have a $400k mortgage at 4.75 interest for another 27 years, with approximately $150k - $200k in equity. My husband has never saved and only last year began contributing to a 401k; he has a total of $12k at 50 years of age.

We owe the IRS $750 a month (current balance is $25k), have $11k in credit card debt, a personal loan for $12k (12%i) that I don’t remember why we needed, another loan for $20k that holds my SUV as collateral at 8%, a loan for the top of the line appliances that my husband wanted in the home with a remaining balance of $22k at 9% interest (we couldn’t include it in the mortgage without having to bump up to a jumbo loan). We have a tractor with a balance of $15k. We also purchased a vacation club membership for $25k (like a timeshare).

To top all this craziness off, I was laid off from my job in December which paid me $150k/ a year. My husband, who didn’t earn much income at all for our first 6 years of marriage, is the sole provider now, thankfully making $118k/year. Our mortgage is $2720. However, he is obsessed with getting his pilot’s license (~$11k) and ultimately, would like to build his own GA plane ($200+) in the shop he built on our property (value = $35k; cost was less than $5k). I don’t want to squash his dreams, but I think saving for retirement is more important.

I’ve gotten to the final round of interviews a few times already but landing a job is taking much longer than it has in the past. We have two elementary aged children and all of this has me thinking, we are on the brink of disaster at all times. I grew up quite poor (so did my husband) and do not want to live paycheck to paycheck again.

So, what would you do with the $45k? It’s not going to make much difference I think...Very depressing.

The fact you are asking for help is step one. You have a million steps left.

To be blunt you both sound weak willed regarding money but you don't have to stay that way. You both need to get smart by learning about personal finance and keeping self discipline. This is gonna hurt a little.

I grew up in a low wealth area and when someone got a nice job, they would go full yuppie and have the new house car etc. Ask yourself what emotional need you are trying to fill (usually insecurity of some kind).

The secret is to realize you can buy time (your retirement) or some glittery object that will depreciate quickly. What do you want? Most people are short term thinkers and just spend. You need to be different.

Also keep in mind you will need to change your social circles if you hang around with big spenders. They will drag you down with their bad habits. If hubby does not want to do it may be cheaper for you to get rid of him now. (How is that for harsh?? Sorry this is real life here, with a wake up call).

P.S. Don't be too offended with the pep talk, just trying to get real. Good luck to both of you!

 

[Kelor]

Post # 83, " I'm struggling with the question of 'do we build the pool' or what exactly to do with our back yard," From the OP.

This is clearly a shtick. She/he had me for a short while too, but the forum is being trolled.

 

[ivinsfan]

This is clearly a shtick. She/he had me for a short while too, but the forum is being trolled.

You know the fact they joined us in 2013 makes me think maybe not a shtick...

Even if it is shtick someone in a bad money position might read this and get something from it.

We have a good friend in absolutely dire financial problems and if you heard his story you'd say it was shtick because no one could be that dumb. Unfortunately his story is real, horrible and very real.

 

[Bryan Barnfellow]

This is clearly a shtick. She/he had me for a short while too, but the forum is being trolled.

This couple can't even afford a shtick!

 

[Supermint]

It's easy to make fun of others isn't it, when they're strangers behind a keyboard somewhere far far away.

I'll take the good advice and encouragement that many of you have provided; I'd not heard of the 'Consumer Expenditure Survey' or the book 'Your Money or Your Life.'

I'll dump the rest of it. I'm glad that my troubles make some of you feel so great about your own decisions.

 

[mystang52]

It's easy to make fun of others isn't it, when they're strangers behind a keyboard somewhere far far away.

I'll take the good advice and encouragement that many of you have provided; I'd not heard of the 'Consumer Expenditure Survey' or the book 'Your Money or Your Life.'

I'll dump the rest of it. I'm glad that my troubles make some of you feel so great about your own decisions.

May I suggest you send an update in 30-60 days as to what you've done.

 

[Aerides]

It's easy to make fun of others isn't it, when they're strangers behind a keyboard somewhere far far away.

I'll take the good advice and encouragement that many of you have provided; I'd not heard of the 'Consumer Expenditure Survey' or the book 'Your Money or Your Life.'

I'll dump the rest of it. I'm glad that my troubles make some of you feel so great about your own decisions.

I think you're getting some eh... less encouraging comments for 3-4 reasons:

You've had membership here since 2013 but your situation is very very wildly off the path of anyone even trying to ER. Your debt concerns everyone here, but not you, really. And that debt comes from spending and a pattern that didn't start overnight.
Your title says "pretty sure we're never retiring" when that's not the real issue. It's like saying "pretty sure I'll never run a marathon" when you've got braces on your feet. You need to focus on walking and getting healthy (new job, paying down debt, etc.) before retirement savings becomes a thing.
Days after you first post, with a financial situation that would give many of us night terrors, you come back with "and we want a pool" because we want a nice life, so that's gonna make even the most generous folks throw up their hands.

The answer is simple, but won't fit with your desires: Use that $45k now to pay off debts. Figure out why your spending isn't in line with your income and make big adjustments. Get a new job of course, but figure out in the meantime how to live on less than 2 incomes. Start saving - first a 6-month emergency fund (so you don't rely on debt again), and then ramp up 401ks and such. Do that for ~2 years and you might get out of the red and have healthy bank accounts. And THEN you can start to chart a path to retirement.

 

[Another Reader]

Supermint:

You have come to a forum populated by savers and investors. Remember the "marshmallow" experiment? These are the kids that didn't eat the marshmallow, all grown up. Deferring gratification is innate in most people here. Debt is something taken on prudently, with the goal of paying it off as soon as possible, or at the most extreme, leveraging to improve the long term financial position.

When we look at your spending and your finances, we recoil in horror. To most people here, your financial situation looks like a train wreck. Many here have friends and/or relatives that have been in your position, lost everything, and are now charity cases.

I urge you to think about where you will be in 10 years, especially if you cannot replace your last high paying job with the same level of income. How will your children pay for college? What will you use to fund your retirement? These are the issues most people here would address first if they found themselves in your position.

Based on my experiences with people in your financial position, I think there is a decent possibility you could end up in bankruptcy. A hiccup in the economy, a job loss, and a withdrawal of the credit currently offered you could put you there. Think it won't happen? Ask all those people that went under in 2009-2012. They did not think these things would happen to them, but they did.

In my view, the only way to reduce your risk going forward is to cut your spending and start paying off your debt. Give some thought to this possibility, and consider reading some of the material suggested here. Change is difficult, but financial failure is a lot more difficult.

 

[Retired Expat]

Not making fun

It's easy to make fun of others isn't it, when they're strangers behind a keyboard somewhere far far away.

I'll take the good advice and encouragement that many of you have provided; I'd not heard of the 'Consumer Expenditure Survey' or the book 'Your Money or Your Life.'

I'll dump the rest of it. I'm glad that my troubles make some of you feel so great about your own decisions.

Seriously, it did not seem that people were making fun of you. Comments reflected a genuine concern that you had made some bad choices and were continuing to do so. We are a group all striving for Financial Independence, security and long and health lives and retirements.

Please try and view the comments here as coming from a good place and not simply snipping or picking on you or making fun.

I have a close friend who is in the same place as you and it freaks me out. I know I should bite my tongue with her, but it is damn hard to watch and not want to shake some sense into her. I think we were shaking you pretty hard, and it is surely difficult to take. But please don’t discount what was said just because your feelings were hurt.....

And please do update us on how it works out. We are rooting for you!