Solid Financial Foundation, Rocky Marriage

[jimday1982]

Good afternoon everyone! My name is Jimmy and I recently stumbled upon this site after researching information on Vanguard's Managed Payout funds and I am so incredibly glad I did. I've been a big fan of the popular personal finance blogs, Dave Ramsey, and the like for a few years now, and these forums appear to be yet another absolute wealth of information on all sorts of personal finance related topics that I'm passionate about.

My stats:

• 28 years old
• Married (for now ) - I'll spare you the details, but it's on the skids. No kids.
• 792 FICO
• $17,400 in Roth IRA (Vanguard Target Retirement 2045 - contributing $360/month)
• $10,000 in ING Savings (Emergency Fund - will boost to $15K in next year)
• ~$4,500 in Berkshire Hathaway stock (best xmas gift of all time!)
• $3,000 in 401K (Pretty wide swath of funds - just started this year - contributing $400/month for now and will increase when 4% match kicks in next Feb.)
• $3,000 in cash for everyday expenses
• $146,000 mortgage on a condo worth about $120,000. I'm currently paying about $800/month extra on my second mortgage every month and hope to be right-side up in a couple years
• My vehicle is paid for and worth a hair over $10,000

I believe that pretty much covers the basics, but it's probably also worth mentioning that I'm relatively frugal and would much rather save my hard-earned cash for memorable experiences later in life than blow it on junk that will only provide temporary satisfaction in the short term. I'm also a huge Warren Buffett and John Bogle fan, but then again, who isn't?!

All of that said, I appear to be in good company here and am looking forward to learning and interacting with everyone as we all keep on truckin' toward financial independence!

 

[Bestwifeever]

Welcome to the boards, Jimmy. Plenty of you young whippersnappers around and kudos to all of you for thinking ahead.

Sorry about the marriage on the skids and hope it doesn't have a negative effect on your finances.

Have you thought about using that extra $800/mo toward your investments instead of toward the mortgage?

 

[jimday1982]

Have you thought about using that extra $800/mo toward your investments instead of toward the mortgage?

That idea had not occurred to me, but I'd love to hear why that might make more financial sense in my situation if you'd care to elaborate.

For what it's worth, I don't really want to stay in my condo any longer than I have to, so I thought the right thing to do was to plow as much money into the second mortgage as possible (especially since it's fixed at 8%! ) and get it paid off in a couple years. Hopefully by that time, I'd be at the break-even point.

 

[Automatika]

Hi Jimday and welcome! Even if the second mortgage were less than 8% I'd still pay it off. Making it easier to sell definitely makes sense. Sounds like you're making good progress on your retirement accounts, hope the dissolution of your marriage doesn't derail your plans.

 

[Sarah in SC]

Welcome, Jim. Like others, sorry about the marriage situ, but it is better to cut out at this stage than later when you have accumulated more assets and/or kids. The later a divorce happens, the harder to bounce back from, financially.

How's your job? Planning to stay in your town for a while? That might have some bearing on your mortgage plan (and ouch, about that rate and second mortgage!).

 

[jimday1982]

Welcome, Jim. Like others, sorry about the marriage situ, but it is better to cut out at this stage than later when you have accumulated more assets and/or kids. The later a divorce happens, the harder to bounce back from, financially.

How's your job? Planning to stay in your town for a while? That might have some bearing on your mortgage plan (and ouch, about that rate and second mortgage!).

Thanks Sarah. I believe that my wife and I are on the fast track to divorce as much as it pains me to say that and I am most DEFINITELY making that my top priority right now. Whether we end up staying together or calling it quits, I want to get that resolved before the end of the year. I actually spoke to a lawyer about it last week and was told that it would be a very quick proceeding since we've only been married for a matter of months (which I'm terribly embarrassed to admit) - it would basically just come down to splitting up the wedding gifts.

As for my employment situation, it's extremely stable and I see lots of potential for growth and advancement - I'm a system administrator for one of the largest healthcare organizations in the state of Georgia. I thank my lucky stars every day for the opportunity to work for such a fantastic organization as I know many people are not nearly as fortunate.

As much as I miss it back home in Virginia Beach, I feel like I've really put roots down here in Atlanta and I don't see myself moving any time soon. Plus, the employment prospects aren't nearly as good there as they are here.

And lastly, yeah, that 8% rate REALLY eats me up but I wasn't as financially savvy when I purchased my condo as I am now...and now that it's worth substantially less than it was in 2005, I'm up a creek without a paddle.

 

[aaronc879]

My stats:

• 28 years old
• Married (for now ) - I'll spare you the details, but it's on the skids. No kids.
• 792 FICO
• $17,400 in Roth IRA (Vanguard Target Retirement 2045 - contributing $360/month)
• $10,000 in ING Savings (Emergency Fund - will boost to $15K in next year)
• ~$4,500 in Berkshire Hathaway stock (best xmas gift of all time!)
• $3,000 in 401K (Pretty wide swath of funds - just started this year - contributing $400/month for now and will increase when 4% match kicks in next Feb.)
• $3,000 in cash for everyday expenses
• $146,000 mortgage on a condo worth about $120,000. I'm currently paying about $800/month extra on my second mortgage every month and hope to be right-side up in a couple years
• My vehicle is paid for and worth a hair over $10,000

Looks like you are off to a good start and don't NEED to change anything. However, if I were in your situation i'd max my Roth, contribute just enough to the 401K to get the full match then put whatever you can towards that 8% second mortgage. Good luck.

 

[Rich_by_the_Bay]

I wonder if it may not be wise to postpone big money decisions until you speak with your lawyer. Moving money from a divorce-accessible account to one which is NOT accessible might give the appearance of knowingly sheltering funds from the divorce.

I know absolutely nothing about these technicalities personally, but divorce is complicated and it wouldn't hurt to ask and stay out of trouble.

 

[jimday1982]

Looks like you are off to a good start and don't NEED to change anything. However, if I were in your situation i'd max my Roth, contribute just enough to the 401K to get the full match then put whatever you can towards that 8% second mortgage. Good luck.

I think that's excellent advice and realized that I can throw a little more at my Roth, so I just bumped up my contributions to the max. Thanks for pointing that out!

As for the 401K and second mortgage, I definitely see the merit in doing that, but I think I'm going to hold off until the end of the year and see where I am marriage-wise before making that decision.

Thanks for the great feedback!

 

[dex]

Thanks Sarah. I believe that my wife and I are on the fast track to divorce as much as it pains me to say that and I am most DEFINITELY making that my top priority right now. Whether we end up staying together or calling it quits, I want to get that resolved before the end of the year. I actually spoke to a lawyer about it last week and was told that it would be a very quick proceeding since we've only been married for a matter of months (which I'm terribly embarrassed to admit) - it would basically just come down to splitting up the wedding gifts.

I wish you well. Try to keep the relationship with the wife as friendly as possible and do not allow outsiders to poison the situation.
If you have to give her a bit more $ do so. Discord is what increases legal fees.

 

[jimday1982]

I wonder if it may not be wise to postpone big money decisions until you speak with your lawyer. Moving money from a divorce-accessible account to one which is NOT accessible might give the appearance of knowingly sheltering funds from the divorce.

I know absolutely nothing about these technicalities personally, but divorce is complicated and it wouldn't hurt to ask and stay out of trouble.

Thanks Rich. That was actually the very first question I asked the lawyer who I spoke to and I was surprised to learn that it would make no difference to the judge if I moved money from our joint account into one of my own before initiating the divorce. Conversely, if I moved any money around AFTER filing for divorce, that could definitely be viewed as suspect by the judge.

 

[jimday1982]

I wish you well. Try to keep the relationship with the wife as friendly as possible and do not allow outsiders to poison the situation.
If you have to give her a bit more $ do so. Discord is what increases legal fees.

Excellent advice and I agree 100%. When I initially brought up the whole divorce thing, I told her I wanted to keep everything as civil as possible and told her I'd be happy to give her a check for anything she needs during the month and a half that it would take to finalize.

We've since decided to hold off for a little longer to see if it's something that additional counseling can help us with, but if we do go down that route, I will be nothing but sympathetic and cordial to her.

 

[haha]

Thanks Sarah. I believe that my wife and I are on the fast track to divorce as much as it pains me to say that and I am most DEFINITELY making that my top priority right now. Whether we end up staying together or calling it quits, I want to get that resolved before the end of the year.

You should understand that there is no "resolution" to a marriage until there is an annulment, a divorce, or a death of one of the parties. Unitl one of these events, a marriage troubled or apparently stable is always a work in progress, or a slow train wreck as the case may be.

My idea is that if you have been married less than a year and the bloom is already off the rose,

More quality help for a man in peril:

 

[Nords]

That idea had not occurred to me, but I'd love to hear why that might make more financial sense in my situation if you'd care to elaborate.

http://www.early-retirement.org/for...f-the-mortgage-or-invest-the-money-30644.html