Leaving Long Island for Texas

[MBAVisionary]

Just realized through my job I have $57k in life insurance and an additional $57k in AD&D. Yes that goes away if I change jobs but still. One could argue some coverage vs none at all but double coverage makes no sense in my situation. That's 26.51/mo.

Contacted Allstate to cancel the $200k policy I have with them. I've paid out $583 since getting it in 2013.

 

[ArkTinkerer]

MBA-- check out MrMoneyMustache. His website matches up pretty well with where you are in life right now. Lots of good tips and inspiration even if you don't go all "Mustachian" on us.

TP's advice is nothing to wipe your bum with either. ;-) Really spot on.

Check on Ting for phone service.

 

[Texas Proud]

Your answers sounds like excuses....

It does sound like you dropped life insurance.... you already have enough money to bury you... its not like you need a big costly burial...

Your phone bill is STILL way to expensive... just do not use 11 GB.... you have to be going through a lot of video to reach that each month.... as someone mentioned, use wifi more... your bill should be cut in half without question... anything else is an excuse....

I do not understand your cable response... you pay $90, but then talk about a plan that is half the price that is still 25 speed... that is PLENTY of speed for one person.... anything else is an excuse...

Someone else mentioned to cut down on the eating out.... I did not since I think you are young and want to get out.... but, you can go out a bit less and save maybe $50 per month...


Just sayin... but you are sounding like your parents (hard headed with your excuse).... they have an excuse to keep spending way too much money.... but, at least you are asking for ways to cut where they seem to want to go down in flames...

So my last recommendation is.... stop with the excuses...

 

[MBAVisionary]

MBA-- check out MrMoneyMustache. His website matches up pretty well with where you are in life right now. Lots of good tips and inspiration even if you don't go all "Mustachian" on us.

TP's advice is nothing to wipe your bum with either. ;-) Really spot on.

Check on Ting for phone service.

I love MMM. Well not that way...though he is a good looking guy. I occasionally read his blogs as inspiration to get myself on the right path. As a society, millennials in particular we think we always need to have the latest Apple / Android phone, laptops with the newest CPUs, current generation everything.

If I keep doing what everybody else is doing I'll be just like everyone else. Stuck in debt, thinking that's just the American way or wondering how I got there. Keeping up with the Joneses will stress you out and leave you in the poorhouse.

 

[MBAVisionary]

The phone data usage is high because I listen to music at work in my cube (firewall blocks everything) and while driving, at the gym or on long bike rides along with inspirational videos on YouTube.

Most of the eating out is dates to be honest. My worst offender was $98 I spent for me and someone I met for the first time because I was tipsy, repulsed by the guy and he made it look like he was going to pay. Didn't realize how much it actually was. That's more than I spend on food in an entire week. The experience was a wakeup call for me.... With friends they know I'm cutting back so we pick somewhere that has affordable options (my whole meal $10-15).

I meet someone I like and they like to go out. Think it's almost a deal breaker if I don't at least go out some of the time. A guy I was chatting with on and off since February and seeing for a little over a month didn't cook at all. He does like going out to drink with his buddies and dinners, etc. A little older and less financial overhead so he can quite honestly can probably afford it. My cooking style is quick, healthy and easy. That kind of fizzled out the beginning of the month though. He said he wanted to take things very slow and had a lot of baggage. Then I said I missed him and never heard from him again... He also was talking about a new car bug after having his car less than 2 years so maybe it just wasn't meant to be...

With Verizon I am in a contract, maybe I can get retention and get the tv bit turned off. Not sure 100% sure how to go about that. AT&T my phone is subsidized. My plan is basically the cheapest one available through them. A current 3gb plan with them would only be 9.99/mo less.

I'm going by How much does an iPhone 6 really cost? (Hint: It's way more than $199) | ZDNet. By signing up with the 2yr agreement until 9/2016 I saved $450 off my phone or 18.75 a month. Being that I have 15 months left I'd have to pay $280 to get out my contract. I use my phone all the time. For directions, social media, recipes, messages from people across the country, dating apps, testing things at work, taking pictures on trips. I'd say I get my money's worth from it. I probably use it for 3-4 hours every day whether actively or passively. I went to the Ting calculator and it said I wouldn't save with it even dropping my usage to 6GB. With 3GB it says I'd save $143 a year. With mobile data usage growing more and more I don't think 3GB is doable.

 

[MBAVisionary]

Just a thought....

Stop paying any extra on any loans... start saving that money as a reserve fund... you should have about $20K set aside and you have less than $2K...

Why have any shares of any company The amount you have invested in them will not make a big difference.... and TSLA could crash as it is over priced... IMO... Invest in mutual funds for now... once you get more you can start to gamble by buying individual stocks...

Why have any life insurance Who is going to get the money.... and why...

Get your cell phone cost down... your costs are way too high... you should be able to cut in half...

Get your cable bill down (or get rid of it).... that is a luxury that you do not need... but, if you do want it, then cut that in half...

TexasProud thanks for the tough love approach. I might not be able to do everything but I am listening. Shifting gears now to put more aside in an emergency fund. The account I designated for that has $75 in it. I wiped it to pay credit card down to 0 last month. I was doing the Dave Ramsey debt snowball type $1k in an emergency fund approach. Now I'm below even that and it's definitely cause for concern.

 

[Another Reader]

Like your parents, you have lots of excuses and don't want to change. Your situation is really no different than theirs. If you don't make changes, you will be eating Friskies under a bridge someday.


Figure out the early termination fees on all these expensive contracts. There is a crossover point at which it makes sense to change. And Ting will save you money when you kick the data habit. Do you have other internet choices? Use them to negotiate Verizon down or switch.


An i-phone 6?? Listening to music at work? Watching inspirational YouTube videos? Ridiculous to pay for that when you are in so deep. Get a radio. Your car probably has one. You are paying for home internet, so watch at home and listen to the free version of Pandora.


Your auto insurance seems high. Accidents? Tickets? If so, change your driving behavior. Otherwise, comparison shop.


As long as you make bad choices and rationalize them, you will never get ahead.

 

[MBAVisionary]

Another Reader, my FICO score is an 848. I attached an image with the coverage I have on my vehicle, a 182hp FWD 4 cylinder Nissan Altima. No accidents since I started driving in 2001, no tickets on my record in the state of Texas. Last year I signed up for Uninsured motorist coverage at the recommendation of my friends. A lot of people here are driving around with no insurance. I seem to be getting a lot of discounts.

Also my electricity bill this month is about $52. I said $100 since I imagined it going up a lot more with the summer heat.

 

[Another Reader]

OK, you now have a baseline for the auto insurance. Call the agent to see what other reductions you can negotiate. Then call all the other companies and get quotes for the same level of coverage.


Your mission in life right now should be cutting every expense you can until you can pay off your debt and adequately fund your retirement savings.


Of course, there is also the income side. What can you do to increase your income? Any promotions coming up? Merit raises? Higher paying positions for which you can apply? You mentioned some type of side work. Can you devote some time to that?


Once you get the loan monsters off your back, you can relax a little. You have already paid off a lot of them on a relatively small income. Your expenses went up when you split with the ex. Get them back down or increase the income and you can make good progress again.

 

[aaronc879]

So I want your input guys. I don't have enough to invest with a financial advisor. Think I'm the best off long-term financially of all my family members considering my age so can't really go to them for advice. Friends get a little uneasy talking about money / aren't as intense as I am. So I'm gonna dish all my financial numbers on here.

Current Student Loan Balance $16,210.56 @ 4.25%
Car Loan Balance: $13,689.14 @ 0%, 4 years remaining at my current 280/mo payment amount
Credit Card Balance: $1545.17
Savings: $1846
Roth IRA @ Discount Brokerage House: $721.42

401k: $9058.59 Balance $6953.13 is actually vested. I'm about a year from being fully vested. Contribute 6% of my income and employer currently matches half of that. I think the matching started after a year of my employment there.

Take home pay: $3200/mo. I was paying $1k/mo to my student loans but now that I've redone my budget to include the house money that will soon be coming to an end that will no longer be an option. Basically if I follow that plan, my expenses always will exceed my income and the credit card balance will keep growing.

Here is my budget in Dave Ramsey's Every Dollar tool:
Main Job: $3200
Expenses:
Emergency Fund: $100
Roth IRA: $100
Rent: 773
Water: $15
Electricity: $100
Cell Phone: $88
Cable / Tv: $90.32
Gasoline: $80
Car Payment: $280
Groceries: $300
Restaurants: $200
Pet Care: $20
Gym Membership: $57 (dropping to about $20 soon but my old $35 membership has one more cycle)
Life Insurance: $26.51
Auto Insurance: $83.50 (not really a monthly expense since I pay it for 6 months)
Student Loan: $800 (dropped from the $1k I have been doing since that's the only way to budget things)

Leaves me with about $86.67 leftover in my budget. Don't think I'd have any problems spending that. This month for example I ran over a nail and needed a new tire. This is the second time that's happened in the last year. Close to $195 total including labor / tax... Looked at downgrading my car but don't want to be that extreme. Plus the depreciation after one year. We're talking 20%+. Have $5k equity and the cars I've seen for that... well they look like they need some work. Each year the car pmt is less than 6% of my gross and the balance is less than 25% of my annual income. I also plan to keep this car another 5 years easy.

So what do you guys think? How am I doing? What would you do differently? Also I'm really good at talking to myself. Maybe that's why I blog just to get the thoughts out since friends are few are far between sometimes...

I don't even know where to begin. You are in horrible financial shape at age 31. You have negative net worth. You spent way too much on a new car and you carry a credit card balance At least it's a dependable 4 cyl car not a V8 Pick Up or something else crazy like that. Plan to keep the car for the next 15+ years. If you can't pay the credit card off in full every month then cut it up and throw it away. Start only paying the minimum on your student loans and put the extra toward paying off you credit card and increasing your emergency savings to at least 3 times your expenses... lets say $10K or more. You're spending $500/mo on food for 1 person? That should easily be cut in half. I spend $200/mo or less and i'm a big guy. Cable TV is a luxury for those who can afford it. You are not one of those people. I've never had a take home pay as high as yours yet I still had savings of over $100K at age 31 and that's also the year I paid off my $40K condo and haven't had any debt since(now age 36). My car is 11 years old and i'll likely drive it for another 5-10 years before paying cash for a USED car. You can do much better and I wish you the best. Good luck.

 

[MBAVisionary]

On the TV side. I will give Verizon a call tomorrow. I probably turn the tv on once a week if that. Apparently they don't have a customer retention department anymore. Looks like the two options for my complex are Verizon or U-Verse. U-Verse is more expensive with a slower plan and they charge extra for the wi-fi router.

I was stressed out for a while at work and ate daily at our cafeteria. Very easy to spend 10 bucks a day there. So $50/week * 4 weeks = $200. That's not including groceries or eating out.

My vacation has sucked, I didn't see any friends, have mostly been in the apartment by myself and father's day is tomorrow. One of my younger friends who makes over double what I do is vacationing in Florida with his bf and not long ago he was in Europe for work. He just bought brand new sports car and his bonus is more than what make in a whole year.

I have broken down a few times and made frivolous purchases to help fill a void. Maybe the car was one of them. I've tried to make friends in my 4 years here but not much luck. I try not to drink / eat out for health reasons and most of them are the opposite. My ex would go out 4 times a week and likes to drink...

Done meetup groups, made postings on craigslist, went to a bike rally thinking I'd find someone to talk to, tried to go to a bowling event by myself before anxiety kicked in. No one other than the guys I dated briefly have come to my apartment and I've been here 6 months. In some way I justified spending money I didn't have to on dates because I at least got some kind of attention. As far as friends, almost all of them earn more than I do by 50-100% or have a multi-income household so even if we do find a common ground place I take a bigger hit financially.

2 years ago my student loan was $39k now it's $17k. If I paid the minimum the loan would be closer to $30k but I'd have a lot more in savings. I now see how it's an absolute must to have a buffer.

As far as my current earnings. That's only been the case for the last 2 years. For 2012 I grossed ~$29k/yr. Half of 2011 with my move I had 0 income and only grossed about 14k for the year. Half of 2009 / 2010 I lacked ambition & worked a misleading part-time job before depleting 10k of savings to live then got a full time job making my total gross in 2010 about $17k and in 2009 I was jobless for 2 months before going into the pt time gig where I never made more than $500/mo. In 2008 I bought the car that I sold last year. So yeah I've been all over the place. I take full responsibility for my actions, no one forced me to quit a job after I emotionally felt broken and defeated...or work for a cheap multimillionaire CEO when I knew my talents / value wasn't being recognized. That was all my doing.

Raises / promotions are a possibility. I'm still trying to move up. Without going into too many details I'm at the lower end of the pay band for my position and have been doing the job of two people for a while. It's been a bit frustrating but I need to become vested while also eliminating these gaps on my resume. Over the long term I don't know if I can reach the level needed in this field to hit my earnings goals. A lot of what they've learned is from experience but the only way for me to get experience is to reach out to other people. However when I'm fighting to stay above water each day and they're bombarded with meetings...time for secondary projects isn't easy.

In closing. Yes I can and will do better. Comparing myself to others is kind of depressing so I try to avoid that when possible. I don't necessarily see everything that was involved to help get there where they are today. Not sure if I could personally handle their 60+ hour weeks. At that point I'd feel like a slave to a job. So I'm going to compare myself to where I was a day, week, month, year ago to see where I'm trending. I really do appreciate everyone's advice here. I don't post much because it seems like I'm so far behind. I want my results / actions to count more than what I type here.

Can't change the past but I have control over my present and future.

 

[Texas Proud]

I cannot believe that your FICO is so high.... higher than mine and I can guarantee I have more money and more income...

But, I do have a car note and a house note.... but low interest so do not want to pay them off....



As for comparing yourself to others that go out all the time, go to Europe etc. etc... that is a fools game... if you do not have their education, their salary etc. etc. there is no way you can keep up with them... it sounds like you wish you could and are getting depressed because of it... which leads you into making bad decisions....


The first thing you have to do is be happy with YOURSELF... it can be hard to do, but if you are not..... nothing in life will go well.... good luck...

 

[ivinsfan]

Wow, some of the last few posters are really dishing out the "tough love". You could change a few things but you are trying and thinking about where to go next. Given the example of your parents and the fact you are a young single guy, I think you are making a real effort.

Check your expenses for some places to cut back, don't make any extra payments on your student loans, put that money into an emergency fund. Get some clarity about what you spend on cars and you will keep making strides in the right direction. Also, don't think you have to make so many excuses for your past actions, just try to learn from them so you don't repeat them. Good Luck

 

[Texas Proud]

I know the OP said 'tough love'... but I do not see it that way... I see it as a different perspective that I assume nobody he knows is telling him...

He asked for opinions and I gave mine... he can take it or leave it as I have no skin in the game... nothing personal on whatever decision he makes...

I do find it fascinating what some people say is normal.... from the court shows that I watch at time it does seem like an expensive phone plan with an Apple is 'required'... I saw one the other day where the person had to borrow $50 to start their plan and the monthly bill approached $500... for two phones... and these are POOR people... then was surprised that their friend did not pay their share....

 

[MBAVisionary]

I may have mis-estimated my earnings history for the last few years. Here is a more accurate summary:

2014 $55,334
2013 $48,247
2012 $29,685
2011 $15,528
2010 $17,615
2009 $29,884
2008 $35,799
2007 $29,129
2006 $25,550
2005 $18,450
2004 $14,614
2003 $11,439
2002 $12,923
2001 $6,365
2000 $7,297
1999 $1,924

I was in HS from 99-01, full time college student from 01-05 and in grad school from 05-07.

Update - I called Verizon and would have to pay a $180 early termination fee as my contract is in effect until December 14, 2016. Downgrading to internet only 50/50 would be 84.99, 25/25 would be 74.99. So getting rid of TV and doing internet-only would only save me like $5-10 per month. Actually more once you roll in taxes / miscellaneous fees. I didn't feel like arguing with them on the phone.

Thought about moving to a 3g/4g service like Clear. A friend used it for a month years ago and returned it due to extremely poor service. Yelpers agree, it sucks.

 

[MBAVisionary]

I know the OP said 'tough love'... but I do not see it that way... I see it as a different perspective that I assume nobody he knows is telling him...

He asked for opinions and I gave mine... he can take it or leave it as I have no skin in the game... nothing personal on whatever decision he makes...

I do find it fascinating what some people say is normal.... from the court shows that I watch at time it does seem like an expensive phone plan with an Apple is 'required'... I saw one the other day where the person had to borrow $50 to start their plan and the monthly bill approached $500... for two phones... and these are POOR people... then was surprised that their friend did not pay their share....

I agree with you on what is normal in this country. I'm sure some people making near minimum wage are going working and borrowing money just to have the latest phone. Not thinking long-term about their career or other aspects of life. $500/mo for a phone I'd do a $20 prepaid before I did that. I cosigned a phone for someone in 07 that was $500 and he was working as a cashier. Couldn't afford a car. Dating-wise he would go out with friends and never invite me anywhere. He said the phone was a gift to him and wouldn't give it back. I cut ties to him after that and fortunately only had to pay back a portion to the phone co.

My friend with a ton of credit card debt. He borrowed close to $30k on a car at close to 10% interest because of his credit. Then proceeded to drive almost 15k miles in 6 months. The car was worth about 10k less than he paid for it when he asked about turning it in. He moved closer to work, gave up his $1k+ luxury 2br apt to live in a room but still has the expensive car.

My takeaway is putting things into perspective. Many non ER folks don't think about the long term impact of their financial decision. They think short-term and falsely attach happiness to material things or experiences that often go on credit. Then time passes, the bill is still there and the item / experience that once brought joy is now a burden.

One of the things I overheard MMM speak about is studying happiness to help break the attachment with consumerism. He's spot on.

 

[Texas Proud]

I may have mis-estimated my earnings history for the last few years. Here is a more accurate summary:

2014 $55,334
2013 $48,247
2012 $29,685
2011 $15,528
2010 $17,615
2009 $29,884
2008 $35,799
2007 $29,129
2006 $25,550
2005 $18,450
2004 $14,614
2003 $11,439
2002 $12,923
2001 $6,365
2000 $7,297
1999 $1,924

I was in HS from 99-01, full time college student from 01-05 and in grad school from 05-07.

Update - I called Verizon and would have to pay a $180 early termination fee as my contract is in effect until December 14, 2016. Downgrading to internet only 50/50 would be 84.99, 25/25 would be 74.99. So getting rid of TV and doing internet-only would only save me like $5-10 per month. Actually more once you roll in taxes / miscellaneous fees. I didn't feel like arguing with them on the phone.

Thought about moving to a 3g/4g service like Clear. A friend used it for a month years ago and returned it due to extremely poor service. Yelpers agree, it sucks.

Well, it looks like you are now going in the right direction salary wise..... good for you...

Yep, it does not make sense to downgrade for $10 per month... internet is expensive in the US for some reason (well, I know... due to monopolies)... in Europe it is much cheaper... so are cell phones... I think we are moving in the right direction on cell phones but not internet...


Just another suggestion.... never put anybody on any kind of plan with monthly payments unless you can cancel at any time without a fee.. it is surprising how good some people are at getting people to do things for them... they will promise any and everything if you just do this for me.... but they have zero intention of doing so... they just move on to the next mark... It sounds like you have been learning some of these lessons as you age... most people go through this learning process...

 

[MBAVisionary]

It's been a while, but wanted to give you guys a few updates...
2016: Not justifying it, but I traded in my 2014 MY car for a more powerful one, setting me back $32k. Paid Off $47k in Student Loans, payments were about $60k once interest was added in.
2016/7: Incurred almost $8k in medical debt, an unpreventable ER visit in 2016, a followup visit for surgery in 2017. Due to the nature of the condition, left untreated it easily could have killed me. That debt went on credit card at 0%.
2017: Got a promotion, $5k bump in salary to $67k/yr
2018: January - Paid off all medical debt. February - Paid off iPhone 7+. Got a new job with a salary of $80-90k.

401k is currently at $35k. In the process of rolling it over. Company match won't kick in until 5 months from now. 3% at 100%, then 50% match up to an additional 3%. It's going into a Fidelity account 95% FSKTX at a .03% expense ratio, 5% in BlackRock US Debt Index Non-Lendable Fund Class F at a .03% ratio. Short term I'm only putting in 6%.


Need some advice from someone wiser. My 1br rent is $848/mo and comes up for renewal in June. Considered moving to a nicer place, one closer to work (currently have a 30-40min commute), but 13% of my gross is sort of a steal. Currently owe $20k on the car at 1.9%, that is my only debt right now. I'm not sure what order to do things. I could pay the car off in 9 months, max out my Roth IRA for 2017/8, max out my 401k for 2018 and reduce my taxable income. There is a definite possibility of moving in the next 2-3 years, plus I'm single so real estate likely won't be a short term play.

 

[Htown Harry]

Sounds like you are doing quite well, MBA.

Here's how I would tackle it. Calculate your year-by-year cash flow and net worth over the next five years. Optimize for the maximum net worth in year 5.

The expenses can be at a high level, maybe 10 categories. These would include your required living expenses: housing, food and other household basics, vehicle operating costs, taxes, health insurance, etc. You will also need a line to account for your all-in vehicle capital costs, which can be variations of a cash purchase, monthly P&I payments, savings for the next vehicle purchase and depreciation.

Once you have a good handle on that, subtract the bottom line from your gross salary for a "free cash flow" number that you can use as the basis for part 2 of the spreadsheet, a series of what-if allocations between all of your discretionary spending. This would include travel & entertainment, and the variety of investment options you have laid out: cash savings, 401k, Roth, early payment of debt. For the 401k, you'll have two components - your contribution and a credit entry against the tax bill. (The match doesn't affect your cash flow; it flows directly to the next page of the spreadsheets.)

The investments you make will cascade down to part 3, your balance sheet with net worth totals by year.

Keep it simple to start. Version One doesn't need to have complicated projections on salary changes, inflation or investment returns.

 

[ivinsfan]

You still need to come to grips with your car spending...if you keep swapping out your vehicles like that, you are going to have an uphill climb.

 

[Texas Proud]

The commute is not bad compared to many...

But, how much would it cost you to move closer? Is the new place in a nicer neighborhood?

Also, do you drive the whole way or take some form of public transit?


I know that here there are closer places to downtown, but there is a good amount of RE between where I am now and downtown that is much worse than here... and getting really close is at a much higher cost... I had about 50 to 60 minute commute and lived with it for years... no good alternatives..

 

[jfn111]

Welcome back MBAVisionary. Congrats on paying off the student loans.
Maybe stay put for one more year and pay the car off. That way you free up some cash for a nicer apartment.

 

[MBAVisionary]

You still need to come to grips with your car spending...if you keep swapping out your vehicles like that, you are going to have an uphill climb.

Couldn't agree with this statement more. The car I had a 2014 Nissan Altima was sort of known for transmission problems that I found out after I bought it. The warranty on the 2008 was extended to 10 years/120k miles.

Examples:
1.https://www.carcomplaints.com/Nissan/Altima/2014/transmission/transmission_failure.shtml
2. Nissan Altima Transmission Problems | Nissan CVT Transmission Recall
3. https://www.carcomplaints.com/news/2017/nissan-sentra-xtronic-cvt-lawsuit.shtml that's with a similar transmission used in the Sentra.

The 2016 Maxima uses a slightly different design with a chain as opposed to a series of steel bands and metal links. Over time it has proven to be more reliable. I'm still on the fence about getting an extended warranty. It's about $3k, but a new one would be about $5k with parts and labor. Maybe my intelligence is lacking for getting another car with a CVT that doesn't have the best track record. Then again I had my 2008 for 7 years with only one minor transmission issue. Kind of a crapshoot.

 

[MBAVisionary]

<mod edit>

I've been in Texas since 2011. Yeah I've become more conservative as I get older. You'd think a gay, black mixed race guy from New York would be super liberal. I am with certain things, but still like people to pull their weight when possible. It's a good city overall. Not perfect but the job opportunities, lack of state income tax, relative low cost of living, warm climate, central location in the US still make it a good choice. The pensions were mismanaged, education system is in disarray, plus police department has big recruiting problems, along with the city growing faster than they can build. Pros and cons right?

 

[MBAVisionary]

Welcome back MBAVisionary. Congrats on paying off the student loans.
Maybe stay put for one more year and pay the car off. That way you free up some cash for a nicer apartment.

Thanks for the welcome back. Yeah I might just renew. Would like a decent cushion in case an emergency pops up. Murphy's Law... I have never had more than $5k liquid at any point since 2009. It's gone almost entirely toward debt. Can't take back the past but that's really my biggest regret. I've been hyper focused on paying along with adding debt and didn't think too much about where I'd be in a pinch.