Datasets:

danielv835

/

personal_finance_v0.2

like 22

Human: Some background: I bank with Bank of America. I have ~720 credit score. I have a month-old credit card with BOA. I have 2 negative marks on my credit report from about 5 years ago, ER bills that went into collections adding up to $300. I make 24,000 annually, live with my parents (no rent) and my bills are ~$700/month. I'm in the market for a $20k-$30k car. My current car will be traded in for $5,000. I don't have any down-payment money. I went to Bank of America today to apply for an auto loan and was denied for a loan on a $33k 2012 used car. After researching some online after the fact, I found out BOA isn't very easy to get auto loans. I'm reading that credit unions are much better, so I will be going to one tomorrow. I'm bringing in the VIN to a car that is $26k. At BOA they didn't ask about a trade in; should I mention this at the CU tomorrow? I don't have a co signer, and am in need of an auto loan ASAP. Any advice would be greatly appreciated.

Is this a joke? You can't buy a car that is way more than your take home pay.

so you make 24k a year and want a 30k car? Im kinda shocked they turned you down

Human: I just got accepted to a top-notch code accelerator and need to pay a large chunk of change quickly to start on time. I don't want to clean out my bank account, so I'm looking to subsidize the cost with a loan or credit of some type in the short term. I actually have a job lined up with a friend at a startup as soon as I finish the program and I know the salary will quickly cover the loan. So, I'm not worried about a long payoff time. However, I don't want to get suckered by some payday loan equivalent. I'm a grown up with great credit, so I'm just wondering about all my options. The one big caveat is that code accelerators aren't accredited in a way that makes them eligible for student loans.

Man this has bad news written all over it. Is this one of the 12-week boot camp things? Is there a reason you're doing this instead of something like Coursera? How firm is your employment prospect with your friend? Maybe you could ask your friend to bankroll your tuition at the boot camp with the condition that you pay it back out of your salary after you complete it. If you drop out/fail then either you owe him the money right away or via payments (or he just forgives the loan). Draw up a real contract so it's all legally binding.

What the hell is a code accelerator?

Human: Hey guys. Long story short: I am $240000 in debt for my undergrad. I made some horrible decisions and choices, and am through trying to justify them and convincing myself that its not my fault. I completed a 5-Year Business degree at a university that is known only for their Engineering program. It is, more or less, renowned for being one of the most expensive schools at the worst value. I paid book price for it. I graduated 2 years ago and bounced around jobs ever since. I landed in a government agency with little-to-no upward mobility. I am still seeking a higher paying job with the fleeting hope that some day I may be able to pay this thing off. 90%+ of this debt is privately held, and co-signed by my parents. All of my deferment has expired, and none are eligible for income based repayment. I have made only a couple "good faith payments" at the request of my mother. It is all in default, and I ignore 15+ collection calls per day. I I'd rather this not become a conversation about my horrible choices to accrue this debt, but a discussion to perhaps resolve the situation. I have posted this several times in other subreddits seeking the latter, but only got the former.

I know this would only make a slight dent, but any chance you could live with your parents for... 25 years?

that is going to be hard to dig out of

Human: It seems every post on this sub is someone asking if they should use their savings to pay off X(loans, mortgage, car payment, etc). My question is, outside of your emergency fund, what is the purpose of have thousands of dollars in savings? Obviously people *save* for things, but so many people say that they have like 50k in savings, but 42k in student loans (or car payment, or huge mortgage left). Why not pay that off (assuming you have a separate emergency fund)? Instant return, isn't it? This has always confused me. It seems like there are so many ways to make your hard earned money work for you, WAY better than a savings account interest rate (which I admit have been higher in the past).

Opportunity. Cash is always king and you're limited to what you can do if your money is tied up. That $50k could make you that much more desirable of a buyer if you tossed that onto your down payment for a dream home. What if you see that the housing market is going to pick up soon and you have the perfect chance to pick of a quadplex or something. You might have to pass up on a great opportunity because you no longer have the cash on hand. I think it ultimately depends on your risk tolerance and age. You're not going to see many older folks leveraging their money as much.

In your example, MANY people don't pay off their debt because they fear having an empty savings account. They fear that they'll incur massive debt immediately afterward, like it wouldn't happen any other time, and they won't have the funds in their savings account to pay for it. Yet they're ok with being charged all the different interest charges all their accounts accumulate. Its stupid really. You would rather pay a combined interest rate fee of $50-$250 per month over the life of the loan than to take that money and put it into a high interest rate of return account?

Human: Since savings account interest rates suck, I was thinking about moving my emergency cash into a bond fund, like Vanguard's Long-Term Investment-Grade Fund (VWESX). Thoughts?

Emergency funds are for emergencies, which can often correspond with market declines (such as job loss). Your emergency fund is not an investment, it is insurance. Leave it in a bank account.

I wouldn't move 100% in there, but as long as you keep 1-2 months in something highly liquid and you understand the risks of bonds then it's not that terrible of an idea to put some of the out months into a bond index.

Human: So, I recently obtained a scanner and started scanning financial documents to be stored on my computer. I also will have this backed up to the NAS, and also have offsite storage (CrashPlan). What sort of important financial documents should be kept/scanned? What sort of documents can be scanned and tossed? What documents can be tossed all together? I've been reading up on this subject, but I can't seem to nail stuff down myself. Side note - I don't see the point in keeping utility bills beyond a year, but Reddit - what do you think?

>I don't see the point in keeping utility bills beyond a year I don't even open the utility bills before throwing them away. Everything's online these days. When I was young and first started paying my own bills, I would keep stuff like this, too. It seemed like the responsible, grownup thing to do. Do you know how many times I had to go back into the file and look at one? Zero. Keep copies of contracts, e.g. anything you sign, insurance policies. Keep the title to your car, the deed to your house, etc. Anything else, like monthly bills and bank statements? Shred away imo. Basically, just honestly ask yourself, "Am I ever going to look at this again?" and, "If I needed to look at this again, is this the only copy that exists anywhere?" If the answers to those are "No" and "No" then don't waste time and space storing it.

Stuff I Keep Paper Copies of, and Don't Scan * Tax Returns * W2s Stuff I Scan and Archive * Car maintenance documents * Medical documents/bills * Work Benefits Summaries * Utility bills that don't have an online option * Major bills (school tuition statements... etc) * Any sort of insurance paperwork * Apartment leases/documentation Stuff I Shred Immediately * Retirement earnings statements * Personal investment statements * Credit card bill statements Other obviously important documents (passports, birth certificates, deeds/titles), I keep in a fireproof box.

Human: I have a credit card with ($730) on it, and have $700 in a savings account. I usually make $30 payments. If I pulled money from savings, I could completely pay off the balance on that card. I still have $1,100 saved elsewhere, which would easily be accessed if needed, so I wouldn't be depleting all of my savings. The interest rate on my card is 17%. Should I pay off the CC and be free of that interest, or keep the $700 in savings and continue to make monthly payments? Thanks!

Pay off your CC.

is this a joke?

Human: My GF has $5000 in Credit Card debt (assume 18% interest), and $5000 in savings (as well as some unknown amount in a 401k). She's refusing to pay off her CC Debt in one fell swoop, because she says it's scary to have nothing in savings. I want to convince her that it's still the better plan, because once she zero's her CC Debt, she can get true, optimal growth in her savings. Can you guys help me explain this to her? I think a CC Debt calculator would help to show her, but there's an emotional component here that I want to help her with.

It's important to realize that a line of credit for $5,000 and $5,000 in cash are not the same thing. At any time the credit card company can reduce your credit limit with no warning. This is part of the reason why /r/personalfinance recommends having a cash savings account, and not relying on a credit card for an emergency fund. Just the other day I saw a comment from a guy saying that his student loan servicer made some screwup (not his fault) that caused a hit on his credit report. His credit limit was instantly reduced by thousands of dollars. Moral of the story: Cash is always better than credit. Build an emergency fund (in cash) and then pay off the credit card with income. I generally side with your GF on this one. I understand you're trying to save money on finance charges. But what if she loses her job right after she makes the payment? Cash is safer. If you **really** want to pay off some of the CC with the emergency fund, use half of her savings account, not all of it. **TL;DR: Don't pay off debt at the expense of your emergency fund. I know you want to save money and not pay finance charges, but an emergency fund is important.**

There are a lot of long winded replies, but the bottom line is that $5000 in her savings is COSTING her ~$80/mo. Pay it off and start rebuilding the savings, it will go much faster than trying to pay off that debt slowly.

Human: I created a Gross salary calculator based off of how much student debt you have/expect to have. I made this while I was weighing the option of going back to get a graduate degree in my field. I wanted to see if my future earning potential would justify the cost of going back to school. [**Salary Calculator**](http://www.manventist.com/tools/minimum_salary_calculator) *A few notes* 1. [This is based off of the student loan counseling everyone goes through](http://i.imgur.com/jg7DhUs.png). Recommendations from the government is that the student loan debt should be between 8-15% of one's income. I've seen other places recommend 8-12%, which determines the minimum and ideal amounts in my calculator respectively. 1. The interest rate is the same one used for the government student loan calculators you can find online, 6.8% which is the same as a the unsubsidized stafford loan. Ideally you're student loans are lower, but some may be higher private loans while others are much lower. I did this out of simplicity, but if there's enough demand I may change things so that you may add your individual loans and interest rates to calculate out the results. 1. I've also included the graduated repayment plans that can be offered, as well as "minimum raises" to keep up with the gradual yearly increases in these plans. 1. Income-based repayments are not included in this since it's highly variable. *Note that this shouldn't be taken as the the final say, but just to give a general idea.* Part of my motivation is also to help some of my younger friends to understand the costs associated with their education. I remember not paying any attention to my entrance and exit loan counseling in school, until my first student loan payment came due. *Full Disclosure: This calculator is associated with a blog I manage. You can ignore the blog, there's no advertising or revenue being generated on the calculator page.* **EDIT:** There's an error that's showing incorrect values, if the numbers appear to be astronomically high, reload the page and try again. I'm addressing it now. When I put in $40000 for undergrad it was showing the calculations for $140,000. **EDIT #2**: If you don't have any graduate loan debt, leave it empty instead of placing a 0. Having something in there runs a different algorithm and is producing funky results for some people. I'll be addressing this in a few hours when I'm home from work, sorry for the confusion.

The fact that my comfortable salary is lower than my current salary makes me feel like I've won the lottery.

Higher education is increasingly a losing choice. If you have over $100k in student debt (I have none luckily), you're then forced to get a very high paying job in order to have enough left over from the thieving government's tax theft to pay off the loans. It just makes far more sense to get practical skills straight out of high school so you can start earning money earlier, save and invest it, and then have no debts. There's no doubt about it, college is a bubble about to burst, and online learning and tech schools are the solution.

Human: I'm currently planning my wedding and had the idea to get a travel rewards credit card to help pay for my honeymoon with the rewards gained through putting all of our wedding expenses on the credit card and immediately paying them off. I'm great with credit card management and this will be a great way for my fiance to gain a little credit. What credit cards would you recommend me looking into for travel rewards? We don't have a plan for the honeymoon yet but I figured we could at least pay for our airfare taking us to a cruise port from Missouri. Thanks for any help.

You might want to look at /r/churning and post there after reading a bit. I'm hoping to do this with Chase Sapphire Preferred cards, mostly because we each have a decent cache of Chase Rewards points from our personal freedom cards. I will also look at the SPG AMEX once we get done churning the Chase cards.

we opened an SPG Amex for all our wedding expenses. also got married at a Sheraton, so we were considered event planners and got whatever perks come with that, plus double points on money spent at the Sheraton. also negotiated to have our SPG number on every hotel room under our block, unless the guests had their own SPG number, so racked up even more points there. we still use this card for majority of our spending, and a couple months after our wedding we hit Gold status. if I travel for work, I stick with SPG properties. you may not be able to rack up enough points/miles/whatever to get a good deal on your honeymoon, since that will probably need to be booked while you're still wedding planning and probably have not made final payments on a lot of things. still a good idea, and you could possibly cash out for a nice anniversary trip instead.

Human: A friend told me this is the place to ask, I hope this is an appropriate place for these kinds of questions. A little background: I worked at a company that had a 401k with fidelity. I accumulated ~$26,000 in that account. I left that company and did a "rollover" into a IRA at fidelity. I'm not sure why I did this, it just sounded like the kind of thing you're supposed to do. I have a 401k at my new company which is through Vanguard. There's about $11,000 in that account which is all in a Target Retirement fund. Is that a good idea? I moved my IRA from Fidelity to Vanguard. Again, don't know exactly why, except I heard Vanguard is good and it seemed easier to have all my accounts in one place. When I log into Vanguard there is a "Rollover IRA" with $0.00 in it. There's a "Rollover IRA-Brokerage Account" which has the $26,000 invested in all the same things it was invested in at Fidelity (FUSEX, FSTVX, FBIDX). I have only a vague idea what those are and no idea if those are the right things to have my money in, I must've picked them a few years ago. Should I exchange these for Vanguard funds or something else? How would I do that? Why do I have two "Rollover IRA" accounts at Vanguard? What's the difference? I don't know if my IRA is a traditional or a roth, how do I check? Which one should it be? What else should I know? I'm sure there are questions I should be asking that I don't even know enough to ask. Thanks for your help!

The two vanguard accounts work like this: Rollover IRA: A vanguard fund account. In this account, you can only buy Vanguard mutual funds. Rollover IRA-Brokerage: An account where you can invest in equities other than vanguard mutual funds: stocks, ETFs, mutual funds from other companies. The reason all your money is in this account instead of the other one is because you money is in funds that aren't vanguard's. These accounts are linked and money can be transferred between them. When you sell the stocks, ETFs, external mutual funds, etc. from the brokerage account, it should put the money into a money market fund in the other account, which you are free to move into vanguard mutual funds. If you want to buy equities that aren't vanguard mutual funds again, it will take the money from that money market fund and move it to the brokerage account. Also, the account names should have Roth in front of them if they are Roth. Otherwise I think you can assume they are traditional accounts.

They'll probably just take a few days to sort it out. If the money doesn't appear within a week or two I would call Vanguard if I were you.

Human: Quick background: I have no car, no mortgage, no beautiful sailboat, and old debts that should have been paid off years ago. I normally ignore all of my finances. Nights out, cab fares, charity, travel, clothes... I've never spent the time to scrutinize my budget. Turns out, I'm a spendthrift idiot. I earn good(?) money, pushing $110k before tax. However, instead of saving and investing, I buy drinks and dinner for whomever, pay for ridiculous international travel with friends, and throw money at charities. Oh, and I'm $25k in debt ($18k from student loan, 7 from idiot-trap credit card) Here's a breakdown of my spending within the last 6 months: Entertainment (drinks, dinners, cabs...) - $15k Travel (flights, hotels, cars...) - $20k Charities - $5k I'm new to having money to spend. Prior to my new job, I was living paycheck to paycheck as a broke student. Despite my higher income, I'm still living paycheck to paycheck. Has anyone else been in a similar situation? Is anyone in a similar situation now? What the shit is wrong with me? [edit: formatting]

First, you've recognized that you have a spending problem. Honestly, that's the biggest thing. And you've realized it before you are $50K in debt with credit cards. Second, you can still have the lifestyle you want without spending what you've been spending. Honestly, I feel like your friends are taking advantage of you. You said that you pay for drinks, dinner, and international travel for yourself and for friends. Stop that. Treating your friends every now and again is fine, but you should not be covering your friends' entertainment spending. They need to pay for that themselves. And the reason I say that is because where does it stop? End that cycle before it gets worse and really out of control. Third, if you are uncomfortable with the amount you are spending on entertainment, travel, and charities, I suggest sitting down and coming up with numbers you ARE comfortable with. If $15K for entertainment is reasonable to you for a YEARLY amount, figure out what you need to do to make that $15K go from a 6-month total to a 12-month total. Same goes for the travel and charities. You are fortunate in that you have relatively low debt for your income level and that you have enough excess income to afford to spend $40K in 6 months on "extras." There is nothing wrong with you.

Find a girl who makes good money and is good with money and marry her. She will solve your problems!

Human: I bought something for $0.64 on my Capital One card and didn't do anything else with it last month. Instead of getting a 64-cent bill, I got a -$0.64 "CHARGE ADJUSTMENT" and a 0 balance. Is this normal? Can I get a free pack of gum every month and enjoy the high life from now on? I guess I'm just surprised a credit card company would let even a few cents slip by...

My guess is that is it more expensive for the credit card company to process such a small payment to make it worthwhile. Happened to me once also. Not sure if they could stop you from doing that on the future, but remember the merchant accepting the card probably paid a higher fee than the amount you charged.

What did you buy?

Human: My wife has been out of college for about 4 years and I've been out for 1. My wife will be quitting her job in about a month due to the arrival of our second child. I just started a 401k with my company, but my wife has had one for a while and has a few thousand dollars in it? Should I transfer her 401k to my 401k so we have more money in it sooner? Or is there something better? I've read some general ideas what to do with it, but not specifically for married people. EDIT: said IRA when I meant 401k. Apologies.

>Should I transfer her IRA to my IRA so we have more money in it sooner? You can't do this. You have to keep IRAs separate. You can rollover her 401k to an IRA for her. On top of that, you can still contribute to her IRA even if she doesn't have earned income, although she probably has enough for 2013.

Roll it to a IRA in her name. Roth if you can swing the taxes. traditional if you can not.

Human: So I am about to graduate college into a job that pays $73k in Austin TX, and I have $10k in debt from school. Real estate in Austin is skyrocketing like crazy. That makes me think that I should buy a condominium instead of renting an apartment since I could potentially make money on the property. However- how much should I reasonably spend? I read that you should spend no more than 28% of your income on mortgage. Since real estate is appreciating here, is it smart for me to spend the whole 28% on a condo? Any and all thoughts appreciated. Thank you! [EDIT] Thanks for the conversation. I'm giving all of this a second consideration and will be taking a much safer route in renting an apartment and building up wealth before taking a stab at purchasing real estate. I totally appreciate your feedback and time, and I apologize if I peeved anyone with my ignorance, since it looks like I was downvoted pretty much everywhere. Assistant: Do you have money for a down payment? 1700/mo isn't that much for what these condos are going for in Austin. You can get a 800sqft place near downtown for ~200 Human: No money for a down payment. :-( I might just be an idiot, but I've been playing with this [Mortgage Calculator](http://www.mortgagecalculator.org/) to see if I can keep mortgage payments in the $1,700/mo range if I loan the entire amount at 3.5% interest on a 30-year term loan. It seems the money can fly up in the $300k neighborhood, assuming those things are true.

> No money for a down payment. :-( You are not ready to purchase real estate.

Don't forget about property taxes. They are crushingly high here in Austin 2-3%. So on your 300k house/condo, you pay minimum $500/month for property taxes. Don't forget to check into what the condo association fees are, usually at least $100/month. The calculators you are looking at might assume 20% down, so check that.

Human: I'm a student in public health who wants to go into software development. I think a comfortable life would be $80k+ Edit: Wow! Thanks for responding everyone. Insightful. I wish you the best in your financial endeavors.

I was in software dev. Out of school was making about 50k a year + 10k a year in bonuses. Quite frankly i couldn't stand it but I know a lot of people who loved it. I moved into being a web systems analyst which pays 70k + bonuses and so far love it.

I am in the legal field, mostly M&A, in one particular industrial sector. I have a JD, MBA, and another "fun masters that will never make me money. Salary is comfortable. Lots of stress, so I don't see myself working too much longer. I still have time to pursue my hobbies, work in the garden and fool around in my peach orchard.

Human: personal finance, i need some help! long time lurker here. using a throwaway as i'm posting honest financial details. bottom line is i am trying to balance monthly expenses, saving for a ring to propose to my longterm gf (who i live with and support), saving for retirement, and eventually saving towards a down payment. but i feel like things are a little out of control and i am always coming up short at the end of each month. all my disposable income is gone at the end of every single month, and sometimes i dip back again into my CC. i want to contribute more towards my roth ira, but don't know where to get the money. should i scale back my 401k contributions? hopefully someone out there can provide some perspective on what i am doing wrong... some background info: * income is 120k/yr pre-tax * take home $5150 per month after 401k deduction (i contribute 1460 per month, maxing out to 17.5k annual limit) monthly expenses: * rent - 1900 * subway - 115 * cell - 65 * home bills - 175 * gym - 40 * credit card - 200 * stupid personal loan - 350 * **total monthly expenses - 2845** monthly put towards "savings": * emergency fund - 420 * other short term savings (engagement ring) - 420 * roth ira - 100 (average, as i put in spurts here and there) * **total monthly savings - 940** details on my debt liabilities (including loans above): * credit card - 2500 owed @14% * personal loan - 9000 owed @4.25% **monthly left over after expenses and savings - 1365** (all gone at the end of every single month) personal finance, what can i do to free up more cash / get my finances in order? **edit**: thank you all for great feedback/suggestions. it sounds like i need to cut back on my 401K contributions and knock out my CC debt. question - should i go ahead and pay off my CC right now with my emergency fund? i'd still have 1.5k leftover from my emergency fund, which i can start to re-build immediately with money freed from my 401k. Assistant: I'd seriously talk to the GF about what she expects for an engagement ring. My SO and I are getting engaged soon and we are aiming for a fairly cheap ring so that we can save up for other things. I think it might be worth floating by her. Human: i think this is valid. i had planned on spending roughly 7-8k on a ring. is that exorbitant? am i being ridiculous?

Uh, yeah, that's obscene.

I wouldn't've felt comfortable wearing a ring worth that much--I don't like to flash valuables, and I want to wear my engagement ring every day. I might have felt more strongly about this issue than a lot of women do, but I think you can find an awesome ring for half or less than the budget you'd been picturing. *Especially* if GF isn't good with money, seriously think about scaling back on the ring.

Human: So here's my story. I'm 31, debt free, unmarried, and have $1.5 million in a trust fund that I have full control over. For the past decade or so, I've taken the standard advice and tried to pretend this money does not exist. I've worked my ass off at soul crushing jobs I pretty much hate, making $40-$50K annually. My career has never really lead to anything approaching professional gratification or personal fulfillment. I was recently accepted into NYU's new Game Design MFA program, which you can read about [here](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDAQFjAA&url=http%3A%2F%2Fwww.polygon.com%2F2012%2F10%2F16%2F3512184%2Facademy-of-outsiders-how-nyu-game-center-trains-the-next-generation&ei=M9uCUcasI8f9qwGazoHACg&usg=AFQjCNFo4uxSfBPSLckLSaMc8cyvyc9Bvw&sig2=FelWMpGSj9suOwBvau2zJg&bvm=bv.45960087,d.eWU). I've always loved games, mostly playing them, but also designing simple board games in my spare time. As part of my application I sent them one of my designs, which they seemed to like. It's always been just a hobby for me, but now that I've been accepted, I have this outlandish notion that maybe games could become more than that. It will, or course, be very expensive. Tuition is crazily high and the price of living in New York City is even more insane. I would be attending school full time, living off the trust, without working. I estimate this little adventure will end up costing at least $200,000. I realize many people would say "just design games in your spare time, you don't need to go to school for that." The problem is I just can't seem to fully dedicate myself to game design while working 50+ hour weeks. By quitting my job and really focusing on games for 2 years, I think I may be able to make some pretty great things. Or at least meet some really great people. Up until now, I think I've felt obligated to play it safe because I've never really felt like this money was mine. In the past, I've had fanciful notions of using the money to make a short film, or funding a game project, but I've always backed away nervously, unwilling to risk my future on a whim. Honestly, I still feel like using the trust to take some creative risks is outrageously irresponsible, especially when I have a good job with a steady income. In some ways, this attitude has paid off, as I've withdrawn a very minimal amount over the years and the trust has experienced some very nice growth. The thing is, in my efforts to avoid using the trust fund as a crutch, that is exactly what it has become. What would you guys do? **TLDR; I have a trust fund that could pay for game design school but feel irresponsible using the money to chase a long shot. Don't know what to do.**

Given the limited information you've presented here, I would go for it for the following reasons: 1. Your current job does not sound like a very nice way to spend the next 35 years or so of your life. It's not like you're giving up a career that's paying $200k a year or anything, so the opportunity cost is relatively low. 2. This degree program at least holds an opportunity for you to pursue something you enjoy. You should, of course, look into how students graduating from this program or others like it have fared, what types of jobs they've secured (if any at all), the companies they work for, and the income they make, so you can again weigh your costs and benefits. 3. You're still relatively young and unattached, which makes transitioning back to school and/or to a different city much easier. 4. Even if you take $300k out--an extra $100k above your estimate--that still leaves $1.2mm in the fund. Invest that amount wisely, and live in a generally responsible manner as an adult, and the amount you'll have in 35 years from that $1.2mm today will more than support a comfortable retirement (and other reasonable needs along the way). 5. It's good that you respect the money, so use it as motivation to not screw around when you go back to school. Treat it as a job and make damn sure you do everything you can to ace all your tests, pursue every networking opportunity, and honor the money that was given to you by turning it into a successful and fulfilling career. Remember, wealth is a great thing to have, but it is not an end, but a means to other ends. Don't just keep your money for the sake of keeping it if you can use it responsibly to pursue other worthwhile ends.

I would go back to school in a heartbeat myself.

Human: Note-Sorry for the wall of text, actual questions are in italics for ease of skimming. I am going to be starting graduate school in late August in Fort Collins, CO. I am not one of those people who is dead certain I will make it through a Ph.D, but Fort Collins is probably my ideal place to live even if I don't. In light of that, I am considering buying a house instead of renting so I am not just tearing up money. Background-I am 23 y/o, have a reasonable amount of cash-on-hand, including some in plans that I can only use with school related expenses (grad school housing counts). I had a full scholarship for my undergrad, so I have no debt and no experience with debt. I can probably swing 15-20k for a down payment, and the house I am most interested in is listed at $169,000. My credit score is 714, and ideally I would get a mortgage where I can pay off the principal as quickly as I would like, and not be locked into paying a certain amount of interest no matter how quickly I pay off the principal. *Is there a term for this type of mortgage, and is this realistic* *What interest rate can I expect to have, and what would a reasonable payment be?* I also know that there are a few more expenses associated with homeownership that aren't there for renting. *Beyond homeowners insurance and house payments, what else can I count on having to plan for?* I am doing a little fact-finding mission later this month so I can look at places in person. *When looking for a house, what are a few things to pay attention to?* *Any advice for contacting and dealing with sellers/realtors?* I know this is an awful lot, but I'm just feeling a little bit overwhelmed, as this is a big financial decision, and I would love any of these questions addressed by someone who has gone through this themselves. Thanks!

As someone who bought a house when starting grad school - just don't do it. Flexibility is worth way more than you realize right now.

Hang out in /r/realestate for a while

Human: My father believes that 6.8% interest on my loan is super high and I should get it refinanced, or ask for a lower rate (because he can get an even cheaper IR on other loans). I do not have any experience with typical IR's so I think he is being overdramatic. This site shows the fixed rates http://www.asa.org/basics/loans/interest-rates/student-loan-interest-rates.aspx. Can you request a refinance or IR adjustment on a loan? Will that affect my loan payments or anything? I personally don't care, but just curious.

6.8% is the rate for federal student loans. No, this cannot be negotiated. If your dad wants to take a loan against his house to help pay for your school then great. Secured loans, and/or loans taken out by people with an established credit history generally have lower rates. Student loans are unsecured debt given to 18-year-olds. It's amazing their rates are as low as they are, considering (and only the case because the government steps in to make it possible).

How much is your loan? Do you only have 1 loan or can you consolidate? I guess I was super lucky that I graduated when I did. I am at 1.6% I think. Doesn't even pay to pay it off.

Human: I love seeing these posts on /r/personalfinance as they've inspired me over the past couple years and I finally get to post one of my own! I started a throwaway account because I'd like to share a little bit more personal detail about my situation. Here it goes: 29 years old. Married. Two kids born in '08 and '10. Graduated in 2011 in Construction Management with $27k in student loans. I was working in an internship that rolled into a full-time job at $45k/year after I graduated. My wife and I both fell into the trap of thinking "We deserve some sort of reward for all the hard work we've done" and went out and got two cars totaling $20k in loans. A few months later we saw the light after sitting down and putting a budget together to see when we could realistically have a good down payment for a home. We were saving ~$300 while making the minimum payments on all of our debt. A down payment seemed impossibly far away. One thing led to another and over the next 19-20 months we sold both cars and replaced them with a beater that I bought for $1 from my father-in-law, and a $3000 car that we bought from my wife's grandmother. After a year at my job I got a promotion and a raise to $55k/year and by then we were aggressively paying off our debt. Just this past March I got another raise to $62k/year and a $6k bonus that helped push us to make our last lump sum payment towards our [student loan debt](http://i.imgur.com/AVDk6Ql.jpg). What I'm actually most proud of is that we've cut our monthly expenses down from ~$3200/mo to $2100/mo while our income has increased dramatically. We're now saving ~$1800/mo towards an emergency fund and a down payment on a house as our two bedroom/two bath apartment is feeling a little small as our kids get older (and bigger). Sorry for the wall o' text. Like I sad at the beginning, I hope my experience can help and inspire someone else to keep pushing. My wife and I haven't been on any vacations, birthdays and Christmas are on the cheap, and it hasn't been very "fun" but definitely rewarding in the end.

Congratulations on getting on the right track! With no more debt, low expenses, and your recent raises, you'll see your net worth increase pretty quickly!

That is so awesome. Congratulations to you and your family!

Human: I'd like to get back into the habit of designating certain amounts of my savings for specific purposes (e.g., pet medical emergencies, future kids, that kind of thing). Ideally I'd like to set up mini "accounts" with these nicknames. The only bank I'm currently aware of who offers this option is ING -- do you all know of any others?

USAA and Ally allow you to create multiple accounts, as well as nick name them.

Simple

Human: I got this loan for $1600 (mostly to help with my credit score, be cause I had none) I'm paying about %19-25 interest. Is my monthly bill ($150) ONLY interest payments? Am I actually going to pay off this loan in 12 months if I keep current on my payments?

This was a bad idea, pay off the full balance immediately if you are able. That interest rate is ridiculous. Use revolving credit to improve your credit score, don't take out term loans to do so.

No, it's not all interest, and yes, if you borrowed $1600 at 19-25% interest, then it will be paid in full after 12 monthly payments of $150. Hopefully you've done the math and realized that 12 * 150 = $1800, so you're paying back $200 more than you borrowed. If you can pay it off now (i.e. if you really just borrowed it to help your credit score, and the $1600 is just sitting in your savings account right now) then pay it off. Get a credit card instead, use it for small purchases you were going to make anyway, and pay it off in full at the end of the month. It will cost you $0 in interest and improve your credit score.

Human: Celebrating a small success! I've always hoarded money into non-touchable savings accounts (401k & Roth IRA) but never was able to keep much in my credit union savings account without eventually transferring it into my checking account to spend. $2,000 in my savings account today! ...Alright, so it has helped that I'm on a new assignment at work allowing me for some nice overtime allowance...but woohoo! It looks great to see my account summary with an actual chunk of money in my savings account! I still contribute 16% of my paychecks to 401K and 8% to my Roth IRA...didn't even have to scrimp there, and am actually thinking of upping the contribution %'s next month. I'm on my way to having an actual worthwhile savings account/emergency fund! ...I realize this is probably chump change to most of you, and not much of an accomplishment...but hey! baby steps! I've learned so much from lurking around here, and as much as I thought I had a handle on my finances before r/personalfinance...I am making so much progress these last few months! Paying off credit card debt (paid down over 50% of it so far), paying off my student loans (just dipped under $20k left!), and having an actual savings account! 401K/Roth IRA are great...but I have been needing to get disciplined enough to keep some tangible savings out for an emergency fund! WOOOHOOO!

Well done. I'm working on the same thing. I'm just starting to get my finances in order after only getting one part-time job during college (though it did pay very well) and living off some inheritance, then having 6 months of non-permanent employment with no PTO and lots of legal holidays. Credit card is already paid off, student loans adjusted to be paid off in 7 years, savings slowly growing, wedding account stable. Going well.

Good job. What works for me is to set the rule that whatever makes it into my savings account does not come back out under any circumstance.

Human: My gut instinct, when he said that, was this is a "run, don't walk" situation. Am I just drinking too much index-fund kool-aid?

> Met with a CFP, he told me "a [well-chosen] money manager can outperform index funds" Can a manager outperform index funds? Sure. Is it possible to know in advance which managers will outperform? No. Will most managers outperform? Absolutely not. Run away.

Only a very limited number of mutual fund managers can outperform the market, so if he can consistently do it after his fees, he's in the wrong office. Instincts confirmed.

Human: I set up my 401k online and it registered at 60% instead of just the 6% I wanted to go in. I will be broke for the next two weeks because the deposit is irreversible. r/personalfinance, is there an upside to my mistake?

One of the many reasons to have an emergency fund!

This is great.

Human: That is all. (WOOOOOOOOOOOOOOOOOO!)

[Celebrate!](http://media.tumblr.com/tumblr_m3dawstAMr1qcaw1o.gif)

Congrats! Isn't it nice to get that bitch out of your life?

Human: New to this subreddit, but it looks like just the right place for this question. I'm about to graduate with a BA and will be starting a doctoral program in the fall in St. Louis Missouri. I will be a full time student so the stipend they give me will most likely be my only source of income for the 6 years I'm in the program. I've been trying to find budgeting advice, but I am finding a lot of conflicting percentages for how much I'm supposed to spend on certain things. If anyone can give me advice for how to divy up my money, and cost cutting tips to survive without going crazy. Other details: I have about $6,000 saved up right now, will be working this summer so I expect that to grow to about $7,500. I am also hoping to buy a used car before I graduate, looking to spend no more than $3,000 upfront on something used so I can own it outright and not have to worry about leasing or car loans. that would put me at probably $3,000 going into to the whole moving across country process in August.

The biggest moneysaver for me has been living with roommates and living close to public transportation, which saves me a ton of money on rent and lets me put off buying a car for a few years. Consider if it is possible to live close enough to your campus that walking and/or public transportation would be viable options. Also, remember that you're a student and therefore eligible for student credit cards (the Citi Forward is my favorite student card) and student discounts wherever they're offered.

Hi there! So I'm in your exact situation, and it's not that hard at all. I set up a mint.com budget once I got rent and utilities settled and I'm still able to save ~$100/month. I don't have a car payment, and my dad is still carrying car insurance and my cell phone, but everything else is on me. That being said, I'm not living all that frugally and could totally cover those things if I had to. By that I mean I live alone in a decent sized 1 BR and go out to eat/ to the bar regularly. Just don't blow money on things you don't really need. What you decide to spend your money on is your business, but by not buying much in the way of new clothes and not paying for cable, new electronics, or other big ticket items I get by very comfortably.

Human: Reddit, I hate my job. Absolutely hate. I'm miserable for 40-45 hours a week. I feel depressed on weekdays because I'm dreading going back to work the next morning so much. I struggle to get out of bed in the morning. Weekends and vacation days are my only solace. The thing is, it pays well enough - I currently make $11.77/hour (equivalent to about $25k/year) and it has health, vision, and dental insurance. I live in Indiana so this is a good living wage for me - live alone, no family or kids to take care of. I have about $2,000 in savings right now but I contribute about $100 more to it every month. I recently picked up a part-time minimum-wage job to supplement my full-time job - it's 10-20 hours a week at $7.25/hour. I also just interviewed for a new job that pays $12/hour but is only 30 hours a week and also has no health, vision, or dental insurance. It sounds like I will like this job much more than my current one, but I'm just not sure if I can get by after the pay cut. Also, I've never been without insurance before and the thought terrifies me. Here are my monthly expenses - these are all required to a varying degree (I know I can cut out internet, for example) Rent: $462/month Electric: $70 Internet: $46 Phone: $35 Car loan: $150 Car insurance: $50 College loans: $242 Gas: $30 Living expenses (Food, netflix, spotify, random necessities): $100 I am moving in August to a cheaper place so my rent is going to decrease to $325/month (yay!) and my electric and internet bills will decrease considerably as well, I'm sure, since I'll have roommates and we'll be splitting the cost three ways. Other details: My school loans are currently at $16,600, again I have $2,000 in savings, and also $500 on a credit card with a $3,500 credit limit. I'm 26 and have a Bachelor's Degree in English. I just have no idea how to weigh my financial security and health insurance against being absolutely miserable at my current job :/ Assistant: I personally don't think there is any amount of money that is worth it if you are depressed day-in and day-out. And if such an amount exists, $11.77 per hour isn't it. Going without health insurance is not good, but you're a young person and if you're healthy you could probably find an affordable emergency/critical care insurance to bridge and pay for your annual stuff OOP. Your ultimate goal should be finding a full-time position of course, but if you can do that within a year it might not be a bad idea. Human: I am young and healthy. I don't go to the doctor much, and I only have one prescription (birth control, which I can get affordably through Planned Parenthood if I lose my insurance, luckily). I guess what I'm worried about is the slim chance of an emergency, something I couldn't foresee or prevent, like a broken bone or a car accident, which can rack up a huge amount of debt very quickly :( Assistant: 24yr old buddy slipped in his driveway and tore his femor(sp) muscle from his knee. No insurance, bills are pushing a hundred thousand bucks... I'd rather hate my job and have insurance than deal with the stress of that kind of debt. Just be real proactive in finding a better job WITH insurance if you can. Shit can happen to anyone at anytime. Human: Exactly. That's why being without insurance terrifies me :( I've heard too many horror stories like this. It's not uncommon.

Buy your own health insurance. Cost starts at about $100 / month.

It does suck, but it's reality. I hope you come to some happy compromise between the life you want and the crap we all have to take into consideration when making these decisions.

Human: (Apologies for the incoming wall of text) I was doing a lot of reflecting after that post yesterday about the person in $240,000 of debt. Take someone who made the decision to go to college ~5 years ago. They made their decision prior to the economic crash of 2008. The cultural zeitgeist at that moment in time did not include discussions about student loans, or at least, it did not to the extent it does today. Neither was there the shifting focus from "go to the best college you can" to "go to the college you can afford" or even "have you considered not going to college." I am now realizing the perhaps society's message to young people is changing, or at least, should be changing. Now, I think the message is, if you are wealthy (can afford to pay for college) or exceptionally talented (can get full scholarships), then yes, pursue your dreams! However, if you are not either of those things, think hard about what you want to do. You may not be able to afford college. Even if you can afford college, you likely may not be able to afford to study what you're passionate about at the moment you enter college. I think it's time to be realistic given the cost of higher education. The message to high schoolers should be: unless you have funds available to you, are exceptionally talented or have a passion for something that dovetails with a profession that's lucrative (say engineering, for example), then chances are you cannot go to college and study what you're interested in. Your choices are then: (i) screw college and pursue what you're interested in with all your time and energy, with the understanding that you might be poor but you're at least not beholden to student loans, (ii) pick something more lucrative that you're less interested in, but that will provide for a debt free life within a reasonable period of time or (iii) mitigate the cost of college by going to community college first and then go to a cheap state college (though, even here, loans could be an issue depending on what is studied). What do you think, PF? Should there be a more concerted effort to change social consciousness away from "you can do whatever you want to!"? Assistant: If you have more than $100k in student loan debt for a Bachelor's Degree, you have done something terribly, terribly wrong in your planning. The guy with $240k in student loan debt is abhorrent. The amount of *financial ignorance* that has brought him to this point in his life is astounding. As the recovery flounders, the ones who are hardest hit continue to be those without a college degree. At this point in time, a 25 year old with a bachelor's degree has a ~20% higher chance of being employed at all than someone with a HS diploma (Edit to clarify: It's not a 20% higher chance, their employment rate is 20 percentage points higher than those with just a diploma), and, among those with a job, they make, on average, $12k more per year. If there's anything that needs to change regarding our message to young people about their post-HS career choices, it should be an open, honest discussion about employment prospects, salary ceilings and floors, and debt mitigation. There are still hundreds of colleges in the US that provide a quality education that puts the total price tag at less than $80k for a degree, including room and board, text books, etc. [We also need to plaster this study up in every high school guidance counselor office in the nation.](http://www.brookings.edu/research/articles/2004/10/education-easterbrook) > Krueger and Dale studied what happened to students who were accepted at an Ivy or a similar institution, but chose instead to attend a less sexy, "moderately selective" school. **It turned out that such students had, on average, the same income twenty years later as graduates of the elite colleges.** Krueger and Dale found that for students bright enough to win admission to a top school, later income "varied little, no matter which type of college they attended." In other words, the student, not the school, was responsible for the success. Human: >If there's anything that needs to change regarding our message to young people about their post-HS career choices, it should be an open, honest discussion about employment prospects, salary ceilings and floors, and debt mitigation. I strongly agree with this. Do you think it's within the purview of parents/high school counselors/society to say the following? "Look, you cannot afford your plan as it currently stands. I know that sucks, but that's the reality given your income situation/skills. Here are some options that might be better for you." Because I think that's the gap - people advising high schoolers aren't and society in general isn't willing to say "You can't do what you really want to do. Sorry, tough break. That's just the way our society it."

> Do you think it's within the purview of parents/high school counselors/society to say the following? "Look, you cannot afford your plan as it currently stands. I know that sucks, but that's the reality given your income situation/skills. Here are some options that might be better for you." Of course I do. It's not the job of parents/counselors/society to coddle people who we have deemed to be mature enough to pilot two tons of steel mere inches from a bunch of innocents. It's our job to foster their growth and ensure that the decisions that they make are the ones that will result in them being as successful as they can be. For some people, that means that they *need* to go to med school, for others, they should probably get their foot in the door at the factory on the other side of town. It's also our job to hold them accountable for missteps but recognize that consequences shouldn't be overly punitive for anyone involved.

after crunching the numbers then maybe yes; if the numbers don't add up [like getting an art degree from that crazy Drexel college from a different thread. Apparently it was one of the most expensive private colleges out there]

Human: I have a vague memory of taking out loans from Fannie Mae and also FASFA loans... or maybe they were the same thing, I'm not sure. My mom also doesn't know anything about it and is no help. I checked my credit at https://www.annualcreditreport.com and it said my FICO score is fine though, and the details didn't show that I had missed any payments (it had some details about Fanny Mae that made it look like it was saying I made some payments that I don't remember ever making), so I don't know, should I be concerned? EDIT: Two, not too, obviously. Assistant: What do you mean it said your credit is "fine?" Do you have student loans on your credit report? No one here can really answer your question. Should you be concerned? If you remember taking out loans years ago and aren't paying them back, of course you should be concerned. Go back to your school's registrar or financial aid office and ask them for records showing how you paid your tuition. Human: I don't remember what it was, but it gave me a FICO score that was in the range of good. > Go back to your school's registrar or financial aid office and ask them for records showing how you paid your tuition. I don't see how the school would have information to help me though? Assistant: Annualcreditreport doesn't give you your credit score (unless you optionally paid for it or something). It lets you view your credit reports for free, once a year. You're supposed to look at your credit report to see what's on it. Go look at your credit report and see what's on it. If you have student loans that you haven't been paying, they'll probably be on there. >I don't see how the school would have information to help me though? Are you serious. Human: I don't think anyone who would work in the office would be authorized to give it to me, at least. It said stuff about the loans but said something that indicated that I had done everything/met it all. No one is paying on my behalf though. No need to be sarcastic.

You have no idea how your school was paid for, and you don't think the school would be able to help you figure that out?

Of course the school can help. Call them up and ask. You're in debt denial here - - it happens to everyone when they're starting out. You think there might be a problem, but you see a way that it might not be a problem. You don't want to call and ask, because it might turn out that there really is a problem and now you're stuck with the problem. Well, the truth is that even if you don't know it's a problem, it's a problem. And in the adult world, people won't come and find you and tell you you have a problem. By the time that happens, you are well and truly boned. But the good news is that dealing with these issues is actually pretty easy once you get started. The people at your school are used to getting calls from people like this. So give them a ring. They'll be able to help or at least point you in a direction. Believe me, you will feel a million times better because instead of a general sense of possible doom, you'll have a specific, known debt and a plan to get rid of it. Make the call, you'll feel a lot better.

Human: I am subscribed to personal finance but since i have submitted my photos to reddit gets drawn id rather not post to my regular account. I have never posted to PF but i think it is time. SO here goes- * my husband and i are both 25 yrs old. married 7 years almost. * we have one son born in late 2010. * last year he made 90k i think, ( http://imgur.com/tbQDRr0 ) * $0 in savings - we live paycheck to paycheck Currently our bills are like this. * mortgage/ppi $806 amonth * my car = $450 month finish 10/2013 * his truck = $250 paying his dad for it so no loan finishing 01/2014 * our car insurance = $300 month utilities - * light /water /gas = $250 month * iphones/ipad $300 month - (except for occasional overages) the rest of our money is basically fun. I shop the fun grocery (expensive) stores and my son has the latest fashions, my son and i are always in playgroup outings and im always driving around, I live in a large metropolitan area and it is not uncommon for me to drive 45 minutes across town. my husband works around the corner from the house he can stay on the same tank of gas all month. me its every couple days. DEBT : * we have 2 secured credit cards $300 each. I pay the balance of every two weeks. * My husband took out a $4k loan at a furniture store for a friend - he stoped paying $2k in and we owe the balance since its his loan. we didnt know friend stopped paying til it was in charged off in the credit report. we dont talk to said friend anymore. * two amex student cards we stopped paying at around age 21 when we were going thru a bad job situation. about $5k maybe 6k after fees. * $22 from a bank account that we forgot about - * $295 from his old truck. it got totaled and the insurance paid it off but not the $295 but the car loan sent the title to the insurance or something, it was said to be paid off but, out of nowhere it wasnt. that is it. how should i go about this ? should i pay off the debts or let them fall off in 3 or 4 yrs? I would like to pay it off to improve the credit and purchase a new home and maybe have another baby, (live in a 2br now). I would get an accountant but really I dont know what to look at in an accountant, are they like lawyers and charge by the hour? I feel like they are for really rich people and they wouldn't want to waste time with us. * EDIT1 I have come to realize my husband and i are the WORST financial match EVER.... I grew up very spoiled & had everything and my husband grew up practically homeless and had nothing. * EDIT 2 reading this thru is ridiculous. I have to do better. step 1 i am cutting out clothes, I hate for my son having to wear the same outfits twice ... but that is STUPID . I am quitting the playgroups and just take him to the library storytime (although it sucks and is boring) we also have yearly memberships to the zoo and kids mueseum I will stick to those and attempt to make friends with other moms there. and i will try and cut our groceries in half. this is alot but I realize no job is secure and if my husband lost his job today wed do these things anyway. I have offered to pay all the old debt even pay extra if theyd just remove it from the credit report but theyre not budging. but I will pay them i mean it cant get any worst (i hope), I would like to set a goal to save 36k in 2 yrs. i dont know how i should save it, ill look around the threads here to see. I will ask my husband if his job will split his check and put 33% into an account not linked to our regular spending and see if it helps just not seeing it.

"should i pay off the debts or let them fall off in 3 or 4 yrs?" This is why we can't have nice things.

From the information provided, you should know what your problem is and how to go about fixing it. Your husband makes a lot of money, you should be very grateful for him and all the hard work he does. Once you come to your senses with regards to spending way to much money on everything, you should make sure that you have all your estate planning documents in order. Do you have a will? Do you have a power of attorney, health care proxy? Who's going to take care of your kid if god forbid something happens to the both of you? Your husband makes plenty enough to fund the premiums for an long term care policy, especially being that you two are so young. Do you have a job? Do you have any retirement plans? Did you know your husband can contribute to a retirement plan that is set up in your name?

Human: I'm just curious since I've been doing some research on the subject and it seems a lot of people seems like it's perfectly reasonable to just up and move to Alaska/North Dakota/Alberta/the Gulf and start working. Most websites and a few reddit posts from people who claim to be educated on the subject (i.e. actually worked there) say that these companies are mostly looking for skilled craftsmen/tradesmen and that unskilled laborers are not needed. The reason I'm interested is because for ~100k a year (the most common salary that every website/google hit/reddit post I've seen) and minimal spending (housing seems to be very expensive in Alberta/Fort McMurray) I could pay off all my debt, and return home with money in my pocket, a healthy savings account, and probably afford to buy a home. My collected debt thus far is just my car (which has a very shitty interest rate due to my credit) and student loans for a total of ~$38,000. I'm not an unskilled laborer, however my trade is aircraft maintenance but I believe that would transfer well to a number of jobs out in the oil fields. I have no ties to the area I currently live (Southeast US) and work long hours for modest pay at the moment. So how do I go about getting my foot in the door in this type of situation, obviously applying is step 1 but does anyone with any experience or knowledge think I'd be a good fit? tl;dr: in debt, want money

It isn't easy. It is very damaging to the body. It is tough work.

No.

Human: Okay, my 401(k) hit $401K in terms of money in there. I am totally bragging, because, fuck, I find it funny and awesome at the same time. Now I'm done bragging - I jut wanted to give some advice for you out there: * Just automatically give the max. I started in 2000. My salary was $62,000. The max you could contribute then was $10,500 (I think). So, I never considered myself having a salary of $62,000. It was a salary of $51,500. Note though that if you are in a low tax state or in a low tax bracket, a 401(K) Roth may be a better answer. * Be aggressive but diverse. For the first 10 years, I invested half in large caps- an S&P 500 Index that didn't do too well, and the rest in a small cap fund to balance it out. The small cap actually rode the early 2000's recession really well, and after 10 years, it was 60% of my portfolio. When my company got acquired, I later switched to an even more diverse portfolio, with more emerging stocks, world stocks, Russell indexes, etc. Basically 5 indexes instead of 2. * Take advantage of company matching. This is a no-brainer. * And here is the most important thing - Don't listen to loser poor people! Loser poor people are people who maintain a poor mentality that will keep them perpetually poor. Not to be confused with broke people, who may temporarily be out of money (as I was once in a while) Yes, there will be some fucker who think the world is going to end, that this latest recession is the downfall of American society. I'm 35 - and I've heard it all from the loser poor people. In the early 90s recession, the Japanese were going to buy us out and we would all be slaves to them, Mexicans would take ALL the jobs, and Generation X was full of slackers would be the first generation that is poorer than their parents. Then, in the early 2000s, terrorists would create a world where we could all die, and the Chinese would own us all. Then there is this recession, where America will magically fall apart again, and this time, Generation Y was full of entitled losers who would be the first generation that is poorer than their parents. These people are the ones, even though made a similar salary to me with similar experience, have maybe 1/10th the wealth, but 20 times the confidence that they are always right. * Trust in the economy. I mean do the math. Personally, I contributed, what, $160K from my pocket - but it is now worth $401(K). And since January 2000, when I started, the S&P is up, what, 8%? How does that work? Well, company matching, which average around $4K a year helped boost it. But obviously that is not enough. As mentioned earlier - I was aggressive and constantly investing. During the two recessions that I went through, the market went down, and dollar cost averaging in aggressive stocks helped tremendously. I didn't panic, I didn't withdraw, I stuck to the long, drawn out plan. Fuck, I think in March 2009, my 401(K) was something like $150(K). Down from $250(K) just a year and a half ago. But that didn't matter - cause this is the long haul. So - hopefully some 22 year old is reading this and in 13 years, like me, will already be set for retirement. EDIT: So this has been great post - and I hope I got everyone thinking about the future by showing that continued contributions, even in a flat, "lost" decade that we just had - through two major recessions - can contribute significant growth. I know there's always these assumptions about getting rich that are based on 12% continuous return on investment from many books and advisors. I wanted to show that even in times like these, that is not the case. I was 22, broke, and in debt with a bit of school loans when I first started. Like a lot of people here. Now, unlike me, you guys will probably not go through a lost decade, and I'm pretty damn confident that when you turn 35, a few of you will be worth way more (even inflation adjusted) than I am at age 35. I'm sure I will see many of you years later in our retirement homes in tropical wonderlands. And to those Negative Nellies out there. Excuses are easy. It's easy to say, "well, I don't make as much, so I'm not going to save!" Or, the "stock market boom is over and I am going to lose everything". Or "I got lucky". These are the Loser Poor People I was talking about. You can be broke, and you can set off to accumulate wealth, or you can be like these guys not just be broke, but be poor. Make special note of these people - cause hanging out with these people, listening to them, will cause you to be poor. The ones that start off with an insult, and then claim to know more than the rest of us are great at masking their own deficiencies. Fuck - my dad was one of these Loser Poor People - he made a good salary for 30 years, and for most of his life, had almost nothing to show for it. If you are broke, and want to be poor - listen to them. If you are broke, and want to do better, listen to ALL the success stories out there, and learn and adapt to your own circumstances. To all those negative people out there, we will see you in our retirement homes in tropical wonderlands, except you'll be serving the rest of the current /r/personalfinance drinks.

You have a right to brag. Thanks for the great advice.

Dude, you f'ed up. You were supposed to wait until you were 41. WTF

Human: I am 21 and turning 22 in August. I recently graduated from a UC with a bachelor's degree in "Economics and Administrative Studies". I have no job and I was dumb for not looking for an internship. I haven't had a job in 2 years because I was focusing on my studies. I have no debt at the moment as my mother paid for my tuition and I am pretty much living off of her for food and everything else. We just found out that my mom has a brain tumor and she will be out of work and unable to continue paying for my needs. I have horrible networking and I have no idea how to quickly get a job. My original plan was to get a job at a bank as a teller after I graduated, but it seems they are only looking for bilingual people. I have been applying to places like Lowe's, Costco, Ralph's, etc. but I haven't heard anything back for about 3 months. I'm starting to feel depressed. What would be my best plan of action right now? How do people break into high paying industries? Thank you very much for your time, all advice is appreciated.

First of all, I'm very sorry about your mom. Can you continue to live with her? Housing is going to be your biggest expense, so if you can eliminate that cost, that already gives you a lot of breathing room. If you can share the cost of food, that will also help. You'll need to chip in (and learn to cook if you don't already) but shopping for a 2-person household should be cheaper than if you both did groceries separately. You just need to get serious about meal planning. Can you also stay on your mom's insurance if you pay for your part? Go to /r/frugal for more help and inspiration. Now, this isn't going to be easy, but you should try to get relevant (or at least "office") job experience. I suggest aiming to have two jobs: one internship and (if you must) a retail job to pay the bills. Assume the internship will be unpaid. This will help you get your foot in the door to some sort of office job, probably administrative. It's much easier to climb the ladder/get your foot in the door if you already have office experience; you'll be able to network with the kinds of people who can help you, the work is more relevant to what I assume you want to do (with an "Economics and Administrative Studies" degree), and it's much easier to conduct a job search from a desk job. Not only could you (discretely) use work equipment and take calls if you have to, but you won't be falling-down tired and smelling like burger grease at the end of the day. It goes without saying that you will need to work hard and be exceptional at any job you take (including a retail job). Also, don't assume your internship will automatically turn into a full-time hire. You may need to do several internships before you land a full-time+benefits job, but don't burn any bridges. Every new job is there to help you get the next one. Do you have any skills you can charge for in the mean time? Can you tutor? Design web pages/power point templates/flyers? Mow lawns? Walk dogs? You're going to need to get aggressive (with your job search, not with people). Looking for jobs is your full time job now. Do what it takes. Expect that two jobs is going to require way more than working 40 hours a week, just brace yourself for that. You don't have the luxury of feeling bad for yourself or to make excuses. Don't know how to network? *Learn.* People not calling you back? *Follow up yourself (keep in mind: people like initiative, but not harassment).* Bank teller job "seem" like it's only open to bilingual people? *Really? Not a single English-only speaker at every single bank in your area?* Too much time on your hands when you can't be job searching? *Learn a marketable skill*. Good luck. And go hug your mom.

I'm not sure how your world works in econ, but in the computer world, we have a lot of events, groups, conventions, etc. My suggestion is to find out where those events are for yourself. Just go and be yourself (it really is more important to befriend people than impress them), and try to get some contact information. Networking is critically important, but you don't have to be in the industry to build that network. Go to the events and start making friends. Start friend-requesting your college classmates on Facebook, be apparent, but not desperately so, that you're looking for a job (perhaps list your job status as unemployed but looking). Another stupidly successful cold-calling technique is a LinkedIn profile. Build yourself a good looking LinkedIn profile and start exploring profiles of head-hunters and people in the industry right now. LinkedIn allows people to see when you've viewed their profile so they'll come check you out too. I don't even regularly browse LinkedIn and I get a job probe from an employer about once every two weeks. One of my best head-hunter contacts came from a cold-call on LinkedIn (I viewed a job listing on his profile, didn't even inquire, but he tracked me down and I'm glad he did). Finally, the art of the head-hunter. These guys can be freaking awesome to finding a job. I think this is honestly the wave of the future for hiring. They have the network and contacts, so try to get in with a few of them. Quick Google search should reveal a few. Wish you luck in the job search. Breaking in can be very difficult, but don't give up.

Human: My Situation: Living at an apartment with a roommate, splitting $1200 in total costs a month. I'm Self-employed ($8000 gross revenue /mo for the past two months), have VERY bad credit - around 530, but I have dad as a cosigner and he excellent credit. I'll have around $5,000 in cash for a downpayment, but have no history of W2's... Is there any possibility of being able to get a loan for a house in my situation? Bare in mind, I'm going into this BLINDLY. I have NO idea what I'm doing, so be gentle guys.

This is a terrible situation in which to buy a house. 1. Do you know for sure you're going to be in this area for a few years? 2. Your credit score is going to negatively affect your interest rate. 3. Your lack of a significant down payment means you will have to pay PMI, adding to your costs. 4. If that $5k is the only money you have saved up, that needs to be your emergency fund, not your down payment. This is not the best time for you to buy a house. Save up some more money, work on improving your credit, and make sure this is where you want to live for at least a few years. Then revisit the idea.

You will not be able to secure a mortgage without two years of employment history, and as a self employed individual you will need to get a cpa to confirm your income, based on the last two years of income tax returns. In your situation, your only real way to get a house is to buy cash.

Human: I mean this to be a civil discussion. Things are not black and white of course but as I am at a sort of crossroads with regards to how sympathetic I feel for the majority of Americans that are struggling. On the one hand, I know supply-side economics isn't as effective as giving the majority of Americans a tax break since doing so would stimulate the economy so much more (aggregate demand increases need to hire people which creates jobs) but on the other hand, they would use it to put themselves into deeper debt or make stupid financial decisions that don't help them at all, and then they get mad at the rich for being so wealthy and expect them to pay more taxes when they are already getting enough of a break. Is it right to feel like many of the impoverished deserve to be in the position that they are in? No one forced you to get a home you couldn't afford, or create a family you couldn't support, or to take out $100K in loans that could never be paid back with the meaningless college education that you got. I feel like if you just knew how to save money and knew a thing or two about being financially intelligent, you wouldn't be struggling that bad in the first place. How is it that people are that deep in debt? I've done the math and if you stick with a budget and cut out the meaningless stuff in your life, it should be reasonably easy to pay off your debts. Edit: the average income would be what, like $50K? That's a hell of a lot of money. If you have a family, you should've planned for how expensive it would be so I have no sympathy. If you can't save with that, you have too much shit and liabilities taking money out of your pocket. I just feel that a lot of people's troubles are self-inflicted. I know I sound like Captain Hindsight, but no one told you to have a bunch of kids, buy that car that is sucking up your money every month, etc. Edit 2: I guess this question really is one of those kinds without a clear answer. Everyone has their own problems and it's not like the answer is just "Full extent. Complete truth" and vice versa. You can feel sorry for some, but not all.

I would say as a general rule, we should all be sympathetic to our fellow man/woman despite his situation or how he got there. However, in the spirit of what you're saying, I feel like there are a lot of factors that come into play that make certain situations more or less "sympathetic" than others. The way we grew up (basically, how our upbringings have molded us into people with very specific, difficult to shake habits, weaknesses, and issues), psychological problems, degree of intelligence, social skills, educational/job finding/nutritional resources and ease of their accessibility and use, medical problems and bills, family issues and obligations (not just children, but parents, relatives), sudden unplanned death - as well as many other factors - can all contribute to unplanned financial hardship that is difficult to get out of and can seem almost handicapping to many. However, at the same time many do certainly have some sort of way out, with hard work, discipline, and some financial intelligence (if they could acquire it). And I agree that many seem to make bad decisions and buy things they can't afford or live lives that they can't sustain and get themselves into completely avoidable problems, then turn around and blame other people for being successful when they're not. I guess I'd err on the side of sympathy until they prove to you otherwise, but that's just my opinion. (edit: fixed a typo)

With the Internet, there is no excuse for lack of financial intelligence.

Human: Please assume that the younger person is currently in a similar financial/economic position as to where you were five years ago. Edit: Sorry I--a word in the title. Since this is r/personalfinance, this should be one piece of *financial* advice. Thanks!

Start your retirement portfolio yesterday.

you're 14, get a job now so you arent an eager spender when you can actually go out

Human: I am fresh out of college with a marketing degree and my first job pays 33k/year. I got a job in property management. Average income in my city is 32k, it's a little smaller. I don't mind going to my job and I like my boss. I also will likely be promoted in a year or so. When should I be switching jobs? Right now I save about 7k per year after all expenses, but I also could probably be making more money if I wanted.

Just out of school, you do want to show some stability with keeping a job for at least a year or two. If this is your first job, sticking around and being able to show they liked your work enough to promote you will be a big help in any future job seeking. Hopefully with your promotion will also come some higher earnings.

If you are wondering if it's time, it's time.

Human: Only half way done but out of debt!! WOOHOO! Now to finish the last two years and not rack up that kind of debt! Assistant: Sad story really- My father recently passed away and left me enought to cover the loans and a small house. I just thought that the best thing I could do with it was to pay off the debt. I never thought it would happen this way and actually saved $70k collectively when I took out the max on loans. I planned to use that as a starting place and as a buffer incase I needed more money for unexpected expences with school. I'm just glad I'm out of debt today. As for tomorrow- I still have two years to go and will have to manage that one on my own.

I'm sorry for your father . I'm sure he would been proud you used his hard earned money to pay something that worth it .

I'm sure your dad would be proud that you used the money for such a great purpose. I'm in law school and I've been racking up serious debt for it, and I've gone through a couple deaths in the family and other crises while I've been in school, and it's incredibly hard. I can't imagine how much harder med school is, with more time and money and effort required, and losing your dad must be an unbelievable strain. But helping you pay down that debt is a great last gift for him to be able to give you.

Human: I've been getting the urge to go to my bank and see my money. I've worked hard saving my money, and all I can see from my hard work is a number on a screen or a receipt. I want to touch it. Is that weird? Is it possible to do without withdrawing? Has anyone done this?

[This is 100,000 Each one is 10,000. Prepare to be disappointed.]( http://upload.wikimedia.org/wikipedia/commons/1/1f/StrappedCurrency.jpg)

Jesse Livermore used to do this. Over New Years every year he would go have his bank fill a large vault with all of his physical money and sit there as he went through every trade he made over the past year so that he remembered what all of the stock certificates he dealt with all year really represented (Source: How to Trade in Stocks, by Jesse Livermore)

Human: It took me awhile but I finally found an entry-level job in the field I'm interested in, advertising. I make 34k a year, so I'm in a pretty low tax bracket. I also owe my parents 22k over the next 5 years, $500 a month with 5% interest. I've got about $5000 in an emergency fund and a decent used car (Corolla). I spend frugally. My employer does not offer 401(k) matching. I spend about $1000 a month for everything (including my student loan to my parents), potentially more if I move out of my parents'. Where should I be investing the $800-900/month I have left over? For reference, I live in MD, US.

I'd max out a Roth ($5500 this year) before going to the 401k if I was in that tax bracket.

Do they have a Roth 401k option?

Human: My wife and I recently purchased a house under only my name. We were planning using her name for emergency loans and to make additional purchases down the road. A family member of her wants to use her name to purchase a house now because they have bad credit. This is a bad idea and I do not really want to do it. The person said he will take her name off in a few years, but that will require re-financing and there is uncertainty if he can actually re-finance three years from now or if the rate will remain low. Any advice on how to deal with this? What are some other potential problems?

Do not do this. Please. Do not do it. Even assuming it did not rise to the level of fraud, this is simply a terrible idea for you and your wife. There are a litany of potential problems, the worst of which is that you are stuck being 100% financially responsible for a second house that someone else isn't taking care of. Do you want to be stuck paying the note on a house that someone has destroyed? My dad taught me one thing: never, ever, ever co-sign for anyone. Maybe that's a stretch (I would of course co-sign for a few people in my life) but really - don't do this.

Nope. No, no, no.

Human: I am 24 here's a snap shot of what I am dealing with 401k : **22k** 20% bond / 80% stock ROTH : **12k** 20% bond / 80% stock vanguard ( low fee ) some stock index ~ **3k** company stock **4k** ( waiting for time to lift before selling for low tax ) House # 1 : mortgage 80k current selling price 140k **NET 60k** House # 2 : mortgage 50k current selling price 100k **NET 50k** emergency fund in no early penalty withdraw CD **12k** ( 1k per month ) checking account **11k** in cash ( i will push this into more index soon ) i have no debt, and no student loans after taxes, my person expenses and my entertainment (movies, video games, dates, restaurants ) , my rental income etc, I save **~3k per month NET** at what age ? how soon can i retire if i don't do much traveling ? if i like to travel when i retired ,( ~4 trips per year ) how soon do you think I will be able to retire ? thanks for your input edit : i spend about ~2k a month, i think about 1.3k on bills and 700 bucks is spend on entertainment, and eating out it also seems I am missing some information **1k from rental income + 4k ( after tax, medical expense, 401k, dental plan, etc ) per month**

your question is exactly suited to /r/financialindependence

How much income do you get from rent? How much at your job?

Human: After living with my GF for a while I'm starting to find out how horribly financially irresponsible she's been in the past and it's really biting us in the ass. Her pay has been garnished for the better part of a year. She promised she wouldn't let it happen again but after getting pulled over and finding out her license is suspended for unpaid fines I'm finding out she has several thousand more dollars in debt that is going to be queued up for garnishment next. As it is she won't get a full paycheck for a couple of years. Normally I'd just ride through it, but we have two kids. I take care of them and work as a self-employed computer repair tech on the weekends and in my spare time. I make decent money from an hourly perspective but I don't have a ton of time to work. Now I'm shuttling her back and forth to work so I have even less time to schedule jobs. Her job provides the family benefits that self-employment doesn't provide so me switching to full time work isn't an option. Getting her license back would completely wipe out our savings that's already taken a hit from a recent move. I can only imagine her credit is rock bottom. Would there be anything to lose in filing for bankruptcy? We need to get these garnishments off our back (they're nearly $500/mo currently) and she needs her driver's license so I can actually schedule work. Any advice would be very welcome.

You need to figure out what else she might be hiding (debt or otherwise) and get a clear view of her financial picture before you think about doing anything.

After she shirks her responsibilities, what is to stop her from running her finances into the ground again? What's going to change when her debts are wiped clean? (This is assuming that she declares bankruptcy.) You're putting the cart before the horse. There's a reason she got into debt in the first place. How will she avoid that in the future? sincerely, Richard Nixon

Human: Greetings /r/personalfinance, I have only the most basic knowledge of savings and budgeting and would like your help. 8 months ago I got my first well paying job, $43k per year instead of $23k per year. Since then I have put a lot of effort into paying off my credit card, which is down to the last $750 so it should be gone in a few months. Here’s the situation. I’m $30k in debt, mostly due to my auto loan. I have three student loans I’m also paying on. My apartment costs $512 a month, car is $336, gas is about $175 - $200 per month. I make contributions to my 401k at work, $144 per month, which I believe is the max of their matching at this point in my career. After all bills, I have about $200 a month in spending money for entertainment and whatnot. In 2010 I completed Bankruptcy, so my credit is terrible right now. In 2018 it should come off my credit report. With a life expectancy of about 85 – 90 years, what do I need to do to retire, and live a life of leisure with room to do a little traveling each year, as quickly as possible?

Sell the car. Buy a beater. Stop the bleeding. Pay off the CC debt. Are the student loans federal? Do Income Base Repayment. If private, don't make late payments. You'd want to attack the loan with the highest interest. You're extra $200 a month in "spending money for entertainment and whatnot" should go into an emergency fund until you have built up $1000. And then after that, proceed to add extra to your loan repayments until you've paid off each loan. Don't live like a hermit, but at this point you can't afford $200 for fun money. If you want to repair your credit score, you can get a provisional credit card through your local bank or credit union with a low ($500) credit limit. Because you'll have to promise you will pay the balance in full at the end of each month, that will help fix your credit score. If you want to retire confortably, take the number of year you plan to live in retirement - 30 years or so - and multiply that be the amount you'd need to live confortably. Don't add social security (because it may or may not be there). That total number is how much your retirement investment portfolio must make in order for you to retire completely, withdrawing at a reasonable rate.

What is your bare bones living expenses? Lets assume you can move somewhere with an extremely low cost of living and live off $1,000 a month as a retired hermit. That will cover basic health insurance, living expenses, and a little extra for fun. At $12,000/year that is 12000/0.035 = $343,000 in savings you need to retire. Assuming all your free money and 401k goes into this savings, that results in $344/month which after roughly 40 more years of savings you'll reach your required savings to retire. Which by then you are already too old for since you can withdraw more. So we'll assume 5%. 12000/0.05 = $240,000, so after roughly 30 years you can retire. Basically, you need to kill that debt quick, cut out a lot more expenses (you are spending way too much right now), and saving every penny you can. Get rid of that car, sell it and buy a used car. Share an apartment with a roommate, use tax credits to get rid of $2500 in student loan interest a year, etc.

Human: I am the beneficiary of my late father's Genworth IRA fund (~$200K). I'm thinking of opening a Vanguard IRA and transferring the funds there. I'm just assuming at this point that this is possible and the expenses at Vanguard would be smaller than at Genworth. Anybody has thoughts on this, or advice on what the best thing to do is? EDIT: I just want to make it clear that I'm not interested in cashing out the fund, just to continue the retirement fund until my own retirement. I'm currently 40.

NO. STOP. People assume that if you inherit an IRA you can just move it to your own IRA. Even financial planners who should know better recommend this. An inherited IRA is it's own type of account with it's own rules. You have to title the account properly identifying it as an inherited IRA and you have to take distributions on a unique schedule (which if you do it right an stretch over your lifetime). If you make a mistake, there is no way to undo or recharacterize these transactions and you will pay massive tax and penalties. Find a specialist who actually knows this (google stretch IRA) and do it right or you will lose a huge amount of money.

Had he started to take disbursements yet? Your basic plan sounds ok, but how fast you can/should take the money out will be affected by whether he was taking money out. Talk to a financial planner or tax specialist about the ramifications of cashing it.

Human: UPDATE: I asked the companies to lower my interest rate. They did... slightly. I am continuing to pay them off with highest interest first.

You have a low income in an expensive area. Either increase your income, or move somewhere cheaper.

Hate to do this to you, get rid of the pet and find a residential home that rent out a room...that can't be anywhere near $1200. You just got a 3rd job for free.

Human: My mom is a 63-year old nurse who is making approximately net $3,700/month. She has $0 in retirement savings, $0 in an emergency fund, and no debt. Her monthly expenses are approximately $2,075, leaving $1,625 to allocate. What should she do for retirement savings/emergency savings? Thanks!

Hopefully she isn't planning on retiring for some time. If she is planning to continue working for 5-10 years then she should dump the savings mostly into bond funds and/or Target Date funds. Fortunately, she is eligible for catch-up contributions to her IRA at this point; she should be leveraging that if possible. She needs to look to reducing her expenses significantly. That's a big number with no mortgage and no car loan. She will be on a very limited fixed income in retirement due to having no savings. This is a very tough situation; she needs to carefully model her projected retirement income from Social Security and any pensions or anything else she has to determine where she stands.

That's a lot of expenses. Is the house appropriate for her situation or is downsizing a possibility?

Human: Here's the rundown: Salary at present job around 70k. Wife around 40k. Just acquired second "job" that will be paying 8k/year. It's techinically a salaried position so it is subject to normal taxes (i.e. no contracting, self-employed, etc). One issue I am dealing with is that the biweekly checks from this are so small they are not taking out any federal tax (they are taking out FICA, SS, and State). What I want to do is take that entire 8k and "remove" it from my taxable income. I am not maxing my 401k yet but will in some form or fashion within the year (expected year end bonus will go all into 401k and should come close to maxing it with my current deferral (3%) + match (100% up to 3%)). Likewise with an IRA. This 8k will go to helping towards one of those goals. I see a couple options but want input on what I am missing. Option 1: Up my deferral from salary to my company 401k by 8k/year thereby reducing my salary by 8k and filling in the gap with this new income. One concern here is how the lack of federal taxed being taken out of the 8k will come into play when my base income is reduced by 8k (and subsequently the taxes on that base are reduced proportionally). The other concern is that my bonus puts be over the 17,500 limit and then I am taxed at bonus rates on the excess of the bonus that is paid out because it can't be put into the 401k (which I'd like to avoid, but such is life). Option 2: Work out some system with the second employer where the entire pre-tax amount is deposited into an IRA (up to the 5500 max). They have a retirement plan but it is quite shitty. In this scenario, I am left with 2500 of taxable income that I can't put into an IRA. Option 3: I could, I guess, throw the entire amount into their retirement plan and then roll it over into my base company's 401k. One problem with putting it into their retirement plan is (I think) that amount would count against my 17,500 yearly limit and I am back at option 1/square 1 anyway. However, it might be simpler to have the entire 8k just put into their retirment plan and then rolled over rather than allocate from option 1 and worry about tax implications on this new 8k. Option 4: You tell me. TL;DR: Have an extra 8k income from second job that I want to completely tax shelter. How should I do it.

Easy option to deal with getting the correct tax withholding is to file a new W-4 with each employer so that they withhold the proper amount of federal taxes. I think increasing your 401k contributions is a good idea on top of that, but it's really a separate issue from the improper withholding you are trying to solve.

And for more info: This is an issue I'm trying to address because with a "0" on all of our W4s the IRS calculator says that I will owe $3,100 at the end of the year. Maybe I just need advice on withholding because that seems to be the issue.

Human: Hi all, I'm constantly re-evaluating my career and I'm afraid I will end up frozen/stagnent if I don't actively look for additional opportunities. Anyone have any experience in the area of career progression/development? By age would be great. Currently 25, turning 26 next month. Salary: 62k/year USD Title: Software Engineer II State: SC, USA I think my salary is fairly competative at my age, but my company has informed everyone there will be no merit increases (raises) this year, and most likely not next year either. I don't want to be making the exact same salary when I'm 28 or so in such a high paying field. I've been with my company for 2.5 years and I become fully vested beginning of next year. Anyone have any advice or experience?

If you stay purely in programming then your increases will be incremental if you stay with the same company (in most cases). As with a lot of fields, the best option for increasing your salary is doing some upwardly mobile job hopping. If you are not anticipating any raises for the next two years and you aren't comfortable with that then you need to start looking at moving laterally to another company or preferably to a higher level position.

> I've been with my company for 2.5 years and I become fully vested beginning of next year. What is "vesting"? Are we talking stock options? How much are they worth? You need to jump ship and get a job with another company to get a good raise. You're coming up on five years of experience since, and should be making more than that. Depending on what the options are worth, it may well be worth it to jump ship now instead of waiting.

Human: Hey /r/personalfinance- I'm graduating from nursing school soon and am hoping to make somewhere around 66-71,000 my first year, and around 75-80,000 my second year with incremental increases every year. After taxes (Los Angeles), this should come out to about 3000/month for my first year and about 3500ish/month my second year. Keep in mind, these are all estimates as I am not sure where I'll be working and salaries vary. I am also going to be in debt $66,000 by the end of school, and I plan on going back to school in a few years (3-5) for a (much) higher paying nursing specialty. This leads me to a couple questions: 1) Is it worth it for me to aggressively pay off my debt for the next 3-5 years in hopes of paying off all of these loans before I start my specialty school? Or is it an acceptable idea to have a bit of debt going into specialty school, knowing that once I finish training, my salary will be about $150,000+ and I can pay it off quicker? 2) If I decide to just aggressively pay it off, should I just focus all of my saving towards my debt? Or should I make sure to save some for an emergency fund? If I save up, I'd probably put down about $750/month for debt, another $750/month for savings, and another $1500/month for living expenses. After I had a sizable emergency fund, then I would just throw down $1500+/month aggressively paying off loans. Thanks for your input!

Reading between the lines you're probably still in college student mode, no house or car payments, no kids or dependant spouse, still able to live on ramen and cheap beer if it comes to that, Right? In that case go for a minimal emergency fund (maybe even count your credit card limits towards that fund, we're talking emergencies here....)and pay off the student loans as aggressively as possible. Think in terms of expenses, what is the most you would have to pay in one go if something bad happened (insurance deductible) then think about what you could live on for 3-6 months bare bones if you were unemployed. Use your available credit for the first number and your emergency fund for the second. As your personal responsibilities increase, adjust your emergency fund accordingly. When you pay interest on loans (student or otherwise) its a negative cash flow to your personal balance sheet, the sooner you get rid of it the less you pay and the more you have to save. I wouldn't worry about debt going into secondary school, just pay as much as you can as soon as you can but don't let it delay your advanced degree. Edit: max out your 401K at the new job, the extra 25% up front tax savings will swamp the student loan interest and you can still get your hands on the money (at a cost) in a real (life threatening) emergency.

Emergency fund first! A minimum of 6 months should be your goal.

Human: If you didn't know, you can write off 3k per year in stock losses. For someone in the 25% tax bracket, that's basically a 25% subsidy on any stock choices you make that go bad. And if it goes in your favor just hold it for a year and you only have to pay 15% capital gains taxes I'm generally a buy and hold type of investor that does all my investing in tax-deferred accounts. But this tax write off has me thinking that it might be a good idea to make a yearly bet on a small cap stock. If I were to buy...lets say 6k worth of a small cap stock every year, with a stop loss of 3k, would I come out ahead in the long run? Lose 3k some years, double up other years, and you'd always get the 3k write off when you lose. Any thoughts? Edit: I think this tax deduction applies to stock options as well. So what about leveraging up and buying 3k in options for a small or mid cap stock every year? A lot more upward potential and you still can write it off if you lose.

I lost 7k in the market a few years back when I didn't know what I was doing and it tanked.. For 2 years, I basically didn't have to pay taxes on 3k of my income. If I could choose between the two, I'd much rather have my 7k back rather than getting a few hundred extra bucks with my tax refund for a couple of years.

So I regularly invest in taxable accounts; like once a month I invest $X across an array of funds. If you do this each month for years and years in a row though, it's going to be hard to harvest losses if they are mostly index funds. The reason is that on average the index funds are going up each year. If you really want to harvest tax losses, it's mostly likely going to be where you are owning individual stocks in a brokerage account, and that just isn't my style.

Human: Ok, so I'm not sure how to word this, but it can't be a feeling that I'm alone in having... How to I avoid getting frustrated with saving money? I work hard, 60-70 hour weeks every week. I live in a crappy apartment because it's the most affordable thing I could find. My car is nothing fancy, because I paid for it with cash. I've been making a minimum of double payments on my student loans (which are down to 10k). I'm saving more than half of my monthly income. Every. Month. And I'm frustrated. I know that I'm doing the "right things", and in the long run they'll be worth it. It's reassuring to have a year's worth of emergency money. But damn, how do you guys keep up with the good habits? How do you stop yourself from thinking "I deserve x, y, or z." What stops you from going out and spending money you know you shouldn't? Right now I'm really want to buy a newer car. It would be so nice to have AC, or even windows that roll down. But my car is mechanically sound, so I can't justify buying something newer. Thoughts? Suggestions? Do I just suck it up, and keep living like I live below the poverty line even though I don't have to? Or, in trying so hard to have good saving/spending habits, am I just setting myself up for failure in the long run? PS. Sorry if this makes me sound like a brat. lol TL;DR How to you keep on track with saving? How do you avoid frustration/getting burnt out on saving?

This sounds like a post from a /r/Frugal user. Perhaps you should live a little, a years worth of expenses may be a little much, most recommendations advise 3-6 months, or is that money is easily accessible investments? Personally I would advise using some of that money to make you happy now, no reason to be miserable now. Try and find a happy middle ground. Or was this post meant for /r/financialindependence ?

Homeless people. Not even once.

Human: have ~200$ of debt on my credit card (I have lowered this by ~1000$ over the last few months). Most of that money I have been saving for a vacation I will be taking next month/the end of this month . I have taken my credit card out of reach so incurring any more charges onto the card won't be possible. So the two choices I see right now are: 1. Pay off the credit card immediately by taking money out of my vacation fund and be out of debt so I can put more money into the savings account or 2. Keep putting a fraction of my earnings into my savings account and just pay off my credit card with my next paycheck. What is my best option?

Unless your savings account is earning more interest than your credit card (which I HIGHLY doubt) then you are losing money not paying off the card. Pay it off.

How is this even a question? Pay it off. You are talking about a difference of 2 weeks.....You wont even be saving that much in interest, just get it over with and be done with it. Pay the danm thing. If you had more debt and less savings you might reconsider....What does your emergency fund look like? You know how much /r/personalfinance loves it's emergency fund.

Human: I recently got a job working in the financial district as a sales type position for a bank in San Francisco. If I live near work its about 400 more per month than if I was to live in Oakland. Do you think the difference is worth the possible networking ability I would have?

Well, you would probably be spending less money on transportation. Would you take BART if you lived in Oakland? That can add up to a lot of money, especially since there is no monthly pass.

Would you happen to be able to make overtime pay if you lived close to work and just worked an extra hour a day (on avg)? OT would pay for the place and give you a leg up for producing more work than a peer.

Human: So I'm 12k in credit card debt and have about 9k in student loans. (Pay like $160/mnth for student loans) I have a car lease of $400 and insurance that's about 160$ a month. Rent is $400 w/utilities and to get to work it costs me about $300 via public transportation. $90 on phone with data. I spend like $900 on food, gas, and going out a month (pay for s/o). I take home around 3k a month after taxes and somehow I can't pay these balances down. I don't have any money saved up. Cards as follows: 4377 @ 18.9% min $107 3665 @ 19.9% min $79 2879 @ 24.99% min $90 1207 @ 12.99% min ? I try to pay more than the minimums but I'm barely making a dent. How should I attack this?

You are spending way too much money on transportation. Why spend $300 on a public transport and pay $560 for a car lease/insurance (plus whatever you spend on gas). Try to optimize your travel so you can reduce that amount. What you need to do is make a decision to reduce the $900 (spent on gas and food and fun), all the way to $600 and use the remainder to pay down your debt. And you SO needs to carry his/her weight as well, at least until you stop drowning in debt. Pay minimum on all cards except for the one with 24.99% and try to get rid of that one ASAP. Once you're done with that one, move onto the one with the next highest interest rate.

In addition to what the other posters have said, you may want to look into refinancing some of the debt. If you can get approved for a loan or %0 balance transfer, you can pay off the high interest debt in exchange for lower interest debt, and then backburner that debt while you pay down the other cards. Look into personal loans from a credit union, %0 balance transfer cards, and lending club. First though, pull your free credit report from the three major credit companies and make sure they are squeaky clean. If you have any blemish, then look into "pay for delete" agreements and do those before anything else. Whatever you do, do not fail to apply the reduced required minimum payments to monthly principal paydown on your highest interest debt.

Human: Wanted to know Reddit's opinion on whether or not its financially worth it to buy an apartment. My thinking is I'm going to be spending 7-8k a year renting while sharing a room and my brother is probably coming to the same school, so he'll be in a similar position. After we both graduate, I'm thinking about renting out the apartment (or selling). I'm fortunate enough that I don't have to worry about tuition/rent, but I still would like to save my parents money. So I was just wondering aside from mortgage payments what are the other fees associated with buying and then later renting the apartment. *Looking at apartments around 160k *Down payment of at least 20% *Under the assumption that mortgage payments won't be a problem Thank you in advance

If you buy an apartment at 160k, down payment for 20% will be 32k + closing cost of 2% (which is low) for 3.2k, which means 35k "invested" that you're losing the ~$2500 (or 7%) investment return you could be making per year. Plus, you'll have to pay taxes, HOA fees, maintenance costs, and possibly more in utilities. PLUS there's a ~10% cost to sell the apartment (taxes, fees, 6% commission to the agents). You'd also have to find an apartment that allows renting. The HOA board decides that, and can also change that decision several years down the road. (Unless you're super actively involved in the HOA board.) Lastly, there's no guarantee that the value of the apartment will keep up with inflation. So basically, no, I don't think it's worth it. If they're going to buy a whole house and have you run it as a boarding house that's cash positive (after accounting for everything, including vacancies) then maybe. But then that's going to take real work on your part.

Do you have any money?

Human: My company matches 50% up to maximum of 4% of salary. So I contribute 8%, they contribute 4%, for total of 12%. Pretty typical. So, the matches are always Traditional contributions, even if the employee contribution is Roth. The mistake i made was this: i elected for only 8% Roth. The company matched the amount i contributed AFTER taxes, so their contribution was less than the 4% maximum! And it will still be taxed when i withdraw! I missed out on several months of free money! Hope noone else did this! **edit: oops. everything works out, false alarm.**

Your contributions to the plan are based on a percentage of your salary, regardless of the manner in which it is removed from your payroll. An 8% contribution made to Roth, or Pre-Tax is the same $ amount. The contribution is figured based on your gross salary and then removed from your check in the manner that you elect. That would be either prior to paying federal taxes or after. If you are trying to figure out what your company match percentage was for the year, take your contributions divided by your gross salary, it will most likely be correct. There are some cases where your salary will be different from your 401(k) eligible salary, but it will be close enough. Your statement is correct in that your companies contributions will always be tax deferred and that you will have to pay taxes on those monies when you remove the money from the plan. More than happy to help you review the data if you can provide either your year end statement, if you are concerned about 2012, or your current year match if you can provide YTD payroll and contribution amount.

What is BS, is my company two years ago decided to do the performance based match company wide. So my division makes our company millions, but another division only makes a couple million........so our company decides they don't have to match. I really need to get the fuck out of this company. Damn family commitments and the middle of no where.....

Human: I have an online-only account (Ally) and a traditional Bank of America checking. I'd completely switch to Ally if I could--I like their fee structure (especially the fact that they reimburse all ATM fees), and fuck BoA. But I'm not sure what I'll do if when people pay me a larger amounts of cash that I don't want to carry. I suppose I could get a money order, but that costs money and involves going to the post office. Any thoughts?

In an increasingly cash-less society, this is not much of a concern to most. On the few occasions that I need to deposit cash, I get a money order. You might also consider maintaining a local checking account if you need to deposit cash often. It is easy to link the accounts and electronically transfer between.

Couldn't you just deposit your money in the atm(reimburse atm fees) with ally.

Human: Hi PF. Have been going back and forth with my small firm's Finance Director this morning and still can't believe what she's telling me. She just got the "Q1 401(k) package, and [my] deferral of 13.99% of my salary is throwing us out of compliance for ERISA purposes." My base is $140k. I max out my 401(k). Never saw that as a problem, but now, as I was just told, "Even though the 'max' for 2013 is $17,500; the Plan testing limits will cap you. The reason is that when Congress passed the laws, it didn’t want unlimited tax breaks for the Highly Compensated. Even if you max out at $17,500 this year, it will put you at approx. 12.50% deferral which is well above the cap of 5.75% now. The reason we have always passed is that the pool of 'non-highly' compensated is getting larger, thus dragging down the average." So, has anyone ever dealt with something like this? I am pushing back but the message I'm getting from my own Finance Director is "Adjust it and get us back in compliance." I just can't believe that it's somehow suddenly inappropriate for me to withhold up to the legal contribution limit. BTW, there is no match at my firm, for what that's worth. Edit: Update So I went back to the Finance Director and asked her that, in addition to effectively restricting HCEs' contributions, we should also take some of the steps others have suggested (e.g. raise awareness of the program, offer a company match, or convert to a safe harbor plan). Her response was that we're already a "mandatory" plan, so enrollment is automatic for new employees, and NHCEs' average deferral is 4%. She says she's spoken with the CEO/owner, and we're not in a cash position to offer a match or switch to a safe harbor plan. So, for now, it's essentially "tough luck." I may go back and ask for a modest comp adjustment to offset the impact, but I guess my best bet is to open a taxable brokerage account and start funding that with the funds I was previously deferring into the 401(k). Thanks again to all who offered clarity & guidance.

This can happen. In my small company, the owners put zero into the plan to help stay in compliance. Look into safe harbor rules. Basically, if you can get lower paid people to participate or a few other "safe harbor" issues, you can contribute again. Usually HR is all over this because they don't want highly paid folks to leave or demand additional compensation because of it.

To get around this, front-load your contributions as much as possible. Try to get to the maximum by May next year. Your plan may have a maximum deferral rate, but if it doesn't, go for it! Of course, then the max percentage mid-way through the year will be lower than 5.75% so you're screwing over the other HCEs, but then at least you get YOUR max.

Human: I think it's interesting to hear what people who are working hard to improve their own finances donate to charity, if anything. For instance, here's a Get Rich Slowly post from last fall with a lot of discussion - answers really run the gamut. http://www.getrichslowly.org/blog/2012/09/07/ask-the-readers-how-much-do-you-spend-on-charitable-giving/ So what do you donate, how often and to whom? Would you ever donate to charity if you were in debt (and does it matter what kind of debt - for instance, a lot of people who donate to charities probably have mortgages)? Does it matter what country you're in? (European redditors - is donating common across the pond, or is the assumption that the government does enough?) Not here to judge, just interested in getting some opinions.

Young American checking in. I rent, have no debts, and have a pretty good job. I have an annual financial spreadsheet that takes almost all of my incomes/costs into account. 1. one cell is for charitable giving and I set it as 10% * AGI. 1. I tell payroll to direct deposit (that amount divided by 24 pay periods per year) directly into one of my different savings accounts earmarked for charitable giving. 1. This account is never tracked in my net worth calculations. From there I can make lump sum donations at the end of the year to a few non-profits. Or let the balance ride into next year. I have been suckered into subscribing to a couple charities.. Usually I cancel those at the end of the year if they don't align with my donation goals. Advice: **If you plan on ever donating, start donating NOW, even if it is a small amount**. You want to get in the act of donating, not just paying lip service to your future self.

Old clothes go to charity. Money can go to charity when my wife and I are dead. My taxes are already being used to fund enough charities/entitlement programs. EDIT: I do drop a few hundred on toys for tots every year, but that's a negligible percentage of gross.

Human: I get paid bi-weekly. I have a decent amount saved in my savings account (equal to about 2.5 months worth of take-home pay), but towards the end of the two weeks in between paychecks I usually have between $100-300 in my checking account (every paycheck I transfer money to my savings account) Is this normal or am I doing something wrong?

Paycheck to paycheck was defined to me as "Having too much month at the end of your money" Having a $300 buffer at the end of the month is HUGE compared to some people's finances. Paycheck to paycheck to me is getting a bill on the 15th and having to wait until the 1st to be able to pay it, while barely avoiding fees or getting small fees on top of it. Edit: Also, you have savings. Most people living for their next paycheck aren't able to save anything. This generally causes a vicious cycle of "I just got a bonus! Now it has to go to this emergency..."

Hey that's better than me. Soon after I start Grad school I will literally have $1 to save every month. You're not alone and this seems completely normal.

Human: I have about $19,000 in a retirement account managed by my current employer. The money is 100% employer-contributed because I've never been able to afford to contribute. I'm currently looking for a job (hence the throwaway), and I'm considering cashing out that account when I leave my current job. My wife and I currently have about $9,000 in credit card debt, and we make about $200 a month in minimum payments. If I cash out the account, I hope to have just enough left after the tax hit to be able to pay off the cards. Other relevant info: I'm 28 years old, she's 27. We've got a $95k mortgage that we're refinancing, plus about $45k in student loans and about $22k in car loans. We're living paycheck to paycheck now, but I expect that a new job will give us at least $1,000 extra in our budget each month. It could be as much as $1,300. (Yes, I am vastly underpaid right now, despite the pretty awesome retirement benefits.) I'm hoping to use the extra money from my new job, refinancing the house, and paying off the credit cards to attack the existing debt and save for a down payment on a new house. We want to buy a new house in five years and expect to need about $20-30k for a down payment. That part shouldn't be a problem at all. **TL:DR: I'm young and searching for a new job, could pay off credit cards by cashing out retirement. Good idea or bad?** [EDIT] **The people have spoken!** I'm trying to talk my wife out of doing this now. She's convinced it's the right solution, but I'm uncomfortable with it, after all the advice you guys gave. Thanks everybody for taking the time to respond to my question.

I am by no means an expert, but if I were in your shoes, I would do my best not to cash out the retirement benefits, especially since you haven't contributed to it and it is all free money right now. I would reduce your spending as much as humanly possible. No outings for dinner, no alcohol, no fun activities, cancel cable, cancel cell phones and get prepaids (and no smartphones). Then I would sell off anything and everything I don't use... DVDs, CDs, video games, you name it. I would try to trade in the cars (assuming they are not underwater) for cheaper, used cars, or just a single car. Then I would pay off my credit cards with the money made off of selling things and things I am no longer doing during the month; live frugally until my CC debt was 0. Again, I am not an expert, but that is what I would do. Cashing out retirement savings is a bad deal (and it is made that way on purpose so that you don't cash them out) and you will end up not only having to pay penalties but also might have to pay income taxes on the money.

So I think 28 is quite old for not having any retirement savings (scenario after you cash out your 401k), but it's not the end of the world if you will save aggressively after that (I'm talking about 25% to 30% of your gross income) or you're happy and willing to work until you're 75 or 80. If you *must* take out your 401k, this is what I would do: 1. Switch jobs. Pay off as much debt as you can. Possibly sell your cars or trade for cheaper cars. 2. Refinance your mortgage. Do you plan to rent it out or sell it when you buy your new house? Do you have any equity in there right now? 3. Roll your 401k into a Roth IRA (probably at Vanguard, maybe Schwab). **Make sure you have enough money to pay taxes on it in your account.** Do NOT pay with the retirement money, or you'll have to pay more penalties and taxes on it. I know that you say you live paycheck to paycheck. But save up ~$5k for the taxes on this (or whatever the appropriate amount is for your tax bracket). This should be possible with your salary increase. 4. In 5 years, you should have your car loans paid off, significant progress made on your student loans, and your mortgage should be easily doable. You can now withdraw the $19k principal from your Roth IRA without penalties or paying more taxes on it. I'm NOT a CPA. And you should verify all information for yourself.

Human: More specifically, is there any situation I can get into where a Visa and an American Express will not suffice?

SAMs club will accept a debit card or personal check as well.

Southern California Edison is the only thing I have come across in years that doesn't take a Visa. Amex is much more widely accepted now than in years past.

Human: I know, I know, good problem to have. The basics: 401k contributions maxed out, both kids' (currently in grade school) 529 college savings accounts well-funded, only debt is 30-year fixed mortgage ($1400/month), good, steady job with health insurance, both cars in good repair with plenty of miles left on them, live within our means, etc. etc. $90k in cash sitting in a savings account earning next to nothing (which is to say, losing money due to inflation), which is probably at least 2x as much as I need in an emergency fund. Not eligible for any sort of IRA from what I can see from the income rules, so not many (any?) tax-advantaged options left. I've always managed my own money, and am very skeptical of most financial advisors - not at all convinced they're going to pay for themselves, so to speak. I'm tempted to just plop $30-40k into a basic low-fee Vanguard 50-50 bond-stock fund and call it good. Is that too simplistic? Is there a better (self-managed) choice to keep it simple? (I don't really have the time or inclination to actively manage a bunch of different investments.) Am I at the point where an advisor is really going to be worth the time/money/effort? Thanks. Assistant: >I'm tempted to just plop $30-40k into a basic low-fee Vanguard 50-50 bond-stock fund and call it good. Is that too simplistic? Not really. You can just do a simple [lazy portfolio](http://www.bogleheads.org/wiki/Lazy_Portfolios). Requires minimal effort, no need to pay someone. Human: Fair enough, thanks. That's definitely where I'm leaning. Assistant: Why would you want 50% bonds, are you about to retire? If you have 30 + years, you would be missing out on incredible compound growth via stocks. As a young person, you do not want bonds > 10% of your portfolio. Human: Retirement is probably 20+ years out for me. I said 50% bonds because I don't know what I might need this cash for before then, so I want to keep it reasonably liquid. My 401k is mostly stocks, is doing fine, and barring a global meltdown should suffice for retirement.

If by liquid, you mean capital preservation, bond prices are very high right now, and if interest rates to up, you will take a big hit getting out of your bond position. Interest rates probably won't go up this year but the unprecedented liquidity will not go on forever.

I think that's a huge mistake. What do you honestly need that much cash for? The majority of people's wealth shouldn't be a dispensable bank account. If you are talking about down payment on a house then that is completely reasonable. If you are saying that statement out of habit without any real genuine need to touch 100k, 200k, whatever, then you are mistaken and should be using your wealth to generate you more wealth via index funds over the course of 20+ years. Otherwise, your money literally loses value due to inflation in most savings accounts and you realize you only needed an adequate emergency fund (say 10k) for when your AC unit breaks or to pay for kids summer trip or whatever.

Human: I can easily afford to pay it back in September, but until then the most I could afford to pay towards a loan is $40 or so per month. However, I need $700 *now* or else I will be evicted. My credit is not great (I have a defaulted student loan and credit card). There is absolutely no one I know who can lend me money. What are my options?

Friends and Family.

Back in the day I used to do this.... If you know anyone who works in supermarket customer service just ask them to ring you up alot of stamps books and then pay credit and take cash instead. A little bit shady but stamps are treated as cash so when their till is counted down cash will show lower and they will have a credit receipt for it. I don't recommend it but if you're desparate it works.

Human: I am studying Architectural Engineering at UT Austin and am on track to graduate in Spring 2015. I will be working this summer full time for about $13/hour and want to start spending/saving my money right. Fortunately my parents planned very well and were able to cover pretty much all education/living/meal plan expenses plus about $200/month spending money. I also have a truck that's worth ~$10,000 and is completely paid for. Going into the summer, what should I do with the money I'll be making? And how do I make money earned in the summer stretch through the next school year.

Stick it in a savings account and be frugal.

Personally, I would do what I did and open a Roth IRA as soon as possible. It's never, ever too early to start saving for retirement.

Human: I am going to a state university for 4 years. Parents will be paying first two years for me. I currently have two jobs in between high school, but will only have one min/wage (under the table) roughly 35 hours for the summer. What is my best bet?

At this point in your life, education is your best investment. Put this money in a savings account, in my opinion.

Savings account and forget about it. I had 4 grand in an account from high school and when I graduated college and was looking for a job it was this 4 grand and some very very frugal habits that managed to keep me afloat.

Human: I threaten to quit recently, and ended up saying I would stay. They invited me to do a bit more with my position besides my normal tasks, although only for 1 day a week. To make matters worse, I'm getting a better rate from my side consulting gig. So I know that I low-balled them when I negotiated my rate at the beginning of the job. I was just naive and in a bit of a tight spot. That's not the case anymore, so I'm not sure if I really should stick around and hope they give me a raise. Although I wouldn't be surprised if they didn't. Now it's not quite an even playing field between the consulting job and my full time job, since I have a health insurance plan with the former. Also I have the opportunity to learn a little bit from my full time job, although I could learn a whole lot more from the right consulting job. To reiterate the title, is staying with this job a horrible idea? I'm pretty sure I could find even better paying jobs if I really put my mind to it. Just not sure how it looks to be constantly switching jobs.

1. Look for a better job (or more full-time consulting work). 2. Accept new job offer, quit current job. 3. Profit!

> I threaten to quit recently, and ended up saying I would stay. They invited me to do a bit more with my position besides my normal tasks, although only for 1 day a week. Your company has already labeled you a flight risk. This isn't necessarily bad right now, but it's less likely you have a long-term future at this company anyway. Coupled with the fact that you're underpaid, start interviewing at other companies.

Human: My fiancee thought she made her last car payment. Unbeknownst to her she accidentally paid $1 less than the final balance. She let it go 30 days past due and received a late fee. It is now paid off. It is now showing up on her credit report just about the time we are trying to refinance our house. Her creditkarma score plummeted 45 points. Is there anyway to get this $1 late balance removed from her credit report?

I'd call the auto lender, get a human on the phone, and appeal to their sympathies. As silly as it is, it sounds like it was legitimately a late payment and they've already been paid, so they don't really have any incentive to go out of their way, but it's such an obvious mistake (and one that's potentially easy to make if you screw up your payoff amount/payment date at the end of a loan) they may be able to delete it for you. You could dispute the report through the credit bureaus, but if it's not an erroneous report I don't know how likely it is that would help. And those solutions could take time to work. Your best bet may be to just talk to one of the underwriters at the lender where you're refinancing the mortgage and explain the situation to them. Again, if you can appeal to an actual human instead of an algorithm, they may sympathise and be able to work with you.

They already got their money they wont give a damn about you

Human: Hi, I'm about to switch jobs, going from one job where I max out my 401(k) to another job where I max out my 401(k). When I leave, where should I roll over my 401(k)s? To an IRA? What is best? Thanks in advance for your advice!

Unless your new job's 401(k) is _fantastic_, roll it to a _traditional/rollover_ (not Roth) IRA. If you don't already have one, call Vanguard and have them walk you through the process. Some tips: * You probably want to maintain your asset allocation among all of your retirement accounts; in this sense, your IRAs (including a Roth, if you have one) can be used to make up for problems in your new 401(k). * Wait for your last 401(k) contribution to hit the account before doing the rollover * Do *not* cash it out. Similarly, now is probably not the time for a Roth conversion. * Recall that the 401(k) maximum is per year, not per job. So you don't have a fresh $17,500 of space to add just because your employer changed.

If I have 3 401ks from 3 old jobs just sitting around, can I still roll them into my IRA? In other words, is there a grace period, or can I do it whenever?

Human: Hey /r/PersonalFinance. I have a quandary that has been sort of burning in the back of mind for a while. My wife and I are both 25 (and graduated from college less than 2 years ago), making about 47k (after tax, 401k, health/dental) a year combined. Right now, we pay 900 a month for rent, about 475 a month for 2 car payments (not ideal, but both cars were necessary at the time we bought them) and about 425 a month for student loans. All of our other expenses are pretty minimal: non-contract phones, no expensive vacations or taste in food. With that pretty burdensome load, we can get together maybe $400 a month (on a good month) to put into savings, which will hopefully go to a down payment on a house in early 2014. So my question is this: Am I doing the right thing with that $400? I'm pretty young, I don't have an emergency fund and right now we don't have a lot of *fun* with our disposable income. Should I be focusing so hard on trying to get a house or should I take a step back and make sure I have my other ducks in a row before I think about that? Edit: This is my budget. Net Income: $3794 (sometimes more when I can get overtime at work) **Expense: Cost** Rent: 900 Phones: 87 Power: 80 Gas: 350 Grocery: 400 Car Payments: 479 Student Loans: 426 Internet (I don't have TV): 51 Entertainment/Eating out: 200 Personal (clothes, starbucks, whatever): 200 ($100 each) Car Insurance: 105 Home necessities (kitchen gadgets, knick knacks, whatever): 100 Leftover for savings: 416

I think you're spending way more than you think. 47K is $3,916 every month. After your listed expenses you should have $2,116. Where is that money going? Obviously some of it goes towards gas, utilities (unless they're included in rent?), groceries. $400 a month for the next year will net you $4,800. Is the kind of house you're looking at cost around $20,000? That's what you can afford with your downpayment. It sounds like you live in a low cost area, but I doubt it's *that* low cost. You're doing well in that you're not going into *more* debt, you're contributing to your 401K, and you have a monthly surplus. So half the battle is already won. But I don't see you buying a house in the next year or even 2 unless you find a way to save a lot more. I would prioritize saving up an emergency fund of at least $1,000 and then start attacking your car and student loans. You *really* don't want to be in a house that will suck up a huge portion of your income, especially when you already have almost $1,000 in monthly debt service.

it sounds like you're in a pretty good place at the moment, but what do finances look like in the near future? will you be getting better jobs, raises, etc? don't forget property tax on the car and other bills. when are the cars going to be paid off? How was your tax return? at least you've got a 401k, so it sounds like you're in a good spot. $400/mo will give you about $4000 by 2014, which isn't much of a house downpayment (though it's not bad, more is better). I'd start with saving up an emergency fund- $1k minimum, depending on your car/medical deductibles, then start cutting away at the cars and student loans.

Human: I thought this thread might inspire some good discussion, and provide some help for those looking to understand their finances better. So, what is one quote you heard about money that has stuck with you to help you better your finances? EDIT: This doesn't absolutely need to be a quote, it could be anything that happened to you that flipped a switch in your mind about money.

"The borrower is slave to the lender."

"It's not your salary that makes you rich, it's your spending habits." -Charles A. Jaffe

Human: A little background. I'm 26. I put enough in my 401k to get my employers full match, and I started a Roth IRA last year. I've inherited a little bit of money which I've used to start the account referenced here. My financial advisor is a longtime friend of the family and has managed my mom's portfolio for years. I definitely trust him, but the comments in the Frontline special made me very nervous. Interested to hear PF's take on his response to the special and my questions about the fees for my account: > The claim that 2% fees for a fund earning 7% (meaning the fund actually made 9%) would cost 2/3rds of an investment value over a lifetime is mathematically correct, IF the ‘investment lifetime’ is over 60 years. The same is true for a fund earning 10% with a 2% fee (fund actually made 12%.) Here’s how the math looks, assuming a $10,000 investment compounding for 60 years: > * 7% 9% % difference > * $579,464 $1,760,313 67% > * 10% 12% % difference > * $3,044,816 $8,975,969 66% > This raises 2 questions- What are those fees? What are the alternatives? > Mutual funds which charge in the range of 2% are typically C-share or level-load funds- funds which do not charge a commission up front but pay the advisor ongoing compensation as long as the fund is held. 1% is paid for that purpose, and the remainder stays with the mutual fund company to pay their expenses, compensate their employees and make a profit. > The advantage of this type of fund is the flexibility- an investor can use many different fund families and can change funds (typically after 1 year) without having to overcome a large up-front commission. The drawback is that the expenses are higher. For an investor who utilizes an advisor, the C-share arrangement can help to alleviate concerns over recommendations being motivated by making a high commission vs. recommendations being motivated by making an account grow. > An alternative that the guy from Vanguard (the founder, John Bogle) would rather have investors use it to only invest in low-cost index funds. The implication of his stance is that instead of the 9% whittled down to 7%, by using his fund you’d only whittle the 9% down to, say, 8¾%. Mathematically he is correct. However there are a lot of ‘ifs’ contained in his assumption- IF the index earns that amount, and IF the investor’s return is close to what the fund earns. > The first if- looking at the Standard & Poors 500 index, the most popular index (and Vanguard’s largest index fund,) on a price basis from early 2000 to today is up 8.7%- total. That works out to just over ½ of 1% per year, a far cry from the numbers he cited. > But I think the second if is even bigger. A highly respected statistics firm, DALBAR, has tracked annually the return achieved by the average investor vs. the return of the funds they invested in. On average, for more than 20 years, the average investor has lagged by over 4%. This tends to be due to the investor buying high and selling low. The amount by which the average investor underperforms the market averages dwarfs the amount by which the average fund underperforms. > Telling the ‘mathematical truth’ without discussing the ‘behavioral truth’ about investing only tells part of the story. The reality is that investor behavior has a far greater impact on one’s portfolio than investment behavior. In your own case, I feel that the funds you have will, over time, give you better than index performance, and that my initial selection and ongoing advice regarding the funds will be worth the fees charged. > *... Then he included some information about the funds I'm currently in and what their fees, are ... Links to where I can find the Net Expense Ratios for a variety of funds ...* > Remember that some of your funds are tactical in nature and have the ability to move away from stocks in times of market stress. Some invest in assets other than stocks, so may not perform as well when the market is going up but may outperform when stocks are out of favor

He is being somewhat clear. He is paid 1%/yr on C share funds. Do you value his services and time to be worth 1% of your invested account balance? If so, then you need to mentally realize a portion of these expenses you are concerned with is buying his time/services. If you don't judge it to be worth 1%, then obviously find a lower/no fee investment, which basically means you do it yourself amd cut ties with this advisor.

> My financial advisor is a longtime friend of the family and has managed my mom's portfolio for years. I definitely trust him, None of this has any bearing on whether or not he's actually good at his job or more importantly, is acting in your best interests. > but the comments in the Frontline special made me very nervous. Good. Reading through your adviser's response, he's blowing a **LOT** of smoke, and with good reason: he has to justify his existence in the market, even though it is not in your personal best interest to invest with him. Some responses to points in your adviser's email: > The claim that 2% fees for a fund earning 7% (meaning the fund actually made 9%) would cost 2/3rds of an investment value over a lifetime is mathematically correct, IF the ‘investment lifetime’ is over 60 years. The same is true for a fund earning 10% with a 2% fee (fund actually made 12%.) Here’s how the math looks, assuming a $10,000 investment compounding for 60 years: > * 7% 9% % difference > * $579,464 $1,760,313 67% > * 10% 12% % difference > * $3,044,816 $8,975,969 66% This part is correct, because it's just basic math. > Mutual funds which charge in the range of 2% are typically C-share or level-load funds- funds which do not charge a commission up front but pay the advisor ongoing compensation as long as the fund is held. 1% is paid for that purpose, and the remainder stays with the mutual fund company to pay their expenses, compensate their employees and make a profit. This is accurate in many cases. Most mutual funds "revenue share" with the broker that sold them, by way of 12b-1 fees included in the expense ratio (the 12b-1 fee is in the prospectus and is also on Morningstar for any particular fund). Class C funds generally have a deferred load, often ~1% of assets. That means if you sell $1,000 worth of a class C fund, you only get $990. While all this is true, he's ignoring the fact that there are many mutual funds (particularly index funds) which charge only ~5% or less the amount of expenses these funds do, and have no purchase or redemption fees/loads of any kind. Of course, your adviser doesn't want you buying those because they don't make him any money. > The advantage of this type of fund is the flexibility- an investor can use many different fund families and can change funds (typically after 1 year) without having to overcome a large up-front commission. The drawback is that the expenses are higher. Again, your adviser is ignoring the fact that *no-load alternatives are available*, because he makes no profit on them. > For an investor who utilizes an advisor, the C-share arrangement can help to alleviate concerns over recommendations being motivated by making a high commission vs. recommendations being motivated by making an account grow. The *only* thing that can alleviate this concern is whether or not your adviser has a fiduciary duty to you, in other words a legal obligation to operate in your best interest. Most financial advisers do not, and only operate on a "suitability" standard meaning they can sell you most anything. Ask you adviser if he operates as a legal fiduciary. I will bet the value of your account that he does not. > An alternative that the guy from Vanguard (the founder, John Bogle) would rather have investors use it to only invest in low-cost index funds. The implication of his stance is that instead of the 9% whittled down to 7%, by using his fund you’d only whittle the 9% down to, say, 8¾%. Mathematically he is correct. Yes, again because this is just math. > However there are a lot of ‘ifs’ contained in his assumption- IF the index earns that amount, and IF the investor’s return is close to what the fund earns. This part is nonsense. Of course an index fund isn't guaranteed any rate of return, but neither are whatever funds your adviser is pushing. The point is you earn whatever the index fund earns net expenses. If the index goes up 3%, you earn ~2.95%. If the index goes up 18%, you earn 17.95%. If it goes down 3%, you earn -3.05%. With a fund that carries 2% in expenses and performs the same as the index, your respective returns would be 1%, 16%, and -5%. Costs are the only element of investment risk an investor can realistically control -- do you want to pay more, or less? > The first if- looking at the Standard & Poors 500 index, the most popular index (and Vanguard’s largest index fund,) on a price basis from early 2000 to today is up 8.7%- total. That works out to just over ½ of 1% per year, a far cry from the numbers he cited. This is just plain bullshit, and your adviser knows it. He's not taking reinvested dividends into account. There is no way in hell he actually thinks this is the case, unless he's clinically delusional. If you don't believe me, go to the chart on Morningstar for [Vanguard's 500 Index fund](http://quote.morningstar.com/fund/chart.aspx?t=VFIAX&region=USA&culture=en-us), put in a start date in 2000, and look at the growth from then until now. An initial investment of $10,000 would be worth over $15,000 today -- more than 8.7% *total* return over that period. > But I think the second if is even bigger. A highly respected statistics firm, DALBAR, has tracked annually the return achieved by the average investor vs. the return of the funds they invested in. On average, for more than 20 years, the average investor has lagged by over 4%. This does not surprise me. > This tends to be due to the investor buying high and selling low. The amount by which the average investor underperforms the market averages dwarfs the amount by which the average fund underperforms. Your adviser is mixing some truth in here to deflect your attention away from the fees. Yes, investors are often emotional, and buy high and sell low which is dumb. But investors also lose a *lot* of money to fees. If you are not buying high and selling low, meaning you are holding for the long term as you should, then fees should be of principal concern. > Telling the ‘mathematical truth’ without discussing the ‘behavioral truth’ about investing only tells part of the story. The reality is that investor behavior has a far greater impact on one’s portfolio than investment behavior. Again, true; but fees are a nontrivial part of the equation and your adviser is ignoring that. He's ignoring it because *he is financially motivated to ignore it.* You can't convince someone of a truth when their job depends on them not understanding it. > In your own case, I feel that the funds you have will, over time, give you better than index performance, and that my initial selection and ongoing advice regarding the funds will be worth the fees charged. He can feel however he wants but his opinion is contradicted by decades' worth of research. > Remember that some of your funds are tactical in nature and have the ability to move away from stocks in times of market stress. Some invest in assets other than stocks, so may not perform as well when the market is going up but may outperform when stocks are out of favor Oh god, this shit. Story time. At my 401(k) plan at work, we have a "financial adviser" connected to our plan who is paid out of participant assets, an arrangement I cannot change. He advises the plan and also gives advice to participants for "free" (since he's being paid already and people don't realize it). Now, I have no need of his advice but I emailed him once to see what kind of advice he is giving to my coworkers, and he recommended three different tactical mutual funds as **core holdings** in my 401(k) plan. My head hit the desk faster than you can say "high profit margin." Tactical mutual funds are different from regular actively managed funds because they're not limited in the amount of an asset class they can buy. They can be 100% stocks this week, 100% bonds next week, and 100% gold the week after that. This makes it impossible to determine for you to determine if they fit in your asset allocation. They're essentially timing the market, *which your adviser already told you is the worst mistake an investor can make*, on an institutional scale. Oh, and they charge even higher fees for the privilege. But, this is why your adviser has sold them to you -- they make him the most money! ----- Your account, as it stands, is only going to effect a transfer of profits from you to your adviser and his firm over the course of your investment career. If you want to actually keep the money you earn, get out immediately. Long-term investing is not hard, it just seems so because financial advisers have a vested interest in making it seem difficult. Take a weekend, read the [Long-Term Investing Start-Up Kit](http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit) link from the sidebar, move your accounts to Vanguard (who is not for profit, low cost, and no bullshit), and start keeping your own money.

Human: I'm turning 18 very soon and I've been meaning to open a bank account. I have been searching for a bank but I honestly don't know much about banks so I'm a bit lost. If someone could recommend a bank and let me know why, that would really help. Also, if anyone cares, what's the best type of account for an 18 year old who's planning on attending community college and getting a job soon?

Go with a credit union. Here is why: they are member owned...which means they are not trying to squeeze every last dime out of your pocket and into their coffers. You should at the very least compare the fees a bank will charge vs what a CU will charge. And what they offer for interest rates for CD's and auto loans. [This website](http://www.mycreditunion.gov/about-credit-unions/Pages/How-to-Find-a-Credit-Union-in-Your-Area.aspx) will help you find one.

Most of them are pretty interchangeable. Go with whatever bank is most convenient to home, work and school.

Human: Check out my life situation and please, rather than say, "Wow. That's bad," tell me what I can do. I'll feel better if I have an action, plan, maybe. I'm 32 years old. I am a single parent. I had my daughter in the middle of a semester in undergrad and went back the next week. I've juggled parenthood and school/grad school since 2005 (when she was born), and I've been racking up the student loans every step of the way. I didn't mind racking up the loans because I was going for my Ph.D. and knew my salary would be good one day. I got two master's degrees along the way. So, we're looking at 7-8 years (14-16 semesters) worth of loans. I don't even know what the total is. I would estimate it to be 100k, but I don't know. I don't even know how I go about finding out the total, because I've used different lenders. I was in year four of a six-year Ph.D. program and I took a one-year leave of absence beginning in February. My two master's degrees haven't gotten me shit, and out of desperation, I finally took a $15/hr temp job last month. I have no health insurance. I bring home about $540 a week. My rent is $1250 a month (soon to be split in half, as I'm engaged). What. The. Fuck. Do. I. Do. I currently have about $4000 to my name, and dwindling FAST. Also, now that I'm out of school, my student loan repayment begins in June. Holy fuck. I am so scared. I don't know if I'll be able to complete the Ph.D. I'm slated to go back in January, but I'm not very popular in the department and I'm not sure the profs are going to let me pass a (very subjective) quals exam. Let's face it, I may not be smart enough. My life has been a series of fucking bad decisions. Just...please help me. How in the hell do I get out of this? My fiance and I just saw each other's bank accounts for the first time - he has 19k in checking, and I have 1.5 in checking and 2.5 in savings. I am very, very unfamiliar with most things financial. Thanks in advance for your help. **EDIT** Per request, I've updated my loan info. Oh sweet Jesus. Loans from Fedloan Servicing: 1. Direct Unsub Stafford Loan. Balance 3551. IR 6.8%. Unsure of minimum payment for these. 2. Direct Unsub Stafford Loan. Balance 3000. IR 6.8% 3. Direct Sub Stafford Loan. Balance 8500. IR 6.8%. 4. Direct Unsub Stafford Loan. Balance 1500. IR 6.8%. 5. Direct Sub Stafford Loan. Balance 8500. IR 6.8% 6. Direct Unsub Stafford Loan. Balance 7500. IR 6.8% Loans from MOHELA (these are older): 1. Subsidized Federal Consolidation Loan. Balance 11461. IR 6.625%. Minimum payment 89.01. 2. Stafford Subsidized. Balance 8500. IR 6.8%. Minimum payment 97.48. 3. Stafford Unsubsidized. Balance 8246. IR 6.8%. Minimum payment 131.61. 4. Stafford Unsubsidized. Balance 3754. IR 6.8%. Minimum payment 58.24. 5. Stafford Subsidized. Balance 8500. IR 6.8%. Minimum payment 97.48. 6. Stafford Unsubsidized. Balance 12000. IR 6.8%. Minimum payment 181.93. 7. Unsubsidized Federal Consolidation Loan. Balance 11766. IR 6.625%. Minimum payment 124.73. 8. Federal PLUS Loan (for Graduate/Professional Students). Balance 4776. IR 8.5%. Minimum payment 80.83. **Total: About 101k in student loans, with two lenders. No idea how best to approach these...**

A clinical psych Ph.D. is hardly going to make you a good salary unless you decide to go the forensic hospital or V.A. route. I should know... I'm attending my hooding ceremony for the same degree next Thursday. Assuming a 2000 hour work year, I made $13.20/hr before taxes on my internship, and will be making $15.60/hr before taxes during my post-doc. Rolling in the dough I am. Seriously consider not completing your Ph.D., especially if you do not have a burning passion for clinical work. Master's degrees in clinical psych are not completely useless - I've worked in university settings a fair bit and many Student Affairs positions as well as positions involving career counseling or academic advising require a master's degree in psychology. www.higheredjobs.com is a great place to look specifically for positions in higher education. Often, one of the great perks of working at a university is that your children may have the option of attending that university for free. FREE! (although some schools may have you pay taxes on the tuition) This is where you can break the generational cycle of poor money management. Master's degrees in Psychology are also very helpful in research settings as they often oversee coordination, implementation, and recruitment in research labs. I've seen salaries as high as 50k for such positions, and assuming you have a solid research background, I imagine you would be competitive for these positions.

Coming back tomorrow to get in on this, bedtime for now.

Human: It seems everybody on this sub thinks buying a house is a good financial idea. I think its a personal decision and financially its a bad one. One benefit of owning is your rent never increases, your payments stay pretty much the same for 30yrs. You have so much of your wealth tied up in the home and its very illiquid. Home equity is only good if you sell the house, then you need to find another place to live. Home equity loans are still debt and I think we can agree debt should be avoided. The cost of replacing a roof, water heater or any renovations is quite expensive. You don't have these expenses while renting, I know the landlord will take these into account in your rent. You can also move much easier if your neighborhood goes downhill or have a job offer in a different area. Even if you pay off your mortgage you still need to maintain the property and pay insurance and taxes, all these costs can rise over time as well. This also keeps you undiversified, like having so much of your money in just one stock. I think buying a home should be a personal decision and I respect that. I would just like to point out some downside if your doing it for financial reasons. I bought a house for financial reasons and don't plan on selling but if somebody made an offer I would probably take it. I hope a constructive conversation can come from this.

I'm not sure where you got the idea that everyone thinks buying a house is a great idea. If anything, the complaints are usually that we are too against buying a house.

>>It seems everybody on this sub thinks buying a house is a good financial idea. You haven't been following this sub. Everyone's financial case is unique and there are MANY instances where owning a home doesn't make sense or isn't the best move.

Human: I'll be starting my first FT position and I'm trying to get a budget together. I used a take-home calculator for my state (IL). Grossing 58k annually, I'll take home about $38600 after federal and state taxes. Being taxed 20k seems extremely high and somewhat unfair considering if this money were coming from dividends or capital gains, the rate would be half that. What are some ways to reduce my tax burden? I won't be married or have any dependents. Also, I do know one way is to have more taken out and put into my 401k. While I do plan on doing this, I would also like additional ways because even if that amount isn't taxed now, it will be later when I take it out for retirement.

Welcome to the real world.

That's life, son.

Human: Please forgive any formatting issues, this is my first time creating a post. We've been struggling with our finances for a while, but now it is to the point that something has to change. Monthly we net **$4821**. Which yearly comes out to be about **$57840**. We live paycheck to paycheck, and have nothing saved up anymore as it has been slowly drained. We both work full time jobs, I'm in IT and am looking for new work to try and make more. We do own a small business that we started at the beginning of the year. It has yet to give us any amount of income though. My monthly obligations follow below. Monthly Expenses *Gym $85 *Gym $72 *Internet $41.76 *Verizon $150 *DirecTV $70 *Utilities $125 *Water $30 *Trash $25 *Life Insurance $33 *Auto Insurance $140 *Fuel $300 *Groceries & spending cash $400 *Roth IRA $50 *Dining out $80 Student Loans *$32,172.59 $185.88 *>$1,377.00 Grace *>$3,458.96 *>$7,089.83 *>$2,064.89 *>$3,105.19 *>$876.72 *>$6,000.00 Grace *>$1,700.00 Grace *>$3,000.00 Grace *>$3,500.00 Grace *$14,505.42 $181.60 *$1,998.95 $50.00 *$4,963.31 $45.35 *$7,957.42 $95.03 *$8,274.10 $96.32 *$2,602.39 $30.30 *$2,153.12 $50.00 Credit Cards Balance Payment APR *$3,249.71 $72.01 15.74% *$5,675.96 $129.00 15.99% *$7,144.97 $259.00 20.99% *$1,131.42 $35.00 21.74% *$6,157.38 $139.00 15.10% *$1,817.68 $38.00 25.99% *$1,422.47 $100.00 *$65.83 $0.00 24.99% Loans *Mortgage $153,906.39 $1,290.64 4.87% *Car1 $24,725.92 $412.00 1.90% *Car2 $13,000.00 $330.00 5.20% Without counting the increase in student loans that will kick in in August 2013, we are spending $5050 per month. Not including anything extra we buy. So we're spending more than we make. I know we could cut out the two gym memberships, and satellite TV. But for our business we require cell phones and internet access. We are bad with keeping any discretionary spending in check. Often find ourselves buying alcohol, or spending money on hobbies. *edit* To clarify, we have $74k in student loans. The $32k chunk are Wells Fargo private loans. We also live in MN, so the utilities cost is averaged over the year to account for winter gas costs. Our fuel costs are high because of commutes, and having to drive in a 50 mile area for our business. Public transportation doesn't run in my city to the areas we work.

> I know we could cut out the two gym memberships, and satellite TV. So do it. > But for our business we require cell phones and internet access. You can do cheaper than $150/month for two phones. Look at T-Mobile. > We are bad with keeping any discretionary spending in check. Often find ourselves buying alcohol, or spending money on hobbies. You recognize that you have a problem. The solution is simple: stop wasting money on these things. > *Car1 $24,725.92 $412.00 1.90% > *Car2 $13,000.00 $330.00 5.20% You have a mountain of student loans so you went out and bought expensive cars on financed money? What are these cars worth? Can they be sold to pay off the debt, and replaced with older reliable cars bought in cash? Better yet, can you get by with only one car? > *Groceries & spending cash $400 $400 on groceries is high. What is "spending cash?" You don't have any spending cash, you are spending money you don't have.

I've never given advice but I think I can postulate what I've seen on advice here (you guys let me know if miss anything). Cancel revolving bills that are discretionary - $155/month from the gym, $80 per month on eating out, and maybe cut $50 bucks from your 'spending money' and you're almost at $300/ month just now. I would toss the satelite tv too. The real thing that I think is killing you is your car payments. I mean if you could downgrade until you get your debt under control you're talking hundreds and hundreds... plus maybe some savings on insurance. I really hope all those credit cards were for school or family emergency. I cannot fathom somebody opening up those credit lines at department stores across town and charing up that much debt. I'm not judging but that man credit lines, I can't imagine that would be *helping* your credit score. Ain't none of that shit matter though until you understand how you got here. http://www.mint.com/blog/credit/the-shocking-truth-about-debt-its-not-a-financial-problem-0213/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MyMint+%28Mint+Personal+Finance+Blog%29 I believe this should help you start to begin to understand that you must make lifestyle changes. Then the money problems will start to get better. Best wishes.

Human: EDIT TO ADD: You guys are AWESOME! I was really nervous about posting all this, but everyone here has been so helpful! I can't thank you enough for all the advice and encouragement so far! This is exactly the kind of discussion I was hoping to generate (even if not all of it is what I wanted to hear.) :-) My son is starting high school next year, and I am suddenly panicking about the cost of college! I really need to start saving – I’m serious about it, and I’m ready for some tough love. It seems like I never have any money at the end of the month and I don’t know why I can’t get my act together. I’d love some help/suggestions on how to budget my life so that I can save $400 per month, and not have to dip into that savings every time I need to get my oil changed, or my oven stops working. Income: My take-home pay is $1690.45 twice per month – I get 20 paychecks per year (no checks in July or August.) I have what’s called a summer savings account which is paid out in July in the amount of $7500 to cover my summer expenses. I get $228/week for child support, but he doesn’t contribute to any other expenses such as doctors’ co-pays, summer camp, class trips, etc. He will be contributing exactly $0 toward the cost of college. I also have a part-time job, but the hours are very variable. For instance, I brought home $900 (gross) in February, $480 in March, and nothing in April or May. Current Bills: Mortgage - $1365 Car - $315 Car insurance $125 Credit Cards – $900 Cell phone - $90 Municipal Utilities - $125 (quarterly) Gas/Electric - $325 Water - $35 Internet/Phone - $95 Home security system - $45 Terminix - $130 (quarterly) Gym Membership - $140 Gymnastics (Kid) - $165 Clarinet Lessons (Kid) - $90 Clarinet Rental (Kid) - $300 (yearly) YMCA (kid) - $85 I feel like there should be more bills on that list, I’m probably forgetting something. You’ll notice that I don’t have a cable bill – I cancelled cable 2 years ago because it was so freaking expensive, and don’t even have an antenna. The kids stream TV shows or movies, or just read books. I have a lot of credit card debt – about $15,000. Trying to pay it down is a seriously uphill battle. I pay my major credit card $125/week, plus $200 once per month. I pay the two smaller credit cards $50 each every two weeks. Things I’m not willing to bend on: I’m not going to sell my house. I have to keep high-speed internet because my part time job is working online from home. My gym membership includes 2xper week personal training, and having lost 60 pounds 10 years ago and kept it off, I’d like to continue doing what works. Help me, reddit! I don’t THINK I spend a lot of money on stupid shit, but obviously I’m doing something wrong. I bring my own lunch to work every single day; I never buy coffee at Starbucks; we hardly ever eat out, and when we do it’s someplace like Panera or Pei Wei; I don’t buy designer clothes for myself or my kids (one problem I did have this year was that I bought my son all new pants in the fall, and then he grew 3.5 inches in 2 months, so he needed NEW new pants - damn him!) Tell me what else you need to know about my spending so I can be ready to send my kids to college. Assistant: With the numbers you gave above: your take home is 4292. That's Monthly pay plus Support. (nothing from the PT job because it is so inconsistent.) Your outflows are 3885 a month. (i broke up the Quarterly/yearly payments into monthly.) Right off the top, You should have a surplus of 400 Bucks or so. Lets add to that. What you *can* reduce: Cell phone ( there are 30 dollar plans out there) Terminix ( there are cheaper alternatives) Home Security System ( what's the story with this?) Gymnastics (luxury) Gym Membership (60lbs 10 years ago is nice. If you haven't developed good habits by now, This is no longer "working.") Clarinet lessons (luxury) Clarinet rental (if the kid is going to stick with it, buy one.) YMCA (Luxury? or day care?) All of that Totals 1180 a month. ( BTW, you neglected Groceries) easy eh? You now have over 1500 bucks A month to work with. That's IF you don't nuke the car. how much longer do you have on the car? Is It possible to sell this one and get something a little more affordable? I get it, you want your kid(s) to do "something" so You pay for lessons and Memberships. But those things are Luxuries. "Tough Love" would dictate all those things be cut. Have your kids go out and Play with sticks and stuff, you run around the block every morning, buy a gun/teach yourself to be a ninja, and purchase some roach traps. Problems solved. in your case, It doesn't sound like you Want to do That. Start with your Deductions Worth through the W4 worksheet and hit up the IRS site. there is a calculator there that can tell you how much you can claim. for instance, someone being married with three kids making under x amount may be able to claim up to 11. DO THE WORKSHEETS. that will adjust how much is being taken out of your check. That's a start. the rest of this stuff is all going to be decided on how bad you want to help your kid with college. Human: "in your case, It doesn't sound like you Want to do That." Yes, this. I am self-aware enough to know that my biggest obstacle is feeling like each expense is "not that expensive" and ignoring the "it all adds up part." Which is why I need someone to slap some sense into me. The cell phone cost is for 3 phones - each of my kids has a phone because they walk to and from school alone (two different schools). The clarinet rental is a rent-to-own kind of thing, bass clarinets cost about $3500 to buy outright (!?) Terminix, security system, and the home phone are, I guess, comfort things - like WHAT IF my house is suddenly infested with TERMITES!?! Or WHAT IF my house catches on fire when I'm not home!?! I need to get over that.

Cell phone is good then - Leave it as is. Bass Clarinets - Check out CL. Doing a simple Search, I found a Bass Clarinet for 1700. Does the School not have Bass Clarinets to loan? (mine did back in the day) On Terminix - I have a guy come, when I call him, he bombs the yard and baits the house. Looks the place over. 100 bucks. I call him about every other year. Full blown chemicals. Nothing watered down. No contracts. I put bug heads on pikes around the property Perimeter to warn them. To bugs, my yard is a wasteland, THE Valley of the shadow of Death the bug bible talks about. If your house catches on fire when you aren't home, that's a**good** thing. Teach the kids to get out and meet somewhere if you can't be there. Buy a smoke Alarm or two. These are the decisions people who wear their big boy/girl pants make everyday. It does all add up. Put it on paper. Spreadsheet it up and look at it. It will change your life.

>bass clarinets cost about $3500 to buy outright (!?) ack. Deleted my previous response to this since I read "bass" as "base" as in "basic." You should have been able to find a student bass clarinet in the low $1000-$1200 range, though. Buying used is always a great idea with instruments as well (I used to be a very serious hobbyist musician and have only bought one brand new instrument in my life, and I used to perform and record just about every week). Might be too late for that advice now, though :(

Human: I'm 23, from Australia if it makes a difference. I've got about $20,000 in savings. I've got no debt apart from HELP (Uni debt with no interest, just indexed), and have never had credit cards or loans that would give me a credit score, although I recently applied for two credit cards after reading "I will teach you to be rich". I'd like to keep my options open for buying a house in the next few years. Any car I buy will be a cheap, small one that I could quite easily pay for up-front. Would it be worth getting one on finance for the sole reason of getting a better credit score? Edit: Thanks guys. Seems like the consensus is to buy a car with cash and stick with the credit cards to improve my credit score.

Your credit score only matters if you need credit. I'm not sure it would be worth paying interest to boost it. Use the credit cards once in a while, pay them off every month and save the money you'd otherwise be spending on interest.

If you can get a 0% interest rate, absolutely. It'll cost something to originate the loan, but it will show lenders consistent payments over 36 months or longer. It has a tremendous positive impact on your credit score, therefore better offers from credit card companies.

Human: I have 2 cards. One with 700 another not used. I'm thinking of using the one that has a 0 balance to pay the other and alternating this way until I get a job to avoid high interest fees. Will this work or am I being stupid?

No, that would be a balance transfer, and there are typically fees for that. Otherwise people would do this all the time to take out indefinitely long 0% loans.

You can't do it directly. As mentioned, that's a balance transfer and typically carries a flat fee even if there is no interest being charged, so not worth it. There is at least one way I've seen that could do it, but it is sketchy/questionable. Not illegal or immoral by any means, but doesn't always work and is probably more trouble than it's worth. It's a method I've read about that credit card churners use to generate spend, and isn't simple to pull off.

Human: 45 years old, married, two small kids. $2,000,000 in brokerage accounts (index funds) $500,000 in retirement accounts (mostly 401(k), also some Roth) $215,000 in 529 plans for college for the kids Home paid for/no mortgage (worth $500k, though I don't think that's too relevant) No debts I anticipate drawing about $80k/year to live on, though we could surely manage on less (and will if necessary). I plan to deal with medical expenses by getting very high-deductible insurance to cover catastrophic illnesses (none anticipated; we're healthy); otherwise will basically just be paying for those. We drive 5-10-year-old cars (van to transport the kids, who are in the 5-year-old ballpark, and a car); will continue to buy reliable used cars when needed, i.e. when those become too much of a pain and expense to maintain. I know this post may strike some as obnoxious, since many aren't in as fortunate a position as we are. I feel very lucky and thankful. I've been saving since college but have also had plenty of good luck. Throwaway account. Oh, retirement in a cost-of-living-index location in the 105-110% range. I've been figuring this out entirely on my own and would love to error-test it against the collective wisdom here. What am I overlooking? Thank you all for your counsel. EDIT: Thank you all for your comments. Many of you have been raising questions that are at the margin between personal finance and philosophy; let me comment some more to address that. I want to retire so that I can spend more time enjoying and raising my kids. They are little boys now, and they obviously won’t be forever. It does not seem to me that my career is likely to accommodate a 5- or 10-year leave of absence; when I came back I’d be much older than many who wanted my job, with more seniority and baggage, and in a career path (law) that is already quite thoroughly stocked with people, to say the least. So every day has a big opportunity cost, which either must be paid by financial security (if I choose my family over work) or by my family (if I choose work over my family). That is a little bit stark, and is an exaggeration, but I say it to help you understand my motivations. Now my philosophy. In the big picture I believe that many of us in the privileged first-world West live in bondage to our own fear. We have been taught to be afraid, and so we are. We make decisions from fear, major life choices from fear, and we get up and go to work from fear. It must not be true that five million, or ten million, is necessary to be safe; if so, then almost nobody is safe. And anyone who has worked to get that much money so that they will be safe won’t feel safe once they have it. The habit of working because of fear doesn’t make you safe, it makes you afraid. Now, I know that that is a hell of a thing to say in the middle of a nasty recession that genuinely has shattered the plans of many people, and that has left many others struggling. There are real things to be afraid of in the world. That’s what makes it tricky. We have to figure out how to live in a way that enables us to enjoy the good things around us right now every day and also to prepare, in a sensible, calm, happy way, for tomorrow. The wiser practitioners of any major religion and a number of other philosophies can teach a path to this. Financial planning alone can’t begin to touch it. (And I agree with all of you who have said that I need to have something to do when I retire; that’s a piece of the puzzle that I just described.) So yes, runaway inflation, government confiscation of private savings, a global depression caused by an oil crash, volcanoes, alien invasion, etc. could wreck my plans. And those of everyone else. We all need to keep our eyes open and make adjustments when necessary, but at some point I think that it is madness to continue spending a large portion of one’s time and energy storing away resources for the future. The universe is going to grind down and destroy us all, and what we ultimately fear is death, which money can’t help us avoid. And the future is arriving every moment, and if you spend all of it getting ready for it, you’re missing the point. And then one day you’ll find/ten years have got behind you, and all that. This doesn’t mean that retirement is any Shangri-la of freedom from fear, or that work is just terror and drudgery. Both are clearly false. A person can be happy and content while working full time; a person can be miserable and wracked with fear while wealthy and retired. Living in fear is the error; it can be committed by anyone. So ultimately, I believe that most people will reach a point where their gathering of money has stopped being sensible preparation for the future and has become nothing but fearful hoarding. It’s always quite possible to construct a case for the point not yet having been reached. That doesn’t mean that it hasn’t been, though. Assistant: What are your plans if you do retire now? Financially it sounds fine, but what about everything else? Your kids are going to start school full time soon, so you'll have 6-8 hrs a day with no kids, no friends (since I presume most of them are still working)... so just you and your wife? Human: Right, that has puzzled me for several years. I've been figuring it out, though. I can use some of my current skills helping people for free, volunteering, hobbies, etc. What I think will be a shock, and maybe is a surprise to people, is the loss of identity that goes with not having a job. It shouldn't really be your identity, but to a significant degree it is.

Have you given any thought to teaching? Retiring at 45, I'm guessing you have a skill that's worth having, and teaching is a great way to stick with your current knowledge, while contributing something at the same time.

Maybe spend a year or two cutting back your responsibilities at work (if possible) and take the extra time to figure out what you're going to do with the rest of your life.

Human: Hey guys. As an infant, I was burnt while at daycare. My parents took the responsible parties to court. Since the age of 2 I have received monthly checks for 5k. The settlement also covers my college tuition (I receive quarterly checks of 25k to cover school and whatever else.) For as long as I can remember I have had my money in cds and thats worked alright so far. Over the past 2 years, some of my cd's have matured. I currently am sitting on about 100k liquid funds. I currently own 78 shares of AAPL and 95 shares of BRK.B, and am planning to place 30k in vanguard funds on monday. I would appreciate any advice that can be sent my way. Thank you for your time.

So you basically have almost a million dollars collected since the settlement? Damn.

I'd go buy a Ferrari with it because fuck it yolo

Human: I typically use 50% if not more of my credit limit each month and know this is harmful for my credit score. I wanted to raise my credit limit but was told at my bank it would be better to just open a new card. I'm skeptical. Which is a better choice?

INQs are not very harmful to your credit score. Using 50% of your credit is, even if you always pay it off on time. Having more credit lines is slightly beneficial to your score. The important thing is that you'll be decreasing your utilization. Either option is fine but getting another card is slightly more beneficial.

Your best answer depends on several factors. You are weighing asking for a CLI with your current card vs. applying for new credit. Some banks are very stubborn about CLIs for whatever reason. If your ok with a couple of INQs you can try for the CLI first. If you get declined for the CLI then you should pay your current card in such a way that <10% UTIL reports to the CRAs. That should give you a small score boost and increase your odds of getting approved for a new card after 2-3 months of <10% UTIL reporting. UTIL is only one factor in your credit score though and your overall credit picture should be taken into consideration. If you don't have many INQs and 50% overall UTIL is the worst thing affecting your score then get your UTIL that reports down, ask for the CLI AND app some cards to get your total CL up.

Human: The purpose of this post isn't to give advice on how to save a large emergency fund. I was able to do it simply because I've been lucky enough to have a decent salary so far. I do not consider myself particularly thrifty/frugal. Instead, I just wanted to give my personal anecdote about how much better I feel about a potential layoff because of: 1) the emergency fund I've forced myself to maintain and 2) the amount of time and effort I've dedicated to building a detailed forecast *that can be re-forecast easily*. Because of this time and effort, I've taken a lot of uncertainty out of the question: "how long will my emergency fund last? Here are some screenshots of my Excel forecast's "Summary Chart" (dollars redacted but the bottom line = $0) assuming: 1. Continued employment: http://i.imgur.com/D6ykyed.jpg 2. A layoff tomorrow: http://i.imgur.com/kcTDYBW.jpg I was able to create scenario 2 by simply deleting my salary and replacing it with expected unemployment benefits and adding estimated costs of COBRA. I didn't do it yet, but I know I could make further adjustments for cutting cable/cell phones, selling my car, buying cheaper groceries, etc. While a layoff will still really suck, I at least know I should be able to comfortably make it until next summer without changing any of my spending/savings habits. For those interested, my Excel budget consists of: 1. a tab tracking historical liquid/non-retirement monetary assets every half-month 2. a tab tracking future income/expenses by half-month including the regulars (like my and spouse's income, bills, gas, groceries, gifts, dog food, doctors appointments, etc) as well as the unusual items (like bonuses, tuition payments, etc). I also maintain a tab tracking historical accuracy and true up my future estimates from time to time. *Edit: It seems there is at least moderate interest in me sharing this Excel workbook. It's too large for Google Sheets.* **It probably won't happen today***, but if I do have a chance to share it, does anyone have a good way I can share an Excel spreadsheet (I'm thinking dropbox)? Also, is there a good way to clear any "metadata" attached to the file? I'd like to remove personally identifiable information from the workbook).* Assistant: Wow, what app is this? Human: It's just an Excel spreadsheet in Windows. I've invested well over 200 hours developing it and fine-tuning it since I started using it in late 2010 (it's got a lot more features than what's shown in the images such as tracking retirement contributions versus limits, loan amortization, tax return projections, highlighting spend data versus budget by category, projecting inflation, future tax rates, retirement income, net worth). Now I spend about 1 hour once every 2 weeks inputting data. If I feel there is enough interest, I'll attempt to de-personalize it and share it with Reddit.

Yes please!

Plaese do share. And send me a PM about it as well!

Human: He said that to get a good credit score, to use 50-75% of my credit limit and to not pay off the full balance and have ~25% go over to the next statement. That sounds very sketchy. The posts I've read from /r/personalfinance suggest 15-30% utilization and to pay off the balance in full. Does what he's saying have an ounce of truth to it? Assistant: It's fantastic advice... compared to using 100% of your limit and throwing your statements in the ocean. Human: I thought so. But are they allowed to to lie directly to you like that? I asked him straight forward questions and he purposely gives me completely wrong information. I feel like that should be illegal or something. Like you have high cholesterol and your doctor tells you you should eat as much fatty foods as you can.

I wouldn't be surprised if the official BoA training told CS reps to tell customers that carrying a balance was a good idea. It's not technically lying because I'm sure there are some people out there carrying balances that have higher credit scores than people without balances. But carrying a balance might not be the reason they're score is higher.

I think the reason they get away with "lying" like that is that credit scoring is sufficiently complex that it would be impossible to prove that he is intentionally misleading you rather than simply being uninformed himself. As wolfpackguy said, it's probably official BoA training. Pay your balance off in full every month. BoA is still making money on every transaction, it's still a win-win. You're making them money by using the card, you're building credit by having the card - and your report will show "pays as agreed" not "this asshole pays the balance in full each month and we're not making money on interest payments grrr".

Human: I am currently a 21 yr old student at a large private university. I funded my way through college with scholarships so I have no debt on my books. I recently opened a Vanguard Roth IRA and invested all of the money that I've earned at my school job into a 2055 target fund (only $1000). I also put $3000 into a Vanguard index fund. Through these investments, 90% of it is in stocks. I know $4000 is not very much, but I want to diversify to mitigate risk and have a healthy portfolio. As for my other assets, I have about $5000 in my bank account that I am saving for emergencies and daily use. I will be interning this summer and earning about $9-10k in net income. On top of that, I will earn some more money from my University because of my scholarship is more than the cost of attendance. That should give me about $10,000 (untaxed!!) additional next year. Anyway, I will have a lot of money to play with next year. What kinds of bonds or other assets would you all recommend that I begin to consider to maximize my portfolio?

If you're 21, you *want* to be mostly in stocks, unless you're extremely risk averse and can accept lower earnings. The diversification you do is invest in many many different stocks, which is exactly what the target date fund does. Plus the target date fund automatically gets more conservative as you age.

I'm basically in the same boat as you. Good luck!

Human: I am graduating college (Saturday) with multiple majors (resorts, management, computer science) and minors (accounting, nonprofit), internship experience at a ski resort, and pretty advanced computer skills with one of my majors being computer and information systems with two concentrations (Programming / Architecture & Security). I'm going to be moving into the basement apartment of my grandmas house so I don't have to pay rent and can save up some money for the move. I currently live in a town in which the median household income is like $20-24k. The town that I am moving to has a median income of $33k. I'm basically looking at this as I have six months in which I am going to pour most of my free time into searching and applying for jobs across the country before I have to start repaying my student loans. I'm working a minimum wage ($7.25/hr) job right now in which I get tips (I'm a bellman) that I'm saving up in a literal piggy bank. I make about $300-400 (take home pay) every two weeks and I've gotten $300 in tips from 4 slow weeks of work (hospitality industry obviously picks up during summer months). What suggestions do you have for someone who is trying to make this move from a small town life into a larger (at least 30k population) town to start my adult journey? Is there some kind of rule for how much I should save up based on where I'm wanting to go? The huge ass cities (NY/LA/Miami/etc) are pretty much out of the question. I read that Forbes list of the best places for college grads that suggests Dallas, TX (5.9% unemployment, $900 average apartment, $46.2k average income), Houston, TX (6% unemployment, $800 average apartment, $47.5k average income), and Denver, CO (7.4% unemployment, $970 average apartment, $50k average income). How much can be placed in these types of lists? With those numbers, what should I try to save up before making the big move? Doing something like this, is it reasonable to sell my car to put towards the savings when I'm ready to move and just invest in a bike or scooter or something? I'm really just looking for any kind of advice. Really desperate to make this move and start making things happen for myself and my family who have always lived in this area I'm in right now. Thanks guys/gals! Assistant: My advice is to not move anywhere unless you have a job in that city. DO NOT move somewhere assuming you will find a job. Because in that case no amount of money is enough. Human: I'm just having no luck finding jobs in my own town or elsewhere right now. I've been sending out resumes nonstop since my senior year started and I am yet to get even a callback for a job. The job I'm working now I just went to their job fair at that location and interviewed on the spot. It seems pretty tough for me to get a job at a resort where I have some internship experience without actually being at the location since everything is so seasonal in that industry, so I really don't even know where or how to begin which is why I kind of want to just wing it and take a chance. At this point in my life I just don't feel like it would hurt me at all. I work a minimum wage job, I have no wife/kids, piss poor credit, and pretty much nothing to lose other than self-esteem (which is pretty low right now). /shrug. I'm desperate and nothing I've tried so far has even come close to working.

You dont have to live in a city to apply for a job in that city. Apply around to different cities, but only move when you have a job.

Maybe you need to perk up your resume!

Human: I have about $10k worth of emergency fund sitting in a savings account earning almost nothing. I suspect there is a better way. What should I do with that money?

I throw mine in my Ira under a vanguard index fund. My fixed monthly expenses are ~350 so an actual emergency of losing work for a year+ would easily be covered by funemployment beyond hat I budget for car repairs and other 'common emergencies' so I feel fairly safe with this riskier gamble. Ymmv

Generally you want to keep it liquid. Don't expect to make money on it. That being said, put it in a higher interest savings account to at least get something. [Barclays for 1%](https://www.banking.barclaysus.com/online-savings.html)

Human: In 2009 I made a decision to quit my retail job and focus full time on my studies. I calculated that with my savings and some student loans I had just enough to make it to my 2011 graduation. I had about $10,000 in credit card debt. During school I made the minimum payments, and received about $20,000 in student loans. I graduated in June 2011 with about $500 left in my bank account. I was lucky to get a job offer two months before graduation. In early 2012 I discovered mint.com and here is my chart showing my progress. I still have a $4,000 0% loan that I will pay off before April 2014 when the offer expires and $16,000 in 4% student loans, that I plan to pay off be the end of next year or sooner. [Picture](http://i.imgur.com/YsBP1pw.jpg) Assistant: Congrats! What happened in February with that drop? Keep up the momentum! It will be so much more exciting when there are no red bars. Human: My student loan was transferred from direct loan to Mohela. Mint double counts it for that month. I don't want to delete the account because it will also delete the entire history.

Mohela got my loan too. At the time it was a whopping 2k or less and I was already on track to pay it off in about a year. Their system is less flexible that Dept. of Education, so I paid it off even earlier. F U Mohela.

Oof, it makes it look so much worse! Well glad you didn't incur $10k in debt in a month. :)

Human: Some extra information: I have very little in the ways of savings and am moving to the US from Canada to work in Houston, Texas. My company matches up to 5% for my 401k which I plan on meeting from the beginning and continue to add an extra percent whenever I get a raise. I've just began "A Random Walk Down Wallstreet" and finished "Naked Economics" but this is as far as my financial knowledge goes. What advice can you guys give me so I don't waste this great situation that I've worked very hard for? Assistant: What did you graduate in/what industry do you work in? Human: Just graduated as an ocean naval architectural engineer. Fairly specific kind of engineering. There was only 30 of us who graduated this year in Canada. Basically we design ships and oil rigs. I opted to go into oil and gas because that's where the money is.

This man knows how to play college.

No doubt, well congratulations!

Human: Since so many people contacted me regarding my previous two posts ([original here](http://www.reddit.com/r/personalfinance/comments/13kef0/suddenly_inherited_a_significant_amount_of_money/) and [update here](http://www.reddit.com/r/personalfinance/comments/13vygo/update_suddenly_inherited_a_significant_amount_of/)) I figured I'd post another quick update on where things stand. It's been almost 6 months since I came into the money and everything is still not finalized. I've only recently gained access to the various money market accounts (this was my fault, dragging my heels) an still need to sell off a fair amount of property and a house (expect to fetch about $250K-$350K in total). The total windfall should be about $2 million, though I will need to pay estate taxes in a few months. Between costs associated with handling the estate, taxes and the like, I expect to have about $1.75 million to use. To date, no one other than my lawyers know the extent of the windfall. People are aware that I came into money (they're mostly considering the profit I will make from the sale of the house, which did not have a mortgage), but no one knows the full amount. Over the last 5-6 months, I've paid off any debt I had, took a small trip (my first vacation in probably 6 years) and made some small purchases. In total I've spent approximately $10,000 of the total amount. Although this was meant as an update, I do have a few questions for everyone here. * First, a large percentage (probably ~&750K) is in money market accounts with Wells Fargo. It seems that people on here don't think much of WF, so any suggestions? * I currently rent, and have almost a full year left on my lease. I'm not 100% sure I want to stay in my area for any length of time, but should I invest a portion of the money in a home? If so, how should I go about figuring out what I should spend on property? If I purchase a $250K house and have the ability to pay for it in full, should I do so ( I would assume not)? **Edit:** I should note that my credit score isn't the greatest. I would imagine getting a loan and making on-time payments over a lengthy period would go a long way in fixing that? * Lastly, while I do enjoy my current job, I'm considering potentially making a slight career shift and either doing some additional training (this would be related to programming/web design) or taking a pay cut to get experience working in an industry I may prefer - working for start ups is appealing to me and something I've done in the past. Does anyone have any thoughts on this. Thanks again for the feedback in the past.

First thing to say is with that kind of cash, you can live the kind of life you want to live. Few people who want that have it, so I hope you do what your heart tells you. 20-year-from-now-you will be thankful if you do what you want rather than what's expected. Once all the legal things are completed, I'd strongly recommend a fee-based certified financial planner (CFP) to help you navigate your investment options. With the right plan you could probably extract somewhere in the neighborhood of 3% of the balance annually from the golden goose, and she'll keep producing until long after you're gone. With that being said, there's no need to take one person's advice in such matters, and you could feasibly get the opinion of two or three professionals in order to take the best advice and ignore the rest. If you don't know already, please, please, please take the time to learn how to allocate your assets appropriately now and in the future. Should you want some book recommendations, I highly recommend The Bogleheads Guide to Investing. As far as a house in concerned, I'd pay for it in full without hesitation.

I don't know anything about money but if you need a photographer for a gala or event or your personal travel photographer I would be happy to be on-call.

Human: I've been slowly building credit since I was 18 (25 now) and after opening an AMEX charge card account without a limit, my rating jumped from 757 to 803 (with three recent credit checks) so I imagine it will rise again in 90 or so days. I was honestly surprised to hear that my score was so high, because I haven't been actively pursuing this as a goal. So my question is, how can I leverage my score? I am currently renting, and will not be buying property or a car any time soon.

There's no magic formula where you turn a high credit score into piles of cash, if that's what you're thinking. :) You will benefit over time by getting better terms on loans, paying less for insurance, possibly getting preference in hiring practices, etc. The biggest benefit will be when you do decide to buy things like houses and cars, as they are expensive and the interest can cost a lot over time if you don't get a good rate. For example, if you have $25,000 saved up and want to buy a $25,000 car, you could always just pay cash, or you could finance it for a really low rate and put that $25,000 into something else that will earn you more money than the interest you'd pay on the car loan.

Use it as a pickup line. Chicks dig high credit scores.

Human: Come on, I don't really have to post a screenshot of a bunch of zeros to back this up. I just want to tell the world. I've been in debt since the day I turned 18 and got a credit card. At various points, had five credit cards with as much as $10k in debt (several times I paid it off and reaccumulated more debt). I took out a $8k student loan right before I graduated. I helped my girlfriend (now wife) buy a car and we financed a small portion of it. I owed family a bit of money, too. I know some of you have it much worse, but this is still a huge financial and emotional accomplishment for me. I'm now 25, and my wife and I can now enjoy being married debt free. To celebrate, we went out and stocked up my bar with enough booze for the summer IN CASH. No more running to the liquor store after every paycheck. Now, we can beef up our emergency fund and focus on the future rather than running away from past debts. I'm hoping we can stay in the black. Children, a house, and potentially expensive grad school loom, but we will stay strong. Thanks to this community for both giving sound advice and instilling in me the desire to become debt free.

Plug time: We made /r/moneymakeover specifically for "milestone" posts, although I'm not among the people who find them irritating here. Congrats, friend. I think you'll find debt freedom to be startlingly helpful for your marriage. Also, be sure to look into what schools offer assistantships + tuition waivers for your chosen grad school field. :)

Great job!

Human: Salary x10 seems to be a popular rule of thumb. I also plan to have my house paid off by 55. What are good numbers to track my progress at say 35, 40, 35, 50? How many X times salary should I be at at each age? Right now I'm 34 and a around 1.5x, I feel like I'm behind. edit: This is the article that inspired my post = http://finance.yahoo.com/news/what-s-your-retirement-number--154155550.html

Just to chime in - at 1.5x at 35, you're on track for a good retirement, but not a good early retirement. And as other comments have noted, the rules of thumb are very rough guides, as evidenced by the fact they go off salary, which is fairly meaningless. Once you get to 25x your expenses, you should be okay. That 4% (1/25th) withdrawal rate is also a rule of thumb based off a large study (Trinity study) which most people stick by, although it of course makes assumptions. FWIW, it assumes a slow economy/gains and a life span of 95 years, so that's why it's the *safe* withdraw rate. You'll find plenty of people saying 4% is too low and plenty of people saying 4% is too high, so just do your best to apply your particular scenario (risky investor? able to work part time? healthy lifestyle?) to adjust that up or down.

bout tree fiddy

Human: Trying to figure out if splitting money into separate accounts (an emergency fund and general savings) would mean I earn less interest than I would if it was all in one place. Based on some calculations with a compound interest calculator, it seems the result would be identical, but I just want to be totally sure.

as long as both accounts have same interest rates its all the same

no

Human: I've been perusing this subreddit for a while now, and it seems like there are tons of posts by people trying hard to game their credit scores using terms like "utilization ratio". Opening extra credit cards they don't need for seemingly no reason. Some people are making questionable financial decisions like not paying off loans with high interest rates in order to maintain "good credit". Or they're considering applying for a loan and paying it off immediately to have a "credit history". Others are worrying about applying for cards because of "hard pulls" of their credit report. When I asked in one thread, someone told me that it's possible for Americans to get denied rental apartments, mortgages, or even jobs based on bad or non-existent credit. Is this actually true? Can you be turned down for a job because you don't have any debt? Forgive my silly questions, but in Canada we don't have any of this. I mean, I know I have a credit report but I don't base my financial decisions around it, nor does anyone I know. Why is this so important in the States?

You can possibly get turned down for a job based on a bad credit history, but not really due to lack of it. Insurance rates and ability to get loan and mortgages can be greatly affected by the individual credit score as well. Some people are going a little overboard in trying to maximize their credit score, however not paying attention to it can cost you a lot of money in the long run.

And I'm sorry -- you think you cannot be turned down for a *mortgage* due to bad credit? What century did you leap here from, and can you take some cash to invest on my behalf when you go back?

Human: So I've been working on getting my life together, and I have to get a bank account now. I've jumped through hoops to avoid them, but I need one now for bills. I'm nervous because I know I've had two banks close accounts because of negative balances, but it was awhile ago. I'm scared of what to expect. Can you literally have so bad of credit that you cant open an account, or do bankers try to work with you? -Thanks

Like your credit reports, which reflect your use of credit, there is a company called ChexSystems which maintains a consumer report containing data about your usage of bank accounts. So if you've had bank accounts closed in the past due to negative balances, this may be reflected on your ChexSystems report. And like your credit reports, you're entitled to a free copy of your ChexSystems report once a year. Here's the link: https://www.consumerdebit.com/consumerinfo/us/en/chexsystems/report/index.htm Unfortunately IIRC you don't get to see your report immediately online, they'll mail you a paper copy. So you won't have it by tomorrow. Negative information falls off your ChexSystems report after five years, I think, so if it's been longer than that since you screwed up your accounts, your record will probably be clean.

As far as I'm aware of credit has nothing to do with it. Banking and Credit are disassociated so long as you don't have accounts in collections. Even so I'm pretty sure they will sign you up for an account either way. They do not do credit checks for bank accounts. Try to find one with no annual fee (hard these days) or a Credit Union as they are owned by you not for profit. I recommend USAA although it is a bank bank it has a credit union mentality and is VERY friendly. Only problem is lack of physical branches but you can deposit checks at UPS stores and you get a $25 credit towards ATM fees each month.