5,700 – loan at 6.03% payments is approximately 150 a month. I’ve been adding anywhere from 250-400 a month.
2,600 – This is a credit card from awhile back. 0% until January 2014. I’ve only been paying minimum, as I’ve been snowballing the other debt.
That’s the only loan I have, as I paid off my first one earlier this year. I’d hate to lose momentum, but my situation is now different obviously.
My monthly expenses:
Rent – 950
Utils – 80 (approximate)
Cable/Internet – 40
Cell – 100
Gym (Specialized gym, Martial Arts) – 200
I believe that I can live off of approximately 1600 a month. Since I’ll be getting about 4k a month in severance for awhile, I should be fine. I’m just wondering if I should keep paying off my loan at the rate I’ve been doing, or should I curtail it back until I find a job and then pay it off again in chunks?
Any advice would be great! Just a note: I will NOT give up my gym membership. I love it too much, and now that I have time off, I am spending a lot of time there. I understand the money factor, believe me I do. But i’d be miserable without it, especially now.
I got laid off right before thanksgiving. Boo… but in actuality, I got very lucky with a 6 month severance package on top of the company paying out my yearly bonus (usually comes in february) and additional money to cover 6 months of cobra. I knew about this layoff for about 6 months, so although I was still paying down debt, I was also saving a lot of money in case I would be out of a job for awhile. I should I have asked earlier for advice on this, but I guess late is better than never.
I got the following payout:
6 months salary, which will payout as normal paychecks (every 15th and last day of month) starting today 11/30/12 and last one will be 5/15/13. The total I’m getting here is approximately 38k. Taxes taken out I believe is around 35% for both state and federal (I live in California)
Bonus amount was 10k, which ended up after taxes to be 5,800.
The extra money for 6 months of COBRA came out to 2,000 after taking out taxes, as they considered this to be income.
Since all this money came in today, I put pretty much everything away in savings/money market except for 2k in my bank, and I also put money into my roth IRA since I no longer have a 401k to contribute to. So now, I’m sitting on about 17k in savings (including from what I’ve saved before) and I will also start receiving around 450 a week in unemployment.
My question is how should I continue to pay off debt? Should I stay on my current payment plan, or be more conservative in case it takes awhile to find a job?
and a pretty serious cancer survivor (all cancer is serious, but his was stage 3 when they found it); he was “transferred” after he returned from treatment from a desk job to a job that was 14 hours a day, 100% physical labor. Finally was fired for “non performance” a few months ago. He is a really nice, non-conflict guy, so when I heard about it, I talked him into filing for unemployment. I was actually kind of surprised when his company fought the unemployment, so the guy’s like, ‘well, that’s it, there’s no hope,” and I’m like Oh No Dude, we have just begun to fight.
So I sat down with him and composed an appeal letter (I love suing The Man) and he went to appellate hearing last week or so, and the hearing officer was aghast at what had happened and totally ruled in his favor!!
I am so excited!
Now if I can just get them to get excited about getting out of debt and staying on a budget (they are selling their home here in CA) and hopefully buying a place out of state and paying cash for it with the proceeds. He’s going to stay on Social Security (remember how I asked a few months ago if you can collect SS and UI? This is the reason why).
Thank you all for your conversations about these kinds of topics. It has really helped !
My DH and I have been testing out Quicken, each on our own machine, for the last few months. We decided this weekend that we like the software enough that we want to keep using it, but it doesn’t make sense to have two copies and separate records. So we’re taking a big (for us) step: as of 2013, we’ll be recording all our info in one general account, so that all our money can be managed together. For anyone who has managed their own accounts for decades, and weathered other people trying to take advantage of that money, you’ll understand what a huge step that is to combine everything. I know DR has always advocated that married couples manage their money together; let’s just say it took us awhile to be ready to take that step. But here we are.
For the moment, I have a fairly practical question: is there a way in Quicken to combine the accounts we already have into one Quicken record? For instance, importing my accounts into my DH’s Quicken record, or vice versa? We know we can start 2013 with a new record and just have them combined from that point forward. But now we’ve got 6 months’ records already in the system and I’d hate to lose that.
When you attribute feed, vet bills, breeding fees etc to any specific livestock because you are going to sell them later and deduct those items from the final sale price/profit, that is due to an accounting concept called Cost of Goods Sold. It lowers your tax liability to do so.
You can also attribute your “wages” to those specific products as long as you document how much was directly tied to that product. There is nothing unusual about the end result being a break-even (no profit, no loss) or a loss scenario (i.e., your ‘wages’ combined with vet bills, feed, etc. equal more costs than what you sold for.)
It just means your tax liability on that product is at or near zero, which is generally what one is aiming for if they are going COGS. On a balance sheet, COGS is deducted directly from Gross Profit, which means that your Net Income (from a tax liability standpoint) is significantly less. General Expenses are deducted from Net Income the end result of which is your net profit (and resulting tax liability.)
On the other hand, there’s nothing wrong with continuing your current set up either. It sounds like you add up ALL of your expenses, plus your wages, and add up ALL of your gross sales and what’s left over is tax liability (or not)
In the long run, if one area of the farm is doing phenomenally well (like, you start selling a million dollars of honey) you might want to organize to a COGS set up. Or if you start doing well enough that you hire help. It’s worth talking about the long term effects of going to a COGS set up with your accountant. From an IRS standpoint, it’s not hard to go from a General Income-General Expenses setup to COGS, but it’s harder (I think) to justify leaving COGS.
As some of you will remember, I’ve been working in Quicken to get our financial records better organized. I’ve run into something of a setup conundrum for how to organize farm income. Per our accountant, we file a Schedule F to track our farm income and that has worked pretty well for us so far. And for general income estimation purposes, we’ve always just looked at gross receipts minus our blatant costs (such as feed, farmers’ market booth fees, butcher fees, whatever), to arrive at a net income. So for instance, one of our biggest income streams is our market hogs. I’ll look at how much we sold each hog for, then subtract out costs like feed, butcher fees, vet bills if any, breeding fees if any, etc. I know that an ideal setup would be to charge an hourly rate for the time I/we put towards each source of income, and then pay ourselves an hourly rate. We haven’t gotten that far yet in our organizational setup.
So now with our Quicken setup, I’m wondering whether I can keep our current setup, or if I need to go do that extra organizational work. When considering the pro’s and con’s, the pro’s would mainly be a much better organized set of records for the farm. The con’s would be that I would almost certainly not be able to pay myself for all the hourly work I do. Either I’d have to show that the farm business owes me back pay, or that I worked for free. For instance, I could easily show the time I spend working for the market hogs and layer hens, because I have enough income coming in from those that I could deduct my hourly rate from those income sources. But for other income sources, such as live animal sales, those sales don’t happen often enough to charge a regular hourly fee for my time. Of course we’re plugging away with me earning enough to always show that I was paid for my time, but honestly we’re not there yet.
How do folks with their own businesses set up this sort of thing in Quicken and/or their recordkeeping? Am I making this too complicated?
I’m comfy with how we have stuff set up for the IRS. I was referring specifically to how to track stuff in Quicken. I’m setting up the Dave Ramsey budget in Quicken, like we learned in FPU, both to budget in advance and track actual costs for records. I could track my income in two different ways – as the difference between gross sales minus COGS, as you elaborate below, OR I can just log whatever hourly time I put in AND was paid for. The difference would be in the cash flow. For instance, if I go with our current approach of “total sales – COGS”, I would log a huge income two or three times a year for the hogs, even after I subtracted the COGS. But then I would show much smaller earnings in between. On the other hand, if I log my time (which I’ve started to do anyway) and pay myself an hourly wage, then I can show a steadier income but at much lower rates. The year-end totals would be the same but the monthly and weekly cash flow totals would be a lot different under those two scenarios.
I’m thinking to keep things simple and just stick with showing income as it comes in, rather than trying to force a regular hourly payment plan which I may or may not be able to sustain throughout the year. Makes for lumpier cash flow, but I think it’s more realistic. Sort of like Dave’s budgeting setup for folks on commission – you know those sales will come in, but you can’t peg exactly when and for how much, so just allow for that unevenness. But I guess I’d still like to know how other folks handle it in Quicken, when they have uneven earnings.
My oldest-in-college is set to graduate this spring and head into the USAF as a 2nd Lieut. I had to co-sign for her first year of student loans (it’s a long story and there wasn’t a quick alternative) and it would never have occurred to me to take out a small term life insurance on her to cover it.
But I will now 🙂
just that I have some experience with how this can happen. I freely admit that I made a mistake and I’m sure everyone here has made their own mistakes that others would criticize. I’ll go back to lurking because I get good ideas from this group but don’t feel a need to keep rehashing what happened with me. What’s done is done.
I think if parents want to co-sign for the loan that they should think about getting a life insurance policy for the amount of the loans. That way if something were to happen then it is covered. NOBODY wants to think of something happening to their child but it would cover it. Term life insurance on someone young is pretty cheap
But sometimes loving them means telling them “no” and no outside entity should have to help us tell our children no. I think most of us are wondering how you can rationalize doing it three times, especially when you knew you couldn’t repay.
College should be a “pay as you go” proposition these days. Work and save money, work and attend classes, save money now if you have small children, scholarships, grants – do the leg work now, there are funds available. Its no fair to saddle newly minted college educated individuals with mountains of debt it might take them a lifetime to pay back. No way a loving parent ought to agree to that, in my not so humble opinion.
No sense crying over spilled milk at this point, what’s done is done. Just hopefully nobody else would make the same choice when faced with the same decision.
I love my daughter and I want the best for her. She was trying her best to get into the school of her choice. She was already accepted but needed to find financing. And I stupidly let Sallie Mae make the decision for me, knowing that I’d been denied credit before. I was sure I would be denied and at least then I could tell my daughter that I tried. I was shocked that I was approved.
Sometimes its not always best to take what people give you, there are strings attached.
As to why they continue to give you loans….they only die when you die. They aren’t bankruptable (if that is a word), they can garnish for repayment without the regular hassle another creditor would encounter, Federal tax returns are encumbered when you fail to pay. The terms stretch out sometimes as much as 30 years, but can, like I said at first, go for a lifetime. Why wouldn’t they give you the money when you could potentially be their slave for the reminder of your natural life.
Please don’t take this the wrong way, but isn’t it the responsibility of the borrower to FIRST determine if they can afford a loan and then apply? There should at least be a dollar amount they know they can/can not afford. Lenders are NOT personal finance advisors.
I’m really confused as to why you would have agreed to cosign a loan not only once, but twice, knowing that you would have difficulty repaying it?
I’m sorry, but I don’t understand why it’s the lenders fault that they approved a loan you applied for but didn’t think you should qualify for.
Yes, I cosigned some of my daughter’s student loans… the first one was ok, the second one I was thinking that Sallie Mae would deny me and i was surprised that it was approved… the third one I was sure they would deny me because there was no way I could afford that! But still they approved it. I want to know what criteria they were using! I refused to cosign any more because it became obvious that they didn’t care about my credit worthiness, and it hurt my son because I refused to cosign any loans for him. Sallie Mae only wanted a signature; it didn’t seem like they cared if you could pay it back. Luckily for me my daughter is at least paying the interest even if she can’t pay the full loan right now. I hope to be able to help her pay it down, but that won’t be for a few more years.
Tell that child to take extra good care of that dresser and it’ll continue to appreciate in value. Something to look forward to having for a long, long time. My folks are downsizing from a 3000sqft main house and a small vacation house into a 2000sqft primary residence, and they’re offloading a lot of their furniture to us kids. My DH and I are the very grateful recipients of a number of antiques: a hall tree, a walnut secretary’s table, a gun cabinet, a drop-leaf coffee table and two large rugs. That stuff is scheduled to arrive sometime during the last two weeks of December. I’ve loved those pieces since I was a child, so it’ll provide quite a bit of Christmas cheer, getting those pieces here!
so if there is something they want and even saving for, they may get it. they only get 1 “big” gift and some stocking stuffers so I would rather get something they really want…not something I think they would want and it be a complete waste of money.
My kids have never been materialistic and have been disgusted by other kids that are….a neighbor kid was ticked off at her parents because she only got the ipod, motorized scooter, clothes on her list, but not the computer she wanted. She was a real B%$#@ for days. My kids stopped visiting with the family after that.
so, a kid said she wanted a dresser–her twin took over the one they shared and she has been using a plastic type. OK, went to a few different consignment shops, found a really nice piece. dark wood with an extra marble piece on top—we were more interested in size and condition. as we were loading it into the van, the guy noticed the markings on the marble–“Italian Marble”…he didn’t notice it when it came into the shop, but now regrets the price of the dresser. WIN for me!!!
We don’t do Christmas presents at all. He was never allowed to ask for something. JMO but when you ask for something it stops being a true gift and is simply a request filled.
For us Christmas is about faith and family. It’s about celebrating the gift of Christ and giving to those who are in true need (ie.. Providing food and warm coats for the homeless, driving around on Christmas eve and handing out hot cocoa to the police officers who are directing traffic at shopping centers and churches. Delivering a gift basket of healthy food to a local family who is struggling etc..
I don’t see it as a pitfall. I see it as a gift.
I haven’t looked into my report in a while so today I took a look. I have heard BN and others say that cards will drop off the report over time. I have a handful of closed cards but they don’t seem to ever drop off my account.
For example, I closed an account in 11/2007 that is still appearing. Also, there seems to be closed accounts that were closed in 2012, but still “report” so there is a recent “Date reported” date. Do any of you know why this is and is that what is keeping the stupid things on my report? Anything I can or should do? It just isn’t happening the way I expected it to… I would like have them off and in my past.
How does the office staff handle your call. Try calling as someone outside the district and see how they are treated. I called a local rep. who I am not able to vote for and was treated SO rudely by his staffer that I will be sending money to his opponent. I was told “Say what you want, but I won’t be passing it to him”. Other rep. from my state, yet out of my district, had very kind and professional staffers.
Also, does the politician accept email from people outside their district? To me, an elected official making decisions that effect the nation as a whole, should be accessible. Some email contact forms only allow comments if you have the “magic” 9 number zip code.
A) I am sort of like Gary in that I am not the most politically correct person. I say what I want to say and I probably offend people.
B) EWWWW….I would be one of the most hated people in the country next to lawyers and used car salesmen.
C) I am not the right ethnicity to run in this district. There has never been anyone besides a black person to hold the position due to serious gerrymandering. Barbara Jordan, Mickey Leleand, Craig Washington, who took over when Mr. Leland passed away in a plane crash and SJL. Which doesn’t bother me, just Sheila Jackson Lee. She is a complete idiot. She is worse than Cynthia McKinney for you out there in the Georgia area for reference. My wife and I were going to campaign for the guy that was going to run against her (who was black), but I think he finally concluded he couldn’t win. SJL has too much money built up. I was hoping that when she backed Hillary for President instead of Obama that the district would rise up and vote her out. We shall see. (See A above)
Mostly e-mail but some snail-mail. You find out a whole lot more information that way-especially stuff about upcoming laws that you’ll never see in the regular TV news & newspapers.
We have one senator that we actually like, mainly because of what we find out in his e-mail newsletter. He always has the links to back up what’s going on & complete video of what he’s said in the senate. His newsletters are very factual in nature. He gives a lot of details about the bills being voted on that we always want to know-but the news refuses to cover. He doesn’t waste time putting down other senators, either. He just simply addresses the issues at hand.
My parents like him, too. We’ll actually be voting for him when his term comes up for renewal. We have our share of other ones that we definitely won’t be voting for, though.
I know this is “politics talk” but the way that the Senate, Congress & the President are voting is affecting the American people’s finances. I’m really upset about the financial mess that the country is in.
Not trying to start any kind of debate or division within the forum about loans for any reason… but all of their decisions affect each American’s personal finances.
you start out all excited and you are mentally ready, and you start off with a bang. Then it seems as if you plateau and it gets boring, and you are tempted to ‘take a break’, but when you do, the weight comes back faster than it went off and you go into a ‘funk’ that makes you wish you had stayed the course. You could make you a chart with goals marked on it and when you reach a goal, no matter how small, ( i.e., Your biggest debt is down by 50.00! Your smallest debt is down by half!) put a big star on the chart. The joy of being debt free will always outshine the times when you think it’s not going anywhere.
about your son and the damage to your vehicle I was afraid you were going to write that you paid for the repairs. I am glad to read that you are making him pay. It is part of his growing up experience. It will help him feel consequences to his choices. Most of us don’t grow up fully till we have fully felt consequences of our actions. Good for you in making this happen.
Here’s to hoping you and dh can get on the same page with your budget.
We’ve set some fairly ambitious goals for our two businesses in 2017, which is easy, but we’re backing it up with a good amount of small business reading to make sure it actually happens. One topic has been project management, particularly in terms of how to plan out and complete projects such that they stick to time/money/effort budgets, which we’ve had problems with in the past. The other is a fairly substantial “financial makeover” for both businesses but particularly for the farm which has been limping along for a long time now. I’ve been reading a book called Profit First by Mike Michalowicz, which dovetails with DR really, really well. For anyone out there running their own business, I’d highly recommend it. It seemed a natural continuation of the principles we learned with DR (and in fact the author refers to DR’s Total Money Makeover in the book, amongst other financial info sources), but it takes those principles well into the realm of business management as opposed to household management. And his writing style is casual and easy to absorb; I can easily read a chapter a night.
Our debt snowball continues to roll downhill. I didn’t hit my goal of being consumer-debt free by last September but I made a big dent in that debt. With the changes we’ve already made to our business ventures and those we continue to make, 2016 should be a pretty good year. We’re cautiously optimistic.
I ran it once with our finances combined, and once if DH and I split our finances and each contribute half of the bills for the household. I’m tired of arguing about frivolous spending. I must have made a math error somewhere because somehow we come out way ahead if I split it than if we combine finances (hopefully that’s not a metaphor, LOL.)
Just before Christmas DS20 decided he just HAD TO have fun and go off roading in my SUV which has 270k miles on it…and broke the axle. Despite making good money, he just blows through it “having fun,” and eating out. We went down to one vehicle over Christmas break, but starting Sunday, we had to rent a car. I’m making DS20 pay for it, as well as the repairs for the SUV. He’s like “how am I going to pay for all that?” I told him he didn’t need to if he wanted to WALK to work (which is 65 miles away. He rents a room in the town he works.) It’s mildly annoying, because he could have picked up shifts the past two weeks and probably gotten his repairs paid for. He’s very very lucky: DH works at a vo-tech school and one of the perks is you can bring your cars in to have the students work on it. They are salivating at the chance to do something more than just “oil changes.” So that should save DS about $1500.
Got cash for the gas and grocery envelopes. Somehow I missed it all these years that DR says to use cash for the things you spend cash for, not cash for everything…(for example, I used to use cash to pay all the bills and would run around to each of the agencies paying them.) It feels good to have the cash on hand to pay for those essentials and know that we’re not going to run out of money before we run out of month.
Other than that, things are poking along 😉