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Getting to terms with our present financial situation...

May 31st, 2015 at 12:54 am

I decided to join this site as a way of keeping myself accountable and motivating myself (as the budget-handler of the house) to keep us on track to eliminate our debt and start saving for retirement. I found this site shortly after I started trying to plan for longer-term goals (like retirement) and was impressed with how so many people here were having success in building toward their goals--I hope to do the same! Below is my work-up of our current financial state.

My student loan: $5,310 (yikes! but much better than the $12,000+ it was when it entered repayment in February...paid most of that down with my previous job, but since I quit we've only been making around $60 payments each month..interest rate is 4.25% This is the debt we most want to get rid of ASAP)

Husband's student loan: $5,500 (but since he's in grad school, and this is a subsidized loan, it is currently deferred and not accruing interest. Since there will be a 6 month grace period between when he graduates and when this goes into repayment, I don't consider this a priority to save for...especially since he's got another four-five years. I think saving for retirement is probably a more pressing need)

Dental bill: $924 (root canal...ugh. In any case, this is at 0% financing for 18mos, so we're paying $60 a month to get it paid off well within the promotional period)

Total debt: $11,746 (OUCH)

That is rather high. Fortunately we don't have any credit card debt...we use credit cards for groceries and gas whenever possible for the rewards, but we have always paid the full balances off each month.

In terms of savings, we are doing reasonably well...aside from retirement savings (whiiich amounts to nothing).

Emergency fund: $5,037

Travel savings: $2,000 (for visit back home and for going out with friends/fam who are visiting this summer)

Buffer: $1450 (built up when I was getting ready to leave my previous job, to deal with non-emergency overages in our budget)

Retirement: $50 (so not even kidding. This is terrible...as soon as I get a new job, we'll be working on this in tandem with my student loan..especially since the interest rates on retirement accounts is generally higher than the 4.25% interest we're paying on my student loan)

Total savings: $8,537

So we have a negative net worth! Of -$3,209! Ack!

Well, of course as soon as I started trying to buckle down with our finances, unexpected necessary spending comes up! Sooo... I'm off to go figure out if we're going to need to dip into our buffer to pay for the unexpected expenses of a computer (husband's died and will cost more to fix than replace...unfortunately this is necessary for his research. Hoping to keep this cost under $500...we'll see) and necessary car repair (we were quoted $800 at one shop, now it's at a shop where they quoted $350...we'll see what comes of it). Fingers crossed!

7 Responses to “Getting to terms with our present financial situation...”

  1. ThriftoRama Says:

    In the grand scheme of things, 11k in debt isn't too terrible. Of course, it's always better to have zero!

  2. NJDebbie Says:

    Welcome to SA! You've come to the right place.

  3. snafu Says:

    Welcome to SA. Since you are aware of the need to be accountable I'm confident you'll make a realistic plan and carry it out when you are again employed. Since you already have an Emergency Fund you're miles ahead of 90% who do not.

  4. Petunia 100 Says:

    Welcome to SA! Best of luck to you with your goals. Smile

  5. VS_ozgirl Says:

    Welcome to SA, look forward to hearing all about your progress, good luck with your goals!

  6. rob62521 Says:

    Welcome to SA! Great folks with wonderful suggestions, ideas, and support.

    As for debt, you apparently aren't wallowing in it and since you pay off your credit cards each month, that is a good thing.

    I am going to encourage you to start putting something in for retirement. Even a little bit -- I'm assuming you are young so you have time on your side. The joy of starting young with retirement, even just a little, as it has time to grow. I started putting in $50 every pay period 28 years ago into a 403b. As I made more money, I put in a little more. Over ten years ago my school district decided to hire a firm to take over making these deductions and giving it to firms for 403b's so I could no longer put money with them. But, on my last statement it said I had put in $30,000 and the 403b is now worth $85,000. Are you eligible for Roth IRA's?

  7. mimaki Says:

    Hi everyone, thanks for your kind words and encouragement! And yes Rob, retirement is our number one goal. We're late twenties...so we definitely have some time to catch up...I can't believe your retirement fund grew that much! It's awesome that you committed to saving that much each month. I'm going over our (current, one-income) budget now to see where I can squeeze out at least a small savings to put towards retirement. Once I'm able to get a job, we'll max out Roth IRA limits to try to catch up a bit. We are definitely eligible for the Roth IRA, I WISH our income excluded us, haha. As it stands we're getting along with about 25,000 pre taxes.

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