The Finances and Debt Thread

[Zog]

Here's the rub - i really like it here. Weather, people, stuff to do. And my Job pays pretty well and I can't do it anywhere else. Id be starting over.. The only thing I can't do is buy a home and I really have to consider how important that is now

Yeah, it seems that in the desirable places in California, this is the case. Very enjoyable place to live, but to most, owning a home is not a possibility. I was in San Jose last week and everything besides the COL is pretty great. Too bad that all of the good real estate is snatched up by foreign investors it seems.

 

[David.]

Yeah, it seems that in the desirable places in California, this is the case. Very enjoyable place to live, but to most, owning a home is not a possibility. I was in San Jose last week and everything besides the COL is pretty great. Too bad that all of the good real estate is snatched up by foreign investors it seems.

So what's the solution? Come to terms with renting for life?

 

[Pick6]

So what's the solution? Come to terms with renting for life?

The solution is to move or save up enough to purchase a house and get a roommate(s) or AirBNB it to help cover the mortgage.

 

[Ob1]

Taxable = Brokerage? Or Traditional IRA?

Roth IRA or Traditional IRA is better than non-match 401k on the premise of the fees that are normally associated with 401k plans. Of course, if you roll over the 401k into an IRA and change employers every couple years, that is negated somewhat, but still something to consider. Plus with Roth you can withdraw the principal without penalty, which is nice if you have unexpected large expenses.

I have a non-HDHP plan so I can't do an HSA. For me 401k Match > Roth IRA > Traditional IRA (can't do both RIRA and TIRA, I know) > Non-match 401k



There is something to say about not having to worry about what the tax rates will be and how much you'll be withdrawing in a certain year. Having a mix of Roth and traditional investments is best, IMO.

Taxable means brokerage. Sorry if that wasn't clear.

I'm actually a pretty big proponent of mixing traditional and Roth 401k if allowed. Like 80-20 split. Who knows that the tax law will be in 2040-70 when we all retire. .. I like to hedge. I'm also in a position where I should be making considerbly more as I near retirement.

 

[Ob1]

So what's the solution? Come to terms with renting for life?

Are there any cheaper suburbs within an hour drive?

 

[David.]

Are there any cheaper suburbs within an hour drive?

They say you never get used to a commute. It is aways a significant hindrance on your life. Something to look into I suppose but that is turning 85 weeks of my life over the next 30 years into time exclusively spent driving to work

 

[Zog]

So what's the solution? Come to terms with renting for life?

If you can somehow save up enough for a down payment, then you could get roommates to help pay the rent as Pick6 suggested. But otherwise it seems like that’s the case for many in some areas of CA.

They say you never get used to a commute. It is aways a significant hindrance on your life. Something to look into I suppose but that is turning 85 weeks of my life over the next 30 years into time exclusively spent driving to work

Maybe just move for a couple years to save money for a down payment? Otherwise yes, commuting is not worth it.

Taxable means brokerage. Sorry if that wasn't clear.

I'm actually a pretty big proponent of mixing traditional and Roth 401k if allowed. Like 80-20 split. Who knows that the tax law will be in 2040-70 when we all retire. .. I like to hedge. I'm also in a position where I should be making considerbly more as I near retirement.

I’ll probably do a split next year. This year I could only contribute for the last 6 months (started new job Jan 2nd and had a waiting period) so I’m putting as much as I can afford into a traditional in 6 months; putting any into a Roth 401k would lower my take home too much.

 

[Ob1]

I’ll probably do a split next year. This year I could only contribute for the last 6 months (started new job Jan 2nd and had a waiting period) so I’m putting as much as I can afford into a traditional in 6 months; putting any into a Roth 401k would lower my take home too much.

Makes sense. I always try to tell people at my office to just try to up your savings rate at least 1% a year. Once you can max out your match 401k, go to HSA, then IRA, etc. If you can max all of those out, go to brokerage and realize you're likely going to be just fine in retirement.

 

[Zog]

Makes sense. I always try to tell people at my office to just try to up your savings rate at least 1% a year. Once you can max out your match 401k, go to HSA, then IRA, etc. If you can max all of those out, go to brokerage and realize you're likely going to be just fine in retirement.

Yeah, I maxed Roth IRA already since I didn’t have anything deducted from my first 6 months of paychecks. Just trying to put as much into 401k as possible now without going broke.

I may change to an HDHP plan next year. I sort of like the protection of a non-HDHP plan though considering the cost is not much more... not sure the advantage of an HSA outweighs the better coverage.

 

[The Process God]

Guitarlfter, I have a question. Big picture , I see we are a few years in and you have reduced your debt . I realize you
hit a rough patch with the accidents, but is the finish line in sight ? I mean you are expending a lot of energy doing debt gymanstics that you could be spending more time with your family. If you had no debt, would you care about he interest rate? Is that goal still jon the radar or is it elusive?

Oh yeah, the end is in sight. My promotion really has accelerated my paying off of this debt. I deal with most of this stuff when my wife is asleep and I'm sitting in bed next to her. This stuff really, in the long scheme, doesn't take up much time, but what I've done has saved me thousands. I just like talking about finances. This thread is stress relieving. My long-term goal financially is to build enough wealth to live a happy, comfortable life and eventually leave something for my future kids. More immediately, that involves getting out of revolving debt and saving for a house so I can build equity.

Anyhow, the car is totaled. Lowest I could get repairs down to was in the 7k range even with me buying the parts. I'm selling the car as-is and buying another car. Best offer so far has been $1,100.

Funny thing is that my mother in-law said I could have my wife's grandfather's car, a 1982 Pontiac 6000, for free since he just passed away. So it caused this huge, several-day-long fight about how I should take this car when I wanted another A3. It was only after a few days that she mentions that the car is a part of the estate that is in probate and won't be available to have for months- meaning it was never an option.

 

[Ob1]

Yeah, I maxed Roth IRA already since I didn’t have anything deducted from my first 6 months of paychecks. Just trying to put as much into 401k as possible now without going broke.

I may change to an HDHP plan next year. I sort of like the protection of a non-HDHP plan though considering the cost is not much more... not sure the advantage of an HSA outweighs the better coverage.

Depends on your medical bills for sure. It's a risk, especially if you have prior medical issues.

 

[The Process God]

Got the wife to agree to allow me to get another A3, but the give there was that we must get out of credit card debt first. So we're buying a very cheap car for now. We were in gridlock for days over this issue. It was my wife's friend who explained to her that I was grieving the loss of my old A3 that convinced her to meet me halfway. I'm gonna guess we will be out of credit card debt in September or October since we will be getting some money from selling my old A3 as is as well as from the accident.

I don't indulge in many things, but being in that car for 1.5 to 2 hours per day made my commute enjoyable and driving fun.

 

[Cassity14]

They say you never get used to a commute. It is aways a significant hindrance on your life. Something to look into I suppose but that is turning 85 weeks of my life over the next 30 years into time exclusively spent driving to work

I'd wager that within the next 10-15 years, cars will be self-navigating to the point that everyone's commute becomes their morning coffee time in the am and their happy hour in the pm.

We'll be on social media/RCF/starting our work day from the car while it gets us to work, and we'll pop open a beer as it takes us home.

 

[Pick6]

I'd wager that within the next 10-15 years, cars will be self-navigating to the point that everyone's commute becomes their morning coffee time in the am and their happy hour in the pm.

We'll be on social media/RCF/starting our work day from the car while it gets us to work, and we'll pop open a beer as it takes us home.

That would be pretty dope but I have trouble seeing it.

 

[Cassity14]

That would be pretty dope but I have trouble seeing it.

Me too, but we really aren't far off.

Tesla does it right now. Car is completely solo functioning if the owner wants to stop driving. Even parks itself and picks the owner up.

That's baseline on a 70,000 car. I know that sounds like a lot, but given the usual car feature trickle down, that being on a car under 100k now bodes very well for the 10-15 year timeframe. Tesla continues to look to build very economical models but has said this feature would be on them as well.