So, you got some extra money laying around

Khane

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Deathwing_sl said:
I disagree. A mortage at $1650/month + student loans at $550/person will pretty much eat up all of that $34k. Those are our numbers(well, actually, my student loans just paid off), but I think I'm being conservative for the average couple.
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I said if you have no debt. Mortgage and student loans are debt bro.

The point of the mr money moustache approach is to erase all debt, and never have debt again.
 
Deathwing

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Elurin_sl said:
I live about 3 miles from work, and the wife about 1. The $60 for gas is pretty bang on. Food we pretty much shop once a week and it averages $100.

Our utilities average about, electric: $120, water: $60, trash: $15, gas: $15 (in the winter, our gas goes up to around $80, but our electric goes down significantly), internet: $50. I cancelled DirecTV a few months ago and got an HD antenna and download everything else.

I should make a correction on the car thing, which I posted above. We have a car fund, so basically anything car related comes out of that. It's essentially savings, but it could probably be budgeted as an actual item. I'd be guessing on this number though, so I'd go with $50 a month or so.

Vacations he was semi-correct about. For my work, I do a good amount of travel (about 6 weeks the last 2 years, 3+ months next), so I've got an assload of hotel rewards. That's where a lot of our miscellaneous money goes, however. We're not big consumers. We go clothes shopping maybe once a year, and maybe spend $150-200 each. We drive high mileage used cars. I'm big on Priceline. For our Alaskan cruise, I booked a 4* hotel in Vancouver for about $100 (plus taxes and whatnot). I'd say one of our biggest expenses is travel, but that's where most of that $3600 a year goes. We just do it smart. For instance camping in the Sierras. Basically just cost for a camp site, food, and gas.

My wife put together a budget for us a few weeks ago (after I brought up the Mr Money Mustache stuff) and she came out to about $40k a year in expenses. But she also went retarded on it with stuff like $166/mo for co-pays, $100/mo for the dog, $500 for random bullshit, and bumped our food budget up to $500 just in case. She did the budget to figure out how much we could actually save per year into the early retirement fund. I let her have her budget and just said let's try to shoot for significantly less than that. I know we'll come in under because she way overshot some of those things.
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Depending on your dog, I could see $100/month. Our cat with 1/3rd of his intestine missing cost that much before he died. But for your dog's sake, let's hope she is overestimating.

I went into mint to look at some of my transactions in the 'misc' category. We just bought new pillows for the bed, the old ones were flat and yellow and gross, so it was needed. But no one buys pillows every month, so where does that go in the budget? Start looking at some of the stuff around your house, including the computer/phone/tablet you're typing the response on and ask if that's properly budgeted. Odds are, you buy a lot of things regularly, but not regularly enough for you to establish a reliable category and budget.

This problem bugged this shit out of me when trying to do an accurate budget. So, I went about it the opposite way. We buy what we need, we buy what we want that is reasonable, and we discuss large purchases(large being relative based on the need). I then create the budget based on categorized purchases going back 2 years. If one is too high, I can address it then. You might find that your average monthly food spending is higher than what you usually spend in a week * 4.345 because of increased spending around holidays.

Another problem this will account for is "one time" purchases that should still be budgeted under a category. I fucked up my mower last year by running over the water main cap. The repair is essentially a one time cost, I don't plan on needing to repair the mower again. But that cost should go under "home" or whatever for a certain amount of time(that's why I go back 2 years) to reflect the cost as if you had budgeted it.

Khane_sl said:
I said if you have no debt. Mortgage and student loans are debt bro.

The point of the mr money moustache approach is to erase all debt, and never have debt again.
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Whoops, I even included that part in my original quote. Yeah, no debt, 34k is fine.
 
Harfle

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Khane_sl said:
Learn how to travel hack and credit card churn/manufacture spending. He shouldn't ever have to pay for a vacation again (outside of minimal fees for airlines and hotels) if he does it right.

If you have no debt $34k is actually a lot of money to spend in a year if you think about it.
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I spent over 20k this year going out drinking. then you could also factor in location.
 
Harfle

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Elurin_sl said:
$1200 rent
$250 utilities
$110 car/rental insurance
$350 medical/dental insurance
$60 gas
$400 food
$100 phones
$300 misc spending (fun shit?)

That's about $33k, plus there's other spending like medical copays that come up often (wife's medical condition) and pet stuff. All in all it's like $33-35k a year. We're looking at moving somewhere cheaper too, which will save quite a lot.

I don't know, maybe you spend significantly more than $300 on random shit a month?

Our combined gross income is about $80k, for reference.
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no budget for a child? yeah you can keep that shit low as fuck then.
 
Harfle

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Elurin_sl said:
I don't think child expenses can be used as an excuse for anything when you're spending $20k on drinking. That's obscene.
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glad you caught the rationale. talking about a family of twos budget in ananlysis when the orginal poster is a family of two + 1 new born. or i could be completely mistaken about deathwing having a child.

but yeah I still max out a roth, deferred comp contributions, put away 40% of my paycheck and still spend over 20k a year drinking for the last 3 years.
 
Deathwing

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Yes, I had a child recently. Don't worry, I don't compare obvious budget categories like daycare, and I adjust others where I think there might be heavy influence from baby spending. Overall, aside from daycare, the 2-year budget hasn't been largely affected. Food(which contains diapers) and misc(which contains clothing) have increased a bit though.
 
Harfle

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Wait till you hit that education and extracaricular activities that's where all the people I know start to complain.
 
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Jumping on the Mr. MoneyMoustache train I put some money into Lending Club and so far the returns have been what was expected. About 12-13% after adjusting for certain loans having to be written off. Not as much as when MMM first started his experiment but can't complain so far.

Another blog that I've been reading is the Uncommon Financial Wisdom blog by a guy named David Shafer, pretty interesting stuff.
 
Deathwing

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Never heard of Lending Club. How is better returns for the investor than an index ETF? And how are you getting 12-13% when their website claims 4-7%?
 
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Deathwing_sl said:
Never heard of Lending Club. How is better returns for the investor than an index ETF? And how are you getting 12-13% when their website claims 4-7%?
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Check out MMM blog under "lending club experiment" and you can get a lot more information. I'm investing in lower quality notes at $25 increments so the risk is spread out a bit more in B-F notes. I have about 600 notes or so. Full disclosure this is a new account only a few months old so it could very well change and I do expect it will, but it's a shit ton better than sticking this money in my "high yield" savings account earning .9% Currently I have 1 note that 31-120 days late and one that is 16-30 days late. So there will be some charge offs.

I don't know that it will be any better than an index ETF in the long run but if you want to diversify your portfolio a bit definitely check it out.
 
Khane

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I'm way too lazy for that lending club stuff. Betterment.com is my go to at this point.
 
Khane

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I still need to set the parameters, and decide what those parameters should be.
 
Khane

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Isifhan_sl said:
True. How do you like Betterment? There's a service fee attached every month if you don't deposit something like $100k right?
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Nope. 10K OR direct deposit of $100 or more a month. I just started using it a month ago, but it's about as easy as it gets.

You need 100K for them to do the tax harvesting.
 
Khane

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I'm currently in the process of deciding if it's worth it to refi my mortgage to a 5 or 7 year ARM. I plan on having it paid off within 5 years anyway but the numbers these companies are giving me seem dubious.

My current rate is 4.5% on a $219k loan, and the principle + interest portion of my payments is $1241/mo.

My credit union gave me a quote on a 5/5 ARM at 2.75% that puts principle + interest at $849/mo.

My current mortgage company gave me a quote on a 5/5 arm at 3.25% that puts principle + interest at $865/mo.

In other words one or both of them is giving me bad information. Either regarding actual interest rate, or actual principle + interest on that loan amount at that interest rate.
 
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Interest rates on adjustable loans have been pretty low the last week or two. Those numbers do not seem wrong.
 
Khane

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Woops that was a typo, the 5/5 ARM from my credit union at 2.75% was quoted as $894/mo, not $849.
 
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Soriak_sl

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Maybe one of them is rolling re-financing fees into the loan and adding that to principal? Or it includes escrow payments for taxes?

However, there's something off more generally. A $219k loan over 5 years at 2.750% is $3,910 per month.

edit: yet another explanation could be a teaser introduction rate. Mortgage companies used to have a special rate for the first month, which they could prominently display on disclosure forms, before hiking your rate in the second month, as disclosed somewhere in the small print. I don't know if the CFPB ever got around to making that illegal.
 
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