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Weekday Help Thread for the week of May 28, 2018

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are there any personal loans that aren't a giant scam? I'm in a little bit of a jam and could use help was thinking a personal loan was gonna help since I have pretty bad credit I'm afraid of just going into it carefree. Anyone ever use these and have good experiences?

Trying to figure out the right balance between saving / investing. While I'm in a good spot as of right now, I want to maximize my potential returns / long-term viability without massively sacrificing during the present.

Info:55,000 Annual Salary

$38k in savings

$18.2k in various 401ks / IRAs (15k with past employer, $2k with current, $1.2k in various investing apps)

I'm currently investing 10% into a ROTH IRA through work, and 5% via 401k for the 5% company match.

I direct deposit 40% of my pay into my savings account.

I am able to pay my monthly bills with around $200 in extra, un-allocated money (eating out, clothes, etc)

No debt.

My question is, with this information, what is the best balance to strike with saving vs. investing? Invest more & save less? Stay the course?

I am in my mid-30s, engaged and moving to a new expensive east coast area with my fiancé. I changed careers and do not make that much now 30-50k a year, but I am self-employed so I do not have a good W-2 history for the last two years.

I have about 700k in investments (large long-term taxable gains) and 130k in 401k. What is the best way to buy a house and plan for unborn children's college without destroying my next egg?

I owe about 12.5k for tuition next year. I could borrow at 5% interest, or I could pay it off in full, or pay some and put some into a Roth IRA. It’s also a possibility I could pay my tuition and contribute to a Roth IRA assuming I get a job next semester. I have about 25k saved up and around 22k in debt. any advice?

At 5% you are close to approaching the 7% market return but with no risk so paying off the loans sounds better. Do you know when they start to accrue interest? If it's after you graduate you could take the loans and provided you are in a good spot after you graduate you could pay them off right away.

This way it buys you more flexibility in case the job hunt takes longer or something unexpected happens.

Some are subsidized and some are Unsubsidized. Maybe I’ll just pay off the unsubsidized one now?

OK do you have your rates and amounts handy?

i dont. im mostly just trying to decide whether or not to pay the tuition i owe for next semester. my older debt is in deferment and im going to refinance that when i get out.

Credit card application question here

Just graduated. Starting a job that has a solid income of $51k in a few weeks. Also have been interning at a company for the past few months thats been paying me $20 an hour.

Currently only have one credit card (Capital One Platinum). Only use it like 15-20% of the credit on a monthly basis. I applied for a Chase Sapphire Preferred card last year and got rejected. My credit score is now 710 and I am thinking of applying again.

Should I do it now? or should I wait a bit until I start at my new company? I would like to get it asap because I am moving to Baltimore for the job and would like to use the expenses for that to help rack up some points.

Are you planning to travel with the points because it's not a good card for cash back?

Yes, I plan to travel with the points

Comment deleted1 month ago(1 child)

Your pay is $14/hr, not "minimum wage + $X/hr". You can certainly ask for a raise, but I hope you have a better reason than 'Well the people who get paid less than I do got a pay raise!'

If I'm a student about to go into college as a freshman, is it worth it to put all my money into a student-centered credit union? eg Apple Federal or something college based? Will I be able to still get benefits of the credit union when I'm done with my college education? I'm trying to decide whether I should transfer my current savings from the bank I'm with right now, whose benefits are little to none, to a credit union. Even if the benefits of a credit union wouldn't last, is it still worth it to apply for one for the time I'm still at university?

Just wanna give a shout-out to whoever posted a popular thread a few months back about asking Discover for a lower APR. Got offered 0% for 12mo or a permanent reduction to 19.76% through their live chat. Give it a go if you have discover!

Recently got a Chase Sapphire Preferred card. Current due date is on the 13th of each month. I’ve already been through one billing cycle. If I were to change my due date to the 27th of each month, say next week, should I expect my next due date to be on June 27th? Or would it be July 27th?

Any help is appreciated

I think it would be July since your current cycle just started... Probably best to look at Chase's site or call them to find out for sure. I think on the site if you change the date it should tell you when it would be effective.

Awesome thanks, I’ll give them a call to verify. Just trying to plan ahead. Thank you!

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-1 points · 1 month ago

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I've had my Chase Freedom card for around 11 years now, and I have never been offered a limit increase. However, they DID start me at $10k.

Last year I opened a Slate card with them with about 2200 and rolled about 1000 into it. Between the 2 cards, I now have just under $13k in credit with them. I usually put about $1000-1500 on the Freedom card each month and pay the balance.

I'm trying to increase my credit score from 759 to >780 Would a credit limit increase request be worth the hard pull? I don't have any major purchases planned, but I'd like to start looking into buying a house within a year or two, so I'd like to get as close to an 800 score as possible by then.

Limit increases don’t count as a hard credit pull. You might also want to look into Pinch (let’s you report rent payments on to the 3 bureaus).

Limit increases don’t count as a hard credit pull.

They don't all require a hard pull on your credit, but many do. To my understanding, Chase usually requires a hard pull to decide a request for a limit increase.

Huh, I had no idea.

1 point · 1 month ago · edited 1 month ago

My husband and I are expecting our first child in September and have started looking into term life insurance coverage.

We got some quotes from Select Quote, and I had a few questions:

  • Is SelectQuote a reputable broker? I think I found them on here, but the phone calls were obnoxious.

  • My best rate is from AIG, and my husband's is from TransAmerica. I've heard of both of those, I think they're reputable companies?

  • Based on medical history (we haven't done actual medical workups yet, this is just verbal history given over the phone), my rate is estimated at "preferred plus" and my husband is "table 2". 20 year/$1mil for me would be ~$30/mo and $65/mo for him. That seems really cheap?

2 points · 1 month ago

Select Quote is fine. I've bought Term Life insurance through them a couple of times over the last 20 years. When I contacted them to re-shop my insurance a few years ago I noticed that they were much pushier than in the past which I found annoying too. (The reason I used them in the first place was to avoid obnoxious life insurance salespeople).

Term4Sale.com is a similar broker to the SelectQuote model.

AIG and TransAmerica are both big companies. SelectQuote should be giving you a rating of some kind for any companies it's recommending to you.

Those quotes that you got sound in the ballpark. It depends a lot on your age. I think I pay about $50/month for 750K but I expect I'm quite a bit older than you (based on the average redditor age).

1 point · 1 month ago

I made a bulk contribution from my bank account to max out the rest of my HSA, is this amount is treated the same as if it came out of my paycheck? (Lowers my yearly income, grows tax free and can be withdrawn tax free for medical expenses)

When you contribute to your HSA via your paycheck it go goes in pre-tax. If you make a contribution from your bank account you'll have to see if you can get a tax-deduction when you do your tax return next year which seems like a downside to me.

My wife and I sat down and looked at our retirement, Should we include her ESOP to our retirement planning?

We're a little blow away, we're both 29 and with both of our 401ks, ROTH IRAs, and her ESOP we have roughly $250,000 already in our "retirement" accounts.

We both come from "working class", and we're a little bit excited and confused at the same time. Our combined net income is around $130,000 which we both got nice raises last year.

You should but you need to have a plan to turn it into a lower risk security. Are there restrictions on selling your ESOP shares, my understanding is that they are extremely undervalued in many ways. SO you may not be able to look at it in any way other than as a continuous source of income, similar to a pension fund with higher risk. 250k is a start and doing well, but there's still a lot of work to do. You need to aim for 2M in today's dollars which is almost 6M in 37 years.

Are 529 contributions only tax deductible if you itemize?

To be clear, you're asking about tax deductible for your state taxes right? 529 contributions are not tax deductible for your federal taxes.

Yes. Though I didn’t realize that before my Googling to try to find this answer.

2 points · 1 month ago

Out of the 5-6 articles I looked at none of them mention itemizing. I would imagine that if itemizing were a requirement that would be stated clearly. So I would say you don't have to itemize, but I'm only 99% sure on that.

I'm sorting through my elderly mother's finances. She has moved into a nursing home and I'm dealing with her estate (?). She recently received a letter from a collection company saying they had been awarded a judgement lien on her house. I had to call them, as there were no details other than a previous collection company that owned the debt in the letter. They said it was a CC debt. I've talked with my mother and she said she never had a credit card. I ran her credit report, and the only indication of the debt is inquiries from the collection companies. It seems like a case where the debt isn't hers, but how do I get that verified? Is that a letter to the collection agency, or a complaint through CFPB (I am in the US)?

Write them a letter saying the debt is not legit and you need proof from them, else they drop it and stop reporting and stop trying to collect.. Make sure you document everything with dates and copies. Also any communication should be sent through certified us mail with receipt on delivery

I have been focusing a lot on my credit score a lot lately, and am looking for tips to continue to improve it. I have just noticed that I still have an open line of credit through a Jewelry store of 10,000 dollars from 5 years ago when I got my wife’s engagement ring. Am I better off leaving the credit line open and unused? I should add that my score is 742 an all three bureaus and I am considering applying for a new credit card to start accumulating FF miles.

Keep the account open, closing it would harm the portion of your credit determined by "average age of credit".

If you open a new card, it will also lower that average age BUT the miles might be worth it. Just really research things so that when you apply you're only doing it once because of the hard pull.

For a credit card:

  • Spend less than 13% of your available credit (above this affects your utilization rate portion)

  • Wait for your electronic statement (this is when the card reports to the bureaus - if you do it before this the card will look like it has $0 on it, which won't help you)

  • Once you get the statement, pay the card off in full (never pay interest - the amount is already reported to the credit union it has done it's job)

Let me know if that doesn't make sense :)

Thanks for the reply. I always pay off my cards but I had no idea about the electronic statement part. It all makes sense. I do have a follow up question as I left out an important fact. My current credit card limits are approaching 50% of my income, with the unused jewelry store credit being almost 25% percent of that credit limit. Would it still be best to keep the account open, assuming I get approved for another credit card that will push my CL to income ratio up?

I'm less familiar with this aspect, however the amount of credit you have available doesn't affect your credit score as long as you aren't at a high utilization rate (<13% is normally what is recommended). Since you aren't using that jewelry store account, it only affects the denominator of your credit used/credit available equation.

The one thing it might affect is if you try to take out a large loan (mortgage, large person loan, etc) and they see that you already have a large amount of credit available to you. I'm not sure if this would affect it, but you could research that more and maybe plan to close it once you're closer to a large purchase.

If a line of credit is open long enough without use, normally the provider will close it because of inactivity. This is better than you closing it. Perhaps call the jewelry store and see if they do this and when, and you can plan to close the line of credit yourself if you need to in the future and they haven't closed it.

Awesome. I already have my home purchased so I won’t be needing large lines of credit soon. I will call today and see if they close inactive credit lines. Thanks for all the help!

No problem!

You already have a "good" credit score (750+ is in the "excellent" range) so it's going to take time and just good behavior to get it to go up much more. Once you hit 750 or above, you're golden and shouldn't worry. MOST financial institutions look at 750 and 800 in the same vein of determining your loan terms (source: step mother is high up at a large credit union). So don't focus too much on trying to get it near "perfect" or anything.

Gotcha. I am trying to hit that 750+ mark but seem like I plateaued here even with all my on time payments. I’ll be making some adjustments.

Yeah it might just be that you were paying off your credit before it was reported to the bureaus, so it looked like you were at a 0% utilization. Even just having $5 in there when it reports will help you out :)

http://goedhartvoordieren.nl/?page=r/personalfinance/comments/8nr8zv/stuck_between_choosing_two_career_paths/ - asked this question/posted this thread for advice. figured I'd also post here

  • Currently working at a sales job ($57120/yr salary, $120/mo for car, weekly commissions averaging around $370, .13 reimbursement for gas per mile and the write off as well). I rarely work a genuine 40 hour work week because in outside sales you may be in a presentation for 30 min - 1 hr and then travel 15 min between each presentation (rural area). This is impossible for me to move up in the ranks at this company due to the location of the corporate HQ and I own a home so relocation is out of the question. 8 days PTO mandated to be taken during the week of christmas then 3 days whenever necessary. no 401k, no tuition reimbursement, has an expense account where if a customer rejects bagels I can bring them home to myself/my girlfriend. I do NOT want to be in sales through my life cycle, I currently love the freedom and flexibility, however I believe that with higher end sales and moving up in a ladder I will have either: more stress (take home work which I do not want to do) or I will have stagnant pay.

  • The other job presented has an opportunity to get into a solid a career path. The job itself is not exactly thrilling (40 hour work week doing an analyst/auditing role, $55000, no bonuses, no reimbursements, no tax write off for mileage, 18 days PTO, no expense account) however it does have tuition reimbursement (100% if you get a B or higher), it does have a 401k with a match of 1:1 on the first 3% of salary invested, .5:1 on the next 3% . Availability to job shadow other employees in ideal roles and requirement to work with other positions throughout your first year-2 years so that you meet other managers and have potential to move positions

  • Financially, to me sales makes sense in the short run because it is difficult to argue with 10-20k additional income, however in the long run the other path may lead to more success over time as it has the potential to grow every which way and also recoup some of the income lost through 3-4% raises each year.

Thought process of losing 10k this year, then 10k+ each year afterwards seems to be a tough pill to swallow as I imagine I wouldn't recoup the income within 10 years.

25/m, emergency savings: $55k, checking account only holds enough for bills + buffer ($5-7k), have separate savings accounts to deposit money for example: "house" where I deposit $1150/mo for renovations/any improvements as I do not have a mortgage, car at $500/mo as I have a '15 mazda3 with 125k miles on it (bought new) and that has a limited life span, vanguard brokerage & roth totaling $73k as well. High saver, effectively 0 debt (no mortgage, no college loans, no car loan etc). On paper, pay cut wouldn't kill me as I live life solely off my salary and invest/save the commissions and my budget only comes out to $2911/mo estimating very highly for expenses ($1000/mo for car between payment/ins/maintenance) for example, whereas assuming 25% of salary going to taxes I would still have a total surplus of ~$525/mo after all expenses.

Need assistance deciding if the pay cut in the short run makes sense financially

How do you value vacation? I personally would value the extra vacation days and flexibility in when to take them off very highly. Is it worth 10k? Up to you to decide

I've taken 1 vacation in 4 years of working out of college. Haven't ever vacationed during the time I've had jobs (21-25). I would love mental health days and not taking home work. I have extreme flexibility (honestly working maybe 20-25 hours a week of actual work) which makes every day slightly like a vacation

We're in the process of buying a house but it could be anywhere from 6 months to a year due to how fast houses sell here. We've already been preapproved for the mortgage.

I want to refinance my car for a lower interest rate but I dont want to hurt my credit score or the preapproval.

Should I just chill out until after we get a house?

I don't know if you'll lower your credit score trying to get the refi done but in preapproval they usually ask you NOT to do any inquiries or bank transfers so that they can prove stable accounts and assets to stakeholders. I would hold off, personally, unless you're paying a large amount in interest or something like that.

I'm not. The loan is less than 10k but the interest rate is 4.3%. I'll change out until after we settle the house loan.

Gotcha! Yeah holding off is a good call then. Good luck!

I will be leaving my job soon and have about 200k in 401k. I am pretty sure that I can move this money into a different company (vanguard) instead of using my current employer’s company. My question is after I move the money (which I assume will go to an IRA account), can I convert it to Roth IRA? If so, how the tax work during the conversion? Is this worth doing? Thank you for your help!!

can I convert it to Roth IRA?

Why? You'd pay taxes on that 200k, bumping up your tax brackets the year you do it. You can have traditional and Roth IRAs at the same time.

I'm sure someone here has more insight into this, but when you move your 401k to vanguard it would then be in a rollover, or traditional IRA. If you wanted to move it then to a Roth you would need to pay taxes on that income as the 401k was pre-tax retirement account. I did the same thing last year and that was my understanding. I ended up keeping it as a traditional IRA.

Thank you!

Yeah, keep as traditional IRA.

Canadian here, accepted a position in the US. If I don't plan on staying in the US for long (a few years at most), how much should I put in my 401k? In what cases would it make sense to put more in my 401k than what my employer matches?

What would happen to it after you leave the US? Is there any equivalent to a 401k in Canada?

Canada has RRSPs. They're pretty similar, but mostly the worry is about moving money from my 401k to my RRSP eventually, especially given early withdrawal penalties with the 401k (which I know little about).

2 points · 1 month ago · edited 1 month ago

Help please with understanding what "tax free growth" means. Lets say I have $10K to put in an investment account and it grows to $100k when I'm 60. So if it's in a tIRA, I owe income tax when I withdraw right? Am I forced to withdraw? If it's in a roth IRA, I already paid taxes before putting it in there so I owe nothing at all when I withdraw right?

So what about when it's not in a tax advantaged account? I already paid taxes on it before I put it in the account right. So when I withdraw in old age, I owe capital gains tax right? What's the deal with divided tax? Is that a tax I have to pay every year? Do I typically owe that tax for a total stock market index fund?

edit: After doing some research, I believe the dividend tax is a tax I would pay every single year if I owned something like vtsax.

4 points · 1 month ago

Lets say I have $10K to put in an investment account and it grows to $100k when I'm 60. So if it's in a tIRA, I owe income tax when I withdraw right?

Yes, you would treat the $100k (or however much you withdraw) as taxable unearned income.

Am I forced to withdraw?

Potentially, yes. Once you turn 70.5 years old, some retirement accounts (including traditional IRAs) require you to start withdrawing a certain amount every year. These are called required minimum distributions.

If it's in a roth IRA, I already paid taxes before putting it in there so I owe nothing at all when I withdraw right?

Correct, as long as it's a qualified withdrawal. Withdrawals from a Roth IRA are usually considered qualified if you're at least 59.5 years old, but if I recall correctly there are a couple of cases where they might not be (i.e. if you just started your Roth IRA within the past five years, or if the funds were converted from traditional within the past five years).

So what about when it's not in a tax advantaged account? I already paid taxes on it before I put it in the account right. So when I withdraw in old age, I owe capital gains tax right?

Technically speaking, withdrawal itself isn't be a taxable event for a regular account; capital gains are for selling. For example, if you sell some funds while rebalancing your portfolio, and don't actually withdraw, you'll still have to pay tax on the capital gains that year.

What's the deal with divided tax? Is that a tax I have to pay every year? Do I typically owe that tax for a total stock market index fund?

Yes. Your brokerage should send you a 1099-DIV tax form each year that you receive dividends in a taxable account. But for something like a Total Stock Market index fund, I think dividends tend to be mostly qualified, which means that they're taxed at a lower rate than regular income (similar to long-term capital gains).

Thanks for the info!

Comment deleted1 month ago(3 children)

I don't think it's anything to be worried about. It's all about your credit score. You have credit history, hopefully a good on time payment history, and a low average balance (resets monthly) when you apply. Go to a couple credit unions, banks, and then compare them to what the dealer can offer you. Take the best rate, put a good chunk down, refinance in a few months if the best terms aren't as good as you would've liked.

I think it depends more on your credit history and how much is in your credit file. If you have a couple credit cards paid off every month for a long time, that would be good. For car loans, they seem to try to approve everyone no matter what, you just may end up with a horrible interest rate if you have poor credit.

I hear this a lot.

Stop listening to this stuff .

Incremental loans is not a factor. Income and Score. And Score is really history. No late payments, and a loan will be treated on it's ow merits. Not a 20K past loan.

1 point · 1 month ago

I have an offer on the table that would be a great opportunity, but it's 1099. Married filing joint with 3 kids means we get the standard deduction of $24,000, but I'm wondering if a 1099 is also allowed to deduct expenses. My wife works w-2 and I have one w2 job, but this would be a second job. There is a consideration of 1099, because if I can't deduct expenses in addition to the standard it isn't as much of a benefit as they talk about.

Thanks!

2 points · 1 month ago

Being paid on a 1099 implies self employment and you may be eligible to deduct expenses that were incurred to earn that income. Be aware that you will probably be paying self employment tax on that income in addition to normal income taxes. Self employment tax is about 7-8%.

1 point · 1 month ago

Thanks for the response. I knew about the taxes and all, I just don't know if I am allowed to deduct expenses if I am also getting the standard deduction. I don't think I'm going to get close to that $24,000 in expenses, so I'm considering if the 1099 is as valuable due to expenses or I can negotiate something different.

2 points · 1 month ago

Yep. You will treat the 1099 income as a business and fill out a schedule c with your tax return. Your business-related expenses go on schedule c and are subtracted from your 1099 income. You can still claim the standard deduction in addition.

1 point · 1 month ago

Awesome, thanks for the response. I'll still work with a tax person, just wanted to get a preliminary idea.

So I made a payment on my car loan earlier. Most of the $500 payment went to the principal but $16 went toward interest. When ive paid large amounts before, only $1 went toward interest. Is there a mistake here?

Is it a newer car loan? Usually for the first year or so, almost all payments go towards interest.

I always do the minimal payment towards the loan to keep it current then I'll do a principle only payment for any extra amount so it goes directly towards the loan.

I've had the loan out for maybe a year, but it could be 11 months. I believe that's what I did here without realizing it. My payment was due so it took the interest. Last time I had paid extra, maybe the monthly payment was deducted from my savings.

The factors that influence how much goes to interest vs. principal the term of the loan, and rate of the loan.

The lower the rate, less of your payment will go to interest.

The longer the term, more of your payment will go to interest early on.

Comment deleted1 month ago(1 child)

Over 18?

First step, go to the post office and get yourself a PO box. This is your new address for anything you dont what your parents to see.

Second, go to a bank that your parents don't bank at. Open an account, give the PO address, and set up any passwords you can. Deposit the money here. You might even be able to get yourself your own credit card through them.

Consider how to get out from under your parents hand. The sooner, the better.

Hello! How does a hard inquiry affect me if I don't have any credit (have never taken out a loan, had a credit card, etc.)?

A hard inquiry shows up as a data point on your credit report. It has a slight negative impact on your credit score.

Yes, I've heard about the negative impact - I was wondering what it would do if I don't have a score to begin with. Does it still have a negative impact somehow? Sorry if this question is naive.

No credit history does not mean you don't have a score

Huh, didn't know that. Would you happen to know what the score would be for someone with no credit history? Would it just start at 300?

2 points · 1 month ago

I doubt your score can go negative. It's a minor temporary impact so I wouldnt worry about it. Everybody has a hard pull before they get their first credit.

Okay! I didn't know everyone gets a hard inquiry before they get their first credit, so that's reassuring. Thanks!

Yep. Nobody will give credit to you without checking your credit score.

Hi, all!

I'm going to be a full time student beginning in July (one year master's in preparation for a fully funded PhD). I've been out of school and working for 3 years now, first year at about $18k but while living with my parents (aka no living costs), and now $34k in a high COL area.

I currently have $16k in savings and a credit score of about 760. Here's my monthly expenses:

-$850/month rent+utilities -$100/month transportation (mostly train/bus) -$100/month car insurance -$150/month food

My parents have graciously allowed me to go back on their health insurance, so I will not have to worry ahout paying that. But tuition will likely be close to $30k. I qualify for $20k in Stafford loans. Trying to figure out how bad this is going to be financially, and how many hours I'll need to work on the side to pull this off.

Any advice is appreciated. Thanks!

Is it possible to get rid of the car? If you're already paying for public transportation, it might work out to get rid of that expense (and possibly get some money back from the car).

Once you add up gas, insurance, maintenance, and repairs, it might be cheaper to just use Uber or a rental when you absolutely need a car.

What is your hourly wage?

About $16

My landlord has been paying utilities and dictated by our one year lease. In California, there are rent controls preventing him from increasing our rent by more than 3% in a year. My landlord is now talking about no longer paying utilities. The law allows him to increase rent by an additional 1% if he pays for gas and 1% for electricity, but it seems like he cannot cease to pay utilities altogether. What should I do? I want to keep living in this house for several years, but monthly utility bill would range from $150-$250 which is a serious blow to my financial prospects.

Your city or the state of California likely has a renter's rights office. Check out their site and contact them directly if needed. This is a potential violation of the law, so I'm sure they'd be willing to point you in the right direction.

Car question: Is there any benefit to getting a longer payment structure or am I fine to shoot for the shortest payment plan possible to minimize interest?

Not going shopping soon but it's probably on the horizon.

Longer term = lower monthly payment, which means most people with really long terms buy too much car. If you get a really good interest rate this might be worth doing so that your money is available for investment or paying off other debt, but it's basically debt arbitrage so you should make sure it's a risk you're comfortable with.

The only other benefit I've found for a long loan structure is if you are going to drive a ton (like, 25k+ miles/year) for work purposes that get you mileage reimbursements, you can play some odds on getting into an accident if you get a long loan with gap insurance and no down payment. Doing so means you will stay upside down on the loan for a while, but if the car gets totaled in an accident you actually make out somewhat financially. It also has the benefit that you can basically pay for the car, insurance, and maintenance, completely out of those mileage reimbursements without any "out of pocket" hit, which keeps your money free for other purposes (see my comment on debt arbitrage above).

Of course, trying to play those odds means you're basically taking out an insurance policy against getting into an accident before you break even on the car, so the first 2 years or so of a long loan. Do you really want to make that bet?

The benefit would be having a lower monthly payment for the same car, though the overall cost would be higher. Some people would recommend though that if you can't afford the 48 month payment, you should consider a lower priced car.

Most PFers will advise you to not get a car loan at all if you can avoid doing so. Just throw it in savings and get a decent used car for a couple grand. If you can afford a brand new car and have an excellent credit score you should be able to get close to 0% interest on the loan would be the best deal. Make sure there isn't a penalty if you decide to pay it off early.

I am a 20 year old college student with virtually no student debt on the horizon. I am very fortunate to have many factors including GI Bill and others that afford me this privelege.

This summer I have a summer job that pays quite well (about $400-500 a week). I am free of essentially all expenses and can put that money basically wherever I want.

The expenses I do have include gas and food. Specifically, I have a girlfriend and we enjoy going out to eat.

I am looking to put money away for some future expense such as a car or house. But overall, I just don't want to waste this opportunity to put away a good amount of money to establish somewhat of a nest egg.

My family has an Edward Jones financial advisor and I have an account with them but no money in it yet.

I was hoping that someone could give me some advice on maybe how much I should be putting away, and where I should put it?

Should I just keep it in my savings account? Maybe put it in mutual funds (something the financial advisor suggested)? Go full WSB and get stocks or crypto?

Just wanting to make good decisions with the little equity I have as I start having to think about being financially independent.

Wiki Contributor
5 points · 1 month ago

Don't use Edward Jones. They are terrible (expensive investments and self-serving financial advisors).

Open an Roth IRA at Vanguard assuming you're have earned income (i.e., taxable income and not a stipend or grant) and get a jump start on investing for the long haul. If you also want to save for a purchase like that car, just open a "high interest" savings account for that money.

Read the "How to handle $" article for more information on these things.

2 points · 1 month ago

Thanks!

I currently have a ton of credit issues, and I think I fucked myself on accident. Here is the current situation:

  • Credit score is 456

  • 0 lines of open credit

  • Only monthly bills under my name are:

    • Verizon (~200.00)

    • Personal Loan for car with 15% interest (800.00)

Once I got my new job (56k a year) I paid of the 2 credit cards that I had. I initially thought that they were in collections because I didn't pay them for a while.

I paid them both off and now they show up as a chargeoff. Since I was paying my monthly bills on time for 5 months, once both of those cards got paid off last month, my credit score got hit with 2 charge offs and my credit score tanked ~50 points.

I attempted to apply for a secured credit card but I got rejected. I am at a spot where I really need to get my life together. I am 31, live in an apartment with a roomate, and I need to fix this so that I can buy a house in a few years (hopefully). Is there any way to improve your credit that I don't know of?

I heard about a site called self lender, but I am not exactly sure if that is something I should trust or not.

Any help would be GREATLY appreciated!

Wiki Contributor
1 point · 1 month ago

Which secured card did you try to get?

Do you have any close relatives that would be willing to add you as an authorized user on their credit card (one with a flawless history and low utilization)? This is not for you to use it, but to piggyback a bit on their credit history.

Also read this:

http://goedhartvoordieren.nl/?page=r/personalfinance/wiki/credit_building#wiki_i_have_bad_credit.2C_and_i_am_looking_to_repair_it.

But if you answer the questions, I'll try to give you more specific advice.

Unfortunately I dont have anyone that I could ask to do that. It was capital one, however they were the company that did the chargeoff, so I might try somewhere else. Thanks for the link!!

Wiki Contributor
3 points · 1 month ago

I'd either:

  • Apply for a secured card from Discover.

  • Join a credit union that happens to offer a secured card, start using them as your bank, and then apply for their secured card.

Pick one of those options only. If you get turned down again, stop applying for credit for at least six months before you try again.

Thanks <3

I'm 24 and I purchased a car about 6 months ago. Currently set up on a 60-month loan at 0.9% APR, so I've still got a ways to go before paying it off (at least if I only go with the minimum monthly payments).

I'm also saving trying to save for a down payment on a house, currently have a little over $10k in a MMA at 1.85% APY. I direct deposit a chunk of each paycheck to this account so I won't be tempted to touch it (roughly $1800 deposited each month). My eventual goal is to save up at least $90k saved up to at least come close to a 20% down payment. I hope to do this in around 4-5 years.

My question is, would it be worth using the money I currently have saved up to pay off the car faster and then contribute at a higher rate to the MMA? (since the resulting monthly on the car would go down) Or does that even make any sense given the low APR on my car loan? I think I'd only be saving $500-ish by paying the car off sooner. Not really sure which way to go, because I really want to have enough saved up for a house in a few years as I hate throwing my money away on a rental. But the thought I having a lower monthly car payment sounds pretty nice as well to free up more money to save each month.

If your rate is truly .9%, never make more than the minimum payment. That's so low it's practically free money.

How would you lower your car payment? Making extra payments on it will lower the time until you pay it off, but your payments will remain the same (unless you have a unique scenario).

You're better off saving for the mortgage to avoid PMI or investing at that point.

I just graduated from a state school in eastern Pennsylvania with a bachelors degree in business administration: management. I have been a marketing and sales intern at a chemical distributor for the past 5 months and believe that I will be getting a full time position as a corporate account support specialist at this company. I was told that it pays hourly but will end up being around $45k annually. I have been trying to research similar positions and have found what I believe to be a median pay of $55k. I'm not sure if this is right or if I should be trying to ask for more if I do get offered the position or if this is fair pay for the position.

too much for us to know - check out sites like glass door and salary.com and see what the going rate is. Talk to people in industry and at your current job. See what people are actually being paid both in industry and your area. Then balance that against the requirements, experiences and total pay/benefits package.

IE - you have a lot of footwork you need to do.

Also to piggy back on this you can always see if there's wiggle room but as a recent grad you have very little leverage. I would try to get some wiggle room and then after a year or two and then see if they will give you a raise or look to change companies.

I’m going on a vacation to Denver Colorado in the end of June, I’m also looking at apartments in the Chicagoland area, my question is, if I find an apartment worth getting, should I go for it or should I wait when I come back from vacation? 28 year old 15k In saving account and 5k on my checking account.

... not sure what the question is. when are you moving out of your current housing situation, what is the rental market in Chi like (i.e. does stuff fill up in hours or is there too many units on the market giving you lots of options).

But as for the doing it before or after your vacation - whenever makes sense in terms of the rest of your life. Not sure how taking a vacation will make it somehow not worth getting a place to live both before and after the vacation.

I'm considering buying a new car by the end of summer. To give my details: I'm a graduate student in a PhD program with a stipend of about $31k a year. My rent when I move next month is going to be about $450 a month. I will probably have about $2-3k at my disposal for a downpayment at the end of summer. My current car ('07 PT Cruiser that just hit over 100k miles last month) is starting to show its wear and tear. I've had it for about 8 years and I think it's time to consider getting my next car. I'm a complete novice as my parents helped me get my first car. What does everyone suggest I need to know and learn before I go through the car buying process and what information am I missing in my consideration? I've tried to find an outright guide on this subreddit but I haven't found a good one. If anyone has suggestions on materials, please let me know.

I would ride that PT cruiser till it dies.

You probably have another good 60k miles on it at least.

Take that 2-3k$ and put it into a high savings account 1.65% and each month put 200-300$ into that account. That is the money you would have spent on a new car. After you finish your PhD re-evaluate.

But if you do buy a car. Any amount financed under 10,000$ is usually higher interest. Try to stick to a 48mo period, and also don't buy a 31k brand new car with your 31k income.

I replied to another comment about more reasons I'm considering this, though I agree this car has tens of thousands more miles that I can reliably get before it is truly problematic. Also, I'd rather get rid of the car too soon then too late, and it is hard to know what the right time is, the first time I buy a new car.

I appreciate the info about the 48mo period. I also have absolutely zero desire to buy a brand new car, nor one for 31k. I was hoping to find a good car for 15k or less if I decided to go the route of buying one.

I replied in another comment that I was going to look for a credit union to open an account, this will help with the high interest savings account that you suggested. I will definitely do this while I'm in the process of making my decision.

Thanks for taking the time to respond. I hope I explained myself and kind of gave my thoughts on your very thoughtful response.

A 10 year old car isn't THAT old. As a PhD student, there's no way I'd shell out for a car payment unless absolutely necessary. Treat yourself to a new car when you finish your program and start your full-time career.

Thanks. I completely agree and understand where you're coming from. Ideally, my car would just make it to the end of my career and then I could get rid of it, in favor of a new car in a new city, since I will need to move for a Post-doc. Also, for the foreseeable future, I will be making ~100mi round trips multiple times a week for at least the next six months. This will put a lot of mileage on my car in a short amount of time. I also rely on my car for a lot of things. I don't want to worry that my car will break down 25mi from home where I will need to consider getting a tow-truck to a non-ideal shop to get worked on. That could end up costing me more then the car is worth to get fixed. This is why I'm considering getting something more reliable at a less than ideal time.

2 points · 1 month ago · edited 1 month ago

The best advice I received when I bought mine in December was to get my loan through a credit union. I use navy federal, had pretty poor credit at the time and got a surprisingly low APR - lower than my friend who went through Wells Fargo, is a Wells Fargo employee and has a much better score.

I was given a check for an allotted amount and was instructed to tell the dealer I was paying in cash with absolutely no mention of the amount I had at my disposal.

Cash buyers are more prone to negotiations. You also won't be required to make a down payment.

Also what I wish I had done -

If you're not sure what you want to buy, if you have the liberty to, try to rent your top choices for about a week. Feel how they run, and compare your experience with CarComplaints.com (a website i wish I had known before I bought.)

On top of your additional fees (down payment, first month) factor in your registration fee.

You really state DMV website will offer about 50-75 in reg fees but anticipate closer to 500 depending on the age and status of the car. (Newer/NewerUsed/Used all have different costs.)

This is dependent on your state, but you'll never be given an estimation more than a hundred when you research it.

You can also request the dealer pay for your registration

I wish I had known!! Use that offer as a haggle. If they don't lighten up on their dealer fees when you negotiate (and research what each fee is - do it at the desk, take their time and make them sweat) suggest they cover the registration.

Thanks for your reply! I definitely need to get a credit union account set up and go through a credit union. I have a few good options as far as that goes.

By more prone to negotiations, do you mean that I am an easier target for negotiations, or do you mean that I am in a better position for negotiations?

I'll consider renting my top choices, but I think that get's really pricey and I'm not a very picky person. I make quick decisions so a test drive and looking up other people's accounts of what they liked and didn't will be enough for me.

The advice on reg fees is also super helpful and I'll make sure to account for that.

I'll keep that in mind as a haggling tool!

If you don't mind me asking, what did you get and what influenced your decision?

You're in a better position to negotiate. As long as they dont know you have a check or your specific limit - imply you have a budget but don't give a specific amount. I was told to act uneasy with all prices so they couldn't gauge how much I wanted to spend lol.

There's a lot of tactics to research tho. This was my first car and I was definitely victim to high pressure sales. I bought quickly at the top of my budget.

I bought a certified pre owned (also!! If you're buying used go certied pre owned!! My transmission was replaced a month ago with full coverage from the warranty. The extra on the price is worth the safety net.) 2016 Mazda CX-5 grand touring for 19k - 22k total with tax (worth 26k pre tax)

I originally researched the Mazda6 and love Mazdas safety features - i last minute decided on the SUV because I decided I needed a bigger car. There are a lot of issues with their mechanical features I don't like now in hindsight - closed transmission, electriconic E-Brake, mostly electronic hardware - something to also keep in mind.

Most cars are gravitating toward electronic features and closed transmissions meaning youll be limited on work you can do yourself AND outside of the dealership. But if you aren't a mechanic (I'm not) and prefer the dealer over a shop then you can overlook that.

Thanks for the heads up about tactics and searching for a car. It was really helpful.

I feel as though now I am favoring Mazdas and Subarus, as I've seen owners of each really loving their cars for reliability, comfort, utility, and efficiency.

I don't really prefer electronic components either for the reasons you mentioned, so I will likely look for an early 2010s version of any of these cars with mileages that are as low as possible, if I end up purchasing.

I quit my job and started a new one. I had a 401k at my old job, I chose the Roth option. I will be eligible for a 401k at my current job in November.

I received a letter saying that my current vested balance is between 1,000 and 5,000. The plan can force out terminated participants. (I wasn't terminated from my job, but I "terminated" my old 401k by leaving the job.)

When I get forced out, my balance will be forced into an IRA at Millenium Trust Company.

I would like to get forced out (by simply not returning the distribution forms to transfer the balance or taking the cash, I definitely do not want to cash it out) and I was wondering if this is a good idea?

If my funds go into this IRA, is that considered a rollover IRA? Will I have to pay 20% of something? Will I be able to transfer the funds from this IRA to my new job's 401k in November when I am eligible for one?

I am speaking with the representative at Norton, who sent me this letter, I am also researching and reading the FAQs in this sub, I have been trying to understand 401ks for a few years now and I am just not good at it. Is there a really simple website or workbook or any resource I could use to help me? Maybe something for kids? I am 30 but I just cannot understand it.

what you want to do is "rollover the funds" to an IRA at a different broker (like Vanguard, Fidelity or Schwab). This will be a non-taxable event, so no issue with early withdraws, taxes and such.

As for rolling into your next 401k - yes and no. They would have to have a Roth option there as well (which not everyone has). But there isn't much benefit to moving into another 401k unless they have better options and lower costs than the rollover IRA would have (which is rare).

Thank you!

When I get forced out, my balance will be forced into an IRA at Millenium Trust Company.

...or you can also roll it over to an IRA of your choice or your next 401k if you have one by the time you're forced out of the plan

If my funds go into this IRA, is that considered a rollover IRA?

If you contributed to 401k via ROTH, it should roll over to a ROTH IRA. If you contributed to 401k via pre-tax/traditional, it should rollover to a traditional or rollover IRA.

Will I have to pay 20% of something?

No. It's a rollover not a withdrawal.

Thank you!

1 point · 1 month ago · edited 1 month ago

I feel dumb asking this, but hey, I'm sure that means it'll be an easy question to answer!

A family member set up an Edward Jones account for me a couple of years ago. At what point do you ever take out the money? I think of the repercussions of paying taxes on it, and I don't quite understand how you know when it's a good time to take the risk.

so there are 2 numbers that you will need to know - the amount of money deposited/invested. This is known as the "cost basis". Then the sell price.

The difference is either your gain or your loss. If it is gains, then you will pay long term gains tax rates on the gain amount - currently 0-15% depending on your total income.

So - overall, you won't owe that much in taxes and will be able to pay the taxes with the proceeds of selling the stocks.

Now - the "when to take it out" - depends on what you want the money for. If you want to take it out and invest it in something else, then today is the best day. If you want to save it for something in the future (like a house down payment or next car) then do it a bit before you are ready to make the purchase.

Great, thank you!

I'm not sure how many people are familiar with saving plus now 401k program, but it's what is offered at my work. For about 6 months now i have been contributing about 15% of my paycheck every month to the 401k program. My pre tax monthly income is $4,389. After all monthly expenses i typically end up with $200 going into a money market account for an emergency fund, and $200 of "fun money" every month. My employer does not maybe ant 401k contributions but i do have a state pension program. I'm 25 years old.

My question is, should I also open an IRA? And if so would I lower my 401k contributions? Why would this be beneficial for me? I'm worried about making too much money in the future to either qualify for a Roth or be able to deduct my contributions from a traditional. If i do open an IRA with say vanguard, how do I diversify it differently then say how I invest my 401k?

Just looking for a little more insight and understanding.

If your employer doesn't match, you should max out your IRA first, or at least switch the amount you're contributing to an IRA. Definitely look into the max income you can make while deducting traditional IRA contribution, as the limit is lower if your employer offers a 401(k). I think it's near the 80k range, but I'm on mobile, so tough to check atm.

The benefit is that you get better investing options. Your employer's plan might not have the good funds. I'd just stick it in a Vanguard Target market fund 2060 or something. That'll do all the diversification for you.

Do you happen to know what a good resource for determining whether my 401k are "good" funds?

You should be able to find information about the different investment options from the website of the company that holds your employer's plan (Fidelity, Transamerica, Charles Schwab, etc). You can usually choose the fund you want information on and see what the fees are, the expected return, the risk, and so on. Then it's just up to your choice. Popular advice around these parts is low fees. Try to find expense ratios that are < 1%, but <0.2% is what I consider good.

So if I'm invested in all index funds. Ans split between small, mid, large international and bond (all index) and their total operating expenses are 0.08% 0.08% 0.06% 0.12% and 0.08%, correlated. That would be considered a very good 401k plan?

If you have funds with that low of expense ratios, I'd say you have a 401(k) with good choices. I put my money in a balanced fund (vanguard Target market), so I can't really speak to the splitting, but it seems fine at first look. Someone with more knowledge might have better input.

I got some good knowledge on splitting between the different funds. I was more curious if these operating expenses were considered good. So all being so low below the 0.2% number, there shouldn't be too much of a benefit to open an IRA then? Especially if in the future I won't get any tax breaks?

So the only real benefit now is that an IRA comes with you more easily when you leave the job. Rolling over an employer 401(k) isn't hard, but it's more work than nothing haha.

Otherwise, if you like your investment options, there's no real reason to make the change (unless someone has other benefits I'm forgetting)

Awesome! Thank you for your feedback! It's always helpful to talk through things with someone!

Happy to offer my feedback :) Keep up the hard work of caring about retirement in your 20's! Haha

Comment deleted1 month ago(1 child)

I can borrow money out of my 401k for a down payment on a house with no penalty

since there is no match on your 401k, it depends on what fund choices you have access to within the 401k. If you have good funds at low costs then it doesn't really matter 401k or IRA. However, if your 401k sucks then I would aim to max out the IRA to have access to better options.

https://www.savingsplusnow.com/iApp/tcm/savingsplusnow/learning/library/investment_operating_expenses.jsp

I'm invested in, small, mid, large, and international index funds. With some in cash/bonds.

1 point · 1 month ago · edited 1 month ago

I just wanted to make sure that a Vanguard 2055 RothIRA is for me. I am currently 20 and still in college earning an Accounting degree. I am currently making $24/hr as an intern and I expect to make a good bit more down the line. I have about $10,000 in savings and $4,000 in a separate checking account. No debt, college is paid for through scholarship, and I have a credit score of around ~730.

I figure I'm in decent shape, but I've been told that I'm "too young" by some and "too old" by others. I can definitely cover the $1,000 startup deposit, but I want to make sure that this is the best option for me.

Do it. Set up an IRA. Likely a Roth if you aren't working the entire year, or if working all year and you don't expect a big pay bump. Maybe the 2060 is better that will put you at 62. Either is good enough and until many years from now they will be pretty close to identical.

There isn't a $1000 startup fee to put your roth IRA money into a Vanguard target date fund. That's just the minimum to put the money there.

If you're 20, are you planning on retiring at 57? If you put it into 2055, but you're planning on retiring later, 2055 will likely be too conservative a fund for you. Put into 2060 or 2065 for a more accurate fund.

Amended my post. I knew it meant that. My bad.

Ahh cool.

As far as whether it's the right decision, I'd personally say absolutely yes. Saving for retirement at 20 gives you years and years of compounding interest that most people miss out on by not thinking about retirement until their 30s.

So I have Verizon stock from when I was a kid, I think a relative got it when I was born. It’s sitting at about 8,000 right now. I have a 401k that I’m maxing for retirement, so I’m more just sitting on it and collecting dividend checks at the moment. I have some liquid debt, ER visits and CC that could be covered with it.

Should I sell it off and pay off my CC and medical debts?

Yes. You will also need to pay long-term capital gain tax when you next file. Get basis info from grantor.

1 point · 1 month ago · edited 1 month ago

I have been saving for my first car and have $5k for a down payment. I'm not sure if I should take that 5k and invest it (it would be my first investment outside of my 401k). I'm thinking of getting a 2015 Honda civic hybrid which is around 15k. I would appreciate any insight. Thanks in advance!

Edit: I would either use the 5k to invest (and take the full 15k car loan) or use it for a down payment. I have excellent credit so I would get a pretty good interest on a loan.

Don't ever invest money that you need short term. The market could crash and your 5k could suddenly be 2.5k.

Use a high-yield savings account (ally is at ~1.6% interest rate, for example) until you buy your car.

I guess I should've rephrased my comment better. My question is whether I should use the 5k as a down payment to the car or simply just invest it instead (and take the full car loan). The reason why I ask is because I see that a lot of people in the sub say not to worry about paying loans that have low interest and invest instead. I hope this makes more sense.

Ahhh! That makes sense.

I would use it as a down payment because you would get a lower interest rate by having a down payment in the first place. Talk to the financer (either your bank or the dealer themselves, though banks are typically cheaper I think), and figure out the right amount of down payment needed to have the lowest interest rate possible (obviously without exceeding your 5k).

I am getting LASIK tomorrow and I know I can use my HSA to fund it, however I currently do not have enough money in my HSA to cover it. Can I pull money out of my HSA as I go as "payments" on it even through there will be only one LASIK receipt (i.e. withdrawing $200 every month until it totals to the amount of the LASIK)? Or do I have to withdraw from the HSA as one lump sum once I have enough to fully cover the expense?

You can pay yourself any amount from your HSA up to the total amount you have in medical receipts (and up to the total amount currently in your HSA).

Ok, awesome, thanks!

You can pay part of the bill out of pocket and reimburse yourself later from your HSA, although I don't know the specific steps to do that. I know you would need to keep all receipts related to it to prove it was a qualifying medical expense.

It varies by HSA provider. Mine has an option to declare the expense and upload receipts if required in the web site/mobile app at any time. It will then keep up with the total of those forever. You can ask for the money to be put in your checking account today, in 6 years, or never.

Do you know if I can reimburse myself in installments as long as the total reimbursement matches the receipt?

You can pay yourself back anytime you like. You can even keep the money in an HSA until you retire to let the money in there grow tax free. If you can manage that your HSA will be much more powerful.

If you did installments over the whole year it would certainly not be a problem to manage the accounting. If you do it over multiple years it may get trickier to annotate come tax time, but the IRS may never even check up on your HSA Distributions. If you have a receipt that show you reimbursed your self less than that total, just make a copy of it and stick it in both year's tax return file. Do digital copies too.

Thanks! I really want to start using it for a retirement account but I can't quite yet.

I'm not familiar with the specifics of reimbursement, only that you CAN reimburse yourself. I'm sure your HSA provider has information on reimbursements.

I don't have a kitchen for the next month... lol. What can I do to minimize my food expense? What do you do for lunch when you forget to/dont bring one?

Need more info. Are you out camping for a month? Are you living in your car? Are you living in an apartment/house without a kitchen?

If camping, look into buying camping cooking gear to help cook food. The gear will cost less than buying food out every day.

If in an apartment/house with no kitchen, buy some portable burners and a small mini-fridge. This will still cost way less than eating out every day.

If in a car or really don't want to buy cooking supplies for other scenarios:

  • bread

  • peanut butter

  • dried fruits

  • apples (can sit on counter)

  • bananas

  • nuts

  • one use packages of things (hummus, carrots, etc)

  • buy vegetables and fruits for that day only (e.g., one head of broccoli and last two meals)

  • snackbars / protein bars

  • canned veggies

  • canned tuna

  • trail mix (peanuts, m&ms, dried fruits, other nuts, raisons, pretzels, crackers, etc)

Do you still have a fridge and microwave? what about a grill? It's more effort, but you can still do simple meals. Also look into eat more raw foods - like veggies, fruits, nuts.

Salads, sandwiches, hot dogs, cans of soup, breakfast stuff like cereal.

Especially if you have a microwave, then frozen meals are decent too. Stuff like a bag of ravioli can be a couple of meals and only needs water and a microwave.

As for lunch - I have 3-4 cans of soup in desk and I'll just eat one of those if I mess up and forget my lunch. simple, filling and can be relatively healthy.

Hey, my mortgage is almost half of my income. I’ve only been paying it down for a year. I have good credit, but no savings. I’m going to get $24k in 2 years from an inheritance trust that is ending. It would take about $10k more than that to reach 20% of princicipal on the house.

I can’t save very much from my salary because I have a family and most of the money goes to the mortgage. $15k in 2 years would be pushing it pretty hard. It might not be possible but it’s not a completely unreasonable goal.

But should I put as much as I can towards mortgage principal so I can refi in 2 years, or keep it as ‘savings’, to spend all at once along with the $24k I’m expecting? I’m concerned that if it is sitting in an account it could get spent on other things.

And I know an emergency fund should be a first priority but if I keep the first 10k I save, that means I’m not going to be able to lower my monthly payment for like 4 years. Im planning on potentially selling the house and leaving town at around 5 years, and I also had hoped to be able to put something towards improvements before that.

I have about $10k in available credit. I feel like if my monthly payment went down a bit, it would be a lot easier to come up with an actual emergency fund.

I don’t know, what do you think? (other than I should not have gotten in this position).

having an eFund in place, especially with your level of ultra high spending and having a family, should be higher up in your list. you are truly ignoring the risk you are putting your family in.

but the main thing is you are looking to refi then move 2-3yrs after that. That is likely going to cost you more money in the long run. I would focus on get a small to mid sized eFund then start attacking the mortgage like high interest debt until you can get rid of the PMI.

If you believe your home has appreciated, you can get it appraised to try and get the PMI off as well. That's only if you think your home value has gone up significantly since it was appraised when getting the loan though.

Hey guys, quick question....

Can adding a co-signer ever hurt the rate that you are offered? i have a higher credit score than my father but he has a longer credit history, house, more assets, etc.

Applying for a loan to buyout a leased car

Thanks!

With a mortgage, it will affect the rate. but with a car loan, they usually just base everything off of the better score.

But if your score is better, there really isn't a reason to add your dad, unless you need his income as well (i.e. you have a ton of student loans and your income doesn't cover the minimums) - and if that's the case then maybe getting another loan isn't the best option.

Comment deleted1 month ago(1 child)
Wiki Contributor
0 points · 1 month ago

A skimmer on an ATM is probably the most likely if you've never used it otherwise.

https://www.creditcards.com/credit-card-news/gas-pump-atm-skimmers.php

Received a job offer and instead of accepting right away, I negotiated for a higher salary. I ended up only getting 3% more... but hey- that's still 3%! One of the perks of the job is on-site housing and all meals paid for... so really the bulk of my paychecks will go straight to savings and paying off loans. I'm moving across the country for this job... but I'll be closer to family and it's financially a great choice. I'm so excited to build a much larger emergency fund and get these loans paid off! If I'm diligent, I can completely get rid of them in about 3.5 years- compared to the current 8 years I have left.

Dude wtf on-site housing? Is this an internship or full time job? Tech or finance? Can you name the company? I'd kill for onsite housing. I'm about to start my first job in tech.

Full time job- not tech or finance though. It's at a lodge/retreat center, so I live on property. Definitely not a "normal" job!

Congrats

Thank you! Best of luck in finding a great job!

2 points · 1 month ago

Do you count emergency fund as part of cash on hand when calculating net value? I want to keep around 20%-30% in cash incase there is a market downturn.

yes, the money you have is counted in your net worth. Even though that money is earmarked for the eFund, it is still part of your net worth. Just like you have other money earmarked for retirement which you count as well.

2 points · 1 month ago

Do you mean "net worth" rather than "net value"? If so, the answer is yes.

2 points · 1 month ago · edited 1 month ago

I have a savings and checking account with Schwab, but I was considering opening a high yield savings account with another bank. Schwab's savings gives .4% APY, while Discover and Ally give 1.6%. I am only going to have around $1,000 in it though, so I'm not sure if I should bother with one or not.

Definitely open a high yield savings account! That's the best place to keep your emergency savings in general. That higher APY will really add up over time.

I'm considering switching up my Chase Sapphire Preferred for a Chase Sapphire Reserve. I already earn a lot of points on my preferred for the 2x travel/dining and I'm wondering if it would be worthwhile for the added benefits of 3x on the Reserve? I know I'd have to pay the fee but there is the $300 travel credit which I would easily use yearly, and then from my understanding I'd recoup the extra $150 after about $5k on the card, which would take me 2-3 months to spend. I'm just wondering if its worthwhile so I can reap the benefits of the 3x rewards points for the latter 9 months of the year?

if the extra benefits are worth more to you then the annual fee, then it is absolutely worth it. Look at how you spent your money in the last 12 months, then see what the difference would have been if you used the new card over the old one. Paying $150 for an extra 1% cashback is a great option if you usually $15k/yr or more on your credit cards.

I think that I’d definitely even put for the $150 - do you know mathematically what he break even amount would be in terms of spending? I figured it would be around $5000 but not sure exactly how to calculate it...

first is what is the difference between the current card and the new card. I don't feel like looking them up, so lets say for the first card its 1% cash back and no fee and the 2nd card is 2% cash back and a $150 fee. Then, going from 1% to 2% - meaning there is a 1% gain as your main difference. Then do the fee divided by the difference. So it would be $150/1% = $15k. So it would take $15k of spending to have a 1% difference be worth a $150 annual fee.

you can use the actual numbers to find out what exactly it is for the 2 cards you are looking at.

The preferred is 2x points for travel/dining with a $95 annual fee, the reserve is 3x points for travel/dining with a $450 annual fee (with $300 in yearly travel credit, so more like $150 annual fee).

So, in a more circuitous way, the yearly fee is more of a difference of $55 after you recoup on the travel credits, right?

assuming that you were going to spend the $300 anyways yes, if you weren't going to spend the $300 then no, it isn't a benefit as it is forcing you to spend in a way you likely won't.

the main thing is if you only get travel/dining as an extra 1x bonus - that means you need $5,500 in spending on travel/dining to recoop the difference (assuming points are valued at $0.01. Not sure how the points pay out for Chase).

I definitely spend at least $300 year on travel (especially because they reimburse for things like uber/lyft, parking lots, etc. - not just flights!)

It would probably take less than 3 months to reach that $5,500 in travel and dining. Sounds like that $5500 math is correct! I appreciate all your help sir, let me know if any of that math doesn't check out :)

First off, check out r/churning and r/awardtravel. You don't have to get into churning, but there's a lot of good info on credit cards there.

Second, if you want to get the Chase Sapphire Reserve, I recommend downgrading the preferred to a freedom card and getting the reserve separately. That way you get the bonus for the reserve and 5 UR points per dollar on the freedom on the categories of the quarter.

Third, I would only recommend the Reserve if you plan on traveling a decent amount like more than twice a year. You want to use up that 300 credit and the points. You want to make global entry credit worthwhile.

Are you allowed to have the reserve and preferred within a year? I thought there was some reason I can’t have had both in 24 months?

That's why I'm telling you to downgrade it to a freedom. Although if you just got your preferred, you're not eligible for the reserve.

Ya I just got the preferred in December, so I figured I would probably have to do a product change and switch it up to the reserve?

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