Personal Finance Weekday Help Thread for the week of May 28, 2018 |
- Weekday Help Thread for the week of May 28, 2018
- Just found out my equal co-worker makes 65% more than me.
- Buying vs renting in the Bay Area: A look at some real numbers
- Couple of tips that went a long way for me, financially.
- Any good receipt tracking apps?
- Child actor, looking to invest all of her money for her future.
- Feel like I'm losing a lot by not investing...how do I maximize my excess cash safely?
- Social security/financial planning for “non-working” spouse
- Should I contribute more to my 401k or to an IRA?
- Just got $1000 for a Graduation present from relatives. And not sure what to do with it.
- Employer matches 8% to 401K after 2 years of working— should I still contribute until then?
- Should I save receipts? Is there the purpose?
- How early is too early to start contributing to a 401k?
- Do I have to wait to refinance an auto loan?
- It's time for a career change, but I don't know what to do.
- Bigger down payment vs lower debt to income ratio?
- Breaking up, fiancé and I share a lease. What’s the easiest and my cost friendly way to move out?
- Optional loans for students?
- My job doesn’t have a 401k plan. What are my choices? I have a savings and checking account now. I also have a life insurance policy that doubles as a retirement plan.
- Already have a 9 to 5 for the weekdays, looking into work for the weekends to keep myself busy, any ideas?
- Options for ending car lease early
- How to justify lower-than-market value for car purchased from a friend?
- Looking for advice for my parents
- If I donate goods and the total is less than the standard deductible, is there any actual tax benefit?
- I will most likely be living in poverty by 2019
| Weekday Help Thread for the week of May 28, 2018 Posted: 28 May 2018 06:08 AM PDT If you need help, please check the PF Wiki to see if your question might be answered there.While we never remove posts just because a question is answered in the wiki, this thread is a low-key place to ask any question no matter how "moronic" you think it might be. Make a top-level comment if you want to ask a question! Also, please don't downvote "moronic" questions! If you have not received your answer within 24 hours, you can feel free to start a discussion. A big thank you to the many PFers who take time to answer other people's questions! For past help threads, please search the Weekly Archive. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Just found out my equal co-worker makes 65% more than me. Posted: 28 May 2018 09:27 AM PDT Hello all. I work in a Crossfit gym and just got a promotion to a full time salary position at $20k/yr + bonus per class I coach. I didn't think it was much but I figured that's what most coaches make so I signed it. Go into the gym today and see another coach got a promotion to the same position at $33.5k. I saw it on a paper left out by accident I assume. I work much more than he does, I do more for the gym outside of coaching, I clean, I work 7 days a week vs his 4 or 5. It was very upsetting to me and demotivating. I do a much better job than he does, as said by my bosses themselves. I love this job and work extremely hard but this is definitely hit me kinda hard. I feel undervalued. How do I approach my employer about this? UPDATE: scheduled a meeting with the owner tomorrow. Going to try negotiate a better pay. I will mention that I saw the other workers salary and make my case for why I'm undervalued. I'll update you guys on what happens [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Buying vs renting in the Bay Area: A look at some real numbers Posted: 28 May 2018 01:55 PM PDT First post here, hopefully I don't break any rules... There are constant discussions going into renting vs buying, but most of it deals in theory. I wanted to share my personal experience with this topic, from the perspective of someone living in the Bay Area, and get feedback from the sub in case I made some wrong calculations in here.
The general perception seems to be that a) index investing and home investing are about equal in terms of returns / attractiveness, but as a commenter pointed out on the /financialindependence subreddit today, the answer is nuanced as it depends heavily on location: https://www.reddit.com/r/financialindependence/comments/8mny4i/what_is_with_the_hate_of_real_estate_on_this/ b) cash flow is generally the key consideration I see when comparing renting vs buying, or at least is what is typically modeled financially. I'm here to present some information based on my personal experience about those 2 topics today.
I bought a single family home in San Francisco in October 2016, after renting in a rent-controlled apartment for the 2 prior years. Prior to this, I had been of the mind that I wasn't giving up much by renting, but when I ran the numbers... boy was I wrong. So I bought a house instead! Monthly housing expenditures Renting situation:
Buying a house in the Sunset (4BR, 2BA):
As you can see, with the benefit from tax deductions and renting a room, it ends up not being too different, even in a place like the Bay Area where the rent to price ratio favours renting.
Income through investing I had to put down 260,000 for the house (plus some closing costs), which would have otherwise gone into some of the hottest years of the stock market, but buying still yielded substantially higher returns. Most of the reason here is due to the impact of leverage, but these (real) numbers really show the scale of this. Here's how it has shaped up after 19 months:
Buying turned out to be a way better financial decision for me. And I'd argue that it will likely pull away even further from stocks after a few more years of appreciation. If the housing market slows, I'd likely explore refinancing to purchase properties in higher growth areas.
I've been keeping an eye out for purchasing investment properties as a result. After spending time modeling various property scenarios, my realization is that appreciation can be a much more significant wealth generator. It's a bit puzzling to me that so many investment property spreadsheets only account for rental income vs appreciation. I'd love to hear from you guys on what your thoughts are on my analysis - is there something I'm missing?
EDIT: Some great comments. Adding in a few takeways on how to improve the model here:
Assuming roughly $1000 for rental income tax, and maintenance per month (is that too low/high?), that brings the cashflow to being -$1,700 worse than renting, which is about $20k per year. This would have cost me around $5000 of stock appreciation per year, assuming 25% yearly returns. I'll have to update my model to see the impact, which back of the napkin suggests it would boost returns in the rental scenario from 33% to 40-45% over 19 months. (Likely on the lower end, given there's the question of taxes on stock appreciation, the fact that this money would not be invested once a year at the beginning of each year, etc).
I think it would be really interesting to run some numbers to see what I'd have to believe about home appreciation and stock appreciation to believe that stocks would have won out for me. This would be a fairer way to compare the two scenarios in the "what if there's a recession" argument, as a recession would hit both stocks and home values. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Couple of tips that went a long way for me, financially. Posted: 28 May 2018 07:46 PM PDT So I was in the shower, pondering life's mysteries and throwing out some comebacks to my school bullies 4 years too late, when I began to start thinking about the positive changes I've made financially. They saved my ass a couple of times, and so I wanted to share. I. The saving accounts.
II. The talk. You know you. And sometimes, you just have to get real with yourself. When I see that Lego set, I'm telling myself "you lazy motherfucker, you're not going to spend your time building that." And when I see that beautiful Solar G Shock that can be submerged for 17 years at 50000 meters, I think "but when's the last time you actually went outside?" Think things over. Find reviews. Imagine yourself using it. Then repeat the process. I sit on purchases for MONTHS sometimes before actually going through with the purchase. Sometimes, by the time I'm ready to buy whatever it is, there's a nice discount on it. Other times, they raise the price and I just repeat the process again. It happens. III. Eating out is your enemy. As I grow older, I find that most of that "fun time" money is going towards eating out. The money is fair game, so financially, it's fine. But mentally? Imagine the toll. Postmates and GrubHub are cancer. It's convienent. Too convienent. And the additional fees are outrageous. Do yourself a favour. Go to the grocery store more often. Buy shit you'll actually want to eat. Buy what you crave. Live a little. Remember, it's fun money. Not grocery money. $20 of food from the store would have satisfied me more than $20 of delivery fees from Postmates. And that's it. Budgeting can suck at first and can be hard depending on what your situation is. I just wanted to share some points and tips that might help the average guy out. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Any good receipt tracking apps? Posted: 28 May 2018 03:51 PM PDT Preferably one that can just scan the barcode (second best is using the camera as I hate manual entry). I have android if that helps, I really love Walmart's receipt barcode scan app. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Child actor, looking to invest all of her money for her future. Posted: 28 May 2018 03:21 PM PDT My daughter is about to start filming in a movie this summer where she will make a decent amount of money. She's 6 so has no need to touch her funds any time soon so I would like to stash the cash for her to have once she's an adult. My wife and I would like some suggestions on how to safely let our daughter's money grow. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Feel like I'm losing a lot by not investing...how do I maximize my excess cash safely? Posted: 28 May 2018 04:47 PM PDT Hello, I've been raised in a frugal family, so I try to live within means. Me and and the wife have been together a while, DINK both early 30s, and have a bit of extra cash laying about now. Planning on having kids, though. From what I've read, just having cash on hand is losing money to inflation. How do I maximize this potential? We make decent money, 100k combined. No debt other than our mortgage. Our mortgage is 840.00 a month and I usually pay a bit more into principal each month. Regular bills, Internet, Phones, Insurance. Cars are paid off. "Problem" is, we have an extra 30k laying around. I have 10k in an emergency fund and we both have 401ks we don't touch. She wants to get rid of her Volvo SUV and get a newer truck, a Toyota Tacoma. probably 20k. I feel like we could do that, and it would help build her credit score. But the lack of payments with her current vehicle paid off is awesome. But it would be handy to have a truck, though. I do the maintenance, and we're starting to replace a lot of costly sensors. 140-300 a pop just on the sensors alone. I know the truck is a secondary notion, but the main question is how do I invest this extra cash? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Social security/financial planning for “non-working” spouse Posted: 28 May 2018 06:14 PM PDT My husband (40s) and I (40s) have been married 20+ years. He put me through college and I got a good job after and have kept it since (almost 20 years). For the past 10+ years, he has worked on his family's place for minimal pay and has done all the running around with the kids and is now taking care of his mom. This arrangement has worked very nicely for us. One kid is done with college and the other will start soon. We have a decent 401k/IRA account that we're contributing to, have no debt and have life insurance on both of us. I had a health scare recently and it makes us worried about his finances if something should happen to me. Our health insurance is through my job. Is there anything we should do to make sure he's ok if something happens to me? Will he get the social security I've earned? We've been a good team at this thing called life and it sucks to have to think about this so seriously at our age. Thanks for any advice. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Should I contribute more to my 401k or to an IRA? Posted: 28 May 2018 03:33 PM PDT Hey everyone! I recently turned 30 and realized it was time to get ahold of my finances. Thanks to this subreddit and /r/ynab, I've almost paid off my credit card debt. Now I'm looking to start using the extra money I will have each month once they're paid off to save up more of an emergency fund and put more towards retirement. (I already contribute my company match to my 401k.) I still only have a basic level of financial knowledge, so I don't fully understand everything in the wiki, but I'm committing to learning more! With that said, I have two questions for you all. 1.) The wiki says that if you have an "excellent 401k" you can consider contributing more to it (over the company match) rather than an IRA. How do I know if I have an excellent 401k? What makes an excellent 401k? I understand I've got a great company match, I just don't know what's considered "excellent" beyond that. 2.) Should I keep my traditional 401k or switch to a Roth 401k? It seems I fall into the "you can do either one" category based on the wiki. My details:
Please let me know if there's any other details you need to know! Thank you in advance for your help! [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Just got $1000 for a Graduation present from relatives. And not sure what to do with it. Posted: 28 May 2018 03:32 PM PDT I'm 18 and about to go into college and I'm not really sure what to do with this money. I was thinking about getting a Certificate of Deposit but I'm not sure if investing it would be wise and get me more money in the long run. I don't have a job now and I plan on going into college. I won't have a lot of debt since my parents started saving for my college tuition the day I was born which I am very grateful for. I have a savings account but know I could get more if I put it elsewhere. This is my first post here so sorry if I broke an rules or anything. Edit: when I said investing I meant in stocks, I currently don't own any stocks. Edit 2: I've decided to put it into my savings account as I don't have a whole lot of savings at the moment. Figured it would be good to start a good habit early. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employer matches 8% to 401K after 2 years of working— should I still contribute until then? Posted: 28 May 2018 06:28 AM PDT I'm at the six month mark. When I hit 2 years, my employer will contribute 8% to my 3% contribution. Should I contribute to it pre-tax until then? Or should I max a Roth IRA instead? "After 2 years of continuous service in which you worked 1,000 hours in each year, you will be eligible to receive the employer contribution to your retirement plan. In order to receive the Museum's contribution to your plan, you must contribute 3% of your eligible earnings. The Museum will contribute 8% of your eligible earnings if you were hired after July 1, 2001. You are immediately 100% vested in your own contributions, as well as in any of your Employer's matching contributions and any earnings on them." -- From my employer's 403b Fidelity book. Thank you! (Also, it's a 403b.. I keep calling it a 401k) [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Should I save receipts? Is there the purpose? Posted: 28 May 2018 07:12 PM PDT So I've seen people save their receipts for everything they purchase and I've always wondered why? Me... I don't see the point. I make around 70k a year. I am in a relationship, have a kid, and am a homeowner. I always assumed by keeping your receipts you could reduce your taxes paid at the end of the year. Is this correct or is there some other purpose to saving receipts? What is the purpose or reason? Is it a budgeting thing? I'd like to know if I could be reducing my taxes or if I'm missing out on some kinda of money saving tip or trick? Someone please explain?! [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How early is too early to start contributing to a 401k? Posted: 28 May 2018 08:02 PM PDT My employer matches all 401k contributors up to 10% of your paycheck. I started taking advantage of this about two years ago, but today I mentioned it to one of my parents and they said I'm too young to be having a 401k already, and shouldn't until I'm in a career that I plan on staying at for a very long time. I'm currently in a retail job that pays the bills and is getting me through school. It's not a career choice, just something to get me by. I was under the mindset that it's basically free money later in life, because my employer is matching me. My parent advised me to immediately stop putting money in my 401k, and not start again until I'm settled into an after college career. They told me it's very difficult to obtain your money once you retire when you start saving so young, so I'm basically throwing it away. I have another two years of college before I'll be looking into a career. So my questions are: Is it more difficult when you have different 401ks through a variety of jobs? Is there an age that would be considered too young to start saving in one? For the record, I am 22. Been with my current job for four years, and plan on staying another two. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Do I have to wait to refinance an auto loan? Posted: 28 May 2018 06:00 PM PDT I bought a new car this week with the help of my dad, but the interest rate is basically double of what we were expecting it to be at 6.29%. We're going to refinance and hopefully get a loan with a rate of at most 4% with my credit score in the 720s. We were told that we have to wait four months before we can refinance. Is this true? I'll call the dealer tomorrow and ask to clarify, but until then can anyone speak about this? Also, where can I get the best rate possible with a credit score in the 720s and as active military member? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| It's time for a career change, but I don't know what to do. Posted: 28 May 2018 05:43 PM PDT I've been a dental assistant for the past 5 years. It's an OK job, but I quickly hit the top of my income potential and I can feel my career stagnating. I want to do something different but I don't know what. As for my background, I don't have a college degree and I feel like that really limits me. Because of a divorce there was no money for college when I turned 18 and I ended up going to a crappy trade school instead for a career I only worked in briefly before I discovered it was a crap career and didn't make much money. After that I got my first dental assisting job. I'm really good at assisting and at pretty much all things dental. I have a lot of responsibility at my job, but I feel like I'm making as much as I'll ever make as a dental assistant now and I'd like to find a career with more potential. I honestly just don't know what jobs are really out there for someone like me that pay more than what I'm already doing and have a good work/life balance. I currently make about $20 per hour. I enjoy the business side of things like working with vendors and getting deals on supplies. But I don't know if the experience I have translates to anything valuable in another career. Also, I live near DC so jobs are plentiful, I just need to know which ones I should go after. I feel kind of lost. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bigger down payment vs lower debt to income ratio? Posted: 28 May 2018 09:47 AM PDT With the amount I have saved I can probably pay off my student loan debt in the next 1.5 years if I really attack it (~$20k). That is my only debt. If I do that I will have very little saved and will be looking to buy a house in about 2 years. I guess my question is what would be smarter since I want to buy a house in a couple years: should I keep my savings for a bigger down payment or get rid of all my debt to improve my debt to income ratio? I like to read the comments in this community. It gives me a lot to consider. Thanks for any insight. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Breaking up, fiancé and I share a lease. What’s the easiest and my cost friendly way to move out? Posted: 28 May 2018 04:20 PM PDT Not sure if this is sub is the right place for this question. It doesn't say on our lease how much it would be to break it. We have our lease until July 2019. How do I go about getting out of it? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 28 May 2018 07:05 PM PDT I've used Sallie Mae & Navient, but only while enrolled in classes. It's summertime and I won't be enrolled in classes, so I was told that I won't be approved for a loan through my school since the loans have to go towards my tuition first. No classes = no approval. Anyone have any suggestions? It's hard for me to be approved because I'm in my final year of school and my student loans have accumulated to 60k, and I now have 599 credit score. All my accounts are in good standing but the debt to income ratio is way off. I was denied by Upstart and One Main Financial. I'm not sure if there's anyone else I could try. I get approved by Sallie Mae very easily, but if I'm not enrolled for the summer, that's a no. Any suggestions? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 28 May 2018 07:05 PM PDT Job told me that they have no 401k option or matching. Said they can split my checks into up to 5 different accounts. I recently got a promotion but this is my first grown up job so I have no retirement plan other than a 750k life insurance policy. Help please. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 28 May 2018 02:22 PM PDT So I am going to have a 9 to 5 for the weekdays (switching over to new company) and to be honest, it does get boring on the weekends for me. I was thinking of doing some work on the weekends to keep myself busy since I don't have much of a social life. Only thing I can find or look into is driving for Uber or Lyft, any other side jobs or things I can look into? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Options for ending car lease early Posted: 28 May 2018 08:30 PM PDT Hi guys! I've been a lurker for years but just recently started occasional posts and comments, but this is my first time reaching out for advice: In 2015 I had just graduated college and started my first job, so I needed a car. In June of that year I bought a 2014 Dodge Avenger. I had just started making real money and didn't have a lot set aside so I got a 6 year loan. Fast forward to February of 2018, and I still owed about $8000 on the car, but it was estimated to only be worth around $5000. Not wanting to pay $8000 over the next 3 years for a car that was worth a lot less than that I decided to go to a dealership to explore my options. At this point I'm making about $20k more than I was when I bought the Avenger, so I wanted something a little nicer. I also live in upstate ny (where winters are harsh) and enjoy hiking and camping so I was looking for a Jeep. The dealership offered to pay off my car debt completely, but only if I leased a 2018 Jeep Cherokee because they were trying to get them all off the lot. I would have preferred buying, but having the debt completely cleared for my car was desirable. I also didnt want to get into another situation where I'm way upside down on my payment. I've had many friends who leased and enjoyed having a nice new vehicle and never having to worry about maintenance fees. So I went with the lease for the 2018 Jeep Cheorkee. Here I am 4 months later and I hate it. What it really boils down to is the mileage issue. Everywhere I go I'm constantly watching the mileage. Even just going to the grocery store. I've had it about 3.5 months now and only put on 3500 miles (12k per year) so I'm right about where I should be but everytime I consider a weekend trip or even an hour drive to my hometown I'm reluctant because of the miles. I would much rather buy a car and not worry about it. I dont want to deal with this paranoia for the next 3 years. My contract says I can get out of the lease anytime for $500, but I know they factor in the difference in the vehicles value and what you've paid so you end up owing a lot more money. But could I return to the dealership and end the lease without paying outrageous fees if I buy another car from the dealership at the same time? I guess I'm just trying to figure out what my options are here because I'm really regretting my decision. Any help would be much appreciated! TL;DR I leased a jeep 4 months ago and I am constantly paranoiad about the miles. Want to explore options for getting out of lease and buying a different vehicle. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How to justify lower-than-market value for car purchased from a friend? Posted: 28 May 2018 08:26 PM PDT I'm buying a car from a friend who cut me a very friendly deal. I live in Pennsylvania and have to pay sales tax on the purchase, and since the car was sold for less than 80% of the fair market value I need to explain why it was sold so low. What reasons are acceptable here? Would my friend not needing the money and doing me a real solid (would prob word differently) count as a valid reason or would they make me pay sales tax on the fair market value? Anyone have any experience here? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Looking for advice for my parents Posted: 28 May 2018 04:36 PM PDT They have around 300k sitting in the bank and no investments and money for retirements. They own the home that they're living in and have a small cost of living. I wanted to help them prepare for retirement. I figure that they should invest most of the 300k into something but I'm not sure what. I'm looking into rental home properties right now as they would be open to it. What would you do in my situation? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 28 May 2018 08:21 PM PDT If I want to donate some clothing and furniture I own to the local goodwill or related organizations, but the sum of what I can donate over the course of this fiscal year is less than the standard deductible, does donating do me any actual good from a tax perspective? How so or why not? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| I will most likely be living in poverty by 2019 Posted: 28 May 2018 07:48 AM PDT I live in the United States with a rare, chronic illness. I am disabled and can't work a traditional job, though I do work from home on a writing business making $30,000 a year. I turn 26 this year and will be losing my insurance. I was receiving disability benefits but $800 a month isn't enough to live on. I can get my benefits reinstated and take Medicare but I would have to give up all work completely. Last year was fantastic income wise, but this year business has taken huge losses and I'm losing money hand over foot. As an example, I had $3,000 in my checking account at the start of the month, which has quickly dwindled to $60 due to unexpected medical care. I have $13,000 left in my savings, which my doctor promises me will be eaten up by medical bills before March of 2019. Talks with insurance agents look like I'll be paying a $7,000 out of pocket max with a $300-$500 a month premium. Credit card debt currently totals $3,000 and I have $10,000 in student loans. I currently live with my parents. Fiance can't yet find a full-time job with benefits. Idk how we're going to get an apartment of our own, let alone pay for even a tiny courthouse wedding. I'm pretty sure by this time next year I'll have nothing. I am scared and upset. I work as hard as I can, I went to school, I did everything I was supposed to do and far more. I don't know how to save myself from this situation. [link] [comments]  |
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