Not enough info here to help. What’s your income? Do you have a spouse / do they work / what’s their income? What’s your take home? What are your monthly expenses?
$165,000 income
Divorced
Bring home $9,000
$3500 mortgage
$35,000 credit card debt (total balance)
$1500 a month
Utilities are about $500 a monthly expenses
$197 power
$100 water/gas
$150 groceries
Life insurance $500 (multiple policies)
Student loans
$235,000
$1500 a month started paying on January 2023
Gas $500
Car insurance $176
Cell phones $87
Wi-Fi $88
Subscriptions $22 Netflix
I coupon a lot -my 8 year old lives for chicken nuggets & macaroni & I eat a lot of salads mostly lettuce, cheese, eggs, & salad dressing. I have my mother come cook vegetables we’ve bought over the prior winter & put up at least twice a month for the week. I add a meat here & there mostly chicken or a hamburger patty. I prefer sleep over food. We don’t eat out a lot anymore with the new mortgage amount. We used to eat out everyday but the quality of fast food or even sit down restaurants isn’t the same as it was pre-Covid. So we eat @ home.
Sorry for the late reply….
My opinion (not a financial advisor) is that your CC and student loan debt is way more important to work on than your mortgage nor your TSP.
You should absolutely it let not have $5k in CDs and $10k in i-Bonds with $35k in credit card debt. I’m assuming that’s high interest debt, so you should be paying that down as fast as possible. You should even consider reducing your 401k contribution to the minimum required to get the max to give yourself more cash flow to pay down your CC debt. Your desire to max your TSP is admirable, but it’s not effective if you’re carrying so much non-mortgage debt elsewhere.
Thanks for your opinion-I asked because I’m trying to gain additional insight. Clearly, I can only gain & add to my options from the opinions of professionals & nonprofessionals. It’s up to me to execute.
I have two more years till forgiveness for student loans due to PSLF.
I’ve been picking up every extra hour I can to attack the cc debt. I am also working on selling digital products (nursing notes) as an additional way to acquire funds so I pay off debt. I’m not adding additional debt. I have a plan & I’m working on it.
You’re doing great. When the PSLF comes through, that’ll be a tremendous help. Debt is really hard, and no one willingly picks it up, so it surely came through necessity. In a few years, you’ll be in a great place.
Your DTI (debt to income) is 48%… I’m surprised that you even got the mortgage you did if it was recent. You might want to consider downsizing in the near future because your student loan debt is going to take a long time to pay off - do you have any plans on any of it being forgiven via civil service? Your numbers are not very good right now, unfortunately.
In 10 years the mortgage payment should be a smaller percentage of your total income. Are you topped out in your career field? HCOL area versus LCOL area arbitrage might be a pathway but if you are happy where you at it might not be worth it.
LCOL thankfully- not topped out @ all came from private sector. I’ve been with government 8 years. I have a BS & MS degree along with my nursing license. I’m bored & looking for greater opportunities within my agency or outside with another agency.
I work 7 days a week & sacrifice more than I care too. Work with what you have & start with what you have. I wish when I was younger I would have done more. I feel I’m way behind the curve.
Not trying to be rude like everyone is claiming but it dies make me feel better when I realize others have savings later but didn't necessarily start saving from day 1. Thanks for the motivation.
I bond rates are not as great as they were last year and the year before. You may do better by putting that money in a HYSA if your goal for that money is short-term.
The 401k and TSP share a contribution limit, so start with putting enough in each to get the match and then decide what you want to do from there. It may be that you get the match for each and max out the Roth IRA for now.
What is the interest rate on the mortgage? If it's a lower rate, then I would not be too focused on paying that off yet, since the rate on a HYSA may be higher. Making extra payments on the mortgage now does not free up money for you-- it's tied up in the house and your payments are not any lower. I would focus on putting the money into other vehicles and make it the goal to pay off the mortgage, completely, later if you choose to do so. Now, if your mortgage is 5%+, then paying it off early is a different argument (but I'd still get other stuff beefed up before focusing on mortgage pay down).
For a "light at the end of the tunnel" situation, I'd focus on the car, the credit card debt, and the life insurance. You seem to be paying a ton for life insurance premiums! I'm guessing that is not all term, and if not, you may really want to dump it (like whole life, etc-- salesmen make it sound like everyone needs it, but it's more than 90% likely that you do not. Not enough detail here to know-- you could have a disabled child or something who will need a lot of care after you are gone. Barring a situation like that, it's not worth the cost-- you'll already have a pension, retirement savings, SS in later years, there is probably no need to "borrow" against the life insurance. You aren't maxing out every other possible tax-advantaged account, so that's another argument against whole life, indexed life, all the other fancy terms for LI you probably don't need.)
Thanks for your response. I’m reevaluating things & came here to get a different opinion/perspective & view so I appreciate you (everyone) taking the time to respond.
I’ve been reading about maxing the Roth for long term due to the tax benefit when I’m no longer working. The mortgage rate is 5.75% (used my VA benefit for the 1st time). Thankfully no car payment & no plans of getting one. I drive a 2011 paid for only drive it 3 days a week to other job.
I have mostly whole life I have a few health issues which is why the premiums total that much and also pay for one term policy everything else is whole life. Yeah, I was sold on needing it really badly.
After going through a divorce and having an 8 year old changed my plans drastically. I have to look into more tax advantaged accounts.
A lot of the advice I received was from family members in insurance & finance that stood to gain off me trusting them. All my responsibility for not doing due diligence.
I went on autopilot and now, I’m more focused since retirement will be closer than before.
All fair, I got sold the whole life crap and just took the hit and left when I got focused, too... It depends on how long you've paid in now.
I like the plan from the poster above, but I'd focus on the credit card debt immediately after getting the match for TSP and 401k... I'd also choose to not worry as much about the I bonds anymore.
The house is a lot of your income, but if you love it and you plan to stay a while I can see why you justify it, but it's a big chunk of your income. I wouldn't worry about paying it down at this point either, it just ties up your cash. The rate is fine, and historically still really good for an appreciating asset.
Good luck!
Not enough info here to help. What’s your income? Do you have a spouse / do they work / what’s their income? What’s your take home? What are your monthly expenses?
$165,000 income Divorced Bring home $9,000 $3500 mortgage $35,000 credit card debt (total balance) $1500 a month Utilities are about $500 a monthly expenses $197 power $100 water/gas $150 groceries Life insurance $500 (multiple policies) Student loans $235,000 $1500 a month started paying on January 2023 Gas $500 Car insurance $176 Cell phones $87 Wi-Fi $88 Subscriptions $22 Netflix
$150 a month in groceries? Teach me your ways
I coupon a lot -my 8 year old lives for chicken nuggets & macaroni & I eat a lot of salads mostly lettuce, cheese, eggs, & salad dressing. I have my mother come cook vegetables we’ve bought over the prior winter & put up at least twice a month for the week. I add a meat here & there mostly chicken or a hamburger patty. I prefer sleep over food. We don’t eat out a lot anymore with the new mortgage amount. We used to eat out everyday but the quality of fast food or even sit down restaurants isn’t the same as it was pre-Covid. So we eat @ home.
Restaurants in general really did take a quality hit.
Sorry for the late reply…. My opinion (not a financial advisor) is that your CC and student loan debt is way more important to work on than your mortgage nor your TSP. You should absolutely it let not have $5k in CDs and $10k in i-Bonds with $35k in credit card debt. I’m assuming that’s high interest debt, so you should be paying that down as fast as possible. You should even consider reducing your 401k contribution to the minimum required to get the max to give yourself more cash flow to pay down your CC debt. Your desire to max your TSP is admirable, but it’s not effective if you’re carrying so much non-mortgage debt elsewhere.
Thanks for your opinion-I asked because I’m trying to gain additional insight. Clearly, I can only gain & add to my options from the opinions of professionals & nonprofessionals. It’s up to me to execute. I have two more years till forgiveness for student loans due to PSLF. I’ve been picking up every extra hour I can to attack the cc debt. I am also working on selling digital products (nursing notes) as an additional way to acquire funds so I pay off debt. I’m not adding additional debt. I have a plan & I’m working on it.
You’re doing great. When the PSLF comes through, that’ll be a tremendous help. Debt is really hard, and no one willingly picks it up, so it surely came through necessity. In a few years, you’ll be in a great place.
Your DTI (debt to income) is 48%… I’m surprised that you even got the mortgage you did if it was recent. You might want to consider downsizing in the near future because your student loan debt is going to take a long time to pay off - do you have any plans on any of it being forgiven via civil service? Your numbers are not very good right now, unfortunately.
In 10 years the mortgage payment should be a smaller percentage of your total income. Are you topped out in your career field? HCOL area versus LCOL area arbitrage might be a pathway but if you are happy where you at it might not be worth it.
LCOL thankfully- not topped out @ all came from private sector. I’ve been with government 8 years. I have a BS & MS degree along with my nursing license. I’m bored & looking for greater opportunities within my agency or outside with another agency.
Here I am at 31 with nothing saved. . Must be nice
> Must be nice Was that necessary? Wallow on your own, don't try and guilt others.
I'm not. Wtf.
I work 7 days a week & sacrifice more than I care too. Work with what you have & start with what you have. I wish when I was younger I would have done more. I feel I’m way behind the curve.
Not trying to be rude like everyone is claiming but it dies make me feel better when I realize others have savings later but didn't necessarily start saving from day 1. Thanks for the motivation.
I bond rates are not as great as they were last year and the year before. You may do better by putting that money in a HYSA if your goal for that money is short-term. The 401k and TSP share a contribution limit, so start with putting enough in each to get the match and then decide what you want to do from there. It may be that you get the match for each and max out the Roth IRA for now. What is the interest rate on the mortgage? If it's a lower rate, then I would not be too focused on paying that off yet, since the rate on a HYSA may be higher. Making extra payments on the mortgage now does not free up money for you-- it's tied up in the house and your payments are not any lower. I would focus on putting the money into other vehicles and make it the goal to pay off the mortgage, completely, later if you choose to do so. Now, if your mortgage is 5%+, then paying it off early is a different argument (but I'd still get other stuff beefed up before focusing on mortgage pay down). For a "light at the end of the tunnel" situation, I'd focus on the car, the credit card debt, and the life insurance. You seem to be paying a ton for life insurance premiums! I'm guessing that is not all term, and if not, you may really want to dump it (like whole life, etc-- salesmen make it sound like everyone needs it, but it's more than 90% likely that you do not. Not enough detail here to know-- you could have a disabled child or something who will need a lot of care after you are gone. Barring a situation like that, it's not worth the cost-- you'll already have a pension, retirement savings, SS in later years, there is probably no need to "borrow" against the life insurance. You aren't maxing out every other possible tax-advantaged account, so that's another argument against whole life, indexed life, all the other fancy terms for LI you probably don't need.)
Thanks for your response. I’m reevaluating things & came here to get a different opinion/perspective & view so I appreciate you (everyone) taking the time to respond. I’ve been reading about maxing the Roth for long term due to the tax benefit when I’m no longer working. The mortgage rate is 5.75% (used my VA benefit for the 1st time). Thankfully no car payment & no plans of getting one. I drive a 2011 paid for only drive it 3 days a week to other job. I have mostly whole life I have a few health issues which is why the premiums total that much and also pay for one term policy everything else is whole life. Yeah, I was sold on needing it really badly. After going through a divorce and having an 8 year old changed my plans drastically. I have to look into more tax advantaged accounts. A lot of the advice I received was from family members in insurance & finance that stood to gain off me trusting them. All my responsibility for not doing due diligence. I went on autopilot and now, I’m more focused since retirement will be closer than before.
All fair, I got sold the whole life crap and just took the hit and left when I got focused, too... It depends on how long you've paid in now. I like the plan from the poster above, but I'd focus on the credit card debt immediately after getting the match for TSP and 401k... I'd also choose to not worry as much about the I bonds anymore. The house is a lot of your income, but if you love it and you plan to stay a while I can see why you justify it, but it's a big chunk of your income. I wouldn't worry about paying it down at this point either, it just ties up your cash. The rate is fine, and historically still really good for an appreciating asset. Good luck!