Asking for advice for a 37 year old with 60000 worth of debt and no 401k

[dufania]

@obuscador Yeah, it’s hard for us to help without a more detailed budget breakdown. Mortgage is good, groceries are perhaps a little high, but not egregiously so, it’s everything else. $2000 for medical expenses and subscriptions is very suspicious. $4500 for bills, student loans, car payment, and utilities also feels very high (even with a nearly $1k car payment).

 

[theadorus]

@mssonya84 The upside for OP includes equity and a house that will be paid off in ~11 years - and the 3% 401k opportunity. And the challenge is within the 6500 in monthly expenses that wasn't broken down.

And OP's family's challenge is to reduce expenses in order to live on their income - less the 3% of 401k contribution that's being matched. Even if there's a pay cut. Sometimes it actually turns out to be good for kids - and for adults to be denied some things for budgetary reasons.

 

[elvin]

@mssonya84 Imagine blaming the manufacturer for buying something you couldn’t afford.

 

[olin07]

@elvin It’s the kind of immature mindset that leads to you being 37 without a dime invested in the stock market.

 

[lzz]

@elvin There are millions of people who do this. Why? No clue but it’s sad to watch.

 

[wonkydonkey]

@mssonya84 Pay off the 10% loan, match the 3% and use everything else to fill your emergency fund back to around 15k. It doesnt sound to bad, in 5 years your car is paid off, in 15 your house, in XX your student loans. After each of those steps you can safe more for retirement.
It doesnt even look that bad just the car was a bad decision und you should have matched the 3% from the start.
In the end if you dont have enough to retire you can always sell you house and live in a cheaper country

 

[brad413]

@mssonya84 Criticizing Dave Ramsey is popular around these parts. But you are the person Dave Ramsey was created for!

 

[lzz]

@brad413 Dave is spot on, that’s why some people hate him.

 

[spret93]

@mssonya84 My suggestion for you is to continue with the retirement contribution up to what your employer matches. You need to get on a written budget and account for any expenses and potential future expense ( Eg. Tire replacement, roof replacement etc). Your budget needs to be detailed. Look at all your expenses. 1,200 seems high for a family of 4 For food. I recommend reading The Total Money Makeover and to start listening to Dave Ramsey or other similar type of person who talks about finances. What Ramsey talks about re finances is nothing revolutionary but the steps make sense. Follow them to get out of debt. I am not a fan of his personal beliefs so I listen to the finance part only and ignore the rest. Can you and spouse get another job tempor until debt is paid off?

 

[bryanjohnmaloney]

@mssonya84 OP, let's talk about your grocery bill. What's up with 1200 a month?

 

[actere80]

@bryanjohnmaloney I spend $100 a week for one person. 1200 for 2 adults and two kids seems fine.

 

[mssonya84]

@bryanjohnmaloney Just went to the grocery today and for weeks worth of groceries it was $220 dollars. We try not to eat out whatsoever so we cook most of our meals at home. And that’s why we have close to $1200 budgets for groceries and toiletries. A month worth of toilet paper and paper towels usually runs about 80 bucks alone. Of laundry detergent is about 12 bucks. Soap, shampoo, dish detergent and hand soap, you’re looking at 50 a month.

I tried to eat, mostly a Mediterranean diet and eat salmon just about every night of the week and I only eat one meal a day. I can usually eat one and a half fillets of salmon a week. That’s about 60 bucks alone. Probably gonna switch to chicken because it’s cheaper.

 

[bryanjohnmaloney]

@mssonya84 Maybe switch to salmon once or twice a week and add some chicken in. I know it's hard with kids, but minimizing food waste is huge.

 

[mmphew]

@mssonya84 Seems like you are using more than one roll of paper towels and at least two rolls of tp per day?

Costco for the salmon, paper goods and detergent if there is one nearby, but you absolutely need to avoid impulse buying. Aldi for day to day groceries. And try to cut down on paper towels to the extent you can. While you are at Costco, I will allow you to buy a pack of bar mops or fabric cleaning towels.

 

[resjudicata]

@bryanjohnmaloney Possibly a meal service? Could be doing a “we prep it and send it to your door” thing for that money.

 

[joppa123]

@bryanjohnmaloney It’s not bad for a family of 4

 

[mat56hal]

@bryanjohnmaloney That's actually very good. We spend 1500 for a family of 4

 

[holiday777]

@mssonya84 I understand why you are nervous and feeling sick but from the outside looking in, it doesn’t sound too bad. Plus time is on your side, like 25+ years! Cut back on the monthly expenses (subscriptions, meals out, cable TV, grocery budget, taking lunch to work). Start getting the 3% employee match. And pay off debt as aggressively as you can, starting with the highest interest rate debt first (the personal loan).

 

[rosewood2011]

@mssonya84 First thing I would do is start doing the company 401k match of 3%. Then immediately after I would take your savings and pay off the $11k loan. The 10% is killing you. Your remaining savings needs to be in a HYSA (high yield savings account) that earns at least 5%, a bunch have this rate right now like Weathfront.
Next, everyone is saying sell the car, and at face value, I agree. What’s that monthly payment alone?
The groceries being $1200 a month I get, that’s $300 a week, any chance you could try to cut this to $250 a week? I find if you have a goal with a weekly grocery budget it helps. You are allowed to put things back or exchange them.
The $2k on medical expenses, subscriptions etc, could this be cut by $200 a month? Start a rolling 3 month stint of some subscriptions? Pause then for 3 months on rotation with streaming services?
Even without the car exchange, I would assume my above suggestions of $400 increase, even with the 401k match coming out of your $500 leftover, with the $11k loan paid off, I am hoping you could be somewhere in the $1k a month savings.
Long term, once student loans start getting paid off and house is paid off, immediately start putting that money into 401k or roth ira’s.

 

[silvernights]

@rosewood2011 Honestly, mathematically the 10% loan is the first thing that should be tackled, but there’s no reason to not immediately do both at once with the 15k in savings.

Stock market is ~9% average in return with a chance of a downturn, and while the 3% company match is free money that should outpace the loan - there’s chance of a correction and 10% debt is enough I’d rather just whammy that right away with any savings.