Financial Advice - Talk About Marriage
Financial Problems in Marriage When financial times are tough, it adds to the stress we deal with on a daily basis. This section is for talking about how financial problems affect our relationships and ways to cope.

User Tag List

 32Likes
Reply
 
LinkBack Thread Tools Search this Thread
post #1 of 34 (permalink) Old 09-03-2016, 08:27 PM Thread Starter
Member
 
Join Date: Aug 2016
Posts: 50
Financial Advice

My DH and I have two debts:

1. 49K mortgage debt: I have to pay about $330/month with 4.875% interest rate.

2. 8K car loan. The payment is $272/month with a very low interest rate.

My Dh likes to give me some extra money to go to shopping or to have fun when his business does well. He also likes to buy bigger TV or other unnecessary items for pleasure but I told him I would rather use the money to pay off our debts. I will enjoy vacations more if we are free from debts.

I make $1330 monthly mortgage payment. The extra 1k is to pay toward the principle every month. I make extra payments whenever I can and I do it quickly before my temptation for spending takes over me . We can afford to pay another extra 1k toward our debts this month. My Dh wants to pay off the car loan first, but I can tolerate 8k better than 49k. I think we should pay the mortgage because it has higher interest rate. We have not decided yet.

We have an emergency fund. My Dh and I plan to have a baby next year so I need to learn to be smart with money. Please give me some advice:

Should I focus on paying off the mortgage first or the car loan first?

How much do a regular couple need for rainy days in America? (I need a goal to save) The living cost in our state is not high. I am glad we do not live in California or New York.

How much fund is adequate for having a new baby added to the family?

My Dh told me he is not good with finances so he wants me to manage it, but I only know how to handle basic finances such as trying not to live beyond our means or to pay things on time. When people talk about IRA, 401k, or stocks, I feel so lost . I saw people who are in their retirement years struggling with money and need assistance for food or medications. I feel deeply sorry for them, but I feel scared for my own future. Where should I start?

Thank you in advance for any input.

candle100 is offline  
Sponsored Links
Advertisement
 
post #2 of 34 (permalink) Old 09-03-2016, 08:30 PM
Member
 
2ntnuf's Avatar
 
Join Date: Jul 2012
Location: PA
Posts: 13,989
Re: Financial Advice

I'm no one to figure it out. I do listen to this guy once in a while. Seems like he really does know what he is doing.

Dave Ramsey Homepage - daveramsey.com

"I'm significant!! Screamed the dust speck." - Bill Watterson

"And this, too, shall pass away."
2ntnuf is offline  
post #3 of 34 (permalink) Old 09-03-2016, 08:38 PM
Member
 
BioFury's Avatar
 
Join Date: Jul 2015
Location: Stars & Stripes
Posts: 332
Re: Financial Advice

Which to pay off first? I'm not sure it really matters. The interest isn't compounding, so the passage of time shouldn't make a difference.

It all depends on what kind of rainy day. Put aside everything you can. When you reach 1 year's worth of expenses, then you can ease back a little bit.

I'm not sure how old you are, but having children when you are financially strapped isn't the best of times. Kids add a lot of stress, and expense. Think of how stressed being in a financial jam sometimes makes you feel, and just imagine feeling like that all the time. As far as how much kids cost, I think $10,000/year is the statistical number. I wouldn't recommend having children until you are debt free.

You're trying to climb out of a hole. And that isn't the time to be digging it even deeper.

- Good people, do good things. Bad people, do bad things. End of story. -

- The problem with unproductive people, is that they tend to be the most reproductive people. -

Last edited by BioFury; 09-03-2016 at 08:44 PM.
BioFury is offline  
 
post #4 of 34 (permalink) Old 09-03-2016, 08:42 PM
Forum Supporter
 
Join Date: May 2014
Posts: 5,507
Re: Financial Advice

You can get a lot more financial advice at this site: www.bogleheads.org.

But to start with, you need:

1. At least 1 years expenses in your emergency fund;
2. To start saving 20% of your pay in a retirement account, so that you will be able to retire some day.

Good luck, and definitely go to the bogleheads site for more detailed information!

Always remember the LD motto: "Sex isn't important!!!"
tech-novelist is offline  
post #5 of 34 (permalink) Old 09-03-2016, 08:55 PM
Member
 
Join Date: Jan 2014
Posts: 914
Re: Financial Advice

Quote:
Originally Posted by candle100 View Post
My DH and I have two debts:

1. 49K mortgage debt: I have to pay about $330/month with 4.875% interest rate.

2. 8K car loan. The payment is $272/month with a very low interest rate.
Who gets a car loan at an interest rate lower than a house mortgage? Is it one of those loans where you paid the car double of what it was worth?

It does not make sense.

Je suis Charlie, Russian Metrojet, Beirut, Paris, Bamako.
Duguesclin is offline  
post #6 of 34 (permalink) Old 09-03-2016, 09:02 PM
Forum Supporter
 
Join Date: May 2014
Posts: 5,507
Re: Financial Advice

Quote:
Originally Posted by Duguesclin View Post
Who gets a car loan at an interest rate lower than a house mortgage? Is it one of those loans where you paid the car double of what it was worth?

It does not make sense.
Nah, that's not unusual.

The last car loan I got was at 1%, in 2008. And I paid less than sticker.

Always remember the LD motto: "Sex isn't important!!!"
tech-novelist is offline  
post #7 of 34 (permalink) Old 09-03-2016, 09:07 PM Thread Starter
Member
 
Join Date: Aug 2016
Posts: 50
Re: Financial Advice

Quote:
Originally Posted by Duguesclin View Post
Who gets a car loan at an interest rate lower than a house mortgage? Is it one of those loans where you paid the car double of what it was worth?

It does not make sense.
We just bought the new car recently. Our old car broke. We only borrowed 9k and paid cash for the rest. When I made my first car payment, the interest amount listed when I checked online was $7.11 for the first payment and only $0.49 for the second payment. The second payment was only two days after the first payment because I set up auto-payment and it automatically took the money after I paid the first one myself. I thought the interest rate was low compare to the house mortgage.
candle100 is offline  
post #8 of 34 (permalink) Old 09-03-2016, 09:09 PM
Member
 
meson's Avatar
 
Join Date: May 2011
Location: Where I pitch a tent
Posts: 1,365
Re: Financial Advice

Quote:
Originally Posted by Duguesclin View Post
Who gets a car loan at an interest rate lower than a house mortgage? Is it one of those loans where you paid the car double of what it was worth?

It does not make sense.
Lots of people do because dealers want to move cars and will offer loans at 1-2%. I have a 2% loan on my new Subaru while my house is at 3.75%.

In the long run you save more money by paying down the longer term mortgage which is at a higher percentage. Effectively you are making 4.875% on money invested to pay down the mortgage. With the car you are saving the percentage rate of the car. However if you have a cash flow limitation paying down the car will accelerate the time when you don't need to pay $272 per month.

So if you are cash strapped now pay the car if not then pay the mortgage for the bigger savings.

I don't want to not live because of my fear of what could happen. - Laird Hamilton
Listen to your spouse!
Fog v. Love
meson is offline  
post #9 of 34 (permalink) Old 09-03-2016, 09:11 PM
Member
 
Legend's Avatar
 
Join Date: Jun 2013
Location: Henderson, TN
Posts: 85
Re: Financial Advice

Pay off your smallest loan first. It will be a weight off your shoulders and it's quicker to reach that goal. You need at least 6 months worth of living expenses as savings for unexpected events. Kids cost about $500 per month per child, depending on healthcare costs. Make sure you have health insurance coverage and don't be afraid to use a midwife instead of a hospital. By paying off all your debt quickly, you will be head and shoulders above most Americans (most of whom are terrible with money and financially illiterate). Debt is a type of bondage whereby you promise your future labor to someone else.
Legend is offline  
post #10 of 34 (permalink) Old 09-03-2016, 09:15 PM
Member
 
Join Date: Jan 2014
Posts: 914
Re: Financial Advice

OP, you should pay the highest interest loan first. It is that simple.


Je suis Charlie, Russian Metrojet, Beirut, Paris, Bamako.
Duguesclin is offline  
post #11 of 34 (permalink) Old 09-03-2016, 09:37 PM
Moderator
 
EleGirl's Avatar
 
Join Date: Dec 2011
Location: New Mexico
Posts: 33,008
Re: Financial Advice

A good book that answers a lot of your questions is:

Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner

It’s a pretty quick read and is a very good book to start with because it simplifies things in a way that the approach is easy to understand, and most importantly easy to carry out.

Now about which bill to pay off. I think it could be argued for either.

Clearly you would save more on interest paying of the mortgage first. But on the other hand, the interest payments on the mortgage are tax deductible.

One of the biggest advantages I see for paying the car off first is that it can be done quickly. That way your monthly bill total is lower. If something happened, like one of you lost your job, you would only have the mortgage payment to make.

And if all goes well, you could put the amount you used to pay on the car payment into savings or add that to the extra principle payment on the mortgage.

There is a balance to achieve between lowering month bills, paying off debt and savings.

Last edited by EleGirl; 09-03-2016 at 10:50 PM.
EleGirl is online now  
post #12 of 34 (permalink) Old 09-03-2016, 09:56 PM
Member
 
meson's Avatar
 
Join Date: May 2011
Location: Where I pitch a tent
Posts: 1,365
Re: Financial Advice

The Athol Kay quote seems put of place since the OP is a woman. What's your point @EleGirl?

I don't want to not live because of my fear of what could happen. - Laird Hamilton
Listen to your spouse!
Fog v. Love
meson is offline  
post #13 of 34 (permalink) Old 09-03-2016, 10:04 PM Thread Starter
Member
 
Join Date: Aug 2016
Posts: 50
Re: Financial Advice

Quote:
Originally Posted by BioFury View Post
Which to pay off first? I'm not sure it really matters. The interest isn't compounding, so the passage of time shouldn't make a difference.

It all depends on what kind of rainy day. Put aside everything you can. When you reach 1 year's worth of expenses, then you can ease back a little bit.

I'm not sure how old you are, but having children when you are financially strapped isn't the best of times. Kids add a lot of stress, and expense. Think of how stressed being in a financial jam sometimes makes you feel, and just imagine feeling like that all the time. As far as how much kids cost, I think $10,000/year is the statistical number. I wouldn't recommend having children until you are debt free.

You're trying to climb out of a hole. And that isn't the time to be digging it even deeper.
I am 27 years old. My Dh is in his 40s. I got married at a very young age and I waited to have a baby until I finished college. I waited again until I found a job. My Dh and I love children so much. We are both working. We always look at other people's children and dream of having our own. We feel so ready to have a baby.

Our parents are complaining about waiting too long to have a grandkid. My parents in law said if I wait till I have enough money, I will never be able to have kids. Our parents offered free babysitting, free new baby crib and baby stuffs, assistance with medical bills (100% for IVF if we have trouble!) and other things. They are very serious. The baby will be a blessing to us. I wish I could wait till we are debt free, but I asked around and most people we know have all kind of debts and still have children. I don't know how they do it, but they said it is manageable.
candle100 is offline  
post #14 of 34 (permalink) Old 09-03-2016, 10:40 PM Thread Starter
Member
 
Join Date: Aug 2016
Posts: 50
Re: Financial Advice

Quote:
Originally Posted by Legend View Post
Pay off your smallest loan first. It will be a weight off your shoulders and it's quicker to reach that goal. You need at least 6 months worth of living expenses as savings for unexpected events. Kids cost about $500 per month per child, depending on healthcare costs. Make sure you have health insurance coverage and don't be afraid to use a midwife instead of a hospital. By paying off all your debt quickly, you will be head and shoulders above most Americans (most of whom are terrible with money and financially illiterate). Debt is a type of bondage whereby you promise your future labor to someone else.
My Dh agrees with you about paying off the smallest loan first. We both have insurance coverage. The baby will have insurance for sure. He/she will be our very first child. I heard it costs like 5k to have a baby in the hospital with insurance. I don't know so we saved about 10k for the baby. We can pay off the 8K car loan right away, but it is too risky because it will decrease our emergency fund. I try not to touch it unless it is absolutely neccessary. The baby fund gives us hope and motivation to work hard. Debts are obligation. It is not fun to work to pay for debts, but it is a must.
candle100 is offline  
post #15 of 34 (permalink) Old 09-03-2016, 10:53 PM
Moderator
 
EleGirl's Avatar
 
Join Date: Dec 2011
Location: New Mexico
Posts: 33,008
Re: Financial Advice

Quote:
Originally Posted by meson View Post
The Athol Kay quote seems put of place since the OP is a woman. What's your point @EleGirl?
Opps, I was using MS Word to write posts to copy/paste in posts because the stupid ads make it almost impossible to type directly in a post box. I accidently copied another post that was in the MS Word file.

I corrected my post. Thanks for calling out my goof.

Last edited by EleGirl; 09-04-2016 at 12:01 PM.
EleGirl is online now  
Sponsored Links
Advertisement
 
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on Talk About Marriage, you must first register. Please enter your desired user name, your email address and other required details in the form below.

Important! Your username will be visible to the public next to anything you post and could show up in search engines like Google. If you are concerned about anonymity, PLEASE choose a username that will not be recognizable to anyone you know.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in









Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.



Thread Tools Search this Thread
Show Printable Version Show Printable Version
Email this Page Email this Page
Search this Thread:

Advanced Search



Similar Threads
Thread Thread Starter Forum Replies Last Post
Advice for a young couple ym96 Long Term Success in Marriage 35 09-05-2016 12:08 PM
What to do? Need advice. Please help. anewstine Going Through Divorce or Separation 17 04-07-2016 10:22 PM
BH writes: My regrets as a 46 year old, and advice to others at a crossroad Truthseeker1 Coping with Infidelity 80 03-31-2016 05:09 AM

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off

 
For the best viewing experience please update your browser to Google Chrome