Debt Dumpers - 2017

[DLgal]

We're suddenly weighing a new car purchase too. We knew we needed to take it in for brakes (squeaking is driving me crazy!), but as of Wednesday night...the key sometimes won't go into the ignition and even if you can get it in there, 9 times out of 10 it won't turn. We tried two different keys (one of which is never used), same thing. They work in the doors. Wheel wasn't locked, googled everything...looks like we'd need the ignition replaced which could run us, along with the breaks, upwards of $1500. The car is almost 10 years old and we barely fit the car seats in it as it is (we have to have our seats pulled WAAAAAY UP) so a new car was on the horizon anyway. Now we just have to (quickly) figure out if we want to dump money into the old car, or use that money as a downpayment on a new one.

Ugh, cars!

Yeah, at some point you have to weigh the cost of keeping an older car vs. the convenience and safety of a new one. I knew if we kept the Fit another year, it would be worth nothing at that point, and who knows how much money we would have spent on maintenance and fixing things that might break over the next 25-30k miles.

I had already told DH that any repairs/maintenance over $500 on the old car would have us contemplating trading it in. At that point, having "no car payment" doesn't mean a lot if we keep having to shell out $$$$ for repairs. $1500 was a no go for me. That was 50% of the car's value!

 

[MrsTurnerLovesDisney]

@Jen and Ashwin

Thanks for the tips and link for the 529 I seriously had no idea they were that easy to obtain. This is the kind of info they need to pass out at the Dr office.

I was able to get an application and will be sending it in next week to start our DD (2 1/2) 529. I was about to start a monthly pay roll deduction of $20 to her little savings account but this has better interest. I have her in the most aggressive growth fund. I'm not going to put a ton into til our debt gets paid down and our retirement gets a bit more settled. Using the calculator and adding in $100 a month in a few years we should get close to $15K by the time she needs it so that is a nice chunk of change.

 

[DLgal]

@Jen and Ashwin

Thanks for the tips and link for the 529 I seriously had no idea they were that easy to obtain. This is the kind of info they need to pass out at the Dr office.

I was able to get an application and will be sending it in next week to start our DD (2 1/2) 529. I was about to start a monthly pay roll deduction of $20 to her little savings account but this has better interest. I have her in the most aggressive growth fund. I'm not going to put a ton into til our debt gets paid down and our retirement gets a bit more settled. Using the calculator and adding in $100 a month in a few years we should get close to $15K by the time she needs it so that is a nice chunk of change.

Most 529 plans have a minimum required monthly contribution, so make sure you can meet that minimum. Ours is $50/month. We have been putting in $100/month since each of our kids was born, plus part of their Christmas and Birthday money over the years.

My oldest is 12 (almost 13) and has $27k and my youngest is 11 and has $26k. It grows fast! The market downturn in 2008 was a boom for those funds. The return rates have been close to 20% on both accounts...we also have them in aggressive growth portfolios.

 

[Jen and Ashwin]

Most 529 plans have a minimum required monthly contribution, so make sure you can meet that minimum. Ours is $50/month. We have been putting in $100/month since each of our kids was born, plus part of their Christmas and Birthday money over the years.

My oldest is 12 (almost 13) and has $27k and my youngest is 11 and has $26k. It grows fast! The market downturn in 2008 was a boom for those funds. The return rates have been close to 20% on both accounts...we also have them in aggressive growth portfolios.

Actually, most of them don't have any required contributions at all. They are really designed to be ultra flexible for parents to make contributions however best fits their needs. What state plan do you have?

I plan to open a 529 for baby right away so that anyone who wants to contribute for birthday/holiday or other occasions can do it. I just have to wait until we have a social security number for her. I would like to start contributing right away, but for the first several years it will probably be a modest amount until we are no longer paying for day care. Then I hope to eventually up our contributions to $500 per month per child.

 

[Jen and Ashwin]

@Jen and Ashwin

Thanks for the tips and link for the 529 I seriously had no idea they were that easy to obtain. This is the kind of info they need to pass out at the Dr office.

I was able to get an application and will be sending it in next week to start our DD (2 1/2) 529. I was about to start a monthly pay roll deduction of $20 to her little savings account but this has better interest. I have her in the most aggressive growth fund. I'm not going to put a ton into til our debt gets paid down and our retirement gets a bit more settled. Using the calculator and adding in $100 a month in a few years we should get close to $15K by the time she needs it so that is a nice chunk of change.

I am so glad that you found the link helpful. Since I plan to open an account for the baby asap, I have been doing my research. I found that website to be really helpful.

 

[DLgal]

Actually, most of them don't have any required contributions at all. They are really designed to be ultra flexible for parents to make contributions however best fits their needs. What state plan do you have?

I plan to open a 529 for baby right away so that anyone who wants to contribute for birthday/holiday or other occasions can do it. I just have to wait until we have a social security number for her. I would like to start contributing right away, but for the first several years it will probably be a modest amount until we are no longer paying for day care. Then I hope to eventually up our contributions to $500 per month per child.

Our plan is the Upromise 529. I think it is through Nevada? Not really sure, although it doesn't matter. We never lived in NV. I don't even know if our state had any plans back then. Or maybe Upromise was just heavily marketed at that time so that is what we went with.

In order to set up automatic contributions, it has to be $50/month. Maybe there is no minimum required contribution if you just do the transfer monthly?

In any event, my kids probably won't go to college, but we will convert the money to an ABLE account if necessary. I'm glad we started saving early, though. We never intended to fully fund college (we just can't afford that) but this is a nice chunk of change we have for whatever higher education they end up needing (trade school, community college, etc).

 

[Jen and Ashwin]

Our plan is the Upromise 529. I think it is through Nevada? Not really sure, although it doesn't matter. We never lived in NV. I don't even know if our state had any plans back then. Or maybe Upromise was just heavily marketed at that time so that is what we went with.

In order to set up automatic contributions, it has to be $50/month. Maybe there is no minimum required contribution if you just do the transfer monthly?

In any event, my kids probably won't go to college, but we will convert the money to an ABLE account if necessary. I'm glad we started saving early, though. We never intended to fully fund college (we just can't afford that) but this is a nice chunk of change we have for whatever higher education they end up needing (trade school, community college, etc).

I misunderstood what you meant by minimum contributions. So for Michigan's plan, if you make a one time contribution, the minimum is $25. If you set up automatic payments, it is $15 per pay period. But it isn't required that someone sets up automatic payments in order to have an account. Most of the plans in other states have similar minimums. I looked at the Nevada Upromise plan and it actually says the plan has the same minimums, so it might have gone down since you initially started yours accounts. I know they want to make these as accessible as possible, so for some people savings just $15 per month might be all they can manage, but any savings is better than none.

 

[bcwife76]

Brutal Homeowning is really a pain sometimes...I know from experience that refrigerant is very expensive!

We have our taxes .included in our mortgage that way we don't have to pony up thousands once a year- maybe look at that next time you do your mortgage?

Fingers crossed on the estate soon

Yep, refrigerant is $100 a pound and we need about 8 pounds of it! I got a quote from the furnace company today, it's going to be $2800 + tax because they need to order the parts from the US (and that will take 3-4 weeks to arrive). However, I'm waiting for another call back from them because the woman I spoke with didn't know if that included the $800 for refrigerant or not! I also asked her to price out a new system for us, just to see what the cost would be repair vs replace but I'm assuming it will be $$$$$. Ugh.

We don't have a mortgage any longer, we paid it off in October So yeah, can't do it monthly with that. I could pay it monthly directly with the city but seeing as though we now split the cost of the house taxes with my mom it seems easier to just pay at once.

 

[DnA2010]

Yep, refrigerant is $100 a pound and we need about 8 pounds of it! I got a quote from the furnace company today, it's going to be $2800 + tax because they need to order the parts from the US (and that will take 3-4 weeks to arrive). However, I'm waiting for another call back from them because the woman I spoke with didn't know if that included the $800 for refrigerant or not! I also asked her to price out a new system for us, just to see what the cost would be repair vs replace but I'm assuming it will be $$$$$. Ugh.

We don't have a mortgage any longer, we paid it off in October So yeah, can't do it monthly with that. I could pay it monthly directly with the city but seeing as though we now split the cost of the house taxes with my mom it seems easier to just pay at once.

Awesome! I think we still have 350K on ours I think our taxes are 4K is- don't want to pony that up every year.. but it is what it is right, gotta live somewhere

Hoping the $800 is included for you

 

[Eureka]

Yes, the university's matching is pretty awesome. But everything is a trade off. I could make a lot more money in private practice than I do at the university, even when you count in my retirement match. But then again, I work 40 hours a week instead of 80 hours a week, so I don't hate my life either.

I work for a non profit and we get amazing benefits, including 10% of our salary matched in our retirement accounts and although I max out, the minimum is only 2.5%. I started my job the same month as @Jen and Ashwin's DH and only had to wait three months before I was eligible for the matching.

 

[ruadisneyfan2]

@Jen and Ashwin

Thanks for the tips and link for the 529 I seriously had no idea they were that easy to obtain. This is the kind of info they need to pass out at the Dr office.

I was able to get an application and will be sending it in next week to start our DD (2 1/2) 529. I was about to start a monthly pay roll deduction of $20 to her little savings account but this has better interest. I have her in the most aggressive growth fund. I'm not going to put a ton into til our debt gets paid down and our retirement gets a bit more settled. Using the calculator and adding in $100 a month in a few years we should get close to $15K by the time she needs it so that is a nice chunk of change.

Not to burst your bubble but $15k is what ds20's college cost for 1 semester, not including room & board which was around $10k/year. Yes, there are cheaper options but not all schools offer the same majors and this was relatively close to home (1 hour drive) and offered what he wanted.
I would expect it to at least double in 15 years.
We looked into Rutgers and the cost more than quadrupled since I attended in the mid 80's.
Still was cheaper than the school ds chose but it didn't offer his desired major.

For babies being born now, I would venture to guess $200k would be good for kids 20 yrs from now for 4 years of undergrad.

Just saying...

 

[DLgal]

Not to burst your bubble but $15k is what ds20's college cost for 1 semester, not including room & board which was around $10k/year. Yes, there are cheaper options but not all schools offer the same majors and this was relatively close to home (1 hour drive) and offered what he wanted.
I would expect it to at least double in 15 years.
We looked into Rutgers and the cost more than quadrupled since I attended in the mid 80's.
Still was cheaper than the school ds chose but it didn't offer his desired major.

For babies being born now, I would venture to guess $200k would be good for kids 20 yrs from now for 4 years of undergrad.

Just saying...

Eh...that amount is close to impossible for most families to save up in 18 years. With what we have saved NOW (kids are 13 and 11), we could pay tuition, fees, and books for almost 2 years at any University of CA. By the time they are college aged, I expect we will have enough to cover all 4 years. Housing will be what loans are for. My parents took out a Plus loan and I had a student loan and also worked almost full time while in school (basically, we split the loans because my parents didn't have ANY college savings money for me). I left school $15k in debt from a UC...not bad at all.

Of course, if they choose trade school, we will have enough for everything, which is nice.

I don't know what school your kid chose, but $15k per semester is insane. I hope that major results in a well paying job.

I also think college tuition is a bubble that will burst sometime in the near future. It's simply unrealistic and unsustainable.

 

[DnA2010]

I work for a non profit and we get amazing benefits, including 10% of our salary matched in our retirement accounts and although I max out, the minimum is only 2.5%. I started my job the same month as @Jen and Ashwin's DH and only had to wait three months before I was eligible for the matching.

Is that on top of a pension/pension plan?

 

[Eureka]

Is that on top of a pension/pension plan?

Technically I think it's a 403(b) (TIAA). As long as I put at least 2.5% of mine in, they'll throw in an additional 10% which does not count toward my tax-deferred limit. So it's not on top of another plan, this IS the plan. Is that what you were asking?

On another topic someone mentioned, we have 529s for the kids and the minimum automatic deposit is $25. When I lost my job last year, we had to cut back from our current deposit to the minimum for a while.

 

[ruadisneyfan2]

Eh...that amount is close to impossible for most families to save up in 18 years. With what we have saved NOW (kids are 13 and 11), we could pay tuition, fees, and books for almost 2 years at any University of CA. By the time they are college aged, I expect we will have enough to cover all 4 years. Housing will be what loans are for. My parents took out a Plus loan and I had a student loan and also worked almost full time while in school (basically, we split the loans because my parents didn't have ANY college savings money for me). I left school $15k in debt from a UC...not bad at all.

Of course, if they choose trade school, we will have enough for everything, which is nice.

I don't know what school your kid chose, but $15k per semester is insane. I hope that major results in a well paying job.

I also think college tuition is a bubble that will burst sometime in the near future. It's simply unrealistic and unsustainable.

Yes, it is ridiculous but in NJ even a state school is around $25k/year. Ds's school was $40k but they offered him $11k/yr in scholarship money which brought it down to around $29k. For a difference of a couple thousand, he chose the beautiful location, 1 mile to the ocean and offering the major he wanted, software engineering. This field pays well and very in demand so I felt it was worth it. Unfortunately, by the end of the first semester, he changed his mind about going into SE and then going to college period. Academically he is quite capable but he was going through some personal issues and withdrew his enrollment.
I was upset at first until I talked to a lot of friends, neighbors, coworkers, etc who said their kids changed their mind in their 3rd and 4th years and I should be grateful to only have 1 semester to choke down.
Still, I thought he was set for life but life isn't so predictable at times.

Anyway, maybe other states are not so expensive. It doesn't surprise me; our taxes are the highest in the nation.

 

[AmyAnne]

Not to burst your bubble but $15k is what ds20's college cost for 1 semester, not including room & board which was around $10k/year. Yes, there are cheaper options but not all schools offer the same majors and this was relatively close to home (1 hour drive) and offered what he wanted.
I would expect it to at least double in 15 years.
We looked into Rutgers and the cost more than quadrupled since I attended in the mid 80's.
Still was cheaper than the school ds chose but it didn't offer his desired major.

For babies being born now, I would venture to guess $200k would be good for kids 20 yrs from now for 4 years of undergrad.

Just saying...

Having sent four kids to college in the past ten years, I can say that figuring out the actual cost of a college for a particular kid is extremely complicated. The starting point is what the college charges (tuition + room and board). But two very important additional factors are merit aid (scholarships based on qualifications like SAT scores) and need-based aid (aid based on a family's ability to pay). We learned that what appeared to be the most expensive schools sometimes turned out to be not that expensive because of merit aid. And once we had one kid in college, what we were expected to pay for subsequent kids decreased (sometimes all this meant was that we were offered more loans, but occasionally it meant more grant money).

My bottom-line advice to anyone with kids who are applying to colleges in the next few years is to start researching the financial aid policies of possible schools now, and certainly before your kid applies. It's not hard to figure out what kind of aid a school offers but it can be time-consuming. I really have no idea what would be best for someone with very young kids. Certainly saving for college is never a bad idea but there are so many variables that you just can't know until a kid is older.

 

[ruadisneyfan2]

Having sent four kids to college in the past ten years, I can say that figuring out the actual cost of a college for a particular kid is extremely complicated. The starting point is what the college charges (tuition + room and board). But two very important additional factors are merit aid (scholarships based on qualifications like SAT scores) and need-based aid (aid based on a family's ability to pay). We learned that what appeared to be the most expensive schools sometimes turned out to be not that expensive because of merit aid. And once we had one kid in college, what we were expected to pay for subsequent kids decreased (sometimes all this meant was that we were offered more loans, but occasionally it meant more grant money).

My bottom-line advice to anyone with kids who are applying to colleges in the next few years is to start researching the financial aid policies of possible schools now, and certainly before your kid applies. It's not hard to figure out what kind of aid a school offers but it can be time-consuming. I really have no idea what would be best for someone with very young kids. Certainly saving for college is never a bad idea but there are so many variables that you just can't know until a kid is older.

It was jaw dropping for us for sure. We thought we had a pretty good amount saved up. Lol.

 

[Eureka]

Yes, it is ridiculous but in NJ even a state school is around $25k/year. Ds's school was $40k but they offered him $11k/yr in scholarship money which brought it down to around $29k. For a difference of a couple thousand, he chose the beautiful location, 1 mile to the ocean and offering the major he wanted, software engineering. This field pays well and very in demand so I felt it was worth it. Unfortunately, by the end of the first semester, he changed his mind about going into SE and then going to college period. Academically he is quite capable but he was going through some personal issues and withdrew his enrollment.
I was upset at first until I talked to a lot of friends, neighbors, coworkers, etc who said their kids changed their mind in their 3rd and 4th years and I should be grateful to only have 1 semester to choke down.
Still, I thought he was set for life but life isn't so predictable at times.

Anyway, maybe other states are not so expensive. It doesn't surprise me; our taxes are the highest in the nation.

Yup, University of Maryland is upward of $25k for instate tuition/room and board etc. as well. My oldest just finished his sophomore year of high school so suddenly this is all becoming more real. I am already starting to look at what some of the more off the beaten path scholarship opportunities are. I'm sure he will find out about a lot of the traditional ones next year at school. He does well and especially tests well so we're hoping for some merit based money.

I hope your DS finds a new path that he is happy with. I'm sure you hate seeing him unsure about things.

 

[Tygerlilly]

I just don't want the girls to end up with thousands of dollars in loans after they graduate. It's just one thing I don't want them to have to worry about as they're finally getting out in the world. I never went to college because my parents had zero savings for me, I couldn't get grants, and I knew they'd never be able to pay the loans off. I couldn't put them in that situation.
Then again, if they decide to take a year in between hs and college to travel, I'm 100% for that. I just don't want them to struggle like I did.

 

[ruadisneyfan2]

Yup, University of Maryland is upward of $25k for instate tuition/room and board etc. as well. My oldest just finished his sophomore year of high school so suddenly this is all becoming more real. I am already starting to look at what some of the more off the beaten path scholarship opportunities are. I'm sure he will find out about a lot of the traditional ones next year at school. He does well and especially tests well so we're hoping for some merit based money.

I hope your DS finds a new path that he is happy with. I'm sure you hate seeing him unsure about things.

Yes, I do. He is so brilliant and it kills me he works PT scooping ice cream and it's seasonal at that. My only hope is that working a crappy job for min wage helps him see how important it is to further his knowledge and get SOME kind of job skills.
He is considering joining the Navy. Dh says of all the military branches, that is probably the safest and there are things he can go to school for there that can transfer into civilian world.
Omg, the worrying never ends.

My younger ds, still in HS, wants no parts of college and says he wants to be a plumber. My BIL is a contractor and while out to dinner last night he told me when he needs a plumber on a job, he pays $125/hr.
Zoinks!
The good thing about that is once he is accepted into an apprenticeship, he gets paid to work and attend classes. Pay is low in the beginning of course but still way higher than min wage and we don't end up with loans.