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How do you manage your budget?

Varmintmist

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Whole life insurance is life assurance where the premium remains fixed for as long as you keep paying it. The catch is stop paying it and you get nothing.
Whole life has a cash value and a low ins payout. May be fixed or variable amount, able to redeem the cash value before death.
Term life is fixed or variable premium fixed amount fixed term. life car insurance. It pays only if you die. When the term is up, it goes away. Your life ins through work is term. As long as you work there and buy it, you are covered X times your base. when you quit, you get nothing back.
 
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Monique

Monique

bounceswoosh
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Annuities are a whole lifeish plan. Depending on how long you live, they can pay off. It is a toss up though. If you put that same amount in the market and leave it alone, you will end up with more and you have control over it in retirement. I dont buy them and dont see where a annuity would be good for me. Run the numbers for yourself.

I don't have to - my FA steered me clear. Not that I was thinking about it, anyway.

Life insurance is a misnomer anyway. It is Income Replacement Insurance. The ONLY reason to have it is if you have dependents that rely on your income and would be in hardship if that income ceased. If you bring home 50K/year, then you want to be able to replace that less what you use so your dependents dont have to worry about feeding themselves or as was mentioned trying to make a mortgage on 1/3 the income and having to sell at a loss and move.The goal is to become self insured, have enough that if you die the dependents will not struggle. That means you have to become net worth well off. Meaning you own a lot less than you owe,

Or, as I called it for the first few months, "blood money." Of course, that wasn't fair. Intel provides it to employees, and it was far more than I expected.
 

Seldomski

All words are made up
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A financial advisor who tries to sell you whole life is a insurance salesman, not a financial advisor. The biggest hint is if the sign over the door says Nationwide, instead of Legg Mason. (or State farm instead of Edward Jones, you get the point) A FA should ask about life ins, and suggest an amount, and thats about it.

Yeah these guys are pretty sneaky. The FA were organized as an LLC with a name that does not imply insurance sales. They sell brokerage products first. Mutual funds of various types. Then, later, they started hyping whole life as an investment vehicle. I couldn't quite understand how it was even legal. You dump all this money into a life insurance policy. The amount above the required premium gets invested into mutual funds. You can borrow against the cash value - taking a loan from yourself?

The benefits they claimed (verbally, not sure if it was actually in writing anywhere):
1) Capital gains were not taxable. Sort of like a Roth IRA. My guess is the investment choices are limited with really bad returns and expense ratios.
2) Added protection from lawsuits. Sort of like your home is protected from suit, life insurance was too.
3) If you die, you forfeit some of the benefits, but why should you care, you're dead?

Only reason I used these FA was my parents have been using them for many years. I don't want to think about the amount of $$ they have swindled from my parents over the decades... It seems to me once you buy into one of these whole life policies, access to that investment requires the 'FA' to facilitate the transaction. So you become married to the FA. Great for the FA. Not for me.
 

fatbob

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Whole life has a cash value and a low ins payout. May be fixed or variable amount, able to redeem the cash value before death.
Term life is fixed or variable premium fixed amount fixed term. life car insurance. It pays only if you die. When the term is up, it goes away. Your life ins through work is term. As long as you work there and buy it, you are covered X times your base. when you quit, you get nothing back.

Ahh I see I should refrain from commenting on such technical matters because our market in such products can have some important differences. Apologies.
 

Varmintmist

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Ahh I see I should refrain from commenting on such technical matters because our market in such products can have some important differences. Apologies.
No problem. The Ins industry has renamed whole life 50 times to repackage the same turd. Most people dont know what they are getting OR that they could do better if they did the math.
 

Varmintmist

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I think it's always hard to get going on this. Even now, my FICO gets dinged with two seemingly contradictory flags:

  • Too few accounts paid as agreed (and I pay them off every month, so it just means too few accounts, there's no issue with them being paid).
  • Too many accounts with balances. (Which apparently means that my three cards all have balances)

So apparently it means they want me to get MORE cards, but don't have balances on them?

I don't call and bitch about these flags because I have a mid+800 score, so who cares? But such insanity is hard to combat when you are first starting out.
FICO only goes to 850 so with a mid 800's you have what they give you.

FYI for the FICO chasers out there, Fico ONLY scores debt. That you are in debt, that you pay debt, and that you stay in debt. You can have a 20 mil net worth and have a 100 fico score.
 

Sibhusky

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FICO only goes to 850 so with a mid 800's you have what they give you.
Actually, I have two different FICO scores at two different banks. One is scored with a maximum of 850, and the other is scored with a maximum of 900. If you go to the FICO site itself you'll see there are all kinds of FICO scores. Some apparently related to total debt, some to credit card debt, some for car loans, etc. Why the banks are drawing in different types of scores, I don't know. Neither is the bank with my mortgage and I haven't had a car loan in decades. Both claim to be using score 8, but they then provide different ranges. The one with the higher range says it's coming from Equifax. No matter. I can get a loan if I want one. But it takes a while to be in that position and my point was it's hard when you first start out.
 
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scott43

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Dunno how they are down there..but credit scorers here are a joke. Debt from different people on your score..missing loans..and you have to pay to fix it yourself. Stellar.
 

jack97

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My FICO scores have been in the mid 800s, never could get it maxed at 850 but still in the exceptional range. Most recently, within the past ten years, as a single parent, I have been able to refinance my house twice when interest rates were favorable and able to get a used car loan in the low 2% range.
 

Varmintmist

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Actually, I have two different FICO scores at two different banks. One is scored with a maximum of 850, and the other is scored with a maximum of 900. If you go to the FICO site itself you'll see there are all kinds of FICO scores. Some apparently related to total debt, some to credit card debt, some for car loans, etc. Why the banks are drawing in different types of scores, I don't know. Neither is the bank with my mortgage and I haven't had a car loan in decades. Both claim to be using score 8, but they then provide different ranges. The one with the higher range says it's coming from Equifax. No matter. I can get a loan if I want one. But it takes a while to be in that position and my point was it's hard when you first start out.
Nope, FICO maxes at 850. There are other systems getting on the "We need something because we dont understand how to live without debt" scores that are industry specific, but FICO is 850 max. https://www.investopedia.com/ask/answers/07/fico-score.asp
 

Sibhusky

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You apparently didn't bother to read my link. Which was from myFico, part of FICO itself. Thanks for the courtesy.

It includes the following paragraph:

"FICO® Auto Scores and FICO Bankcard Scores have these aspects in common: Many lenders may use these scores instead of the base FICO® Score. It is up to each lender to determine which credit score they will use and what other financial information they will consider in their credit review process. The versions range from 250-900 (compared to 300-850 for base FICO® Scores) and higher scores continue to equate to lower risk."

I suspect that one of my scores is the basic FICO 8 score and the other is my FICO Bankcard Score 8. BOTH FICO, but with different ranges. Reading further on that page will show that they are now touting a score 9.
 
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surfsnowgirl

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One thing i just did to help my budget was to trade in my 7 year old wrangler. I loved it but in recent years we've been traveling to vermont more and more and with big gas consumption and very uncomfortable ride, it just wasn't practical any longer. I'll get another Jeep one day as a second car when we aren't on the road so much.

My new crosstrek gets insane gas mileage, is a plush and very comfortable ride with lots of bells and whistles. Got a great deal because it was an 18 model, it was the last day of the month and they wanted it gone.

My budget is smiling because i have a cheaper monthly payment and get amazing gas mileage. Plus, knock on wood since i have a brand new car my vehicle maintenance for a good long time will simply be oil changes and tire rotations.

I'm now in a much better position to pay off my credit cards and get some money back in the bank.
 
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Monique

Monique

bounceswoosh
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I thought I undid a ton of the budget damage of the last couple of months - but now I realize that a lot of the perceived deficit was actually business travel that got reimbursed. So I guess I've stayed about even after going over budget one month. Meh. But at least I'm staying even?

Bike repairs after a big fall ate up some of my August budget. It occurs to me that if I hadn't been maxed out of pocket for health insurance, that fall would potentially have been a lot more expensive after the x rays and MRIs. In this case, it was bad enough that I definitely would have gotten the MRI, even though I now know it didn't show anything (that, itself, was information). Hm. It's not just bikes that cost money.

I'll be getting a decent chunk of change for Eric's aviation equipment - headsets and miscellany - from his flight instructor. I MIGHT have gotten more from a stranger, but maybe not, and I would have had to sell each item individually, and it wouldn't have gone to someone with the personal connection. That's all going into the emergency fund.
 

socalgal

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My favorite on line source for financial info is " Mr. Money Mustache" a guy out of Longmount,Colo who preaches stoicism. Great on line group of folks with a passion for money very much like the Pugski crew has for skiing..

Their tagline - Early retirement thru badassity.

http://www.mrmoneymustache.com/blog/
I just wanted to say thank you for this link. I checked it out soon after you posted and it has been eye-opening, encouraging, and even "life-changing." I especially enjoy and utilize the forums. Thank you!
 

pete

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My FICO scores have been in the mid 800s, never could get it maxed at 850 but still in the exceptional range. Most recently, within the past ten years, as a single parent, I have been able to refinance my house twice when interest rates were favorable and able to get a used car loan in the low 2% range.

perhaps mentioned but it affects some folks insurance rates too, so car and home may be lower.

I shopped around a bit for Car/Home insurance last year, called my agent (yeah, I still use one knowing he likely gets a % .. but it's way down for him from years back) and with questions and numbers I got a reduction which led to my staying.

On odd side note, guy I worked with had another insurance company that was going to raise his rates due to 2 claims not his fault - his car being hit in parking lots 2ce in 1 yr. He used to be an adjuster and was aghast of this, in conversation the his adjuster suggested just getting a new policy and keep same lower rate. Seems in considering him as "new" they overlook the two claims not his fault.
 

RumbaRockette

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One thing that helped my budget:

Moving from southern California to Colorado. My house payment halved, my property taxes are now 1/5th, and my general cost of living for everything else is about 75 percent of what it was in SoCal. I do miss the weather, but I don't miss almost everything else. Denver is a better airport than LAX or SNA anyway.

I keep a spreadsheet that generally tracks my budget. I try to save a large portion of my income as I'm currently single with no kids and few liabilities.
 

RumbaRockette

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One thing that helped my budget:

Moving from southern California to Colorado. My house payment halved, my property taxes are now 1/5th, and my general cost of living for everything else is about 75 percent of what it was in SoCal. I do miss the weather, but I don't miss almost everything else. Denver is a better airport than LAX or SNA anyway.

I keep a spreadsheet that generally tracks my budget. I try to save a large portion of my income as I'm currently single with no kids and few liabilities.

3 days after I posted this - I got reconnected with an old dance partner. I'm moving back to CA now by the end of March.

Good thing my house didn't sell!
 
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Monique

Monique

bounceswoosh
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3 days after I posted this - I got reconnected with an old dance partner. I'm moving back to CA now by the end of March.

Good thing my house didn't sell!

Make plans, and the gods laugh...
 
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Monique

Monique

bounceswoosh
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Update from the OP:

I'm now a year out from my husband's death, and I'm no longer panicked about money. So far, I've been able to stay within the budget and guidelines that my FA gave me - something that seemed impossible at the start. I continue to use my simplistic spreadsheet - every month, it starts with my budget, and I subtract everything I spend, shooting for a positive number at the end of the month. I am starting to see that categories would be useful, but for now, this works for me.

I have a financial advisor, and he takes a percentage. I've decided it's worth it to me because, honestly, I detest dealing with financial instruments and tracking the market. This way, I just have to sign some papers now and then, or verbally approve of something. That percentage buys me peace of mind, and it allows me to invest my mental and emotional energy elsewhere.

For a variety of reasons, I haven't skied much this season. My ski condo lease is up in July, and I've asked my landlords if they'd be interested in ending it early. My FA tells me that if I don't buy or rent a mountain home, I can retire 5 years earlier than planned, and with greater certainty (ie, monte carlo simulations are even more favorable). I love the mountains, but I-70 is getting worse and worse, my older dog isn't doing well with the drive, and I have a lot going on in the front range. Maybe holding off, investing Eric's life insurance, and retiring early to a less crowded part of the Rockies isn't the worst plan. I hear that SOME people don't even have a ski condo at all, and are fairly happy with their lives ...
 

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