[quote]Dr. Pangloss wrote:
I would want to make sure I had some kind of declared income, lest the IRS wonder how you can afford your rent, car payment, and trackable expenses on little or no income.[/quote]
Well, thats obvious.
What else would deduct the interest rates from?[/quote]
Do you mean deduct, in the sense of taxable income? Because in the States auto interest is not tax deductible.
[/quote]
If you buy your car with your home equity line it is.
[quote]Dr. Pangloss wrote:
I would want to make sure I had some kind of declared income, lest the IRS wonder how you can afford your rent, car payment, and trackable expenses on little or no income.[/quote]
Well, thats obvious.
What else would deduct the interest rates from?[/quote]
Do you mean deduct, in the sense of taxable income? Because in the States auto interest is not tax deductible.
[/quote]
Not even if it is mainly used for business?
[/quote]
You have to file a “business return” in that case, which can be a simple schedule C. However, you’d now be responsible for the employer’s portion of SS & Medcare so there are tradeoffs.
I’ve taken myself from about $26k worth of debt down to about $9k in the last year thanks to selling off a car, paying off a credit card, and living more frugally. I bought a house that is substantially cheaper than renting and since it was through a program designed for people in my income bracket it’s brand new with warranty coverage for just about anything that could go wrong. Purchasing things for the house has hurt me a little bit as of some of the repairs on the vehicle.
I am also now contributing to my 401k at 6% and to the employee stock program at my new company at 6%. I’m also busting my ass at work to claim a position I hope to have before the year is out with a decently large pay jump. The game plan for me is essentially the Dave Ramsey model- I snowball all of my debts. Until I started here about 3 months ago, I wasn’t contributing anything and all my money was going towards my cc but I found I wasn’t able to pay off debt quick enough and I wanted to make sure I was prepping for retirement. Now that the $90 cc minimum payment is gone I can contribute that to 1 of the 2 cc still lingering and then take care of paying off the rest of my car (I had to take a loan just to be able to purchase a $4000 car). Then I will work on building up a 3-6 month cushion
[quote]Dr. Pangloss wrote:
Lot’s of great info above. I would just add, “never borrow to purchase a depreciating asset”.*
unless you’re using the asset to make a living.
[/quote]
Right, a new car purchase with cash is even bad. A new car purchase under financing is worse. Rather a 2 year lease return purchase with cash is the best bet. [/quote]
A “new car” anything is bad.
Purchase a 3 year old car and let someone else take the significant depreciation hit.
[/quote]
I have been doing this for years. My new vehicle I waited and searched for 18 months until I found the right deal.
[quote]coolnatedawg wrote:
I’ve taken myself from about $26k worth of debt down to about $9k in the last year thanks to selling off a car, paying off a credit card, and living more frugally. I bought a house that is substantially cheaper than renting and since it was through a program designed for people in my income bracket it’s brand new with warranty coverage for just about anything that could go wrong. Purchasing things for the house has hurt me a little bit as of some of the repairs on the vehicle.
I am also now contributing to my 401k at 6% and to the employee stock program at my new company at 6%. I’m also busting my ass at work to claim a position I hope to have before the year is out with a decently large pay jump. The game plan for me is essentially the Dave Ramsey model- I snowball all of my debts. Until I started here about 3 months ago, I wasn’t contributing anything and all my money was going towards my cc but I found I wasn’t able to pay off debt quick enough and I wanted to make sure I was prepping for retirement. Now that the $90 cc minimum payment is gone I can contribute that to 1 of the 2 cc still lingering and then take care of paying off the rest of my car (I had to take a loan just to be able to purchase a $4000 car). Then I will work on building up a 3-6 month cushion
[/quote]
Dave is the man. I still can’t belive how money problems can just go away with his plan. Plus if your wife is on the budget and on board life is happier. It’s phenomenal how much better a relationship goes when you are not fighting over who spent what and why. It’s all clear. You both have a personal budget you stick to vs trying to spend the money while it’s there forcing the other partner to get resentful.
[quote]beachguy498 wrote:
I started with the base IRA 6% contribution and every time I got a raise, I bumped it up.
[/quote]
This, to me, is one of the easiest ways to help yourself financially. The software our HR department uses allows you to automatically increase your 401(k) contribution at the beginning of each year. So every Jan 1 my contribution automatically goes up 1%. I don’t notice the difference because typically our increase also go into effect Jan 1. Even if I only get the standard increase of 3% my paycheck still goes up as does my 401(k). I think I’m at 12% or 13% now [most of it is a traditional 401(k) a few % points are a Roth 401(k)]
The only issue is if you will go over the contribution limitations, which is unfortunately a problem I don’t have.
[quote]usmccds423 wrote:
I’ve never bought a car with the intent to do anything other than to run it into the ground, is that not what most people do?[/quote]
No most keep up with the Jones’s and are upside down
[quote]usmccds423 wrote:
I’ve never bought a car with the intent to do anything other than to run it into the ground, is that not what most people do?[/quote]
No most keep up with the Jones’s and are upside down [/quote]
Hmmmm, I didn’t realize that was the majority. Why not just lease then? Personally I think it’s stupid to lease or rent just about anything (if you can avoid it), but I also think it’s dumb to buy a new car every 3 years.
[quote]usmccds423 wrote:
I’ve never bought a car with the intent to do anything other than to run it into the ground, is that not what most people do?[/quote]
No most keep up with the Jones’s and are upside down [/quote]
Hmmmm, I didn’t realize that was the majority. Why not just lease then? Personally I think it’s stupid to lease or rent just about anything (if you can avoid it), but I also think it’s dumb to buy a new car every 3 years. [/quote]
Dude there are actual places called Rent A Tire http://www.rentatire.com/
We live in a society were people will finance tires and wheels and you wonder about the majority being upside down on vehicles?
[quote]Derek542 wrote:
Realistically what should someone be putting in?
Say at 40 years old with on average 25 more years of work? [/quote]
The maximum you can afford. Especially because you’ve lost so many years of compounding interest.
Imo the second goal a person should have (after creating an emergency fund) is to max out their 401(k). [/quote]
I agree just wondering what other people are doing.
this is not what I did, I have a slightly different plan that I did.
Not that you shouldn’t be doing this, but all this is the reason the economy sucks (in some respects) right now. Everyone (including big and small businesses) are cleaning up their balance sheets after the mess from 2008+.
Now that I’m done making Krugman’s “lets print money” argument for him, I’m going to go slap myself for even beginning to side with that bastard.
[quote]usmccds423 wrote:
I’ve never bought a car with the intent to do anything other than to run it into the ground, is that not what most people do?[/quote]
No most keep up with the Jones’s and are upside down [/quote]
Hmmmm, I didn’t realize that was the majority. Why not just lease then? Personally I think it’s stupid to lease or rent just about anything (if you can avoid it), but I also think it’s dumb to buy a new car every 3 years. [/quote]
Dude there are actual places called Rent A Tire http://www.rentatire.com/
We live in a society were people will finance tires and wheels and you wonder about the majority being upside down on vehicles? [/quote]
I know people do this stuff, I just didn’t realize so many did.
[quote]countingbeans wrote:
Not that you shouldn’t be doing this, but all this is the reason the economy sucks (in some respects) right now. [/quote]
True. I’m more concerned about the inevitable post social security era than our current economic climate. This will probably make me sound like a dick, but I stayed employed through the recession (have actually taken several steps upward) and I don’t foresee that changing based on my current and expanding skill set.
[quote]Derek542 wrote:
[
Now what about retirement?
Realistically what should someone be putting in?
Say at 40 years old with on average 25 more years of work? [/quote]
Check this out…assume a 10-12% return for mutual funds. I’d guess 1,000 per month will get you comfortable. If you pull 8% out at retirement a year you should still be growing the nest egg.
[quote]countingbeans wrote:
Not that you shouldn’t be doing this, but all this is the reason the economy sucks (in some respects) right now. [/quote]
True. I’m more concerned about the inevitable post social security era than our current economic climate. This will probably make me sound like a dick, but I stayed employed through the recession (have actually taken several steps upward) and I don’t foresee that changing based on my current and expanding skill set. [/quote]
/ignorance
I haven’t ever read or really researched the social security timebomb that people claim but are people really saying that all the SS money I am paying out per paycheck aren’t going to be available to me when it comes time for me to utilize it? Who’s fucking pocket did I line then?!
