Post by borinquen57 on Dec 9, 2018 11:04:42 GMT -5
PDQ as I will be deleting later...
So, my credit is shit, super low 600s. I'm towards the end of a divorce (finalizing 12/21) and during the divorce process, STBXH decided to stop paying the mortgage. At the time I had just gone back to work as a sub and wasn't able to pay the mortgage in full and we didn't have a finalized financial agreement through the courts. I'm currently working full-time and working with the mortgage company on a modification. I've brought down my 3 CCs down to zero, although the limits are quite small. I do charge a small amount every month, then pay it off entirely. I use YNAB religiously and I'm working on building my savings. I receive alimony, child support, I will be awarded the house/equity, and the entirety of his deferred comp. If the modification doesn't work, I plan on using some of the money to bring the house completely current, I really want to work to keep the house so I can sell as soon as I am able.
Last month, I took out a small holiday loan ($1200 at 16%) that my credit union offers as a means of adding more credit to my history since it's so poor. Starting in January, they will take the payments out each month ($101) and I plan on paying at least another $100-$200 to pay it off early. I've already paid an additional $100 towards it. I feel like my credit is so fragile that I need to make decisions very carefully at the time the loan seemed like a good idea but now I'm not so sure if it even helps at all. Should I just go ahead and pay off the loan altogether?
I'm not comfortable posting my budget but any advice about the loan or finances is welcome. He had us in a huge financial mess because he refused to work with me to budget since I was a SAHM and according to him, I was "worthless and I wouldn't be shit if he wasn't working." I know that not to be true and I'm truly in a good emotional/physical place, now I'm just working towards getting my finances together. TIA!
Post by dr.girlfriend on Dec 9, 2018 12:39:27 GMT -5
I'm so glad that you're out of that situation. I think hanging around and breaking up some of your situation into multiple questions might be helpful too, so it's not so much to try to consider at once.
In terms of the holiday loan, if you can pay it off, I would do so. 16% is pretty steep unless you need that money to keep the lights on or whatever.
Have you pulled your credit reports to get a sense of what is actually going on? If you haven't done so in the past year, you can do it for free from all three credit agencies at annualcreditreport.com, and I would do so.
You can kind of see what the issues are. To some degree, your credit rating is a game and you have to know how to play. If you have paid all your cards down, your utilization is low, so you may think about requesting an increase in your credit limits, maybe a bit in the future if alimony and stuff will be counted in your income (sorry, IDK much about alimony/child support). If there's anything on there that you can dispute, go ahead and do so...sometimes you can bump your credit up through some strategic phone calls or letters. IDK if this still works, but in the past if you were added as a joint user to someone's account, you would get the benefit of all their past credit history. This is a big deal, because you are also jointly responsible for their credit debt, so there has to be a lot of trust there. My husband was in his late 20's when we met and he had never had a credit card, so his credit history was crap even though he had no debt or anything. I added him as a joint user to my account and he magically got credit for all the on-time payments I had made on the credit card my parents gave me when I went to college in 1994, so like a 10-year history of on-time payments in an instant. If your mom or someone has great credit, that's something you might consider.
And, this might go without saying, but I would try to have a budget going forward that doesn't rely on payments from your ex. I know there are things you can do to chase that money down if he doesn't pay, but they are probably time-consuming.
Down the line as you become more financially stable, I would think about getting advice from us about: 1. Selling the house and what to spend on new mortgage/rent 2. Increasing your income by advocating for a raise or other means (if you're a teacher you might be able to do some tutoring or test proctoring on the weekends, etc.) 3. Making sure things are in place for your kid(s) (e.g., life insurance for you, wills/trust/guardianship, college savings) 4. Best ways to build your retirement given that you are probably a little behind schedule on that
If you want to post your budget under an anon, it would probably be really helpful. I *hope* that most of the people on the board are understanding that you are trying to pull yourself out of a bad situation, and unless you have $2k a month budgeted for designer sneakers or something they are probably not going to give you a hard time about the numbers. :-)
I'm so glad that you're out of that situation. I think hanging around and breaking up some of your situation into multiple questions might be helpful too, so it's not so much to try to consider at once.
In terms of the holiday loan, if you can pay it off, I would do so. 16% is pretty steep unless you need that money to keep the lights on or whatever.
Have you pulled your credit reports to get a sense of what is actually going on? If you haven't done so in the past year, you can do it for free from all three credit agencies at annualcreditreport.com, and I would do so.
You can kind of see what the issues are. To some degree, your credit rating is a game and you have to know how to play. If you have paid all your cards down, your utilization is low, so you may think about requesting an increase in your credit limits, maybe a bit in the future if alimony and stuff will be counted in your income (sorry, IDK much about alimony/child support). If there's anything on there that you can dispute, go ahead and do so...sometimes you can bump your credit up through some strategic phone calls or letters. IDK if this still works, but in the past if you were added as a joint user to someone's account, you would get the benefit of all their past credit history. This is a big deal, because you are also jointly responsible for their credit debt, so there has to be a lot of trust there. My husband was in his late 20's when we met and he had never had a credit card, so his credit history was crap even though he had no debt or anything. I added him as a joint user to my account and he magically got credit for all the on-time payments I had made on the credit card my parents gave me when I went to college in 1994, so like a 10-year history of on-time payments in an instant. If your mom or someone has great credit, that's something you might consider.
And, this might go without saying, but I would try to have a budget going forward that doesn't rely on payments from your ex. I know there are things you can do to chase that money down if he doesn't pay, but they are probably time-consuming.
Down the line as you become more financially stable, I would think about getting advice from us about: 1. Selling the house and what to spend on new mortgage/rent 2. Increasing your income by advocating for a raise or other means (if you're a teacher you might be able to do some tutoring or test proctoring on the weekends, etc.) 3. Making sure things are in place for your kid(s) (e.g., life insurance for you, wills/trust/guardianship, college savings) 4. Best ways to build your retirement given that you are probably a little behind schedule on that
If you want to post your budget under an anon, it would probably be really helpful. I *hope* that most of the people on the board are understanding that you are trying to pull yourself out of a bad situation, and unless you have $2k a month budgeted for designer sneakers or something they are probably not going to give you a hard time about the numbers. :-)
Anyway, welcome, and hope we are helpful!
RockNVoll, thank you! No, I technically don't need it. I took it out just to have it and used $300 of it towards a car repair but I can actually pay it back in full. So I'll do that.
dr.girlfriend, child support/alimony are automatically paid from his employer but I do agree about having a budget that doesn't count on this money. Part of my insistence to get financially squared off is so I can put that money to the side and live solely on my income. I know that that I need to set up retirement for myself, 529s for the girls, and I want to have a solid savings account. I'm way behind on retirement since I foolishly cashed out when we decided that I'd stay home over 6 years ago. I don't have any ridiculous lines on my budget so I'll post it soon . I'll definitely stick around, thank you so much!
You’ve gotten some good advice. I wanted to add that I would not recommend starting a 529. You need to save for retirement first. Once you’re on track with that, then open a 529. Your kids can get loans for college, but you can’t get loans for retirement.
I 2nd getting rid of the 16% interest rate credit card. Also when my husband was going through his divorce he credit took a major hit. The mortgage hit him, because she had to refinance and couldn't take his name off until she did. I think divorce itself hurts your credit. He was in the high 500s when they split and when we got married and was in the low 700s (5 years after) and now 10 years after his divorce it is in the high 700s. I am sure there are things he could have done along the way to help speed the process up, but I am not sure what. His credit score has never hurt us for car loans or getting approved to buy a house, so I just wanted to let you know that it will get better.
Post by borinquen57 on Dec 10, 2018 10:25:13 GMT -5
tripleshot, is there a calculator of sorts where I can calculate how much I should have for retirement so far?
xctsclrx, it's a loan. I just brought it down to half and I'll do the other half in two weeks. My savings are still very low, so I want to keep something in there just in case. I do think divorce can hurt your credit. When I was on the phone with the mortgage company for the mod, they read back 8 credit cards that were all in his name and I only knew of three when he left the house almost 2 years ago. He is constantly broke even before the alimony/child support was in place and he has a well-paying city job. I have no idea what he's doing with his money and I want to be as far away from that mess as possible.
tripleshot , is there a calculator of sorts where I can calculate how much I should have for retirement so far?
Here's a rough rule of thumb, that I would base on your current full-time salary if you're thinking about catch-up.
Multiples of Your Salary To figure out how much you should have accumulated at various stages of your life, thinking of a percentage or multiple of your salary at that time can be a very useful tool. Fidelity suggests you should have 50% of your annual salary in accumulated savings by age 30. This requires saving 15% of your gross salary beginning at age 25 and investing at least 50% in stocks. Additional savings benchmarks are as follows:
Age 40 – two times annual salary Age 50 – four times annual salary Age 60 – six times annual salary Age 67 – eight times annual salary
I would make triple-sure that you aren't listed on any of the credit card accounts. The ladies on Starting Over might have some more good advice about separating your financial situation from your ex's.
Post by borinquen57 on Dec 10, 2018 19:49:20 GMT -5
dr.girlfriend, that saving list is very helpful. I recently opened an account with Ellevest and I'm having two auto transactions withdrawn from my account every month. My current employer offers 9% but that's only while I'm staffed into a teaching position, should I match it? Right now I'll be in one until mid-February, then rolling into another until mid-April, then back to being a full-time sub until the end of the year. I'm subbing full-time while I work on my Master's because it's an easier workload but the pay isn't too bad.
My current employer offers 9% but that's only while I'm staffed into a teaching position, should I match it? Right now I'll be in one until mid-February, then rolling into another until mid-April, then back to being a full-time sub until the end of the year. I'm subbing full-time while I work on my Master's because it's an easier workload but the pay isn't too bad.
I think quoting this is probably okay, but let me know if you want to delete. I'm not sure what you mean by your current employer offers 9%. Do you mean they match your contribution up to 9%? And are you vested immediately, or over time? Here's what vesting means if you need more info:
Any money you contribute from your paycheck is always 100% yours. But company matching funds usually vest over time - typically either 25% or 33% a year, or all at once after three or four years. Once you're fully vested, you can take the entire company match with you when you part ways with your job.
Usually, what this board recommends for retirement is:
1. Fund your 401k / 403b up to the match, so you're not leaving "free money" from your employer on the table 2. Then fully fund your Roth IRA if you're eligible 3. Then go back and increase your 401k/403b up to the yearly max
But, if you're leaving before you're vested, the company match won't matter anyway, so I would prioritize Roth IRA because that money grows tax-free. If you're not sure what to invest in within your 401k/403b or Roth IRA, you can ask for recs here...best thing for novices is to pick a Target Fund for your date of retirement (e.g., if you'll be 60 in 2040 you can pick a target fund for 2040 -- that will automatically start with more aggressive investments now and will rebalance to more conservative investments as you get older) or just a Dow Jones Industrial Average fund.
You might want to repost your question for teachers, because I'm sure there's stuff specific to retirement/pensions for teachers that I'm not quite grasping. Good luck!
You’ve gotten some good advice. I wanted to add that I would not recommend starting a 529. You need to save for retirement first. Once you’re on track with that, then open a 529. Your kids can get loans for college, but you can’t get loans for retirement.
I needed to hear this for my own life! Thank you! This really relieves some of my guilt of not being able to help my older children with college. I feel bad, but their dad and I are not in a position to save for them or help them. We might be when our younger ones are ready, but not right now.