Ep. 142: Tatiana’s husband just lost his job, but their financial life is still looking up

0 comments Homeownership, The Pete the Planner® Podcast

M$D: October 28, 2027

Meet Tatiana.

Tatiana’s main concerns, in her words:

Hello Pete,

Our goal is to be debt-free except for our house by November 2019 if not sooner!

What can we invest in that will increase our net worth and minimize our tax liability while we are paying down debt or should we ignore that and just focus on the debt and just save minimum to 401k and HSA until then? Also very concerned that our ER savings is very small for our in income.

When will we be millionaires?

Ages: both 46 years old.  Two adult children and three grandsons.  1 child in private college. Our pay went up substantially in the last 10 years.  Both of us went to college late in life. And made lots of mistakes over and over again along the way! Including the short sale of two homes 7 years ago.

Facts and figures:

  • Husband income: $190,000
  • Wife income:  $78,000
  • Monthly take home pay: $11,000 after taxes, ins, 401k, FSA, HSA and $600 a month to brokerage savings account.

We are using a budget for the first time in our 27 years of married life and still are working out the kinks! Have maxed 401k’s, but would like to do just the matching amount for 1 year to pay down debt.  My husband – 5%. Me – 6%. Retirement balance: $376k. ER Saving: $5,000

Mortgage: $325,000 (appraised at $410k). Refinanced at 20 year fixed @ 3.5%. Pay biweekly ($1,150) and a little over for a total of $2,300 a month.

Term Life Insurance: due to renew in 2018! Husband – $500,000. Wife – $350,000

Cash flowing youngest daughter’s private college.  This ends in May 2017!!  Woot woot! This will free up $23,000 a year!!

Debts besides the house and in order of our payoff focus:

  1. Parent Plus Loan: $6,000 @ 7.2% and paying this first at $1,250 a month or more if possible.
  2. Lazy Boy: $5,000 – zero interest $303.00 min.
  3. Truck Loan:  $20,700 @ 3.75% $670.00
  4. Leaf Loan: $27,000 @ zero %  $450.00
  5. Stupid Loan- Promissory Note from HELOC for a home we don’t even own anymore! $38,000 @ 2% $400

Tatiana has sent us an update!

We paid off our truck = $19k.
We built up our 3-6 months ER savings to $50k.
We have just hit a net worth of $530k – first time ever over the half million mark.
YAY!!!!! And the best news…
My husband found a job with a base salary of $160k.  It is a $30k drop from his last job but it has a rich bonus and stock options.  And well we don’t have as many bills with tuition and the truck payments done.  The only caveat is that it is in Las Vegas!  I love my house and want to be near my grandsons so I have no plans on leaving Arizona.  We will now have a super commuter marriage. The good news is that it is only a four-hour drive or $100 RT flight and NO income state tax!  He found another 40 something single and normal male professional that travels for work and they are going to share a house.  My husband will come home two weekends a month to start and I will go up there one week a month to work. I work at home and can really work anywhere.  So… it all works out in the end. Now we are just reworking the budget to make sure we can keep his expenses down and finish paying down debt while maxing the 401k contribution.
Our motto for the next year (we committed to one year to try this) is… We have a plan. It is a good plan.  We are going to work the plan.  Everything will be OK. 😉

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