That Personal Finance Question
October 19, 2015 1:37 PM   Subscribe

We're saving for a wedding and paying down debt and trying not to go crazy in the process. Any advice?

Our combined CC debt is about $2,500 which we intend to have paid off by the end of the year/ January the latest.
We're saving about 30% of our take home pay, or about $2,400/mo for the wedding which is in a year. (Yes, the wedding will be expensive but it's an item that's not up for negotiation.)
Slowly working on the emergency fund, but since we are crash saving for the wedding the emergency fund is getting a little neglected. We'll hopefully have $2,500 saved in the EF within 1 year which is enough to cover a little over 1 month living expenses.
Where we definitely bleed money is on the car: car loan of $315 a month w/ 5 years remaining (ugh, so embarassed about the loan). also has a 3.55% interest rate. Trying to pay an additional $100/mo towards the car in order to pay it off in 4 years. Our car insurance is insane - around $350/mo. due to speeding tickets. The car is a necessity as it is driven about 50 miles every day (round trip) for work.
We both contribute to individual 401k.
We use Mint to track things & have my own budget in excel. I couldn't get into YNAB.

Some days I feel like it is all manageable, and we can still go to dinner 1x a month and splurge on a fun activity here and there.
Some days I am panicked that we won't be able to continue to save like this, the wedding will have to be cancelled, we'll get ourselves back into CC debt. And on the days I'm panicked I obsess. I mean, obsess. Spend my day reading personal finance blogs instead of working, make a bazillion excel charts that aren't that productive & just generally work myself up.

I know my issues are really just dealing with life itself, but how do you manage personal finance without obsessing over it?
posted by kmr to Work & Money (17 answers total) 5 users marked this as a favorite
Is there a number missing in your *combined* credit card debt? I am an idiot with money but that doesn't seem to be a balance that requires a super aggressive payment plan. Not that you shouldn't keep paying it, but that is a very minimal balance for TWO people to carry, it certainly isn't an amount that would make me live in fear of my credit score.
posted by cakelite at 1:41 PM on October 19, 2015 [2 favorites]

Best answer: You describe somebody who is in a hole but has a plan to climb out of that hole. How you climb out is, you don't look down. You put one hand in front of the next: slowly, carefully, making sure you are secure before you move the next hand or foot.

You have a plan. You are working on the plan. You have read the literature on planning: you know to keep some liquid savings in case of unforeseen emergencies and then put money into the 401k, for instance. You are doing those things.

Stop looking down. Focus on where you are. Focus on the next handhold.

Each paycheck: that's a handhold. When you get that check, you do all your things to make sure you're doing it right. This much for the car. This much for rent. This much to savings. At the end of that list of things, include this thing: "should I be doing anything differently?" If the answer is yes, do that thing. If the answer is no, then you have answered your question until the next paycheck. That question is closed. You don't get to open it up again unless you have new information between paychecks.

If this doesn't work for you, it might be worth a few sessions with a therapist.
posted by gauche at 1:44 PM on October 19, 2015 [9 favorites]

I'm doing a similar thing right now where we're putting every spare penny toward paying off our house. We will be done (DONE!) in four months. Over the last year it's helped me a lot to focus on how much extra cash we're going to have the second that house is paid off. It sounds like you'll be in the same boat once the wedding is over: you'll instantly have $2400 more every single month to help you get a handle on the car and the emergency fund, and to have a lot more fun with on a day to day basis. So maybe it will reduce your anxiety to think about this as a temporary situation.

If I were you I would go ahead and set aside the emergency fund right now, though. It's still savings, so in the end you can use it for the wedding if you need to, but on a daily basis it would make me feel better to have that earmarked and set aside already.
posted by something something at 1:50 PM on October 19, 2015 [3 favorites]

In your boat, I think not having one of those monthly bills would just all around make me feel better. Therefore, I would simply pay off the credit card debt right now. It sounds like you have the money to do that (since you are currently putting $2400/month towards the wedding fund). So, for one month, just pay that money toward the credit card and have it DONE. Don't charge anything else that you can't afford to pay off immediately. At least to me, car + rent + wedding sounds more manageable in my head than all of that + credit card debt (which, again, at least to me, feels way more guilt-inducing than all other types of debt!).

I also think that sometimes playing out the worst case scenarios in my mind is somewhat instructive in helping me not panic, in a weird way. Like, think about the worst case scenario, but then actually follow it through to the very end. Suppose a few months pass, and you realize that for some reason you cannot actually afford the wedding you were hoping for. Well: that would suck! But, you guys could still get married! You could do a less expensive gathering for friends and family, or you could delay the wedding for a while, or you could even do a courthouse thing with just close family, and all of these option would still result in you marrying the love of your life. So while it would be IDEAL to get the wedding of your dreams, and it would suck for that to not happen, it wouldn't be the end of the world if it didn't. Or similarly, let's say you pay off this credit card debt, but right before the wedding there's some emergency you and you end up charging $1000 of the catering onto a card. Again, not ideal! But, it sounds like you guys have the financial cushion to pay that off reasonably quickly, so again, it would not be the best possible outcome, but you would still be ok! Etc. Etc. Anyway, you might not find this process as calming as I do, but I actually find it works quite well!
posted by rainbowbrite at 2:03 PM on October 19, 2015 [11 favorites]

Best answer: It's a year. Anyone can do anything for a year. You are fed, clothed, housed and have heat and running water. You're fine and you can do this. It's not even that long because after January, the CC will be paid off and that will free up all of that payment money. And after the wedding, you'll be positively cash rich.

So: break it down into steps and see all of the gains on the way.
posted by DarlingBri at 2:05 PM on October 19, 2015 [1 favorite]

Best answer: When I first started focusing on my personal finance, I definitely obsessed over it! I think part of it is that I was still trying to grok the various ways things could fit together (maybe pay off credit card first? maybe pay a 3% transfer fee so I don't have to pay interest for a year? etc). Part of it is there were just so many moving parts. And part of it is forming new habits (e.g. not eating out as much and cooking at home more).

I think time is what will help. For one thing, you'll have fewer moving parts. When you pay off the credit card debt (which I would prioritize and pay off ASAP and then save for the wedding and pay extra on the car, if I were you), you'll have one less thing to worry about. When you're done with the wedding, you'll have another thing you don't have to worry about.

Your habits of checking Mint, manipulating spreadsheet will also get old fast. There just aren't THAT many things you can do. If you're not buying things, there will be no new information on Mint.

If you stay focused, you'll climb out of that hole. Stop speeding, and your insurance will eventually go down--so make sure you leave yourself plenty of time when you go driving. Practice sticking to your budget. (Most people will slip at least a few times, but just keep focusing on the future you want, where you are financially secure.) You have a plan, which means you can do this.
posted by ethidda at 2:05 PM on October 19, 2015 [1 favorite]

I strongly suggest that you pay the CC debt off immediately, then make the full emergency fund deposit, and then start saving for the wedding. Mostly because having that money in the bank will help you feel more secure when you start freaking out.

Also, try to find something to redirect your attention to when you begin trolling the finance sites. Get into couponing or once-a-month cooking or something else that satisfies that need for security, but doesn't feed directly into the "we are horrible people who are going to drown" mindset. Pick something that you're actually good at and that you enjoy; I suggest couponing because you sound like you're just obsessive enough to feel satisfied with saving $0.45 on beans.
posted by SMPA at 2:07 PM on October 19, 2015 [8 favorites]

Your numbers looks good. Like, actually good. You're saving $2400 a month?! Your expenses are way lower than that. Your combined debt is actually really small in objective and relative terms.

Step 1, pay off your credit card debt (which is in reality very small) ASAP. There is absolutely no reason for you to be paying interest on that debt and it looks like you can afford to pay it off.

Step 2, fill up your emergency fund, if for nothing else so you can relax. Then you can save for your wedding in peace.

Step 3, your car insurance premiums sound ridiculous, but I don't know how car insurance works in the US. At least shop around and see if you can get a better deal.

To answer your actual question - limit the time that you devote to your finances. Maybe set a single night a week where you pay bills and look at Mint. It's not something that needs your daily attention. Automate as much as you can, and then schedule a specific and limited timeslot for regular admin.

I agree with the suggestion that counselling or therapy might also assist you with this level of anxiety that you are experiencing, because it seems disproportionate.
posted by His thoughts were red thoughts at 3:27 PM on October 19, 2015 [2 favorites]

Yeah, once you're done with your $30,000 wedding, you'll have a lot more money. Every time you get stressed, remind yourself that you're doing this so that you can have that wedding. If it were not for that wedding, you could be out of debt in a couple of months and saving tons of money for the future. You are broke because of that wedding. You will be much less broke after that wedding.

(And I'm really, really resisting the urge to say something about the $30,000 wedding, because you said it's not negotiable. But seriously, if you're not getting premarital financial counseling, you absolutely need to, because one or both of you have some ideas about money that are going to keep cropping up over and over again if one or both of you think that's a reasonable, much less non-negotiable expense for people who are in debt and have no savings. It is what it is. And what it is is $30,000 you don't have.)
posted by decathecting at 3:33 PM on October 19, 2015 [17 favorites]

There's no magic finance blog or spreadsheet that will get you past where you are with your reasonable plan. In your place, I'd dedicate more of that anxiety driven time to researching how to cut wedding costs with a combination of bargain hunting, DIY, and cutting out unnecessary costs/items. Your research could really pay off in that area. My sister and I shaved 10+K off her budget by doing a lot of things ourselves and by doing aggressive bargain hunting.

I only look at finances twice a month when I get paid and pay bills. Unless something has radically changed, that's more than enough time spent staying up-to-date and on-program. See if you can get in the habit of scheduling the time you spend thinking about the specifics.
posted by quince at 4:10 PM on October 19, 2015 [2 favorites]

Can the wedding money act as an emergency fund if an emergency comes up? If you both lose your jobs, or suffer some other catastrophe, you are going to reduce the amount you're spending on the wedding or delay the wedding, aren't you?
posted by chaiminda at 4:20 PM on October 19, 2015 [1 favorite]

What about either having a simple wedding at the courthouse now and having a big party once you feel more financially secure or postponing the big wedding for another year so you can continue to save? I'd pay off the credit card debt asap as you're doing now and then pay off the car loan next as I think it'll be a huge relief! It sounds like you're on the right path, and I wish you l luck. As always, I'm a big fan of Washington Post financial columnist Michelle Singletary: she's tough but awesome.
posted by smorgasbord at 4:31 PM on October 19, 2015 [1 favorite]

Definitely pay off the credit card -- you're saving up $2400/month so divert one month's wedding fund to credit card payments. If you were going to pay it off by January anyway, it won't affect your wedding saving and it'll be one thing off your mind.

I would not, actually, put the extra $100 toward the car payments until the wedding is over. Put the car on autopay and forget about it. After the wedding, you can think about continuing to be frugal for a few months and getting the car paid off.

I understand the anxiety about having debts, but take a deep breath -- you really don't owe very much, and in a year you will be rolling in dough if you can afford to save $2K a month! Until then, focus on the wedding and aside from the credit card, don't think about any other debt/expenses until the wedding is over.
posted by chickenmagazine at 5:30 PM on October 19, 2015 [1 favorite]

We'll hopefully have $2,500 saved in the EF within 1 year
You could have that saved in one month, were it not for fact that the wedding saving plan is non-negotiable.

combined CC debt is about $2,500 which we intend to have paid off by the end of the year
You could have that paid off in one month, shame about that non-negotiable wedding.

Trying to pay an additional $100/mo towards the car in order to pay it off in 4 years.
You could pay one month's worth of wedding savings toward this and take a big chunk off. Oh, right....dammit!

What is it that a $28,000 wedding gets you that a $20,000 one doesn't?
posted by sageleaf at 6:07 PM on October 19, 2015 [8 favorites]

Is this the same SO you asked about in Oct 2014 (Can money issues really end a relationship)?

I obsess like that when I am trying to make our budget accommodate something it can't, when I am uncomfortable with something, or when I want something we can't afford. Scaling back usually fixes it.

Afford does not mean "technically the numbers add up so it must be ok" but "we have nothing else/better to do with this money than X - we have it to SPARE". You have debt and no safety net, so the wedding money doesn't feel - and isn't - really spare. Weddings are parties. They are extras; they are fun and nice and all that... but if you lose your job and have to turn around and borrow money from your parents or something it's irresponsible. I challenge the statement that the wedding is non-negotiable. Debt i.e. money you already owe someone is non-negotiable. Having a safety net should be non-negotiable. Weddings should be negotiable. I think you'd feel a lot better if you scaled back the wedding even a tiny bit, and got the CC paid off and a little safety net in place.

I don't know which one of you is insisting the wedding is non-neg, but I'd recommend seeing a financial advisor to make sure you're on the same page because my hunch is that you're not.
posted by jrobin276 at 6:38 PM on October 19, 2015 [8 favorites]

I know my issues are really just dealing with life itself, but how do you manage personal finance without obsessing over it?

It's easy really. Stop creating budgets with zero room for error. Anything else will require you to obsess about whether it makes sense to save for a wedding instead of paying off credit card debt, or whether you the terms of your auto loan mean you're just prepaying interest. The pattern you are in is you trying to stare long and hard at spreadsheets trying to fix a budget that may be mathematically viable but leaves your psyche drained.

And trust me, I know how to really obsess. I've posted before about using GNUCash (open source Quickbooks) to track finances to the penny. I save approx 50 percent of my gross pay. But having room for error is critical to not obsessing. I haven't reconciled my accounts in 3 months, and things are fine. The shape of my error planning is twofold: budget surplus, and checking float. My annual budget shows a surplus without any earmark, meaning if I get something wrong, or just decide I want a big ticket item more than the money, I can. But timing can also be critical. I try to keep about a thousand in checking acct, because you never know when your bipolar parents will need to borrow to bring their mortgage current and prevent their home from going into foreclosure.

So where does the error budget come from? Well, hard to say without banking records etc you might provide a financial planner. Probably the extra car payments can just go. You have my blessing. It's a decent interest rate, so you should probably max out your 401ks before trying to pay that off early.

And finally, a serious question: what's your fiancée think about this?
posted by pwnguin at 10:10 PM on October 20, 2015 [1 favorite]

Response by poster: As usual, I've been given the different perspectives I was hoping for. Almost all answers mimic my thoughts on any day, both the supportive ones & the harsh honest ones. Trust me, if there was any way to have the wedding cheaper, we would & are actively looking for ways to do that. It helps to have something tangible and in the near future to save for and we are hoping to use the wedding as a jumping off point for a lifestyle where we live below our means and aggressively save. (Weddings are such a polarizing thing. If i had just said saving for X end goal, would reactions have been the same?) And yes, fiance is on board and we're very transparent & together on these things - with help from my prior question. With this advice, I am paying off the CC asap, forgetting about the extra car for a little, and yes even more aggressively looking for wedding $ saving techniques. Thanks all.
posted by kmr at 9:12 AM on October 22, 2015

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