Help a Reader: Separated Mom Needs Advice

Here's an email I recently received from a reader:

I am 31 years old, from LI and separated from my husband.  I am a complete newbie when it comes to investing being frugal etc.  But now out of necessity I have come to a place where I HAVE to be so careful with every penny I have.  With 2 little boys (2 1/2 and 14 months old) at home and little child support things are really tight for my financially.  Here is my story in a nutshell. 

I received a very large tax return this year (almost 10k).  I used this money to pay down credit card debt and lawyer fees.   I now have about 4K remaining in credit card debt.  This is a HUGE step for me as a former shop-a-holic!  I can proudly say that I didn't buy myself ANYTHING with that money.  I put it solely towards paying my debts and giving an offering to God.  Although I was VERY happy to have this money in my return after some research I realized that I was basically giving the IRS a free loan for the whole year.  NOT a smart move.  I am in the process of changing my withholdings to show that I am a single mom, head of household, paying for childcare costs etc.  I found out from a tax advisor that I can claim 6 or 7 on my W2 and 'Exempt' on my W4.  He said that I do not have to pay any taxes for the rest of the year.  I am very excited about this because this means I will have an extra $300 in my paycheck every 2 weeks. 

Anyway, I would like to invest this money if possible.  I have a 401K with my company that will put in 50% of what I contribute up to 6% of my salary (which is 36K).  I would like to put 6% of my salary into a 401K.  After 5 years of service I will be fully vested with the company contribution (I have been here for 3).  Currently I am living with family and need to move out asap.  There is no way that I can stay living with my family b/c of reasons that I can't get into here.... (I pay $500 a month in rent).  I am trying to find a very inexpensive place to rent ($900).  (I would love to be able to buy my own home one day.)  With the extra income I want to invest it in an account that I can have access to if I need to like a money market or possibly index fund?

What would you tell her to do?

Comments

[moneyandpf]

Well it doesn't so much sound like she is asking for help from the above blurb. As far as an account for the extra income if you want access to it very easily either put in in a money market account or a high yield (Well not so much anymore) savings account to maximize interest while having flexibility. Don't put your money into an index fund if you plan on needing to use it soon as it is to risky and you could lose in the short term.

Overall it sounds like this reader is on track to becoming very successful which is great to see especially since she is now a single parent taking care of kids.

P.S. - Not sure if possible but another way to help pay off those credit cards would be to find a friend or someone else close to you that could get a place with you and split the rent. $900/mth for a cheap place seems a bit high but if you find someone else to split costs that can get you on track to own your own home soon enough.

Good Luck.

[rwh]

Maximize the 401-k up to the match and put the money in a balanced portfolio of index funds if that is an option with your company. I recommend a 60-40 stock/bond allocation.

Focus on paying off the rest of the credit card debt until it's gone. If you can switch the balance to a card with a low or zero interest teaser (up to 6 months before the regular interest rate kicks in) do that until the card balance is paid down. Do this before starting an emergency fund.

When you get to the point you can start saving a little, like $100/month, put it in a savings account at a bank or credit union until you have enough to open a money market account at a mutual fund company such as Vanguard (they require 3000 minimum). Keep building up the emergency fund until you have 3-6 months cushion.

Then start an IRA. I would suggest a similar 60-40 stock/bond allocation through index funds (total stock market/total bond market). Do this before you even think about starting a college fund for your kids. They can borrow for college, you can't borrow for retirement.

I sincerely hope your soon to be ex-husband remains in the picture for your children and he pays child support. If he doesn't, don't hesitate to take legal action to make sure he pays.

Good luck. I know others in your position. The first year or two are the hardest. If you work at it and keep your spending under control, you will get on your feet and things will get better.

[Kyle]

I would say definitely take advantage of the match. Other than that, I'm not sure we have enough information. Is this extra income to be used as a down payment on a house? How far away is that? If it's less than 5 years I would stay away from stocks completely.

If this isn't already earmarked for a downpayment, I would suggest a ROTH IRA at Vanguard. One of the target retirement funds should be fine.

[MC]

Most of the advice given above is good short-term advice, but long-term (and maybe this is obvious) I would suggest that she find ways to boost her income.

Can she go to school on nights or weekends on a scholarship to get a certification or degree in a field that would pay her more? Could she get a second job? Could the family that she is living with now help with childcare so she can work more? Does she have skills that she could use to work from home in addition to her "day job"?

It will be difficult to pay for these kids (especially if she wants to try to pay for college) and fund her retirement on her current salary. Of course, it can be done, but would involve a very simple lifestyle. The simple lifestyle may be worth it if she is unwilling to spend more time working so she can be with her kids, a course of action I completely understand.

[Dedicated]

Her situation is too volital at the moment for out of reach money.

She may find it a struggle when she gets on her own with $900 rent (even if they include utilities). This equates to $10,800 a year or 30% of her gross income (before 401k deduction).

She doesn't speak about daycare - which could run anywhere from $150-$300 a week. ($7800-$15,600 a year).

I think it is in her best interest to keep the money close to home. Rainy days are too close. Especially until she pays off the remaining $4k of debt.

I would save 3 months of earnings locally - with easy access. $9000 could be a life safer with 2 small kids, or a job loss.

Then work on eliminating that debt.

Then, come back and look for a location to earn some more money on her dollars.

I commend you for tithing on your tax refund, but since that money had already been tithed (assumingly) as part of your gross income, you actually did it twice. Hopefully you will be twice blessed!

I would also save up $10k in an emergency fund and then invest 6% in the 401k. Then I would work on savings for a house.

[rwh]

Dedicated: I'm curious why you recommended she start an emergency fund before paying off the credit card debt?

[Ryan]

The best bet would have been not to be seperated from her husband. Divorce is way too easy these days at 50%+ divorces per number of marriages.

[Meoip]

So far the above advice is looking Good.
Certainly pay off your debt first. That's a simple way to boost income. When you have that done simply shift your payment from a payment toward debt to a payment toward savings (Roth IRA, saving for down payment).
I don't know how much you are carrying in your checking and savings accounts but you should look into a higher interest bank account. Start by asking the bank you are at to move you into their higher interest account and eliminate the fees because you are a loyal customer.
As for the apartment; I don't know where you live but you may want to look into apartments with "income restrictions". I know there can be a stigma to them but the ones I lived in were very nice and cheaper than the rest of the area. Some apartments partner with Realtors and builders to help future homeowners with their down payment. One place I looked you built up a $600 a year to use toward a down payment (up to $2400). If there are fees don't buy into the program, call the company responsible for it (the realtor or the builder) and ask for the fees to be waved. They want your future business as much as you want a future discount.
You've made plenty of smart choices so far, keep working toward your goals.

[Becca]

rwh: I agree with dedicated on that one. She's got two kids, she can't afford to not have one. My mom raised my sister and myself alone for the beginning of my childhood, basically in a similar income/rent situation--it was tough for her. She spent most of it working two or sometimes three jobs in order to do it. While getting rid of the credit card debt is important, the priority for her as a sole caregiver should be on having something to support her if/when things go wrong. She'll pay more interest but will have more flexibility, esp important since she's "getting little child support and things are tight financially."

That being said, saving for retirement is important too. My mom waited a long time to save and I'm pretty worried about her retirement. So I vote Retirement and Emergency Money, then paying the credit card and finally saving for the house. The house is a great goal because that way there's something to look forward to and a good visual reminder (In the form of a picture or just driving around) as to why the other stuff is there!

[Jim @ FreeBy50]

I agree with Dedicated that the situation right now is too volitale to consider 401k as a priority. Sure a match is great and should be taken advantage of when possible. But first priority right now is getting your immediate financial situation straight.

So first I would sort out living situation and pay down the remaining credit card debt. Then I'd get some money in an emergency fund. Once things are stable some, thats when I'd start with the 401k.

Jim

[Rick Francis]

It’s really great that you are taking the time to plan for you and your children’s future. Ultimately that will be far more rewarding than any purchases you could make.
> I am very excited about this because this means I will have an extra $300 in my paycheck every 2 weeks.
A painless way of living frugally is that when you get a raise or other extra $- you keep your life style the same and put the extra $ toward savings or debt reduction. You may want to track your spending for a while too- see if there are areas that you can cut without too much pain…
>Anyway, I would like to invest this money if possible. I have a 401K with my company that will put in >50% of what I contribute up to 6% of my salary (which is 36K).
It’s a good idea to put something toward retirement, with the 401K you will get a tax break and the employee match is free money that’s pretty hard to beat. Try initially contributing 6%, you can adjust if necessary later, but really TRY NOT to!
I’m not sure how you are going to manage the extra $400/month for rent when you get your own apartment AND save for retirement. If you can find a roommate it may work out, but don’t forget the cost of utilities! Also, you will likely need some cash for a deposit- it varies but figure at least an extra month’s rent.
As for owning your own home- you should consider does it really make the most sense? You need to carefully calculate how much it will really cost. Be aware that there are a lot of additional costs and work to maintain a home once you purchase it. There are often expensive appliances that need to be repaired… for example I suspect I will need to spend ~$1000 for a new water heater soon. With a full time job and two kids to care for do you really want any more to worry about? Will you be able to get a reasonable loan rate? I think it’s a great dream and that you should try to save for it, but ONLY buy once you are 100% certain you can cover it.
I wish you the best!

[beloml]

What does LI stand for?

[Hal]

I think investing in her 401k, in her case, is one of the last things she needs to do right now. The only thing with a lower priority than that would be buying a house, when you take into account her situation AND the current housing market.
She needs to build up her emergency fund..minimum of 3 months pay...and then concentrate on paying off her debts...since she is going to also be looking for a place to live at the same time....this will be plenty on her plate...with two little ones, she's going to have plenty of "unexpected's" she's also going to have to deal with.
Good luck.

[Sarah]

I concur with the people who say an emergency cushion is more important than a 401(k) right now. Kids are so expensive! However, I'm a little concerned about this "no tax this year" conclusion. I'd double-check that. You really don't want to be stuck with a scary bill come next April!

Ryan: a man who isn't providing adequate child support for his kids (as her ex is obviously not) is a man no woman should be married to in the first place.

[Ryan S]

Sarah,

I never had an ex-wife, and I am happily married. Thanks for asking! My wife shares the same viewpoint that thier are too many divorces these days.

[FMF]

LI = Long Island

[OP of ']

I am an assistant and have been for ten years. I was thinking of starting my own business but am nervous about the instability of working for myself. Since I make 36K a year and received about 1K a year in childsupport I qualify for day care assistance from the state...this allows me to be able to afford day care. I only pay $400 a month for full-time day care for 2 small children the state pays for the rest. I never ever thought I would be on any kind of assistance but am so grateful that I have help with quality daycare for my boys. Normally the cost would be over 2K a month. If you make more than 42K a year you don't qualify for this assistance. If I got a part-time job I wonder if it would be worth it (considering that I am receiving about 22K a year for daycare assistance)? I have considered getting a job in NYC (because the salary is so much better) but after I thought of the commute and lack of flexibility and time away from my children I decided against it. I am looking for some kind of stay-at-home job I can do at night while the kids are sleeping and have even considered going back to school online. I guess I just need insight into what is the best field to go into? There are so many online scams it is hard to tell what is real and what isn't. As a kid I was told I was smart and had a high IQ but never really applied myself (I am not proud of this at all). Now that I have children I want to be successful for them.

As far as leaving my husband...I had to leave while I was 4 months pregnant with my second son..I was afraid for our safety. Yes, I should have thought of that before I got pregnant but I learned a life long lesson through all of this. I was naive and trusting to a fault. All I can do now is be strong for my kids and go on and try to make our lives better.

Thanks again for your well wishes and advice.

[CyanSquirrel]

I am wary of the advice given to her about her tax withholding. Claiming 6 or 7 exemptions??? For three people? Uh...no. More like 4 max. Something sounds fishy there...go to the IRS website and use their tax withholding calculator to help you get the correct number of exemptions to claim on your W-4 or else you could be in for some serious penalties if you have too little withheld and do not make tax payments during the year.

As for what to do with that extra $300 a month, I recommend you get the full employer match for your 401k. That's FREE money and a 50% return. After that, I would focus on building a sizable emergency fund instead of paying down debt. Put the credit card away and transfer the balance to a low rate offer, and then pay the minimum until you have some cash reserves. This is important to breaking the debt cycle, especially with little kids around, needing to find your own housing soon (which requires a security deposit more often than not) and other possible setbacks that would send you reaching for the credit card if you did not have the cash reserve to pay for them outright.

[rwh]

Well, I see a difference of opinion on paying down debt versus building an emergency fund. Those that suggest building the emergency fund first make some good observations, particularly having a rent deposit. Perhaps a compromise, put some money into an emergency fund and some extra toward reducing the debt? Credit card rates are very high, anywhere from 10% on up, while mutual fund money market rates are a little over 3% and obviously going down.

Ryan: Did you ever hear the old saying "there but for the grace of God go I?" I think you are too quick to rush to judgement. The lady asked for financial advice, not a sermon.

[Kevin]

You might check to see if you are eligible for advance EIC on your paycheck as well. The limit for 2007 was $37,700 or so with 2 kids. That might put a little extra in your paycheck.

I would save an emergency fund first so you don't have to rely on the credit cards if something major happens. Then work on paying the rest of that off.

Good luck and good for you for standing up for you and your boys.

[BenG]

CyanSquirrel -

Have you actually went to the IRS website and looked at the W-4? From my quick estimation, she's eligible for somewhere in the neighborhood of 10 allowances. When you are the Head of Household with 2 kids and have eligible child care costs, the allowances add up real quick. I wouldn't be surprised if her 1040 showed $0 tax liability. In fact, I'm betting she's even eligible for the EITC.

Personally, I can't imagine trying to support two children in the greater NYC area. Kudos to the original poster for what I'd consider an impossible task!

[mysticaltyger]

I also think 6 or 7 sounds like waaaay too many exemptions.

This subject brings up a topic rarely covered in frugal living blogs.......how a suitable marriage partner behaves. It seems some of us are natually attracted to bad spouses without knowing it. For those people, the person they're not attracted to may actually make a better spouse.

[Susan]

rwh,

In defense of Ryan's statement, one of the worst financial decisions one can make is divorce. So the decision to divorce and financial decisions go hand and hand.

[Diane Eats the Elephant]

Several points:
1. Divorce is a financial crippler, so while it may have sounded preachy, the bottom line on Ryan's comment is to really think this through and not to be making a rash decision without considering the impact to her children (as well as her own sanity). It seems she's done that, from her reply.
2. She's got child care coverd. GOOD!
3. Extra income - your writing is good, you might try freelance writing from home. Start small and build up. Ask for writing jobs at work that you can help on - these could help you build your portfolio (if shareable, like company brochures), your confidence, and your range of writing skills.
4. I am divorced - about 5 years ahead of you, in a lower cost of living area. My rent was about $800 sans utilities for a nice 2-bdrm apt. I wanted to get into a house to stop dropping money down a hole (rent). Sometimes utilities (heat) was bad at the apartment - others had the same experience.
5. I bought a house, using 80/20 since I did not have 20% to use. I borrowed family money to help with those upfront expenses needed to close on a house. I knew I was going to be pushing against my monthly income and that it would be tight for the first 2-3 years until my income grew while the mortgage stayed the same. Fixed rate 30. You can adjust to a Fixed rate 15, but do not go for an adjustable rate mortgage, particularly in this market where the value of the real estate may drop.
6. What I missed - thought I was moving to a cheaper area, but they have a city income tax that costs $50 per paycheck, and there is an additional school tax and a homeowner's association bill of $100 per year. It all adds up. Property tax is about what I left behind in the town I'd been in (they abut).
7. Homeowner's Insurance - I had a deductible of $1000 and a flood from a busted pipe within the first year. Onto the CC, which I had almost gotten all down to zero finally - had about $2k left, plus student loans.
8. The washer broke down after about 8 years - had had it fixed enough that I knew not to put anymore into it this time. Took out the XXX days same as cash, then began trying to find ways to pay for it. Did it with a CC-borrow and stock buy before the whole market went down, but that was pretty risky (who predicted the market going down so rapidly when it did, either - luckily I sold off before it did). Am worried about the dryer now.
9. Home Warranty pretty much was useless when I needed it - didn't cover this or that, but I am about to sign up again as I expect major appliances (refrigerator, etc.) may soon go. So, that will help me with emergencies.
10. Van is paid for (only thing good from the divorce other than part of the equity which went for CC and lawyer - i was livng on CC for 2 years, in addition to the loans, getting my MBA, preparing to re-enter the workforce after 8-10 years as a SAHM. MS had gone from DOS to whatever it is now; a huge change.
11. Van, paid for, is in good shape except - AC went out - compressor and condenser, catalytic converter needs something, and transmission needed replacing. Weighed the costs of all those things against the cost of a new vehicle, against the average cost per year of van ownership WITH those costs thrown in. Cheaper to pay for them all (which I couldn't) that to get something else. Tho I am considering a cheaper 2nd car, better gas mileage (tho I get 20 in the van). The van is a Honda Odyssey, 2000, bought in Sept 1999. So, I consider it as having a few more years - it was supposed to go to my oldest son when he hits 16 in a couple of more years anyway, give him something to work on that he can't speed all over town (slow him down). Assuming I can find a second car somewhere.
12. Matching 401k at work as I am restarting a retirement. We wiped it out to buy the van - alternative was to finish paying for our mortgage. In hindsight, I would not have anything to drive if we'd paid off the mortgage.
13. I am assuming you are a lot younger than I am - perhaps in your 20s. (I am 47.)

Priorities
- kids - have day care - check
- more income without sacrificing time with kids - writing
- CC rates will tell you if you need to pay them off before setting up an emergency fund. Emergency fund earns zero and if you can charge at a lower or equal rate to what is on the card now, then charge for emergencies and get the debt off the cards (where you are paying to hold it). If your CC is at 1.9%, then pay min and set up the emergency fund. You can't usually charge bills at the 1.9% rate(s).
- defer the 401k matching if your CC rate is 20% or thereabouts AND you are young. Otherwise, put in there for the matching 50%. But since you are not fully vested for 2 more years, waiting til then would be a good idea too, since this job market is so iffy that even admin assts are losing their jobs.
- MAINTENANCE - get a maintenance checklist There are a lot of things you may not have thought about because someone else was taking care of them. See if your budget will be able to afford all of those as well.

- BIG ONE - CUT DOWN ON YOUR SPENDING - you will need to change your spending habits. Perhaps you should bite your tongue and find another place to live or a roommate for a while - someone with kids to share babysitting duties perhaps so you can both get a night off from time to time, or have emergency back-up. AND reduce the costs of rent. That might allow you to rent a house together.
- There are a lot of blogs out there by mothers who are trying to feed their families on 20-35 dollars a week, and still provide healthy foods.

Good luck!

[rwh]

Susan:

I'm well aware of what divorce does to one's finances. I've seen it with friend and family members over the years. What make's Ryan's statement indefensible and a cheap shot in my view is how he didn't bother to try to learn about any of the circumstances, as if it's anybody's business anyway. He just fired away.

Sarah made it clear why her marriage has ended. Unfortunately, most marriages end not from mutual agreement but because one spouse either is impossible to live with or just wants out. That leaves the other spouse alone and often in a financial jam.

I think people are often too quick to blame or pass judgement. I've been guilty of it myself in the past. Everyone, from time to time, should try and think a little before speaking, or in this case typing.

[Susan]

rwh,

That said, Ryan's post came before Sarah explained her circumstances. And anyone who doesn't agree that thier is way too much divorce in this country is plainly nuts.

[Jake]

It isn't indefensible and cheap to state a fact. I don't see wahts the big deal by siting divorce statistics. They are way much too high.

[Sarah (not the original poster)]

Man, it would be a lovely world if, instead of focusing on how people tended to their own private business (it's always "too much divorce" until it's your own divorce), people sank their energies into caring for the needy and supporting their communities. Hey, that sounds vaguely familiar. Something about feeding the hungry, clothing the naked...nah. That's just crazy talk.

[Susan]

Sarah (not the original poster):

Or even better if we would sink our energies into caring for the needy, supporting thier communities, AND not being another divorce statistic. These things are not mutually exclusive of each other. I really don't see your logic since someone's opinion on divorce has no correlation to thier charity.

[rwh]

Susan:

That is precisely my point. Ryan didn't know Sarah's circumstances but he felt compelled to offer his unsolicited opinion anyway. It's like kicking someone when they're already down. What good does it do?

Nobody likes divorce, but if I were in Sarah's position and took my finance questions to a financial advisor instead of this blog I would be pretty offended if the advisor chose to offer judgement on what he/she perceived my personal failings to be instead of just sticking to the finance.

[Susan]

rwh,

First off, Sarah's circumstances are that she is separated, not divorced, so Ryan's statement not only makes sense from a financial point of view, but any pastor would give the same advice.

[Freedombound]

I am a single mom with 2 kids and I do not pay any federal tax out of my paycheck... ever. I also get Advanced Earned Income Credit in each paycheck of about $30.00 per check. Even after all of this, I still get a federal tax refund of about $3700.00 per year. You can claim as many exemptions as you want on your w-4... I claim 10 because I am not going to pay any federal taxes when they just turn around and give back at tax time. I need all the money I can get in my paycheck...not next year at tax time. When you are a single mom with 2 kids, you need every penny you can get! I hate to say it, but tax time is the only time of year that I have any money to use to "get ahead". I currently make about $26,000 per year (without overtime), but I do know that making $36,000 per year with 2 kids is a completely different story (in the irs' eyes, that is). You will probably get some earned income credit, but it wouldn't be very much.
So this is how it breaks down:
$36k - 6% 401k= 33840.00 adj gross income.
$33,840.00 - apprx. $18,000(standard deductions ($8k for single head of household and $9k for you and both kids) = $15840.00 taxable income
$15,840 @ 10 % = tax liability of $1,584.00
Daycare credit is approximately 1/4 of what you have paid in which would bring you down to zero. Then you should get $2,000 child tax credit and a small amt of earned income credit.. which would be your refund. This is how it works for me and your situation is very similar. So, you should be ok if you change your exemptions to get more money in your paychecks.

You had stated that you needed to move to your own place, and I am sure you have good reasons. With that being said, I just want to say how difficult it is to be a single parent and it NEVER ends. The bills, the kids being sick, the bills (did I say that already?), clothes for the kids, money for school trips...etc. I could go on & on. The reason I am saying all this, is that I would give anything to be in the position where I could live with someone to lower my expenses(for a short time). It would give me the chance to get financially stable. When you are out on your own, your cost of living is going to go up significantly and the pressure will be on (trust me). You have a fabulous opportunity to save money & pay down debt, and that is a blessing! Don't waste it! You might not ever have this chance again, so please use it wisely. If your family would agree to let you go rent free for 8 months, you could pay off the credit card and save money for emergency fund/moving fund and be way ahead of the game. (If they agreed to this, I would definitely still pay utilities and buy your own food, regardless- you don't want to be a freeloader). If there is anyway you can continue to live with them for a little while longer, I would do it. I have been a single mom for 7 years and it feels like 70!
You are new to single parenthood and if you listen to any of these posts, please know that mine comes from the heart. You are about to go down a path that I have been on for a while now. I am worried that you a in for a rude awakening. You said that you are a former spendaholic, plus it sounds like you are going from 2 incomes to one. This is a very bad combination. If you add in increased living costs if you move out, it sounds even worse. My words are not to meant to discourage you, but to encourage you.... You have a fabulous opportunity, so please use it wisely.
I also receive daycare assistance and wouldn't be able to work without it. I used to work 2 jobs, but I stopped because they increased my daycare copay and then I had to pay a sitter on top of that. It wasn't worth. I suggest putting all efforts into increasing your education.. taking classes, improving job skills, reading self improvement books.

Just make a plan and do things in the right order. Pay off the debt, save to move out, keep investing in your 401. Rent for a few years to get a good financial foundation. I bought my house 5 years ago and I was broke..houses need to be "fed" too. Higher utilities, yards need to be mowed, repairs to be made... more responsibility. They say that the best mistakes to learn from are someone else's. Pleeeassse learn from mine :)

[Sarah (not OP)]

Susan: "I really don't see your logic since someone's opinion on divorce has no correlation to thier charity."

Sure it does. It played out right here. Someone who's in a pretty difficult situation is asking for help (in this case, advice) and you are coming back at them with judgment rather than charity, compassion, and love. It's been a while since I've been to church, but if I try really hard, I think I can remember Who it is Who is said there to be the only righteous judge.

[Mike B.]

I really don't get these comments telling her to build an emergency fund instead of paying off high-interest rate CC.

Pay off those credit cards--if an EMERGENCY comes along, you can always use the credit again. But to earn 2% interest instead of making 17% paying of the cards makes no sense. The 'emergency' fund is just illusion if you still have that credit card debt. PAY DOWN the credit card debt first and once it's gone never let it return by then building an emergency fund.

[Susan]

Sarah(not OP):

I see no judgement since Sarah (OP) is not divorced yet. I would discourage all people who are not divorced from ever getting divorced. This is sound advice, and is very compassionate. And as for judging people, I think you are judging Ryan S far more than any judgemental tone he has used here.

[rwh]

Susan:

She said she left with a 4 month old son because she feared for her safety. And you still "discourage all people who are not divorced from ever getting divorced"?

[Susan]

Without knowing the details of why she fears for her safety, yes. Has he actually ever hit her? Or does she just fear he may hit her someday? If he did hit her, how long ago was it? Did he seek help for his behavior? Neither of us knows.

[Jake]

Hehe, on another note, if you want to talk about a woman who should fear for her safety, it is my wife. I am the clumsiest man alive and could easily injure myself and those around me by pure accident due to my clumsy nature.

[CyanSquirrel]

BenG,
I did go eyeball the withholding publication myself, and it turns out that ten would be about right for her. Wow. I learned something new. I have no experience with head of household/childcare expenses/etc as exemptions. It's been a while since I've had to fill out a W-4, ha!

My original post was pointing out that the number looked high and she should double check it. There are unscrupulous advisors out there, and that was all I was saying.

[CyanSquirrel]

MikeB.-
Using credit is what got her into debt in the first place. People build a cushion of savings to use IN LIEU of credit so that you don't even have to step foot on that slippery slope again. I have debt because it was all too easy to say "hey, I'll pay this off and THEN save..." and then get hit with a car bill or insurance bill that I did not have the cash to cover, so I had to use credit again, which plunged me back into the very debt I was trying to get rid of. The point is that you don't pay for stuff with money you don't HAVE. Credit is not money you HAVE. It is a mortgage on your future. Wise ones save something so they can pay these unexpected bills with money they have right that moment and avoid getting on the debt treadmill ever again. It's just too easy a temptation and too easy to let get out of control again.

I do agree with the idea of compromise, though. Some to debt and some to savings. That's another approach that's ok. But savings of any sort is essential to getting and staying out of debt long term.

[rwh]

Your right Susan, neither of us knows, but some of us choose to pass judgement anyway.

Since you would never recommend divorce under any circumstances, which you are certainly free to do, I can only say for all those spouses that have been physically abused, serially cheated on or have spouses that simply decided they want to pack up and leave, I'm glad the legal system doesn't reflect your views.

[Mike B.]

CyanSq-

But, as I mentioned an emergnecy fund when you have CC debt is all an illusion. Pay off the durn CC. As you mentioned, that's why she's 'in trouble'. IF she has an emergency, the credit is there for an EMERGENCY--why have a fund when you have CC debt (most are double-digit percentages, that's really bad debt). If she has some discipline (she seems to have found some, not spending the tax refund) and distinguishes between emergency and just wants, she will be better off, if the emergency happens or not.

[Susan]

rwh,

Talk about being judgemental. LOOK IN THE MIRROR!!

[Susan]

rwh,

The Bible, (the book of my faith anyways - and yes, I know, you made it very clear you don't believe in it, so this may not apply to you) states that adultry is a valid reason for divorce. But this does not mean that adultry means, "time to get a divorce". To me, it means, if the person does not change from thier ways, it is time for divorce. My personal belief is that this applies to abuse and any other reason for divorce as well, although not explicilty stated in the Bible. Do I believe in drive through divorce like you, no chance! Does our legal system allow drive through divorce, yes! Just because our legal system allows for drive through divorce, is anyone who opposes drive through divorce wrong? No. Thier is a difference between having strong beliefs and expressing them, and being judgemental. I'm a a person with strong beliefs that expresses them. Others (not mentioning any names, hehe) are judgemental for ripping into everyone with beliefs that are different than thiers.

[Jake]

Get out the popcorn boys and sit back and watch this wild one!!! A religious woman using the Bible and a extremist feminist atheist going at it right before our eyes. This should be good! Right now I'd score it as, religious woman - 5, extremist feminist atheist, 2. Place your bets.

[Susan]

Jake, I don't appreciate you making a game out of this but, hey, at least I'm winning! ;)