[USER]

I was all about my credit, acquiring assets and saving money. I dropped out of school to start a business and by 20 I had a successful franchise and looking to buy a house.

All the money to start the business was borrowed (no friends/family mostly bank loans and leases) so when the industry essentially disappeared I was left with nothing but debt.

Not having a degree has made it hard for me but now I’m 40 with a family of 5 and single income. I make a little over $160k/yr but have no savings.

I had to overpay for my current home and have 1 rental that I bought at fair value 4 years ago (south Philly) and hasn’t appreciated at all so I’m borderline upside down on two properties.

I’ve always been super frugal and motivated by money but made a few speculative investments that went belly up.

First off if you read this far thank you and second, if anyone’s ever been in my situation, I’m looking for words of wisdom/advice.

A second job at $15-$20/hr part time nights and weekends isn’t going to fix my problems.

Feeling hopeless and open to any/all advice.

Mid life crisis hitting hard…

[Deborah]

You don’t mention a partner just family is 5. If you have a partner sit down and have a talk about finances. Maybe your partner can help work part time, cook from scratch, no eating out ect..

make a budget together… when our kids were little the one who made the most worked full time and I worked gig work.

As soon as the last kid was in school full time I worked when they were in school.

It takes 2 to accomplish goals when you have a family.

[Michael]

I just made a 27k investment in MSTY that will generate 1700 to 4100/month.

Not financial advice but I would imagine you could find a spare 27k,even if you had to borrow it. Even if you lose in principal,the investment cash flows itself over time.

Or more conservatively:
Why not rent out both houses and then rent a small apartment for you and your family?

I went bust in 2008 and then a toxic relationship made me go bust in 2014-2015.

Its à humbling experience to be able to lease a new car every 3 years to driving a used KIA,but honestly, it gets me from point A to point B.

I don’t care about flash at this point. I’d much rather save the cash.. to deploy to income producing investments.

I didn’t qualify for Chapter 7 and Chapter 13 was out of the question because I didn’t own a property at the time.

I’m more of a Kiyosaki guy than a Dave Ramsey guy but sounds like a Dave Ramsey solution might be in order.

Maybe sell everything? Downgrade to a smaller place? Sell the cars..public school for the kids..

[George]

Realizing you made a mistake is the first step towards change, write down your goals and what it will take to get there.

There’s no shame in honest labor, you’re going to do great.

[Marisa]

You say you are super frugal but spend a lot on housing, car, and food. I’m sorry but by definition you aren’t super frugal.

[Marcus]

Try giving to your local church or charity. I know it sounds strange; doesn’t make sense.

And you don’t have to be “religious” about it either … just give; even when you can’t afford to.

It will reverse the downward trend of finances.

[Fewee]

Have you listed your debts out and made a plan to pay it. Baby steps. It can be done.

List your expenses and see what you can cut out to pay debt and save instead.

[Bondad]

20/hour in Philly can make a difference. I’m not sure your expenses/life but I do feel there is a bit of an ego.

I always worked in the food industry so that I could earn money and not spend money on my food costs.

Yeah, its kinda weird when people you know see you working part time, especially if you have a regular job, but whats more important? See if a grocery store is hiring.

You get free stuff that you can probably take home to your family. Take SEPTA. Also 160k isn’t peanuts either.

I’m in west and am considered someone who ‘overbought’ by getting a bigger house than I needed but could make it on 75k if I wanted to.

I am single, buuuuut I save half my income. I believe in you

[Brandy]

You said the rental home is cash flowing all expenses with about $200 / mo profit and you’re fine with that. I agree.

You already have it and it’s a long play. Even though being borderline upside down doesn’t feel good when you think about it, it doesn’t matter unless you have to sell today and you don’t.

For.encouragemnet, I used to have rentals that cleared $50/mo – $100/mo but now those same rentals $500 – $1000 mo. Your time will come too.

On your primary, not sure if you can save by moving now. It sounds like interest is your real issue, not buying too much home.

But if it would make a big impact without too much loss, can you downsize/relocate?

Your income doesn’t go as far as you’d think in today’s world and it’s disheartening.

I can’t even imagine that income with kids and car payments and that mortgage.

No wonder you can’t save. But it sounds like it’s time for drastic measures! Beans and rice, no eating out, nothing new for a year, sell the car(s), $20/person Christmas budget and that’s only for your kids – NO one else gets a present, etc.

Look at EVERY SINGLE EXPENSE to find ways to reduce or eliminate it (spend a lot of time with Dave Ramsey). Does your spouse work at all? If not, can you care for the children a couple nights a week while she picks up a couple shifts somewhere?

Serving is great as you get a lot of $ for your time if you’re good at it. Can she do that and put all extra money toward debt payoff?

It is amazing how far money goes when you stop spending it, do that and pay off some debt and you’ll start feeling rich!

[Chris]

In another comment, you mentioned your situation at home, which appears to be the main problem. Perhaps you could have an honest conversation with your father-in-law and let him know that his spoiling of his daughter could backfire when he’s no longer around and cannot provide for his daughter.

She needs to feel the pain of hard work and financial uncertainty somehow.

Also, don’t underestimate small steps, as evidenced by your statement that a second part-time job isn’t going to fix your problems.

Having income from that is better than where you are now, and you can build on that.

You can’t expect to snap your fingers and have your problems solved; most of the time you have to dig yourself out of holes one shovel at a time.

[Russell]

That’s a lot of story without a lot of details.
$160k is double the U.S. median household income.

Most of that seems focused on net worth (eg upside down on home value due to lack of appreciation…) but nothing about cash flow.
Is the rental covering its costs?

What are you spending so much on that you can’t save when making double the median income? You’re in the top 10% of earners.

[Alex]

Too vague to give useful advice. Having lost big investments before 40 is normal for ambitious people. You have high income with no saving, means you are barely living within your means.

Frugality is always dependent lifestyle creep.

Try to re evaluate your cash flow. You might need to downsize. Private schools might not be worth it.

You might need to buy a used car/van rather than lease or buy an SUV. These are just generic advices though.

You might want to set aside 10-15% of your income directly into retirement account that is not risky. Buy a generic low cost index fund. No fancy stuff.

You can still do risky investment after you have fulfilled the retirement contribution.

[Mandi]

You say the kids are eating you out of house and home basically. My thoughts with some tough love mixed in: That means your family (kids) are ‘snackers’.

households this snacking is eating tons of processed foods (stop that!), others it’s a lot of fresh fruits which if left unchecked can get out of control on the budget. It’s about balance.

I would advise to meal plan AND stop the snacking. Once a week shopping using what you have on hand that maybe didn’t get used up first.

Create extras for leftovers to have for lunch the next day. Much cheaper long term than deli meal sandwiches or takeout. Make the meals larger overall and filling, so the kids aren’t hungry between (needing the snacks).

When kids are constantly snacking they don’t eat full meals … then the full meals tend to get waisted. Primary cook is irritated cause no one is eating the food.

Vicious cycle and it’s best to just say “No more”. Allow a small transition period, but for real having a larger meal at 7 am, 12 pm and then 5-6 pm people survive just fine. Finish the meal with a little bit of fruit.

In fact for many years people
Only ate 1-2 times a day. Make a habit of everyone helps clean up after together. Many hands make light labor.

I bet if you looked at your food waste you’d be slightly disgusted. Same thing for us when we opened our eyes, so no judgement. Just changes needed.

I believe strongly that 5 people should be able to eat VERY well for no more than $1250 a month, and honestly you should be able to get that under $1000 overtime with changes to behavior.

That’s assuming mostly organic, watching sales, meal planning and limited snacking (especially the snack foods like pre portion XYZ). Remove the chips, crackers, cookies and fluff. Focus on Whole Foods.

You’ll need to learn to compare things, paying attention to prices and be willing to walk away when it’s too high. You also don’t go to the store without a written plan! As an example look at fresh organic strawberries vs. frozen pricing right now.

I’d love to eat fresh strawberries year round, but it’s $6+ for a pound for fresh right now vs $2.25 for organic frozen at Costco. I’ll take the frozen ones and opt to make smoothies, warm them up and smash them to create my own fresh berry sauce over waffles, etc.

I cut the fruit with equal parts ice in smoothies to reduce sugar content and save money. I’ll add pea protein to balance and this becomes a great ‘treat’.

I look at having staples and ingredients to make a meal over having premade items which are significantly more expensive. Soups, stews, casseroles, crock pot meals, etc. Breakfast is hearty.

You can pre-make your own breakfast burritos and sandwiches which taste a lot better, are twice the size and for half the amount.

Using potatoes and veggies to bulk them up. Focus on meals that you know are cheaper because the base ingredients are cheaper. Learn to enjoy oats, beans, lentils, pasta, rice and unique grains.

Walk away from that instagram recipe calling for 17 things you don’t have. Give yourself grace. It’ll take some time.

Start with a meal plan and only going once a week to shop. Look at the sales to see if it’s worth going to 2-3 stores and only getting those few loss leader items.

If you don’t have a stand up freezer find one second hand or affordable which will allow you to freeze items to preserve them (and bulk buying). As time goes on you’ll have a little extra at the end of the month that’ll allow you to purchase items at a discount for the pantry.

We now spend about half our budget on the needed items for this months recipes and the other half I’m able to purchase staples for future meals (at a discount/sale).

This took time, but is well worth it. I now look at what I have on hand and write out my meal plans for 5-7 days.

I go shopping for what exactly I need … and then I know I have about X amount each trip for items on great discount for meals in the future. Doing this I save so much money over time. Good luck!

[Lly]

How old are the kids? If your spouse feels like/is taking care of them, you’re saving an incredible amount of money on childcare, and at least she’s contributing in that way.

Can a couple kids get PT jobs, teach them food prep, evolve that into simple family cooking time.

Food costs will continue to spiral, especially for teenagers.

[Chuck]

I was in a similar situation at age 40, less the family, and less income (even adjusted for inflation). I tracked every expense and found places I could save.

Then I incrementally attacked each debt with the Dave Ramsey mindset.

While I believe I could have kept my 3% mortgage longer, invested the money and made more, it worked. When I was 50 I was debt free.

Owned a house, 4 y/o Tacoma, toy car, outright. And in the 4 years since have done well.

Track your money. Make a plan. Execute it. Adjust as needed, but never lose sight of the goal.

[Rochelle]

Sounds like you should have a few sessions with a Marriage Counselor or go to a Dave Ramsey event with your wife to figure your finances out together.

Have her do a budget with you since money is no big deal to her.

Even though she doesn’t like to cook, there’s plenty of InstantPot or crockpot meals that can be made with little effort (involving the kids also helps).

Right now, I would consider getting rid of your rental property if you can break even on it, just because right now it’s adding to your stress and budget.

You can always get another one down the road once you’re back on solid ground.

Maybe the in-laws can help more, since it sounds like they are anyway.

[Kathy]

Reading comments and your responses, it sounds like you are struggling to live within your means as a family in part because your wife is not really on board with staying within a budget.

That’s a fundamental problem that more money won’t fix.

I’ll second the recommendation for Ramit Sethi’s video/podcast/book(s). He has a new book about money for couples that is likely to help if she is willing to read it.

Otherwise, a “money date” every week or two to start engaging with her about your finances might help to start talking about money values and goals.

You have to get those goals aligned to make progress, which usually takes compromise on both sides.

[Karen]

General comment overall: get her and dad together and lay out all debts on the table so he can help you talk to her about solid goals: family time (including YOU not working another job), term life insurance on you as provider and her as caregiver, paying off debts, funding yours/hers retirement, starting college savings even if only $50/month/kid to start. Refi when rates drop.

Dad has $ so maybe he’s financially savvy and can be your ally IF you admit you need help.

His daughter, his grandkids.

[Joe]

I’m sure family of 5 eats up that income really quick. I would lean on your spouse if they can possibly find a part time job?

One that allows them to still be present with the family mostly and gives you more room in your budget to save and invest.

[Josette]

I commend you for your bravery and starting your businesses.
It was successful.
$160,000 per year is great.

Any way you can move to a less expensive place and keep that same income?

Can you sell the rental to have an emergency fund?

[Author]

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