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2007-11-29 2:18 PM

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Subject: Oh I am so tempted

I just got a nice and very unexpected bonus.   I so want a road bike and won't even spend 1/5th of the bonus but we are 15-16 months from getting out of debt (except our house) and this bonus would cut 2-3 months off of that time frame.......  Once out of debt I would be able to buy just about any bike I would want within a few months of saving.......

By the way, I am currently riding a Giant Cypress (hybrid).  I want to go faster and be able to do group rides on Sat mornings. 

Haven't even told my wife yet.  I am so excited but I want to see her face rather than tell her on the phone. 

 



2007-11-29 2:22 PM
in reply to: #1074525

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Subject: RE: Oh I am so tempted
Congrats! Bonuses are fun. Except for the 40% tax associated with them.
2007-11-29 2:24 PM
in reply to: #1074525

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Subject: RE: Oh I am so tempted

Well, if you are conservative you can still get a decent used bike that will fit you for relatively cheap.  We're talking $3 - 400 on EBay for some pretty decent basic stuff.

Talk with the wife and come up with a plan for how to spend the dough and throw out the idea of allotting each other a few hundred bucks play money?   That's how I ended up with my latest tri frame and zipp wheels.  We won a raffle for $30k and after taxes walked out with $22.5k.  So I "suggested" we let each other have a nice portion of it and put the rest towards bills and expenses.

Edit: And my employer allows us to take our bonuses with just soc. sec. and medicare pulled out, so we don't get nailed with the taxes (outright .... it still comes out in our filings for the year when we submit them in April of course).



Edited by Daremo 2007-11-29 2:26 PM
2007-11-29 2:32 PM
in reply to: #1074525

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Subject: RE: Oh I am so tempted
Congrats on the bonus.  You have a tough decision and I am not sure what I would do.  I wish I was 15 months from being out of debt and if I was I would probably wait for the bike or at least buy a cheap roadie for now (check out bikesdirect.com you can buy a cheap entry level for the next year then upgrade) and get what you want in a year.  The other part of me thinks that you should enjoy part of the money since you did work to earn it, but then again think if you enjoyed it by getting into debt in the first place!!
2007-11-29 2:45 PM
in reply to: #1074525

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Subject: RE: Oh I am so tempted

"but then again think if you enjoyed it by getting into debt in the first place!!"

Yes, that is correct.  Oh the freedom we will have when we are out of debt.  It is tough tough to be patient. 

We have been on this road since about Aug of last year but were hit with probably almost 9k in unplanned expenses since then and that has delayed the payoff.  I will say though that I did not put 1 dime of those expenses on a credit card.  We started with a few thousand cash in our emergency fund and just had to keep rebuilding it and only this month will I have it back to almost 2k.  We are ready to get back on the plan road to freedom. 

I might add:  What freedom I feel going over 20mph on a bike (only done that a few times on my hybrid down a hill or a big wind at my back).  I never knew it could be so much fun. 

2007-11-29 2:47 PM
in reply to: #1074525

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Subject: RE: Oh I am so tempted
I'll give you perspective of a guy who worked his tail off to get out of debt.

Being out of debt is OK, but extending the no debt date out 2-3 months from 15-16 isn't all that big of a deal. Once you're debt free, you may look around and wish you'd had a little fun along the way.

Other's suggestions look to help you with both of your goals - debt elimination AND new bike.

Congrats to you for putting yourself in the position to have to make a decision!



2007-11-29 2:50 PM
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Subject: RE: Oh I am so tempted
No debt would be a wonderful thing.  I got my bike for well under $400 on bikesdirect (motobecane mirage sport).  I tell everyone I know about it when they first ask since I feel I have done fairly decent on this bike.  My first and only oly was this summer and I averaged almost 22mph (a flat fast course) and my bike is a tank.  they also have a tri bike with dura ace/ultega components for $995 (depending on your budget).  I actually am about to buy the frame only used and build it up.  Remember you can always buy something fairly cheap and then sell it to a newbie in a year.
2007-11-29 2:57 PM
in reply to: #1074609

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Subject: RE: Oh I am so tempted

leapdog - 2007-11-29 3:47 PM I'll give you perspective of a guy who worked his tail off to get out of debt. Being out of debt is OK, but extending the no debt date out 2-3 months from 15-16 isn't all that big of a deal. Once you're debt free, you may look around and wish you'd had a little fun along the way. Other's suggestions look to help you with both of your goals - debt elimination AND new bike. Congrats to you for putting yourself in the position to have to make a decision!

That is a good point and if I do buy a bike it will still be very budget minded and I would only be spending about 1/4th of the budget so it would only add about one month or so to the timeline.  I have a whole new concept of $, now that I buy everything cash. 

I think I know what I would do, but not sure what the wife will want.  I would definately want to take an amount and split it in half.  She has stuff that she wants that has been put on hold too. 

2007-11-29 3:04 PM
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Subject: RE: Oh I am so tempted
lisac957 - 2007-11-29 3:22 PM

Congrats! Bonuses are fun. Except for the 40% tax associated with them.


bonuses are not taxed at 40%, they will be taxed at your whatever % your income is at the end of the year when you file your income tax form. the withholding my be 40%, but sorry, they aren't taxed at that rate.
2007-11-29 3:10 PM
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Subject: RE: Oh I am so tempted
ohiost90 - 2007-11-29 3:04 PM
lisac957 - 2007-11-29 3:22 PM Congrats! Bonuses are fun. Except for the 40% tax associated with them.
bonuses are not taxed at 40%, they will be taxed at your whatever % your income is at the end of the year when you file your income tax form. the withholding my be 40%, but sorry, they aren't taxed at that rate.
Amen to that.  My company only withholds 28% federal plus SS (no state income tax in Texas).  Chances are the 40% is fed, SS and state plus if you have a 401K they often take that percentage out to unless you elect not to.
2007-11-29 3:53 PM
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Subject: RE: Oh I am so tempted

ohiost90 - 2007-11-29 2:04 PM
lisac957 - 2007-11-29 3:22 PM Congrats! Bonuses are fun. Except for the 40% tax associated with them.
bonuses are not taxed at 40%, they will be taxed at your whatever % your income is at the end of the year when you file your income tax form. the withholding my be 40%, but sorry, they aren't taxed at that rate.

 

Actually if they are taxed as income you are correct, but if they are taxed as a gift, they are taxed higher.  Here in Colo with Min. exemptions my taxes on my bonus this year will be just over 38%.  It really depends if it is part of your salary or treated diferently.



2007-11-29 7:00 PM
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Subject: RE: Oh I am so tempted
velocomp - 2007-11-29 4:53 PM

ohiost90 - 2007-11-29 2:04 PM
lisac957 - 2007-11-29 3:22 PM Congrats! Bonuses are fun. Except for the 40% tax associated with them.
bonuses are not taxed at 40%, they will be taxed at your whatever % your income is at the end of the year when you file your income tax form. the withholding my be 40%, but sorry, they aren't taxed at that rate.

 

Actually if they are taxed as income you are correct, but if they are taxed as a gift, they are taxed higher.  Here in Colo with Min. exemptions my taxes on my bonus this year will be just over 38%.  It really depends if it is part of your salary or treated diferently.



On a federal level, gifts transferred by or for an employer to, or for the benefit of, an employee cannot be excluded from the gross income of the employee for Federal income tax purposes.
That is, they are taxed as regular income. I have no idea what or how Colo handles employer gifts.
2007-11-29 7:12 PM
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Subject: RE: Oh I am so tempted
mgmoore7 - 2007-11-29 2:18 PM

 this bonus would cut 2-3 months off of that time frame.......  Once out of debt I would be able to buy just about any bike I would want within a few months of saving.......

A subject I'm passionate about.... 

The day you become debt free (except for the house) is close to the same feeling as crossing your first IM finsh.  It felt very weird.  I'm a huge advocate of this and our family has been in this position for several years.  Everything is paid for in cash or with a debit card.  The kids in this house have no clue what a credit card is for and we take pride in vocally teasing sales clerks who try to push their stupid department store credit on us.

Knocking 2-3 months off  your goal is huge.  I'd treat the bonus as a blessing and would probalby it in a money-market account as an extra security blanket for when life gets in the way of the 15month debt free goal. Meaning -> crap always seems to break as you gain momentum in paying off vehicles, silly best buy 90 days same as cash crap or whatever.

Long story short is that once you paid everything off but the house your life will be filled with so many more opportunities.  

If you are patient, keep your eyes open and let everyone in your world know about your road bike needs I'm sure one will find it's way to you.  I'd rather see your debt free goal pushed out 2-3 weeks instead of months.

2007-11-29 7:20 PM
in reply to: #1075110

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Subject: RE: Oh I am so tempted

jeffehli
I hear yah.  I am very passionate about it now too.  My wife and I are discussing it.  If we do spend any of it it would only impact the timeline by less than 1 month.

 

2007-11-29 7:46 PM
in reply to: #1075127

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Subject: RE: Oh I am so tempted
mgmoore7 - 2007-11-29 7:20 PM

jeffehli
I hear yah.  I am very passionate about it now too.  My wife and I are discussing it.  If we do spend any of it it would only impact the timeline by less than 1 month.

Awesome! 

2 to 3 years down the road you won't regret that decision.  Besides - in 3 years would be time for a new bike anyway   In the meantime there is a way to participate in this sport and meet your personal financial goals.

2007-11-29 7:54 PM
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Subject: RE: Oh I am so tempted
Skip the bling bike for a while, a $300 used roadie will be more than enough for the next year or two.


2007-11-29 9:58 PM
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Subject: RE: Oh I am so tempted

Well, we decided that we would pull out $1,000 and split it between us.  That gives me $500 to find a used bike and she will be able to buy some things she has been wanting.  This will only impact our plan to be out of debt by less than 1 month.

 

 

2007-11-30 1:13 AM
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Subject: RE: Oh I am so tempted
Good plan. We have learned to keep 3x what we think we might need in emergency cash. My wife and I were just a couple months away from being debt free, except the house, when she was laid off. As the primary income earner this was a huge hit to us. We spent the remainder of her time on the payroll saving as hard as we could.

She has a new job, but we had to move so we are paying rent and a mortgage, waiting for our house to sell.

2007-11-30 7:37 AM
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Subject: RE: Oh I am so tempted
mgmoore7 - 2007-11-29 2:18 PM

I just got a nice and very unexpected bonus. I so want a road bike and won't even spend 1/5th of the bonus but we are 15-16 months from getting out of debt (except our house) and this bonus would cut 2-3 months off of that time frame....... Once out of debt I would be able to buy just about any bike I would want within a few months of saving.......

By the way, I am currently riding a Giant Cypress (hybrid). I want to go faster and be able to do group rides on Sat mornings.

Haven't even told my wife yet. I am so excited but I want to see her face rather than tell her on the phone.



Debt first, then hold out for the bike you want. You've come this far, keep it up. The bike will still be there when you're done.

2007-11-30 7:49 AM
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Subject: RE: Oh I am so tempted
jeffehli - 2007-11-29 1:12 AM
and we take pride in vocally teasing sales clerks who try to push their stupid department store credit on us.


I do that!

"Would you like a Hous of Fraser card? Save 10% on your purchases today"

"At 40% interest? I don't think so"

"Excuse me, but it's only 38%"



Only.

38.

Percent.



THAT'S ALMOST HALF!!

2007-11-30 7:54 AM
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Subject: RE: Oh I am so tempted

Tri-FatBoy - 2007-11-30 8:37 AM

Debt first, then hold out for the bike you want. You've come this far, keep it up. The bike will still be there when you're done.

Yes, I guess I am looking at it this way:  Another major goal in my life right now is losing weight.  I have lost almost 20lbs in about 5 months by biking and running.  A new bike just helps with the motivation to keep going.  Also, we have not bought ourselves anything for about 16 months.  This is a small bit of motivation and reward to keep going.  I know I sound like I am justifying it, but I assure you, debt is a very very very high priorty and giving each of us $500 will only add less than 1 month to the plan.

Secondly, I really don't think, especially after our discussion last night that she is going to go for any bike any more than $500 or maybe $750 now or later.  So I doubt that I will actually have more $ to spend at that time.  Since that seems to be the case, I feel like I may as well get what I can now and enjoy it over the year or so.  Still then, I could sell this bike and upgrade if things change.  This is a tough one.  She just does not understand.  She thinks $500 is just nuts for a bike and just about drops to the floor when I tell her that I can't buy a new one for that and that they go into the the thousands.  I don't want one that expensive but a bike at the 105 component level would be nice. 

She has two kitchen appliances that she wants that will cost $500 or so.  I think that is crazy. 

Thanks everyone for the comments.

 



2007-11-30 8:18 AM
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Subject: RE: Oh I am so tempted
jetlag - 2007-11-30 7:49 AM
jeffehli - 2007-11-29 1:12 AM and we take pride in vocally teasing sales clerks who try to push their stupid department store credit on us.
I do that! "Would you like a Hous of Fraser card? Save 10% on your purchases today" "At 40% interest? I don't think so" "Excuse me, but it's only 38%" Only. 38. Percent. THAT'S ALMOST HALF!!
It's only 38% if you don't pay it off every month (just saying). 
2007-11-30 8:20 AM
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Subject: RE: Oh I am so tempted
Keep paying off the debt. The cost of keeping the debt going a bit longer does mean that you have less money for bike stuff for the future.

It's definately nice to be debt free.
2007-11-30 8:22 AM
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Subject: RE: Oh I am so tempted
mgmoore7 - 2007-11-30 7:54 AM

Tri-FatBoy - 2007-11-30 8:37 AM

Debt first, then hold out for the bike you want. You've come this far, keep it up. The bike will still be there when you're done.

Yes, I guess I am looking at it this way:  Another major goal in my life right now is losing weight.  I have lost almost 20lbs in about 5 months by biking and running.  A new bike just helps with the motivation to keep going.  Also, we have not bought ourselves anything for about 16 months.  This is a small bit of motivation and reward to keep going.  I know I sound like I am justifying it, but I assure you, debt is a very very very high priorty and giving each of us $500 will only add less than 1 month to the plan.

Secondly, I really don't think, especially after our discussion last night that she is going to go for any bike any more than $500 or maybe $750 now or later.  So I doubt that I will actually have more $ to spend at that time.  Since that seems to be the case, I feel like I may as well get what I can now and enjoy it over the year or so.  Still then, I could sell this bike and upgrade if things change.  This is a tough one.  She just does not understand.  She thinks $500 is just nuts for a bike and just about drops to the floor when I tell her that I can't buy a new one for that and that they go into the the thousands.  I don't want one that expensive but a bike at the 105 component level would be nice. 

She has two kitchen appliances that she wants that will cost $500 or so.  I think that is crazy. 

Thanks everyone for the comments.

 

I basically had the same problem when I got my first bike.  I wanted to do a tri that was a month away and had no bike and really my wife was not keen to the idea of spending a bunch of money on a bike.  I convinced her to let me spend $350 and got my current bike from bikesdirect.com (sora level).  Decent bike but pretty heavy and low end components.  I have put about 2300 miles on it this year and even did a HIM on it so it works fine just heavy (but it is a 64cm frame so that does not help).  I recently found a fellow BTer selling a motobecane nemesis tri frame and I buying it for $125 this weekend with the hopes of slowly buying parts to build it up.  This way I get a decent bike in pieces and my wife won't mind as much since I will be using my allowance money towards the parts. 

Do you have a budget that allows for personal spending?  Maybe once your debt is paid off you can create a "new bike" line on your budget so in a year or so you can upgrade to a nicer bike.  Maybe she won't mind as much if you do it that way.  Just an idea.

2007-11-30 8:51 AM
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Subject: RE: Oh I am so tempted

Kproudfoot

Yes we both have a personal "blow" budget but right now it is $30 a month and it won't increase until we out of debt.  Tough to do much with that.  I also budget for events as a separate line item but this is very low too.  I have to be careful with that too as I want the $ to go to debt rather than events but the event help with the motivation to keep loosing weight.  Once I register, I am locked in and that helps with the motivation.

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