Well it is official. My old car is gone! Towed to lord knows where and who cares for what future! What a huge relief to be done with it after all of this time. I am still surprised to learn there is a statute of limitations for auto loans because I always thought they were kind of like student loans.... will haunt you even after death lol. I have a three day weekend so I think I will use it to relax and not think about finances. Then I see where I am at and figure out what to work on next.
Remember that 2nd job? Well I have been extended until the end of June! Yes the long days are tiresome and some days I feel like quitting, but given all the financial/legal matters that have popped up this year the extra money has been a blessing. The job was supposed to end mid-March, but they extended me until the end of April because half the team had quit because they found full time jobs with benefits. Even though I am only part time I was trained on all of the products and my process speed is high so it was cost effective to keep me. Well then the only other team member who knows everything I know went out on family leave and will not be back until July, so now they really cannot afford to let me go.
Congratulations to me! I finally settled on a renters insurance policy and yes it is for actual replacement cost and includes additional coverage for my computer. I also got a discount because they are partnered with my auto insurance company. Part of this process was inspired by some new gal pals, who happen to be lawyers that were talking about how the personal liability coverage works. Prior to my struggles I always had renters insurance, but I clearly did not understand how the personal liability portion worked otherwise I would not have scrimped on it. Well scrimp no more! The deductible is a bit lower than I would have liked, but my EF is not where I would like it to be yet so this made sense.
I can also add a separate rider to cover business property at any time. That came up because for my job I am being asked to travel to multiple locations and I have to take the company laptop. Perhaps I am paranoid, but I do not trust the company to take care of it if something that is not my fault happens and I may not have whatever absurd amount of money they claim it is worth lying around either. On Tuesday I will contact our IT person and get a value from him so they can give me a quote.
I also made major headway on that legal matter that crept up sooner than expected. I was able to just get a free legal consult and did not have to hire an attorney, thank heavens! The amount of paperwork was kind of ridiculous and the time spent in the courthouse was lengthy, but everything was completed correctly and filed. The actual cost ended up being a bit less than I expected, but it still would have been nice to funnel that money into my EF or toward debt repayment. Now I just have to wait for a judge to review it and give their approval, which can take a couple of months. Thankfully I have only had to miss one day of work to deal with this and do not anticipate missing any more. What a relief it will be when it is all over!
Wow. I am making progress in an unexpected way. Remember when I mentioned my neighbor asking about buying my old car (even though it is a piece of junk) and how I was not sure where I stood with it financially. Well one of the wise members here suggested I get a report to find out if the lien holder is even still listed. I did that (and it cost me $3 *eye roll*) and it turns out the lien holder is still on there. I had no interest in trying to deal with them so I decided to get some legal advice on what my options were. I really just want to be done with the matter and am happy to make payment arrangements if that is necessary.
I am not exactly in the know when it comes to lawyers so I used the Employee Assistance Program at work to ask for a referral. That turned out to be a wonderful idea because they connected me to a firm that specializes in debts and collections and told me I can have as many consultations as I need on any number of matters for free. Yep FREE! Can you believe that?! If I ended up needing an attorney to represent me they could provide that for a fee, but I was hoping not to get to that point.
The experience was actually quite pleasant despite how embarrassing it was to explain why I wound up with an unpaid and now non operational vehicle. After all of that I was given surprising news. Apparently it is past the statute of limitations to collect on this debt, which is why it is no longer showing up on my credit reports (I just thought they made a mistake lol) and why I was sent cancelled debt forms to file with my taxes a few years ago. Basically the cancelled debt forms were the lien holder’s way of settling their books since they cannot pursue me any further. This also means that the vehicle is the lien holder’s property because they possess the title and they will take possession of it if I call them and tell them where it is. Apparently this will happen fairly quickly because they will not want the city to tow it and have to deal with impound fees or whatever.
I will admit I was stunned by this information and did not do anything for a week or so. A part of me was relieved that there is a light at the end of the tunnel, but another part of me feels bad about not paying like I intended to. I did not want to be in this situation and I certainly was not looking for an easy way out. I have more than learned from this experience however, and am doing everything I can to never be in this situation again. Continuing to stall does not change anything so today I placed the call to the lien holder. I did not identify myself or provide my contact information, but gave them the vehicle’s identifying information and location. I even told them that it will require towing, how nice of me right? That was also a pleasant call despite the circumstances. Now I just have to wait and see how long this all takes. The firm told me to contact them immediately if I have any hassles from them, but hopefully it will not come to that.
Wow what a great choice it was going with stainless steel cookware! I am so in love with it I could quit my job and just cook all day long =) I have not used every single pot or pan yet, but that will come in time. The slow cooker is probably my current favorite since I tend to throw everything in before I go to bed and the food is done by morning. I know I can have it cook while I am at work, but somehow it freaks me out to not be here just in case. I also have not used any oil while cooking and nothing sticks!
I actually thought I ruined the rice cooker because after using it, I washed it and then noticed a strange rainbow colored stain all over the inside. Apparently this is common with stainless steel and more likely to happen when cooking starches. Harmless, but still annoying. A little web searching indicates I can clean it with vinegar or Barkeeper’s Friend.
As I continue to shift from constant dining out to meal planning and cooking at home I expect my food budget to shrink. So far the savings are minimal, but I am inspired to keep at it =)
So here is some good news....
I passed probation at my day job despite all of the headaches with my boss. She is still making it very clear that she dislikes me, but I have not given her a reason to write me up or get rid of me. Passing probation means a raise which is nice, but I am still keeping my eyes open for other opportunities.
I also expected my 2nd job to end in the middle of March, but here it is the end of April and I am still there. I appreciate the extra money so I am trying not to let the long days get to me.
My expense tracking is getting back on track and it is amazing how closely I look at receipts now. One of the things that stood out to me looking at the first few months of the year is how much money I spent on water. I am on the go a lot so it has been more convenient to buy bottled water whenever I am out. Well at some point I brought that habit home and started exclusively drinking bottled water at home too. Thinking back I realize I have done this for maybe 2-3 years! Judging by the water purchases this year I estimate I was spending a few hundred dollars a year which is pretty ridiculous. I purchased a new water pitcher and filter and fill up my 32 ounce bpa free water bottle (got it free at an event) daily.
I also settled on a smart way to adjust my finances to accommodate that annoying legal matter. I did not stop my debt repayments, but instead reduced entertainment/dining out costs, have temporarily stopped funding my EF and am using the portion of my tax return that I allocated for a secured credit card. All of that should be enough and once the courts do their thing this should all be over in a few months.
And one piece of not so good news.....
Rent is going up $60 per month. I get that building maintenance and common utilities are expensive, but on the other hand I feel like I should be rewarded for being a quiet, non-destructive long term tenant. Even with the increase I am still paying a below market rate which I know I am lucky to have. It is just a little annoying that I am finally starting to get ahead and have some breathing room and then this happens. It would be too costly and inconvenient for me to move at this time so I am going to eat the increase and keep focusing on my goals.
Ok so maybe my progress train has derailed a bit or maybe I am over thinking it. Here is the rundown of what has been going on.
1) Day job... It is terrible. The work itself is boring, not challenging, and despite what I was told in the interview process I am not actually using any of the skills I developed in my graduate program although they are paying me for those skills. My boss hates me and has made it clear she is not impressed with me or my work. I am doing exactly what my colleagues are doing and yet they get raves from her. There just do not seem to be any great options to try to make the situation better without winding up in a her versus me situation and her longevity winning. I am still in my probationary period and cannot afford to just walk away so I am trying to tough it out, but am also keeping my eyes peeled for other options just in case.
2) 2nd job... In February there were more hours available and we lost some team members so I expanded my schedule a bit. The extra money is good, but this on top of my day job and everything else is just tiring and made me realize that I do not want to work like this until I retire. I think for the longest time I just assumed I would have no choice but to work like this, but with my career change it will not be necessary since my earning potential has increased. March has slowed down which is nicer.
3) Spending... I have not gotten out of control here likely because I have been working so much. I am still eating out more than I would like due to the long hours, but my new cookware has arrived so hopefully I can change things soon. I have also treated myself to tickets to a few upcoming performances and arts related events, but had no problem saying no to shows that I thought were just way too expensive.
4) Expense Tracking... This I have totally slacked on. I have pretty much all of February’s receipts to enter and those from the beginning of this month. I know I did not go over budget because there is still plenty of money in my checking account, but I miss the organization of seeing everything on the spreadsheet. LOL! There is something I never thought I would say.
5) Debt Repayment... Ummm I have not done anything here since paying off that payday loan. I did call to take care of the second one, but their system was down so they could not process it. Then I just got too busy to call back during their business hours. I just feel kind of directionless in this area, but maybe I am just tired. I keep having the strangest thoughts..... What will I do when all the debts are paid? Of course I could use that money for other things. But what other things? What if I run out of other things? Maybe that sounds stupid.
6) Savings... I have slacked off on the 52 Weeks Savings Challenge and adding to my EF. There are plenty of funds sitting in my checking account, but I have to move them and I just do not feel like it or that could be me being tired again. Sometimes I feel as if I cannot remember why I wanted to save in the first place. This could be because I did not outline a purpose for the 52 Week money and because the things that would normally be emergencies that would create debt I am now able to comfortably afford.
7) Surprise!... A minor legal matter has popped up and no it is not debt related. It is something I expected to have to deal with at some point and apparently that time has come now. Thankfully I can handle the matter myself and will not need to hire an attorney. It will just be a pain to have to go down to the courthouse to get everything squared away. The fees are a bit more than I expected so I am considering pausing my debt repayment to take care of this. Or maybe I should pause my saving? I do not know.
Today I decided to pay off one of my smaller debts with a portion of my tax refund and settled on an old pay day loan. I did not want to risk dealing with an inexperienced employee in the store so I just called the corporate office to find out how to proceed. Well surprise surprise they were able to take my payment right over the phone for no extra charge and cleared my account immediately. Worked for me!
Then I got a second surprise when she mentioned another outstanding pay day loan, but from a different company. I knew about this one and figured I would deal with it next month, but I was not sure how she knew about it. Turns out the other company is their sister company, which means they should not have given me a loan because I had an outstanding one with their parent company. Their bad. The upside is I can deal directly with the parent company to clear that one as well for no extra charge and the amount due is much less than I thought it was.
I knew getting out of debt would be a slow and somewhat emotional process, but it was really nice to not be hassled regarding this account. I expected there to be rudeness, snarky comments about my being irresponsible, and some ridiculous hoops to jump through just to get them to take my payment. How nice to be able to just pay and move on.
New cookware is on the way! After plenty of research and comments on this message board I finally settled on stainless steel. The set will have all the pots and pans I need and has a good warranty in case there is a freak accident. It should be here in a week and I expect to love it.
While I was at it I decided to replace my aluminum rice cooker that long ago became scratched up and also makes my food taste a bit off. I found one with a stainless steel insert and it has already arrived. I even found a pressure cooker and crock pot combo that has a stainless steel insert and that should be here in a week as well. I could also use it to make rice, but I am one of those prepare many things using every single pot, pan, and gadget at once kind of cooks. Waiting to free up something would just get on my nerves.
I grumbled a bit about the cost of everything, but this is more of an investment that should last quite awhile. Plus I am hoping the savings on takeout will lead to it paying for itself soon. Now I just need to decide on bakeware.
Yesterday I checked my mail and was surprised to find the title to my vehicle properly signed off by the title company and a final statement confirming that I am paid in full. What a strange feeling I had while looking at it. When things got really rough I did not think I would ever pay off that loan or see the title again, but here it is. Today as I went about my usual routine I finally figured out what that feeling was.... relief. I cannot remember the last time I felt that so strongly. Now I feel ready to pick up the pace and resume meeting my financial goals, instead of the lag I have been feeling since paying off that loan.
I am continuously amazed at the advancements in technology. I filed my taxes online on the 1st and my federal refund was deposited into my checking account on the 6th. I remember when I first started filing I would not get a check until April lol. I ended up owing the state under $100, which is not terrible, and I have already sent the payment to them. After some thought I think I have finally decided to divide my refund over a few things:
I have so much hatred for my cast iron set I do not even want to bother cooking, which so far has meant spending more money eating out. I would like to change this.
Secured credit card
This is on my 2015 goals list and I like the idea of doing it now so I can spend the whole year benefiting from it.
I am going to pay off one of my smaller debts in full.
I am going to put a little in here to keep the momentum going.
I needed a change of scenery so I took a day trip yesterday and had a blast. It was mostly walking around and enjoying free stuff so the expense was really gas and food, which was not much.
Not a bad mix of things I think.
I have only been at my new job a few months and I find I am still getting used to all of the HR and payroll related things. I nearly had a heart attack when I got my paycheck and saw no deductions for my medical, vision, or dental. I know human error happens, but I did not want to deal with a false cancellation which would likely be really annoying if I actually had to use my benefits. Well it turns out my company has so many pay periods in the year that if they deducted the premiums on all of them we would be overpaying. So they just pick a couple to not deduct from and we get to enjoy the extra money. Would it have killed them to put a little blurb on our paystubs as a reminder?! Geez!
Wow January is over? In expense tracking related news, things are still going well. I have about $36 unaccounted for which is annoying, but not the end of the world. This could be vending machine snacks, gas, cash tips, or something I bought and forgot to ask for a receipt for. Regardless I just noted it on my spreadsheet as “I have no idea” so it would balance out lol.
In income related news I got a cost of living raise at my day job, which is good because that means more money toward debt and necessities. It just caught me by surprise because normally those adjustments are so low I do not notice any difference in my net income, but this time I definitely do. My 2nd job has cut hours due to less work and even though that is extra income it is still sad to see smaller checks. They are expecting work to pick up in February, so I am crossing my fingers.
My car insurance is up for renewal and will go down a couple bucks. I also reviewed my coverage and learned that there is no deductible for just liability/uninsured motorist coverage. All this time I thought I would have to pay a deductible if I got hit by someone with no coverage, but apparently not. My car is worth less than 3k and the mechanic says I should be able to get another 2-3 years out of it so I will continue with the same coverage.
I also was able to add that class I wanted to take for professional development purposes and I must say it was kind of exciting to just pay cash for the tuition and books. I could have used this money to knock out some more debt, but in the long run this will lead to more income and it was a way to celebrate getting rid of that title loan. Normally I would celebrate by going out to dinner with my family, but I did not tell any of them about that loan because it was entirely too embarrassing. Advancing my career is an even better celebration =)
Given how wonky my spending was this month I figured I would wait until the end of the month to add funds to my EF. So I go to log in to Barclays and get an error saying my account is blocked or not recognized. Odd. I know I am using the correct user name and password and I received no contact from them indicating a problem. Well apparently there is no way to request a password reset online (and that may not even be the problem) so I actually have to call them to get to the bottom of it. I am already very skeptical of online accounts and this is not making me feel any better about it. Hopefully this is some weird computer glitch that can be quickly remedied otherwise I will happily close my account and forgo a good interest rate at a brick and mortar institution.
So I called Barclays this morning (now Feb 1st) to find out what was wrong with my account. The rep couldn't find a single thing wrong with my account or my log in information. He said the only thing that was strange was that I was logging in via their main site, which I should be able to do, but it wasn't letting me for some reason. He gave me the direct link for their banking site and logging in there worked fine. My money is where it should be and my information is safe, but that was still really weird.
Expense tracking is off to a good start for 2015 and I am glad I used December as a practice run. I am noticing that consciously asking for receipts or recording cash purchases in my cell phone to later add to my spreadsheet often makes me ponder whether I actually need the item or if there might be a more affordable option. I even surprised myself by actually taking some coupons to the grocery store when normally I keep forgetting them and then they expire unused.
Spending this month has been a little crazy due to a business trip I had to take, but I submitted my receipts for reimbursement immediately after my return. I did quite a bit of research to keep my costs low regardless and that worked out very well. In addition to this my car needed new tires, front brakes, and an oil change. All necessary maintenance, but still costly despite the deals I was given. I am also hoping to take a class for professional development purposes and will be paying out of pocket for that at the end of the month if my add request is approved.
It was just after the New Year that I got an updated statement from the title loan company and I was happy to see that the balance was finally under $500. On my next paycheck I sent them a final payment and thought good riddance. They will forward my title as soon as they have removed themselves as lien holder and I will go back to owning my vehicle outright. This debt is finally dead and this experience (life lesson?) will never be repeated. The final numbers are as follows:
Amount Financed $3090.00
Amount Paid $9983.35
Yes those numbers are daunting, but as I mentioned in a prior post part of the reason the amount paid ended up being so high was because I wound up paying late or making partial payments on so many occasions. When that happens generally they apply payments to late fees, finance charges, and interest before going anywhere near the principle just like most other debts. That is also how they make their outrageous profits, much like payday lenders.
Thinking back to the dire circumstances that led me to get this loan in the first place leaves me with mixed feelings. I did have to deal with that situation and at the time there were no better financial options available so I cannot say I regret doing it. However, I do regret not having educated myself earlier on about how to put myself in a better financial position so that the odds of me going this route were significantly reduced. Oh how grateful I am to be doing things differently going forward.
While I am happy to be done with this debt I think I expected to feel differently when it was over. This frees up so much income to throw at other debts and savings and I guess I expected to feel more inspired to pursue those goals. Instead I just feel kind of flat and like doing nothing. That is not realistic and I will not actually do that, but I am surprised to feel that way.
Wow 2015. I have actually just spent the first week of the New Year trying to take in all the progress I have made and all the goals I have set for myself. As mentioned in the sidebar, my goals are in no particular order largely because it was too exhausting trying to decide what should come first. I have had enough stress the last few years and do not want to continue that way going forward. Once I felt centered I figured I would just be guided to handle each goal in whatever order I was meant to and that would be ok.
So here I am having a loungey TV binge day at home (I just discovered Switched at Birth and am almost done with season 1) and there is a knock on my door. I am not the type to have guests so knocks are usually the landlord, someone needing directions, or well meaning religious types. Turns out it was one of my neighbors that I have seen around a few times. I have lived in this complex for a few years, but I pretty much keep to myself or am gone a lot so I do not really know any of the other tenants. She came by to inquire about my old car (the one I still need to deal with) that I have parked here and registered in non-operational status. I just told her that it is a hunk of junk that no longer runs (which is true), I am still making payments on it (not exactly true), and when it is paid off I am dumping it at the nearest junkyard.
Well funny thing is she loves it and does not care how much work it needs. She thinks it is adorable, is mechanically inclined, and sees it as a fun project for herself. She said when I am done paying on it she would love to take it off my hands. Visually it is cute so I kind of get that, but why on earth would she want to waste the time and money fixing it up? I rattled off all the repairs I had to do over the years because of its poor design, the high cost of insurance (I do not currently have it insured to save money), and just what a huge pain in the ass it turned out to be despite its cuteness lol. And after all that she is still interested! Weird right? I guess this is the universe telling me that I should begin working on this goal now.
I actually do not know the current status of the vehicle and was thinking of using that EAP service through my employer to talk with a lawyer about it. When things got bad (as detailed in my post The Indebted and the Irresponsible) I was not able to keep up with the payment and the lender would not work with me, surprise surprise. I figured they would eventually just pick up the car, but that did not happen. Then a couple of years ago I got some tax forms (which I filed as part of my return) in the mail related to the loan because I assume they were writing it off their books. They still did not pick up the car, I still do not have the title, and I have not heard from them since those tax forms so the status is unclear to me.
At this point it is not really worth anything so taking it back would not do them any good, but I am thinking there is room to reach some kind of settlement on whatever amount they were not able to write off in exchange for the title. That is why I figured talking to a lawyer might be a good idea and then they could handle that kind of negotiation and explain all the fine print to me. If that is indeed possible and my neighbor is still interested then I have no problem letting her have it as I am ready to let it go.
While it was my December goal to have the title loan paid off I do not think I made it and not because I lacked the funds. I am actually still waiting for an updated statement from them and they were closed a day or two for the holidays and may just be behind. Even though I may have to make a payment or two in January this is already feeling like a huge burden lifted and seems like a positive way to start the New Year. Thanks to the avalanche method I am also seeing the light at the end of the tunnel and am happy to be on track with my other debts.
In reviewing December’s expense tracking spreadsheet I could not help but notice that I spent a third of my net income on debt repayment and past due bills. Yes you read that right.... a third! I can hardly believe that myself and I definitely want that to change in 2015.
For December I was given a free month at a nearby gym and surprised myself by attending an average of 4 times a week to a variety of classes. There are lots of options to go around my work schedule and it helped fill some of the down time I have too much of so I think I will stick with it throughout 2015. I even used my Google calendar to track the classes I actually attended which will help compare number of visits to monthly cost. Physically I noticed that I slept better and ate less in the evening after working out. It is funny how a morning workout, which I usually prefer, increases how much I eat throughout the day and does not seem to help me sleep at all. As an added plus they have a hot tub and the one at my complex is always broken which annoys me.
Thanks to my employer I was able to get the required upfront first and last month’s membership fees waived and $20 off my monthly membership for as long as I have it. Plus they had an end of the year special that reduced the application fee to just $10. If that is not enough they then told me that they now allow members the option of coming in and paying in cash each month instead of mandatory auto billing! They do require a card on file in case you do not come in on time, but I had no problem using my prepaid Amex debit card, which also keeps them away from my personal accounts.
In other expenses news I have completed my tracking for December and wow it is weird to see all my money listed like that. It is very helpful though to know where every cent went and to have a little bit of money left over for once. I cannot wait to see what my household bills are actually like each month now that I am finally caught up.
A couple of categories seemed high such as Clothing/Accessories and Dining/Drinks Out so I will watch those closely next year. Other categories were surprisingly low such as Gas and Entertainment, so I am curious if that is the norm for this time of year or not. I will have a better idea next year.
Well as I suspected I did not make my goal of putting 1k in my EF this month. The debt repayment and past due household bills really did me in. Plus I underestimated how much taxes would be taken from my paychecks. My income has more than doubled which is good, but the added taxes are a challenging adjustment. Regardless, I did not want to ring in the New Year with nothing in my EF so I transferred $25. It is not a lot, but at the same time it feels great knowing I started. It may sound silly, but to me it seems like a way to set my intentions for the coming year as if I were saying to the universe..... Yes I am serious about saving money!
For those of you who want details and not just the brief list in the sidebar here goes.
In no particular order, my goals for 2015 are...
Continue to track all income, expenses, and debt avalanche/snowball
After using December 2014 as a test run I altered my expense tracking spreadsheet a few times and now I think it is perfect for my needs. Since I still have a second job I am going to continue to handle debts with the avalanche method, but when I am down to one job I will probably switch to the snowball method.
Continue to pay bills on time
For most things I get e-bills and I also set up reminders on my online calendar. Now that I am caught up I think this system will be fine.
Continue to pay into company retirement account
This is a mandatory and automatic deduction, but so far it has been working out ok and I am getting the employer match. I think if I had been given the choice of what percentage to contribute I would have gone a little lower to free up more income for debt repayment. However, having another job helps me accomplish that and comfortably handle the larger retirement contribution.
Find realistic ways to reduce expenses
I am not sure how or where I will reduce expenses yet, but as I review my tracker each month and read the forums I am sure I will get plenty of ideas.
Get Renter’s insurance
Before getting laid off all those years ago I had this coverage and was grateful for it even though I never had to use it. Resuming this coverage will create added peace of mind and it is not too expensive.
Get Disability insurance
My employer does not pay into the state’s system and the free policy they offer only gives you up to $800 a month for 6 months. HR blatantly said the company does not care and employees are expected to purchase a supplemental policy to protect ourselves. I later learned that because all of my prior jobs have paid into state disability it is possible (though not guaranteed) for me to still file a claim with them if I need to, but it will not cover my full income, would only be a short term benefit, and may be reduced due to benefits my employer is giving me.
My thought is that these not so great short term disability options will be ok provided I have a solid EF. My greater concern is if I need to be on disability for more than 6 months and my EF is not enough to cover a year or two or three. My employer offers a supplemental policy, but it will not stay with me if I leave them so I will begin getting quotes from elsewhere.
Get Life insurance
After learning that life insurance can do more than just protect minor children I have decided that obtaining a term life policy is a good idea. I currently do not have funds for my own burial and that expense would create a severe hardship for my family. I would also like a part of this benefit to support my mom in her golden years should something happen to me. I still have plenty of research to do in this area on required documents/proper set up as well as help her get her affairs in order, which I mentioned briefly in my blog post Incapacitation and Inevitable Incidents.
Establish an EF account of 2k ASAP and later get it to 5k
I talked about this in my blog post Predicaments and Precautions, but in a nutshell I decided 2k is the bare minimum I need to handle basic emergencies and to feel comfortable raising my insurance deductibles. 5k is the number I came up with to start to work toward having 8 months of living expenses set aside. I am still not entirely sure exactly how much my monthly expenses are because of all the debt repayments/catching up and I have only been tracking for a month, but it is looking like 2k per month or 16k total. Not bad, but that could change later in the year, which is fine. I think I am disciplined enough to treat EF contributions like a bill each time I get paid, and after some research I have decided to try putting this money in a Barclays Dream Account. I am not completely sold on online accounts though so we will see how it goes.
Tithe/Charitable giving of 5-10% of net income
This goal is part personal part spiritual. I just do not feel right having so much when so many have nothing. Plus during my years of struggle there were so many times people surprised me with help in ways I never imagined. I have always done my best to be a good person and help others either by offering my time, resources, or money and all the help I received in my time of need had to be karma. I would love to do more, but my debt and savings goals have to be a larger priority.
Become debt free except for student loans
In my opinion the student loans are my only positive debt and they have always remained in good standing on my credit reports. All the other debt I have is not serving me so it has to go.
Deal with my old car
This may be something I consult a lawyer about because I will admit I am not completely sure where things stand. This is currently not my top priority and not even in the top five so I am going to stop thinking/talking about it until I have taken care of a few more important things. Then there will be space to deal with this.
Review and clear up discrepancies/errors on credit reports
I still have those 2 that I did not open, but I am getting there. The suggestions on these boards have led me to a few helpful resources on handling this so I am not worried.
Obtain a secured credit card, select one household bill to be automatically charged, and pay it off on time each month
Now that I really understand how credit cards work I think I can do it right this time. No cash advances, no convenience checks, no balance transfers, and no carrying it around! And no letting them waive my payment for a month (or two or three!) because I have made a few consecutive on time payments! That is not a benefit; it is an underhanded way to get me to pay more interest! A limit of $300-$500 should be just fine to help me rebuild my credit and keep me from getting into trouble.
I am also leaning toward choosing the phone bill (yes I still use a landline!) to be automatically charged. Right now it is the only routine bill that I get via snail mail because the company does not offer e-bills. Yes I know that is stupid and I have been back and forth with them about it, but they are not interested in creating that option. To send a paper bill they charge me a $2 fee each month, but they will waive that fee if I set up an automatic payment via a credit card or bank account. I do not want them anywhere near my bank account so a credit card is a good option.
Use up my FSA
I learned a very hard lesson in 2014 that I am hoping to not have to repeat again. In January 2014 I landed a full time job in my new career that offered benefits. Having to go without health insurance for a few years I knew there were some things I needed to take care of and I could finally do so using my new coverage and the FSA. I did some research, estimated my costs, and began to fund my FSA accordingly. The challenge I quickly found was having to pay for my medical costs out of pocket and then wait for the FSA to reimburse me later when my low wage (and trying to keep my head above water financially) did not allow for that. I was hoping that by the end of November 2014 to have enough money to front the cost of everything and then get everything done in December since my original plan was to stay at this job a year and then move on.
Well then in October 2014 I was blessed with the opportunity to take a much better paying job and I jumped at the chance. I had not reached my savings goal regarding my FSA and found out that only services through the end of October would be eligible for reimbursement because I was leaving my position. There was just no way to squeeze in the appointments I needed or front all the out of pocket costs before leaving my job, so I ended up losing more than half the money in my FSA. When I signed up for the FSA originally it was not clearly explained how the account would be handled if I left the company and I was so grateful to get off the temp/unemployment wheel I did not think about it either.
With my current job they gave me an FSA debit card which allows me to use the benefit immediately after it is deducted from my paychecks. No more trying to save up to pay out of pocket costs, no excuse for losing this money at the end of the year or if I leave this job unexpectedly, and no mailing in receipts waiting for my own money back.
Participate in the 52 Week Savings Challenge
After reading some of the threads on this it seemed like a great way to make saving fun. I need fun or I will get lazy and quit. I am not sure what this money will be for.... New cookware? A vacation? Professional development? Wardrobe updates? Something else? I love the idea of having it for a rainy day though. For now this money will sit in my regular savings account, but if things seem to be ok with Barclays I can move it there.
This month has been a whirlwind of financial gains, learning, and reality checks all of which I am grateful for. I think I am almost done finalizing my 2015 goals thanks to the input on these boards and the books I have been reading. Surprisingly it has been reading Suze Orman’s book Women & Money that made me realize that preparing for the unavoidable is a huge part of financial planning when I guess it always seemed like something else to me. What I am not sure, but something else. I have always known it was important to designate beneficiaries for things, that I will care for my mom in her golden years, and I should ponder my own end of life care but since I am only in my 30s I have not really figured out all the details yet.
The book discusses the benefit of having a will, a revocable living trust with an incapacity clause, an executor for your estate, an advanced directive, and a durable power of attorney for health care. There are likely other options or documents not discussed, but just this much information was about all I could take in. Why this type of preparation is helpful makes sense especially since I have repeatedly seen the agony families go through without this type of planning. I realize I do not have to rush to do this stuff as my health is fine, I have practically no assets right now, and no one is currently dependent on my income. I do think it is good to have this topic floating around in my head though.
You know what is terrifying? The fact that when my situation changes and the need for these documents becomes more urgent I do not have anyone to handle any of these things if something did happen to me. When it comes to my mom I can count on her to want to do the right thing, but to be completely lost in all the documents, legalese, and grief that she will just fall apart and do nothing. Generally in times of crisis I handle everything and she is comfortable letting me make all the decisions and explaining options to her. There is no other me in our family. I have a sister, but I would not trust her with a rock let alone my estate, health, or finances. I have a large extended family, but we are not close-knit and instead just see each other a couple times a year. They are not really trustworthy anyway. I do not have any close friends that I could ask to handle these kinds of circumstances either.
What do single people do in these situations? Sure things could change in the future and I may get married, but what if I do not or I outlive my husband? It seems like regardless I am supposed to have this person who will handle my affairs and fight for my best interests and I have no idea where such a person is supposed to come from.
Originally I had hoped to create a 1k EF this month, but I likely will not make that. Some of my household bills were higher than I thought and there were fewer hours at my second job than expected. Considering everything else I have accomplished before the end of 2014 I am ok with this. Hopefully I will be able to put something in my EF to at least get it started, but I am not sure how much I can contribute yet since I still have one more paycheck on the way and I am hoping to knock out that title loan. Regardless having the idea of a 1k EF floating in my mind solidified an EF as something important that I have no choice but to create.
After pondering my own expenses and reading On My Own Two Feet 2nd Edition by Kedar and Thakor I have decided that my EF needs to be a minimum of 2k, so that will be my starting point for 2015. When I think back to the financial emergencies I have had over the last 10 years most of them were under 2k so having that amount on hand would be great. I also realized that I can raise my insurance deductibles, therefore saving on the premium, and put more money toward debt repayment. No longer am I the gal that can barely scrounge up $500, because I am becoming the gal who planned ahead and had her deductibles waiting in the wings. Of course I realize emergencies are not just insurance deductibles so my long term goal in 2015 will be to get 5k in my EF.
I am going to try to keep it simple and just pick an amount each pay day to transfer into it after I have covered bills and debt repayments. Since I am avalanching my debts the amount I contribute to my EF will likely go up later in 2015 and I want to add part of my tax returns as well. For now I am going to put my EF in my general savings account, but at a later time I might be able to move it to a money market account and get a better interest rate.
It is official..... I have caught up on all of my household bills! I can start off the New Year sans late fees and past due notices, what a relief! It will be so much easier to just pay them as they arrive and finally get off the which-bill-should-I-pay-now-and-which-should-I-juggle merry go round. I can also see if I qualify for incentives to lower any of them as well.
Additionally, I have done well bringing breakfast and lunch to work, which is a nice improvement and makes the day more relaxing. I even made a small donation to a charity that I feel very strongly about which is something that I am hoping to do more often as my finances continue to improve.
In other expense tracking news I am enjoying this process. As predicted it is not depressing the way sticking to a budget was and it feels way more flexible in terms of unexpected costs and things I want. At the same time I am not having any difficulty thinking first and often postponing purchasing wants because it is so much easier to see how close I am to my goals and I love accomplishing things.
I have begun to notice my wants (whether things, entertainment, etc) increase significantly when I have too much time on my hands and I grow frustrated sitting around by myself. I work two jobs, have a handful of volunteer projects, have hobbies, and yet I still have so much down time. This is so much worse this time of year as friends and family spend more time doing couple and/or kid things and my life is not like that. I ended up with a free guest pass to a gym in my area which has helped kill some time and improved the quality of my sleep. The monthly fee would not be a hardship and the New Year will likely bring a few specials so it is on my to consider list. Regardless I still have a ton of time to fill.
We are what, a third of the way through the month? So far I am doing well tracking all of my expenses even though some of the numbers are a little surprising. For example, going out to eat or for drinks has cost three times what I have spent on groceries so far. Some of that going out is laziness or being social, but when I looked more closely at the receipts I noticed something else. Often I am going out for ethnic food which I do not know how to make at home and a number of the ingredients used are not found in standard grocery stores. There are tons of specialty grocery stores around, but perhaps I am wrongfully assuming they are more expensive.
Skipping ethnic food completely is not an option, so I have been researching dishes that can be made in a crock pot to hopefully save time and money. Of course I have to buy a new crock pot since mine broke awhile ago and I did not have the funds to replace it. Recipe searching has actually been a lot harder than I expected. Do the makers of ethnic food not think using a crock pot is a good idea? So far I have found a few Mexican and Indian recipes, but not many Ethiopian or Moroccan ones. That is just the tip of the iceberg when it comes to cuisine I eat too. Regardless this is worth a try and I do actually miss cooking.
Other observations? This was the first month I paid rent in full and on time in I have no idea how long. Before I was so underpaid that I was dividing my rent over a few checks which meant getting a 3-day notice each month even though the landlord was aware of my situation and said it was ok to make payments. The notice was really for their documentation in case I did not make all my payments and actually needed to be given an eviction notice. Paying rent in full and on time should not be a problem going forward, YAY!
I also wanted to get my hair done last week and decided to try a local beauty school. It took a little longer since the students had to stop for instructor assistance, but overall I paid half of what I would have at a regular salon and they did an excellent job. They also do manicures and pedicures for far less than I pay elsewhere. I can see myself returning, but I do not think I would do something that required any kind of chemicals like coloring since you do not have the same recourse you do at a regular salon.
Finally dealing with my debt has been a relief. I still have not opened those other two credit reports and therefore do not have a complete picture, but that is ok. Even though I wanted to get into a position to improve things for a long time I know I have to pace myself. Otherwise I will get discouraged and probably do nothing which will not do any good. Here is what I have tackled so far:
Amount Financed $3,090.00
Amount Paid $6,642.01
Balance Due $2,748.34
Yes I know that is ridiculous lol. The interest rate is outrageously high and I accrued late fees when I could not pay on time or made partial payments. I do not like to say never, but after this experience I can truly say I will never do this again! I am absolutely determined to have a decent EF so that I do not have to resort to this ever again. I seriously cannot wait to pay this off and be done with them forever.
Given that this is my top priority and the interest rate is so high I decided to use a modified Avalanche method. Basically instead of making a monthly payment I am making payments from each paycheck, because I have been blessed with two jobs. Given my estimates of this months income I see this loan paid off before the new year.
While the goal is to be debt free one day I am less stressed about these debts. Why? Because before my world turned upside down (when I just had my Undergrad loan) this was the one debt I was actually happy to pay. The whole experience of getting this bill, writing a check, and putting it in the mail reminded me of what I had accomplished with the money I borrowed. Despite how easy it was to get a forbearance I felt the guiltiest about being unable to pay this debt. At that time the payment was $100.00 a month and the fact that I could not afford that (or less than that!) made me feel like such a failure.
As soon as I finished my Grad degree this past spring I could not wait to enter repayment. I was still working a low paying job (although permanent full time with benefits) with no idea how long it would take to get a better one so I applied for the Income Based Repayment (IBR) on both loans. I was surprised that IBR gives you the choice of using last years tax return or submitting current paystubs to determine your monthly payment. I opted to use last years tax return because my income was less while a full time student and primarily temping/unemployed. I figured I could use the breathing room to take care of more important debts and get caught up on household bills. Right after I turned in the IBR paperwork I landed my new job, but decided to stick with my original plan. IBR is good for one year and here are my monthly payments:
They likely settled on $0 because at the time I was making less than a third of my overall loan total. My hope is that I can begin paying midway through 2015 and at least enjoy writing the interest off on my taxes. When its time to renew in 2015 I am leaning toward using my 2014 tax return so the payments stay low, allowing me to focus on building my EF.
Here you can see the modified spreadsheet that I am using for my expense tracking needs. There are some things I left from the original that I do not currently have or do such as Life Insurance, Car Payments, Vacations, or Netflix because they may be things I acquire or can just act as reminders of worries I do not have. I probably have way too many sections, but without being so detailed I am afraid I would forget to track something.
The original spreadsheet worked from net income which I did not like. I really wanted to be able to see all my money in one place and not have to go hunting for paystubs or W2s if I do not remember how much I paid in taxes or for benefits. Plus I have more deductions coming out of my checks than I am used to and I thought it might be helpful to see the whole year at once as I adapt to being in a higher income bracket. Wow that is weird to say still.
The difficult thing is forcing myself to track all those things that many would consider frivolous such as the Hair Salon, Spa, Clothing, or Dining/Drinks Out. Yes when money was practically nonexistent I enjoyed these things far less often and was not ashamed to search for deals, but these things are likely spending kryptonite for me. This is worsened by the fact that I tend to pay for them with cash which I have a harder time keeping track of. I have gotten rather defensive before when questioned about how much money goes on these things because I knew exactly what people would say. In the past I have sacrificed things that I should not have in order to enjoy these things, which is not good. If I am serious about improving my finances then it is important I be honest with myself.
It has only been a few days, but I have done well tracking my expenses. I ask for receipts and when that is not an option I note the expense on a notepad I carry in my purse. My focus is on getting caught up and so far I am doing that.
This might sound ridiculous, but I am kind of struggling with constantly having a positive balance in my checking account. I am used to having my account at zero (or negative) and pay day is a week or more away. But now one paycheck is more than I used to make in an entire month! December is special because I will get 3 checks instead of the usual 2. It is just very very strange. Then on top of it having a 2nd job? Having 2 jobs is normal, but actually making ends meet feels foreign. I wonder how long it will take to actually enjoy it and accept that I worked hard to earn this so I deserve it.
I need order. When I was always broke it did not seem to matter that I sort of tracked expenses on random scraps of paper or haphazardly in my head. I already knew there was not going to be enough money so why bother getting more organized? I tried setting up a budget many times and always failed. I would get frustrated that every single penny had to go somewhere and never anywhere fun. Then I would get more frustrated by the never ending emergencies that threw the whole budget out of whack. It was suffocating and eventually I could not take it anymore and would ignore what my budget said and do whatever I wanted. This of course created bigger problems.
Suze Orman says budgets are like diets, which we all know are strict and not fun. Instead of budgeting she suggests just tracking your expenses because that will tell us if we are living within or above our means. Considering how frequently I use cash and either do not ask for or lose receipts this will not be easy, but I am determined to try. I have found a simple spreadsheet (courtesy of SquawkFox) that I was able to modify to my expenses and another for tracking debt repayments (courtesy of Vertex) via snowball, avalanche, snowflake, or a custom method. December will be kind of a practice run to not only get into the habit of using them, but also to make sure I modified them correctly for my needs.
So here is what else I have done to develop my financial plan:
-Pulled all 3 credit reports. Admittedly I only read one of them and then got tired, but I will get to the others.
-Got my credit score from VantageScore and laughed because in the last 4 years it has gone up 5 points.
-Signed up to have 9% of my income go into my retirement account at work (this is the minimum for the company match).
-Decided to use the avalanche method for debt repayment until my title loan is paid off, hopefully by the end of the year. A number of my debts are under 2k and no longer on monthly repayment schedules so it may make sense to continue avalanching, but just pay each one in full.
-Caught up on 2 household bills, with 3 still behind.
-Signed both of my student loans up for Income Based Repayment and they were approved for monthly payments of $0 (consolidating them would actually cost me money in the long run so I declined to do that). I have decided to not fixate on these for a few months while I focus my attention on the worse debts/household bills and an EF.
-Decided to start with the Dave Ramsey 1k EF because I might be able to swing that before the new year.
There are still a lot of things left to do, but I at least feel like I have started. I figure this month may be a little hectic as I adjust my goals, gain more information about my situation, and just keep learning.
It was around my 28th birthday when I woke up in the wee hours of the morning soaked in sweat. Absolutely nothing was going on, but I was filled with dread and it didn't take long to figure out why. My life was a complete and utter mess. Two years prior I'd been laid off from the first full time job I had that felt as if I was starting a career with advancement opportunities. I was able to afford a tiny apartment alone, making my debt payments with ease, had health insurance, and living comfortably within my means. I had made some financial mistakes with credit cards and a private loan (no not a student loan) during my college years, but was happily getting on track. In hindsight I should have started saving as well. Then came my pink slip, immediately followed by the Great Recession. *sigh*
The next two years became a whirlwind of job hunting, inconsistent temp work, crappy seasonal/part time jobs, food closets, utility shut offs, no car insurance, and unemployment checks. It wasn't long before I got behind on bills, missed debt payments, and it didn't seem to matter how frugal I tried to be there was never enough money. I tried to reason with the collectors, but they refused to work with me. I had proof that I was living below the poverty line and zero assets and they didn't care. The last debtor I called was my student loan and I was in tears expecting yet another refusal to help. The kind woman I spoke to helped me put my loan in forbearance and told me I should have called as soon as I got my pink slip because they would have helped me. Thankfully I was not in default and they hadn't reported the late payments to my credit reports. This may sound silly, but I was relieved to still have one account in good standing.
So there I was at 28 lying awake wondering what to do next. I had a degree and plenty of work experience, but jobs were scarce. I couldn't rely on my always strapped family and didn't qualify for most social services because I made too much money or didn't have kids. *sigh* At some point I think I just went into extreme survival mode and literally focused on what I absolutely had to. I stopped opening the mail, stopped answering the phone, stopped making debt payments, and began juggling bills. I turned to payday loans to help make ends meet, but if my temp assignment ended suddenly I couldn't repay on time and accrued penalty fees plus the nsf fees at my bank. Eventually the bank closed my checking account and I couldn't blame them. This then meant paying check cashing and money order fees which ate into my already too low income.
I continued to barely keep my head above water until I realized I just couldn't keep doing it. The economy hadn't improved much for the type of work I'd always done and I hated it anyway. I was sick of not having health benefits, sick of the collectors, and just flat out sick of being broke. I had to figure out what I really wanted to do and make it work. During my figure it out phase I opened another checking account and got in the payday loan trap again (I'd discovered online ones by this point). Then I opened a couple of credit cards thinking I understood how they worked (I didn't) and would be able to use those instead of payday loans. Temp work had gotten steadier, I hadn't used payday loans in months, and I finally felt like things were looking up. I organized my debts in age order and tackled them one at a time, newest first. In hindsight I realize that was not the best system, but at the time I felt great about doing something.
Fast forward to age 30 and my car (yes one of the debtors that wouldn't work with me previously and I still hadn't dealt with yet) took a crap and my apartment became a health hazard so I had to move suddenly. Around this time I also stumbled upon my dream career, which would mean returning to school. I managed to weather the bumps and temp work remained steady so I decided to begin putting my return to school plan into action.
Yes I know some of you are thinking I had no business going back to school when I had debts to deal with and yes I had that same thought many times. The thing is I wasn't going to get more financially stable with the path I was on and a permanent full time job hadn't come since my lay off a few years before. The job prospects were better in the career I wanted to change into, it was a 2 year program, and I'd be a million times happier. Yes I'd have to take out more student loans, but I'd be able to work full time throughout. There was also this strong sense (I couldn't explain it, I just knew) that this was the right move to make. So I took the risk and went back to school.
I loved being in school and couldn't wait to graduate and land a new job. I opted to only borrow federal loans (just like I did the one year in undergrad I borrowed) and only the amount needed to cover tuition and fees. Everything else I financed through my hodgepodge of temping, unemployment, and seasonal/part time gigs. Family surprised me by stepping up and helping with groceries, gas money, and even a gently used car.
Then things took a turn yet again when my temp assignment ended suddenly and my unemployment claim was "pending" longer than normal with no acceptable explanation. A payday loan wasn't going to work so I went for a title loan on the car I was just given. Yes yes I know. That was stupid and I shouldn't have done it, but at the time it was the best of a handful of horrible options. I went on to max out my credit cards and had yet another checking account closed due to nsf funds. I also got tax forms regarding my other car being charged off. So yeah things were pretty bad.
It would be a few months before unemployment paid me and I landed a new temp job. I was back in extreme survival mode and focusing on finishing school, repaying my title loan, and covering basic necessities but there wasn't enough money. I went on like this for a year before I felt I couldn't keep up anymore. The thought of dropping out of school and not making it into my new career was heartbreaking, but I was drowning and flat out exhausted.
It was 2013, about two weeks before Christmas, and yet another temp job ended suddenly. I was prepared to admit defeat when something amazing happened. I got a job! A permanent full time job with free medical! And it was in my new career that I was going to school for! The pay wasn't great, but I was so grateful to get off the temp wheel and do something I enjoyed that I figured I could use it as a stepping stone. I started in January and they accommodated my school schedule too.
2014 turned out to be the year the tides changed for me in so many ways. I started to get caught up on bills, decided to educate myself about finances, and took a second job. I opened a new checking account and this time didn't even order checks to keep me from turning to payday loans. What a relief to stop paying check cashing fees, although I still paid money order fees. I was just doing things one step at a time and reminding myself that things were going to get better when I was done with school.
Once I finished school (woohoo!) I did the one thing I wish someone had told me to do in undergrad.... research salaries so you know if you're being underpaid. Once I learned what an appropriate salary range was for my education and experience I tailored my job search and refused to settle. I was already in a low paying job and had spent the decade before in them. I had earned and deserved better.
That determination paid off because I landed a permanent full time job in my field that pays well above the expected salary range. On top of that I still have my second job, which means I am in a great position not just to get caught up but ahead. Even though the year is ending I feel this is the perfect time for me to lay the groundwork for an amazing 2015. I'll only be 33 next year so all is definitely not lost. I've got a few things in the works, am doing lots of research, and getting organized so I'll share more about that in future entries.