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Money Management Makeover

December 30th, 2014 at 10:04 pm

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.

7 Responses to “Money Management Makeover ”

  1. snafu Says:

    Kudos on moving forward towards your goals so quickly. Sorry facts about FSA caused yet another loss of precious funds saved. I think 2015 has potential to you have you find solutions to all the issues highlighted.
    I hope it's ok to ask you to consider...
    If you anticipate a significant tax rebate, how do you wish to allocate those dollars? Does your sidebar reflect the order you plan to tackle issues? Only when someone asked how often we visit the 'Brick and Mortar' banks, did I realized I don't use or need their expensive services. Our banks now charge for services that were free in the past; their profit margins are huge and the quality of 'service' is really just marketing to get us to buy services we don't need. I find the e-banks are more secure. We're always seeing newspaper articles about documents found in dumpsters or found in someone's stolen car.

    I really don't understand 'Title Loans.' This agency is charging you $ 6,300. in fees and interest on an initial loan of $ 3090.?
    If you have a cell phone, how much benefit does a land phone add?

  2. creditcardfree Says:

    I have had utilities and phone companies use our bank account for automatic payments for years. Probably over 15 years! I have never once had a problem. Some utilities will charge you an extra fee to use a credit card, so I would check with the phone company first before getting a credit card for that service.

  3. FS Says:

    You might want to check with your HR, but a lot of the FSA plans I know made the entire year contribution available on the first day of the year.

  4. PatientSaver Says:

    Yes, I believe FS is right, in that your entire annual contribution is available for you to use the card as needed. In other words, you don't have to wait for a weekly or bi-weekly amount to be added to your card; you can charge right up to the annual limit you set.

    I love using my benny card. It's so easy and what a relief not having to file all those paper forms. However, I had some trouble trying to use up the remaining $2 balance on my card; twice i tried to buy bandaids at walgreens and cvs and the charge was rejected. I called the administrator and they said sometimes the store does not correctly code the item you're trying to buy, so in that case, you have to file the paper form.

  5. FrugalTexan75 Says:

    I was going to say the same thing as FS and PS - I'm pretty sure that the whole amount of your FSA is available from the beginning of the year.

    Also, be sure to find out whether or not your employer gives you a grace period in 2016 to use up your FSA amount or carries over up to $500. Mine gives us a grace period (til the end of March I think.)

    BTW - I'm impressed with the thought you've put into your goals. Rooting for ya!

  6. LittleMissSplendid Says:

    Thank you everyone for your comments, insights, and support. Now to address your questions....

    About the FSA: My prior employer did not make the entire year funds available at the beginning of the year (yes they suck and I am glad I left lol) and did not offer an FSA debit card and they are well in their right to not offer either of those things. Funds were only available as they were deducted from my paycheck which would have been ok had I not had such low wages, was already so behind on so many things, and my medical expenses were not as high because of not having healthcare for so long. If they had told me how the benefit was handled should I leave the job (including no grace period because I left) I probably would not have paid anything into it and would have just skipped the doctor completely. The new job works very differently so I should not be in this situation again.

    About my tax rebate: I have no idea what I will do with it yet and have been purposely not thinking about it because there have been so many financial adjustments to make since the new job. I usually get a decent sized refund because working so many jobs in a year I gave up trying to fiddle with my withholding and just leave it higher to avoid another bill. In the past I have used 80% of it on bills and 20% on something unnecessary lol.

    About my sidebar: No the order is not particular, I will just handle things as it makes sense and resources allow regardless of how they are listed.

    About brick and mortar banks: I actually go in all the time and am not at all bothered by this. If something is not right I want a person to throttle not sit around drafting a terse email lol. When everything is great then I want to tell that to a person, not some contact form on a website. If not going into the branch then I generally call to handle things. 2014 was the first year I consistently logged into the banks website, but all I did was confirm deposits/charges posted and have no idea what half the other features are. They do not charge any fees for any of the services I am using which is good.

    The title loan: Oh lord do not get me started lol! They are ridiculous and I am never doing it again.

    The landline: Actually it is the landline I always talk on and the cell phone I almost never use. For several years I did not have a cell phone because I had no desire to be pestered while out and about (and I still do not lol), but now my commute for work (and school until I finished this past spring) is long and often out in not so populated areas. A cell was more of a safety issue. When I am at home I forward my cell to my landline because I prefer to use that lol. The landline company does not charge a fee for auto billing to a credit card since that is what they want you to do. If you do not they charge you a fee for a paper bill.

  7. Mrs Smith Stephanie Says:

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