Finance Gets Personal

Well, my net worth took a hit this month due to fabulous market performance, but oh well. I did manage to pay off my credit cards and finish saving for our house painting.

Net worth as of June 1: $70,247
Net worth as of July 1: $68,814

Here are this month’s highlights:

• We paid off our last $272 of credit card debt! Hooray!
• We hired someone to paint out house the week of July 21 for a total cost of $2,992 (a little higher than most of the other bids, but the company gets great reviews and I’ve got a good feeling about the guy). We might also hire them to put another coat of stain on our deck for $120.
• We had our first ever garage sale, which was quite a success, and sold a lot of books on Amazon.com. Our new mattress fund is now up to $595, and the mattress we’ve decided on is on sale for $899 until July 5 (originally $1900). We might wait until Labor Day sales, or “borrow” some money from our special 30th birthday vacation fund to go ahead and get it tonight.
• My high school reunion came and went without too much drama. The whole original $50 per person event was canceled due to low response, and a $30 per person event was planned for Saturday night at an Italian buffet restaurant that normally costs $15 per person. I didn’t go to that event due to all the drama surrounding it, but I went to a Friday night event at a bar hosted by a friend that about 50 classmates showed up for, and then went out with some other friends from high school on Saturday. Some of the people who went to the reunion met us up later. Of course, we probably ended up spending more than we would have if we would have RSVP’d for $100 in the first place. Sigh.
• I received an 8% raise despite our “raise freeze” and perhaps due to my “complaining” (see “where’s my money?”) about company spending.
• I didn’t spend too much time or effort on my snowflaking business or weight loss goals, mainly due to the garage sale, Amazon sales and my new CVS addiction, which has now spread to getting the best possible deals at grocery stores.
• Getting to work on time has been easier lately due to the fact that my stepson’s summer school starts 45 minutes earlier than regular school, and being late to work means he is late to school. However, now that summer school is over, I’ve got to put in a renewed effort. I’ve found what helps me the most is setting my bedside lamp on a timer to turn on about an hour before I need to get up.

I’m excited about July because of our staycation and because the house will be painted soon. I’m hoping to make a lot of progress on paying off my husband’s student loan, and also to post here more frequently!

Photo Credit: Smoke on the water by PetroleumJelliffe, used under Creative Commons licensing

Nearly 10 years after getting my first credit card as a freshman in college, I’ve paid off my last balance.

Although I had my Citibank card locked in at 2.99% for life, it is still a great feeling to be done with it!

Last night we went to Buffalo Wild Wings to celebrate. Now, it’s on to the student loans!

In other news, I got a 8% raise today (yea!)

Photo Credit: Buffalo Wild Wings by Keegan Jones, used under Creative Commons licensing

Last month, I expected that my net worth would take a hit in May due to home repairs, but I’m happy to report that it went up anyway!

Net worth as of May 1: $67,943
Net worth as of June 1: $70,247

Here are this month’s highlights:

• We spent about $105 on Mother’s Day presents, including baseball tickets for me (yea!)
• My mom’s birthday ended up costing us a bundle, even though not all of the costs were incurred in May. She wanted to go to a play that cost us $100 for our two tickets, we went out to dinner ($30), bought her a present ($30) and paid for parking ($7).
• We got a bid for painting our house and it was only $2,600, so we decided that we’ll hire someone else to do it instead of painting it ourselves. Since then, I’ve gotten another bid for $2,100, and am trying to get some more bids, but painters apparently don’t like returning phone calls. We’ll probably have the house painted late summer/early fall, and will be taking a vacation in our own city (staycation!) instead of going out of town.
• We received our $1,500 economic stimulus payment and $213 state tax refund, which went toward replacing our heat pump ($3,467) and hot water heater ($674).
• I started snowflaking toward my credit card about halfway through the month, and paid an extra $171 through snowflaking techniques such as selling things on Craigslist, spending less on gifts, matching spending on indulgences, etc. I also created a website for graphic design to get some additional income from a snowflaking business.
• I began playing “The Drugstore Game” and it’s been pretty successful. Before too long, I’m going to have a year’s supply of razors, shampoo and toilet paper!
• My husband got a bonus of $885 and about $200 extra in his paycheck (due to having three paychecks in May - they don’t take insurance out of the third one or something), which went toward the credit card.
• I’ve been putting more effort into getting to work on time, and I’m getting closer to “on time,” though I’m still not quite there.
• I have been trying to lose weight, and lost five pounds last month, but I’ve been slacking off lately. I’ve only managed to maintain my weight loss from last month, but I think I’ll be able to get back on track if I start tracking my calories online again.

  Welcome to June, the fifth month of Finance Gets Personal!

Yippee!

We got our first bid for house painting today and it’s only (ha!) $2,600! I was expecting something more in the neighborhood of $5,000.

Needless to say, we will not be taking a week’s vacation later this month to paint the house.

Yeah, I know, I shouldn’t just use the first company that quotes a good price, and I don’t plan to. But this at least gives us confidence that we’re making the right decision. I’ll be getting more quotes and checking references in the next few weeks, and we might not actually have it painted until summer/early fall.

Part of our “deal” for hiring someone else to paint is that we’re not going to go on vacation this year. That makes me sad, because we were planning to go to Minneapolis. I had the iteniary all planned out - Twins game (I’m trying to visit all the ballparks), Walker Museum of Art, play at the Guthrie, shopping trip to IKEA, riding the escalator with our shopping cart at Target, dinner at the German restaurant…sigh. But we really couldn’t afford it anyway.

So, we’re taking a vacation in our own city, and our house will be the hotel. Basically, we’ll be doing all the things tourists do that we’ve never done (or haven’t done in a while).

I’m just SO happy I’m not going to be spending the whole summer scraping and painting on a huge ladder!

(This post was included in the Carnival of Money Stories, hosted by Money Walks.)

Photo Credit: Cheerleader by Hometown Invasion Tour, used under Creative Commons licensing

While my net worth improved this month, it will be going down again shortly
due to some much-needed home repairs…

Net worth as of April 1: $63,415
Net worth as of May 1: $67,943

Here are this month’s highlights:

• The cracks in our foundation walls started leaking again, making me question why we ever bought this home. Then, our sump pump failed, causing water to come up through new cracks in the foundation floor.
  We replaced the sump pump and called a structural engineer to assess our foundation. He came out today, and I’m happy to say that our house is structurally sound! We just need to do some regrading under the deck, maintain the slope against the south wall of the house and have the cracks in the wall sealed. Total cost should be under $1,000.
• I received a first quarter bonus of $2,100, which I put in savings along with my suspended debt snowball payments in anticipation of having to pay for expensive foundation work. Fortunately, I don’t need the money for the foundation, but we do have to replace our heat pump for about $3,000 within the next few weeks. Once that and the foundation issues are taken care of, I’ll replenish our regular $1,000 emergency fund and begin paying extra toward our debt again.
• I got a little impatient with this whole “saving” thing last week, and transferred $1,000 of the money I’d saved to our credit card debt, which is now down to $2,300.
• I started a diet on April 9, with a goal of losing one pound per week. So far, I’ve lost five pounds. It hasn’t been as hard as I thought it would be, especially since I haven’t incorporated exercise into my plan yet. I’m tracking my calorie consumption, weight and measurements on The Daily Plate, a website I learned about from Get Fit Slowly (the sister blog of Get Rich Slowly)
• Since signing up for My Coke Rewards, my Coke habit has gotten me a free subscription to the Oprah magazine and a free movie ticket.
• I finally finished our taxes after much procrastination, and am eagerly awaiting our refund and $1,500 economic stimulus payment.
• I’d been considering donating plasma to make an extra $60/week, but am even more squeamish about it given the things people have been typing into Google to find my website lately - bruising from donating plasma, sick after donating plasma, donating plasma weight loss - ew. I’m definitely going to try giving blood first, but probably not any time soon.
• I’ve been wanting to have a garage sale so I can replace our pathetic mattress, but don’t think I’ll have the time in May because we’re going to be painting our house. I’ve been collecting items, and will probably do it when the subdivision has its annual garage sale event in June.

Whew! Eventful month.

When I started this blog, I promised that I’d give monthly updates of my financial progress, so here it goes.

Net worth as of February 15:  Approx. $54,000
Net worth as of April 1:  Approx. $63,415 (does not include market fluctuation between now and then, but everything else is accounted for)

I’ve put a NetWorth IQ badge in my sidebar so you can track my progress in detail.

Here are this month’s highlights:

• My husband received a year-end bonus of $433 after taxes that we put toward our car loan
• I received my 2007 401k employer contributions (3% guaranteed, plus approx. 10% for profit sharing)
• We paid off our car last Friday with our bi-weekly $690 debt snowball payment
• My husband and I both learned that there are no raises in our immediate future, and that he won’t be getting quarterly bonuses this year
• Almost two years after joining Upromise, we finally reached the $25 minimum for transfers, and $29.08 was transferred to my stepson’s 529 plan

We’ve revised our goals slightly as well.  Instead of aiming to pay off our credit card and half the second mortgage by the end of the year, we are now going to pay off our credit card and both our student loans, saving the $35,000 second mortgage for next year.  Although the credit card and student loans have extremely low interest rates, we think this will give us the momentum to keep going through the long second mortgage payoff process.  Stay tuned!  

Tonight we’re going to Buffalo Wild Wings to celebrate paying off my car.  

The loan officially bites the dust on Friday, but we’re having an early celebration so my stepson can be there (side note: my husband bought a Powerball ticket on Saturday and we were taking turns saying what we would do with the money if we won.  My 9-year-old stepson said the first thing he would do is pay off all our debt - what a genius!)

The last time my husband and I had paid-for cars, they were both over 10 years old with close to 200,000 miles on them.  Now, we own a used car that we bought in July with 75,000 miles on it, and my ‘06 that we purchased new two years ago. 

The first thing I plan to do after work on Friday is take my car for a wash and vacuum/clean the interior.  I own this car now, so I want it to look good!

The timing on paying off the car couldn’t have been better - I just reached 50,000 miles earlier this week, which means my warranty has expired (I have a long commute).  I’ll feel a lot better paying a repair bill for a car that I’m not still making payments on!

Now it’s on to my credit card.  Citibank, I’m talkin’ to you!  Just because you have a fixed 2.99% interest rate doesn’t mean you’ll be hanging on for another nine years (that’s right, nine!).

My employer announced today that they are freezing raises. Apparently, there’s some little problem with the economy that’s causing our top clients to slash budgets and lay off their employees, and now our company’s outlook is uncertain.

Worse, a few weeks ago, my husband’s employer announced they are freezing raises. Oh, and they’re also doing away with quarterly bonuses and laying off thousands of employees (my husband is not expected to be one of them).

This is a problem for us for two reasons:

1. We owed the IRS $1,000 this year because we lowered our withholding last February (I thought we were doing a smart thing since we kept getting big refunds, but we ended up making a lot more money last year than in 2006, and now we owe). So, we need to change our deductions back to zero, which will leave us at least a hundred dollars less per month. Our budget is super tight because we are paying an extra $1,450 to our smallest debt each month. So, I was going to soften the blow by changing the withholding when we got our raises. Now I’m just going to have to make it work.
2. We included estimated raises and bonuses in our get-out-of-debt timeline. While I kept estimates low (3% raises, the lowest bonuses we’ve ever received), I wasn’t expecting zero. So our five year goal (house and everything) is looking pretty unrealistic these days. Hopefully we can still do it in six.

I guess it’s just another challenge to see if we are serious about getting out of debt.

There is at least one piece of good news though. My boss told me they are going to try to make an exception for me and give me a raise later in the year (yesssss!)

I started listening to the Dave Ramsey Show podcast in July, and have continued to listen to it every day on my way to work. That’s a real compliment to the show, considering I’m a non-church-going liberal and he’s, well…not.

I’ve been working on paying off my debt ever since I began acquiring it in college, but once I’d get one thing paid off, there was another reason I “needed” to borrow money. But listening to Dave Ramsey every day is like AA for overspenders.

Here are Dave Ramsey’s steps to financial freedom, which he refers to as the “Baby Steps:”

1. Build an emergency fund of $1,000.
2. Pay off all your debt except your mortgage, from smallest to largest (regardless of the interest rate). This is called the “debt snowball.” You pay minimums on all your debts except the smallest one, and you attack it. Then, when that one is paid off, take all that money plus the minimum you were already paying and apply to to the second smallest debt. Etc. If you have a second mortgage, you are supposed to include it in this step if it is 50% or less than your total annual income.
3. Build your emergency savings up to 3-6 months of living expenses
4. Invest 15% into retirement, not including any employer matching. You should not be contributing ANYTHING to retirement (even if your employer offers a match) until you reach this step.
5. Save for your children’s college.
6. Pay off your home early. (Steps 5 and 6 can be done at the same time)
7. Invest in mutual funds and real estate, and donate lots of money to charity.

So, I am following this basic plan, but here’s where I’m doing things differently:

• We are contributing 5% of my husband’s income into his employer’s 401k because they give a 5% match. I get about 10% from my employer with no contributions on my part, but I’m putting $50 a month into a ROTH IRA. Dave’s basis for saying you shouldn’t contribute to retirement until you reach baby step 4 is that steps 1-3 shouldn’t take that long if you’re really being hardcore, and the 15% should more than make up for it. However, steps 1-3 will probably take us about 2 1/2 years, and I am not going to give up any free money.

• We started our debt snowball with our car loans, which did not have the smallest balances, but did have the highest interest rate. We’ve paid off about $16,000 in car debt since July. As soon as the remaining $3,000 is paid off, we’ll move to the $3,400 credit card, which has an interest rate of 2.99% fixed. I know it doesn’t make much sense mathematically to pay this off, but I’ve been carrying around this balance for 7 years and am sick of it! Plus it will give us the momentum we need to keep with this once we start paying extra on our $35,000 second mortgage.

• Dave says to tithe 10% of your income to your local church throughout this whole process. Well, we don’t go to church, so we don’t do that. I’d like to give 10% to our favorite charities, but I think it makes more sense to make this commitment after we’re out of debt. So for now, we just give $50 here and $25 there.

When I read financial blogs, I like knowing the writer’s financial stats, so here are mine:

Household Income: $105,000

Mortgage: $139,435 at 5.88% Fixed

Second Mortgage: $35,149 at 7.86% Fixed (We took out a 80/20 loan when we purchased our house a few years ago - dumb. But at least our rates are fixed.)

Student Loans: $14,248 at 3.5% and 3.13% Fixed

Car Loans: $2,494 at 6.05% (This is the loan we are currently paying extra on)

Credit Cards: $3,426 at 2.99% Fixed until balance paid in full

401ks/ROTH IRAs: $40,272

College Savings for Stepson (age 9): $2,184 (no longer contributing to this)

Emergency Savings: $1,000

Total Net Worth = $54,000

Our goals for 2008 are to pay off the car loan, credit card and about half of the second mortgage, while contributing 5% to my husband’s 401k (he has a 5% match) and $50 a month to my ROTH (my 401k has a 3% employer contribution with no match required, and approximately 7% for profit sharing). I’ll be giving an update on our progress every month or so.