<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Archive: July, 2011
 

Archive for July, 2011

New Savings Goals

July 29th, 2011 at 04:46 pm

Iíve been really thinking about my savings in a new way recently. Before, I just put about $600 per month away in addition to two paychecks and my tax returns so far this year. Now Iíve evaluated my total savings to see where I really should be putting my money. It gives me new focus and a defined commitment of how I should be saving, why Iím saving and how much to commit each month.

Summary of Savings

EF $9046.13
Car (new) $300.00
Vacation $2283.38
HSA $1035.95

I will be able to commit just one more installment of $300 to my emergency fund next month. This is due to a furnace I bought last year so my landlord gave me a yearís worth of rent free to pay back the interest I lost but it was a better profit than if it had stayed in there so Iím not complaining. I live with a roommate so my half of the rent is $250. Then it will be $50 a month to the EF for the rest of the year until my debt is paid. I get an ďextraĒ paycheck in October since I budget myself on two biweekly paychecks a month and that month will be three. The other 50% will go on my credit cards.

Iíve decided to take the car money that Iíve been putting away without thinking and commit to applying it only to my car replacement/repair fund. I paid off this car last year and ever since Iíve been sticking the $300 away without a thought as to its true purpose. I added it to my emergency fund but Iím too lazy to do the true math to separate it out. I had some car repairs that totaled approximately $1k which threw off what I had really saved to the penny including interest. Instead Iíll start from square one.

My vacation fund is for my trip to Orlando next week. I really hope I donít have to use this fund. So far Iíve been paying for it out of take home pay. Whatever Iím able to spare will be left there for now. I am planning a surprise trip to Georgia to surprise my pregnant cousin on her baby shower. The ticket is going to be cheap so Iím expecting it to come out of take home pay and I wonít have to pay for a hotel or food since I can stay with my family. Iíll be adding to it monthly for next yearís trips but if it gets out of hand Iíll transfer any excess to the EF.

I have a high deductible health plan for now. I donít know if thatís going to change since my employer may be looking into another health care plan. Iím currently committing $50 per month since Iím now using it but I plan to contribute at least $100 a month when my debt is paid. My goal is to get this fund to $1500 just to avoid the $3.95 monthly maintenance fee.

I also save my spare dollars and change when I get a twenty out of the ATM. I rarely carry cash on me and when I do I tend to spend it just because itís there. As soon as I can I try to deposit the loose money into an old jug Iíve re-purposed as my spare cash and change bank. I try to empty it out a few times a year to add to my debt so for now I wonít count this money toward savings as long as itís going for debt repayment.

Stay tuned for my debt payoff strategy!

Cell Phones and Poverty

July 25th, 2011 at 11:38 pm

I have this client with no savings, retirement; sheís a renter, no assets. Her total monthly income consists of $1201 in disability and $4, yes, four dollars in food stamps for a family of three. Iím having a major problem with one of her expenses, a $250 monthly cell phone bill. Sheís $1500 behind in her rent of which she only has to pay approx $150 per month. Her excuse for not paying her rent is that she didnít know where to send her payment to. She had it saved but ďsomething came upĒ and she didnít have the $1800 she owed to her landlord. To her credit the property manager had so much on his plate he forgot he rented it to her but stillÖnot one phone call to them to ask where to send the payment? You did sign a lease didnít you? Sheís currently paying more than $100 over her regular rent payment to pay it off yet I canít help but to tell her about reducing her cell phone by I donít knowÖ$200 maybe? Then she could pay off the remaining balance of her past due rent in five months instead of fifteen and take the $300 and start saving toward the $2000 sheís allowed to have in savings without interrupting her disability payments in case something else comes up.

It gets worse. She proceeds to tell me how she canít cut the cell phone because itís a multi family plan between her, her daughter and granddaughter. ďOk, are DD and DGD paying for their share of the bill?Ē I asked. ďNoĒ she says. DGD is living with her along with her own infant-aged child without a job. Although, she is making a valiant effort to apply for welfare. Not because she really needs it but because thatís what sheíd rather do instead of getting a job. DD apparently has a job but doesnít pay her share of the bill either. I didnít care to ask what her problem was.

Granny is $98 in the hole every month (which explains why after looking at her file I see she had to get ďemergency helpĒ with her utilities.) I proceed to go through her budget to see where she can cut back $108 since she tells me that sheíd like to start saving $10 a month. I noticed that sheís already cut her cable entirely and she tells me about wanting to make the necessary budget constraints so she can have the cable cut back on. Itís $168 a month. No worries thoughÖthatís the bundle price.

I have scheduled her for a follow up but Iím afraid it will all be in vain. She doesnít see her spending the way I do. I donít think I pay $3000 in three years on a cell phone let alone one. Then thereís the cable and she NEEDS the cable. Despite the fact that sheís one more late rent payment away from eviction. This of course leaving her with no place to hook up the cable.

Itís my Party and Iíll Save if I Want To

July 24th, 2011 at 08:27 pm

Today is my 30th birthday and Iíve been pondering all year what to do about celebrating it. I went from trying to rent a hall, calling a caterer, paying over $400 for a custom made multi tiered cake, and wanting to pay some musician friends of mine so that I could have a live band to play all night. Now I donít feel like doing anything. There was a huge concert coming up and most of my friends would be there. I really enjoyed the concert and thought it was a fitting gift for myself. Money well spent. Plus, my cousin who is having a destination wedding will be getting married today after church for friends and family who wonít be able to attend outside of the country. So I imagine I will be celebrating with her instead.

Although Iíve been setting aside money just for this occasion, Iím sort of breathing a sigh of relief that I wonít be celebrating that big. I always admit how Iíve never really been a celebratory person. Iím grateful to God for another year, but I never really did celebrate my birthday beyond a small sheet cake and a reasonably priced dinner (about $30 including a beverage and tip) with friends. I also donít do presents either. Not that I hate them or wouldnít appreciate them itís just that if you asked me what I wanted for my birthday Iíd get a headache trying to think about it. My mother treated me to dinner today. Total spending for my birthday was $15. Birthday balance leftÖ$1,985 which I moved to my emergency fund.

Debt Explanation from yesterdayís post.

The Macy's and Limited card I haven't paid interest on yet. I'm going on vacation next week so I had it in my budget to go shopping for things I would need. I will be paying those off. (I guess I should've said that.) I've been saving for my trip since last year. I budgeted $2000 but so far I've been paying for it out of take home pay because it's been pretty reasonable. The Limited and Macy's are still a part of that budget so I'm still on track. The only thing that needs to be paid is about $600 for car rental, parking, food, park tickets, shopping, hotel, and, offering. My church convention is down there which explains the offering and the deeply discounted ďvacationĒ.

The Citi will be paid off by next month. Also no interest. That includes $43 that I charged last month that's due Aug 7th and some new charges I made this week for online purchases which I don't normally use my debit card. They included concert tickets I purchased for my family for approx $100. I was given cash for them minus my own ticket for $15 and random food purchases for the month.

Savings #1 for $2283.38 was my vacation fund. I havenít tapped it yet. Iím still trying to see what I can pay for out of take home pay. I will have until September to pay Macyís and Limited without paying interest. Iíll try to see if I can do that without touching savings.

Savings#2 was my car repair/replacement fund. I havenít been monitoring it closely. So I decided to convert that to my general emergency fund. Since starting this blog, I committed $300 out of this past Fridayís paycheck to start my first installment. I just had some major preventative repairs done so I wonít have huge problems later so I should be done for a while. I also started putting money in for my 30th party which was about $2000. Iíve decided to celebrate in Florida since itís only a week away and itís already in that budget.

Savings #4 and #5 was my emergency fund split between the two different banks I have accounts with. Before, I had about $100 to $200 a piece in them just for quick emergencies in case I needed them. They also serve as transfer accounts for my online savings. Because of the overdraft laws and now the debit card transaction cap fees, both banks have sent letters regarding fees to my checking. I could be charged up to $4 a month for each. I donít get direct deposit so that works against me. I also get my statements online so that saves $2 off my fee. I keep both accounts open because I like having money with at least two banks. Itís a trade off though. One bank I get free checks for life. The other I get rewards which far outweighs the $1 fee I will be paying starting in October.

To sum it up I guess that makes it $9031.13 for emergencies and $2,283.38 for my vacation fund. If I happen to go under budget which I suspect I will, I will use approx $200 to pay off my old cell phone balance. (just switched over to Verizon) and set up a repayment plan for my medical expenses. I could pay a huge chunk but why since Iím paying at 0%? I will have to cut into my dining out budget from take home pay until itís paid for.

I hope this clarifies a few things.

My Finances on the Table

July 23rd, 2011 at 06:44 pm

Nowís my turn to tell you about my finances.
Savings
Savings #1 $2,283.38
Savings #2 $5,051.12
Savings#3 $1,478.32
Savings#4 $2,501.69
HSA $1,035.95

Total $12,350.46

Debt

Capital 1 CC $1065.82 @ 3.99% Fixed for life of balance
BOA CC $2,175.36 @12.74% adjustable
Citi CC $183.73 @29.99% Adj. (but who am I kidding)
Macyís $292.69 @23.99 Adj.
Limited $97.12 @24.99 Adj
Medical Bills $2354.00 @0%
Old Cellís $254.00 @0%

Total $6,432.72

Hopefully Iíll be able to update these monthly. Iíve been aiming for reducing my debt while increasing my savings. I paid off my car last year and although I have been putting that money away in savings for my car repair/replacement fund every month since September 2010, I havenít been monitoring it closely. From now Iíll just make it my part of my emergency fund and starting with todayís paycheck I will commit my first $300 monthly installment. I could back track but Iím too lazy to do the math since I just spent nearly $1000 to have it fixed last month.

Some might ask why I just donít take my savings and pay off my debt. I wish it were that simple. I work for a non-profit and although Iíve never missed a paycheck, in this environment sometimes you get paid and sometimes you donít. I once had to wait three months and got paid over $5000 in back payroll while waiting for a huge invoice to come in. It hasnít been that bad in a long time (thank You Jesus) but I think you can understand now.

The four savings accounts are two online only accounts and two accounts linked to my two checking accounts. Iím working on building these balances currently at $1,478.32 and $2,501.69 to $2500 a piece to avoid fees on the checking accounts. Before my banks started charging fees I barely kept $500 in them. Just some quick money in case of a tiny emergency. Like my version of a ďpay day loanĒ to tide me over till I got paid and yes, I did pay myself a $10 penalty for lost interest for doing so despite the fact that Iím earning less than $5 in interest on each account right now. Iím also working on building my HSA to $1500 to avoid the $3.95 monthly fee.

So there you have it! Everything out there on the dance floorÖincluding my heart for it is in this as well. I look forward to chronicling my progress.

SoÖWhatís ďhousing counselingĒ anyway?

July 22nd, 2011 at 05:04 pm

Being a housing counselor is like nothing most have heard before. Most people donít come to us until theyíre experiencing a crisisÖwhich is unfortunate. We started off just before the thick of the housing boom. However, during that time we were all about teaching you to save your money, budget, and improve your credit scores the old fashioned way. Calling up your creditors that you werenít paying and havenít paid in a long time and negotiating a payment arrangement to enter on a path to paying off your debt. As well as debt repayment strategies for creditors you were current on.

We decided to expand our financial literacy program to include housing education and boy did we put a lot of people in homes. The right way, a fixed rate mortgage that they could afford. However, a lot of people turned away from us once they learned that their finances were so out of sync that it could take up to two years of saving, paying down debt, and building your credit scores before our network of banks would finance them for a home. Now, some of those people have come back to us for counseling. No, not to purchase a homeÖthey now need us to help them save it because theyíre in foreclosure. They skipped over us because some, as we later learned, already had approvals with subprime and predatory lenders or had gotten them later on. I once had to tell a single, divorced mother why she couldnít afford a $180,000 mortgage on a take-home pay of $2600 and therefore should start packing up and looking for another place to live. Instead of saving her home, we went over options she had to give the home back to the bank. I keep a box of tissues on my desk for moments like these and she went through about half a box. This poor woman had to uproot her children because of her painful divorce and this house had seemingly provided stability for them finally and I have to be the one to tell her ďnot so.Ē (I didnít really say that by the way) Itís really hard on me as well. I have never cried in front of a client but sometimes you take it home with you.

Why couldnít she afford the home you ask? Because it was an Option ARM, negative amortization loan that started off with an interest rate of 1.87% and kept adjusting upward after she made her first payment. She got out of it by paying the minimum mortgage payment which was less than the interest and by the time she got to us her mortgage balance had increased over $15k while her home value had plummeted. Her interest rate was approx 12% by this time, her payment had increased and she had only been in the home two years. She was only paying about $600 and she should have been paying close to $2700 for a full mortgage payment. More than 105% of her take-home pay. Yeah, that was a hard day at the office. THAT was in 2007! It's been non-stop ever since. There was once a time I could tell you which banks were going to go under based on the mortgages they wrote.

We started off helping people to buy homes and now weíre helping them to save them. Yes, neck deep in the trenches of the foreclosure crisis and I donít see an end in sight yet. Iíve also chosen to chronicle my adventures at work. My Lord do I have some stories to tell. I hope you find it interesting.

A Little Bit About Me

July 21st, 2011 at 04:39 pm

Iíve been in housing education for 12 years this August. I have to say that I love my job and itís been the most unique professional experience ever. I have always been a ďpractice what you preachĒ kind of girl and since I teach and preach all day to my clients about the importance of being on a budget, saving money, and cleaning up your credit, Iíve decided to take huge doses of my own medicine and get my act together. Itís still a work in progress but my personal struggles and victories have given me a lot of material to use in guiding them to their own healthy finances. Not to mention the people I see have also given me something interesting to talk about which I look forward to sharing on here.

Thereís no time like the present but I should have started this blog a long time ago. Between what goes on at work and in my own finances I always run into situations that make me say ďNow THIS would make an interesting blog postĒ ďTHIS I could put on the message board to start an interesting dialogueĒ The best I can do is to start from where I am and continue to track and share my progress along with the funny tidbits that is my life at work.

Other Stats
Iíll be 30 on Sunday. Yeah!!!
Single, no children, no pets.
Iím a saver and a wannabe debt eliminator.

It's been a long time coming!!

July 20th, 2011 at 11:58 pm

Believe it or not, Iíve been lurking on this site since 2005. Never once have I thought of contributing or at least saying thank you to the many other posters and bloggers for exposing their financial nakedness and thereby educating me along the way. People like DisneySteve, Ima Saver, LuckyRobin, and Banker Gurl to name a few. I have to say I look forward to each of your blogs and message board posts. I read what you have to say and Iíve looked at money more differently than I have ever before. I do have to admit at times I wasnít a very good student although Iíve managed to pull myself up by the bootstraps and pay off every derogatory debt that was holding me hostage from my future.

Accountability is one thing that Iím still struggling with. Mostly itís because I donít know too many people I can lay my eyes on that are doing what I do with my finances, which is mainly to pay down debt and save money. Iím looking forward to now exposing myself. HEY!! Canít we all learn from each others triumphs and failures anyway? I invite all to come along on this peculiar journey with me.