I’ve had some major setbacks on the budget.
To start with, I had to get my car inspected. I had budgeted the money to do so, but what I didn’t know was that there was metal sticking out of my tires. Fortunately, I hadn’t made my extra payments yet from my debt snowball, so i was able to get four tires for the car without having to get into the EF.
But then I developed an infection in my tooth. The whole side of my face swelled up, and I was in misery.
My mother in law works at a dentist office and had the dentist call in a prescription for some antibiotics. But the scrip still ended up costing over $100.00
So now I’m broke. I ended up almost $100.00 overdrawn, which i covered from the EF. I have left some change in my car and a couple of dollars in cash. But tomorrow is pay day, so it’s all good.
Someone remind me that this will be worth it one day. I’m tired of being broke.
BofA has changed its mind. Now they love me after all.
It’s amazing how when you drop your balance down a month away from zero they suddenly take interest. Was it really only a week or two ago that they decided that I was only good for 18% interest? Ahhh, but now my balance has dropped by over $6k they love me again. I got a letter in the mail from them today with the cash advance checks included. If I use the checks, the amount I use them on is 1.99% interest until Jan, 09. Even if I make them out to Cash.
That means that I could pay off my Student Loans with them, effectively freeing up about $600 per month in extra Snowball Ammunition. That means that I could throw a SmackDown at the Air Conditioner with my Income Tax Refund, followed by a thirty day payoff (or thereabout).
I can only see two problems with this idea though:
1) The proportion of debt to balance would be about 90% on that card, and it would hurt my credit rating until I brought it down.
2) The balance that is already on this card would be paid off after the 1.99% portion, so I would be stuck with the interest on it every month, although it only works out to about 20-30 dollars per month for it.
and potentially, 3) If I were to be late on a payment the entire balance would go up to the current 18% rate.
The benefits include: 1) Adding an immediate $850 per month to my debt snowball, minus the new payment to BofA (rough estimate $250 per month) for a net increase of about $600 per month added to my debt snowball.
and 2)Getting rid of Sallie Mae once and for all. To me, Sallie Mae is one step under the IRS, because if you should ever default, they can put a hold on your state license, which I need to work. To be honest, I would rather pay a higher interest rate to be rid of dealing with her. But in this case it is much lower than what I was paying her, so I still come out ahead.
Neutral is: 1) The balance transfer fee is $90 maximum, but the monthly debt interest payment to her is over $100. This not only neutralizes the balance transfer fee, but also the interest that I would have to continue paying on the current BofA balance.
I believe that this is really a winning situation for me, and I intend to initiate the cash into my bank account tomorrow, and send in a giant payoff on Monday or Tuesday, whenever my current Sallie Mae balance posts to my account.
That is, unless someone on here can explain why this would be a bad idea to do. I don’t really see a downside to it though.
Today was a rough day. Plain and simple. I think the reality of it all is sinking in. Or maybe not. Nevertheless, it was a rough one.
I woke up this morning to the sound of rain. That’s not too bad. I like the rain. But this didn’t sound like it normally does. This sounded more like rain sounds when you are outside. And that was a little bit disturbing. I looked around to see if I was outside, and I wasn’t. So I got up to go investigate. Outside it was raining so hard I could only see about twenty feet, and the wind was blowing so hard that the rain was coming in sideways. And the front door was wide open.
The dog was in the living room, so I knew that nobody had come in the house. So I checked on the kids and they were both nestled all snug in their beds. So I just shut the door and locked the deadbolt. It seems that the wind was too much for what’s left of our doorknob. The little part that holds the doorknob latch part into the frame is very old.
So I knew I would have to replace it. That’s not so much of an issue. I’m really handy around the house. It was just a matter of having the money to get a new doorknob. And I think that was the root of my bad day.
Having already had to fill my wife’s prescription, I was left with about fifty bucks left in my checking account. Of course, that’s enough for a doorknob, but I still have to go to work all week, and I have to pay to park at work, which comes out to about twenty five dollars a week, and I will still need gas money. I think we are still OK on food.
So I faced the reality that I wouldn’t have enough money to fix the doorknob and still make it through the workweek.
It’s not that I haven’t been broke before. I’ve been very, very broke before. It’s just that this time it happened to occur to me that I was a lot happier day in and day out when I was blissfully ignorant and in debt, as opposed to sending in all of my extra money to get out of debt.
Ignorance is bliss, so it seems.
But of course, I have a thousand dollars in my EF, and I think that front doors qualify. And gas money probably qualifies, too. In the end, I transferred a hundred dollars from my EF into checking, and I’m guessing that will get me through until payday. And I guess that’s what the EF is for, after all. It’s just a lot different than how I am used to doing things, and it takes some adjustment.
(shrug)
I could really use some advice here.
Later this week I will be getting paid, and I will be completing what would be called Dave Ramsey’s “Baby Step One”. That is, I will have $1000 in my Emergency Fund. After that I will be attacking the Credit Card Monsters.
My problem is that I don’t know which one(s) to attack first. Dave Ramsey says to go after the smallest balance.
But my quandary is that the Fed just slashed the interest rates by another 75 basis points. To me, this means that the time to refinance the house is coming up sometime later this year, or maybe early next year, when the Fed is done slashing.
With all of the sub-prime mortgage problems that the banks are having, I would think that they would be virtually begging for people to have traditional mortgages.
My current mortgage is at 7% and some change. I would think that if the going rate went back down to four or five percent that it would be a good idea to be in a position to refinance.
So what I was thinking is that if I while I am paying off the credit cards, if I were to start by paying on any card that is above forty percent balance to limit ratio, it will improve my credit score and make me qualify for a better rate if/when I do refinance my house. I have heard that when your balance on the credit card is above forty percent of the card’s limit, that is when you start to take a hit on your credit score. And while it wouldn’t speed up my debt snowball as much to pay a card down to thirty nine percent and then switch cards, it should drastically improve my credit score.
My current score is about 670. I’ve never had a late payment. The only damage to my score that I know of is that my balances are high compared to the limits. It has previously been as high as 740, when my balances were a bit lower. So I would think that by paying things down correctly, I could probably gain that 70 points back again on my score and then I would qualify for the best rates on my mortgage.
I currently have more than 20% equity in my house, so I don’t think the banks would be upset at all to lend to me. My credit union even sends me letters from time to time, which I haven’t even considered, since interest rates are too high right now. But as the Fed knocks them back down to where they used to be, I want to be able to do something about it this time.
So I need someone with a bit more education than I have to either tell me that this is a good plan, or tell me why it is not. I don’t consider myself to be particularly stupid, but I don’t have a lot of education in regards to Finance (which I’m rectifying).
I guess my biggest fear is that I will pay off the credit cards Dave Ramsey’s way, and the interest rates on mortgages will have dipped down and then gone back up already and I will have missed it.
I expect to be out of credit card debt in a year to a year and a half, if that helps any.
Well, it’s Sunday afternoon now and the payweek is over. I only managed to get 24 hours of work in this week, to be combines with the overtime from last week. I haven’t run the numbers yet. I know that I will be able to easily pay my bills and have maybe a thousand dollars or so left over to put into the debt hole. More or less. At the very least, all I really wanted to be able to accomplish this payday was to get my EF up to $1000 so that I could begin attacking the debt in earnest. I believe that I will get my W2 from work this payday, so I’ll get my taxes in as soon as I can. I expect I’ll get a good chunk back this year, since they took out for a high income the first half of the year and then the last half of the year the income slacked off. My rough estimate is that I should get about three thousand back. But I’ll have to keep my fingers crossed for that one.
Even so, it’s been a rough couple of weeks and I’m realizing that I’m going to have to run this race as a marathon and not a sprint. I’ve heard that said before, and now I understand it. I have such a long way to go and I’m tired already.
Oh well. Whataya do. I just have to keep on keeping on.
At least I’m scheduled off tomorrow. Maybe I can sleep.
When I made out my budget for this paycheck, I had forgotten that my license for my job is up for renewal. Oops. $67.00
So I sent off the money last night (online payment) and that puts me a just a little bit short for the week. I’m ahead of my food budget though, so I think I can squeeze it in if I’m careful. If not, I will have to rob the EF of a few dollars before payday. Those one time bills always throw me.
Mental Note: Car tags are due in May….
After working on my budget for most the the day yesterday and updating the blog along the way, I managed to get a nap for a half-hour. And then I went to work for twelve hours. I managed to make it through the night without falling asleep on the job. Or at least without falling into a really deep sleep.
The pay week ends after Saturday’s night shift is over. Or rather, on Sunday morning at 7 am.
I’m regularly scheduled to work on this Friday and Saturday, so if I can make it until Sunday morning without getting canceled, I will have cemented in the overtime that I have worked this week.
In the meantime, I am adding up my debt totals. It’s a daunting task. I’m not too sure that I want to know the total.
But I know I need to do it so that I can figure out what to pay off first once I get my EF up to $1000.
But I’ve still got two more weeks until Payday #2 of 2008, and I intend to play with it more when I’m not so sleepy.
I have several competing ideas about what to pay off first. Of course, Dave Ramsey says to pay off the smallest to largest. This has the benefit of giving you some extra motivation to start with when you see the smallest debts go away quickly. I don’t know if I want to do that. Some of my credit cards have high balances compared to their limits, and one thing I am considering is to pay them all down to under 40% of their limits so that my credit score won’t take such a hit. Not that I particularly need a high credit score. And by paying them all off, it will go up eventually on it’s own.
But then I have the idea of paying off the ones with the biggest monthly payments first. Then I will have more disposable income that can go into my debt snowball. But again, if the payments are high, they will pay off faster just by making the minimum monthly payments. A case in point is the student loan. I am paying over $800/mo on it. If I pay it off quickly, I can roll that $800 into the next debt. But by paying such a high payment on it, it will be paid off this year even if I never add to it. So I could be paying off other things in the meantime and let it get paid off just by making my normal monthly payments.
And then there is the option to pay off the ones with the higher interest rate first. Mathematically, that makes the most sense. But only to a certain degree. If I pay off the highest interest rates first, I will save some money in the long run by paying lower interest on the ones outstanding. But paying off the lower balance ones first would increase my debt snowball faster and then the higher interest rate ones could get paid off faster. Maybe.
And then there is the option to pay off the most inconvenient ones first. I have one that I can’t pay online. I have to write a check and mail it every month. That is a major pain. I always have trouble finding stamps. And then if I want to make an extra payment to them on the paycheck that I pay my house on, I have already sent off the pre-printed envelope and it makes it hard to have to wait until next month when I want to pay it off now.
But then there is the option to pay off the car first, because no matter what, they will never repossess the dinner that I charged on the credit card. If something bad were to happen, I would have the car paid off already and the car is what takes me to work every day.
And then there is the choice to pay off the highest interest rate ones, and then save the money that I would have sent in to the lower interest rate ones, and draw more interest than they charge. And then when I have enough, pay them all off in one fell swoop.
I’m open to suggestions here, if anyone has some wisdom to share.
But for now, I’m going to bed.
Today is Payday. That’s why I wanted to make sure to get this blog online last night. It’s my first payday of the year. I get paid every two weeks, on Wednesday night/Thursday morning. I wanted to make sure to start the year off right, so I stayed up late and worked on the blog.
And it turns out to be harder than I thought to post all of my own dirt online. My respect for the other PF bloggers, and especially those in debt, has just gone up tremendously.
I’m sitting here looking at the blank page and wondering just how much information to post. It’s amazing, putting all of your finances out there for whoever wants to to look at.
But WTF.
By coincidence, I’m listening to Unwritten by Natasha Bedingfield being sung by a girl on youtube. It’s amazing how applicable it is.
I am unwritten, can’t read my mind, I’m undefined
I’m just beginning, the pen’s in my hand, ending unplanned
Staring at the blank page before you
Open up the dirty window
Let the sun illuminate the words that you could not find
Reaching for something in the distance
So close you can almost taste it
Release your inhibitions
Feel the rain on your skin
No one else can feel it for you
Only you can let it in
No one else, no one else
Can speak the words on your lips
Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
The rest is still unwritten
Oh, oh, oh
I break tradition, sometimes my tries, are outside the lines
We’ve been conditioned to not make mistakes, but I can’t live that way
Staring at the blank page before you
Open up the dirty window
Let the sun illuminate the words that you could not find
Reaching for something in the distance
So close you can almost taste it
Release your inhibitions
Feel the rain on your skin
No one else can feel it for you
Only you can let it in
No one else, no one else
Can speak the words on your lips
Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
Feel the rain on your skin
No one else can feel it for you
Only you can let it in
No one else, no one else
Can speak the words on your lips
Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
The rest is still unwritten
Staring at the blank page before you
Open up the dirty window
Let the sun illuminate the words that you could not find
Reaching for something in the distance
So close you can almost taste it
Release your inhibitions
Feel the rain on your skin
No one else can feel it for you
Only you can let it in
No one else, no one else
Can speak the words on your lips
Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
Feel the rain on your skin
No one else can feel it for you
Only you can let it in
No one else, no one else
Can speak the words on your lips
Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
The rest is still unwritten
The rest is still unwritten
The rest is still unwritten
And so here we are. It’s the first payday of the new year. Let’s see what’s going on then.
As I said already, I get paid every two weeks, so one paycheck goes to pay the house note and the car insurance, while the other goes to utilities and credit card payments. Today is the one for utilities.
My utilities for the month including electric, gas, water, cable, and cell phone totaled $682.00
It’s a lot, I know. But my cell phone bill is typically $200.00/mo. The reason it’s so high is because I have included my mother on my plan, so that she could cut her own land line and cell phone, and save her some money. I could lower my bill by cutting her from the plan, but it’s not something that I’m willing to do. In addition, we have a couple of iPhones added in there, so that adds $40 to the base price ($20/mo each) for unlimited multimedia access. It’s not optional when you sign up. The cable bill is the other one that I could cut. If I were single, I wouldn’t have cable at all. I almost never watch TV. But sometimes I work long hours, and my wife does watch TV. I’ve never really even considered cutting it, because I think she deserves to have it, just for putting up with me. I also have high speed internet mixed in with my cable bill, so it increases the bill as well.
Nevertheless, my utilities come out between 6 and 7 hundred every month. And that’s down from nine hundred.
After that, my MINIMUM debt payments are $694 this month. I’m carrying almost exactly 20k in CC debt, plus there is a $6k air conditioner that I financed, which is in deferral and I haven’t even started paying on yet. So it will actually go up in another month when the deferral ends. I have six CC’s that have balances on them. I also have a car note that is $266/mo. There is somewhere around $9k balance on the car.
And last but not least is Sallie Mae. I’ve been paying her since ‘96. I started with a student loan debt of about $36k and it’s down to $8498 right now. Last year I increased my monthly payment to $850/mo on a two year schedule, so it should be paid off somewhere around Halloween this year. That payment is automatically deducted and I never see it. So my net pay is after student loan payments. Yeah. If you are a student, I have a tip for you. Don’t ever fall behind on your student loans, because Sallie Mae is a vicious biatch.
So anyhow, my minimum payments to debt total $694.00 this month, including the car but not the student loans.
In the plus column, I have a paycheck. Under normal circumstances, I will usually take home around $2700.00 after taxes and student loans. That’s more than enough to pay everything and still live quite comfortably. But things haven’t been normal lately. We had a slowdown at work and I haven’t had a full check in a really long time. I’ve been taking home between fifteen and eighteen hundred dollars every two weeks for the last five months. So it’s been pretty tight around here lately.
But things are picking up lately. I’m actually getting all of my hours this week, and I hope it continues. In fact, I’ve even gotten some overtime in. If things work out, next paycheck should be REALLY good.
But today’s paycheck is in the OK category. I have $2421 today. After paying the utilities and minimum payments on everything, that leaves me $1044 in cash to live off of until next payday.
Shelley usually gets anywhere from fifty to a hundred bucks in cash just to blow, and I will need about $150 for gas and parking at work, little things that people need during the week (milk and bread), and any miscellaneous expenses. All told, I usually will keep out about $700 to cover these things, plus food and household needs.
That leaves me with $344 left over after everything in the budget is taken care of. That’s what I currently have to work with to work on my debt. Sucks, doesn’t it? I’m really hoping that things will pick up at work soon.
So I’m putting this over to my Emergency Fund to move closer to the $1000 that I will keep in there. This gives me a new balance of $457.55
There. You wanted dirt. You got dirt.
